york toe'll go from new london to san francisco in the next hour. here is what we are watching. xbox writing after the oil giant. chevron misses earnings. crude oil is set for the biggest monthly gain in a year. u.s. outputs drop. with robertl talk kaplan. why he says the markets may be underestimating how soon the fed could move into higher rates. how they couldon impact the global economy. betty: shares of pandora are soaring. about their tough competition in the online music business with pandora ceo tim westergren.

a lot on tap this morning. the go to the market desk were julie hyman has the latest numbers for consumers. is the sentiment reading from the university of michigan. we are coming to 89 and 90. people are not so optimistic. a slew of economic data with personal income and spending. all of that is pretty much in line with estimates. you are seeing stocks fall across the board at this point. all major averages in the red after sequences decline. so, continuing the selling other get further into today's session. what exactly is driving the selling? if you take a look at the s&p 500 and the bloomberg health care, it is the worst-performing group today.

so, a lot of the cyclical groups , although health care is not necessarily cyclical. energy shares are now little changed. earlier, it has been one of the where -- rare areas in the green. we'll talk about big energy earnings. even though year-over-year, it is on a decline with net income it did come way above $.28. the interesting thing here is that the boost it was not from the so-called upstream business. rather, it was from the petrochemical business which saw a 38% increase. it is hanging onto gains. chevron is lower, posting the first loss going back to 1992. in 1992, oil prices are $18 per barrel. it is interesting that we were seen that once again. that company is posing a 61% drop in earnings.

it is defining margins not so strong. but as some of the other energy producers. that energy index is now, as i mentioned, going down. we have seen a little rally in many of the stocks. although, many of the companies that have been volatile like southwestern have seen huge double-digit gains. overall, we have seen a big increase in energy stocks for the past few months. take a look at the bloomberg #1122. this is the rally we have seen in crude prices. what we have added to the market cap globally is about $400 billion. so, they have been quite happy about the rebound we have seen in oil. i had a similar looking chart on. of the upstream price not doing as well as their others. i think this chart illustrating here.

where you see that, even though they have this huge plunge that 2013, thehe middle of price of oil falling off the cliff. exxon has not been able to keep up the pace with their construction costs. in fact, there are lifting those costs for the year. finally, they're starting to bring them down. you ifthe idea is that you are an energy company bowl, and all these companies are cutting cost romantically, they will be an better shape as a oil prices continue to rebound. oil prices have been higher today. we have seen a downward move in the oil price hike. we have been seen a rally for the fourth straight session. that has very sharply turned around. let's take a look at the u.s. dollar. they have been feeling some gains in oil.

they are not helping oil anymore. that has not been the combination of the lower dollar as well as with falling production. some things change. mark: it is pretty glam here. every industry group is trading lower on the stock europe 600. the index itself down by 2%. the biggest fall for the month. we are on track for our first weekly decline. we are on track for the second decline since the index hit it second of february 11. this month, the best-performing industry group, basic results. and basic results is are falling. what a big quake it has been for weking's earnings echoed have lost more than double missing estimates because of the 223 million pound impairment charge which was primarily

.elated to exit they also paid 1.2 billion asnds to the u.k. treasury part of the bailout repayment. also, it will take longer than expected to resume dividend payments. it needs to complete a series of tasks before it follows with the first payout since 2017. as i've showed many times this week, all the u.k. banking players, we're in the middle of the board. they have a standard chart down by 45%. really quickly, the british airways say the fight has been hurt by the brussels terror attacks. they had inflation in the new

area. falling -.2 percent. that was more than expected. it was a long way away from the ecb. it inflationme, was a 2%. so, yes, growth rose. but the inflation -- where's the inflation? inflation, that is the hope from mario draghi. it is hiding. let's get to first word news this morning. vonnie quinn has more. vonnie: thank you. we begin with vice president joe biden. did not say what they are planning to discuss in a private meeting. the sitdown with the cardinal is his last stop at the vatican. he talked about regenerative medicine in vatican city.

