Less than we were initially this morning. All three major averages taking a hit, but the nasdaq only down. 25 at this time. You still have banks that are the worst performers here. Industrials and Consumer Staples also on that list. Still seeing some weakness along the large cap banks. Take you look at energy, only down. 1 . We have seen a turnaround in oil come a very dramatic turnaround in oil prices. Higher after we got weekly inventory reports that showed a building inventories. Crude a drawdown in inventories. That is what is pushing oil to that turnaround. Follow rightstocks along with it, even though stocks are still lower. In is in yellow, stocks white. They are moving pretty much in tandem as we do tend to see. Ive shown this chart on almost a daily basis. If you look on the other side of the coin, the socalled safety assets, you are seeing them give up some of the gains today. Gold has per those gains to 1. 4 . The same has happened in the bond market. If you look at the 10 year note in the move we have seen. Earlier, we saw yields dipping much more. Still some buying of treasuries. The dollar has also had a Similar Movement in its trajectory today. Down on the day after it was gaining earlier. Finally, the vix as well. Advancedired its today by almost half. Not at the elevated levels we saw in the last month or so. Check on the bloomberg first word news this afternoon. Generale u. S. Attorney Loretta Lynch is defending the Government Plus push for apple to comply with the judges order to unlock an iphone. The iphone was used by one of the San Bernardino shooters. Is idea president plenty of precedent. This is not a theoretical issue. The going dark problem is a very real threat to Law Enforcement possibly to protect Public Safety law ability tos protect Public Safety. Mark president obama says the u. S. Will help jordan cope with the refugees. The two leaders discussed u. S. Assistance to jordan as it grapples with the influx of syrian and iraqi refugees. U. S. Has provided 4. 5 billion in aid since the beginning of the syrian civil war. House Speaker Paul Ryan says republicans are taking legal steps to stop the president from posing this closing the u. S. Military facility at guantanamo bay. Paul ryan says the gop is taking all legal preparations necessary to ensure guantanamo remains open. In syria, russian and syrian warplanes pounded Islamic State positions. The syrians and the russian allies are trying to regain access to a strategic road near the city of ale. O. O alepp global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. Carol thank you very much. Lets return to the storm cloud hanging over global markets. Firma summed up the uncertainty earlier today on bloomberg. They are scared of not investing because they are suffering from the negative Interest Rates. They are also scared of investing and looking stupid in one years time if the markets are way down. Fear come ont happiness. It is a very scary market. Carol investors seem to be lost in a Bermuda Triangle of macro concerns. Us. T to have you back with have you seen a market environment like the one we are in today . Nick no, this is really unique. You have so many different aroundof uncertainty Central Banks and stock valuations and what sectors to invest in. His more recent trend in terms of a rally in the 10 year and in gold. Tracy it does feel like we are getting a disconnect between the actual fundamental data, main street and what is going on on wall street. Nick great point. If you were to just drop in the middle of this, you would think it is pretty good. The way you have to think about it is through the lens of volatility and future uncertainty and overseas uncertainty. Andre worried about europe the low Interest Rates we are seeing their and what that means what thatthere and means and also japan and china. In a very narrow sense of the u. S. Economy, things are good. Carol if jobs hold up and consumers keep on spending, is it enough that it can hold up the Global Economy . Nick there is the hope that the u. S. Economy can pull the rest of the world through this. Markets disagree or at the very least it is the open question of the first half of the year. My sense is the answer is no. We live in a very interconnected world. It is possible. Carol he doesnt sound certain. Tracy we have to talk about the president ial elections. We saw news around trump. How much is that weighing on the nervousness of investors right now . We are seeing it come up and a lot more client conversations with traders and myself. Something six months ago people took as a joke and now, it is here and real and donald trump will be the republican nominee for president. We will have to deal with whatever that means. If you look at the offshore gambling odds, Hillary Clinton still has a 54 shot of being the next president of the United States. Donald trump is in second with 22 . Up with howardt marks of oak tree and he talk about whats going on in campaigns. They are scaring the hell out of people. Donald says the chinese are killing us. The mexicans are killing us, the japanese are killing us. So, we are going to get the jobs back. I think people tend to believe him. Then the others compete to be equally dramatic. It has to put investors on edge and scaring corporate america. Legislation and so forth do we get some uncertainty come november . Nick we absolutely should. We will have the eventual winner of the campaign. If it is donald trump come all bets are off. You will see more volatility in aalth care and financials the volatilitys around the campaign and what both parties will have to say to win votes in