earnings news could look very good. scarlet: i love how he gives you a shout out to your desert island indicator. joe: i also like the best since ultimate. [laughter] caroline: shout out to the s&p 500. we held there, up three point. currently -- the eighth day in a row. the dow was way down. 2000 finishing in the red, 2/10 of 1%. at one point, it had been down more by 0.7%. yield curve the freak out perspective, there was a story out on what was being talked about today. you look at that yield

curve. scarlet: at 15 basis points, it is really flat. joe: i like yield curve cherry picking. caroline: let's vindicate these valuations. into the action with our market reporters. abigail: the financials are dominating everyone's attention ahead of the big banks later this week. the s&p 500.rt of over that time period, the financials really led the s&p 500. really we are looking at a financial correlation. the fed tightening policy. last year, starting to trade lower ahead of the s&p 500. what we see now is a big divergence between the s&p 500 and the sls, really caught in that downturn. it puts a lot of pressure on the

earnings reports coming up. it seems like we get the s&p 500 and financials will reconvert. the question, which way will it be for the s&p 500 and the financials as well? romaine: as we headed to the banking earnings season, you have to keep in mind there's a lot of concern about fundamentals and the yield curve. i want you to look at some of the evaluations. analysts are expecting one of the slowest quarters for bank earnings that we have seen in a couple of years. eight few positives underpinning banking stocks. what you are looking at on your screen, price-to-earnings multiples near a 40 year low. you're basically looking at a ratio of a ratio. you can see that decline. on one hand, that is not necessarily a good thing. i guess the silver lining is that you have low expectations and when you have low

expectations like that, any sort of beat to the upside would push higher. >> i wanted to take a look at last year's flight to cash. ane a look at shy, exchange-traded fund, a blackrock fund. you can see it had the biggest one-day withdrawal on friday in about 10 months. you can see how there was that slew of deposits in october and november and december amid all of the uncertainty. people edifying this idea that there could be more to run with respect to risk assets. thank you so much. us -- a lot for us to

chew on here, whether it is the yield curve, bank earnings. let me get your thoughts on the yield curve. which part of the yield curve do you like looking at? >> all of it. you've got to watch all of the yield curve. i like to take it seriously if not literally to paraphrase there. a lot is drawn into the flattening aspect and people looking for signals there. pretty -- ae seen year ago, he wrote, the bull steepening you see afterwards. that is your cell signal for stocks. beyond that exit from shy and these short-term bond etf's. people piled right into it, biggest inflows since january 2. it is tough, especially with

central-bank involvement at one end. joe: going back to dividends, you were talking about how they, ine the -- are this environment, kind of the perfect hybrid between equities, which get upside from growth, and bonds, which payout? is it a sweet spot they sort of capture the goldilocks from both sides? eddy: i think that is it exactly. we've seen a slowdown in the where mortgage rates are down. remember the comment that we are . long way from neutral we have had such a big seachange in the outlook for interest rates. the three year is down something like 70 basis points from november. they pick that up so they sort of get that double whammy

effect. it has been a very good market for them. caroline: it has also been a good market of late for those long commodities come along oil. we are seeing oil up at five month highs. your perspective on how long we can see performance from energy? eddy: i think it can continue to run. we've just seen bad performance from commodities for a long time. i think we are due for a rebound. if these stories about china, there, the pickup in the u.s., that could be very bullish across the board. joe: if we do get a rebound internationally, whether china or europe or the stock market, who stands to benefit from that in the market? luke: what has it priced into the reflation trade the most, what i hear the most is emerging-market currencies come

up as the best answer. still a very uncertain dynamic because china's stimulus is not geared toward spillovers. it is unclear to which the direct benefit you will get. from a financial standpoint, those seem to be the ones that haven't completely jumped on board. a note saying that the dollar is in a tight range the last six months or so. scarlet: same question to you, eddy. what part of the market is best positioned? eddy: i think a lot of the consumer cyclical, chemicals, those will be prime winners. i think a lot of the defenses might start to lag. i think there's a possibility that some emerging markets could emerge winners in the latter part of this year. scarlet: ok, so wait until the second half. thank you so much for joining us.

