To use a private email and said yesterday she broke no laws. The email she has turned over after screened for Sensitive Information. The upper hand against Islamic State history mrs. They captured account a town and militia men are now gearing up to retake it itself. The cia reportedly played a key role helping the Justice Department is part of our lives between cia and domestic lawenforcement. It uses an airborne device that could locate specific cell phones. The dollar hit a 12 year high against the euro. Up 22 against the currency here that will eventually make things cheaper. A factor in yesterdays steep decline in the u. S. Stock market. And a billionaire investor has work for the fed. Jeff predicts the central bank will have to reverse course if it raises Interest Rates this year. The cofounder says the Federal Reserve is intense on being a blockade and is worried the fed will repeat mistakes. In pro football, one of the biggest checks is going to a defensive back who is leaving the super bowl champion patriots and coming back home to the jets on a fiveyear, 70 million year. Those are your top headlines. In a good day and the stock markets. The three main benchmark indexes fell marking the worst day in months for the s p 500. It appears markets are in the mood for a good oldfashioned tantrum. Mike is here and one of the catalysts come the reason we use the word tantrum, a temper can trim, a cliche from last year. Is it happening again . The jobs data on friday as well as speeches from fed officials like Richard Fishel yesterday, are really having people push forward the timeframe when they think rate increases in the middle of the year toward the end of the year. That combined with stimulus actions from the ecb. There is that overseas earnings will be heard as a result. Results back. If you dollars a barrel strengthen the dollar will exacerbate any declines in oil the dollar is a big factor as well. Matt are you hearing other analysts and economists saying this fed will be is being a blockade . They will start racing and then reverse course. They stopped raising rates and began lowering about six months to a year later. He is the first one i have heard floated the idea. Matt what are the forecasts for how far this fall could go . You mentioned david bianco. Hes keeping the year and forecast pretty much unchanged at 2150, about a 5. 2 gain from yesterday. On average, the main wall street strategist is looking for a close up about 9 from yesterdays is closed. For now, it looks like one of these tips. We have phone in the market of three steps forward and one step back. We have seen the dips regularly over the years. The question is what is the big correction everyone is waiting for . Only time will tell. Matt we will have david bianco on the program at 9 00 to hear it you do not want to miss that. He is calling for a 9 drop if the fed raises rates. Thank you very much. We will surely be standing here offset with your pad ready when david bianco joins us. Annual reports from the fed yesterday in a second round in a stress test. The states the stakes are particularly high. Michaels his new job could be on the line. Michael moore joins us. First off, lets clarify the fact that all these banks have actually passed the stress tests for the First Time Since 2009. They all have sufficient capital according to the fed. Quite yes theyll pass the numbers last week. The questions today are, will the fed approve the capital plan . Let them give the Access Capital back to shareholders citigroup pass on the numbers with the fed says, we will not pass you because we do not like the way youre going about this. Matt citigroup has spent couple hundred Million Dollars running models. Michael is pretty serious about not only passing the test, but also giving money back to shareholders. Bank shareholders have been waiting for a number of years to see the payout ratio go up. The thought is if banks of the new utility, they need to pay dividends like utilities as well. They so far have not been doing that. Michael really diving in, trying to make sure they are able to give more back and prove to the fed they have a handle on all the businesses in countries. Matt wells fargo aced it by two percentage points. Goldman sachs is squeaking by. Will they pay out . We are waiting to see if they have to change the payout request or change the structure. One thing about Morgan Stanley a lot of their losses are in the early part of the cycle so some analysts think goldman can restructure its request so they pay more in buybacks later in later times and not in the early part of the test. Matt you can watch bloomberg for coverage or go to our website at bloomberg. Com. Thank you for that. Hillary clinton defended her use of a private email out and server while she served as secretary of state. She faced over 100 reporters yesterday. She maintained the account was used for reasons of convenience so she would not have to carry two devices. She said security was not an issue with this. Hillary clinton the system we used was set up for president clintonss office. It had numerous safeguards. On property, guarded by the secret service. There were no security breaches. Matt jennifer was at the u. N. Yesterday and joins me now. Jennifer, thank you. I wonder about the one device issue. I am sure you have more than one email account on your iphone and i have at least two. Why did Hillary Clinton only managed to use one . It goes back to the technology of late 2008 and late 2009. It was more complicated, especially with a government account. Various people i have talked to have set on twitter in the last day that they could not use their white house email on their personal phone, that they needed to have a blackberry that needed to be separate from their work email. She is a seniorlevel official so it seems likely that would be the case for her and maybe it would have been different by the time she left the administration, but she already had a routine down from the beginning. That seems to be may be what she is saying there. Her office has not asked wayne that many mortgage help. It seems like the most likely explanation on that. Matt all the technology existed for people at apple but maybe not there. It is still very reliant on blackberry and was much more so a year ago. Matt i do not think a lot of people delete personal emails, especially those that would be meaningful for them in the trippy about be the focus of republicans going to award. Click yes. It is an odd thing to delete 30,000 of your personal emails. I decided i could not do it because i never knew if i would actually need some of those emails. To think that somebody like Hillary Clinton did that is kind of wild and it seems to lead republicans and other clinton credit debt clinton critics and knowing the history of secrecy and scandal, to wonder why she deleted these emails, what was in them was it just because she did not want her personal life to become even more tabloid fodder than already is or didnt have to do it missed behavior with the Clinton Foundation for she was talking about benghazi . Matt jennifer, thank you so much Bloomberg