>> from bloomberg world headquarters in new york, good friday afternoon, i'm scarlet fu, energy stocks of struggle mightily but david news hazard -- neuhauser says there is value. oil prices moving higher today, has the market finally hit bottom? goldman says so. yahoo! ceo knows she is in trouble but doing whatever she can to keep her job, even as it changes hands. get a snapshot of today's market activity. let's head to julie hyman where she is looking at investors having second thoughts about their initial reactions to the ecb moves. julie: an interesting 36 hours as investors have a digestion of the ecb stimulus which initially , a lot of investors were skeptical about, maybe it would

not do what the ecb wanted it to do was one of the comments i saw yesterday. the old -- the other question was about mario draghi's comment that this would be the last interest rate cut but skepticism about that. is it all that the ecb will do? it looks like there is a more bullish read that is happen in the u.s. and in europe. the rally to date means that for the year to date, major averages have trimmed their losses considerably, particularly the s&p and the dow, now let -- now doubtless than 2% on the year. of -- forss than 2% the year. signs ise positive counterintuitively been the losses in the high-yield. , this looks at the s&p 500 total return index in blue. the bank of america-high-yield index and he is pointing out

that of the last four times we saw high yields fall on an annual basis, stocks then rallied the following year. this looks back at the prior instances when this happened and and stocks rallied. that is one of the reasons he is looking forward to be bullish. we will see if the run has more to go. isone factor everyone looking at is oil prices climbing to a 2016 high, the bullish comments from the iea. >> february 11 was the low price we saw, we have seen again about 45% since then. ati, up again today on the ie comments. more risk on attitude in the market. that means the so-called safety trade is not doing as well. continued selling of treasuries as the 10 year gets lesser to 2%, gold is lower and the dollar

strengthening versus the japanese yen. the trait in the euro. -- traded in the euro. it is unchanged. we were seeing a decline earlier which makes sense given the flip-flopping sentiment with what the ecb said yesterday. >> maybe it will change in a half hour. thank you. let's check in on the bloomberg first word news. >> ben carson says he and donald ,rump have buried the hatchet the former republican presidential candidate joined donald trump in palm beach, florida to announce his endorsement of his former rival. carson called donald trump an intelligent who cares deeply about the united states. donald trump says carson will be involved in education and health issues. donald trump: we are at the bottom worldwide and yet spend the most money. not even close. second does not exist. he will get involved in that and

very much involved in health care where he is an expert. >> carson dropped out of the presidential race after disappointing results in super tuesday. hillary clinton is getting some support from a few powerful women in her latest ad, kerry starngton and viola davis in tv shows produced by someone featured in a spot, it was directed by tony goldman who plays resident fitzgerald grant on "scandal."president obama will appear at the southwest -- out by southwest festival in austin, texas, the first sitting president to attend and will participate in a conversation with evan smith of the texas tribune. people's -- he will headline democratic fundraisers in austin. let's have set records in northern louisiana and today might not be different. more rain could cause levees to run over their banks, three people have died in louisiana

during two days of severe weather. the governor is expected to tour damaged areas today, weather permitting. news 24 hours a day powered by our 2400 journalist and more than 100 80 news bureaus around the world -- 150 news bureaus around the world. >> some may consider it the trait of the year, short valiant, the controversial drug maker has plummeted amid investigations about its business practices. the mining giant recovering from a 70% route last year is up over 50% over the past one year. our next guest called both back in november. the founder and managing director at livermore partners, visiting us here in new york. valiantabout the short trade, are you still in this position? themhave been following

for a long time, an interesting company with an asset base and strong management. we had the commodity rally over the past several years and come october is when you started to .ee stress in the sector when the stock started to get on the hundred tens we look at it as an investment. we thought the intrinsic value was dramatically lower than the market was perceiving. thekey to that was on friday, i was tempted to take a position and it was the weekend. i said let's wait for next week. on monday, an analyst came out report saying sell, it could be worthless under these different scenarios. when you start to see analysts say things like that, and the stock was on 30% that day. i looked at it and we made an instinctual call which was we

wanted to get long the stock. >> interesting it had a contrarian effect. he is a senior director at glencore. the other side, too short -- to short valeant. you had some analysts talking about it and raising concerns about the potential fire. let's listen to what he said in october. >> based upon public information on the public available information, i can show share ownership of -- of something and show an invoice going from one entity to the next, that is what we call a lot of smoke. if you do not want to say there is fire, there was smoke with valeant last week and it keeps increasing on a daily basis. >> the smoke increases on a daily basis, would you say the

smoke has cleared or is there a a lot of concern that needs to be unpacked? >> both of these situations were unique. you had a company that could do no wrong for a long time, that had a strong business model, earnings momentum. on the other hand, glencore, opposite, the market was black for them. they had debt. you had one model that was breaking down. meeting the business model -- meaning the business model to provide the growth was gone. that is a true momentum shift. a number of investors failed to act, they call people back is an entry point and you would receive the re-rate. thatthey fail to realize failed to realize is becoming saddled themselves with debt and

you could argue the valuation they paid. when you see the issues at hand, on the political front and on the corporate balance sheet, which has a lot of debt. you look at it more and you saw some interesting research which unlocked pandora's box further. you can look at the valuation as it can get fairly dire. at this time, i will say, they are at an inflection point. it will take a long time for the company to rebound. mr. ackman is in it and the goal is to recalibrate the company. scarlet: they might be bouncing along for a while. >> there could be more shoes to drop. it could go back to the upside. we still have a nominal short position. there is a lot of headwinds for the company. that is our view. scarlet: i know you have been

more -- have been looking at industry, industrials, and financials, recently you have taken a position in an entertainment company that is listed in the u.k. but is based in canada. why did you go outside of your comfort zone? >> i will look anywhere. a livermore partners, i'm not afraid of getting out of our sandbox. a lot of people in the u.s. will stay and look at usaid assets of we invest in canada, i like canada. we look at latin america and europe. even africa to some extent. investors,ol of your you want to calculate that. with entertainment, we are long lions gate which is a well run company. we are looking at entertainment one which suffered a drop in the share price over the last year.

