scarlet: good friday afternoon. alix: here's what we are watching at this hour. he and scenery came in becoming the world's largest movie theater chain. is becoming the world's largest movie theater chain. scarlet: not all workers are benefiting. what is disappointing economists . alix: the massive investigation into corruption getting close to the center of power. >> julie hyman is checking things out for us. a big beat when it comes to nonfarm payrolls. a modest gain in stocks. julie: the modest gain in stocks came out way after that payroll

came out. we saw stocks declining and that turned around just an hour ago. we had a big beat on the top line. the big miss came from the gain or lack thereof in average hourly earnings. right now, we are seeing a gain in stocks. take a look at the s&p 500. we were lower at 10:30 or so. commodities come energy and material stocks leading the gains we are seeing right now. haveems to not necessarily as much to do with the job support as the moves we are seeing elsewhere in the market. if you look at the biggest ,ercentage gains today chesapeake energy gaining once again come 80% now over the past three sessions. today, we'veins

been talking about its cooperation in the investigation late founder the of the company. hewlett-packard beating estimates with its first earnings report. copper and gold benefiting from what we are singing commodities here. rising to the highest we've seen -- alix: chesapeake was under two dollars three or four weeks ago. you can look at the gain in oil as well. more than 30% gain in oil. natural gas near a 20 year low. more than 40% of the shares are sold -- i want to talk other commodities. we've been watching gold prices. this goes back to february of

2015. this price at its highest since that point. oil prices at their highest since january 5. we've been seeing those gains from the bottom. copper prices at their highest going back to april of 2014. this goes back to november of that year. the highest we've seen in quite some time. at its highestl since october of 2015. let's check in on the first word news. ark: some republican members opposed to donald trump have changed their strategy. for the current candidates to stay in the race and tonight trump the delegates they need and they will force a contested convention in july in cleveland.

one day after he criticized trump, mitt romney will speak live with mark halperin at 1:30 p.m. new york time on bloomberg television and radio. hillary clinton plans to deliver a policy address in detroit today. finding ways to remove economic barriers for families. has accused her of supporting trade deals that have had "disastrous consequences for workers." crews in flint, michigan beginning today got lead pipes. in neighborhoods with the most high risk residents, including children and senior citizens. tom brady may still have a steep price to pay for his role in the flake eight. -- deflategate.

the odds that the four-game suspension will be restored reportedly rose considerably. the judge gave the players union lawyer a tough time. evidencethat there was brady encouraged it and supported it. a decision may be weeks away. global news 24 hours in a day powered by our 2400 journalists in more than 150 new sparrows around the world. -- news bureaus around the world. scarlet: amc entertainment is mic -- car mik alix: the purchase was apparently a deal in the making. pursued the company as soon as he got the job. some analysts have been saying

pay per screenur for this merger was relatively low. there could be competing bids coming in. set anhink we did attractive price for carmike. it is a free country, anybody can do what they want to do. we are quite comfortable that when this all shakes out, we will be the owner of carmike cinemas. scarlet: i want to talk about the rationale for the deal. you said time is the enemy of all deals come adding some urgency here. why does this deal makes sense now at a time when the u.s. box office may have peaked? y that.n't exactly bu in three of the past four years, hollywood has created the industry record-setting performance domestically here in the u.s. and canadian markets.

star wars launched in mid-december, the highest grossing film of all time. ool, thesaw deadp highest grossing film ever to open in the month of february. when we look at 2017 and 2018, they look to begin busters. -- be gangbusters. this might be a perfect opportunity for amc to get some realt as blockbusters hit movie screens around the country. perhaps u.s. box office speaking with china over taking it as the biggest box office market. >> i think what you are referring to is one week in february when the chinese box office was larger than u.s. box office if you look at the 12 u.s. boxiod, the

office is still quite large. we have a shareholder who operates the largest set of movie theaters in china. we are happy for our partners at rwanda group. at the box office is strong in china and the u.s. alix: what does this merger wind up doing to help you get scale in china? >> it doesn't change our scale in china at all. bmc is almost entirely a u.s. movie theater chain. -- amc. e's theaters are all within the u.s. increasing our position to create a national footprint in the united states. we will be not only the largest chain in the u.s., but the largest chain in the world. youlet: that scale means get more bargaining power as

well with studios increasingly relying on more and more of these blockbuster films. what does that mean in terms of a revenue split on the next star wars? >> i look at the studios as our partners and not adversaries to be negotiated with. i'm much more interested in growing the pie for all of us instead of worrying about the split. carmike, we like about we can take proven consumer friend the and extend them into a larger network of theaters. amc has been known for putting in really comfortable leather recliner chairs, creating diamond theaters come expanding our food and beverage options. growing out number of imax screens and i'll be cinema screens -- dolby cinema screens, premium large-format

auditoriums. we know that consumers love seeing movies not only in theaters where they see a big screen, but also a super big screen as you see at imax. this deal brings 21 new imax screens into the family at amc. scarlet: did you see star wars on one of those supermassive screens? alix: with the food and the chair, indeed. the doj has been tough against mergers. what kind of push back to you expect to get from them? merger in completed a december of 2015. we are talking 75 days ago. we were able to grow by 10%.

we had dialogue with the justice department for much of 2015. we think we have a solid understanding of what the justice department is interested in. keen putting together carmi and amc, we will only have a market share of 23%. that is not the kind of market share that tends to scare anyone. when we have conversations with the justice department, they there's competition in local markets. when we get through all this, we are highly comfortable that we will be the owner of carmike cinemas. job february's number coming in higher than estimated. it is not all good news.

scarlet: brazil's president under investigation. alix: natural gas on pace for its lowest close in 21 years. what is behind that decline? ♪

alix: welcome back to bloomberg markets. scarlet: let's head over to our markets desk where julie hyman has been checking on company movers. julie: let's start with big lots. the numbers were not very good. missing estimates, looks like the forecast miss estimates. it is returning cash to shareholders come in the form of a buyback and dividend increase.

