this is "bloomberg markets." ♪ betty: we kick off the hour with new phone sales data from mark. ons is another piece of data how the housing market is going down, or is it hot? julie hyman has more than his desk. getting a 1% decline. higherget a revision than the prior month of 519,000. that is part of the reason of the month over month decline. this is the third monthly decline we are seeing in new home sales. it is the weakest pace of the man on the west coast. weakest place of demand on the west coast.

sales are a much smaller part of the market than existing home sales. look at the stock market, we continue to see declines for the major averages. steady withlatively those declines. you got the doubt leading the drop -- you got the dow leading the drop. theave been watching evolving situation of oil and its interplay with stocks. on bloomberg look here, you have consumer staples as the least worst group today, but energy is the worst performer, down by nearly 1%. industrials also following suit. one of the large oil companies, if you look at how they are trading, exxon, mobile, we will hear from more of these companies in the next couple of weeks. halliburton's trading higher.

that company coming out with preliminary numbers late on friday. -- company is booking reportyed its earnings to may 3 from april 26 because the deadline is by the end of the month. analysts are saying that that deal is not going to go through. getting to oil prices themselves, we had an unusual trade this morning. oil prices declining after saudi arabia said it was going to complete the expansion of a saudi oil field in may, which would keep its production steady. since then, we have seen an abrupt turnaround about an hour or so ago trading little change, but not helping energy stock group. betty: i wondered if some of the

effect might be from currencies? julie: it might be. weakening or abrupt as we saw the oil move. as yen has been in focus investors try to weigh on what the bank of japan will do. will be see an expansion of negative yield? you can see the trade in the dollar/yen has been lower. got some central bank meetings this weekend, including in japan and in the united states. we had been watching the tenure closely. those yields are higher for a six straight session. that is the longest streak since november. mark: stocks falling after they the secondeek for consecutive week. stocks are tracking oil and other commodities lower. you will see the basic resources as an industry group is down 3%.

banks down by 1.7%. , realip side of the coin estate, household goods, food, and beverage rising. the index is down by .5%. julie says, a big week for the banks and the doj. company, shares, 4.8% lower, the biggest drop in 18 months. focusing on health care. the focus is holding onto an ipo. ipo would reapn less benefits than a private sale, which has been unsuccessful. this is the first time a chief executive has said publicly that phillips may prefer an ipo to a private sale of the lighting division. asy make products such streetlights.

betty, i am going to get back to you. i gather something is not right. [laughter] betty: there is something going on there. we are going to fix that. bunny has more in the newsroom. madee: president obama has it official. sending more troops to syria to fight islamic states. the president spoke after being in germany. >> a small number of american special operatives are on the ground and expertise has been critical as local forces have driven isil out of key areas. improved it to 250 to keep up the momentum. vonnie: mr. obama says the iranian forces will not be leading the fight but training local troops. more than 3300 foreigners expected to having links in jihadi groups have been deported from turkey. this is according to a top

government official. another 41,000 foreigners have the barred from entering country. for deadly bomb attacks in turkey since july have been blamed on islamic states. the obama administration will decide whether to release part secret info on the attacks. light onents may shed possible saudi connections. lynchey general loretta are trying to smooth the way for prison inmates who are set up for release. she is urging governor's to make it easier for convicted felons. the move is aimed at helping the roughly 600,000 state and federal prisoners, who try to return to american neighborhoods each year. for pro football player johnny manziel. there are reports that a grand jury has indicted him for

assaulting his former girlfriend. the cleveland browns cut them after two years and he was dropped by his agent. global news 24 hours a day, powered by 2400 journalists, in more than 150 news bureaus across the world. i'm vonnie quinn. mark? mark: all eyes on saudi arabia. officials unveiling a blueprint for diversifying the economy. the shakeup, which is being led by the deputy crown prince, is producersteer the oil form -- from crude. he joins us from dubai. andrew, take us through this blueprints. what do we know so far? know --a lot of what we we are talking about the biggest

economic shakeup since the kingdom was founded in 1932. it is going to be sleeping. there is no corner of the economy that will be untouched. it will lift the country's oil. they will take the money to drive the sovereign wealth fund to use to diversify away from oil. they will roll back subsidies and increase taxes. all this is in preparation for what they think is a post-oil world. what happened was, when they opened the book, the imf said they had five years. they look and said, we only have two through years. betty: andrew, it sounds liked citizens and investors alike, or at least business people alike, in saudi arabia are pleased that it doesn't involve a high degree