they were not generating any free cash flow which caught my eye. we took a stake in mid-january. this is after the canadian pension plan took a large stake in the company in november. the view was, push for change on activist front, contacted the board and management team and said need to pull back on your growth strategy, focus more organically and on reducing your gearing and fortunately -- potentially look to buy back shares to support equity. reactionwhat was there initially and now? >> to push me off initially. fortunately, it went public. i do not know if they truly get it. the equities are about what we paid for it today, i think it is substantially discounted to the intrinsic value of the business, they are very attractive, a content provider such as others.

it is uniquely positioned but they have work to do. scarlet: thank you for joining us, the founder and managing director at livermore orders in chicago. come back again. the chairman of bloomberg lp is a nonexecutive director at glencore. up, will mario draghi's plan to reinvigorate the european region work, we will put the question to a cheap economist. the international energy agency's may -- say oil may have bottomed. we talk to the cio of global credit at pimco who says it is the most important development in global markets this year, nevermind this week. ♪

scarlet: we have breaking news. standard & poor's cutting a a+.ng to a from they reflect the view that the capital management expected to remain tighter than its peers. the outlook is stable in the short-term credit rating has been affirmed. the counterpart of rating cut to a. we will watch this one. let's head to the markets desk. julie: you were talking about valeant. the stock is seeing a bounce back after the report that we were talking about, the employees were reassured, saying there was no more to drop. same-day same day rcb cutting its 2016 estimates for the company, citing currency headwinds and the week of take -- the female libido medication

that has not taken hold for the company. analysts say we believe the market is now anticipating lower guidance. the shares are bouncing back today. upgrading from overweight to underweight, citing the bold cost-cutting programs to address the threat from right sharing technology, z recognizes the threat and opportunity from right sharing technology, shares surging by 11%. the underwater drillers, after goldman sachs upgraded to of them, smc technologies, a by 12%. analysts -- up by 12%, analysts say there will be a pickup for orders because of trees in 2017. that could be good news.

we heard from the iea about a central bottom in oil prices. that would not hurt. scarlet: we will talk about the iea and those calls. the ecb's meeting yesterday left investors worried about how mario draghi's -- successful's mario draghi -- mario draghi is. of not arepresentative panic money but a tailored approach to the problems facing europe. the issue is being able to get credit flowing through the banking system to borrowers. that is essential to get europe back on track. he has done that by matching the negative deposit rates. to try to promote the flow through of credit to the banking system to the borrowers. that is what is necessary to get europe growing.

we all know and have always said that he cannot do it alone. he needs the assistance of the fiscal policies. >> i want to show you a quote by a columnist, saying that without fiscal measures for the countries that cannot afford to nudge public spending, he is firing blanks and throwing big money after bad, you do not believe that, you think he is stopped working on euro-dollar and working on other businesses? >> always a problem of the banking system in europe, there is a lot of work to be done. the mandate is to get to 2%, he knows he cannot do it off the back of the euro. that is not something effective. he has to use the other set of instruments he has in order to promote the flow of credit. he is not firing blanks. look at the markets. he also is not the only one who should be holding the gun. is mario draghi's

theory sustainable? i saw more than anything yesterday was the dissent of germany and the netherlands, i believe the vote was 19-2. this says a lot about core europe? >> you could tell in advance they would defend from this type of action by draghi. that is no news. on the other hand, they have to go along with the consensus and i think we are seeing a growing consensus within the rest of europe that the only way we will get europe back on track to grow consistent with its potential and what it needs to do to serve its citizens better, we have to have a concerted effort across the board, not just with buttory -- monetary policy, with fiscal policy, the message is becoming clearer in brussels and i would hope there would be a little bit more facilitation

of fiscal spending out of europe. tom: the best article i have seen is just black -- jeff black 's article on what happened. he emphasizes, i noticed the word horizon. mario draghi has a verizon to work with. -- has a horizon to work with. how long is that, how far away is it? >> to get to a decent rate of growth? tom: two years, five years, 10 years? >> a two-year horizon, a three-year horizon is not unreasonable. about the extent to which policy makers can act and look like they are acting in concert. expectations are important and to the extent that you get policymakers speaking with one voice, saying they will take action in a concerted way. this leads to the private sector taking on board the belief that

they think the policymakers will do this. the issue is not so much the horizon for the private sector to react, it is how long will it take the policymakers to act as a collective whole. scarlet: that was catherine man speaking in london. out of the iea, oil production outside opec will continue to decline. does it mean crude prices will be on the recovery? ♪

♪ scarlet: this is bloomberg markets, i am to go it who. -- i am scarlet fu. the iea says oil may have bottomed, disruptions inside opec is eroding the surplus. are on the bloomberg first word desk which means you get lots of headlines. always looking at research.

a shift with a lot more proclamations that oil has bottomed. >> people are talking about it. be iea saying there could light at the end of a long dark tunnel. goldman says price is between -- would be between $20 and $40 and next between $25 and $45. people have been saying that oil production is starting to rebound, u.s. production is dropping, production drops in other places like nigeria. a production freeze and saudi arabia and russia and opec is trying to figure out their game. we are seeing what could be. prices have been going up for four straight weeks. , what we saw, a 12 year low last month, maybe the bottom. scarlet: mark it on your calendar. when you see the headlines

across on production freezes, whether out of opec or coming from the russians, energy minister or from iran, how much of it do you leave and how much of it is noise? a lot of redeker -- a lot of rhetoric and what the fed should or should not do? >> we saw volatility in prices, yesterday there was a small uncertainty whether iran would join the meeting because russia has spoken about it and saudi arabia has spoken about it. iran is just coming back. no one knows what they want to do. do they want to increase production, will they and what will they do going forward? that peopleng parts watch every single headline. there is so much volatility. says maybe we have bottomed. scarlet: goldman sachs says they

see green shoots. talking about a supply. >> there is a lot of floating u.s., hearinge about the storage facilities. becoming an issue. , until thereeeing is a rebalance in the market, we will continue to see volatility. scarlet: thank you. she is with first word, covering the energy industry. coming up, the policy move heard around the world, what the bond buying program means for financial markets. ♪

