>> welcome. >> i'm dave gura. canadian pacific end $27 billion bid. we speak to canadian pacific ceo hunter harrison next. >> then earning season kicks off today. despite being forecasted the worst ones since the financial crisis, u.s. stocks are in the green. is that the next flag of the bulls market. >> tesla announcing today its recalling over 2000 model suvs. what it means for the brand and future selling power. two hours from the closing of the trading. >> we seen storks sort -- stocks fall off. had an early strong start. then paired gains as we head

into the afternoon. the dow is remained the strongest performer. rally remains is largely commodity. it you take a look at oil and gold, both trading higher. -- there's not a lot of optimism on that. we're seeing crude get a lift. gold also higher as the dollar turned lower. we seem to be seeing that inverse trade at play today. take a look at at imax. financials now in the top pot. just in the past few moments. technology also gaining there. those are groups higher. healthcare has been the big drag throughout the day. >> of course, there's earnings. >> don't ferc -- forget about earnings. personal-- here's are some charts

we've been looking at going into this earnings season. so called earnings recession. this is a trailing 12 month average change in earnings for the s&p 500. this is turned negative. it's forecast earnings for s&p 500 companies will fall by 10% in the season for the 1st quarter. speaking of alcoa, those shares are strong going into that report. up by more than 4%. we have a seen a lift in commodity or rebound in commodities if the 1st quarter. that is contributing to some of the gains we're seeing and commodity producers set to report. then there are the banks. we did have some analyst commentary today. outlook of the banks too negative. we always talk about the caveat companies do beat a margin of three quarters here. typically, get anywhere from 2/3 to 3/4 of companies beating

analyst estimates. here are the banks rising. you have to look at the idea these banks have done poorly. j.p. morgan and goldman sachs two the worst performers in the dow today. this reflects the pessimism. >> first world news. mark crumpton has more. >> in new york hillary clinton is calling out donald trump for not appreciating the diversity of his home state. this is clinton later comments to southeast asian communities during a campaign stop in jackson heights queens. mrs. clinton told the group mr. trump is from your area. he doesn't seem to respect diversity. campaigning in upstate, bernie sanders criticize's hillary clinton's record on fracking. that's he said mrs. clinton has not led the opposition against

fossil fuels. in japan, u.s. secretary of state john kerry today visited the memorial to bombing. today's visit makes secretary kerry the most senior american official to travel to -- americans reached global leadership role. he said it would be a serious mistake to retreat from the economic stage. >> responsible and sustainable u.s. leadership in the global economic system begins at home. we have to lead by example as we did by bouncing back from the financial crisis that threatened america's place in the global economy. >> secretary lew speech that

americans are losing badly in competition with china and other countries in the global economy. global news 24 hours a day powered by our 2400 journalist. i'm mark crumpton. >> thank you. canadian pacific railway announced today it's pulling the plug on push to buy. >> $27 billion fizzled after five months of effort. >> that of course will be hunter harrison. he is the chief executive officer. on the phone with us, you spent some time spending some time with the rail yards in chicago. there are a number of things that we need to talk about. a couple of things missing from the statement. terminating your efforts to buy norfolk southern. two, what's next. let's begin with the why.

why end these efforts now? >> i think that we can see the handwriting on the wall. when there's a clear misunderstanding of the transaction, when the justice department, you know has no stay in the transaction, when the u.s. army and political pressures start to bare it's time olook to see if we want to want to waste a lot more ti clearly norfolk southern was not ready to discuss the issue. they said our offer was woefully inadequate but they wouldn't tell us inadequate was. we saw a deck stacked against

us. let's vote forward. this is not the end of the world. we're looking at the share hold -- shareholder. we're going to go back to calgary and work hard >> why not weight it out? as you point out with your reference to both the department of justice and the army, it's the surface transportation board that has exclusive jurisdiction over railroad mergers. at the end of the day, it's the stb that decide yes or no. they haven't ruled yet. >> i think, eric, there was clearly in my view, there was a disrespect for the surface transportation board. to me, it's like changing the rules of the game in the middle of the game. i think we had -- >> hunter, may i interrupt you. are you saying, i want to be clear, that you don't feel that the various arms of the u.s. government including the surface transportation board treating

