bloomberg television. vonnie: we're going to take you to sanw york to london francisco. the eagerly awaited u.s. jobs report is out. stocks arein u.s. fluctuating on the news it will lead to this month's crucial meeting. takes from other candidates. of our interview with mitt romney, who says trump isn't fit to be president. >> and why facebook is changing its tax strategy.

judy heim and has been -- julie -- hasas been marketing been following the market. number, welladline above the 195,000 estimated. then you looked at the average hourly working -- average hourly earnings number. bad from thisf report and overall the read right now is negative. stocks bouncing around a little bit ever since the number came out. look at the sectors on the move. materials -- discretionary health care, energy. all trading lower.

initially we would have seen a spike. also wanted to look at the currencies and see how that is shaking out in the wake of jobs. if you look at the rates market and see the 10 year yield arising, one would expect we see dollar strength. and wanted to look at the commodities. gold, copper, and oil. a little bit of an anomaly, reaction to this report. >> brazil is the big story when it comes to global. >> brazil is the place to find it. after authorities said

they were investigating former president --, which may have implications. all of this sending brazilian stocks higher for the year. a different story from what we have seen in the united states. gaining 8% today. >> corneas and the bad news desk. was on therump defensive in last night's republican presidential debate. called the front runner a phony and a fraud. here is marco rubio.

doubt the numbers are there. the numbers also say two thirds of the people who cast a vote in the republican primary have voted against him. they do not want you to be their nominee. the reason why is because we are not going to turn over the conservative movement of the party of lincoln and reagan to someone whose positions are not conservative. >> rubio, ted cruz anton k-6 k-6 says if trump wins the nomination they will not support him. we will speak live with bloomberg managing editor mark halperin. as julie mentioned before, police detained former president -- in the production probe. the scandal could bring down the current president. led to thegation has arrest of several top officials.

there is more rallying from north korea. being ready to launch nuclear warheads in any moment and that came after the country testfired short-range projectiles. to prepare for the impact from those united nations economic sanctions. spendingof the company growth will increase. the estimate was released before tomorrow's start. canada's prime minister said it would be nice if americans paid attention to the rest of the world. when he was asked what canadians don't like about the u.s. -- meeting next week with president obama. global news 24 hours per day

powered by our 2400 journalists and more than 150 news bureaus in the world. funny bank former chairman of vonnie:omic advisers -- former chairman of economic advisers joined us this morning on bloomberg . >> labors have been relatively weak in the u.s.. we have seen the share of total income decline. have weakthat we inflation. we are seeing purchasing power rise. i'm surprised we didn't see more of a pickup in wages. this report is actually disappointing. >> for a look at how the numbers are impacting the markets and the potential for another move,

of's bring in the co-cio strategies and bloomberg's economic editor michael mckee. i'm going to start with you. we obviously got great numbers. not rise. participation rate did not rise. how's the fed going to see this in terms of inflation. anythingre going to do -- they are not going to do anything in march. the question is, does it bring june back into play? it rose up to 62 .9, a jump of the prior month. good things but as alan krueger was saying, there are some head scratches.

we had a big jump in wages. we also saw a cutback in hours worked. really hard to tell from this report. vonnie: how many months does the fed way to? >> we have several months. the large numbers and the april numbers, there will be a meeting in between but it is a non-press coverage meeting. that will be a another two. today'sis -- what does data mean for the feds in coming months? >> we think this is the type of payroll report that puts the fed back in play. we would be surprised if they didn't take the opportunity to

indicate their intention to normalize interest rates. certainly they want to look at the data for another month or two. this does raise the probability that june is back in play. are you confident we will see a sustained pickup in wages? do we focus the previous months? how should we read that disappointing wage aspect report? can be reasonably confident wages are heading up. if you ask them about their own expectations, they believe their incomes are going to go up three at if you survey small businesses, which is the sort -- the source of job creation, they about attracting talented labors.

certainly the stars are aligned for wages to be heading up. >> when you are not looking for a rate rise, do you mean in terms of the guidance statement? if i can throw this idea that the ecb might change the equation. >> may be begin to position for that as early as the march meeting. right about international developments being key to the outlook. area if thed reason ecb moves next week to further ease financial conditions, we think it will in a variety of ways, it takes the pressure off and allows the fed to pass the baton over. earlier that said the fed was the global central banker.

