>> from blorg world headquarters in new york, good friday afternoon. i'm scarlet fu. >> and i'm tracy in for alix steel. here's what we're watching this hour. u.s. stocks are down for a second straight day. there are a few signs of pickup in economic growth. what does the fed need to see before it raises interest rates again? we have an interview with the dallas fed president, robert kaplan. >> the oil industry's incredibly shrinking profits. exxon's earnings haven't been this small since 1999, and chevron posted a lot. >> and amazon soaring. jeff bezos finds a way to make money, even while spending a fortune on future hardware and entertainment. >> we are halfway through the u.s. trading day. let's check in with julie hyman at the markets desk. we talk about how amazon's earnings are so amazing in that they beat estimates, yet not giving a lift to the broader market. >> no, not even to technology, yet alone the broader market.

we are seeing stocks fall to their lows of the session. we've seen a sharp gyration during the course of the session thus far. some of it appears to be driven by oil, perhaps some people paying attention to those comments by robert kaplan. but overall, we are definitely seeing a negative at this point for the major averages. take a look at the bloomberg here for the groups on the move. healthcare is the worst performing group. then there's technology, financials and energy. i should mention amazon is actually in the consumer discretionary index in terms of where it is sector-wise, and that index is very slightly higher, so it's not grouped with technology in the s&p 500. when you look at healthcare and see the big decline, at least some of that is due to gilead. the company's profit missing analyst estimates. it had disappointing sales of its two blockbuster hepatitis c treatments, and so that is what's behind the steep drop we're seeing. then there's a cycle, which is a health waste management company. that company is in the s&p

industrials index. it came out with a forecast that some analysts are saying was shocking from the k. the shares are down by 22%. as for amazon, it is hanging on to gains after it reported a record net income. as you can see, other technology not faring so well. apple continuing its string of declines. intel cisco also taking a hit. that's sort of the balance we're seeing today, and there's just a lot of declines going on at this point. >> we did have news out of china overnight. it doesn't seem to be having an impact globally, right? >> no, we're seeing this negative reaction, if you will, in u.s. stocks, but it's not really a reaction to what we saw coming out of china, because it didn't start overnight. what we had was the fixing of the dollar versus the ren inimum bee as the biggest gap. unlike the move we saw last

summer, doesn't appear to be policy driven, rather driven by the volatility that's been happening in the u.s. dollar. here you have the daily change in the dollar, these bars here. you see a pretty big swing. and then you see the chinese yuan, the fixing in blue. that's why it appears that we have not seen a bigger reaction in markets around the globe. if you look at the dollar itself, however, we are seeing a decline there, the third straight months decline is what we're seeing for the u.s. dollar. that's a long a streak of losses on a monthly basis that we've had in a couple of years. and then the 10-year looking there, because we had some economic data out today as well. we're seeing little change in that 10-year yield today. >> thanks so much, julie am we have breaking news. a rating company has retained portugal's investment grade rating, so portugal does not get downgrade. this is important, because they're the only rating agency that still rates portugal as investor grade, which means

they're qualified to be purchased by the e.c.b. >> we'll have to see what sort of impact this has on the market, if anything, given that they're basically staying pat. it is of importance to portugal obviously for the dbrs rating. >> we'll continue to monitor that one. in the meantime, let's get to news. mark: scarlet, tracy, thank you. norway officials now say the search operation after a helicopter crash has ended. officials say all 13 people aboard are presumed dead. the copter was carrying the people from an off-shore oil field when it crashed near the western city of birgit. authorities say they are banning all airbus helicopters, like the one that crashed, from flying n. southern california, a demonstration against republican presidential front-runner donald trump turned violent. mr. trump was speaking nearby, hundreds of protesters threw rocks and stomped on cars much they were demonstrating against his comments on immigration and

mexico. 20 people were arrested. vice president biden has received a grand welcome in rome at the residence of italian prime minister matteo renzi. the white house didn't reveal what was on the agenda, but italy, the united states, and other countries are struggling to deal with the instability in libya that has fueled the growth of islamic state in the north african nation. the vice president plans to return to washington after his meeting with prime minister renzi. more flooding threatens houston, texas, today. thunderstorms move through the eastern part of the state. a flood warning and flash flood watch have been issued for the area through sunday morning. the national weather service says storms could leave as much as eight inches in some areas. houston was hit by devastating floods last week that killed at least seven people. president obama declared a major disaster for parts of the state, freeing up funds to help rebuild. global news 24 hours a day, powered by our 24 hundred

journalists in more than 150 news bureaus around the world. i'm mark crumpton. tracy, scarlett, back to you. scarlett: well, europe is confronted with an economic conundrum. g.d.p. picked up at the fastest pace in a year, while inflation is still nowhere to be found. consumer prices renewing their decline. tracy: have a look at this chart. the bars show quarter onquarter g.d.p. for the euro area. the last was a gain of .6%. the white line tracks inflation. as you can see, it's not budging from its downward trajectory. they're discussion how european policy makers and markets are responding to this conundrum is david, a global market strategist at j.p. morgan asset management. how are markets responding to this conundrum? it seems to be a big one. >> what i think you're seeing now is a bit of a move in the center of growth globally from the u.s. over to europe. the data in the u.s. has cooled off a little bit recently. we don't have the same inflationary pressure that a lot of people were expecting. obviously there's no inflation to be found in europe right

now, but the growth numbers this morning were particularly encouraging. what i would also add is you're seeing a lot of growth coming from the periphery. you're seeing places like spain and ireland finally come back online, which is a testament to the sustainability of this over. scarlett: people are getting in thinking the turn is around the corner. does the e.c.b. simply need more time, that growth will feed through to inflation, through the labor market? david: i think we need to set expectations appropriately. we are in a very low-inflation world. globally, demographics are not on our side, and there's definitely a focus on saving rather than investment. so i'm not sure that central banks having these targets of say 2% inflation necessarily make sense. i think we need to see inflation move off of the bottom, but i'm more concerned with just a simple improvement in inflation, less concerned with hitting that 2% target. and i do think, you know, with growth continuing on the trajectory that it's been on, that should feed through to the labor market. we saw the uncombament rate come down to 10.2% in europe this morning. that should result in higher wages. tracy: setting the inflation

targets aside for a second does, it concern you at all that even though we saw a rebound, inflation still came in lower than expected? david: i do find that a little bit odd, and, you know, reading various things this morning, listening to what others have to say, it seems i'm not the only one who finds that peculiar. fundamentally, inflation is very simple. inflation is too much money chasing too few goods. you'll see statistical issues when it comes to the change in oil pricesing when she it comes to the change in food prices. but how do you really get an inflation sflob you either have wage growth or massive amounts of lending. we're not seeing any wage growth in europe yet, but we are seeing signs that bank lending is picking up. i think we will see the inflation that the e.c.b. is trying to generate later this year. scarlett: we've got a lot of fed speak others the docket for next week, among them dudley, lockhart, williams. we had a fomc statement that, to some people, read as dovish, to others hawkish. what was your takeway?

