tv Bloomberg Markets Bloomberg March 31, 2016 3:00pm-4:01pm EDT
>> from bloomberg's world have yours in new york, good afternoon. here is what we're watching at this hour. .ast day of the first quarter a president loses key political support as the economy exterior it's further. put a good situation in europe? the a major and i, challenges confronting the continent. got one hour from the close of the trading day? julie: we are an hour from the close of trading not just today but for the quarter and for the year thus far. let's look at where stocks are today, a mixed picture and the nasdaq is little changed. s&p and the dow is little changed as well. the s&p is near its lows of the
session. year to date, the s&p is hanging onto gains as it solidifies its recovery up 1.5%. nasdaq remains the laggard this year, declining nearly 3%. it has been a v-shaped market this year. the s&p 500 in the first six by 10.5%.he year fell we talked about how rare it is, but then the balance has been a rapid and large as well, 13% as we have seen the recovery now in the past several weeks. on the downside, i was at the s&p 500 and analyzed. the company that contributed to the most to clients, we are not quite there yet. i can tell you, coming from apple and amazon, we are
contributing the most to the decline in the first few weeks of the year and those are the stocks that of also contributed the most to the recovery as we have come out of it since february 11. these are the best-performing groups year to date. the interest rate sensitive groups have been doing better at -- as rates have been going down and more defensive groups have been doing better this year. the two groups that are lower this year our health care and financials. those are the big laggards. also, we have not seen a recovery in rates. investors want rates to be financialsrder for to perform better. another thing our want to mention about recovery, this is something that bears repeating. checked again, 592. we have seen a return of
volatility in volume over the year. seen is ony we have relatively low trading volume as well. it is not just those big tech movers i was talking about. oil prices have recovered quite a bit as we have headed past the lows for the year, up 3.4% year to date, a 50% move that we have seen oil prices. gold prices as well have not just in a recovery from the lows of the session, or of the year thus far. it has been a year to date recovery, pretty consistently. quarterlybest recovers his 1996. the gains have come at the expense of the u.s. dollar. we have seen the pullback in the dollar index of more than 4% this year, at least one of the elements that has fueled the recovery in the commodities. >> the year in which we expect interest rates to rise, we see them fall.
>> yes. the 10 year year to date, we have seen that come all the way down to 1.78% for the two-year, it has been a similar trajectory of falling yields as we see buying and treasury. here is what we stand with no increase, 22 percent. as we take it back, this is fascinating to me, the chance of an april rate increase is 50% and the june increase was 74%. expectations have changed quite dramatically. david: mark crumpton at our news desk. seven were killed in a
bombing today in the country's mainly kurdish region. butlaim of responsibility one news agency claimed the violence on terrorists. at least 23 people were killed according to pro opposition activists who say the strike was one of the deadliest incidents involving civilians since a partial cease-fire went into effect more than a month ago is it was not immediately clear who was behind the airstrikes. nearlysanders has raised $4 million this month and is hoping to tap the 43.5 million he generated in february. the sender it -- senator wanted more money last month than his rival, hillary clinton, but hillary clinton still maintains an advantage in cash on hand. the money is key with primaries
in the next week in wisconsin and april 19 here in new york. on list of ceos calling north carolina to repeal a controversial law is growing. the law would limit bathroom options for transgendered people and prohibit local antidiscrimination measures. more than 100 corporate executives signed a letter calling for a repeal delivered to pat today. the ceos of starbucks, ebay, and american airlines. five star players on the u.s. women's soccer team has filed a wage discrimination complaint against the u.s. soccer confederation. the women's team generates nearly $20 million more in revenue than the men's team but the women raining world cup and all in the champions are paid nearly four times less. that is all according to the complaint filed with the equal employment opportunity commission. news 24 hours a day powered by our 2400 journalists and more than 100 50 news
bureaus around the world. i'm mark crumpton. david: just mentioned the explosion in turkey. the attack will not stop a migrant women from going into effect on monday. turkey's president is in washington set to meet with president obama later today. turkey host the margin of you will strengthen ties and it also comes at a tricky time for turkey's nato membership. i'm joined by the president of chicago council of global affairs. thank you for being here with us. you have another attack in turkey on the heels of the attack interpret -- brussels and paris. >> we are seeing a growing threat. in brussels and before that, in paris. we are seeing the intelligence
