>> i'm mark crumpton with first word news. at the trump administration has approved 3.6 billion dollars in new loan guarantees to finish the nuclear reactors. the expansion in georgia is years behind schedule and its estimated cost of more than $27 million has doubled since the construction was approved in 2012. money isay taxpayer being used to prop up a failing project. trump's declaration that washington will recognize its sovereignty over the israel

he occupied area is drying strong condemnation from countries in that region. the syrian government called irresponsible and a threat to international peace and stability. iran's a foreign ministry said it plunges the region into new crisis. it turkey and egypt also criticized the decision. it mike pompeo blasted lebanon's has the law which he promised the u.s. would continue to pressure. during a visit to beirut, he called on lebanese people to stand up to the militant group he said was committed to spreading destruction. >> has a lot stands and the way of the lebanese people's dreams.

434 years, has a lot has but the libyan people at risk. whatever political promises or outright intimidation of voters, hezbollah sits inside the national assembly or other institutions and a to support the state. >> secretary pompeo added that the u.s. would continue using all peaceful means to curb has long and iran's influence. more towns are evacuating as the flooded missouri river seeks over and through busted levees. the national weather service says the river is expected to crest today at levels just short of those reached during the 1993 flooding. is missouri river swell following heavy rains and snow melt this month. the floods have been blamed for three deaths. a heavy toll on

agriculture. global news 24 hours a day and at tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ >> this is bloomberg markets the close. i'm scarlet fu. >> i'm caroline hyde. the end of the trading week here in the u.s.. we are accelerating our losses now. tech in the firing line. this is a global selloff bond by data from germany.

the yield on german ten-year negative. the euro lower versus the pound. >> the em under some pressure right now. this goes back to the yield curve in the you u.s. inverting. you can see there, -1.36%. we care because the spread has accurately predicted the last seven recessions. the pound compared to the dollar in recovery mode. we will discuss this all further in just a moment. let's look at our top calls. off, analysts are still positive on making. they are seeing a buying

opportunity in today's weakness. downgrading stanley biogen. the company announced a failure of alzheimer's treatment. lululemon downgraded to neutral. seeing less upside ahead. those are some of your top calls. >> now, brexit bedlam. primeders have prompted minister may's bid for a delay. you have written about brexit. you are also realistic about it.

estimation that theresa may can get her deal through next week week on a third attempt? >> it looks very unlikely that that will happen. when youaw yesterday saw the eu give its conditions, it is intriguingly precise that they came up with that. i took a look at her and decided she can't get this deal through. they also decided she didn't know what to do next and so came up with a system that would force her hand. force others in parliament to take control of the situation which is i'm sure what they think will know happen. to emmanuelown

macron saying there was a 10% chance of her getting it through. >> what about the chance of a general election? could this be delayed because of a new government and the u.k.? >> an election is a contest between parties and the party system is misaligned with choices over this one issue of brexit. both main parties are deeply and fundamentally split. unlikely to be a way to solve the problem. you would get a different collection of mps at the end of it. with thehat coincided way the electorate was moving is a matter of complete chance as

far as i can see. there are strong parties on one who took the opposite view during the referendum. ishink what will happen either we have a decision to leave without a deal in three weeks and that is what the eu wants it to appear to be, a decision by the british to do this themselves rather than the europeans forcing them into it. if we do anything other than that, it presumably has to be on the base that someone other than theresa may is taking the initiative and starting some longer process with a second referendum with some question being much more likely than a general election. then we are talking about a much longer delay. >> for our viewers who are probably sick to death of

hearing the my new show details? you lose yourself, you can see what for trees. what are the takeaways in terms of the economic damage or not? is it just the british pound we look at? >> if you look at the british 250 hasrket, the ftse underperformed for the rest of the world by 23%. since the referendum. it is obviously affecting british stocks. the pound is as good a gauge as good engages you are going to get. the problem you have using even the pound is a good gauge is simply that the range of options isn't clear. in many ways, although i can thoroughly understand why her

suggested deal is so unpopular with parliament, it would be fairly popular with the market. it basically means that britain carries on much the same economic terms that it was which as far as anyone knows anything about economics is good news. it means it's continuity and it continues a fairly healthy situation. against that is uncertainty. >> all advice toward certainty. coming up, shining in a rough holiday season. we are talking about tiffany's and it doesn't lose its sparkle. we will talk about why. this is bloomberg. ♪

