david: good afternoon, i am david gura. >> software training in a narrow range today. investors are awaiting janet yellen and a fed decision 24 hours away. david: more warning signs for investment banks. revenue trading plummet 82%. tuesday, it is super part three in the race for the white house. donald trump looking for a knockout victories in florida and ohio. hillary clinton looks to extend her lead over bernie sanders in the democratic race. we are two hours from the close of trading. let's go over to the desk where we have today's laggards. ramy: good afternoon.

stocks are headed up to their session highs of a with that said they are still in the red. right now let's take a look at where they stand. the dow is coming up on the flat line, but the s&p 500 is down by about a third of a percent. the s&p is down for the second day in a row, and this is its first back-to-back losses so far this month. part of the reason for that is because of the retail data that we did see earlier today. sales for february falling, and january's game revised to a decline. we will see how the fed will factor in that with interest rates tomorrow as well as the day after. i want to show you the general health of the s&p in its sectors. four are in the green, six are in the red right now and looking at the positives, information technology is of the most, by about a quarter of a percent. utilities not too far behind. 1.5%, care is down by

which had been preceded by materials. energy is down by about 1% as well. i also have to talk about what is happening in the pharma world, especially with what is happening with valued we can see a little bit of knock on effect happening here. down by 10.5%, no surprise it is getting hit in tandem with valeant. this is the s&p i's biggest liger today. -- a laggard today. basically, there is a limited growth driver for distributors and they are seeing the end of a 15 year super cycle of generic introductions that are coming to an end. david: oil prices cannot be hoping that. ramy: of course, continually being an issue. energy looking at oil. oil down off session lows by a

little more than 2%. this is its first time in a month that we are seeing back-to-back falls, in particular because of a wrong that we have been talking about throughout the day today and yesterday, saying that it will not freeze oil production. and iranian production climbed last month by the most in almost two decades. david: thank you. now let's check on the bloomberg first word news, mark crumpton has more from our news desk. mark: president obama has reversed course on drilling for oil off the southeast coast. the administration is withdrawing his pledge open much of the southeastern atlantic coast to offshore drilling for the first time. coastal communities and environmentalists had imposed the play and so did the pentagon. new york financier george is returning to the ticket political giving after an 11 year hiatus. he has spent or committed more than $13 million to support hillary clinton and other democrats.

that is more than his total disclosed spending in the last two presidential elections combined. alarm over the candidacy of donald trump and -- cruz voters in five ted cruz. five states are voting today. the same band of conservatives that toppled former speaker, john boehner are blocking the current budget. that means that they could fail to pass a budget for the first time since they retained control in 21011. man in charge of the water control insulin flint, michigan, says it right he should have realized. bysays he was grossly misled

state and federal experts who never told him that led was leaching into the city's waters live. theead was leaching into city's water supply. i am mark crumpton, back to you. lisa: let's get back to the market. u.s. stocks getting a lackluster performance as they question if they could be reaching their limits. haveal central banks now dipped into the market. david: what are they ignoring risk? i know a couple of months ago you shifted a lot of assets away from hedge funds, your wilting in the equities markets. are you still confidence in that move? >> the commentary we're talking about with regard to equities is not think that equities are wrong or going into a bear market, what we are discussion

is relative risk to market right now, after this rally equities are seeing everything is fine. we will not have a recession, do not worry about china. we are comparing those assets, ,quities, to structure credit and there's an emergency in value. you can focus on cash flow, and inefficient prices. last week the european central bank kind of changed the game in credit and certainly in credit markets in europe. how much does the ecb really change the picture for the u.s., reticular really with respect to corporate market? global supplyck out of credit markets, prices should go up to the same degree. you saw a very violent tightening and spread investment grade, because all things being

equal european buyers will have less to buy over there. we think we have seen that reaction already. if you on investment credit youy you are saying that think it will be relatively low and you will be compensated for that. the returns for us are not high enough we're trying to go into what opportunities with far higher yield. david: there is so much going on now. when you look at all of that on the horizon, and then the market, do you think that the markets are reckoning with those events as legislation be? >> bear markets are tough to call. some would argue that we just had a big correction and we are not in a bear market rally at all. we know that equities are arguably much more overvalued than all credit assets, particularly those in structured credit for mortgage backed securities. the price action does remind us of bear market rallies in 2000, and in the financial crisis.

