of tomorrow's statement. >> and apple reports after the bell. is the iphone the gift that will stop giving to apple's bottom line? ♪ david: a warm welcome to bloomberg go. i'm jonathan ferro alongside david westin. david: it's good to be here. i read your newsletter for years and benefited from it. welcome. we will also hear from eli lilly's ceo. and roger goodell talking about the business of the nfl. and may be the tom brady decision yesterday. the markethead of

opener, let me give you the global scorecard. the dax is slightly negative. futures of little bit positive in the u.s. just a weaker dollar story here once again. cable keeps creeping higher as well. and crude as well. let's cross over to matt miller for the stocks to watch. matt: procter beating earnings estimates. gamble beating earnings estimates. ofare looking for a mean $.82. sales of $15.8 billion.

you can see procter & gamble moving up 2% in the premarket. this is one of a slew of companies reporting earnings today. 40 nine companies are reporting in the s&p 500 alone. 500.almost 10% of the s&p 1.3 billionr at euros. chrysler beating as well on the earnings side. missing the estimate of 27.8 billion. beating on earnings and missing on sales. t-mobile coming out, beating the street. a 7th street corridor of adding a million new customers for t-mobile.

adding customers at a pretty quick pace. whirlpool also coming out with earnings. you can see whirlpool actually moving down in the premarket. which is merging with dow chemical and firing 10% of its workers boosted its full-year earnings outlook. doing better but decimating the staff. the company is down 1%. eli lilly reporting sales that topped estimates. the drugmaker said it had a net income of $.41 a share. they are really unchanged in the premarket. a moment.overseas for the overseas earnings have been driving futures here this morning. surging.chartered

capital increased more than analysts had estimated. the stock is up 11% in london trading. surprised people today with a profit. they made about $532 million and that drove shares higher. what does this say for the other majors that announced earnings? ryan chilcott joins us from london. what does this tell us about the oil industry? >> i think it's pretty indicative. the business models for the largest five oil companies are pretty similar. with a oil but they also refine oil -- theyan't pump oil but they also refine it.

it was really on the refining and trading side where they did a lot better. refining -- the differences between france's oil company, they have a larger refining operation. did not do as poorly as many were anticipated. trading in the first quarter was very volatile. when it comes to the european oil companies all of them have pretty sizable trading operations. so they should benefit if they do properly. david: a good story made for a not as bad story on taking the oil to the ground but they also cut costs didn't they? >> they did. they reported they had spent about $4 billion. that puts them on track for $16 billion this year. of 15ould hit a range

million -- $15 billion to $17 billion this year. they have been cutting costs aggressively. david: thanks for joining us. jonathan: fascinating cost management story. these big oil companies may be a little more nimble than we thought they were. jonathan: they can tolerate lower cost, they can boost supply as well. on energy a lot equity, but the debt market just phenomenal. matt miller. you pointed this out to us this morning. you can see the euro denominated debt is now trading with a negative yield. we are looking at negative seven basis points. this is the dollar denominated debt.

huge spread here. pointed out the driving force behind this is the ecb. we can look at the yellen-draghi spread. this is an investment grade energy company -- it's phenomenal. >> it's extraordinary. we have never been here before. this is new water. when the central bank takes nexusyield, the basic reserve here -- it pulls down all yield's. marketplace in the has to realize their portfolio. many of these players by law have to own certain types of bonds regardless of the yield and this is an example. you and i would not voluntarily

by a negative yield bond. i wouldn't. i'm not sure about you. but why are people doing that? why do 7 trillion and growing every month of negative yield debt in the world -- growing every month. because it's forced into the market place because of this nerf policy. it's called fixed income because you get some kind of income there. i'm not getting income. for corporate that is great news. for me as an investor, it just becomes an outright bet. we think that you realign overtime your entire view of allocating assets. if you can't -- what do you do if you're an insurance company in europe and you have a sleeve

you must own sovereign debt? you have to own it by law. you buy it with a negative yield. then you have to make an adjustment somewhere else but asset classes -- asset classes are realigned. and investors have trouble with that. it's counterintuitive. david: also from the company's point of view -- if you are a cfo or treasurer you are constantly making decisions about how to raise capital. this really skews toward long-term debt. david: it also says, go borrow as much as you can for nothing and figure out something to do with it. and they are doing it. jonathan: look at what's happening in the energy sector. bp is cutting spending. they are actually cutting spending. this goes way beyond energy. they are not going to invest in fixed income no matter what the price is. just to carry on buying back

stock. with central banks focused on the price of money, when are we going to change the way we look at what's happening here? david: we are seeing it in japan. japan has moved in a huge way. look at the holdings of japanese stocks by the central bank. it's remarkable. they can never sell them. they have to hold them. imagine what the front run would be if you had to announce to the market, we are going to be selling stock. ofs is a permanent position an equity investor by a central bank. matt: we were chatting with david and the effect on treasuries and the spread between the u.s. 10 year in white. you can see the spread. use that chart to visually demonstrate something

we do internally. pulls downw nerp positive yields. the widening spread shows that. david: you just said permanent. it's not just that it affects everyone's yields everywhere. you believe it has a long-lasting effect. david: there is no way out. when you own this kind of structure -- think about it for a minute. digress for a minute. years from fed four quarter point one hike last december. crazy and we had a quarter-point hike after four years. imagine what it will take to taper back up to zero. we are in zero interest rates are lower for the rest of this

decade. and that is reallocating asset prices in ways we have never seen. jonathan: important question. i have had so many people come and they would say, 25 basis points does not matter. this is a picture is market and economy so geared towards low rates, it's the idea that they can't get a tightening cycle towards anything that looks like a normal rate historically. they just cannot get away from beginning hike. mentioned 25 and that deals with the spread. the other issue is the level. the third piece is that in is thehe base rate lowest negative rate. the positive is the highest. in the u.s., it's the excess reserve. in europe, it is the lowest.

25 basis points adjusted on either side is a monumental widening of spread. jonathan: david kotok is with us. join us at 1:00 p.m. eastern in new york. let's cross over to vonnie quinn. the presidential front-runners have a chance to win five primaries in the northeast today. the only oneis left in the republican race who can reach the number of delegates needed for the nomination. he could win the rest of the primaries and still come up short. hillary clinton winning today's races would leave little doubt that she is the nominee. in the u.k., jr. doctors in the national health service are on a two day all-out strike. they will refuse to provide emergency care. they are unhappy over their pay

and conditions. senior doctors will step in to cover. it's another hit to malaysia's reputation. the country's development fund has defaulted on a $1.8 billion bond. already ata fund is the heart of investigations over claimed it was used to funnel money to politically connected individuals. 1mdb has denied any wrongdoing. i'm vonnie quinn. jonathan: a busy day. standard chartered kicks off earnings season. those surprising results after the break. we will be talking to eli on their earnings announcement this morning. ♪

jonathan: good day to the city of london. up .3%. 100 bank earnings kicking off in europe with quarterly results from standard chartered. more i want to go to richard partington in london. headline numbers and thought, why is the stock popping so much? that's the story this morning. absolutely. there was a big drop in revenue this morning. it's a huge amount for a company to be down by. the loan impairment -- investors

have been very scared that this growingwas posted impairments on bad loans as well as slowing economic growth in asia. it wasn't as bad as expected. david: there was also a beat on the tier one capital ratio. how important was that? >> absolutely. is somethingtal investors in banks around the world are fixated on at the moment. it rose to around 13% and that is a good level. the capital really dictates how strong the balance sheet is and how much dividends this institution can pay when it has finished its turnaround program in a couple of years time. jonathan: we are always looking for a read across. hsbc is trading higher as well. it's a natural read across from

these numbers this morning. >> there is to a degree. operate in similar markets. hsbc has been the incumbent of scale. standard chartered has grown predominantly over the past 10 years. hsbc is much more conservative on its lending practices. it often lends to the oil super majors as well. standard chartered being the plucky underdog has perhaps had some less quality in its lending. however there is some read across. not to a great degree but there is some. david: david kotok, we hear all the time negative interest rates low interest rates are hurting banks. evidence that a bank stock pops and there is a positive surprise. and we are seeing more of that. is there a changing sentiment on banks that you can sense the read across that john just talked about in a broadway?

