betty: good afternoon. week is the end of a rocky in stocks and oils seeing a rebound while investors are for clues and was forecast to be the worst earning season since the financial crisis. >> the yen takes a step back after five straight games. el-erian's take on the fed balancing act. secretarytreasury hank paulson says china faces serious challenges. are halfway through the trading day on the final trading day of the week. let's head to julie hyman. the gains in the markets are about half what they were earlier. from the earlier pops from the major averages, particularly the

nasdaq, it has been a commodity that rally and that is still the case but outside of commodity related stocks we are not seeing the gains he saw earlier in the session. up considerably, 1.9%, off their highs of the session, up 2.25% at one point, industrials and financials up but everything falling back from where it was earlier in the session. more red on the wheel, health care and consumer discretionary stocks are down. oil is coming down off its highs of the day though still up considerably, 6% off a little bit from the highs this session. that is contributing to some extent to becoming off of the highs for overall in stocks. likely not the whole story. >> the yen getting relief off the huge rally. julie: a little relief that

changing. point --, the yen came came down to unchanged and now it is very little changed, the five-day rally we had seen in the yen -- the bounceback is dissipating to some extent for the u.s. dollar. gold prices, it has been having a big week. it is positive on the day, it was negative earlier. well, the fate in stocks today -- fade in stocks today, gains in havens. year, still 10 selling in the 10 year, the yield at 1.72%. scarlet: thank you julie hyman, she will be back with more. >> let's get the news with mark crumpton. >> french police officials

confirm harris attacks suspect -- paris attack suspect has been arrested in belgium. a day after it called on the public to look for a key suspect in the march 22 attacks that killed 32 people, the prosecutors in -- office did not provide more information. the race for the democratic presidential nominated growing increasingly testy with bernie sanders saying that hillary clinton is not qualified to be president but the vermont senator told charlie rose it was the front runner who decided to go on the offensive. i have try tos: run an issue oriented campaign which is what i believe the american people want to hear, what ideas we had to improve their lives, not just attacking each other, but what i have to say, if we are getting attacked, every single day by the clinton campaign, i want them to note we will respond in kind. >> both white house hopefuls

gearing up for a crucial primary in new york state 11 days from today. ted cruz added more than $12 million to his campaign coffers last month, he has raised about $32 million over the first three months of beer according to his campaign. campaign officials did not say how much cash ted cruz has. the cost of mailing a letter is going down beginning sunday, the price of a first-class stamp drops two cents. the reduction is the result of an expiring surcharged designed to help the postal service recoup four point $5 billion in losses, the agency estimate it will lose $2 billion in annual revenue with the price drop. global news 24 hours a day powered by our 2400 journalist and more than 150 news bureaus around the world. the yen is seeing its best week since february and for

investors the question is at what point will the bank of japan intervened, according to nouriel roubini that could come before summer. nouriel: we are in risk on mode and more negative policy by the boj would weaken the yen, that is the direction they will likely to go. in mohameding el-erian. he joins us by phone from irvine, california. when you look at how the has been driving most of the other asset classes today and driving the headlines, give us your take on what is driving the currency stronger. >> a couple of things, what is everybody -- what everybody is talking about, markets are reflecting a more dovish fed. i think that is only a small part of the story. the much bigger part is the yen is telling us that the bank of japan has gotten to the point

where the extremity policies are not just ineffective but counterproductive. a good economic explanation and that is that beyond a certain point, it is no longer interest rate differential that determines exchange rate but the stocks of foreign assets. comparisonok at charts of the 10 year yield on a japanese debt versus the dollar yen, you can see as the boj went negative, rates in negative territory but the yen strengthening, does that mean the bank of japan, no matter what they do, will be ineffective? >> i do, i think they have gone beyond the point of effectiveness. as i said, the risk is they become counterproductive in a sense that the more they try to push interest rates negative, the more they strengthening their currency because people disengage from the financial system and that is one of the

unintended consequences of negative interest rates and one of several. scarlet: it creates a dilemma for the bank of japan. talk about what kind of lesson the yen's strength in the face of negative interest rate from the bank of japan me for europe, what should there take away be> ? >> it is time for a handoff of policies from a prolonged reliance on central banks to a more comprehensive policy -- that at addresses prop -- addresses the problem of too low growth. not an economic issue, a political issue. we have seen this week on the political front means that this handoff is even harder. >> it will be hard for the bank of japan to look at the yen and stomach it much longer, even if you think the bank of japan has been ineffective, the potential of helicopter money coming in, much more aggressive easing

going into the market and buying more stuff to help crop it up. you feel for alternative measures are on the table? >> they could be, central banks are like doctors in the sense that even if they do not have the right medication they will not walk away from the patient. the bank of japan may try to do even more in terms of negative interest rates but i suspect we will find out this will be more counterproductive. the question is willingness to do more, like a doctor, it will always be willing to treat the patient, its ability to actually get this -- get the desired outcomes. >> that has a whiplash effect on u.s., you do not usually think of a yen-stock correlation but dayschart, the s&p move on when the yen gains 1%. -- for most of 2015 and 2016, u.s. stocks are exposed. scarlet: it feels like we are

talking about the yen as the feeding asset class or the leading asset versus say credit leading stocks. how has the yen taken the lead? december, two very important elements of support for the markets have come about. they speak to the yen, the first one is that central banks are not just willing but able to continue to repress financial volatility and boost asset prices higher. if the bank of japan is visibly ineffective, that raises doubts about the ecb and we have seen the euro strengthened even though the ecb has been more dovish. the second element, we used to be in an environment where growth was low but stable. markets understood how to function. now it is an environment which growth is not just under pressure but no longer stable. is happeningo what

in japan which is they are running out of momentum already on their growth. a bit of a spurt and now they are slowing down. in a funny way, the yen has become a leading indicator. next week will be critical because we get the earnings and that will give us a good feel for how corporate fundamentals are. >> the theme for the last few months have been oil prices and the correlation of oil, credit, and stocks, do you feel that correlation is broken down? >> i think it has come a counterintuitive correlation. you would expect oil prices over time are any positive for many companies, if you suffer. we -- a few suffer. the advanced world is still an oil importer, especially europe. the volatility of oil prices, we see it today, a plus move in oil. that transmitted volatility to

other segments of the market. scarlet: you are staying with us , we will focus on one of your favorite topics, the fed and monetary policy, the subject of your book, "the only game in town." anden to what jacob frankel nouriel roubini said on bloomberg television. >> monetary policy is still viewed as the only game in town and that is something that the limits of the town should not be extended. >> unless there is greater global risk and we see monetary policy -- it is the only game in town. ♪

