francine: europe stocks sharply higher as china's exports jump by the most in the year. commodities rising ahead of gdp data out tomorrow. jpmorgan kicks off the earnings season, and we look at how bad it will be for the industry. oil slides from its highest level in more than four months n's oil minister says he may not attend the key meeting. how much does it matter? this is bloomberg "surveillance." tom, we are going to have a great show. we have jpmorgan reporting, and

we also have to tightly look at oil. tom: i have never seen an earnings season like this. you have to go back to early 2009 or 2008 for the excitement and mystery of what we are going to see. we have those layoffs, citigroup, and now jpmorgan. on a small number of people. francine: yes. we will be bringing you the very latest off the bloomberg. let's get straight to bloomberg's first world news. nejra: thanks. more turmoil for the brussels airport, only this time it is a walkout by air traffic controllers. the airport is already reeling from the terrorist attacks that killed 16 people. today's labor strike is disrupting flight that the hub. it began over a dispute over the working age of traffic controllers to 58. syrians are voting today in parliamentary elections. some 3500 candidates combined

for the 2500 parliamentary seats. president bashar al-assad voted early in the elections, which are taking place in government controlled parts of the country. now to brazil, where the vice president is drying up plans to form a transitional government. dilma rousseff sharpens accusations that he is the mastermind of a coup against her. a crucial impeachment vote is looming, set for sunday. meanwhile, the vice president is focused on reforms to stem the worst recession in brazil's modern history. if you want to earn more money, it helps to be a man with rich parents and attend the london school of economics, according to a study of 2600 british grott graduates who tracked them after where the vice president is drying up plans to form a transitional government. dilma rousseff sharpens accusations that he is the mastermind of a coup against her. leaving . a gap in annual earnings between the children of wealthy backgrounds and those from powerback backroads was $11,500 from an. men.r

i'm nejra cehic. tom: thank you. let's look at equities, bonds, currencies, commodities. an interesting nuance. three days in a row, dow futures up. not near record highs but many stocks breaking up. strong, reverses a strong euro for two days and pulls back with nymex crude up from the afternoon yesterday. i noticed that the german 0.52, a numberis grinding lower. an important check. let's look at european stocks. we opened quite a lot higher on the back of commodities that are gaining 4.3% with some

better-than-expected news from china. it was strengthening for quite some time and now we have a little bit of relief. tom: lots of relief with range imf leading this weekend there will be announcements from that and the press conference will have a lot of important interviews on economics in the weekend. where are we right now? every once in a while it is good to take a long-term view. this is back to eisenhower, lee churchill. --we go with the inflation this is the government's 10 year yield in the united states and then down we go, the great disinflation. 2%, is end of the year, ..2% and we rolled over to 1.7% we continue this long-term n. f flation fo

francine: filter circuit everything -- this is the one that takes the best look. this is a very important technical level. we mentioned yesterday but the u.s. benchmark above the 200 day moving average for the first time since july, 2014. this is as u.s. production continues to decline. markets ticking higher, and yet there are still so many concerns. if you listened to the imf, there were more risks than just six months ago. we are joined by the blackrock investment institute global chief investment strategist. great to have you. we were looking at inflation charts, oil charts, and you have brexit and geopolitical risk. is there anything that you think we shouldn't be so pessimistic about? the imf cut growth forecasts. >> i should big clearing a sweet

spot for the market and you have downl growth stabilizing to the levels of growth that most people have been forecasting -- francine: but given the central bank policy it is nowhere near as high as we were expecting. >> growth is sufficiently strong to remove the risk and the concern of the markets which they had only six or eight weeks ago. enough asnot strong to be driving any concern about the fed raising interest rates in the near term and it got global central banks easing. you have to sweet spot for financial markets -- back in the 90's it was called goldilocks. we are in a sweet spot where some of the concerns that have been worrying markets -- chinese evaluation, the european banking system, oil price -- those were big concerns in january that have diminished and the global growth outlook looks good enough.

i think the transfer rkets is higher. tom: when i look at the idea of where are we now, come on back to this chart -- this is 15, 30 years of disinflation. richard, in your study, is there any successful reflation that doesn't involve seismic events like war? everything we are talking about it surveillance is a policy to reflect -- do i have that right? you are seeing huge reflation policies in the u.s. -- we have seen massive quantitive easing and we are now seeing that up from the ecb. when you look at history i'm not sure how hopeful it is, this unprecedented environment. you have got to consider some of the risks. we see a number of risks out there and people are focusing on less, which looks much

focusing on the european banks -- that has diminished candidly. risk is the risk that inflation picks up. we don't know how this plays out . we are throwing a lot of money problem and the fed has signaled that it is prepared to tolerate higher inflation at least in the moment -- that is something we need to watch closely. tom: as a global investment strategist, how do i deal in bonds? how do i collected coupon and sleep at night? >> i think bonds play number of roles -- the traditional role i aill think is to diversify -- player really important role -- francine: you don't move money? >> you make a bit of money, but you need something in your portfolio that will go up with the rest of the market goes down. that diversification role, for having long bonds, there are

other areas which i think are interesting like that. in the u.s., it's a really attractive place to be, coming back to that inflation risk we had earlier -- a big gap between actual and implied inflation. there is a lot of good deflation fears still in the market, and we think that may come out -- francine: you are hedging everything. >> when volatility is back at low levels, i think the primary role is fixed income place in your portfolio. you will not be making big returns going forward so you have to inc. about where the risk return is most attractive. increasingly we take fixed income outside of the u.s. and non-dollar looks more attractive because you have the ecb on your side. you have much more aggressive quantitive easing that increase is not just the volume of qe but is moving down the spectrum.