the closing for bell and for me. romaine bostick is step again next for "what'd you miss?" this is bloomberg. ♪

♪ caroline: we are live from bloomberg's world headquarters in new york. here's a snapshot of what the u.s. -- and how the u.s. stock market performed this monday. gains for the s&p 500. joe: the question is, "what'd you miss?" caroline: the german lender says

it is firmly committed. megadeal. saudi aramco attracts interest with demand hitting $60 billion. fighting in libya fueling a rally in crude. deadline diplomacy. theresa may may meet with french president emmanuel macron tomorrow. joe: deutsche bank with parts of talks to acquire commerzbank. joining us with more is nicholas --bar, founder and editor of commerzbankger with really solve any problems? prof you look at it on a forma basis.

deutsche bank is high leveraged, it has more derivatives as a percentage of capital than any other large bank in the world, it's trading arm has got a reputation for being very risky. it is trying to reduce risk but it doesn't seem to be able to do it very well. that you've got this midmarket kind of a play on germany and commerzbank. sticking them together, you don't get something that is much more profitable or much less risky. there needs to be a kind of transformation to take place for this thing to really work. romaine: what are the other options than for deutsche bank and commerzbank if they don't combine? to combine, they need to drastically,sts

which is a politically difficult option, cutting staff dramatically, tens of thousands of people who are unionized, politically influential, or cut assets, which is also difficult because you are going to be finding -- you are going to be trying to sell assets to people who will be discounting them. for you will have to raise capital where the shareholders were's will -- the shareholders will say, why should we have to pay money in? in the german taxpayers will say, that is really going to be politically toxic to ask the german taxpayers to put money in. that, the plano is really finding another buyer for commerzbank. unicredit is sort of waiting in the wings. they are like the suitor that is just waiting for the chance to buy commerzbank. for deutsche bank, they need to

still try whether they merge with commerzbank or not. us just howmind important these banks are to germany in general. when i was living in berlin, you got a feeling of how many banks there are. there's a bank on every high street. yes, these are considerably dominant, but is this an industry that needs to consolidate across the board? nick: germany is famous for being overbank. there's a statistic i've seen bank there are four branches in germany for every supermarket. that just shows the scale. a the face of it, there's great market. the midsize german companies that need banks, sell widgets all around the world. so they should be a good place

to run a bank. have a problem is you lot of incumbents and the only way to really actually make it a profitable business of banking in a place like germany is to digitalize everything, turn everything into app based banking. that is what nordic companies are doing. that means tens of thousands of jobs will have to go. you have to bring in robotic -- robotic processes, automate deutsche bank, and turn it into like what is happening in some of the leading u.s. banks or in nordic countries. that's going to be really hard. caroline: really hard but interestingly something i saw in berlin. there's a company called n26, backed by the likes of peter thiel. you are seeing more app based banks growing in germany. joe: it does feel like there's more of that in germany and

europe overall then you see here. is it just a matter of politicians giving the green light essentially to the difficult restructuring that would need to take place and the ensuing job cuts? nick: they kind of have to bite the bullet. they are between a rock and a hard place. the other option of not cutting the jobs means they have to inject a lot more capital. that is taxpayer money if they want to keep the same percentage .f shareholding they have to either accept the job losses or put in taxpayer money. romaine: do you think that the cost savings so far over at deutsche bank, is that enough to at least get them to sort of an interim period before a longer-term strategy can take hold? nick: not really. the cost-income ratio is so high