♪ alix: you're watching bloomberg

markets. scarlet: forget about the federal reserve raising interest rates, they should be cutting the formering to minneapolis fed president. -- he widely speculated makes the case for easing. alix: he writes monetary policy makers should be speaking to ease instead of typing instead of trying to normalize rates, the fed should be do what is needed to get employment and inflation back to normal. let's bring back mohamed el-erian from irvine, california. one of his main arguments is that the inflation expectations over five years have been falling. what do you think? mohamed: i am puzzled by the arguments. if you look at the u.s. on a standalone basis, the case for the fed to hike is there.

the employment objective has been met, wages are moving up. inflation expectations have picked up in the last few weeks. the major issue is how do you balance the domestic case for higher rates with the international case that suggest you have to be very cautious. we heard it from the president of the new york fed this morning, the main balancing act notxternal versus internal, inflation versus employment, internal versus external. scarlet: inflation and employment are two of the fed's mandates, a lot of people say they have taken on a third unofficial mandate which is the monitor of overseas development, do you agree? mohamed: i think they are much more sensitive to overseas developments. the fed typically has been a very insolent institution because the u.s. economy is relatively closed. that is no longer the case, we are seeing the fed care much

more about the external environment than it has in the past, making his policy decisions more difficult. a lot of people accuse the fed of flip-flopping and being inconsistent, if you are data dependent and you have these competing influence on the domestic and external side, you end up by giving inconsistent messages but it is not your fault, it is the reality of the environment. alix: it seems like greenspan and yellen when they spoke with paul volcker and bernanke were saying that is legit, to look at what is happening overseas, 92 think it would not affect u.s. policy -- naïve to think it would not affect u.s. policy and we saw the number of officials the fed were worried about inflation going down where the downside risk, 11, the highest ever. mohamed: it is legitimate to worry about the world. you cannot be a good house in a deteriorating neighborhood. you have to worry about the

neighborhood. i agree, it is legit. inflation, they have a number of puzzles they are dealing with that all of us are dealing with. people would have expected wage growth to be much higher given how strong employment has been, that is not the case, no one has solved the productivity issue. dealinga fed that is with an extremely fluid situation. i have a lot of sympathy for them. that he the other chart included in his case of why the fed should ease rather than tighten what the employment of population ratio at it plunged during the financial crisis and has certainly recovered a little bit but he says the rate of improvement is still fairly slow . even if the employment population ratio increased by another 2% in the next 30 months it was still remain below its level in 2007. this argues him, for more monetary stimulus and generating a faster improvement. alix: what do you think, this is

the prime age workers, 25 to 54, not at risk for retiring. mohamed: he is trying to answer the cyclical versus secular question. if you believe the decline has been cyclical in nature, then yes the fed could influence it that most people think this is unfortunately a structural issue. this speaks to much deeper elements that have to be -- do with the world of technology. therefore, they caution, do not expect the fed to influence that ratio and the labor participation rate to a huge extent and that speaks to the bigger thing we spoke about earlier, the need for other policymakers to step up to their responsibilities and not the leave the fed -- leave the fed is the main policymaker. , earningsearnings season kicks off next week, many analysts think this will be the trough and from here things will

get better for corporate warnings -- corporate earnings. mohamed: it is hard to tell, big questions about the global road we arehink the on a low but stable growth is ending. i think we can tip in one of two directions, either generally higher growth, or recession. it is too early to tell which we will tip, i would love to say it is this way but to be honest, it could be either way depending on how the politicians respond. that will have a huge influence on corporate earnings. i think there is uncertainty as to whether this is the worst for corporate earnings or we may be seeing worse ahead. i have to stress, as much as i would like to say it is this or that, the data is not decisive enough at this point. scarlet: what does that mean for

corporate america, the treasures from the ceos, they need to make strategies and decide how they deployed the researchers -- resources in the coming months. mohamed: they are saying they want lots of cash on their balance shoot -- she to have options but do not want to get caught like they did in 2008, so they sete resilience as important. the more cash they have on the balance sheet, the more attractive they are for those who want to unlock the cash back into the marketplace. and activists are getting very cash.sted in the corporate's are telling you something clear, they are not willing to take on a lot of risk now and while they have cash on its balance sheet even though it turns virtually nothing -- earns virtually nothing. alix: s&p, what kind of breakout either way do you see? mohamed: we will remains range bound.

may head backk we down. the range is still there. i think you will expand over time until we get evidence as to whether we are going one way or another on the global economy but a reason we are range bound is because while the fundamentals have been highly supported, quite a bit of the quiddity in the system which speaks to volatile markets but no breakout. scarlet: thank you for your time . alix: coming up, check out this chart, investors betting the farm against this one company, has done more than 40% this year, getting kicked to the curb again, find out which company this is an why the company is not horsing around. ♪

♪ scarlet: this is bloomberg markets. alix: time for the business flash, the biggest business stories in the news. goldman sachs awarded ceo lloyd blankfein a $7 million bonus to be paid out over eight years, if they meet certain targets, his total compensation for last year would be $30 million. he can receive more or less of a long-term incentive award based on whether the firm achieves return on equity and book value targets. --rlet: a st. louis jersey jury has sided with willem marx in a class-action lawsuit, the suit alleged the company the seed smokers by claiming light cigarettes were safer than rigorous cigarettes by the jury sided with the company after deliberating less than an hour. alix: cap shares fell after the struggling chain posted disappointing sales, it said inventory is piling up, sparking concern its comeback effort has

stalled, same-store sales fell 6% last month and analysts have projected a 5% decline according to retail metrics. performedublic especially performance with same-store sales plunging 14%. that is your business flash update. they of spirit under everything. let's head to the market desk where julie hyman has a reveal of our mystery stock. julie: a place you don't shop too often i bet. -- boot barn. a call to sell america's just selection of western where. -- they call themselves america's the selection of western where. it is neutral today.

