agreement could be made without iran's participation. speaking of deals, glencore akes another step within multibillion-dollar deal about pension funds. welcome to bloomberg go. i am here with jonathan ferro and stephanie ruhle. stephanie: what is interesting about thisam here with jonathano and stephanie ruhle. stephanie: what is interesting about this deal is when you think about everyone involved, there is nothing they hate more than the government walking in and sidestepping them. >> clearly see decision has to be made to not push the deal. they have made the decision to say no way, that is a big story.

costanie: because lawyers so much money. >> let's get a check on the markets. futures are positive. 24 points up on the dow. up around four points. it is the oil majors leading the game and europe. you see wti on the screen up 2.8%. we are at a seven-day losing at 1.13.d the euro is let's go to vonnie quinn. have a republicans will contested presidential convention -- ted cruz succeeded over donald trump in the

wisconsin primary. ted cruz calls this a turning point and says republicans now have a real choice. >> we are winning because we are uniting the republican party. hillary clinton, get ready. here we come. vonnie: donald trump is still on top. 143 delegates for john kasich. noovan -- donald trump made concessions beach, he issued a statement. meanwhile, bernie sanders is on a hot streak. he beat hillary clinton in wisconsin and taking 57% of the vote. now, he has is eyes on the next prize. the new york primary is april 19. -- helen clark will run for

secretary general of the united nations. a woman has never held the job and now for women are running for the position. 2009, she has run the poverty eradication program. one annecticut women unprecedented fourth straight ncaa title. breanna stewart scored 24 points to win a record 11 titles. i am funny quinn. stephanie: those ladies made history. extraordinary. huge. massive. also a win for the white house. against its fight in corporate inversions. pfizer has terminated its merger with allergan, ending what would have been the largest other health care acquisition. i want to bring in matthew

campbell. is this the end of pfizer's efforts to merge completely? could this be the end to all mergers? bankers everywhere just started weeping. matthew: in the first case, there is no question that the u.s. government went after pfizer-allergan specifically with the steal. the new regulations are written in a way to specifically target pfizer allergan. it is very clear that if pfizer tries to do this again, there will be a similar response. but foruture, who knows now, pfizer will not try anything else. as to whether this is the end of inversions generally, we will have to see. it depends on whether congress can pass a tax reform that would move forward in the future. allergan stock is not

the only stock trading lower. some of these banks are getting hit. what does that mean for them, the bankers involved in the deals? matt: there is no other word for it other than disastrous. advice on m&a transactions is a binary business. if the deal goes through, you get paid and if it doesn't, you get little. so if you're goldman sachs, you take the hit but if you are someone who is small or a boutique, it is obviously a big knock to your profit and what you were hoping to accomplish. ,tephanie: just to qualify there is a lot riding on the deal with potential advisory fees. matt: that is exactly right. sheet,n't have a balance they are not financing in any case. so this is something where advisory fees were going to be now that the deal has

died, the banks might be lucky to get 10% of the amount, not a lot to go around. david: hindsight is 2020. i wonder whether they saw this coming? because $400 million was put on the breakup deal, a cap which is pretty small. that is almost nothing. matt: that is an interesting question. it is something that we have been hearing, the two sides does anticipate that there might be something from the white house, a new set of rules. i think they may have been surprised by those code things. first, how targeted these were to go after pfizer-allergan specifically. and also by the general severity.

this was a low probability event and if something did happen, it would be manageable but it turns out that we have had the rules committee and they are very stringent. jonathan: big stock action on the back of this. shows yes, i think this where the companies go from here. here is the stock when the deal was announced, the traded sideways after the deal was announced. allergan has gone down. that would imply that allergan needs this more than pfizer. i want to look back at the five-year chart. this is adjusted for percentage. allergan has made a series of large acquisitions. allergan has been one of the tenants of the strategy, various mergers. that has created growth. did allergan and pfizer, do they turn to other suitors? both to buy them or do they make acquisitions to try to continue to fuel stock growth? jonathan: matthew campbell,

thank you. futures this morning, up a little bit. a big money in crude oil. see, stocks are higher and futures are higher across the board. up four points on the s&p 500. wieting is here. just the top of the corporate story, but political risk is hard to predict. but going to the back end of this year, it is something we have to think about this more. steven: we are thinking about this particularly in the case of the u.k., the referendum with the european union is an issue. once that has passed, we will look to the future. how the u.s. election goes, and that really depends -- we don't

focus in on that, it is subject to changes. both at the same time, they have managed to come out ahead. but for now, we are not focusing on that too much. we are focusing on the marketplace. stephanie: it is it -- is it affecting the way your clients are investing? yteven: it is affecting the wa we are looking at the markets in a forward-looking way. taking very large country centric risks in certain markets , we have avoided that because of political issues in some cases. this is a year where politics are meaningful for markets. it will not turn around the global economy, which is what is most important for the performance of world financial markets but it is important for us.

david: it seems to be rising on peoplest as far as what worry about. where are you with brexit? steven: it is considered unlikely. our experts think the probability is 30%-40%, which is not a trivial risk. the view is that after all of the campaigning is done, markets will be there. not to go into the long-term, it is not trivial. the u.k. exports 30% of the gdp to the european union. so this is very meaningful for the economy in the u.k. jonathan: we are seeing this play out in the fx market very clearly. we are seeing strong demand, there may be an argument that they are longer but do you expect this to play outside the fx market? steven: of course.

there are certainly different influences on these markets. but the idea that it should be entirely and fx story, we don't think that is right. it depends on if we see something happen, if the vote doesn't occur, or is there will be no separation, there will be followed on that but the larger move would be the breakup. it does affect all markets to some degree. stephanie: where do you want to be taking risk right now? steven: it depends. if you are one of the people who will focus on the next couple of months, then you want to consider the sorts of risks, but we are looking longer-term. tactically, we are looking for one-1.5 year terms. we can handle more of the volatility than others can't.

chase acids up and down over the short run. david: where do you like the risk reward ratio, in terms of geographical areas? steven: i think that we are now coming out of a state of shock in the financial markets. the view is that there was an extremely hard landing in the world economy with the u.s. and other areas. so we like equities. that we like them a lot less than two years ago. ars ago, we were up 7%. u.s. income, or in particular for u.s. investors, municipal's where the bond you would need to get at the longer and would be a 6% bond. we are seeing the same sort of yield on long-term use of polls. stephanie: don't we need to look

at them in a different way? additionally, they were considered a safe asset. but when you look at detroit and puerto rico, people were not prepared for not just the kick up but the disaster. when you look at the rise of candidates like donald trump and bernie sanders, it is telling us that there are parts of the country that are suffering. steven: puerto rico is not investing in great municipal bond markets. investors need to make a conscious choice in what they are looking for with municipals. it will have to buy safer securities and take a look at the high-yield market. for the best returns, some of the beaten-down high-yield energy areas were recently trading at a $.50 dollar price and have come back a great deal. it has a good yield premium and it has been sold off much less but is a safer bet within the

high-yield so there are all sorts of opportunities and specific need to take risks. prices around the world are not depressed like 2009. stephanie: do investors pay enough attention to credit ratings? because since the crisis, we have seen investors search for yields and when high yield was trading at 6%, we saw a lot of nontraditional leverage clients go into the markets and at the beginning of this year when high-heeled spell, they panicked. steven: their managers should pay enough attention to credit ratings. there are cases -- a lot of these things are priced well in advance of ratings changes. so it is important to look at times of credit deterioration. the united states, more are usedd energy bonds

in terms of the share of the market overall. but obviously, the price of oil isn't what hundred $15 anymore. this is a big issue. it away from that, we have pretty good fundamentals. low rates in about the united states and the yield opportunities that we find inside u.s. markets, it is so much dramatically better. jonathan: steven wieting, great to have you with us. ♪

david: we will go overseas to

europe. glencore is moving forward with its plan to sell assets. the largest pension fund but a minority xavier plan in the agricultural fund. they will hold a 40% stake in the business. we have been talking about this for the next test for the past few months. and this is a major component in what they want to do to reduce debt. >> the biggest part of the debt reduction plan for reducing the debt of $6 billion -- glencore is trying to reduce that, selling between $5 billion in assets. reacting so far has not been positive today, and that is because it is the 40% stake that they have sold is

below expectations. jonathan: management is doing exactly what they said they would do. we have the chi like copper mine and the australian coppermine. where is the emphasis for asset sales? >> glencore has said that they have the right to sell 20% of the agri-unit. was battlingcanada against a saudi company. so potentially, glencore could sell and other 20%. there are buyers out there. i think it will have to be metal thatt is the every investor still likes but glencore has a bit more to do. theuse if you think about company with low corporate prices and flow oil prices, they

are still trading low. david: so the bottom line, they were at 30, they cut to 17, where are they now? gone, whaticulture is left, potentially they could sell and other 20% and they ile.d sell more mines in ch stephanie: thank you for joining us this morning. steven wieting is joining us, thank you. next, the panama papers. this story short isn't over. under pressure. we will have that and more when we return. you are watching "bloomberg ." ♪