capability. and the kinds of problems we have had before the 9/11 attacks before different agencies don't share intelligence information, we see in places like belgium and even france. there is a lot of improvements happening by the european companies in order to strengthen the abilities as they travel across borders to prevent these kinds of attacks. david: what is the biggest hurdle to that that you describe? >> in nato, there is a little bit of intelligence sharing, mostly the kind of intelligence where the united states or britain or other countries provide their best analysis of what is happening in particular regions in the world. very much focused on russia and the military capability it has, but also on the middle east and
when we were actively involved in afghanistan and libya on those kinds of places. intelligenceot of sharing on terrorism as such and that is something nato should be either looking into, is there a intelligence,ore to have a capability within the alliance that exists, where you can get the information into the tight and widely share it? the european come -- countries have not been willing to share this kind of information. they are not really sure how to do with it and do not need to share it among the agencies themselves. to have a serious examination as to how they improve, sharing within their own societies and between agencies, and ultimately between the different countries. the wind has announced the nato secretary-general coming to visit with president obama next
week. this is imbued with a lot of symbolism. what is at the top of the agenda? >> that this is a meeting preparing for that summit, one of the big thing -- big things that have changed since i was there was the russian tried to europe. russia for the first time since the end of world war ii forcefully changed borders when it connects to crimea and then invaded ukraine. europe,tries of eastern new members of nato, they were not members of nato during the cold war, they were on the other side. now they are members of nato. worried that perhaps russian intentions are pretty negative and they're looking to nato and the lines they joined to protect them to provide reassurance that it will be defended and a d the united states has already announced a major buildup of its military forces for division
.orth that is one of the issues on the top of the agenda in july. the republican front letter --david: the republican with-runner has met newspapers earlier this week. what is the role of nato today? >> the rule is the same in some ways as when it was founded in 1949, to provide a collective defense. the threats have evolved over time. it is to be the soviet union was the biggest threat. the soviet union does not exist anymore. it does not mean there are no threats to the country. collective obligation was invoke. the soviet union never attack. when the united states was attacked in a way that nobody
had foreseen, but at that point, nato got into action. nato continues to be involved in afghanistan. european allies have fought and died to do with terrorism. -- deal with terrorism. they have fought in the to protectn in libya the libyan people and ultimately led to gaddafi. there is no reason why nato cannot have a bigger role to play to defend the territories of its member states when it -- with regard to terrorism. well with that look like if nato were to do more to fight, how would you see that playing out? one-way was to use nato as an institution to share more to -- more intelligence for the kind of intelligence that people need to know about it or they can do
that by laterally, the way we do it at the moment, or we can do it multilaterally within the construct of nato. we have the procedures of handling highly classified information within the organization. they do not have to be reinvented. that is one scenario. is tocond scenario protect our territory against direct attacks. in turkey, in germany and holland and spain, it had been deploying air defenses to protect turkish territory in syria or any other air attack from missiles or from aircraft. a third way is there are military operations going on in syria and iraq. they could because it made it if nato so desired by nato. we have a command-and-control capability to do so. we have assets that can be deployed and are already the point, early warning radar
aircraft for example, to assist in the fight. inre are a variety of ways which not only the united states, but every other nato country contributes, could have a role to play to deal with the threats we face, whether that is the threat of a resurgent russia or the threat of terrorism. i asked if nato could play a bigger role dealing with the migration crisis, and that point was big and is only gotten bigger. it was not something nato had a responsibility for or there was no role for nato to play. do respect that? >> nato has deployed a naval operation that has cooperated with turkey and greece and the capacity, for the
european union, to exchange information and gather andlligence on smuggling, find ships that are in need and both that are in need to be able to come to the rescue. nato is now already involved. it could do more if the flow of folks across were to increase again. at the moment, down because of the agreement in turkey and the european union. there is clearly a role to be played if they so desire, or indeed in the mediterranean, if refugees start falling again from north africa into italy or greece. thank you for your time, joining us from chicago. in the next 20 minutes, will the u.s. economy finally see some wage growth for the u.s. jobs report and what it means for the fed hiking timeline? we recap the quarter and find out which tech giants are leading the index higher. runaway inflation is not going