$250 million. that might be hoping matters today for this company. , the maker of contact lens related products. .hose shares up by 5% the company raising its 2016 forecast for earnings and revenue after its first-quarter numbers beat estimates. the company talking about stronger demand for its products. stronger demand for people working out, planet fitness coming up with numbers, shares up 5% as well. if forecast here better than what analysts had been anticipating after its fourth quarter numbers beat estimates. broad,, the ticker is still abgo. company's7%, the fiscal quarter sales in line with estimates.

this rolled up a number of different companies as we saw this huge wave of consolidation in the sema conductor industry -- semi conductor industry. scarlet: a stunning turn of events over in brazil. police detained and questioned the former president as part of their corruption probe. investors are betting brazil is at a tipping point in a changing government that may be imminent. stocks rallied come extending their bull market. this is a political and economic problem. you have to get the politics in order before you starting the economics. the news recently has been there is a higher probability the president may get impeached or implicated in the corruption scandal. the market was the possibility that we make get a change in

government. this very speculative at point. i wouldn't buy this rally. alix: bloomberg's exit door order international government joins us now from london. for international government joins us now from london. >> in the short term, there is not that much good news out there for the brazilian economy. we saw some bad data in the beginning of the week. despite the fact there is renewed optimism in the market that the paralysis we've seen over the last few months, we're closer to the end of that. there's not much sign of good news that things will turn around soon. time, evene a long that for now, the not much hope for the brazilian economy. scarlet: investors are perhaps

jumping the gun a little bit here. when you look at corruption investigations, those often take on lives of their own. is that what is happening here or is it still fairly focused? >> it will be interesting to see what the former president has to say for himself. he is due to give a press conference in sao paulo this afternoon. it's unlikely we will see him come out and say he is cooperating with the investigation. he has been taken in for questioning. it goes to show you how close to the center of power this investigation has become. he knows a lot of what's going on in brazilian politics. alix: what does this do to the lack of support for dilma rousseff? >> this is very bad for her.

she is the protege of former president lula. that she willse get impeached. this is a move to clean house. there will be a much stronger in impeachment proceedings. these proceedings have been paralyzed since early december. it will be difficult to get them through. after this morning's dramatic news from other will be much more impetus to get them going again. alix: dilma rousseff was the robras from pet 2003-2010. she has been able to ward off the investigation for a while. >> it's important to bear in mind that so far, the impeachment proceedings are very

much restricted to investigations in terms of the budget. in the complicit massaging of brazil's numbers? it is possible she gets pulled into this. she is removed from the investigation for now. they are focused on former president lula. alix: we talk about how the economy is in a recession. goldman sachs called it a depression. what do the central banks do, if anything? interest rate are already so high. >> they are very tight. -- policymakers are in a bind. there's only so much the central bank can actually do. on the fiscal side, there's a lot of reluctance in terms of the rating agencies, by the

government to loosen the purse strings. there's little that policymakers can actually do to cut result this side of resolving the political crisis. scarlet: thank you so much for joining us with a perspective on brazil and the corruption scandal there. alix: we will be right back. ♪

scarlet: this is bloomberg markets. economicorrow, top leaders in china will gather for wherenual congress officials will release the country's five-year economic plan. how the government

plans to rein in debt and bring an end to the economic slowdown. annuald of china's political pageantry taking place in beijing, policymakers have a delicate balancing act. they will be looking to try to put forward policies to support midterm growth. ensureexpecting them to these much-needed structural reforms. especially in sectors like steel and coal dust pollution has returned with a vengeance. there are environmental and economic reasons at the top of their agenda. overcapacity also means a loss of jobs. up to 6 million jobs could be on the line when it comes to state owned enterprises. we will be watching out for how the policymakers plan to deal with that. in recent months, they've taken a more accommodative stance.

cut earliersurprise this week -- these reforms are not going to be easy. he spoke about how it's like taking a knife to one's own flesh. we will be watching to see how far policymakers are willing to go in terms of sacrificing near-term growth for longer-term economic rebalancing. we will be keeping an eye out for any rhetoric on the yuan. we've heard a lot about this currency basket. they are aiming for more flexibility and to manage expectations for further yua n depreciation. there is panic every time it depreciates against the dollar. ,carlet: ahead of the cnpc

china went back to its old playbook, lifting big cap stocks. in can see the divergence the index. alix: big banks have such a large waiting in the benchmark indices. that's why they want to focus their energy on that. financial stocks climbed the most among all the groups, jumping 4%. their state owned energy companies also rallied. all about throwing money at the big guys. we will be right back after this break. ♪

alix: from bloomberg world headquarters in new york, welcome back to bloomberg markets. i am alix steel. scarlet: let's start with the

headlines. mark crumpton has those from the news desk. mark: thank you. we will hear from republican presidential candidate, ben carson, later today. he was the -- he will speak of 4:45 new york time at the political action conference in maryland. he is expected to go into detail in his speech. he raised more money than any other republican contender, $58 million since he began his bid last may. cleveland is expected to buy to suits before at convention.publican it could draw up to 50,000 visitors. the center for disease control will hold a conference next month on the zika virus.

the summit is scheduled for april 1 and inventive. is european union unio offering hope to agrees that it will not become a long-term haven for migrants. checks by theng end of the year. back, the eu is sending those who are ineligible. global news 24 hours a day, powered by are 2400 journalists in more than 150 news bureaus around the world. i am mark crumpton. back to you. alix: thanks so much, mark. natural gas prices crashes for a 17 year low after another year of ultralow prices. that is due in part to a mild enter weather season, and an overhang supply. are startingysts to see the begin of the -- the beginning of the end of the

crash. clients are now starting to wonder how to a 17 is shaping up. the question is, has natural gas bottomed? >> we have lost 18% this week and just natural gas prices. a lot of this has to do with the seasonality of natural gas. we have seen a winter that is .2% warmer than normal although it is snowing outside today, it has been very, very mild this winter. at the same time, we actually highed this year at very storage levels. we entered with over 4000 billion cubic feet in storage. that is a lot of storage to be going in with. if you couple that with the fact that we have had a very mild winter, it is understandable that we will get prices now, and see where they are. you have to separate the short

term fundamentals. what we are seeing now is very bearish, but in the background, you are saying a bullish outlook. scarlet: and the weather, 60 degrees after today. alix: come inside the bloomberg. you can take a look at the natural gas lower curve. the rest of this seasonality. this is extremely and table. your forecast for 2017 is right around there, 305. what do you think the market is missing? >> i think the whole curve is getting eaten down -- beaten down. that is what we are telling clients. alix: what gets into 305? .> falling production you are seeing production come off line.