stephanie: you are watching "bloomberg ." we are talking panama papers. with theore accounts panama papers is putting the british islands in the caribbean under scrutiny are you. the overseas territory is home to have a million companies. stephanie baker joins us now from london. the leak is putting pressure on the david cameron. tell us about the u.k. relationship with the overseas territory. >> the revelation that more than half of the companies exposed by the panama papers were registered in the british virgin islands has put the spotlight on the u.k. -- it is awkward, the relationship with the overseas territory. this is a former crown colony. head of statethe and she appoints the governor

who appoints the prime minister. who thinks the u.k. has a measure of control and influence over what goes on there. david cameron has put pressure toterritories like the bbi open up and set up a potential register for companies there. but so far, they have ignored his calls. he is now facing pressure from opposition politicians like labor leaders to take direct control of overseas territories that continue to a front u.k. tax laws. jonathan: are these leaked arguments or are they moral arguments? reputation is the issue at this point. >> i think the concern may be about the government that if the pressure of the overseas territories opens up, it could disrupt the fragile economy there. financial services account for more than half of their gdp. there is a concern about what

the impact would be. they do have a quasi-independent status and that gives the to sayent the ability they cannot do anything but there is a precedent here. in 2009 -- the control of the turks think it goes islands after there were reports of widespread corruption. they took control, cleaned it up and handed it back in 2012. money.tell me about the if they shut this down tomorrow, there are 500,000 companies there. with the u.k. government lose a fair amount of revenue from this? >> no. the other argument is that the city of london benefits enormously from the relationship with the territories it operates as tax havens. so it could have an impact on the city of london if they were to force places like the bbi to open up.

bbi cells is secrecy. so having a cover of not having to disclose official owners of companies register there is a selling point. if they do follow david cameron's call and open up, that could look -- that could cause them to lose business. david: that was stephanie baker. coming up, the pfizer-allergan deal is off. details are coming up next on the "bloomberg ." ♪

thank you. ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. it's reliable. just like kung pao fish.

thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business. youto get the help you'refar looking for. that's why at xfinity we're opening up more stores closer to you. where you can use all of our latest products and technology. and find out how to get the most out of your service. so when you get home, all you have to do is enjoy it. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. jonathan: this is bloomberg go. some hole in the middle. they could be to the right.

i think above the room and tempo, the roman ruins, we did bloomberg's "surveillance" from there. will bring us our morning must-read in a moment. let's get to vonnie quinn. a setback for trump runners in the race for the white house. ted cruz and bernie sanders were the winners in tuesday's only primary election. to 45%. hillary clinton was beat by 43%. she still has a substantial lead in delegates. thep is still on top of republican race. he has 740 delegates and 143 for john kasich. the european union may affect the outcome in the netherlands. they are voting on a treaty that eases relations between the eu

and the ukraine. the other 27 nations in the block of ok'd the agreement, but many of the netherlands oppose, saying it allows ukraine to join the european union. the government of india is reporting reported offshore accounts of hollywood stars and business tycoons. more than 500 indians were linked to the accounts described by the panama papers. global news 24 hours a day powered by our journalist. david: thank you. it is time for the morning must-read. extinguished historian and even more," edmund burke. he is my favorite. tom: everyone should get a different take on conservatives. that is what we saw on wisconsin. harold james with interesting thoughts. this could be america's generational war as well.

some commentators describe the burden in even more brutal terms, saying the current generation is a essentially colonizing the future, as they, like many european colonizers in the past, strip the west line for those -- the wasteland for those they colonized. it is happening in spain, europe and may be in america. the case: isn't that simply of senior citizens vote and young people do not? tom: i think that is one of the great drivers of the trend and professor james would suggest the same idea that this is something that has always been there. it has just been more accentuated. david: this is what edmund burke comes in. what he wrote is that people are not just making decisions for themselves but the ones that come after. maybe what we need is a mobilized young electorate who gets together and gets a little angry with -- turnout,ve seen that

not only here but in the recent elections in the united kingdom, people are mobilized but it is a question of what will you do? to me, the answer of what is missing in professor james citation is gdp growth. jonathan: what is missing is a recognition by politicians that this cannot continue and now it's a to shift away from the political force and go to the business strategy, which effectively -- [laughter] jonathan: it is a massive ponzi scheme with the greatest of intention and when you have that, either you have more people with a demographic problem and we don't have that over the burden is for the people and the generations to her three below yourself and they will have to do the heavy lifting and that means paying taxes and looking after the older generation. david: to the point about gdp growth, we have invested in the least productive part of society. we are not investing in the

youth, which will generate gdp growth. tom: i would go with that, but i think the other thing that professor james mentions and we see this in europe coming out of that's a much world war ii but the 1950's, the idea of the chronic nature of this trend. david, we are getting up toward where it has been a long time -- stephanie: the chronic nature of the trend, the only way it changes is that those in people who are being adversely affected act. you do think it's reading and paying attention to this piece? tom: i think they will act, but do they have a majority bu? -- view? no. they do not have the voice to affect the dialogue in europe or the united states. it is clip service to them. what is old, david? [laughter] david: i am old. tom: over 39? the only thing good about this is our next guest has gray hair.

[laughter] stephanie: there you go. we have got to move on topics. 160ave got to talk about billion dollar deal that has been terminated between pfizer. we are joined by patrick cox, law partner an expert in structure.x patrick, can the treasury actually legally change the rules? when jack lew cannot with the statement, people beyond and said that it was not in his wheelhouse and they moved on. people are paying attention here. do have they authority. it is in the code itself that the treasury can an act regulations and implement within theicies, so section 78-74 regulations and now with section 385 regulations, there is a specific authority for them to do this so they are acting under that authority. they do not tend to do this sort .f quickly historically

the 385 rules were enacted quite some time ago, right around the time i was born, and we finally got regulations under that code section. that is 50 years that we have been waiting essentially for this regulations to come out, so they don't always act immediately with the authorities in the code to enact guidance. sometimes it takes a long time and sometimes not so long. you are seeing the rollout of followions to sort of their statutory authority. the short answer is yes. david: even if there are statutory is, there are bases on which they could be challenged. arbitrarily caprice in certain things, but my question is, who would challenge them? you have to go and do the deal and then challenge the regulation because no one will do the deal because it cannot go through. patrick: exactly right. nobody will put that was their

capital to go to court and find out what happens down the road. the only way they are likely to get challenged is people get caught up in the rules or you get some sort of strong man case where they go and challenge the treasury, absent the really overstepping their bounds. i don't think anyone in the tax community amongst tax professionals feel like the rules necessarily do that. i think it is unlikely. you are right, they will pull the plug on those deals and not moved forward and take the risk. from nyu wrote a wonderful essay five years ago with the unintended consequences of regulation. what are the unintended consequences of the kind of thinking that bus at this large transaction? patrick: this is the perfect example where you see the evolution of notices and kind of regulations that come out to try . but i think they tried to do over the past two years or three years, remember, pfizer started

this a few years ago in trying to do a big deal like this and do an inversion, and they have had starts in the process. along the way, the treasury has been looking out to try to stop them, so the problem that you changesthey do micro with the unintended consequence which is other companies trying to make money and compete in the business world and they get caught up in the rules and you need to hire somebody like me to catch the sort of football unintended consequences of micromanaging rules. i would add quickly that this is now not micromanagement but the rules that came out on monday are enormous in length and scope. we are talking hundreds of pages of regulation. we are talking about actions under 385 that people have anticipated for years, decades

coming out, so these are big changes. jonathan: i will hire you right now and you will not charge anything but i'll ask a question. outside of cutting tax rate, i asked someone to explain the rules in 10 seconds but you cannot explain your rules and 10 seconds. what rules would you have implemented to stop these things from happening? have beenk, so we talking about politics lately. every presidential candidate has had sort of tax plans and president obama just came out on monday as well with his framework for business tax reform modifications, so he is sort of now focusing on what is the effective rate because that is what you report in your sec filing, the sort of statutory 35% but what president obama said in the train work for business tax reforms is our effective tax rate is around 18% to 90% and

that is kind of what it is on a global basis for most of the g7 or major developed economies, so he sort of points to that saying it is fair already, but getting there is troublesome. some companies to get there and some companies do not and you end up having to hire somebody like me to sort of find your way through and get to that effective rate, whereas i think the republican or some other republican candidates would say, let's cut to all that and go to a statutory rate of something lower. even president obama said we should lower the rate from 25 to , so everyone wants to get to a lower statutory rate and cut out some of the problems with getting to that rate this sort of hyper planning. david: two are very much. tom, i think we should do reflections on the revolution of france tomorrow. -- ifnie: that is not a that is not a sexy thursday, i don't know what is. david: patrick, thank you very

much. you have been hired a couple of times since you have in here. the race gets closer the tuna candidates as the underdogs hope for it. we have more on that, next. ♪

jonathan: i am in the hp gringo. coming up, like mail on the state -- up, the state of affairs. here is your latest business flash. i am vonnie quinn. germany is luxury carmakers are in talks with microsoft and amazon over the digital mapping

service. according to "the wall street journal," it could lead to the companies taking minority state. the pairing of my cb spends -- the parent company of mercedes-benz was in nokia last year. this comes after revelations that global leaders and celebrities used baton of us based law firms to perhaps hide their fortunes. one lawmaker says a norwegian fund has about $24 billion in assets parked in offshore accounts. hadish retailer first-quarter earnings that beat estimates. the strong dollar hurt margins. they get about 80% of the product from asia. h&m predicts the situation will improve by the end of the year. jonathan: thank you. let's get a check on the markets. where are we? up in london, up about .6 of 1% and that the cross most of the european equity markets except for the dax.