>> despite earlier concerns,

shoppers still want a life of luxury. tiffany persisted showing modest growth for the remain the of the quarter showing -- pushing shares higher. our analyst. what is the secret? target are trying to younger consumer. they are investing in digital to try to be more relevant. what happened in q4 and holidays was a broad softening across the board in retail. for them a continued in january because of the strong dollar. is that going to reverse

itself or will they have to find new areas of growth? >> a are growing in china and they are seeing strong builds within the market. i do think that broadly, a lot of their success depends on these exogenous factors. you can become more innovative and do more marketing but if you are so affected by a currency and the way people are traveling, it will be harder to continue to propel your growth. >> it doesn't matter how you are going to control your inventory. >> have you plan for that, also. we saw that when the yen weakened and everyone started traveling to japan. theldn't they just got slack in other countries? >> in theory, they should but america is still there largest market in terms of sales and operating margins. the americas as a whole. talk about millennials, the big thing there is not to

buy but to rent. why on something when you can rent it? >> the business model is you have a subscription and you pay a certain amount of money for month and you get to rent up to four pieces per month from handbags to evening dresses. rentallan is to be the avenue for everyone. for multiple categories. they have patterned -- partnered with west elm. millennials -- it seems they are less financially stable than earlier generations and they are into the sharing economy. if they want at the innovation and freshness and this is the way to do it. >> great to have you.

a quick look at the markets. it is a down day to end the week. this is a global selloff we saw today. >> banks leading the way on the day and the week. this is bloomberg. ♪

this is count on to the close. >> i'm scarlet fu. take your pick. which are you focused on? >> the stock market selloff is dramatic but if you look five downif nothing, we are 2/10 of a percent. it's not nothing but it's not huge by any stretch. is extraordinary in

rates. i was looking earlier and a huge mover for the slovakian 30 year i don't think we have ever talked about it but it does say there is a massive reach for duration anywhere where there is received safety and long and bonds. people are buying. it is bright green across everything. the week data in europe has something to do with it. the volume of bonds that are back in negative territory on the yield are surging. circle.comes a vicious people are worried so they gone -- go into bonds. it amplifies the concern across the market. >> when you see how it all shows up, there is the spread between the fremont and the tenure and it is negative. .t spills over into equities it started off with a lower open and we try to come back a little bit of them market is not having

any of it. the nasdaq is the lead to kleiner off by more than 2%. utilities and food beverage and tobacco are defensive. we can show you it is down 7% . >> if you look at financials as the worst performers, banks off by 7% and diversified financials of by 7%. >> this is a global selloff which we have not seen since the beginning of january. >> let's go to our reporters who have been checking out different parts of different asset classes. at a started. >> i am watching one of the worst-performing stocks today and that is nike. earnings.on where the concern was was

revenue to girly in north america. as you can see, nike shares are down the sixth 5%. that is the worst day for nike this year and since back in october of last year. north america is clearly the largest market for nike. the forecast for the current quarter also came in a bit short. publicnt to look at jobs. shares of 6% today. they are basically saying that shaquille o'neal will join the board. to bite nineing restaurants in the atlanta area and he agreed to be a pitch man as part of a larger marketing agreement. the shares were down 29% last year. mainunderperformed its two competitors by 40 to 60 percentage points respectively. keep in mind, that

underperformance came before the unsolicited political commentary from the founder and the racial slur he was accused of abusing that led to his ouster. shaquille o'neal has had a good track record in investing in companies. he was an investor in five guys the hamburger chain. investor inrlier google and most recently in ring the home security camera company. see ifhnson, trying to the shaquille o'neal touch is going to wear off on the company itself. >> thank you. we were talking about the significance of the end -- inverted yield curve.

professor, thank you for taking the time to speak with us. what does in version in this part of the curve mean to you? >> it is very bad news. my dissertation in 1986 detailed that this unusual type of behavior where the loan rates have a higher yield usually been short rates but now, you have a short rate with a higher yield of the longer rate. the last time this happened was june of 2007. we know what happened after that. >> does the inversion caused the recession or is it just a signal of a recession but not actually a cause? that in my model, this provides expectations. it provides a prediction of recessions. it is a prediction that has been remarkably accurate in terms of the out of sample.