at deutsche bank. it is a really measly return on capital. it is well behind even the likes of bnp paribas or barclays. it is really at the bottom of the scale. someve got to try to make dramatic cost savings, just to put a convincing case to shareholders. joe: if the commerzbank deal doesn't happen, what do you see as the next most likely path forward for the bank? nick: well, it is whether the current management, and as you know, this is a bank that has had a lot of public splits in its board. the fighting has become quite public at times. the've got to sell shareholders a convincing strategy for transforming this bank. at the moment, the risks are portfolio isacy

one of the riskiest in the world still. the federal reserve is putting stress tests on this bank's operations. it is still the same as deutsche bank in a lot of ways. they have not convinced anybody yet that they will turn it around. caroline: coming up, pinterest is going public, but did the virtual corkboard wait too long to go to market? this is bloomberg. ♪

caroline: time for a look at what stories are trending. user -- users were reading about

a strategist at jp morgan who said that equity investors have been worried about the wrong yield curve. the investor advised looking at the spread between the 10 and the two-year instead of looking at the inverted three-month treasury yield. bloomberg.com has a story on elon musk, who may have overstated his twitter restraint. muska told a federal judge that he was dramatically reducing his tesla tweets, but has sent more in march than going all the way back to june. and, tictoc on twitter has reported that a new study finds that a bad diet is much deadlier than smoking tobacco. poorllion people died by a diet in 2017 based on low conduction -- low consumption of grains and fruit and high quantities of sodium. romaine: more mega moves to go public.

pinterest is looking to raise as much as $1.28 billion in its ipo, which could value the company below the price it reached in its private valuation two years ago. let's welcome bloomberg tech startup reporter eric newcomer. they were a little bit above that back in 2017. what happened in the last two years? eric: there is this $12 billion valuation. now they are kind of saying the top of the ranges $9 billion. i think these unicorns were able to raise these prices ahead of where they were. you are worth $12 billion. investors are really starting to get this equity stake. investors really have to grow into those valuations. some companies like dropbox get that same number and then go public. to havet doesn't seem been able to get high enough. a little bit like

a company that was yesterday's news a little bit, right? a few years ago, people talked about pinterest a lot. now you don't hear about them as much. eric: any consumer technology company, you want the story that this could be the next big one. this is a future, mobile video, with snap. i don't think people feel that way with pinterest. the story is, we are different, people don't use this as often, but when they do, revenues are getting bigger. it is not like slacker something. caroline: i was surprised by the amount of people using it on a monthly basis, eight quarter of a billion. i thought that was a decent number. i think that is the

argument, that it is sort of a sleeper company. we are not using it to talk about the news. journalists will over index on twitter. there is this segment of people using it for things like weddings, baby showers. moments where you will spend money buying things, fantasizing things. that is the selling point for them, certainly. this iss is --romaine: an ad-driven company. is there anything else there? eric: advertisers want to get away from the dominance of facebook and google. if you have an ad budget, you think of them in the list of big companies you want to buy from. the revenues are still growing significantly.

it is still significant growth. and they have a clear path. caroline: it seems you would be able to buy whatever you are fantasizing about. pinterest, i've been following this for some time and it seems so obvious. alibaba, they have sort of apps that are better to look at. pinterest, everything should be eight by button. i think that still seems far off. caroline: we will see how much they continue to vindicate the valuation on their roadshow. a quick check on the latest business flash headlines. zoom videos preparing for what highestd up being the valuation in the u.s.. a market cap of $7.8 billion. shares of boeing falling today.

analysts warning it will take more than a software fix for the 737 max to be recertified. now expect a six to nine month delay. the former nissan chairman on the verge of telling his side of the story even has he is -- even as he is detained in jail. he had been freed on bail for almost a month but last week he was detained again over allegations of financial misconduct. guard --r mixed power mixed power bars. they are best known for the likel -- for the cereals raisin bran and shredded wheat. they also make supplements. i missed this story. power bar. caroline: you are not a shredded

wheat kind of guy? romaine: i kinda feel like power bar is from like 10 years ago. caroline: i can't get over how much sir raja there is intimate -- how much sriracha is in america. they are about to get some competition. joe: i really like this sauce. but it is not that hot, it is kind of syrupy, it is kind of like catch up that respect. are more srirachas intense. caroline: i'm really pathetic. i think it's quite spicy. as ald have seen you more man who makes his own. romaine: i'm too lazy for that. caroline: we will see how this goes. coming up, what is next for brexit. more on u.k. prime minister theresa may's push for compromise.