a 25 points on the dow jones. looking at crude, amazing. wti up 2.67% gain. dollar yen at one 1042. -- 110.40 two. some of the market moves this morning and let's cross over to julie hyman for the talk on wall street. julie: starting with the european mover with shares in the green. they have to sell up yesterday and rebounding from that. they have upgraded the stock to a strong buy. is the prices target and they are at 140 six right now. the analysts say they will be a small pickup, especially after last two, despite the worsening global backdrop. giving us some of the gains but thinking on for .5 of 1%, up about 1% on the year. let's move on to air france

comics uprising news in the red, but up obsession those. they were downgraded to neutral. they touched a seven-week low after, no supplies, the ceo of the company departed, this coming after three years at the top of the company. shares climbed 17% during his tenure. the stock of the day is allergan. the deal is often pfizer officially terminated the proposal. it is the lowest on the street, $250 rating and being sliced from neutral. the analyst saying a lack of common catalysts. down 24% this year and a lot of the decline came yesterday. david: two you are. we will go to wisconsin. a big night last night with time there is a both sides of the aisle. ted cruz be the front runner donald trump. the vote and that

makes it more complicated for trump because now he has 514 delegates. side, big night for bernie sanders. he extended his winning streak, edging closer to hillary clinton. 57% to clinton's 43% with 1050 six delegates to clinton's 1743. we will bring in megan murphy, our bureau chief in washington. tell us about the republicans. what does this mean for trump? what this means is how much more likely it looks like we will have a contested convention. yes, the path becomes increasingly narrow for donald trump. we expected him to lose last night. wisconsin was never a state that they were him tremendously as other states have carried it is a more highly educated demographic and it does not have the evangelical swing that benefited him in the past. aing forward, it has been

brush stretch for his campaign and it has not really dented his message and momentum. particularly in women and other kinds of photos, where people will be consolidated behind ted cruz. stephanie: which texas to the next round -- which takes us to new york. one would believe it is more trumped flavored, but if you think about what he has done in the last couple of weeks, what do? that megan: we say wisconsin nice and now it is new york nasty. we will see a term can rebound. we are looking at 50% threshold and what that means in how the delegates play out. this is all about math now. bea lesser extent, it will pulling delegates away from trump anyway they can, including in new york, pennsylvania, california. it is going to be a sort of dog

delicate,gate by state by state, district by district and of the folks out there right now, one of ted cruz's advantages is he has more people more familiar with the process. that is going to her donald trump unless he focuses on getting the organizations around to keep his advantage. stephanie: is it a positive or negative that people in new york actually know donald? [laughter] megan: what was interesting in wisconsin was that he had these missteps. are i not sure people talking about today is he came hewith 35% last night and still took over one third of the vote in wisconsin. that is kind of a little bit in line with what he is been taking in these states. that was higher -- higher than that would have been a win in michigan. what was most interesting was ted cruz in terms of people look, if itaying, will not be trump, maybe i will

put my vote behind cruz. jonathan: the markets development have come from the seat and about tax and version. on policy, where do the candidates sit on the policy coming out of washington, d.c., at the moment? megan: one of my favorite topics. in versions came as a huge surprise in washington. no one expected obama to be as aggressive and it specifically targeted pfizer-allergan. it is rare for them to put up a policy like that were people at that surprised. interestingly, the people who have been out front of conversions, donald trump, bernie sanders and hillary clinton, but trump has made in versions one of his key platforms. it will be interesting if he can capitalize on that. stephanie: except he has used regulation and tax policies to help himself, i.e., filing for bankruptcy. that has nots, but

really damaged him as much. i think one of the strategies ted cruz will do is get people up and affected by those the group sees. , is thisrnie sanders his high water mark? megan: it could be, but he has continued this incredibly successful run. he comes to new york, hillary's adopted home state, and her new firewall begins and ends of the empire state. david: all back to new york. stephanie: one of my favorites, and i'm not talking candidates but megan murphy. let's take a quick look at the markets. the nikkei sliding for a seventh day. the longest streak under prime minister abe. we will take a closer look at the state of japan's economy doing off the charts,. you are watching "bloomberg ." ♪

jonathan: a warm welcome back to

"bloomberg ." volatility remaining subdued in japan despite a seven date losing streak for the nikkei. julie hyman takes us through all of that in off the charts. child behinde the us. color.kei in this aqua the worst since abe became prime minister of japan. they goes all the way back to 2012. volatility has picked up a little but still subdued. something curious. you would think with stocks tumbling there that there would be a bigger increase in volatility. jonathan: maybe not for equities, but when you talk about japanese equity, we have to talk about what is happening with the currency. julie: indeed. we have it yet and chart as well ,hat we had the nikkei, the yen and the japanese control valance

sheet in white. in the u.s., when we had quantitative easing and the explosion of that balance sheet, stocks kept going up and up kerry that was happening for a while with the dollar strengthening against the yen. and i allowed to walk? jonathan: you can walk. julie: here in the balance sheet, it has continued to expand but stocks have fallen and the yen has strengthened. does it show the limits of the ability of the doj to do what it is trying to achieve your? i think it goes back to the argument about to not fight the federal reserve. whether or not it is fighting everyone takes, steps forward to hike and that is why it matters on the dollar- yen trade on the other side, so regardless of whether the balance sheet of japan continues to did this, the dollar-yen tracks lower and coming back to 110. seemingly, thatcher janet yellen doing more to that japanese

equity and trade. julie: and governor kuroda, will he be doing more to fight the fed? clearly see a cut further into negatives in japan? that is something that is being talked about. jonathan: seven-day losing streak on the nikkei to 25 in the dollar yen around in october 2014 low. you, julie hyman. coming up, america's managing director mike mayo on the state of affairs in the banking industry. fedthoughts about the rate hike. ♪

jonathan: pfizer terminates -- 160 billion dollars merger following obama's crackdown. controversial rules announced today facing intense opposition

from the financial industry. greece beat to the u.s. labor secretary first on bloomberg. speak to the u.s. labor secretary first on bloomberg. the jump in crude prices have not stopped the cost of low equity. york,8:00 a.m. in new 1:00 p.m. in london and in the clock p.m. in hong kong. i am jonathan ferro along stephanie ruhle and david weston. research, director of billion andover $11 a leader of the house team leader. stephanie: he is working overtime. david: a lot to cover, but we want to start with the market.

jonathan: futures positive across the board. doubt features of 36 points. the dax is up by five points this morning. the ftse up .8 of 1% as we had into the close over there. switch on the board, wti climbing high for another day, up 2.9% at 3695. near an october 2014 low. the nikkei to 25 on a seven-day losing streak. the treasury market got higher, up three basis points, two basis points now to 1.74%. let's get to vonnie quinn. setback in wisconsin for the front runners in the race for the white house. ted cruz and bernie sanders where the winners in two states. cruz beat donald trump in the republican race, 48% to 35%. sanders beat hillary clinton 47% to 43%. sanders 1056 delegates.

has 740 delegates to 514 and john kasich at 140 three. the biggest natural gas leak in u.s. history threatens southern california. the storage field was plugged in february, but there are restrictions on how much gas can be injected there. state agencies say that could lead to block outs for millions of californians this summer. though you and their stephen a cohen decided to form a network of free mental health clinics for veterans and their families. his goal is to open 25 clinics by the year 2020. his son served with the marines in afghanistan. global news powered by our 2400 journalists and news sparrows around the world. stephanie: thank you. a win for the white house despite corporate inversions. pfizer and allergan agreed to and the largest ever health care

acquisition. and you armstrong is here to break this down for us. what is your take on this? >> the market never thought it was going to happen or they did not for a long time. the prize did not get up to the purchase price for allergan. thinkthis deal, we still their assets go through and greatan will be in a position. they have a balance sheet to do buybacks and make new acquisitions. still a great company. david: there was underlined business reasons for these companies. they needed the deal. what will pfizer do next? carmel: business reasons? david: they tried to grow the top line. andrew: they really did have a reason to get involved. pfizer had been talking about winning to get bigger to possibly wake itself up. that is still on the table and expect to make a decision by the

end of the year. allergan has been this acquisition machine just going and going and pfizer seemed like a logical exit point, but both of these companies, they do have plan b's sitting here. allergan coming away with a big pile of cash dealing with debt and having a lot of power left over. pfizer sitting on plenty of cash. they have the firepower to do 160 billion dollar deal and they could probably look somewhere else. you look at where shares are trading, it will come up 3% or 4% this morning and everybody thinking, what is the next allergan for pfizer when they look around with that powder that they have? carmel: since we talk about allergan, if you look at bloomberg, this is allergan and it looks in to the acquisition history. it has made 43 deals over the past several years.

