mark: i am mark barton and this is "bloomberg markets" on bloomberg television. >> here is what we are watching. 30 minutes into the trading session in new york and stocks are fluctuating. european equities rising to their highest level since january. climbing to over $40 a barrel. can u.s. markets built off a high that we have not seen since last year? quarteran sachs first profit drop 60% as revenue plunges. a look at what is behind the punch and what the chief executive is doing to try to turn around the word -- the worst-performing stock in the dow this year. -- itwas one value that was once valued at $9 billion. they are admitting they are under investigation by the sec and the u.s. attorney's office. she says she is devastated by the problem at her blood testing

labs. there were promises that her company is going to survive. from bloomberg world headquarters in new york, we are about 30 minutes into the trading session. i want to head to the markets desk where julie hyman is. it has been a mixed bag of earnings. we are at the hyatt the market. julie: we are at the high this session. that is partly because of earnings, partly because of a rally in energy and material stocks. those are the best performance rear watching today. the nasdaq is lower at the moment. the s&p and dow are holding on to their gain. the dow extending gains from yesterday, a nine-month high. the nasdaq was at the highest of the year as well. it had paired its declines for the year to less than 2%. you can see it is lower today. it is now down a little more than 1% on the year. the s&p and dow are higher and that climb is building. we should point out if you look

at the s&p by a couple of other measures including its total return index which fasters -- factors in dividends or equal weight index, they have reached new records. we will look at that again at 11:00 a.m. one a look at what is going in earnings, ea. it is a good way to do it on bloomberg. and upset growth in sales in earnings. going into the earnings season, the estimate for s&p earnings was to fall around 10%. of ther, with only 52 500 component seven reported, we have a decline of about 12%. an advance in sales that is less than .5%. even though we saw the estimates being cut considerably going into the season, they are coming in, up until now, a little less -- worse. betty: that is a low bar. give us highlights from the earnings. julie: highlights and lowlights. let's talk about the big misses. that is where we are seeing dramatic trading activity.

netflix -- actually, goldman sachs is turned higher. netflix coming out with a subscriber for fast -- forecast for international subscribers to grow by 2 million. analysts had predicted 3.5 million for the current quarter. that is a big disappointment. ibm, even though the newer business that has been restructured anyway reports earnings, has been growing well, double digits, that is not enough to weaken the growing -- to offset the weakening legacy business. goldman sachs beating the lower bar for earnings even though revenue plunged at the company as they have cut some -- costs. the shares are lower but as you can see, they have turned higher. johnson & johnson, united health, united health says it is going to exit all of the aca, the affordable care act health exchanges on the state level. it looks like investors are happy about that. they say they are not as profitable. johnson & johnson rising on the strength of its pharmaceutical -- pharmaceutical business which is the largest component and it

has taken -- overtaken medical devices. those earnings beating estimates. mark: stocks rising for the seventh day, heading for the highest close since early january. the rebound in oil since yesterday, 6.8% plunges. boosting sentiment. every single industry group on the stock 600 is trading higher. it, itself, as up by 1.3%. l'oreal, the world's biggest company, shares rising as much as 5.6%. the most since 2010. it reported first-quarter revenue and beat estimates. strong demand for its nix makeup, helping speed up growth in north america. compensating for a slowdown in parts of asia and latin america. very much a day for the french today. la frace reports earnings today.

they reported first-quarter sales that beat estimates thanks to more business from its digital operations and growth in north america and european markets as well. shares up by 5.3%. let's finish with everything french. big mover today. shares earlier rising as much as 8%. the most since april, 2009. the french distiller reporting fourth-quarter sales. they beat estimates with chinese markets improving. peersointreau against its is up by 14%. come party is up by 11%. the other french group down by 3%. the world's biggest distiller is up by 4.8%. viva la france. congnac. i assure you there is no congnac

at this desk. vonnie quinn has more from the newsroom. an attack by the afghan -- they blew up a car bomb outside of the security agency followed by a gunbattle. there are at least 28 dead and reports of 300 wounded. the taliban have claimed responsibility. the notes in group announced the stars of its spring offensive. and i could or, rescue dust in whatever, crews are running out of time as they rescue people trap by the killer earthquake. the 7.8 magnitude quake flattened scores of buildings on ecuador's specific -- pacific coast. obama as that always with senators in his own party over a bill that has angered saudi arabia. it would allow saudi arabia to be held responsible in u.s. courts for any role in the 9/11 attack. the third ranking democrat in the senate reports the matter.