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♪ bloomberg world headquarters in new york, this is bloomberg markets. i am scarlet fu. let's start with the headlines. mark crumpton has those from our news desk. mark: apple is waiting for a one-week delay before filing its response to the u.s. justice department. the company says the controversial case in california over unlocking one of the phones of the san bernardino shooters should be filed -- should be argued before apple files its case in brooklyn. former republican presence of candidate ben carson is throwing his support behind front runner donald trump, speaking in palm beach, florida this morning, carson called trump and intelligent man. the two had that

over the hatchet disputes. republicans in the region islands caucused into the night. the winner was no one. the party chairman says all nine delegates from the territory will go to the republican national convention as delegates. that makes them free agents, in a sense, free to support the candidate of their choice. former first lady nancy reagan husbandburied today her at the ronald reagan library in simi valley, california. rain is predicted, and intent .as been erected over the site mrs. reagan was 94 years old when she died on sunday. global news 24 hours a day, powered by are 2400 journalists in more than 150 news bureaus around the world. i am mark crumpton.

analysts have argued that the european central bank monetary policies have failed to credit in effect on recent months. what is the impact of the bond buying program? bloomberg asked about the move and its effect on credit spreads. >> this is huge. this is one of the most important developments in global markets this year. central banks are realizing the limitation of negative rates. we are transitioning to a world where we see less interest rate easing. this is actually huge. the ecb could literally by overtime up to 50% or more of the primary market, and increase toir stocks of holdings 10%-20% of the corporate bond

market over the next year. this will be very positive for credit spreads. globally, this will cause capital to flow into the u.s. market and continue to cause credit spreads around the world to tighten. >> the first point, what happened yesterday? it took a while to get it. take to sink it in? part two, you mentioned u.s. credit markets. how will develop? >> it took a while. in fact, i was up all night going through the details of the ltro, and what this actually means. what it means for credit is two things. one, the banks are going to benefit from the ltro because they will be able to borrow, and use their collateral from the ecb directly, which will compress their funding cost. this is very positive for banks. the second thing, for

nonfinancial credit in europe, $500 is basically about a the ecbllion market, will start buying their bonds. the flow through effects to the world are going to be huge. why is that? 75% of the japanese government bond market has negative yields. hasof the german market negative yields. where will these investors go? they will go into global credit markets. >> since you have looked at the so carefully, is it correct that the loans that the banks have to make to take advantage of the ltro's have to be european-based? >> yes. the way it works basically is they have to pledge high quality collateral to the ecb. basically, they can now borrow from the ecb, pledging

collateral. as a prerequisite, they have to make those loans. whether this happens or not if the question. the real benefit to the economy may be less limited. in terms of the impact for markets, it is significant. basically the ecb is going to start taking out supplies and come producing assets to the world. institutions, countries all over the world that need and come will compete with the ecb for the bonds. >> you stayed up all night parsing through the details. doesn't change your strategy? you woke up today, and what will you do different? >> we have been positive on the credit markets for the last six months. in fact, we wrote several pieces. i came out and said this is a one in four or five your opportunity. you can earn returns with half

or a third of the volatility. this reinforces what was already at pimco a very positive view. >> since you are already positive on credit, are you going to kill it this month in terms of performance s? >> i think the technicals will continue to be very powerful. there have also been three recent developments, which i think are also important, which investors may be underestimating phi and has near-term prevented may be underestimating. near-term prevented declines. number two, look at what is inflation in the united states. inflation is up 3%. oil prices are rising. that is very positive. the third thing is the credit markets significantly

overestimated the probability of u.s. recession. credit markets were pricing in 30%-40%. the u.s. economy is healthy, growing got 2%. those are three additional factors by think the market is not paying enough attention to. , had to goe myself over the statement again and again to actually let it sink in -- was i reading what i thought i was reading, that you could get paid to lend. for years, mario draghi will not , beyond 2019, what does that say about the underlying economy in the eurozone? up an amazing point. there are limits to central banks. central banks around the world cannot force wages to go higher in a world where nominal gdp trends are coming down in

emerging markets. central bank effectiveness has diminished. we need the private sector to engage. that is a fact. clearly, there are limits to central banks. >> many investors have been sitting in treasuries, hiding out, waiting to see what the fed will do next. what is your prediction? >> we think the fed is probably going to raise rates one or two times this year. it could be more. particularly if we start to see inflation trend higher with oil. i think there is an important development though with china. you're seeing china stabilized near term, and you are also seeing the limits of monetary policy. that means the basically the currency, the u.s. dollar, may not appreciate as much as it has in the past. a large to give the fed room to go. there is a saying that china is

u.s.ectly influencing monetary policy. that is a fact. more stability in china and a stable dollar will allow the fed to go. we do think inflation will trend towards 2% by the end of the year. we think we just will rise. the market may be underestimating the fact that the u.s. economy is doing pretty well, and the fed is probably going to go this year. carlet: that was mark kiesel of pimco. deutsche bank wants to see an industrywide trading drop this year. herssa mayer hopes to keep job. a sneak week of her interview with charlie rose. plus, it has been a wild six months for valeant. details from a private meeting. ♪

