from bloomberg world headquarters in new york, welcome. david: can stocks and bonds keep rallying? materials a big gainer, tech the laggard. lisa: peabody energy becoming the latest mining giant to file for bankruptcy. is this the end of the american coal industry? david: the clintons casting their votes. will a win in today's primary seal the democratic nomination for the former secretary of state? let's head to the markets desk where julie hyman has a look at the latest. julie: stocks took a leg down midday and the net leg right back up. we've made a round-trip here. w remain higher by .2%.

technology is lagging today. we've got information-technology down about .6%, paring its earlier decline, but still the biggest drag on the s&p 500 as it is the heaviest weighted group. consumer discretionary also lagging. energy shares up 1.7 percent and financials being led higher after those goldman sachs earnings. alumina is a health care stock, but the company does make genetic sequencing machines, down 24% after preliminary earnings that missed estimates. netflix down after its forecast for international subscriber missed estimates. we have amazon and google also lagging today, perhaps because of their exposure to video as well. announce that standalone video service and google the owner of youtube.

facebook with a price target related to facebook messenger, those shares up by 1.4% today. overall, the clients and technology today. lisa: talk about up and down energy. wasn't it leading the gains earlier today? julie: because oil is getting a lift today. up better than 3%, above $41 a barrel. the dollar is lower today. the bloomberg dollar index at its lowest in nine months. .e have energy stocks rallying transocean getting a big lift today, 10.5%. noble also trading higher. energy stocks are now at their highest they have been year to date since early december. up by about 9.5% so far this year.

one of the best-performing groups in the s&p 500. lisa: now, let's check on the first word news th. clinton has lost seven of the last eight primaries or caucuses to senator bernie sanders. she's hoping to regain the upper hand. is favored in today's new york primary, represented the state in the u.s. senate. donald trump is counting on his home state to provide a big boost toward the republican presidential nomination. a win would give trump momentum going into five key northeast contests next week. the senate has approved a bipartisan aviation bill that would increase airport security come extend new protections to passengers and introduce package delivery drones. the legislation would extend the

faa's programs and powers through october of 2017. the bill now goes to the house which has become bogged down in the dispute over whether to privatize air traffic control operations. president obama at odds with senators in his own party over a bill that would anger saudi arabia. the third ranking democrat in the u.s. senate, chuck schumer supports the measure. the white house says the bill risks alienating a key ally in the fight against terrorism. president obama spoke with charlie rose for cbs news. president obama: if we open up the possibility that individuals in the u.s. could routinely start suing other governments, then we are also opening up the u.s. to being continually sued by individuals in other countries. mark: paul ryan is refusing to

endorse the bipartisan bill. president obama visits saudi arabia tomorrow. you can see more of charlie rose's interview wednesday night on charlie on bloomberg beginning at 7:00 p.m. new york time. two brushfires affecting rail service in new jersey. direct service has been redirected to hoboken. ath is honoring tickets north penn station, hoboken and 33rd street. have sent large clouds of thick smoke into the air, but no injuries were reported. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. david: concerns of a global recession, commodity prices and the so-called brexit have some

wondering just how effective monetary policy will be in mitigating these risks. lisa: negative rates already in effect have overstayed their welcome come putting to our next guest. joins us.ody, jr. do you think negative rates are doing more harm than they are helping? henry: yeah, i think we do. at this point, there are three issues. on savers andact the implicit off-balance-sheet liabilities. the second is the impact on bank balance sheets and how monetary policy can throw this flow through -- can flow through. the third, the incentive the companies have partially due to the short-term nature of shareholders to buy back stock. that has had a great deal of

contention -- the relationship to low rates needs to be focused on more. companies are doing too much -- lisa: the way they are buying back the stock as they are selling debt, particularly investment-grade debt, we have seen issuance pop up, gains of almost 5% so far this year. u.s. investment grade bonds -- has this rally gone too far? henry: probably. and 20, by our math, 40 basis points of increase in interest rate across the curve gets you a negative total return in investment-grade credit. 20 basis points gets the spread whitening -- widening -- that is not enough of a cushion for investors to be enthusiastic about the asset class. we like to look towards those areas of the market that have been weak, the energy

commodity space. you are areas to focus on. to three times that you've had a 200 basis point spread between tight and wide sectors of the market, that investment grade that is white has outperformed high-yield. generate ways to return but being like the index is not one of them. david: there's been conversation about the process -- the prospect of using negative rates in the u.s. we are still trying to ascertain the effectiveness or potential effectiveness of negative rates. , just theging discussion of their legality? henry: the potential efficacy is the focus. whether or not negative rates will spur on additional debt borrowing that will flow through to the economy is the real question. when rates are at zero, the incentive to take on a single