the white house says the bill risks alienating a key ally in the fight against terrorism. president obama spoke with cbs news. barack obama: if we open up the possibility that individuals and the united states can routinely start suing other governments, we are also opening up the united states to being continually sued by individuals in other countries. the president visits saudi arabia tomorrow. john kerry is meeting with iran's or in minister today -- foreign minister. they will meet in new york before he flies to saudi arabia to join president obama at a summit with gulf arab leaders. it will be about iranian complaints that it is not getting the sanction releases it deserves under last year's landmark nuclear deal. by 2400 journalists in more than 150 news bureaus around the world, i'm vonnie quinn. betty: thank you so much.

the year start to seems like a distant memory as stocks or arising around the world. as the rally that led to the s&p gains momentum, skepticism still prevails. , theng us now, dan suzuki chief strategist at bank of america merrill lynch. he expected pullbacks this year, 5%, 10%. are you skeptical of this rally? i'm getting increasingly skeptical of the rally. you can argue there is more momentum here given sentiment and positioning was so negative going into this quarter. you are looking at data. we are looking for data to get better from here. betty: which data? dan: earnings data, macro data, all of the stuff is improving which justifies the rally you have seen so far. if you look at the monthly data thehe quarter, it was for march-april timeframe that thing start to get better. it is not showing up in the numbers as much because of the horrible january-february.

if you listen to the management commentary, you can actually see glimmers of hope which you haven't seen for a while. that any negative positioning gold argue the market to higher from here. i think things are getting stretched. we are at the cycle highest. at the calendar, there are a lot more things to be worried about. we have the fed which we think will hike in june. that is the base case scenario which is not priced into the market. a couple weeks after that, the eu referendum. pretty soon -- betty: marks favorite subject. dan: we just have the prime minister in new york. betty: let me pull up this chart. in terms of momentum and optimism, look inside our bloomberg here where you have three versions of the s&p. the index itself, but the blue line is a total return index. includes a levy dividends that are paid out. the equal weighted index. they are all at or near their

record highs. , either thoseyou momentum there or are things getting stretched -- that can tell you either there is momentum. dan: if you look at what has stretched in the market, what has driven the rebound in the market come mighty big leaders, up 15% or so, the bond proxies. utilities and telecom, the best-performing sectors are a reflection of the fact that interest rates will stay lower for longer which i generally agree with. if you think the fed will tighten to times and you base the market pricing close than -- to less than one, that needs some adjustment given as high valuations. the other driver of the big rallies have been energy and materials. energy had a nice rally. i think seasonally, once we get past peak driving season, there could be weakness to get people worried before we rally into your end. i think we're looking for choppiness. mark: what about the correlation between the stock market, the

country world, and the price of oil? the correlation is at the highest since 2013. at what point does the correlation breakdown? started tove already see correlations break down a little bit. when oil is plummeting precipitously, it makes things were -- cents for to correlate with oil. it is signaling bad things for the overall economy. what is driving oil is less about the underlying demand whatrs, but really about is happening on the margins from the supply. that has less to do with the growth on the mental's that we are worried about. if you start -- the growth fundamentals. if you see oil approach the lows that we saw a earlier this year, you have to start worrying about investment applications, what does that mean for the overall economy and growth? with oil at these levels, i think that the worst-case scenario is not mixed in. other macro factors start to

take hold. the other thing to look at is the dollar has fallen this year. that is generally going to be a positive for oil prices. the dollar, if you think about last year, was up 16% on average on h rate weighted basis. this year, we are close to flat. that had won going away is positive for the overall market and also for oil prices. -- that had won going away is positive. -- head win. >> you talked about brexit risk. what is the worst-case scenario? many are saying sterling could fall 20%. what about outside the u.k.? about outsidee -- the eu area? what is the global impact of a brexit? dan: the best way to plan for it is to reduce your exposure to anything with sensitivity to the u.k. and europe in general.