after my publication, there have been great recessions each one preceded by an inversion. the intuition is simple. you already talked about it on the show. when risk is on, people go to the safest possible asset in the world and that is the 10 year treasury. the price is bid up, the yield is down, people are leaving short-term to go into long-term and that inverts the yield curve and that is a harbinger of bad economic times. >> how long is that harbinger usually? >> the lead time from the inversion to a recession varies between nine months and 18 months. it is safe to say if this inversion lasts for a full of 2019 ort the end the beginning of 2020. >> what part of the curve should we look at? oftentimes, markets like to

quote the 2/10 spread. you use another part of the curve in your research. what part is most important for where we are now? >> there are many different pieces of the yield curve that you can look at. i prefer to use the 10 year minus three month or the five year minus three month because those were the ones that were tested in my dissertation in 1986. we have a. of out of sample validation of the model. i am hesitant to look at these other spreads because we don't have as long of a track record. i would hesitate to go to the 11 year minus the nine and a half year. >> looking at other spreads and two/10.

it is not inverted yet but it is flattening. if the way you put it is that the signal from the yield curve is largely as a result of the concern that people have when they buy long-duration treasuries, what is the real difference between an inversion and something that is close to it? >> my dissertation has to do with growth. economic growth and the slope of the yield curve. even if the yield curve is flat and not inverted, my model predicts lower growth which is consistent with other information we are getting. the fed is also concerned with slower growth. even if there is not a full inversion for a quarter, the model is saying we are heading for lower growth and it might be zero. >> looking globally, has this been the case? we arguably closer to a recession in europe than in the united states.

are you seeing that sort of a trend globally? >> my research also looks at different economies. is validated in many different economies. we need to be careful the way we use it. often what i do is look at the difference between whatever countries yield curve and the u.s. yield curve and that countries economic growth relative to the u.s.. world, thisss the model does not work in every country but it has been validated in many countries. >> we are showing the returns on the bonds around the world. theear yield on one is lowest since 2015. does the u.s. yield curve inversion mean less or more in this environment? that this is bad

news. if you think of the yield agenda, the yield represents a real return that is linked to the economic growth rate and it also represents an inflation expectation. lower yield is usually bad news. yields usually are bad news. that way forseems the stock market today. yield curvend the inversion theory, we thank you for joining us. that fear about global growth sent money into bonds over a fear of the yield curve. we are currently seeing the s&p 500 off by 1.9%. >> we closed at session lows. and prettycome down much the index is closing at lows. >> pretty ugly. caroline: let's dive deeper into the action. >> i am watching the banks today. wednesday, ite really has us in pain across the board.

since that fed decision, lower growth. 4% today.down almost that is the worst day since early december. even if you look at on the week, returns for the banking sector are more than double the losses than the next worse industry group. and if you look at the kbw bank index for the week, the worst weekend more than three years. romain? rising once again, really on a tear. we should point out that we just got that new data coming across the liar which shows that money managers still remain long, still remain bullish on gold. the week endeds on tuesday. any additional bullish sentiment you would have gotten after the fed meeting is not reflected here. we did see exchange traded funds

adding in the last couple of trading sessions, boosting their total to 930,000 ounces for the year to date. a bloomberg survey of gold analysts showed they remain bullish. we are either at a pause or a combination. this could be good news for gold investors. caroline? caroline: go to those havens. great analysis. for more on the markets, let's bring in kristin, head of capital markets. what are your clients saying now? are they worried about global growth? >> they are. what happened with the yield curve today reinforces that. they are asking the question, what does this mean? believe it is still too early to tell. when we look at this yield curve inversion, the fact that the yield curve is flat is telling us something.

it needs to be a prolonged inversion. we looking for prolonged inversion. what a lot of investors are looking at now is stable data around global growth, not reducing more than it already has. >> kind of a cliche, but green shoots. that data we got in europe was not green shoots. >> that was not helpful. ,f we go back to the rally we've seen an extensive rally. it is unrealistic to anticipate we are going to annualized these returns. what has fueled it? what has fueled that rally, initially it was short covering, then we had share buybacks. this has not been a rally that investors have loved. we have not seen cash coming off the sidelines. we are waiting for some consistent economic data. we also waiting for earnings and to see the outcome of that.

that will give people more confidence. -- there havey been revisions down, but one thing people need to keep in mind is that happens every year. this idea that expectations are going to be revised down, we've seen that every year. i think trade resolution is something that is front in investors minds. scarlet: that is going to hang over us for a while. i want to go back to the idea of a growth scare. recently in 2016, people were worried about recession. it seems like we are in a different volatility regime. how does that growth scare manifests itself in this kind of environment? >> if you look at where we are at today, it is basically the fed doing the u-turn that they did in january and then reinforcing that sentiment. basically, the fed was in an extreme tightening cycle last year.