-- broad way? has been a big rebound in bankshares. certainly standard chartered is the only u.k. institution now to be in positive territory. there has been some discrimination. there are banks where investors just are not buying this story from the executives leading them. for example, barclays, credit squeeze -- credit suisse, deutsche bank. this environment of negative interest rates -- there are institutions where perhaps the worst is now behind them. forward buty road they are certainly on the mend. jonathan: richard partington, thank you very much. chartered in positive territory for the year by just 3%. a question for bill winters, an

exclusive interview coming up with the standard chartered ceo tomorrow on bloomberg television. next, the coming up already troubled malaysian government's reputation takes another hit. we will bring you the details on bloomberg go. ♪

jonathan: this is bloomberg go. i'm jonathan ferro. futures stayed a little positive on the dow. outperformance on the ftse. up by .3%.artered here inay for earnings the u.s.. let's cross over to matt miller. paring earlier gains the analyst estimates. sales improved overseas and in north america. luxury handbag maker said

international sales jumped 5% while north americans ales edged higher by 1%. this could be taking money off the table that is -- has already been made. would you call it a premium or luxury brand? it has a lot of mall traffic. david: it's expensive. matt: let me move to spirit airlines. non-ticket revenue per passenger remained relatively stable but the company experienced modest pressure for certain ancillary items which it believes is correlated to low-fare levels in its market. the stuff you buy on the plane that they used to give you for free and now they nickel and dime you for. shares of supervalu in the red after fourth-quarter results

failed to impress investors. shares topped estimates but profit fell by 23%. revenue came up short by roughly $50 million. supervalu already having a rough go ahead of today's open. they will be coming ahead all morning -- in all morning. david: this is where we talk about the stories trending on the bloomberg right now. you can find these in your terminal. still with us is david kotok. i'm fascinated with this story. 1mdb. this is the malaysian sovereign wealth fund. they borrowed a lot of money. it has everything. goldman sachs with huge fees, possible misuse of the funds and now they have defaulted. it's a $50 million payment. this is being investigated by authorities around the world. jonathan: it was used for some

high-profile projects. david: including some filmmaking in hollywood. but i want to get to the city i thought was called "lei -ches-ter." leicester city needs a win against manchester united and they seal the league. them to win are 5000 to one. david: it's the same as the odds of votto becoming pope. -- bono becoming pope. coming up, eli lilly ceo john lechleiter. ♪

[ soft music ] e.t. phone home. when you find something you love, you can never get enough of it.

change the way you experience tv with xfinity x1. show show me more like this. s. show me "previously watched." what's recommended for me. x1 makes it easy to find what blows you away. call or go online and switch to x1. only with xfinity. jonathan: good morning. if you are elsewhere. looking for a positive open, s&p

futures slightly positive. features positive across the board here in the u.s. in europe, a rally on the ftse 100. standard chartered and bp outperforming in earnings. that said decision tomorrow, it's a weaker dollar story. and weakereuro dollar. year,ield on the 10 1.91%. let's get to vonnie quinn. vonnie: in brazil the countdown to impeachment has begun. recommendedas members to the committee that will decide whether to impeach president dilma rousseff. a trial could happen as early as may 12. train service in france today

has been hurt by the third strike in two months. it has to do with private companies preparing to offer passenger rail service in competition with state run service. no word yet if the new england patriots will appeal the four game suspension of quarterback tom brady. a federal appeals court judge his suspension for the deflategate scandal. i'm going to start with tom brady. this was vindication for roger goodell. he suspended him and it was overturned by the district court and now it has been reinstated. it seems the nfl shifts things to social media platforms for some -- to some extent. the size you compare

of their company, it compares very favorably. that's an hour from now. jonathan: the other decision we need to look out for is the boj this week. concluding a two-day policy meeting on thursday or the governor is under pressure to improve monetary stimulus. francine lacqua joins us from london. about currency wars and politicians getting involved' -- and central bank independence. francine: i don't know if it's a case study on how to do it or not to do it. we had a great interview with governor kuroda back in davos. three days after that boom he surprises the markets with negative rates. the problem he has now is does he surprise on thursday when boj meets? i suspect he will look at what janet yellen says tomorrow.

the policies given by central banks is that -- we certainly talk about divergence. anything the fed will do will impact the boj and governor kuroda. been talkinghave about is out of all the central seemsin the world it governor kuroda is probably the strongest at doing everything independently. the ecb has a lot of members it has to please. governor kuroda seems to want to try the limits of central bank monetary policy. jonathan: and he has done that. when it went to negative rates it was very slim margin. when they boosted stimulus in late 2014 it was the same. me about all of this is when politicians get that immensee saw japanese yen strength couple weeks back.

today the prime minister's economic advisor is saying this week's meeting is the perfect time to do more because they can be preemptive and surprised the market. do you think politicians should be getting this involved? francine: we have the same debate here in europe with the german politicians always giving a lot of flak to the ecb. german politicians say, we respect the independence of a central bank but as politicians we also need to tell people what we think. what's interesting about japan is economics is not really quite working to the extent that the prime minister wanted because of structural reform. they are relying probably even more than the ecb on monetary policy. they have a strengthening yen. that's a concern. as the boj comes more -- does more, we need to look at balance

rates because of negative . jonathan: thank you, francine lacqua. david, 93% of the 41 economists surveyed by bloomberg expected more from the boj by the end of july. david: exactly. and it in the fed, it's almost the reverse. the market is not believing. 0% chance for this meeting coming up this weekend only 20%. we now have carl riccadonna. we enjoy him immensely and david kotok from cumberland. what can we expect? >> the fed has limited real estate to telegraph a new message. there are no forecast updates. all they really have is the four paragraphs or so of the meeting statement. the economic assessment is fairly straightforward.

moderate to downgrade growth and consumer spending to reflect recently reported data. we need to focus on in reading the tea leaves of the statement is the balance of risks. -- has been always suspended for the last two meetings. if it remains a suspended that means it's very difficult to get to the point for june meeting is actually in play. that shows it in they are really angling and trying to keep june in play. and continue to acknowledge these global and financial risks creating so much uncertainty -- i think the odds will start to take to if they want to have multiple increases the next move will have to be in july. david: we have seen changes in rhetoric. charles evans out of chicago. normally very dovish. now sending signals and warnings.

you think that gets incorporated in this statement? >> absolutely relevant and worth watching. are makingthe doves the argument to lean into the wind and push against market expectations amid a flurry of weak economic data that is telling you something. narrowing ofn this the view. we have seen moderate hawks reining in their rhetoric and we have seen dubs talking a tougher line. is not going that to be satisfied with just one rate hike. they're are going to develop this reputation of one hike per year and they don't want that. for two.still pushing jonathan: you just mentioned leaning into the wind. they truly believe that the federal reserve takes of you at this meeting to ts up to take a tee us up to--

take a move in june. live meetings or they seriously getting around the table to communicate a hike in june? >> they hate for a meeting not to be viewed as a live meeting. this meeting is -- not dead but pretty darn close to it. livewant it to at least be . it will depend on the tone of the economic data. is likely tok q1 be they really need to see convincing data that the economy has rebounded significantly in the second quarter. david: what did you find? often brings it back to currency story. blue youmovement -- in have the emerging markets

currency index. in white the all country index. you can see the dollar strength pushing these currencies down. then the fed lowers its forecast for hikes. the market had been feeling that the fed was backing off a little even before that. the dollar this year has underperformed any major currency excluding maybe what is the pound. jonathan: the pound has been terrible. kotok, it is one thing to say does may be getting more hawkish. they may even go further in that direction to really have that kind of different regions is going to really recap it. reallyrgence is going to wreak havoc. rateme form of negative policy -- that's roughly one

fourth of the gdp of the world. negative rates. u.s. trying to goose operates one fourth of the world positive and the other half of the world is lowering interest rates more than raising the and they are peripheral to negative rates. this is a massive tug-of-war. we are in a tug-of-war. you had the ecb and the boj really pushing and creating a lot of pressure. the pressure valve was the dollar. the fed allowed the dollar to play that role. the fed is not doing that anymore. the reason the dollar has weakened is not because we all that comfortable with the idea of the shallow rate path, it's because the said has backed away. this pointd say at is that the fed has pretty much

said they no longer want to play as the pressure valve in the market. at this point the fed cannot move. it is cornered by the market. david: if it moves, what does it do? the dollar, gets pushed back u.s. economic forces, and it flattens the yield curve. the yield curve is getting flatter. we are looking at the short-term rate. thesestribution of all interest rates are flattening if the fed moves up a quarter. they were flat and more. >> the fed is not refusing to play the pressure valve. they are refusing to play the patsy. this goes back to the fomc meeting of last year. janet yellen told the markets she is not going to tolerate a remarkably strong dollar that's going to clobber the manufacturing sector and u.s. workers in any multinational industry. march anded that in

that is when the fed began backing off in the markets had to reassess this divergence of monetary policy. , thankn: carl riccadonna you very much. and thank you to david kotok. tomorrow, the fed decides. special coverage. to break down that statement, are you going to be there? .ay be 1:00 p.m. that starts 6:00 p.m. london. 1:00 a.m. hong kong. , aid: tomorrow at 2:30 senate committee will be having a meeting on sudden aggressive price hikes of decades old prescriptions. remind you of anybody? valeant. to seell be fascinating with the senate has to ask them about. if you do not have aan:

news conference with the fed, this could be the next best thing. 's ceo., eli lilly about 45 minutes away from the open in new york. futures positive one hour and 45 minutes away from the open. ♪

david: i'm here in the green room. coming up, nfl commissioner roger goodell on this week's nfl draft and a unique new media deal with twitter. vonnie: you're watching

bloomberg go. the financial affiliate of alibaba has raised record amounts to pay for its expansion. it's the largest single round of private financing. the largest u.s. health insurer is pulling out of more obamacare markets. unitedhealth group quit selling affordable care act to individual towns in kentucky. the's the 26th state company has quit so far. i was insurance regulations -- iowa has said it is losing -- berkshire hathaway shareholders will not have to go to omaha this is weekend to hear from warren buffett. the so-called woodstock for capitalists will be streamed online for the first time thanks to a partnership with yahoo! last year 40,000 people showed up to hear from buffett and his longtime business partner charlie munger. david: we will turn out to eli

lilly, the u.s. drugmaker reported first-quarter profit earlier today. it was lower than estimated that similar to last year. shares are falling on the news. investors have been focused on eli lilly's diabetes franchise. sales of an insulin drug missed estimates. we are joined by ceo john lechleiter from his headquarters in indianapolis. thank you for joining us. tell us the story behind the numbers. lilly'srespect to eli first quarter, we were pleased to see 5% revenue growth. if you factor out currency which was a topline headwind our revenue actually grew 8%. this was a big turnaround after a number of years. we really took a big hit from revenue declines driven by expiring patents. of that topline growth came from the sale of new product. we launched six new medicines

starting in 2014. we have two others currently under regulatory review. , therespect to humalog underlying trends looks solid. this was a one-time event in the first quarter that really represent catching up with prior discounts and rebates as those invoices came in in the first quarter from prior periods. if you look at prescription growth trends for humalog in the u.s., things look quite differently. we remain confident in that product. david: as far as existing drugs you say this is really a story of drugs that are protected by patent. ofch of the main drivers revenue and margin for you -- the ones that are on the market? products that predate the recent launches we are still

seeing good performance from cialis for example. we are seeing good performance from our bone drug. clearly in this business patent expirations eventually hit. medicines become available at lower-priced generic versions. i think the success quotient for us has been investing in innovation and replenishing that pipeline with new products and clearly this was a good marker in the first quarter that we are succeeding with that. most: which are the drugs likely to come up the soonest? >> we announced this quarter that we have completed the filing of an anticancer drug. it treats a condition called soft tissue sarcoma. earlier in the quarter we had , anleted filing for a drug

oral medicine for rheumatoid arthritis. in the u.s.d that and europe and japan. those would be the drugs closest regulatoryet pending approval. we also have seven medicines in phase three development including an alzheimer's drug that we announced. you have some pretty aggressive goals in terms of margin. what can you report on that? on track toe remain achieve the target that we laid out for investors in early 2015. we said that in 2018 hour total operating expense would be less than 50% of our revenue. we feel very confident we are on track to achieve that goal. that's going to be driven by a combination of revenue growth and good internal expense control. david: that eli lilly ceo john

lechleiter. take you for joining us today. earnings, apple. it might be the one company that every single investor pays attention to. why is apple so important to the market? we explained next on bloomberg go. next onplain bloomberg go. ♪

jonathan: time for off the charts. apple reporting earnings today. it has been a bear 12 months. losing newly 1/5 of its value. matt miller joins me to see how the s&p would have performed without ample -- apple. matt: i kind of changed it a little bit. it is similar but the s&p and the nasdaq are two indexes on which it is heavily weighted.

it is about 3% of the s&p and almost 8% of the nasdaq. so you can see the same trends with all three of those indexes. it is very interesting. when you take apple out and igh the index without it, it performs better. hillary stayed up late last night and recalculated the index without apple. the blue line is just the nasdaq 100. it looks the same whether you do it with the spx or the ndx. apple's performance has been such a drag on the index. jonathan: conventional wisdom was that if you are not in apple you were not in the game. that charge is not tell me that at all. mark kirk to be fair, this is a

one-year chart. to be fair, this is a one-year chart. concerned about the number we are going to see in sales. splc, which allows you to see the supply chain of any company you entered. list of 330 five suppliers and 156 customers. down here you have competitors. i put up a one-month price change of apples suppliers. red is for stocks that have performed poorly. green is for stocks that have performed well. aree companies in red companies that get 50% or more of their revenue from apple. they have all done really poorly. getcompanies in green substantially less.

6% or 7% of their revenue coming from apple. they have escaped this punishment that these companies so reliant on apple as a buyer have been meted out in the market. jonathan: apple has given us the guidance, don't expect a great quarter for iphone sales. investors in the other companies have been looking at the production numbers and the reports that apple has asked those suppliers to maintain production. it's also important to note that apple always under promises and then over delivers in the end. jonathan: that is good expectations management, isn't it? david westin. david: we will talk for all with roger goodell -- we will talk football with roger goodell next. ♪

jonathan: the fed meets today. when will janet yellen raise rates? iphone, the gift that

will stop giving apple the bottom line? jonathan: we're joined live in the studio for an exclusive interview. ♪ jonathan: a warm welcome to the second hour. the fed gathers for that non-decision tomorrow. i would never rule out any changes. david: we are interested. in earnings with 10% of the s&p today and another 20% in the next two days. bob michael is joining us to talk about all of this. first we check on the markets. futures are positive throughout much of today'session.

rallyp 500 positive for a driven by earnings and standard .4%.ered up by a weaker dollar, the story in the space. the market, one dollar 45 on cable, one euro, 74. , but a rally on crude at $43 and $.17. matt miller, a lot of moves in the market and a lot of earnings as well. almost 10% of the index reporting today. in the next couple of days, we will double the number of companies. start with 3m coming out. -- first quarter profits. boost of health care and safety

businesses, they also makes gottsch tape that goes on so car driverset can see when they are texting. a cost-cutting campaign, benefiting from a strategy and focusing on sales in its home market of cincinnati. lower despite estimates. the world''s largest producer has been cutting costs and selling assets as part of the strategy. their gold is up 118% year to date. more than double. analysts were looking for 268, missing by a nickel. the largest maker of home , salesces and whirlpools following to nearly 29% in latin

america. david: thanks. let's find out what is going on in the rest of the world. vonnie quinn. the next week may determine whether donald trump may be the nominee for president. in the northeast in indiana's primary next tuesday. isnwhile hillary clinton expected to expand her lead over bernie sanders. states holding primaries, connecticut, delaware, maryland, pennsylvania, and rhode island. the u k's national health service has begun a two-day all-out strike. the first time they will refuse to provide emergency care. doctors are not happy about it. navy has strong praise from its biggest military rivals. the head of the u.s. aircraft

carrier to the south china sea tells bloomberg -- he is engaged with the chinese navy. the chinese were called extremely professional. they also accuse each other of militarizing the region. i am vonnie quinn. jonathan: to some of the earnings, bp is on the move after beating estimates despite an 18% decline in earnings. crude oil prices continue to slide. likely an indication of how the measures might perform. first-quarter earnings on wednesday. announcing results on april 29. coming out for the energy majors next week or so. i want to bring in the bloomberg news oil and gas reporter over

in the city of london. management.f cost how phenomenal is the drop to balance the book down to 55 in the next year or so? do is anp is trying to short -- a sure investors the is the topr bp financial priority. further to $17 billion this year and saying they have a capability to go further next year, they are telling shareholders to underpin the dividend. the market value telling the company north of 17%, that dividend yield is very much at risk. there is enough to do even more on asset management as well?