and, a growing demand story. there is a bit of an industrial demand story and powerline story also. scarlet: you said we are pretty ofh at a record amount storage. what kinds of problems does that create down the road? >> what that does, and what is interesting about the u.s. natural gas market is we normally build up storage in the summer, and would draw it -- withdraw it in the winter. what this means now is we will exit winter with storage around cubic feet. that is very high. what that means is we will see less demand for gas. that is a bearish blanket on price. on the short term, that is weighing on the entire curve.

it is important that you see these more bullish factors that need to be taken into consideration. alix: president obama is begin on the monthly jobs report. we will go to him now. six straightma: years of job creation. 14.3 million new jobs. in fact, our businesses have created jobs everything will month since i signed the job .illing obamacare bill think about this, if someone had told us seven years ago, that we would get to this point, at a time when we were losing 800,000 jobs a month, and the unemployment rate hit 10%, we would not have believed them. today, american businesses are creating jobs at the fastest pace in the 1990's. the workforce is growing at the 2000.t rate since

it is showing the kind of strength and durability that makes america the and the of the world, despite headwinds it is receiving because of perceived of theses in other parts world. in other words, the facts don't lie. it seems useful, given that e realityan alternative out there from some of the political folks that america is down in the dumps. it's not. america is pretty darn great right now, and making strides right now. es hiringiness right now and investing right now, and building this country great by brick, block i block, neighborhood by neighborhood, all across the country. facts, expect that these and this evidence will convince

some of the politicians out there to change their doomsday rhetoric, talking about how terrible america is, but the american people should be proud of what they have achieved because this speaks to their resilience, innovation, grativity, risk-taking, and it. the fact the matter is the plan to be have put in place to grow the economy have worked. they would work even faster if we did not have the kind of obstruction we have seen in this town to prevent additional policies that would make a difference. there will be a debate going on around the budget in the coming months. congress aren sadly trying to cut some of the investments that could spur additional growth area they are blocking things like an increase in the minimum wage, or more in jobs,vestment an

training, infrastructure, education that could continue to lift up wages and income, an area, by the way, where we are not seeing the same kind of pace we want to see. that is what we should be debating. that is the debate that is worthy of the american people. , not name-calling, not trying to talk down the american economy, but looking at the facts, understanding that we have made extraordinary progress in job growth. how can we continue to advance that? how can we ensure that people are successful in climbing the income growth and in the coming years? how do we make sure this economy

grows even faster? the kinds of proposals we put forward repeatedly, in terms of rebuilding our infrastructure, improving the job trading system, lifting the minimum wage, dealing with things like family leave, making sure that retirement accounts are more helpful to middle-class families and working families, making college more affordable, those are all the things that will make an enormous difference. we have to keep pushing that agenda. that is what we should be talking about. that is what i will talk about with my colleague here in the coming months. the notion that we would reverse the very policies that would dig is out of a recession, and reinstitute those that put us in a hole, plans being proposed by republicans in congress and some of the candidates for

president, that is not the conversation we should be having. that is not the direction that america should take. to aooking forward forcefully making clear that what we have done has made a difference, and there is a huge gap between the rhetoric that is going on out there, and the reality of success that we are seeing in america's economy, even as we knowledge there is more work that can be done to make sure that everyone is benefited from that success. thank you very much, everybody. have a good weekend. scarlet: that was president obama speaking at the white house. in the next hour, we will be speaking with mitt romney. alix: we were talking about how the short-term fixture for natural gas looks particularly bearish, at a 17 year low. the man,he thesis is

demand growing over the next four years. where did that come from global lng prices are so low? >> you have to consider how a lot of these lng projects are being structure in the u.s.. right now, you have five lng projects currently under construction in the u.s. is way these are structured you are paying a fee of around three dollars, and the health price, plus a shipping cost. as long as that cost is below the market, we think they will run at high levels. costs have come down very quickly. right now, you can charter of vessel for $27,000, compared to over $100,000 10 years ago. gas froms i can ship

here to the u.k. for $.40. lng exportslly ala will save the day when it comes to natural gas? >> it will take some time. alix: thanks so much. scarlet: we just heard president obama speaking about the state of the economy, coming up, a look at the jobs report with the former fed economist.

alixscarlet: you are watching bloomberg. alix: this is your global business report. scarlet: police officers raided the home of brazil's former highestt, lula, the target in a massive money laundering scheme.

alix: amc entertainment will have to sell a lot of popcorn. car mike.al scarlet: first, we star in brazil, where police have raided the home of former president lula. he represents the highest profile figure targeted in a corruption scandal that has rocked latin america's biggest country. taken for investigation that petrobras has been encroaching on the workers party. alix: hiring in the u.s. remains sk, employers hiring more in february than expected. during an interview, and investors that there was 100%

probability that the economy would be in a downturn within one year. >> it has been eight years since the last recession in the u.s. historically, we have them every 4-7 years, for whatever reason. the debt, the debt is staggering, japan is in recession, china is slowing down, half of europe is in recession. alix: almost wall street economists see a less chance for a session, the odds below 30%. scarlet: the richest man in creating a chain of movie theaters. it will increase amc is green to almostcreen count 8400. has come up

with another idea to save itself. the company is thinking about one thing it's web operations and sell them off. yahoo! japan is the most profitable website. yahoo! never had a shortage of ideas. it has floated everything. it recently tapped a formidable advisers to help them figure out what to do. it looks like foxconn's acquisition of sharp is close to a done deal. the deal was thrown into doubt when foxconn learned of sharp's potential liabilities. alix: facebook is about to pay more taxes in britain. the social network has been criticized of avoiding taxes in acquisition of sharp is close to a done deal. the deal was thrown into doubt when foxconn learned ofbritain t . last year, it revealed that the company paid a low more than