this year they are committed to sustaining economic growth. when we talk about return of volatility, we have to put that in context. last year, we saw implied volatility at historic lows. if we go back to the beginning of last year, there was this exuberance in the market. a level ofed to around 15 to 16. which would still put equity market volatility today well below historic averages. joe: is it cheap? is there a way to go long ball if it is cheap here in a way that doesn't waste a lot of money? >> the conversation we are having is, how do you confidently stay invested in? that is where those strategies come into play. all relative. what is cheap to me? basically take the

dividend yield on your equities right now and use that to buy six months downside protection at 10% below today's levels, if that will help you confidently stay invested, that makes a lot of sense. also, is it cheap? equity markets have rallied in the u.s. since the lows of december and that is now 50% cheaper. caroline: are banks cheap enough? are they value traps? >> i think we need to wait to see in terms of the yield curves. banks have been a strong reaction to that movement to the slowdown in economic growth. whenever volatility spikes in a particular sector, selling it as a way to build long positions is lower than it is currently trading. scarlet: you advise a globally diversified portfolio. you look at the u.s. and everyone talks about a dirty bag

of laundry or whatever. a lot of people have been talking about maybe trying to buy europe, but maybe you have to think again. >> we love emerging markets asia. if we are going to put capital to work outside the u.s., we advise globally diversified portfolios. it doesn't mean that you have to put a dollar to work in your own country. if you look outside, the 10 year extended bull market, emerging markets have only participated in one third of that. if you look at asia, they have -- they are still 10% off the 2018 highs. that trade say resolution is priced in, it really isn't. kristen bitterly, thank you for joining us. that does it for the closing bell. romaine bostick is next on "what'd you miss," where we will

look at the yield curve. this is bloomberg. ♪

caroline: we are live from new york. i'm caroline. romaine: i'm romaine bostick. joe: and i'm joe weisenthal. caroline: the market closed down on the day, the worst day for u.s. stocks since january 3. inversion insecurity. a significant part of the yield curve flips.

is a recession coming or not? more ugly european data. german manufacturer slump even further into contraction. and, place your bets. how one media seller plans to score big on march madness. the key story of the day, the curve inversion for the first time since 2007. >> inversions are typically followed by a slowdown. >> wait and see. >> investors are trying to calibrate what this means. >> we are going up. >> lower for longer. >> we had the fed coming out a lot more dovish. >> very dovish commentary from the fed. >> the boj, ecb, all of them signaling that they are willing to stay on hold. >> yields in europe have come off. economiess in foreign

that has kept foreign bond yields low. >> slowing growth. >> i need yields somewhere. caroline: joining us now is brian, bloomberg opinions economist, and gina from bloomberg intelligence. .bviously the bond market moved let's start with the bonds. brian, should the market be freaking out as much as it is? >> maybe not as much as it is. the yield curve inverted for the first time in the last time that happened was 2006. it took another two years for a recession to materialize. people are wondering, when will a recession come? yield curves are a symptom of the conditions that foster potentially a slowdown. there is concern about inflation, growth, and if the bond market is reacting accordingly. joe: gina, if we were only looking at the stock market,

would we see any signs of investors worrying much about growth? >> i think there were a few signs coming into today. that suggested the gains we've had so far were questionable for the s&p 500. small and mid-cap stocks have not confirmed the new highs. --nsfer station stocks transportation stocks have been breaking down for weeks. that said, it is a short-term divergence. all these components of the equity market have been rising since december. period ofe for some consolidation. i think there is a lot more to this than what is happening with the yield curve and european data. it is a short-term divergence in some of the broader indicators that we are experiencing the consequences of now. romaine: there are so many factors. when you saw the data out of europe and the u.s., if we

didn't get that yield curve inversion today, do you think the equity market would have reacted as negatively as it did? >> you never know. there's always some catalyst we can use as an excuse. i think the fact that the yield curve inverted is one of many reasons the equity market is correcting. the equity market is hypersensitive. we saw this in december as well. we saw massive drawdown in equities. we were in a different sort of phase at that point. we are in a little bit of a different space for the market now, but we are hypersensitive to the yield curve and that is just reality. fed going into super dovish mode. why hasn't that been enough to re-stoke growth and inflation expectations and give a boost? you kind of think that a really dovish fed should be kind of a -- >> the question.