digit return project mothers a lot of risk. -- there is a lot of risk. if short-term focus problem, not one that flows through to long-term health of the economy. we think rates need to be higher to encourage more long-term projects, more focus on operations as opposed to financial engineering. let's say central bankers do not raise interest rates. was saying theek biggest risk to the bond market -- hiking tooing soon. what would be the catalyst to cause yields to rise in this environment? henry: to us, the fed obviously has two things on his mind, full employment and c price stability. this adjustment to higher rates will be painful for some, for

sure. this will be a slow adjustment process. with that, chances are you let inflation out of the bag of it, which could cause the long end to be disconnected. risk to think about as that fed undergoes this process very slowly. a reason to not look like the index, investment-grade credit with so much embedded interest-rate risk. david: what are you seeing high-yield right now? henry: an interesting space. the energy market has been incredibly strong, particularly the low rated segment of the market. prices at the market , maybeied default rate 5% if used about metals and outng -- if you strip metals and mining. were left for dead and

we were talking about deflation. that was a wonderful opportunity. today, a little less so. lisa: what is the most dangerous debt out there right now? henry: low yielding government bonds. you have to believe that central banks will keep rates very low and will keep inflation expectations anchored. they don't want to do the latter. the central banks of the world want to introduce more inflation. to us, that low nominal return is a very dangerous place to be. which ist-grade credit extended in duration by three or so years, has a lot of embedded interest-rate risk. we would suggest that investors be very cognizant of that risk. david: henry peabody, jr. joining us from boston. coming in the next 20 minutes, will big banks be forced to break up?

explains, next. country could raise more than $15 billion in what would be a record for a developing country. david: look at the performance buenos aires -- more "bloomberg markets" after the break. ♪

david: this is "bloomberg markets." time for the bloomberg business flash. the state of the saudi arabian saudimpany -- state owned

arabian oil company has chosen -- jpmorgan isse working on preparations for the ipo. the prince is working on a plan to list shares on the domestic stock exchange as soon as 2017. lisa: viacom warning dish network subscribers they may comedyannels like central and nickelodeon tomorrow. viacom seeking to increase the subscriber fees. jack lew had planned to put susan b anthony on the $10 according to an internal memo sent to president obama last year. the secretary decides to get feedback from the public and there was plenty.

break up the big banks. that's what we've heard from bernie sanders. ,isa: according to sheila bair investors have the final say over which large banks should shrink. she made the case for the banks living wills. >> we could use some more transparency. the fed put a lot more information this time around -- it's important to understand there were two different processes to deal with the feeling large financial institution, one is titled two, a government run bankruptcy process. we are ready to use that if we have to. title i, what the living wills are about, requiring these theytutions to show

can go through a traditional bankruptcy process without disrupting the economy. david: explain why there are two agencies involved. different rulings came up from the two agencies. sheila: it's because of the living will process informing the fdic under title ii come if that would be used. it's important for them to work together. the fdic has a lot of expertise on how to wind down institutions. regulator for the holding companies. congress decided to put them together and it happened to be a joint decision-making process. david: isn't it the case that the fed has had more direct hands-on experience with a large money center, big systemic banks?

assured ofve been these large institutions for a frankime -- prior to dodd , the fdic resolution authority only played to the insured bank inside these large financial conglomerates and that created an investment during the crisis they blamed stresses on another part of the organization. not understands large institutions -- we've been entering them for a long time. the purpose is getting to a point where we are not jeopardized by the system -- is this getting us there? sheila: title i is a powerful tool. agencies sayth

these plans are not credible, they can do a lot of things. including ordering a breakup or divestituresres -- . tool.a very powerful none of the reason why congress wanted to agencies involved in making the determination. -- another reason why congress wanted two agencies involved in making the determination. d: bernie sanders and says we need to break up the big banks. what do you think? sheila: i do think under title ii, you could deal with a failing institution.