it made the activist allergan, and they also have a chart of the market cap of this company asset has been growing and growing perry that is not it. i have a lot of charts. here we go, no. oh, great, here we go. there it is. you see this step up when you the some acquisitions and explosion in market cap as a result of that. was this sort of an interruption in the strategy? and it goes right back to the playbook or does it have to come up with something you know because of this interruption? david: or even go to something called. if it was a good deal based on fundamental business principles before, it is still a good deal but at a different price. take a look at this deal, take up the tax savings, reprice it and it would be a sensible deal. is that impossible? easy.: it is not as the 2080 will not inversions of make it difficult.

drew: the tax component was always a piece. for years now, he has said that when he is looking at the big deal he is going to do, there will be several components, scale will be involved, they will look for pipeline and tax. they have to complain about the system for a while and they have watched competitors, companies like allegan, leave and be able regime to invert. they're looking at the obama administration and saying, everyone can get out of here and we are left holding the bag when he dropped the regulation? i think they are probably feeling, as are a lot of companies, wondering, weight, where do we draw the line under gets to invert and who does not? it seems to be have drawn at pfizer. jonathan: if you look at the m&a situation, a lot of companies going after the tax cut. what does that tell you about that? carmel: one, we had opportunities in the health

careand i don't think the m&a cycle is over in that space. evaluation is too attractive, but for broader economy in the u.s., i think it looks a price on the worries for us are europe. there is higher political risk and earnings risk in that market. risk is good price -- is new price. stephanie: what do you mean? look at the yields, it is not the discrepancy you would expect. we have the greek refinancing coming up, cameron has just been implicated in the panama bank scandal -- stephanie: the refugee crisis. mel: exactly. just because draghi has come out with a great plan, it does not change the political background. jonathan: should there be a bull market? carmel: absolutely. jonathan: how big?

i talking about basis points or percentage points? carmel: i think it is closer to percentage points. jonathan: do you think germany should be trading one full percentage point higher even with these ecb buying a huge amount of german debt? polls: the most recent came out in favor, 48 to 42 in favor of leading -- leaving the union. what happens if britain leaves? there will be a lot of issues. they will also buy more treasuries. -- i don't think that europe will be as attractive as of the markets will be at that stage. toid: i want to come back the overall state of the global economy. i have read that you have said if you look at company by company building up, it is in much greater shape than macro down. what accounts for the disparity? what is macro missing?

carme let's take the case of japanl. the economy is slowing and they may: have to do more easing, but what kind what they do? they will probably by security which means the market will go up, even if the economy is slow. there is this corporate governance change that is making companies that have been able to go one have lower returns for long years and they come out and have to become more focused on profitability and returning capital to shareholders and become more shareholder friendly . that is a huge scene change and you are seeing that happening in the largest companies in the market. stephanie: what do you mean? you have the banks buying back shares, sony divesting operations which are not earning that much money but it has been their legacy businesses and everybody knew that but it was not their future. those are the types of things that improve the return on invested capital and they make great investments. impetus for stock buyback in this country and japan, designate tell something

disturbing about the underlying economy? ceos are deciding there is no place for their cash and investment so they would rather buy back their shares. isn't that troubling? this sizeen you have of cash sitting on the balance sheets, a company like nintendo, it is excessive, so yes, they are still investing in their businesses, but they do not need as much cash as they have been holding for such a long time. stephanie: thank you so much for joining us. wellso and drew armstrong. coming up, u.s. labor secretary joins us to announce new controversial judiciary rules that are already upsetting financial advisors and republicans. we will have that, next. ♪

investors are about deceit of the change. the department of labor unveiled the final version of the long-awaited judiciary rule, which is to ensure investment advisors are putting the client's interest ahead of their own. we'll go to washington for a ofment from u.s. secretary the labor department. thank you. what is the problem you are trying to address and what is the solution? the climate has changed dramatically over the last two years. they worked 30 years at the same company, they retired with a pension, pen and a party and they do not have to worry about that pension money drive because it was assigned benefit pension for life. in today's world, 401(k)s,

riaa's, the consumer has to take ownership over how to spend their hard-earned money, and what we are doing today is making sure that the regulatory landscape keeps up with the changing retirement plan and making sure that the bedrock principle of consumer protection is putting your customers first and is put in place in the retirement that is what our goal is about. it is about saying that the marketing slogans, we put our clients first, is not only a marketing slogan but the law. david: give us some sense of how brought this regulation is. how much money will?it affect and how many people secretary -- and how many people will it affect? it is notperez: simply my parent's generation to his getting ready to retire go has retired but any millennial -- yesterday's generation reworked one job for 35 years, i

millennial generation may work 35 jobs over 35 years. every time, they are rolling over to one job to another and they have accumulated a 401(k) and that is an important point and they have to understand that decisions they make affect the long-term retirement security. this affects millions of americans. is estimated at about $17 billion a year. and that is conservative in figures because it covers one segment of the market. anybody who is saving for retirement and has a 401(k) or an riaa, they just got a new tool to make sure that they will be able to do a better job of saving. david: it will also affect thousands, maybe tens of thousands of advisers and brokers. heavy debt the cost benefit analysis on how much that will cost the industry to provide the support? perez: as part of our regulatory process and you can

get it on her website and look at the entire cost benefit analysis. i will tell you, the cost of the status quo has been remarkably burdensome for so many people, and the president this morning sent a letter to the total. illinois, and -- to toll. in illinois, and it is went in advisor can put their own self-interest over the best interest. they worked hard, play by the , theyand at retirement went to the local bank because mr. toleful could no longer manages money and they were put into a horrific product that was quote unquote suitable for them, but it was anything but good for them. they ended up on the horrific track. not who we are as a nation.

again, this is a simple principle. put your customers first. people like john bogle -- jack bogle and he is right, when you put your customers first, it is great for your customers and business. david: when you share stories like that, no one can defend that. it is outrageous and terribly sad, but i am sure there are thousands of advisers doing at the right way. why is it the right way to do it by a broad regulation that affects everyone as opposed to just going after the bad actors? secretary perez: i really appreciate your question because this is not the case about people who have malice in their hearts. i have said that repeatedly. advisors are not bad people. i have spoken to so many. they are trying to do the right thing. a systemhe case about that is structurally flawed. the incentives are not aligned. consumer'srds, the

best interest is not aligned with the current incentives that result to brokers, so the tol eful case, again, that was suitable and they did nothing wrong legally, but it is not right and that is what we are fixing. they can she we align the incentive structures. have considered unintended consequences, consequences such as some people may actually lose taxes to advice because it gets more difficult and expensive. you may have consolidation along the largest of the advisory is yournd what assessment of those unintended consequences? secretary perez: here's the good news on that question, and it is an important question. we already have a substantial subset of the market, including the advisor that my wife and i use, who act as judiciary's. we do not have to speculate what

happened. in my conversation and later today, we are doing an event with the number of advisers who will be there. people who are already doing what we now require today. what they tell me is this, we have figured out how to do good and do well. it is a false choice to suggest that the only what you can serve a small favor is by being allowed to put your own interest ahead of theirs, and what they tell me must frequently is, tom, those companies who say they will leave the market for small savers, give them my e-mail, give them my phone number because i am going to investors. busters.oing gang it is incredible to see the innovation occurring in the market to make advice more accessible. technology is our ally. i have great confidence because people who are small savers, middle-class, they should not have a smaller

set of consumer protection. that is not right. we can do good and well here. secretary --s u.s. labor secretary, tom perez. coming up, copper on a losing streak. ♪

jonathan: this is "bloomberg ." about one hour and eight minutes away from the open in new york. futures positive throughout most of the morning. our get it up on my bloomberg for you. we stayed there about 36 points. futures up about five points in the dow jones and nasdaq up around nine. crude trading higher. let's cross over to julie hyman for big movers. julie: it never hurts futures because of thes way dean. shares are higher in the

premarket after the initiated coverage with a strong buy up apple. price target at $150. lower margin saying apple's platform turn his apostle percent annually. that suggests your competitive pressures and potentially more pricing power. needham has downside protection in the buyback program. the shares up about 4% this year. cisco is higher ahead of the open. upgrading neutral to price target of 27 50 from 17. analyst rob hall says the company's 3.8 percent dividend yield is compelling in the midst of current volatility. jpmorgan had an underweight rating on cisco for more than two years now before this change. you very much. a quick look at commodity markets. futures in focus and we're taking a look at copper, trying to avoid a seven straight date losses, that would match the longest since november.