it raises a question that has been confirmed over in europe by the ecb. what can central banks do? can they actually foster growth? there might be concern out there that the fed is sort of giving in and we just can't get out of this lower for longer. are we just in this lower for longer environment? maybe i do want to grab duration while i can. been freakinge out about the inversion in the u.s. bond market today. germany, negative territory once again. we've had japan continue to do that. what does that mean for the u.s.? are they all singing from the same hymn sheet? >> i think what is going to be interesting to see is who is buying, if there's far inflows into treasuries, is people are saying, i'm going to take my chances with the u.s.

maybe the dollar will continue to stay strong and my investments won't deteriorate. ecb have nothe really lifted off and yet you see the global growth slowdown. joe: there's always this fear people have that no matter what the fed says about allowing some inflation to happen, that the moment they see it, they can't even credibly say they will allow it. could someone like stephen moore rip up the playbook and say, let it rip for a while? >> the headlines suggest that he could. he's not ruling out the gold standard or whatever he was saying. it will be interesting to see what his voice brings to the table. he does seem to strike a dovish tone. caroline: we spoke to jim morris a little while ago and we will be bringing in more on his hawkish perspective in the next section.

we thank brian and gina. up, pmi problems in the u.s. and the eurozone. we are talking manufacturing. this is bloomberg. ♪

caroline: warren buffett has made a correction that raised the idea he made by an airline. last year he said he wouldn't rule out owning one. buffett hasn't always been a fan and he had a problematic investment with usair. employees in the u.s. received a major share of the bank's bonuses this year.

the german lender is trying to retain top performance after cuts in the investment bank. deutsche bank set aside $2.2 billion for bonuses, down from a year ago. top management received their first bonuses in four years. citigroup is cracking down after an investigation into trading. eight have been ousted and three were suspended. they say they found personnel conduct that did not meet standards. the bank is examining whether traders properly disclosed financial interests. that is the business flash update. romaine: under pressure. that is what we got out of europe when we got preliminary numbers for manufacturing data, primarily from germany and france. take a look at this chart. the biggest concern is that any dip below 50 signals contraction. france already there on a manufacturing basis. areany and the entire euro inching toward that level.

in the u.s., you can see a little concern on the pace of growth. again, getting pretty close to it. here to talk more about that is tom orlik, a bloomberg opinion columnist joining us right now. we look at the data here and there was certainly a lot of can turn -- concern that the global economy might be sinking into a contraction on a manufacturing basis. when you look at the data, what is it telling you? >> the numbers coming out of europe in particular are clearly troubling. pmi, atan manufacturing least the preliminary/reading, down to i think 44.7, that points to a marked contraction. beyond -- let's not look through or ignore these troubling indicators. our view remains that some of

the big stumbling blocks to growth which were there at the beginning of the year, the threat of fed hikes, of trade war, the government shutdown, the uncertainty about china, those have been significantly reduced. we've got a patient fed, a trade truce, a china stimulus, very significant increase in china credit. yes, these numbers out of europe re troubling. our view remains that we are near the bottom of growth for the year. joe: tom, when you look at the totality of the data, how much does it come down to that what we need is german fiscal stimulus? >> if it is german fiscal stimulus that we need, then we could be waiting a long time. germany historically has not been the first to push the trigger in terms of fiscal spending.

the other point to know about , the factoryat yes sector is stumbling, but the services sector is more significant and the services sector continues to register fairly robust looking growth. caroline: you talked about how some of the key concerns are now off the table. we were just talking to the latest, who seems to be the fed nominee, stephen moore, talking about how he would want even more growth policies coming from the federal reserve. >> i consider myself a growth hawk. what i will try to pursue and persuade and work with the chairman to try to make sure that america grows as fast as it can, and wages rise, and we have long prosperity through sound monetary policy. caroline: do we need any more growth hawkishness?

