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tv   Street Smart  Bloomberg  March 31, 2015 3:00pm-5:01pm EDT

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alix: welcome to the most important hour of the session -- 16 its left until the closing bell. -- 60 minutes left until the closing bell. i am alix steel. this is "street smart." we will look at how the ecb and janet yellen influenced investors during the first quarter, and what to expect in the second quarter. iran and world powers racing to resolve a 12-year standoff over iran's nuclear program to will get the latest from talks in switzerland. -- program. we will get the latest from talks in switzerland. "street smart" starts now. here are the top stories we are
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watching the head of the closing bell. new details about the pilot that may have deliberately caused the deadly plane crash in the french alps. the germanwings pilot notified the owner that he battled depression. this is the first time lufthansa says they have been aware of his mental illness. treasury secretary jack lew just returning from beijing, saying he had "frank and constructive conversations with chinese leaders about reforming china's economy." he also said here china to establish and maintain clear roles in cyberspace. he is speaking in san francisco tomorrow. the incoming host of comedy central's "the daily show," is drawing criticism before even takes the job. meeting trevor noah is being called anti-somatic and sexist. he says behind every successful
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rap billionaire is a double as rich jewish man. scarlet fu is looking at the action on the street. we are winding down the first quarter. it went so fast. scarlet: it is so fast, but the trading has really slowed down on this final day of the first quarter. i'm looking at volumes, and for the dow jones industrial average, for instance, 20% below the 10-day average. for the s&p 500, 15% below. for the nasdaq, 11% below the average. you get the idea -- there is a lack of participation, a lack of conviction on this final trading day, and all that is resulting in drops of about .5% for the s&p, the dow, and the nasdaq. if you look at the vicks, which tebow is the price of detection against -- which tablets the price of protection the s&p 500, it is down 21%, its biggest quarterly decline in two years. volatility has come down even as we have seen swings in the s&p
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500 and the dow over the last three months. of course, we're keeping a close eye on oil. energy shares are among the worst performers in the quarter, giving the decline -- given the decline. supply concerns, once again demand concerns, once again driving oil lower. according to chad morganlander who i just spoke with from steeple necklace, he takes oil can get to $35 a barrel. we need to wrap it up with the euro. it is extended its biggest quarterly slide versus the dollar since its inception as we await a resolution on greece talks. alix: we will check back with you later in the program. turning to the top story -- negotiators will expand a self-imposed deadline for reaching a broad nuclear deal with iran. the medical respondent indira: --indira lakshmanan is in switzerland. we are accepting talks to go well past midnight. what are you hearing right now?
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indira: right, well of course, midnight is the deadline, the witching hour, so not for nothing, it is curious that we are pushing past that time. we just saw the french foreign minister who said he expects the talks to go well into the night. the state department has made a statement on the record saying they have had enough progress and they expect to go into wednesday. so, what we hear from all sides is there are a few, stubborn meaning issues. they deal with enrichment, with iran's research and development and also with the pace of sanctions relief. until they can work out the details on those, the major sticking point, it is very hard for them to come up with a declaration that would have some bullet points. they are trying to pull out, of course, by sometime within the next day, is some sort of an agreement in principle with some bullet points that will give them three more months to work out the details. alix: important point. printable details -- principles
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and details to come. thank you. sergio lavrov how the news conference in moscow that stated "i think once an agreement is reached, the sanctions should be halted. they should cease to function." he went on to say russia does not recognize unilateral sections from the u.s. and europe as legal. so, where will sanctions stand following the outcome of today's talks question mark joining me for more his reacher's -- talks? richard worked for the national security staff from 2011 to 2013. he helped to orchestrate the current sanctions. we are so happy we found you. thank you for joining us. richard: thank you for having me. alix: we get a framework deal -- what will it take to roll back the sanctions? richard: we need to outline the
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schedule. you first need to have that schedule worked out. that will take some time. then you need the iranians to take some steps. i think we are several steps away -- months away, assuming we even get the final political agreement, until we will be in a position for sanchez to be suspended and then lifted. alix: has been agitating for a quick relief of the sanctions, so, in reality, how quick is quick? richard: from their perspective the day they start doing steps, that should be when sanctions are suspended and eventually lifted. frankly, we are talking about three to six months after an agreement is consummated because the iranians have to take technical steps to build confidence to allow sections to take -- left. alix: what is the process in the u.s.? richard: lifting would require an active congress.
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some can be taken care of by the president come but to lift sanctions requires congressional action. to suspend sanctions, the president has a lot of authority to waive and not enforce certain sanctions depend out what the statute says. alix: which, quite frank the he has been doing 50 grimmett was reached in november, 2013. other sections remaining -- which, quite frankly, he has been doing since the deal was reached in november, 2013. what other sanctions are remaining? richard: accessing foreign reserves and you have to look at them in combination with oil sanctions. even with oil prices reduced the oil sector is still an important one in iran. so long as they cannot sell oil, get the proceeds, their economy is in trouble. alix: what was it like to be at the table drawing up these sanctions against iran? what was the process? richard: it was a rigorously
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analytical process kid we examined for vulnerabilities, -- process. we examined for vulnerabilities and then what our partners will -- would be willing to do it. it was a complex analysis of what are the vulnerabilities and then, what will our partners be willing to do. alix: we're getting headlines now that iranian talks have made enough progress to extend to wednesday. that is according to the u.s.. what does that actually mean? richard: i think it means in the last 24 hours there have been these glimmers that the iranians would be willing to say things in public they were not previously prepared to say. for instance, that enrichment will be capped at a certain number of centrifuges or nuclear material will be dealt with in a certain way. there has been enough indication that the estate feels comfortable in saying we will stay -- that the united states feels comfortable in saying we are comfortable. alix: is what we are hearing the reality, or is what is going on behind closed doors different
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from the rhetoric each side has to take home with them to get something done? richard: there certainly is a portion of this which is rhetoric. the iranians have to come home and say we fought a really good fight, we were able to get strong sanctions. the administration has to say the same thing on the nuclear program. the simple reality is the deal will die in tehran or washington if it is not good enough despite the rhetoric. alix: they want totally different things at the end of the day. richard: that is right. the reality is this was always going to be very hard, if not impossible to do. the iranians want sanctions relief on the cheap, the nuclear side. it ministration would prefer the opposite. ultimately, this is always going to be about finding the inch of overlap the between the positions. alix: the inch and from the man who was part of giving those inches from the sanchez. thank you, richard nephew, -- inches from the sanctions. thank you, richard nephew. former ruler buhari has won the
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nigerian elections in the first transfer of power since 1999. paul wallace joins us from lagos. it took weeks to get the selection done. is this cause for celebration question mark is this done, -- question -- celebration? is this done? paul: in the states, his supporters are already going onto the streets, and celebrating the victory. so far, the reaction from the opposition, the strongholds of president goodluck jonathan seems pretty muted. that suggests, so far, that they -- there might not be the widespread violence that some people feared if the president lost. it is quite a thing that he is actually conceded defeat.