♪ you are watching bloomberg. i am scarlet fu. here is what we are watching. a warning from jewis deutsche bank. is the worst over four oil prices? the iea says market forces are working their magic. and arrest warrant has been issued for brazil's former president lula. we begin with more bad news for investment banks. is forecasting the revenue for the industry will shrink again this year. in a statement, the bank says

the clients are refraining from doing deals. it would mark the fourth straight annual decline for the industry. meanwhile, it has cut its bonus pool by 11%. to show just how widespread troubles are, bank of america is cutting back in asia. it has fired 15 senior bankers. according to people familiar with the matter, they also cut junior positions and back-office jobs. oil prices may have bottomed out . that is according to the international energy agency. that it willcts of wrote the global oil surplus, but it will take time. sinceices have risen 15% january. that is welcome news to oil-producing companies like norway. minister tells

bloomberg that she is taking a wait-and-see approach. >> norway was still remain an gasrtant oil and producer for years to come. we need to invest in other sectors of our economy. we need to make sure we have growth in other parts of the economy. break for bpg rake for oil spill. of mexico they have already paid up $55 million in damages for thie spill. the latest pressure on dilma herseff has to do with ula.ecessor, lind it is time now for bloomberg quick take where we provide

context and background on issues of interest. today's topics, canada's next p step. times are tough for the economy, and the new prime minister is promising to spend into deficits to turn things around. the bank of canada this week kept interest rates unchanged. policymakers remain optimistic saying the economy remains on track for recovery. there are headwinds. the canadian dollar is still under pressure and the central bank is reluctant to provide stimulus. the prime minister is hinting that he will expand his pledge to include deficit spending, on pace for $30 billion. canada's debt to gdp ratio would .till be the lowest in the g7 that is not enough for canadians

. trudeau probably did not have merits with president obama. for years, the president has been pushing for infrastructure spending. it may not be a coincidence that that -- with the sense for more, visit bloomberg.com. .lobal stocks abigail doolittle at the nasdaq with the latest. we have the nasdaq up 1.4%. if the index can close higher, we will have the fourth weekly gain in a row. a bit precarious. let's see how the rest of the day trades out. one stock trading decidedly higher. salon, after it

beat fourth-quarter estimates. salon, after it something that could perhaps put the record high at risk. scarlet: talk about the negative side of the ledger. abigail: it is hard to find one, , a retailer. they gave a weak sales outlook for the first quarter. there are some tell whence that could help the stock. the bright spot could be the opportunity to go to the website a ferrari.erran this could include matt miller, a well-known car enthusiast. scarlet: i'm sure he is on it now. thank you. investors,ure from

yahoo! ceo marissa mayer has promised to do what is best for shareholders, as it company alibaba.ts stake in charlie rose interviews her about her role in yahoo! overall. challenge is our growth to begin with. there only three u.s. companies that had more than $4 billion of digital advertising in a year. basically us, google, and facebook. that makes it really hard to generate growth. users is anew rounding error. charlie: you have had that many users for a long time. one billiond the

mark and early 2014. we have been growing our abusers , so we round, but it is action higher than that. charlie: why do people come to yahoo!? >> our business is around and entertaining users. it really is a digital network. there are some people who come from mail, and they stay to do a search, or read a news article. there are some people who come for sports, and may search, or do e-mail. searches around allowing people to do discovery. mail, people come and check aeir mail dozens of times day. news is our voice and our differentiation. it allows us to personalize. charlie: some of the things you

have downsized include active scenes. there have been a number of people you have brought it to provide the kind of new space for the company. they also raise this question which is fundamental. they say, look at these core assets. if you take the alibaba state out of it, the value is very limited, very small. >> i don't think the value is small. the way the market is valued them today -- charlie: it is almost minimum. the market is saying that those core businesses are not worth much. >> this is part of why we are considering digital alternatives. we believe there is more value there that can be realized. charlie: to think you will be running the company a year from now? >> i think, again, i would love to. i would love to be running yahoo!. we have a three-year strategic plan.

i think it is about our users and our employees. what is happening with all them. i certainly hope that our services are here and year from now, and run even better. that should easily be the outcome. we have a terrific team at yahoo!. continue to do the good work. we will look all possible strategic alternatives. i'm confident we will find the right one. scarlet: for the full interview with marissa mayer, turned into charlie rose tonight. coming up, valeant ceo is back from medical lead. -- medical leave. ♪

♪ pharmaceutical ceo taking baby steps. he is learning to walk again after about of pneumonia that left him hospitalized or months.

.e is reassuring top investors around?turning valeant before we get to the blueprint, there was lots of speculation about the outlook. it was his health? >> he thought he had the flu. his long square full of fluid. rumorsally addressed that it might have been something else -- drug rehab, a he hado the caribbean -- pneumonia. scarlet: valeant is known for taking on a lot of debt. he promises to address that? are you going bankrupt, no,

he said that is not true. he put on very positive light about what was happening. scarlet: he has the full support of the board? >> you have the support of the board until you don't. yes, he is ceo right now. yes, he is ceo right now. scarlet: what pressure is he putting on pearson, if any? >> one thing i can said, on march 8, maybe they will sell off the same as i unit, and they said, no. scarlet: final question. why hasn't he spoken publicly

since his return? >> that is the big question. why is he saying these things internally, and has not come out in the public. overs raised questions whether there is improper disclosure. they are going to present marchosing ons march 10 -- 15. scarlet: thank you so much. you can find bob story on bloomberg.com. hour, ap in the next warning sign to investors. ♪

scarlet: it is 1:00 in new york and 2:00 in hong kong. welcome to "bloomberg markets." ♪

scarlet: from bloomberg world headquarters in new york, good afternoon. i am scarlet fu. here's what we are watching this hour. stocks surging today, but technicals could tell us the rally is in the late innings and caution is keey. when will oil prices and stock markets go their separate ways? what oils influence will be and what we will start to see? it did take a day for global markets to react positively to the ecb big surprise. what mohamed el-erian may have said about mario draghi firing his last bullet and it may turn out to be a dud. we want to head over to the markets desk julie hyman has been tracking the moves. this rally has gone on uninterrupted today. julie: things did not change although you never know in this market. we are seeing stocks rise to the highs of the session.