it has come out with disappointing earnings, down 45%, down today sharply as well. down 16%. it has to do with the oil and gas industry goes according -- 30% of its stores are in heavy oil and gas markets. with the downturn in the market and layoffs in oil and gas, places like houston, this has not been good news for boot barn. alix: the cowboys of oil not buying their boots. scarlet: a company made for you. much more coming up. ♪

alix: live from bloomberg world headquarters in new york, i am alix steel. i am scarlet fu. this bloomberg markets. let's start with our bloomberg

word news. mark crumpton has that from the news desk. attorneys for the justice department say in today's court filing that apple has cooperated in previous cases, and should do so again. the government successfully accessed the california shooters iphone without assistance from apple. establish what republicans are eager to beat donald trump, so much so, the party's donors see ted cruz as the only candidate have the party's nomination. the texas senator will have hundreds of influential republican donors and jewish leaders all to himself this weekend in las vegas, with he will address the jewish republican coalition. .t is funded by a billionaire president obama says of

functioning american democracy is what is at stake in november's elections. he says it is important to elect leaders who believe compromise is not a dirty word, and listen to those who disagree with him. republican front runner don trump and his rival ted cruz several times in his remarks. space x has another big lunch planned. an unmanned rocket is set to take off this afternoon. spacecraft's dragon is set to deliver supplies, including a module that could be used for space hotels. it will be the first station delivery since an accident last june. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i am mark crumpton. back to you. scarlet: thank you so much. former treasury secretary frank

olson has long held the belief chinese reforms are critical to the u.s. his book looks at how it all affects the u.s. alix: he joined the bloomberg team this morning. >> it is an economy with transition. it has a very serious challenges, short-term, medium, and long. short-term currency, overcapacity and confidence. intermediate, you have debt, which is a very big issue. looking further, they need a new growth model very much. as i look at it, the good news rebuildingution -- confidence in dealing with the debt, and new drivers of growth,

are speeding up reforms. the reforms they need to put in place to really scale back the state owned enterprises, put them on a level playing field, and that the private sector do with the need to do. it is a matter of political will . as i look at china, the market response to volatility anywhere. when you get the country as big as china, and with the scale of their problems, it magnifies the volatility. country, i look at the the biggest problems are a few years in the future. if they be mitigated speed up the reforms. i think what we will be looking at for a number of years because you will seeard --

continual bouts of volatility, as you see the struggle between state planning, capitalism, and markets. said thant easier done. >> there is a lot there to unpack. let's start with the short-term. you are on. to expected to continue, to depreciate against the dollar. >> it is interesting the way frame the question. in washington, they are accusing the chinese of trying to drive down the currency. there's been a lot of money to pop up -- prop up the currency. ultimately, they are moving s a currency that is

more market determined. in the short-term, they understand how important stability is. when you have confidence to the andside, and really, understanding of the economy, and what the leaders are doing at a low. this is a good time to have stability. over time, you will see it market driven. frankly, i don't want to opine on what i think the value is as time when there is so little understanding in the markets about what is going on in china. chinas the u.s. have a policy jekyll if so, what is it? what should it be? >> i was in china two days ago. there are three people they talk about they know in america. it is you, henry kissinger, and bob selleck. >> i would say this.

the biggest ties between our two countries has ties.he economic we have really a robust economic relationship for some time. this is a very troubled relationship right now, in the sense that it is under stressed, and a lot of people in the u.s. are rethinking what is the value of having a good relationship with china. what is the value of that? timelook at it, this is a when never has that relationship been more important because despite the differences, and we could spend a lot of time talking about the differences, we have many issues where we have a common interest, and it is so essential that we keep this relationship on an even keel. alix: that was former treasury

secretary hank alston on bloomberg . haveet: fx reserves stabilized, and the yen has s well.tability a is china out of the woods? you say that china has volatility at times and structural problems that abound. which of the reforms is most pressing? how is the timetable changed? china bought itself some time on currency, first of all by imposing capital controls on money flow out of china. it is not necessarily good. it is not really a solution to what ails china. fed bought them time by backing off the anticipated rate

rises. that has removed some of the thesure on china to defend dollar. the pot sometime, but ultimately, they have to fix what is wrong with the chinese economy. that is what frank is talking about, a full plate of reforms that they have only begun to bite into. alix: part of that was all that debt. hsbc has staggering numbers. the amount of debt that must be absorbed, 10-15 million. how does china handle that in an intermediate basis that does not disrupt the global financial system. >> if you are in a hole, the is to stop taking. this is what i'm skeptical of the announcement that china is

cycle, andimulus that will turn around the chinese economy. the problem is china has overstimulated investment in its economy. they need to back off of that. it does not help the overcapacity situation. it makes it worse. each time they announced a stimulus package, you get a bump , but it gets less and less each time. they have to break the cycle. scarlet: that is certainly on their to do list. it looks like they have achieved some stability in the ethics reserves. do you believe in this? viewalways maintain the that a lot of these hedge funds saying that china would be , that theyevalue

were facing a typical emergency debt crisis. there are actually in the opposite situation. it actually needs to maintain a strong currency. it has a lot of tools to do that, including a large amount of reserves, larger than they , and theited for ability to also tighten down the outhes on capital flowing of the country. like a said, it is not as thoroughly good thing, but told that they have. china, i don't think the china .ill be forced to devalue i think there is downward pressure on the currency. they need to hold the line on the pressure. the danger is they get taught into it by about a people that they choose to devalue. so far they have not done that. alix: looking at the fx

reserves, it looked juicy last month. the surplus is still tens of billions of dollars. in. , was the river -- in theory, was are they in more trouble tn we think? >> it is pretty opaque. the imf asked what their derivatives functions are. maybe we got an answer, maybe we didn't. taking a step back, we know that outflows capital issues. the reason is a failure to rebound h the economy. a failure to rebound growth. scarlet: i feel like when it comes to china, the economy slowing down is well accepted. there's nothing controversial about that now.