Politics reporter. Coming up, we will hear from one man timothy massad, chairman of the commodities futures trading commission. Stay with us. Matt a look at our top stories this morning, European Central bank expanded asset purchases and will push euro area inflation toward its goal according to the ecb president mario draghi, who thinks an economic recovery is on the horizon. Today in frankfurt, he talked about the start of quantitative easing. Evidence points to further improvements in economic activity. Ecbs one point trillion dollar Buyback Program there seeing if banks and companies will come rush cash into the economy. Seven marines and watch oh soldiers are missing after a held after rash in the florida panhandle. They were flying in heavy fog on a Training Exercise on a remote beach. Rescuers reached the scene earlier this morning. The names of those on board are currently being withheld. A former j. P. Morgan chase executive is invading the world of virtual currency. The ceo Digital Asset holding. The Startup Company plans to use bitcoins for settling asset trade. Planning to cut jobs, up to 2200 of them in sweden. Part of a costcutting plan improving profitability. The Company Wants to save 1 billion over three years. Those are your top headlines. Senate republicans say sanctions against iran have worked in the past, why not try them again . They are defending a controversial letter they sent to iran. The letter warned army leaders that any nuclear deal they made with president obama could be overturned once he leaves office. Mitch mcconnell says the republicans simply fear the president will make a bad deal. Mitch mcconnell to make a deal with one of the worst regimes in the World Without any congressional input leads you to believe he will make the deals we all fear he will make. Matt finance leaders are at boca raton right and betty liu is down there with them. The fia International Futures industry conference. Betty is joined by tim massad. Betty great to see you this morning. I know you will deliver the keynote a just and a little over an hours time. You have got 1000 of the most important people you could imagine in your field in the exchange world. What will you tell them . Tim i will reveal what our priorities are in the coming months, including continuing to look at our rules and make sure theyre working for the commercial and users relying on the markets, finishing the rules required under doddfrank and looking at issues like Cyber Security automated trading. I will also spend time clearing household we have done a lot of work in that area and well do more and i will speak some about that. Betty there is a lot of debate about trading and whether the u. S. Rule you the u. S. Will have to get closer to what International Requirements are right now. Where are you seeing the move on that front . Tim that is a very good question. The rule is a very important piece of the overall framework airline committed to harmonizing the rules of ross borders. We have had good conversations with europe and japan and im hopeful we can get the rules to be substantially similar. They will never be identical, but i think we can hopefully bring them close together. Betty are they moving closer to Global Standards . Tim i have said i am prepared to be flexible on some issues in order to get there. Betty there has been a lot about market manipulation. We have seen the cases around raking foreign currency rates. How do you restore the confidence in various benchmarks . Tim enforcement is one of our biggest priorities all the time to we dedicate a lot of resources to it. We have brought significant actions against the largest banks. Were trying to manipulate Foreign Exchange rates and we will continue to bring those kinds of cases if we see them. We have brought cases, a new way given the increases in electronic trading. You do not really intend to transact. We have put people behind bars working with the Justice Department. If you look at our cases, there have been a number of things were people who have tried to pursue manipulative strategies have ended up in jail. Given the increase in automated trading, it is certainly something were paying attention to. I think we have very good markets in this country. They have a lot of integrity and i think we have a lot of good controls in place. They are the most dynamic innovative markets in the world. Our job is simply to do all we can to keep them that way. We are about five years out from doddfrank and have put a lot of regulations in place. Are you satisfied with where we are in the rules . Yes, we have made a lot of progress to bring the overthecounter market out of the shadows, create more transparency, create more reporting and emphasized Central Clearing that has been very important. How much of the trading should go on regulated exchanges . We set up a framework for that and a lot has moved on to those regulated platforms and i think we will continue to see it. People are still getting used to that and it is still working it is still getting worked out. It is more about which products are suited to that type of trading. I think we have major mendes progress in all these areas but the main thing is we are focused on making sure the markets still work for the businesses. Betty thank you for joining me. Tim massad. We will be back in just two minutes. Matt you are watching in the loop live. I am matt miller in for betty liu. We are keeping a close eye on shake shack today. The shares of the burger store have doubled since day right. It is set to deliver its first Earnings Report public to the company. The newest fast fast capital dining craze. I want to bring in the chair of independent ratings and analytics firm. The most interesting of all is shake shack because we all love to eat the burgers. What do you think about the Earnings Report . For the most part, when companies go public, the banks time it can have a feeling they will have perfectly good and consistent numbers and beat expectations and the stock will likely perform quite well. Classic was priced preipo and has doubled since then. It is a little off where it broke but has held up better than i think the step this thought it would. The skeptics thought it would. It is a very strong rating of a zero to 100 scale. It is certainly the highest of the companies that have come out in the food and Beverage Market over the last couple of years. We think highly of the company. It is a very efficient as this. The real challenge for them Going Forward is how well they can use protein proceeds from the ipo to carry out expansion plans and what kind of profitability they can achieve in those new stores around the world. Matt to your point, all of the gains came on the first year of trading. Maybe this will be some impetus for growth Going Forward. Lets move to vox, an interesting company. It is very popular, especially among the tech intelligence. It is basically a cloud anyone can use but is more developed and dropbox. They are competing against dropbox and google and microsoft. It is a competitive landscape. It has Collaboration Tools and is very enterprise focus. That