s&p shooting higher after the morgan stanley earnings, a nice boost there, as we see morgan stanley holdingains at 1.8 percent. in the currency market, the stronger dollar story in some currencies like the pound, down .5%. this is bloomberg. ♪ alix: inflation in the u.k. falling more than expected, the slowest in the year, for the month of march. down by gilts are now four basis points as investors jump in and buy in. what happens with the boe when they boost rates this month? jamie murray joins me from london. is the down trend in inflation sustainable, or was this an idiosyncratic month? the big picture is that inflation is coming down in the u.k., and that is the effect as speedsg depreciation through. this month in particular, there is some idiosyncratic stuff happening. the weather has been dreadful in march, and all of the shops are full of the wrong clothing. this has led to discounts that otherwise would not have happened. my guess is that you will see a rebound. you will see that in the european data more broadly. alix: what is interesting is how the european market rerate it expec

i know they have morgan stanley as an underperformer i'm long morgan stanley. >> $51 price target. >> i disagree. i think morgan stanley is heading completely in the right direction in terms of diversifying their model i'm take their $51 and make it $61. >> let me step away and head back down to washington, d.c eamon javers is standing by there. we had watched a little bit of the steam, a little bit, i want to stress, come out of the rally, perhaps, on a headline that we're putting up at the bottom of our screen now, related to the search of president trump's personal attorney >> that's right. "the new york times" reporting within the past couple of minutes that the reason for the search was that law enforcement officials were looking for information about two women connected to the president of the united states. one is karen mcdougal, an ex-playboy playmeat, who suggests she had a relationship with president trump at some point in the past decade the other one is the woman known as stormy daniels, the porn star, who has also alleged she had a relationship with the president of the u

are you trading, morgan stanley?> we have a bit of a dilemma here because a lot of financials on a lot of metrics don't look particularly expensive we had pretty good results this week we had reasons to believe that businesses like morgan stanley, we saw good growth we see more deal flow this year. that's obviously on top of all that, they look relatively cheap, relative to the rest of the sector outside of that, they -- next week it's about 3 or 4%. that's less than average what else is moving less than average the last 30 days everything is volatile to me when you see a combination of that weakness and the office coming in at less of a%? in june, you would spend $140 current stock price. that's one of the reasons why we like this trade. to me i don't really see how you could be overly optimistic after what we saw this week. >> i think the most important thing about this trade is mike can obviously make a pretty decent fundamental case for owning this stock here on valuation and maybe some of the cattle resee and yo

morgan stanleys? >> he has not and if there's a criticism of john williams that i think is the most salient it's the one that he does not have the experience regulating these. dudley came from goldman sachs >> not as a regulator. >> fair enough but u i think his understanding of the, i think more important to your point, is that he was head of an open market operation at the new york fed, which dealt specifically with the plumbing in the financial system. and had that job by the way, his job, dudley's job during the crisis was to sort of foam the runway for in other words, if lehman was not saved that weekend, dudley's job was to prepare the market and the system for what would happen if lehman failed williams does not have that. he was involved with the crisis. but not in that way. and i think that's an excellent point. >> stick with us down to d.c. for a moment. join eamon javers. the president was just speaking moments ago and eamon was at the white house with the comments from president trump >> y

what do the next few quarters look like for the likes of morgan stanley and goldman sachs? 1q isn: one to is when -- when most make their money, especially on the thick line. albeit how much morgan has changed their business, that is a topic of debate, how much seasonality is there? we saw it last year. we saw as he went into a slowdown in activity levels as the quarter progressed. april is not off to a smashing start but when we take a step back and think of the environment we are in now unlikely to be in for the perceivable future versus the past years, you have divergent andral-bank policy likelihood of reduced correlations, likelihood of a greater baseline volatility level, and this factors tend to support trading levels that are going to be higher than they have been running. while i would expect this to come into play, i do think trading outcomes could be better than we have seen and what we notched in the mid-teams for both arms will come down on that seasonality and remain about the cost of equities at 10% and in the teen range for the year. rating on have abuy morga

i think they have done great but we're talking about the future morgan stanley has done well, and nobody can take this away from them, they integrated the brokerage side and advisory side from smith barney. they have done it, nobody thought they would be as successful the other thing they have done, which is not necessarily going to be great going forward, is they figured out a second revenue stream for a lot of their wealth management clients, which is taking the brokerage assets and basically secureatizing them for another