obviously, europe, given its proximity and trained linkage will be most affected which is why i don't understand why people continue to be under waiting the u.s. if you look at the global fund manager survey we put out every month, you can see that until a couple months ago, the consensus trade was over with europe -- overweight europe and overlooked -- underway japan. investors have come off the japan train. i don't really understand given the better fundamentals for europe. investors have been under waiting europe for the last 14 months. i think that is the opportunity. if you worried about what will happen with the eu referendum, you want to increase your exposure to the unit -- the u.s. and reduce the overweight to europe. mark: thank you for joining us. here on bloomberg markets, yahoo! digesting bids for its assets from the likes of verizon, that is all ahead as

the latest reports out after the bell today. we will see, betty, how shares are reacting. betty: we will, indeed. take a look at your screen. a house subcommittee hearing on an encryption debate taking place on capitol hill, among the witnesses, apple's general counsel who will make the case that strong encryption is good .nd necessary for everybody we will have more on that later this hour. you can watch it live on the bloomberg using live go or at bloomberg.com. >> identifying a solution to this problem will involve trade-offs and copper was on both side but ultimately --

mark: happening live right now, brazil president speaking to the media. this is -- this as congress

pushes forward impeachment proceedings. she says she has been the victim of a great injustice. we will continue to monitor and bring you any headlines from that speech. betty: incredible what is happening in brazil. it is time for the bloomberg business flash. a look at the biggest business stories in the news. are one step closer to winning approval of the big takeover. the company has accepted to buy the beer brand. the price tag, $2.9 billion. the deal is contingent on closing the smb miller deal. they are hoping to ease concerns of antitrust issues and europe. volkswagen investigators looking into the admissions testing scandal are being tripped up by dozens of code words. according to people familiar with the matter, a code word for the illicit technology was used to turn off admission controls when the cars were on the road. vw probably won't have a report on the cheating scandal by the end of this month.

a new study says the outlook for women ceos got worst last year. womenys worldwide, captured less than 3% of new ceo positions. that is the lowest in 2011. -- since 2011. the numbers were worse in the u.s. then can appear less than 1% of the ceos were female. that is your bloomberg business flash update. back to the markets desk with julie hyman. let's have a look at more earnings that have come out. julie: it will be a busy week. we had some of the biggest companies, but i want to hit the other ones that have been reported, as well. inmina is the worst reported the s&p by a quite a margin, down 22%. this is a maker of genetic sequencing machines. they came out preliminary numbers that missed estimates. the company is saying they are seeing lower-than-expected sales of some of its instruments. they also say revenue growth for the year is higher than its prior forecast, looking for 12% growthas opposed to 16%

previously. they will be out with their fall earnings on may 3. our intelligence analysts said this is an investment year for the company. nonetheless, these numbers are disappointing to investors. northern trust, as we talked about the financials are reporting numbers, this is one of them. arnie's -- earnings are coming ahead of estimates. 1.2%arnings have risen by from 1.1%. we have talked about a lot about how the banks will benefit as they see the yield curve widen. the net interest margin can be a direct beneficiary of nonperforming loans decline for trusts. on the flipside, harley davidson , after the first quarter beat estimates, revenue beat estimates first quarter, shipments of 4.3%. the company kept its forecast the same for the full year, particularly on shipment. that may be ready source of disappointment is. finally, i want to mention yahoo!. as you heard mark talk about before the break yesterday, it

was the deadline for bids for the company. as alex sherman and others have reported, it has gotten bids from verizon and others, one formally known as yellow pages.com. the company is also reporting its earnings after close of trading. they will move more when we get more information on those bids and if there is an accepted one. very much, you indeed here at coming up on bloomberg markets, the fda, now the sec. we have the latest on the string of damaging revelation -- revelations.