david: all eyes will be on the u.s. jobs report. for marchrkers agreeing to a bloomberg survey. a preview of jobs, chief u.s. economist carl. this comes out tomorrow at 8:30. what is the part of this you are most interested in seeing? >> i would be cautious not to overreact to a week number. march has a penchant to disappoint. for the last five years, the
consensus over estimated last month's payroll by 60,000. last year was over 100,000 missed on payroll. as you highlighted there, the consensus is looking for 205, that passes precedent. you get a number closer to say 150 or so. my personal expectation is something in the vicinity of 185. you're coming on the heels of a week qe4 gdp growth, corporate profits, contracting for the last five quarters. the story is being set up that the economy is stalling. i do not think that is the case. could justl print fan the flames of those concerns, especially on the heels of those retail sales and consumer spending earlier this week. is the factrtant that the unemployment rate continues to grind lower. i suspect it will edge down to 4.8% tomorrow.
i think it is easily possible and in fact, if you trust the wisdom of crowds, we look at the michigan sentiment survey, which we will also get later this morning, expectations for the unemployment rate continue to point for a lower rate, possibly even more aggressive than the decline the president is looking for. close to it by year-end. in that environment, wage growth will pick up. we will know once we get through it to a considerable degree, we will have more wage pressures. aside from what the payroll print is and the unemployment rate tomorrow, i will be looking at aggregate hours work. workers times hours. we saw on unusual contraction in the work week last month and that meant less income was generated in the month. because it snap back was partially related to the weather and unusual circumstances in the energy sector. with employment income snapping
back, the network tells us we can ignore resale -- retail sales in the consumption we saw in the quarter and consumers can show up to a better degree in march and heading into the second quarter. much, thank you very carl, chief u.s. economist at bloomberg intelligence. for anhead, calls impeachment of brazil's president are reaching a fever pitch. a new government will jumpstart the nation's economy? ♪
looking ahead to that, there is not a lot of options -- optimism built into here. >> there is not. if you look in november, we were expecting about 60 basis points, negative earnings growth on the s&p 500. that number has evolved as companies have kept bringing things down. we are talking -10% earnings growth on the s&p 500 for q1. that will be a drag. if you look at q2, it is not much better. -4.5%. you have a little earnings recession that people are worried about now. right. even though we have seen stocks rally, it seems as though there is a lot of hedging activity going on. is there any place where you have seen that concentrated? i have not seen a lot of concentration in any single thing. if you take a look at the vic, it is at like 14. it is pretty calm here right now. julie: let's turn to one of the
events, tesla rolling out the model three after the close of trading here. that is the lower-cost vehicle hoping to get some market share there. optimistse of the when it comes to the model three. we have had mixed talk from analysts. why do you think it will be a catalyst for tesla? deal.s is the big it is tesla thursday. you have people lined up at the dealerships waiting to put $1000 down like it is a meet and greet to see taylor swift or something. it is a huge marketing event. they think it will be the thing that will give them a half a million cars a year eventually. they are hoping to get 100,000 orders for the model three within the next week or so. see that happen. that is where all of my optimism is coming from when it comes to tesla. i think it will be a make -- a big deal and when mainstreet starts to hear about these things, everyone will have $1000 to put down on tesla stocks in the hopes for future. julie: what is your trade on
tesla? bullish call on a spread, by the two 30's, sell the two 60's, and that way i get not only the optimism surrounding the awesome tesla event today, but i will also have another earnings report in there. i am hoping with the two of those, it works some magic. $10 for $30 of upside potential. i could triple up on this one. julie: we have got to toss it back to david for breaking news. news out ofing richmond, virginia. there has been a shooting at a greyhound station. more on this as it develops. more after the break. ♪
reports of a shooting at a greyhound station in richmond virginia and early indications, four people have been shot and wounded. will of course continue to monitor the situation in richmond and bring you more information as soon as we get. the fbi is helping arkansas prosecutors unlocked and ipad and iphone type to a murder investigation. it is unclear if the agency itns to use the same method used to access the iphone of one of the san bernardino shooters. prosecutors have been asking the fbi to help unlocked iphones connected to crimes. say is thehorities main paris attack suspect will be at should i belgium to france. the prosecutors office says he will be returned to face charges , but no timetable has been set for the transfer. he was captured in brussels after four months in the run. -- on the run.