sort of here just below the line and the presumption is just as citi has already done that, that morgan stanleys next. so back to the index, itself, holding the line as individual components break the parts compose the whole. the prem shun is the hole will break. marken stanley is on the radar here it will, goldman, too, break next week. >> all right well, come on back over. in the meantime, how are you trading morgan stanley >> we have a little dilemma here because a lot of the financials on a lot of metrics i think don't look particularly expensive. we have pretty good results this week we have reason to believe businesses like morgan stanley, we saw good asset growth from black rock from the retail side, morgan stanley hinged to asset management we seen more deal flow this greer. we have more volatility. that's good for sales and trading. when you think ab their businesses, you'd say, that looks pretty good. they look relatively cheap to the rest of the sector outside of that though, they've performed very badly, what's interesting to me, the implied move is 3.4%, that's less than average, w

morgan stanley is. are under pressure after the company issued that lower than expected full-year profit forecast analysts say the legacy hardware business continues to hurt growth and profit margins. we've said a couple of times this morning that it's the worst day since october 20th of 2014 erasing about 80 points off the dow by itself. >> similar patterns we've seen of recent days morgan stanley is still up but it was up about 2.5% at one point. certainly shaving those gains given what at least all the analyst reports i've read at this point and heard was a very strong quarter really across the board. hardly anything to take issue with at the company. goldman sachs had what many thought was a strong quarter until comments about the buyback that may have disturbed people we'll keep an eye on the financials >> the financial weakness in the stocks has been interesting. it's happening at the same time energy is making this big move higher crude is spiking as jackie reported back to 2014 highs on oil. ene

we are waiting on morgan stanley, due out any moment, morgan stanley the last of major banks to reportrter results and the sector is having a strong start to the year, a lot of people expecting banks to do well as interest rates are expected to move higher, the demand story picks up and, of course, the rollback in regulations, meanwhile there's this, the internal revenue service extending the tax-filing deadline by one day, cheryl casone in the new york bureau with the details, cheryl. cheryl: it is interesting, maria, here is where we are at now, last-minute filers will have until midnight today to file and pay 2017 income taxes, the irs issued the penalty for extension after its website crashed yesterday on tax day, treasury secretary steven mnuchin describing the problem as a high-volume technical issue, the arrest website we should say is now up to speed this morning. well, we are getting our first look at facebook's privacy makeover, more privacy safeguards in europe in order to comply new data laws taking place next month. from now on you will need permission, facebook say it is

first up is ebay, getting a double upgrade at morgan stanley. from underweight to overweight you don't see it that often. >> you don't, and you really have to respect an analyst when you go from i'm selling it to i'm buying it. but they're not married to a view what they're focused on is payment solution ad revenue what i would say the payments area is what's getting increasingly more competitive. so that's not one of the anchors i would use for the story. >> all right lam research is under pressure despite a beat what's going on with that? >> first of all, this is a very volatile stock the semi equipment stock i like tear adine better, but the guidance here in terms of memory chips was the problem. 84% of the revenue and orders from march are reflected by these memberships. the question is, is there an nand oversupply, that's the concern. and the other side is the analyst community has quickly come out, defended the company, and said capx will be strong this is a point you buy it at. i'm not sure i want to go into lam research, because of the v

leftyoung trader just morgan stanley, his name was morgan stanley.e just wanted to have fun with some light news. thank you. you can read her story on the bloomberg. markets board of politics. the news -- from new york, this is bloomberg. ♪ julia: this is bloomberg markets. i'm julia chesley. scarlet: i'm scarlet fu. stocks rallying or a second day, overshadowing geopolitical tensions. selloffs could be buying opportunities. stephen, great to see you. you summed it up saying tariffs are two 2018 what north korea 2013.o until we find out more it is a lot of noise. >> tariffs are going to be less important. basically, markets used to talk about tariffs but if there is not much action i don't think they are going to take it seriously. , the stockthing market drops 15%, you can walk it back the next day. you can't walk back a war. andcan walk back a tariffs unwind the effects. markets are going to be more specific -- sophisticated. so it is more dynamic. interesting. julia: the thing to focus on in the short-term term is the data and earnings season. wha