with the disclosure of the panama papers, how does it change support back home >>? >>china watchers, like myself, have shifted focus from the debate over what is happening with the economy. i think most people who watch it closely think that the economy is on a downward path, and will continue. that conversation shifted to politics and asking, what is he doing. he is obviously exerting a great deal of control. the anticorruption campaign has paralyzed a lot of decision-making in china because it is so backward looking and forward-looking. it has enraged a lot of people in the party. we are getting signs of that. he has made a lot of enemies. right now, those enemies fear him. if he stumbles -- i think this

is a reason why they have been so overreactive to things like falling, things like sending so many mixed messages is because there is no .oom for error what that translates into in terms of political outcome, i do not know. this notion that he has a firm grip, but a fragile grip. scarlet: great stuff. thank you so much. alix: coming up, currencies are the big story of the week. and economists will give us his insight on the crazy week and currency volatility and negative sentiments in the global economy. ♪

scarlet: you are watching bloomberg. i'm scarlet fu. alix: i am alix steel. this is your global business report. scarlet: photo: becomes -- begins preparations for a bank selection process. alix: alibaba finance affiliate has increased the amount of trading to $3 billion. country'spushes the violation to about 600 billion. scarlet: iceland central bank is on track to free money to investors that has been caught in the capitals control. alix: we begin in india where photo phone group is getting the process of choosing investment banks. the british company may sell about 10% of the india business through the share cell.

advisors could be chosen by next month. vodafone india is the second -- the nation's second-biggest carrier. in china, alibaba's -- no, we just talked about that. we are doing that. in china, alibaba's finance money to as raising total violation of $600 billion. runs china's biggest online pay service. the alibaba early in their founder is at the helm. iceland is on track to free the last hedge funds caught in the capitals control. iceland's central bank governors bloomberg the auction will likely take lace before summer,

and recent political turmoil will not have an effect. >> there is a political process for choosing parliament and the government. we work with the government in power at any day in time. inhave our independence terms of monetary policy. government said it was sure it would survive a no contest motion. scarlet: it is time now for the whicherg quick take, in we provide context and background issues of interest. the national conversation on onigration often focuses undocumented people moving across the border. businesses have a different focus. they focus on immigrants they want to bring in.

the u.s. wants these workers. the problem comes on deciding who and how many should be admitted. here is the situation. took just six days to reach the a lot of positions says -- hb visas. indiaciaries like complained of protectionism. u.s. businesses also bring in seasonal agricultural workers. these are limited to 66,000. movie stars and sports athletes can get visas set aside for themselves. the rich can get a visa if they invest over half $1 million in the u.s. a law.s stemmed from

congress carved out special visas for certain nationalities. in 2014, the white house used executive authority to expand a program to a allow graduates to work in the u.s. tech in agriculture says there are not enough locals to fill the jobs. meantime, opponents say the companies are avoiding trying to pay higher wages. that is your global business report. for more stories, visit bloomberg.com. alix: coming up, verizon is said be bidding for yahoo! next month. ♪

alix: this is bloomberg markets.

i am alix steel. scarlet: a quick check here on u.s. stocks. biotech shares the biggest rally in seven years yesterday. of course, peak oil -- alix: the s&p, only up for tents of 1%. a little bit of calm restored to the market. scarlet: let's go now to abigail doolittle, live from the nasdaq, following some tech movers, starting with yahoo!. abigail: lots of news here. the company has extended the date.inary did it scarlet -- id this follows yesterday's news that verizon seems to be proceeding with its bid for yahoo!, but when you look at what they paid for aol, some may extrapolate the idea that theyir

grade would be less than the $10 billion that yahoo! is looking for. the stock is up, suggesting that yahoo! could trade higher in weeks ahead. scarlet: thank you so much, abigail. alix: staying with tech, the number of private companies valued over $1 billion has soared over the years. it has grown to over 200 companies worldwide. scarlet: now, the companies are starting to struggle raising money. and leaching joins us now from san francisco. are the startups headed for a bubble or of boom -- a boom? emily: that is what we will try atte wer in a special addition today of bloomberg west. this is the biggest tech incubator in the world, called

the harvard of startups. we will be talking with the ycom,nder of white, -- and airbnb and dropbox. i recently spoke with the chairman of airbnb and asked him this very question. he reminded me the airbnb was created in the financial crisis. he said, in a bad economy, people are always looking for new ways to make money. was born.en uber airbnb is on track to become profitable this year. what is next. go i asked, when is the ipo, when is the exit? >> i think that a great company should always be ready to go public. you want to operate your company like a public company. need forhave any more

capital. redundantly to have plans over the next two years to go public. after that, we will see. speaking will also be with a cofounder, as well as the dropbox ceo to talk about this -- big question bubble or broom, and what is the future of silicon valley? we have much more coming up on bloomberg markets. don't forget to tune in for a addition of bloomberg west -- edition of bloomberg west this evening. alix: and much more. ♪

it is a new york, 6:00 in london, and 2:00 in hong kong. scarlet: welcome to bloomberg markets.

from bloomberg rolled headquarters in new york, good friday afternoon. i'm scarlet fu. alix: i'm alix steel. stopped pulling back from earlier highs but you have oil heating up on the final day of the weekend the yen pulled back from its rally in one of the most volatile weeks for currencies in five years. scarlet: verizon to google is set to be lining up to bid on yahoo!, who is pushing back the deadline to put itself up for option, and what is next for marissa mayer? alix: uber pushing into food delivery. what will you do to your local grocer, and will it be like what happened to bookstores? scarlet: julie hyman is tracking stocks.