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even this morning, what else talking to some people and investors who follow nigeria closely, they said they could not imagine the president calling up the opposition leader and congratulating him on a win, which is now what has happened. alix: unbelievable story and a big change in events from the past few weeks. paul wallace, thank you. coming up, greece's negotiating team has home. what is next question changes could be coming to indiana -- next? changes to be coming to indiana's religious freedom law. ♪
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no deal for greece -- the country's negotiating team heads home. tomorrow, the euro area will schedule a call on greece's reform plan. what is the next step? we are joined by lisa
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abramowitz and tom. we are getting into a heated debate. what happens tomorrow on the phone call? tom: at the end of the day -- to the conversation we were having off-line, which i think is critical -- at the end of the day, you have to keep in mind that what is happening in europe in particular you see stabilization at this point. again, as i was saying, stabilizing at a low level, but at the end of the day, when i think about the contagion coming out of europe the eurozone is insulated for a host of reasons and as a result of that and an ecb that is showing active engagement that to me indicates some of the risk. things can deteriorate, and europe has been a basket case for quite a while, but i think intentions are good. alix: you are bringing up the
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peripheral bonds, spain, for jewel, italy, and the conundrum you see in the markets -- portugal, italy, and the conundrum you see in the markets. lisa: what i'm trying to rectify is spain could follow in greece's footsteps. the spreads do not show this. yields have fallen. that means that prices have risen. that means they are perceived as more creditworthy, right? how do you reconcile this with the growing chances of a greek exit right now? i do not get it. tom: look, i'm a u.s. economist sierra getting a u.s. perspective, it -- so you are getting a u.s. perspective, but the european team has been steadfast. they do not expect greece will exit. if you like greece go, you have to have a conversation of who else you like go, and that is when the speculators could step in and start to damage a country.
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that is an important point. i do not think it is a foregone conclusion. i was in europe last week. it does not seem like anyone is binding to the notion they will exit. alix: credit default swaps tell us something different. lisa: a 75% chance that greece will not make good on obligations? tom: but what are they telling you about the funds -- if you look at where the market prices fed funds, they are almost always wrong with all due respect to the market -- lisa: the market is really offended right now. alix: we cannot talk about the market and avoid the currency and talking about the euro, the worst quarter ever, is that due to dollar strength, mario draghi qe, or another factor? tom: at the end of the day, what you have to consider is it is all a relative value play.
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we would argue the u.s. is in materially better shape than europe and any european country cap from that perspective, if i was making the call -- country. from that perspective, if i was making the call, i would say we should have been a parity already, and probably beyond that at this point. lisa: from people i talk to, it is not just greece exiting the eurozone, but the collateral damage that happens as this goes on, as the negotiations go on. it is hurting greece. greek banks are in a rough spot. deposits are the lowest level in 12 years after his capital outflow. tom: here's what i would say -- these are not new stories. this has been going on -- europe has been fundamentally unsound and i'm being polite, for quite a while. spain is still struggling with significant unemployment. either ongoing issues. it is not something that is just coming to a head now. i would argue this has been in
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place for quite a while. alix: we have to leave it there. lots more to discuss. we are watching the bond market. tom, you're sticking with me. lisa, we'll check back with you later in the show. just ahead, we will look at the ecb's influence on investors this quarter, and what that might tell you and us about the rest of the year. later in the program, the major media mergers moving stocks today. that is a tongue twister for you. "street smart" will be right back. ♪
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alix: this week investors are analyzing a school of economic data for clues on the rate increase. jeffrey lacher said the main interest rate should be raised in june, pointing to the jobs
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market, and spending growth heading back to the fed target. confidence is rising to the second highest level since august, 27. home prices rising at a faster pace in 20 major u.s. cities to -- cities, but manufacturing chicago tracking. we are joined by rcb economist tom moore sally -- tom. we see this divergence. what you see continuing? tom: what we would say is a lot of what we went through over the last couple of months, we think some of the weakness is easily explained. the weather, the port strikes -- look, i get it, and i can see people rolling their eyes as they listen to us. alix: it is not just the port strikes, the weather. tom: in part. this is not us guessing. you know from the responding
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comments from the isn report from the beige book, where they highlighted not just the port strike, but the weather is having some impact on consumption. here is what i would say when you are trying to square the circle. does it pass the sniff test, and in that regard, here is what i would say -- we have added 1.5 million jobs over the last four months, an outstanding run rate. wages are actually slightly on the rise if you look at the high, which hopefully will get into over the course of the conversation. so, you have consumer fundamentals that look really sound. the consumer confidence report is a great example. if you look at the confidence level for those people making north of $50,000, a group that is responsible for two thirds of all the spending, that is at a cycle high. income expectations continue be -- to be at a cycle high. given all of those fundamentals, you have some sort of underlying, weird, pernicious evil spirit that we are all unaware of driving down
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consumption or that there is some other factor weighing on consumption in the face of all of the sound fundamentals? we would argue that the latter makes a lot more sense -- that it is a transitory development that has gone on. by the way, the proof will be in the pudding, because in a week, or two weeks we'll get retail sales. if the retail sales report does not bounce, which we expect it will in a march report, you can expect to have a real conversation about what else is going on. given the fundamentals, it seems reasonable you will consumption that will continue to run at around eight 2.5% pace. alix: is 2.5% good enough, because goldman sachs brought up a note that the jobs growth would have to slow to catch up with the recent data. we will have to see declining jobs to catch up. what you think? tom: i did not read the note. i cannot comment on it specifically. alix: i can tell you exactly what it says -- "implement gains
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have been running too hot recently, wrote to do economic growth and under our baseline forecast this year and next we expect a gradual deceleration to a roughly 200,000 a month rate. tom: i do not disagree with that. will get a new report friday. we are expecting a 220,000 outcome. i do not disagree with the general premise. alix: you're just saying that it is not going to last for a while. tom: that what will not last? alix: that the deceleration the job market will not be sustainable. tom: sustainable at what level -- this run rate of about 5% on nominal wages, that is enough to grow wages -- excuse me consumption, at a 2.5% rate. that is what we expect. again, without context, it is hard to comment on that specifically. what i would say is if you think about the second half of 2015,