david: i viewed the statement as relatively dovish. i think that the omission of a statement on the balance of risks and a change from, you know, focusing on this global financial risk to just monitoring these global financial risks says to me the fed is comfortable with where things are, but they also understand as soon as they start talking about hiking rates, that's going to put upward pressure on the dollar f. we go back to september of last year, the thing that really pigeonholed the fed was the strength of the u.s. currency. i think the fed is going to be very cautious. i think the hurdle for a hype the middle of this year is relatively high, given how the statement read and gven how other things are on the global agenda, things like brexit. we still think they can hike once this year, either in december or december in my opinion. my guess is with volatility coming from the political situation, december is more likely. tracy: how closely are you watching the u.s. dollar for an indication of where the fed might go? that seems to be almost key input in some of their calculations now. david: currency markets are the most forward looking f. we look at the dollar index this year,

it peaked around january 20. where do we see the bottom? february 11, give or take a couple of days. i am watching the dollar closely. what investors need to really focus on is the dollar is getting weaker or stronger relative to things like the you're owe orient, or relative to currencies? the yen has beeneninging. i'm not really sure that that's a good type of weakening, so we're much more focused on what the movers and shakers are, rather than the absolute move. scarlett: commodity prices have come off their bottom. how much of a fee will you have in the u.s.? even though the fed looks liking at inflation, zphrg food prices out. >> i think that inflation in the u.s. is headed higher. i think that as labor markets continue to tighten, and it keeps falling, we begin to see the wage growth, which has pruche to be elusive in the recovery. and i actually think that the fed is willing to let inflation

run a little bit hot. they're going to wait to see how they pull the trigger. scarlett: the inflation above 2%, but how far above? david: i'm not sure exactly how far above 2%, but once you start to get closer to 2.5%, you have inflation in the system. nobody's going to debate that with you. the question i ask myself is do inflation expectations follow suit. you know, the fed is obsessed with inflation expectations. right now expectations are in line with current inflation f. expectations move up as actual inflation moves up, i think the fed is more inclined to start tightening policy. tracy: david, thank you so much. david: thanks for having me. scarlett: tune in to bloomberg on monday. bloomberg heads to the conference in los angeles. i will be speaking with the .i.o., as well as alan schwartz. those interviews beginning at

12:30 p.m. eastern time. ♪

>> we breaking news. ted cruz picking up another endorsement, this time from indiana governor mike pence. he has endorsed senator ted cruz as the republican presidential candidate. this comes days before the indiana primary on tuesday, may 3. pence saying that the vote is not against anybody, but he is voting for cruz. so, again, indiana governor mike pence endorsing ted cruz for president. tracy: time for a bloomberg business flash, a look at some of the biggest business stories right now. chevron lost money during the first quarter for the first time in almost a quarter century. the last time the world's third largest oil explorer poastd a first quarter loss was 1992

when crude traded for about $18 a barrel. the c.e.o. has cut one of every 10 jobs and lowered production targets. and the move prompted s&p and moody's to cut chevron's credit rating. scarlett: shares of exxonmobil are rising after the company posted its smallest profit in 17 years. didn't we just talk about this? yeah, let's move on here. that is your bloomberg business brief. we'll have much more after this. racy: for more on oil, we have an analyst from lynch lunch. >> they've been pretty strong so far. remember, some of the basic ingredients, price extremely cheaply, and what's happened throughout the course of this year is natural gas prices have come down a lot, but crude oil has gone higher, so that spread has heidened, and that's a little bit linked

to the chemical, to the chemical returns. the companies are delivering. so certainly not a bad environment. global demand for stuff is actually pretty good. what we saw last year, the crisis. hey've rallied dramatically. it's been quite ok, so if you had the right spread, you did pretty well. scarlett: we heard about a lot of companies creating a better situations for themselves, but it's still costing exxon a lot to get oil out of the ground. >> definitely he tracks costs remain high. if you charge extraction costs versus the price of crude, it's pretty dramatic. this chart, which is 1123 on the terminal, it shows that extraction costs haven't come down with the price of crude. now, this goes to 2015. so the price of crude is going to be up another 25 cents, 25%,

and you actually see cap ex down 33%. but jason, let me ask you, i mean, when we look at extraction costs, that's a different number than cap ex. are they able to get their extraction costs down in line with cap ex? >> there's been a dramatic reduction in both cap ex and extraction costs. and really, we're looking at a larger reduction in cap ex, mostly because companies are not really pursuing large products at this point. but we have seen about a 20% reduction in cash operating costs, and that's something that will drop to the bottom line immediately. cap ex, when it's reduced, doesn't really affect earnings for -- it can be a multiyear time frame. but what they're doing on the op ex side is part of the reason why we're seeing beats across the board on erks. >> if i look at a comparison and take anything that chose to slash the dividend and make the move very early, it has the highest replacement ratio out

of all of its european peers. it's going to maintain capacity. we've seen big cap ex cuts in the first quarter from exxon. what's going to be the legacy of these cost cuts from the company that are maintaining dividends versus those that have acted early and got a high reserve replacement ratio? >> well, i think you're on exactly the right point for the longer term, jonathan. the pullback in investment is going to affect reserve replacement. it's going to affect production down the road. you know, i think in the case of exxon, they're already guiding for their production to be flat. i think that even hitting that target is going to be difficult given the pullback that we satisfy there. now, by the same token, i do think that exxon's cash flow is stable enough to not only support the existing dividend, but to have a progressive dividend. we did see that this quarter, but the increase in the dividend. i think that finding the right balance between shareholder distribution and investment is an important thing. and i do think in exxon's case

that, while they perhaps could be investing more, the stability of the dividend is important, and i see no risk to the dividend at all. scarlett: that was head of global equities, francisco blanch, and jason gammel this morning. tracy: coming up, our mystery stock of the day. there is no need to be afraid of today's mystery stock, which is having its best day almost since the holiday most associated with its name. it's no bull our pick is displaying major energy today. ♪

scarlett: tgif. let's head to our markets desk,

where julie hyman has the big reveal on today's mystery stock. what were the clues again? jew will he: we have a scary holiday. what's the scary holiday? scarlett: halloween. jew will he: ok, and what are things associated with halloween? scarlett: ghosts, witches, monsters. jew will he: monsters. scarlett: oh, monster beverage. jew will he: yes. no red bull, energy, energy beverage. there we go. i was thinking red bull. the stock is down 3.5% year to date, but you see the big pop in today's session. that is thanks to coca-cola. monster beverage is partner, and one of the benefits of that partnership is that coca-cola is now distributing monster beverage products. so if you look at the stock today, you will see a 12% gain in it due to that, and that helped boost the company's earnings. just a quick check on other earnings that we are looking at today. no mystery here. gen worth financial coming out