the dollar index hasn't moved. most of the trading currencies. what they have decided about whether they are going to invest is making a big difference in monetary conditions. if the ecb gets easier you will see more money come in the united states, which is going to have an effect on interest rates here. that takes the pressure off of the fed and some control what happens in the fed. >> we did see a movement immediately after the jobs report. we are back to the way it was before the jobs reports. >> they are confused by the data there. in thek it is stronger report of the market apparently does.

the data is going to be critical. and also what the ecb and bank of japan do is going to be critical for the fed. extent do central banks like the ecb under estimate the economic, the market risks of negative interest rates? we think central banks have underestimated the risks. they are beginning to understand that. it is why they have seen a step .ack we have to expand our purchase activity.

buying bank loans and even corporate credit. we think it is going to be much more powerful and much more productive than moving further into negative interest rates, which has a lot of negatives associated with it. vonnie: thank you so much for joining us. god's --n under republican underdogs aimed fire set trump area -- aimed fire at trump. >> they do not watch you to be our nominee. >> donald trump supported jimmy carter over ronald reagan, john kerry over george bush. >> we are not going to turn the party over to someone whose positions are not conservative.

republican candidates stood firmly together. but the final blow may have come to the movement when the trump rivals would ask if they would support trump as a nominee. >> i will support the republican nominee. yes, because i gave my word i would create a >> if he ends up as the nominee, sometimes he makes it a little bit harder, but i would support whoever is the republican nominee. >> let's get reaction to the debate. margaret, thank you for joining us. they spent their evening laying into donald trump and then they would say they would support him. doesn't that fact undercut their attack? , it does. -- >> it does. consistency is not what this particular campaign was about.

distancing themselves from him is a delicate dance. >> and it is a delicate balance for the party itself. as you write so well in one of your articles, they hate trump, but they dislike crews anymore. heard lindsey graham say he never thought he would utter the words i might support senator cruz. you know how bad it has gotten. even his friends don't like him. been a leader in the senate, even by the low level we have now in washington. >> margaret, donald trump has not been playing by any of the traditional rules of the political gain.

his supporters want to believe him. he got many. when he came up with a good was relieved,ne all supporters were relieved. is there anything that can do damage to donald trump? hard-core supporters want for trump is giving them, which is complete and utter disdain for washington. and in particular the republican party, which supporters rightly feel -- >> that was fine, he came up to an answer to that. when the moderators talked about his health care plan and how ridiculous his numbers were, is there anything he will still not have an answer to? he did not have an answer that satisfied the immediate

fact checking, which was so good to have it right then and there. he is so bombastic that he barrels on and has no embarrassment. there is nothing he won't say. the one great moment was when he did the brief on trump university that are then anybody .- than any candidates his supporters are not going to be deterred. a group of people who vote for him when he gets his 30%. that could be swayed. the messages we have had it up to here. we don't mind that he is course, we don't mind that he doesn't know very much. >> there was a view before that

if you narrow the field, trump's rival, now it seems to be a view they should all stick it out until the end and trump will win the delegates paid is there wishful thinking that there could be a contested convention at the end of this road? >> on the first ballot he will get his due and all bets are off. time when the field had narrowed it could have been helpful to be anti-trump forces. the other candidates are going to stand down in florida and help rubio win. that is a way for trump to get to the delegates.

>> margaret carlson there. stay with bloomberg markets for more on the presidential race. student a bloomberg markets today, 1:30 p.m. eastern to get mitt romney's reaction.

>> it has been a wild week thanks to a string of disclosures. mike pierce would give up his chairman title and return after an extended medical leave. and then along came monday when valiant abruptly canceled the south side analysts.

non-friendly. welcome back from mike pearson. a company facing multiple challenges. in this week's issue of bloomberg's this week, weighing the pressure and giving background to pearson. moment, how at the much of it is self-created? >> this is a guy who said i have a new model for the industry. the department wasted too much money on drugs, it is better to buy drugs. it worked really well for a long time but now falling apart. was a management consultant basically and then they asked him to come in as ceo because he was doing a good job. what do you think his final goal is. is adjust ticket valeant out of trouble?