your offer fairly? >> no. early on, we had great respect for the surface transportation board. they're knowledge of the process and the procedures that should take place. we think that they should have been the ones that gave the final ruling. but it became clear with what i would describe as political pressure and the justice department and the u.s. army and others stepping in. we knew at the same time this resolution of ours was nonbinding. norfolk southern didn't have to react to it. we could not make a trust structure successful without their cooperation. >> the statement that you made does not mention csx. what about csx? >> well, eric, we kind of turned

that page. i don't see a lot of difference between the two. the opposition with norfolk southern i would presume that csx would have the same position that they had previously. unless somebody changes their mind or attitude, i would hate them to add, if you look at the statements of the so called big board in the u.s. i would say big four minus one now. they came out publicly against the merger after they had done theirs. it's fair to say in the -- matt rose has said, as i read his statements that me made -- he made public. merger could be a good thing. it's the timing issue. >> hunter, if that's the case

if it's just a matter of timing you shown a willingness to go back at this more than once. can we safely assume that hunter harrison will try to find another way to buy norfolk southern or csx and create a transcontinental railroad at some point in the future? >> i don't think that's not something i'm really focusing on. i do think, eric you know my views. i think down the line, maybe post my retirement. is it smart for the north american network, particularly for the u.s. and east of mississippi, can take under consideration a merger? absolutely. would there will be a chapter in the book devoted to it. absolutely. what lies ahead except for cp is to run a good railroad in western camden. >> it's a book i'm looking forward to reading it. now we have to talk about what's next.

what are are you going to do? everyone expects hunter harrison and cp to do a big buy back of stocks. we've talked about it. how big of a buy back are you considering? >> i think that something we talked about before. i think that's something that we're not going to dump everything we can. i think that we think that the value of our stock is under valued. it's good bargain. i think you can look forward to subject to board approval in weeks to come. there will probably be an announcement. >> what everybody wants to know, how big? you entertained using leverage to buy norfolk southern. would you use a bigger leverage to buy back? >> i don't think we'll use the leverage that we talked about

before. that's something that needs to be up for discussion relative to today where interest rates are as well as where our stock value is. what we see in the future with maybe some commodityies strength bouncing back which could be very helpful. >> hunter harrison, we thank you very much as always for your time. he is the ceo of canadian pacific. today terminating its efforts to buy norfolk southern. >> thanks so much. you can see the handwriting on the wall. coming up of "bloomberg markets," will 2016 be the year of flat returns? >> how bad is the economy's debt debacle. >> alternative energy, we dig into commodity markets and find where to find the upside.

>> this is "bloomberg markets." i'm david gura. >> alcoa kicks off earnings season. investors are bracing for the start what forecasted to be biggest earnings slump since the financial crisis. >> some are optimistic. oppenheimer allocated 60% of their funding. with us to explain. i enjoyed reading your notice john. you say this is a commentator patient. you say that the market has been analogizeed. where are we now? >> right now what i think, we'll be trying to patience is the thing. worry and worry.

>> patience and worry, worry. yet, you got 60% invested in equities. >> i hope so. >> how does that compare to how it has been in recent months? >> actually, not so bad. if you go on a year to date basis, defense outperforms cyclical. if you look at it from the bottom on february 11th, through today. it's been a better market to be exposed to equities. and a better market to be cyclically positioned. looking for the economy to come back, we're not looking for anything to continue. not expecting or looking for a recession. in particular with the u.s. sustainable economic expansion with europe, china and japan as labor as its recovery process

is. foreign markets in recovery. >> looking at the composition of your portfolio there. not much in allocation of commodity. do you expect that to continue? >> actually, david we look at the position we have with overweight material it's a good proxy for exposure to commodity. the material sector has a lot of processes in it who can do very well picking up commodities on the cheap processing them and not passing all the benefit of lower prices on to customers. >> we're heading into earnings season. typically, companies do peat the analyst expectations. what will the narrative about this time around? will the narrative be driven by the beating of the estimates or driven by the declining in revenues? >> i think what it will be driven by is by the fact results will beat expectations.

