scarlet: u.s. stocks closing higher this monday. joe: the question is, "what'd you miss?" ask what theill nation needs to stabilize its economy. joe: monetary policy will continue to support growth, after data on new lending, retail sales and industrial production all missed estimates. scarlet: goldman sachs out with a new study on oil. we have the charts that you cannot miss. we begin with our market minute. pretty much a steady rally throughout the day although we did close off our best levels of the session. the dow gained almost 180 points and the s&p 500 up about 1% and the nasdaq gaining 1%.

you can credit oil prices for this. joe: an impressive turnaround, we started off in the red. futures offered -- opened negative. all,morning markets took so quite a strong day. a little off the highs, but not much. apple was the biggest gainer on the dow. warren buffett giving a vote of dashboard of confidence. and almost 0.2% stake but to be fair there was a separate regulatory filing. associate a't company like apple with a company like archer. one interesting thing, check out after that week chinese data, australia's 10 year yield hitting an all-time low.

maybe it will go down lower. you can see why there's demand for. also anxiety over the british pound, no let up there. it did come back a bit. the other notable thing you were pointing out is the south african rand. the two-month low versus the dollar. reports are police are set to arrest the finance minister. that's not a story want out there when there's already major concerns about government stability. oil having a big day, more concerns about supply disruptions. estimatepping its saying the commodity has gone into deficit faster than it expected. it had a pretty big day in that set the tone for everything

today as you mentioned earlier, energy shares rallying on the back of that. scarlet: you can find all the and functionsts at the bottom of the screen. we got the in hb homebuilder sentiment report, this goes back 10 years. i've broken it down by region. you can see prior to the crisis it was up in the 50 area and then it was in the basement during 2008-2009. ,ook at the white line everything else is holding up ok but the northeast is falling off a cliff. there's a lot of multifamily that was the hottest for a long time that might be fading. overall it's fine and most of the regions are holding up at keep an eye on that because it is really tumbling. as as been over 50 mid-2015, so that's something to keep an eye on. everything else seems to be

holding up all right. that is the one clear exception. m&alet: there's a lot of deals today. 101 deals announced today for a total value of $23 billion. there were five transactions that topped a billion dollars. , one ofthem are m&a them an investment. clearly a lot of big edie -- deals announced on this monday. here's another way of looking at it. will change it to monthly and the green line is the number of deals announced every month. the blue line is the volume of deals in dollar amount. you see a steady increase through 2015. that was the theme as we continue to rise. this year a big drop.

that the peak was right around july 2015. a month before china devalued its currency and through investors for a loop. since and we have recovered but we did not talk the previous high. off.year we've seen a drop we will see if this is the start of a turnaround. it offers more activity to come. scarlet: see all this and more on twitter. i want to bring in the bloomberg news stocks reporter. joe: oliver, thanks for joining us. you published a controversial report using a model to look at the relative valuations of stock. it argues that it's not really expensive as people think. explain why it shows that and why so me people are distrustful of it. all of her: i give a voice to this controversy will model

without endorsing it. topic.ons are a big stopts more difficult as gets pricier. it's essentially a model to look at the earnings yield which is the inverse price-to-earnings ratio. here is our chart, is pretty much what it boils down to. the blue line is the 10 year yield -- the blue line is the spread, the white line is the treasury. large. is very people want to be in stocks. the blue line shows the spread getting wider. whether or not you think it's a great way to look at valuations, right now you have to have an exorbitantly high pe level to make stocks look expensive relative to tenure.

it's still the reason why a lot of people come into equities. we talked about this over and over, there are few other places to see any kind of yield and the chart exemplifies that. the downside is the model doesn't really work. oliver: stocks are generally expensive historically. this is one metric you can look at that says maybe they are not quite as expensive relative to what i'm getting elsewhere. that is a big driver for markets right now. on what it all depends you're comparing it against. you can look at dividend yield, everyone is looking for that regular payout. traditionally utilities and telecom companies. oliver: that is what the earnings yield, a lot of people look at that because if you have a company that's generating