of government spending. is that right? andrew: it is a mixed bag. you talk about citizens. they are going to have to get used to fewer handouts. 70% of the population is employed by the state. that is going to end. in terms of companies, there are going to be a lot of changes. there is going to be a lot of opportunities for investors. there is a lot of uncertainty. we don't know all the details yet. our reporters are in a compound. we affect the final details to be announced later this evening and the will have a clearer picture. but what i can tell you now, or what is interesting to me, is how wide ranging this is going to be. one huge nugget that came out today is that the military is going to fall under this plan. into a, when i walk saudi military base, i see marble and gilded doors.

and when i go to a u.s. base, i see concrete and marks on the ceilings. they will review military contracts and seek to drive and amilitary industry saudi arabia ranks three or four in terms of global military spending. that will have a direct impact on a lot of companies. mark: andrew, i want to show you a chart that highlights the fact that saudi arabia and banks -- saudi arabian banks are facing a -- climbing above 2% for the first time since 2009 on sunday. the oil's love has been tightening this funding squeeze, which is prompting exactly the measures you have been telling us about. seeking ways to reduce the nation's reliance on crude. andrew, how difficult is this shift -- does this shift away from crude prove for a company

which hasi arabia, become a part of the system over decades and decades? this is not an easy transition, is it? andrew: no. about the funding. we are seeing this pickup. saudi arabia has 600 billion of reserves. it has come down 100 billion. we are seeing this pop-up everywhere. it is a massive challenge. did they have enough time to get this done? was a population be willing to accept this changing -- will the population be willing to accept these changes? saudi arabia is very young. 25 orf the population is under. he himself is 30. he thinks it will make it easier to accept these changes. but one interesting thing he told us that one of our

interviews, i don't care about the price of oil. oil can be $30. it changes nothing for me. if it is higher, it gives me more diversity to get away from oil. go and quickly, gettingi prince said more details on the saudia /aramco. to bed the evaluation around $3 trillion. what can you tell us about this? would: they said they list less than 5%. you give the $2 trillion figure. that will drive the sovereign wealth fund. we will find out later today will begin out of this compound with some of the details. betty: all right, andrew, thank you. much more ahead on "bloomberg

markets." season, keeping investors busy. we will gauge the corporate with scott wren. ♪

♪ live from london and new york. i'm mark barton. betty: and i'm betting -- and i betty liu. you are watching "bloomberg markets." time for bloomberg business flash. -- home salesly unexpectedly fell for the third straight month. sales dropped 1.5% and plummeted in the west coast down 24%. the overall0% of

residential housing market. halliburton unexpected delays suggest its merger with baker hughes may be called off according to a key bank analyst that says, an announcement of the state of the proposed merger could come from baker hughes's board as soon as this week. shares of baker hughes under pressure. apple out with their earnings tomorrow. the results are expected to show how far iphone sales have dropped. in january, apple forecast ed more than a decade. the reason, sales are down in iphones. we are getting thicker into earnings season. 60% beating sales estimates. 61% beating earnings estimates. prettyar already set low? scott wren is a senior

strategist from wells fargo. scott, i read your recent note about earnings season and you think there is way too much negativity about earnings season. why no? are -- earnings aren't a coincidence. what happened in the first quarter, the market is looking well beyond the first quarter of the 7% or so. expected thatve for months. the markets are looking ahead, not only of a balance this year, but looking at the 2017 thinking things are going to be better. is why why the -- that the s&p is trading where it is. scott, i don't know if you can look at this, but the viewers can see this on our

screen. i will describe it to you. it shows s&p profit margins have been declining. every time you see that happen in past periods, that always preceded a recession. it happened back in 1999 before the tech bubble burst, and it before we saw08 the housing collapse. if you look at it now. it looks likes history may be repeating itself, scott. scott: betty, the margins have been at a record high. certainly, a meaningful record high. you would expect these margins to come off in a slower growth environment. companies are hiring people only when they have to. but you are right, it has frequently, when margin start to decline, if they keep declining, that leads to a recession. for us, i think there is a small percent of a recession.