>> bp still has the highest among super majors. there is a risk to the dividend payout. they do see they have more flexibility to cut costs, even cash costs. they end up in the previous four by $400, they cut cash billion. further management of costs, jobs, all of that together. performers the worst so far this year. i have a graph normalized you today. thattting dragged on by concern that they could be cutting the dividend. i also have a chart showing stock reactions over the last 10 year -- 10 earnings.

five of the last 10 earnings, the stock price has moved to standard deviations away from the mean. is that volatility due to a concern about the dividend? >> yes. especially the ones in europe, it has to do with dividend concerns as oil prices have been in the last two years. dividend has been the main concern for the companies. they have tried to underpin it by reducing costs. on the other hand, they have to be almost short not to cut all to the bone. sense they need to keep investments going for future profits. up 5%an: bp stocks are today. thank you for joining us. today and tomorrow we

have the fomc. the fed meets to talk about the possibility of a rate hike and everybody agrees it will not happen. the question is what happens going out, they keep open. it and it shows back in august, it went way down and came back up. in january it went way down. now we have bob michael from jpm asset management. what do you think the fed ought to be doing? >> the fed has conditioned the market for doing nothing this week and they have to be in a comfortable spot because the capital markets have recovered. talk about earnings and you will get china, which had been a seemrn of theirs, things to have settled down. you look at the financial index and go buy their own playbook,

they should be raising rates at this week's meeting. down.hing has settled equity markets are higher, the volumes lower, the dollar is off a bit, printed -- credit spreads are in. all the things which prevented them from raising rates and continuing a normalizing process in march, they are actually easier than when they raise rates in december. don't the bank of japan and ecb put practical restraints on what they do? doesn't genuine -- janet yellen have to think about what that does to the global economy? look at the corporate earnings, the headlands they face for the thet quarter is still legacy of a higher u.s. dollar. whether the fed is proactively in a currency war or entered in on a de facto basis, it does not matter. it weighs into the decision-making process. jonathan: does it matter to you why conditions?

the lies seems important to me. why seems important to me. >> of course it matters. jonathan: the fed should not move at all. --soon as the fed moves, >> it was the boj and the ecb also flooding the world with liquidity. february 11 looked like a very different world and once we got all of the extraordinary accommodations from the central bank, things calmed down. nevertheless, if you look at everything else, still committed to the normalization process. andorate earnings look good the labor market looks ok. it does not matter what they will do. the boj will try to offset it on its own. committed to a

normalization process. what was the last time they used the word? >> not for a while, you are probably right. there is still an assistance when you listen to speakers about the probability of one or two more rate increases this year. economic of projections, the textbook fantasy that is out there at three and a quarter percent, there are still those who refer to that. bob michaels will stay with us. special coverage of the fed decision tomorrow starting a 1:00 eastern time in the afternoon on bloomberg. jonathan: coming up, one tech company with earnings that could potentially shock investment companies. and coming up, our exclusive with the nfl commissioner. ♪

vonnie: i am vonnie quinn. gives credit for high demand for sport utility both in the u.s. and in europe. fiat chrysler expects americans to keep demand and bigger vehicles too low -- relatively low gas prices. t-mobile added more than one million subscribers in the u.s. the third-largest wireless carrier posted profits that beat estimates. jon leger is trying to lower customers from other wireless carriers by off during free video streaming and rollover video. prince's records sorted by 40,000%. 2.3 million of princes tracks

were sold as singles and his greatest hits album sold a quarter of a million copies. we have been talking about earnings. now. well into the season bring us up to speed on what we're doing so far. 161 companiesseen report so far. this is definitely the heart of earnings season. i love the function because it allows me to take stock and see how we have done compared to analyst estimates as well as compared to the same quarter a year ago. i click on a surprise tab. typically, companies beat analyst estimates. right now published earnings are 4% ahead of analyst estimates and even sales are ahead by about a quarter of a percent. if you click to the growth tab, that is where you get the

important information because a lot of companies can be good at guidance. the question is can they be the numbers compared to how they did last year? you will see that earnings are down 8% compared to the same quarter last year and sales are down three quarters of 1% compared to the same quarter last year. it is amazing. the top line cannot the massage but the bottom line typically can be and they are not doing that well. it is also interesting to look through and see which sectors these are coming from. you would assume energy is having the toughest time and you would be right. down 60% compared to where they of lastthe same quarter year. e-mail not expect financials to have missed by so much. ago 16% compared to a year and sales that banks are down 4.5%. financials, as well as energy, are the big problems and they are big heavily weighted sectors so they will drag on the index with the exception of the fact

that hopefully investors are prepared for this and they are only looking to see how the companies are doing compared to expectations between those stocks. david: we should come back and do this through the earnings season. one of the big earnings is apple. you'll not have good news according to all reports. we expect sales of the iphone to climb for the first time ever. last year, the iphone was responsible for over 60% of apple's revenue. manyng us, who has taken leaders including yahoo! and ebay. joins us from irvine, california. give us a sense of what you are expecting from apple and what is hurting in sales. michael: good morning and good to be here. a lot of big news in terms of having declining profile in the

iphone sales for the first time. it is down about 30% over the last year or so, 6% or more in april. about two dollars and 51 million in unit sales, etc. is awe have to remember couple of things. apple is facing the same in terms of the strong dollar and a macro environment, etc. apple had a phenomenal couple of years. remember we are four months away from the iphone seven, their big two-year iphone refresh. for those reasons, it is well anticipated that we may have a little bit of a retrench, but the overall numbers are phenomenal for the company.

product.ey need a new where is it likely to come from? the iphone seven or something else? michael: the iphone seven is a big upgrade. we do not know all of the features but the innovations and display and battery and style, etc. this year is the anniversary of the apple watch. it was something that did not have a lot of anticipation around it. it has cost about $6 billion in revenues. apples and oranges, or should i say apples and rolexes. rolex to 4.5 billion and that is a brand that has been around for a long time. apple and the first year has done 6 billion. that is also expected to be refreshed. that will likely have meaningful upgrades so it does not need the

iphone directly, and other features. -- company also introduced in the last quarter the iphone sce. that should do very well internationally. asia especially, at a lower price point. recently, that will not start to show up in financials until q3. , and thatfor the ipad also, we will not see the financial impact until the next quarter. given those array of products, and we have an interesting product story. the other thing i will say is drawnalso has recently attention on investment services. a growing peace of the business profile. everything from apple music to apple pay. they have interesting opportunities to they have not

aggressively competed here with the likes of facebook and google, etc., in this space. one possible thing they could do given they have one billion ios devices around the world, they could do some of the things that facebook and google are doing, generate revenues on new features like at installs. multibillion dollar industry for its competitors. developers could bid for positioning off of their apps against a huge audience of people who look at the iphone store every day. thank you for being with us. bob, you will stay with us. twitter with us ahead of the bell today. jonathan: coming up, we get michael's investment advice. david's of course, exclusive with roger goodell. that is coming up on the program

eight minutes away here in new york. futures are positive. ♪

jonathan: bob is still with us. looking at what happened in the a quietket, we have had back up in yields and a retreat in bonds that has not gotten a lot of attention. or just yields tracking worker does going? government bonds that of the bit, but if you look at the corporate on market, corporate bonds have done pretty good. credit spreads have come in. high-yield trading at close to

10% back in february now trading at seven and three quarters percent. recoveryhis is normal responding to central bank intervention. people are taking credit risk again, kirk -- corporate earnings have and see companies where they do not have good topline growth, cut costs. it is all quite possible. we talked about the negative yield, they are taking credit risk, outright risk and outright losses. the most read story on the bloomberg yesterday, risk. walk me through that here how much risk is being taken? i think the central bank is taking a lot of the risk. the ecb is going in and will buy 5 billion or so euros per month of corporate debt. it is not as deep a market as it

is in the u.s. they're willing to buy 70% of any particular issue in the market. what we seeing from the bank of ease, is thetative holders of rich bonds sell them to the central banks and take the money and export it to cheaper on markets. withuld be the u.s. treasury yields approaching 2% on the 10 year. it was good and it could be credit. jonathan: a huge thank you for joining the program. my producers tell me it is one of the most watched events on the tv. i should know now that i live here. the commissioner of the nfl joins bloomberg for an exclusive interview. ♪

jonathan: i am jonathan ferro. hit the markets.

dollar weakness in the fx market, cable, 71, at a euro, 1287 as we get breaking numbers. here is matt miller. matt: durable good, transportation actually dropped. we were looking for a gain of half of 1% there. durable goods orders were up 0.8%. we were looking for a gain is or to 2.19%. 3%, downs, a drop of even more. this has got to be a concern for the economy. these orders are what you buy one you're putting out. it is not just about people buying refrigerators. it is about company buying

stuff. the print on my screen i hear in the bloomberg. you up-to-date on the disappointing data. is -- has an interview. david: i am joined here by roger goodell, the nfl mission are, doing that for about 10 years now as i understand it. the evil of your nfl draft is coming up. 300,000 people you expect in chicago for this. yes, it has become quite an event for us. a time in the nfl it these young men who have all been working hard, they find out the team they are going to. it is an emotional time and a great time for every team. david: you have the court of opinionreinstate your

