-- eight times a year. closely at inflation and wage growth and a breakdown of the regions. let's go to erik schatzker in washington. signs of inflation, that is the key take away from the new beige book. the fed said prices increased modestly across the majority of its 12 regional bank districts. modest may not sound like much, but it a lot better than generally flat, which is how the fed banks-- characterized february. modest economic growth since the last beige book, seven districts as opposed to three come a significant improvement. this country has a 5% and employment rate.

the regional fed banks said companies in their district had trouble filling low in retail and construction and also hire skilled jobs in engineering, accounting and information technology. wage growth remains the big question mark given the fact increase --ad an an increase in hourly earnings per at which pressures were stronger in new york, st. louis, minneapolis and san francisco. in the industries where labor is tightest, kansas city and st. -- the fed beige book is about anecdotal information. it is highly anecdotal, which is why the fed leads us grasping at

words such as modest and moderate. don'terical terms come we know what that means. that is the point behind this report. the few gaps here and there, the anecdotes signaled that the domestic economy is gaining strength. improving. we see that in prices and wages and economic growth. it is only the domestic picture it does not say anything about what is happening outside the country. the external risks the fed has highlighted. that is the fed beige book cannot answer. david: stay with us. we will get a check of the markets. julie: we have not seen much reaction as of yet. perhaps people still reading through the beige book to get some takeaways. stocks and bonds holding steady from where they were before these headlights came out. the nasdaq king on to its leadership on the day. -- hanging onto his leadership on the day. we got economic data out of tina

-- out of china. let's take a look at the bond market and the 10 year and its reaction, going into these headlines, we had seen some buying in the treasury market. see, there has not been much reaction directly in the wake of this report. let's take a look at the groups within the s&p 500. financials continue to take the leap on jpmorgan. evenlical lead rally today as the more defensive groups are lagging. staples, telecom and utilities trading lower today. jpmorgan shows building under again throughout the highs of -- session up or .5% on that 4.5% on that stronger-than-expected report.

a building crude oil inventories and also an uptick in gasoline demand and a drop in production. heating oil little changed right now and gasoline not really getting the benefit from that gasoline demand number. crude oil has come back from earlier declines. david: let's focus on the oil and ahead of that meeting in doha. lisa: grains are having a big day. huge day. it comes back to china. the export data showing the biggest gain in about a year. corn, wheat, soybeans up big today. upmost in about seven months. agrium getting recommended as a short come analysts saying there is going to be a continued farm downswing. that rally in the grains notwithstanding.

shares down by 1%. david: let's get more on the fed's beige book data. a lot of anecdote here. julie was just talking about energy, oil prices. i wonder if we have seen that borne out here in this latest facebook. -- latest beige book. erik: the dallas fed has the most say about -- most to say about energy. -- low prices in general are laying julie: julie: low prices in general are weighing on output. if we look past energy, number of bright spots. manufacturing, the fed has noted in previous page books, has been held back by the strength of the dollar.

retailers are generally optimistic about the outlook for 2016. he talks about the all-important wage growth, wages up in all 12 districts. 12 districtsed's reported that wage growth -- several of the 12 districts reported that wage growth is picking up. that bodes well for those who would like to see inflation my count janet yellen among them. lisa: this seems overwhelmingly positive. is there any hint in here of why backed did not ratchet expectations for raising rates this year? was there any negative point here? erik: i will answer your question in two ways. first come in general, no.

that is not entirely inconsistent with the pictured the fed has painted of the domestic economy right now. with the fed is clearly most concerned about is how external risks will feed into the performance of the u.s. economy. as we saw with the last summary of economic projections, the fed does anticipate that will put downward pressure on the pace of economic growth between now and the end of the year. negative i can find in this report is the anecdotal evidence suggesting low oil prices are still keeping input costs down and generally creating some this inflationary pressure. -- disinflationary pressure. crude prices have been on a tear thus far in april. some of those pressures may already be dissipating. david: you mentioned the optimism that retailers have. i wonder what you've ascertained about consumer sentiment and consumer spending when you look

at the whole u.s. economic picture. a bit weak in the last month or two. regional fed banks speak to ceos in the districts over the course of this period. consumer spending rose modestly in most districts. that is a bit of a qualitative change. this is all qualitative information and not based directly on quantitative data. business spending and real estate activity also expanded relative to the previous page book. just to further highlight that economic conditions domestically do seem fairly robust my credit conditions did not just improve, the commercial banks in these 12 regional fed districts largely

reported that lending is becoming more competitive. banks are competing with each other and that is putting pressure on interest margins. the banks are very eager to extend credit, which should guests -- suggests the is goodng credit because you just want your principal. pretty impressive. let's get to the first word news this afternoon. mark: authorities in spain have arrested a frenchman they believe supplied weapons to one of the suspects in the deadly january 2015 terror attacks in paris. the 27-year-old was apprehended in a southern coastal town in spain. two men were also taken into custody. four people were killed inside a kosher supermarket in that 2015 attack.