november. Our investors actually nervous about their economic policies or just nervous about the uncertainty in general . The nervousness comes from the fact that these fringe candidates speak to a piece of america that that message really resonates. The degree to which a mainstream candidate has to pull their message more to an extreme and deliver on this promises next year is a source of concern. Much. Thank you so minutes, the next 20 exclusive comments from jack lew. His take on the prospects for any efforts to boost Global Growth at the g20 meeting. Getting the boost he wanted heading into super tuesday. We put his nevada win into context. Countrysme of the one start winning, winning, winning. Carol welcome back to bloomberg markets. It is time for the Bloomberg Business flash. According to folks familiar with the matter, the ceo will probably step down. Discussions about the 20 billion deal still fluid. It might not happen at all. Says rocks money manager the time has come again for all time stock pickers. He says he will buy again after having 20 percent of his holdings in cash. Will open a new factory in wales. The decision coming after the Company Looks at 20 other possible locations worldwide. It has build cars in england for more than a century. Matt miller will be there. Own 007ets look to our of the markets, we have julie hyman. Julie where is my aston martin . The nasdaq has actually now turned higher. It was down. 25 . 2 and theow up major averages are paring their earlier declines as we talk about that. There are still significant declines to know. One of them in transocean after the company said a contract had been terminated early for an ultradeepwater summer civil submersible driller. It will be stopped this may. The other drilling stocks are still falling today. Stage of street in a Conference Today said the environment continues to be challenging. Said theynancial could have 65 million in energyrelated chargeoff this year. It was downgraded to underperform by analysts. Those shares declining. Auto related stocks are weaker today. Argan stanley says in recession scenario says that profit would go negative. Tracy what was that . Submersible . Julie i will go practice that. Tracy g20 finance ministers and Central Bank Governors will beget ring friday to discuss concerns about Global Growth and a worldwide selloff in the markets. Jack lew says not to expect the new fireworks. He sat down for exclusive interview with david westin. Jack lew im hopeful this will be a g20 where we take a commitment we got at the last meeting for countries to refrain from competitive devaluation and push it a little bit and have that become something that is heard outside of a meeting room to ensure the world that is a commitment taken seriously. What can we hope in the communique humming out of these coming outhat of these meetings beyond that . Jack lew these last months have made clear that weakness in demand globally is a problem that cannot be solved by everybody is looking to the United States. Ive been telling my counterparts for couple of years now, i think we are doing pretty well. They think we are doing pretty well come at you cannot count on the United States providing all the demand for the world. You cannot be the consumer of first and last resort. There needs to be more. In countries that have big economies, they need to use policy tools. When china looks at what it can do, it has to look at how to stimulate consumer demand. Europe looks beyond Monetary Policy and not what it can do with fiscal policy as well. Whereountry like japan theres been two decades now of slow or negative growth, theyre careful not to make the mistake of stopping the economy with fiscal policies that put the brakes on it. Instead, use fiscal policies to drive things forward. There are structural issues that need to be addressed. In some countries, it is regulatory some countries coming as financial reform. This structural issues need to be addressed. Fiscal and Monetary Policy are important to us that when used together are powerful. That combined with sharing information about Exchange Rates , having a clear understanding that it is unacceptable to target Exchange Rates to gain unfair advantage outside of your country, that is a question of who gets more of the existing pie, it does not grow the pie. As i talked to my kind of parts, understand that is not a direction we the World Community can go and. Can go in. Theres been a lot of speculation in the world that these conversations could lead to a different kind of decision to underscore that that is an important principle, that is important. Carol you start with Global Demand. The problem we have is a demand problem at this point. Do you hope this communique actually does have specifics about how Global Demand be stimulated could be stimulated . Jack lew there are general printables apply in Different Countries in different ways. Theres always a lot of discussion about the words because no country wants to sign onto general words it knows will be behaving inconsistently with. Getting more meat on the bones makes a difference. I cannot get ahead of the process. We are still going backandforth. I dont think this is a moment in time when you will see individual countries make the kinds of specific commitments that have been made in some other contexts that have been marked by real crisis. This is not a moment of crisis. Economies doing better than markets think in some cases, you have a future that could be influenced very much by the kind of policies im describing and the idea is how do you avoid having things go to a place that you dont