. alix: and i am alix steel. joe weisenthal is off today. stocks are closing higher this friday and we are going for our best week since december, 2011. scarlet: but the question is, "what'd you miss?". alix: hourly earnings declining for the first time in over a year. scarlet: and we look at the new world order for oil. it could be no longer in a freefall. alix: and digging into a cheap price, if it means good value. scarlet: we begin with the market minute. these are recovering from early losses, now gaining for a fourth straight day, the longest stretch since october. the jobs headline number was strong, but wage growth was really not there. it took some time for investors

to catch on. alix: it appears like the market is interpreting this as a little bit of good, a little bit of that, so maybe this will go the straight and narrow. they have a huge rate hike, not necessarily issuing caution. it could be like these stocks are machine -- mushing around it but when that did not mush around. in justck is up 83% three days. the biggest three-day rally ever. on the one hand, the company to get immunity from the antitrust case against the former cofounder who died earlier this week, mcclendon. the 44% of the shares are available for trade, that are sold. and it is so high that any good yews will really really -- buo the stock. scarlet: a huge profit.

and when you look at what is going on with the market, treasuries tumbled and to the 10 year yield at a one-month high. and we are looking at this breaking even, declining after a 10 day advance, but investors are expecting 1.52% over the next decade. and this is a rate of inflation. and with the currency, the dollar rally is on hold against the euro and the pound come all the majors except for the young -- yen. the lack of wage gain is what people are fixating on. emerging market currencies building under a rally credit this index tracks the effect. this is the fifth straight day. you can see the brazilian, people are hoping that this could create a change in brazil soon. alix: and with commodities, it was twofold. first off, you have a terrible story, this at the lowest level

since 1995. warm weather continued to drag on inventories for natural gas. completely different story when it comes to other commodities, taking a look at oil, copper. copper at you four-month high. 4.5%, even more. there you go. week.rcent -- 10% on the unbelievable numbers. it begs the question, are we looking at a market that has bottomed in commodities? if yes, this is the ripple effect we see. the triples over with the u.s. stocks. scarlet: and oil is a catalyst for all of the others. talk about -- we will talk about this later on. these in the market minutes, now we will take a deep dive into what is happening at the bottom of the screen. alix: in my quest to find out if we found the bottomed out

prices, this has to do with bank of america and positions in china for copper and in london, as well. what you see is record long positions in china come around 40%. the lme has not participated. and bank of america's hypothesis beenat this in copper has not fundamental. if it was fundamental, usa more long -- you would see more long the grass. scarlet: do not draw too many conclusions from it. i am looking at gold. the gold and yen could keep the safe haven status intact. what we see a speculative positions for the yen. the green bar is a stronger yen. since 2012, pretty clear.

mrs. risk on. -- of this is a risk on. and then it changed. this position, that positioning, moved closely with the ball. there you go. and another rise of gold prices, the yellow line on the bottom. this is the process for risk, which is higher, than risk on. if you look at how things are performing, gold is up 50% and the -- 15%. alix: an incredible story. scarlet: you can see all these charts on twitter. alix: i want to bring in matthew, our guest host. he have been going to the jobs report and really looking at the one thing that stood out -- >> the thing that stood out was the market reaction or lack there of. if we take a deep dive into the terminal, if you look at the expected pace of the tightening, between 1-2 years ahead, you can see that it has come up after

the jobs report, but barely. that shows you that -- alix: weight at the end -- way at the end. >> yes, this is where it was before the fed said they were going to keep it for several years. it is at a slow pace for the fed tightening, regardless of what -- in the jobs report for jobs report. alix: a different tone than what we saw. >> not going down anymore. scarlet: no longer talking about recession. joining us now, the founder and ceo of fourth-ranked and estimaise. lee, we will dig into the jobs report in what it says about the market. tell us about your company and how it increases transparency in the equity market. -- weekly concept

gains, comprised of 10 stocks each. we have commodity gains and global index gains and you are asked to rank the stocks. you put them in order of how you think they will perform over the coming weeks. whoever was accurate with rankings and of the -- ends up winning the prize pool. scarlet: like fantasy baseball. alix: you do that for you data -- e co co data. is the mentality different than reality? >> i think it is the expectations, they are higher than what they expected. the jobs numbers have been very good. the interesting part, and you were talking about the said expectations, we also crowd source that. in the community, it is not