♪ mark: the hits keep on coming for sarah knows, the blood testing startup that has been feeling the heat from multiple authorities. there are facing criminal and civil investigations. on an interview of nbc's today

show, the chief executive a defended her company against reports the technology may not work. devastated that we did not catch and fix these issues faster. thisthe founder and ceo of company. anything that happens in this company is my responsibility. we stopped testing and have taken the approach of saying let's rebuild this entire laboratory from scratch so that we can ensure it never happens again. the report of is been closely tracking the rise and fall of the company is back with the latest on this. what does this mean? a criminal investigation? >> this is another very serious development for theranos. what we reported last night is that they sent out a memo to all of its business partners including walgreens which does a lot of blood testing. disclosing to them for the first fcc and dojere are

department of justice criminal investigations of the company. those are right now at the stage of document requests. those agencies are sending requests to sarah knows -- theranos, two companies doing business asking for records, data. betty: criminal tells me, what, fraud? what exactly are they alleging? sheelah: there are no charges, and this may not lead to charges, but i could be one thing they are looking at. they may be looking at whether anose ar -- ther properly disclosed the efficacy of this technology. whether it was presenting things to consumers accurately. there are number of different areas they could pursue. this is at the state of document requests. the company says they are cooperating. mark: can they survive all of this were not? that is the $9 billion question, i would say.

certainly, elizabeth holmes yesterday in the interview which we just showed said absolutely, we have built this powerful technology. we know we will come out ahead. it depends on who you ask. what we know right now is only part of the picture. it is possible that the company could, somehow, address many of these issues and resolve them. on the other hand, there is this real threat that they could lose lab. license to operate a that is a separate issue they're dealing with with their main regulator as a result of the lab inspections. betty: if they can'operate a lab, that is it. sheelah: that would be a real problem. they have said they have responded. that would be a devastating blow. theranos is scrambling to respond to its regulatory requests. it will prove to its regular -- regulators that it can operate a lab. some of all we are seeing is the result of the fact that a group quickly and do not have the personnel in place to deal with

all of these things. this is a heavily regulated industry that affects people's health. you can't just charge in a decide to figure it out later. betty: thank you so much. fascinating story. of bloomberg businessweek. still ahead, after 15 years of being shut out of global credit markets, argentina is finally returning with a big bang. we we'll tell you how it is being received in the international waters. ♪

♪ from bloomberg world headquarters in new york and london, i am betty liu. mark: this is bloomberg markets. news, what we have

is the latest? vonnie: plenty of news in houston. we are going to start -- we are going to continue with new york in a moment. back to houston. at least five people have died of massive flooding. thunderstorms dropping 15 inches of rain about -- across parts of southwestern texas. 100,000 people have lost power and houston airports have canceled hundreds of flights. in new york, hillary clinton has lost seven of the last 18 primaries to bernie sanders. now, the front runner is hoping to regain the upper hand. she is favored in today's new york primaries. she represented the state in the senate. donald trump is counting on his home state to provide a big boost for the republican presidential nomination. polls show him with a double-digit lead over. -- ted cruz and john kasich in new york. a win would give him momentum going into five key nor eat -- northeast contests next week. rudy giuliani says he is or endorsing donald trump.

he says he is not playing a role in the campaign. he had previously announced he was voting for trump in the primary but stop short of an actual endorsement. raleigh has lost $3 million because of cancellations prompt -- prompted by controversy over the anti-lgbt laws. is a growing list of entertainers at of canceled concerts in north carolina. bruce springsteen, boston, and ringo starr are among those refusing to perform in the state. by 2400 journalists in 150 news bureaus around the world, i'm vonnie quinn. at what isa look happening to european equity markets. we are roughly one hour away from the end of the tuesday section -- session. stocks are rising for the seventh time, heading for their highest close since early january. oil recovery is boosting sentiments. 600 boosted- stoxx

confidence. having look at the best-performing industry and the stoxx 600. every industry is rising today. l'oreal is boosting consumer goods. its first-quarter sales beating estimates. we had beats from publicist, remy cointreau just today. there is the energy industry up by 1.4%. in the currency and bond market or the pounderling is up against the dollar by almost 1%. the euro is lower against sterling. a move out of safe haven assets as equities rally, bonds are yields rising today. the 10 year up 1.5%. tengerman tenure bond -- year bund up. abigail, hi, what do you have for me today? : the nasdaq is down