you could do it without systemic impact. longer-term, you do not want it to be systemic. i think the market would drive this if they increase the capital requirement further. it is harder for them to make return on equity as the capital requirements go up. you see shareholders putting pressure on these large banks to start analyzing whether they would be worth more and smaller pieces. .avid: that was sheila bair let's head to the markets desk where julie hyman as you look at company movers. with harley start davidson. it's one of the smaller companies to report earnings -- sure is down 6.2% even though earnings beat estimates. down 6.2%. the disappointment comes with a

lack of raising shipment forecasts -- spirit up 6% today. its costs willd fall 2%. first quarter capacity growing less than forecast at 26.5%. capacity constraint when it comes to the airlines is a good thing. first quarter, earnings missing estimates. down,tte volume 1.4% shares down 1.6%. i wanted to get a bigger snapshot here. on the bloomberg if you are looking for the s&p 500. you are looking at the absolute

growth in earnings and sales. the current quarter, we have sales up a very small amount, less than .5%. earnings per share down 12%. we've only heard from 52 of the companies in the s&p 500. these numbers will change considerably. remember going into the quarter that the forecast for earnings was for earnings to fall by 9.5-10 percent. most of the companies that have reported have beat estimates. we will continue to update you on this as we go throughout the earnings season. lisa: thank you, julie. still ahead on "bloomberg markets," argentina tangos with the global bond market for the first time in 15 years. why we could see a record sale as the nation moves. ♪

lisa: you are watching "bloomberg markets." david: argentina returns to the international debt market today for the first time in 15 years. the country is planning to sell over $16 billion in bonds in a four-part offering them a single day record for developing countries. , very aware excited of the importance of the sale. lisa: this is a very big sale in size and significance. it was originally just going to be $10 billion, it has been upsized to $6.5 billion because of incredible demand. billion.6.5 three-year argentinian bonds are being proposed with a yield of 6.25 percent. a ukrainian three-year yield is 10%, the two countries have the same credit ratings. david: how did we get to this

point? leadership, he has come out and made this an important point that we need to access the capital markets. we have left billions of dollars by being locked out. they will commit themselves to being responsible stewards of the capital markets. the president defaulted semi times before. -- so many times before. david: the commodities closes coming up. here is a look at oil and natural gas. all in the green. more "bloomberg markets" coming up after the break. ♪

david: from bloomberg world headquarters in new york, this ." "bloomberg markets

lisa: let's start with the first word news. mark: a house panel is hearing testimony today on encryption. among those testifying, apple general counsel who sought to set the record straight about iphones sold in china. provided source code to the chinese government. we did not have a key 19 months ago that we threw away. we have not announced that we are going to apply pass code encryption to the next generation of icloud. allegations that have no merit. mark: apple has recently clashed with the federal government over access to data on iphones belonging to criminals -- result will end up with her taking an important step toward the nomination best bernie sanders needs to win 60%

of the remaining delegates if he hopes to clinch the democratic nomination. for donald trump come at capturing more than 50% of the votes statewide would put him in strong position to win all of new york's 95 gop delegates. man charged with plotting to attack the u.s. capitol in support of islamic state has been found competent to stand trial. a federal judge issued the ruling after hearing testimony from a psychologist for the defense. christopher's trial is set to begin in november. heat streak has hit a record 11 months. march's average global temperature of 54.9 degrees was not only the hottest march, but continues a record streak that began last may. the heat record smashes a streak to 1880.ng back global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world.

i'm mark crumpton. david: commodity markets closing in new york. let's look at the day's biggest movers around lunchtime. beef coming cattle futures falling to the lowest levels since 2012 today. worry is that an uptick in supplies may be looming ahead. heading to a bull market, trading around 1595 a troy ounce -- $15.95 a troy ounce. lisa: you have beef, i have cold. -- i have cold. -- i have coal. peabody energy seeking to reduce a $10.1 billion debt. mental regulations and a glut of --elmaking coal

environmental regulations and a glut of steelmaking coal. i want to welcome dan klein. are we witnessing the death of the coal industry right now? think it has been exaggerated, but it is certainly tough times for them right now. three of the top four: companies are now in bankruptcy. coal companies are now in bankruptcy. it is interesting that a major driver of the feedstock that goes and the things that power us every day is under chapter 11 bankruptcy. coal stocks are high, the mind -- demand is low. david: you look at that trio of coal companies, how similar are the stories there? dan: there's a lot of similarities. the root of the matter is what

happened in 2011 when the market was good, these companies went on a spending binge and peabody spent over $5 billion to buy an australian company called macarthur coal. good and undere these expanded portfolios, they thought these companies would be able to survive. things have changed. the australian dollar has not done any favors for peabody. u.s. coal demand dropped 40%. lisa: about 70% of the companies in this industry are at risk of filing for bankruptcy. up from 57% last year. this clearly is not the end of the distress we are going to see in the coal industry. where do we go from here and how much worse is it going to get? there are similarities from cold to the wider energy sector.