is all well and good, but they still have a lot of major competitors and it is not as though that marketplace is some mystery to google and microsoft. A lot of money and Balance Sheets going after the same market. In contrast to shake shack it really had to go public because they did a private equity round in the middle of 2014 that carried with it penalties if they do not go public by the middle of this year. Their timing was probably a little more out of their hands than a typical ipo and there is more variability in their first Earnings Report as a public company. You can see things being better or worse. Will they make money . Not anytime soon. We rate them as a 23, a low rating. For historical comparison, 90 of companies that have failed in the past 20 years have felt filled a 40 or below. The Balance Sheet has Resilient Properties. They are not at risk of defaulting in the next 12 months, but they have a lot to prove. Matt compared to 85 per shake shack. Lets talk about pepsi. Etsy. It is like an ebay for people who make their own arts and crafts. That is also a very niche player. We rate them exactly the same as mock spear they have got more Resilient Properties so while they are rated at 23, the resilience factors in them can look more like a company in the 50s. The kind of Balance Sheet and the kind of cash they will have particularly on hand after the ipo means theyre also not in a risk of default in the shortterm. They are not profitable and are burning a lot of money. It will take a while before they can prove how the Business Model will be longlasting and efficient. They also, i would say, are probably an acquisition target down the road. The players who go into the stock when the ipo comes will realize there are risks of execution and competition and ultimately, this could be taken out by a larger player. Matt fascinating. Thank you for joining us for the chairman and ceo of rapid ratings international. I want to give you a look at the top stories we are following this morning to Hillary Eaton says she deleted 32,000 emails from her years at secretary of state. She says none of them are government related. She handed over another 30,000 messages from the personal account she used. She says it was more convenient to use a private email server but she told reporters she has broken no laws. Hillary clinton the server contains personalcare indications from my husband and me and i believe i have met all of my responsibilities and the server will remain private and i think the state department will be able over time to release all the records provided. Matt the state department is going through the emails to screen out Sensitive Information before passing them along. A key role in government spying on cell phones in the u. S. The agency helped the Justice Department developed technology to the spying was part of analyzed between the cia and domestic Law Enforcement agencies. The system uses an airborne device that can locate specific cell phones. Like a joan. China passess economy not keeping pace with government hopes. Industrial output, investment, and retail sales growth all miss target in january. Factory output the slowest since 2009. Analysts surveyed say chinass central bank will try to boost the economy next quarter. The dollar hit a 12 year high against the euro. It is up 22 compared to the european currency. That will eventually make currencies cheaper for americans if it has not already. The dollar was a factor in stock declines in the u. S. Investors concerned it will hit u. S. Corporate profits. The worlds biggest solid rocket booster will be tested today. It is part of nasas new heavy list space launch system an extended version of the shuttle the shutter motor. A vehicle that could carry astronauts to mars, though they will never come back. Two singers must share some of the money they made on the biggest song of 2013. A jury ruled that they copied in 1977 marvin gaye classic when they wrote blurred lines. They must pay marvin gayes family. Those are your top headlines to coming up, a special focus on Cyber Security. Tune in 11 00 a. M. On Market Makers for the executive produce or of a new csi series csi ciber. Staying on security, the former republican senator from georgia, Saxby Chambliss joins us to talk the threat from iran and tackling Islamic States. Matt less than an hour until the start of trading. A look at the action this morning. It has been the same story over the past half year but it fell as low as 105 c, the 12 year low torn quantitative easing the rate of change here. City index says by every measure detracting declining dollars strengthening. The british economy diversion as well as long as along with the economy. The boj wants to value its currency to get inflation, getting ready to weaken past 122 per dollar. The dollar is now the strongest since 2007. Economists surveyed say they we can 142 how the boj target. Rising into early trading right now up by nearly 3 after Goldman Sachs gross margin expansions as well. Finally, secondary offer putting pressure on mastercard come off by 1. 3 in the market share more supply stock out there. The eps of existing shift mastercard reportedly to sell 12. 8 million shares and arranged to 8795. Thank you. We will take most attention to this mornings is open after yesterdays big drop. Almost every sector for massive chains like home depot and target to entertainment giants like sony providing great entertainment. How do americans and companies protect themselves from these incredibly costly attacks that would diminish the companys credibility even if they boost the popularity of a comedy movie . A special agent, the new york fbi come argues we need an entirely new strategy. He is in part of our onehour special panel of guests beginning at 11 00 a. M. Eastern on cyber ready. He covers the Cyber Industry and joins us ahead of Market Makers where he will be joining coverage as well. Jordan thank you for coming on two previous to what a great year for reporting on Cyber Security hack attacks. It is endless, a crazy year of hacking. We have a great show coming up to discuss how pretty much everyone is honorable, jpmorgan, sony. Even if you spend a lot of money on hacking defense. People get hit and you can still get hit hard. Matt while the sony story provided a lot of great fodder for us and in the end really promoted a fantastic movie, the interview it highlights the fact that any of these big corporations across america tour around the world could fall prey. The focus on sony was in terms of public awareness. Jpmorgan spends a ton of money on Cyber Security. The fact that they were hit as hard as they were, it really is a wakeup call that all corporations need. There are few companies that spend more on Cyber Security and it shows the hackers are getting really good. It is not that these companies are necessarily data security. Matt a cyber bubble in tech land, they get very popular lately. What is your take . Classic you have a Cyber Security idea these days, you will get funded and have a lot of money for it. Theyre in a company not too old , but wellregarded by investors. An