next year, a touch higher, but still not that large. you want to keep your eye on the margins, but the work we are doing suggest that margins aren't really going to decline very much and that they are still going to remain high and remain historically high through the balance of this year. mark: scott, what is the s&p -- what is the upside for the s&p? there is not much headroom. scott: we had been talking to our clients. better range is conservative. i will leave it at that. the bottom line for us is that this cyclical bull market has more room to run, even in this 2% growth environment, you are going to see consumer theretionary, those of sectors we want to overweight. you're going to see the market,

maybe not the first couple of times it tries to break through that high, but by the end of the year, we are going to be happy with where the s&p 500 closes this year out. mark: scott, how are the european stock markets looking from where you are sitting? does the same rationale applies to earnings? analysts are cutting their estimates for the stoxx 600. where is the growth? what is going to push european stocks? what you were saying about the u.s.? scott: people are looking ahead. the eurozone is going to grow 18%. you are not going to see earnings take off. when my clients ask me, what is

the catalyst? i think that is too strong of a term. to takeis going to take stocks higher is stability. you have seen stability in the price of oil. chinese growth is not falling apart. some stability in terms of european gdp. u.s. gdp, even the the first quarter will not be a great example. what is going to drive stocks higher over the course of the next 12 months, 18 month, is stability, dependability, and just a thought that hey, the world is not coming to an end. we are moving forward in a slope pace -- slow pace. that will allow stuff to drip tire. mark: good to see you. thanks for joining us today. analyst for wells fargo. we will see how the stocks are reacting. ♪

♪ betty: you are watching "bloomberg markets." i'm a betty liu in new york with mark barton in london. let's head to the markets desk with julie hyman, including one mover. julie: valiant is back in the news today as they get a new ceo. .e will be the chairman he has a big job to do at valiant, who has plunged and has a lot of different issues. valiant shares are bouncing. errigo shares are plunging. they cut it earnings forecast for 2016. 42% over thewn past year. they were also downgraded for

outperforming. said they have set unstick stations -- unrealistic expectations. big deal to talk about in the publishing industry. an $815 -- $815 million bid. it is 63% higher than tribune's closing numbers. you can see those shares are surging by 16%. we have seen a lot of consolidation because it has been a suffering industry. --nett

mention of the top and bottom of earnings performers in the s&p 500. the rocks coming out with earnings it missed estimates. more.re has been up much xerox plunging by 12%. betty: thank you. julie hyman with those numbers. still ahead, politics make strange bedfellows. ted cruz in john kasich teaming up to stop the donald. is it too late, though? interviewnclusive coming up at 11:00 eastern. his take on the turnaround of the u.k.'s largest retailer. ♪

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betty: live from bloomberg world headquarters in new york and london, i'm betty liu. i'm mark martin. you are watching bloomberg markets.

let's get to bloomberg first word news with vonnie quinn in the newsroom. rollingtrains began into the station this morning. 16 people were killed in the attack on march 22. the brussels airport still is not operating at capacity. a $6 million settlement in the death of tamir rice, shot by a white police officer while playing with a pellet gun. the city will pay $3 million this year and $3 million in 2017. a grand jury declined to bring criminal charges in the case. in california, a trial could end up costing jurors. legislation supported by court officials would let judges fine jurors up to $1600 for posting messages on social media. could be fined for

researching cases on google. supporters say it would give peace to currents bands. and "the jungle book" is on top of the list for the second weekend, bringing in $61 million this time around. number three over the weekend barbershop,sharp -- the next part." time to get you caught up on all the action around the world. let's start in asia where things a stock note. all in the red as you can see. region story out of the the etf purchases have made it a top 10 shareholder.

>> under the current stimulus than $27t is more billion. that has made a top 10 shareholder in more than 200 of the shares on the nikkei. it could accelerate etf purchases. wary of the outside impact on the japanese market and says the glowing -- the growinginfluence risks devaluation. european stocks following their asian counterparts lower on this monday session. 600 a look -- the stoxx falling for a third consecutive day. are draggingies down these basic resource companies. the stoxx 600

finished with a gain for the second consecutive week. even the big moving industry groups on the stoxx 600 today, and banks down by 2%. happeningk at what is in currencies. to itssterling rise highest level since february 10 following those comments from whereent obama on friday he stated his view that the u.k. .hould stay in the eu some say that could have an impact on the vote. the yield on the u.k. 10 year is up by 1.61%. yearield on the german 10

