alix: u.s. stocks closing mixed this afternoon. the dollar seeing its fourth-quarter and within five years. quarter. we break down the moves in global stocks, currencies, commodities, and bonds. howy: banks are deciding much money to lend oil companies. we talked to a top houston lawyer. alix: it is jobs right tomorrow. we have the three must-see charts. we begin with our market minute. thes wrap up the day in month because this was the biggest monthly gain for stocks since october. quite a comeback. s&p and the nasdaq, snapped three straight months of losses. what was so fascinating to me was the dow, it was traded in

his tightest range of the whole year. we actually thought low volume. a lot people are waiting for the jobless report tomorrow. sawy: the whole month, we it really come down, for the most since october. over the whole month, the risk of the volatility really decreasing overall. it seems like quite a trend. us to wrapping up the first quarter of the year in what a quarter it was. i want to start your with the nasdaq in particular, because it started off the year falling below its moving average. but in february with the rest of the market, the green for the quarter, but none the less, it was quite a comeback. the dow and the s&p also seeing a second straight quarterly gain. let's be honest, overall, we really haven't gone anywhere. we're still flat.

tracy: we have in there and back again. it felt like a lot happened here. alix: it did. , andhappened with the s&p then that rally? he stocks that led in decline were apple, amazon, baker of america and microsoft. of the upside, the same stocks. apple, amazon, microsoft. we didn't really go anywhere, unless you are energy stocks. it is the best quarter for energy since june of 2004. tracy: i'm going to one of you. best quarter for emerging-market currencies on record. alix: you win. that is nuts. tracy: let's take a look at this chart. astounding. all of that is off the back of the rally of commodities prices and also the much weaker dollar, the dollar having its worst

quarter since 2010. thanks largely to the statement we saw earlier this month, it and the dovish janet yellen this week. in terms of the out performers, and of that was brazil russia. if we take a look at the developed markets, take a look at what has been happening with the pound in with the japanese yen. that is addressing. the japanese yen was one of the best-performing currencies this quarter. the great british pound was one of the worst. is clear looking at the chart, not a happy camper. tracy: it is unreal. in terms of commodities, the story belonged to gold. this is the best quarterly rally for gold in 30 years. finally having a positive quarterly gain since 2014. it was really interesting to me that money slowed in.

since at the fastest pace 2009. that was how much fear was in the market this quarter. the other part of the story has to do with oil bottoming in february. then managing to climb higher very quickly to that $40 a barrel. best quarterly rally since june. alix: let's move on to bonds. returned 2.9% this quarter. if you take a look at the chart, that is the u.s. yield. basically the difference. mostly because of the safe haven bid and how terrified everyone was. now it has been steepening again off the back of the fed stock. i think and mention this, but 2.9% for the quarter in terms of treasury. -- a gain since june 2012. tracy: the bears keep coming out

and keeping wrong. i want to take a deep dive into the bloomberg. i'm looking at emerging markets, because the other part of the quarter with the rally we saw in emerging markets. this is the index. organ stanley out with a note today saying he where earnings season. 10% downside. they point out that rallies tend to slow and matchup with poor performance. earning season, you saw a decline. right around here, you saw a steep decline. right at that level here. you have a lot of weakness, deflation, week growth overall. a lot of excess capacity. i feel like the question over whether the rally can continue is a debate one -- is

going to be a big one. i havedeep dive, something more u.s.-oriented here we thought u.s. consumer comfort figures come out this morning. measure of how optimistic consumers feel about themselves and the economy. there is an interesting divergence happening here, along political lines. i have the list and read. these are republicans responding to the consumer comfort survey. in blue we haven't democrats. -- we have democrats. republicans not so happy with the economy, democrats feeling a little better. in white is the difference between the two. the worst you feel, the more you might want to vote for trump. i think it will be interesting to watch this difference between the two parties as the presidential election heats up. alix: you can see all these

charts and more on twitter. i want to bring in our guest, global strategist for jpmorgan. there is plenty of blame to go around for the stormy part of the quarter. he really points the finger at one of the usual suspects. >> the bottom line is central this one, isng confused. they do not know what to do. they do not know what the next move could be. that is why the markets are so volatile because you see these changes and people are unsettled. alix just mentioned portioning blame, are central banks the ones to blame? putting all the blame on anyone factor for the roller is slightly in q1 misplaced. thinking ahead, i think

investors are within their rights, it is healthy to be skeptical. central banks are part of that. dovish tax,at the that has been part of the rally. ultimately i think that will be self-limiting. oil prices rebounded. of the medium all seem to put downwards. i think $100 oil is a thing of the past. it is a thing of the past, yes. there is a lot of downward pressure on oil prices. china, you still have these latent risks bubbling up from currency management issues. what you think the trigger for that is going to be?