even though we are lower on the week, even at the highs of the session today, we have given those up today, at several points today dipping into the negative. right now, it is hanging onto a small gain we have also been tracking the japanese yen. day, falling for the first first session in six, even though the decline has now updated and the u.s. dollars advance against it has been paired considerably. very close to unchanged at one point in time. the weekly action in the yen has also been considerable, it's best week going back to february. this has caused an uptick in the volatility. you have a measure of volatility in the g7 currencies in white, emerging market currencies in blue.

essentially, you have near the highest level going back to 2011 , particularly spurred by the japanese yen. elsewhere, we are looking in oil prices which have been gaining pretty aggressively throughout .5% --sion, now up six 6.5%, and a lot of commodity related stocks leading gains in the s&p 500 today. if you look at some of the biggest gains percentagewise for those individual stocks, report, diamond offshore drilling and murphy's. a lot of retailers among the worst performers. eight out of the 10 are indeed retailers. coming out with his monthly comparable sales numbers, down 60%. down 14% at banana republic. they say inventory numbers are pretty high right now.

estimates on ag number of department store retailers. comparable store sales numbers also declining. oneer armour doing a two for stock split today as well. in on thelet's check first word news with mark crumpton. mark: a fugitive suspect in a november 13 paris tax was arrested today in belgium. police say today's raid was linked to the march 22 bombings in brussels. the suspect is believed to be the mysterious man in the hat, who escaped the double bombing at the airport. if true, it would mean that he had a role in both attacks. those attacks left a total of 162 people dead, 130 in paris, another 32 in brussels. bernie sanders is backing away from an earlier suggestion that

hillary clinton is not qualified to be president. senator sanders defended speaking out harshly against mrs. clinton, saying we have to fight back, but when asked whether she was qualified for the white house, he said, of course, and a clinton, on her worst day, would still be an infinitely better candidate than anyone on the republican side. ted cruz added more than $12 million to his campaign chest last month. raised $32 million in the first three months of the year, according to his campaign, but they did not say how much cash the center has on hand right now. john kerry is on baghdad -- in baghdad on an unannounced visit meeting with officials. he will be discussing military advances with the islamic state. he says the pentagon is considering more small military outpost to provide support to iraqi forces.

scarlet: turning now to foreign-exchange, after the thes monster rally, japanese currency taking a pause this afternoon. alix: nevertheless, traders are very bullish on the end. take a look at the positions. these are noncommercial longs. you can see how extended they are over 50,000 contracts. we do not really see over 50,000 often. juice is inmore this surge? joining us now is a barclays strategist andras jamie. how much more rally is there in the end? -- the yen? >> we expect by the end of the

quarter it could reach 105, and then it could reach 100 or the first quarter in 2017, and then going below to 98. job owning saw some from the finance minister this week, but the yen continues to find lots of support. >> definitely, myrtle -- verbalon, it seems intervention, it seems like it will not be that affect it. if the boj could start intervening in the market, that is not clear. the last time, there was a coordinated intervention and the reasons were different. that was after the synonymy, the yen started appreciating -- tsunami, the yen started appreciating quickly. even if they step in, we don't think that would be enough to change the direction. at some point, intraday volatility could be lower.

definitely, we think they would not be able to change direction. a call onhe rally risky assets and a plot to save haven, or more a call on a weaker dollar? >> both. we have seen a similar move in other currencies, in particular in developed markets. yen-golde the euro or -- they have been outperforming the dollar lately. there is a perception that risk is deteriorating. [indiscernible] this is when seasonality actually peaks together at the end of the year. scarlet: the beginning of the fiscal year on april 1. is that something that best -- investors outside of japan have

not been taking advantage of, and should be? >> that is something that should be temporary. the big question about moving into the yen, the question about whether authorities are willing to cap move or not, but tools they would use. from our point of view, it is not justified yet. scarlet: of course, the move has resulted in more volatility in g7 currencies, while emerging market currencies have not seen as big swings. alix: you can see it again on the bloomberg, the white line showing g7 volatility index, that huge spike in the last several weeks. volatility, weem can credit some of that to oil price stabilization. what do you think? -- well, last year, developed market currencies was

on a monetary policy divergence. this year is more uncertain as markets are debating whether the fed will be able to hike this year or maybe not. is most optimistic scenario maybe they deliver 50 basis points, but right now that's not clear. last year was pretty clear and the trend in the dollar was pretty clear as well. this time around, that is fueling volatility. peso is off byan oil, despite the fact that has rallied and emerging-market currencies have become stable. what is up with that? recently, mexico has been struggling with its oil company pemex. last week, we had a changing outlook from moody's, downgrading them.

the dollar will continue to trade deep until the government presents a very clear plan on how they will make pemex a stable company going forward. why the balance sheet has not deteriorated is because of pemex. if you take it out, the balance sheet is actually quite strong. today we have a rally in oil and maybe the mexican peso is not acting that much, but it is important to follow. alix: thank you. up, gold prices struggling today, but still one of the best-performing commodities of the year. can silver catch up? alix: verizon plans to bid on yahoo!, but it may need to compete with google, but why

would anyone want yahoo!? scarlet: amazon is growing its fresh program. will it put your supermarket out of business? ♪

alix: you are watching "bloomberg markets." scarlet: it is time to take a look at the biggest business stories right now. blankfein was awarded a $7 million bonus to be paid out over eight years if he meets certain targets. he can receive more or less of long-term incentive award based on whether the firm achieves roe and book value targets. according to data compiled

by bloomberg, it is the first inflow in four months to the $1.3 billion fund. hedget: john paulson's fund tumbled in the first quarter, according to someone familiar with it. and that is your business flash update. let's go over to the markets desk, where julie hyman is focusing on gold and copper. julie: we are seeing action in the oil market. less action in some of the metals today. gold futures are higher by 1%, notable on a day when stocks are also higher. people are still doing some hedging activity through gold, something characterized in the recent upturn in stocks. gold rising. are also higher

today by a little bit, .4%. the weekly picture for these two is also worth noting. gold is having its biggest weekly advance in a month, up by 1.6%, as we have had some of these concerns about global growth creeping back into the market. copper futures, as it is more reflective about global growth, is down 3.6%. are fivea glut of metals, according to one of our analysts, and that is attributable to china. scarlet: thank you so much. that sets us up for our next segment. alix: one of the best-performing segments this year has been gold . but silver is up only about 10%. that brings us to one of the oldest ratios monitored by metals traders. the gold-silver ratio.

