>> from bloomberg world headquarters in new york, good afternoon. i'm scarlet fu. alix: i'm alix steel. pfizer and allergan officially walk away from their 160 billion dollars merger, a major turning point for the justice department. after gold's biggest advance in a week, the precious metal is retreating. good news and bad news from one of wall street's most watched bank analysts. an ugly first-quarter anticipated. scarlet: we are halfway into the u.s. trading day, so we need to head over to the markets markets desk, where julie hyman is keeping track of the recovery rally in stocks before the fed minutes come out in two hours. julie: it is led by health care and energy.

we are up around the highs of the session, with the nasdaq leading the gains today. energylook at the imac, taking over the top spot. care, thelth pfizer-allergan deal being canceled, both of those stocks were up and we are seeing ripple effect speculation about where we could see further consolidation in the health care industries. discretionary and tech stocks are trading higher as well. this is the energy portion of the equation. week's inventory reports showing an unexpected draw down in inventories accrued four point 9 million barrels. we are seeing refineries process crude at the fastest pace in three months. usually there's a delayed effect. that's what we saw once again with the leg upward in crude and then initially

gaining steam as he away from the inventories report. we talked about the correlation between oil and stocks generally . this looks at energy stocks specifically. lowest pointts since 2003. it dragged energy stocks in the blue with it. this is global energy stocks, not just in the u.s. now we are seeing this uptick over the past several days straight segment energy, we would be remiss if we did not mention baker hughes and halliburton. announced in november 2014, this has been a long time in the making. the department of justice filing suit on antitrust grounds to block this deal from happening. you can see shares of both companies popping today. they have been declining since the deal was announced. remiss if iould be

did not talk about the japanese yen today. the safeto look at haven assets going into the fed minutes. gold trading a little bit down, seeing an uptick in the 10-year. 10 level.low that 1 the yen has now been higher for four straight sessions. we are seeing a dollar versus yen at the lowest going all the way back to october of 2014. thank you so much, julie hyman. alix: mark crumpton has more from our news desk. sanders won his sixth caucus or primary in the last seven contests. sanders beat hillary clinton 57% to 43% and has his eyes on the next price. senator sanders: do not tell -- i don'tlinton

want her to get more nervous -- but i believe we have an excellent chance to win new york and a lot of delegates in that state. ark: mrs. clinton still has substantial lead in the race for delegates. the new york primary is april 19. a warning from america's transportation safety chief, protecting subways, trains and roadways for terrorism is complex because the systems are open to the public. tsa administrator tells the senate's agency devotes the bulk of its budget to manpower and aviation. hundreds of residents of flint, michigan have filed a racketeering lawsuit targeting governor rick snyder. it is one of many suits that came from the decision to switch flint from the detroit water system to the flint river in april of 2014. no comment yet from governor snyder's office. uconn will skip its parade

around campus because of unseasonably cold weather. the national champion women's basketball team will rally indoors today. the huskies made college basketball history last night with their record 11 national championship. they posted their 75th straight win. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i am mark crumpton. pfizer and allergan have terminated their $160 billion merger in the face of u.s. treasuries crackdown on corporate inversions. scarlet: the allergan ceo spoke about his company's future and how they will spend the cash they have on hand. >> we are in a terrific position. this was not plan a. we were prepared for this, we had a contingency plan. allergan has a great opportunity as an independent company to leverage its profile.

as you just mentioned, our balance sheet. we will continue to become the premier growth pharma company. we will continue to find assets that complement. >> is valeant see one of those complements? >> i can't comment on a specific company. valiant, i would really have to understand their growth profile to be able to answer that question. >> and you don't understand the growth profile, or you don't like it? >> they haven't reported. it's hard to see what was volume versus price. they have a lot of good people. i can't comment specifically on valeant because i haven't followed it that closely. >> would you be interested if

they were to spin out? not followed it closely. they operate in different segments of eye care than we do. they have more of a bent towards consumer, like contact lenses and surgical. but i know the business well. i would have to really understand the pipeline and growth prospects of that business. >> i know you don't want to comment on specific acquisition targets. would something like amgen be too big? >> no. comment on amgen specifically, but really these new rules have virtually no impact or no material impact on standalone allergan. the income stripping as well as a three look back provision really don't impact the company like allergan, particularly as we get to october and the third year anniversary. >> when you think about what

kind of deals you want to do next, are you thinking more in terms of r&d heavy organizations or are you thinking more in terms of the branded pharmaceutical phase? >> we are going to look at both and everything. we are going to look at other ways to improve our return capital to shareholders. everything is on the table. the end of the day, the most important thing we can do is stay focused on our strategies, executing our business, and looking for opportunities to enhance our growth profile. >> how about your profile, brent? guy,re known as the deal and clearly, this breakup happened quickly. if pfizer broke up into two copmanies, -- companies, could you be the buyer of one of them? >> i do like pfizer and i have respect for the management team at pfizer. prepared for this

contingency and they will do great. but we will look at anything that is a growth oriented asset. we are a growth pharma company. everything is on the table, everything is a possibility, but it always will be true to our growth profile and growth oriented assets. coming up on "bloomberg markets," the case for piling into the precious metal. ♪

alix: you're watching "bloomberg markets."

i'm alix steel. it's time for the bloomberg news flash. i do best ackman says he's expecting shares from valeant pharmaceutical to make a comeback. -- activist investor bill ackman says he's expecting shares from valeant pharmaceuticals to make a comeback. admitted the valeant trait has led to quote, soul-searching. he says there's a handful of prospects to become valeant's next ceo. scarlet: the controversy about offshore tax havens has spread to canada. the world bank of canada says it has a team investigating the bank's role in the matter. halliburton is being sued by u.s. antitrust officials. they say the klan takeover of baker hughes threatens competition and should be blocked. the suit is a blow to halliburton's bid.