with earnings that beat estimates. the company trying free up capital to meet debt payments. superior energy services posting a smaller loss than estimated. the entertainment company, revenue missing estimates, but improving subscriber results, and pandora also up 6%. sales there beating analyst estimates. people listening to pandora more. scarlett: thank you so much. so close, yet so far. as we've been reporting, shares of apple are extending losses after a rough week. the moves are taking a big bite out of tech-focused e.t.f.'s. tracy: it is more represented in e.t.f.'s than the entire continent of europe. they're examine the ones escaping the apple selloff is our senior e.t.f. analyst. i had no idea that apple was that influential. >> people will sometimes say e.t.f.'s are the tail wagging the dog. apple is the tail waging the

e.f.t.f. this thing is the top holder in the largest, all the big wins. so if you add it up, it's about 25% of the assets or exposed to apple in e.t.f.'s. the 16% selloff we saw in the past two weeks, by my back of the envelope calculations, erased about $2 billion in assets as a whole. you cannot underestimate the power of apple, and that brings us to market cap weighting. most of these big e.t.f.'s are market cap-weighted. when you look at these e.t.f.'s, you sort of live by the big stock sword and you die by it. apple is ok. apple is the 13% weighting. it's down 4% this month. apple is responsible for half of that. facebook did well, right? but it's half that weighting, so it's just not enough to get it higher. scar less: there must be an uneven distribution of apple exposure in these e.t.f.'s, right? some must be managing down their apple weightings. >> apple is why god created equal weighting.

this is a big area of smart beta. the guggenheim equal weight tech e.t.f. is almost a billion dollars. apple is a 1% weighting, just like everything else. it's the house of representatives, they're the senate. it's equal weighted. this is down 2.3%. apple only contributed .2% of that. again, you don't get to feel what apple is doing great, by the way, apple is responsible for 40% of that. so even though we're down on apple, like every two years we seem to have this conversation, but then apple goes crazy and you're loving your apple weighting. but r.y.t. is popular for people who want less. scarlett: apple ontario even a part of, it's built on tech momentum. >> when you see a stock like this, you're going look at the smart beta products. this is a case of smart beta working. this is the power shares momentum e.t.f. so basically back in january, apple had like a smaller, it

got sold off like a little bit. this momentum e.t.f., it got kicked out, 6% weight, got kicked out in january. the little foreshadow selloff saves this one from this huge selloff. so that is a case where smart beat is working. this was only down 1% because of that. scarlett: eric, thank you so much. tracy: thank you, eric. coming up on "bloomberg markets" -- if data reconciles with the latest jobs figures, the dallas fed president says he would push for a rate hike. highlights from our exclusive interview with him, next. snote note ♪ show me movies with romance.

show me more like this. show me "previously watched." what's recommended for me. x1 makes it easy to find what you love. call or go online and switch to x1. only with xfinity. tracy: live from bloomberg world headquarters in new york, i and tracy alloway in for alix steel. scarlet: i'm scarlet fu.

this is bloomberg markets. we start with the bloomberg first word news. mark c.: the justice department has not set a deadline for the investigation into former secretary of state hillary ofnton's private use e-mails. loretta lynch discussed the status of the probe. we always have to do a full, independent review of everything that comes to our attention. we have to be full, fair, and independent. we do not make productions on the time because that cuts off .he independence of that we do not predict the timing of any of our matters. mark c.: you can see the entire interview with attorney general loretta lynch on charlie rose. indiana governor mike pence is endorsing ted cruz for president. the texas senator needs a victory in indiana after being swept by donald trump in five

northeastern states earlier this week. the endorsement marks a setback for donald trump, who appealed to mr. pence to not make any endorsements. rebel forces shelled a mosque in the city of aleppo, killing at least 15 people. that comes after airstrikes killed at least 100 people. investigators are now looking into whether prince died of a drug overdose. that is according to the associated press. they also are looking into whether a doctor prescribes him drugs in the weeks leading up to his death. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i am mark crumpton. back to you. scarlet: thank you so much. we have some breaking news. some headlines crossing the bloomberg that companies are

considering making a bid for -- medivation. they are considering the possibility with their advisors. thevation is said to want aides of at least $65 per share. tracy: right. novartis is also said to be exploring a bit. lots of competition there. medivationourse, an offer on friday because it undervalues the company. we will continue to monitor these headlines. if the u.s. economy improves over the next few months, the president of kaplan says he would support an interest rate increase. tracy: he painted a picture of

the u.s. economy. >> the consumer is getting stronger. we know, while they might not have spent in the first quarter, their capacity to spend should we improving. the job market is strong. we are hopeful that you will see a rebound. i would like to see the rebound. it is what i am expecting. mark b.: does the slow growth mean the federal reserve should take a little more time before raises interest rates again? >> the job market has been strong, so right now, i would put it differently. we need to reconcile gdp data with job data. that is going to happen one of two date ways. gets stronger.dp if that happens, i personally would be moving towards advocating some removal of

accommodation sooner, rather than later. :.tty so far, what we have seen is any income gained by the consumer seems to be headed more into their banks. they are pocketing the money, rather than spending it. how do you get consumers to spend the money? >> the question is why aren't they spending. there are a few possibilities. the financial turmoil of the first part of this year really had an effect. if you turn on the television and see turmoil, you might not by a car. also, political uncertainty is having an effect. the other issue, the population is getting older, and the ofulation may be thinking saving towards retirement. only time will tell, but they have the capacity to spend,

which is the first step in spending. we will have to see. betty: we are basically at full employment here in the united states. when will that translate into some substantial wage gains, which we really have not seen. >> yeah, we really have not seen as much, other than skilled trades. the job market has never been more global. companies think more globally about where to higher. they have choices to position jobs globally. that puts downward pressure on wages and affects the negotiating power of wage earners, unless you are in a skilled trade. on one second, i want to bring in mike mckee who is also joining in on the conversation. mark i had a question for

arden. mark kobe going to the voting booth on june 23. you will be making a decision 15.nterest rates on june how much will brexit influence what the u.s. fed does? >> it will be a factor. the meeting is the 15th, and eight days later is the vote. -- we are going to have to make i will have to make an assessment on june 15 what the likelihood is. right now, it is a little bit unclear -- forget the little bit, it is unclear. mark b.: how will you make the assessment? buttingor putting in -- in -- if you look at the polls, they are notably unreliable. >> so i have heard. mark b.: how will you make the assessment? >> this has been part of this trip. i have had lots of conversations with people on how they are assessing it.