this morning morgan stanley, rising interest rates may shutter the junk-bond window.ldare you guys on high credit now? rachel: there are questions about technicals, fundamentals. on the fundamentals side, defaults are low. it brought the average default rate up over 2%. that is very low historically. release expects the default rate to declined between now and year end. we see leverage moving up, but when you look at high-yield, what is the level of issuance and triple fees? we saw a 5 year period from 2003 to 2007 where issuances were as high as 33% in 2007. right now 12% of issuance year to date. over theen 10, 11, 12 last 4 years. the average level in the new issuances is extreme dread there have been outflows from a high-yield asset class. 20 billion has flown out of the mutual funds. that could seem an alarming number. there is a lot of cash flow that comes out of the high-yield bond market. we see about $20 billion just this month being freed up. worry that don't much about the supply-demand. jonathan: morgan stanley also pointing out the maturity wall for high-

bank of america, goldman sachs, and morgan stanley reporting.resident of the united states will be meeting with prime minister of japan shinzo abe. bank of canada will make a rate decision. we get the fed book as well. aig, rachel,e, cr and matt. just time for some final thoughts. i want to reflect on the final quarter as quarterly earnings come through. what has changed in the last three months despite all the volatility we have seen in equities and global politics? i don'tthat is just it, think a lot has changed, and yet the market has gotten flustered by the pickup in equity volatility. in the zip code of 15 to 20, it doesn't disrupt things. earnings are going to be solid. you have tax reform that is going to help. s&p 500 earnings up 70%. supply and demand. it has been a relatively calm period. near-term smooth sailing on global economies. the comment that the pace of growth is slowing, absolutely true, but that could lead us back into a goldilocks environment. >> i think we are in the goldilocks environment still. growth we are still waitin

scott, back to you >> ylan. >> thank you so much >> morgan stanley and much more tomorrow let's take these names because they are important. what do you got on the list that you like? >> j&j this morning. >> i think ibm is interesting. nobody owns this thing and there are only going to put up >> i am jim blumenthal >> is that a statement of itself >> i don't own it or like it, i think they have a lot of issues. the set up is quite good we talked about the set up and things that goes well for the shares at 1% revenue growth is hard for me to get excited of the long-term investmeninvestment >> they need to show growth and revenue again. that's be the third quarter in a row. if for some reason revenues don't grow, everybody sees it changes. last quarter, great revenue growth but margins were terrible this year they're supposed to improve the margins. do they do that in one quarter they need to show tangible signs that margins are improving ibm, prove it to me and i think they will, stephanie >> what about other names on the list >> i think morgan stanley. this stock is notacting well go

shares o morgan stanley in an overall uparket were up to 54.14. >> invideo moved to overweight at morgan stanley. the semiconductor company will be one of the biggest beneficiaries in the movement towards machine learning. shares rose 6% to 227.91. morgan stanley also upgraded shares is of seagate technology benefiting from increased demand for artificial intelligence. price target was raisedo $72 and seagate shares finished up more than 5% to 59.35. >>> still ahead, are you looking for a new car? i well you are, there's a greater chance that it might have been imported from mexico. ♪ ♪ >> to the economy now and a losely watched gauge o inflation, that would be the producer price index, which is a measure of the prices that businesses receive for their goods and services. band it rose 0.3%, more than expected. the rise came from a sharp increase in food costs and g strong priwth in the services sector. the report is the latest sign th inflation pressures may be building in the economy and that's certainly something the federal rerve will be paying close attention to in the coming months.

>> while they're in the lab is morgan stanley invests in the company. visibility is such that we're able to attract institutional and individual wealth to these companies. pulse their time in the lab. we saw amazing success last year with the five companies. one was purchased while it was still in the lab seven weeks in. another one got another purchase offer. another one doubled their size of investment such that they had to shut down their fund raising. they blew through their targets. another one received a fortune ten contract and the last one accelerated their corporate pilots so five for five we think we did a pretty good job picking them but more importantly we were in the ecosystem to be able to find them as you know, part of the issue you see with on accelerators, they don't have many people of color and women in their cohorts. they can't find any. but clearly they're out there. >> let's talk about some of the companies you found this time around what are they, what do they do >> all technology enabled companies. one is an end to end solution f