the first half of 2016 is the get.t it's going to we are exporting lng because natural gas is still so weak, we are driving more because gas is so cheap. we are seeing reductions of oil and gas and coal all around. will still have a bit of weakness over the next several months. if you do have natural gas prices turn around to three , you will havee gas prices go higher, gas demand in the power sector go down and then cold will run. -- coal will run. the companies will come out leaner and wiser.

peabody, their minds are still operating -- mines are still operating in a cash flow positive. there is major downside for the usedt of coal being medium to longer-term. there needs to be a rightsizing of the industry. , theal demand goes down production site needs to be more nimble to account for that. there is a path for these companies to survive over the median or longer-term. even though the made the mistake in the short term of buying out the australian company, they beat their survivor by getting to the asian market -- david: amidst all the talk about clean coal and where this industry is heading, the technology has not been able to keep up without quickly the declines were. has not been any kind of major breakthrough like

we've seen in natural gas production. fracking has changed the game. reason coal demand is declining -- there is not a similar technological breakthrough on the production side or usage side. is used in big power plants. to have that widespread technological revolution will take a long time. breakingare getting news on the terminal that the white house's josh earnest is saying he's aware of the saudi threat to sell treasuries. this has been something they threat come a potential should the u.s. go ahead with its lawsuit against saudi arabia.

one more quick question. using a lot of energy companies diversifying. is that in the future for coal companies as well? david: we have seen that with , moving intosal the gas space. there has not been a widespread move to do that, but it certainly could be. david: dan klein joining us in new york. donald trump and hillary clinton poised for home field today's new york primary. will this change the tone of the race going forward? lisa: apple executives defending the company's privacy rights. data obtained from the san bernardino shooters phone may have helped in that investigation. david: bank of america, freeport-mcmoran, netflix --

more "bloomberg markets" after the break. ♪

david: white house press secretary josh earnest said the administration is aware of saudi arabia's threat to sell treasuries. the ending economic retaliation -- threatening economic retaliation -- they might sell up to $750 billion in treasuries with securities and other assets in the u.s. at the bill were to pass. -- if the bill were to pass. lisa: if they were to sell their treasuries, it would cause yields to rise, prices to go down because it would increase

chinaply so greatly -- has reduced its foreign currency reserves by almost that amount over the past year and a half. you've only seen yields come in tighter. instabilityate globally, would people reach to the haven trade? and it isreat significant and something people will be watching. new yorkers headed to the polls in the latest presidential primary race. those casting their votes include donald trump and hillary clinton, both candidates poised for home state victories. wins how might their narrow the field for the remainder of the campaign? joining us is megan murphy. how is the new york primary going to change the debate going forward?

megan: on the republican side, we see donald trump trying to get a big win here with a big margin of 60%. on the democratic side, hillary clinton is looking to new york to really open up the gap with bernie sanders to make it clear that she is the candidate to beat, his momentum has stalled. and that the democratic party needs to consolidate support around her. david: ted cruz had a stumbled there with his new york values comment. was he able to gain any traction? megan: he has run a very targeted campaign. factory, but he's been selective about turning certain areas where he thinks he might be able to pick away delegates.

where can they pick away and at delegates that they can limit his chance to get to 1237? that path for him is narrow as it is. john kasich on the right, what is his strategy going forward? megan: get to the floor and hope there is some epiphany among republicans, party insiders that he is the only man that can beat hillary clinton. polling shows that he is the only one of the candidates that has a big march against hillary clinton -- margin against hillary clinton. no one has gone negative against john kasich. strategy, aling difficult strategy and when he will be under pressure to get out of the race. lisa: is there another primary race that has equal importance going forward? megan: california, where the race will ultimately be decided.