the s&p and the nasdaq neck and that with a game of a 1.2% each. if you look at what is driving this game, energy is the best performing group. it is dancing around today up more than 2%. financials also doing very well today. financials very heavily weighted with in the s&p 500. that is helping matters. the other heavily weighted group, information technology, also gaining on the day. all this means that the s&p in the dow in particular have pared their losses in the year to less than 2%. the s&p is up 10% from its low of the year on february 11. the nasdaq has been the laggard. we have seen volatility in tech stocks higher than the broader s&p 500 and we have seen a lot of trepidation around that group . that has not entirely dissipated. in terms of what is driving energy stocks higher, we have watched oil go up today. gold heading in the opposite direction in the more risk on

byenario, but crude oil 2% on the back of that iea, that we may have seen a bottom. scarlet: you ended there with gold. where does the stock rally lee bonds? julie: really high yields, at least on a relative basis. there approaching 10% on basis. we get all the stimulus from the ecb and we see more using there, the forecast for the u.s. tightening is going higher. here, ande bloomberg you have the probability of the rate increase at the meeting still very low. it is only 4% and that is what is being priced into interest rate futures. the only now have to go to july to get a more than 50% probability. it was not that long ago when we were seeing 50% anywhere going into 2017. and december, you're

looking at a 70% or more chance that we could see an increase in rates coming. scarlet: thanks so much, julie hyman. mark crumpton has the headlines from the news desk. -- marcoe's a twist rubio is telling his supporters in ohio that the best way to be donald trump is to vote for ohio governor john kasich. >> clearly, john kasich has a better chance of winning ohio than i do. concludes in ohio that voting for john kasich gives us the best chance to stop donald trump there, i anticipate that is what they will do. his: a k-6 spokesman says candidate is going to win in ohio without rubio's help, again just as he will lose florida without our help. is endorsingiew" president. cruz for they write that no politician is perfect and that ted cruz will find our endorsement with

friendly and ongoing criticism. the editors continue that ted cruz is "the republicans best chance for keeping the presidential nomination from going to someone with low character and worse principle." the center also getting the endorsement of and wagner. diplo deploymentg in brazil diagnosed was the cap with the zika virus. the cleveland browns have released quarterback johnny manziel after two troubling seasons. the 2012 heisman trophy winner started just eight games for the browns. last year, he had a lengthy stay in rehab, his future in the nfl is uncertain. he could sue face criminal charges in texas in connection with a domestic violence incident. day,l news 24 hours a

powered by our 2400 journalists and more than 150 news bureaus around the world. i'm mark crumpton. ago thisseven years week, the s&p 500 bottomed out, giving birth to today's bull market. names are hitting new 52-week highs, there are signs of the bull run is losing steam. joining us now is crisp around welcome back to you say this latest leg of the rally is -- joining us now is crisp below and. welcome back. you say this latest leg of the rally is leading us to this determination. are only four weeks off the february 11 low and we have had a lot of technical damage t. i'm not convinced that's repaired in four weeks of a rally. with the s&p back in the 2500 neighborhood, the best we can see is maybe 2050 or 2060 on this move.

i will give you examples on why we are unconvinced. scarlet: is this one of them? chris: exactly. we are looking at exceptional breath off the market low and we want to see in expansion in new 65 day highs. that has not been the case yet on this move . scarlet: were at a cap by that redline. chris: when 30% of the index makes a three month, your forward twelve-month returns are well above average. isrlet: that red dotted line that exactly. chris: we were only 17 days off the october 11 low and we are 20 days off the low right now. i don't think we have seen the extraordinary breath that we are looking for quite yet. scarlet: there should be some support from seasonality though. we are in march and typically you tend to see it till april. chris: technically speaking, 050 or 2060 represents

the upper band of this move . it's perhaps early to back away from this yet, but we know where the exit is. until we see what we are looking for, it's early to declare victory and say we are in the clear just yet. scarlet: what might be the catalyst? what asset classes are you looking at to give us that leading indicator? are onendustrials factor cyclically important that of acted better over the last eight weeks on our radar. something that concerns us is all the former leaders -- amazon, mastercard, visa, netflix -- are not acting as well as they have opened last couple of years on this recent rally. scarlet: some momentum names. chris: the same stocks that we all knew very well last year have started to deteriorate on this move. i want to be mindful of that ./ take jetblue or disney or visa

or mastercard. these were big-time leadership stocks over the last five years that do not show the same type of returns right now. scarlet: in the meantime, you want to be more exposed to defensive names. companies are less tied to economic swings. chris: we like phillip morris coming here a lot. kimberly-clark, cisco, big cap consumer staple names. coke is one of our favorite names in the entire market that broke out of a 30 year base. there is something to be said for the more defensive names and have some guilt and operated well in this apartment. scarlet: one thing you did highlight as a company that might be honorable as general dynamics. dan clifton, your colleague in the washington office, has talked about how i donald trump presidency could lead to benefits for the defense sector. why are you negative on general dynamics? chris: what a look at lockheed or northrup, four out of five still act well. general dynamics is the exception.

for whatever reason, another one of those leadership stocks that has really not participated in this rally to the extent we feel comfortable with. it is of the four or five big ones the one that we would back away from here. scarlet: let's go to oil prices because you wrote another note focusing on commodities. you may do, that the oil rally that we have seen off of those on february 11 is starting to fade. chris: if you put your thumb around $40 on the oil chart you'll get the high on this rally within a dollar or two . we are four weeks off a low following a 60% decline coul it take. it takes time to fix that damage. we are early in the repair process. we will test $30 or $32 the next few months and i would be skeptical of chasing the move. one of the commodity turns we are more impressed with is gold. we start talking about this in november and december. i think the the move there may

be the early innings of a trend change. the rate change on goals is the best we have seen in about a decade. momentum searches also lead trend changes. we are in the early innings of that happening here with gold. scarlet: we are showing the chart right now with oil approaching resistance. it is similar to oil and no looking at the 50 day moving average. the 200 day moving averages the green lantern the goldeline. the golden cross happened a few weeks ago. chris: when we talk about moving average crosses, we are talking about trend changes and we are in the early trend change. gold hung in there. old was early to bottom and has been early to turn here. it consolidates for a few more weeks and ultimately goes higher. scarlet: very quickly, your comment on 10 year yield. chris: i think the best we are going to see here is to 15.