, afits and bringing in money lot of that will go to the payouts we talk about which is the dividend. the orange line is the s&p dividend yield, above 2.2%. this is not the way it always is more pronounced relationship this year. the tenure has moved down sharply since the start of the year and this is the type that explains why so many people are theonly favoring docs but particular sectors that have the higher dividend. scarlet mentioned earlier one of the surprise headlines, berkshire hathaway holding a billion dollars stake in apple. out with whatming they are holding. how closely to investors watch this stuff, and particularly

buffet? for whom thisle is a big deal? manyr: i don't know how people are looking at buffet saying if he is in i want to be in it also. it's interesting when you're coming off such a rough order for hedge funds. out.any were forced the apple thing is particularly interesting because a lot of people have been talking about jumping out of apple after a , it'sove in the stock kind of out of its glamorous age here at least temporarily. you have to have a strongly convicted case to not be in apple. 2014,didn't hold apple in if you are not in that stock, a

lot of these guys are going to be in big trouble. joe: tiger global cut its shareholding by 4.9 million shares in apple. that's a big cut. to wonder, berkshire getting it would a lot of these faster moving hedge funds seem to be getting out. scarlet: people talk about how cheap it is, the valuation. group, tradinga at 18.8 times reported earnings with the dividend yield of 1.69. apple obviously has a fatter dividend yield. buffet likes the regular in pop -- income. is surprising because so many

at places ino look the market where there is some kind of value. we were talking about looking at strange metrics and trying to figure out what the true value is in stocks. you have people looking at apple saying it's 10 times and still don't want it, that is a pretty bold call. that could be a big factor going on, looking at returns at the inn of the year. scarlet: what other institutional investor do investors really focus on? soros, einhorn , thoseeenlight capital are particularly interesting. george soros has been vocal about his disbelief in the chinese economic strength. he thinks there is an undeniable hard landing coming there. ended inquarter that 2015, he had a big stake in stables and telecom.

react how he is going to to china should be interesting. einhorn had his first solid quarter last quarter after two years of that performance. it will be interesting to see if he weathers the storm. scarlet: speaking of david einhorn's bond, 3.2 men shares acquired in the first quarter. that headline just crossing as you were talking about it. , one greatt looking function you can use to dive down into the current holdings of hedge fund managers and look at his current positions, he has a lot of that long consumer discretionary positioning. oliver, thanks for joining us. scarlet: words of advice for brazil's new cabinet. ♪

so-calledarolina bathroom wall is facing another legal challenge. the american civil liberties union wants a federal judge to stop the law from being in force. the group made the request in court papers filed today. the state of north carolina and the justice department are suing each other over the law which orders transgender people to use

the bathroom that corresponds to their sex at birth. the u.s. coast guard is suspending the search for a crucial passenger believed to have fallen into the gulf of mexico. carnival cruise lines has surveillance video shows a woman falling over a deck railing on the carnival liberty about 2:00 a.m. friday. the hunt was suspended sunday after crews search for more than 20 hours, covering 4300 square miles. authorities in colombia have intercepted or than eight tons of cocaine and what they say is the country's largest seizure ever. the drugs were found inside an underground hole located on a banana farm about 300 miles from bogotá. three people were arrested during the police operation. authorities say the drugs were ready to be sent to central the unitedund for states. south korea, the u.s. and japan will hold joint military exercises next month. they will focus on cooperating to detect missile launches from

north korea. the north has been testfiring missiles and in january, conducted its fourth nuclear test. .lobal news 24 hours a day brazil's acting president may announce a budget freeze by friday, according to an official from the economic team. the congress would need to root a fiscal target change by the end of the month. he and the newly appointed finance minister are under pressure to deliver results. we are joined by someone who was the same job. he was brazil's finance minister last year. he is currently cfo of the world bank group and joins us now. joe: what does brazil's interim to getent need to do now the economy accelerating again? >> they have a finance minister,

and experienced man. we better trust him. joe: one thing we hear is that hopefully the government can now othercal reforms and investment reforms that will get investors excited. what specifically needs to be guy, and how much can begun without hurting the economy further? supply-side really helps, the free market, you improve the tax code. in our experience in the world bank, it applies to so many countries and i think it could apply to brazil. scarlet: let's talk about your role at the world bank. to global you say investors, particularly foreign investors, who are skeptical about the potential for change in a country like brazil? >> if you look at emerging-market countries, many of them have suffered some headwinds because of change in commodity prices.