$6,000 for taxes in 2014. scarlet: for more stories, visit bloomberg.com. back to jobs now. of the council of economic advisers expressed his dissatisfaction with the economic report on bloomberg . >> one of the numbers i look at is total hours worked, aggregate fors, that was down fo ur tenths of a percent. an interesting development, is in some sense, it means more work sharing, where people's work hours decline. unless we see wages big up, that will mean income will also not keep pace. alix: we are joined with the tiaa. economist from

you agree? the bestport was not report. it is one report within a trend that has been increasing over the past several months. i would not put too much weight on what we saw today. historically, for a look at wages, come inside the bloomberg. the last time we were down at around 4.9% unemployment rate, the average hourly 30 3.5%.went down >> that's right. they should be rising, and they are not. the trend is looking like it is moving in the right direction. if we look at all the data combined, it is actually trending modestly in the right direction. great, we dot need several more months of

this, but we are moving in the right direction for later this year. scarlet: if we continue to get data like the february report -- job growth, but inconsistent wage growth -- can the fed still stick to its predicted four rate hikes for this year? >> it is probably a goldilocks report from markets. we got a good report on the top line. you know, the labor market trend is still going in the right direction. that is the good part. the good part for the let's not hike message is the wages. this gives the fed another excuse to not raise in march. however, we are still moving in a trend like manner that would probably about them to raise in june. if we discontinue and job growth

continues, back on trend, we could see more rate hikes later in the year. chart is charting the unemployment rate -- hold on. you will have the unemployment rate falling, but also gdp falling. what's wrong with that? >> in the short-term, you can have deviations, which are not sense,o -- may not make in the short-term. you can have these deviations. that reflects different dynamics going on in the current business cycle. this has been a very lackluster cycle. we have not seen the kind of growth that we would have expected to see in this part of the cycle in this stage of the game. we are getting some -- it is uncertainty in the data that leads to a lot of different opinions.

the last spot, where we looked the data,eople liked and some say it suggests we are moving into recession. the fact of the matter is it is a weak recovery, and still on trend. scarlet: tim hopper, thank you for joining us today. alix: coming up on bloomberg markets, nasdaq and netflix. plus, we will speak with mitt romney on what he thinks of the presidential campaign. ♪

alix: welcome back to bloomberg markets. i am alix steel. let's go now to abigail doolittle live at the nasdaq, where she is looking at netflix. abigail: netflix is trading surveyon a bullish saying that usage level and

recordction is at a posit high, and turnover, a record low. a bull is now trading in market of sorts, up 20% from the low. even the so, it recently traded at a bearish level. higherhares are trading on comments that the company could raise its dividend by 5%-10% and add to a stop right plan.lan -- stock buyback lots of positive commentary here on a stock that is almost trying to go flat on the year. scarlet: any loser on the day that you are looking at? dayail: microsoft, second in a row, point drag.

it could be a matter of investors going from safe tech names to the high growth names. alix: coming up in the next hour, we both speak with former gop presents a hopeful mitt romney of what he thinks about the republican presidential campaign. ♪ . .

it is 1 p.m. in 6 p.m. in london, 2:00

a.m. in hong kong. to "bloombergme markets." from bloomberg world headquarters in new york, good afternoon. i'm scarlet fu. steel.'m alix a hiring binge, 42,000 jobs created in january, but not all of the news is good. where the dark spots are. scarlet: one day after to announcing donald trump in harsh terms, mitt romney will be speaking to us. he will talk about the civil war in the republican party. and whether he intends to run again. alix: ken staples survive a deal? scarlet: let's go to the markets desk where julie hyman is tracking the market. julie: it seems like the story

is not so much the equity market . it is the commodity market. this is where we are seeing movement, not so much on the day . on the week. it is a broad basket. the best week since july 20 12. pretty remarkable, as we continue to see gains, not just in oil, not just in gold, so pretty much a bull market for gold. the gains in gold have continued even as stocks have rebounded as well. people were buying gold as a hedge, place to hide, and it's interesting as risk appetite has come back into the market -- you see this 22% gain in gold for the year today. in oil, too, we have been seeing a significant gain from the bottom. here is the year to date chart on oil. the game from the bottom is more than 30%.

the moves that we are seeing and stocks are tied more to the gains we are seeing in commodities and have decoupled to some extent from the jobs report this morning. how is that reflected in the stock market? generally as oil goes and commodities go, so goes the market. julie: pretty much. but volatility has not fallen as much in some of the commodities. ofyou look, i made a chart that on the bloomberg. here is a chart comparing the volatility of these asset rates. yes, we have seen volatility rates come down, but still a very elevated level. we see that above 20. the volatility level as measured is 16.5.x stocks today, yes, they are seeing gains, but it is a fairly

tight range. all of byd the nasdaq half of 1%. they were down this morning at the open, but we are still seeing a relatively tight range. take a look at the bloomberg. this is the index i have been checking a lot lately, the range -- range of the doubt. it was funny. we kept joking. nothing was happening. maybe the jobs report would give us more direction, we got the jobs report. you are right.: scarlet: let's get to bloomberg's first word news, and mark crumpton has that. we're focused on politics. mark: absolutely. groups backing ted cruz for president are combining

resources to raise even more money. his campaign has 13.5 million dollars available at the beginning of the month, more than twice what marco rubio's campaign reported and far more than john kasich's. donald trump writes his own checks to pay for his campaign. hillary clinton and bernie sanders are set to attend the reverend owl sharpton's annual civil rights conference. -- reverend owl sharpton's annual civil rights conference. anrpton has not offered endorsement in the race. in los angeles, there is a new development in the o.j. simpson saga. various media outlets are reporting a retired police inicer received a knife several years ago. the homeless later demolished. it is unclear if it was linked to the 1994 murders of nicole brown-simpson and her friend ron

goldman. simpson was found not guilty of the murders in what was then called the trial of the century. more tough talk from north korea. kim jong-un has ordered forces to be ready to launch nuclear warheads at any moment. this after the country fired what has been described as short range projectiles. he also warned his country to prepare for the impact of new u.n. economic sanctions. global news 24 hours a day powered by 2400 journalists in 150 bureaus around the world. i'm mark crumpton. back to you. scarlet: thank you so much. it is widely known that etf's have given retail investors the same access to stocks for the same cost as institutions. but institutions have turned etf's for a wide friday of purposes. alix: eric balchunas has a on this topic. first of all, congratulations on