with global yields everywhere still quite low, it is hard for us to want to get too excited. i think yields are cap out there. scarlet: thanks so much. one joining us. what can we learn from iron ores crazy week that no one else is talking about? our metals analyst has the details. when will oil prices in u.s. stock prices decouple? a strategists will give us his best investment. we will hear from mohamed el-erian's about the latest ecb moves and whether it was too little or too late. ♪

scarlet: this is "bloomberg

markets." it is time now for our metals bolton. julie hyman has all the details from the market desk. julie: we are talking copper today. it is set to break a three-week winning streak. it is up 1% today as we have been talking about a risk on environment in the markets and optimism that the ecb stimulus will help globally the economy and potentially the demand for copper as well. if you look at copper demand in china, you might have a problem. this would be the world biggest market/ copper stockpiles have doubled in shanghai and that does raise doubts about demand for physical copper in china. you see the year-to-date increase in copper supply in shanghai. look at your today at the performance of and you have actually seen a rebound here of about 5%.

it's positive on the year unlike other assets we have watched. this is more risk on asset that has benefited a little bit more. peruvian athed the the high for the year. you can see the dollar falling versus the peruvian currency. this is also a country that is quite dependent on copper, so that is why we have been watching it. 's biggest export is copper and that is why we see the peruvian currency game. we want to take a look the miners year-to-date as we round copper tour. with the exception of southern copper, many of the miners have outpaced the gains in the underlying metals. they have also dropped more than underlying metals coming into this year. makes sense, right? scarlet: julie hyman, thanks so much. we will stick with metals because it has been a wild week for iron ore prices.

you have to wonder what a metals rally earlier this week justified. and to bring in ken hoffman there is a lot of confusion over whether iron ore is extremely liquid or illiquid market. which is it? ken: iron ore is unbelievably liquid in china. what we really learn this week that i do not think people are talking about is that iron ore is really a chinese traded commodity. we are seeing more and more that china is the world's biggest buyer of commodities, but they are becoming the world biggest traitor of commodities. the important thing to note here is that chinese markets are far more volatile than that of western markets. for example, the shanghai some numbers,ran that is 2.5 times more volatile. iron ore tends to the 3-4 times more volatile. this is not over. you will see massive swings in metal prices going forward. scarlet: thank you for the

warning. having said that, give us a sense of the positioning here. how credit is a short iron ore trading position here? na, theyterms of tryinchi trade billions of dollars a day. they were incredibly short iron orchid monday was a short squeeze of all short squeezes. i think what a lot of traders do did is let a couple days pass and more pile back in. more bad news came back out for iron were that that mine in brazil will start right back up in the fourth quarter and get more in the market could the fundamentals do not look very good and i think you are trading around a bull move in a bear trend. scarlet: we only have about 30 seconds, but what else is iron ore used for? what is it comes to china's industrial economy? ken: steel is iron or.

iron ore is the chinese economy and their ability to change that economy around. that's what tells you could it successful for moving that forward or not and it is not been successful the past two years. scarlet: ken hoffman, thank you. he covers metals and mining. oil and stocks have been moving in tandem this year oddly enough. when will they start going their separate ways and go back to their traditional relationship? we will explore that next. ♪

scarlet: this is "bloomberg markets." strange bedfellows. there's been a autocorrelation between oil prices and stocks is

here. -- this year. they're both climbing back up in tandem. what is causing this trend and how long will it last? let's go to cory johnson and carol massar in the radio booth. thank you so much. this is the bloomberg advantage of bloomberg radio. the chief marketing strategist at converges is with us. we have spent some much time talking about the correlation between oil prices and what is going on in the stock market. you get that a lot from your investors. >> it is a huge topic for our clients. carol: where do you think it's going because it has been closely correlated? not something we often seen historically. where do we go from here? >> it is lasted for a better part of the year. it seems to be breaking down a little bit. if you look at yesterday's price action for example, you saw oil prices comment, bu but stocks hold up reasonably well. overall, the relationship gets

closer down as we get closer to 40 for oil. cory: we also see the dollar comes to trade closely with oil. talk about that correlation as a factor. nicholas: it absolutely is. the dollar has had a correlation to stocks ever since the financial crisis. wale has had trouble to follow on trade on that, but has been much more noticed and are some each highs to different sectors. energy stocks as well as financials have traded very close the oil. energy is only 7%, but financials are bigger sector. that has had an effect as well. carol: stocks are up overall today. energy in terms of equity groups, your best performing industry group in the end of som s&p 500 are the energy groups. when you start to see the breakdown, do we see this breakdown coming? nicholas: we see the breakdown and we see it not just in how the overall stock market

behaves, but the correlation among different sectors inside the market. last month, it was north of 85% to the market as a whole. this past month just ended yesterday and they are up to 77%. we are seeing more dispersion among the groups and that is healthy as well. trend?hat breaks that oil represents much more than oil. it represents economic activity. the stage of the oil represent even economic recovery. what is fundamentally going to break that? nicholas: i do not think it will ever be officially broken. cory: they don't ring an bell. nicholas: we are seeing a slow unwind. we are seeing it in terms of from more of an impact on stock prices. it seems to be more of a process than an actual journey. it's an important part of the

economy, but we are seeing a break of that type intraday one-to-one relationship that we have seen so much of the last year. carol: nonetheless, as you guys were talking, oil is in important indicator for a lot of things. what about when it comes to china specifically? nicholas: that historically last 18 months, one of the ways our clients have told me is that they basically do a shortcut to see what the chinese economic growth thiis. it is been a good indicator because it stages the back half of the oil first. it is been a powerful proxy for that and i do not think that will ever stop being the case only because we do not enjoy a lot of high-quality information from the chinese economy. if you get a great market indicator, you will hold onto it. cory: does the breakdown and that correlation also struck to signal an end to the lows in the oil patch? today is showing a few more rates in the declined by six. i keep looking at these low oil

prices and look at that bounce off of 27 a full $10 ahead of it. i wonder if this is one some oil companies start to look more interesting. nicholas: it does look more interesting and we see a lot of interest from our institutional client bases as well. they're looking for stocks that have gotten hammered over the past year that might have a chance of staying solvent as prices can stabilize and begin to recover. additionally, you look at large cap energy sector. i do not check the numbers, but i think we're up on the year for march cap energy -- large cap energy. who would've thought that would been an outperform or or at least holding its own? cory: here today, yet exxon up 6%. s&p super composite index up on the year. nicholas: we like energy and think it's a great trade.