example of how to do this right. Back here on wall street, you mentioned the fbi is also investigating that wall street tank. How key is this to our National Security . What are the concerns at what happens at an Entertainment Company . It is a big concern because of hackers get deep enough into the network, they can manipulate the markets and destroy economies. We saw hackers accommodate a a twitter account. They can have devastating consequences and it is really high stakes. Yes. Reports behind the sony hack attack, at first indicated north korean hackers. North korean computer guys can be so experts that they get into sony without being noticed or without being stopped. National hackers could get in from any other country. That is one thing about north korea, the information north korea hardly has any access to the outside internet. You are exactly right when you look at russia or china or iran directly at acting out Financial Institutions or our corporations, there is a widespread sentiment that the best thing you can do is prevent the attacker from doing real damage. That is where we are now in Cyber Security. It is not, we will keep the hackers out. It is, what do we do once they get in. You cannot stop the russian government if they want inside your company. It is really hard. You cannot stop north korea, you probably cannot stop anyone. Really looking forward to this, 11 00 on Market Makers. Stick with us. This allstar lineup. Coming up, how nonbank lenders are growing their market share in the mortgage industry with the ceo of loan depo. And the multibilliondollar tourist, the number of chinese travelers and what they will spend in the next five years. Stay with us. Matt president obama is resisting congressional calls to help on the ukraine. They were urged to send weapons to Government Forces there. The president wants to see if the ceasefire will hold. More than 6000 people will that have died fighting the prorussian rebels and more than one million have fled their homes. The Nations Capital is the Electric Company will pay 146 Million Dollars to settle a lawsuit or shareholders say they were misled when duke energy took over an Energy Company a few years ago. The board fired bill johnson just hours after the merger. Target lays off 1700 workers at its minneapolis headquarters and is eliminating 1400 opened the. The cuts represent about 13 of targetss headquarters. 550 layoffs in january. It is part of a 2 billion costcutting push. And headed your way, a lot of chinese tourists. About 174 million of them by 2000 19. They will have about 264 billion to spend according to bank of America Merrill lynch. Already the worldss most prolific spenders and their numbers have surged. There were just 10 main of them in 2000. They are also young tourists. More than 60 are under the age of 34. Those are your top headlines. I want to turn to a story out of the Banking Industry now. Following the financial crisis, Regulatory Environment around lending has only gotten more stringent and more copper kidded. That is allowing more opportunities for nonbank lenders to have more business to traditional lenders like wells fargo, the share of the market has fallen by nearly one half while alternative lenders like we can loans have seen their piece of the pie get larger. I am joined by the loan depo ceo and one of the market leaders in nonbank lending, second to quicken loans in terms of mortgage lending. Is that right . Thank you for joining us. I think it is a really fascinating segment because it has changed so much. We talked about this as being the Banking Industry. It is right out of the Banking Industry. I sit is but at the end of the day, a home loan to consumers. We went through the cycle of the crisis in 2007 in 2008. They are starting to come back to the marketplace and housing is getting stronger by the day. Matt this is really a result of the fragmented Banking Industry and what the regulation has done to the onestop shops. Yes. What is happening is supply and demand is starting to shift again. Consumers are coming back in and making purchases of various things home loans and personal items. You have the supplyside banks consolidated and many of them do not go through the prices. Most of the nonbank lenders do not survive and close down. Today, you have this regulation that creates a barrier to entry. You have few lenders and a lot more demand these days. Matt i imagine tim i imagine tech plays a big role in these these days. People are increasingly going to the internet for things like loans. That is right. Not only is it convenient and faster but it allows users to select your own way of targeting and how you want to communicate with us, whether you want to do additionally or pick up the phone. You are in control as the consumer and you are not having to drive around and move paperwork. It is a lot easier that way using digital means. Matt your victims your business is more vanilla but is offering other more cutting edge or avantgarde areas of lending. We are and we see an opportunity to provide multiproducts to the consumer appeared as an example, we are getting into the personal loan space, which means you can borrow up to 35,000 without having a home loan or collateral at collateralize your real estate. Matt how are the risks . They go back to the previous cycles. We look at your credit history. We look at basic modeling of what your ability is to repay. Of course that credit score has a lot to do with it. Our average credit score for a bar were such as that. Matt does the fedss low Interest Rate policy now give you the same advantages it gives the big tank . Bank . It helps everybody but ours is different because it creates to the private sector and not borrowing money through the federal government. Our funds are higher but we keep costs low. It is still fairly low and obviously, there is nowhere for that to go but up. Matt how will that affect your business . It will be welcome to us because it will make it more tracked it for investors looking to buy the assets. Right now, there is an argument that Interest Rates are too low on the home loan side for us to develop new products. Matt higher Interest Rates from the fed will provide more funds for you to lend out to people. That is Mortgage Rate mortgage lending is at a cycle low. Forecasted as the industry to be around 1. 1, 1. 