-- new england patriots. we want to get your reaction. >> we are pleased with the court decision. we think that was right. they were firm in their decision. it was within our authority and the judgments were based on solid facts. we are pleased with that and hope we can move forward here. david: has that given a second thoughts on this? roger: this is something we have had in collective bargaining agreements for decades to we think it is important that the commissioner protect the integrity of the game, that you cannot entrust that to somebody with no understanding of the yesterdaynd the court referred that. we think this is an important element of our success. processchanged our through the years and we will continue to do that if we think

it is in the best interest of the nfl. the twitter deal is a new deal, a $10 million deal to stream 10 games. how important is that to the future of the nfl, the new digital? is important.k it you are aware of the changes in the media world. they are significant and evolving. we feel the foundation of our success has been being available to the broadest possible audience. we have great cable partners. we want to continue to expand and reach those consumers and those fans consuming on their if a tablet or a phone or any other kind of device we want to be there with those devices and our content. this is a very good opportunity for us to do that we think it will support our broadcast audience but we think this is something the future is very important to us to be involved

in now so we can make the right decisions down the road. you are the leader of a major sport but also the ceo of a big company. andou look at the revenues compare it with other major companies, it is substantial. other people have quoted usa saying you have a goal of the billion by 2025. how important, whether it is twitter or facebook or other outlook -- other outlets be in achieving that goal for you? roger: the most important thing is to do it in a sustainable way and think long-term and not short term. we are not just trying to get to a number. the nfl and nine clues on a global basis. international is a great opportunity for us to expand our game. we are playing in london and makes so this year. in chinalans to play

in the future we want to bring our game to the broadest audience. we believe our content is of great value still here in the united states and around the globe. for us wertunities think are still very significant. we believe the best days are , and weead of us there will continue to focus on how we grow. david: can you see a day when revenues from facebook or social media we do not know about yet could rival that of broadcast? roger: it is hard to say but we are planning on that, and the potential is there. what do we do to make sure we are there? the core for us in the short how do we reach our fans? today passes technology is giving us the ability to reach directly to our fans and we never had that before. it makes our content even more and gives the ability to speak directly to the

.an it is a great advantage we never had before. you mention london as was other places. as i understand, they are sold out for the most part. is the london franchise in the nfl in the cards? it is ae think potential to three regular-season games. this will be our 17th this year or we played 17 already. we think there is a great for us to continue to grow. if we continue to be successful, we can work out the logistics and the competitive issues. we think one could handle a franchise and that is exciting to us. david: any chance a u.s. franchise would move to london? on how toare focused keep the franchises where they are. if we have situations where we cannot resolve them in the local market and we allow the team to

continue to be successful, we would have to consider that. how do wenow is continue to keep our franchises in the state successful. i was in san diego in the past to san trying to get diego. we think that is the right thing for the community and we would like to see them continue their for the long-term. david: i was going to ask about san diego. you made the arrangements for los angeles. is there some inclination for san diego to move up north? they: we haven't --roger: have an option. it is one we would rather not exercise. if they cannot get their issues resolved in san diego, they have worked close to 15 years to get a stadium built in san diego. there is a generally knowledge in the community that they need a stadium. looking at a project that is more a a stadium, it is a convention center. we are starting the process of getting on the ballot and it will look like it will go in

november. we are hopeful this is the right kind of solution for the community as well as the team, so they can be there long-term. you look to grow the business, you talk about new digital streaming outlets. ?hat about data you have a deal with sport radar now. how important is that to your future as a business matter in growing that part of the business? roger: it is incredibly important. that is what consumers want it one of the big things we learned from all of our efforts is how and data and how much video how much information consumers want. our fans want to get behind the players, they want to get behind the teams. our job is to try to give them the opportunity. that is why we focus so much on making the game more accessible to the fans. some people look at sports data and they take a step over to legalized gambling. is saying that is

a good idea. is that an expansion as you grow down the road? ther: we have been on record and oppose legalized gambling. we do not think it is in the best interest of the integrity of the game. we know fans want to know that when they are watching the game, they are seeing the real thing and there's nothing influencing by outside -- outside forces. we take this seriously. we have a strong policy the area. we plan to continue that. also, as the ceo of a big company, one thing the ceo does is think about larger potential strategic threat. the concussion situation, the brain injury situation, has an in the press a lot here in you had a settlement with a large number of former players. tell me where you are in dealing with the issue and how much is that to the game itself? roger: we focus on how we operate the business and more importantly the rules of the

game, the equipment of the game, what we have for strong players. we need to keep this a number one priority for our players, our game, going into the future, and not just on our level. when we make changes that the impact ons an college, high school, and you football. the awareness we brought about how to handle concussion injuries, it is really important to us. we reached an agreement well over a year. any of the former players and families who have a neurological issue, created by football or any other factor, they have what is available to them. we like now that the court of appeals has approved this, we would like to get started and get those benefits to former players as soon as possible.

forward, is it your view the players know there is a risk so you have further liability? roger: because of the awareness with head injuries in all of contact sports, i think everyone understands the risk to repeated head injuries, particularly if they are not managed properly. that is with the nfl is leading the way on. conservativee a approach to identify them, deal with them, and issue a real calls for change. players reporting their own injuries, that is good for the game long-term. it is the for athletes that play any sports or make sure it is properly treated. any great ceo thinks about what comes after him or her. succession is one of the main things for a great ceo.

i'll will not ask you today to declare when you will leave, but you must be thinking about the process. what are you doing to ensure that the nfl continues well after you're gone? roger: i agree i think the strength of an organization is if it can carry on. can the people step into roles and drive the organization forward and adjust issues we undoubtedly will have going forward? great team with great young people. work on developing those every day. part of my job is to make sure for everybody and organization, including yours truly. my job is to make sure they have the right experience and the right opportunity to see that. you came up through the ranks and started as an intern. butowners get to decide

would you anticipate that your successor would come from within the nfl? roger: i do because i think the complexity of the organization is unique in the way we operate. we are not like any other where i dictate essentially and a big issue we deal with. i have a back and get 24 or 32 owners to approve. it is like a big board in some ways, but it is a great asset for us because of we can find a solution, working with our ownership, that 30 -- 32 owners actually support, i think we have got a pretty good solution. it is a great system and it is proven -- has proven to be a foundation of our success. i expected someone who fills the role after me will have to respect them understand that and be able to operate in that kind of environment. david: thank you for being with us. good to see you. jonathan: fascinating interview.

he can find that on the bloomberg terminal and the uber website as well. coming up, a new way of looking at the auto industry. why it is not all about the number of cars sold anymore. opening.s from the new york and futures stay positive but we are off session highs. dollar coming out of number as well. we'll talk about the markets next. ♪

jonathan: tomorrow, you won't want to miss this. larry fink right here on go. the fed decides at 1:00 p.m.

vonnie: third-quarter profit beat estimates. sales were looked warm but that was partially offset high-cost cuts. thorne and should $10 billion in reductions over the next five years. half of mitsubishi's market value have gotten worse. the motor maker says the fuel economy of its cars for the past my five years. mitsubishi has named three former prosecutors to a fair -- a panel that will investigate. it has taken nine years but america has finally put the process of foreclosure behind us. the lowest levels since october of 2011. in 2010, banks seized a record 1.20 2 million homes.

the market has gotten stronger and incomes are rising. that has held our worst stay current with their mortgage payments. let's get to the morning meeting today where we hear what banks are looking at. a favorite of mine on the program this morning, adam, global head of auto research and morgan stanley joints me with a look at the future of the auto industry. thank you for joining us today. a question that we tussle with all of the time here, why our auto sales looking so strong and yet, auto carmaker shares are not we never see a pickup in ford, we never see a pickup in gm stock, even as they continue to boost margins and sell more cars. >> the market discounting two things. long in the tooth in the cycle. we are doing margins closer to bmw or german or luxury auto

rather than historic margins. the market has been trained to think these are good times to sell. there has been concern as to the quality of the incremental credit entering the market at 17 or 18 million. the increasings consideration of the industry is the target of technological distraction. are puttingstors that into the terminal value. you are a vanguard of analysis when it comes to technological disruption. do you see investment opportunity here? globaluld highlight our mobility, recently publishing a blue paper and dressing that, the technological distraction and reinventing how investors should look at the market instead of units sold, but miles traveled, with the value of around 10 joined he dollars globally, or 15% of gdp, excluding the value of time. a really big market. we struggled to find investment

opportunities from within the auto sector. i highlight within my u.s. coverage names like tesla motors, relatively well positioned, but you have to pay a big premium to get in or get on board. and then names like fiat , they arend ferreri so detached from the disruption in a way, because they have other strategic objections, we think they are in their own world. not that many fundamental winners here. isn't it a special case? it is a luxury goods maker more than a carmaker, right? >> it is not transportation, it is human driving pleasure. silicon valley firms that are attacking the transportation industry and looking to monetize get rid time, trying to of the kinds of experience that for already -- fried provides. they are going after 95% of the

boring part of the commute that with,y consumers put up and of course the danger of public health risk involved with the commute. tesla.ou mentioned what about companies like google and even apple? just last week, we heard mark fields say he assumes apple is getting into the car game. detroit, florida, in gm, and others, have a high awareness that things are different this time. they are expressing a high awareness. we do not think they are blind to that. many of them are saying similar things, that they will disrupt themselves, that they will attract and maintain the best talent, and that is clearly a glass half-full approach. you cannot say they cannot make it. the stock market's towing you we have seen the story before and we will put the burden of proof on you first because the silicon valley companies you mentioned

have nearly unlimited budgets and in many cases, markets that are petering out. they want to go for the auto industry, 100 hundred billion dollar markets. matt: we see them open an office in silicon valley. gm has a partnership with lift. they're looking to get their hands into the pie. what will be the winner in the end? what is the motive just rotation we will all use in 10 years? >> we think it is a combination of autonomous, shared, and electric pair at any advancement in state-of-the-art, any of the three independent tech technologies, helps accelerate the other two. using it more than 1% utilization helps really fortize the upfront costs the battery infrastructure that up to now has not worked out well.