lisa: within the structure credit market, some of these could last for a wild. -- while. banks were selling a lot of the lower rated, driving prices lower. looking earlier at bloomberg, showing how much prices have declined in mezzanine ratings. will this persistent there are not buyers? >> everything is driven by supply and demand. there's is not a lot of liquidity from dealers, they have sucked of these access rights moves. these prices you have tons of cash flow. do not care prices ever go on, you probably prefer they do not commit giving have cash for longer. in the short-term term we are very cognizant of the fact there equitiesher great hello, market prices could go

lower. so we elected valuations here and we are willing to hold them for a long time. david: you're talking about regulation here. you say you see opportunity. explain. >> what dodd-frank was designed to do with the safer and resilience in the next downturn, and never cause a downturn again. the knock on effect is a limited ability for banks to take risk in the market in structured credit. what that means is that when we have these big changes in sentiment, or one big motivated seller, there is no propriety trading desk with enough balance sheet to take that down. extreme pricee leanings than we have seen like we have seen in structured credit. lisa: what about liquidity concerns, and another five that does not have the luxury of long-term capital? >> that is something we take very seriously, because we provide our investors reasonable

liquidity. we have intermediate liquidity strategies. equity, we private do not do real estate, but we take things that will take a quarter to liquidate. for us to the only area that is dangerously low on liquidity is massive spreads. are three points off your spread, that should be sufficient. david: thank you for coming in. the next 20 minutes of bloomberg markets, blackstone president tony tan's is next. he says energy will be the most attractive area in a private equity firm this year. lisa: and he is a prolific fundraiser for hillary clinton. we will see if she can beat bernie sanders in ohio. david: trump is currently 90

delegates ahead of ted cruz. ♪

david: this is bloomberg markets, i am david gura. in an exclusive interview today, tony james gave insight on the firm's activity in private equity, real estate and the energy market. >> when oil prices go up, you're going to have suddenly a lot of companies that were in the process of rushing back that need capital because they can drill wells again profitably. they do not have access to capital. they are still overleveraged versus the value of their reserves, and a do not have access to equity as a result.

italy's capital even when prices go up. i think we will have a loss of activity. -- a lot of activity. >>: be your most active investment this year? >> gift. we thought it would have been last year, but it did not prove to be the case. we were either smart or lucky that we did not do a lot, but now we have a lot of dry powder and we are able to do a lot of deals. interestrought in some and investment and things will get better. people talk about the elasticity of the crisis. do you see this, and if so where? >> i do not know about a ceiling, because problems can spike through the ceiling at any will. but absent that it is a normal market. you are talking prices in the 75 area, long-term. it might curve to 50. it is well above the curve.

been among thes most volatile of commodities and investments that anybody could want to be or not want to be part of over the past 18 months. as the financial market volatility, and in particular what we've seen over the last few months expected blackstone business in a positive or negative way? >> both. in one hand it has created new investment opportunities, but we have had markdowns of existing portfolios. we are in a business where that is the way of the world. we benefit from new investments, but we pay the price on old ones. erik: a longer three main business is, which is best suited to deploy capital right now, in which is best suited to monetizing right now? >> i think we are doing both in all businesses, actually. right now there is an amazing opportunity in credit, which is

not so much based on fundamentals, but liquidity through the banks falling back and a lot of reductions coming through the fund because of energy worries. i think that is great. estate, the u.s. has gone a little pricier, but europe and asia, we are doing a lot of things. suddenly, there are values out there. news, ae company in the chinese insurance company that has made a bid for store board, sold the waldorf astoria in 2014. it seems you may be selling that insurance companies some more properties. in china they talk about the next warren buffett. chairman is a very smart man, and he has a long-term investment horizon. anddifference between china america is the stored value of stocks.