2 trillion to compare that to three joined hours before crisis care that is a nice contrast, although we have low Interest Rates we are not at a record level of borrowing. Matt very cool. Thank you for joining us. How much the General Electric ceo sees total compensation almost double to a lot. Full figures. The market called to drop. Be prepared for stocks to meltdown when the fed raises rates. Matt almost double his comment 2013, german by a soaring tension. It includes an 8 increase in its salary and cash bonus. Three shape the companyss portfolio. Coming up, live from sunny florida, an exclusive interview with a nasdaq ceo on his plan for new Energy FuturesTrading Platform. Betty liu is down there and from Financial Markets to going off the market, i will speak to the ceo behind marriage sites on the growth of online event planning. Matt welcome back to in the loop. Futures indicate stocks will open higher. Investor confidence is getting a boost from corporate deals and the european bond buying program. After you drop more than 300 points, you typically bounce back. Hillary clinton says she deleted 32,000 emails from the years as secretary of state. She says none of those were government related. She did hand over 30,000 messages that were government related from her personal account. She said it was more convenient to use a private email on one device. She told reporters that she broke no laws. Clinton the server contains personal communications from my husband and me. I believe i have met all my responsibilities and the server will remain private and i think that the state department will be able, over time, to release all of the records that were provided. Matt the state department is checking the emails that clinton turned over, not the one she deleted, obviously. Seven marines and four soldiers are missing after a Helicopter Crash on the florida panhandle. Rescuers reached of the scene earlier this morning. The names of those on board are currently being withheld. The dollar hit a 12 year high against the euro. It will eventually make imports cheaper for americans if it has not already. It was a factor in yesterdays deep stock drops. A Key Management change at google. They are looking for a new cfo. The cfo was stepping down after seven years on the post. He is staying on while the Company Looks for a successor but then he is out of there. Apples itunes and app stores are experiencing outages worldwide. Users in the u. K. , switzerland, and the United States experienced difficulties. Those are finally your top headlines. We start them twice and we end them twice. Lets cut you down to the opening bow with the top 10 headlines hitting our radar. Alex sherman and julie hyman join me today. Lets kick it off with musical artist for row pharrell and robin thicke. They were asked to give up 7. 4 million after a jury found them guilty of copyright damages for their song blurred lines. Alex art begets art. Matt exactly. Alex if the video of the song is not high art, nothing is. [laughter] julie you had the sam smith song that was like the tom petty song. Those two settled. U2 settled with the joe century on a satriani. Alex david boley under pressure and vanilla ice. Matt lets all watch the behind the scenes with vanilla ice. Alex the first time i listen to it, i thought it was a prince sampling. Matt number nine, more people will take to the skies this year is than last year this year than last year. 138. 4 million passengers are expected to fly, but it is more of a pain in the but then ever before butt than ever before. They did not mention how uncomfortable or horrible it is, charging for every bag. Let me take this moment to point out that i pay an extra 75 for a better seat on american coming back from vacation last week and it did not recline. Alex that should be the big story. Julie they are advocating for apparently there is a danger of another increase in airline taxes. Alex this is a double whammy for oil prices. It sort of hits both ends. Matt what do you think would have happened if apple had been chosen for the dow in 2008 . I saw this chart this morning. It is shocking if you look at the divergence. If you added apple in february 2008, you can see what would have happened. It soared to over 700 before it would have slipped. It makes you wonder about the rest of the dow. Julie people wonder about the dow all the time. Matt i only wonder about the dow occasionally. That was more when i was a kid. Julie this is very hypothetical. It talks about maybe bank of america would not have come out at the same time. What apple have split its shares earlier . It is a fun exercise. Alex it is like the butterfly effect at this point. Would carl icahn have made the same stinky made . Would well be Walking Around with samsung devices instead of apple . Matt no. [laughter] the ceo of General Electrics compensation almost doubled this year. His base salary rose 8 . Shareholders did not fare so well. Julie it is down 9. 8 . Alex and on time to get a double in pay. Matt profit fell, shares fell and he gets 40 million . Julie the narrative is that he is investing in the future of the company. He made an acquisition, he changed structure. Alex that is the great thing. If the share prices did go up the narrative would be that he made all this money for shareholders. It seems like a winwin. Matt if you know people in high places. Which im sure jeffrey in mmelt does. Eu officials are gearing up for a look at greeces accounts at greece agrees to open up its books or wake up on time. Greece is running out of money time, and friends. Frances finance minister actually expressed frustration with the greek finance minister who is obviously very cool, but seems a little bit laidback. [laughter] julie he is a little too cool. Alex the greek finance minister is an economist who is a game theory strategist. He doesnt want to do austerity measures. Lay back and wait for the process to come to him. He sees that he holds leverage because of nothing happens, they come up with a new extension deal. He feels is best strategy is to do nothing. Matt i would say he is using the lessons he taught in Athens University against the bureaucrats in the eu. It looks like a winwin situation for him. Coming up, is the s p ready for fed hikes . Deutsche banks david bianco says, brace yourself. He joins us after the break. Matt we continue to count down to the opening bell. It is time for the deep dive. The tightening tantrum. U. S. Stocks wiped out gains yesterday. So far, the decline in the s p from its last record is 3. 5 . Deutsche bank strategist david bianco warns that could even get worse, with a drop of 9 . He joins us now. A lot of people have been talking about this call. 9 drop from here or from the high in march . Do you think that is going to happen . David i think it is probably 3 5 from where we are now. It will put us back within the 1900s as investors internalized that the fed is going to hike which we think is appropriate. The Dollar Strength is going to pretty much prevent any Earnings Growth out of the s p in 2015. Matt does this mean you will lower your target for yearend . David our target is 2150. We argued the fed would hike the dollar would strengthen. This combination of strong dollar, slowing china, a lot of pain in the commodity complex, big challenges for a dust reels underweight in industrials big challenges for industrials, underweight in industrials. I think there is room for expansion of longterm yields stay low. Matt if your target is for a 5 gain, but you are saying if the fed raises rates, we are going to look at a 9 drop. David we are expecting the markets to fall before it makes its way higher. The key to getting to the 2150 is making sure longterm yields dont climb too much. Matt my concern dovetails with Jeff Gundlachs comment that the fed is intent on being a blockhead. In your thesis, it says that the fed is going to raise Interest Rates