the sector has been beaten down into good place to look. carol: we've got to run. net, thank you so much. he is the chief market strategist of convergence. scarlet, all yours. scarlet: thank you so much carol massar and cory johnson of bloomberg radio. still ahead, we will speak with mohamed el-erian, a bloomberg , this. we will discuss the ecb moves and why governments must move beyond policy in order to deliver real economic progress. that's next. ♪

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scarlet fu. mark crumpton has more from our news desk. mark? thank you. former presidential candidate ben carson is throwing his donald trump. dr. carson: we buried the hatchet. that was political stuff. americanens in politics, the politics of personal destruction, all of that is not something i've particularly believe in or get involved in, but i do recognize it is part of the process areas -- process. called trumpalso and intelligent man who cares deeply about the united states. apple once a one-week delay in filing its response to the u.s. justice department involving a brooklyn, new york case about unlocking a drug dealer's iphone. the company says the fromoversial case

california should be argued before apple files its brief in brooklyn. the california case is scheduled to be argued next week. apple says "there should be a full airing of the related issues." president obama will appear as xsw conference. is scheduled to headline democratic fundraisers in austin. state department officials as the u.s. is increasing the number of refugees it excepts, including the number of syrians. will continue to be a welcoming place for refugees. no word yet on how many additional people the u.s. plans to take in. some 14,000 refugees are living in dire circumstances is an --

tent citycrowded increase. in simi valley, they are getting ready to honor the former first lady lady, nancy reagan, who died last weekend at the age of 94. we will have more on that story at the top of the hour. global news powered by our more than 2400 journalists in more than 150 news bureaus around the world. scarlet: economists are weighing in. spoke with" mohamed el-erian. you wantultimately, if to look at the success of what the ecb is doing, it comes down to exchange rates. that is what will help or hinder the recovery. you have used the words massive, dramatic, and like you, had you

told me yesterday morning they would do what they did and ask me what happened to the euro, i would have told you narrow to -- 2 107, not 110. the is what happened to bank of japan as well. are we nearing the point where these policies become ineffective? quite clear looked that that was where he wanted the market to focus now? do you think it may take a lot more time? moreed: it certainly takes time. but it could be like pushing on a string. while he is pressing the accelerator, the regulators are also pressing the ritz, and that is why you cannot get the impact on credit you would expect. the u.s. is lucky because it has other engines of growth, where is europe does not.

>> this may be the key question for central banks. you have written in your book -- they are basically saying we will pay you banks at some point to loan to people. is it possible they can affect demand through that mechanism? it is possible, but it's not probable. we have decoupled the ability for the wealthy to spend. we are lacking structural reforms, and third, the companies are not responding. so, i look at this and i think, you know what? this is another attempt, good for him, good for the ecb. doors,ope behind closed it is time for the handoff. stephanie: but look at credit

products. they're going to rip. once again investors are piling into an asset class that is riskier than buying corporate's. -- corporates. of bedmarket falls out again and you have nontraditional investors in an product, they will be hedged, wedged, and screwed. do we realize those can be the ramifications? here, but think we do there they would argue, yes, that is the risk of collateral damage, but if we get the benefits, that would be ok. jonathan: there was support for the banks. isn't that good news? mohamed: it is good news that there is support for the things, but ultimately it has to come from the assets being worth more because the credit risk has come down and you only get there through other policies. go back to the g-20. it is fiscal, monetary, and

structural. it's not going to work. the iea says today that production may have leveled out. weighed in onan where he sees prices going. mohamed: you cannot justify oil based on supply and demand. there is massive supply disruption and demand will pick up. but the market was not finding its feet when opec exited. now the market has found its footing and we have supply destruction. i think the rebound in oil israel. it will remain volatile. no doubt about that. but we see the bottom following in a significant way. a reduction --ed our guest said there was a bottom line. he was not sure where it was

going to go. >> oil probably did hit the bottom around $30 a barrel, but on a given day, given speculation, it could go anywhere. but in terms of where is the real level, i do not see it going much below the 30. my real question. is oil the symptom or the disease? does it really affect the underlying fundamentals of the global economy and growth? but low oildoes, prices have gone from being a blessing to a curse. 3% to 7% moves daily in oil have become common. oil is not a penny stock. it is a widely traded commodity. if you get those moves in that commodity, it is telling you the system is becoming less stable and i think that is really important. .ook at the volatility of oil

it gives you good insight into how stable is the underlying economy. matt: i wonder about the comments -- if you look at bloomberg in the bloomberg, there is an oil production tab. click into it and it does appear over.e rolled obviously at a record high. how much do you trust this kind production from opec? it seems like most of the members outside of saudi arabia will produce as much as they can. they need the money. mohamed: yes, i agree they will produce as much as they can. that is where they are. -- on come back on screen the stream, that is what will happen. but the other opec members, they are at maximum outflow -- matt: they can freeze at those

levels? course they can. that statement has no level. stephanie: why? mohamed: because they cannot produce anymore. either you need it or you are protecting market share -- saudi arabia. it is clear. produce the maximum and drive out the high-cost producers. much does this helping struggling to hit inflation targets? mohamed: this helps. the last five weeks, oil and commodities has come back, talk of a u.s. recession that has declined. and i think there is a tactical change in the inflation outlook. i do not think it is a strategic change. >> is that your answer to mark barton's question? i think it is tactical,

but it is not structural enough for me to be confident that the ecb will no longer worry about inflation. yes, we have taken a leg up. if we take a leg right back down, can the u.s. economy keep on trucking? mohamed: i think there's a lot of good in the u.s. economy, but it is a good that allows us to grow at 2.5%. it is not where we should be, which is escape velocity. stephanie: you sound like larry fink. have two good head winds. one comes from volatility and the other comes from the weakness and emerging economies. scarlet: that was "bloomberg view" columnist mohamed el-erian speaking on "bloomberg " this morning. we will dive deeper into canada's unemployment crisis. in the bond what

market? we reveal the data points you may have missed in the fed's latest flow of funds report. a cannabis hear from budding trading platform ceo. ♪

scarlet: this is "bloomberg markets." i am scarlet fu.