expectations -- last i looked i checked the fact, the numberser negative in revenue. that looked to me at a quick glance, all of a sudden, revenues are turning around. i think that might be a part in parcel of the dollars recent weak -- weak knowing. -- weakening. the dollar bins to weaken once the fed thrown the gauntlet down down. 25 bases points in december, the market is beginning to reflect that. that's causing a relative rally in commodities and the reduction of the strength of the dollar which could benefit revenues and earnings. i'm looking forward the mark may anticipate that the worse maybe over in terms of strong dollar.

maybe we are finally beginning to drop in terms of earnings results and energy where the expectations are. i think it's negative 101 or negative 103%. still trying to figure out how that works. it's just dramatic. >> we've marked the beginning of earnings season. let's look ahead. four more president will speak it week. what is that most important to you? are you hearing anything different? >> i would say to the fed president, the wonderful thing about the bernanke legacy federal reserve is transparency. in essence, the fed chairperson let's the body of the fomc and nonvoting members speak their mind. with that is created for the market maybe troublesome for those who don't believe the feds. if you look at the picture, the fed has been remarkably accurate

at saying what it means and doing what it means or all that jumbo record -- wording. they are conscious of the risk of a much stronger dollar and low interest rate world if we start raising the fed funds rate too fast. >> all right. i like it. john stotzfus chief investment strategic at oppenheimer. thank you. >> equity investors and tell come surprised what the next guest has to say about the leverage ratios.

>> you're watching "bloomberg markets." >> as the credit market recovers from february bottom one sector

is still feeling pain. tale come -- telecom >> telecom companies are muchus live is moffett. welcome. thank you for joining us. when we talk about levered telecom companies. you will be remised to not talk about sprint. i think sprint as an example. how much more leverage would a balance sheet look under new regulatory reporting requirements. >> there are a number of things happening. starting in 2019 start to take operating power leases. you have to add back the payments you make on those operating leases back. make that adjustment and then you're all ready talking about a significant c. to -- increment

to leverage. because of the transition that the industry is making from subsidizing hand sets to first selling hand sets and now leasing hand sets. which adds a lot of increments. especially at sprint, two thirds is coming from accounting changes. it's not real. make all of those adjustments and sprint which looks like its levered four times, which is high to begin it, it's levered eight times. tremendous leverage ratio. by the way, probably for a company that it's hard to argue would deserve a evaluation of more than eight times. >> that would mean that the debt would go from $34 million to more than $50 million. >> you're talking about a company with $50 million of debt. where the real -- just because of all of the changes on the

hand set side, really goes down to about $2.9 billion. people are talking about $7.9 billion. add back the lease payments and what have you, you're talking about a company that is levered eight times. there is no such thing as truth in accounting. accounting is an approximation of a set of numbers to try to get you reasonably close. it there's truth truth is cash flow. the real free cash flow of this company is negative. >> how is this sidelined for so long? >> it's funny. it's an odd thing. we started writing about this for our subscribers in early as early 2014. we were shouting the house was on fire. if you can use that as a title of a report back in early 2015

for whatever reason, the bond market didn't really get serious about this until soap of 2015. bonds bounced back some. they bounced back some. there's still a recognition there's real duress here. >> thank you so much, craig moffett partner and senior researcher at moffett. >> still ahead "bloomberg markets," oil riding high. we'll talk about the latest move in crude. also seeing opportunities in the clean energy space. that's coming up next after the break.

>> from bloomberg world headquarters in new york. >> less get a check on bloomberg first word headline. this hour with mark crumpton.