i think that brazil, in spite of everything that is happening, you see the currency market is holding ok. their banks are strong. when you compare it to different countries, when you see a strong financial sector, a willingness to reform, usually it is a good sign of the country's resilience. joe: you mentioned commodities being one area that has hit brazil. if the global situation does not improve, china continues to sputter, how much can brazil do? how important is the stabilization of commodity prices? >> are advised that the world bank, although i take care more of the financial side and the if you read the communiqués and other things, what is important is to address the macro things. brazil has done that.

you're making the macro adjustment, then you have to work on the supply side. you have to look at labor markets. i think it is common to most countries. and of course infrastructure investment is very important. the world bank is devoting a lot of time because it believes even thate global level infrastructure investment can be a great opportunity to help sustain global activity, especially at a time when global train is a bit -- global trade is a bit stagnant. the world bank committed almost $600 million last year in is up to $800 million this year. 2012.off the high of are you in discussion on any new loans? of this't take care part, i take care of the funding of the world bank.

look at the global situation, the headwinds in so many countries. we do see a demand for support from the bank. it can be in many different ways . it can be tax reform like we did , thingsot -- with peru like we did with vietnam, or it can be like columbia. it's a very important program for infrastructure. that's what we need now. thinking back a year ago but -- before the fed started its rate hike, there is concern a rate hike might drain money out of the emerging world. then there was a few that they just need to get on with it and the certainty associated with the hiking cycle would be good. now we are in the middle area where nobody really knows the

pain. what is the role of the fed in this, would it be helpful to have more clarity about what u.s. monetary policy is going to look like for the global environment? see how theto economy grows. there are several indicators. you see jobs continuing to grow. i think the direction is clear. the pace depends on data. scarlet: we know that the g7 finance ministers are meeting next week in financial markets are faring better than earlier this year. there were a lot of questions on it will have. what do policymakers need to do to boost growth overall globally? you have to continue to look at the supply side and also think about demand. one important thing is how we could connect investors to

investment opportunities. we see so much money going to risk last assets. you should try to get new opportunities to generate long-term cash flows and build things like infrastructure. joe: thank you very much for joining us. a hearing now -- were .earing from david einhorn we will give you all the details next. ♪

scarlet: carl icahn confirmingscarlet: there is no

share in apple as of march 31. it was already known but now we have confirmation. i love the idea of a handoff between carl icahn and berkshire. more questions about whether berkshire scooped it up at just the right time. scarlet: greenlight capital coming out with new announcements. they are no longer showing or garmin.ei we mentioned earlier they added . position to help as well based increase their stakes in apple, yahoo!, macy's, and yelp, all in the first quarter. they have some new positions as well. fromther headlines here elliott, which is run by paul and out,nd semantic

all in the first quarter. also noble. joe: and also pfizer, a new position there. the headlines are coming out fast and furious right now. the one we paid attention to today was apple and warren buffett. global mention tiger tearing back at apple stock. up, core still in coal output dragging in production in china. china facing new pressure to support its economy. we discussed, next. ♪

shery: welcome back. let's go to first word news. the u.s. supreme court issued decisions and new orders today. contraceptivea coverage under obamacare. they are sending it back to a lower court. the justices ruled that investors can pursue security ,raud suits in state court deemed of a setback to the financial services industry. the court rejected an appeal leaving intactle a $236 million reward to new hampshire. and they also let stand a $25 million award to philip morris. that money goes to the estate of a smoker that died from cancer.