>> i think it is a question that everyone would prefer to see a strongly growing u.s. economy with rising wages. the question is, what is the right instrument to achieve that? you would lower interest rates be the right way? would sayts of people interest rates are still a little bit accommodative. the key is addressing some of the structural barriers, doing things to raise labor force participation, doing things to address the infrastructure deficit. caroline: breaking news coming from the u.s. interest is filing for its ipo. we just heard uber was going to look for the new york stock exchange. interest will too. romaine: ok. we want to get back to tom here. when we look at this economic

data, the backdrop, or sort of behind all this, is this idea that a lot of people are not satisfied with either the direction of their economy or their government, and we are starting to see a rise in populist sentiment. i'm wondering what you can tell us about the rise of that general movement. >> i think this is actually a key factor for the global economy. and what we've done is we've pulled together numbers which , whiche share of g20 gdp is now being run by populist rulers, by mainstream democratic leaders, like the communist party in china, and the trend is just extremely striking. back in 2016, the mainstream democratic parties of people like angela merkel in germany were still calling the shots on the majority of g20 gdp.

that has completely changed and we've got populist leaders and nondemocratic leaders calling the shots on close to 70% of gdp in the world's major economies. we are already starting to see the consequences of that, most notably in the trade tensions ,etween the u.s. and china which really hammered global exports and played a significant part in contributing to the slowdown in the first quarter of the year. caroline: tom orlik, always great to get your perspective. now we return to the breaking news. rushingtech companies and two of the key players have chosen the new york stock exchange. .ber and now pinterest ands going to be called pin it says it has more than 250 million active users.

joe: coming up, surviving a breakup. both sides of the aisle threatening to regulate big tex. what could be the impact on the stock market? that story is next. this is bloomberg. ♪ want more from your entertainment experience?

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>> i'm mark crumpton with bloomberg's first word news. president trump is reversing his administration's decision to slap new sanctions on north korea, ordering them withdrawn. the white house press secretary said today the president likes chairman kim and doesn't think these sanctions will be necessary. on thursday, the white house sanctioned two chinese shipping companies suspected of helping north korea evades sanctions. british prime minister theresa -- reasons her political battle in parliament. the leaders have agreed to delay 22xit to march 29 until may

if may succeeds. should she fail, the e.u. has given her until april 12 to come up with some new approach. donald tusk is happy about the outcome of this week's brexit summit in brussels, but says there's nothing more that he you can do to help prime minister may. he spoke to reporters today after the conclusion of the meeting in brussels. >> the fate of brexit is in the hands of our british friends. for the worst, but hope for the best. >> the european commission president says britain should leave the e.u. by the start of elections to the european parliament on may 23 if the country is not taking part. the government of mozambique is asking for international help a week after a cyclone struck the country and swept across the nation. more than 300 people are confirmed dead.

officials say that number could rise sharply. entire villages have been submerged. the trump administration today announced additional sanctions for venezuela in response to what it describes as the illegal arrest of opposition leader juan guaido's chief of staff. the announcement came while president trump met with leaders from five caribbean nations in florida. venezuela was at the top of the agenda. the region has been far from united. global news, 24 hours a day, on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. joe: regulation on big tech has

become a bipartisan threat. elizabeth warren has proposed breaking up the biggest companies. president trump has also not been shy about his feelings toward silicon valley. seemed to today, he say he would not go that far. >> i don't like the concept of it. i would like everybody to refrain, but they don't treat us the same way as they treat liberal democrats and others. joe: for more on these potential breakups and what the impact would be for investors, i won't to welcome -- i want to welcome gary evans. he joins us now by phone from montreal. this is an interesting angle. in theory, you break up one of these big companies and maybe investors have two or three shares versus one. what does history tell us about what happens when big companies get split up this way? >> this is one of these big things we like to look at.

what we did was to go back and look to what happened in the past. there are some famous cases like , and what we at&t found was that these companies typically take a hit when the first announcement comes through, but there is a time when you can make money. when the dissolution is announced, if you have bought at&t at the date of its split, you would have made 14%. if you would have bought the bells, you would have made more than that. if you get your timing right, you can make some money out of this. joe: do you think with the current crop of companies, the ones that are near monopoly, that it would produce sort of the same effect, given that the business structure and the types of businesses they are in are a little less industrial, a little less tangible than we saw with

the telecomms or the railroads? >> i don't see any reason why it wouldn't be the same. we've said that probably amazon is the most vulnerable. it has almost 50% of e-commerce. president trump has a personal dislike of jeff bezos. you can look at google and facebook. it would be a similar story. investors would not like the monopoly being broken up. if you want to see google or amazon split, i think it is quite likely that the pattern of the past will be repeated. joe: the flipside argument is that data becomes increasingly more valuable when it is combined. possible, because these companies, their models are very different than the monopolies of re, is it possible that