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sanders says mr. trump has chosen longtime secret service member james murray to take over as director in may. the secret service director reports directly to the secretary of homeland security. kirstjen nielsen resigned from that post on sunday. says she nielsen continues to support the president's goal of securing the

u.s.-mexico border. nielsen spoke to reporters outside her alexandria, virginia, home today. she thanked the president for what she called a tremendous opportunity to serve this country. european commission president jean-claude juncker traveled to as london -- traveled today commemoration services mark 25 years since the start of a genocide. the service at the memorial where belgian peacekeepers were among those killed. in the capital, rwandan president said his nation has learned some valuable lessons. >> we have to be there for ourselves and keep trying to do that. >> the mass killing of rwanda's tutsi was ignited in 1994 when a

plane carrying the then-president was shot down and crashed who -- crashed, killing the leader who, like the majority of rwandans, was an ethnic hutu. calling on those on all sides of the military conflict to stop fighting. european union foreign ministers are meeting in luxembourg and are united in their call for a truce. because ittress this is very important. i think it is important for the libyan and important for me personally. deserve peace and security and stability for themselves. mark: the united nations has the death toll- has risen to 49, including civilians. libya is a departure point for

many refugees trying to cross the mediterranean to europe. 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. i'm mark crumpton. this is bloomberg. aramco's debt debut is just the beginning of the oil markets. have cranny was told will more options to own more bonds down the road. they spoke ahead of today's deal. >> the roadshow is ongoing. i think the deal will close on wednesday. i'm advised not to comment on it. i think that press reports and analysts and investors have been extremely impressed by what they have seen. this is no surprise to us. we've been saying it for years.

saudi aramco is not only the largest but the best quality company that exists on the planet, and i say that from every angle, not in terms of resources. to.company has access also its environmental stewardship, also its technological prowess in terms of indigenous technologies that provide safety and human resources, the company led by saudis, andated by governed by predominantly saudi board that has always taken the right decisions. the value is out there for the world to see. i think we have to think beyond the bonds. deal.nk closing a

manus: will it be a curtain raiser to perhaps going back to the market yet again? >> the markets that will have both debt and capital instruments. i can assure you in a couple of years that you will have your working foren bloomberg and either aramco bonds or aramco shares or commercial paper. aramco will obviously have all the tools at its disposal to access capital markets. i think in terms of paying the is going.the deal, it again, the prospectus for the reason forthe only

accessing the bond market. it is a tool that the company needs to have and we need to lever up and just have some debt instruments on our balance sheets. a verythat establishes clear yield curve. ?ho is right was it $20 billion demanded her $30 billion? what the world really wants to know is, where is the bulk of the demand? >> it is still dynamic. i think the books have not been closed but it is upwards of those numbers. of 30 it is north billion? >> i believe so. i'm not part of the roadshow. but it is healthy. just be patient, wait a couple of days. on wednesday, we will all know. romaine: that was the saudi energy minister in an exclusive interview with manus cranny.