expect this to go to 50 basis points until early in the fall. they are really putting it off. we do not see a change after the report, either. scarlet: quickly, if you come inside the wr ip, this is the work function. i should say the fed fund rate. this is on where it will be and the consensus is that there will be a rate increase of 67 -- 6-7% odds of an increase by december. >> it is interesting the chart you showed with estimates for the payroll, they continue to be low. and payroll numbers keep coming and above the estimate, month after month. so it seems like investors are waiting for a slowdown. >> it is vacillating, the results around the that number. they have been higher more then i have been lower. i do not think that people bought into the fact that this is a really sustainable kind of jobs growth environment with all of the issues in manufacturing,

payrolls, there are all sorts of issues. i think that people feel like there could be a bottom to fall out. alix: the thing you brought up, overall growth. you come inside the bloomberg, i got the start from three economists today, this is looking at gdp versus unemployment rate. none of limit rate continues to fall and is said is the gdp, but in theory they should be moving in opposition. >> it is interesting. i just had lunch with an expert on productivity growth and he is very bearish on productivity growth, but he sees the trend continuing. scarlet: what does that mean, when you look at earnings estimates and how analysts should re-rate certain sectors? >> this was the worst quarter since 2009 of earnings, energy down and the next quarter is

looking worse. scarlet: it should be easier. >> the thing is, oil took another leg down, so that has reset all of the year-over-year numbers for energy. mining is terrible. we are looking at the numbers that of technology, but it is not enough to keep that will index afloat. i think that is what you see in the volatility in the equity market. it seems like we are in a bear market, a vicious market rally, but within that you'll have sectors that are short, like industrials. and then you get a vicious rally, that is one energy will a little bit. will will -- >> will coming up will oil prices autumn?

♪ let's get to first word news. the war of words continues between republican presidential front-runner donald trump and mitt romney. mitt romney says he would support an effort to deny donald trump the nomination at the convention this summer if he does not have enough delegates to win outright. he spoke with mark halperin in an interview. he said that he might contribute to super pac efforts attempting to block donald trump from getting the nomination. and it seems the big winner of the debate last night was hillary clinton, at least according to twitter. the front runner posted nine

tweets during the event, with 10 million retweets. she cannot claim the most new followers, she gained 4000 and donald trump got 8600. the u.s. supreme court will hear arguments in an appeal for a corruption case on april 27, nearly two years ago mcdonnell was convicted of doing favors for loans and gifts. in michigan, digging up old pipes connecting water mains to holmes. this will work on homes on the highest risk -- with the highest risk for lead poisoning. mark. the world, i am lost itsc has relevancy. they were able to push oil prices under $40 a barrel, but had little luck increasing them. us now is ed morris.

ourif opec as last -- lost -- power, what is leading the market now? >> oversupply and at least some of the countries have done this, to see how weak production might be. we are in a big experiment. the first of the shale era to see how they will respond. it has been far more robust than some opec countries thought it would be. will seetually we about u.s. production falling and then we will be in the rebound. the rebound could put a cap on it again. scarlet: paint a picture of u.s. supplied, it is extraordinary. quickly have the bart chart -- u.s.hart, it shows that

supply has come very close to what saudi arabia had back in 2012. this is remarkable. >> what is even more remarkable is what they did not use, this adding up all of the crude oil and liquids, biofuels. the u.s. is producing more like 14.8 million barrels a day against the saudi's 12 plus and the russian's 11 plus. alix: you can attribute the recent rally to this conversation that opec, even if they do not have a lot of power, even -- it doesn't their rhetoric have enough to support the market? >> they give and take back. there was a great interview between the saudi oil minister and another, saying that yes, we can talk about this, but in the

same breath we will provide clients with whatever oil may want. and this past week, they had a press release saying it was time to reinvest. that is all words around a freeze, they are satisfied with the amount of production and have no intention, at least for the moment, the raising it. >> anybody chart of total u.s. production and oil rigs in the u.s., how does the u.s. play this chess game? >> it is easy. look at gas. this is where the rig issue has played itself out. we had a recount below 100, it was at 1600 not long ago. and production is up 90% from where it was. it is not want to go down. this is really a new phenomenon. and it can be seen in technology gains.