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-- 2014, that was an unsustainable run rate, north of 4%. we will downshift we would argue is a more sustainable 2.5% pace. alix: tom, to our for joining. tom porcelli chief economist at rcb capital. ♪
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with the fastest in-home wifi and millions of hotspots xfinity is perfect for people who love fast. don't miss furious 7 in theaters april 3rd. alix: here are the top stories we're watching ahead of the closing bell -- u.s. and iranian talks are being extended till tomorrow. world powers are trying to resolve a standoff over tehran's nuclear program. they may have until june 32 draft a detailed technical agreement. and an update on a story we are following -- the incoming host of comedy central's "the daily show" is being called anti-semitic and sexist. comedy central being -- defending trevor noah, who is known to push boundaries and spare no one. lawyers for boston bombing
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suspect mr. tsarnaev resting their case after presenting a brief defense and a showing his older brother was the mastermind of the 2013 terror attack. the defense making it clear from the beginning of the trial that the strategy is not to win an acquittal but to save tsarnaev from the death penalty. just under 30 minutes until the close of trading for the first quarter. let's go back to the breaking news. scarlett: i want to mention two names -- tobacco companies. there were several reports that regulators met this weekend are voting on mergers today. no confirmation of that, but recall that reynolds announced it was buying lorillard. some concern the deal would not be approved has been dragging on shares.
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we saw that reynolds briefly a race losses -- briefly erased losses. let's move on to charter communications. buying the number six u.s. cable company. the stock is trading at an all-time high up by more than 6%. the transaction will cost more than $10.4 billion in shares with a $2 billion cash component as well. the important back story is that bright house as a consolation prize for charter because it lost out to comcast trying to buy time warner cable. finally, priceline defying weakness in a broader market after steeple updated its -- after stifel upgraded its rating. priceline gets 2/3 of its revenue from the netherlands. alix: i didn't know that. thank you so much, scarlet. we'll check back with you later in the program.
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the indiana governor saying he will meet with state lawmakers this week to clarify the controversial religious read on law -- religious freedom law. check this out. pence: i don't believe for a minute that it was the intention of the assembly to create a license to discriminate or a right to deny services to gays lesbians, or anyone else in this state, and it certainly was not my intent. alix: for more on the ramifications of the law, our guests join us now. todd was sitting there laughing as he talked. you did not believe him, i guess. todd: people tried to insert language and the bill that would prevent dissemination, and it was struck down, so why he was surprised the startling to me. alix: if they do put legislation into law saying it does not give the right for businesses to discriminate against everyone, does that solve the problem? todd: if they are willing to do
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it. he said he would not sign a statewide nondiscrimination bill. 30 lawmakers in february sent him a letter explaining how bad the law would be, why it was different from the federal law which people keep misconstruing, why it was different to any other state law, because it was so much broader, and he completely ignored that. including a law professor from indiana state diversity school of law. alix: can you quantify for me the risks of this law? tim cook's apple coming out against this law. what's the economic reality? carl: the economic reality is indiana is in a precarious position. he had talked about this time and time again -- the indiana manufacturing sector is seeing problems and several headwinds. what is happening nationally is happening to an even larger degree in indiana, and we can we that looking at the trends in the unemployment rate in the
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u.s., the national rate is surging lower. in indiana, it has been moving sideways a best of not drifting higher since this time last year. alix: let me take the opposite view of that. a republican writer wrote a piece saying tim cook's editorial was not an accurate reflection of similar religious freedom laws. he wrote, "cook argues religious freedom laws truly will her jobs growth, and the economic vibrancy of places that adopt them. what might hurt the economies of these states, though are boycotts driven by false impressions of the sort cook is creating." what do you think of that response? >> i think the governor had an easy fix to the problem -- they wanted to extend the protected legal status to include lgbt individuals, and he said that is not on the agenda and he does not support that. that would have been an easy fix to move on from this issue, and clearly, there will be some sort of tab dance that goes on between now and the end of the
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week when they propose the new fixes. alix: going to that point, he is basically saying that all this does is provide a legal claim for people who do not want to serve certain individuals -- presumably, that would be gay people. todd: they will not say, right. alix: but all it does is give them a claim. at the end of the day, they just have their day in court. todd: by the way, the law is so broadly written that it is not even a claim for a head of a claim. if i think it could potentially impact my religious beliefs, i could do. how many court cast -- court cases will the indiana legislature have to take on? how does that positively impact the taxpayer? that will be a huge burden for the taxpayer. alix: meaning we will have a lot more cases coming up? carl: but also the onus on the
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individual because it is expensive to hire a lawyer and go to court. do you really have the wherewithal to pay a lawyer to represent you for an indefinite period of time? alix: something the article points out is that some of the claims that have come to court have not worked out. todd: they were in states where they had nondiscrimination. indiana does not have nondiscrimination, so governor pence created a law to fix a problem that did not exist. you could already discriminate against gay and lesbian people in indiana before this law so he has doubled down on discrimination and is somehow surprised that people are upset about it. >> you say in states where cases have not gone for the claimants it means they had a nondiscrimination law, and that's why they lost. todd: exactly. 90% of the american public think it's illegal to discriminate
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against lgbt people, and a 29 states, you can still legally be fired for being gay. alix: despite the backlash we've seen from, say, apple, walmart, salesforce, governor pence is seeing support from prospective republican candidates. jed bush -- jeb bush saying he's done the right thing. ted cruz saying he commends governor pence for his support of religious freedom in the face of fierce opposition. there was a time not long ago when defending religious liberty enjoyed strong bipartisan support. how does this issue wind up playing out as a gets sucked into the presidential election? todd: this will become a litmus test for every candidate in the election -- are you trying to win conservative primaries by supporting governor pence? if you come out in favor of him how will you be viewed by the general electorate?