look, where do we think the risk reward is most attractive -- we look at non-dollar. but your point i think it will be very hard. when weascinating time begin serious coverage. at imposing will be with us on friday. coming up, a brutal quarter for all of global banking. in this hour, we begin with mr. diamond in jpmorgan -- we will go beneath the headline data, coming up. ♪

francine: it's a busy day when

we talk about markets and finance -- i'm francine lacqua in london. let's get to the bloomberg business flash. nejra: thanks. is filing for chapter 11 bankrupy protection. in joins at least four other companies who see the bankruptcy of the industry as they in do t inter-tougher environmental energies and a glut that sent ailing -- steel met steel for tenure lows. trades were suspended immediately. jp morgan chase has reduced headcount it is wealth management unit according to a person familiar with the matter who says that 30 positions were eliminated or 5% of the jobs -- this comes as the bank tries to refocus on serving clients with higher investment thresholds. more evidence of stabilization in the world's second-largest economy -- the exports have

jumped the most in a year and narrowed. overseas shipments were up 11.5% in march from a year earlier compared with a 25% slump in february. the trade surplus decreased to about $30 billion. that's your bloomberg business flash. francine: let's get more on this with the chief asia economist for bloomberg intelligence who jointly from beijing. when you look at china's exports, they are dumping the most in the year. that tells us that they are doing too badly and it is stabilizing but we can't really read into it, can we? , i would quibble with the message we are getting from the headline numbers for a couple reasons. first, the growth rate is really being flattened. there was a huge slump in march, 2015 that is really pushing up the numbers we're seeing now.

secondly there is a big holiday affect that pushed some shipments forward into march. how do we see past that? we look at the growth rate as a whole and if you look at that what used he is china's exports still down 4% year on year. some of the growth numbers have onn pretty good but based we stillt numbers think china has some fairly significant challenges to face. francine: so what you're telling us is that you can't read that the chinese economies are faring better than expected. what are we expecting from gdp figures? expecting 6.7% year on year growth when the gdp data on friday.

that is based on our monthly gdp tracker -- we look at a range of indicators, bundle them together to give us an overall reading of the strength of the economy. that is pointing to 6.7% growth, down from 6.8% at the end of 2015that is based on our monthlp tracker -- we look at a range of , but still within them government's target range of 6.5%. tom: let's drive it forward to friday. there was always a message at the world bank imf -- will be the message of china in the hallways of the imf? >> that's an important question. what's interesting is that the ins's view on china has changed. if you look at the china theyast back in 2015, what were looking at is the u-shaped pattern for growth -- they expected a decline in growth in 2016 to 2017, that a recovery toward the end of the decade as china benefited from a reform dividend. trying tolater forecast -- they raise the forecast for 2016, but that has come at the expense of a continued slide in growth in the

imf forecast for china back to 2020. that really gels with the message we're hearing from other analyst -- concern that china is buying a short-term boost to growth by allowing more rapid letting but they will be a price for that going forward. tom: with all the research you china feelble, does like it is part of the dialogue of the new mediocre or do they feel removed from it, where they don't have to partake in the debate, the discussion, the discourse over a slow global economy? >> well, if you look at some of the concerns about the global economy and global markets in the last six months, a lot of them have originated in china, first with the collapse of the equity markets and then with the mishandling and the shift of the more flexible exchange rate. a lot of the turmoil that was

derailing global growth in the beginning of the year does have its origins in china so i would think china does not regard itself as exempt from that discourse. francine: thank you so much. tom orlik from beijing. our guest is still with us -- when you look at china, have you read it? investors have a little bit more faith in the system than they did two months ago. >> i think the tone, not just -- youw, is improving don't want to see too much focus on a new individual number, you need the context. at the beginning of the year we were worried about a chinese recession. ist you have seen since then measures put in place both to stabilize the currency, which has been very successful, with very notable change. the broad economic data has improved from a very low space

-- it's not just the export data, it's the ppi data to consecutive positive data coming out -- it all tells you the same picture was that the chinese pol -- francine: how do you measure whereith young china, they see growth as an approach? >> we analyze all the internet data to get a signal about what's happening in the chinese economy as we do in every economy. with china there are the right questions in the official data but that analysis has been telling us consistently that china is in a slowing growth environment but not falling off a cliff and it continues to tell us that. the evidence we are getting still seems like it is slower growth for china but far from the hard landing many people were predicting. francine: thank you so much. we will be talking about bank earnings and about brexit concerns.

coming up, the imf director of monetary affairs. the interview is in the 10:00 a.m. hour, 3:00 p.m. here. on friday, we will bring you live coverage of the spring meeting in washington. ♪

francine: welcome back. today in about an hour and 20 minutes, jpmorgan will report

earnings to kickoff the earnings season. this is what i picked out for our morning must-read -- this is what we heard -- went into mediation -- he is talking about the financial industry -- his main assumption is that there is so much interconnectivity that if there is something systemic it will be dangerous for the will economy as a whole will stop we are back with our global chief investment strategist -- when you look at the investment landscape and when you look at the banking industry, it doesn't feel any safer than it did in 2008. >> i think it does. you have that increasing with the regulation, but that regulation is having the impact of making the banks much safer than they were previously.

banks are typically holding 60% more capital today than they and balancesly sheets today are as strong as they were 80 years ago. they face profitability challenges that i think that systemic risk is much lower. you see that in the markets where they continue to operate very heavily. tom: yeah, but the summary of that -- there was that op-ed the other day from the esteemed professor kaufman, they will all turn and utilities. i don't want to talk about individual banks, but if the banking industry -- that means we care about our away and are we. i don't see that. >> you are searching to see them behave more united utilities but when you think about the returns you will get from banks going over, the role dividends will play being much more important

in the future, you think about pricing and book value rather than earnings becoming more important -- you start to think about them in the context and they become more attractive investment -- thanks have been the worst performing sector in the market and they typically trade at .7 times book. they will return more capital in the form of dividends and in and an environment where payout ratios are very high as the are one of banks those sectors where they still have the potential to rise. -- up next,e taugh we look at the u.k. political landscape. ♪

wednesday, thursday, friday -- the imf meeting with the outlook yesterday. francine lacqua fell off her

chair in i thought brazil was really something, francine. francine: the u.k. -- politically, the imf said it is not that popular and they say they are getting it wrong. tom: let's get right to brexit. but first, the first word news. nejra: thanks. saysouth korean president they are boosting visibility in today's parliamentary election but exit polls see the party falling short of a majority stop south koreans are voting to elect a new parliament two years before the next presidential election. so is limited to one term her party needs to gain a key majority. of republican voters think the candidate with the most delicate after all the state candidates should be the nominee, even if he doesn't have the majority.