>> donald trump is voicing his displeasure over the selection posess for presidential nominees. calling it quote, corrupt and crooked. he inches closer to a contested convention. trump told the campaign rally in new york yesterday, that the person who wins the most votes in the primary process, should automatically be the party's nominee. the new polls says half the u.s. approves of president obama's job performance. the first time that's happened since 2013. the new associated press survey finds the president seeing an up tick across a number of issues including the economy. but, 54% characterized the economy as poor. just 1 in 10 republicans expressed a positive opinion of the president or of his performance. demonstrations in north carolina on this monday. supporters and opponents gathered to highlight their differences concerning a new state law that limits anti-discrimination pole

policies -- policies for lesbian, gay and transgender people. both rallies were held in raleigh. the international fury over the panama paper entered second week. prime minster said that even though he's released six years of tax returns other ministers should not be made to disclose theirs >> as for mp's we have robust rules on member interest and declaration. i believe that's the model we should continue to follow. we should think carefully before abandoning completely all tax confidentiality. >> the prime minster has been under pressure since his father ian, was identified as a client of a law firm that specializes helping the wealthy. global news 24 hours a day in more than 150 news bureaus around the world.

>> thanks. commodity marks closing in morning. let's take a look at today eats biggest moves. copper futures rebounded after the biggest weekly loss in three months. china biggest copper use. producer price decline narrowed in march. wti closing near four month high. prices dropped one point in the session. it boosted output 2%. frill >> now for on the outlook of crude. we're joined by johnny. i want to start on oil. if we see a cap on output from opec. how would that impact your outlook for prices >> there's a lot of factors with oil. in general, market participants have to look at oil as a new

rule book. it's like a scale. we have factors on the bullish side for oil prices. we're talking about caps into we've seen in the past sort of 16 or 17 months as much as two million barrels a day. we've seen the tangle in oil prices. that's come down to about four or five. you look at the nearest term future -- the prices will rebound. we saw a big move on friday. if we look at those factors, we can extrapolate where i think oil certainly is going to have its day in the sun. in the future. but how many days in sun is it going to have? that's what we got to look at. >> you sent along chart showcasing this. maybe you can help those of us to understand what's going on here? >> con tango oil bidding for

storage. we had that a year or year and a half out. it's high as high 8 or $9 in profit. what happens now, the lack of drilling and we have lot of this demand and supply balance is coming together. we see that. we see where the prices are changed to the backward side of that equation. >> you said that you want to see oil may not see its day in the sun in the next, 5 or ten or 15 years. can you ewill-- elaborate. do you expect oil not to see day in the sun for the next two days. why? >> oil will definitely have its day in the sun. on the bullish factors for oil we have politics. decline rates got to replace five million barrels a year. we're seeing now with the lack of drilling the rigs now in the united states 355.

that can't happen. for the e&p's in the oil business, you got 4000 duck wells that can be completed. so what we've seen about two million barrel a day price difference. adoption technology, these are game changers. if you look at it the amount of oil, we saw what two million barrels of day discrepancy between supply and demand. we could sigh five million barrels a day. we look at the 88 million cars sold every year. innovation tells us by 2025, cars have to be 50 more% more -- 50% more efficient. the reason i'm driving electric car is to show people the future is now. and the success that the tesla model 3 had, you can talk about that all day long. 225,000 orders.

that is damning indictment on the automonthive inferrers. it's all about infrastructure. that's another thing we got to talk about. >> but then to your point, guzz this mean that with driving oil prices now is the demand side or the supply side? because demand gone down or supplies gone up so much? >> it's both. i would say demand has been very reliable. even last year where where we saw the oil prices collapse demand increases. that's beginning to keep happening. we use 96 million barrels a day on a global scale. we would never in history see another 30% gain for the demand of oil. the real question is, when do we start going in the terminal decline for oil demand. certainly it's going to be more oil in the future. i think within the next five or ten years.

we get to that point it will surprise people because of the adoption, innovation technology. technology is not the friend of the oil business. not how we use oil and more importantly the technology how we can actually extract oil from other formations around the world. the oil shell renaissance in the united states has yet to be exported to other formations around the world. >> my ears perked up when you said 325,000 model 3 owner. they only own the right to buy one of the cars. they are manufactured. they will be those who say you're a little early. we aren't seeing the advent of the electric car just yet. >> it's going to happen with a lot of automotive manufacturers. when you look at tokyo, detroit

and germany, there's a siren on the programs for them to have technologically advanced vehicles. companies like apple, google, we've seen the vacuum cleaner company accelerate car program in the united kingdom. i think it's going to surprise a lot of people. nothing happens overnight. in the next four or five or six years. you'll see a lot of that. it's all about infrastructure. the gas station can happen with electric gas station i'm talking about, electrician can bailed charging station at a hotel in a day. these things can be multiplied. >> we caught you in houston. when you stopped to reenergize to recharge your tesla, what's the number one question that people ask of you about the car? >> people are shocked when they find out that the super chargers are all over the nation.