allegedly getting into physical confrontations with reporters. website, the press club president released a statement which reads in part, quote, turkey's leader in his security team are guests in the united states. we have increasingly seen disrespect for basic human rights and oppressed human -- and press in turkey. than 150 news bureaus around the world, i'm mark crumpton. david: markets close in about 30 minutes. the nasdaq in positive territory, if only bear to -- if only barely. has been a relatively quiet day for the nasdaq, but for the quarter we are at the end of the quarter in the end of the month, not so much.
the nasdaq without as much as 60% but has largely recovered after its february low. one important sector to the --daq that is still down biotech. down about 23%. it will be interesting to see whether the sector can cover and compete with the nasdaq overall. apple in particular got the best theh -- best boost on month. the court did drop its case against apple. analysts appear to be getting a little constructive here. morgan stanley said they thought the current quarter is tracking ahead. just yesterday, shares were upgraded to outperform. more of a bullish stance. drag this month,
far quarter, this year, by and no international. investors are concerned about this ceo coming from valeant. here we are at the end of the quarter. any surprises from last month? abigail: yahoo! top performer for the month and the year. often percent to month really part of a a recovery. it seems investors are really encouraged by the company's efforts to potentially sell itself here the wall street journal reporting that yahoo! set a deadline of april 11 for pulmonary it's. -- bids. david: anticipation over sweeping change in brazil's government is causing investors to get a move on the cup a. take a look at this chart.
a record back in june but has been steadily declining among speculation that the president will be impeached. our investors at jumping the gun? to startecide where with brazil. this political story gets thornier and thornier. it is a political story, but playing a big outsized role. >> it is a political story and we do not have a view on how we think the politics will end up, but it has clearly been largely apolitical story. a story that is getting lost at the economywhich is in brazil is extraordinarily weak. the markets, particularly the weakness, and also by definition, some kind of background to the politics also
appeared. got a report downgrading the country's prospects for gdp in 2016. a contraction of 3.5%. geoff: we are actually a little weaker than that. out to be correct, it will be the same as last year which was also -3.8%. the issue investors are wrestling with his when does this economy start to bottom out? when can we start pricing in some sort of modern me out level of output. it may very well turn in the fourth quarter of this year or first quarter of next year. but come what may, all the concerns about the economy and a lack of confidence, this is an extraordinarily weak environment. the worst recession in brazil in decades. about your
perspective being an investor in the united states, looking at brazil. so much for an interest in this country when this story comes to a head. i was actually in brazil visiting investors just two weeks ago and the locals continue to be very cautious about the markets and very cautious about these developments, even though you have had a strong run in the markets since late january. foreign investors have generally been more interested in trying to make -- trying to pick som opportunities. our worry is that this market is up over 50% in dollar adjusted terms since late january. it has been at the forefront of this rally. that is the local of vespa, but a decent chunk is the rally in the currency here.