your book. we are very excited. we tend to think of etf's is a retail product. tell us how that is wrong. about 50% of the assets are retail. a lot of advisers talk about that. i wanted to look at other outlets. you have pensions, endowments, asset managers, hedge funds. $80ectively they have about trillion in assets. when i went through and i 64 people who manage these funds and blended my experience with how to do due diligence on things like that with their experience -- there's a lot of quotes from them on how they are using them -- interestingly, they have 12 or 15 usages of it that are not long-term allocations. pension plan, to

get cash, they put it in as the veryy quickly --in spy quickly and move it out. scarlet: it is a parking spot? guest: exactly. cash,d of keeping it in you would put it into an etf. a lot of people would use futures contracts for the spirit etf's become cheaper in some cases because the futures are going up the cause of mention,ns, and not to etf's are less specific. bond managera junk taking cash, and there is no junk bond future. so, this is more creative and short term and that is what we're seeing. scarlet: but you say that they use or misuse etf's as well. give us an example of that. guest: one thing about institutions, they are so hung up -- and these etf's account butover half of all volume,

the toolbox is over 1800 products. they are stuck in etf's that came out in the 1990's. it is like using the iphone 1 for everything. what we do to unlock the toolboxes and apply volatility -- you can create new etf shares , as long as the basket is liquid. we have metrics to show you how liquid the basket is. you can create new shares until the cows come home. would beitutions scared to touch this etf, but the implied the quiddity the basket, you can create 3.1 billion shares today without moving any of the underlying stocks. and to your point you can make new issuance when you have to, blackrock suspended the issuance. why did that happen? guest: basically what happened,

it is a 33 act find. in that registration, you have to say you need this much capacity of shares. it's an odd technical thing. i don't know why they were not ahead of this. did not know why they request more earlier. yes, there was gold demand, but handled way more and that is running fine. a week is not that bad, but it was a little bit baffling. i think if anything, it may be a little annoying, but no major his -- systemic risk. scarlet: that is why hedge funds managers are so mindful of liquidity, right? that is what they do not want to happen. is a two-way it street. you can arbitrage, and everyone loves that because of the price. but you close those, you have what looks like a close run

fund. nobody likes that. that is why close and funds do not have much in assets. it's almost like taking the heart out of the etf. it does not work right. also have something called the nasty surprise rating system. like, guys, sec, you should not be approving these. think,a lot of times we this is dangerous, this is safe. i call it a five tier system. it is based on movie ratings. vanguard, that is rated g. nothing weird going on. but hidden costs, weird taxation -- you could have leverage, right? you could have equal weighted, smart data could be pg. senior loan etf -- are they dangerous or not? that might be pg 13 are would be leveraged and in c-17 is --

all7 is reserved for product leverage and roll cost. i am trying to get people thinking about a tier system for etf's and not thinking good or bad. thanks so much, eric balchunas. check out his new book, "the institutional etf toolbox." scarlet coming up -- california's primary could be make it or break it for donald trump. jerry brown tells us his thoughts. alix: and predictions that the bank of canada will lower borrowing costs at some point in 2016. will we see a cut when the bank announces its decision in less than a week? scarlet: and the conversation you do not want to miss. mark halperin sitting down with mitt romney. that will be at 1:30 p.m. ♪

alix: welcome back to "bloomberg markets." i'm alix steel. scarlet: i'm scarlet fu. we will head to the markets desk where julie hyman is looking at individual movers. we are looking at sears peers.-- these sales are performing. he says that's an indication that it will continually improve. he is a $15 share price target on me stock. the shares are moving up 5.6%. if you look at the bloomberg here, we have a chart that looks at the trading range. it has been in effect for about two and half years for jcpenney

shares. they look very close. the uppereaked above part ofhis -- the upper this trading range. also watching cap today, the company coming out with february sales numbers overall in line with estimates -- also watching gap today. were unchanged, analysts anticipating a decrease of 5%. analysts saying the company is still in the midst of a turnaround. it is early days yet. and burlington -- i keep wanting to collect burlington coat stores, but burlington is the technical name of the country. earnings falling again today after being downgraded to neutral from buy at citigroup, the analyst saying that shares have done well this year.

resultst quarter reminder that it is the third player behind tjx and ross stores. itrlet: i continue calling burlington coat factory as well as tg max instead of tjx. jerrycalifornia governor brown ran for president multiple times and he is weighing in on the race for the white house. emily chang spoke with the governor about his take on the current environment in washington. governor brown: the position america is in, our position in the world, the growing gap tween the rich and the poor, all of these things create tension. unfortunately, it is very hard to have an answer when government is divided. they are divided between democrats and republicans, conservatives and liberals,

religious fundamentalists, libertarians, and all of the rest. we have a crisis of governance in the midst of an increasingly difficult and dangerous world and people are upset. i have to tell you, the campaigns and the candidacies are not all that inspiring. but it's very difficult to be inspiring in the midst of this kind of challenge and complexity. i sympathize with the candidates . they have to do better to win the support of the american people. some are saying california's primary could be last stand,ans' the establishment's last stand and preventing donald trump from winning the nomination. is that inevitable? it's notbrown: no, inevitable. mr. trump does not have a majority. like everything else, things happen in unpredictable ways. he is doing remarkably well, but it's not a majority. stay tuned. there's much more to happen soon.

it is very open. i would say anyone can win this thing. emily: does it scare you though he is that close to the nomination and thus to the presidency? governor brown: i don't like to say i am scared. there are things i am work and signed about. i am concerned about the big issues facing america and the inability of the republican and democratic leadership to get together -- whether it is on the supreme court nominee, roads and bridges, increasing research and development, or to deal with the negative consequences of globalization in the form of inequality. i would like that to happen. the president, with all of the hoopla, is going to disappoint people, because if we have a dysfunctional congress, ultimately people will get mad at the president. we are all in this together. i would like to do my part to make it more positive political environment.