scarlet: typically, silver tracks gold pretty closely but recently we have seen the ratio moved to levels not seen since the financial crisis. to break down the phenomenon is this even market strategist -- the senior market strategist. phil, what do you make of the ratio? >> it is like a rubber band that has been stretched too far. over time it will stretch back to normal levels. over the last 20 years, it is in the 60 to 70 range, but now we are back at the highs. we still have the same main drivers come in a safe haven demand, very low interest rates, and then you also have the weaker dollar. but where silver will start to catch up and gain some ground and bring the ratio that down is once industrial demand comes back. demand isuge that

looking at one of the economic indicators, pmi. we have seen it expand from january to february and march, and that over 50. this upward trend should continue through the year and you should start to see silver push up through that 16, $17. alix: so the ratio comes down because silver rallies? >> silver has the same three drivers behind it that gold has, the safety play. guys will be going into both markets, but the key is, the fed should only raise rates once or maybe twice this year. inflation will pick up, industrial demand will pick up, and until the prices will riley. they should get a boost time that. alix: what is the rally potential? >> i think the ratio will come back down to 60.

i think silver prices go to $17 by year end. goldice talking on the market is closer to $14. scarlet: what is the argument for gold coming down? >> if the fed aggressively starts raising rates. that would at least stall rally out. if they do cause a shock to the market, you may see traders jump out of that and start to get into riskier assets, start looking at shorting treasury bonds or 10-year note instead. scarlet: philip streetball, thank you. alix: still ahead, tracking unicorns. our startups headed for a boom or bust? we will talk to top venture capitalists. ♪

scarlet: i'm scarlet fu. alix: i'm alix steel. this week, steve case

explained what investors need to know about the next wave of technology. was led the first wave by the government and in a second wave, the markets have led the way. scarlet: in the third wave, the markets and the government money to dance together. to carol, let's go massar and cory johnson. [indiscernible] to ask you about this changing valuation of the unicorn. we were talking on radio about this notion, that the psychology has changed. vc's are demanding that things are different from their companies. messaginghanged the to the companies you are investing in? >> we have told company to be careful about spending money.

in the past, they were very generous with respect to fundraising, so companies were willing to grow fast without caring about gross margins or profitability. now things are getting back to normal worth people are focused on making money. some companies are having negative gross margins? not negative, but they could have gotten a 70% gross margin but only got 35%, because in a rush to get to market, they did not worry about the money. we have talked to people talking about the environment changing, real estate in san francisco, possibly even a recession in the area. has any of the sentiment with startups chain -- changed? definitely companies have started to slow down on vestment and the growth, they hire fewer

people, the rate of growth slows down. as a result, fewer people -- more people are now in the job market and demand for housing and other things declines, but i don't feel there is a significant slowdown. we see companies with the right fundamentals and real value creation are still growing rapidly. the financial market [indiscernible] we are growing rapidly because we are selling to find institutions where the demand is still very strong. companies with not so strong business models and the ability to make money have slowed down. companies where the fundamentals are strong are still growing rapidly. cory: what is not growing rapidly is the number of ipos. to get bankt earnings and i think we will start to hear more of this conversation. has the ipo market fundamentally changed?

please unicorn companies can stay private longer. are we going to see the $200 million ipos come back, or is that a thing of the past? >> i feel the market is more sane now. there was kind of an undercurrent in silicon valley in the last two years, where people thought going public was more important, you had more regulatory compliance issues, so you should stay public -- private. people are now realizing that going public has some fundamental benefits. when you have regulatory compliance issues, you are doing the right things. you are having to answer to the investor. focusing on the right issues. that psychological change happens. now silicon valley is back to a normal situation where they want to grow companies fast and take it to ipo. the reason we are not seeing

more ipos is because of the commodity market and china, a slowdown in the public market. even good companies are waiting for the market to stabilize. the nasdaq is up 3% in the past few days, so it is cyclical, but i think silicon valley [indiscernible] our startup company staying private longer, is that making better companies when they ultimately decide to go public? wherehas been a thing companies want to stay private longer so they can invest in technology and go into the public market with more robust offerings. now people are realizing that going public is a good thing because when investors look at a private company, they still feeling they are investing for growth and are more forgiving. look at amazon. they got many years to grow. cory: amazon and netflix are kind of unique.

when do you think the ipo's will come back? >> in the next quarter or two. cory: thank you, an interesting conversation. back to you in tv. scarlet: thank you. amazon'sll ahead, supermarket dreams. how e-commerce giant plans to bring home the bacon in the grocery biz. ♪

show me movies with explosions. show me more like this. show me "previously watched." what's recommended for me.