, justing to a new poll 40% think it would be acceptable for the delegates to take a different candidate. organized crime prosecutors have rated the panama law firm seeking evidence of money laundering and financing terrorism will stop this follows the leak of millions of documents about tax havens set up for wealthy international client. the attorney general said it also searched other subsidiaries but the firm has denied any wrongdoing. business groups from britain's biggest trading partners are voicing their support to remain in the european. they say it is good for trade and investment ahead of the vote on eu membership and cameron's government is arguing that people's jobs depend on remaining in the 28 hundred block. journalists 2400 and 150 news bureaus around the world. francine: thank you.

let's get more on this -- we are the blackrock investment institute global chief investment strategist -- thank you for coming in. we killed the u.k. -- we covered the u.k. election for a long time. i know there are serious concerns, but do we really worry that it will happen? >> generally in referendums, what happens is the status quote position experiences the majority and the status just of the status quote. if it was going to happen i think we would need to see it quite a bit further ahead than they are currently. it's clear that momentum is with brexit. it appears to be with brexit old,t across from young to and if we are being honest, the campaign hasn't taken off.

i think there is an increasing chance that we could see the british vote for brexit, however -- crisis,: the refugee security concerns, the panama papers -- >> was interesting is when the debate begin it was all about gotomics but the economics so confusing with figures encounter figures that each side has mutual as the other. what you have our coherence models being postulated by both sides which don't correspond to any reality anyone can grasp. that is no longer the issue -- the number one issue is security, terrorism, and open borders and we haven't yet had a convincing case that argues that security,part of our that the key point for britain is if we have a secure europe we can keep the terrorists from our borders. the real ammunition for those who want to exit is europe as

seen as soft on terror and unable to cope with terror, and that brings it to britain's borders. tom: we were talking about the theology of the united kingdom -- what you heard yesterday was also central park south, where i sat in on a speech of mergers and acquisitions conferences. francine lacqua was way out front on the global importance of brexit. cameron shouldt need ald not do is we prime minister that has to not do something or about a prime minister that has to do something -- which is it? >> i think it becomes a prime minister who has to do something. what's clearly not working is the remain campaign -- the plans for the remain campaign want to create momentum, to make an argument for security and stability and that isn't

working. momentum is with those who feel we should leave it is accentuated by the horrific terror attacks and the energy and vibrancy is with the exiteers, if i can call them that. the trouble is that cameron never really made a convincing case for europe while we were in it. he sort of grapes and moaned and britain hasn't led -- they are really the strongest military power and i think it's really the most important global europe andpower for britain could lead europe. but it has given up. it's an irritation and it is very hard for cameron to argue positively for europe but he is going to need to. tom: this is brilliant, but what i am fascinated by is that theology or the mythology -- you

used britain versus united kingdom. is it a united kingdom, is it britain, is it little britain, or is it england? what is going on? i think you really put your finger on where the argument will be what or lost. the way to convince the british people is what tie-in are we voting for? are we voting for a country that remains a world global power -- arguably, written is the most influential country in the world in terms of its education and law, in terms of its diplomatic legacy and history. i am for staying in because i'm believe that the path to britain's power in the 21st century is through europe, the british history has always been to divide europe, has no threat on the borders, and rule

the world through the sea. that is in there anymore. what we can do is have the global table to unify europe and i think britain has the ability faces threats that europe are ones that only britain can help. francine: you are saying that this is a vote on what the country is but when you look at the referendum the u.k. is choosing what kind of world we will live in because it is one of the biggest risks facing the world economy -- i hate to use the word systemic, but could it lead to a shock because people freak out or because we talk about it? oneveryone has been focusing sterling and the u.k. markets as the primary source of volatility should the u.k. go to leave but what i would add is that as we look at the markets we are pricing in something like a one still theance, so

minority outcome although it is certainly increasing and should britain choose to leave, which is highly uncertain i think people will still look at sterling is the main asset class. i think people are going to start looking beyond british borders and the next stop will be in europe for the broader breakup of europe. and thisee risk rise is the beginning of a process that roles that globalization and the last century that has been very favorable for financial markets stop tom: outstanding. the challenges of the united kingdom. we will continue on this discussion of the week. to continuee need the discussion on a brutal quarter for american banking -- we will begin the discussion later on bloomberg radio with new york university. ♪

francine: i'm francine lacqua in london; tom keene is in new york. we are looking at oil -- this is the morning mover -- we are there isthose because hope that they will come together & some kind of agreement although we don't know if the iranian oil minister is showing. blas or blogs -- javier joins us. when you look at the price of oil -- it went down a touch today but that is more to do with u.s. stock piles. >> they overnight reported that

stockpiles increased by 6.2 million barrels per day, which was higher than the market was expecting and a reversal of what we had last week. theme thatking the was triggered yesterday by hopes that on sunday there was an agreement. francine: willy have an agreement? although even if we have an agreement it will be very soft and symbolic and there is talk of a freeze that could tighten the oil balance. it will preserve the status quo -- every country is producing nearly as much as they can with the exception of saudi arabia. it may be that we don't have as much oil in the market but in essence it is keeping the situation that we have. it will not change significantly. let's bring it to a

halt as the stanley cup opens -- what is a freeze? i was skeptical about this as anything -- who is freezing who? >> it's a good question. would say they will free their production that they are using as much as they can and production is going down -- i got very excited when the freeze started because i thought the priest was going to be a much larger deal to cut production. since then, the minister of saudi arabia has made clear this is not the beginning of the grant process, the there will be production cuts. it is very much what's happening on the market so it doesn't change much. tom: the only thing -- i'm trying to put a freeze on the scarves and i am feeling at that.