they plan to meet with the italian president. officials say 11 bodies have been found after a helicopter crashed on an island off the coast of westerner way. it was carrying 13 people from an offshore oilfield when it crashed near the city of bargain. the broadcaster says 11 of the 13 people on board or employed by the oil and gas company. helsinki, a tunnel is warning the finnish government that they could expect harsh reactions from russia. havea and for ministers the military technical response. nato supporters in finland and sweden are dealing with the ukraine crisis. and, investigators in minnesota -- looking into whether the the gentleman died of a drug

overdose. it was going on in the weeks before his death. there are are reports that prescription drugs are found in the singer's body. global news, 24 hours a day. powered by our 2400 news journalists. i am vonnie quinn. betty: much more had come up up the volume. listening hours for pandora. pandora ceo tim westergren joins us next. it an exclusive interview with robert kaplan. that is on television and radio. he has potential risks for the u.s. and global economies. they might keep the fed on hold.

mark: live from london and new york. betty: you're watching "bloomberg markets." it is time for look at the business flash. volume pharmaceuticals has filed a annual report meeting the self-imposed deadline. that means bondholders attend noticing of the fault with the financial report. they are under investigation by several agencies. they have nominated new board members. they are under incoming ceo. the debt crisis enters a new phase as weekend, and less they can go through the bond payment for the coming days. there and need of a technical default. congress is looking at a rescue

plan that will probably not be brought back until congress is second from may 10. that is your business flash. shares of pandora are surging following an encouraging earnings report. first-quarter sales topped estimates and increased 4%. for more, emily chang is intent san francisco with the pandora ceo. emily: tim westergren, thank you for joining us. since theot been ceo company has 40 employees, why are you back in the chair? tim: i love the company and i believe in it. i have been the foreign manager for all these years. i feel connected to the company. affiliate is the right time. tim: the strategy is intact.

we had in january the same plane we have no. i'm really working to build from this huge foundation we have. we will expand this into new features and sets. emily: pandora has explored a sailor this year. tim: you do not hire a ceo and invest like we are. it is full steam ahead. again, we spent 10 years building the underpinnings of a really big business. emily: now, active listeners picked up that this is not a huge increase. will it take to drive that growth even faster? tim: we have 100 million people that come to pandora every three months. that is a 25% pool. the first half, how do you make those listeners monthly listeners deco the big catalyst of that is ce and auto. making pandora more of a habit

to more places. outing ahead, we will roll more expensive features that we talked about. more activity. that will allow us to provide for all the things people want in music and one spot. , they want to listen to a song. we want to keep them on pandora. i think last, but not least, we will add some more live events. this might be your one-stop shop for music. ; millennials spend more time on pandora than youtube. dropped morehas than 40% over the last year. why? what are investors missing? tim: i think it is a lot of misperception about the company. it is my job. any to make sure the story is clear. a lot of our strengths are not immediately visible. the engine that drives our song alection on the radio is

fantastically hard problem. even as we have a lot of competition and people talk about free alternatives. our per month listening has continued to increase. i think that is the reflection of this massive investment. the second is motivation. we monetize our products pretty closely. it is only 1/5 of the ad load. those are two huge strategic pillars for us. they are not very well understood yet. when we talk about that story, it brings up the next coming months. emily: what about listeners choosing what they want next considered is waiting for what comes up? how close are you to that on-demand platform? tim: audio acquisition brought in great talent to help us fix it. the word thing about it is that this will not be a youtube service. our 30 million songs in a search box approach is not how we will come to this.