the environmental protection agency is working to strengthen the federal rule limiting lead and copper in drinking water. the acting chief of the epa's water office as proposed changes will not be released until next year with a final ruling expected months after that. a bipartisan bill to provide federal funds to help flint, michigan is stalled in the senate. donald trump says the republican presidential nomination is being stolen from him. trump is trying to cast a shadow of a legitimacy over the contest -- illegitimacy. trump called the system absolutely rigged and phony after ted cruz beat him and delegate contests in colorado, north dakota and iowa. sederal prosecutor revealed an individual accusing

-- the sister of another alleged victim is also expected to testify. totert has only pled guilty breaking banking laws. he's accused of abusing five boys when he was a high school wrestling coach in illinois. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. david: coming up in the next 20 minutes, goldman sachs paying more attention to liquid alternative investments. larry joins us next to explain. lisa: at the bottom of the hour, we will at the commodities what impact will the upcoming meeting have on crude prices? ♪

david: this is bloomberg marketsdavid:. time for the bloomberg business flash. trevor communications proposed merger with time warner cable has cleared an important hurdle. thatge has recommended regulators approve the deal. needsrderer still approval at the justice department. lisa: don blank and an appeal to court -- heappeals was convicted of conspiring to safetyly violate mine standards. a west virginia coal mine exploded in 2010, killing 29 men.

thousands of verizon landline and cable workers have walked off the job after working without a contract since august. pensionsants to freeze , make layouts easier and rely on more contract workers. the wall street journal reporting the u.s. is seeking to ban elizabeth holmes from blood testing again. the headline here from the banning --s there they are banning her for two years. she's been unable to change practices and policies at the company. liquid investments outperforming their heads friend -- hedge fund counterparts.

lisa: are they a good investment? joining us now is larry, goldman sachs head of alternative sales. let's put this in perspective. they've grown from $70 billion in 2009 to well over $400 billion. a huge universe come in many different funds. how does the average investor sift through all these and figure out the good from the bad? arry: that has been the challenge for a lot of investors. they are new to a lot of retail investors. institutional investors, high net worth investors have had exposure to them and been investing in them. it's over the last 10 years or so that we have seen the growth of liquid alternatives. alternative mutual funds that look to give investors alternative investment like exposures, but in the fewer --

in the form of mutual fund. one of the challenges they have, they are used to looking at their investments in a certain way mother they are used to just owning stock and bonds. this is completely new asset class for them. one thing we've tried to do it goldman sachs is educate investors on how they might be able to look at liquid alternatives. by looking at them through the lens of hedge funds, which have been around for decades, there of hedge funds come a trillion dollar industry, a big industry to look at my thousands of funds come a good data set -- if we look at liquid alts, we can see how they perform and get a better assessment of how to put them in a portfolio. david: hearing about how an ac and this market is -- how to nascent the market is, how is it doing in the long-term? larry: the dataset does not go

back quite as far. we have tried to slice and dice universe intos more traditional hedge fund classification and look at them relative to hedge funds. themeauty of looking at relative to hedge funds come can go back further and look at a longer dataset, go back to 25 years and see how hedge funds have performed. if we can show that they perform a lot like hedge funds, hopefully, you can make a more educated investment decision. thathing we found is liquid alternatives do in fact perform a lot like hedge funds. you have funds that are mutual funds, they have the liquidity to meet daily redemption, they're supposed to deliver alpha that is more than the average mutual fund, see you get everything and then some. how does that work? larry: within the rules of mutual funds, there is some

shorting allowed, there is some leverage allowed, but they are confined by the rules of the 1940 act. these are the same way as you are regular mutual funds, governed by the same liquidity rules, but what is different is the managers of the liquid alternatives don't try to follow the benchmark. what they are trying to do is generate returns in a more absolute sense, make money in its own way. when we think about liquid alternatives, it's about stocksfying away from and bonds, adding this other sorts of return by being more active, less constrained than a traditional mutual fund. david: tell us what the future holds. are we going to see etf's in this space?