people are used to owning stock, they think that gives the value. in asia, the middle east, and other parts of the world it is real estate. the stored value is real estate. you hold it a long time. it will take care of you. i think he has that attitude. he is buying some great assets. lisa: that was an exclusive interview with the blackstone president and ceo of tony james. -- and coo tony james. let's head to our market desk where remy has some stocks that are moving. first off to chipotle. down,tock right now is coming off of session lows. down by about 2.4%. sterne agee coming out with a call saying that it expects lower receipt totals coming out

of its restaurants because of more coupon redemptions that are coming out. i got a coupon in the mail saying come back to chipotle. but these receipt totals are lower basically. that is despite better traffic levels in january. oute capital also coming with something on chipotle, saying it spoke with the food safety specialist, and basically that specialist is cautious about the food safety outlook for the company. they think that same-store sales can recover, and has an outperform rating. let's go to apple. apple is seeing its highest price since the first week of january. they say they will see surprising of science. the firm anticipates it will sell about 6.5 million units

alone. this is the head of the 52 million iphone guidance that they think will happen. seeing the worst point since the january low if it. scraping the bottom for the whole entire day. city is downgrading the stock to a neutral from a by uy. they do not believe the near-term business trends are going to improve. the price target being lowered into $70 from $86. lisa: thank you. did you go have your marino for burrito forri lunch? [laughter]

vote in primaries, but all eyes are on the state of ohio. can kasich pull off a win in the buckeye state? ♪

lisa: this is bloomberg markets. turning to politics. my states are voting today in nominating contest, but all eyes are on ohio or donald trump and john kasich are not into that and the stakes could not be higher. a kasich wind could put him around, but a trump victory would put him within reach of the nomination. david: bernie sanders is looking to make headway against hillary clinton after his surprise when in michigan. let's start with governor kasich in the polls. the internet quit donald trump

-- he isn't and neck with donald trump. john: they are all consistent on this matter. there is no chance outside of a that marcoacle rubio would win florida tonight. sometimes miracles happen. you do not want to say it is outside the rubble of all possibility. but he is outside three far. even the rubio campaign, there is a totally different tone and tenor. in the john kasich again, they are just brimming with confidence. in john kasich world, he is a guy who has never lost a campaign in ohio. he has about a 70% approval rating, one a reelection in high 60's. he says they know how to win on ohio, and have done a lot, so they are very confident. and the public polling suggests r thant will be close

they would like it to be, but will be a genuine race. lisa: let's say that john kasich by a slighto margin. does this give his campaign lines? -- legs? john: it gives it life. we are in a single elimination game. if he wins that state, he goes on. if he loses, he calls it quits. how strong his legs will be, a lot of questions will come into play. the capacity for him to raise money, he needs to do that. he will need to get out to utah and get ready for the arizona and primary races next week. for a long establishment republicans, their attitude previously has been that donald trump and ted cruz were either going to have to get shot or get poisoned. received a long

establishment support if he demonstrates he can be trump in ohio and that he could conceivably do well in other states like illinois. he could finish second there. mitt romney was on the trail with him yesterday. a lot of them assume he will endorse him if he wins tonight. that will bring him a stream of that establishment both. a lot have been skeptical, but they are looking for some way to stop donald trump. keeping john kasich in the race kasich butsement of also an endorsement of continuing to have a split field that may be able to allow various strong candidates to be trump in different places. that might be the best path to theing donald trump below number of delegates and pushing this to a contested convention.

take: what is he able to on the other midwestern states? position onish trade he has been pushing against hillary clinton. he has a chance tonight, a chance to win three of the five states. he could win illinois, he could win missouri, and he could win ohio. none will be cake walks, but he could win all three and in terms of delegates, hillary clinton will win so many that she will still end up with a net delegate advantage tonight. but if sanders can win three out of five states, the momentum moves for him. david: thank you. more bloomberg markets coming up. ♪ . .