getting pricedh in, and this equity market, especially with a weak economy, is also very expensive as far as we are concerned. overpriced, being your advice for investors, is a two step back and see what happens? people notre telling to chase the rally, generally in emerging markets, in particular not in brazil. global investors adding to brazil now, we say, i think we basically have to wait for a pullback in with for some better news on the economy. this is not just about the polls, it is about the economy. definitely -- year -- david: are the any you think
show greater promise? geoff: we do have some risk in our pro forma oil. tfolio. -- our por russia, turkey. we have some exposure there in terms of our model portfolio. we do also like parts of asia. china, india. some of the very high risk markets, apart from those that we have overweight, they had done very well. they have simply run up far too much as far as we are concerned. we have some risk but not an all risk portfolio. some of those markets that have done well, we would be selling here. david: this is still much a currency story. geoff: it is a weaker dollar story. we have done a lot of research on this. we have shown to investors many
times that emerging markets react addictively to the trend of the dollar. since may 2011, to the beginning of this year, the dollar went up in a straight line. very bad news for emerging. 6% index has pullback about or 7% since january. that is a classic environment where emerging markets to do new better, they have more kerry and more interest to earn. rally inen an enormous the currencies. we are concerned that eventually the fed will increase rates, the dollar will not go much further, and i think that is another reason why you do not chase brazil at this time. david: thank you. aboutgetting more details that shooting at a greyhound bus station in richmond, virginia. two state troopers had been shot and wounded. the shooter is in custody. no details were given about the
♪ this is bloomberg markets. it is time now for the look at stories.he business drafting and fennel are suspending all of their college content. that is according to espn. the suspension is indefinite in all states. it follows months of discussions. the largest blue diamond ever will go up for auction may 18. it is called the oppenheimer blue. it is 15 carats. his likely to bring in as much
as dollars. rivalsuber's biggest once to become the biggest company in london. half of london's licensed taxis. its global revenues will hit $500 million this year. that was your business flash update. the chief investment officer of oppenheimer funds was on bloomberg tv a short while ago and discussed the fed cheers comments. thought she was the most -- instead of talking about typing she was talking about what they are going to do in terms of easing. they are really worried that people in china and japan, the dollar would depreciate unless they do something about it. said there aree
lots and lots of things the fed can do and they are going to be very gradual. he said she has been the most you have ever seen her. yet we do not see much of a pop. why not? fair question. when expiration could be we have had a massive rally in equities and credit since the middle of february. in the middle of february in a middle of march, it was one of the biggest moves you have seen in the markets in a long time. i think we are just catching up. what that does tell you is that if she remains as dovish as she was, there no reason to expect otherwise, the outlook for the markets over the next 3-6 months is much better than it has been over the past three months. 300. just showed the s&p
600 versus the s&p 500. the european stocks have well underperformed u.s. stocks, the fourth quarter in a row. this is a huge underperformance of europe, is it because she has turned it dovish, or do you think that divergent plays over and we will see them tracking together? >> i think divergent plays over and will see them track much closer. 500n the rebound in the s&p and the underperformance of international equities, i think international equities now look quite attractive. >> where you see the 10 year? >> it is right now probably where it is going to be. 42 rally significantly, u.s. economic performance has to be quite soft and i do not think that is in the cards. gethe other hand, for to two to 30 or 250, which will not
happen in my mind, but to 30 is plausible. -- 230 is possible. negative it yields around the world, and if you have some kind of financial sock -- shock or crisis, couldn't you have foreign money come back to u.s. treasury's? >> the dollar at that time would be rallying massively. i wonder what you think about the possibility of a rate cut. a rate hike, futures are showing it is a possibility in december. last time we were talking, we had just heard from radel leo and he said he thinks it is a possibility. mind, the point in my rate cut is entirely possible. the fed to not have gone down this path of tightening, not
because of the u.s. cyclical situation, more because of what is going on overseas. that is not going to change anytime soon. as they continue down the path of easing, the fed may get dragged along just to make sure the dollar does not depreciate and take down the u.s. economy. >> this is fed easing. >> and she basically said that. the most interesting thing she said was, the fact that the markets reacted a certain way, assuming that the fed would tighten, is a tight -- is a positive, they want the markets to be the fed's work. given her dovish stance, are you going back to riskier credit, back into stocks? >> yes. the outlook for stocks in credit for sure is quite good. day, in a lowthe interest rate reap --
environment, it is probably going to be modest. looking for is modest returns, high volatility. if the markets rally a lot, they will get some of that back. david: that was chief investment officer at oppenheimer speaking earlier today. the close of trading just as a way here are the major averages. the dow barely moving. 10 points.about the s&p 500 down to hundreds of a percent -- half a point. ♪
movement. julie: we already been an exhaustive look. i wanted to look at little bit more to we have not seen much activity. the s&p and the dow are very slightly negative, nasdaq very slightly positive. might have been one of the tightness ranges for the s&p 500 we have seen all year. continuing to seek relatively low volume. 50% below the 20 they average. let's check at some of the other assets. oil and gold, actually now going in opposite directions. oil has been rebounding what it is now lower. --d up about .e have been watching rates the 10 year yield is the lowest we've seen thus far in march. yellen'sof janet dovish commentary. eight reiteration of her dovish commentary.