want them to go. That is a different conversation then what do you do in the middle of a fullblown crisis. Talking to bloomberg about the upcoming ecb meeting and whether more stimulus measures are on the way. Tracy welcome back to bloomberg markets. The head of germanys central bank is upbeat about the outlook for his economy but says inflation still is not where he wants it to be. With him andspoke asked him if is looking at more Interest Rate cuts. We will have some Monetary Policy meetings in march. At that point, we will reconsider the Monetary Policy stance and perhaps take decisions or not take decisions. What matters is the mediumterm inflation outlook and to what extent this is compatible with our definition clearly the market is expecting this. Is there a communication problem by the ecb . No, it is clear that the current price developments warrant forward Monetary Policy debate. The crisis has a major influence on prices. To what extent is the fact that the effect of the mediumterm inflation outlook would you make it clear you are focusing on this mediumterm . It is obvious that we are focusing on the mediumterm. We need a debate on the necessity to act and then we can have a debate on the instruments at our disposal. Talking about having a mitigating effect for banks if they end up taking Interest Rates lower. Do you think that is even structurally possible to even have some sort of tiered system . Is thatmatters for us we dont get counterproductive effects. You want to have a transmission of monetary impulses on prices at the end. It are measures produce the opposite of what we want, it would not be smart to raise in the first place. We always have to design our measures in a way to make sure they are powerful and effective. You are open to the idea of having a multitier system. Im still in we have this debate with the governing council. What is the lesser of two evils . A 10 basis point rate cut or an additional further rate cut but with some sort of mitigating effect for the banks . Think it is futile to discuss the instruments hypothetically. This is a debate we should have with the governing council. And then the necessity to act, we discussed instruments. Carol still ahead come after chesapeake pledged to lower its debt, shares soaring. Lets get a quick look at stocks as we head to the break. Major averages recovering at their highs of the session. The nasdaq turning positive along with the s p 500. This is bloomberg markets. Mark thank you so much. The Washington Post reports Brian Sandoval is being vetted for the Supreme Court vacancy. Governor sandoval was the former judge of the u. S. District court for nevada. Prior to his service as a federal judge, he served as the states attorney general. Up histrump has picked first two congressional backers. Chris collins of new york and Duncan Hunter of california are now on the board. Greg abbott is endorsing ted cruz, hoping to give the senator a boost. Harry reid announced his support. Or Hillary Clinton the endorsement makes read the backst ranked lawmaker to mrs. Clinton. The charges stem from rick perrys public threatening and carrying out of a veto of teams of Health Workers banding together to determine if the zika virus is causing babies to be born with a birth defect affecting the brain. Cdc and from the u. S. Three Brazilian Health ministries went to work in brazil where the virus has hit the hardest. Global news to hours at a by our 2400 journalists in more than 150 news bureaus around the world. Commodity markets closing in new york. , raw sugars morning prices surged the most in 20 years after the International Organization crude oil advancing, closing out their highs of the session. Cheap gasp a third demand and sent inventories lower. Bolstered demand and sent inventories lower. That gasoline demand rising 1. 8 . Conception was up 5. 2 in the same time last year. Guess futures up 5. 25 there. Gas futures. Chesapeake is the biggest gainer in the s p 500 today after the company said it will pay off its 500 million debt after investors expressed concern over plunging that gas prices plunging nat gas prices. Abigail doolittle spent more than a decade on wall street as a research and chart analyst. Spencer, talk to us about this news from chesapeake. The clock was ticking here. Spencer the clock was ticking and still is taking. They did a report that they would pay off their bonds last month. We knew that based on the Debt Exchange they washed in december to telegraph that they were likely to repay that bond. The Biggest Surprise to me was they and yesterday with only 300 million in cash. They had 1. 5 billion in cash at the end of the third quarter. We knew a lot of that was going to go in Fourth Quarter because they had maturing thats they had to repay maturing debts they had to repay. Between december 31 and over the last seven weeks, that has gone to 300 million. What is happening to all the cash . For chesapeake, the primary focus they have to have over the next year is liquidity. Tracy did we hear anything on the call about what actually happened to the cash . Spencer we did not hear what happened to the cash. They said they used some of it to buy back bonds but there is etill a big gap in ther between what they had in december and what they received from this asset sale and where they were as of yesterday. They have a 4 billion credit line up for redetermination in april. Most of the banks have said they expect Borrowing Baselines to be cut between 10 and 15 in this spring redetermination season. Their Credit Facility has never gone through a Borrowing Based redetermination process. This 