so i would say b of a and morgan stanley are set up quite well. >> reporter: wells fargo's profit was better than expected, but revenue was down almost 2% s wells iar ago, still dealing with regulatory fallout. it's considering a $ billion offer to settle civil charges related to auto loans and mortgage rate fixing. a potential charge that may be holding pts stockce back. >> it's cheap for a reason. and it feels like a value trap, i think, to a lot of folks at this point in time. they seem to be in that dunce cap relative to the fed, so it's tough to get excited. at some point, the stock price it, respond, but right now just feels like it's a bit snake bit as a >> steve dodash joins us now to talk more a tbt the banks ttonight. he i president of iht wealth management. thanks for joining us, steve. always gyod to see >> good to see you bill, too. >> what's your version? why do you think the stocks sold off as much a they did today? the bank stocks i'm talking about. >> the panic stocks sold off because we all knew this quarter was going to be the big quarter. er since the t bill was fl

i like them. >> morgan stanley over jpm >> i don't know, i like them both >> morgan stanley and chase you guys need a punter? >> you guys left this guy got a good leg. >> stef. >> wynn resorts. they're off the charts and obviously we don't know what's going to happen with the new ceo or a break up or what's happening with boston and the property is split. there is a lot that can happen and can go right the stock is attractive. >> not worried about china shutting down macao. >> i will answer your question, goldman sachs. >> morgan stanley or j.p. morgan >> how about this, i will take goldman sachs. >> oh. >> sometimes it is validity. >> atvs you spent a lot of time on that. >> north korea is a bad actor and russia and china is a bad actor. it cannot be stopped they have cyber security, right? >> assume. >> thank you for being here. it is always fun >> i love this >> don't forget to catch jim tonight with "mad money. "power lunch" begins ynow. >> i am michelle caruso-cabrera. >> here is what's going on we'll go straight into the surge straight ahead sticking with strad when china runs o

and i believed him i guess morgan stanley agrees. we are add it, morgan stanley updated a forlorn sea gate in response, seagate rallied 5% today. we have seen analysts raise their price targets. of course once they raise the bar, it becomes harder for netflix to beat the numbers but i can't really complain. this fang stop is up another 3% today. ulta beauty was ready to bottom, and today we got confirmation of this ulta vaults 4.2% one of the major dogs in the dow exxon mobil. caught an upgrade. merrill lynch, the thesis, exxon trades like an oil when oil was much lower so it deserves to go higher. if you take a look at where oil prices were when exxon was at this level before, they were dramatically lower big shoulders on that one. especially when it rallies almost 3%. big move for exxon including a fantastic piece from steve how nike just acquired a start up doing body scanning the ability to scan your feet can give them a major up here. i need these i have to buy two pairs of nike -- anyway, too much information. nike has been one

mentioned morgan stanley, that is bearish, and morgan stanley is saying after the corridor, by the depthr the quarter, buy the dip. and china is a big deal, you look at an annual basis of china and green come and over the last couple of years china is coming down. europe and purple is beating china, and that is not what investors are looking for. the chinese adapting to the iphone x and the upgrade cycle as they hoped. joe: and this dovetails with the warning from wednesday night of a taiwan semi conductor that does business with the iphone, and that is when it started. abigail: their guidance from the second quarter coming in less than expected. thatgan analysis saying has to do with the iphone, and if we hop onto the work we have a chart showing why that matters. apple is a direct customer of taiwan's semiconductor by 20%. but is not a huge chunk, what you are looking at and white is apple, and blue is that semiconductor come and to your point we see the semi conductor slicing down and apple falling. some egos i would like to point out is -- more talk about this yesterday -- these repo

look at morgan stanley, and goldman sachs. people are taking a look as the market fades look at goldman sachs bouncing off that 253 to 255. a couple of bucks. morgan stanley being another one. when you go through those reports, they were phenomenal. i've heard other people come out on the network and say, you know, they're not buying buyback to goldman sachs i'm like, are you crazy? if that's the biggest that they pull away from that that stock deserves to be higher. >> do we agree with that, the banks, final, finally -- >> answer that question. tell me where you think we are in the cycle, as for american expre express, it should have a 6, 7% move on good news, because in recent years it hasn't had a lot of good news and has drastically outperformed mastercard and vees on top of which american express is taking credit risks and mastercard and visa are not. where are we in the cycle? do you think in six months we're seeing upticks and delinquencies or chargeoffs? >> i'm not saying they do. >> how many times have we been here sa