joining us now, bloombergs managing editor for energy and commodities. you just heard the interview. we've seen all the numbers on this debt sale. what do you make of this specifically in the context of how saudi arabia tries to transition more away from oil? >> this is a $10 billion bond offering. projectingg, we were $40 billion in demand. by this afternoon, $60 billion in demand. this is a chance for folks to get in on the first bond offering by a saudi company. it is also a little bit of a preview of what is to come with the ipo and a couple of years. this is the first time we are seeing any kind of bond of this sort. the newness of it, if you will. if you look at the potential pricing of these things, we will

get the actual prices tomorrow afternoon london time, it looks like tomorrow, indicating pricing even at a lower premium to the u.s. treasury. people think this is an even safer bet than investing in the kingdom of saudi arabia itself. we have to remind ourselves, it was, what, six months ago admits the backlash over the killing of jamaal khashoggi. it really shows you how much wall street is betting on the future of saudi arabia. tina: these were the same group of banks that were refusing to go to the davos in the desert a couple of months ago. bygonesl let bygones be as long as debt is concerned. people are quite keen to make themselves useful to the saudi's at this point. romaine: as our former expert on

oil and hurricanes, i want to point to the broader oil market. we did see wti rise up a couple percentage today. crude over $70. that really wasn't tied to what was going on in saudi arabia. we are seeing, the civil war if you want to call it that, but certainly the opponent forces to the saudi back government. tripoli is not near the largest oilfield in libya but what it is near is the export terminal. that is the interesting part and that is sort of what is in play. in theory, in the worst case scenario or maybe eight medium case scenario, what would a further escalation due to the global supply and demand picture? tina: we have already seen them shut down at one point this year, just in the past months, getting up and going again.

over $70,oil prices brent over $70, it will be interesting to see what if anything opec does in response to this. colleague calls it one of the shaky stakes. caroline: the question still remains over iran, a key producer over whether there will be other companies trying to get in on iranian oil. the, trump seeming to raise aggression level over the weekend. tina: it doesn't necessarily change anything for oil traders because they are already avoiding iran by and large right now. it does sort of make it difficult to make -- to get money in and out of iran. i think what the oil markets is looking for is what happened with the waivers do to come off

in they. caroline: we will watch that space, tina davis for the round out. sticking with oil, let's talk about the european side. norway is actually seemingly backing off its love of oil. romaine: what's going on? i understand it from a sort of philosophical standpoint but from an economic standpoint, it does make you scratch your head. joe: it really does seem like some sort of genuine shift into the expectation of further development of this area. the labour party shutting it down. norway's 53% of exports are coming from norway and gas. they are suddenly taking into account climate change. what does it mean for the bering sea as well? we will see.

how the times do change. coming up, the house of lords moving to prevent a no deal brexit. prime minister theresa may looking to find some sort of compromise. the next on brexit. this is bloomberg. ♪

caroline: u.k. prime minister theresa may is trying to find common ground with the labour party. for more on the ongoing brexit talks, let's welcome in bloomberg opinion, this -- opinion columnist. to we getting any closer some sort of compromise between labor and conservatives? >> honestly, no. i think there's a bit of a game going on here, a dragging of

heels. the labour party is hoping for a armal customs union and also second referendum. trys really an approach to and get a romaine option. isthe moment, theresa may failing to blur her redline sufficiently to get a win for the opposition labour party. obviously sheme, has to meet the european leaders on wednesday. they are meeting tomorrow to prep the meeting on wednesday. extension tohort the end of june. the reality is more likely that the eu will offer her a much longer extension. joe: why does the you want to offer such a long extension? all it does with a short

extension is basically take us to april 12 or june 30 with no guarantee that anything gets constructively done and all there would be is another cliff edge that puts more severe. more -- if there's a much longer extension or time is given in a weird way, that might hasten a deal to get done. browbeating, the conservative party, perhaps wavering labour members as well. it is a big conference trick on all sides. hands to the public without really showing their true hand. it is politics. romaine: i want to turn to another big topic on your part of the world, and that is the

ecb meeting on wednesday. we are seeing kind of a growing chorus of concern that they are headed for a policy mistake. i wonder what you are seeing on your end specifically. marcus: what is slightly odd to thatpresident draghi hint they are looking at the deposit quite some while. excess reserves, that is the better banks, at negative-40. so, i can't quite see what they , they shouldbout be focusing on the weaker banks. this is the debate that i think is going on at the moment. long-term funding operations, which is essentially supercheap funding for the banks that need