because the jobs numbers look so good, but that is going to hurt corporate profits. David i dont think the fed is going to be too worried about corporate profits, provided it doesnt turn into any deep dive. Matt if it hurts enough corporatations are going to start corporations are going to start making cuts. David we think it is a typical cutback. We think the fed will stay focused on the labor market conditions. The conversation lately is how strong of a dollar can the u. S. Economy tolerate . This is a globally interconnected economy. This is why i think the fed is going to hike. The hikes will be modest and plateau well below historical norms. Matt the effect on the s p 500 notwithstanding, if it does not hurt corporate profits so much that it kills job growth, you think it is the right move to raise Interest Rates . David yes. It has been slow Economic Growth in the quarter. We still see the labor market tightening at a quick pace. Labor inflation is not problematic, but unit costs are beginning to drift upwards. We think it is time to get off of zero. Matt you think it is going to be only 50 basis points by the end of the year . David we see it getting to 100 basis points by the end of the year. We think the hikes are about 20 basis points per meeting. Where do the 10 year yields settle . I think it is going to plateau at about 2 for the stockholder. Matt more with david bianco. He is going to stick with us through the opening bell. We will talk about a lot more from david. Still to come, betty is in florida with nasdaqs ceo Robert Greifeld. He will give us an exclusive announcement. Matt lets get back to bringing you the most important stories you need to know before the bell. Here at number four is an interesting one. Big banks get their report cards later today. They all passed last week. The stakes are still high. Especially for citigroups ceo Michael Corbett whose job could be on the line if they fail the second round. The second round is basically whether or not they can give money back to shareholders. Corbat is only giving shareholders a penalty penny. Julie it is pretty clear that he is going to be able to give some money back it seems like from the initial results of the stress test. Matt they passed. They did a better job than Goldman Sachs. Who passed by the skin of their teeth. There is a little bit of wiggle room with the banks. This is what we want, right . We want a tougher fed, we want harsher multiple level stress tests. Do you guys agree . Is this a good thing . As a country, this is what we want. Give me the other side of it. Matt what if you had less regulation and then when banks fail, you let them fail . That is kind of a novel idea, a free market, crazy thing. Julie then what would happen to the overall economy. Matt a former j. P. Morgan chase executive is invading the world of virtual currency. He is the ceo of Digital Asset holdings that plans to use bitcoin for recording or settling asset trades. It could include anything. She says that trading takes place at work speed, settlement doesnt and bitcoin takes place pretty darn fast. Alex why do we need banks at all . We could use bitcoin as our currency. This is more about the idea of settling trades and helping banks. If you use bitcoin or other digital currencies, there is the sort of merge between an outside banking system. Matt she is not saying use it as money, but rather a contract for ownership and it makes a lot of sense, actually. Julie it is also a step toward legitimizing bitcoin. You have seen a pretty big setback for it in recent months. Matt we dont need bitcoin to be legitimized. [laughter] the strongest dollar in more than 11 years is coming to Stores Across the u. S. It will take time to gradually ripple through the economy. Lower costs for imports and then in prices paid by consumers. This is exciting. Julie if you look at apparel imports into this country 97 of the clothing that is sold in this country is made in other places. It makes sense that if the dollar because of the action we see in the dollar, that costs are falling. Alex apparel, electronics automobiles. Not all that much made in this country in those three major categories. Automobiles, i suppose. Those three areas, a great time to buy. A great time to take a trip to europe. Matt automakers are trying to produce where they sell. Would you will see in a lot of car manufacturers, especially those based year is better components coming into cars because they can buy these things overseas. You will have better interiors in a ford or agm. A gm. Julie that got way too car geeky for me. [laughter] matt im sorry. Looking for a little bit of a bounce today after a 300 point drop. Maybe there is something behind this one. Matt welcome back. Lets get back to bringing you the most important stories you need to know. Alex sherman and julie hyman are joining me. Number one, i kind of spoiled this earlier. Billionaire investor jeff gunned thedlach said that the Federal Reserve is intent on being a blockhead. How great is that . He is worried that the fed is going to repeat mistakes that other Central Banks have made. He is referring to this old game where you had to stack on the shaped blocks on top of each other and if you made a mistake theyll topple down. Julie did you know that is where blockhead came from . Alex yes. Julie i think of charlie brown. Matt there is a gumby character. Alex there is a sports reference. Roger clemens said he called the umpire a blockhead, which he clearly didnt. [laughter] matt everybody has a connection to block it, but Jeff Gundlach makes a strong point. I want to bring in david bianco to talk about this from deutsche bank, the chief u. S. Equities strategist. What do you think about this comment he has made . Lets take the comment out of it. What do you think about the idea that the fed will have to reverse course . David i have a lot of respect for the fed and the challenging decisions they have ahead of them. We think it is right for the fed to begin to get off of zero and hike rates in the middle of the year. We think the rate to way to manage the risk the economy is fine, but it is a risk. This is why the fed is going to be extremely incremental. We have seen them lean toward dovish decisions. I think when they hike, it is small hiking. It is important that they signal and communicate the best they can what they think the destination is for the overnight rate and i think it is going to plateau well below historical norms. Matt what do you think about this zero hedge concern about all of the Central Banks artificially pumping liquidity into the system and i will give credit to business insider. What you think about the idea that it will all topple down . David so far, we have not seen an inflation problem. So far the policy and the prescriptions have been pretty on target. Lately, that same conversation in the context of currency wars, but we are making the point that the u. S. Is getting ready to have a stronger dollar and that may have its challenges to earnings, but it is probably the right thing for the world economy. Alex what is your timeline for reversing course . If