ben: that is before the notable characteristics, this rebound. i think that comes under pressure at some point, imminently. alix: what is the trigger? do with macro pressure. if you think about the growth rate of emerging markets against othervelopment of markets. emerging markets are growing very little above developed market counterparts. back any to thousands it was more like five percentage points. last year, it was 2.5 this year is 2. we see a structural difference of growth around 3%. macro year. a tough that is what ends up manifesting itself. negative keepsl

on bubbling up every time you get earnings announcements related to that. earnings, ifg of you like when it comes to u.s. stocks we have been through a lot. like what we were talking about, we haven't actually moved that much. was going on there -- what is going on there? ben: you have a series of big shots. one in august, one in january. you want to take that into consideration, especially your time horizon as an investor. turning a critical eye on the rebound for the reasons i mentioned. i think if you are investing over a long horizon, i think you are more willing to look through these fluctuations if you think these big financial shocks will be a regular feature of the environment, which i think they are.

tactical, i think you should be somewhat skeptical. this shows what is that happening honest and credible quarter. your single best rate for the second quarter? substitutingbeen out of the margin, we are still optimistic about u.s. large capital. substituting equities into credits. credits, you are getting equity-like returns with a fraction of the beta. if you are worried about these big shots bumping up your portfolio, i think you should have a portfolio of beta portfolio. he will give you some of that along with the quality of u.s. equities. u.s.e other hand if the stays out of recession, you have high carry assets with limited downside. to call youl have

back at the end of the second quarter and see how that:. -- how that went. coming up, we are discussing a record high correlation between non-energy junk bonds and oil. next. ♪

♪ virginia,ichmond, state troopers responded to a shooting at a greyhound bus station and have been taken to a hospital. the shooting suspect is in custody. it was not immediately clear if the three people hospitalized had been shot or sustained other injuries. there is no immediate word on their conditions. president obama says the united states and china are on the same

page when it comes to north korea's nuclear program. the president spoke today at the nuclear security summit in washington where he was joined by the chinese president and dozens of other world leaders. of great importance to both of us is north korea's pursuit of nuclear weapons which threatens the security and stability of the region. the president and i are both committed to the de-nuclearization. fourthoday marks the summit the president has helped. forces were killed in a bombing today and the -- in the country's kurdish region. 23 people were killed. that is according to activists who say it is one of the

deadliest incidents involving civilians since a partial cease-fire went into effect more than one month ago. day,l news 24 hours a powered by our 2400 journalists in more than 150 euros around the world. i'm mark crumpton. host: defaults will pick up and name.\n-energy-related let's bring in credit strategy list -- you say this hike relation will trigger defaults because we're not paying attention. the big problem in the market today is this everybody is so focused on oil they have not paid attention to what is going on in the non-commodities basis for us one of those are concerned. if you look at it, it is as bad as we have seen in many many we

-- years. worse evennever been a growth -- ebida growth. host: are you looking at things like leverage levels? you do not default because of leverage alone. you do not not default because of low leverage. we're looking at acid impairments, debt to acid a balance -- haveany write-downs non-commodities companies in writing down. when you look at that data, debt to tangible assets is that all-time highs. the data does not look good. host: where is the risk, if it is not energy and commodities? michael: there is risk in any company that has acquired cheap financing. host: quite a few. michael: absolutely.

