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tv   Bloomberg Markets  Bloomberg  March 18, 2016 3:00pm-4:01pm EDT

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betty: from bloomberg world" is here new york, good afternoon. i am betty liu. here is a we are watching -- stocks are rising with the markets closing out a fifth straight week of gains. health care and industrial leads the way as the s&p joins the dow, now in positive territory for the year. as apple fights the fbi over unlocking the iphone, the company is getting ready to showcase its newest product on monday. however, will a small-screen iphone be enough to boost revenue? the battle over starwood hotels $13.2 billion has been offered, putting pressure on marriott to increase its bid. how is this deal going to shape up? are we going to be in the middle of a bidding war? and we are about one hour away from the close of trade.
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what a week it has been, where we have powered higher once again can i want to head to the markets desk where bloomberg's ramy inocencio has the latest. stocks are on track for their fifth week of gains, and we are holding strong with markets in the green with about one hour left in this trading session. the s&p 500 is up .33%. the dow is up by .5% there. interestingly, i want to talk to you about what has been happening year to date. we have seen two slips. date, the s&p 500 is holding onto gains, up .10% today, and rising a little bit. yesterday, you will remember it popped into positive territory briefly, but pulled back. the dow is now up by nearly 1% year to date. yesterday, it pulled into the green. the nasdaq, as you can see, a ways off from climbing into positive, down by 4.4%.
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hop into my bloomberg, and let's take another check as to the s&p 500's 10 sectors -- the imap section. you can see we are split down the middle -- five sectors in the green, five sectors in the red. as it has been, health care, industrious, financials have been the biggest leaders, with health care of the most, by about 1.3%. betty: ok, and the are a lot of mergers. it is not merger monday, but what, merger friday? ramy: i was china to think of a word that started with -- i was trying to think of a word that started with f. it is a merger friday. let's talk about starwood and marriott. starwood is up by nearly 5%. marriott up by nearly 2%. the big news is the merger between starwood and marriott is in jeopardy because of a consortium led by en banc
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concern -- insurance. $70 a deal in cash versus the marriott additional -- initial offer. we will see what happens out of that. in addition, from hotels, we want to go to natural gas pipelines, very specific, but involving the united states and canada. right now, trans canada is down by about 1.6%, but transcanada says it will acquire columbia pipeline group. columbia is popping, up by almost 6%. the price tag is a little bit more than $10 billion. the deal makes transcanada a bigger player into u.s. national -- natural gas pipelines on the order of 15,000 miles. finally, in science tech, i want to look at astra metrics. this is the highest in the past eight years. basically, origin technologies says it wants to buy up astra
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byrics, topping a rival bid thermo scientific. origin was actually founded by former founders. it looks like some scientific entreaty saying i want it back. betty: thank you. thus check the headlines. mark crumpton has more from the news desk. mark: after request of-month international manhunt, police have captured the top fugitive in the paris attacks in the same brussels neighborhood where he grew up. the deputy mayor said salah abdeslam was shot in the leg and detained by police during a raid today. authorities are still looking for another suspect reportedly holed up in a house a few dozen yards from two schools. two explosions were also heard, as police with riot shields cordoned off the area.