just to give you one example, a couple of years ago, the average number of days to date and complete it well was 30. it could create 12 a year. now the average is up, the count is down, but you can complete a well in eight days. it is that kind of gain that is continuing to make it really difficult to project what a lower recount will mean for the production. scarlet: there is productivity. alix: so how does that make sense? on the one hand coming of natural gas rigs under 100, but the price is near a 17 year low. oil prices are rallying, 10% on absolutely nothing this week. what is going on? >> the short-term, it will be volatile. expectations have been, like you said earlier, the market has bottomed. alix: has it? --we think it has it we were

has. we wrote that it bottomed. now we have global refinery demand for crude, maintenance is going down and april should be the weakest month of the year. it was like that last year. but then oil prices started to rally in february and march and they went up in april and may. assume the -- so the seasonality may not play out. alix: we may have hit a bottom, but that is not mean that prices could not go lower. >> we think so. scarlet: does opec think they have bottomed? is saudi arabia trying to get the price of oil up? >> it is hard to say. the words from the kingdom are, they are fairly and be a good -- ambiguous. there could be reasons they want to cooperate with russia that has nothing to do with oil. it could have to do with the unfolding of the plan to replace

the president in syria. we do not know the degree to which do politics is more predominant than oil markets. alix: meaning that the saudis go to vladimir putin and help them out. >> you said that, i do not. but it could be. alix: when you look at the market share for the saudis, 24%, it is unbelievably low to where it used to be. how do they wind up keeping to fight for this? no one knows how it will play out. >> they are looking for demand growth. alix: they are hoping for a rescue? chinao not know if it is or these other countries, you add up the anomaly -- vietnam and the rest of south asia, and you get a production of more middle-class people and that is

the market they are aiming for. there is growth and they will compete for growth. scarlet: shale has really changed things dramatically, reducing cost by 35%. is the cost curve, does it make it economical for any country? >> cost curves have come down in unconventional places, that is the dilemma for opec. they saw a fall in production coming from the u.s., brazil, and canada. and it includes shale and deepwater. cost,ere aiming at high marginal cost production and what happened, and challenging what is happening, we are seeing dramatic cost deflation. a good 30% and much more to come. i think that the market will be surprised at the amount of cost deflation on the horizon. and deepwater, this is the beginning. prices are collapsing. this could last a long time. we have access -- excess of

supply that could last seven years. that means that rates are down. dayasn't such a $50,000 a -- $650,000 a day last year. it makes a big difference for the economics. in general, you can say that across everywhere, cost has come down 30%. middle range, were deepwater and shale are, it looks like it will be down. alix: thank you for sticking with us. coming up, will oil soon be worthless? one chart shows it as zero dollars. and a quick headline. scarlet: the german-based chemical company is said to be working with advisers to examine the possibility of making a counter bid for dupont. dupont and dow chemical agreeing to a merger from last year. we will continue to monitor

these headlines for you. ♪

♪ oil: "what'd you miss?" -- could be broken. it is no longer a true price predicted. and if is why. you are looking at the curve right now for wti, prices around $36 right now. in 10 years, we expect it to be under $52. ed and his team expected to be around -- by the end of the year. does the curve matter? >> it does for a bunch of things. storage, it is wide

enough, indicating that inventory could be used profitably. you can pay for the cost of storage and make money. it is good as an indicator of that. it is not an indicator of christ direction either never -- price direction and it really never has been. when there was more liquidity, it was an indicator of that -- where the marginal cost of production was. or where it could be balancing. it no longer has that either, because the liquidity is not the right spot. scarlet: you're looking at inflation. posts, there was a blog about the inflation rate last week. there was an intention for core inflation -- assumption for core inflation and backing out on the oil price. and it shows oil price going to

zero. is there any sentiment like that in the market? >> no such sentiment in the market or anything on the lines of negative interest rates, but you'll get somebody who will pay for it. there are times when producers pay for somebody to take away natural gas and oil, and that is when there is a bottleneck on production and you need to alleviate that. alix: good to see you. scarlet: and a check on shares of dupont. they are gaining. and a company is working with advisers to look into the merit of making a counter bid for dupont, which agreed to a merger with dow chemical back in december. we will cover this story and more, when we return. ♪