donald trump says florida senator marco rubio is not under consideration for vice president. the washington post reported marco rubio, sarah palin, and chris christie are all being considered as running mates. donald trump treated that the washington post is wrong and most of those mentioned are not being considered. a strong earthquake shook tokyo and other cities in eastern japan earlier today. there was an initial magnitude of 5.6 and hit about 60 miles east of tokyo. no major injuries or damage. floods and landslides at a popular waterfall in indonesia have killed 17 people. one person was found alive and was being treated at a local hospital. officials are searching for four people still missing. more than 70 students were visiting the waterfall when the rain began. global news 24 hours a day part i try to 400 journalists in over 150 news bureaus around the

world. i am shery ahn. alix: let's get a recap of the market action. we looking at gains for the s&p, dow, and nasdaq things to crude prices that boosted energy shares and apple is the biggest gainer after berkshire hathaway disclosed a stake in that. joe: you can see a bit of a surprise. there is weak economic data, empire fed, and china we are about to talk about. and yet you some resilient equity markets. scarlet: you can thank warren buffett for apple. in a filing has reduced his stake in paypal by 8.4 million shares to 3.1%. that is still a sizable stake for carl icahn and paypal. he was very vocal in pushing for ebay to spin off paypal as well. so his stake is still -- joe: good on tech overall. scarlet: and news on george

silvers filings as well. let's go pull it up. do we have that right now? ok, i am getting the word from the producer it is under ni heads. only, do you know that company? george is reporting stake in this as well. glty. , sp y and we will continue monitoring these headlines from those filings. "what'd you miss?" we are pointing to economic data in china. china's economy grind down the year in april. industrial production came in at 6%, down from 6.8% in march and missing estimates. retail sales also missing forecast. just over 10%, and -- joe: let's go to the chief

strategist with silver crest asset management. he has also served on the american chamber of commerce in china. ? is as good as it gets we have a few months or we are showing react celebration in china? acceleration? we are backing down now. >> it should not be surprising. , the definition of insanity, some people say, is doing the same thing over and over and it acting at this -- different result. china has been trying to do this for several years. each time they do it, markets cheer and they say yeah, stimulus will save the economy. it does not happen and they get less and less each time. and they add more and more of a dead weight of debt to the chinese economy, deadweight dragging the chinese economy down. scarlet: and we have seen the

debt whatever metrics you pull up, they show a lot of addition of debt. there is a lot of confusion over policy makers and their priority . last week we had editorials, newspapers that indicated there should be more of a focus on restructuring reform and less on sustaining growth. where does that leave us odor do you know where we are, where policymakers' minds are? >> the makers are confused about what they want. scarlet: so it is an internal battle. >> in their own minds it is an internal battle of what they really want. a lot of the chinese economy, the story of the past several years has been they want a correction without having correction. they know there are imbalances, but they are resolving those with slow growth, so they miss targets. the more they stick to the idea they have to achieve a certain growth target, and the more quite friendly the markets cheer them on say yes, we have got to

hit 6.5% gdp growth or a big disappointment, the less able they are to implement the kind of changes that will, in the long run, turn the chinese economy around. joe: so what is the medium? should we slow down? these twin goals of reform combined with stimulus continue to fight each other? unfortunately it is more and more of the same unless someone makes a break and decides to accept slower growth in order to actually reform the economy. i think we are going to continue to see markets premier odyssey -- periodically by, and china stimulus economy -- china will stimulate its economy. things get worse before they get better. but the implications for the global economy. you mentioned markets have shrugged this off. they have a right to shrugged is

off. the slowdown in china is really the end of china's overinvestment. certainly benefited some people if you are selling commodities into china. but it actually was deflationary on the rest of the double economy and many markets. so relief from that overcapacity economy,f getting the global economy back in balance again. so i don't think that china's a slowdown is going to derail global growth or growth in the united states any more than to pass dramatic slowdown in the 1990's did for the same reason. neither japan or china were growth drivers. scarlet: i like that. one breakdown we find in the latest data is that home sales kept growing. how concerning is this sudden return to a boon situation for housing? >> is that a bright spot?

just if you want to see higher numbers. i was reading today that china has unsold homes, and that is not even including empty, but unsold homes with square footage of seven manhattan's. overcapacity in the commercial real estate sector is even more severe. healthy't see that as a housing sector. what you do see is a lot of money sloshing around, looking for a place to go. whether it is stocks, bonds, real estate. it was commodities a few weeks ago. that is not healthy. scarlet: i'm going back to the idea of money rolling around looking away for a place to get returns. joe: we were talking about insein and unbelievable volumes on the metals futures market. that seems to have tampered down. it has quieted down.