larry: we've already seen some. we will continue to see more. ago, we were the first or second inning of the liquid alts evolution. we are in the fourth inning now. we are in a maturation of the space. eugene continued growth. -- we've seen continued growth. we continue to see growth, we continue to see better players get in the space. we continue to see advisors and clients be more educated about the space. as investors are more educated and advisors are more educated, they will see the benefits of owning liquid alternatives over a market cycle. lisa: fascinating topic. inc. is a much. -- thank you so much. david: history is on the line at the nba closes out the regular season tonight. the golden state warriors 72ndng for a record

win while kobe bryant places last game. ♪

lisa: you are watching bloomberg markets. 2 huge historic games the nba tonight. kobe bryant playing his last game and the golden state warriors going for the all-time win record. david: i'm surprised there are tickets available. what does that say leading up to these games? you or i could take out a credit card and get tickets? >> essentially come a lot of brokers held out until these last couple of days. knowing there would be this last-minute rush for people who want to see kobe's final game

and that for the warriors come it could come down to the final game. see kobe come it is $1100 on average right now. the warriors are little less than that. still a high premium ticket. lisa: i'm interested in the market for these tickets, of course. what is the market, the secondary market for basketball tickets like and how regulated is it? somebody could say i have a couple to gets come i will put them out there in charge $1100 and some money will buy it. hub, secondary markets like that are totally regulated. these happen to be tremendous games. there's a lot of inventory out there. were a lot of people traveling far commit spending a lot of money on tickets to

lakers games and kobe was not playing a ton this season. >> the entire demand for lakers tickets this year were a last chance to see kobe. when he played in other arenas, it was a big deal, this is kobe's last time playing against lebron, playing against san antonio. lisa: what about warriors tickets? year,y have been high all you see on the road, they are usually the most extensive ticket in the opposing arena. sure, there is a chance to see history tonight. if you're a warriors fan, you be careplay -- you may more about the playoffs. does any of this money go back to the team? >> not directly, no. stub double take 22%.

the team has sold out its arena, which is the money that goes to them. it is a delicate balance for teams about how much you want to keep rice is really high -- prices really high because there .s demand for it david: i'm sure there will be an opportunity to buy commemorative gear. >> there's $30,000 hats out there. lisa: still ahead, commodity close, oil bouncing around today. more coming up next on "bloomberg markets." ♪

david: this is "bloomberg markets." lisa: let's get a check of the

first word headlines this hour with mark crumpton in the newsroom. mark: news on this wednesday afternoon, the head of the republican national committee is challenging donald trump's claims that the nomination process is rigged. there is determined says the rules have been in place for years much weeding it is the responsibility of the campaigns to understand it. -- tweeting. sanders has received his first senate colleague endorsement. he concedes that sanders has an uphill battle to win the democratic nomination. charges of workplace dissemination against lgbt employees jumped 20% last year. she told bloomberg more and more people are willing to talk about the issues. increase in charge as

follows the u.s. supreme court's decision legalizing same-sex marriage. the fbi is offering the reward of up to $25,000 for information leading to the recovery of seven andy warhol paintings. the campbells soup collection was part of the artwork stolen from the springfield art museum in missouri on april 7. it's valued at approximately $500,000. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. david: commodity markets closing in new york right now. let's look at the day's biggest movers. the biggest rally in seven months on demand from china, the subindex up 2.75% kaman pays for the biggest advance since

mid-september. oil has been fluctuating from the day after the energy information and ministration reported that crude levels fell to their lowest levels since october of 2014. wti settling at $41 63 since. $41.63. foundernning theranos elizabeth holmes 40 years -- four twr two years. david: let's dig into what the journal is reporting here. the crux of this complaint from is federal government theranos had 45 deficiencies in their testing. they do not correct 43 of them. question is in

california. for the last several months, including the last year, they were being inspected by federal regulators taking their lead agreement saying this stuff doesn't work, are you providing people with accurate test results -- does it work? it is very important for practicing medicine. you they are saying now is have not fix these problems. this is a startup. -- it isot a company built around one person's vision. it is elizabeth holmes. guessing soe, i'm is this company. it is not a massive business with potential successors and stuff like that. it is still at a vulnerable point as a health care company. lisa: is this the death knell

for theranos? >> if it is not the death knell, it would certainly be a pretty mortal blow. that all the criticism holmes has taken, the company has stuck by her. that hasverything happened to this company. it has been problem after problem, negative press and no significant changes at the top of this company. valeant come of the ceos gone from internal investigations -- when you're in a private market, you don't have that same level of income ability -- same level of accountability. newave not seen a valuation.