that's your bloomberg business flash update. scarlet: the federal reserve will release minutes from its meeting at 2:00 p.m. market conditions largely stabilized as the first quarter drew to an end. investors continued to pour investment into safe havens, including gold. what is behind the gold many bill? -- mini-boom? let's bring in james rickards, the author of a new book, "the new case for gold." saying there is now a new case for investing in gold. what is the number one reason? james: the goal debate has been going on for decades. cybermber one reason is financial warfare. vladimir putin has a 6000 member cyber brigade. these are russian military intelligence working day and

night to destroy, disrupt, and erased digital assets. i run into billionaires and say, what do you have? you have electrons. this can all be wiped out by putin, and by syria. in bangladesh, one of the poorest countries in the world, backed by the safest bank in the world, and the money disappears. if you don't have some tangibles, i recommend gold for 10%, real estate, silver. you have to have something physical or it can all be wiped out. scarlet: one of the older reasons is the central banks themselves put a lot of stock into gold as well. the u.s. has 8000 tons. alix: you are a gold standard guy. james: maybe just use it as a benchmark. just take the dollar in isolation. when people say it goes up or

goes down, i don't think of it that way. the higher dollar price for gold is a lower dollar. a lower dollar price for gold is a stronger dollar. it's in verse to the dollar. scarlet: for most of the first quarter gold rose along with the dollar. alix: that's true. we charted the two. gold.s the dollar versus the orange line is gold and the white line is a bloomberg dollar spot. those red boxes highlight when the two move inversely. the reason for that -- i call gold a commodity -- chameleon. sometimes it's a commodity, sometimes it's an investment, sometimes it's money. you have the euro, yen, dollar. the dollar and gold are both showing some strength. right now with the fed doveishness that will lead to a weaker dollar -- i would expect

a weaker dollar, stronger yen, but gold should also go up. that goldhis argument is money and does not need heels -- it's not liquid in the same way that cash is liquid. gold is more liquid than cash. i've never seen any difficulty selling or buying gold. you have to have save storage, use brinks -- scarlet: that's a lot of ifs. james: not really. as long as there is a certified warehouse involved, it's fine. look at the bond market, october 2015, the flash crash in rio. primary dealers are stuck with inventory they can't sell. i've never seen gold not have a bid. it's volatile, but liquid. alix: you have india and chinese

demand has not been as strong as we think. that not really gone over 1000 tons. it leaves the onus on western etf investors. can theymore juice squeeze out of gold and bring gold higher? james: china is the largest gold producer. they have 450 tons of indigenous output. gold lies about their holdings straight you can look at hong kong exports and mining output, it is far greater than what the government says there is. china looks to buy another 3000 tons to reach parity with the u.s. of all the 10% official gold in the world. that's why they don't talk about it. china has between 4000 and and

5000 tons. when the system collapses, they will have a good seat at the table. we talk about gold and liquidity. most people think about gold as being liquid. they can go in and out of it very quickly. you make a distinction between physical gold and paper gold. james: paper gold's paper. when you buy an etf, it's like buying a share of stock on the new york stock exchange. it can be digitally hacked. the new york stock exchange was closed for five months in 1914. a closed during hurricane sandy. it closed after 9/11. it closes every weekend. they only have about 1% of the open relative to the interests. all those paper gold contracts, they give you price exposure when you don't need it.

when you want it the most, that is when they are going to terminate it. scarlet: what is your price target, and when? $10,000. james: if you're going to go back to the gold standard, what does the price of gold have to be to support world trade, world commerce, and the money supply? its eighth grade math. the blunder would be if you go to the gold standard with the wrong price, that would be highly deflationary. that's the mistake that winston churchill made in 1925. that's where gold will end up when confidence in paper money is lost, which will be in the next crisis. keep your necklaces. ickards, authorr of "the new case for gold," you

are sticking with us. we will get immediate reaction from the st. louis fed president at 3:00 p.m. eastern time on bloomberg television and bloomberg radio. don't miss that interview. ♪

scarlet: this is "bloomberg markets." i'm scarlet fu. alix: i'm alix steel. the pain,ers feeling stocks they avoided went up, stocks they owned went down. research from bank of america shows only 19 percent of neutral fund managers beat the s&p 500, the fewest since 1998. let's bring in a bloomberg stock market reporter. scarlet: sticking with us is jim rickards, author of "the new case for gold."

talk about why fund managers can't do well or aren't doing well. >> it has been a pretty rough porter. the kicker is not that fund managers have a rough time. the landscape for picking stocks -- it's not golden, but it's getting better. we've had a very long period where stocks cross the market indexes have moved, and volatility at the beginning of the year actually aided that. goldman sachs indexes they chart, it's the top 50 and top 50picks underweight picks. this is relative to their index. it shows you which 50 stocks they were the most overweighted. you can see a pretty big dispersion between the two there. that line on the bottom half of the chart goes lower. that means the underweight it stocks -- underweighted stocks are doing better than the

ones they put more into. we have seen hedge fund managers, and now we are seeing mutual fund managers. that helps explain what happened in gold in the first quarter. do you feel like there is more rotation, catch up investing to come into gold on a short-term basis? >> absolutely. individuals.0% for i said, how much gold do you have? he said, none. when you go around institutions -- most of them have none or very little. if there were a modest 2% --tion of gold, 1% or there's not enough gold in the world at these prices to meet that demand. i expect that trend to continue. whenet: what do you hear you speak with fund managers

about how they are diversifying their funds? reporter: we have a table we compile where we survey seven bullish bracket banks. the first quarter they are maintained flat recommendations in terms of allocation. it takes that 60/40 shape, where people have become less favorable to stocks. there's been a few managers that have suggested picking up, getting some exposure to real assets. have sort of the alternative ballpark where you have hedge funds and that kind of thing. there have definitely been some strengths, certainly in gold. scarlet: you have a specialty in currency, but i wanted to get your thoughts on gold-mining stocks. james: gold-mining stocks are a

leveraged bets on gold. they are more volatile than the metal itself. the problem with miners, some of them are great, some of them are frauds, and you really have to do your homework. i would recommend a seasoned fund manager where they have crawled down in the minds and they know the mines. scarlet: thank you so much, oliver renick of bloomberg news, and james rickards, author of "the new case for gold." alix: the bears are bringing home the bacon after an analyst brought the brakes on his outlook. ♪