>> absolutely. he wants to be one of the top five pharmaceutical companies by this year. i don't know if he is going to make it. >> not everyone is a fan. warren buffett, a longtime partner described his practices as the plea of moral. -- as deeply immoral. >> hillary clinton is running a ampaign, saying we have to do -- we have to put a stop to this. i think that is over and a big problem for mike pearson. >> obviously he has been on medical leave. >> they told us he will be

talking really soon but we couldn't wait. a guy who has been out for two months on medical leave. >> thank you so very much. devon's story is featured in this week's edition. and the cover story shows us how snapchat -- the magazine is on newsstands and tablets today. more on bloomberg markets next. after this morning's jobs report.

>> live from bloomberg world headquarters and london i'm vonnie quinn, in for betty liu. mark: i'm mark barton.

this is a bloomberg television. this check in with the first word news. courtney donohoe has more. courtney: we will hear from presidential candidate then cars in it for: 40 5 p.m. eastern at the conservative political action conference in maryland. tosaid that he sees "no path the nomination" and is expected to go into detail today. he raised more money than any other gop contender, 58 million dollars, since he began last may. hillary clinton will deliver a policy address in detroit outlining removing economic barriers for families. vermont senator bernie sanders has accused her of supporting trade deals that have had disastrous consequences for workers. the democrats will hold a debate in flint on saturday. buying riot controled suits when it posts the republican national

convention. they have a 50 million dollar security grant for the event. cleveland will have thousands of police officers on hand for the convention, which could draw 50,000 visitors. the economy will not get going until prime minister alexis tsipras purges his cabinet. most greek minister should be replaced with people with technical knowledge and the ability to carry out reforms. it is one of the closest encounters ever reported between a commercial jet and a drone. last month and unmanned aircraft ame within five feet of jet landing in paris. drones are banned from flying your airports. news 24-hours a day, powered by news400 journalist and 100 the boroughs. mark: there is an hour left in

today's session. the stocks are up, they look like they will finish higher for the third consecutive week. that has not happened since october. it has been quite a rebound since february 11 when the stoxx 600 has jumped by 12%. on that day it fell to a 2.5 year low. days againstood the pound. stirling is up against the dollar today. it is up as well after getting pounded last week after the announcement of the referendum, trading up. gilt as we see an appetite for riskier assets. check out the best-performing industry groups. is the minersit that have led the rebound in european stock markets in the last three weeks. check out how u.s. stocks are doing. julie hyman is standing by. julie: we are muddling along.

i do want to point out movers that are doing better than the broader market, moving more. enterprise, hp enterprise making its first report as a separate entity headed by meg whitman. it is coming in with earnings that topped estimates, reassuring investors about her strategy to break up the company and withstand competition from large competitors. 15%.ng by also higher again today, looking at the bloomberg, chesapeake gain for an amazing the past three-days. 70%. remember, the company has been rising over the past several sessions, even after the death of the cofounder in a car crash on wednesday. here's a look at the three-day chart and the increases. indicted had been

prior to his death related to bid rigging. chesapeake has cooperated with investigators and gotten immunity. there's also a short squeeze. this is a shorted stock, more than 40% of its shares sold short. that is contributing to the gains. another stock on the rise is broadcom. this company was created from the acquisition of broadcom by of all go -- avgo. it is up 6% after the forecast of sales, in line with estimates. this company has been a consolidator. that was the latest acquisition on a line of acquisitions. volatile stock. today it is in the plus column of 20%, settling a lawsuit for 28 $.5 million related to a case foreen a failed acquisition

latin america power holding. another legal situation put behind this company. 10:34 in new york. if you saw "the big short" you might remember the scene where economics professor richard naylor used a blackjack metaphor to explain how soon that exceed the oh. he has been a high near at the university of chicago school of business. he developed the strategy behind the behavioral value fund. it has beaten 90% percent -- 96% of its peers. is david, who manages the fund. being a big movie buff, hasn't made an impact? has it changed things or not? david: most likely, no.

for taylor, likely yes. he only travels with an entourage. we will see with the next movie brings. he is a man of many talents. i'm glad that he chose academics, and not acting, as his career. mark: tell us about the theory of behavioral economics for those who might not be well-versed. nutshell, behavioral finance is the theory of finance that challenges the idea that humans always behave in a rational fashion. this was developed 35 years ago by couple of psychologists. daniel carmen won a nobel prize oneconomics in 2002 and is the board of directors at full and in baylor. leadingbaylor was the economist to bring in the psychological learnings from his

economy in the first few days. he is the mind of a generation toeconomists, asking them reevaluate the rational assumptions. it is fascinating from an academic side. for investors it is practical. we used this in our everyday portfolio management, and the results in the long-term and short-term have shown that. vonnie: the behavioral values on the small-cap mutual fund, looking for values in the ifditional way, the -- ,ou're using metrics like pe how do behavior factors come in? what do you look at? david: that is a great question. he wrote a paper 30 years ago called it doesn't stop market overreact, determining if investors have biases from past negative information and driving down to the point that there is a permeation of investor bias across the marketplace.