the polls are unclear, and they show it to be very close, then you have other measures that are a little more lopsided. the reality is we will have to see what is available. if we cannot come to a conclusion, it will be a factor. >> should the vote to leave the european union have such an effect that it take the fed out of the european union for some time? >> i will not comment on something that i think -- my own sense is that it is more likely than not going to happen, but we will have to wait and see. i will wait for it to happen to comment. i will say this. certainly, there is a whole range of impacts that it would have, not the least of which on andu.k. currency,

other countries, impact on life quality, and other issues that would create some instability. if it did happen, we would have to take some time to digest it. tracy: that was robert kaplan. scarlet: we want to get back to the breaking news. on theion shares popping news of a report that companies are exploring a bid, considering a counter offer for the company. the stock, almost getting to $60 per share. ♪

scarlet: you are watching bloomberg. i'm scarlet fu. tracy: i am tracy alloway. this is your global business report. mortgage lending is soaring in the u.k. does it mean home prices will keep arising? growing. will the uptake change the political landscape ahead of elections in june. scarlet: the bank of japan holding off on a stimulus. one says that structural problems are here to stay. homebuyers in the u.k. were trying to beat a deadline in the last months. mortgage lending rose the most since 2007. tracy: the eu wants to make sure that cheap still does not threaten european producers. it triggered a system for monitoring imports, especially from china, the world's largest steel producer. in january, japan pledged to

limit steel capacity. in will create over 2 million jobs. the plants are in line with bringing the budget deficit below the eu ceiling of 2%, one year later than the deadline. they have elections in june. robin lee plans to spend billions in the coming years on robot cars and food delivery. scarlet: japan's economic challenges are not going away anytime soon, according to robert kaplan. he spoke with bloomberg about japan's efforts and why structural issues will p persis. -- persist.

aging population and a high level of gdp. it makes the dead issue worse. the central bank easing is not going to address any of the issues. the country time to deal with the issues, but it is not a substitute for more structural reform. tracy: time now for the bloomberg quick take in which we ofvide context on issues interest. today's topic, electric vehicles. here is a fact. we need cleaner cars if we want to slow down climate change. cars and trucks produce almost one quarter of the greenhouse gas emissions in the u.s.. worldwide, they produce almost 17%. the road to cleaner cars may be

longer and dirtier than we think. here is the situation. in the 1990's, europe c poached the soul cars -- the diesel cars. also in the 1990's, but on the other side of the atlantic, the ew one point $5 billion at developing a supercar that would get 80 miles per gallon, but that never materialized. companies like tesla, chevy, and nissan have been betting on electric cars. >> why are we making electric cars? why does it matter? it is very important to sustain sustainable transport. arelon musk says they cleaner than their gas chugging

counterparts, but some question of electric cars, whether they are all that clean, alleging that they charge on electricity .hat comes from coal plants transforming the world's power grid will take decades. here is the argument. critics say initiatives like europe's diesel push and america's supercar show techates choosing winning knowledge he is. the real wildcard is china and india. sales of electric vehicles is growing rapidly in china, but not in india. the demand for new cars in both countries could cancel out any gains for the quest for clean

cars. scarlet: that is your quick take. for more stories, visit bloomberg.com. tracy: coming up, amazon reports record profits. where is the growth coming from, and is it sustainable chuc? ♪

this is bloomberg markets. reporting its most profitable quarter to date. let's dig into the financials in today's "the numbers don't lie." when you look at the difference between its retail and cloud is this, that is widening. web services generated $2.6 billion in the last quarter. the cloud unit now has an annual of $10 billion.

producesl up, and it half of its operating income. the prime numbers are its golden ticket. one industry estimates there are 54 million prime minist membersn the u.s. grew 50% last quarter. still, this comes with a cost. with the prime membership, they get free shipping. shippingcost of continues to climb, it makes up 6% of revenues, the highest ever. affability is also growing. 3.7%, the highest in years. in which amazon is hoping to make headway is

groceries. almost half the people between 25 and 34 say they have bought or would likely buy groceries online. amazonupdate on how stock is trading, abigail doolittle joins us from the nasdaq. surging we have shares today after the first quarter that you described so well. this shows the stopgap -- this has happened to other times in the last year. what might stand out over the last year the most is that shares are trading between the buyers and the sellers. strong a shelf of pressures. workhave really got their cut out in terms of overwhelming the long-term sellers. tracy: what has been the general wall street reaction to this

quarter in tech? abigail: it has been very bullish. says it is all working. he carries an overweight opening , suggesting the stock could surge more than 45% from current levels. another says that while it is a great quarter, there could be some pressure around the web unit. in the one-year chart, a very volatile trading path. tracy: thanks so much. mahaneyg spoke to mark about his outlook for the industry.

he kicked it off with linkedin. >> they have had some execution challenges. we have thought they had a couple of problems, but not saturation. this is an online employment agency. when you look at it that way, that is a big market. it is a big market. we have different macro headwinds. inare not buyers of linked stock here. this is a very diverse business. advertising business called marketing solutions and a premium solutions business. it is one of the most diverse business models in the space today. stockonder about the

historically. if i run a function on the bloomberg which shows total return over five years versus linkedin was000, making such huge strides until 2014-2015. it is now down 53%, absolutely crushed from its 2015 hi. i notice there is also almost no shortage. what are investors doing other than they have sold it? i know it had a massive correction earlier this year, but there were a number of mrs.. there was an acquisition that as not go as smoothly it could have. issue ata sales force

the beginning of 2015. we had three quarters in a row fy a few results -- if results. a couple of things compounded and the stock probably got re-rated -- -- should have gotten re-rated. scarlet: can we talk about amazon because that stock is up about 50%. we happen questioning mr. bezos and his strategy. change --t seen a lot o >> this is our number one pick. ahis is i diverse business -- diverse business. this in google are probably the two most diverse businesses that we cover. amazon is showing profitability. .t is a midsize business they are showing that they can have success in the international market, and they

have this aws business, the single best revenue mix story across all of technology. further amazon shareholder, what you need to know is it is not 10% of its business -- it is .oing almost twice as fast it is a great revenue mix shift to have. scarlet: as we were mentioning earlier, medivation shares are getting a pop. they have come down a little bit , but comes on the heels of our reporting that a number of companies, including pfizer, are on the into making a bid company. i will speak with alan schwartz of guggenheim. it will be interesting to get

his take. i don't know how much he will say -- tracy: the tricky bit, but at least you have a peg. scarlet: i have a peg, definitely. what are you going to be doing? tracy: i will be my drink a panel on the age of asset management, whether they are good for stability or whether maybe there is more risk coming into the system, or a different kind of risk. scarlet: may be shifting around the financial system. tracy: exactly. scarlet: coming up on monday, tracy will be at malcolm conference, as will i. much more bloomberg markets coming out. ♪

tracy: it is 1 p.m. in new york, 9:00 p.m. and abu dhabi. scarlet: welcome to bloomberg markets.