it's an old one that the company has stuck by. we don't know if they will have to go out and raise more money. a two-year ban would probably necessitate some of that. going out and getting more resources to carry on. we don't know where that valuation is. it is a private valuation at this point. lisa: is there any potential appeals process or any way that even if regulators to come after theranos, they could somehow overturn that and keep operating? >> we don't know exactly what the result has been t. .t is a very serious letter they do open up a negotiation saying you have 10 days to write us back and tell us how you are fixing these problems. they want to see a satisfactory

answer. there are notes has run into a lot of problems with regulators were they have not provided those satisfactory answers. ins letter was sent back march. if they came back and do not give cms what they wanted to see, that may be the case that something even more serious is happening or they are still negotiating. a lot of this process does happen behind closed doors until it is made final. the most recent thing we know is that there are no's was still operating -- theranos was still operating. there's no reason to believe yet -- it could be that this exchange with medicare is still ongoing. you mentioned how closely elizabeth holmes is tied to this country. that's company. -- is tied to this company.

she's basing the ban, not the company being banned. when regulators are looking at a case like this, they are trying to find the people they believe are responsible for the problem. individual -- an when we look at fda inspection reports or medicare inspection reports, it's typically aimed at the company. it would to just that they have had an issue with her or they feel she is entangled enough with the company as its founder and ceo and everything like that that they are trying to target her directly. usually when we have these actions, it is usually regulator versus company. not always does it go after an individual. the letters are common in the sense that regulators are always inspecting. one of theery tight

most regulated industries in the world. your typically getting inspected all the time by state and federal regulators. people's lives are on the line. it is not, hey, did the arm rake off my toy -- break off my toy or something like th. the fda does a ton of inspections, cms does the same thing. a lot of times, they will go after areas where they think there are problems. i'm sure that's what happened here. this company got a ton of attention and all of a sudden, they are being investigated by cms. lisa: thank you so much, drew armstrong of bloomberg news. david: killer clinton has lost seven straight contests to bernie sanders. -- hillary clinton has lost

seven straight contests to bernie sanders. lisa: facebook shares gave up early gains today as the company holds its annual developers conference. david: a list of the so-called -- ♪

david: this is "bloomberg markets." time for the bloomberg business flash. a federal appeals court has cleared the way for argentina to settle its debt. since shane or a, argentina has

reached deals to pay out over eight billion dollars to creditors. -- since january. in miami, carnival is being sued in federal court. the case involves a policy that prevents cuban nationals from arriving or departing to the island by sea. they said their rights were violated because they were not on atted to buy tickets cruise from cuba to miami. facebook putting a big emphasis on virtual reality as it holds its annual gathering. word that one million stories are posted on facebook every day . users have logged 2 million hours of video. stay tuned for emily chang's

interview. that is your bloomberg business flash update. jeff merkley writing a new york times op-ed that bernie sanders is boldly addressing the biggest challenges facing our country. lisa: this by a recent string of wins, sanders is still faces a major uphill battle. hillary clinton is leading by a substantial margin. joining us now is megan murphy. tell us about these superdelegates. why are they so critical right now? >> their critical in a sense that these are people who are hillary get behind clinton independent of what is playing out in these states were routine sanders rack up this impressive string of wins. she has more pledged delegates from that process.

she has far more than he does in these officials who will back regardless of that process. the argument the sender's's turn to make is, look him a you need to reflect the will of the people. they will be in the process now of trying to peel away the superdelegates were uncommitted or those from those state to of already said they will back hillary clinton. -- the argument from the sanders is, look, you need to reflect the will of the people. donald trump's complaints about what happened in colorado was ane weekend -- the omission of strategy on both sides of the aisle. megan: the bernie sanders theyign would say, look, never expected to be in the position they are in.