hohes w'oiithongestc ?estc .thlais hotas hkeca hyson' at' y llseg ca hke cwistomin biness rnte fid , p cth bou e.juais hotas hkeca hyson' at' y ddstus azetomimed ag y wiourof'r eie esr a adylr -onheesev .or upde 'its restn i, w c u 'doe t eth dveryay oding uc pwiwiro fi hthatelroui david: from bloomberg's world headquarters in new york, this is bloomberg markets. lisa:headlines with mark crumptt the news desk. mark: today is primary day, one

of those days where we can separate those who might win from those who might be leaving the presidential field on both sides. kasich'sio and john futures could be hanging in the balance. they are both desperate for wins in their home states of ohio and florida. hillary clinton is hoping to keep bernie sanders from building new momentum in the midwest. there are more delegates up for that almost any other day in the primary calendar. while florida and ohio are the biggest prizes, three other states are also awarding delegates. don't miss a special two-hour edition of "with all due respect" where mark keilman -- where mark halperin a john heilemann will break down the votes. the gop wants all messages between 14 state department officials and private e-mail domains associated with hillary

clinton, former president bill clinton, their daughter, and the clinton foundation. they want to locations between state department and officials at the u.s. agency for international development which distributes foreign aid. is obama administration continuing to lift restrictions regarding when and why americans can visit cuba and what merchandise they can purchase. the new rules say individuals can go to cuba as long as they have a schedule of authorized activities. americans will be allowed to purchase cuban alcohol and tobacco products. in other news, prime minister justin trudeau is expecting to announce canada will run for a temporary receipt -- temporary seat on the united nations council. the prime mister will be in new york for meetings with the

secretary general. though miss our exclusive interview as bloomberg news editor-in-chief john nichols late sits down with the canadian a.m. newister at 9 york time. global news 24 hours a day powered by our 2400 journalists and more than 150 news euros around the world. commodity markets closing in new york. let's look at today's biggest movers starting with copper -- erasing much of its loss today. metal prices advanced too much with copper prices settling at $223. crude dropping for a second day as iran boosted crude export. settling at just over $36 a barrel. pressure in intense the solar industry. cory johnson joins us for a look at the solar landscape.

how does it look? stocks have been under tremendous pressure because big changes in the industry and changes in the markets in the way they are looking at risk and you can see it in the results. some of the big solar companies have seen a big correction prices, starting with solar city. 42% over the last year. a newly public company, son run which has seen a tough time, including the earnings report last week. sun edison very different, but a big solar player, down 91% in a year when they've been trying to fix their business model. when we'veat a time seen interesting changes in the dynamic that affects the solar industry, specifically nevada changing its rules about goingng and how much is

to let them get the benefits of solar to individual homeowners. tough it is the only state do this, 13 other states band together and said they would not do this net metering change and it had a big effect. how much do the declines have to do with oil prices? if they are reducing the incentive to go green. cory: i don't know that it has a lot to do with that but there's asot of pressure as far residential electricity. this which from cold to gas has been going on since 2008. this thanks to fracking and horizontal drilling has kept the prices thanks to that. to capital, even

residentially has involved with solar city where they have had to borrow money, sell the debt and question the ability to pay affected these companies. if you look at the cash flow generation, you don't see any free cash flow. some of the people who have been short these stocks question the viability of stocks like solar city. ofa: let's bring in the ceo a residential solar company. hasfrom your perspective on solar?t foundered guest: i think wall street is missing it. we've had an almost 100% growth rate while keeping our customers and the industry is here to stay. miss the secular

shift and i think it's happening with rooftop solar. we arey optimistic and in this for the long run and i am a lush. david: how tied to incentive is this industry? is it totally reliant on that? guest: the benefit of our business model is we have two mass appeal -- energy crisis are increasing and our grid is aging. we talk about fuel might be down but we have to invest a trillion dollars in transition and that drives rate pressure up. the other benefit is our costs keep coming down. to installost rooftop solar dropped 17%, so combine that factor and rising alternative price at 3% to 4%.