1015 cut your hearing from the banks is based on the Borrowing Base we from last fall which was done in october when oil was 45 a barrel. Wasapeakes Credit Facility largely unsecured until last september. This is the first time they will go through that redetermination process. It is a bit of a wildcard as to whether it will stay at 4 billion, go to 2 billion, who is to say . Carol i want to talk about the stock itself. It was such a big move come up 22 . All the technical analysts have to be pulling out their charts today. See the stockll appears to be heading longterm buying support. What happened in the past, there were big rallies. The question i would have for spencer, what would have to right got a big recovery in Energy Prices to cause that kind of a massive rally higher once again . Spencer what would have to go right is you have to see gas prices really get back up to the three dollar range. Just a because said they need to break even around the three dollar range. Their liquidity will be short up over the next 24 months. Even if gas prices do not get their next month, maybe they can there next get th, maybe they can get given where their bond is trading at . 40 less, it is unlikely they can refinance that debt as it comes do or they can do asset sales. That 700 million worth of asset sales this year if they can get that done, that should help to build the Liquidity Position and buy some time and be able to riepay some of that debt in 2018. What there is a high could cause this bearish investors to cover their position . To me, it would have to be a real game changer. What you just described, it seems like it would take a bit of time. You could see a big asset sale that boosts liquidity, you could see a partnership. Youve seen some Companies Get money from the private equity firms and the partners who develop their assets. You have to do something that fundamentally changes the outlook for natural gas. Or something that is fundamentally going to change the view for chesapeake. They sure up there Liquidity Position, they sell the company. It is hard to say who the buyer is these days, but there is m a in the space. Up buyers do not want to pay , the sellers do not want to take the current bid. There is still a lot more to come when it comes to whats going on in energy. Spencer, thank you so much. Tracy should computer code be protected as free speech . That is what apple is expected to argue in federal court in its ongoing battle against the government. Joining us now is cory johnson. Could Software Ever be considered free speech . it has been considered free speech. There was a case out of berkeley in the late 1990s. The government told him he could not publish it because they saw it as a risk and an Appeals Court looked at it and said this is a form of speech. In the same way the government cannot compel speech and apple as part of their argument against the desire of the government to have them write code that allows them to crack into this phone, their argument will be that they should not be compelled to say something. In this case, the code that would unlock the software. I think this will go all the way to the Supreme Court. You dont think so . Cory theres lots of ways this could go. The courts could look at this and make a decision about this. They could settle this out of court in some way. Apple is saying they Want Congress to look at this. Somewhatublic opinion split on this issue. That is an interesting thing as has because the government picked a sympathetic case as they could possibly find when comes to terrorists when it comes to terrorists. The fear of terrorism might have that effect. I think it shows you that the s involvement means this is carol coming up in the next 20 minutes to shares of royal bank of canada falling 3 today. We will speak to the companys companys cfo exclusively. We will check in with our politics team, straight ahead. Carol good news, bad news for royal bank of canada. Shares of the bank trading down after it missed analyst estimates. On the plus side, the bank has passed Goldman Sachs to be north americas fifthlargest bank. Joining us now is the chief Financial Officer live in our toronto newsroom. I think the thing we all want to is your Energy Exposure and how much you have in terms of transparency, really understanding the banks exposure to those troubled energy companies. The bank has exposure to those troubled energy companies. We have great transparency because when you look at our Energy Portfolio commits about 1. 6 of our total portfolio. When we look at the companies in drilling, we work with them and go through their cash flows, look at their price estimates to get a real handle on whats happening with respect to their Debt Repayment and debt we servicing. S particular companies those particular companies we went to come against the Assets Resource list. N we are working with them they today in making sure that we understand where they are. Tracy you did announce a pretty big increase in energy loans this quarter. You still adequately provision for that . If you look at where our provisioning has been far total come when he come at last quarter it was around 24 basis points. Benign because it had been that low for a long period of time. We thought a more normalized provisioning level was around 30 basis points. We are right where we expected. They could get as high as somewhere in the 40s and 50 basis point range. Are working through our exposure given the uncertain economic environment, we are not getting any surprises. This quarter, we had five on. Owers we put provisions it comprised two thirds of our