these companies just aren't that robust when broken up? >> what we would say is that in the end, a company like facebook or google, youtube and instagram -- in the end, these are just advertising companies anyway, and the advertising market is finite. advertising used to be driven by television. there's a limit to how much consumers are willing to spend. in the long run, perhaps the bigger problem might be that we hit those limits. eventually they hit those limits. splitting them up might make them more effective. caroline: educate me. how much lobbying was there done ? is there more sway in business in washington nowadays that

would actually avert any sort of monopolistic breakup? >> i think there was a lot of lobbying in the late 19th century as well. if you think about the standard oil monopoly, it was a very corrupt time in the united states. one of the things we concluded was that the circumstances looked quite similar. we have an environment of corporate overreach in the sense that companies are making strong profitability. the labor share of gdp is going down. the capital share is going up. there's growing protectionism. typically you find these breakups happen late in a cycle or recession, when a government wants somebody to blame, or deflect the blame. years, weext couple are in similar circumstances to what we saw in the past. romaine: gary, fascinating

study. i'm sure it is something we are going to be talking about for some time. gary evans joining us by phone. coming up, the wave of unicorn ipo's continues. interest, the latest in our ipo listing surge. more on that, next. ♪

caroline: time for a look at what stories are trending. you are reading about citigroup. it has ousted eight equities traders in hong kong and suspended three others after a sweeping internal investigation. the bank said it found personal

not meet itsdid standards. in new york, cracking down on developers. bloomberg says builders are extending skyscrapers. the practice is potentially dangerous. tictoc on twitter is reporting that the first underwater restaurant is in norway. it also serves as a research center for marine life. its walls are more than three feet thick, built to withstand the pressure of the icy waters. you can follow all these stories on your terminal on bloomberg.com and tictoc on twitter. romaine: breaking news moments ago. interest filing for their ipo, the image-based social media site coming to the market among a torrent of companies.

us now to discuss this is bloomberg's elizabeth fournier, who covers the ipo market for us. interest is a company with decent revenue, but why are thinking this up? we weren't expecting this for a couple more months. >> the window seems to have slammed wide open for the ipo's. april. expected in it seems like it is accelerating. people are going while they can. joe: how sustainable does the business look? some of these losses are so gigantic and there still seem to the questions about whether they will get to profitability. does this look like a company that has a clear path to making money? >> it has shrinking losses. revenue grew by about a third last year. losses shrunk. they are heading in the right

direction, which is different from a lot of these companies. they are reliant on advertising. they think there's a lot of room to grow. 97% are not branded. they see huge opportunities. caroline: i'm interested in the themes. what has been growing is plenty of demand, but also thin on explanation of their business model. and maybe control of the company. like we saw with snap, many worrying about control over voting rights. are there any growing concerns across all of them about how much information they give up? is between thect deep analysis and what investors want. in 2017. back to snap people are hungry.

if you get the timing right and the markets stay fairly open, then investors want to let it up. is there any concern about the age of these companies? >> that is not unusual at the moment. matureeen uber, lyft, companies. pinterest shows that they've had time to mature the model. they seem to be heading in the right direction. joe: break it down a little bit further. there -- snap, there was fear that facebook and alphabet and amazon is now dominating. is that a concern for pinterest? we've seen instagram do is probably a good model for this. they go into detail. they try to tell the stories of the people that use this. the guy in argentina who used it

for his leather boots. it shows how there can be opportunities for them to link up with brandon posting and maybe click through. caroline: we have to keep a close eye on how people digest that business model. elizabeth fournier, great to get your analysis. the interest in rushing to the market is further fueled by the high valuation of tech. check out this chart. we are seeing rallies pushing the tech ratio to an 18 year high. do we really want to be at the highs we saw in the 2000's? joe: it is a really striking chart. one thing that is different is that tech earnings are a much bigger deal to the market. 2000, tech wasto

massive in terms of market share , but not that big with earnings. this time it is kind of backed up. and when you go across these industries, this is where the growth is. caroline: we will see whether that growth can ever mean profitability. let's check on the headlines. blackrock has agreed to buy a fund to expand private equity. the world's largest money manager will pay $1.3 billion in cash. the deal will add to one of black rocks key businesses. google wants to meet with a top american military commander over artificial intelligence work in china. the chairman of the joint chief of staff says that google's work indirectly benefit the chinese military. and, papa john's has a new page man. shaquille o'neal joining the