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that's a different story. winning the south carolina primary versus winning the national election. todd: which is completely out of step with the majority of republican voters. project right side was created using republican pollsters going into republican districts and asking them specifically about how they felt about lgbt nondiscrimination and marriage equality. the overwhelming majority say not dissemination should be law. marriage equality on a very small majority. the younger you go, the larger the majority gets -- all say it should be law. in the amicus brief filed a few months ago, hundreds of conservative's signed on to support the supreme court finding for marriage equality for all the united states -- hundreds of conservatives signed on. these guys are completely out of step with the electorate. carl: they are trained to retool the economy because they are still a 20th century economy with a big manufacturing sector.
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if you want to entice jobs from places like the tech sectors on the east coast or california, oregon, seattle, what not, you have to have a similar type of protection. alix: thank you very much. this is a debate that will take up as the legislator takes up the issue in indiana. thank you very much. coming up, charter communications by in bright house after missing out on time warner cable. plus, ibm teaming up with weather company? we'll tell you what that's about coming up next. ♪
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alix: the cable industry continuing to consolidate. charter communications announcing plans to buy a majority stake in bright house networks for $10.4 million. bright house is a consolation prize for charter, which lost out to comcast last year in an effort to buy time warner cable. both deals still pending regulatory approval. alex sherman, who broke the
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story a few weeks ago joins me now. to be honest, i don't know what bright house is. alex: a lot of people do not know what it is, which is odd because it's worth $10.4 billion. it's the sixth-largest u.s. cable company. as you mentioned, it's a bit of a consolation prize for charter who originally wanted to buy time warner, which you are probably more familiar with. the cable industry does not overlap with each other. they do not compete, and that's why you've never heard of white house, but if you live in california or michigan or florida or a few other states, they would be your local cable provider. alix: does that mean charter will definitely not make a bid for time warner? alex: the deal is contingent in many ways on the time warner deal going through because one of the conditions is that when comcast agreed to buy time warner cable, a few months later, they made a side deal with charter where they said,
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"we will sell you a few million of these subscribers." if that deal does not go through, expect charter to make a run to buy time warner on the back end, and that will become their focus. but the chatter among people close to the cable companies is that they expect the deal to go through. alix: comcast announcing a management shakeup. the cfo stepping down to launch a technology and media investment firm with $4 billion in backing from comcast. what will the new company do? what does that mean for comcast? on the phone with us is "bloomberg west" editor at large cory johnson. is this significant? why do this? cory: comcast has a very busy venture capital portfolio. investors at all spectrums of investment and they have been investors from way back in the day tivo to newest are -- newer
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startups like instacart and a pinterest meets martha stewart for housing, and it has been a bit of a passion for the cfo. maybe it is closer to what he wants to do. it is interesting that this has amassed so much debt rather than piling that into the market. it is an interesting time in stage in the market to be making such an investment. alix: thanks for joining us. lots of cable news today. coming up next, ibm has a new partner that may make winters easier to navigate. plus in the next hour, we break down jobs data and how that may affect your news tomorrow. ♪
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alix: staying on tech, let's
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move to ibm because when sales at retailers disappoint, executives more often than not blame the weather. companies are teaming up to build tools to assist companies in retail, insurance and utilities and planning for the worst. i don't get it. >> they are saying the weather company has all this data from smartphones, weather receptors all over the u.s., and they are teaming up with ibm and instead of giving companies what the temperature is and the barometric rusher outside, they will figure out how to use the information to solve the problems. they will not need people in stores because the blizzard will keep customers out of them. there is going to be a top line impact in terms of customers and not buying. what can retailers do to make sure they are cutting expenses at the same time? alix: our customers going to buy the product, or do they like the fact that they can blame the
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weather for poor sales? alex: that's the big question here. companies will use the data out there to better streamline how they do their business and transform how they do their business. if they buy into that idea, that's where i begin gets to jump in and say, "we have all these technology consultants and analytic systems we can sell on top of that to make a bit more money." alix: it gets to the heart of the issue -- ibm needs to make more money at the end of the day. alex: the ceo has been trying to write the company, and they've been doing a lot of partnerships with twitter, now with the weather company. the real moneymaker for them is in that analytics because that's what ibm can provide. alix: how much money can they make up a product -- make off a product like this? alex: the data analytics
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business is growing. $2 billion year at this point and they are really kind of moving strongly into that area for them. alix: to that point, they are going to spend about 3 billion dollars over 4 years to create a division around the internet of things. what is that? alex: it will be web-connected devices if it is a washing machine or motor and an airplane or any kind of engine, to again take that data -- all of this data that is out there and put it in a form that can solve as this questions. that has really been the big issue now. companies are aware there is all this information, but it is almost too much to make sense of . again, that is what they are selling. we figure out a way to make the business run better, to save costs, to do things better for the customers. alix: can they help me get more sleep? that's the question i want to know. the close is coming up next on "street smart."
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alix: welcome to our viewers around the globe. we are just moments away from the end of the first quarter. we have stocks falling commodity producers sliding, along with the price of crude. let's get to our chief correspondent at the breaking news desk. give me the juicy details. scarlet: it's a waiting game at this point. volume has tapered off, marking the slowest trading day of 2015. people are waiting for the first quarter two and.