slightly today. the big story is undoubtedly netflix. shares are plunging after the company offered weak second-quarter guidance on a domestic and international basis, more than offsetting the positive first-quarter results. there is at least one analyst who got this call right. they barrett reduced to second and third quarter estimates a few weeks ago below consensus. them oncehas adjusted again down. we look at the near-term chart, we see netflix sold off sharply after it's mixed fourth-quarter report. momentum more recently has given way to the sellers taking control. it could suggest that netflix is likely to trade back down toward this year's lows. mark: you know how much i like debt crosses. i remember a netflix chart from a couple of weeks ago. what is happening now? abigail: you have a good memory. days basically when a 50

moving average slices below the 200 day moving average telling us the near-term and long-term are turning toward bearish or downside momentum. there are three death crosses over the lack -- the last several years. 2011, 2014, this year. a big downturn associated with all three. the last to suggest something similar to the near-term chart, that netflix is likely to trade back down in a sideways manner to this year's lows, below $80 for share, even lower possibly. they have or through their 50 day moving average, telling us the near-term buyers for netbooks have disappeared. tok: great job, no one, not -- not too, but three death crosses. should we talk argentina's big day? betty: you are frightening me. you love death crosses. after sitting on the sidelines for more than a decade, argentina is back in the global bond market. and, in a really big way.

it boosted its planned bond sales to 16 point half billion. it was originally thought to be 15. it marks the end of its pariah status after defaulted on $95 billion in debt in 2001. here to tell us what kind of reception investors will be giving argentina. they feel confident, they are selling more than expected. >> absolutely. on the street, your hearing that the subscription for these bonds were five times oversubscribed which is a lot. it kind of seems likely that they would upsize the deal. they are taking advantage. they don't want to issue more than once this year. at least, that is what they are saying. they are going to take full advantage of this. the majority of this money is going to go toward repaying the holdouts. elliott management and others that have held bonds from the last 15 years and have been waiting for payday for a long time. about 10.5 billion goes to them.

the remainder will be for general government spending. betty: how are the rates? katia: the rates we are seeing, a low six handle for the three year bond. up to about 8% for the 30 year bond. they are building out a nice curve. they have some restructured debt that will resume getting paid shortly as soon as they pay off the holdouts in 2033 and 2038. they will have a nice curve. the rates are, depending on who you talk to, they are great for argentina. they are lower than they had expected to come out. from investors, some of them are saying this is a little bit more money than i expected -- or rather, less money than i expected to be getting. at the end of the day, investors are under emerging markets and argentina.derweight if you follow a benchmark, eventually, the benchmark is going to have to readjust to

make up for the lack of argentine debt that has been out there. that means you will have to own, you have to catch up just to be neutral on the benchmark. that is explaining a lot of the demand we are seeing. but was a cost of this 15 year bond market isolation for argentina? ,atia: the finance minister when he was washington last week was saying that this whole mess has cost the country about $120 billion in lost opportunity cost. foreign savings, no direct investment, particularly over the last couple of years. it is not just about -- we haven't tapped markets. it is about the policy markets that the last government had to implement because they were not tapping markets. because they were avoiding tapping markets. because they weren't having markets went the commodity bund -- boom ended, what did they do?

they printed money to finance them selves. when you print money to finance yourself, you start accelerating inflation. when inflation booms, money doesn't want to stay in your currency. a gets out of the country. then you start putting in currency controls. that limits foreign investment. no one wants to put money in your country if they can't get it back out. this was a brutal cycle because they wouldn't sit down and finish what they started with the defaults in 2001. mark: the new president is winding back all, or reeling back a lot of those measures that were implemented in previous 10 years -- tenures. what has he achieved? katia: he has already unwound the currency controls very quickly. he scaled back a lot of the export taxes. think about it at tax. it is killing the golden egg, killing the goose that lays the golden egg. you know what ask were taxes when your entire economy is based on export.

he is working to fix the statistics agency. if you recall in 2007 under the former and late president, they kicked out a lot of the strategists -- not the strategists, the statisticians and replace them with government cronies, so to speak, who minute. the statistics. when you manipulate statistics, meeting inflations, poverty statistics, the economy, you lose your credibility with the ratings agencies, with the investors, and with the imf. all of that is being redeemed now. they have replaced everyone in that agency and put some credible people in there to redo the statistics. new will not have statistics out for a few months because they are starting from scratch. betty: thank you so much. still ahead on bloomberg markets, let's switch gears and talk about apple and the fbi squaring off before congress again today. is toneral counsel

testify before lawmakers about the heated disagreement over the law enforcement access to iphones. that is a live shot of the congressional testimony. we will go to capitol hill for the latest. >> discussing the best possible systems to buy. the best combination of cell phone ♪

mark: bank of england governor is testifying before the parliament committee. he is speaking on the upcoming eu referendum. he says a boat -- a vote to lead the eu may lead to extended uncertainty. adding to the comments bank of england made last week. he said the eu vote the biggest risk to domestic financial stability. he cites the sterling decline.