he would go into real estate for a while despite the massive overcapacity. >> anyone's guess. people areesting surprised, they should not be. there was no underlying demand growth in china that would justify a rebound in commodities, particularly in metals. people are buying in because they want to. joe: thank you very much. scarlet: crude oil climbed to a six-month high, moving into an earlier than expected deficit following stuff in nigeria. ♪

♪ scarlet: it is time for the wittenberg business flash -- bloomberg business flash. energy playing to reorganize its debt under cap europe -- chapter 11 bankruptcy laws. into equity while allowing the corporations to keep going. they filed in u.s. bankruptcy court in texas. the oil and gas producer has the support of competitors. report from the united nations and the world health organization has concluded the chemical found in month santos roundup is unlikely to cause cancer in humans areas this caps on europe controversy after the killer. it was the most used herbicide.

and the treasury department is disclosing specifics about how much u.s. debt is held by saudi arabia. this had been held confidential for more than four decades, but is being released in response to an open records request. the stockpiles are under $117 billion as of march. that makes saudi arabia third among foreign nations with u.s. debt behind china and japan. and that is the bloomberg business flash. coming up, it has been a rough for department stores and apparel retailers areas we dig into how home depot might fare with earnings tomorrow. ♪

scarlet: last week's earnings report shows americans are spending less on close at department stores, and it may be different when it comes to shelling out on improving their homes. let's look at the numbers on home depot showing the numbers do not lie. home jumper -- home depot group 7%, the fastest in a year. post negative sales since 2012. pretty remarkable. home depot is outpacing lows in which is the blue line. 's which is the blue line. when more americans are fixing up their homes, home depot prospers. there is correlation with the remodeling market index which surveys remodelers on it

quarterly basis, how much work they are getting. any work above 50 is an increase . it is still holding above that if the line. home depot also beats out lowe's when it comes to stock price. walmart is in light blue. according to analysts, one part of the success is strength and building new stores. america is seen as over stored -- over-malled, and over-retailed. reports earnings tuesday before the u.s. opening bell. this with thecuss senior equity analyst. it has been in the news with department stores and other retailers. is there an amazon effect with home depot, or are they amazon in unit -- immune? >> it may be smaller for the , butmer side, paint

largely the protected, 35% of sales come from the pro that wants specific row brands, pick up the curbside and go to did job. they are playing with this and players like lumberyard or whatnot. they are more protected than other retailers. about the proslk in the store to talk about what they mean. is there e-commerce opponent? e-commerce is up $1 billion last year, $4.7 billion for home depot. 5.3% of their sales is growing rapidly. they see 40% of online doors -- sales touch the stores. whether that is curbside or pickup, they are integrated and interconnected. joe: home depot has been amazing, the performance have been phenomenal. how important is the continuation of the homebuilding cycle for the company? what are the drivers that are necessary to be in place? >> home depot is in a great

position because they benefit from new home sales and also existing homes. the age of the home, the stock is 67 years old. the older is, the more likely to remodel. so then obviously that. as the population gets older, there is a lot of home improvement as people reconfigure houses to make it accessible to an older generation. scarlet: what is the distinction home depot holdover lowe's? people said consumers like going to lowe's better, they carry -- cater to women. they try to attract different kinds of customers are you is that still the case? >> home depot's locations are better for the population move with the urban live, work, play multi-family structure. they have better locations.