emily: who are you supporting? governor brown: i am not anyone at the moment. emily: would you expect a vice president nomination? governor brown: i don't accept what i have not been offered. emily: would you? i ran forrown: president, not vice president. the republican party has not quite gelled yet, but it's getting close. emily: two gelling around trump or -- governor brown: events happen in politics. scandals occur, untoward events, comments made, and you never -- it is -- it looks like it is coming together. but i would wait a bit longer before we locked things down and say, now we know who the nominees are. i would give it a few more

months. emily: is donald trump fit to be president? i would say the idea to build a wall and make mexico pay for it is preposterous and would create tensions with our closest neighbor. a dumber idea i cannot imagine. scarlet: that was california governor jerry brown speaking with emily chang in san francisco. stay for more on politics, with us. former presidential nominee mitt romney will be joining us at 1:30 p.m. werlet: but before that, look ahead to the march 9 decision. that is next. ♪

scarlet: this is "bloomberg markets." i'm scarlet fu. alix: i'm alix steel. scarlet: will the bank of canada

cut interest rates? the next decision is march 9. alix: i want to bring in pamela ritchie, bloomberg tv canada's anchor. this is all perhaps in reaction to this discussion and big discourse about whether fiscal policy can take over the reins from these stimulative moves of my jerry policy. rates in canada sit at 5% and yes, there is a meeting march 9. the question more, surveyed by bloomberg, seven of nine economists, there will be a cut to rates before the end of this year -- i guess the divergence we are seeing, the interesting piece of this is traders do not seem to be lining up that way. if you go back to january, before the bank of canada more thann traders,

90% of traders were lining up to say, yeah, there will be a cut. and went, and there were no rate cuts. now you see less than half of traders counting on a rate cut before the end of the year, 37 percent. but economists are saying, yes, we will need one. it rests on the questions hanging in the canadian economy right now. we expect this budget on march 22 which will give us an idea of what fiscal spending will be. justin trudeau sitting down two days ago, saying, obviously this is coming. we need to take over the reins to a certain extent, but just spending money will not solve all problems. i guess the questions are, how much spending and what type of spending will there be? a divergence of concern over the economy. out with aa came smaller than expected trade gap in january. part of that, you could say, oh, that is good.

we are seeing more exporting than importing or are we seeing falling demand across the board? is always that back-and-forth. in fact, record levels on the export and import side of things, exports coming in at -- the loonie not buying as much internationally. so, you can see import growth at not such a faster pace. it's important. the governors of the bank of canada are looking at whether a loan lise will be enough to stimulate the economy until we see nonenergy related exports. it's coming along, but is it quickly enough? meanwhile, meeting about pipelines -- what is the verdict there? they have been meeting in vancouver, all of the leaders there. they issued a document, saying they agreed to pave the way for

commodities to reach markets in a responsible way. a pipeline, essentially. i guess they are agreeing on at least a first step. it has been a struggle for canada. all right, pamela ritchie, bloomberg tv canada anchor. scarlet: and former presidential candidate mitt romney will join us. he will tell us about his beef with donald trump of whether he will consider another run for the white house. alix: can't wait for that. we will be right back. ♪

alix: from bloomberg world headquarters in new york, welcome back to "bloomberg markets." i'm alix steel. scarlet: and i'm scarlet fu.

alix: mitt romney has been taking to the airwaves attacking republican front runner donald trump. down with mark halperin. mark started with his speech criticizing donald trump. mark: governor romney, thank you for joining us. it's about 24 hours since you gave your speech in utah. i'm wondering what your experience to ridley and what you have observed in the reaction? to it governor romney: i have messagesa number of and e-mails -- mark: anyone viewers will know? governor romney: i don't think so. those people can express themselves of they would like to. i said we could measure the readiness of donald trump to be hesident in part how responded to my speech, whether it be policy or a personal attack and characteristically, he took the low road.

mark: sean hannity reacted negatively. did that bother you at all? governor romney: i did not see that. friendly i am speaking about something that i care very deeply about. am speakingi about something a care very deeply about. the future of my party in my country. i do not think donald trump has the experience or the temperament to be president. mark: can you think of any particular things he is done in the last few weeks or months that you and mrs. romney have said, that is too much. -- that is too much? avernor romney: well, it is long list. his comments about mexicans. that was very early on. his comments about muslims. very recently his equivocation about david duke and the ku klux klan and saying george bush, was a liar at the same time as saying putin is him when he respects is a strong and affect eater. it has -- effective leader.

mocking a reporter based on their physical disability. and if you will, the sexual and vulgar elements that have been part of his campaign. all of that has been troublesome. this has been a low road campaign for a much from the beginning. mark: anything a last straw for you, or just cumulative? governor romney: i did not want to make comments about a particular candidate until it was absolutely necessary. my thought was i could remain neutral and call the balls and strikes and a foul here and there and i have done that along ku klux klan in equivocation and how late this is getting into the process, i said to myself, gosh, when my grandkids come and say, what did you do to stop donald trump, i do not want to say i did nothing. so, you did your speech yesterday, you are doing this interview, you are doing others. is that it? what we be doing the

between now and ohio and florida, march 14 come a in terms of doing everything you can to stop donald trump? governor romney: well, i'm doing this and that probably reaches more voters than showing up in a state and i'm not sure statey showing up in a would do that. i am laying out the case why we we need a real public and to lead our party and why donald trump is not that person. that's probably something i can do best on the media. mark: after today, are you done? governor romney: i will be on a sunday show or two tomorrow, and i will continue to work behind the scenes and do what i can do that is effective. about activating your fundraising network? will you help with that effort? are you? ivernor romney: i am, and think they probably noticed my remarks yesterday and i'm hoping those people who were thinking of saying, well, donald trump is

effectively the nominee, we might as well get on board, i'm hoping they will say, wait, let's give it a second look. a pretty wealthy guy. not as wealthy as donald trump. are you going to give money to those? governor romney: that's something that my wife and i will have to decide. mark: you have talked about his taxes. do you know something about his taxes? or are you doing what one of your older grandkids might have called trolling? timenor romney: every someone has raised the question of his taxes, he of aids. you don't do that if you are running on releasing them -- he evades. you don't do that if you are landing on releasing them. he began by saying they are big, beautiful, bold. he was going to release them. now he is giving excuses. he said, oh, they are being

audited. four or five years are being audited. now it is three years. give us the taxes that are not being audited. somehow he will not do that either. evidence is the same do, which is he does not want to release his tax returns under any circumstances. i do not believe he ever well because there is something in there that he is afraid if people saw it, he would not be the nominee. mark: would it be enough for him to release his income, effective tax rate, and charitable contributions? no, candidates: for office have traditional given their tax returns and whether it is one year or two years or three years or five years -- i provided my tax returns in the year i have been completed in january of 2012. we are in march of this election year. it's late to be releasing returns. he ought to be doing it. the party. debate in let's take this away from donald trump and say who is entitled to