part of the conclusion in our collaborative report is we think ed penetration goes to 15 or 20% or more in the next 15 years. a real change of the ecosystem, not just on the how we get around, but commonly mobility on demand but also a propulsion system. matt: thank you so much. adam from morgan stanley, global head of auto research. battle of the charts next. you are going against joe weisenthal from with all due respect. he is a tough one. do you want to lead us off? what did you miss. david: oh yes. joe: this is a chart i have been watching for a while. it shows s&p 500 futures and white versus the yield on the 10 year u.s. treasury. they often tend to move in

concert as people sell equities and get nervous, yield goes down as people get optimistic by equities. yield goes up here they match each other through february and starting in the middle of march, they started to the verge. we saw equities continue to rise but we saw 10 year yield tumbled. lately, we have started to see the gap close. i have been watching this for a little while. the 10 year yield creeps up. even as equities holiday out sort of. there is not much risk on appetite. but we have seen higher yields. the question is will this continue? are we going to continue to see higher long and yield without many games going on with treasury -- treasuries or whether it will fall to her we will see whether this causes them in coming weeks. matt: very interesting, very bizarre. >> a lot of money is crowding into this and the yield goes

down. bonds.cally, people buy that has not been the case. >> this is the move right here. standing on the shoulders of giants, i am taking the bloomberg index that john use yesterday. a brilliant char and i feel really bad. blue, we have the index, financial conditions, as they get better. it gets worse as they go down. i inverted it. as financial conditions get better, it goes down and as it gets worse, it goes higher. the white line is the move index. the merrill lynch options volatility estimate, it shows how complacent bondholders are in investments are with the fed policy. are incredibly

complacent as financial conditions improve. i thought it was interesting because we all think the fed will not do anything. even more reassurance. >> it is fascinating. that is the one i like. i do not quite understand it. what do you think? jonathan: i will go with joe p are the most important thing in the markets. an interesting move. i often ponder this as well. we will ask how he thinks this bread reconciles as we carry back to the market open on bloomberg . ♪

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david: we will take a deeper dive into bp's cost-cutting plans. jonathan: why one of the streets

top analysts are keeping this stock as the top pick. david: and, overcoming a strong dollar by cutting costs. there are concerns about the diminishing market share. ♪ this is bloomberg and i am sitting here with jonathan ferro. we count you down right here on bloomberg . futures stay positive and dow futures are up 30 points. futures positive or points. all of this despite a disappointing u.s. durable goods number. it did not really move equity futures. a weaker dollar, cable is a big gain. a euro that goes through 113 up one third of 1%.

crude, wti, 1.6%. to theount you down market open, let's get you to three things before we go there. matt miller with the numbers. matt: very interesting. we see an increase in home prices. schiller has come out with its 20 city home price index. a jump of 5.38%. a little less than the survey. we were looking for 5.5%. better than a stick in the eye. this. grasped last fivee over the years, price gains into the double digits. we have settled about 5% gains throughout 2015 and 2016. 20 city home price index, 5.4% year-over-year.

jonathan: here with us, cio for global fixed income. welcome to the program. bp, number one, surprising with profit haired wife standard chartered is surging over in london. first earnings trading higher today after post a surprise profit was stronger than expected performance. lowest in 12d the years during the first quarter. -- wednesday, exxon, chevron, announced too much on friday. is a backup seen

videos together with crude pushing higher. the question is what is underpinning the bonds we have seen in the last couple of weeks. is it just oil? is partnk no doubt oil of it. we have not track the growth of the quarter this year. you think about what happened, the u.s. did not grow that quickly. but if you take that into 5%ount, third u.s. and about , when china made the decision in the middle of february, when the governor said, we could postpone reform, meaning we will grow, all you have seen is nonstop. you see it in the commodities market all last week. cotton or other commodities, china is growing in the leverage is building. you see it in all of the

commodities. all of these are coming into play and it is why rates are backing up. financial conditions are easier. they are going to grow the economy. david: it was not just joe with monetary policy. task at the things like that. the numbers are staggering. if you watch what has happened, you look at the index, fixed asset index, it is literally bending higher. leverage. for markets and commodities, the impact is tremendous. chinesets that the authorities are getting concerned, they really spiked up the prices. thehink about what commodities are. the best barometer of short-term. clearsures market short-term supply. you tend to overreact down and

up. in may fishermen this amount of sense. one thing they have to be careful about is -- too high to start with. matt miller with the chart of the morning looking at this. a couple are interesting. this is the one we were talking about in the morning. debt,e euro denominated and white, dollar-denominated debt. similar a majority but yielding 1.4 and the euro denominated debt is negative eight basis .oints it has to be incentive to get cheap financing and surely, the ecb, this kind of negative interest rate climate is allowing companies to refinance cheaply. you got another interesting chart here. this is still markets in china now.

still referencing the chinese commodities speculators, they have been running up the price of the stuff and giving filmmakers the biggest margins since 2009. put these things together and i have got to think people will produce as much commodities as they can because they can finance it for less than zero and getting massive margins. good: short-term sounds but long-term, i wonder. you build capacity. >> the tricky dynamic in china, we talk about japan, a derivative of exactly what we're talking about here, japan will announce potentially more negative rates are at we will continue to go down the path. exactly as you describe it, it what feels positive, commodities point of view, i think it has to stabilize. why wouldn't you just keep issuing the bond at zero, why wouldn't you just keep issuing?

what is happening is credit leveraging is moving up. you could purchase a whole lot of stock. >> we have not even discussed from the perspective of the investor right now. no income anymore. how do we think the credit market at this point? >> i gave a presentation, investing in a world that is not fixed with no income. exactly to your point. i think you have to run and we do more of a barbell portfolio. parts of the high-yield market are attractive. you get yields that make sense. we talked last time about emerging markets, places like mexico just under 6%, places where there are real yields. places to buy credit at negative yields does not make a tremendous amount of sense. david: we will talk to you more about that later on. is in tomorrow.

everyone seems to agree they will not hike the rates in the meeting. u.s. markets.ve download again in the global growth. it were simply domestic issues, should the fed rate hike? >> it is hard to separate it out because we live in the global world. aging of the world and growth is tough. i think the fed had a window to go a couple of years ago. auto sales of 18 million cars, right now, i think growth is decelerating. car sales are coming down a bit.

it exactly played out today. to do good.inues the corporate sector, the sixth straight quarter of negative growth. is hard to spend on inventory and hiring. i think what the fed is doing now if you include the rest of the world, it is exactly the right thing. you have to be a bit patient around the dollar because of the influence run the world, it is so profound. jonathan: i want to talk about fed communication. a room full of phd's, it has been reduced right now and one statement comes tomorrow. i one paragraph and one line. -- a one paragraph and one line. this rick lee -- read the tea leaves or stick to what he knows

about the world around you? >> two things we will want tomorrow. one is financial conditions and largely globally. we will -- it will be interesting to see how they talk about that. the other is data softening. i do not think there is much. i think it will be tough for them to move in june as well. i do not think there will be a huge amount on tomorrow's data. it will be interesting to see. we talk about the show, this is -- year we want to generate we equity markets are softer like kerry. -- increase more analyst

estimates. $100 million in risky assets which had its first annual loss since 1989 last year. it actually dropped. does this go to the point, i will not use the word stunning around in china, at least it is stabilizing to some extent? look at non-performers not growing significantly within the banking system globally, you have postponed and you have to take capacity out of the system. push it back. we will because of the influence on labor. that being the case, we think there will be more defaults and more defaults in asia. of i think the rate acceleration on those defaults will probably be pushed off of it because the growth is so much better.