he cites other measures to show the risk. he says eu membership has reinforced the dynamism of the u.k. we will continue to monitor the governor and see what else and hear what else he has to say about the upcoming referendum. the health care products pharmaceutical giant johnson & johnson beating analysts estimates earlier today. the company also raised its 2016 forecast fueled by drug sales as a result. shares of the u.s. company bounced. on rumor ago today. he described the company's core strengths. >> overall, the business continues the momentum we saw at the end of last year and to the first quarter. we are off to a great start to the year. -- a strongat start quarter with all businesses picking up momentum. pharmaceutical sales have been robust. -- pipeline continues to be to build which is good for

continuing that strength of excellent performance going forward. the consumer business is making steady progress. it is always improving its margins. the medical device business continues to show signs of improvement for we are pleased across the board. all businesses are performing well and we will continue to see that throughout the year. >> i think that is all most half, 45% of your sales. has been a big factor in that. there is the issue about bio similars coming up. how big a threat is that to the continued growth of that part of your business? gave guidance, overall sales guidance which is consistent with our guidance in january which did not assume, does not assume that a bio similar competitor to remicade will enter the market in 2016. we still remain with that assumption primarily because we believe we have strong intellectual property that protects our product. we are not assuming a launch of a bio similar in the u.s.. it, thesederstand drugs necessarily have a

half-life. you have to replace them. what do you have coming down along the pipeline? >> there are many drugs in the pipeline that will replace remicade or any other product that loses patent protection. it is a natural, normal course of business in the pharmaceuticals. we have 10 new products we are filing between now and 2019, each of which have over a billion dollar potential. we have a strong pipeline for the future. >> what is your plan for access cash? will share my neck be the main vehicle or a you looking at potential mergers? at --- >> overall, her our capital allocation strategy has been consistent and rewards shareholders significantly. it starts with our dividend. we pay an exceptional dividend over 53 years, continuing to increase dividend. we want to invest in m&a, but at the rice price -- right price with the right partner, the right valuation at the right

time. happywe do that, we are to return more cash to shareholders. we are in the middle of a $10 billion share buyback, 25% of the way through the 10 -- $10 billion share buyback. >> tell us about your consumer business. that is heavily dependent on the emerging markets. how vulnerable are you to the emerging volatility in those markets? >> consumer business continues to do well. study progress throughout the major products. significantly very and emerging markets, it is a great opportunity in emerging markets. although we see slowdown in economies in emerging markets, it is very clear that consumers in emerging markets want better consumer health products and are willing to spend for premium products in a consumer space. we are thrilled with that business and we think it will do fantastic for us as a lead in our emerging market growth. think about do you inversions, are they good for the u.s. economy?

>> the topic of inversions is a topic of whether or not our corporate taxes system needs to be revised. i think everyone concluded that it does need to be revised. unfortunately, it may not happen during this political season. a territorial system, a lower tax rate, and send us or renovation -- innovation is what matters and that is what we focus our attention on. betty: that was the johnson & johnson cfo. apple and the fbi are back before congress right now. officials will testify about everything discussed, there heated disagreement over law enforcement access to encrypted devices. apple's general counsel will represent his company in his prepared statement. he said, "keep in mind the people's -- subject to law enforcement inquiry represents far less than .1% of our hundreds of millions of viewers -- users. 100% of our users would be made more vulnerable if we were

forced to build a backdoor." for more and we can expect, we go to capitol hill where a bloomberg news reporter is standing by. tim, apple is testifying before the committee. there are a couple of others who were invited that are not attending, is that right? tim: a congresswoman complaining about who is not here, facebook is not here. here, however, a lot of local law enforcement officials from across the country saying their inability to get into apple phones and other devices is inhibiting their ability to solve crimes that they have long been able to do. tim, this goes on, this continues, this big battle between apple and the fbi. as the government case been undercut by the revelation in california? that a correct terrorist phones -- it's cracked terrorist phones