we have 100 million people that come to pandora. we note baton about them. what songs they like, what stations you are creating. we know a lot about preferences. we can bring you into this environment in a relevant way. so, we can take in with the music we already know. walkinging that problem to the record store you can have everything, what do you do? pandora console that for us. i think will be a version of on-demand. labels asking for the same rate for the give spotify 70%? would you pay that? tim: i suspect that we will be in the same ballpark for services. wille hoping that labels look to be flexible on how the prices come to market. i threw one it -- i think one of the great opportunities pandora has is to address this tens of who are of listeners

not typical subscribers and i'm not really thought about it, to introduce them to premium services. we want to hire for our product. if we have some flexibility, we can really expand the industry. emily: you said pdora's about to get louder with advertising. when cap or more usage than youtube in the united states. have these levels of maturity. it means we need to speak louder and invest more in marketing this year. products, you will see us be more vocal about that to declare what we're doing. emily: beyonce drop entire album with exclusive streaming rights. what is your take away from that? cannot change the future for title? are increasingly seeing more

and more artist rebelling against streaming services. tim: i think that you will see a handful of artists who actually have the stature and the audience to do those kinds of things. i do not think that will be a broader trend. i think they will want to make the music broadly available. i do not think that will stretch beyond the top artists. emily: of course, founder of pandora. i'll send it back to you. betty: emily chang in san fran. it is friday. tgif. we have your weekly look at the $3 trillion etf market. we tracked social media sentiments. stay with us.

betty: you're watching

"bloomberg markets." i'm here at mark barton. is good to julie hyman. we go with our weekly deep dive into the markets. julie: what to say on twitter could end up on the etf. are selects stocks based on social media sentiments. here is our etf guru eric. there are a lot of etf's that tracked social media stock. this is different. it is stocks of being talked about on social media. eric: that is correct. it sounds a little gimmicky. but, i say let's just look at them. the first is a social media insight. what this does, i'll just give you the process. you know, some people already do this. it is like a fundamental analysis, or technical analysis.

basically, we look at the 100 most talked about stocks across 20 to 40 financial blogs. then, we go what is positive deco who go through who is saying. we find somebody with good predictive ability. then, that is how they get the 25 stocks in the etf. they weigh them by sentiment score and balance them every month. that is essentially, how the etf operates. it is very quick. where, this is holding the basket for some amount of time. there was another index out there called market profit. shorted stocks that were negative. that is not out yet. the person who started this one, they said their think about this one. just come out with one that is easy to understand.

that is just the general play. look, there a question i have for them. are you going to stocks if the price already goes up? they claim that no. there are stocks that will get eventually come to of a cross that is going through google to ford. you believe that social media they willsentiment have stocks that are owned and the s&p. julie: would this have performed that way when they introduced a? eric: just assume that they have outperformed. it.nnot look out nobody will launch an etf.

julie: this is the one you're just describing. the other one is a crowd investment etf. is there methodology similar to the others? eric: they said we will base this on the wisdom of the crowd. so, they have an app which you can sign up for. there are 500 users. of people vote on stocks. they vote on one per month. they are like antagonistic. actuallythe crowd is unbiased. that is the thing. some people can finance. some people do not. basically, they're trying to get a sample of the crowd. then, they'll put the stocks in their that the crowd votes on. in a way, this is all dependent on the one app. other one goes out into the wilderness and scrapes data all

over the place. a little different, but the same time is that the sentiment is weighted. i'll send it back to mark barton. mark: thank you. still ahead, who will be talking with the fed reserve bank of dallas robert kaplan to get his insight on the state of the global economy where the fed might move to hike interest rates. that interview is next. ♪ âi

betty: live from world news headquarters here in new york and london. i am betty lou. from we are seconds away

an exclusive interview with dallas fed president robert kaplan. before we begin, let's have a look at what is happening to european equity markets on this friday session. it looks like we are down for the week. after two weeks of gains, it looks like stock markets will finish the friday session low. every industry group is falling. it has been a good month. it is the last trading day of april. stocks in europe have risen for a second consecutive day. there has been some bounceback since february 11. that is where the stoxx 600 hit its low. the gauge has rebounded by 14%. i want to welcome our listeners a this on bloomberg radio and television. i am mark barton. i want to introduce a special guest. robert kaplan will join us from london exclusively. thank you very much.