alix: you're watching "bloomberg markets." i'm alix steel. scarlet: i'm scarlet fu. mark crumpton has more from our news desk at

mark: the next battleground state on the road to the white house is new york, primary scheduled for april 19. it will be the first time to state has played a meaningful role in the nomination process in decades. new york offers the most delegates of any state left on the primary calendar until california on june 7. mrs. clinton says rival bernie sanders has neglected to do his homework when it comes to breaking up thanks -- banks. senator sanders. some questions on the issue after an -- during an interview with "the new york daily news." sanders was unable to provide specifics on how he would break up the big banks, or how officials could have been prosecuted for the collapse in 2008. blankenship was ceo of massey

energy when one of the company's west virginia mines exploded six years ago. the blast killed 29 people. blankenship was convicted of conspiracy to violate mine safety standards. the world health organization says diabetes is on the rise. 422 million people were affected in 2014. diabetes grew around the world, but increased the most in africa, the middle east, and asia. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. crumpton. we need to head over to our markets desk, where julie hyman has a check on individual movers. she has the reveal for the mystery chart. let's review the hints. we've got bacon, pump the brakes. alix: i think it's harley

davidson. the hog is the ticker. julie: you say you are not good at this, but here you go. the bacon hits refers to the ticker, hog, hog for harley davidson, pumping the brakes refers to motorcyclists. an analyst at itg cutting his estimates for hog. total motorcycle revenue in the arst quarter will fall, reduction from this analyst's prior view. this is a worst-performing stock in the s&p 500 today. revving up in the opposite direction is tesla, those shares up for the fifth straight insion, they gained 17.5% that time, in anticipation to an reaction to the model three unveiling. the shares are 4.5%.

since he took that short position in the stock, it has risen. i should mention he's not the only one. stock iserest in the 33% of float. some of the recent pop we have seen in the shares might be exacerbated by the short interest we have in the stock. then we get to bill ackman. he held a quarterly conference call today for his pershing square capital management, talking about some of his positions. one of them is valeant. he said there are a handful of folks in consideration for the ceo position to replace mike pearson. he also said the company's 10k, that investors should have full confidence on that when it eventually does come out. he's a big shareholder in howard hughes.

he says the south street seaport development for howard hughes has a lot of potential. the shares not moving by that much but getting a little pop today. sun edison looks really ugly parade on the verge of bankruptcy here. stocks plummeted nearly 100% overproduction, over leveraging are to blame -- plummeted. overproduction, over leveraging are to blame. market cap.r is its when we say overlevered, we mean overlevered. scarlet: dan vickers sees opportunities in solar. dan, you are and oil guy. as we talk about how you have written this book "shale boom, shale bust."

dan: the solar sector very much is dependent upon oil and gas prices. solar has to be competitive. when oil and gas prices are extended low for a long time, they get less competitive. when you see something like that and sun edison, a lot of the problems we have with -- have is with over expansion. that's what happened to sun edison to a great degree. it is what is happening with a lot of these shale players. why i try tot's talk about the solar space. scarlet: when i look at that capital structure -- i just took a look at swiss energy. structure-- capital looks the same. how do you waeve through the guys that will fail versus the guys that need time? dan: very much the same way.

you look at their capital structure. that is what will matter with the solar players. there's a lot of reasons why the incentives for the solar players still remain despite the sun edison bankruptcy that's coming on. there are certain players in the that you want to be betting on as some of these weaker players, overleveraged players start to go bust. players,for solar government subsidies helped them get a foothold, but economies of scale are really the driver for falling prices. the cost of solar power is now 1 1/150 of the level it was. dan: it's getting better, but it is still not competitive with fossil fuels. the congress extended subsidies through the end of the decade. the opportunity for solar remain for another 2 or 3 years. the climate accords were another reason why.

there are still opportunities in solar for the next 2 or 3 years, that they are still dependent on government subsidies. alix: what oil price do you like solar more and what price do you like ent's more? price.like them the same . like oil above $80 alix: you have a $150 price target as well. dan: i still believe you have to have a certain 10% to 15% inside the renewable space. there's nobody in a better position to benefit from the bankruptcy, the ultimate bankruptcy. that is a stock i would recommend being in. you want to be a part of renewable space.

that will benefit those who have an industrial and commercial focus for solar. scarlet: i'm looking at that see ast -- cast function. this is their debt, and this is their market cap. this is a different picture than what you saw with sun edison. scarlet: absolutely. in terms of the argument that solar generation will keep rolling, you mentioned parallels between the oil space and solar energy space. efficiency -- y, better.are getting i would point to these efficiency gains inside solar as particularly the price for panels, which has dropped tremendously over the last few years. but this is still a baffling

industry -- battling industry against fossil fuels. it is doing better than it was several years ago. -- we can see a lot of cancellations of projects from utilities which help their of low energye prices. you just don't have the need to convert from natural gas or oil. scarlet: what about solar versus other renewable energies? the i think solar has greatest potential going forward. there's nothing like it. it has been so underutilized. use of 1% of the energy we in this country is solar energy. the huge percentage gains you here in solar energy are coming is why thethat numbers are so large. this remains an enormous opportunity.

this is what sun edison was trying to capitalize on. alix: dan, thanks so much. always good to see you. up,ig up, -- coming investors are in wait and see mode for the fed minutes which are due out at 2:00 p.m. ♪

alix: this is your global business report. here's for watching.

the indian central bank governor says we have reached the limit of monetary policy, citing fears about qe infinity and why growth is the only solution. is cuttingntandera as many as 1200 jobs in spain as the company tries to steer customers towards digital banking. alix: the indian central bank governor is worried about qe. in an interview with bloomberg, he said the situation is not stable and that growth is the only remedy. >> i don't think this is a .table situation either we need stronger growth are we need to recognize we have reached the limits of monetary and slowly we get back to normalcy across the world.