scarlet: coming up, a record quarter for morgan stanley. the bank's stock and bond traders pushing profit to all-time highs. this is bloomberg. ♪ julia: this is "bloomberg markets." scarlet: time now for the bloomberg business flash. paradek earnings continued with another solid report -- morgan stanley beating estimates on all metrics as revenue topped $11 billion for the first time. the ceo is keeping expectations of under check. >> this was a very good market environment. not perfect. we can definitely do better. the underwriting calendar was not phenomenal. wealth management transaction activity is extremely light. we had few gains in the investment portfolio. we are managing expenses strongly, but not ruthlessly. there are things we could do to drive returns higher. world that has reached a new high of $164 trillion -- world debt has reached a new high of $164 trillion. the trend could make it harder for companies and countries to respond to the next recession. steve cohen is looking to invest in asian startups. his company has mostly

morgan at are expecting an increase in morgan stanley.is 6.5% increase, so not 38%, but analysts were often their expectations for other banks, so we could see morgan stanley surprise there. it would be interesting if we did not see that because they are the leader in equities trading. if we did not see that, that would probably be an issue. fixed income, we are expecting a decline of 5%. .aidi: looking ahead to that coming up next, beijing takes the carrot and stick approach with washington on trade. find out how that will affect china's economic policy and domestic market. that is next. this is bloomberg. ♪ ramy: welcome back. haidi: the imf says the global economy will keep expanding for the next two years come a but warns after that trouble is ahead. the seeds of the downturn have party been sown. about that. what are we expecting from the imf this week? >> a gathering of central bank governors and finance ministers. i suspect we will hear that global growth is ok, longer-term challenges, and more challenges trade, the rise of protect

bank of america, morgan stanley, goldman sachs?ke morgan stanley at this point in time equities are especially strong if you want to play the equity strength move into morgan stanley we like that setup a lot b of a will be fine. we continue to like jpmorgan and b of a and the stronger bank are going to continue to get stronger i would say b of a and morgan stanley are set up quite well. >> gerard, what are your picks >> we concur with that we're certainly big believer in bank of america. not only the merrill lynch business but they are a very large consumer bank and we saw some good numbers out of citi's consumer business. jpmorgan's consumer business was strong particularly in the credit card area on the processing side. so i think bank of america could benefit from both the merrill lynch strength in equity trading and other types of trading activities, plus the strong consumer franchise and they also should benefit from a bigger chargin. morgan stanley very strong in the equity trading area. so we anticipate we'll see good number

morgan stanley reporting $1.45 a share quarterly profits.s the cor o there said the results were strong across all businesses in all regions. and that stock has been up all day. right now morgan stanley shares up 2.6%. the company beating on both the bottom and the top line. another company, that would be textron came in with earnings of 72 cents a share versus the 48 cents that had been anticipated. the maker of cessna aircraft brands also announcing the sale of its tools and equipment businesses to emerson electric for $810 million >>> a decliner in premarket trading is ibm expected better profits. and revenue grew however, margins missed the mark investors also disappointed we the company's profit outlook for the entire year. >>> pompeo is probably safe, right? but -- >> i would guess >> do i have to? >> madeline albright went in 2000 with her father >> father. and she came back with some choice descriptions of what -- yeah anyway, let's get back to the broader markets. i don't know i was just thinking about that i don't want to go joinin

manus bank -- manus: morgan stanley posts a record quarter in the first quarter.uled by a surprise jump in fixed-income and equity trading, capping a series of strong earnings from the bank. >> across the board in all the divisions, morgan stanley seemed to have really hit their marks, if not exceed them. they past $11 billion in revenue for the first time. that was a record. they exceeded expectations in fixed-income, they exceeded expectations in investment banking. in fact, they were the cream of the crop in investment banking, the best on wall street. they were up 7%. with m&a advisory, morgan stanley is leading the charge. >> president trump has confirmed cia director mike pompeo made a secret trip to north korea to meet kim jong-un. the two met to discuss a summit between the leaders. the focus would be on nuclear weapons. the president tweeted that denuclearization will be great for the world and for north korea. >> it is a huge surprise. this is the highest level talk between the u.s. and north korea in almost 20 years, since then secretary of state madele