there's thousands of them. it takes me 30 or 40 minutes to get this car up. remember, when you're talking about electric car, the question is, can i get from lifestyle point a to lifestyle point b. absolutely. can i travel across the nation. they are shocked when they find out that this car can top up in 30 or 40 minutes. about the same amount of time it takes for me to have lunch or breakfast. also the sort of the regular availability of these chargers. they are from seattle to florida. already installed. this is shocking how quickly they were able to put this infrastructure in place. it exist today. >> thank you so much. good luck on the rest of your drive across the u.s. >> still ahead why donald trump erupted in anger after senator ted cruz swept daily gaits in -- delegates in colorado.

did vice president bide inmake a -- biden make a surprise endorsement of the presidential nomination?

>> this is "bloomberg markets." >> it is time for a look at the business news story. federal reserve chair janet yellen broken ranks. making the fed a fully public institution and ensuring the process of picking fed presidents is transparent. be sure you tune in at 4:00 eastern time. >> goldman sachs will pay $5.1 billion to settle handling

of mortgage backed securities. loans weren't proper vetted before being sold to investors. it was the fifth multibillion dollar settlement reached. >> airbus, lost an order for two super jumbo jets. the carry planned to fit each plan with 840 seats. they're also ordered the double decker in 2009. that is your business flash update. >> republican presidential candidate ted cruz swept colorado over the weekend. senator locked up all of the state's 34 delegates without any votes being cast in a traditional primary process. >> donald trump erupted on a broadcast interview this morning following the event. echo similar statements on twitter. how it is it possible that people of the great state never got to vote in the republican primary.

totally unfair. we were talking about how colorado is going to allocate delegates. how unfair is it and when donald trump talks about challenging this? >> it's not the way you design in a civics class. it gets away from the notion of one person one vote. but both party have rules that are party rules. they're not elect -- they're not government elect. trump has a great argument. as does bernie sanders if he wants to make the argument. we went to -- he won the wyoming contest and gets the same number of delegates. these are the rules. all parties are worried about challenging delegation. once you start to say that state didn't have a fair process. i don't think there's a state in the whole process that really could argue one person one vote. this is going to been going -- to been going discussion.

i suspect they will be called for reform beyond calls for self-interesting call. >> how loud were trump's protest before the vote was actually cast? if this is unfair process? >> he's raised it previously in some other states. particularly in the caucuses. if they are more traditional caucuses. you just disenfranchising people overseas or working or can't get a babysitter. trump has been raising some questions. he's raising a lot more here. you never know. when you get to convention, some of people may eventually vote different way. there's a lot of ambiguity in the process. the country will learn a lot about delegates. >> how is the narrative that ted cruz is trying to perpetuate

here. if you don't want donald trump automatically you should go to him. he pick up delegates over the colorado in weekend. is there truth to that narrative? >> you see it in some of his endorsers, people like lindsey graham who don't like ted cruz but are supporting him because he see him as a way to stop trump. there's a growing sense among some republicans. when you get to the convention in cleveland you may see some of the people who are looking far third candidate. whether it's john kasich or paul ryan. for now the person in the best position to keep donald trump from the majority before the convention is ted cruz. you see some support going to him for that reason. he joked the other day, that was good enough for him. as long as people were doing it for that reason. >> vice president biden in an interview with mike spoke about the latest in the race. he talked about how he was very happy to see -- he was very

happy to see a womb a -- womb a president. is this a endorcement of hillary clinton >> no, i think the vice president saying what he thinks. which is he likes a woman president. i don't think it's an endorcement. i think he like, president obama wants to remain neutral. the worst thing that clinton supporters could do is to try to force an end to this before the sanders people and senator sanders is ready. >> we were talking last week about the sanders campaign. ahead of your interview with the campaign manager. you're hearing them talking about philadelphia sort of a live convention. they plan to challenge hillary clinton if she is the woman in