if every time the central bank starts moving towards normalcy it says, exchange rate appreciating, we've got to go back, we are in it for a long time. alix: the central bank governor called for a new set of international rules last month to assess monetary policy that includes using color codes to rate global welfare. of the company's 55,000 employees, 15,000 -- those positions are currently at risk. nokia's workforce is set to double. nokia now concentrates on networking infrastructure. the corporate cutbacks continue. as manyra plans to cut as 1200 jobs in spain and close 450 ranches this year. -- branches this year.

santandera's spanish business employs 24,000 people and contributes 12% of the bank's profits. lender second-biggest may also reduce its domestic branches, all that including -- from its ceo. the dutch are holding a referendum on an eu treaty that would ease trade and political relations with ukraine. ukraine is fighting two wars. dislodgeits effort to pro-russian separatists from its easternmost provinces, the other a battle to reshape the economy. the imf says pledges to combat corruption need to be kept. armed conflict has decimated

ukraine's industrial homeland, home to the bulk of its steel and machine building. the economy shrank almost 10% last year. we don't have that chart up -- you read go. ukraine's 44 million people have made little economic headway since the fall of the soviet union. reformers who came to power in the nonviolent 2004 protest movement, called the orange revolution, failed to deliver on clique a, leaving a billionaire businessman in control. here is the argument. the government's four-year transformation plan includes privatizing state assets. it is asking citizens to and cuts in heating subsidies, inflation of more than 30%, and freeze and pensions and wages while trying to wean itself off of alliance on russian gas. vladimir putin has shown little willingness to tolerate losing influence over the former soviet republic. ukrainians themselves say they need more help from foreign

companies and governments. ukraine has a long way to go. in 2015, the country attracted $3.1 billion of foreign direct investment. that is your quick take and global business report. for more stories, visit bloomberg.com. still ahead, bracing for bank earnings. alix: one of wall street's most watched analysts gives his forecast ahead of earnings season and as he says, hold your nose. ♪

are watching attorney general loretta lynch speaking right now in washington at the american bar association antitrust law conference. after theng comments department of justice sued to prevent a merger. said halliburton's acquisition and baker hughes

puts competition at risk in too many markets. halliburton was sued by the u.s. to blo that merger. lynch said the deal violates the core antitrust principles and found a negative impact in 23 markets. very eager to hear what more she has to say. that merger has been a long time not coming, i guess, trying to get together in 2014. the attorney general loretta lynch speaking at the american bar association antitrust law conference on halliburton and baker hughes. we will be monitoring these headlines as they cross. scarlet: both shares are higher in trading today. you're looking at gains across the board, as we can you down to the relief of the fed minutes from its last meeting on march 16, at which point the fed decided not to raise interest rates but also give indication it would be less likely to raise rates than it had been earlier in the year. the nasdaq is trading near session highs. biotech stocks are leading those

advances. hi, abigail. do have the nasdaq trading sharply higher, being led by the biotech sector. it'sok at the nasdaq 100, pretty unusual. the top 10 stocks are biotech, plus we have tesla and ebay in there. as for what's going on with biotech driving the sector higher, we have a bullish initiation with favorable ratings on all of the big biotech's. a bloomberg biotech analyst told me that the allergan-pfizer deal is off great allergan is focusing on rmb centric acquisitions. that could beginning a boost to some of these names. the best biotech name, the company said it acquired the rights from eli lilly for a bone marrow drig/ -- drug. alix: what is happening with those two top outliers? high for thea is

fifth day in a row after the launch of the model 3. said in response to a question it would probably be unwise to short the stock. pretty strong opinion there. as for ebay, it's not clear what is driving the stock higher, that ebay is having its best day in 2016. stay tuned tuned as we dig into that one more. scarlet: bank earnings are nearly upon us. one of wall street's most watched analysts says it will not be pretty. alix: mike mayo stopped by bloomberg this morning. u.s.'s an ugly quarter for bank earnings. you have pressure on net interest margins, the 10 year has come down, and you also have capital markets being pretty sluggish in the first quarter. we are trading down 1/4 year over year. that hurts the wall street banks more than the main street banks.

let's define the difference between the two. >> wall street banks, the big trading houses. of then certainly parts jpmorgan, citigroup, and bank of america. and trading is lousy for the first quarter compared to last year's first quarter. the main street banks -- it's kind of not much growth, and it is sluggish but not as bad as the wall street banks. having said that, for 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's 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 comparisons get better throughout the rest of 2016 and 2017. we think this is as ugly as it gets on a year-over-year basis. >> how much of that is in the price? >> more than enough. this is the first time in 20 4ars we have recommended the largest banks in the united states because we think prices are discounting a recession. we upgraded bank of america. bank that we dislike the most in terms of oversight and governance, but even in a recession, we think bank of america grows their book value. as even a bank of america is trading below tangible book value, that book alue grows, we think it's good opportunity for banks. hold your nose, make it through the next couple weeks. were's one other bank upgraded for the first time in over two decades. that bank is comerica bank.

we still have their tangible book value growing. our issue with comerica is some of these banks have a strategy -- shine your shoes, go to work, and wait for interest rates to increase. that's not enough. ,s many banks as there are there are also other banks which are generating good returns, returns above the cost of capital, like a jpmorgan, like a wells fargo. the questions i will be asking on the earnings call is, some of your peers are showing good returns. it be -- you said walking in, shining your shoes and waiting for rates to rise isn't enough? how about all the people who aren't walking in? every day we get more and more headlines about people leaving banks. what is left there? the worst revenue

growth in the banking industry in 80 years. >> but you like bankamerica. >> revenues stink. >> so what is there to like? >> the only way to make it on the bottom line is become more efficient. yes, head count will be down. necessity is the cause of this. banks have no choice with this tough revenue environment. what is underappreciated here, it's fair to beat up the bank for lack of revenue growth, but it's not fair to beat up on the banks for lack of resiliency. resiliency is the strong suit of the banks right now. ♪

>> welcome to bloomberg markets. ♪

scarlet: welcome. alix: here's what we're watching at this hour. stocks are moving higher after the release of minutes. hoping for more clarity on the future of interest rates. scarlet: the merger is off between pfizer and allergan. bed bath & beyond reports earnings after the bell. lower for the retailer after a disappointing third quarter. scarlet: julie hyman has the latest. it is the first game this week. julie: we are seeing a big ounce back after a two-day decline the largest in two months. rising to about the highs of the session with the nasdaq leading.