the big piece of data this week was the u.s. gdp. we have the worst quarterly performance in two years. cetaceans cannot blame the weather. we have seen back after the first quarter, what sort of a risk is there that will see a similar bounceback this time? there is a risk on the positive side that the consumer is getting stronger. their capacity to spend should be improving. so, we are very hopeful that you will see a rebound. we are is what expecting. it is what i'm expecting. mark: the slow growth mean the federal reserve should take more time before it raises interest rates again? the job market has been

strong. so, right now, i will put it a little differently. we need to reconcile gdp data with job data. that will have been one of two ways. job data will get weaker or, the gdp will get stronger. i'm expecting the latter. i think that if that happens, personally, i be moving towards advocating some accommodations removal. betty: this is betty here in new york. you mentioned that you believe that the consumer will pick up. so far, what we have seen is that any income gained by the backmer seems to be going into their bank. they are pocketing that money and not spending it. how do you get consumers to spend that money? robert: the question becomes why are they spending. one is the financial turmoil of the first few months of this year had a real impact. it is understandable to turn on the television and say turmoil,

you're not as likely to buy a car. thatther thing is political uncertainty is having an effect. it's also that the population of the u.s. is getting older and people are thinking a lot about saving for retirement. the truth is that only time will tell. people have the capacity to spend, that is the first step. it is just a question of when will we see that? to take aalso have look at the improving job market. we are almost at full employment here. translateat going to into substantial wage gains, which we really have not seen. robert: we have not seen much other than in skilled trade. i think part of what is going on, there are different theories . the job market has never been more global. companies are thinking globally about where to hire. they have choices to position jobs globally. downwardhat puts

pressure on wages and effects in negotiating wage earners. that is unless you are skilled trade. i think that might be part of why you are not seeing more weight pressure. i want to bring in our economics editor mike mckee. mike: i was listening and had a question for mark barton. they said i should ask it. mark will be going to the voting booth on june 23. you will be making a decision on interest rates on june 15. how much is that going to impact what the u.s. does." robert: it will be a big factor. you laid it out right. our meeting is on the 15th and eight days later is the vote. i will have to make an assessment on june 15 what the likelihood is. and, right now, it is a little bit unclear. it is a little on clear. if it is still unclear on june 15, that will be a big factor.

polls,f you look at the they are notably unreliable. so, how will you make that assessment in just eight days ago robert: i've had lots of conversations about this. if the polls are unclear, and they showed to be close, then you have other measures which are more lopsided. the reality is that we will have to see what is available. if we cannot come to a conclusion, that will be a big factor. >> let me follow up. should the british vote to leave the european union? let have such an effect on the global economy that it will take the fed out of the game for a wild? robert: i will not comment on something -- my own sense is that it is more likely than not

that it will not happen. we will just have to see. i will wait until it happens before a comment. clearly, there is a range of impacts. u.k.are moving along the currency and ripple effects that might have four other countries impact on equality and other will create some instability. so, it will be a factor and we will ask if it did happen, we will take some time to digest it. betty: since we are talking -- nots, want to ask you necessarily that i want you to comment i want the bank of japan did not do color this week, but what are you learning about what is going on in the situation in japan? robert: as you know, i live there for almost five years. japan has two big problems. .umber one, an aging population and they have a shrinking

population. number two, high levels of debt. both of these issues interact with one another. it makes the dead issue worse. is nottral bank easing going to address any of those issues. it might buy the country some time to deal with them, but, it is not a substitute for structural reform. i know that japan is trying to get more women in the workforce. that is an example of an appropriate structural reform. i do not think central-bank actions will solve this. they will have to deal with these structural issues. that is probably true of central-bank action in an advanced economy. they can buy time in be helpful. they will not deal with a real structural issue. betty: using that is why they decided not to move? they could be, because there are ripple effects on financial institutions. the reality is that i think they

are independent of this. they certainly did not expect the yen to strengthen as much. there is a cost to negative rates. it does not surprise me that they might decide to wait a little bit for some of these to unfold more before they decide on their next move. doj bringsng of the me to currencies. many have said that the fact up mightdoj have stood give you a window. they might hike rates with having too much of an impact on the dollar. can you elaborate on the risks to the dollar from other central banks and, how it is playing into your thinking. the fact that it came down from an early year high. robert: we had two very rough months in january and february. the fed very clearly slowed down . the dow in march had a lower