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markets." alix: scarlet: i'm scarlet fu. mark crumpton has more. the decision to appeal comes even after the fbi successfully gained access to one of the san bernardino shooters iphones without apple's help. it's become a pivotal case regarding privacy rights. official says an airman shot his commander at an apparent murder suicide in san antonio, texas. two handguns were found your the bodies of the men. officials stressed the shooting was not an act of terrorism. the fbi is leading the investigation. the brazilian president has canceled her appearance increase for the flame lighting for the summer olympics in rio de janeiro. she is fighting impeachment had ever 2014

reelection campaign. president rousseff has denied committing any crime. holocaust victims and survivors has reached a milestone, one million people persecuted by the knot sees -- nazis. the project is known as the world memory project. global news 24 hours a day. back to you. alix: bloomberg has learned verizon is planning to make a first-round day for yahoo!'s went business and the telecom giant is also willing to acquire its yahoo! japan stake to sweeten the offer. google is also considering throwing their hat in the ring. let's get into it with alex

sherman of bloomberg news and paul sweeney, who follows the industry at large. alex, the question seems to be, every bidder has a piece of the pie they are looking at. >> yahoo! makes sense to different companies for different reasons. you could throw in the equity firm as well, who may partner with these other companies. verizon owns aol, and the idea would be to merge yahoo! and a altogether, some synergies where maybe verizon can add were no other company can, which makes yahoo! a better deal for verizon theoretically. google would want it for other reasons. the problem with google is antitrust concerns. been all overe google for years, so you woer, if they bought yahoo!, whethey partner with someone in order to divest certain assets they need to avoid antitrust?

we don't know if google will make an offer. we know that verizon is working with at least three banks. they are ving forward on a first-round bid. alix: strategically, yahoo! was doing everything at the same time. are they still looking for a way to turn around the business at the same time of trying to sell themselves? >> i think they are. mercer mayer and her team are committed to what they believe is a turnaround plan to the company. when you look at yahoo!, you see a company that has a lot going -- a lot of high-quality content, one billion monthly average users. when it does not have is the growth story. they operate in a business, internet advertising, which year, but yahoo! has been declining several years. they have lost share to a lot of the competitors like google and facebook and investors are losing space.

scarlet: which is why we are talking about splitting it up into different pieces. there is a great column today talking about how yahoo! is like three different pieces, and the biggest piece is getting rid of this alibaba state without incurring a massive tax. how do they accomplished that? >> well, it avoids the question immediately. if you hold onto it, you don't have to deal with the tax perspective. the original plan was to spin it off in a tax the way, and then the irs said we are basically not going to let you do this. this is sort of plan b. at least allow us to hold on to the state, and then we will deal with whether or not we want to keep it and operate as a alibaba holding company, or figure out another way of getting rid of it. whether or not that means merging with alibaba or selling to somebody else. that question still remains to

be seen. by all accounts, may not even be a part of this discussion, where yahoo! says, let's at least monetize our core business, which the market values of zero, so it will be accreted to shareholders. let's do that first and that is still in outstanding question, how much will they get for their for business? analysts say it could be anywhere from $2 billion to eight lean dollars. we know that verizon values in less than $8 billion, but we don't know by how much less. who do you think can actually afford to pay that? $8 billion, private equity would have a tough time. >> i think there are a lot of people that could take a look at the company, primarily because there is $750 million of cash flow that the company would have this year. there is a lot of cash flow that a potential private equity buyer or private equity jointly bid

with a strategic company could did to finance the acquisition. no matter who buys it, there has to be a plan to try to turn around the fortunes of the business, which have been characterized by a secular decline in revenue, despite some attractive assets. aol in arizon buy similar transactions last year, and i think many are hoping that verizon comes to the rescue again. alix: thank you, and congratulations on breaking that -- story, alex. has been slowly growing its amazon fresh program. looks at whybanjo this could mean bad news for your local grocer. amazon is the undisputed leader in online retail, but there is a $1 trillion category in the u.s. where paul short,

groceries. but make no mistake, amazon is coming, and it could kill your neighborhood grocery store the same way it went after bookstores. beyond that, groceries could solve one of their biggest problem, it's a lackluster profits. in a 2013 letter to shareholders, ceo jeff bezos said he was ready to scale amazon fresh after years of testing the delivery service in seattle. has expanded to parts of california, pennsylvania, new york, new jersey, connecticut, and maryland. in the u.s., amazon that controls 22% of the online food and beverage market. but that market is still very small. food and drink sold online are expected to represent only $33 billion in 2016, which is just 4% of the overall market. that number will double by 2021. selling you fresh tomatoes and

apples could be the key to amazon's retail future. not only would it boosts sales, it would help amazon with its massive filling and -- shipping and fulfillment costs. getting people hooked on grocery make delivery more profitable. grocery orders. regular demand to justify sending trucks into each never heard a daily or weekly basis. with that infrastructure in place, any toy or book it delivers on top of that is gravy. amazon certainly has always to go, but it it's calculus of taking over categories one by it has taught us anything, is that even if it takes time, it is likely to deliver. that was shelly banjo. for more insight, head to gadfgo on the bloomberg. canadian job gains crushed

forecasts. how does that happen as oil continues to fall? ♪

breaking news,e west star energy in kansas has drawn takeover interest from its rival and marin, as well as an investment group including the canadian pension plan. other possible suitors for west frominclude this group barela's infrastructure management. certainly a move on the stock. alix: you can see the intraday currently halted for volatility, a huge spike up. utility, a regulated

the juicy part of the business. when you have natural gas is prices down so low, that hurts the business model, so regulated utilities is where the consistent money is at, and in part, why they will be a takeover target. the meantime, julie hyman has been checking out some social media companies. julie: let's start with facebook. falling today. publishers are seeing a drop in .acebook traffic traffic across their clients declined about 20% from january to march. data showing the biggest drops came from publishers that have been invested in instant articles. on the flipside, wells fargo is saying the instagram opportunity , ad revenue opportunity, is larger than previously thought. that does not seem to be mitigating the decline. twitter has not been having a good week, the stock is down again.