has been lagging throughout the session for one thing we have been watching highlighted in a bloomberg news story today has to do with short interests and stocks overall. we have seen them climb and climb. that in the recent rally, the recent move has been fueled in some part by a short covering. take a look here. s&p 500 and the games we have seen -- games we have seen in the past several years. it coincides with an uptick in short interest, about at its highest going back each year. it has come back down slightly here as we have seen the gain in stock. nteresting phenomenon we will continue to keep an eye on. thee watching the groups in s&p 500 health care continues to help lead gains, neck and the, getting a boost with oil prices

paired with health care, it has canceled deal now from pfizer and allergan. those stocks are trading higher. likely they it is acquisition of allergan's business would continue to go through without a hitch. about lot of speculation where we will next see consolidation as a result of this deal's putting apart. will we see pfizer and allergan ago after others? there is just a lot of talk about what would next materialize. alix: oil prices, you have a nice inventory drop. julie: right. had defined products rising unexpectedly even as crude oil but it isnexpectedly, enough to boost oil prices. they were already higher going into the weekly inventory report at 10:30. following theup barrel where we are now.

the other big oil related news deal thatto do with a to preventot happen the acquisition of acre he is. the third-largest companies, both of those stocks also trading higher today. thank you, julie. julie will be back later. mark crumpton has more from the news desk. mark: hillary clinton's's use of a private e-mail account as secretary of state. wants to question current and former staffers under oath, including top clinton aide cheryl mills. the government wants to death .he judge to restrict questions

boston marathon officials say all systems are go for the marathon. a public safety official outlines security details today for the april 18 race. security at the marathon has increased in a terror attack in 2013. and 260ople were killed were injured when two bombs exploded near the finish line. the obama administration transferred money in a larger he -- largely successful fight against ebola to combat the growing threat of the zika virus. most will be devoted to the center for disease control prevention. focused on vaccines, cheating the infected, and combating the mosquitoes that spread the virus. andng to reassure belgium's foreigners that brussels is safe again. the city's subway system back up to normal operations after last month's terror attack. the prime is told reporters that brussels is not paralyzed.

police and the army are out in force. global news 24 hours a day powered by our 2400 journalists and 150 news bureaus around the world. alice, scarlet? investors are looking for signs of hawkishness and any kind of policy clues. there is a great function inside rightoomberg -- it shows now, shares are pricing in zero chance probability of an increase in april. 54% by december. in the meantime, there are odds of a probability of a cut, admittedly not high. the fact that it exists is interesting. what janet yellen said concerning fed policy and markets come in very, she should be targeting markets rather than

not influencing and ignoring them paired basically talking about market expectations for the future path of the u.s. rate hike that actually help students ease financial conditions. ust actually is helpful for and gives more room. scarlet: in the march decision, another thing referenced was the idea that global developments are starting to take a bigger role. the fed has a dual mandate of stable inflation. feels likees, but it an unofficial mandate in there as well. they of people have noted are looking at global financial markets. really china at this point. to determine what they do next. alix: hopefully getting some clarity on how other dissidents saw that.

gold down today as investors await the fed minutes. the central bank will pursue rate hikes cautiously to will we see a repeat today? scarlet: calling 2015 the year of the consumer or what does that mean for the real estate market? alix: does allergan have a script -- a plan b? ♪

time scarlet: for a look at some of the biggest big scarlet: -- business stories in the news right now. three family-owned franchise dealers have held a class-action lawsuit against rules again. they allege the automakers defrauded them. a spokesman for volkswagen

declined to comment. a company employs 3000 in the u.s. due to challenging market conditions. scarlet: puerto rico's governor signed into law a bill with a fiscal emergency and the ability to implement a debt moratorium. -- law is designed in part it is running out of money and could face insolvency. credit holders made a portion of the debt load morning of lawsuits. that is the bloomberg business flash. alix: time for the metal bulletin. julie hyman has a check on the bigger metals. the metalsing at looking into the fed minutes. a rally this year and gold prices. going with some of the most

recent dovish comments with janet yellen, we see gold trading a little lower and that is a similar trade to what we have seen in precious metals as well. whatis a turnaround from we have seen thus far this year when we have seen the prices of mostly bids metals up because of concerns about global economy slowing. after it had its recovery, it has had a bit of a downturn. if you look at your today, a few of these are having their best quarters in quite some time for gold, the best quarters since 1986 for the three other precious metals. we have the best going back to 2012. they have been on quite a tear appeared in terms of investment .e have seen

holdingss at gold generally. these are the funds overall. that is the white line p holdings in exchange traded fund. we have seen a considerable uptick here. viaave seen gold holdings these etf's at their highest going back about 14 months. the, one could argue, somewhat improving u.s. economic areure, it looks like folks still looking alix: for safety. alix:alix: last hour, we have the ultimate gold bowl. jim is now the author of a new case. scarlet: he explained the meaning behind the title of his book and the big call on price for gold. >> vladimir putin has a 6000 member cyber brigade. these are russian military intelligence working day and

night to destroy, disrupt, and erased digital assets. they havees say stocks and bonds. i think that you don't. you could all -- this could all be wiped out by putin. ago,d example a few days bangladesh, one of the poorest companies in the world. the safest bank in the world and the money disappeared. if you do not have some assets, i recommend gold for 10%. real estate and fine arts. back can all be wiped out. it is going to be $10,000 price target. if you're going back to the gold reference, what does it have to be to support world commerce and the money supply? if you go to a gold standard at

the wrong place, that would be highly deflationary. price, 10flationary thousand dollars, low-end. high-end, with 100% backing which i do not recommend, that would be $50,000. it will be in the next crisis. author of the new book, the new case for gold. 45 minutes way from the release of the fed minutes from the march meeting. how much dovishness are we going to see? tom joins us now from capital markets. he just cut his call for year-end hikes from three to just one. good to talk to you. >> it was not a fundamental call. it was not a fundamental economic call. it was a fundamental view on yellen. the reality is she has been extremely dovish edit seems as if she has created an extremely high hurdle to actually see two