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♪ scarlet: "what'd you miss?" -- china's congress will meet this weekend in and they will address economic and environmental concerns. will there be more fiscal stimulus in their future? we have a preview. >> ahead of the political pageantry in beijing, policymakers have a balancing act. they will be looking to vote for -- looking to put forth policies -- and we also expect them to push forward structural reforms, in particular when it comes to overcapacity in steel and coal. the pollution has returned to

beijing, so the environmental and economic reasons are at the top of the agenda. overcapacity means a loss of jobs. up to 6 million jobs could be on the line when it comes to enterprises over the next three years. we will be watching for how the policymakers plan to deal with that. we know that recently they have taken a more accommodating stance when it comes to economic growth. we have had a surprise from earlier this week, the latest in an easing cycle. they have spoken about how these reforms are not going to be easy. it is essentially like taking a knife to the flesh. so we will be watching to see how far policymakers will go in terms of sacrificing midterm growth for longer-term rebalancing. and we will keep an eye on

rhetoric leading up to that. they have been talking about currency, they are trying to aim for more flexibility and to manage downward expectations for depreciation. they do not want the markets to panic every time that the currency depreciate against the dollar. is striking, the pollution and smog behind her. idea they encapsulate the of what they are trying to do, change the economy, but all you see is smog, which really stands for the industry at the end of the day. >> i covered the new york said and they did a joint conference in china this week and they are trying to step up communications and they think it is something that they will do in the future, maybe in new york next year. we could have a chance to go. scarlet: notable it is in new

york, not china. alix: at the u.n., there is a theory, that there is a shortage yen and buying it off. scarlet: and we are looking at the trade of the decade. firms from blackrock and goldman sachs are in the bull camp. are these strategic? meb sabr. is when it comes to valuation, you look at the case ratio. what does it tell you about the emerging markets and their attractiveness? >> we want them to agree. i must also the same thing, the u.s. is expensive, not terrible. foreign developed is reasonably cheap. and emerging markets are really cheap. the average ratio is around 17,

the u.s. is around 24 and emerging markets are in the low teens. developed,t, some but mostly underdeveloped, you have these ratios that over the next few years could get you in the double-digit returns. this is a great time to be allocated to these countries. scarlet: in the next 10 years, but they will move higher at different rates, will they? >> this is why you can never predict the valuation. i would've said last year that they would be cheap as well, but then they declined. if you look at brazil, it is already up 20% year to date, one of the cheapest markets in the world. you never know exactly what the catalyst is when the markets go up. but that is the margin of safety you have when you buy the cheap ones. and avoiding the expensive ones.

whether it happens in 2016, 2017, 2001, either way, you want to be much more heavy weighted in the cheap countries. >> when markets were in turmoil a few weeks ago and we had a , youof potential recession know, how does that scenario play out for emerging markets if that sort of thing would come back? >> hopefully the emerging markets will diverge, you never know. if the u.s. goes into recession, a good chance it could bring down those markets and they will get even cheaper. we lost a fund based on this, focusing on the cheapest stocks, we launched a global value bond thinking that the sovereign bonds are equally interesting to play. we think that allocating to both

-- but if the u.s. catches cold, a good chance that the emerging markets are not going to be able to wade through it with note -- no damage. but as an investor, this is an awesome place to be. alix: if you look at emerging markets and the spread with treasuries, they are at the highest level since 2009, speaking to the idea of how cheap and how much yield you are getting from these guys. >> what surprises people and they often do not know, that foreign bonds are the largest asset class in the world. in emerging markets have really grown up. so the sovereigns back in the day were a lot riskier. if you look at a basket of emerging sovereigns now, you get 6% and this is around investment grade quality. .ou could be triple or above that is equivalent of nice corporates in the u.s.