francine: you should buy some stocks. tom: i should. is it look at oil -- extended moving from 30 to 40? is it fundamentally extender technically extended? i think both of them -- >> i think both of them play a role in wti. that is helping. manage money is increasing on the long side, so that is clearly providing a list of prices. probably the market is getting ahead of the fundamentals -- the market will tighten and supply and demand will tighten the second half of the year the last time i checked that was said about july and august and april. i think we are building inventories around the world so that it seems like the market is ahead but also one thing that is important -- running from 30 to 40 will be a lot easier than

running from 40 to 50. the moment we set up that $50 per barrel, we are going to start having u.s. shale oil producers starting to talk about adding rates and trying to reduce production. francine: i want to bring in the bloomberg. we have a little bit on what this means, and help me out. the yellow line is the msci world index. the white line is the price of oil. you can see the correlation. it was strong then and now we have had a reversal, but it seems oil and stocks are getting back into it. >> yes. we look at oil today as being a signal of whether the global economy is stabilizing. a lot of the left in the oil price is less about a change in the fundamentals and more about sentiment, more about a signal that people are confident on the demand side of the equation, more confident that the global economy will be ok. if you look at the demand

figures, expectations are still around 1.1 3 million barrels per day. it is coming through gradually. --are more constructive there is a stabilization and oil is one of the key factors, which helps the global economy. tom: does a stabilization of oil, richard, lead to a higher inflation and re-inflation, or diminished fear of deflation? >> it certainly leads to a diminished fear of deflation. we talked about tips earlier -- there is that gap between action inflation and implied inflation starting to close. when you were going to see is the headline rates of inflation, and you are already seeing that. let it doesn't mean is that core inflation will pick up. you have to look away from oil to see tightness in the labor market and price increases spreading broadly. javier blas, with

bloomberg news. a shutout to james sweeney at credit suisse, who killed on the deflation diminish story a good number of months ago. let's do a data check. as we go to break, equities, bonds, currencies, commodities. the 10 year yield is 1.79%. euro has been weaker, dollar advancing, oil weaker. german two-year yield weaker as well. stay with us. ♪

tom: good morning, everyone. francine lacqua in london; tom keene in new york. first, a bloomberg business flash. nejra: thanks. chairman has agreed to retroactively reduce a payout stemming from his previous job. people familiar with the matter say it is to help resolve the dispute over management bonuses in the middle of their cheating scandal. he was under scrutiny because he was promised a payment of $11.4 million last year as

compensation for leaving the higher paid cfo post. valeant pharmaceuticals is facing pressure to file financials. it received a notice of default from some bondholders, and a person familiar with the matter said they notified the drugmaker of an intent to issue a notice of default. on schedule to file its 10k on april 29. sweden's finance minister is raising the economic growth forecasts for 2016 and predicting narrowing deficits. whichs an economic boom helps the nation cope with a record number of asylum seekers. the gdp willsays expand 3.8% in 2016, up from an earlier forecast. that ouh. tom: thank you. we are talking international economics, banks, jpmorgan in the next hour, a little quarter for banks, which means there must be time to be optimistic on equities. richard terminal is with

blackrock and he joins us this morning. -- you this comes down have a new enthusiasm on equities. is it off the income statement? is it a clear balance sheet? or is it smoke and mirrors at the revenue line? >> look, in a very low return environment where most asset classes are guaranteeing or promising you very disappointing returns,, equities look best. they win that not very challenging competition. they do that because the valuations look very reasonable compared to the valuation elsewhere, but if you look at the earnings seen in some there is some encouragement but the last few have been horrible and it's likely to be a tough quarter for most u.s. companies. there is evidence coming through that this could be the inflection point when we start to see better news, particularly as oil and the dollar start to see through until we think

better figures are coming in. tom: your fearless leader at st. lawrence has been quite good about this -- when i look at the equity markets in the movement down the income statement, what comes down to me as productivity. all the games have gone to corporations, to equities and they will supposedly have this shift to labor. do you buy the idea of new games to labor or do you just give it back to shareholders? >> i think if you are going to see a sustained rally moved back to a higher return than what we are anticipating what you need to see is companies using their cash flow less to give it back to shareholders in the form of dividends and buybacks and give away more than 100% of their earnings in the form of dividends and buybacks and start re-publicizing capital expenditure. if we are going to see a return to a healthier growth

environment that is what we need to see. unfortunately we just aren't seeing it. tom: i think this is key. deutsche bank was great on this, on the profound capital dynamic and investment dynamic which means all the gains go to corporations. francine: right and we had a great chart yesterday saying that in europe the ceos are not willing to spend. they aren't making mario draghi's life any easier -- there is the central bank money awash. what will it take to start spending? >> i think it comes back to confidence in the economy. we are seeing a very slow recovery and many ceos are scarred by what happened in 2008. you never want to see that happen again. we are seeing a structural shift toward stronger balance sheet and we think at some point we are seeing that return to oilets, a stabilization and

. i think you need to see that confidence return. regionallyo you pick or do you go by industry? ? like the u.s. market because if you are looking at earnings growth to be the key driver going forward rather than re-rating which has played a key part that we see the u.s. market as one way of being that inflection point where you can get an earnings growth going. sect totally you are more by style then literally interesting. --s is an environment with if you look within the market, what you find is value-oriented stocks and value sectors which have been leading for the last few weeks still looking very cheap. it's a value of styles at a 35% discount to the broader market

that compares to an average of only 20%. tom: richard, thank you. a great briefing there on economics, fixed income, and equities. we will continue that discussion. a week of international economics. we will be joined from beyond the research; a lot of thoughts on the research and veracity. it's a fancy francine word. francine: good word. vonnietom: the veracity of earn. wieser andb alphabets/google. bloomberg "surveillance." ♪

it has been a brutal quarter for global banking.

in this hour, jpmorgan will report a trim staff in hong kong. oil and equities rallied. oil pulls back a little bit. draghi on the 21st, yellen on the 27th. we consider a failed business plan this morning. everyone wants a piece of yahoo! it will be interesting. good morning, everyone. "bloomberg surveillance," live from our world headquarters in new york. francine lacqua is in london. tom keene in new york. michael moore will join us on the set as well. "bloombergo our first word news" with neighbor change. for theore turmoil brussels airport, only this time it is by air-traffic controllers. the airport was reeling from last month's terrorist attacks that killed 16 people. today's labor strike is disrupting flights at the hub.