or more hikes. for everyone.r we have been saying four hikes. the fundamental backdrop continues to support the idea of hikes this year but i think given yellen's dovishness toward the global backdrop -- backdrop, think it will be difficult to see more than two. we were basically forced to cut our view. alix: you have argued the fed has met its mandate. the jobless rate right around the long-term estimate as well. does the lack of willingness to raise rates again mean it has adopted a new mandate? how would you describe the mandate? >> it is reasonable to make the argument that in the context, as you rightly outlined our view, you are already north of the forecast for inflation this

year. toward well underway long-term forecasts on the unemployment rate, if we were truly following the tenants of the dual mandate, then yes, it would seem the removal of the accommodation at this point should be well underway instead of the state that it presently exist. we would suggest that clearly the fed is not being governed by the classic dual mandate. they have foreign issues on their mind. think you could make the better orhat, for worse, the segment is being a multivariable mandate, which clearly includes global. just to drive home the point for emphasis, i would suggest to you that that is at the top of the list. alix: we have a great chart when it talk -- he comes to the young word count.

it shows the word count for global china and the dollar. how much of an inflation or review do you think that janet yellen will tolerate? this is one of the areas where at least some officials would be somewhat disingenuous about their stance here. if everyone recalls in january, the fed put out policy goals report. the view is very symmetrical. they were not stand for prices that lead above their target, just like they would not stand for prices are low the target. it is very obvious in yellen's recent musings, she was very clear that she is willing to pricesnd or stand for that go north of the target. she called that a standard part

of any cycle. the truth is, i do not think you ever get to the breaking point because i don't think there is enough of an inflationary in colts -- impulse in the backdrop. it sounds like they are willing to tolerate inflation that hovers somewhere between two and 2.5%. scarlet: michael mckee will be in washington helping to break it all down. exclusiveon't miss an interview a 3:00 p.m. with james bullard. he will be joining kathleen hays and pimm fox on television and radio. ♪

alix: i'm alix steel. scarlet: consumer spending is set to accelerate this year to the trust -- strongest pace in more than a decade.

for: what does it mean property investment and what doesn't mean for putting your money in high-yielding assets? it over toet's turn cory johnson in san francisco and carol massar, here in new york. carol: we welcome everyone. we do want to talk about the consumer appeared a new report in wakefield. bloombergned in our studio here in new york. nice to have you here on bloomberg. tell us about what you find, what you have left that in the study that says this will be the year of the consumer. >> we have seen a huge drop in oil prices and we have been concerned about where it is showing up. relatively moderate increase.

a big reason for the slow growth is lower oil prices. people have been talking about how the decline in oil prices consumers to have more discretionary income to spend on other things. miss penny do not appear to be showing up in the answer was it was showing up in the explict -- inflationary adjusted numbers. if you look at the details adjusted for inflation, real retail sales were up 4.8%, the strongest growth since 1999. auto was a big piece of it. another piece of it. auto sales were at a record high. no question, with gasoline prices, the sales were way down in autos were way up. sales and department stores were up in other categories as well. overall, consumers were spending. it just was not showing up in nominal numbers. year, income, a main driver of consumer

spending, income has been growing in adjusted for inflation real after-tax income by over 2.5% for 17 straight months. the reason for that, when we look at real tax income, we look at the aggregate, the number of people times what they are making. that is income. if you look at that alone, the reason for the growth has been more jobs. that has been the biggest single reason, if you look at 2014 and 2015. both years, very strong job growth. wages on the other hand have been much more. think this year is the year wages also kick in. cory: but a station cow makes between auto and the rest of consumer spending is important because of the impact on what happens in real estate. it is so very different. where are you seeing the impact in real estate? >> two main areas.

when we look at commercial real estate from retail real estate, we look mostly at two major categories. locationsenter type and also high street retail in major cities. we have seen is in the shopping center area, steady in vacancy, but it has been bifurcated. >>the one hand, the high-end models are doing extremely well. luxury spending has held up well. the other area where you have seen a lot of strong sales has been the discounters. depot, ands, home those places continue to do well. it is the middle of the market, the midrange retailers, not luxury, but midrange sales, those have been lagging. facingson is they are

more competition from e-commerce. for every incremental dollar spent, more and more of it is going to e-commerce. that is affecting the stores. carol: our listeners and viewers, thinking about the retail, it has in a troubled space for some time at this well known brand, you think they will be fine and anything on the high-end is fine and anything else is one of specialty retailers that are struggling? >> the challenges have been mostly midrange retailers, hard -- hard good retailers, and those are the ones that have faced internet and e-commerce. they are struggling to right size the operations. a lot of their stores are too big. they need to downside. -- downsize. usuallyosing season is january, february. we saw a large number of closings in the petard -- in the

department stores and apparel stores. interesting. thank you so much. their latest survey taking a look at why 2016 will be the year of the consumer. we want to send it back to you guys. still ahead, a megamerger breaks down now that allergan's deal with pfizer is off the table. we speak with the ceo about what is next. ♪

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from bloomberg world headquarters in new york, you're watching "bloomberg markets."

mark: presidential primaries move to the next battleground, new york, scheduled for april 19. it will be the first time the state has played a meaningful role in the nomination process in decades. donald trumpon and both need the state to provide a bounceback victory after defeats in wisconsin. a republican aid says top advisers to john kasich plan to meet with leading gop activists in washington to talk about the strategy for the governor's battling for the party nomination in cleveland in july. the only contest governor kasich has won so far is in his state, but he continues to compile him artist number of delegates, who could be crucial in a tight race. merrickbin met with

garland today. meetings are also set for garland to chat with dianne feinstein. the senate judiciary committee chairman, charles grassley of iowa, will meet with judge garland next tuesday. billion of stephen a cohen has pledged billions of dollars to form a network of free mental health clinics for veterans and their families. clinics is to open five by 2020. his son served with the marines in afghanistan. global news 24 hours a day powered by our journalists in more than 150 news bureaus around the world. drugmaker pfizer and ireland-based allergan walked away from their merger today, which would have in the biggest health care merger.