this is a great place to be allocating, traditionally widespread to treasuries. scarlet: earlier this week, we spoke with investors about whether emerging markets are worth buying. one said that he was not convinced that they are attractive enough and one reason, the estimates are not realistic. >> if you look at price-earnings ratios, you get a different picture. what has been happening over the last five years, analysts have been overoptimistic about much of the emerging equity markets. andy is a downgrading of earnings and revisions. scarlet: the idea is, they could get cheaper because not as much pessimism is in there as it should be. >> my audio is off. alix: can you hear me? it looks like we lost him for a minute, but we will get him back.

it does not necessarily mean it is a good value, is what he was saying. scarlet: you do not want to go into early and potentially miss out. or get money stuck in a dead end. another point of view, you can be worried about the long-term, there is worry there. but it seems stabilized for now and commodities seem like they found a bottom. blackrock says it is worth looking at them as a tactical by. -- buy. >> the positive, they have the ability to return on the short-term. the balance sheets of the public sector are pristine and today have the ability to control capital. alix: interestingly, it could be better on the short-term, but the longer-term is where it gets really difficult. so you are back with us, the question really is, if there is pessimism to be found in the

emerging markets, could these? get even cheaper -- these get even cheaper? >> yes, and we should celebrate that, the opportunity to buy them down 50%. one quote says, investing is the only place where when things are on sale, everybody runs out of the store. i would relish the opportunity to buy these. but a lot of the single-digit ratio countries, you may not get the opportunity to buy these again for a long time. scarlet: for the emerging markets, we talked about the valuations making them attractive, double over the next 10 years at different rates. which countries do you like the best right now? >> research affiliates did a study that we did as well, when you see these ratios go down around 10, these countries like a lot ofrazil, like

emerging and eastern european countries and a few of the asian and latin american countries. they are getting into the bucket as well. a lot to choose from. russia and brazil are among the cheapest in the world. scarlet: thank you. apologies for the technical difficulties. alix: coming up, a strategic high-yield default set to become the new normal. guest says yes. ♪

♪ scarlet: it is time for the business flash. canada pension plan investment board and saudi and cultural

investment are lead bidders for the minority stake in an agricultural unicredit this is according to people with knowledge of the matter. companies are providing final bids this month. and glencore is open to more than one party. a senior independent nonexecutive director at glencore -- alix: and the sale of intellectual property is set to attract bids, on the list, and the international, and others. that is according to people familiar with the matter. the company is working to sell the business which is worth $3 billion. and breaking, basf is considering a counter bid for dupont. they are working with advisors and financial bankers to examine the merits of a bid. this is according to people with

knowledge of the matter. if you're a member, dupont agreed to a merger with dow chemical back in december. ♪ scarlet: that is bloomberg business flash. alix: and flows of money to high-yield bonds reached their highest number in a decade. our next guest says that default will hit 6% this year. roberts,s is scott from atlanta. scott, why are we going to see more defaults, especially why -- while oil will rally? >> a couple of points, long-term defaults are about 4% each year. last year, we were around 2%. this year, maybe around 5% had one thing that is changing, we think companies will do a strategic default, where they may have 12-18 months of

liquidity, but then they will do they think.han they may decide to default early, recut the capital, then ride the rebound 18 months out. scarlet: that is what we can watch out for, but companies could be at risk -- they are in fund-raising mode. they raised cash to ride out the downturn. what does that do to the sector's recovery or the push to preemptively default? --if i may clarify, those there are those that can raise capital and those that cannot. -- with veryily little market caps. we think that larger companies with access to markets in the tune of $10 billion a day, they

are subtly adding to the balance -- simply adding to the balance sheets. two different worlds. alix: part of the big controversy with high yield, is in not predictive of what we will see in the u.s. economy? are we going to see a u.s. recession when you take a look at the high-yield market. >> what is going on outside of the energy space, what iss the outlook for defaults there? >> overall, these are pricing around a percent for the default rate -- 8% for the default rate in the market. overall, the commodities around 2.5%. we see a lot of good things in sectors that are facing the strong u.s. consumer, places like automotive and cable and food and beverage. there is value other away from the commodity space. scarlet: let's take a look at the chart. high-yield bond spreads, the

blue out earlier this year, but they have come back down. when you see where they have come in, is this an actual improvement? >> there are two things, the inflow coming from a change in sentiment. if you think that -- back, there was a low in the s&p 500 and we saw a change in risk appetite. this was there the first part of the year, to a massive rally. what we have seen the last couple of weeks, a very strong case into the market -- pace into the market. we do not think that that is sustainable. we do think that the market will grind tighter as people really reshape the use of growth this year. alix: something interesting on a tripleeld market, the c's and a double b's.