board of the struggling pizza chain and will invest in nine restaurants. he will get a cool $8 million over three years. and that is your business flash. startuping up, how one is breaking into the multimillion dollar sports betting business through online subscriptions. this is bloomberg. ♪

joe: billions of dollars will be

spent betting on the ncaa men's basketball tournament and the action network is looking to cash in. teams will begin the journey. four will make it to the ncaa finals in minneapolis. the number that is most interesting, $10 billion. that is how much money will be wagered on march madness, most of it illegally. the network hopes to cash in by becoming the go to source of gamblers,n for those offering data and analytical tools. you can buy expert picks and analysis. spend $250 a month and you will get a lot more, including where money is flowing. the pros have placed their bets. a new group of investors including team owners just invested $17.5 million in the

action network. joe: joining us now is the action network ceo, patrick kane. thank you for joining us. right now your business is providing information and data. do you see yourself getting deeper into the stats, becoming a referrer to places where people can place bets, a site where people could offer bets directly? >> our mission today is to be a subscription product, to inform bettors. we can see an opportunity. there's been a model established in the u k and asia where you can be an affiliate. you have to register with every state and every state is different. the u.s. is 50 different countries. think that is going to be a revenue opportunity. romaine: do you think it is important for that to be part of the company? can you just be an information provider?

>> i think we can build a very robust business just being a media provider. we say we want to be the bloomberg of sports data and betting information. dollar a multimillion opportunity to really be the picks and shovels for people to think about how they want to that? us about otherto parts of the infrastructure. big media companies seem like they might win out as well. do you see them getting in on your act, being complementary? >> i think they are a robust platform for partnership. companies,t media they are vested to figure this out. they are trying to get people to engage more deeply in venues as well. every league is trying to figure out, how do i extend the game experience. joe: when you look at a new

space like this, lots of different players want a slice of that pie. sports betting moves from largely illegal to legal. sports teams are going to want a slice. existing casinos. how do you see that fight going? >> the margins in being an operator are not as great as they are being in the media side. you are looking at single-digit margins. we can build a robust business. when you take a dollar and you are splitting it between a media company, a team, operator, that gets caught up pretty quickly. romaine: i wonder about competition. a couple months ago, there was a milwaukee bucks game. they essentially ran kind of a gambling broadcast. they were giving yuan's and breaking down certain plays in the game.

i thought it was sort of an intriguing concept. do you worry about a gigantic company like nbc basically saying, we can do what this guy does? >> i don't. this is what we do every day. we have a large organization focused on building data tools. another example is monumental sports, which owns the wizards in washington. they did an action cast. where you have a bar on the screen where you have data, tools. a big part of this market is , how many threes is steph curry going to have, because gambling can be confusing for consumers. caroline: i find it confusing that the u.k. and europe have been doing this for years and i know there's lots of cultural differences and religion comes into it, but what have you seen

and europe? in >> i think it is different here. the betting scenario is huge in premiership, but i don't think it is going to be as fun as it is here. over under of how many throw ins are going to happen is probably less interesting than how many assists chris paul is going to have in a game. people have been playing fantasy. fantasy is sort of the gateway drug to betting. i don't mean that in a pejorative sense. you are able to make sense of how to do it. i know you said you didn't mean the drug analogy in a pejorative sense. nonetheless, a lot of previously illegal or taboo behaviors, people are changing their views on them. do you think there's a reason

that this is happening now, where various activities that people thought should be illegal is changing their mind on? >> it is interesting to see what i look as the millennial and generation y community that have grown up on the internet, they play video games, their affinity to sports is about winning, not necessarily about their team winning. it is about winning as a better. i think that is the norm with the community growing into sports. we want people to bet responsibly and legally. we are only partnering with legal books. i think you are seeing a lot of things that were in the darkness come into the light. caroline: and consumer protection will be there, i'm sure. thank you so much, patrick. apple holds an event on monday where it is expected to introduce an original

programming service. joe: and mario draghi speaking to the ecb conference on wednesday. romaine: trade representatives are in beijing for more trade talks next week. caroline: this is bloomberg. ♪

♪ emily: i' emily changm. this is bloomberg technology. coming up, ipo fever. pinterest files to go public, posting more than 250 million active monthly users. as stocks has its worst day since the first day of january. president trump names his chief technology officer after the post has been vacant for two years,