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authorities say the brussels was among abdeslam the attackers that killed 130 people at a rock concert, the national stadium, and cafes on november 13 in paris. a brazilian federal judge has suspended an injection that blocked dilma rousseff's appointment as her chief of staff. can takely, lula office, but the ruling can be overturned. in addition, there are nearly one dozen other request before the brazilian supreme court that could on all the swearing in testimony, set for next thursday. president dilma rousseff's move was seen as an attempt to shield him from a corruption investigation. police and the fbi are investigating a threatening letter sent to the manhattan apartment of donald trump's son eric. pulmonary tests indicate the
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letter was not hazardous. it was postmarked march 5 from austin, and referenced donald trump's presidential bid. president obama will not make the first woman to head a u.s. military combatant command. if confirmed, air force general lori robinson would be the seventh head of the u.s. northern command. she is currently the head of the pacific air force. news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. i am mark crumpton. betty: thank you. breaking news out of mexico -- the mexico central-bank just keeping its overnight interest rate change -- unchanged at 3.5%. atin, keeping it unchanged 3.75%. back to stocks in the u.s., we have been watching central-bank moves around the world, including what has gone on here
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in the u.s.. stocks here staged one of the biggest turnaround in history the last five weeks. the next guest cautions the chatter about future rates could trigger more volatility i had. arone joins us from boston. in a way -- i hate to be the debbie downer here, but we have seen a client over 11% since the low in mid february. is that a little scary? we seem to bel, in the middle of this cycle, and the big news this week was the federal reserve. that cycle is starting again with this idea of the fed is backing down from further interest rate increases, and as a result, the markets and risk assets in particular love it. the problem is this likely continues. pretty soon, we are going to be wondering whether the fed will begin raising rates in june and what that means.
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it is a vicious cycle we cannot seem to get out of. betty: right. mr. arone: if you think about the data this week, it has been good -- national association of housing builders, the jobs numbers, jokes, jobless claims -- soon we will be chatting about whether the fed should raise rates again. so, in your view, there is some economic, fundamental reason as to why we saw such a quick rally back -- there is a fundamental reason for that? mr. arone: well, certainly the market seems to -- it is this instead where the market, for a while now, has been saying to the fed you will not raise rates four times, and the fed is coming around, saying we're not going to raise rates four times. we will raise rates two times, and the market has been predicting economic growth, inflation -- the other items, that the fed was too optimistic.
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now the fed is coming around to the market. i do not know about you, but i like when i am proving -- proven right, and the market feels like it was proven right, and it is charging higher. betty: there are two sides to that -- the market was essentially telling the fed the economy is not strong enough to raise interest rates in march, yet it seems like the markets are saying it is strong enough theome back from you know, low back in february, and to come back another 11%. mr. arone: well, it just seems as though the market is really comfortable in a spot where you have low and slow economic growth, economic growth of anywhere from 1.5% to 2.5%, where the fed has the wind at its sales. they are a comedy, keeping interest rates low, and inflation low. the market seems comfortable operating in that environment. they are uncomfortable operating in an environment where the fed is pushing rates up to aggressively, and they are scared of deflation coming from other forces from that perspective.
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so, it seems like they are comfortable in that environment. what is interesting, to your point, that environment has existed for a while, yet we are seeing these big moves in asset prices up and down. betty: right. mr. arone: despite what has been that environment since 2009. betty: so, explain that. mr. arone: what i think is interesting is all of these policies are focused on boosting consumption, and all of them, in terms of if you lower the rate far enough, central bankers will tell you that asset prices will rise, consumers will feel the wealth effect, and they will spend and businesses will borrow at the lower rate. they will use the money for more important or more productive capital projects. what is happening, betty, is the transition mechanism is broken, and we are not seeing that flow through to the real economy. there are a few different reasons. first and foremost, you are boosting financial assets, and they are short-lived. -- a transactions like
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transaction can be canceled at any time for any reason. cash transactions are much more difficult. financial assets tend to be much more liquid, where a real asset or a capital project, is much less liquid. if anything, we know the financial crisis told -- taught us in liquidity can be fatal. we have seen this since the fed made its decision. the vix has come lower. credit spreads have narrowed. i am not sure the real economy is any less volatile. the last thing is certainly around, kind of, the signaling mechanism. betty: yeah. mr. arone: the signaling mechanism is there is a floor on prices, and the market, at least financial assets, like that. betty: it seems like we may have found one, at least thus far this year. michael, thank you. michael arone. still ahead, we'll hear from the chamber of commerce ceo tom
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donohue on how the u.s. presidential elections could affect jobs growth, and as we had to break, here is mark take on therber's election. farb i will vote for mr. trumper: as he may destroy the u.s. economy, but hillary clinton will destroy the whole world. that is the difference. ♪
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betty: you are watching bloomberg markets. i am betty liu. it has been a big week on the economic news front, spurring debate over the quality and pace of u.s. growth, and according to tom donohue, the head of the u.s. chamber of commerce, the u.s. is at risk of becoming a less significant economic force. he spoke about the impact of
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tighter financial regulations on the economy in interview with david westin. mr. donohue: they fundamentally see it as a problem, as opposed to the absolutely necessary for service that we need to grow this economy, to put people back to work, and they have got to change that view, and deal with it in a different way, or we will pay the price for a long time to come. david: so, how far you willing to go to change people's minds? these are also -- these legislators, for example, people you need to do business with. are you willing to go after them? mr. donohue: yes, we are willing -- we have been trying for a long time to educate them. we have been trying for a long time to petition them to look at this -- the financial institutions -- as a value, and not as a loss deal. and, why are they doing it?
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they look at the polls. they figure out it plays well. they listen to elizabeth warren -- all of a sudden she is the pope in terms of what is acceptable in this religion, and we are making a fundamental mistake. david: when you look at the leadership, including the leadership of the president, and when you look at the presidential candidates, both sides of the aisle, republican and democrat, they are not making warm and fuzzy noises about wall street and the banks. quite the contrary. they are acting up the criticism, saying there should be more regulation. what you think of that? mr. donohue: i make that a percentage of that is they may well believe that based on a lack of valid knowledge, but i make the most of it that it seems to be a good political after athat people, while, they begin to believe all of this when you talk about it. they have been badly treated by large financial institutions. how? how?
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responsibility by those running to talk about the issues as they understand them, not as the polls tell them how to put it so that they will pick up more popularity. it is incumbent on people that take major positions in our government to familiarize themselves with the facts, and get off of the rhetoric. david: if you look at the political candidates, trade is talked about a lot, and not in a good way. donald trump says we should have 45% tariffs on goods coming from china. you have hillary clinton coming out against the tpp. hillary came out against the tpp after supporting it for a long period of time because of the pressure from the unions. donald trump has very little idea about what trade really is. trump is the leading candidate on the republican side. you are the most important, in many ways, person to speak out on behalf of american business.
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what would it mean to american business if we impose 45% tariffs on imports from china? mr. donohue: it would mean they would impeach donald trump if they figured out what that really meant. that is overstatement. i am just trying to make it really clear that if you double the price of something we are buying from china, the citizens that go to walmart, target, and go to their stores, and people that buy components, they are going to pay for this. it is not the leaders of the government, or the leaders of big copies. your neighbors are going to pay for this -- companies. your neighbors are going to pay for this. we have to understand in a global economy 95% of the people we want to sell something to don't live in our country. they live somewhere else. if we don't want to sell it to them, other people are going to sell it to them, and we will become a less significant economic force. and when we become a less
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significant economic force, we will be a less significant force in geopolitics, and we do not want that. david: my final question -- i come from michigan, from flint, michigan, actually, originally. what do you say to the people that look around, see factories close, their friends out of jobs, their parents out of jobs, and a look at trade and they say it is because of that trade that it happened. what do you say to them because they are hurting? mr. donohue: it is one of the hardest arguments to make, but let me say it to you, and you, over time, can help us communicate it to your friends in flint. come 40%aken, who have of the jobs out of the manufacturing process. information technology, robotics, process engineering, supply chain management, have taken away 40% of the jobs. they are never coming back. it is efficiency. why are we going to do the
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efficiency. otherwise, we are not going to sell products because we have to compete with efficient people from around the world. the bottom line is if we don't trade, we don't grow. if we don't grow, we have fewer jobs. again, that was tom donohue, u.s. chamber of commerce ceo. still ahead, the options insight. here is a check of the biggest gainers on the day. ♪
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betty: this is bloomberg markets. i am betty liu. stocks are on their way to a fifth consecutive week of gains with both the dow and the s&p in positive territory for the year. ramy inocencio is standing by with how the options market is trading all the action. ramy: thank you.
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joining me for today's options insight is mark sebastian, options pit,ner at and he joins me from the cme in chicago. the markets were off session to ourbut we are up fifth straight week of gains. how are you feeling? mr. sebastian: it seems like there is a pretty big risk on. a couple of things i am hearing -- we are going to spring break. things are taking things off. we got clarity out of the fed. one of my biggest complaint was the fed was waffling on what they were going to do. this seems like a more decisive federal reserve relative to what they have done in the past that has allow the market to, you know, maybe release the pressure to go allowing the vix lower than i thought. it is trading with a 13 handle. one thing i would point out -- there is a little bit of fear expires inuture that april -- it is still trading near 18.
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there is still some fear out there. it has certainly been a big risk-on approach over the last couple of weeks. ramy: right. volatility falling here in the u.s. at the 13--- 13.9 mark, i believe. you are talking about in your notes earlier that volatility over in brazil, which eventually is where we are headed with your trade -- volatility over there in banks is rising to tell me about that. mr. sebastian: yeah, there is a lot of increased volatility. i was looking at the brazil etf. there is a big increase in volatility across the board. dilma rousseff, the president of brazil, has all sorts of problems. there is a huge scandal with petrobras. she is not going to escape it. she has serious problems. she protected her mentor, putting him on the cap. she is in the middle of impeachment procedures. we saw a huge amount of put buying in brazilian banks. a huge put by.
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they bought about 110,000 on the june 6 puts, paying about $.28. the other big bank in brazil -- the june 7 trade there. the june timeframe seems to be where a lot of the volatility trading is taking place. apparently, that is about the timeframe where maybe a lot of ead with theo h president. it is supposed to take a couple of months for the congress to figure out whether they will move forward with impeachment proceedings. it looks like june is the month to own in ewz and the brazilian banks. betty: -- second worst the performer on the e in the last few hours or so. wz what you want to do with the ewz? , the brazil etf? the brazilian etf?
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mr. sebastian: i think it is a time to fade the move. i like holding june. ports,owning the june 24 and to finance them, sell the april 24 points. moves lower if ewz and implied volatility increases in june, both things i think will happen. i like paying $.80. it is an inexpensive way falling back to where it was on monday. that is the way i am playing this thing. ramy: all right. great. we will leave it there. happy friday. mark sebastian. more bloomberg markets coming up right now. ♪
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mark crumpton has more from our news desk. mark: suspected terrorists alebdsam wasah caught today. he was shot in the late and detained during the police operation. authorities are searching for one person who was reportedly hold up in the house. the belgian prosecutors office 'sid that salah abdeslam fingerprints were found in another part of the capital. he was part of several attackers that targeted a stadium, a rock concert and a cafe in paris. those attacks killed 130 people. he was living under a squatter conditions. thousands have lingered along the border, hoping that refugees
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fleeing to central europe will reopen. the german chancellor except they should trust greek authorities to find a better accommodations. she says refugees do not have a right to choose a specific european country. senator bernie sanders says key maintains what he calls a path toward victory in his presidential bid against hillary clinton. suggestionting the that she has all but showing up the party's nomination. in an interview, senator sanders predicted the upcoming calendar of races in several states, including arizona and washington, and the april contest of wisconsin, new york and pennsylvania, offering him the chance to catch up. as republican leaders continue efforts to shut down talks that they should hold hearings and a vote on supreme court nominee merrick garland. he has met with harry reid and other democrats. republican senator rose the
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party ranks to say he would consider the votes but not until november. global news 24 hours a day powered by our journalist and news bureaus around the world. i am mark crumpton. betty: thank you. markets are closing for this week. today, in about half an hour, abigail doolittle has more. kind of a bumpy session today with the nasdaq. abigail: it has been bumpy but higher once again. not just on the day but for a fifth week in a row. nice winning streak for the nasdaq. the weekend -- the weekly gains are needed. in this tire on the week are less than 1%, so let's see how the next minutes play out. from the point perspective, member waiting% up about 3%, trading higher ahead of next monday's media event when apple will unveil a
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smaller iphone and a refresh of the ipads. they claim that this could be a catalyst for apple. maureenrlier this week, out with a bullish comment saying that the recorder appears to be tracking well. apple is above the 50 day moving average and this suggests apple may move back ahead of the 200 backup 100average or $12. from a percentage standpoint, a better performer is tesla. the stock up more than 10% on the week, and today, popping above their 200 day moving average. bullish action could be ahead. the last time this happened last april, they moved higher by another 28%. the real story is the stock's huge turnaround this year. a few weeks ago, tesla was down more than 40% on the year. now, down just a little more than 2%. pretty amazing reversal. betty: pretty incredible. you were talking about the
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nasdaq being higher for the week but it is less than 1%. what has been the biggest drag? : from a point perspective, amazon, but right behind and in a dramatic action, and do international. and about 30% of the week most losses coming down tuesday. valiantaded down with and they are worried that some of the issues could spread over to endo yesterday, the stock took another died as. they have the current quarter that was below estimates and expectations. all of this appears to be a continuation of the strong, even relentless selling pressure, that has endo international dan about 70% from the record take less than one year ago. .etty: thank you abigail doolittle at the nasdaq. disney espn is one of the most-watched media companies. more viewers are cutting the cords. rather than fighting this,
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disney seems to be embracing the change. including touting skinny bundles as a way to access espn. here to explain this is paul sweeney. he joins us from our bloomberg offices in new jersey. looking bright. are you ready for the weekend? paul: i ready before the snow, but ready. betty: i know. our first snow on the first day of spring. paul, what exactly is espn? they are bleeding subscribers, so what are they doing in terms of embracing the skinny bundle? paul: when you look at espn, you are looking at the most viable cable network in the marketplace. they have slightly over 100 million subscribers, and the subscribers pay north of six dollars per month for espn. it is a profitable business for walt disney. however, like most cable networks, they are losing subscribers on the margin over the last couple of beers, so it years, sole of
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consumers are choosing to get the content outside of the big cable pay-tv undoped and maybe they are getting it in skinny bundles that some providers offer, such as dish or directly over the internet. in either case, the walt disney company recognizes that they need to make espn available in any format that the customers want to get. either in a big bundle like a comcast or some of the skinny bundles as well. change thedoes that position of espn within disney? paul: it really calls into question the long-term profitability and growth profile of the company. as they lose subscribers in the has impactede, it the growth rate and investors have put upon the profitability of espn. last summer, the company ratcheted down the growth networksfor the cable
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primarily because espn was losing subscribers, so it is having a hit on the bottom line. i think what the ceo of disney is saying, we recognize that our consumers are consuming our product differently. we need to be adapted and flexible. if it means making our espn product available on skinny bundles or even at some point in the future direct to consumer over the internet, then they will be there. betty: in our bloomberg story, we mentioned sling tv gaining hundreds of thousands of subscribers. rejections are it will have 2 million subscribers by the end of the year, so who's skinny bundle is really working and attracting customers? sling the tv, amazon, what is it? paul: skinny bundles are in the infancy. bundle of roughly $20 a month has been in the market the most and the one investors are focusing on the most to see what is the uptake? is there a lot of demand from
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consumers for this? when disney looks at this, maybe this sling service could attract a couple made subscribers. that is starting to get the attention of the cable network operators out there. it looks like there may be said demand out there, particularly with younger demographics are some of the skinny bundles at lower price points. i think the cable networks are saying, how does my cable network position in the world to the extent that there is demand for new types of distribution platforms? betty: thank you, paul sweeney. you can go off on your weekend. think they are trying
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to squeeze this in. a little too big, a little too small. this is basically the iphone 5 with updated components and a lot of people like the small thumb. it makes a lot of sense. it is revolutionary -- evolutionary and not revolutionary. this is the first product in history that the margins have expanded and matured. people of the iphone. betty: do you think it will pump people? do you think it is going to
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prompt that sort up refresh? scott's: i think the refresh among people will hold up from the6 because they like smaller phone. the smaller phone is more elegant. if you have a designer big your website, you end up with something too small because it looks prettier and people like me need to figure upon because we are getting old. betty: like me, too. scott's: a lot of people like the smaller form factors, so this is good. betty: you don't seem so impressed. i am feeling that provide. : this is kind of like, who cares? it makes sense but it will not -- but not profound. betty: some people say that tim cook needs to do this. there is concern that the iphone might go the way of the ipad, which is that people are holding onto it longer and they don't need to refresh as much, therefore, the sales will go to decline. be the litmus
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test for growth in the iphone and willing out different features. we are in a position where apple is starting to talk about geographies more than products when they talk about gross. india represents a huge opportunity. betty: it is a bad sign when they do that? scott: we expect apple to have a revolution every 24 to 36 months and when they do not do that, the stock goes down. the big thing about apple versus amazon, facebook and google, we punish them harder and look at them and individual product releases, whereas, amazon can fail widely with fire and google with glass, but they get much higher multiples. for some reason, apple is evaluated differently. betty: it is 75% of their sales. don't see the iphone going anywhere. nothing seems as powerful as the iphone. in the worst house
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with the worst technology and in the best house with the best technology. people used to identify them to clothes and hot beverages but now it is through the phone. everyone wants to identify with the apple. betty: you want to be part of the fullness or that community. tim cook has been in the news for that other news which is the whole fight with the government. him toople are expecting talk about that on stage. you think that would be the right thing? i think this is a no lose situation. he is taking a principled stand great what shock to me is that i believe apple is on the wrong side of this issue and i put on the blog post and i could not get over how many of the millennials i work with that l2 just went crazy and felt that there is such a religious fervor with anything apple announces, so i would be shocked. betty: what about the privacy issue?
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you think it is about apple and of the privacy issue? cott: i believe we have dealt with privacy versus security for a long time. i home is safer to me, and if someone wants to search my home, they have to get a search warrant. i don't see what the phone is any more sacred than my home. if you do not like privacy, then select new people who put in place different judges. it is more reason, sacred than other. if we make phones that are less safe, then they are less safe or basically penetrable than they are less safe for millions of people, hundreds of millions of people. scott: you can make the same argument on search and seizure of anything we own. the paris attacker has been apprehended. they found the phone, to think it would make sense to get into that phone or have we decided it
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is better for the world not to get into his phone? i'm under the belief that we have toppled elected officials to make the judgment calls. whether or not it is a drone strike on an area with a lot of civilians were at someone gets to search a car or computer. for some reason, apple has convinced us that the phone is more precious. if the shooter had the blackberry, do you think we would be having this argument? to think they would have waived the middle finger in the face of the government? only apple could get away with this. betty: we will leave it there. thank you. scott galloway of the stern school of business. we will bring you special coverage of apple's new product event on monday, including an all-star lineup of guests. 1:00 p.m.ins at eastern time. still ahead, who wants to own sheraton hotels? the marriottis on
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to counteract. we will be back with that story in a moment. ♪
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betty: this is bloomberg markets. i am betty liu. the takeover fight for starwood is getting more expensive. starwood plans to accept an offer and gave marriott and offered to counter bid. they are offering $78 a share in cash for starwood, fallowing the hotel chain of $13 billion. area has until march 28 to counter bid. joining us from denver, research analyst david. your position is that you do not think marriott is going to counter bid. david: i think they might
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counter bid but they will not match. i don't think they can afford to pay the same price that on bad did and delivered a good deal for shareholders. that is important to marriott. betty: you don't think they will match, if they cannot match, why will they counter bid? david: the tricky part for starwood, the board, is that they made determined that marriott stock is worth more the long run than the cash, so that is what they have to decide. if you think about buying marriott stock today, you don't know if you are owning marriott or starwood combo. the combination should be very strong and starwood board may be convinced, we will see, maybe convinced that the combination of the two companies is worth more in the long run. it depends on where they come in with a bid or if they do. marriott may decide to take the $400 million and say thank you and have fun. betty: if they cannot match on
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the price, what could they offered to sweetened offer? david: they could offer more cash, but i think the chances of bang going as high as ang in terms of current value is slim. can they make the case to the starwood board that in the long run, their stock is worth substantially more combined with created, therefore, they a better value in the long run for the shareholders? that this tough call to me. frankly, it is a tough sell on marriott's part. they could be less than angbang so i think they have the advantage today. betty: the hotel industry, bigger is editor, right? so there's this desire that you want to continue to grow and whod out your hotel, so does make sense to be with starwood? anbang on marriott? david: that is an interesting
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question. to deal with airbnb, travel agencies, and i think in the long run, larger global companies are better, but who is to say that anbang stops at starwood? why couldn't they cut a deal for higher yet, continental or any other company or hilton? cane are ways that anbang go to the platform globally and have other benefits of consolidation. i think there's more consolidation to have, whether anbang wins or marriott does. betty: who do think would make a better partner? today, from the industry perspective, and probably in the long range of travis perspective, the marriott starr would deal makes more sense. it is that -- marriott-starwood makes more sense. but does not mean it will make more sense to starwood asterisk board. betty: thank you. david love on starwood -- loeb
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on starwood. mitt romney writing that he will vote for senator ted cruz in the utah caucus. the only way to stop donald trump is with the contested convention. a lot happening in politics. we will be right back. ♪
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betty: this is "bloomberg markets." i am. markets are closing in 10 minutes time. ramy has the market check. ramy: the markets are pretty much at session highs. been agot to say, it has climb the whole entire day and week. take a look at these numbers. s&p 500 up by half a percent and the dow jones of 5.7. .7.he dow jones up
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they are seeing their longest winning streak since october. at the end of today, it will be in the seventh day of gains. let's take a look at how this is having an effect on your today. the s&p 500 is on track for positive. up one third of percent yesterday and it did hit into positive territory and then pulled back. they're up by about 1%. from slipping into positive territory, up 4.2% down for the year. betty: thank you. do not let the strength for you. -- fool you. investors are betting on a spike. we want to bring in joe ciolli. traders are betting on rising volatility? for we saw a nice change the s&p 500. it was negative on monday and tuesday and after the fed said they would slow down the pace of rate hikes in 2016, stocks responded positively and carried
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that momentum to the end of the week. the longest streak since november. however, yesterday and on wednesday, we are seeing these funds that that on vix. 80% of the time, it trades inversely to the end of the stock market, so v if we are seeing a spike inix -- spike in vix, that would show a decline in stock prices. betty: enjoy it now. joe: people are beginning to think that stocks will take a dip at some point in the future and trying to get ahead of that. that indicates the level of nervousness that still exist. betty: why are traders so nervous? joe: the sticking point is our needs. we have seen three straight quarters of earning and we are on pace for a fourth according to estimates. it is not supposed to turn positive on the s&p 500 until the third quarter. a lot has to do with energy. we are seeing a huge drag on the earnings front.
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crude oil has stabilized and we could be a bottom there in energy earnings but it might take a little while for them to raise all shapes in the s&p 500 and see a nice earnings for a full quarter. betty: thank you. good to see you. joe ciolli, stocks reporter. that is it for "bloomberg markets." he was one last look at the major averages. we are less than four minutes away from the close of trade. ♪
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♪ scarlet: scarlet:we are moments away from this closing bell. alix: joe weisenthal is off today. ♪
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alix: u.s. stocks closing higher today. 2016,p recent losses for with the worst start ever to a year. but the question is, what did you miss. the job is challenged in court. our guest says the riyal is overvalued. scarlet: and white protections on the emerging political cycle does not make economic free-trade. >> consumer confidence funds -- fall to a five-month low. we have charts you must not miss. scarlet: we begin with the market minutes. you mentioned the s&p turning positive for the year. joining the dow jones industrial average. we had the highest levels of the year, a recent declines. six out of 10 industry groups within the index

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