your competitor came out to raise some money at 5.25%. you have 100 basis points there and i know it is your competitor. wonder what your plans are to access the capital market in any form and how that might be changing based on the way the market is perceiving the industry. guest: the market is very strong on that despite the noise. we just raised our lowest cost of debt financing this january at about 4%. the reason there such a deep market for this is these assets are very high quality. we are saving our consumers on average 20% on their electric bill. customers pay for energy. it is a necessary good.

we have eight years of track record and we have been doing it for 10 years. when you talk to the underwriters at these banks, they love this cost. cory: why couldn't solar city ranche out at all? to ask solarve city specifically. what i love is when things are less favorable, it is time to go on offense and time to deliver this to customers. how long can you continue to have that message with wall street getting it wrong? how many industries can sustain a compound and grow -- growth rate over the years? the value has increased and so we see margins increase.

prices are coming down and electricity is going up, so if you see the price of what we are competing with is going up while avoiding is going down, that's going to drive the increases going forward. there's a secular shift happening to local renewable energy starting with solar and batteries are becoming cost competitive and you combine those technology and what i am confident of his innovation wins and technology wins. we will get there. johnson wrote about something that was illustrated on business week. nevada?unch was it is a one-off and is blocking progress. i don't think it is a trend at all.

the bigger trend is forward thinking places where we have regulators looking at rooftop solar knowing that it is the future. how do we make business models to incentivize this? england.ppening in new these are big markets and i think nevada will see the light. that is what is so great about this country. cory: see the light? david: i saw that. guest: that was totally unintentional. cory: sure. shows up course cory with the tough questions. lisa: thank you so much. david: coming up in the next 20 minutes of bloomberg markets, we are going to talk to jefferies group who just posted their worst quarterly loss since 2008. one of the lawyers

representing apple in its fight with the us ei speaks to bloomberg in an exclusive interview. apple is expected to file its latest response today. more bloomberg markets after the break.

david: welcome back to bloomberg markets. reported a loss of $167 million in the fiscal first quarter, his worst quarter since 2008. revenue fell by 82%. the ceo says they are humbled by the loss, but trading has effectively improved since february. lisa: for a closer look, let's

bring in our banking reporter, laura keller. can you put it into perspective how bad were the earnings? laura: they were really bad. it made for great headlines -- handler humbled -- they had a lot of problems in fixed income which we have seen with the front ranks and problems with their equities trading. they hold some positions in a few different holdings that were put with them. but investment banking -- across the board, there were almost no positive signs of their than them guiding and saying the first 10 days of march, we've seen things get that her. handler vowing things will get better. what were the indications that might happen? laura: he cited some of the

changing items -- yields and outflows have been terrible. concerned out the economy and he said some of those things are turning around and we see influence back in high yields starting to stabilize. he's thinking things have picked up a little bit. let's bring in our guests from portola's partners. jeffries has been a leading indicator for all of wall street. jeffries is going to have a horrific first quarter? guest: yes. one thing -- we know the first quarter will be week, just how weak will it be? the first quarter of 15 is

typically seasonally strong. the second thing is, is there light at the end of the tunnel? falsehad a number of starts and we've had good at followed by bad volatility. i know you have reduced your estimates for number of banks. guest: there will be a hearing. andill have the green hills it's going to be very weak. you have more balanced players like rank of america which will do relatively well. then you have morgan stanley and goldman sachs. i am struck by is for so long, people are saying yields are so low and there's not enough trading. now, you have a lot of volatility in high yields. why are they not doing well? bad volatility is read