-- next move attentively of the next mu potentially up futures, phillip joins me now in chicago. a reason that some of the mining executives say they want to keep hold of copper assets because they think copper prices will recover. not seeing that in the last couple of weeks. do we expect to see an uptick sometime soon? philip: we saw copper up 2.5% last quarter and they hit that high-end march 18. since then, we have had a series of higher highs and lower lows, so the downtrend is an attack, but as you get closer to two dollars, copper will eventually become one of the most undervalued commodities. tied into that is silver, a byproduct of copper. production,at production levels of slid off quite a bit. china on the other hand, they consume about 45% of the world's copper. china was kicked at the start of the year with just a mass amount

of problems. everything from geopolitical to just straight political. copper prices have come back down since then. pmi, the retail sales, and other production factors have started to turn slightly bullish on copper. also, the fed, one of the problems that has been sober handgun copper, the fed could raise rates of two times this year. i don't think that will happen, especially with the election. the fed may delay that and we may only see the one rate hike in december. if we do get that indication, we should see copper go on a fairly large and fairly long rally. the supplyooking at and demand fundamentals, china accounts for approaching half of global demand for copper, but how much is that currently going into stock power? have jumpedkpiles up about 50,000 tons last month

to about 350,000 tons. if you look at the lme, and theys have -- playoff each other. i don't necessarily think that just building stockpile are that good of an indicator. i like to see the economic data support. the need and every thing for copper building into it. jonathan: big thanks for joining the program. next week, the earning season begins. banks expect to hit a soft first-quarter. the side could be on revenues. that is coming up, next. ♪

david: we are now just one hour away from the opening bell here in new york city. you are watching "bloomberg ." welcome, mike. good to have you.

jon: it was ugly this time yesterday in financial markets. we stay high, dow futures up 22 points. board, seems to be risk on, kind of. 2.55%.ude up low. the 14 year lo let's get to news now with vonnie quinn. a new flat rate pension program takes effect today. women andill benefit the self-employed by giving them greater security to plan the retirement. some say will be less generous in the long run.

skepticism about european union may affect the outcome of the referendum in the netherlands. the dutch are voting on a treaty that eases relations between the eu and ukraine. many of the netherlands -- many inhe netherlands say it is a move to allow the ukraine to join the european union. more than 500 people in india linked to the accounts in the panama papers. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i'm vonnie quinn. week, first-quarter earnings will be coming out for big banks and we want to talk about what we are looking forward to. -- i read mike your notes and you say

mainstreet is better than wall street. for: it is an ugly quarter u.s. bank earnings who have pressure a net interest margins, the 10 year has come down and you have market -- capital markets being sluggish for the first order. trading down .25% year-over-year. that hurts the wall street banks more than the mainstreet banks. stephanie: can you define the two? mike: goldman sachs, morgan stanley and parts of jpmorgan -- those are the wall street banks. trading is lousy for the first quarter compared to last year's first quarter. the mainstreet banks, not much growth and expenses are higher this quarter, it is sluggish, but not as bad as the wall street banks. having said that come up all the problems with revenues, this is one of the few quarters this

decade with negative earnings and negative revenue growth year-over-year. that is for all the top 10 banks. that is the bad news. the good news is the resiliency of the banking industry. credit quality remains good, capital is higher, risk is down. as ugly as the first quarter is, we think that comparisons get better throughout the rest of 2016 and 2017. this is as ugly as it gets on a year-over-year basis. jon: how much of that is in the price? mike: more than enough. this is a first time in 20 years we've recommended the fourth-largest bank in the united states because we think the prices are discounting a recession. --upgraded bank of america the bank that we dislike the most in terms of oversight and governance, but you been in a recession, we think bank of

america grows their book. jpmorgan grows their book value. as long as a bank of america is trading below tangible book value, we think it is a good opportunity for banks. plug your nose and make it through the next couple of weeks. bank, talk about shortfalls. we have their tangible book value growing. banks likese comerica has a strategy -- shine your shoes, go to work and wait for interest rates to increase. that is not enough. comerica, bank of america, citigroup, there's other banks generating good returns about the cost of capital like jpmorgan and wells fargo. the questions i will be asking when the earnings call that should some of your peers are

showing good returns come even with the top environment, why aren't you? next tuesday kicks off the annual meeting season. we will be going to annual meetings for the fourth year in a row, starting with bank of new york on tuesday. jon: deutsche bank trading at .3% of book. my: there's two reasons why banks would trade below tangible book value. when is your concern about the book value of stock. you think there is hit in write-downs. for the u.s. banks, that is not the case. these balance sheet have been scrubbed, you have a stress test the entire decade here. the second reason why you might be trading below tangible book value is because investors don't have confidence you are going to generate returns above the cost of capital. some banks are, some banks aren't. you will need a plan to convince investors they can do that and

move the stock price or we have to start thinking about management changes or other cover questions. julie: we've seen an underperformance in the financial sincere. best this year -- in the financials this year. i'm looking at the price-to-book ratio of the financials versus the s&p 500. .his is a five-year chart you see the gap between the two is the broadest it has been over that span of time. the pessimism going into this earnings season is notable. he was the change in earnings estimates and and revenue estimates -- here is the change. using this decrease in both of those that have not been quite large -- quite as large for some as for others. there's a huge amount of pessimism going into this earnings season broadly and for the financials in particular. walking in,ou say

shining your shoes and waiting for rates to rise is not enough. how about the people that aren't walking in? we get more and more headlines about people leaving banks. mike: this is still the worst revenue growth in the banking industry in 80 years. revenues stink. stephanie: what is there to like? >> the only way to make on the bottom line is become more efficient. there will be more firings in the banking industry. necessity is the cause of this. things have no choice with this type revenue environment. ist is underappreciated, it fair to beat up the banks for lack of revenue growth but not fair for lack of resiliency. resiliency is what is the strong suit of the banks right now. have aie: they get to boy scout badge, but are they reason to invest? >> they are like an oil spring

-- a coiled spring. at some point, they become uncoiled. we are in japan for the next five or 10 years, fine. we put that report out five years ago. if you think that is your view, fine, there's bigger issues here. we think that is overly pessimistic. david: here's an alternative explanation. the problem with the earnings -- the banks have been through a trauma in terms of regulation. they have had to adjust their business, go out of profitable businesses and retrench. back.regime will come it's not that they are shining the shoes and waiting for rates to increase. a lot of these banks are doing a

lot of restructuring and getting into other businesses. you think that is fair to new management? ke: one side of the regulation is the risking and deleveraging has hurt revenue growth. the other side is that it has improved resiliency. it is not one-size-fits-all for the banking industry. some banks are generating returns above the cost of capital. wells fargo, jpmorgan. other banks like bank of america, citigroup and comerica are not. does banks which are not, they are fair game for some sort of restructuring. bloomberg had an article saying that to be she that saying mitsubishi -- saying mitsubishi is looking at american acquisitions. michigan, california, texas --

whether it is comerica or bank of america were citigroup, if you are not generating adequate returns, go ahead and restructure them. stephanie: perfect segue in terms of m&a. now, i want to bring in our next guest for today's morning meeting. leon is the city institutional group client chairman. welcome this morning. when we look at the volatility in banks, m&a has been a bright spot. m&a out of china in the first quarter of this year. what is your outlook for q2? leon: the stability that we ended the first quarter looks well for q2. there's a significant conversations going on in boardrooms right now on strategic transaction. whether it is q2, q3 or going into the best part of the year, i think we will have a reasonably robust m&a environment.

combine that with people feeling comfortable with their stock prices having rebounded and continued low interest rates from a financing standpoint, we will have a reasonably good year right now. cross-border flows continue to be very, very interesting, especially china into europe and the u.s. stephanie: the new treasury rules could have a muscled negative effect on inversion activity going forward. how big could that impact be? leon: my instinct is people are paraded within the letter of the law historically. those laws have now been changed, they will adapt and operate within the new constraints they have. i don't think it will have a big impact going forward. it has had one significant impact on last year's large transaction. the majority of the transactions

are strategic and not focused on tax related items. therefore, i don't think it will have that big of an impact going forward. there are some things that will get killed, but it is not something quite high on the list of worries going forward. stephanie: will m&a be the bright spot? leon: i'm hoping it will be. there is such a degree of strategic interest right now and consolidation. companies are looking to see what consolidation opportunities that are available. i think there will be a bright spot here going forward. how bright? we will see as we get into the second and third quarter. to me, the brightness will be very, very directly related to the market volatility. volatility, the more people will hold back and try to see how stabilization works. mike: there is strategic interest in buying u.s. banks.

the issue for some of the u.s. banks is the willingness of some banks to sell. return below the ast of capital, they are at size that can be bought, there are some willing buyers, are they at least willing to talk about their strategic options if they don't have a legitimate plan to return to above cost of capital? stephanie: william, thank you for joining us this morning. for joiningnk you us this money. , we have a lot more to talk about. you are watching "bloomberg ." ♪

jon: this is "bloomberg ." coming up later today, do not miss bloomberg exclusive interview with jim bullard at 3:00 p.m. eastern after we get the minutes from the fomc march meeting. returning to an emerging special, litigation finance at the forefront of this industry urging the world's largest investment firm -- they currently have $1.4 billion in assets under management. welcome to both of you. this is near and dear to my heart. i never had a top line. you can have a top line, you cannot revenue coming in. explain how this works. >> you saw the emotional scars.