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there appear to be many ups and downs that resulted in an extension of the s&p 500 game. the dow looks to be closing out with a loss, which is what it did at the same time a year ago. there's also waiting for the march jobs report, due out this friday. the stock market is closing, and the bond market will be trading for half a day. some signal from the federal reserve on when it will begin raising interest rates, and waiting for the earnings season to begin, alcoa will be coming out with first-quarter results next wednesday. the effect of a stronger dollar continued weakness in oil prices, what that means for corporate profits and executive use of cash going forward. alix: thank you so much. i'm here with lisa abramowicz and you just heard scarlet lay it all out but we keep getting data trickling out that is not that great. we saw the chicago pmi coming in pretty late in march.
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>> absolutely. the u.s. has hit a soft patch, but three factors are impacting the market right now -- one is fed policy, two is the strong dollar and three is declining oil prices. each of those are having an effect on the equity and bond markets. going forward, we will start to get clarity with the jobs report on friday, and we will start to see corporate earnings coming out in another two weeks, and markets will have more clarity to move forward. alix: this seems like a mushy compilation of all this data but we continue to see triple-digit swings on the dow every day. >> yes, you said yourself, there is that data out there, but there is also good data as well. look at consumer confidence. we are starting to see a mix of economic data, and that is one of the reasons why we are seeing this mixed result as we went through the entire quarter for the s&p. alix: with the mixed data, it calls into question how much the u.s. economy can diverge from europe when you see consumer
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prices still declining for a third month, right? this is still not your rosy scenario globally, and how much can the u.s. really diverge? that's the concern people have especially when the fed says you will not -- alix: lisa to your point you might argue consumer confidence might be more backward looking. chicago pmi inventories really jumping, and that could be a sign of weaker demand. even a consumer confidence was good if you weeks ago does not mean it will be good for the future. richard: the temporary soft patch we're experiencing now will be replaced by further strength because the oil industry is contracting, but the housing industry is expanding. housing is seven times more important, employs seven times more people than the oil industry in the u.s. the declining oil prices will lead to a greater dividend for consumers ultimately, and that will benefit stock rises throughout the year. alix: how much does that go for?
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how much payback do we have for these falling oil prices -- wait, we got the closing bell. hold on, we'll really picked up a little bit of steam and the last two minutes. the s&p off. the nasdaq down by 46. we do look at a dow fall into negative territory. suffering the first negative quarter in a year. offset that with the state of the u.s. dollar which is looking at its best quarterly gain and oil falling for a third straight quarter. for a look at the biggest equity movers let's get back to scarlett. scarlet: i wantscarlet: to start with how some of the quarters of limping to the finish line. you can look no further than craft. last week, they jumped to above 80 because of warren buffett.
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that gave it a 38% jump for this quarter, which is the company's best quarter ever. volume has picked up since last week and is fairly strong this week. also, biotech. i want to mention the etf. it gained as much as 21% in this quarter at includes names like bio jen. investors started on the momentum trade last week. ibm ending the last day of the first quarter down 2%. alix: i am here with lisa mike and richard. they're trying to help me great down the first quarter. we have stopped physically flat.
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the nasdaq closing off the quarter substantially higher making its ninth straight quarterly gain then, health care biotech firms seeing gains this quarter. the biotech index in the winning streak, the longest since 2000. the others added for three consecutive quarterly declines. along with oil prices. we have the dollar strengthened gaining and really starting to threaten to erode corporate profits. we have heard this on conference calls in the third quarter. what will be the catalyst? we have had the billing plans for additional stimulus inflation and wage remain too low for higher borrowing cost. that is what moved markets in the first quarter. what will be the catalyst? lisa: under this the near of this grind and some bigger moves
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in other places. otherwise, the quarter ended up much where we left off on certain markets. it was volatile. there was an incredible amount of shipping sentiment about how much global growth can take off. the imf ratcheting up the economic forecast and people looking at a potential deflationary scenario in the world's biggest economy. alix: where do we see the volatility? it was not in stocks. the beginning of the year, it was around 22. lisa: if i look at junk bonds, treasuries -- richard: we do see some volatility. i think the real reason for the volatility goes back to interest rates. i don't think janet even knows when they will move but when they do we will see more
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volatility. it is kind of funny to think it will go up at some point but we will see it when it comes. if you can be countable with that uncomfortable situation, buy into the volatility. volatility and risk are different things. alix: what is the catalyst? richard: we have had nine years since the last fed tightening. we are staring down a potential tightening in september. we had a dramatic move higher in the dollar that is creating global winners and losers along with the decline in the price of oil. the market has to digest this all stop it is not uncommon we have a highly volatile environment. alix: what are the chances of a policy mistake? richard: look what happened in the late 70's when there was accommodative monetary policy because of a dramatic rise in debt in latin america.
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it went up 300%. the identical increase has just occurred where global emerging market debt has gone from one to three and a quarter trillion. many of them are oil-producing nations so they have the revenues that have declined. we are staring a policy era down in the emerging market arena. alix: talking about emerging markets the question being is the u.s. economy strong enough to sustain some kind of rate hike? investors have been reacting to conflicting signals. the divergence between stocks and bonds. does that makes sense? is it a chart we should be looking at? you see risk but safety at the same time. lisa: optimism and stocks, pessimism in bonds. mike: the question is, when will rates rise?
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there is just no inflation out there. it is getting there but how long does it take to get to 2%? we don't see any wage gains, at least to the level i think it will instigate the fed to move forward. could we say policy mistake? maybe. i think the second rate hike maybe the policy. i think we continue to see that divergence between the bond and the equity market. richard: fed tightening leads to a stronger market but the curb will remain low in terms of yield as a result of the global negative interest-rate policy pursued by the ecb. alix: this also obviously has a they contact on the dollar. the issue of course will be what it does to u.s. stocks. you have the dollar rising, the snp rising. does that make sense?