>> we are starting to see actual defaults. some of them are state owned enterprises. it is not just private enterprises. we will not necessarily stay by all of this. >> it is to signals. yes, you have to change the way two, the leverage is a big part of the issue. where you will continue to see some pressure going forward, as well as in some other corpus and particularly the corp. is in the area where you have got to get capacity out. i have a chart that may make investors think twice about what is going on in standard chartered. ratio total, it goes back to two thousand seven, financial crisis, and all of a sudden the sudden, what is this? nonperforming loans as a ratio of total loans are approaching 5%. that was last quarter's data. the nonperforming low ratio

increased 4.9% in the fourth quarter. is just coming up. it has got to be scary. to help you out with that story without actually talking directly about it, standard chartered was a company's years ago that people said, euro -- eurozone banks dad and this bank is good. those investors ended up holding something they did not want to it has been difficult for a lot of people told the stock. income,e to go to your typically you would not go to if you do not have to. people end up holding the stuff they should not be holding? great question. it does not make a lot of sense. it will be a losing transaction, no doubt. in japan, purchasing negative rate bonds has been a fruitful

endeavor because it just keeps going. it is all about when do you put it on and when do you take it out. like places like mexico, you get 300 basis points of real rates, the economy growing about three, stable dynamic. is challenge going forward exactly as you describe. when the volatility picks up the cousin well, all we have done his post on, are you holding assets that are good quality assets, the assets that are going to perform? it will probably cheapen a bit. thefeel pretty good about ability to outperform the rest of the markets, i think that is the key to investment in the next few months. tomorrow we will have an exclusive interview with the ceo, bill winters. those matter now. justhan: the market open over 16 minutes away. let's get to the stocks with matt miller. matt: three stocks in the dow

here. tons of stocks coming out with earnings. topped analyst estimates -- estimates as well. the new cost-cutting program plans tosh tepid sales merge with dow chemical, raised its earnings outlook. prices boosted quarterly sales. what you see in the premarket. and a lot of movement with the exception of dupont. keep in mind they can move a lot more after the bell rings. we have jetblue and spirit airlines reporting earnings this morning. increase in passenger booking. you buy a blanket and peanuts which they used to give you for free.

obviously, cheap fuel helps. they now charge for everything. normal sized humans cannot fit in the economy >>. you see a couple of movers in the airlines. 49 stocks in the s&p 500 coming out. a ton of earnings today and obviously, one of the biggest companies in the world after the bell. jonathan: it really needs no promotion. thank you. two vonnie quinn with first word news. >> they decide the future of the democratic presidential candidate bernie sanders. hillary clinton suggesting the end is near for the sanders campaign. sanders says if clinton is the nominee, she has to convince his supporters to vote for her. the indiana primary may determine donald trump's

prospects. he called on rival ted cruz and john kasich to quit. elected members of a committee that will recommend whether to impeach -- she would have to step down temporarily. i could happen as early as may 12. .lobal news 24 hours a day i'm vonnie quinn. david: much more is ahead. coming up, the largest company in the world, apple has dwindling iphone sales but there may be something that could offset that. we will talk about that next. ♪

jonathan: welcome back. have you ever wondered what is on rick passes bloomberg? i can bring it to you right now. the one thing he is looking at right now. rick: maybe we go a bit further and the question is, are they going a bit further on that, are they going to execute a plan to provide went need to the banking system or are they going to buy a good deal of equities? the consensus, there is not a big consensus today. they could buy up to 10 philly and yen in terms of equities. i think it is a big deal. .he nikkei's eight or 9% he look at what happened to yen

over this time, it is obviously strengthening and it is now .tarting to back off the deal in terms of developing markets, which japan will do. it affects flows in the world. if you are a japanese insurance company pension fund, how you innk about your investment , a huge amount in the markets. >> what happens if they take either of the choices? >> i think negative interest rates does not have any tangible value. larry fink is on tomorrow to talk about the same thing. people get nervous and do not consume as much, you want the long end of the year to death yield curve to move. the only benefit people talk

about is helping currency. equities, orto buy what mario draghi did in terms of buying credit or opening the credit channel, those initiatives can hit the right part of the financing mechanism, and i think how much corroded dozen where he goes over the next couple of days. impactful.will be keeps pressing a negative interest rates, i do not think the market will be happy. classes you were advising, it would be to go qe and not negative interest rates. >> to some extent, fiscal policy. if you death in the monitor policy today, what i do more in terms of equity, or more on -- in terms of capital stack, i would. tomorrow, and exclusive interview with the black rock ceo larry fink right here.

the opening bell is moments away. a look at new analyst calls next on bloomberg . ♪

matt: let's take a look at some analyst calls. this morning, a ton of earnings out. 49 companies in the s&p 500. let's start with some of the retail movers. and earnings look more than an analyst call look. third quarter results topped analyst estimates. sales improved overseas in north america. the maker of premium handbags and shoes is cutting jobs and shaking upper management as he continues the turnaround. it will cut 300 corporate jobs resulting in a 2% reduction in the workforce. shares are up.

t-mobile with a seventh straight quarter of adding more than one million customers. the company announced his overall customer growth for the year at the high-end of estimates. a 2% gain for the company the premarket. do we have time to do more? jonathan: just take another then we.5 minutes, and will come back and you can rip open the market and that will be great. i look forward to that. next on bloomberg go. futures are positive for any u.s. u.s..e in the ♪

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x1 makes it easy to find what you love. call or go online and switch to x1. only with xfinity. e.t. phone home. when you find something you love, you can never get enough of it. change the way you experience tv with xfinity x1. jonathan: this is "bloomberg ." i am jonathan ferro. s&p 500 futures positive up three points.

dow futures over 30. the rally continues in london. of performinggs 10% of the s&p 500, reporting earnings today as you hear the opening bell. story versus the pound. brexit risk, is that subsiding? .3630. treasury yields going nowhere. nymex crude up to $33. 20 seconds into the session. matt: let's take a look. the major averages. gains across the board as we get a slew of earnings in. i will pull up the imap. sectors arendustry

up, but energy and materials are the biggest trainers -- gainers. if you look at the biggest loser so far, energy, materials, order.als, and that and the biggest winners in today's session. let's check a bunch of materials companies. miners coming out with earnings. cutow barrick beat and will costs more aggressively. free four gasp freeport -- freep ort-mcmoran also cutting. at ant is nowadays -- now buy equivalent. fiat chrysler also out this morning. the company disappointing, down 2%. jonase talking with adam

about fiat chrysler. he says this is a company that has not been able to keep up with the technology. marchionne has always said better late than wrong when it comes to a cars. the stock down. earlier -- wase down earlier. we will check that later. david: apple will report its earnings. in january, it warned it will probably have a revenue dropped. --t would be the third time the first time that 13 -- aligned our be the first time in 13 years revenues dropped. gene munster joins us now from minneapolis. and we still have rick rieder here. i want to go to jean -- gene. explain your view on apple. i think everyone agrees it is a great company.

the question that strikes me is growth and valuation. gene: it is not as high as a growth story as it used to be, is reflectingion and even lower growth rates. the iphone will be down 15% in the march quarter, and it should be up 7% in the december quarter. we think the multiple will expand, going into reasonable growth. on top of that, you have the services business, which is a new aspect to the story. and is higher growth substantially higher profitability. the combination of those will be a positive for the stock. david: when you talk about services, i assume you're talking things that are sufficient-based. that is a change for apple. i think of it as a hardware company. change. is a

the basic idea is they are finding ways to monetize the specificallytem, in their services business, you talked about itunes music. the app store is the biggest part of it. there is also the itunes and applecare and apple pay. the combination of those experiences around ios. those are more sustainable. it is not the hit and miss in more of product cycles, about our everyday engagement in the apple platform. that is why it should have a higher multiple. i think they are just getting disclosures around that. we will get increasing disclosures, which should be positive for the valuation. >> one of the things i have been truly amazed why is the amount companycash flow the throws off that i would argue is a store and to keep margins where they are.

where you would think margins would compress over time. is that sustainable? can you continue that over the long term? the next fewy over years. it is sustainable. investors expected margins to come down the next five years, and that has not happened. gross margins have been around 40% the entire time. there is debate whether or not to have a branded car, that would be an example that would open a large market that would be punitive to their margins. as far as sustainability around the margins of the iphone, we feel good about that. but the broader topline growth story could be negative to margins longer-term. matt: i am looking at the cash and seeing $215 billion in cash and equivalents. is this the kind of war chest they need to build a car? gene: it is.