your timeline is 20 years they are probably going to reverse course. It seems very unlikely that there would be an immediate reverse in course after we have lasted this long. Matt if there is a delayed reversing course, that would not be abnormal. That has happened many times in the past. We talked about that, as well. Janet yellen has a pretty good track record and she will probably hold her course for long enough to make it less of a blockhead. Alex it seems like it is how much are you going to raise rates, how quickly . Julie getting back to stocks and your strategy. I know you look particularly at tech and health care. It seems to me when you are looking at technology, that means you are willing to pay up in order to get return. Is that a correct assumption . David to put this all in context we think with the modest hikes by the fed, we think it is enough to strengthen the dollar further this is a challenge earnings for sectors like tech and health care. 25 of profits earned in foreign currencies. On tack it is 35 . On tech it its 35 . It is a much bigger challenge to things like industrials, week moderately complex in the weak commodity complex in the capex. If the fed hikes on time the Dollar Strengthens, inflation stays low, we think longterm yields stay low versus history and that would justify further pe expansion. Matt unfortunately, we have to leave it there. David bianco thanks so much. Alex, it has been a pleasure having you as well. Julie, i will be seeing you throughout the day. Keeping u. S. Markets competitive is at the top of his agenda. Nasdaqs ceo Robert Greifeld joins us. The company has a new commodities initiative. Details coming up next. Matt with trading under, lets go back to scarlet fu. Scarlet we have been talking a lot about how the stronger u. S. Dollar is hitting the overall stock market. Here is a companyspecific example. They make credit card readers. It cut its 2015 outlook because of the stronger u. S. Dollar. Nevertheless, it is trading higher. That is interesting. It was lower earlier. They are an example of the stronger u. S. Dollar hurting its results. Lets move on to retailers. Vera bradley is trading at an alltime low. Disappointing fourthquarter comparable sales. Fullyear revenue trails estimates as well. We will stick with retails and tell you about express. Retailers and tell you about express. Lumbar liquidators continues to trade at a volatile pattern. Lots of opinions, both strong and otherwise negative and positive on the future of the company. It has fallen more than 20 two times in the last two weeks alone. Matt the nasdaq Just Announced a new Energy FuturesTrading Platform that will compete directly with the cme. Betty liu is live and joined by the nasdaq ceo Robert Greifeld exclusively. Betty thats right. Thank you so much. Bob greifeld just leaving his press Conference Announcing this news. I noticed that on the agenda today this news was not on the agenda. Are you crashing the party with this announcement . Greifeld thanks have an me. We are crashing the monopolistic party. You have a competition somewhat limited. We are here to say that a horizontal, open, competitive model is better. It is interesting that we have most leading participants partnering with us. Betty you have jpmorgan, Goldman Sachs, Morgan Stanley. How do you plan on grabbing market share . Other exchanges have tried to go into other markets with a not so Great Success. Bob greifeld horizontal clearing is a bedrock principle. If you have open interest in a clearinghouse, other trading venues should access that. Senior management want to create an environment with air or not locked into a vertical silo. That is the underlying proposition. We are fortunate to be partnering with occ which has a low ceiling for clearing. We have broad support. Over 85 of the marketplace. You have never had an upstart start with this amount of distribution. Betty why Energy Futures . Bob greifeld when you look at the capture rate in Energy Futures, it is quite stark. We run an equity options business and are deferred con deferred rate is under . 20. The two major competitors charge 1. 34 or 1. 45. It is a huge difference. There is opportunity. You have seen the open outcry trading model evolved to become electronic, but the benefits the cost benefits has really accrued, not to the trading participants, but to the exchangers. We are trying to balance the distribution. Betty you will be undercutting them on that front . Bob greifeld definitely. Half their cost. Betty half their cost . Bob greifeld and still quite profitable to us. We will see the rate come down over time. It is a big opportunity. The customers wanted. The list of people supporting us is wide and growing. It is a good healthy competitive dynamic. We are looking to do this midyear. We have to get some finalize regulatory approvals. The technology is basically in place. Betty bob, talk to me about ipos. It has been busy but slower than in years past. I know the nasdaq has competed fiercely with the nyse. We have a graphic. It shows that the number of ipos has increased and the nasdaq. The dollar amounts have dropped visavis the nyse. How do you turn that around . Bob greifeld we are happy with the numbers. We had more billiondollar plus raises than any time in my 12 year tenure. We are seeing great progress in the bigger ipos. We are focused on that. Understand that the ipo raise is not a function of the market. It is a function of the banking and the roadshow in we dont participate in that. In a real sense, that is a better measure of how we are doing. Betty does the trouble you that there are various Tech Companies in the last 1218 months alibaba, twitter, that have gone to the nyse and not the nasdaq . Does that trouble you . Bob greifeld our desire is to win every ipo. That is not seen as a positive. We strive to improve. We have to recognize how well we have done, not just intact, but in other industries. You have see the broadening of the nasdaq brand. We were exclusively tech. Walgreens switched their listing to nasdaq. We have seen Great Success in broadening our message across a wide range of industry. We continue to lead in technology. Betty you were also looming companies to your exchange by adding more human touch right . You beefed up stepping staffing. Bob greifeld we have put in charge of the ipo process, and auctioneer a Central Point of communication between the Listing Company and the banking syndicate. They are there coordinating all of the internal mechanisms within nasdaq to make it happen with the external. That has been very well received and it is certainly helping us. Betty are we in a tech bubble . Bob greifeld no, we are not. [laughter] our indexes 20 times multiple versus 185 back in 2000. Big difference. Betty that is a huge difference. Big difference. Back to you. Matt thanks very much and thanks to bob. A quick break. Matt Senate Republicans are on the defense after signing an open letter to iranian leaders warning than that any nuclear deal they make with the president could be overturned once they leave office. They have been criticized for ignoring diplomatic precedent