morgan stanley fell. commodities rising. the dollar up what treasuries falling. -- up but treasuries falling. we're calling it flat. yvonne: for once we are not focusing on equities. we saw such big news in the commodities market. a 3% jump when it comes to crude after we saw inventory from the u.s. fell. -- yields treasury higher. breakeven rates climbing. the debate about whether this will converge over the next six months is still going to be the big focus for many of the market. let's look at how asia is set up as we are taking a look and digesting comments coming through from shinzo abe and mr. trump. we are seeing some upside when it comes to stocks. 7318 for the kiwi right now. taking a look at trading australia just under one hour away. futures looking pretty positive. still could see some decent rallies when it comes to stocks. yields not going a lot when it comes to the aussie 10 year. we're counting down the open in japan and korea. take a look at the dollar-yen. we did not see a lot of reaction to these at mar-a-

she is wei christiansen from morgan stanley. at the moment, given that speech by the chinese president yesterday? wei: i think it was very timely. recently we were all anxiously a back-and-forth between china and the united states, the trade tensions. a lot of people were not sure what this was about, is at the end of globalization, or the start of a trade war? sure, i i am pretty think this is not a trade war. is political posturing, and escalation. we have a reason to be worried. yesterday the speech was reassuring, demonstrating the leaders on both sides have the intention to really resort to negotiation. in your view, the central message coming out of the speech -- if you look at this from donald trump's point of view, you could interpret this as china blinking first. china as not playing this tit-for-tat game. threatened china pretty seriously after the first tariff proposal. opening upcusing on its own market, and also china wants to deliver the message that china supports globalization. i think that message was delivered.

with m&a advisory, morgan stanley is leading the charge.resident trump has confirmed cia director mike pompeo made a secret trip to north korea to meet kim jong-un. the two met to discuss a summit between the leaders. the focus would be on nuclear weapons. the president tweeted that denuclearization will be great for the world and for north korea. >> it is a huge surprise. this is the highest level talk between the u.s. and north korea in almost 20 years, since secretary of state madeleine albright went at the end of the clinton administration. it is a real sign that this meeting is likely on. >> if i think that it is a meeting that is not going to be fruitful, we aren't going to go. if the meeting is not fruitful when i am there, i will respectfully leave the meeting. president trump says he and japanese prime minister shinzo abe will continue to work together on trade to reduce what he calls "imbalances." >> it does seem like the japanese prime minister is really forced to respond from the commit -- defensive. he is facing mounting scanda

. >>> ebayer shares upgraded from overweight to underweight at morgan stanley. ebay's shift toward its own payment system and move away from pay pal. the stock rose nearly 3%. norwegian cruise lines saw its rating raised to buy from holdo deutche bank. the anticipated appointment of a new cfo. the price target, $66. the stock was up nearly 3% to 55.43. >>> coverage of u.s. steel was initiated with a sell rating over ubs. a possible fall in prices and a structurli d in steel demand. the price target is $30. the stock closed at 37.50. >>> coming up, investigators zero in on what may have caused that assuming west airline engine to blow abart. >>> if you couldn't pay your taxes yesterday, because the irs website went down, you can now. the website is back up and running. anecause of the glitch yesterday the deadline to file was extended to midnight tonigh the house i scheduled to vote on a bipartisan bill today, making major changes dhat agency, including giving taxpayers new rights and protectis. >> as we reported yesterday, starbucks is going to close its 8,000to

i know this is something morgan stanley has been looking at.o you see the announcements we are getting coming out? semiconductor announcements tend to lead the cycle and we believe we are in the later innings of this economic cycle. towardsrobably headed the peak in the semiconductor production, the book to bill ratio. that will lead to a pick up in capital spending and the hardware shipments later in the year. semiconductor pace is probably at its peak. how do you feel about the mxp socketomm and that keeps going, and china? -- soccer that keeps going, and china? lisa: we're talking about the bigger issue, the dialogue between u.s. and china diplomacy. debate aroundtory cross-border m&a is going to be another piece. president trump has surrounded cabinet thata new has very strong views about wanting to make sure that intellectual capital is protected. china's march down value chain in technology, they think it should be controlled. that will then create for non-us players on the international scene. techou talking specifically, or other sector