scarlet: from bloomberg world headquarters in new york, good friday afternoon. tracy: here's what we are watching -- u.s. stocks fall for a second day with lackluster earnings and weak consumer spending have curb enthusiasm. dollar has its third straight monthly decline. pandora and linkedin report better-than-expected earnings but where world growth come from? -- where will growth come from? we will hear from both ceo's. scarlet: the reason why we brought up abu dhabi is because you are going to the middle east. tracy: i'm leaving new york as a tomorrow and looking forward to starting something new. scarlet: much more details to come on tracy's new adventure. in the meantime, let's go to the

markets desk. in the u.s., we are seeing stocks decline today. on theseeing a pullback major averages hovering around the lows of the session. we have seen this downturn occur midmorning that has continued throughout the day. the major averages are down around the same amount. 500 has zigzagged. it has made a couple of attempts at coming back from declines but hasn't made it there you. . gold prices have been rallying. as wes now up right 2% see more of a risk off scenario today. the u.s. dollar has been bumping along the lows. that has been fueling some of the gains we have been seeing in gold prices. risk off sentiment seems to be one of the themes today. tracy: we have had some earnings from big oil? julie: yes, it has been

interesting. exxon mobil came out with earnings that beat analyst estimates even though it's dropping year-over-year revenue. the company's on increase in its petrochemicals division with sales up 38%. costs and cut back on drilling and exploration so it's hanging onto not much of a main. chevron is boasting its biggest quarterly loss since 1992. phillips 66 is suffering from compressing refiners margins. the declines we are seeing in these stocks are on the back of a big rally that has come as oil has been recovering. not confined to energy producers in the united states. the blue line is the price of brent and we look at the market cap change for global energy stocks. we have seen this big recovery in that market cap of about $400 billion during this rally in oil

prices. today, withino the energy complex, other refining stocks are lower along with phillips 66 and marathon and bolero are under pressure. if you look at the more perspective as to what we have seen, if you look at oil this month, you've got the s&p 500 energy stocks up 8% and oil prices have been up even more. 19% and it's a three month streak which is the longest in two years for these oil prices. tracy: thank you so much. we are going to check in on the bloomberg first word news with mark crumpton. mark: president obama announced today what he called common sense steps to curb gun violence. they include identifying requirements of so-called smart guns for law enforcement agencies to buy and use them.

smart guns use new and enhanced safety technology to prevent accidental shooting or to track down a missing gun. officials expect to complete the process by october. the supreme court has rejected an emergency appeal to stop texas from enforcing its voter id law which has been challenged in lower courts. the justices said they could revisit the issue as the november elections approach. the law has been in effect for recent voting after a trial judge struck it down in 2014. there is noers say reason the requirement to show picture ids at the polls should remain in place. doctors without borders says the death toll from this week's ,ombing of a hospital in aleppo syria has risen to 50 including six medical staff and patients. the organization warned the 250,000 residents in the rebel held parts of aleppo are in danger of being completely cut off and left without medical

care. airstrike some hospital drew international condemnation. the puerto rican health secretary says the island is relatedd its first zika- death, 70 euros man died from a drop in blood platelets in january. there has been more than 600 zika cases. news, 24 hours a day, powered by our 2400 journalists in more than 150 news peers around the world. two of wall street's most influential firms are calling for treasuries to move in opposite directions. taking a look, you can see this clash of the titans. goldman sachs is the yield on the 10 year should be more than 2.1% while morgan stanley predicts it will fall to 1.45%. but -- right now, we are at 1.836%. goldman extract treasuries to fall while morgan stanley critics gains. joining us to weigh in is james

camp, the head of fixed income at eagle fixed asset management and oversees about $30 billion joining us from saint petersburg, florida. debate, where the do you come out in that argument? favor the lower on the treasury rate. i think we have seen a decided seachange in 2016 from central bankers who had tried to convince as they were going to begin a normalization process. with what's going on in europe and the bond buying and the ecb accelerating, it is difficult to posit an inflationary scenario or a scenario where u.s. treasuries will go much higher in yield. i think we will probably retest the lows which puts you at the 150 level. aboutt: you're talking more gains and the price and the yield comes down. are you concerned about valuations? >> i am a little bit. let's remember that when the fed

did their first move, token as it might be, we have had one of the best long bond rallies we started the year with an history , up over 10% on long-duration assets. there is a paucity of yield and risk-free assets. has notioned that gold continue to appreciate and we old to sometimes laugh that is a high-yield asset at zero because 20% of the world debt is traded in negative yields. scarlet: good point, the former any apple is spread president -- fed resident wrote that this is hurting u.s. economies but not issuing enough debt. there are some of demand and you can see that in the fact that yields are so low. household and businesses are demanding more assets to protect themselves against sudden downturns. regulators are requiring banks to hold more safe assets. tracy: we know that he has been ever -- advocating for the fed

to do more. james, do you think the fed means to do more? actually, i think the contrary. the fellow reserve and central-bank of overstayed their welcome. they are distorting capital markets and having asset allocating decisions and budget decisions which are not stimulating to long-term growth so now it's a fiscal matter. in terms of scarcity of treasuries, bank balance sheets in currently access reserve one of the things that that should look at is how to get some velocity to those excess reserves in the form of more generous yield or more normalized monetary policy and let's get capitalism working again the financial markets and wean off the central-bank enabling we have had over the last five years. tracy: you mentioned central-bank distorting asset presses -- prices and many people would agree. how do they asked her cape themselves from that and move

market expectations closer to where they need to be? >> that's a great question. it's clear the fed has been very reactive to market and they have only moved when there appears to be some permission to do so. if central-bank normalization means asset valuations move, that's ok. i would like to see winners and losers be separated by reasonable measures instead of the high correlation across asset classes. i think the time has come for that what it appears that it's not imminent and i think the beginning of 2016 has proven that. we wait for normalization and we wait for fiscal policy to take the baton. all of us are impatiently waiting for that but i think that is the next step in this recovery. it might be minor. scarlet: as we wait for the data to roll in, the fed president talked earlier on bloomberg and was explaining the balance between gdp and the labor market. >> we need to reconcile gdp data

with job data. that will happen one of two ways -- either the job data will get weaker or more likely, gdp will get stronger. i expect the latter. personallypens, i will be moving toward advocating some removal of accommodations sooner rather than later. -- he ishe is a voting not a voting member but his voice is influential. tracy: how is the fed going to react to the data we will see over the coming week? theirhat vindicate decision to stand pat or are they looking for something to justify making a move? i think the inflation data will be key. we have seen the year over your personal consumption expansion expenses very low. the constraint on wages even though the employment picture has been good for a number of quarters, we have not seen wage appreciation or wage inflation