>> we are focused on shareholder return and looking for opportunities to create cures and treatments for unmet medical needs. that is our mission. to $25,est we can get if it's three years or five years from now, we need to get there. stephanie: what is the number? three or five? >> i cannot answer that question. ourill provide an update on quarterly conference call in may, but we are focused on making sure we leave our industry in total return. we will continue to focus on that and continue to build the premier growth pharmaceutical company in the industry. stephanie: as you focus within your own company, what kind of restructuring still needs to take place? >> before pfizer, we had looked at restructuring our company to better deal with the divestiture .f our generics business

we have that plan. it has been sitting on the shelf . we are going to pull it off the shelf this week, ensure it is fresh. we were prepared for this. we did not want it to happen, but we were prepared for it. we are ready to go and we will be in great shape. stephanie: were you completely blindsided by this? how come you did not decide to ? ght it you moved to stop the merger quite quickly. what was the thinking and the analysis in terms of what you could have potentially done? >> of course we were surprised by this. this was an extraordinary change of the rules after the game had started, but we were prepared for it, so that was the good news. i think fighting it is not in the best interest of our shareholders for employees. it would have been a long, protracted, expensive fight. perhaps we could have one, but a good position to

put our shareholders and, particularly when our growth prospect and pipeline are so strong. stephanie: given that the government stepped in and road blocked you in a big way in terms of acquisition and growth targets, how about pricing? how concerned are you as you look to the government and upcoming election, the pressure on drug pricing? >> we always take the pressure pricing seriously. we believe we have a social contract with patients and medicines to price our based on value and in a responsible way. we will continue to do that, but the most important thing we can do is find cures and treatments for unmet needs. as long as we can do that, i think the value equation will remain intact and we will continue to push.

in versiondo the new rules concern you if the government is quite focused on you? could this tax policy change change again if we have a new administration? could the new administration be even tougher on you in terms of pricing? >> i think the administration was focused on pfizer, not allergan. the rules they passed today were focused on in version, but they have virtually no impact on ourdalone allergan and ability to execute on a standalone basis. we are in a strong position. i do not believe we will be targeted. in fact, we have a competitive advantage. has the-based company freedom to operate in a more competitive way. we're going to go in little bit deeper with bloomberg

reporter jeff mccracken. was there a specific provision that did kill this deal? pfizer to do the deal or any u.s. company to buy another company, they need to buy a company that is at least 25% of their size. the u.s. treasury basically said they would ignore deals done in the last three years that it a certain category. thise case of allergan, would have made them too small. pfizer'sf being 45% of size or have 45% ownership, have 45% stake in their combined company, they would have had less than 25%. if pfizer was to go ahead with the deal, not only would they not be able to lower their tax rate, they would have had to rate up, son's tax there was a disincentive, basically a penalty to do the deal. argument that it

was strategic does not really play out? jeff: i do not believe that. when they say it is not about taxes, it is about taxes. most deals are often about taxes or at least a number two reason they do the deal. itrlet: pfizer could argue is the bigger loser of the pair. what do they do next? jeff: they tried to buy at davis, which is the predecessor, years ago, before they did the alelrgan -- allergan deal. now, it looks like they are looking to spin off or selloff their established drugs portfolio, which is worth billions of dollars. some people have hypothesized that that could get spun out and it will be an inverted company, a foreign-based company, and then there will be the old pfizer in the united states, and allergan will come back and buy them and take their tax basis down to 16%.

that is one option, and the other is what would pfizer buy ins that of splitting up. have you had any names bandied about? jeff: i have not heard any names yet. people are really looking at allergan because they are in a really good position. they are the one with the lower tax rate. they have money coming in from their generic sale to teva, which should close in the next few months. the other thing that works in their favor is a competitor, former competitor is probably not going to be in the deal game . there are things that they might want to buy like bausch & lomb, which brent saunders used to be the ceo of. i think you will see more deals for allergan going forward then you will four pfizer. scarlet: coming up next, that, bath and beyond reports earnings after the bell and analyst brace for a slowing quarter -- up

next, bed, bath, and beyond reports earnings after the bell. ♪

scarlet: this is "bloomberg markets." a look at some of the biggest business stories in the news right now. halliburton is being sued by u.s. and trust officials who said a planned takeover of their rival prevents competition and should be blocked. the attorney general addressed the proposed merger earlier today. ag lynch: if completed, it would remove competition and 20 markets and hamper america's efforts to become energy independent, a setback that would harm not only our economic well-being but also our national security. put simply, it is a bad deal.

the takeover has been bogged down in regulatory reviews around the world since in 2014.nounced bass global markets is planning to complete its initial public offering by the in the next week according to a person familiar with the matter, who says it may value of the u.s. exchange operator at $1.8 billion, more than twice expected. bill ackman says there are a handful of prospects to become valley and's next ceo. and that is bloomberg's business flash. that, bath,rlet: and beyond is likely to report quarterly same-store sales below its forecast when it reports earnings. bath, and beyond sales have

jumped more than 50% since the end of 2008, following the bankruptcy of linens and things and its acquisition of cost plus. lately, as you can see, revenue has stagnated. the chain is investing in its online channel and looking to boost sales through new stores. a critical problem for all retailers is attracting foot traffic, even with north america getting a little bit of a recent bounds, overall traffic is still negative. the store struggles to effectively compete in an industry where there are heavy promotions and a shift to online shopping shows up in its margins heading south. you can see the downward pressure in this chart, which is one of bloomberg's top charts on the terminal this afternoon. cost have spiked since 2011 as the company scrabbles to update its systems and maintain competitiveness, especially against online peers. like other companies, buybacks are supporting shares during its struggle. the company announced an additional 2.5 billion dollars share buyback program on top of

the roughly two billion dollars remaining in its existing authorization. since it generates more than $1 billion in the cash flow per year, yielding almost 7%, buybacks can likely continue. we will know more today when they report after the close of trading. at the actionlook ahead of the march fomc minutes. julie: we are seeing action ahead of those minutes. to the highs rise of the session. nasdaq leading the gains following the s&p and then the dow trailing those gains a little bit today. let's also look at what is going on extinct-wise in the treasury market today going into the fed minutes. we are actually seeing an increase in yields today. still historically a very low level for the 10-year, but does this indicate maybe we will get more of the hawkish side of the equation in those said minutes