the nomination? the person with the most delegates going into the cleveland convention, is that person entitled to the nomination? governor romney: nobody is entitled to the nomination. the voters decide who they want to support and the delegates make a determination of who would be in the best interest of the party in the country to be our nominee. look, this is a process that is a normal political process. it may go to a contested, open convention. i think that would be interesting, exciting for the public at large, and as part of the political process. you've got to win. either you get the delegates and show you have the support of the nation, and if you didn't, you have got to go to the convention and convinced the delegates. the: if donald trump gets most votes and the popular vote gets 40% of the delegates, you would be comfortable in part of the dialogue saying 48% is not 50%. he is not the presumptive nominee with 48%? governor romney: a person like donald

trump who has said what he has said about muslims, mexicans, women, george bush, john mccain, a person like that should not be the nominee of our party or our president and i will campaign for an alternative to donald trump until that avenue is no longer open. mark: what would you say to the people who voted for him? governor romney: i will do my very best to get other people to vote in a different direction. that is how politics works. we have a political process. i anticipate you will see a process here where people decide what is the best way forward. by the way, if there were no such thing as an open convention, than my guess is the three people running as opponents to donald trump right now would combine into one. they would say, hey, you have to get it before you get there, we better get down to one. no, they are running separately. they think that gives them the best chance of getting the delegates they need. pretty roughd some things about john mccain, that's

politics. rick santorum and nud newt gingrich said rough things about you. that's just the way it works. the things that you and others are saying about donald trump, is this beyond normal politics? think what hey: i is doing in the campaign is taking politics to a wholly lower level than we are seeing, at least in modern times. the attacks based on people's physical characteristics -- saying about carly fiorina, look at her face. marco rubio in the debate, "little marco, little marco." this is not been done before. even calling someone a liar. you could've said, this is a person who has difficulty with the truth or this is a person who is dishonest, but saying he is a liar. liar ted. these kinds of things. and friendly people carry the -- again, that has not been part of -- and frankly, the vulgarity.

again, that has not been part of campaigns. it goes on in locker rooms and small groups. but to engage onstage in these personal, physical attribute attacks is something donald trump has brought we have not seen before. mark: you said to matt lauer you would not vote for donald trump, but you would not vote for hillary clinton. a lot of your advisors and i think you would probably say, that is the most likely outcome still, donald trump and hillary clinton. what will you do if those are your only two choices? governor romney: if those are my only two choices, i would vote for a conservative on the ballot and i would write in a name. are you available? be available. let's say donald trump wins florida and ohio. he is ahead in the polls right now and it looks by the middle of march he will be the republican nominee. would you like to see an effort made by some conservative to get ballot access? governor romney: you know, i have not thought about that at this stage, mark. i just know that donald trump is

not the one i want to see you lead our country and i do not want to see hillary clinton lead our country. i will go to the voting booth and i will probably be riding in a name. the winner in that likelihood would be hillary clinton or donald trump. whose presidency would be better for the country, whose would be worse? i am going toy: channel lindsey graham and say do you want to drink the poison or take the bullet? neither one of those options is one uncomfortable with. some things about hillary clinton yesterday. i know you are not a fan of her being president. the clintons.t it does not sound like you respect donald trump. as example for your grandchildren, you do not think that hillary clinton's presidency would be better than donald trump? governor romney: i'm not going to do anything to suggest that i am for the democratic nominee. would be a horrible

situation for you and tens of millions of others if those are the choices, it sounds like? agree withmney: i that. you have seen polls -- people i talked to -- the republicans who were supportive of me, have come up to me time and again after the speech, said thanks for doing that. just coming up in your building, in the escalator, thanks for what you said yesterday. this is something people are very concerned about. not all republicans. obviously many people support donald trump. but a lot of people aren't comfortable with someone whose policies are so far away from the views of mainstream republicans on foreign policy and then with regards to domestic policy. you know, i said yesterday, i am convinced his policies, if implemented, would cause the country to go into recession. and they do not create jobs. he says he will bring jobs back. he has no idea how to do that, other than to say will put in place a big tariff, which would

be devastating. there are ways to get jobs back. i talked about them in my campaign. ted cruz and marco rubio and john kasich talked about them last night. mark: part of what is driving election is a lot of skepticism about career politicians, cynicism. less night you had marco rubio, ted cruz continuing to save the kinds of things you're saying about donald trump. marco rubio has been saying for over a week now that he is a con man. e, the end of the debat when asked if they would support him, they said they would. is it lead to cynicism? yeah, i will support him if he is the nominee? it's ar romney: difficult decision for each of them. did they sign a statement? i do not recall. mark: isn't that putting the party about the country if they view him as a con man? they can alsoy: say, i cannot stand the guy, i do not want him to be president,

but i'm concerned about the supreme court nominee. i think they've made it very clear they do not think you should be the nominee and i agree. mark: would you trust him to nomineeseme court more than hillary clinton? governor romney: i think ted cruz made a good point last night. it's very hard to know what donald trump will do. when the subject was raised about the "new york times" transcript of what he said about nomination, is pretty clear that he said something different, and he talked about flexibility and wanting flexibility. i do not think that you really know what he would do and the fact that he has given money to so many democratic presidential contender suggests is interest in the court is different than mine. mark: you are optimistic about america and people. it possible -- is -- is it possible that donald trump could become the nominee, get elected president and turn out to be a better president

than he has suggested to you so far? is that possible? governor romney: he said he has never repented, never asked todd for forgiveness. it does not seem like this is a guy who embraces the idea for -- of changing his view, changing his demeanor. i don't think that's very likely. all things are possible in humanity. i will not write off how people have the potential to change and improve themselves. but he is laying out something about what he would do and his temperament which suggests this unhinged approach is not going to be the leadership we want to see in washington. last question. you had a relationship with him before. he endorsed you. if he called you tomorrow and said, i would like your advice about how to campaign the -- how i can run this campaign to make you proud of me, would you take that call? would you take that call? governor romney: of course. mark: what would you say to him? say,nor romney: i would