rate of -- line of rates. i think that slowing has tobined with other factors help stabilize the markets. i believe it has been helpful to china in their stabilization process. i think it has created less of a divergence. clearly, greater divergence tends to strengthen the dollar and tends to create a healthy ripple effect. to the extent that there is less divergence, i think it makes it easier for the fed to manage the situation. mark: with china, and the meeting, you said you are less worried about the risks proposed by global economic weakness and financial market turbulence. i will ask you about that. how relaxed are you about those

risks, relative to the beginning of the year when we saw a flare up in turbulence? robert: the good news is that on china, the last month or two has been a time of increased stabilization. they asserted some reforms that made it harder -- harder for outsiders to arbitrarily currency. they will not reduce internal capital. and, i think we are seeing some stabilization. but, i always remind myself with china, their big issues are overcapacity, high levels of debt to gdp. in aging population, and they're making a long-term transition from being export driven to being consumer driven. that will not be resolved quickly. this will go on for many years. my judgment is that i'm glad to see stabilization. i'm also mindful that what they're going through will go on

for many years and, will always be vulnerable to bouts of financial instability several through the rest of the world. with the central banker for the united states, those ripple effects in china can cause financial situations to tighten very quickly. that is what will china so closely. this will go on for an extended time. michael: you have a decision on september 21 in december 2. if the british election could impact fed policy, good the u.s. election do so also? robert: i will answer this way. i have said this before. i think what is going on in the political arena, as well as any political pressure should really be something -- in my approach -- we will screen out of my thinking. to the extent that political

uncertainty come on the other hand impacts economic conditions, maybe consumers are less willing to spend and companies are less willing to spend on capital, that should factor into my thinking. , in terms of the fact that an election is coming up, that, in and of itself for me, not impact my position or what i'm advocating, unless it has created enough uncertainty to impact the underlying economic conditions. michael: do you think it is creating that kind of uncertainty and go people are running around talking about how bad things are. robert: you go back to the first quarter. it could be residual seasonality . it could be uncertainty because of financial turmoil. the truth is that you will never know for sure. we'll have to see how the second quarter unfolds. i'm watching that carefully to try to understand how the consumers thinking.

the are dealing with consumer to try to get an idea of how consumers are thinking. this is just something we will have to be watching very closely. robert, when janet yellen, was on the stage with her predecessor a few months ago , i believe it was last month, she said that she did not think that a rate hike in december was a mistake. she thinks that we are on a gradual path of rate rising. do you think that it is a mistake to continue to focus on the dot plot as a determinant, or a big indicator of where rates go here? robert: i agree with what she said. i do not think december was a mistake. have these cautious increases. the dot plot has to be punt to the right context. redone quarterly. it is a good snapshot of what each of us think at any point in time. people just have to remember that it is not a commitment.

it is not a forecast. it is basically just what we think on that date. we will redo it in june. i think that people sometimes read too much into it. i also think on the positive side of that it is a good indicator of what we're thinking on the time that we do it. mark: one last question. the 40% probability of a rate hike on the w ip function looking a little bit too dovish? market expectations are down to 14%. robert: let me put it this way. if i seen improvement, will not get ged data by the time. we will have the consumer price information and other information. if that is changing over the next three months, i do not know whether it is june or not, i cannot do it on individual meetings. i will tell you that if we see better data, i will be advocating that it does not last are future. to answer your question, i think

these probabilities should come up. mark: it has been great talking to you. thank you. robert kaplan. president of the federal reserve bank of dallas. and our bloomberg radio listeners. thank you for joining us as well. that he is yours. betty: thank you for joining us. now, much more ahead on bloomberg markets. alexander hamilton may be a hit on broadway. would he be a hit in the beltway? more on that story next. ♪