without the tech giant assistance? the we are still early in hearings, but some of the comments brought up the idea that do we really want the government reliant on third parties to do our investigative work as a country? the tone is a little different than a month ago when we were on the hill with apples to help lawyers. lawmakers atfrom the knees to be more compromise. you can't have one side winning this battle. at what am looking is testifying in front of the hearing, what she is saying. she is saying the fbi needs the industry's help to crack phones and also, that the government alone can't override encryption. that is essentially the stance we have heard from law enforcement officials as to why they want companies to help them with this. will they get much sympathy from

the congressional -- from the lawmakers on this point? tim: the house committee margaret -- members who have been on the record have not been supportive of the government position saying, worrying that opening a backdoor will weaken security in general. it is also going to be interesting to hear from apple's top lawyer. his comments and jesse will be highlighting the fact that the government, itself, hasn't been protect records, that they had a hack and security records were released. mark: thank you for joining us today. bloomberg's tim higgins in washington. still ahead, shirley temple, blue diamond is up for auction in new york tonight. will history help set a new sales record? that is next. ♪

♪ mark: tonight in new york, they will host what is called the

magnificent jewel sale. the star attraction is an iconic blue diamond ring. the sale comes just once after the auction house sold another blue diamond for a record $48.6 million. they are hoping the celebrity history surrounding today's ring can offer in another record-breaking sale. bloomberg's kelly reports. kelly: blue diamonds are the rarest gems in the world. withare causing a frenzy buyers, selling at record prices. they will try to cash in on that enthusiasm at their magnificent jewel sale in new york. the star of the show is the shirley temple blue diamond. >> this is surely. my point -- 9.54 care, -- carrots, deep color.

the potential to be internally flawless. kelly: in 1940, the father of child acting star shirley temple bought the ring for $7,200. they estimate it is now worth $35 million. with the celebrity of its former owner, that estimate may be low. >> you don't know on a given lady who -- day i will place a value on that and how much value they will place on it. we placed the estimate on the stone and watch them take it from there. you have no idea where it is going to go. they have a track record of selling colored diamonds a blockbuster prices. pendantd a blue diamond for a record $33 million in 2014. last fall, a shutter that record one hong kong billionaire joseph lao paid over $48 million for the blue moon diamond. pricesink, because those were at shattering, that is why the market is so good. it went from $3 million a carat

to $4 million a carat. that is ready market is. kelly: in may, they will put the largest blue diamond ever to be auctioned on sale. the stone is honest 15 carats. estimates are it could sell up to $45 million. they are not concerned. >> i think the two diamonds are different in shape, size, and color. i don't see them as competitive as you might think. i think it enhances the market, to be honest with you. find outey will soon if america's darling, shirley temple, can keep his record alive. betty: that is a gorgeous ring. that was kelly belknap reporting. i think i have found our prize for battle of the charts. [laughter] mark: it was going to pay for it? today has toloses put a bid in for the blue diamond.

betty: you are on. as long as it is not me. [laughter] much more ahead. mark: a quick check on the equities. we will be talking brexit, the boe with the chief european economist. have a look at what is happening . he is testifying before parliament right now. he is speaking about the upcoming referendum. he says eu membership has reinforced the dynamism of the u.k. he says the boe must look at implications of the eu for monetary policy. in the european close, next. ♪

betty: it is 11:00 in new york in 11:00 p.m. in hong kong. mark: live in london, i am mark barton. you are watching the european close on "bloomberg markets."

♪ mark: we are going to take you from london to new york in the next hour. here is what we are watching today. the campaign to prevent a brexit is heating up. mark carney and george osborne come out with all they have got in front of parliament. is it enough to keep the u.k. in the eu? betty: air carriers are reaping rewards of falling oil prices. have companies been passing it down to passengers? we will hear exclusively from the ceo of ryanair? mark: l'oreal reporting earnings today. we are going to break down the winners and the losers of the european earning bonanza. minutes now to the trading session.