it, and maybe linking that into this deposit rate, which is where the excess reserves will spill over with qed. they put it back to the central bank, a bit of a round robin. sides of the balance sheet, the deposits and the funding rates, they ended qed at the end of last year. could see the big export economies like france and germany. numbers are terrible in germany or they continue to plummet. they have already extended rates into the next meeting and are unlikely to do it again. in june, we get to see the economic forecast to see how bad things are and therefore how swiftly they have to react. caroline: for now, they get a

bit of a reprieve with a weaker euro. a quick check on the latest business flash headlines. bloomberg has learned that softbank has named nomura at the biggest underwriter. nomura will get about 40% of the issue. the sale is aimed at investors and will help the bank pay off a mountain of debt. disappointing deliveries report by cutting some of its sales staff across the country. bloomberg reports that the company cut sales teams in chicago, brooklyn, and tampa. they declined to discuss specifics. u.k.'s crackdown on facebook and other social media. theresa may is proposing a new industry watchdog. companies could face heavy fines and individual managers could be held liable. that is your business flash. joe: coming up, president

erdogan pushing for a repeat vote in istanbul after last month's elections. why has move has em investors on edge. this is bloomberg. ♪

joe: the turkish lira under pressure. president erdogan intensifying his push for a vote in istanbul where his party lost last month selection. it is showing a possible push toward authoritarianism and a loss for investors. so, in these regional elections, biggan's party lost the cities and he's pushing for a do over. >> there are three things we are looking at. when you wake up this morning, s-400 basically the

missile defense system they have agreed to purchase from russia, a pretty big deal because they are nato member. then it cuts moving to the one-week week repo window. combining all those things, pretty negative for turkey and for creditors in all of turkey. romaine: when i look at this challenge is making to the istanbul vote, at some point do we have to start asking what type of democracy is turkey? >> i look back a year ago and one of the themes emerging markets investors were looking at, maybe you want to invest in russia, turkey, more populist or totalitarian governments, maybe there markets are better than democratic governments. 2012,ecall and go back to a harvard textbook study, allowing shareholders to vote electronically at atm's and do

-- ong-edge stuff on the that side. it is just really sad. we are hoping for a more bullish outcome. i think sanctions risk and now comes into play. as a nato member to be buying missile-defense systems from russia when they are explicitly told not to can be bad for them. caroline: we saw of course other assets selloff dramatically because they were protecting to a certain extent the lira. now the lira is less protected and we are seeing it go down. is this a short-term selloff or longer-term investors? >> i think it is a credibility crisis now. my constituents as a fiduciary and convince them that my investment in turkey is

justified when it is run by a leader who thinks that cutting when inflation is running high. there are a lot of issues bubbling to the surface. credit is about credibility and it will be tough for people to get comfortable with. this whyhe end, isn't emerging-market investors get paid? you have to deal with this not as much in developed markets. this is why, in theory, there's a -- >> where do you buy, and what is your catalyst to buy? some of the actions over the last few months that we have seen, just again, from an investor standpoint, it is really difficult to justify. to your point, how did this kind of spillover to emerging markets? they were forced to sell out of

other good classes, emerging markets that basically had to get hit. there is definitely potential for more contagion to flow through if there's another run on the lira. caroline: it is great to get your opinion, bloomberg intelligence chief em credit strategist. don't miss this as well. with primeelection minister netanyahu running for reelection. joe: i'm watching economic data. u.s. job openings come out at 10:00 eastern. levi strauss reporting first-quarter earnings after the bell. this is bloomberg. ♪

♪ emily: i'm emily chang in san francisco and this is "bloomberg technology." off itst kicks roadshow. valuation less than it fetched in its last valuation round. facebook, instagram, twitter, even more face possible fines over a u.k. band under a new law if they