undermining the commanderinchief. One newspaper called them traitors. Yesterday afternoon, Hillary Clinton weighed in on the subject. Clinton the recent letter from republican senators was out of step with the best traditions of american leadership. Either the senators were trying to be helpful to the iranians or harmful to the commanderinchief in the midst of highstakes international diplomacy. Matt lets head back to betty in boca raton, florida. Betty thank you so much. Senator, great to see you. Look, you have had a storied career in congress and you were on the Armed Services committee the foreign intelligence committee. When you hear Hillary Clinton say that this is essentially destructive to our negotiations with iran the senators who signed this letter and sent this over to the leadership there, would you have signed the letter . Senator chambliss i think i know what the contents of the letter are but i have not read the letter. Here is what i do know. I have been very much opposed to these negotiations from the start. Why do we negotiate with terrorists . Why do we negotiate with a country that intentionally allowed the manufacture of ieds that killed our men and women . Here we are having the country of iran exactly where we wanted them, in a position of sanctions , sanctions were working. That is why they wanted to come to the table. That is why you saw celebrating until ron when the agreement in tehran when the agreement was announced. Now, what the letter said was was that the president of the United States by entering into this negotiation and whatever agreement may come out of it betty is endangering america. Senator chambliss the president is going to change in 2017, so that all may be valid. Betty but we are where we are and by the senators taking this action, does it not jeopardize we are where we are with negotiations negotiations and does it not change . Why try to undercut the president . Senator chambliss i dont think it jeopardizes the deal. I think this administration is committed to making the deal. The problem is that these 47 senators know and understand he is probably going to make a bad deal and they just want to make sure that the leaders in iran know and understand that this deal, if there is one that comes out of this, it may be overturned by the next president. It ought to be voted on by congress. I am a strong advocate for doing that. Betty you would be ok with this deal was approved by congress . Senator chambliss if Congress Approves it, it would be the right kind of deal. It would eliminate the capability of iran from manufacturing a nuclear weapon. Betty does this set a bad precedent for future president s if they have to worry that congress, congressional leaders may act otherwise . Senator chambliss being commanderinchief is the toughest job in the world and every commanderinchief has to make decisions on a regular basis respecting or concerning the National Security of the United States. What this president did with the conflict in syria, when he drew the red line and said, we will take action if you cross the red line. Instead of taking action, he said, we are going to put it to congress and we are going to tell you what to do. Once he did that, that set the precedent. This does not impact the precedent from my perspective on future president s. Betty secretary of state john kerry is speaking in front of congress on how to deal further with Islamic State. I know that you have talked before about how we have to kill Islamic State, not just contain them, but kill them. What do you think the u. S. Needs to do to step up the campaign . Senator chambliss you are not going to rehabilitate these folks. We have had no strategy and plan. They have been allowed to grow at a very rapid place. You are going to have to have the insurgent Ground Troops work alongside the airstrikes that are taking place. Those Ground Troops do not need to be american. They need to be arab Ground Troops. Betty thank you so much for joining us. Matt i know my way around a ford f150. But this is an industry that is completely alien to me. Weddings, babies, and marital homes. My next guest is the ceo of xl group xo group. He is the creator of the knot the bump, and the nest. Thanks for having me. We had a really good quarter. We set out to fundamentally transform our company in 2015. We want to drive much higher growth and better value for our investors. 2014 was the beginning of the results. Local advertising business and the overall user base has grown. Matt as a single 40yearold man, i know nothing about this. It is a Huge Industry with people putting their registry online. You can buy them gifts for their wedding. Or buy them something for their baby. It is really a growth industry, isnt it . It is. And im sure there is someone out there for you, too, matt. Matt thank you. There a pattern to run newborns pregnancy, and parenting. It is a really big space. They need the inspiration, they need the tools, the planning and the services. They need connections to vendors to help them pull off these big days, whether it is planning their wedding or having their baby. That is our mission and that is what we do here. We have been driving pretty good results. Matt im sure there are crossplatform synergies here. I wonder, have you considered expanding out into other lifestyle or life events . We always could, but first our focus is inspiring, planning, and booking every wedding in the u. S. When every couple can pull off their perfect day with our help, the job on weddings will be done. When every couple who wants to get pregnant, have a baby, and be good parents can do that with our tools anytime, anywhere, than it is probably the right time for us to think about other spaces. Matt how do you balance the needs of your advertisers with the needs of your customers . Users want to hear about the best product, not necessarily the one that you are paid to promote. It is a great question. The most fundamental change in our company and our products this year is that you can now find every vendor who can service your wedding on our website. That did not used to be true. You want only find the venue, the band, the dj, the officiant, the wedding planner we are paid to advertise you will find the wedding vendor that is perfect for your wedding day, whether they pay us or not. Making that match and that connection is the essence of our marketplace and its is where our investment is. Matt i will keep you in mind for that fateful day. Thank you so much. Matt that does it today for in the loop. Betty liu will be back tomorrow. That is tomorrow at 8 00 a. M. Eastern. Live from bloomberg headquarters in new york, this is Market Makers with Erik Schatzker and stephanie ruhle. Stephanie when will the fed raise Interest Rates . Just take a look at lack rock blackrocks yellen index. Hillary clintons message to voters trust me. We have heard that from the clintons before good the former secretary of state says she has turned over all the workrelated emails but the choice of what is in the Public Record is strictly up to her. Pharrell and robin thicke got to give it up. A jury says