that is the foundation for the jp morgan. it is a contrarian fund. we want to get certain signal such as insider buying's from the executives. are they taking a chunk of their own paycheck and putting it down, saying we believe in our company and valuation? we look at valuations and purchases. the board of directors authorize purchasing. we are not going to spend money on m&a, forgo growth capex. the cheapest thing we can do is to buy back our own stock. and in doing so reduce the share count. vonnie: you look at the behaviors of the executives and the investors. in addition to traditional value

, where have you found value in a market that has been grinding higher and higher? david: there is always idiosyncratic risk. it is easier to find broad base value in august 11, the great recession, the summer of 2012 when the euro was splintering. we find that the being a high conviction manager, holding a limited amount of stocks, there is enough going on at a particular company to which the investor base will overreact. to which, most likely, the insiders will say this is crazy we are trading below intrinsic value, the company isn't falling apart. over the cycle the opportunities change, but it is the case that over the long-term you are able to invest in and get most of these ideas to work. mark: you had the odd failure. it leads to the question, how does one protect themselves against unpredictable black swan

events? david: a great question. i think it is less about protecting yourselves, you are never going to isolate those risks. it is more about sizing the , the riskier positions, more prudently. at that time we were overconfident at the prospects of a company and didn't realize how much damage a software glitch could do to the company. you think about a clothing retailer, they send out the wrong sweaters to sears, that is an operational glitch that will not bring down the maker. as of midnight capital, a software glitch wiped out their entire capital, and they were bought out at a lower price. mark: great to chat, thank you for joining us. david potter. managing the jp morgan undiscovered managers. behavioral value fund.

coming up, facebook will stop routing its u.k. ad sales through ireland, increasing its tax bill by millions of pounds. we will break down the numbers to what that means for their advertisers. ♪

♪ mark: we are live from london and new york. i mark barton. vonnie: i am vonnie quinn. this is bloomberg "markets." the state of california is the seventh largest economy thanks , whichbook and google choose to call the golden state home. governor jerry brown oversees it off.

they talked about the encryption debate, the economy, and silicon valley. >> silicon valley did not happen overnight. you cannot just come here, drink the water, take it home, and think you will create stamford, apple, and hewlett-packard. we have to be very careful to nurture. i'm not worried about other people grabbing it. it is not for sale or transfer. >> the encryption debate between apple and the fbi has created a bigger divide between silicon valley and washington. could washington be at risk at losing its biggest economic contributor. you can createot encryption that no one can look at -- that is a topic -- i want to give real thought to that. is on one side, cook is on

the other, i'm not prepared, on this program, to offer my wisdom. it requires more knowledge than i have. beshould companies like uber giving their employees benefits? where do you stand? >> it is being tested in the courts. we do have rules in california that will be interpreted by the courts. i think the flexibility is good, but you have to watch the exploitation of workers. and the flexible standard is incredible. there are points when workers have to have a sense of security. there is amazing flexibility that is provided. when they try to combine the newfits of the old and style of employment, it is not going to be all one way or all the other way. we have to find a balance. vonnie: that was governor jerry brown of california speaking

with emily chang. we will look at currencies and yields. $1.10.o just topped it is stronger today following weaker wage growth data out of the u.s. jobs report. something we have not conjugated on is the trade -- have not concentrated on is the trade deficit is widening, causing a little concerned. the 10 year yield is 1.8 8%, rising slightly. abigail doolittle has the latest from the nasdaq in manhattan. is tradinghoo! higher, hitting their highest level of 2016 on a report the company is looking into selling $1.3 billion worth of non-core assets, including patents and properties. it is part of the decision to form a committee to explore alternatives. marissa mayer is under pressure to make changes.