mr. trump, or donald, i would go back and say that was a mistake him a i should not have said that. i have not heard him say he was wrong yet. i would say, what he said about bush knowing there were no weapons of mass destruction -- by the way, that not only indicts george bush, but our intelligence community and the chiefs of staff. i would go back and say, what i said about putin being a strong and powerful leader, that was wrong. what i said about mexicans being rapists, that was wrong. that is what i would like him to do. i doubt he is going to do that. -- i'mere to change afraid it takes too much change for us to consider such a thing, but that is the advice i would give him. , but i said last question i do have to ask one more. but if a majority of delegates in cleveland said we want mitt romney, would you turn that

down? governor romney: would you? the prospects of that happening for me is about the same as you. mark: i would say slightly higher. what if it happened? governor romney:+++ to go there. i'm not going to go there. that pretends i have any interest in that and i don't, in the reality is our nominee will most likely be donald trump, unfortunately. if i am successful and other candidates are successful, it will be one of the other people running for president, but it's not going to be someone who is

not running for president, not eking that -- not seeking that office. that's not what i'm doing. i would like to see is nominate someone who can actually win and i do not think donald trump can beat hillary clinton. i want someone who can win and can lead the country in a way that will make us proud. weknow two people -- mark: know two people at least who the get-go the other way. governor, thank you. we appreciate it. let's bring in mark halperin. what was the most important part of that long ranging conversation? part of wants to be this. he feels strongly he needs to speak out, but he's not going to run a war room. he's not going to donate money necessarily himself, because it he hopes a lot of his supporters do. and he recognizes he may not be able to stop donald trump or he and others -- he said if it comes down to donald trump and hillary clinton, he will not vote for either of them and that is a remarkable thing to say by a guy who was the republican nominee for years ago. do you thinkmuch he represents the establishment gop? how many people are like him in that? they would abstain from voting? mark: i think there are a lot. it's remarkable when you think about donald trump for a week. on tuesday, he did smashingly well on super tuesday if he were a normal republican

establishment candidate, people would be talking about how everyone else should get out of the race. christie, senator sessions from alabama endorsed him. he has received no weather prominence endorsements. the debate last night turn some people off. and yet he continues to resonate strongly with voters and the electoral map. he is strongly positioned to be the nominee, despite the fact there is a growing effort that mitt romney is part of and one of the leaders off, to stop him. alix: when chris christie adorsed trump, it was like bombshell exploded on the presidential race. does he hold that kind of weight? to do more going television interviews to get the message out. help tohe is trying to feel people in the next 10 days between now and we have another super tuesday anchored by ohio

and florida, winner take all states. i think he wants everyone to keep the powder dry until then, figure out a way to deny donald trump the majority. and the also said, he does not believe if someone wins a plurality of the delegates they are entitled to the nomination. he does not believe that and that will be a leg public debate. if -- a big public debate. is 49% or fewer of the delegates, does that mean he should be the nominee? is thereis that why or a strategic reason while of the candidates said they would support trump if he became the gop nominee? mark: they all agreed -- ironically, the republican national committee asked all the candidates to support the nominee to pin down trump. now these other guys are pinned down because they made the same agreement. mitt romney went through the same thing. he did not sign that agreement. i think it's possible john kasich or ted cruz or marco rubio or maybe wore them one of

them in the end if trump is the him,ee will not support despite what they said last night in the pledge. support trump? vote for you clinton if she is the democratic nominee? or find some other way symbolically, probably to vote for a third person? perhaps someone else runs. but realize that if someone else runs the republicans vote for, it probably means that hillary clinton is the next president if she is the nominee. alix: mark halperin, bloomberg politics managing editor. staples coming up next, says the deal is dead after the judge grants an injunction. we will discuss that next. ♪

this isarlet: -- bloomberg markets. i'm scarlet fu. staples shares crash.

a sale entirely dependent on whether there will be a blocked merger with office depot. let's see what the numbers say about the retailer in today's the numbers don't lie. quarterly sales growth fell 7%. you can blame it on currency headwinds, online competition, and a decline in retail. -- 1800 -- over 1900 1900 locations. it exemplifies a shift to more commercial business, and that business-to-business segment is driver. primary growth as the orange bars show, it generates more than $8 billion in sales. the growth rate is coming in at 2%. staples is also counting on its purchase of office depot for margins. it creates synergies that lead

to $1 billion. the ftc's earlier rejection is seen as a long-term negative. supply chain savings and revenue synergies would not be realized until much later on, years after the transaction closes. we will keep an eye on the shares and what the court says as well. alix? thanks, and for more, we go to our analyst. from thatalk away year-long effort if the judge grants a preliminary injunction from the ftc to block that deal -- what do they do after that? in the long term, it is the viability of the business. you see other big-box retailers really struggle with amazon and online competition. i think they will try to

increase productivity. you can cut costs, you can cut costs, but if you'd you not grow the top line, that's a long-term negative for the name. other kind there any of company they could team up with? i guess they have relationships with suppliers and they could go directly to the consumer, which is probably an extension of the contract business, but probably not another direct player like office depot. alix: could another company wants to come in and buy staples if it goes the opposite direction? reporter: i'm not sure of it's a largeny -- entity. i do not know where the synergies would be. i guess you could have benefits, you could pick up another big box retailer like bed bath & beyond, but the merchandising would be very different. you would have a seamless infrastructure to deal with an online competitor. scarlet: maybe amazon should

look at it for that matter? estate officeeal space? i'm not sure what that would look like. scarlet: you can find bloomberg intelligence's full analysis on the terminal. alix: today at 4 p.m. eastern, a does opec still matter? the global head of commodities research ed morse will join us to discuss. scarlet: coming up, not all rosy in the february jobs report. we will discuss this with a chief economist. ♪

>> it is 2:00 p.m. in new york and three clock a.m. in hong kong. best 3:00 a.m. in hong kong. .> welcome to bloomberg markets

good afternoon, everybody. what we ares watching this hour. a mixed jobs report with a gain in payrolls but wages unexpected lee declining. that's unexpectedly declining. mitt romney continuing his barrage on donald trump, telling bloomberg tv the gop front-runner is on a low road campaign. asking him when he will make an endorsement. first next on becomes the u.s. oil firm in the race for crude. carol: we kick things off with a check on the markets. we have the monthly jobs rt