about 50 flights were canceled this morning, with more expected. syrians are voting today in parliament elections. some 3500 candidates are vying for the 250 parliamentary seats, although opposition groups have boycotted. 'sesident bashar al-assad facebook page said the president assads wife are at the library. attemptdilma rousseff's to stop a coup against her. the vice president is focused on reforms to stem the worst recession in brazil's modern history. donald trump says the election is being stolen from him, according to "the new york times."

he says there is a shadow of illegitimacy over the selection of delegates. trump says, "our republican system is absolutely rigged. it is a phony deal." this after senator ted cruz outmaneuvered him in colorado and nevada. global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus i'm nejra world, cehic. tom? tom: let's go through the data check. not to waste the second of our good time with mr. beyond go -- with mr. bianco. blue chips moving to near record highs. the euro pulls back big time, and oil cannot figure out what to do. the duo hot collar. -- the doha collar. the second screen, the german two-year yield at -0.52%.

francine? the chief energy correspondent was saying when you look at oil, it has to do with a spot -- with the stockpiles in the u.s. that were released overnight. gaining on the back of a little bit of optimism that china's economy is stabilizing because there is trade data. you had chinese exports jumping at the beginning of the year. bloomberg intelligence in beijing says it does not mean anything because it was being adjusted. watch out for the moment. it seems investor appetite is back. it may not last. tom: the world is coming to an end. minnesota, mining and manufacturing, over to the bloomberg terminal. where are we now? where are we? eisenhower, the 1950's, back when everybody looks like tom hanks. up we go. the great disinflation, the great moderation down, rolling

down back onto trend. francine, what do you have? is -- i actually wanted to look at the oil moving average, so this is the 200 day moving average on oil, and the u.s. benchmark -- this was yesterday, late yesterday, stepping above the 200 day moving average for the first time since july 2014. u.s. production continued to decline. this is an important technical moment. tom: it is good to have james bianco with us. fundamentals with technical analysis as well. i will protect the copyright. we will not send out his treasured research reports. appearing live in new york only with the chicago cubs in first place. are the cubs for real this year? james: absolutely, they are. it is over. is the market over?

, or dubear market intact see the blue chips break out the new highs, like 3m and others? james: the market did peak last may, so we have gone almost a year without a new high. it has been struggling. what it has been benefiting from has been central-bank policy. the fed caved on more rate hikes. you are getting is your money out of japan and europe. that has been the driver of the market for the last two months. earnings fundamentals have been a struggle for this market, and that will continue. tom: in the work of chris whalen, his wonderful work on financial history -- the idea of figuring out how to make the next penny i do not get. what do you expect to see on bank earnings this morning, and how do you fold that into bianco world? james: energy lending is a

significant part of their business right now. they have preannounced some kind of right off, and we will have to see where they go from here. the question is, how much are they going to write off. tom: we got this, francine. "theis an oil chart from journal" this morning. this is the minutia that mr. bianco is going to go through. francine: i am disappointed. we put better charts up. jim, when you look at earnings in banks, how much of the bad news is priced in? --know it from your s banks from u.s. bank and from your. is it a buying opportunity? lot ofthere has been a bad news. i am not quite sure we are through it just yet. it is going to be about what to do with interest rates.

they would really benefit from higher rates, the banks would, and a wider yield curve that would help their net interest margins. but it is looking more like that is not going to happen anytime soon. as far as the banks go, the big question is, what do you do with all those earnings loans? they are going to write some of them down, but will they write enough of them down? will oil response to the corresponding write-downs? some of the commodity producers and how they are linked to the banks -- i had chris wheeler, one of the biggest european experts on banking stocks, saying let's just focus on the good news. is there anything that could surprise on the upside coming from bank earnings? their tradebly in revenues and banking revenues, a lot of people do not expect much out of that, and that has always been a wild card for them. if they could put up a big surprise in that area, it could be good for them. bring up the negative rate

chart of the morning. this is the one thing with the markets really moving. the german two-year just will not give it up. i would suggest mario draghi has been off the map. i believe he is an important central banker. fit in the euro challenges with that confidence we neeto invest. james: it going to be hard to do because with the negative rates we have in europe, this is a whole new ballgame with negative rates. if you go back to -- i know you will like this -- if you go back to sydney homes interest rates, there is no negative interest rates in that book at all. that is a new phenomenon within the last two years. people are struggling, especially among europeans, to understand what this means. tom: the heart of the yield book classic, ismer's real rate return.

we talked yesterday about the risk-free rate. who knows what it is? how do you play the investment game, the finance game, or the janet yellen game with negative real rates? james: it is very difficult to do in that environment. not only negative rates but nominal or negative rates being -- nominal rates being negative as well, it is a whole new ballgame. there are no roadmaps. tom: can it be found at wrigley field? james: i would hope it would, but i do not think it is right now. tom: francine is like, what the hell are they talking about? in each in egypt, the currency was in gold, so no matter where you look, maybe you buy gold because it is a hedge against inflation. if the dollar moves, gold is maybe the chart of the year. had tremendous speculative interest in gold pretty much all year long. argument against gold was, for relic thatit was a

yielded you nothing. today a zero yield is a high-yield around the world. that is the positive carry. that is the yield, zero, where everybody else's negative. that is why gold has had a big -- has been a big beneficiary. francine: tom keene loves this. of a history lesson. ancient egypt, thank you so much. coming up on bloomberg markets, the imf director of monetary affairs. that interview in the 10:00 a.m. hour in new york. that is 3:00 p.m. in london. live coverage from the imf spring meetings in d.c. we speak to ken rogoff, david lipton, and adam posen on friday. ♪

francine: i am frenzy and likewise in london. tom keene is in new york. we have plenty of news -- i am francine lacqua in london. tom keene is in new york. here is nejra cehic. this company joins four other coal companies to seek bankruptcy as the industry endures its worst downturn in decades amid for environmental policies, a flood of cheap natural gas, and a glut that sent prices to 10 year lows. trading in peabody shares in new york was suspended immediately. jpmorgan has reduced headcount 30its asia-pacific unit,