they have a lot of debt as well. if you look at the net cash, it is more like $160 billion. still a huge amount. that is the type of money they will need to be more aggressive in auto or in augmented reality. that is the type of thing that mark zuckerberg is intense about. tontually, apple will have replace the iphone. that could cause a large of -- a large amount of investment. the massive buckets they will spend money on is augmented reality and auto. through thet me earnings release. if eyes strip out iphone cells, which will always make the headlines, what is the one metric you will be looking for? gene: it has to be the iphone. or upside ofine that. also, the guidance -- the streak

is looking at around $47 billion in the june quarter. we expect a 2% guide down. that is a symptom of the hardcopy -- hard compds. -- comps. is interesting you talk about the services side, then you talk about cars and augmented reality. you have not talked about the iphone seven now. does that mean you do not expect anything major in fall? gene: exactly. we think this will be a nominal upgrade. it will have the effect of returning the iphone to growth, because there is an and go affect where people who bought iphones two years ago will upgrade with this cycle. and it will gain market share with that. the big reason people upgrade their phone is not because of some killer feature. the reason is their contracts their phones are

slowing, and they need their phone. rateigh 90% retention needs to be intact. jonathan: is that path enough to have the target has? is 133.ensus what justifies your price target now? from what i have heard, we did not really hear enough. wee: from our perspective, think the multiple will expand. the question is how much and what justifies that? ourevaluation is based on 18 time the 2009 estimate. inthink that is justified part because as the iphone returns to growth and investors become confident it will turn into the multiple. perspective, this is 10% of the revenue grown and operatingith a 15%

margin. the overall is 30%. if you put google as a multiple, just on the billion services business. i think those combinations, even though it seems outrageous the stock could get to 170, it i think it is realistic. after apple will report the bell, scheduled at 4:30 eastern time. thank you to gene munster, tibor jeffrey senior analyst. -- piper jaffray senior analyst. jonathan: next up is proctor and gamble's cost-cutting strategy enough? we will speak to one analyst talking about the company's diminishing market share. ♪

matt: i am matt miller. eastern, at 10:00 a.m. former greece finance minister and what cycle rider yanis varoufakis -- and motorcycle rider yanis varoufakis. vonnie: you're watching "bloomberg ." quarter product nearly doubled at fiat chrysler. it expects americans to keep demanding bigger vehicles because of relatively low gas prices. the crisis that wiped out half of me to deceive -- of mitsubishi's market value has gotten worse. three former prosecutors have been named to a panel to

investigate. his the death of prince, record sales soared 40,000% according to the "l.a. times." 2.3 million of his tracks have sold as singles. that is your latest bloomberg business flash. david: 13 minutes and a bit into the trading day here. matt: ibm has boosted its one dollar 40 cents a share from one dollar 30 cents. i believe it is the 21st dividend boost ibm has given us consecutively. so ibm yearly does this. slew ofa great sloew -- analysts who forecast these things -- they were exactly right. here is the intraday move. not much other a reaction, probably because shareholders have in paying attention. use the bloomberg.

3m also out with profit that was boosted across divisions as it dollar strength. it beat estimates pay proctor and gamble also came out with profits that be estimates. it is cutting costs to christian sales.ion tepid still fire 10% of its entire staff, because it is doing the merger with dow. those are the synergies that the make talk about when they their case for the merger. earnings coming out after the , ebay,nclude chipotle and twitter. it is not just apple, now after the close. you can see these stocks rising into the earning reports. chipotle open?

it does not open until 11:00 a.m. i feel like they need to open earlier for those of us who want burritos for breakfast. jonathan: go and tell them. matt: i will be one of the crazies asking questions. jonathan: the nasdaq up around six points. let's head to abigail doolittle at the nasdaq. abigail: one stock plunging. the -- fda approval panel backing has disease from the muscle drug. shares of sarepta therapeutics now down 95% of the year. one stock that was faring better

in the premarket but is now down -- actually flip higher again -- t-mobile. this after the company added one million subscribers, boosting the full-year outlook. is bullish on these results and on its free cash flow generation's prospects. he's a just t-mobile may just climb above the recent highs. jonathan: cost-cutting continues to be a trend among companies that have reported earning so far. proctor and gamble know chipping with rivals away at market shares domestically. it has focused on trimming expenses. p&g shares down -- down slightly. here to talk about it is nik modi. p remove&g --

strategy theutting best one just to combat slowing sales? you have to cut costs to create money to reinvest and get your top line growing. that is what they are setting the stage for. the last couple of margins have been better than expected. they have been telling us they will reinvest heavily. it is the right move here but these things take time. david: are the two directly related? getting out of relatively low-margin businesses, which will increase their margins. nik: the businesses they are getting out of was about a 100 basis point track. that is still tepid growth. p&g needs to start address price gaps with the competition, because they have been losing shares.

internally, there is culture healing taking place. and the new ceo is the right guy for the job. jonathan: final market -- final, on the fx market. wind should become a tail wind should become a tailwind in the coming quarters. earnings?ft -- lift most multinational companies have been moderating the hits from fx the next couple of quarters. we will not get into a tailwind until some point next year, only if today's rates hold. modi, rbc capital analyst, thank you. rick rieder still with us. a series of companies doing this -- cutting costs. good for credit? rick: ultimately good. topline revenues for companies have been sliding and simultaneously, what has been

happening, is the selling genera unmatured has been pressing margins. the cost of labor is also moving up. it is a natural dynamic that you have to start pressuring costs sunraysless you see reason topline revenue will accelerate significantly. with some better numbers the weakness of the dollar and some of the dynamics about china and the international growth. but no doubt, you have to keep costs down in this environment. david: which is hard. companies have it easier increasing cost been decreasing costs. hiring people is easier than getting rid of people, as a practical matter. but if you do not grow your top line, it does not say much about global growth. rick: part of why we talk about why the fed is probably right to

be patient. if your top line is not growing, capital orgrow hiring. that is where we will be for a wild. will is only one thing price growth higher. it is a discussion about fiscal and infrastructure. i that when my boss talks about it tomorrow, more and more we think you will see the dialogue change away from monetary policy. things like infrastructure. things that will create durable growth and put people to work and create a more consistent growth paradigm. passing rates for the negative will not do it. jonathan: is that not the last thing they want? inflation in the likes of japan? rick: then who? jonathan: anyone who was sitting on 2% of gdp. rick: it is all about relativity. the hard thing is when you are running the debt pile, when you

are in a deflationary cycle, that debt becomes more expensive. you want to have deflation run. we can live in a world where moderate growth -- inflation will not be as high, because technology gets so significant -- but you cannot have a deflationary cycle with so much debt. it is white jockey -- why draghi presses on it. you need inflationary expectations to be positive to get companies spending. not too positive. you do not want to deteriorate your currency. .hat is the worst of all worlds you want reasonable growth. you want nominal gdp to replace where you can de-lever the economy. obviously they want growth to pick up here but can you grow out of a situation where your debt is 200% of gdp?

and you go from -10 basis points to a more normal level around 3% to 5%, that would ruin japan, wouldn't it? rick: the other dynamic as you have a demographic -- david: bring productivity into this. rick: the headwinds in japan are probably the strongest. the manufacturing dynamic. so what do you do? it is one of the few places in the world where you have the neck and is in. that is the only thing that works. you have to have structural reform, fiscal initiatives, and easing on the monetary side. the challenge is arguably bigger than any other part of the world. it is going to be hard. really tricky going forward. it is all about can you let the margin do things like postpone the back tax and get a little growth?

they will have to do a lot of little things to get it to work. jonathan: rick rieder from black rock, thank you for joining us. david: up next after "bloomberg markets."bloomberg former finance minister of greece is joining us. --o, we have countries king part ofking, ceo of countries that got this huge -- and john nicholson. we talked about how he is on the zynga's premier team called leicester city that had as much of a chance of winning the bonosh premier league as has of becoming the pope. but apparently, that may be true.

so he will join us on how he might the right here. jonathan: looking forward to that. betty liu, thank you. 6000 to one. i still cannot get over what is happening to leicester city. david: it is more than the chicago cubs winning the world series in anything in the u.s.? jonathan: i put out a question on twitter about the u.s. equivalent. it is like a college division in third and winning the whole thing. ♪

david: tomorrow, larry fink right here on "bloomberg ." jonathan: that is it for "bloomberg ." " bloomberg markets "bloomberg is n -- next.berg markets is ♪

betty: it is 10:00 a.m. in new 10:00 p.m. in hong kong. from the bloomberg world headquarters in new york, i am betty liu. am markd in london, i

barton. this is "bloomberg markets" on bloomberg television. ♪ we will take you from new york to london to washington. the federal reserve begins there two day meeting this morning. no rate hike expected. investors are closely watching wednesday's statement, including on inflation and global headwinds. mark: big day for earnings. 10% of the s&p 500 report ,esults, including apple procter & gamble, and at&t. betty: and bloomberg talks exclusively with the nfl commissioner. what he says about the suspension of the patriots quarterback tom brady.