the lead there going into philadelphia. how seriously are they looking at that? >> i don't think they're staffing up there. they're focused on getting through the day. they are scrambling what is in front of them. i think that is the case. if he continues to perform well. if he doesn't win every state, there will be some ambiguity when we go to philadelphia. she'll have to cobble together on the floor. i think senator sanders see what happens. let's see if the super delegates continue to support her. let's see if some delegates figure out a way to vote, or vote for her or him or have a delegation challenge. he's hoping to be close enough so there's some question. you never know. >> there's a poll that you guys are going to be releasing. you can't say much about it at 5:00 p.m. today. politics poll. tell -- can tell yous anything?

>> we're seeing what you can say about a particular group. today we're looking at married women. obviously a huge part of the electoral. mitt romney did very well with married women. we're locking at the republican party and democratic election. where are married women on a range of issues. again, important for both parties. >> mark halperin thank you so much. >> detail-- let's head down to the markets. check on some company movers. you're looking at the auto sector. >> i want to start with tesla. even though the stocks is not moving much. it's come down sharply. let's take a look at it avis budget. both stocks are lower. hertz came out.

over supply of vehicles pressuringest -- pressuring its prices. that range had been 1.5 to but you.-- 2.5%. we are also watching some of the other auto related stocks today. i think we're talking about ferrari next. which it spun off. er-- ferrari ceo planning to retire following nomination of new board of directors. also, at least temporarily as ceo of ferrari. interesting movement we're seeing in the shares today. auto nation was initiated. the natural there put -- analyst there putting a $50 price

target. nonetheless, seeing shares pull back. now let's get to tesla. tesla shares, little change now. coming down sharply off the high of the day. after the company said it was recalling 2700 model s suv's. there's an issue with the third row seat. the company said you can still use the cars. you should not use that third row. just for context here. the stock is up 66% from its low from the year back in february. the short interest is relatively high about 33% of the company's floats. interesting given this headline, the stock is not performing worse in the wake of that. i know you guys will dig more into it. >> julie hyman. up next, we'll head out west for more on tesla. stay with "bloomberg markets." more after the break.

>> you're watching "bloomberg markets." >> the parent company of uk in talks with a number of potential bidder for yahoo!. there's no certainty a deal will take place. >> yahoo! said its exploring alternative including sales. verizon and google are among the bidders for yahoo!'s assets. we're joined by emily chang. why would the daily mail be interested and i assume they couldn't go it alone? >> exactly. they're now one of 40 different company who expressed interest. we don't know how serious this interest is. one way this could work, the daily mail by the media asset from yahoo! turned into a freight company. another partner, potentially a private equity firm by the web part of the company.

apparently, the daily mail has been in talks with a number of different private equity firms by structuring a deal. yahoo! mark cap is ten times the size of daily mail. it's certainly they couldn't do alone. we're corporating to look at -- we're continuing to look at verizon. the most serious bidder in this process. verizon is one player i said yes, definitely we are going to submit a bid. we're going to submit a bid on april 18th which is the deadline. >> emily turning to tesla. model s it had to be recalled for a seat belt problem. how big of a set back is this for fess -- tesla? >> we're talking about all model s made before 2006. they were testing the third row seat. it didn't pass internal set.

until the recall is recalled they're asking drivers they not have anyone sit in the third row. 2700 cars we're talking about here. it is interesting. we're not seeing a big hit of shares. 325,000 orders for the model 3 whether or not the tesla can meet the orders. >> thank you so much. coming up in the next hour "bloomberg markets," wells fargo joins on "bloomberg markets." more after the break.

>> is 3:00 a.m. in hong kong. welcome to bloomberg markets.

from bloomberg world headquarters in new york, good afternoon. i'm carol massar. full the dollar plunges ahead of first quarter earnings. how to play the volatility trade and which markets to avoid. the daily mail throwing his hat into the ring. which company is a top contender and what it all means for marissa mayer. we are one hour away from the close of trading. you'll take it off this hour. >> that is what has been happening for most of the day after a strong start.