and that's one of the things the fed really wants to see before it can justify normalization. the fed is tightening. it's tightening into a slowdown. globally and perhaps domestically. i am hopeful that your guest is correct that gdp picks up office maker level -- off of this meager level. i don't think the fed will have the all clear from the markets unless the inflation data comes in much better than we have seen over the last couple of quarters. scarlet: that is something we continue to wait for. you set yield will likely come down further. what do you do in the meantime until we get the expected rate increase from the federal reserve? how do you position yourself? >> as i mentioned earlier, it's counterintuitive that the fed moves higher and long rates rally. we have for number with the rest of the world is doing. i look at income investing from a number of different ways. i like the municipal bond market

from a demographic standpoint. i like dividend paying stocks if they are well researched and companies that can pay and grow. if you put bonds and stocks together in an income vehicle income managed for generation capital preservation, you can take advantage of the fact that the fed is essentially rewarding owners of companies and being less generous to the lenders to companies. tracy: james camp on the somewhat fraught relationship between markets and the fed, thank you so much. scarlet: we will discuss monetary policy more next week. i will sit down with neil ferguson of harvard university. he calls the current market condition a third leg in the global crisis. we've got a lot coming up and i will speak with him it for 15 p.m. eastern time on monday. ♪

tracy: you are watching bloomberg markets. it's time for the bloomberg business flash. aleant pharmaceutical has filed its 2015 report that may satisfy bond and loan holders and had sent notices of default related reports which was to have been submitted in march. it is under investigation by several state regulatory agencies. newcompany has nominated board members at it overhauls its strategy under incoming ceo joseph papa who takes over next month. scarlet: snap chat is going for a limping gold. it scored a major coup in a deal with comcast/nbc to host some of

the summer games. it's the first on the network will share video with the event. snap chat will set up a dedicated channel on the mobile app. will make money from advertising. tracy: there are potential private equity bidders ars. willanadian drugmaker gauge interest in a possible takeover and talks are in the early stages and the firm may choose not to make an offer. scarlet: the eu was to make sure that deals that threaten european producers trigger a system for monitoring imports particular from china which is the world's biggest deal producer. in january, china pledged to cut capacity but the eu said that would not be enough to rebalance the market. that is your business flash update. let's go to the markets desk and julie hyman. good time that we talked about eu. julie: i will start with a

steelmaker. there is news on ak steel sold 52 million shares at $4.40 apiece and the shares are pulling back today. when you get more shares in the market, you get dilution. come back from losses and they are at $4.73. according to an analyst, this offering by ak steel could be the first of a series of equity raise among metals and mining companies as we see more financially levered companies tap into the equity market to cut down on their debt. since we are on the last day of the month, i want to look at the monthly performance for a number of different metals. let's start with iron ore. there is a hot debate over whether it's rally will continue. it's up 19.5% -- 23% month to date. rallying.teel rebar

iron ore is up 23% and that the biggest rally since 2012. aluminum is the biggest month a rally since 2012, up by 11%. withr is participating alleviation of some concerns about chinese economic growth which has resulted in a 3% rally and gold and silver are participating in the rally we have seen over the past month, silver in particular has been a very hot metal, up 17%. scarlet: pretty incredible. thank you so much. where coming back in a few minutes. we will get down to the music is this and hear from the ceo of the rock 'n roll hall of fame next. ♪

scarlet: this is bloomberg markets. last week gone, beyonce's lemonade took the market by

storm and now it's about rockers and nwa. tracy: the rock 'n roll hall of fame induction ceremony airs tomorrow night. this ceremony brought us plenty of drama. we are going to matt miller and cory johnson. matt: we are joined by scarlet and tracy on television. thank you for letting us jump in here. we have a great guest, joel parisman, chief executive officer of the rock 'n roll hall of fame and joined by john heilman. cory: what is he doing here? matt: i don't know. he is a big lover of music. and aa huge fan of joel great music reporter as well. he is one of the co-anchors of "with all due respect." joel is here to talk to us about the new class of the rock 'n roll hall of fame, the inductees steve miller, deep

purple, and cheap trickery of tells about this year's class. >> this year's class is kind of special because like you said, you and other people grew up on this music. these kind of groups really almostnt the soundtrack of the greatest hits of the 70's and 80's. when you bring in nwa, one of the groundbreaking hip-hop groups. wa definitely one of the main players in the soundtrack of my high school and college life. one of my most worn-out cassette tapes, i know the words to every single song and so did every friend i grew up with. it's not rock 'n roll. >> in your opinion but in many it is. rock 'n roll has a really broad definition. we look at the rock 'n roll hall of fame and what we celebrate at the museum's all things that make up this genre of what

people call rock 'n roll. it means different things to different people but it comes from the same place. if you watch the broadcast tomorrow on hbo and you hear what ice cube says, he talks about rock 'n roll is a spirit, it comes from the same place. it's rock 'n roll to you but it's not rock 'n roll to somebody else. there are many different things. cory: this was a controversy this year. comments thatad irritated a lot of people. in the hip-hop community that what they are doing should not be qualified as rock 'n roll. >> when you look back to the roots of rock 'n roll and where they come from whether it started with drumbeats in africa that came over with slaves singing in the field and develop into rhythm and blues and the rolling stones took that early stuff and developed it, hip-hop is just a further development of where all this music came from. what sheen simmons thinks is his

opinion. you can find a lot of other people that disagree with him. we have inducted other hip-hop groups into the rock 'n roll hall of fame. matt: i may be one of those people. deep purple is not folk music. chicago is not heavy metal and nwa is not rock 'n roll. chicago is not rock 'n roll either. >> when you look at chicago from their latest hits in the late 80's, that's a different band from the early days. if you look at what they did in the early 1970's with the first couple of records, that was groundbreaking for them to have a rock band that brought horns into music. deep purple, same thing, cheap trick -- all these guys come from a place of inspiration that just branches off into different places whether it ranches into hard rock or progressive rock or hip-hop, it's all rock 'n roll. that's what we do at the museum in cleveland and that's what we

do with different exhibits we have. we have an exhibit coming about the new inductees and we are running up a new exhibit about rock and politics. it will be there when the convention happens. matt: when can we watch this on hbo? >> tomorrow night at 8:00 p.m. xm and a deal with sirius there will be a simulcast of the music. there is a lot of replays and you can put it on dvr. matt: any performances? >> all the bands except for nwa andwe also had david byrne we had sheryl crow and grace potter to celebrate the music of glenn fried. ey. we put in a clip about prince that featured a performance where he was inducted. he did while my guitar gently weeps. cory: that alone is a reason to

watch. >> it's worth tuning in and it gives a broad definition of what music is about and that's what we are all about at the rock 'n roll hall of fame. matt: i am into all the music but i think it's interesting to categorize it. back to scarlet and tracy. that was matt miller and cory johnson speaking with the ceo of the rock 'n roll hall of fame. i wonder -- they will probably pay tribute to prince and david o he and glenn frey. tracy: it seems we are losing a lot of good artist lately. linked in and pandora and results from both companies. ♪