get prices that with off and there are discontinuous markets in terms of pricing. that is hard as market makers to get involved in. decline have had is a in fixed income currency because the electronic occasion of regulatory trading. what is happening now is you are overlapping secular pressure with cyclic girl -- cyclical pressure and reduced appetite. that affects the banks and what they hold on their balance sheet. when they hold these loans, they've got a problem. in terms of transaction and volume, that is helpful because more volume gets more commission on those traits but i have not seen banks be able to zero it out. lisa: what would it take to pick

up the revenue little bit? it's not volatility or higher yields. guest: i think we are going to have to go through a cycle recession capitulation trade. david: strong stuff there. thank you very much. in the red for a second day let lower by health care. ramy inocencio takes a deeper dive into the spider sector report. y biotech and health care is getting hammered today. it is down at session lows, by nearly 6%, it's worst drop since february and that it's lowest in two weeks. let's look at kite and june oh. down after a reviewer

cited safety issues as well as concerns around antique immunotherapy drugs. down by 3.5% but it was initiated with a hold at deutsche bank. says the stock may have a tough time outperforming because of concentration of the drug -- it gets about 60% of the revenues that there is an uncertain duration of exclusivity. --have to talk about valiant taking a quick look at where it is -- at session lows and down by 50%, losing half of its value today. this is what happened after issuing a correction and revising that down and talking about breaching some of its debt agreements. happening at what is

in health care. down today in a row, the lowest in five days, down by nearly 2%. no surprise it is getting hammered. but let's look on what is happening with the constituents that make up the xl the. down by 15%. was the worst it performer on the s&p. note surprise there, falling after the earnings and looking at cardinal health, both downgraded to market perform from outperform. wrap for the biotech and health care sectors. david: thank you so much. we will be right back with bloomberg markets talking about apple filing today. ♪

lisa: this is bloomberg markets. i'm lisa abramowicz. apple is expected to file their response to the government second filing in the battle over encryption. the next showdown will be on tuesday, march 22, when they will argue whether you will have to comply with the federal order. what did ted boutrous has to say? the specter was raise the government could go after apple's source code. what did he say about the state of play in this legal back and forth? hasy: every filing escalated this case. helate as this evening, reiterated apple's position that what the government is asking for is against the law. there's no precedent for this

and i said what if the situation were even more extreme? what if a terror attack was imminent and thousands of people were about to die. what he help the fbi then? we are talking about is a court order and justice department going in where the san bernardino sheriff has said there probably isn't any evidence on this phone. the fbi and justice department would not be issuing fred -- issuing press releases if they were hot on the lead of additional evidence. we understand their desire to leave no stone unturned. emily: sort of dodging the question, saying that's not what is happening right now and there's not an imminent threat. he relied on this argument that the government doesn't have this power.

listen to what he had to say. ted: we are going to focus on the history the government is invoking and show history does not support with the government wants and we will respond to the factual misstatements and false statements the government included in their brief. to take the high road and show they are wrong and the fact of the law and that the court should deny their request. emily: he says apple is doing this to take it all the way to the supreme court but that this case could go on for years. it feels like it is being played out in a public court at this point. how much of this is going to be a public relations exercise? emily: that's an interesting question because the lawyers have said there is no middle ground here.

they say they want to be decided by the courts on a case-by-case thes and he says it is wrong place to be decided. i said can we realistically expect congress to tackle this issue in the middle of an election year? want an active debate about this issue. for the government to suggest there's a nefarious relationship with china is just lane wrong. david: emily chang, anchor of "bloomberg west." coming up, we are talking about the politics of oil with the ceo of the red apple group. ♪

from bloomberg world. in new

headquarters, good afternoon, i'm betty liu. stocks are trading lower today with energy and health care. all this as investors await the key fed decision and news conference tomorrow. we are very constructive on the domestic side of the economy. household balance sheets are in great shape and that will keep the fed emboldened to deliver more rate hikes this year. we just don't think they are going to be able to do it. betty: valiant cuts its revenue forecast. michael pearson takes responsibility. >> it starts with me. has changed to some degree since december, but we have to do a better job.