morgan stanley says u.s.will continue to outperform their european peers in the first quarter. higher interest rates and technology investments will boost revenue eight percent from one year ago. european firms should see a 1% drop in dollar terms. a foxconn subsidiary is making a blockchain films -- phone with partners, making it easier to use bitcoin in daily transactions, such as shopping on bitcoin-friendly sites. the phone will launch in turkey and vietnam, the t crypto cmunities. shipping is scheduled for october. spotify shares are falling today. the streaming service went public on tuesday. that is your business flash update. i did not know turkey and vietnam were the most active crypto communities. julia: now you do. it may have changed in the last month or so. julie: four minute. julia: apple is working on bringing touch control to its a.i. efforts. mark, talk to me about this new control feature. how does it differ from the touch and i believe, google is also working on something similar? break it

morgan stanley points out near term results should support a path to $1 trillion cap and as a handicapper from way back i have to agree jockeys switched the company's focus from a slow-growing windows product and enterprise software to the cloud. namely their incredibly fast growing azure business. a stock i always thought could one day be neck and neck with apple if the ladder slipped up alphabet has come back into the race after a series of lost races where it was hung on guidance but today deutsche bank comes out with a piece entitled google can beat a low bar in 1x '18 by, the gist, deutch thinks the hot money is going elsewhere and odds have gotten so long you can have a dark horse backed by a potentially positive tone by google cloud, youtube and search yep, in-line quarters what he's saying is could push this stock, who is going to win? midpoint of the race anything can happen right now, though, amazon is the one that could break free, break away from this three-horse pack to challenge apple can it overtake the favorite not if apple surprises the upside this quarter but if it misse

morgan stanley has earnings today.'m dealing with the new world where the push back is i've got roku and the smart tv. it comes out as a smart tv this is a stupid tv to me because of the things i'm paying for. but, david, in the end it's a revolution it's not an evolution. it's a revolution. it's happening faster than we think. >> to your point about facebook and hang reed hastings did address facebook last night. take a listen to that. >> i'm very glad that we built a business not to be ad supported but subscription we're very different from the ad-supported businesses and we've been very big on protecting all of our members' viewing and we don't sell advertising. so i think we're substantially inoculated from the other issues that are happening in the industry and that's great. >> and what i thought was a couple of things that were amazing about the call it's very rare but when you listen to it, it's kind of an advertisement for all the stuff that people are watching it's a very unusual call you have one analyst aski

morgan stanley said the expenses will be too high expenses seem too optistic and morgan stanley puttinga damper on. >> yeah. not on netflix. >> yeah. netflix is having a good year on the stock market. >> morgan stanley was active yesterday. they like paypal. >> aulta. >> yeah. >> one of the top preferred destinations for teens in the middle income brackets. >> they said it's better now than sephora which is jk penny you used to love ulta. >> i did. >> and tractor supply. >> i used to like to talk to you about them they were the key to the market. >> they were. >> that was the age of the retail. >> yes. >> brick and mortar retail. >> yeah. >> remember that >> you mentioned netflix, of course, it brings up, in my mind cbs and viacom why you want to consolidate in this current world. >> right. >> a couple of things to share there. this is a miniseries now but i think it's on the way to being a major motion picture what is the growing encyclical both sides. cbs management teams not as much. they're not arguing with each other. the controlling shareholder. but one of the keys i pointed out y

morgan stanley is a asset manager. that is the core business.oldman sachs is not i think it is really critical. we were in an unnatural state and they're slowly walking it back how are we supposed to make money. not only the natural state but a state where they had targets on their backs. i think goldman sachs profitability will absolute lyn crease, commensurate with -- why you would bet against lloyd. unless you don't like what lloyd is investing in? they're absolutely going down. do you want goefldman sachs to look like morgue an stanley. in my quarter, it was close to $1757. last quarter, 181. we're seeing rises in book value. what is the right multiple against that 186 i think it's between 107 and 108. do that math i can do it in my head watch this $335 a share >> why isn't lloyd doing it in his head and buying back the stock? >> maybe lloyd sees better investmentes for the capital >> any investment he uses the capital, the return is years out, you know? the game is right now, you buy the shares back. you buy the share count, higher eps. you