âi scarlet: from bloomberg world headquarters in new york, you're watching bloomberg markets. let's start with the headlines

on first word news with mark crumpton. mark: u.s. attorney general loretta lynch says the justice department is not set a deadline for the investigation into former secretary of state hillary clinton's use of private e-mail. she made her comments to al hunt during an interview on the charlie rose program. >> one thing is we have to do a full thorough independent review. comes whereg that attention. we have to be thorough and fair and independent. we don't make predictions on the timing because that essentially cuts off the independence of that. don't predict the timing of any of our investigations. mark: you can see the entire interview tonight on charlie rose on bloomberg at 7:00 and 10:00 p.m. new york time. vice president biden's andrew to washington following talks and run with it the italian prime minister. the white house did not reveal but the on the agenda

united states and other countries are dealing with the instability in libya that has given rise to the islamic state in north african nations. esther biden had a private meeting with pope francis as they prepared to give separate remarks at a conference on regenerative medicine. the italian navy rescued 283 refugees off the coast of libya. among those on board were 72 children. the international organization from migration reported that 181,000 refugees have entered europe by see in 2016. in salem township, pennsylvania, flames shot into the sky after an explosion inside a 36 inch natural gas pipeline. a man who was burned after the explosion was in a home that caught fire nearby. officials say the fire is contained but residual gas in the pipeline continues to burn for hours. the area has been evacuated.

global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. amazon gets the glory after a blowout first quarter earnings report by two other companies are holding their own. talking linked in and pandora surging after first-quarter results that topped estimates providing of boost after an otherwise grim year. tracy: emily chang have the opportunity to speak with their ceos after rnings and joins us now from san francisco. we remember the last link in earnings report as it plummeted more than 40%. they said we are not going to grow as fast as we thought. this earnings report, we see that shares surging because they said we are going to grow faster. the problem with linkedin continues to be that their core business is decelerating.

if growth fair is decelerating, where is the rest of the growth going to come from? take a listen to mike interview with chuck weiner and why the stock is been so volatile. >> i understand volatility. best to, we will do our try to provide as much visibility as we can into the business. continues toss grow, we are introducing some additional lines and i think it takes time for people outside the company to learn those businesses and calibrate expectations. you said that the addressable market for linked in is $12 billion. you are trading at about 20% there. if the market is large and penetration is low, why can't you grow that business faster? the objective is to grow the

business faster over time. we are investing in our recruiter application and we just rolled out the next generation version of that application. it's a complete overhaul, the largest of its kind in our seven years. skews andout 2 new our referrals business. we see a growth catalyst in our career pages. we have also been investing in our job seeker application and the active job seeker use case and that has become one of the fastest part -- growing parts of the sites. it should help future growth in our talent solution business. your: that is 2/3 of business, which you say the business is now saturated because growth is decelerating? >> no, hardly saturated. there is multiple billions of dollars of immediate addressable that we believe we can further

penetrate i virtue of these new products and improvements to existing products. plenty of growth ahead. emily: let's talk about mobile engagement. that is driving the ad business. how much do you see growth accelerating their? facebook and google are king in that market. >> we are very focused on the btob components and we bring unique data to that part of the business. sponsored content has been our fastest-growing business for some time and we expect to continue to be the case. growth drivers continue to be acceleration of engagement, engaged pete sessions which generates the inventory for our sponsored content business. we are seeing better roi for marketers so that is increasing the number of customers sticking around and purchasing more, improvements to targeting. we will continue to focus and develop api and improve that and we are now starting to pilot off

network sales of sponsored content as well but it's early days there. all of those things could contribute to future growth in that part of the business. emily: when it comes to growth theyde the core business, have made some significant like china in places and we will see that contribute more significantly to the business as the core talent solutions business starts to slow down. i also spoke with the pandora's ceo. he left asounder but ceo when pandora was 40 people and they brought him back recently. there had been some discussion that pandora was looking at being bought out and they -- and he said they want to be independent and he laid out a i've your plan. the listener hours picked up and user numbers picked up but not that significantly. take a listen to how he addresses how pandora attacks

future growth. >> there is a lot of misperception about the company. part of my job is to make sure that story is clear. it's probably because a lot of our strengths are not immediately visible. personalization, the engine that drives our song selection that creates the personal radio is a fantastically hard problem. ande have had competition free alternatives on demand, our per listener per hour or per month has continued to increase. that is a reflection of this massive investment in personalization. the second thing is monetization. wayonetize our product the broadcast radio does. those are huge strategic pillars for us and i don't think they are yet understood. we will tell that story and i think we will show it and connect the dots in the coming month. emily: what are your plans for an on-demand product where listeners would choose what they hear next rather than waiting for what comes up?

how close are you to having what you need in place for that platform? >> we know how we will approach that. the audio acquisition brought in great talent. too is not going to be a me service. the 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 in 23 hours per month and we know a ton about them like the songs and stations create. it is precise information about your preferences so we can bring you into this interactive environment in a contextually relevant way. playlists, popular your experience so solving that problem of walking into a record store were you can have read thing, what do you do? pandora can solve that. it will be version two of on-demand. emily: are the labels asking for the same rate that they give spotify, 70%? would you pay that to them? >> i

expect they will be in the same ballpark. we a slightly different approach because we are hoping that labels will look to be more flexible on how the parts can come to market. when of the great opportunities pandora has is to address this huge tens of millions of listeners were not the $10 subscribers and haven't really thought about it and introduce them to premium services, upsell this big fat middle of listeners and higher our product. we can expand the industry. emily: you said pandora's about to get louder with its advertising. what do you mean by that? >> it's time for us to stake our claim. we are a huge service and we account for more usage than youtube in the u.s.. at thisto be louder level of maturity to have that voice. erik: what does louder mean? in mean speaking louder to be

a stronger marketing presence and we are investing more in marketing this year. you will see us be more vocal about rolling out roddick send a clear what we are doing. emily: one of the interesting parts of the interview, i asked him about beyonce dropping an entire album to stream. does he think that could be that key to success and he does not exclusive deals like that will scale the services. he says it's not the way to win loyal fans. it's a little bit self-serving perspective that the newly reinstated ceo of pandora. scarlet: great stuff and fantastic interviews with the ceos on earnings day. great job. we've got much more bloomberg markets coming up after this. ♪

scarlet: this is bloomberg markets. tracy: it's time for the bloomberg business flash. this year's top national football league prospects are split between the los angeles rams, philadelphia eagles, and san diego charges but all of them are going to nike. the company is extending its investment in football with 15 members of the rookie nfl class. just won ar has contract and no word on how much they are playing paying the -- paying the rookies. scarlet: there's a counter offer for innovation. novartis is exporting -- is a glory a bit as well. ion rejected $52.50 per share which they say undervalues the company.