you look and this is been a strategy that is not specific to health care, not specific to tech. is notperspective, it about which companies or sectors you want to all, it is which type of companies you want to own. you want to own it largely companies that are exposed to the ninth its economy. you want to own companies that have grown organically. these are the companies you want. host: do you worry about companies that have issued debt, because this seems to be the other trend. michael: absolutely. you have absolutely cnet. tremendous amount of ig issues. we have seen that market grow by 110%. theook nearly 20 years for credit markets to double in size

leading up to 2008. the seven years since it has doubled in size again. phenomenal growth. much of that growth has been fueled by cheap debt. host: what will be the trigger for investors to say, oh my god, this will be terrible? michael: we are looking for is catalyst a capitulation. host: serious jargon. michael: a little bit of alliteration for you. it could be a major default. from a big company, not necessarily high yield. typecom, and jan -- enron event. paying morestart attention to the fundamentals of corporate's, i think they are going to find things they do not like. we have seen a little bit of that with volkswagen. a chinese miss that could be an issue. misstep could be an issue.

i think any of these could yield the market backup. host: it seems like one of the wildcards is what happens in terms of interest rates and central-bank. does that end up extending the credit cycle? michael: no. i think it extends the most recent rally. eventually it will fade. we have had very low rates for quite a while. this is not the first time the 10 year has been less than 2%. where you are going to find the yield is no different today than it was 12 months ago. every time you see that argument used, and ultimately underlines -- unwinds and ends in tears. for a longer. of time, i do not believe so. host: the problem seems to be timing.

waiting to see that big shakeout in credit. michael: we have gone in high-yield in particular. 10%. up to nearly about 8.5%, at which is still higher than we had been in a very long time. we are starting to see a pickup. 2% default rate. i think next year is when you start to see the big pickup and defaults. digits.gh single high-yield strategist for bank of america, merrill lynch. we have breaking news on the war.oping bidding

angbang is walking away from its bid of starwood. starwood's stock is dropping. marriott had a rival bid at about $13.2 billion. they were also in this bidding war. both pulling in after-hours. coming up, when strategist says specular is our swimming against the tide when it comes to the yen. ♪

♪ are speculators swimming against the tide when it comes to the japanese yen? check out this chart. basically, in white we have net long speculative positions on the japanese yen. lots of people betting began will strengthen. meanwhile, over here in red, we have a foreign investment and japanese stocks and bonds, which is trending down. purple, we have japanese investment in foreign bonds and stocks. outflow going out of japan and inflow is deteriorating. meanwhile, all of those currency

speculators are betting the yen will rise. the fundamentals might not prove that to be true. alix: i love that chart. we have the capital outflows and inflows at the same time. tracy: i actually do not know. all i know is there are weird things happening in the yen. there are market distortions in the yen. i'm looking at something amazing. .his is proprietary information evenslooking at the break , which are typically thought to be higher. he found out that was not true. these are a sampling of different counties in the ba kkan. the lowest price for breakeven, $30 a barrel. nhere are areas in the bakke

that are making money. it goes as high as $63. counties that are making money under $30 a barrel. $35 a barrel. if you have assets that are you can pick up some of the assets on the cheap. this can help rival texas and eagle for. none the less, that really shocked me. this must be a negative for oil prices, because a lot of of these guys can say pumping for longer. alix: the lord the cost, the more you can keep pumping. good stuff. it is that time of year when banks review their credit lines for you.

we discussed the options. ♪

mark: i am mark crumpton. let's get to first word news. in richmond, virginia, authorities say two troopers responding to a shooting at a greyhound bus station have been taken to the hospital. not immediately clear if the three people hospitalized have been shot or sustained other injuries. there is no immediate word on their conditions. donald trump met with republican party chairman in washington today, just days after trump, john kasich, and ted cruz, made it clear they decided to back away from a loyalty pledge they signed in september, a guarantee

the party's presidential nominee would receive the support of all the candidates. the u.s. and china will sign a climate accord earlier than expected. in a joint statement, president ibama and chinese president x say they hope the early commitment will knowledge other countries to join in. global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. i am mark crumpton. alix: u.s. markets closed mixed today, fixing -- finishing a wild first corner. let's look at asian markets. paul allen is in sydney. good morning, paula. paul: good morning. futures indicating we are australia,er here in and probably on the nikkei as well. in hong kong, we will be watching china agriculture bank. this is the last of the five --

big five banks to report this week. the headline number looks pretty good, but once again, that is just .6% profit growth for chinese agriculture bank, the weekend -- the weakest in a decade. if that sounds familiar, it is the same we heard from all the other chinese banks to report this week. also out of china -- manufacturing and nonmanufacturing pmi for the month of march -- we expect to see a number of 49.3. improvements on the previous rate of 49. number, a number below 50 indicates construction -- contraction. well things are continuing to deteriorate, at least things are slowing down slower, if that makes sense. alix: yeah, it does. paul, there is important data out of japan today. paul: yeah, similar story here. we are excited to see manufacturing we can -- a read of 12 in the fourth quarter,

expected to shrink to 5 in the first quarter, and similar for nonmanufacturing, weakness from 25 to 19 there. appreciation is weighing on corporate profits and it is likely to weigh on business conditions as well. that is just some of what we are watching in the asia pacific today. i am paul allen in sydney, australia, bloomberg tv. " -- thehat'd you miss? season is just getting started and we are seeing deep cuts to the borrowing base for shell companies. --h did win crude reserves dwindling crude reserves and world prices, thanks hog-ties enough their exposure to energy. the next guest says demand for capital will return. it is a matter of when and what type. buddy clark is a partner and head of energy practice. you are on the ground, in the

oil patch, talking to all of these companies we mentioned. what are you seeing in terms of how the borrowing base is shaking out this year? mr. clark: it is going to be a little bit more of a challenge for producers this time around. we do borrowing base we determinations for oil and gas producers every six months, and westfall fall, the reductions were not too bad. theink -- last fall, reductions were not too bad. i think the markets at producers were hopeful prices would comebacks in her than they have. it has been lower for longer, and now we are in eight months of a downturn. the banks are giving of the optimism that prices will turn around soon enough to recover on some of these producer loans. the expectation is the borrowing bases will be reduced. alix: i have been hearing that for a year and the banks keep kicking it down the road. why is this going to be different?

mr. clark: that is a good question. i think -- well, number one, banks want to work with producers. they do not want to lower the boom on them. to the extent you can push the barrel down the road in hopes prices return, that makes a lot of sense from the banks' perspective. now that we are 18 months plus into the downturn, it becomes more difficult to convince the credit committee that we need to get the produces another six months and everything will turn around. plus, we have had this lower price for longer. has been reduced. replace theto reserve, establish the borrowing base six months ago, that has not led to drilling. they have been replacing the reserves. what they looked at in october as far as total crude production might have been a maximum amount, and they are probably lowering the actual values, not just the prices. the third confluence would be that the hedges have rolled off.

when producers had the opportunity back in 2014 to put 90, $100 hedges in place, that was great, but those have rolled off, too. alix: tracy, there is a distinction to be made whether you cut to your base, or cut it further. different pressures for each. tracy: on that note -- is the wildcard here, the regulatory attitude? toward bank lending we have seen regulators make some noise. do they read to the pressure on banks at this point? --do a ratchet up the pressure on banks at this point? i think it is more of an acknowledgment that the pressure is already there. the regulators came out in november of 2015 with an announcement they would be looking closer at oil and gas loans. they have been talking to energy bankers. if you are familiar, they claim out with a new -- came out with a new guidebook.

the new guidelines that came out were actually not as bad as the examiners had been discussing in in formal conversations with the bankers. it is somewhat technical, but the bottom line there is the new guidelines, when they came out -- i think some of the bankers were able to breathe a sigh of relief. so, whether the regulatory oversight is going to push the banks to be more aggressive in redetermination borrowing bases i am not sure there is the possibility of that. certainly, the banks are looking at the new guidelines. they want to comply with them, but i think it is going to be the market dictating where the borrowing bases are, not so much the regulator. alix: what area when the market is like jazz right now -- raising equity. this is staggering to me. we have seen more than $9 billion in 20 offerings to guys like pioneer -- pioneer was the -fracker ina mother

terms of wanting to short it by some investors. tracy: it is amazing when you think of how low oil prices were at the start of the year. financesat types of are available to shale producers this year? mr. clark: the equity is open to those companies that do not need the capital the most, by definition, and the debt markets are certainly nowhere near as friendly as they were in 2012, 2014. my guess -- certainly i do not have a crystal ball -- my guess is the source of capital going forward, say for companies exiting bankruptcy, or for companies that are healthy enough to try to acquire assets from a vacancy sale -- that kevin rose would be coming from the private equity folks. capital would be coming from private equity folks. tracy: this comes in the form of a lean -- does that eventually lower recovery rates potentially? mr. clark: that is possible.

it depends. every company has its own different capital stack of how they access debt. private equity guys could come in as equity. we see some distress producers -- in order to increase their borrowing base, rather than increasing production, they are going out and looking at some possible acquisitions, and if they can find a creative acquisition, they might get the private equity to finance that. you add the new production, and you increase the borrowing base, and you kick the can a little bit further down the road. alix: not only that -- the equity raises, for example, but you mention private equity -- they raised $20 million they are waiting to put to work. bernstein is setting up a team to deploy capital into energy companies because the banks are shutting their doors. what is the longer-term implications for shell production on that? does the money come with different kinds of strings attached? mr. clark: every deal is uniquely negotiated. alix: that is a yes.

[laughter] there is: i have heard $85 billion. i guess there is as much money out there to invest as there are good deals to invest in, and just because there is $85 billion penciled by the investors, you have yet to see a lot of that money actually being put to use. there have been a few recent acquisitions. they haven't finance to private --ity, and large, that money they have been financed by private equity, but by and large, that money is sitting on the sideline. tracy: when you are down in houston in the oil patch, talking to oil clients day in and day out, what is the mood on the ground like? mr. clark: i think it is helpful. this is an industry that is populated by optimists, and they are getting challenged with their optimism, but, you know, everyone is in this industry because they see the long-term picture, and clearly, it is negative right now.

out,nths out, 24 months people are expecting, certainly prices, to turn around. plenty of be opportunities. it is really just "hold on -- hold on to what you have in order to be able to build into future." alix: what you think will be the primary source of capital for energy companies into the future? mr. clark: you know, those that are healthy -- the public companies that are healthy -- they will be able to raise more capital through stock offerings. the smaller producers -- there are hundreds of smaller producers -- i think their access will be private equity investors. the bank capital, it remains to be seen if the new regulations make it more difficult for commercial banks to really dissipate in reserve-based debt markets, but for the near term, i would certainly put my money on private equity as far as if i had to go raise the money tomorrow -- there are a couple of private equity firms i would be knocking --i would be knocking on their doors.

it is like the wilson phillips song, "hang on -- hold on for one more day." paul allen mention the release of the japanese survey. we will tell you the three things you cannot miss in the vital report. looking at the after our trading of starwood and marriott. stocks falling in after hours. ♪

alix: i am alix steel -- a look at the biggest stories in the news. walking away from the proposed takeover of starwood hotels/they

recently made a bid in a bidding war with marriott. shares of starwood are falling in after hours trading on the news. tracy: daily sports fantasy operators draft kings and fan dual are suspending their college contest. the suspension is indefinite in austin, part a video deal with the ncaa that follows months of discussion. the move takes place after monday night's ncaa men's championship game. supplierle is doing a shuffle. royal philips is in -- the revision and a boon to phillips, the world's biggest lighting bone --boon to building; thirst to make leds. tonight, the tankan survey is released. companiesthousands of

asked about current conditions. we're going to look at three charts that are really important in this report. the reason we care so much about this -- the bank of japan uses this data to help formulate more it -- monetary policy. it is a forward-looking survey. that is why we care. tracy: and the survey is known for its role in japan's monetary policy. --'s look at the first chart this one shows -- we were talking about this at the top of the hour -- the y has been strengtheningen. it is amazing given the stimulus measures doj has -- boj has taken. thathe more hiring manufacturing does, that might affect the japanese prime on whetherdecision or not to launch more fiscal stimulus coming up. alix: i thought what was

interesting was the nonmanufacturing business conditions are holding up to the nonmanufacturing outlook -- the pink line -- is turning down, but both of them holding up much better than manufacturing, which is the orange and white line. the services industry, or nonmanufacturing, employs a lot more people than manufacturing. that will be key in determining how much stimulus or texas they will have to do, -- tax cuts they have to do. tracy: for sure. the next chart has to do with .apx it shows the corporate survey. it has turned slightly lower. the orange bars show the tankan large firm ca[x. it is pivotal because it is the start of the investment plan for the next fiscal year. companies willt spend for the past -- next 12 months. past indicators show march has been particularly weak for the survey. the last march, it didn't below

-- dipped below negative territory. x can beat 0%, that is huge -- a huge positive single. alix: will be watching for the positive signal. that will be fun. tracy: i have one more left for you -- the third chart showing current profits in japan versus the yen appreciation, which we have been talking about already. the higher the yen goes, the worst it ends up being for japanese corporate's reporting earnings. alix: no matter how much he wants to work the yen lower -- you talked about it before -- the trade was short the sterling and longer yen, and that is exactly what they do not want to see, as well as companies. tracy: is such an odd dynamic, but it socgen is right, maybe talents -- loses

talents. alix: coming up, how resilient is the u.s. labor market? we have tomorrow's u.s. job report in three awesome charts. ♪

alix: i am alix steel --"what'd you miss?" tomorrow is jobs friday. matthew boesler joins us. at thelooking unemployment since it between a 25 and a 54 euros. why is that key? this playing out in the 25-54 prime age age group,

an important category because this strips out retirees and also students. when you can see here is that median wage growth for that age group has been rising. raisesr about stagnant -- wages. that is not the case for 25 to 54 euros. if we see another pick, and will be a good sign for wage growth. alix: wage growth is there if you look hard for it -- look in the right place. matt: exactly. if you are under the age of 55 and over the age of 24. tracy: let's look at the second chart -- the spread between the an appointment rate, which is one of janet yellen's favorite things and the u3. tell us what this is -- matt: a proxy for how much slack is in the unemployment market. you can see it is elevated to -- relative to precrisis levels.

that implies there is a significant amount of shadow slack. if that keeps coming down, you'll see less and less of an argument there is more slack beyond the headline unemployment rate and you cannot trust that number. i will be a good sign a more supportive of wage growth going forward. quiteit seems like it has a way to go to get back to where we were before the crisis. the difference is both the headline on implement rate and the on implement rate are both moving down. we could get to the point where we have a very low headline unemployment rate -- maybe below 4.5%, if some forecasts pan out, and maybe we still do not see that wage pressure for that low of an unemployment rate if the underemployment rate is still elevated. weeklyou have aggregate payroll growth versus consumer spending. give us a definition. matt: this is the number of people employed times the number

of hours they worked, times the amount they make per hour. this is the aggregate paycheck. this is important for the fed. this will support consumer spending going forward. consumer spending is a big part of the positive outlook for the economy from the fed. if we keep generating this paycheck that goes to support spending, and i will be a very good sign as well. we have really seen, like, that rowing at a steady clip. there are no worrying signs there at this point. tracy: i have a general question about tomorrow's jobs report -- given that we saw a very dovish janet yellen talking about risks to the u.s. economy, is a going to be more attention paid to the report, and if we see, for instance, a big beat on the headline number, are people going to be going what is yellen thinking? matt: some have said it is more about global developments and less about the labor market, t i think that is wrong because if you get down to a lower unemployment rate you will have

janet yellen and some other dovish officials like charlie evans scratching their heads about can we keep rates lower for longer -- that could ultimately force their hands. alix: on the flipside, steve englander of citigroup's saying that good news will be an indication -- having good ruse -- news on the unemployed rate is because we cap loads -- because we kept rates where we did. confidentre more given the numbers are coming out where they are. alix: do you have a job's call? matt: i have to figure that out. i will bring that to you guys later on. alix: good stuff, matt. matthew boesler of bloomberg news. need: coming up, what you to know to give up for tomorrow's trading day. next. ♪

alix: don't miss this -- night pmi:45 p.m., we get china -- a good read on manufacturing there. also, in a few hours, tesla's model three will be unveiled in outlay at 11:30 p.m. eastern, it: 30 p.m. -- 8:30 p.m. pacific. are you going to do that? i am not, as a non-driver. it seems a lot of people are. another think coming up tomorrow -- besides jobs day -- a host of u.s. data. isn manufacturing. michigan sentiment, and construction spending.

missed jobs and manufacturing? a data kaluz of. alix:

mark: i am mark halperin. and: with to donald trump rants previous -- secrets, secrets, are no fun. mark: greetings from the university of wisconsin at madison. more fallout from donald trump explosive assertion that in a world where a abortion is illegal -- there has to be some sort of punishment for women having them. we will spend the a block talking about the biggest and in some ways the only question in there, can race -- has the teflon