.2 -- .26%. abigail doolittle has the latest from the nasdaq in mid-town manhattan. abigail: nasdaq trading mildly lower following a two-week losing streak for the index. one of the worst performers in the nasdaq 100 after fitch said the chinese internet retailer has the credit profile of a high-yield company. this in the context of a high capital-intensive business. shares are trading down, suggesting they could trade lower in a range. mark: what else is dragging the nasdaq lower? abigail: the worst or former is when macau casino revenue looks worse than expected.

tracking to decline year over year of 15.5%, worse than they had been looking for. in atock recently put bullish cross and may see a turnaround. lots of buyers are getting interested and involved with the shares. let's talk politics. betty: we shall indeed. let's bring up some live pictures right now of john the republican presidential candidate and ohio governor in philadelphia campaigning after news came out that he and ted cruz are going to be partnering together in order to stop donald trump. indiana living up to that pledge. is our washington

bureau chief, megan murphy. megan: you say partners but i'm not sure what they are partners in. what they are going to do is carve up the states in a bid to stop donald trump to get the delegates he needs to get to the magic number of 1237. this means john kasich will be in oregon to maneuver and new mexico and he will stay clear of indiana where ted cruz, they think, has a better chance of snatching up winners. is it going to work? megan: i think some ways it fits into donald trump's narrative that the establishment wing of the party are trying to steal

the nomination. i think it's hard to understand goneandidates who have against each other are teaming up to block trump. i think it remains to be seen how they can make the case to voters that you could vote strategically after tuesday tomorrow. the outlook for the next set of northeast primaries? is trump favored to do a sweep? megan: the latest polls are pretty brutal -- trump is over 30 points up in some polling we've seen in connecticut. good daycted to have a tomorrow as is hillary clinton solidify their status as the two front runners. iny are looking to stop him

indiana and california to see what they can do to block him there. if not, it is over. i want to turn to the interview with charles koch where he seemed to give an endorsement to hillary clinton. the same time, he will not be attending the republican national convention. >> as far as the growth of government, the increase in spending, it was 2.5 times under bush than under clinton. >> you could not see yourself supporting hillary clinton, could you? >> we would have to believe her actions are quite different than her rhetoric. betty: and i'm sure you saw on hillary clinton's twitter page -- not interested in endorsements from people who scienceent -- climate and make it more difficult to vote.

she may not want his endorsement, but it does it help her at all? megan: it's a remarkable comment but i'm not sure it helps. only for people like donald trump but what ted cruz would do in the middle east. bill clinton -- it really shows the state of this race that someone whose political network has pledged they would spend almost $900 million on republican candidates in state, national, and local elections is saying i may go hillary. mark: thank you for joining us. up, herbal life is in the news, building up a huge defense against activist invents that -- activist investors. and it comes in the form of the world's top soccer players.

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mark: this is bloomberg markets. i'm mark barton london with betty liu in new york. time for a look at some of the biggest is the stories in the news right now. usa today publisher and that is offering to buy tribune publishing. the price? $850 million in cash, representing a 63% premium to their closing price. among tribune's papers are the "chicago tribune" and the "los angeles times."

could be an ipo for the record broke -- for the record books when saudi arabia sells part of isramco. aramco.i's -- of the saudi's plan to sell 5% of the company. and in china, auto dealers are facing a shakeout as the industry depends on beijing for the annual auto show. three out of four auto dealers lost money last year. sluggishem is a economy and too much inventory in showrooms. that could lead to consolidation plus dealer groups like send to china. drugmaker valeant will have a new ceo.

cynthia kunz joins us now with more details. what do we know about him? guest: he's a very -- a very experienced pharmaceutical executive, so there's no doubt about the sheer amount of experience leaves in the role. but what he's leaving behind is disconcerting and that's what investors are trying to parse out at the moment. launched a very aggressive last year and what happened is he came out of whatimates in terms he could deliver and now they are backing away from his numbers. but there some feeling that you're not going to be able to turn it around like you said and we backed you and now he's walking away from it. note some feeling that he's -- that they are not getting

that on his side of the story. he left because he didn't think he could turn around the company or it seems he's turning around the company? the timing is questionable because they are downgrading numbers he gave to say stick with us and we can grow this and the numbers are not panning out. he's taking on a much more troubled company and will hopefully build the credibility. have been a much harder job to turn things around, so this is what he is walking into. just a feeling of wait a second it's a very experienced

executive with a good reputation . so for valiant, it is pegged. mark: what is on the to do list for him once he arrives? cynthia: the biggest job is going to be improving pr and starting things on the right foot, communicating to wall street and the media and investors what the new strategy is. that has been through the form of congressional inquiries that they have had to answer questions. he's going to go in front of congress again and have to answer questions about a lot of the old practices valeant had in place. valiant itself is saying we're not going to do this, so he strategycome out with at authority and talk about how he is going to change the corporate culture because that is what people are worried about.