that's why you see candidates already going out there to raise funds -- we never predicted we would be in a place where new york would be this pivotal. we haven't seen a race in a long time where california would be the deciding vote. we will see what delegates we come out with. as somebody who lives in brooklyn and has seen a lot of excitement in that borough for what is hisrs -- plan going forward here? the delegate count seems so insurmountable. if his plan at this point to hopefully influence the way that hillary clinton will campaign going forward? already influence the debate so much and influence the structure of the democratic party so much. look at the debate last week to see the issues that resonate are him and his crowd

issues that have actually come to dominate this race in a way we never expected. he has made her drift left. she knows she has to be competitive in the general. he has galvanized this group of supporters that don't turn out that much normally in elections. will his cohort of supporters come out in force for hillary clinton? lisa: art trump and clinton the , int runners there as well california? megan: they are. hillary clinton's pathway is quite easy. donald trump's path to 1237 is still very narrow. he needs a big win tonight. lisa: megan murphy, thank you so much. energy leads the market for a second day. -- the semi

conductor julie hyman has the details. , the semiking at xfd conductor etf. we have been seeing it fall negativef analyst commentary after it had a positive year to date performance. if you look at the year to date, it is higher, 16% from its lows it reached in february. downgrading a number of different companies here. there, is the analyst looking at those recent chair gains as one of the reasons behind his downgrade. a mediocre environment for many of these companies. which companies are affected? texas instruments downgraded.

sky works also downgraded. ti not down as much. maximum and nxp semiconductors cadmium.g at the whole year should be solid, but there are low expectations going into the first quarter earnings. those shares down 4%. withe watching rambus preliminary second order earnings that are below revenue forecasts. forecasts hinges on solutions licensing. those shares are down by 9%. the shares not performing as well as they had been. the first of the companies to report, maxim on thursday.

bloomberg intelligence looking at p/e ratios for the companies that make chips for phones. in finney on an texas instruments -- we've had a bounce in the p/e ratios, the multiples for these stocks. they are still below where they were going back to 2014, 2015. his point being it will be difficult for the multiples to get back to those peak levels because it will be a tough environment this year. up, yahoo! reports earnings after the bell. how will the numbers impact potential suitors? ♪

lisa: this is "bloomberg markets ." david: time for the bloomberg

business flash. coca-cola giving cans and bottles of its flagship sodas a makeover. it plans to unify the appearance of regular coke, diet coke, coke zero and coke life. the one brand look will rollout in mexico next month. has been shuta out of the global credit markets for 15 years and is now returning with a blockbuster sale. they plan to sell $16.5 billion in bonds and a four-part offering. a single day record for a developing country, marking the end to isolation that followed argentina's $95 billion default in 2001. david: apple has hired tesla's vice president of vehicle engineering. he will work on special projects related to the tech giant's electric car initiative. he will become apple's most senior car guy.

lisa: the tug-of-war between apple and the fbi over encryption is showing no signs of easing after months of arguments both sides testifying to a house subcommittee today. david: emily chang joins us from san francisco with more. hotlynot the most expected hearing on the hill. what did we hear from apple today? emily: this is the second time in a few weeks that apple has been on capitol hill testifying on this issue along with members of law enforcement. fbi startedrom the it off the sing they want to find a middle ground here. there are certain things they cannot accomplish without the help of a third-party. they were able to open the san bernardino shooter's phone. they say every situation is case-by-case, they are all different, you are dealing with different operating systems,

different levels of encryption. said's general counsel strong encryption is a good thing, we need this to protect our customers, protect everyone from hackers, from malicious actors. it is a necessary thing, something that the government should support. there are still a lot of questions about apple strategy. apple said there is no middle ground. what about these open cases, these issues going forward? bruce: we have not provided source code to the chinese government. we did not have a key 19 months ago that we threw away. we have not announced that we are going to apply passcode encryption to the next generation of icloud. we just want to be very clear on that because we heard three allegations -- those allegations have no merit. emily: apple is saying they are

standardizing encryption with , thenew generation of ios same standard for every single customer. the government is still trying to get apple to help them open a drug dealer's iphone in new york. the suspect has already been found guilty. the government wants to use additional potentially additional information to find out more about this particular case. there are a dozen or so cases open across the country. this issue is not going to go away. lisa: yahoo! is reporting earnings after the bell. do expect them to comment on the bidding for their assets? emily: they will be asked about that. we will have to see how they address the proceedings. tpg, y p, formerly yellow pages.com, have put in

bids for yahoo!. tpg coming from a more traditional private equity perspective. verizon a more traditional bid. valuing yahoo! at $8 million. marissa mayer would not be part of the equation. we expect profit to decline. everyone wants to know how yahoo! is weighing the different offers. david: don't miss emily on "bloomberg west" later today -- that is six clock p.m. eastern -- six clock p.m. eastern right here on bloomberg tv. ♪

likes welcome to "bloomberg markets." your

from bloomberg world headquarters in new york, good afternoon. saudi arabia waiting for klein.n banker matthew netflix shares plummeting after it is nowy reports the time to buy netflix.