what they are always trying to do is make up ground and look ahead. we have the big new york contest coming up. they're looking ahead to california. they're in a situation where his candidacy has proven much stronger and resonated much more deeply with the american public. , on theonald trump side republican side, the process is the process. will make that argument again that the party officials are not reflecting the will of the people. ted cruz is beating him in states that even have yet to vote. that is why on the republican side, we are edging closer to a contested convention in july in cleveland. to trump and the fractures that are occurring, there's some heated words from the rnc chair and trump on

twitter and elsewhere talking about how donald trump's attempt to make an independent run possibly if he does not win could be problematic. can you walk us through this? is there any way that these fractures could be healed at all? an independent run by donald trump would be disastrous to the republican party. it would make it almost impossible for the republican candidate to secure a win in the general election. this is what the republican we move along this very long process now. it is looking at a fundamental schism of the party because people who support donald trump --e say in various numbers have said they will not vote for that makes it--

difficult, impossible for the established candidate to actually secure a general election win. that is why the party is actually focused on how far they want to carry this stop trump movement. or is there going to be pressure to say, look, he is still the person with the best chance of this nomination, we would rather hold our noses and behind him than risk a true seismic split of this party. david: what is your reaction to what house speaker said yesterday? paul ryan saying he in no way wants to run for president this time around. around, right?e paul ryan is not stupid. he can see this cataclysmic fault line developing in the party and knows that perhaps

this time to sit out is the best possible option for him. moved -- effectively removed himself from the process. you hear speculation about all sorts of names as a compromise candidate if we go to a convention with donald true cruz. or ted paul ryan was this name always the last chance, the last straw for this establishment. they have three options available to them. they may have to settle on one of them. . lisa: megan murphy, thank you so much. more on the race for the white house later today with "with all due respect" 5:00 p.m. eastern

time bloomberg television. david: facebook banking on virtual reality and its messenger service. francisco for more. ♪

lisa: this is "bloomberg markets ." let's head to the markets desk julie hyman is looking at consumer tech, wearable and otherwise. julie: looking at go pro first of all because it's having a big gain in today's session, seeing shares surge by 17%, the biggest gain in more than two months. an industrial designer from apple is jumping to go pro to head up the new hardware design group. it shows perhaps that go pro is willing to take some dramatic

steps to turn around the stock which is down 35% this year before today's gains. there are concerns about demand for its upcoming products amidst competition. companyabout 30% of the short.houlder -- sold we are looking at fitbit. the second pod of the -- second positive analyst comment, yesterday was morgan stanley, citi,ime, it is reiterating a buy rating on the stock. shares up 12%. we are looking at paypal and square as well today. the price target for paypal was raised to 44 from 38.

suntrust protects that analysts will have to raise their earnings forecast for the full year. square initiated with a hold -- finally,accord let's get a quick check on ofebook as it has day two its developer conference, shares down 7%. the reasons behind this are a bit murky. there's a bit of talk about a note from an analyst, it could -- clsaor jpmorgan or jpmorgan saying they are lowering ad sales. there is maybe a stabilization of ad sales, if not the kleins. -- if not declines.

david: the company putting a big emphasis on virtual reality as it hold its annual developer conference. mike came out with some interesting to us that sticks about his speech. ininteresting statistics a his speech. i saw pictures of him wearing the oculus device, putting his photograph on a virtual reality landscape. why are they banking somewhat on virtual reality right now -- so much on virtual reality right now? emily: i will be speaking to the cto of facebook in about an hour. he asked a simple question. what does this have to do with the future? what is oculus rift nvr have to do with facebook? vr have to do with facebook? he laid out how oculus fits into

facebook. we saw him hold up what may be the first selfie stake in virtual reality. in virtualtick reality. for the try oculus first time. it is still rough around the edges. it will take a lot for facebook to get from game to social and virtual worlds that everybody can participate in. saying in a blog post that they hired regina from google. worked at arco -- darpo. facebookming over to and will supervise a new hardware arm.

facebook is increasingly focusing on hardware, these devices that will connect everything from facebook messenger to virtual reality and everything in between. whether its drones and satellites bringing the internet to remote parts of the world or chips or antennas on radio towers to increase their capacity. these are big things that facebook is thinking about to bring all these different parts of what are now facebook into a hole. david: that is emily chang. with miss her interview the facebook cto later. ♪

>> it is 3:00 p.m. in new york. welcome to bloomberg markets. ♪

from bloomberg world headquarters in new york city, good afternoon. i'm carol massar. here is what we're watching at this hour. the close of the 2016 high financials here it financials are leading the way after earnings from j.p. morgan chase beat estimates. it begs the question, has the bar been set to low for the bank earnings season? , alsog demand for autos restaurants leading to a surprise drop in march retail sales. why are u.s. consumers holding back and is this a long-term trend? bigfacebook is putting a emphasis on virtual reality. we speak to the social network's chief technology officer. we are one hour away from the close of trading. at the markets desk julie hyman has the latest.