it is time for the bloomberg business flash. selling up an offer for a competitor that recently shut down. they will retain the full balance for withdrawal. as for their pledge to donate to 100 charities, draft kings is doing that as well. fantasy help is the second site to shut down this year. thataea predicts production will erode global surplus. oil prices have climbed 50% since reaching 12-year lows back in january. and the clock is ticking on ariba style. they are trying to avoid being delisted by the new york stock exchange. -- the clock is ticking for aeropostale. and that is the bloomberg

business flash. let's head to the markets desk were julie hyman has the latest. retailershe three key eropostale, abercrombie & fitch -- julie: they are all still around. scarlet: still around, but times have changed. abercrombiecally, seems to be doing the best. as we know all-based retail generally hazmat been doing great. -- generally not been doing great. let's talk about food. o and bojangles, not just in food, but in chicken really -- coming out with numbers. interestingly, it is about the forecast for these companies. loco gave a range

forecast and bojangles is above estimates, and that appears to the trade. bojangles talked about headwinds in the quarter, including significant competitive discounting. party city shares are gaining, too. the midpoint is above estimates three comparable sales for the fourth quarter of 2.8% above the analysts were estimating. also, salon, this is a stock doing very well in today's session, of right 16%. it is above analyst estimates, seeing a growing demand for beauty forecast, and it looks that it is less susceptible to things that have heard other mall retailers, week mall mall traffic,k

strips versus indoor malls. and sporting goods -- dick's , that had been dipping earlier. a bit of a mixed report. beating estimates forecast for mixed retail, so a and consumer bag. salon in -- ulta particular having a big gain. scarlet: one to watch. thank you, julie hyman. let's head to canada. importers cut 52,000 full-time jobs, the most since 2011. if you look of the province of alberta, the and rate has climbed to a rate not seen since 1995. i want to bring in bloomberg tv canada anchor pamela ritchie. talk to us more about the context here. it is the quality of

jobs. you pointed out in alberta particularly how much the unemployment rate has gone up. alberta was the engine of growth for canada for decades, so it is shocking to see their unemployment rate so high. is the jobs lost, roughly speaking, were full-time jobs with benefits and so on, and if you look at the gains, they were part-time jobs. not enough to make up for what was lost. increaseid record an in goods manufacturing. , québec, thea manufacturing regions. and they expected that to pick up because of the low leumi. there's 36 million people in

canada, so these may not seem make alot, but it does difference to an economy and a province. scarlet: much-needed perspective there. to what extent is this the new normal for the canadian jobs picture? what are people saying? bureau chief was speaking to the senior economist at td. she thinks this is the new normal and roughly what we will see are more jobs losses in the oil patch, also saskatchewan. and much of that will, at least tried to be made up by the manufacturing side of things. of course, this is the grand , andof the bank of canada with stimulus on the way, there is hope there could be an evening out there. what expectations are in place for a québec budget

next week? pamela: that's right. this is due to be brought out next year. they balanced with lots and lots of cuts involved and the premier saying we could only continue to see this if we continue in the province. the province is expected to deliver its second browse budget next week. if there is a surprise surplus there, they can help eat away at what is a massive provincial debt, about $70,000 per taxpayer. scarlet: thank you, pamela ritchie, bloomberg tv canada anchor joining us from toronto. -- findings on who earns what in the bond market and the equity market. that is next. ♪

u.s. household wealth increased almost $87 trillion last quarter. had three charts to dig deeper into the report. been a big story for three years, but we got good dated today. this is the highest we have seen since 2004, the share of corporate funding. so, it's just -- it just goes to show how dependent u.s. companies have become on the bond market. thiswhat is the reason for ? why has it become such a big share of corporate funding? there has been an environment for higher-yielding debt -- that is something corporations have been able to

take advantage of in the bond market. the fact that the share of corporate debt rose again in q4 kind of implied that market conditions had not deteriorated at that point. but that is certainly something, you know, that is a risk going forward if market turmoil comes back, given how dependent companies have become on the u.s. bond market. scarlet: i wonder how they make money through bond sales more than they would commercial loans live in interest-rate environment? good: that's a really point. certainly the investment banks are having a heyday, right? another thing you are looking at was the household share of corporate debt, right? guest: this is kind of scary if you are concerned about market liquidity, financial stability. mutual have seen is funds are gobbling this stuff

up. mutual funds are 20% of the corporate bond market. they have almost three times as much as they did in 2007. and this is is at the expense of households owning less of a share of this market and that includes hedge funds. so, you can kind of look at this as a lot of these bonds do not even traded all. issuesre may be some with liquidity, market liquidity and financial concerns. joe: and then finally, you're looking at who owns u.s. treasuries. guest: you can look at that blue line -- you can think of that as born investors. their share dropped to the lowest level since 2007. the story about foreign investors owning all of the treasuries, that is receiving a bit weary of -- that is receiving a bit.

growwo sectors that did were household funds and pension funds. what is interesting -- you do not see that here -- u.s. households increased their portfolio allocations in u.s. treasuries at the highest level since 2010. scarlet: really? guest: it kind of goes to show you that people are moving out of treasuries and more into riskier assets of it. , we will beay speaking with paul mcnamara. he has three reasons he is bullish on the emerging market. more "bloomberg markets" after this. ♪

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david: live from bloomberg headquarters in new york, this is "bloomberg markets." definition. i am david gura. tracy: investors and traders decide ecb's latest policy measures are not so bad after all. stocks looking to end friday in the green. as we look to next week, it is all about the fed. david: an internal presentation ceo -- heleant tells executives it is not on any big issues. tracy: we will hear from the ceo of the cannabis trading platform of the potential for the commodity to be bought and sold. think it sounds far off? let's head to the markets desk where julie hyman has the latest. julie: we are on day two