positions eliminated, or 5% of the jobs. the move comes as the bank tries to refocus staff on serving clients with higher investment thresholds. the bank reports earnings late this morning. more evidence of stabilization in the world's second-biggest economy. in --exports have jumped have jumped the most in a year as imports have narrowed. stocks rallied on the news. shipment's were up 11.5% in dollar terms in march from a year earlier, compared with a 25% slump in february. that is your "bloomberg business flash." francine: joining us now from hong kong, enda curran is with us. .ith us also is james bianco great to have you on the program. the markets are happy that we had this good trading data, exports rising from china. how much does it have to do with seasonal factors, or does it

mean that china's economy is stabilizing? good morning, francine. it is better than america expected. we saw signs of better buying from key trading partners from the u.s., for example. it maybe to this broader narrative and emerging stabilization, but with these numbers we will see that we are comparing march of this year with a very weak march in 2015. we are starting a quite a low base. we have to factor in the annual chinese new year holiday, which happens in february. a month after that, we received a rebound in that activity. in headline.e it might be another indicator that the manufacturing sector is stabilizing, but i would suggest we have to because is on this number for now. francine: we also saw, for that makehinese units

pizza hut and kfc. it willhere -- is there difference between what we see and the figures that are dished out by the government? enda: there is skepticism around chinese numbers, that is for sure. the trade in posting linked in capital flows and people trying to get the money out of china. but you mentioned the consumer sector and the corporate sector. there are plenty of foreign multinationals like starbucks, who are prompting expansion in the country. shanghai,t disneyland, which opens this week. the consumption side of things is coming along. of --just that that kind that side of the economy has a long way to go before it fills the gap. tom: enda curran in china with a

briefing on a little bit of good news for china. just before the imf meetings, we will continue this conversation with donald straszheim. he will be talking on the pulse and the reality in china. coming up, atlanta, new york. gdp now. ♪

us. doha is upon opec out with a normal report. demand growthr

estimate by a modest amount. but nevertheless, there it is. trimming their demand growth. that is a bit of a surprise. francine: it is. in doha we are expecting opec and non-opec producers to meet. we had a note out by bank of america merrill lynch saying that that takes out about 500,000 barrels or day. you can see this is a small but significant number, because demand growth is going down. it is also a logical in this market -- it is all psychological in this market. tom: maybe the next toughest thing after oil to predict is the american economy. let's get to my "morning must-read." atlanta gdp now has become the de facto standard for gaming the american economy from day to day. here's a quote from the new york fed yesterday when they dropped the bombshell.

bill dudley was at -- they have done some important research. tom: james bianco joins us now. this is hilarious. we have a gdp between atlanta and new york. soon we are going to have the st. louis now cast. james: you are right. they are coming. the reason they are coming is

the atlanta fed gdp report, of anything the research departments of all the federal reserve's do, that is probably the highest profile one. tom: does it get us away from good quarterly reports, blue-chip advisors by consensus? inwe get value from moving the one-call 90 day, or once a week when there is major news? james: i liken it to your marathon split time. it is good to know what you are running at at the 10-mile mark or the 15-mile mark, but there are 11 more miles to the race and you do not know if your pace is going to change. francine: under three hours for tom keene. -- iwe look at forecasts have been doing some research the like -- speaking to people like blackstone and black rock. they have cameras in the parking lots to see if people are coming in to spend.

when you look at e-commerce and all of this, the fed, the ecb -- do we need to rethink on how the actual model growth -- how we modeled growth and consumption? james: absolutely. the gig economy, the 1099 economy in the united states has been exploding, especially among millennials. bls says that is not being properly captured in their data, and they are trying to properly capture it. if you look at the current debate among economists right now, we have strong payroll growth, weak gdp, which implies a negative productivity in the u.s. economy. does anybody believe the u.s. economy is negatively productive? no. francine: this goes back to the productivity puzzle. there is another school of thought, more radical, that says it is the mandate that is a problem.

if you try to stick to inflation, certainly here in europe, it is not working. you need flex ability with your mandate. james: you do. dualthe fed has the mandate, they can do find that any way they want. then it becomes that there is no mandate at that point. tom: this is the atlanta gdp. mike mckee has this tattooed on his left arm. i overlaid on that where the new york fed is right now. james bianco, explain this to me. how can i get a .1% atlanta fed any more optimistic bill dudley one? out of new york? it does not make sense to me. james: it does not make sense to a lot of people. what is more confusing, it has been in the last three weeks that the new york fed and the atlanta fed have diverged. you would think that if they were -- as they were moving

toward the release date, they would converge toward each other. tom: i am editorializing. the reality is, people are hanging on the atlanta gdp -- the atlanta fed. this is fun. we will see how this goes. congratulations to the new york economics,rty street for their important research note yesterday. coming up, it is an important research note always when ryan windsor publishes -- when brian wieser publishes. finally, an intelligent discussion from brian wieser on yahoo! i promise you we will go a to z on his optimism on google as well. "bloomberg surveillance." ♪ you shouldn't have to go far

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we're doing everything we can to give you the best experience possible. because we should fit into your life. great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. tom: in a modest bit here, the jpmorgan earnings report. widely anticipated, the kickoff to a brutal quarter of reporting. we will have a lot on that

coming up. michael mckee, france in the quad. here is nejra cehic. nehra: exit polls indicate south 's party willent fall short of a majority in today's election, a potential setback to her final year in office. a new parliament is being elected less than two years before the next presidential election. park is limited to one term. organized crime prosecutors have raided the offices of panama .apers' law firm the raid follows a leak of millions of documents about tax havens the firm set up for wealthy international clients. the attorney general's office also searched other subsidiaries of the firm in panama. the firm has denied wrongdoing. business groups are some of -- of some of britain's biggest trading partners are voicing

for britaint staying in the european union. cameron is arguing that people's jobs depend on remaining in the european block. global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world, i am they reach a hitch. tom: we are going to squeeze this in. an importantis guest come out of the university of british columbia and the prestigious university of western ontario, he will not explain why there are no canadian teams in the stanley cup finals this year. he will explain what the hell is going on at yahoo! discuss. what is going on? brian: they are going through the process of making us believe that they are going to maybe attempt to sell the company. tom: i love that. yahoo! has been a train wreck for 20 years.