betty: alexander hamilton's legacy is helping celtic's on

broadway. the founding father may have something for washington. economic foresight in the magazine's editor alan pollack joins us now with more on this. we know it is getting a lot of attention on broadway. should be getting more? allen: he's a off, that is right. -- it certainly raises some issues that are important. basically, hamilton believed that the federal government should be able to tax and spend. if you believe a smaller federal government, you might enjoy the broadway show, but not into what he believes. mark: how popular would he be if you were around today? ellen: i think people would argue with him. he believed in tariffs. that is a hot topic now. -- sort of modern terrorists, because he wanted to

protect these industries in the u.s.. some people might find that appealing. if you are purely free trade, you might have a problem with that. betty: i want to pick it to another story on bloomberg businessweek put out last week that was very impactful. it was a story about amazon and their delivery error. what happened with that story? ellen: the story was a collaboration with our graphics team. amazonoked at where offered prime one-day delivery services. they had in certain areas where was not offered. so, it created a bit of an uproar. massachusetts of complained and asked him along what was going on. as a result, amazon announced that it would start same-day service and roxbury which had been excluded. instead, politicians from illinois and new york city, from the bronx have also asked amazon

to explain why this is the case. and, to ask fcc look into it. betty: ok. very key there. you said amazon is starting a service. the halve the hole in the big doughnut. ellen: yes. betty: alan pollack of bloomberg businessweek. mark: the luxury hotels are having their worst order since 2009. find out why occupancy rates are dropping. that is next.

mark: london's luxury hotels are having their worth since 2009. the priciest hotels are down 70%. what is keeping the world's wealthiest travelers at bay?

the managing director of christie and code joins us now. what is behind this big drop-off? >> of there is a 6.9% drop. i think what we're looking at is just a key one statistic. there are two parts of that. number one is a seasonality. this pollof year goes. in march or april. that can drive the decline. we see that donate, 2009, 2016. the drop-off is higher than what we would like to see. concern about the uncertainty in the market especially with overseas traveler. mark: there are terroristic concerns. putin is advising staying at home. what about the upcoming referendum?

address: i think that we are dealing with the transaction market. sales and hotels, people are taking stock and saying let's see what will happen, then, we will push the button walkway from the deal. i think that it is more of the geopolitical economic environment that is hitting the luxury market hard. betty: do i have to pack my bags and get a ticket to london? >> are not think that is the case, yet. what people are doing, they're the hit onaintain the occupancy sales. you look at the latest global, the luxury segment is still much saying that 275 pounds per night. so, there has not been any huge movement there. i think they'll try to keep that above all costs.

betty: let's say this persists. i do not want to jump to conclusions, but, could hotels start to go out of business? that is looking at it at this one quarter from i think there will be too much concern there. i do not think hotels will close. i think what we are going to see is that we are doing a decent number of generators. had 4-5 yearsave of strong growth in the market. one quarter will not offset all of that. if you see the average rates start to drop, we will see the concern there. be priceed to competitive adapted to their offering. they had an increase of 2.5%.

m&a, putting the roof front of will it be a good >> they have this taking place. just this week, h and h from which,s into carlton, will also have a big stake in residue or hotels. and, thereby into fair mark. ofy are expecting a lot activity to continue. thank you for joining us. the european close is minutes away. do not miss it.

from ploorg world headquarters here in new york, i'm betty liu. mark: you're watching the european close on "bloomberg markets."

marc: from new york to london in the next hour, here's what we're watching today. we got a snapshot of progress in the euro area recovery, showing first quarter g.d.p. expanded, while unemployment dropped, inflation came in lower than expected. we'll dig spew all the data. betty: we will indeed. meanwhile, the dollar is headed for its lowest close in all of the year, as the prospect for another fed rate hike rose even more slim. how much more could the curps a pull back? mark: with the referendum vote just a few months away, bloomberg television hosted a breakfast debate with some of the most passionate voices on the issue. we'll have all the highlights. betty: 90 minutes into the trading session in the u.s., i want toad