mark: thank you. betty: -- this may help the company fend off activist investors like bill ackman -- also involved in valiant. it seems like bill ackman is everywhere these days. herbal life has recruited the -- [indiscernible] they wanted to go big-time into the rest of the world. strategy to barton the scope here and went to latin

america and had a new ceo come in who came from disney and said how do we market this rent to a new audience. they said how about soccer? the list popular sport in the world? huge following in latin america was so they got some great deals with the la galaxy. they have the most followed athlete on the social media, over 100 million social media followers and he endorses -- he endorses herbalife. they: does this protect company from accusations that it is a pyramid scheme? one of the things he says it is how does it last as long if it's a pyramid scheme? it has ties to a number of different things, like big-name star athletes.

plot by herbal life to keep stuff going and if you look at herbalife, they are just marketing a brand. pretty well. if you think about bill ackman's campaign, it's over three years herbalife has taken some hits and has some problems, but it has still grown its distribution base. now it's 4 million people doing it. mark: what is the cost of this? these sports stars don't come cheap. what are they spending on these endorsements versus nike and procter & gamble? matt: they are actually not spending much. there spending less than 2%. it's coming pretty cheaply and they've done a pretty good job tying ties up with ryan aldo.

kudos to them. whether you think it is a pyramid scheme or not, there marketing scheme is to get. mark: you can read that story in the latest issue of bloomberg businessweek. still ahead, your next high-end safari destination could be in montana. you don't have to wrap it -- have to rough it. but you can help the wildlife at the same time. ♪

mark: the american prairie reserve is an ambitious project to turn 35 acres in montana into the largest nature reserve in the u.s. it could also be a safari

destination for you. we have the story of our reporters experience in the upcoming issue of "bloomberg pursuit or cap how'd and you visit the american prairie reserve? bozemanu fly through and then you have some driving ahead of you. this is evidently remote. you've got to be committed but once you are there, you are treated very well. this is what betty cares about, being treated very well. how well will betty he treated? brad: nicely. i was able to take my wife because she would be staying in a luxury yurt. -- these round tents are upscale versions, $2400 per privateer night is a chef and a safari van to take you around in a fire afterwards and northern lights as if they had been ordered up for us.

betty: do you have to walk anywhere? up to you.s you can hike or bike or get yourself around on foot. i would even spend the night sleeping out. i'm with your wife. radical and you can brew up some nice coffee on the deck as well. tell us about the amenities and price points. night.2400 a i would give it two or three nights max. it's a long weekend. you might take a trip to yellowstone or the tetons. fish or do some rafting, on either end, you could look at your stay at the reserve. appeal is for the birds and to be a part of something that is a work in

progress. they are building this thing, so you can have been there as they are constructing this ambitious conservation project. the african game reserves have the big five. what does the american prairie reserve have? -- brad: it is the big two right now. a lot of animals have been pushed to the brink. i didn't know this, but the grizzly bears used to run all over this territory. and now they are holed up in the rockies because they have been pushed up there. their idea is to bring back mega africa-likeeate an big five and call it the american serengeti and bring back the mountain lion and the grizzlies and the wolf. you can imagine there's little controversy around that. thank you so much.

very interesting. i almost might go. brad: you would love it. mark: it is very windy. if you don't like the wind, don't go there. onty: you can read more "bloomberg pursuit." up, we will talk european banking. let's see where the market stands -- 34 minutes away from the end of the monday session. stocks are falling for the third consecutive day. it is miners and the oil companies leading today's decline. ♪

a.m. in new york and 11:00 a.m. in hong kong. i mark barton.

you are watching the european close live on bloomberg markets. we are going to take you from new york to london to frankfurt in the next half hour. here is what we are watching -- we are 90 minutes into the trading day. red on the screen today. european stocks retreating for a third day as energy and commodity producers slide. ininess confidence data came worse than expected. hopes toesident obama finalize a trade agreement with the european union by the end of his presidency, however the bill faces tough opposition in europe and in congress with many lawmakers and the president own party opposing the deal. and a bloomberg exclusive -- we will hear from the cfo of tesco, u.k.'