we are doing our best to help with that through litigation finance. the law department's and companies across the world have been among the victims of cost cutting over the last several years. in addition to being a cost center more broadly. legally, those companies that are most often defendants but sometimes have the reason to be a plaintiff come to firms like ours for financing solutions. very expensive, legal fees and all the costs associated with it -- this is a way for companies to manage those expenses and other risks that come along with the litigation process. david: i want to take you through the plaintiff side and defendant side. the plaintiff side, tell me how it works. you come in and what do you say to us? >> we can make it a risk-free proposition to. -- proposition for you.

if the case ends unsuccessfully, --have warehouse to the risk warehoused the risk. david: you come and assess the chance of a litigation. what are the likely costs? you will advance a certain amount of cash upfront to the company? record we can provide the capital to cover legal fees and cost. -- that's exec right. -- that's exactly right. providing capital to the company secured by the outcome of the legal or regulatory proceeding. david: what is your upside on that? >> it depends on the level of risk. flexibilityt of with our investor mandate to invest in alternative different situations dependent on risk. we can enter late in the case through a settlement. the cost of capital is lower.

through the earlier phases, we need more equity style returns to compensate for the risk we are shouldering. david: what if you are a defendant? you are just trying not to pay money. >> that's right. there are a few ways we help with that. helping finance the cost of the legal engagement and earning a premium for having warehoused the risk of those fees. the same strategy on the plaintiff side, just takes more creativity to define what is a win for the defendant. helping companies guard themselves against runaway judgment risk or liability exposure. situations where we might step in to make an investment commitment to help a board of directors know their risk or exposure in a piece of litigation is cap at a certain amount. david: you have $1.4 billion to work with. you are looking for pe?

so far,s exactly right our track record is in line with that. that is mostly borne out in the fact that we've been able to raise a significant amount of capital from institutional investors over the last three years. david: fascinating. something i did not know anything about. favorite next is my battle of the charts. ruhle taking on caroline for the pond edition of battle of the charts, next on "bloomberg ." ♪

jon: in today's battle of the charts, caroline will be taking on stephanie ruhle. here to judge, because i'm too scared to do it myself. caroline: i've got one for you.

i'm going big on britain, big on brexit. the stock market doesn't care, is shrugging it off. #btv 811. u.k. stocksseen so expensive compared to new york ever. you have a premium of 8% versus the stoxx 600. 15 times 600 is earnings estimated earnings. we've never seen the stock market actually see so much -- every single week, bearish bets up and coming down on u.k. stocks. why? the british pound has come down 4% versus the u.s. dollar.

minors and energy stocks doing well. stephanie: written, brexit is important. i will go bigger and i will go global. janet yellen, the change in the number of times she uses the "global."a" and all economic outlook press conferences. small in may. december, medium. massive by 2016. job isonally, the fed's not to focus on the global economy, it is the u.s. economy. the times are changing. janet yellen is not just focus on how strong the dollar is, what jobs look like. the u.s. cannot operate in a vacuum. to go global. that is what she is talking

about and doing and this is different from previous fed chairs. there you have it. jon: mike, begin the voting , please. mike: exactly what i'm thinking about with large u.s. banks. trading is down year-over-year because of the unrest, the re-rating of china. david: you have to vote, sooner or later. mike: stephanie. that risk off is summed up by the chart that stephanie has. jon: it is very timely, but for me, london, the big story in the u.k., brexit only playing out in the fx channel. that is an important thing to highlight. my vote goes to caroline. david: thanks, jonathan.

sell -- i you can love stephanie's. david has to sit next to me. my elbow to his rib hurts. jon: fantastic charts by stephanie and caroline. mike mayo gearing up for earning season. coming up, we talk the merger of allergan and the release of the fed minutes. that's next. ♪

stephanie:'s official. the megamerger between pfizer and allergan is off. the fed releases the minutes of its march meeting later today. for signs ofking

hawkishness. an output freeze will be done even without iran. hope you are ready for a big hour because we are 30 minutes away from the opening bell in new york city. you are watching "bloomberg ." jon: joining us for the next hour, senior investment officer at prudential fixed income. david: it will be a very big hour because drew armstrong will -- brentiewing saunders. stephanie: sitting down with brent saunders, the ceo of

elegant -- ceo of allergan. drew is with us right now. walk us through what has happened here. night, we gott word that pfizer and allergan were pulling the plug on this deal, $160 billion, the biggest ever deal in health care. they made the announcement official this morning. new rules that the treasury department put out this week had killed the deal, made it no longer feasible for them to do. it is over. , two dayst is done after the obama administration came out with that proposal to crackdown on corporate tax and versions. -- in versions. jon: thank you for joining us.

we are 28 minutes away from the open. up a bit softer now, down futures up 11 points. s&p up barely two points this morning. the dax down 24. a rally in crude, is a continuing? plenty -- wt going on in the markets. onnie: it was a big night in wisconsin for the underdogs in the race for the white house, ted cruz and bernie sanders were the winners in tuesday's only primary.

bernie sanders beat hillary clinton 57% to 43%. clinton still enjoys a big lead in the delegate race. hasn't 740 delegates now to cruz 514. ferguson,ween missouri and the justice department to make changes to the city's police department could be in jeopardy. a copy tax hike. -- property tax hike. ferguson made national headlines after the fatal shooting of michael brown. the world bank is slashing its growth forecast for the russian economy. andto lower oil prices international sanctions. 3.1 million more russians are

living in poverty. global global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. time for the three stories that matter to markets right now. the pfizer elegant deal falling pfizer-allergan deal falling through. things to cover treasury r ules intended to crackdown on inversion deals. it would have been the biggest farm a deal ever paid -- pharma deal ever. you said earlier there is a plan b for both of these companies. tell us what it is. r allergan, they are selling their generics business for $25 billion. they will have to pay down a lot

of their debt. and havee able to go been advantageous financial division to go out and take up us-based assets. pfizer will go back to what they've been talking about for a while, breaking up the company. they said we will make a decision by the end of 2016, whether pfizer gets split up into multiple pieces. said thet at bernstein fact that they appear to be accelerating that break up timeline will suggest they will not pursue an inversion after all. they will not wait for after the obama administration. they will go ahead with what they've been talking about for years, breaking pfizer up into two or more smaller pieces. stephanie: we will have more on that deal in a few minutes, sitting down with allergan's ceo.

the potential candidates all seem to be pushing back against in versions. won't this be viewed as a massive positive for president obama? he's commented on in versions. >> he will view it and portray for him, for win the administration, for taxpayers in the u.s. i'm looking at it from the broader implications for the bond market. the fixed income investor, i see two general implications. we've had the view coming into this year that m&a activity will be on the wing. it's been an incredible amount of volume. we thought that was going to wayne anyway -- wane anyway. a lot of the deals we've seen

happen tax inversion deals. that's been good for the corporate bond investor. that means less supply. a lot of the deals are being funded with debt. a lot of these deals tend to be leveraging transactions. the other side of the coin is on the banks. last time my talk about how much we like the big money center banks with regard to their senior debt. this is another headwind for them. they've been hampered on their ability to make money on it interest basis does on a net interest basis. netake money on their interest basis. they been getting a lot of revenues from revising on m&a deals. this is another headwind for bank earnings. david: a couple months ago, some of that leverage that was having -- leveraged debt was having trouble finding a home.

pressure --ave that relieved that pressure? >> i think so. we had a big deal the other day, western digital issuing a multibillion-dollar deal with their purchase of sandisk. the financing in the high-yield market is challenged still, for sure. jon: that is the top story this morning. special thanks to drew armstrong. number two, the federal reserve releasing its minutes from its march meeting at 2:00 p.m. eastern today. michael mckee will be live in washington with the details. looking for signs of hawkishness. we did not see much dissent in the statement. we have this series of speeches that made it like a very fragmented fed. will we see that in the minutes?