any certitude here, or is it all up in the air? brian: i think it is all up in the air. if they end up with a knockout bid, someone who is willing to massively overpay, who is willfully optimistic, and throws a lot of money at them, it is quite likely they would sell. this is critical. they are a discipline buyer, verizon is -- brian: you know what they are getting into. they are offering a lot of money, but they know what they are getting into. that is a huge difference. relatedho has data assets will think they can monetize it through paying to advertise. because of the positions of google and facebook, there is a lot of people in the industry

who do not fully appreciate that even now. francine: brian, who is left? you are talking about a couple of conductors who are not going to overpay, so who is going to overpay? it is likely that china will get in because they will get u.s. regulatory approval with the data crackdown. brian: there are a couple of companies that have been in the press about being interested. daily mail. it should have been an eye-opener for a lot of people where you had a player that was not ostensibly in the business of selling advertising that thought that we have assets, we can monetize it, and we are going to buy this otherwise -- francine: we were trying to discuss this, right? daily mail, doesn't even make sense? how do you create value? they would go after the u.s. component, 85% of sales.

but it does not seem like the right fit. brian: let's clarify. almost every company on earth things they can manage the country better. that's it. press,azon gets all the and you have been great -- i'm sorry -- out for that -- alpha bet, you did not come up with this name. a hegemonic alphabet. do they get distracted by buying yahoo!? brian: they would know where they are getting into. they would know in terms of the patents, if the patents have value. it takes a disciplined, knowledgeable buyer. tom: google is the best, i would suggest. brian: they would have ideas about how they can make it work. tom: last night, buzz feet came out with a bombshell. i do not know if you saw it --

buzz feed came out with a bombshell. i do not know if you saw it appeared is very general set of destructors and all this happy over now ashe game yahoo! tries to find someone dumb enough to pay up? for any upstart, there is a range of plausible growth and a range of plausible scale that upstart can have. there is room for niche players of twitter, linkedin. no one is going to compare it to google and facebook for the for seeable future. where it goes next is marketing tech, add tech. tom: what does that mean? brian: marketing technology comes down ultimately to the -- the way that they can use technology to better segment audiences, and the way they can think about marketing more holistically, rather than spending money on paid media.

some, that is for where the business is going. when you hear about marketing clouds, you hear about oracle versus adobe. that is where the business is going. it is competing differently than just for paid media. francine: you are suggesting that everything in tec is overvalued. brian: not necessarily. everything has a price. twitter has a strong niche, a really important niche. niche,zz feed can have a but they are not just going to all keep growing forever. eventually they start normalizing their growth rates. francine: so we spoke to peter thiel yesterday, who plans to majoritarily invested in tech stocks. brian: he knows a lot about the businesses.

take that for what it is. it is difficult to make a lot of money in paid media advertising. if you are not already an incumbent. in the same way that if you are going to take on the traditional tv networks. tom: exactly. that is where i wanted to go. brian: it is hard. tom: you are the best guy in the world on linking the advertising dynamics to all this techno mumbo-jumbo. the essay the other day on the future of visio -- a video, it ain't happening. this, is it just a fiction that wears itself out over three or four years, except for facebook and google? , i think tv as we have known it can still grow. with,very essay ends "yeah, but they want to be like tv." brian: broader industries believing that they can be more efficient than tv is not really

true. tom: the single best buy right now, what is it? brian: probably twitter. , on twitter.eser i still do not know how they are going to monetize right now. coming up in minutes, the report of jpmorgan. i can say without question, except for maybe early 2009, the most interesting quarter coming up for banking. james bianco will assist us, and michael moore in london. ♪

tom: good morning, everyone. james dimon and jpmorgan reporting. they plan to increase their capital return in the first half of 2016. you are not hearing that from deutsche bank and other troubled banks. this is the jpmorgan distinction. francine, one of the distinctions is they have headlines that are in english. it is always a joy to report on jpmorgan. francine: it is, tom. the first quarter revenue better than analysts had estimated, --ing in at 21 $4.1 billion $24.1 billion. point --timated at 21

$24.8 billion. jpmorgan, the most interesting bank because it is a bellwether for the rest of the sector. we then have a lot of competitors. michael moore, our expert in banking, is here with us. i know it is very early in the day, but this feels like not as ugly as it could have been. michael: it is one of those quarters where it becomes so consensus that everything is going to be terrible, that anything less than that is not too that. certainly when earnings are not great, you talk about other ways of rewarding shareholders, and that is with a returning capital, which is what they appear to want to do. francine: so the main headlines, first of all, they are increasing capital returns. saying we are not doing too badly, we are going to get some of that back, the fixed income revenue through this is crucial -- a little better than

estimated, coming in at $3.6 billion. billionated $83.2 figure -- we estimated a $3.2 billion figure. michael: it had been a bad ic.rter for f that does put them at the head of the game on the revenue side and maybe allows for more comfort with this increasing the capital. tom: i want to do two things. michael moore and jim bianco. up 8%, way out over the nominal gdp growth. and other usual credit mumbo-jumbo that looks pretty good. buried halfway down is really r, whichthe worry du jou is oil. credit losses $459 million, theared to $31 million in

previous year. process,o, this is the a multi-quarter process. is, and thelutely discredit will not only for the banking system but for the energy system as well. they have to get the write-downs now. writey are not going to down these loans fast enough, it suggests that they will leave some of them open, leaf production too hi, and that could put pressure down on oil. tom: the clearest press release for all the banks, they talk about their principles. this is intraday in premarket. we have had a number of good days for jpmorgan with the risk-on feel. my eyes are failing me. it is 4.1 percent. can jamie dimon do some thing about my eyesight? tom, let's look at exactly what we learned.