provisioning. Re is some ugliness mugginess. We are making sure we are working with our clients. Gas, what is the outlook . How specific can you get . We are thinking that for the year, our provisioning level will be for the total portfolio 30s basis points given where Energy Prices are now. It is hard to predict for the rest of the are because we dont know whats going to happen with the volatility of the oil price. We think if it stays where it is today, thats what were looking at. Tracy i have to ask about negative Interest Rates. Weve seen the bank of Canada Governor talk about the possibility in canada. What impact would that have on your Business Model . You look at negative Interest Rates, given where funding costs are, what we would see with negative Interest Rates is just more spread compression. With negative Interest Rates, we heard our governor talk about it, but we have not seen the economy getting to a spot where we think it will be. It represents more spread compression so when you look at our own position in terms of continuing to drive earnings growth, for us, its about doing other things like monitoring our expenses and making sure that for any revenue compression that happens with negative Interest Rates, if it does happen, we can make it up to our mediumterm objective. Worst globals the environment that you are preparing for . Home do stress tests for price depreciation in canada. Youve heard something about that. ,ontinued low oil prices unemployment going up, Interest Rates going up. Stress teststhose to see how our portfolio would do and what our performance would be. From that perspective, we look at what could happen from a worse time perspective and we manage the company from the perspective of prepare for the see a goodif you environment, be ready to capitalize on it. That is what we are looking at. It is more about the macro uncertainty. Carol great to get some time with you. It is time for our Bloomberg Business flash. Brazils Sovereign Rating during deepening political turmoil. The outlook for the rating is negative, meaning more downgrades could be had. Moodys is the last to strip brazil of its investment grade. And outvote in the june 23 british referendum will change europe forever. Donald trump said it would be for the worst. Brokered the deal with the 27 eu leaders last weekend. Barclays cut their bonus pool by as much as 12 according to people familiar with the matter. It would have been more if the bank had not cut 400 jobs worldwide and close operations in asia. That is your business update. His donald trump considering one of his fellow competitors as a running mate . We dig into the latest politics, next. Tracy another big win for donald trump. The front runner to tuesdays nevada caucuses by a wide margin , winning nearly 46 of the vote. Marco rubio and by more than 20 percentage points. Joining us from charleston, how big was this for trump . Trump, is a big win for not just because it is his third in a row, but because of the margin by which he won. If you add together marco rubio yesterday,zs votes it is still less than what donald trump got. That is a big deal. Is margin by which he wins not just the margin, it is the people that supported him, hispanics mostly went trump. Older people, all these groups, educated, and uneducated, they are all going for trump. This is something he can stand up the argument against trump this whole time has been stability and now he can stand up and say hispanics, and uneducated, educated, they are all supporting me. This is his way of getting the party to rally behind him. How do you make sense of this when you have donald trump talking about putting up borders with mexico . It seems like there is no stopping him. How do you make sense of it. Everyone is trying to figure that out. , donaldral consensus trump has negatives. They are high. He pulled a like certain things about him that people dont like certain things about him. The strength he projects and the faith they have in him to be a leader trumps everything else. That is what is happening here. People might not like some things here or there, but when it comes down to it, they look at the field and say who could be the strong as leader and ald trump is there pick strongest leader and donald trump is their pick. Whoes still some people are wishing and hoping that the next couple of weeks will change the narrative a little bit. We are starting to see signs is tryingstablishment to come to grips with what a Trump Nominee would look like and how to rally behind him. Saidarty chairman has whoever the nominee is will be rally behind. Trump today started talking about potential Vice President s, the type of Vice President he would pick. He said it would be a political person. He knows people dont really trust him in a lot of ways. If you can start thinking and talking about a political person , he might be able to ease the establishment. Next hour,ng in the were talking about regulating shortsellers. As we headed to a break, quick look at stocks at this hour. We see stocks rally off their lows of the session. Nasdaq slightly higher. Stick around. Welcome to bloomberg markets. Vonnie good afternoon. Here is what we are watching this hour could a stocks a racing declines after falling about 1. 5 across the major indices. The major averages are now in or near the green after oil also reversed earlier losses. Vixtility returns, the higher today. Our fundamentals driving this . The markets and stay volatile. It is not underpinned by any real fundamentals. It will just flow around based on any news. Atnie should analysts treated andms be regulated like banks