"bloomberg i think -- >> i think we will. we were mostly surprised by yellen's dovish sounding comments last week. herb you might be extreme view might ber extreme relative to other members. you might see less consensus around a really do wish you. -- really dovish view. you might get a backup if you get hawkishness. this is the bank of america, merrill lynch global bond index. it is the lowest it has ever been. not necessarily surprising given we have a third of developed market that now yielding.

still remarkable to see that kind of a chart. what kind of repercussions are we going to see around the globe? >> they are one of the few central banks even talking about hiking rates. you can see a scenario where and hike at the front end on the back end, that follows in yields because we are in the slow growth, low inflation world. you have the qe in europe and japan, that will continue to keep those front end yields related that's really low and extreme the negative. i'm not perish on the overall level of yields in the bond market. just worried that we might get back up in the front end of the u.s. curve. stephanie: oil extending gains on the hopes that a potential afterould freeze output kuwait's has an agreement can be reached without iran. -- after kuwait says an agreement can be reached without

iran. -- wti rising 3% today. even though you get these temporary agreements to really curtail production increases, there is still a tremendous amount of excess inventory of oil and natural gas sloshing around the world, that will take a long time to burn off. you will be stuck in this low will price environment for a long time. or $60,it gets to $50 these marginal fracking producers in the u.s. will have to be profitable again to pump more oil. the implications for the bond is on these energy companies. they are struggling in that environment. david: we've seen oil correlated

with equities quite a bit. oil correlated with china, projections of china. do you see that continuing? is this mainly china story? the marketsot of have been behaving with the tremendous amount of correlation. you will probably continue to see that. part of it is a demand a story from china, but a lot of it is the supply store. that's supply story. we've seen a pickup in demand. gasoline demand is up. lower prices do result in higher demand. you are seeing that on the margin a little bit. stephanie: there you have it. those are the stories that matter to markets now. michael collins of prudential fixed income will be sticking with us. coming up, the story we've been following all morning long. the official end to the $160 billion merger between pfizer and allergan.

we will be speaking to allergan's ceo, next. sitting on a pile of cash, what is he going to do? ♪

vonnie: welcome to "bloomberg ." as many as 1200 jobs could be they want to see customers move to digital banking. facebook is rearranging the notification panel on its mobile app. the app updates will be rolled

out in phases and will take several weeks to complete. she is replacing longtime confidant and viacom chairman -- owns anear-old redstone 18% voting interest in viacom. jon: let's get a check on the markets. futures, where are you? the much unchanged coming up highs, negative on the dow by three points. unchangeswitch up the board vey quickly. euro-dollar coming up session those at 113. dollar yen retreating once again. down .2%.

october 2014 your lows. -- 2014 your lows. -- year lows. the crude rally continues. let's cross over to julie hyman for some stocks to watch. julie: let's start with baker hughes. the department of justice would tosider a filing suit challenge the halliburton acquisition of baker hughes. the stock is down once again --ay after three days citigroup sees a slightly better than 50-50 chance the halliburton acquisition will win approval. is worth $39 a share on a standalone basis. there is another possible merger that he got attention this year -- that got attention

this year. concerns this inversion role could obstruct a possible deal. they are not moving this moving. --nstein is common that commenting that tyco does not meet the definition of a serial inverter. coming up next, the story we've all been following this morning. the end to the wonders people in the 600 -- the end to the $160 billion merger between pfizer and allergan. allergan's ceo is speaking to us. ♪

stephanie: we are focused on allergan this morning here on "bloomberg ." down about 1% this morning after the company and pfizer agreed to officially and their planned

$160 billion merger. citedllergan and pfizer cynthia, what's interesting to me is this is not just about the government, this is not just about inversions in general, but this is activist haven. we know how involved bill ackman has been. you have to look at something like valeant. could it suddenly be an acquisition target? if brent saunders is sitting on -- ie of cash, guess what will ask brent saunders who joins us now from the new york stock exchange. welcome. he clearly had a busy, busy week. as you look at your company today and the outlook, all that cash you've got, not much leverage, what will you spend it on? how about valeant?

are in a terrific position. while this was not plan a, we had a contingency plan and allergan has a great opportunity as an independent company to leverage its growth profile, large r&d assets and our balance sheet. we will continue to look to become the premier growth pharma company and look to find assets that complement and increase our growth profile. be oneie: would valeant of those? brent: i cannot comment on specific components. r&d assets -- valean t, i would have to understand their growth profile to be able to understand. the have been reported.

it is hard to see what is volume versus price. it has a lot of good assets, they have some good people. i is to be the ceo of bausch & lomb. i have not followed it that closely. stephanie: are you interested if they would be willing to spin out bausch & lomb? are a premier asset in eye care. lenses.tact i know the business well, i like the people there. i would have to understand the pipeline and the growth prospect for that business. stephanie: given these new treasury rules, with something like an amgen be too big? brent: no. i cannot comment on amgen specifically, but these rules have no impact or no material impact on standalone allergan.

the income stripping and three-year look back provision really don't impact a company like allergan, particularly as we get to october of this year. cynthia: you will have a lot of cash once you are done with a ton of transactions that are you thinking more in terms of r&d heavy organizations or the branded pharmaceutical space? brent: we will look at both come everything. we will look at other ways to improve our return capital to shareholders. the most important thing we can do is stay focused on our strategy of executing our business, driving double-digit branding growth and looking for to enhance our growth profile, whether it be through r&d assets or marketed pharmaceutical product. stephanie: you are known as a deal guy. this breakup happened very quickly. if pfizer broke up into two

companies, could you be the buyer of one of them? i do like pfizer and i have tremendous respect for ian read. they will do great. we will look at anything that is a growth oriented asset. we are a growth pharma company. that will include r&d assets and marketed product. everything is a possibility. it always will be truth to our growth profile -- true to our growth profile. on ana: you were executive committee that would have potentially helped run pfizer. what do you think they should do next? brent: pfizer has a strong plan. is a terrific ceo. they will move forward on building their business, doing great things in oncology,

vaccines, or diseases. that's rare diseases. stephanie: you've said in the past that you are on the path to $25 earnings. has that changed? brent: we are focused on shareholder return and looking for opportunities for cures and treatments -- that is our mission. $25,astest we can get to we need to get there. stephanie: is it three or five? will provide an update on our quarterly conference call in may. making sure weon lead our industry in total shareholder return. we will continue to stay focused on that and continue to build -- premier growth pharmaceutical company in the industry. stephanie: what kind of restructuring still need to take

place? brent: before pfizer came, we had looked at restructuring our company to better deal with the divestiture of our generics business. we will make sure it is fresh and the right thing to do. and then we will get moving. we were prepared for this. we did not want it to happen, but we were prepared. back, were youg completely blindsided by this? why did you decide not to fight it? you moved to stop the merger quite quickly. what was the thinking there and what was the analysis of what you could have potentially done to fight back at the treasury? brent: this was an extraordinary change of the rules after the game had started to be played. we were prepared for it.

that was the good news. fighting is not in our shareholders's best interest. it would been a long and expensive fight. that is not a fair position to put our shareholders and, particularly when our standalone prospects, growth prospects is so strong. thehanie: given that government stepped in and roadblock to you in a big way in terms of your acquisition, how about pricing? how concerned are you as you look to the upcoming election, the pressure on drug pricing? brent: we always take the pressure seriously. have always believed we social contract with patients and physicians to price our medicine based on value and price that in a responsible way. the most important thing we can

do is find cures and treatments for unmet needs. as long as we do that, the value equation will remain intact and we will continue to flourish. stephanie: do the new in version rules concern you? could this tax policy change change again if we have a new administration? could the next administration be even tougher on you in terms of prices? brent: i think the administration was focused on pfizer, not allergan. the rules were to stop the .onversion -- the inversion they have no material impact on standalone allergan. we are in a strong position. i don't believe we will be targeted. we have a competitive advantage in that these rules lock u.s. companies into being less competitive globally.

whereas a dublin-based company has more freedom -- of the: is that because earnings stripping stay laid out there could be in versions tactics that are stripped away to enjoy.ax benefit >> the way they are targeting earnings shifting in these rules, does not impact our structure. i think it isd, difficult for them to do that and they haven't knowledged there will be unintended consequences. my sense is they were tarred to write the rules and my sense is -- president obama has no said congress needs to make their next move.

the hope here is congress will do something to make the american tax system more competitive for companies to operate. wereether or not you blindsided, clearly this is a big smack. who do you want to give political dollars to? i will not endorse a specific candidate but i want to make sure the conversation of the politicians changes from punishing companies to figuring out how we can make america more competitive. that would he a much more constructive dialogue. >> you believe what they did here was punishing you? trying to they were punish pfizer. they accomplished what they set out to do, to break the deal. pfizer and allergan will be fine. independentrong, plans and strategies, and both will move on and focus on those. i do not think they succeeded in punishing anybody.

>> you are jersey strong. the ceo and president of allergan is joined -- joining us this morning from the new york stock exchange. thank you to fit -- to cynthia. a quick look at where stocks are open. 1.5 minutes into trading. help me out here. green. i love it. julie: a little bit. s&p isks generally, the having its biggest one-day drop in about a month. today, gaining but not much. the nass act leading what gains we see, up .2%. this is something we have been watching or the short interest versus flow ratio in the s&p 500, up here is the short chart near its highest in eight years, as there is incredible pessimism, people making these about $1 trillion short and some analysis such as that them by jpmorgan shows when you

get positive surprises on the economic front, you see a bigger reaction in markets than when you get a negative surprise because of the short interest. i also want to take a look at oil prices this morning. the interest rate number coming out at 10:30. awaiting that comment looks like oil traders are pretty optimistic as we see oil gained by 3%. today are to watch pfizer and allergan, as you might expect. both of those stocks are rising. apple also worth a mention, not up as much as it was in the premarket after analysts initiated coverage of that stock with a strong buy, saying they're looking at some of the platform numbers for his operating system that show it is holding up well to competitive pressures. the price target their, $150. stephanie: thank you. andrew betting against tesla even after the model three banner unveiling.

he will be joining us next. you are watching a big day on bloomberg . ♪

julie: i am julie hyman in our green room. on bloombergames radio 3:00 p.m. eastern. do not miss it. jonathan: prudential fixed income senior investment, michael collins is still with us. the conversation is fixed income. four weeks? i have lost count.