is trading down today on the news that the company will stop moving advertising sales in the largest u.k. client through ireland, resulting in a bigger british tax bill. it will take effect in april. the bigger bills will be paid next year. it is unclear what the impact will be for the numbers of facebook, but the shares are outperforming the nasdaq index itself on a strong december report and a positive look at 2016. vonnie: thank you, so much. facebook.s stay with in 2014, the social media tycoon in u.k. taxes,s just over 6000 u.s. dollars, less than what the average british worker paid. it will change in april. facebook will stop routing

advertising sales through ireland and increase its tax bill finally millions of pounds. is this a big deal? let's bring in jeremy kahn. jeremy: we don't know if this is a big deal. facebook does not break out its u.k. sales in its u.k. subsidiary or where it was booking them before, ireland. we don't know with the level of sales they have to the u.k. advertisers is. it will be interesting when they file their accounts for next year. for the first time, they will tell us how much advertising them sold to these customers in the u.k. we will get a better sense of is the amount of tax they are paying fair. they told us they will be paying millions more in tax. compared to 4000 pounds, that is a mark: big deal. how does the double irish tax structure work? andmy: google, facebook,

other tech structures book most of their international revenue through an irish subsidiary. that irish subsidiary pays royalties for intellectual property for another irish of city very that is located in the cayman islands. facebook has several of these located in the caymans and bermuda. google puts it on bermuda. that is where there is no corporate tax. they do this to avoid most of the corporate tax. in island it is low, 12.5%. in the u.k., 20%. in the u.s., upwards of 40%. 12.5% int pay the ireland because of the double structure. they pay less than that. of irish legislature got rid it in 2014, but if you are already using the structure, true for facebook, google, and the others, they have until 2020

to change. even if there is an international tax structure change and ireland loses 12.5% tax rates, companies can move on to walter, the cayman islands, right? malta, the cayman islands, right? jeremy: that is a frustration that the u.k. has voiced, that these corporations can move quite a bit. they have a lot of flexibility to do that under the law and pay less tax. you are seeing the public pressure for them to pay more in certain jurisdictions like the u.k.. it has resulted in these companies choosing, almost voluntarily, to change their arrangements. like facebook did today, saying areall have more in this of the u.k. and pay more tax. they have the ability to not do that if they didn't want to.

mark: still ahead on bloomberg come.ts" more to international gatherings coming together for the world-famous armory show. why are we expecting more subdued sales? more ahead. ♪

mark: the armory show, one of the leaving art fests, kicks off. the premier auction houses are predicting sales drops. low auction was spoiled the show? take a look. show is taking off in new york city, leaving behind all fears of an art market saw. -- art market slump. market is strong. we have reserves on work.

we are hopeful it will be a successful fair. significant are a force of revenue for dealers. >> a huge range of work at different rise points for a wider audience. little art fair sales were over $10 billion, accounting for 40% of total sales. >> we estimate $200 million worth of art is sold in five days. it is where dealers come and collectors come to buy art. 39% of the $59es billion global art market. >> the art market in new york is strong because the u.s. economy is growing, and there is a large and passionate collecting community. >> coming from italy, he is among the 2005 galleries of fine for a crack at the u.s. market.

>> we love to be in new york once a year. we are at the fair, and we know we have a chance to meet the people here. it is not easy to bring a collector from here to italy. sell.also came to 60% of his income comes from our fares -- from our affairs. >> on an average day at the gallery, we would get 50 visitors. here, that happens in an hour. it is an comparable the amount of exposure you can get out of there. that is why we come here. >> in the new york art market, exposure means sales. that was the highlights of the armory show in new york. you can read more on bloomberg pursuits, your destination for the finer things in life, including travel, art, and

dining. next hour,n the european stocks are rising on the jobs data, showing more workers in february than projected. mirs celebrate with investors speculating on stimulus measures from china. those stories and more coming up on the european close. to the what is happening stoxx europe 600, rising for the sixth day in seven. it is the resources leading the rally. it looks like stocks will close higher for the third consecutive week, the longest winning streak since at hobart. -- since october. the european close is next.

vonnie: it is 11:00 a.m. in new york number 4:00 p.m. in london, then night in hong kong. i am vonnie quinn. mark: i am mark barton.

this is the "european close." ♪ mark: we will take you from london to new york in the next hour. here is what we are watching. europe are higher. they have been fluctuating in the u.s. after a mixture jobs report. what bill gross says about the jobs report, coming up. vonnie: the brazilian real, the of a former president, is the president he coming closer to impeachment? mark: europe's refugee crisis is the focus of an emergency summit in brussels. we will hear from the european commissioner for migration. let's go to the market desk. julie hyman has the latest.