lowe's is more in the suburbs, so there is a little bit of that at way. home depot is excellent. joe: when earnings come out tomorrow, what is the number you are most curious about? >> the transaction. --the ticket is going up maybe they are seeing a slowdown in big-ticket, which is a slowdown in remodeling like tension and stuff like that. -- kitchen and stuff like that. scarlet: what about the impact of labor? >> home depot is pretty competitive with wages and they offset the rising cost with applied chain optimization. they announced a project to schedule when freight delivers to stores, there is more on schedule, they don't waste time. they have a three-year plan to reach a 14.5% operating budget. they are already at 14%. scarlet: are people spending more on the expense of buying

things like clothes owner >> they are definitely spending on home remodeling, but not necessarily home furnishings. that has been weaker. if you don't need a new couch, you don't buy it. if your kitchen is under construction, you will finish the job. joe: bloomberg intelligence senior analyst, thank you for joining us. scarlet: oil coming to a six-month high on the goldman sachs call at the global oil market moved into a deficit. there is supply disruptions in nigeria. joining us is robert from renaissance capital. why do so many people in the capital seem to underestimate the impact it would have? >> i was there last week. we were surprised. we only had just announcements from ministers suggesting output could have dropped from over $2 othern to $1.4 million.

analysts are saying $1.7 million. it looked like an extra 300,000 barrels out of operation at the moment. lagos.u said you were in we have heard stories about nigeria and supply disruptions in the past. what is the underlying cause, and how quickly have a resolved themselves? >> there is not as much oil in nigeria as nigerians think. they have 2 million barrels a day. they think that is a huge amounts. when you spread among 270 million people on their producing something like 12 barrels per thousand people per day. even benefit 300 in the emirates, tune in 17 in saudi arabia, -- 217 in saudi arabia. nigeria does not have a lot of money, but the militants where the money is, they think they

should get more cash. the rest of the country thinks they should get more of the cash. of people have been betting on some kind of currency devaluation, which we have not seen so far. joe: i was going to ask you, is the nyro pegged to the dollar? >> we are looking for depreciation in the nyro cents last year. we have the vice president speaking last thursday, wednesday. he was also saying it is a matter of debate for the authorities now. of, you said there is not much oil to go around or as much as people inc., everyone thinks they should get paid more. are there any more policy moves to improve the situation? >> it is tough. these militants down in the delta region right now, i was checking them website. they are looking for an independent date. the only way they would be better off is if they were their own country. if you divide the 2 million barrels between the people in the south, they are right.

, thehas happened before former president bought them off . he gave a lot of cash to the militants, and that proved enough. suddenly all the great idealistic aims for independent country faded when they all had enough cash in their bank account. joe: is that option available now or because of the collapse in oil and the weak economy, is that more difficult? >> it is fairly more difficult. there is an additional problem, and this was flagged a year ago presidency, the president seemed more successful because he was from the north and a muslim. addressing this problem of the capital, but they were concerned he would fall out with the christian out in the militants -- christian south. so there is an ethnic undertone to this. joe: would you say to avoid the country completely?

you think the currency is going to be under threat? do you see opportunity? >> we have a lot of clients who just howcognizant of cheap these stocks have got. a lot of bad news is right in. they are ready to come in at a point when they feel comfortable. they can get out again if necessary. there is very little dollar around in the parallel market, the unofficial market, the currency is 360 to the dollar in the unofficial market, 200 at the official rate. so people are waiting. they would like to put money in. they are waiting for a currency move that could come in a week or two. joe: thank you for joining us. scarlet: another deal for today, this is from schroeder, the largest probably traded fund manager. they are adding them brookfield management that manages $4 billion in assets. schroders, the european hedge

fund manager. there is also headlines from andrew left, the short seller. he triggers that downfall in the stock had sent the stock reeling, company on the defensive. of the he is a buyer stock now many are exiting. joe: he nailed the timing after being the guy that helped spur the downfall. that was a great, that will be a great trade. scarlet: he said it is trading like it is over. what you need to know to gear up for more trading tomorrow. ♪

scarlet: "what'd you miss?" japan's industrial utilization tomorrow at 12:30 eastern time. joe: and i looking at u.s.

housing starts and building permits at 8:30 a.m. especially watching the cpi member to see the inflation numbers in the economy. scarlet: peggy for watc

>> i am willie guys. mark: i am mark halperin. we hope this one is a little more intimate. >> mark halperin is aboard a delta flight somewhere over the united states. what are we doing? are you really in the can? ♪ mark: this is your captain speaking, sit back, relax, and buckle up because we are expecting turbulence, especially for donald trump. maybe, controversy swirls around him like they can -- like dust around pigpe