mario draghi drop some bombs and said they would buy corporate debt. your strategy is to ride the wave a bit? exceedalways seems to expectations, other than last september third i think he later make. announcing an expanded program to buy corporate debt. we have seen corporate spreads in europe contract. even though we will not stop buying them until july 1. the markets anticipate. our view has been as european credit spreads get lower, u.s. credit spreads will be drive a naturaluse you have rebalancing that happens when credit spreads get to tight or narrow in europe. naturally.locate you also see issuers and u.s. companies issuing in europe. fedex did a 3 billion euro deal the other day, with an average

coupon of 1.06%. that is a good deal. they had european businesses, so it is natural for them to euroce that debt with denominated revenues. a beautiful thing. question evenly fascinating. -- >> genuinely fascinating. it changes your allocation. >> we have seen a big shift. i do not know if it is changing your capital structure. it is definitely changing your did -- geographic dispersion. companies are incentivized to issue debt. we are seeing that are the good thing for u.s. credit investors is there is less a prion a margin of u.s. corporate bonds because more of them are being issued in europe. you normally get the first pick in jim >>, so what are you buying? like the big money

spending banks. as a bondholder, you do not need earnings, you need to get paid back. we have a high conviction we will get paid, even some subordinated debt. the regulatory environment is so incredible. it is a crush on earnings growth potential but it shores up your balance sheet. to us more generally on leverage corporation spirit we had people tell us conflicting things, that they are more leverage or less leverage? >> they can issue that easily. really low interest rates and they are incentivized. historically, a lot of these companies do not have that at

all. they are really safe and defensive companies. much more leverage they used to be. corporate america, is that as high as it has ever been? economy wide standpoint, middle market, smaller companies who generally cannot get access to the capital markets have dever -- d leveraged. those countries, it is low. consumer debt is generally lower. from a macroeconomic standpoint, the u.s. leverage ratio is looking pretty good. >> in europe, access to credit markets goes to the banks, traditionally. we have been talking about companies going to europe and that is fine. to get that mechanism working in the eurozone, we want to see the corporate entities go into the market an issue debt. how quickly do you see that

market here? is dead to supplies. do the banks that is happening in the capital markets, it is growing and i think there will continue to be a growth in the markets. jonathan: you talked about the credit of some of the big banks in the u.s., you're convinced you will get paid. in europe, it is different. >> the big geographically diversified global banks in europe, really good shape. we continue to have negative headlines even with the release of these documents. there is an implication that the big swiss ranks are involved in setting up shell organizations. affect bithould not there. >> was not long ago we had a

major european bank have to go public. it, they justd called to talk about how they are indicated. this will play out in the european banks and maybe the u.s. >> hsbc is a big player in the market, the shell companies. it is earnings risk for sure. it is not a great story for an equity holder. folks,ngent for these they have tossed now about the committee implementing an additional surcharge on the biggest 50 or so global banks, to generally affect bondholders. what don't you like? >> some of the commodity players .re risky there is still a lot of risk to

come. but we are nibbling and looking to pick our spots. some of them will be free cash flow positive. hyman.s go over to julie company shares are .p 3.6% earnings it is considering an ipo for the canadian wine business. wind also came out with preliminary results for the first quarter. the results beat estimates. they were down year-over-year because of a tumble among other reasons. shares are trading lower even

though the number street estimates. reportingonsanto fifthst sales and profit 2011. shares are slightly down your it sales trailed estimates and there are interesting headlines coming out from a conference call here. the company ceos saying he no longer sees large scale m&a as a he sees commercial partnerships instead. hugh grant on the conference call, perhaps again coming back to new -- linking it back to that news. 14 minutes into the session. the nasdaq is bucking the trend. let's head over to abigail doolittle live to the debt -- live from the nasdaq. , shares one on the open are plunging after the company announced yesterday after the mouth -- after the bell. revenue.by 11%, due to

a highretty optimistic interest of 60%. shares could remain under pressure for some time. the stock is soaring after oppenheimer raised its price .arget to $60 a share in shares have been trading the last few years and that supports the idea that therapeutics could trade up to pernheimer's price target share. left is withdrew us this morning. we have gotten to know his name this year. hearing in hong kong over a report accusing

chinese real estate from ever grant of accounting run. us an update. getting involved in hong kong, a pretty dicey business. >> we will get a hearing back in august. openoping to have more market, more dialogue like we have in the s. to make it more transparent in hong kong will be a better market for it. i express my opinions and thought they were fair and honest to we will see what the tribunal says now. it over, woulddo you have done this? given as much as what was in stake -- what was at stake? >> moneywise, it was not a smart financial move for me. change something, there has to be more than just making money.

maybe yes. but it has consumed a lot of my time and financially it was a bad decision. >> you think regulators were concerned about the fact your short? >> has to be the fact that i'm sure. if they would go ahead and charge every single analyst who put out able case on the stock, and accuse them, i would actually come out as an angel in that case. was only because i was the other side of the trade. obviously awas hotly talked about and heavily shorted stock that had a lot of coverage. every analyst that had coverage on it was very wrong with price targets. not one of those analysts find themselves in front of the tribunal. stephanie: why would the government be so aggressive here? specifically,any

i am wondering why the chinese government would be so aggressive. >> is probably not the best idea to write a short report. all that being said, that is in the rearview mirror and i am doing with it now. you know, that is where it stands. david: let's go to another stock you have been short in. he just andrew's comments specifically. i think we should play that. of andrew not all less allegations prove to be false. our business is actually very strong, good cash flow and great growth prospects. we are reallyere describing the opportunities we have for development in our portfolio. we are pleased with the performance of the business and we inc. we have a strong business and great cash flow

going forward. david: he says you are wrong. do you want to back down? andrew: i would check it take him and put him in a wonder woman lasso so he has to tell the truth. it seems like his lawyers wrote exactly what he has to say. everyone is discussing tax in versions. the biggest joke. let's put it this way. press corps has got a product with no real clinical testing for 50 years. they charge 30 $6,000 per vial all supplemented by the government. they move all of those profits by ireland. of course business will be good there. it is going to be ok. us -- it will happen as soon as we change business models. .> perfectly legal to do that efficient to do that. he is making the company efficient.

andrew: it is legal. it should be a third line treatment. i do not believe it is legitimate on an insurance front. stephanie: he says it is 30% of their sales. do you believe it is different? andrew: $36,000 per vial, and a lot of it is a generic as a spare forget about what percentage of sales. what percentage of the real money comes from it? where did sales have to go? if they go back to where they , can theyyears ago service their debt? stephanie: if all of this was so obvious, how are so many caught of thehe wrong side health care roll up? never a problem until it is a problem. you consider around and be short for years and everyone thinks you are crazy and you are banging your head, and then one

day, everyone is like, my god, you know what you're talking about. so that could happen one day. go without let you talking about tesla. we have talked about their new model three. a beautiful car. andrew: one interesting thing about the market, the reason you are here and why we are all here, you cannot say well, you're short on 170 and now it is 250 it every day is a new day. if you look at every day being a new day, tesla has introduced a model three. they have already talked about if you look at the trajectory of orders they have for it. jonathan: breaking news, the department of justice pursuing to block the acquisition of baker hughes. seeking to block the baker .ughes deal stephanie: the hits keep on

coming. it is a new day. >> you look at tesla today and there are obviously somebody questions regarding the car, how much it will cost. when they introduce model s, the pricing with 55,000. they took deposits and did end up selling for 90,000. prices were lower and no one doubts that. it is the profitability of the company. not doubting elon musk or the fact that tesla is a wonderful car. we are looking at it as a publicly traded company. many have been run over in the name. there have short, been shorts that have been run over in the beginning. where we are today, if you have never looked at it before, we saw some capitulation yesterday, people just said, i do not want

to open this anymore. at these prices today, i believe it will be lower. jonathan: thank you for joining the program. coming up, it is bloomberg markets with betty liu and mark barton. what you have? is coming up including continuing coverage of the wisconsin primary and the results for ted cruz and sanders. speaking about politics and its influence on our national defense, the nato secretary-general will be joining us. david is doing that interview. trump has set on the campaign trail, whether nato should still .xist he is questioning its existence. moore bloomberg is coming up next. ♪

jonathan: 26 mins into the session. the s&p 500 is up, barely, the dow down around 26 this morning. to the close in london, up one ackman holdingl the quarterly conference call it :00 a.m. eastern. can follow that on the bloomberg terminal. the fed released its minutes and michael will have live coverage and do not miss an interview on radio.rg tv and that does it for bloomberg . bloomberg markets continues next. ♪

betty: it is tax a.m. in the -- it is 10:00 a.m. in new york. i am betty liu. mark: i am mark barton. this is bloomberg markets.

♪ betty: we will take you from new york to london to hong kong in the next hour. the world's biggest ever health , pressure in the u.s. government on taxes. we look at what other deals can be affected. ink: the front runner wisconsin, bernie sanders beating hillary clinton by double digits as all eyes now shift. ted cruz topping donald trump. does the wind for ted cruz now boost the odds of a contested republican convention? betty: big bets on the global bond