we have been watching the u.s. dollar as well which is showing a mixed picture today. this is been a week quarter for the dollar. we have seen a mixed picture today. earlier in the show we talked about the biggest contributors to the drop in stocks at the beginning of the year and then the recovery. biggest the contributors through february 11. this is an index point. this is the amount they took off the s&p 500. apple fell, amazon, microsoft. bank of america as well. we have seen financials weak. stocks that contribute to the gains. it is three of the same stocks. apple, microsoft and amazon is seen recovery. apple on track to have its best monthly performance since 2011. general electric also on that list. we have seen this recovery in tech.
nasdaq is the lower on the year because it is a bigger index, but it is important that those stocks and begin to recover. david: thank you. let's break down some highlights in the final moments of the first quarter of 2016. what stands out to you here at the end? things that stands out is the markets ability to rebound. and its low point it was down then made that back and then some. over the entire history of the dow, or the s&p 500, which goes back to the 1920's. a 55 instances in the 30's, another one in 1980 as the market was fluctuating. then it gets more interesting. first quarter of 2003, which was
at a bull market. then again, first quarter of 2009, which happens to be when the current bull market started. you look back over those eight previous instances. average gain the rest of the year, 28%. it is a relatively small group of instances, we should point out. youtheless, it does show the potential for the rest of the year. david: a big part of the story is helping volume has been. david: no doubt about that. there is a lot to look forward to. , theobs report tomorrow fed policy decision starting next month, them looking forward to get a sense of what is happening. it, the explain some of rest is, stocks have stabilized finally after a down and up quarter. david: let's talk gold.
biggest game for gold since 1986. to the performance of gold stocks. 15 gold mining companies. you're talking about a gain of more than 60% this quarter. compare that to 16% for gold, and actually be stock index heading towards the best quarter ever. it shows you how much these stocks have benefited from rising gold prices. the schism when you look at european equities and u.s. equities, a real stark disparity. david wilson: if you take a step back you have a disparity there as well. haven't economy sputtering in europe, a central bank that is taking steps to add money to the bankg system, trying to prop
up the economy. with the fed it is a different situation. bute not moving along, still, there is growth. the question is when of a going to raise interest rates? between action economy and monetary policy is playing out in the stock markets. david: thank you so much. that is david wilson. that is it for "bloomberg markets." let's look at the major indexes, less informative before the close. the dow down. 0.1%00 down by ♪
alix: u.s. stocks closing mixed this afternoon. the dollar seeing its fourth-quarter and within five years. quarter. we break down the moves in global stocks, currencies, commodities, and bonds. howy: banks are deciding much money to lend oil companies. we talked to a top houston lawyer. alix: it is jobs right tomorrow. we have the three must-see charts. we begin with our market minute. thes wrap up the day in month because this was the biggest monthly gain for stocks since october. quite a comeback. s&p and the nasdaq, snapped three straight months of losses. what was