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you dig a little deeper. she knows where i'm going. apple makes up almost 4% of the snp but gets top of its percentage revenue from overseas. johnson & johnson, 1.5%, overseas revenue. 40%. the dollar will come home to roost. richard: industries that are domestically focused like homebuilders consumer discretionary stocks, there is still opportunity in the market amidst the rising dollar. lisa: you have to think, if people are not getting returns on their money, why would they invest in anything? why not just take cash and put it in a mattress because it will be worth more tomorrow. in europe, that is what is going on. alix: or gold. lisa: or gold. the longer it persists, doesn't
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it have a negative the back on equity return? richard: the economy is growing. we have a 5.5% unemployment rate. it seems they have overstayed their welcome and now there are no tools in the shed if the fed needs something to attack a weakening economy. alix: on the snp dollar question, what point do we wind up seeing a decline in the s and p due to a stronger dollar? that seems to be a very big risk in the second quarter. mike: those expectations are already baked into a certain degree. a lot of it is priced in. it is hard to say how much. we find out wednesday of next week when earnings season kicks off. being a long-term investor,
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currencies are in issue short-term but they will not change the sides of technology and biotech or the ability or apple to innovate going forward. i don't believe they are true, fundamental issues over the long run. alix: we have to talk about the euro. extending the biggest quarterly decline since its inception. that is a crazy statistic. part of that is greece struggling to avoid default. athens is still struggling to get bailout funds. there are about to run out of cash next month. at what point, do we see the dollar-euro level -- richard: xerp versus nerp.
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nerp causing rates to go negative in europe. housing u.s. rates to be low. that is leading the euro lower versus the dollar. we expect that to continue going forward. mike: no question about it. the fed passed the baton to the ecb. it worked here. i wouldn't say we cause -- fixed structural problems but it made acids go of. alix: all i will hear from lisa over the next couple of days is nerp, nerp nerp. [laughter] alix: good to see you guys. coming up, greek negotiations head home. what we can expect tomorrow. iran nuclear negotiations go past midnight. what the global impact would be for a deal. ♪
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alix: here at the top stories we're watching ahead of the closing bell. high-frequency trading from austin trading is under investigation for allegedly manipulation. the regulator has subpoenaed a group for information. j.p. morgan executives have been disposed and thousands of pages of internal documents have been subpoenaed as part of an sec investigation on banks asset management unit. they're looking into steering clients into investments for financial gain. let's get to scarlett. scarlet: he cracked website has filed to offer an ipo. 16.6 7 million shares priced at $14-$16 each which would give it proceeds of $182 million. earlier this month, the company
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filed for an ipo with a placeholder of $100 million that is used to calculate fees. for now, more information on where it is looking to raise $182 million selling 16.6 7 million shares. alix: thank you. moving now to europe. the financials don't look so good for kris. tomorrow, policy consider extending lifelines to greek banks as the country continues to bleed cash for the sixth straight month. euro area finance officials hold a conference tomorrow to discuss reform. a lot mounting on greece tomorrow. joining me now is edmund phelps. he is the winner of the nobel prize in economics. such a pleasure to have you here. thank you for being here. what happens tomorrow? what will happen?
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edmund: my guess is nothing. restart the clock. greases -- greece's bangs are being kept alive by the trickle of money from the ecb. it is based with the need to cut pensions or do something just to get by. alix: what is left in the toolbox? we keep talking about the 11th hour. what is in the toolbox? edmund: they are doing so many things wrong that it would be easy to make major improvements. they don't have any political support for those improvements. for example, in the public sector wages and pension levels for retired government workers
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are way above market levels. i was in athens lost october and i was told, i think it was pensions, are twice the level as in spain. twice. spain is a more productive economy. they have higher wage standards. then, in the private sector the problems are such that it is hard to see how there can be any kind of recovery because one an entrepreneur hires someone, you will be afraid to be stuck with that worker forever. you have this stasis, rigidity. alix: which leads me to wear greece might look to next. we have heard the prime minister will be meeting with vladimir putin in the beginning of april.
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what does that tell you? edmund: it is very scary actually. we would rather not see greece added to the soviet union, the new soviet union. alix: do you think that is what this represents? edmund: it makes as worried. alix: i mean, you are laughing but it is serious. edmund: it is a possibility. before brussels would maybe relent and write off some of the debt. even if brussels and the ecb made the debt then is, there is still the question of how the greek economy will function. it does not have the revenue to go on doing what it has been doing. if it begins to make adjustments in wages and pensions, people will be out on the streets and there will have to be a new government. alix: even if they wrote off all of the debt, they still have
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huge problems where they can't grow. edmund: i think so. alix: exit? probability? edmund: i don't know whether it will be a pull out or push out. alix: very grim. thank you so much, edmund phelps. it was so nice to meet with you on this topic. coming up, iranan's issues continue past minute. ♪
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alix: this is "street smart."
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the threat of an iranian nuclear deal of the over the market. does this mean more oil floods the market if the deal is reached? iran oil fields are not in great shape. the country needs upwards of hundred billion dollars to boost production. the risk is floating storage. 40 million barrels sitting waiting to be sold. there will be a quick knee-jerk reaction and the oil market but it won't last because real supply won't hit the market until late 2015 or 2016. staying on this global economic impact following the result of a potential deal, negotiators continue to work to establish the framework of a deal on iran. george friedman says the concern should be a ron -- ira growing empire-- iran's growing empire.
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this time, the spear of influence potentially includes yemen. i am joined by michael rubin, currently a resident scholar with the american enterprise institute. do you agree with what george says? it is not is a fairly the nukes but the running influence that is the problem? michael: we tend to look at them as a status quo state but it is an ideological state. when you look at the iranian constitution, it says the purpose of a ron is to export -- iran is to export revolution. they showed with yemen that this is not just empty right or. alix: it puts the u.s. in a conquered it situation. they are joining to fight against islamic states in iraq
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and fighting against then and yemen. how does the u.s. navigate all of these potential pitfalls? michael: we are rudderless right now. even our adversaries don't seem to believe it. when you look at yemen, they stood outside the capital for a few weeks waiting for a reaction. they entered the capital. they did not overthrow the government for a couple of months because they were waiting for a reaction. at every point it seems everyone is running around blindly. alix: what should the u.s. be doing? michael: the u.s. needs to recognize that we do have allies and we have to abide by those allies that alliances have value.