tracy: dbrs says it will not lower portuguese sovereign debt to junk status. say must be rated investment grade by at least one major ratings company. dbrs is the only main agency that did not cut portuguese bonds from an investment grade after a $90 billion l out in 2011. that is your business flash update. scarlet: let's go over to the markets desk and julie hyman. she will check a couple of movers including one by the oracle of omaha. >> berkshire hathaway has its annual meeting this weekend. julie: we decided to look at their top holdings and how they have done this year. you can see the shares are up nearly 10% year to date although they are falling back a little bit today. you can put berkshire hathaway holdings in two different buckets. the financials are first and how they have done year to date -- wells fargo, bank of america and

u.s. bancorp. wells fargo and bank of america are down as most of the financials have seen declines. u.s. bancorp is an accession but the financials remain the worst-performing group in the s&p 500. that investment has not worked at your today. how about consumables? and heinz and coca-cola are up. some of the other large cap american ibm, p&g, express, that's a mixed bag and philips is out with earnings today. you can see the shares are down 6%. by that measure, not a great way, however, this is the only one of the refining stocks that's up yr to date about $150 million year to date so that has been a good performer for berkshire hathaway and warren buffett. his portfolioe

which includes some privately held companies that urge her hathaway controls. they look at the publicly traded holdings. if you look up or cure hathaway and you look at it under its client tag, you can look at the performance using the portfolio analytics and go to the performance tab and look at it in different ways. this is looking at the year-to-date total return performance of the various stakes that they have in various companies. it's a 2.9% total return year to date. the berkshire stock has actually performed better than have these underlying publicly traded holdings. it does not account for the private holdings that workshare

+++ that performance. scarlet: good stuff in the be cool -- and a big weekend for berkshire hathaway holders. the canadian economy is on track for the fastest growth in more than a year but they might have a set act in the month of february. tracy: our bloomberg tv canada anchor joins us for more. the canadian economy turned negative in february, how much of a concern is that? >> the markets and the dollar are treating it is no concern at all. part of the reason is that we are still tracking for a strong first-quarter number. you have been seeing this negative number for february, down 1/10 of 1% in gdp growth but economists are not swayed. 2.23$ is wary connoisseur looking. manufacturing was week. wholesale sales were week but one place where we saw strength which is something people will feel optimistic about is on the retail spending side. we saw consumer spending up 1.4%. and somewas week economists say march may show no growth but the quarter will still be good that what will the

second quarter look like? we will look for some answer to that and the strength of the u.s. each time he and hope our consumers keep spending. scarlet: that's the big picture of canada. there is also news that a large developer is in trouble in toronto. the housing market in toronto has been super hot and almost overvalued but does not show signs of slowing down. is this a one off or is there cause of concern? >> that's a question that we will have to answer over time. this is relevant because urban corp. is a large developer and it's the first sizable developer to hit any kind of trouble since the housing boom began. carefully tong it ask the question -- is this a sign of one company that got itself into trouble or is this a sign that there may be some fraying with the market question ? last a 30% increase in the

10 years in house values so we feel it's over stress and we have warnings from various people that vancouver and toronto and parts of main mainland quebec are overvalued. they have 1000 units under construction and there are people being shut out. it's eight related companies are restructuring in the hopes that they will continue to be able to survive and build. the interesting side note as they issued israeli bonds. if there is a trustee in control of the assets, it might be from israel. tracy: thank you so much. scarlet: starting on monday, bloomberg television will go to the milken conference in los angeles. we will bring you the biggest names in business including the chairman of the cftc, all that coming up monday. ♪

tracy: this is bloomberg markets. scarlet: currency trading across the three largest trading plan arms fell to 38 billion dollars per day compared to 670 billion in september of 2014. the drop in volume is fueling concerns a further volatility and possible flash crashes. with the chief investment officer at acumen management and explained the surgeon action we saw in the yen after the policy decision. >> that move that we saw, that quick flash move on the back of no decision and no action by the boj was a lot of pent-up aggression. they are preemptively selling out of the yen to look at action in policy. having come back to where we started and the lows we previously saw. the future is anything below 1.5

and the authorities start to get touchy because the corporate said on the bulk of their hedging their. let's call it the last 9-12 months per it anything below 105, there is a bit of nerves coming out of the equation. further up, it's in a range where we can watch what happens. it's a dollar driven move outside of that. think there was talk about these moves in currency being compared to systematic trading. what do you think of that? thef you take a look at dollar index and where we sit in terms of a weekly scale, we're approaching significant tech levels. the underlying macro picture does not necessarily justified a lot of dollars selling. cta and systematic traders look

or a statistical anomaly better chance than not of something happening. there is every chance we are seeing the pronounced selling of the dollar on the back of that happening. when you look at the u.s. data, we don't see a great deal of dollars selling as a function of that. we see it in the aftermath and today is a perfect example. and not a whole lot of good soul but in the crossover between london and new york, we saw a bit more. joe: we talk about the data has not been that great this year. you say the weakness is not even about that based on the fact that a lot of the selling we are seeing is in the time before the data comes out. >> generally, if it was a macro driven move, you've got exactly that last 6-8 weeks of data supporting that but the seller is not really come as a result of the data.

it's been the aftermath. we are now faced with a situation where the macro players in the dollar are taking a step back and taking a breather. they are not buying fresh dollars but they are not convinced their underlying picture has changed that dramatically. us is our cohost joe weisenthal. we have one of my favorite topics of all time to discuss on today's show. joe: we talked about fx liquidity yesterday. your favorite topic is bond liquidity. and what's happening with volume. isre is all this talk about their bond market liquidity question mark maybe the data says there's not. scarlet: the data shows that volume has been increasing but you would not know it from the results from the big banks in the first quarter. all reportedanks

double-digit percentage declines in first quarter of trading. tracy: the banks are still complaining that they are nothing that pickup you might have expected in bonds in the first quarter. i would say that trading volume does not equal liquidity. that is the big issue is how you define liquidity. joe: they like to see more volatility. is that why they are not getting the revenues? tracy: yes, they are complaining about low volatility for years to when they complain, it's not the right kind of volatility. coming up today, we have chris white, who will join us for a deeper look into the credit market at 4:00 p.m. eastern. scarlet: moore bloomberg markets coming up after this. ♪

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>> welcome to bloomberg markets.

from bloomberg world headquarters in new york, welcome. >> here is what we are watching. markets are tanking again as if all comes to a close in stocks are flirting with ending the month lower. oil is bouncing around but it's heading for its fourth straight weekly gain. earnings reports from exxon and chevron are exposing the differences between how the two companies prepare for an oil slump differently. puerto rico faces of payback.