news, although that is not what it is bringing it down. yesterday, recall, morgan stanley cut forecast for the companies stock price on projected loan growth in everything from revenue to new users. , happeningn today midmorning, happening for a second straight day. linked being downgraded over at m km earners. $150. share from 's then the at mkm decline in first quarter online job postings in the u.s. was a negative forward indicator for their numbers. canada is crushing it when it comes to the job market,

implement rose faster than expected in march. that makes itsay less likely that the bank of canada will come this year. pamela ritchie is with us now from toronto. what parts of the economy saw the most jobs added? pamela: i want to go back to the ar story. borealis is part of the third-largest engine found in canada. as well as the infrastructure arm of another pension fund in canada are looking at this, to give you some context. back to the jobs picture, it's a surprising number. the surprising part, 19,000 of the 40,000 added in march were in alberta, the area that is suffering, racking up job losses because of these jobs added to

the economy in the province of alberta, we see unemployment ticking down to 7.1% from 7.9%. the overall on implement numbers in the country down to 7.1%, from 7.3%. other than that, still a very regional story. we definitely have seen some interesting swings in the regional story. ontario, quebec, british columbia, others have been doing well on a low loony. that has been bolstering the manufacturing side of things. alberta did reasonably well. are on those jobs added a lower paying side of things, but overall, of the 40,000 added, 35,000 of those are full-time jobs. what is confusing, as oil prices fall, why are jobs coming back, what is happening? there are a few

complexities to the canadian numbers, and they do tend to see wild swings. so i cannot really answer directly. i spoke a little while to a senior economist at scotia bank. he explained more about why this number can be a bit of a head scratch or sometimes. >> this one is rooted in a household survey, like the u.s. household survey, as opposed to nonfarm payrolls. sample, a modest calling households and asking them complex questions, and you are not really fully sure whether those numbers are accurate or if you are answering accurately. in that mix, you can get a lot of volatility. so we have to step back and look at a six-month average of how we are doing on the jobs want. ,ith this number on the mix over the last six months, averaging about 11,000 dollars added each month. we have about 30 6 million people in this country. scarlet: what does this data do

in terms of the bank of canada's next move? pamela: it appears to make it look even less likely that they will have to cut in any meaningful sense. 13,next meeting is april next week, where the bank of canada will make a decision. not quite at record lows for the bank of canada but just about. in january, the governor of the bank of canada said that he would try to rely more on fiscal stimulus, which we have heard is coming through the budget, as well as a pickup in nonenergy exports. also some other data. looks like our first quarter gdp 3%,er could be not far off lots of exports on car parts, durable goods, and so on. at the moment, looking like a relatively strong q1 number. scarlet: pamela ritchie, thank you. alix: coming up, what is behind the recent rally in the yen?

we have some counterintuitive views that we will discuss. ♪

alix: this is "bloomberg markets." alix: scarlet: i'm scarlet fu. in the yen is headed or a four-year high. it looks like the boj decision to adopt negative interest rates has failed to rein in the currency's 11% rally this year. yesterday, we spoke to a guest on what we are missing about the recent rally. number was already bullish on theyen six days ago, and real big move has come early in the fiscal year or japan, which is also unusual.

usually at the beginning of the fiscal year you get some capital outflow from japan and the yen usually weakens. you have a lot of things going on, long positions already in place at the beginning of the new fiscal year. things that would normally depressed the yen but instead is actually racing higher. not relativeing, interest rates, no reason for big capital inflows into japan. we had a bad day today, but in general markets have not been risk-averse over the last couple of weeks, so you are scratching your head saying what is going on? >> what is going on? you laid out all the reasons, but is there anything that sounds like a story that makes sense? >> one of the possible explanations goes back to china. china has been very concerned that their currency had weakened against the dollar but was still

extraordinarily strong on a trade weighted basis. who were their trading partners? europe, japan, etc.. china knows that if they weaken ,he currency against the dollar it creates uncertainty and volatility in financial markets. that there is a potential china has been reallocating some of their reserves out of dollars into yen and euros. that would help to push those currencies higher than would help to weaken the chinese currency on a trade weighted basis, without directly intervening in dollar-china, where there is such market sensitivity. i don't know if that's happening, we probably will never know. certainly after the g-20 pledge not to mess around in currency markets, it is unlikely they would be doing that, but something is going on here. explain it as a reallocation of reserves. scarlet: you look across asset

classes, currency is one area. credit, stocks, bonds, commodities, all seem to be driven by the yen. what does the bank of japan do next, given that everyone is looking at it? >> it is one of those tv shows actione actually in -- here it is a shooting and you hear a click and there are no more bullets in the gun. that is the boj, are not sure there is much they can do. have notinterest rates really weekend at the currency much. scarlet: you can see that there with japan introducing negative interest rates, and going from strength to strength. >> and does not appear to be an interest rate story. you could understand yen strength for the end of their fiscal year, they often repatriate some of their assets. that is no longer the explanation. there is something else going on in the markets. theres not look like --

could be some big reserve ships going on around the world, and those are things we don't know about. alix: i thought it was a really fascinating take. china doing its own fx rebalancing that could be leading the yen higher. strength is something that everyone is talking about but nobody really has a coherent going on,t what is especially in light of the boj going to negative right. he was not particularly sure himself, but it's possible that china is reallocating some of yen.x pile into scarlet: i find it fascinating on whether it is the result of something happening, or is leading other things into happening. , now ite had oil prices seems to be lurching toward what the other way around? alix: nobody has any idea.

>> isn't that how it is in the markets? that is kind of the fun of the whole thing. you have some kind of correlation and then we get to fight about whether it is the tale or the dog. alix: we are going to be doing a global tour today on "would you going from canada and then to peru. >> i am pretty excited to talk about peru. they are having an election this weekend, the first rounds. the daughter of the former leader is leading in the full's. probably not going to get the 50% to avoid a runoff, but she is a leader. a lot of volatility are the peruvian currency recently in the run-up to the vote. usrlet: we also have with michael ashton of injuring investment management. he is big in the inflation

world. alix: primarily responsible for the creation of the cpi futures contracts. nitty-grittyto get on inflation and what he sees here in the u.s. should be a lot of fun. >> and then i'm excited to talk about canada, good data, strong day for the loony. important story. up, a "bloomberg west" special featuring the ceo of dropbox. whether or not the unicorn bubble has popped. ♪

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david: here is what we are watching this hour. markets looking to close out the week on a high note, struggling to gain traction, giving up earlier gains. health care is the laggard. lisa: crude looking to close out the week with a 5% gain. oil rallying today big-time. 322 billion dollar valuation -- two hours away from the close of trading for the day. the ted to the markets desk where rami has the latest. ami: off