the idea of who is right? either the investor moves down, or you will see double b's give up and investors exit the market . what do you think? >> if you look at the triple c market, 12-13% of the market, they usually trade around 19%. it includes the distress market, so those really get blown out. if you look at the safer part, the double b's. and are just inside 16% this is part of a high-yield. alix: thank you. you have all day to hear about the headlines, but we'll have today's three charts in report. ♪

♪ alix: "what'd you miss?" -- three charts in the u.s. job reports that go outside the headline numbers. was madeot of drama about the decline we saw an hourly earnings, why should we take that with a grain of salt? >> the decline may have been due to a calendar quirk this month. it is based on the day of the 12th falls on. the 12th is is, on a friday and it means the ath, or pay period, falls on monday.

they do not pay people that week. so what you see, when it is on a friday, it we typically have the lowest average monthly earnings. scarlet: that is a change for this past february. >> exactly. it seems like maybe we should expect that to reverse next month. scarlet: do not conclude too much from this. sales jobs also caught your eye, the number of people employed in sales, why is that? >> the number of people employed in sales has been flat over the last several years, as you can see. highestary, we got the number of people working in sales since 2010. it seems like a good sign, why else would you hire salespeople unless you think they can sell products. alix: it is not even the holiday season. does it matter the quality of the job? >> if you look at the sales

data, it is not break down, we do not do a lot of information bed but we did get information about total full-time jobs, part-time jobs. there is encouraging stuff in the report. certainlygreat, but nothing to worry about. we are not looking at the recession fears. scarlet: that is what everybody is coming back to. this is a goldilocks report. recessionthink that is off the table. alix: and retirement rates slowing, what is that? >> this is taken from the labor force data that they report. it shows a number of people, the percentage of people with jobs every month that leave the labor force. it shows people retiring. we have baby boomers retiring right now and it can see that the so-called retirement rates surged six months ago, not it

has been moderated. so that is something to watch. if it goes down a lot more, it could say just that people are not feeling as secure that they can retire when they want to, that they need to stay put in jobs for a wild. scarlet: i am surprised they do not go up. anyway, a very, the bonuses. alix: andy would assume that if people are leaving at a retirement age, they feel better about pensions, the retirement funds, that would be difficult to understand if we had volatility in the market. you see the volatility, you do not want to leave the job because you are scared about what will happen in the 401(k). >> and we see that in the surveys. they asked questions about the probability of adequate retirement. how many people expect to feel like they can retire comfortably. those numbers have been bouncing around a lot with the market volatility we have seen.

so that could be a factor at work. scarlet: we are going into the week and what is the one data point you will be looking out over the next 10 days? >> that is a good question. we will have a lot more manufacturing data, consumer data will be important to watch, it looks like manufacturing could be bottoming. we will definitely want to see how that plays out. the manufacturing jobs picture was not great today, so any sign of what is happening will be important to watch. scarlet: looking at the function on the bloomberg, there is not a lot of data coming up for the first part of the week to coincide with bloomberg parody of have market conditions index at 10:00 a.m., do we use that? >> that is a summary of the job report. the week after the report, we have that data. alix: we're going to talk about

what else you need to know to gear up for the next week, we will be right back. ♪

scarlet: "what'd you miss?", don't miss this. china will be releasing the 2016 gdp. the national people's congress will take place tonight and tomorrow. this is a political number, there is a widening gap between the official figure and what everybody believes it is. alix: and in china, we will get foreign reserves released on monday. we want to see how much they are taking out to support the market. >> and bringing it back to the u.s., we will have credit data for january on monday.

that will be interesting to see if the acceleration that we saw in the last few months keeps going. alix: matt, thank you for joining us. scarlet: john: with all due respect

dueld trump -- with all respect to donald trump, this may not be the best idea. mark: our daily donald fix and the republican party's big swinging ego. mitt romney stops by our studio hisart of day two of "anybody but trump" tour. today he went on a new