today? we shall see. the two-year tends to be the most sensitive, is also taking up slightly. i also wanted to look at the 30-year note to see where the yield is. we are also seeing an increase there. michael collins was on bloomberg this morning and said even if the fed does raise rates are there, what we could see is that gains in the 30-here yield would be relatively restrained because there are still these concerns about global growth. we will see how that plays out. one more thing i wanted to point out is that the movement we have seen in arms -- in bonds globally has been down. this is the yield -- this is as far back as it goes, back to 1997. as you can see, globally, bond yields are at a record low at this point amidst all the .oncern about global growth

as many central banks around the world are still in the meal is mode instead of where we are here in the united states. alix: that's why it is so striking. thank you. scarlet: glencore has agreed to sell a 40% stake in its pension as part of a debt-cutting program. the ceo moved to ease investor concerns about the company's ability to pay down $30 billion of debt. alix: is this a good fit? let's get some insight from pamela ritchie who joins us from toronto. the parent ofion bloomberg news is a senior nonexecutive director at glencore. what on earth does a pension business? ith an ag pamela: it is really a long-term view that pension funds as well as insurers have had for a long time. they really wanted these prize assets and managed to beat out

asian as well as middle eastern to getgn wealth funds these assets. agriculture, of course, is a long-term investment and allows long-term horizon players to write out a number of years of low returns. with thees it fit in investment strategy overall? that is essentially how it fits in. it's a very long-term side of things. if you look at how glencore may proceed on all of this, i think you mentioned the amount they are going to go ahead and pay for this -- $2.5 billion. that puts the overall ag business for glencore at the low-end of what other analysts, particularly citigroup had put this business as worth. said $10.5ad

billion. that said, it is money through the door for glencore, and it will certainly help. glencore also has the option to sell another 20% of the business. mark jenkins told bloomberg that partner toanother come in and buy of that 20's 20% remaining in the near term. coming up, india's central bank governor weighs in on the decision to lower key interest rates and why he says this cut is different. ♪

scarlet: we are just a couple of minutes away from the release of the bed march minutes. -- the fed march minutes. at the same time, loretta lynch talking about the fed rate path.

that's loretta mester. limited lynch is the ag. we are also watching another central banker today. india lowering its key interest rates for the first time in six months. the reserve bank of india says he raghuram rajan wants reserve banks to start lending more. talked: earlier, rajan about policy in the developed world. dr. rajan: real growth and fundamentals have to go up to match that higher level. that's why i say the one thing that will save us is very strong growth. the problem is that we have to keep monetary policy so accommodative until that

actually happens. that is not happening. we heard the imf managing director say yesterday that things are still bleak and mediocre and so on. 2, numeral 3, 4. it's qe infinity. we keep doing it. that is the concern. asset prices then start going back toward fundamentals, which is far lower than the elevated level at which they have been kept. risk.at is the some central bank says no, no, no, wait, wait, wait, more accommodation, and we go back to the higher-level until -- the point is i do not and this is a inkle situation -- i do not this is a stable situation -- i do not think this is a stable situation.

bankery time the central starts moving toward normalcy, it sees the exchange rate it decides weand have to go back, we are in it for a long time. alix: that was raghuram rajan speaking earlier. clarityl be looking for on the future of interest rates. good luck. our colleague, joe weisenthal, joins us now. it seems to me one of the big questions is the relationship between the markets and the fed and how they understand that relationship compared to before. joe: one thing i think is interesting coming into the release of these minutes is sense that march meeting, we have had a continued rally in markets but also fairly dovish commentary from janet yellen that has caused markets to push

back on expectations of when we will get a rate hike, but what i think is really remarkable is the tone today compared to where it was. now we have people talking about the central banks have found other ways to ease besides negative rates. you don't hear anyone talking anymore. lack of ammo it is a real sharp change in narrative. >> you have price stability, but you also have full employment, and you could make the argument that the fed has fulfilled those addedes and has unofficially a third one, which seems to be to keep a close eye on global markets. have also seen that split in the fed. you had fomc minutes with a bunch of presidents coming out hawk after hawk after hawk, even if they were not voting members this year. it's going to be interesting to see what kind of unity there will be among voting members. joe: to your point, for so long,

everyone was talking about they were doing well on the employment side of the mandate, but on the inflation side, they have room to go, but in the last few months, more people are convinced they are getting close on the inflation side, too, which makes the dovish rhetoric a little more surprising and striking. scarlet: it is good the fed is making progress. it seems like central banks around the world are not so much. sweden plus central bank said it is time for a rethink on how central banks were, making clear that he is open to changing how theral banks were and have curve on japan. you wonder if this will be a conversation that wilson be taken up here, if the head needs to be looking at changing up its inflation gauge. alix: i have the awesome gauge on the bloomberg for that, looking at what the inflation target is for countries compared

to what they actually are. it just is a nice way to illustrate it. euro is a great area to look at. the target is 2%. they are at -.1%. switzerland, .8%, but they are looking at 2%. it goes to show you how off central banks are when it comes to targets around the world. look at japan, right? joe: we have seen this idea of talking about helicopter money, direct financing of spending. i do not think we will get more on that today, but there will be more coming in the future. maybe it will be a topic of discussion on thursday. alix: joe is coming back at 4:00 p.m. ♪

lisadavid: we are moments away m a look at the minutes of thedavid: fomc march meeting.

we will see how dovish the yellen fed is. we go to michael mckee in washington, d.c. he will walk us through what those minutes had to say. in the drive fed to speak of the minutes, you can see the outlines of what was likely a contentious meeting that centered around the question of whether a rate increase would be advisable at their april meeting. in march because the minutes show many participants expressed a view the global economic and financial situation still posed appreciable downside risks to the domestic outlook. the u.s. economy had been globalnt amid the financial developments. the minutes show at least one other member of the committee