first of all, revenue seems to be in line. expensive. they seem to be in check. trading is a little bit better than expected. that will maybe put them apart from its peers. they also need to focus on oil and gas, which is one of the big worries, that they were somehow linked to not just jpmorgan, but the big banks. the hedge fund manager in the oil commodities space. it may hurt them quite significantly. right, and just the loans for the producers, and the mp companies certainly driving that. it looks like the total provision cost was $1.8 billion, which was on the high end of estimates. a lot of that is driven by the oil and gas sector. to be even with the higher credit costs is good. tom: mike, i am absolutely that duke did was

not get to the basketball finals. they buried trading revenue. that i am -- i am just shocked by that. they have revenue down on 13% with fixed income down 13%, obviously affecting the business equity markets, down by just 5%. i do not want to put you on the spot, but that is pretty much what we expect to see from a lot of other banks, right? and it is even a little bit better than they had been. at the beginning of march, they and other banks had guided down 15% to 20%. 13% indicates march was a little bit better than january and february, with a little less volatility. tom: what is great about this is the complexity. we are thrilled to have brian wieser on the set with us this morning. he is qualified to be a next bird on banking. and jim bianco is with us as well. he is qualified to be an

expert on banking. and jim bianco is with us as well. within securities analysis, they are doing what you have to do, which is break down everything and try to make it clear. jim: i would hope so. tom: michael, what else do you see? michael: it looks like the capital ratios are up again. they did a lot of work last year to get the requirements down to try to convince the regulators that they were less complex, less large, and got rid of some of the deposits that they held to try to get to that end, and now they are comfortably above their minimum requirements on the capital front. francine: this is the first bank reporting, michael. how ugly is it going to be? the stock price before trade is getting 1.8%. things seem to have gone pretty

smoothly for this bank. can we extrapolate and say that some of the rivals will be expected because some of the bad news was priced in, or is this just a jpmorgan case? michael: i will be interested to see with the other stocks do. certainly jpmorgan is the biggest trader on the street. maybe they can weather the storm better than others, but it is better than expected. , are perhapscosts on the high end of expectations, so it may depend on your mix of business. are you long on financials? do you have the optimist him of charles peabody that there is -- do you have the optimism of charles peabody that five years, eight years down the road, these people will return money to shareholders? me thatyou will give kind of timeframe, i would be. but he will be a bit of a struggle for them as they try to figure out what to do with interest rates, net interest

margins, and what they will do with some of the problems in the energy sector. if you look past that, yes. tom: jim bianco with bianco research, and brian wieser with us as well. we begin report on banking earnings and the lack thereof. really of great interest, the oil dynamic with the major banks. stay with us. ♪

tom: welcome on the day of jpmorgan earnings. francine lacqua with a jamie dimon quote. weaker euro, stronger dollar. crude, 44 point 30. dollar crew dynamics playing out there. i put them in the forex report this morning. francine? thecine: looking at pre-trading banks, they are gaining. gaining, jpmorgan, for now. this is what we heard from jamie dimon. he talked about increasing capital return.

we also heard about compensation. bonuses,a lot on these and a lot of the european banks have been cutting bonuses significantly. jpmorgan cutting bonuses significantly, 5%. this from jamie dimon -- francine: michael moore is in the house. when you look at this report, first of all, pretrade shares were up. control, and he is returning to shareholders. thing that is interesting is the divergence in the credit stories. on one hand you have oil and gas , a 530 million dollar provision. $160s and mining, another million. on the other hand, he talks

about consumer credit quality improving, and that is the other side of the story with energy prices. we have not seen computer -- we have not seen consumer spending more with lower gas prices, but it has improved credit quality on a lot of these loans. see -- i i could not cannot say enough about this new function. it consolidates the earnings report with our expert editors second by second. we talked with michael moore a little bit earlier about that it would be interesting to know the share price reaction with the rivals of jpmorgan. it seems like investors are expecting that. i guess we will see. certainly trading is not nearly as bad, fixed income down 13%. equity down only 5%. again want to emphasize the scale which michael moore is one of the few people to really

get this, the scale of these banks. if you take a 600 million write-down on oil and gas and compare it to a $2.5 trillion balance sheet, whether it is now or a year from now, you have to have three zeros before the 2. .002%. let's switch now to jim bianco. single best chart this morning. the inflation-adjusted dow, and we strapped a regression across it going back 30 years, and we are pretty much on trend. there is no question about it. jim bianco, it has been a better than good market, but you have done a lot of questioning about earnings. let's start with the banks. do you trust their earnings? jim: you have to. but i do have my doubts. they are a little better than china.

tom: your generous this morning. very hard to see. a lot of the numbers that the banks have are made up models and assumptions. tom: you are telling me quarter to quarter they are making up revenue? jim: there has always been revenue recognition's problems throughout the industry. but if you look at it in total, the s&p 500 level -- the s&p 500 total works itself out in the wash and its numbers are actually pretty good. francine: so equity trading, fixed income trading are much better than analysts expected. still havingoil is an impact but they take provisions, and the bank has also been cutting costs. what is the most surprising out of those three fact? jim: probably that revenue has been better than expected. if you would compare them to active managers who had one of the worst quarters that we have

seen, up and down wall street, the first quarter was very difficult for investors and for traders away from the banks, and then jpmorgan comes in and says they deal a lot better than what people expected. here onhave a leg up jpmorgan. then wieser, do you trust accounting in the advertising technology space? brian: mostly. tom: what are the intangibles on the balance sheet? brian: it is more a question of what is gross revenue and what is net revenue. even revenue recognition is not the same with every company. thebook does not classify talk to martin sarao about this issue. orrell about

this issue. tom: michael moore, thank you so much, in london. special thanks to jim beyond go and brian wieser as well. mr. bianco will continue on bloomberg radio. "bloomberg " will continue the discussion on bloomberg television. ," weloomberg surveillance will advance the discussion about the state of global wall street area friendly hints will join us -- of global wall street. bradley hintz will join us. he actually gave out in a. stay with us. "bloomberg surveillance." ♪

david: jpmorgan weighed down by that investors are happy with what they've seen so far, sending shares higher. global economic slowdown could

oil demand.r this is a production cut may be in the works. numbers may be tell -- do the numbers may be tell a different story? david: welcome to "bloomberg ." has decided to pursue other challenges. we wish her the very best. vonnie quinn is with us. vonnie: think earnings season kicking off. that's bank earnings and season kicking off. to breakrd is here it down. jon: