Outperforming european equities since 20,003. The euro dollar. The dollar index heading for its sincet quarterly drop 2011. Yields on the u. S. 10 year at the 10 year. Wti at 38. 17. Lets go to vonnie quinn. Vonnie in washington dc, the Nuclear Summit gets underway. Terrorism and the Islamic State will be on the agenda. President obama will discuss north Koreas Nuclear and missile tests with japan and south korea. Considering whether to deploy a Missile Defense system in south korea. They will talk about north korea with the chinese leader. The president will bring up human rights and chinas territorial claims in the south china sea. Officials at the Bristol AirportBrussels Airport are working on temporary repairs. Bombs destroy the checkin area. When the airport reopens, it will be able to only handle a fraction of the normal traffic. Donald trump has reversed himself after making remarks on abortion. Earlier, the president ial frontrunner on the republican somesaid there would be sort of punishment roman who got an abortion if the procedure was outlawed. Later, trailed said the doctor and not the woman would be responsible. Global news, 24hours a day, powered by our 2400 journalists, in 150 news bureaus around the world. Another reality check for the worlds secondlargest economy. Chinas economic slowdown continues to be a cause of concern. The outlook for chinas Credit Rating was cut to negative from stable, stating the rebalancing is likely to proceed slower than expected. For more, we go to end a curry enda curran from hong kong. Anything new in this for you . Enda we know it the chinese debt story is. It is still a timely reminder of the challenges china is facing. The pace of the debt held up has been a concern. Since 2008 it is grown to two point five times the size of the economy. Bad loans and the Bank Balance Sheet added 10 year high. Theyll act as a drag on growth. The s p is whining woman because is warning, because they do not think it is going along as smoothly as expected. They dont think china can pull this off. It will be a balancing act for china to make sure it hits his growth target of 6. 5 and manages to contain its debt while at the same time unleashing fiscal spending. The focus . T i do not understand the s p questioning the growth numbers. If something goes wrong, they will not give them the flexibility to deal with it. There is not a crisis in china. Government that the Government Debt levels are 40 of gdp. China has room to spend if they need to. There are risks. Hurt0 year high will Economic Growth. You do not want to slow Economic Growth in the local government is already heavily indebted as is the banking system. There is the risk on the Capital Accounts side that if the money began flowing out of china if , for example, expectations on the american dollar reversed, that would put pressure to keep liquidity. I do not think s p is in crisis, but there are risks to the outlook in china. Tiere this is the second and third tier of the baking system. What happens in that goes bad . Is this get forgiven . Swap by the a debt government. Theyre talking about it equity program. That is not going down well with the executives. Some banking executive save we do not want to swap that debt swap bad debt or bad equity. Orember, we are not 1999 2004 when china had to establish 4 bad banks and clean up the system. David thank you. The chief asia economics correspondent. It is the end of the First Quarter. If we look at global stocks, theyre practically where they were at the start of the year. Europe might be a different story. The index that measures performing and emerging markets is down a quarter pay percent. Andrew slim and joins us from chicago. Thank you for joining us. So far. Een topsyturvy what is it telling you about your Investment Strategy . Ndrew a lot if you fellows sleep on december 31 and woke up today, you would say the s p is up 1 , it is a boring quarter. The major story is a leadership rotation. Value stocks has worked over growth. Emerging markets are starting to outperform developed markets. That is the bigger story of the quarter so far. You rebalance your portfolio for the last three months . Jonathan absolutely. Number one, in the u. S. The big that secularecame Growth Stocks became too expensive relative to value stocks. Value that very cheap. Value is prized for a recession that we didnt see. Opportunities arose and commodities, materials, and energy stocks. That warranted a valuation swap. Along with that, some of the commodity emergingmarket areas. Very cheap. That has warranted a swap also, increasing exposure relative to developed markets. Two very big stories in an otherwise lackluster quarter for the markets overall. Matt miller, here. Will you see a continued performance for value stocks versus growth. Number 754 in, our library for those who want to check it out here at values have outperformed growth so far here and were finished with the quarter. You expect that to continue through 2016 . Ndrew i do you can see that we have had a big reversal in the last month. I think that we are due for a breather. The fact of the matter is that the market was pricing some of the sectors as if they were in a recession. Energy is clearly in a recession. We know the best time to buy stocks is when they are in a recession. Year of thef the year comparisons for some of the Industrial Companies with a weaker dollar, energies the bottoming word is that they will be opportunities for good returns in 2016, even though the overall return is moving along with earnings growth, which is lackluster. S p. Ear to date, for the that is 4 if you annualized it. Withe moving along lackluster earnings, as we did last year for the markets overall. The buyer keeping the s p alive. That was companies themselves. Does the buyback trend continue . What happens if it doesnt . Andrew thats right. Gdp and to 2 environment in the u. S. , companies are not reinvesting money back into their companies. I dont see that changing this year. The whole argument that Profit Margins are peaking and will drop, i dont see that happening. Companies are using their cash flow very conservatively. Is only thing they are doing buying back stock and reinvesting. Were not seeing a big Capital Expenditure elsewhere. That might come sometime next see some kind of Corporate Tax reform. Is ifside from the market we have any tax reform next year, that could induce companies to reinvest in their businesses, but i dont see that this year. David as you look at balancing and rebalancing the portfolio, how big of a factor is the fx . That could be true for American Companies or overseas. What is fascinating, and i heard another guest talk about the dollar, think about the dollar. It only rallied off of the fed increase of december of last year. That was the move. It was priced in for the dollar , developedr markets markets, all of 2014 into 2015. When the market realize the fed would not raise rates until december 2015, the dollar stopped appreciating. I dont think it will continue to appreciate. Janet yellen is saying we are taking it really slow. I think the dollar appreciation stories behind us. That is why we are more optimistic on emerging markets. The dollar started appreciating against the euro last year. It only stopped appreciating recently. Emergingmarket currencies have done well. Emergingmarket stocks have done well this quarter. Do you expect that to continue and profit more with dollar weakness versus currencies . Andrew bingo. Youre absolutely right. It is not justt em currencies, it is commodity currencies. The Canadian Dollar started to appreciate. Value rotation that is starting to help some of the emerging markets and other currencies that are commodity oriented. As a dollar investor, you get a double whammy as the stocks improve and the currency goes your way. David when we play the game, bingo is as good as you can do. Thank you very much. Seniorslimmon, the portfolio manager. The euro zone cpi drops for the second month in a row. Will the druggie stimulus measure be enough to turn the economy around . Vonnie heres your Bloomberg Business flash. The biggest a control lenders and china posted to post annual profits and a decade. An increase in bad loans. The president of the bank of china forecasted a new normal of lower profit growth. Argentina is one step closer to returning to the International Credit market. A bill was approved to end a 15year dispute. Preventedd loans that the government from repaying bondholders. A comeback from bill gross. The janice capital on constrained bond is having its best quarter, up 2 . The top 11 in its pure group. Law andss dominated the market for decades before he was ousted from janice capital. Jonathan we will dig into bill gross. Do not miss that. The euro inflation falling for the second month in a row. One day before the European Central bank rams up its Bond Buying Program from 60 billion to 80 billion. For more, we are joined by the European Central bank team leader. Paul, it is good to see you. It seems like 0. 1 around the negative or positive is the reality for the rest of the year. 40. 1 . He forecasting only a pick up to 1. 6 percent average in 2018. The goal is just under 2 . 1. 6 is not there. The stimulus needs to feature into the system. Central purchases will rise by to 80 billionos euros. Then we will at longterm loans were banks could be paid to take cash and linda to the real economy. An intriguing concept. Will it work . It will take a while to see it. Policymakers will be nervous in the meantime. Jonathan the shift from 20 to 80, just to give the world the Financial Markets a guide. Going from 60 to 80. What do they buy when they shift the dial . Paul the details have yet to be sorted out on corporate debt. It is unclear what or when they could start buying. A lot of this will be government bonds. Regional debt is in the next. National Central Banks are buying regional bonds as well. In ecb has been confident saying that should they need to expand the program they can. They will not run into liquidity problems. This is a lot of debt thereby. Thereby. David what is the difference between nominally and cores . It was up. The price of oil, as it stabilizes and comes up, what does that do to your nominal number . The fact that it is stronger is good news. It is still too weak. It doesnt have a goal, or a publicly declared goal. It sees it as an indicator of where headline inflation will stabilize in the mediumterm. It stabilizes at 1 , that is in good enough. They want to see this number rise further. Energy prices hopefully bolster headline in places, i will say rebound. Matt this shows us with the ecb has bought since the program began. You can see 26 of their purchases are in german debt, french debt. The biggest countries get the biggest allocations. . Ou use this tool a lot if you shift into another category, country buying, where they buying on the curve as they shift up to 80 billion . The idea of the ecb is to match the size of economies using the k. Germany is 25 of the euroarea economy. Debt. Re not buying more the same goes for maturity. They want to match the maturity of the market. The ecb will try its best to do the same. Remember, the mandate is to get inflation to under 2 . They will do what it takes, even if it distorts the market. Vonnie how mario draghi is thinking about the euro now that it is strengthening . Paul the ecb does not have an Exchange Rate target, but they are aware it is important to bolster the recovery. They havent downplayed how important the Exchange Rate is as a policy transmission mechanism. Live withrobably these levels. They wouldnt want to see it rise further. The central question for mario draghi is not how he is buying bonds, but where the money goes. People selling bonds get money, the question is where does he put the money . Is going into plants and equipment rather than buying japanese bonds . This is why theyre so much hope in the longterm loans program, because it is lending to the real economy and stopping money from floating in the system. Excess liquidity in the euro area has increased. Banks are not lending. Redit has been fragile the ecb wants to do whatever it can to push banks to lend, and households and companies to borrow and invest. David thanks very much. Coming up, more layoffs on wall street. Blackrock announces job cuts. Will pay full attention to the jobs forecast tomorrow. Bill gross is one of the guests that will be joining us on bloomberg. Jonathan this is bloomberg. Let me get you up to speed on equity markets. Futures are positive. The s p 500 is up barely one point. Dow futures the dax down by. 5 of 1 . The quarter. Bank stocks in europe are down around 20 on the quarter. Big moves this quarter. Lets go to matt miller. Matt i want to kickoff with a broad call on nigeria. Downgrading his 2016 growth forecast for the african nation to 2. 5 from 3. 8 . Capital inflows were cut in half last year and bond inflows driedup in the second half. We have a great function on bloomberg. Country guides. I picked nigeria in the yellow box. You can click on economics and see that growth has been strong in nigeria, but inflation has been big. Rio tinto downgraded from a holdover and axiom capital. Cutting 14 from 19. Alumina markets are worse than feared. The Downside Risk. In 2016 ares expected to fall 18 yearoveryear. Arcelormittal and the global steel dynamic improved. They are protected by antidumping duties with the lower earnings estimates and a positive catalyst in the long term. They decides whether or not to shut down, giveaway, or sell their british operations. David blackrock, the Worlds Largest money manager, will cut 400 jobs, 3 of its workforce. The biggest cut in its history. We will go to boston. Give us a sense of how big of a deal this is. It is a pretty big deal if you look at what they have done historically. Theyve only done one other layoffs in 2013 where they laid off 300 people. Theyre planning on laying off around 400 people this time. Broader employee base, it is a small number. They have 13,000 people, but it is still significant that it is happening at this time. David is it because their earnings are expected to be down . Sabrina it is hard to say. It sounds like it is driven by market volatility from the First Quarter. Earlier in the year. To lookwhat killed them at their businesses and see where they will focus resources Going Forward. There are estimates revenue will be week for the next couple of quarters. Jonathan thank you very much for joining the program. It has been hectic for the banks for the last three months. No one seems be insulated. We will have more on the jobs situation. , World Leaders gather in washington for the Nuclear Summit. You shouldnt have to go far to get the help youre looking for. Thats why at xfinity were opening up more stores closer to you. Where you can use all of our latest products and technology. And find out how to get the most out of your service. So when you get home, all you have to do is enjoy it. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Shoshow me more like this. E. Show me previously watched. Whats recommended for me. X1 makes it easy to find what you love. Call or go online and switch to x1. Only with xfinity. Jonathan in the city of london, this is bloomberg. Down. 7 of 1 . Just hammered on the stoxx 600. Down around 20 value. Tom keene joining us straight out of radio, but down the last three months. Tom the fake headline in the f the big headline in the ft this morning, we go into this quarter and it is serious. Jonathan lets go to vonnie quinn. Vonnie an early draft of the plan to help puerto rico with the 70 billion dollar debt. Republicans object. That echoes complaints from readers who do not want them to be forced to take losses. And insurgents in columbia may come to an end. The Second Largest Group as agreed to a piece sold with the government. The government says they will not continue until they release of hostages. They have similar negotiations with their largest rebel group. More attention in hong kong as the city prepares for elections in september. Hong kong is threatening sevare the Political Party advocating independence. They say hong kong is an inalienable part of china will take action against any movement that urges otherwise. News 24 hours a day powered by our journalists and news bureaus around the world. David thank you. Tom, its time for the morning mustread. And i huge news flow should not do this but this is brilliant. In the new york times, this is the dumbest time of year for people trying to get their kids into fancy schools. He kills it. College admission shocker. , even thele student west end child, could not live without. In the stack of applications that i reviewed, i did not see any Gold Medalist from the last olympicssummer or winter gamesand while there was a 17yearold to perform surgery, it wasnt openheart or a transplant or anything like that. She will thrive but gail. [laughter] this is the stupidest time of year, isnt it . David the sad truth is there is a lot of truth. Not quite that bad. Tom my grandmother would call it harbored on the rain harvard on the brain. Serve on the board of my kids school and we talk that it is not about being straight as, you have to do other things like bring peace to the middle east. Catherine of the Washington Post did the great summary this week. Everybody gets that. Jonathan a similar situation in the u. K. With some