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also, use our leverage. i'm not so sure the iranians want the price of oil to plummet. their fiscal year starts march 21. they count on oil being $70 an hour. when they're under that pressure, i think they should be making more concessions. alix: you say alliances have power. what does that mean? michael: alliances have value. all of our friends in the gulf, kuwait, quatar, they are playing -- complaint the u.s. is not listening to them. iran is an ideological state and they have these different names. alix: thank you. coming up, quest diagnostics. the ceo joins me in the studio
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coming up next. ♪
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alix: welcome back. here are the top stories we are watching. the judge overseeing the radioshack bankruptcy case says he will approve the sale to the chain's biggest shareholder. it ensures the survival of the retailer for now and it saves thousands of jobs that might have been lost. the buyer plans to run the business in a cobranding arrangement with sprint. etsy filing for an ipo. the online marketplace will offer almost 17 million shares. an ipo price of $14 to $16 a share. the world's hardest race is just too tough. all 40 runners who attended to
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finish the 100 mile marathon in eastern tennessee did not finish the race. in 30 years, only 14 out of about 1100 runners have completed the race which is made up of about five loops around a mountainous 20 mile course. i feel really guilty for taking a cab to work today. stocks closing out the dow falling 200 points in the final trading day of the first quarter. scarlet is at the breaking news desk with a highlight of a pretty volatile quarter. scarlet: we were up and down for the dow. in the red for the final trading day. the exact same way it was kicked off for 2014. this really shows the ups and downs of the quarter. for the s&p and the dow they peaked in early march -- march 2 -- since then, they have wavered. nasdaq hit its record high on
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march 20 before losing steam. he got within half a percent of matching and surpassing its record high but it failed to top the level. one reason we meandered so much in all over the place is this was a point for earnings and interest rates. earnings may just fall in the first quarter and second quarter and third quarter -- that is what analysts are estimating now. of course, everyone is wondering when the fed will start lift off on interest rates. this was supposed to be the year when we would see that happen. and yields would start rising but look at what happened. we started off the year -- if we could pull the screen backup -- we started the year at 2.17% and had a low of 1.63%. now we're ending at 1.93%. what comes up must go back down and vice versa. alix: thanks.
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web hosting service go daddy set to go public tomorrow. the public is offering 22 million shares between $17 and $19. the company has posted losses in the last three years so why bother going public now? joining me is john womack. why public now? john: it is a good time to test the waters. we have talked to some people on wall street, the investment community, there seems to be some interest in this company. it is not exactly an amazing highflying stock or highflying company in the valley but it has some pretty good numbers. it has a pretty strong customer base actually. alix: the company is not profitable -- it has not been in the last three years. what is the stomach for something like that? brian: the numbers are moving in the right direction. the losses are decreasing.
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profit margins are moving in the right direction so there is some appetite there. godaddy serves the small businesses all over the country and around the world that don't know a lot about how to get on the internet and what to do. they really got into this great niche of people that may not think about their companies. so godaddy has an opportunity to exploit that, grow that expand that. i think some it -- investors will see the opportunity. alix: thank you so much, brian. quintiles and qwest diagnostics teaming up to create a second largest lab services company. it will combine both companies in its network of investigators. joining me now to discuss the partnership are the ceos of each companies, steve rusckowski and tom pike. congrats. why now?
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steve: the pharmaceutical industry is really booming. you cannot pick up a newspaper without seeing new therapies new opportunities to help patients. what we wanted to do was combined the capabilities that we have to really provide better laboratory services. tom: together, we have more scale, more expertise. over 3500 medical doctors, phd's and statisticians between our companies that can really go to work helping advance development. steve: we have seen huge amounts of activity in the sector recently. you guys have decided to partner up. how come you did not decide to do this thing yourselves? buy up some testing company or something. buy some technology. why do this as opposed to a deal?
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steve: we thought about what is the best options. we had a variety of dialogue from various companies. part of my strategy is to make sure we did the right thing with our shareholders capital. when we started talking about the possibilities of working together, we realized the benefits to work together as one organization. we get the benefits of what we can do with our data in the drug discovery marketplace. we thought it would be an efficient way of attracting the right synergies to our shareholders and delivering the bottom line without an acquisition. alix: i know quest diagnostics because every so often i get a letter from my insurance company saying this blood test was not covered. what does it mean for me? tom: i think we are going to focus together on clinical trials. if you follow an area like
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oncology, increasingly just clinical trials is a key part of the treatment options when you have cancer. we are going to put together the best technology and lab services company with the best clinical company and really be able to create a better company for customers. what that should do is accelerate drug development, get better medicines to patients sooner and that is what we all about. steve: really, this is the beginning of what is described as precision medicine. we are the diagnostic portion of that. the ability to find the right patient matched up with the right drug. it is no longer trial and error. it will be more precise and targeted. alix: thanks. we have to leave it there. thank you for joining us, thomas pike and steve rusckowski and steve armstrong. up next we are going to preview a slew of manufacturing data out of china tonight. and musician and actor usher on
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jay-z's newest business venture. ♪
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alix: breaking news -- arkansas legislator is passing a bill that is virtually identical to the religious freedom bill that was signed into law in indiana. mike pence saying earlier that the law needed to be revisited. we will monitor the ongoing developments out of arkansas as we get the headlines. we are getting to count down to the china market opening. manufacturing data out of china tonight. signs from february was pretty discouraging so what could investors could expect now and what policy experts? here is rami. thank you for being here. we're looking for contraction in the official pmi data. how severe is it going to be? rami: we are looking at a 49.7
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reading, according to a survey of our bloomberg analyst. if true, this could be a lowest in about the last 2.5 years. that was when it fell to 49.2. anything below 50 means contraction. over the past five years, we can see there is a bit of a bottoming out over the past you years because of the weaker domestic demand and exports. alix: the real question becomes what will the central bank do? it seems like every data point it weighs in. rmyamy: i seem like i am talking like a broken record but it is the same tools we talk about. interest rate cuts there have been a few that have happened in the past few months. in addition, a cut to the reserve ratio department that could potentially put more money into the economy. those two things can be happening over the next few months or year. alix: does that mean we take a look at the markets? it is the bad news, good news situation? ramy: that is a tough question.