mike wilson is morgan stanley's chief u.s. equity strategist he joins us now.e, good to see you. when i heard about all the deals being announced this morning, i thought maybe this is a sane of an age bull market companies are acquiring growth as opposed to seeing that growth is happening around them and they can do it on their own. how worry ready you? >> well, look, i think so it's a process that's begun we have written about this extensively. i think the valuation peak was december i would argue that sentiment and positioning people is january. and now we're waiting for a price peak we said we think it's probably in the third quarter it will coincide with the peak forward earnings for this year going forward 12 months. but we've already seen stocks devalue by 15 or 20% in many cases. in some cases stocks devalue by 30%. it can last a while. but this is a much different environment than last year, obviously. >> you made your point that the s&p 500 in recent weeks down by about 7% for p/es down by about 11%. we are going to see the peak in forward p/es or we h

throw galvanizoldman in there, o >> i think you can use put spreads in morgan stanley. >> i think you can roll those out toward may, even >> it looks like our time has expired. i'm melissa lee. check out the website, >>> my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now >>> hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to save you some money. my job is not just to entertain but to educate and teach you so call me at 1-800-743-cnbc or >> can washington pull down wall street these days, the answer is yes. president trump is creating a level of uncertainty that breeds selling on any rally there could be big news flow on saturday and sunday. that seems to drive the answer around here every friday including today. i say that because we saw the power of genuine fear when jpmorgan and citigroup reported fantastic earnings and their stocks rallied big and then getting clobbered and staye

morgan stanley provided $132 based on last trades that were done do you anticipate wide volatility they all the shares are available to trade, north of 90% of them, and of course, that could mean a lot of volatility out there. what kind of range are you expecting? >> look, it's a good point as we have highlighted a number of times, this is similar to an ipo but different. the company is not selling shares, there's no selling shareholders, there's no underwriting process what that means is that first it will take probably a little longer to find the right price, because we have to wait for all that interest to synthesize itself i would expect it is more volatile once it opens because it takes time for the secondary interest to come into the marketplace for price to stab li stabilize. >> spotify is not selling any new shares most companies do need to sell new shares is this something new we will see, this direct listing, or is this a one-off specific to spotify? >> i think that's the right question to ask. there is probably a lot of eyeballs on today's deal watching that. i agree this is

morgan stanley won't be able to save it. this is what i wanted to see better than expected on about every line if they don't like this one, they don't like the group. >> joining us now, victoria fernandez from global investments, and elliot, ceo and founder of hightower announcing today they will acquire private wealth management business good afternoon to you both discuss the aspect of goldman sachs to begin with, victoria, in terms of very strong numbers, but the sector and the stock is trading down is that worrying for the market as a whole, for the sector as a whole, or just for goldman sa sachs? >> the market as a whole and expectations for earnings have been set so high i think you look at the citi surprise index, that's been high lately so as the bar has been raised, yes, they are great numbers coming out from all the financials, but i think people are looking even for more, and so they are pulling back a little when they are not getting everything or when they get something that's a little less, like loan growth. >>

obviously that is positive for morgan stanley. see what is happening on their advisory front. we will be watching the deposit betas. overall for the banks, very modest but in a wealth management business, we are seeing an increase. out, if weoaden this take a look at sector earnings growth expectations for the first quarter, we have a chart you can bring up. double-digit growth for telecom companies as well as energy companies. how are you playing this potential earnings growth? what are the places we have been finding a lot of good valuations as of late has been within the energy space. you are seeing some of the sharpest rebounds, but for us, it also boils down to valuations. you have a lot of names whereas theprices have rebounded, stocks have lagged and have not kept up with that and as a result, you have a lot of equities in the energy sector that just don't price in a lot of the oil and gas price gains we have seen. price-to-book valuations are still hovering around trough lows. a lot of the narrative or the dialogue has bee

for both of them, investment banking was weak for jpmorgan and morgan stanley for this quarter beak being the one goldman sachs could fight back, they might have to wait. >> last week, results in investment banking for one company. >> correct >> you see the issues you had an incredible amount of investment banking activity m&a has really ratcheted back up significantly. the last bastion of feed protection is no longer there. you're seeing major compression in investment banking fees as well as the boutiques taking share. >> that's true, but not necessarily fully the picture. we have to remember that repatriation is succoring, and most of us, i'm one of them, think it will lead to more m&a fees are compressing, but if the volume picks up, investment b k banks could be a positive. >> i have nothing but man love for you, but i'm going to push back jpmorgan in the similar way the cubs started the season, that's what jpmorgan did, they hit the cover off the ball yes, the stock is coming off and there's profit taking, but they did very well on their trading activity, and also libor no one is ta