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looking at the stock market, and i looked at it just before ever since november when the first interest rate cut hit, the shanghai composite rose 1000 points. there is a sick and exact going. -- zig and a zag going. alix: to another big topic out of china -- deposits for up to $81,000 will be fully covered, according to the state council. what is the real significance of this? ramy: this will kick in may 1. the whole significance of this is actually basically liberalization. we are throwing in deposit insurance in order to throw out deposit interest rate tax. the last of the u.s. actually have any deposit rate caps was in the 1970's so this can be said this was a long time coming. deposit cap right now over the u.s. are -- in china are three 3.75%.
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that means the banks have the fight for the customer money and the banks that make the right decision get to survive and those that don't die. alix: fair enough. it is transforming the economy into a consumer driven one as well. thank you so much. we will revisit this tomorrow. thank you. coming up next, we will hear from the ceo of hang on the future of streaming services. plus usher talks about the future of music. ♪
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alix: here are the top stories were watching after the closing bell. sales from apple and google app stores will double by 2018, according to a new study. the report also forecasted in-app advertising will triple in three years time. in addition to overall growth, the study says the industry is seeing a shift away from paid
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apps to one better initially free but offer in-app purchases. apple may use facial recognition to unlock mobile devices according to a report. the tech john received a patent for the technology which would use a mobile phone camera to capture an image of the users face to analyze it to make sure it analyzes the owner. that is cool. queen elizabeth's staff at windsor castle threatening to strike over pay. the union claiming already low-paid staff are excited to carry out extra unpaid dueties like giving tours and being interpreters. this would be the first strike ever by staff working for the royal family. lets the on music because coming up, pimm fox speaks with musician usher about investing in jay-z's title. here is a preview. usher: specially when you see
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such incredible a motion -- emotion, today is a really amazing benchmark for something very significant in many, many artists' careers. we are definitely starting a difference, creating a difference. the ability to have a sense of control is what itidal offers. alix: jay-z bought it for $56 million. a is bringing some friends along with him. madonna, alicia keys, rihanna daft punk run yesterday's lunch event and the goal is a unified platform for artists by artists. for more, pimm fox joins me now. how was it talking to watch her? -- to washerusher? pimm: april 18 is earth day. usher, along with a variety of other musical guests, will be at the event of the national mall
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in washington. they are hoping to get 250000 to attend and the focus is to end extreme poverty. there is a big focus to use social media, streaming services in order to generate public support that would force politicians as well as other world leaders in order to dedicate money and resources to try to end world poverty. the second issue has to do with tidal and new forms of music streaming and nude kinds of rights -- new kinds of rights that would offer musical artists more money, more of a take of the actual pie. one of the things i did was try to look at the number of online streaming service is currently available in the world. there are about 25. distinguish those from the number of online music stores from which you purchase actual music. again, 25 of those. then there are online music lockers where you can buy music
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and you can put it on locker and actually access it using a variety of devices. what is interesting about this is the artist want as much control as possible over the money portion of the distribution. do they own the distribution rights? alix: is that up to them? it is up to the music labels that really wind up having the power here. pimm: exactly the point. the issue becomes what do the music labels do for the artists . in the analog world, they would take a chance on the artists. they would help them make the records, distributive records because the artists to any of the distribution. now with streaming services, the axis to distribution, just like distribution in a variety of industries, has broken down to the point that those that produce the actual content can be connected directly to those who consume it. alix: like netflix. pimm: the issue then becomes
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will people pay $9.99 a month for music even if it is commercial free because you can already get that from a variety of sources. one of the big things that will have to do is make sure they have another artists, not music -- they say they have 35 million songs already online and adding more. will they be able to compete with spotify or pandora? they will not go down without a fight so this will add more competition. we will see if people pay for it. do people really papered music? alix: tidal is claiming to have better sound. pimm: there is more of that. alix: do not miss pimm's interview with was are usher. coming up, the ceo of hang is looking to challenge twitter. his plan coming up next on "street smart." ♪
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alix: parascope and meercat are big names and live streaming. hang has over 2 million users and joining me to discuss is the ceo. how do you compete? what did you do that is so different from the names that are so popular now? andrew: we have years on these guys. we have been developing this product for a number of years and we have a lot of enhancements that make it very unique like being able to broadcast on multiple platforms. we can do five at a time versus periscope which is just one.
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you have an alternative. alix: when you have only 2 million users when facebook in general has over one million, how hard is it to scale up? andrew: it is challenging but what has happened with twitter and getting involved, it is has brought live streaming to the forefront. it is showing the public that live streaming is something that is real. we have been trying to educate the market for years and here it is. people are now talking about it. people are talking about live streaming. that did not exist six weeks ago. alix: what happened to your usage over the last few weeks? andrew: there is definitely alternatives out there. we monetize and give the user the ability to monetize. they have the ability to actually make money. monetization is a big part of the strategy. alix: what is the difficulty of
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having more than one of these streaming companies? meerkat debuted at 140 on itunes. periscope launched and it fell all the way to 523. my interpretation of that is there is not of appetite for multiple life-giving companies. -- live streaming companies. andrew: they will get a huge chunk of those uses very quickly. we will continue to compete and make a better product and fight this fight. giving people an alternative. we have a lot of celebrities we have been signing. alix: jared leto is one that supports you guys. is it financial advertising? andrew: he is an advisory role. he does some incredible broadcasting. he was streaming live from a concert in russia. he was on the stage broadcasting
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and 15 minutes later, he is backstage talking about the concert. alix: he is also hooked up with meerkat. andrew: he is a technology guy and i think getting involved in multiple things is probably his file. -- style. alix: andrew, thank you. i want to update you want a developing story right now. jack lew was speaking right now in san francisco after returning from beijing. lew says china understands more reform is needed on foreign exchange and the u.s. stands ready to work with the china-backed asian infrastructure investment bank. secretary lew urged china to establish and maintain clear rules in cyberspace. that wraps it up. for tomorrow, i will be joined by former citigroup vice chairman bill rose. we will talk about greece restructuring and to successfully move the country from the eurozone. that is coming up tomorrow.
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"with all due respect" is next. have a great night, everybody. ♪
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john: i'm john heilemann. mark: hillary clinton, when you're choosing between baskets and containers, though bradley will tell you always go with the baskets. john: right. ♪ mark: the tablet and the barrel and the dollar bill. governor mike pence of


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