The etf line after bringing it down like 50 . It was a tough quarter. The session, the stock 600 quarter as the kissed the threemonth high. 18 out of the 19 Industry Groups eighth largest drop in the dow in the green in europe. In history, it took a lot of futures are in positive territory in the u. S. Green, leading the people by surprise. You would think wall street gains in the Commodity Markets. Traders might pick up on this somehow or beeper aired. Number fallings thats what you are seeing in 60 on sunday. Numbers across the board the labor strike put at the fore especially on trading. Morgan stanley and Goldman Sachs dont have other sources of in crude, with a headline coming revenue to help them out in situations like this. Out of sundays meeting. You see the riskon in the fx market sql in the fx market Goldman Sachs always had a reputation for being smarter than everyone else and being better traders. I am curious to see whether in as well. The trading businesses, they were able to do that or the at 1. 79 as well. Morgan stanley. Revenuetotal trading with 109. 35 as well. Beat estimates but it was still matt we are about to hit the down 40 from last year. Something like Morgan Stanley heart of earnings season. 80 of S P Companies will report in the next couple of weeks. Which has been deemphasizing trading in recent years has Something Like 850 million of revenue in trading which was quite low for them. Got destroyed premarket yesterday after a disappointing im sure Goldman Sachs did better than that. Outlook for International Subscriber additions. They beat on every measure in q1 does olbermann have the earnings, but forecast 2 million exceptionalism that people had come to expect . Jon total trading revenue is international ads. The street was looking for 3. 5 million in this coming quarter. It beat 17 out of take a look at this screen. The last 18 quarters. Shouldnt we pay more attention volatileyou how netflix is. To actually what is happening in more than half of the last 10 with these banks on wall street . Times netflix has reported earnings, the stock has moved bank of america is the only one that missed. More than three standard is down andrevenue deviations, which is absolutely huge. , that to look at ibm profits are down and they are struggling to get revenue. How much does this go on for . You are right. Company out with firstquarter earnings or down earnings, the shares down premarket. From what people expected or down from the previous quarter. The Company Forecast q2 earnings lower than projections. They are still making five alien dollars of profit. Ibm has suffered a fouryear sales slump in an attempt to five billion dollars of profit. Move into Cloud Computing and artificial intelligence. This shows is that there is it has been tough going for that company. United health is trading slightly higher after beating q1 real benefit in this kind of each, me, this kind of dynamic on wall street for more estimates. Diversified base of revenues. The Health Insurer is pulling out of five states next year. I think you see that with j. P. Morgan chase who is hitting on helpednsulting business all cylinders compared to its competitors. It overcome losses on obamacare plans. J j also beat just out 10 you see the weakness in the Business Model of a Goldman Sachs or Morgan Stanley which is minutes ago with q1 aps, raising more monoline in that regard. Its fullyear guidance or Johnson Johnson expected to 6. 68 this year. I still think happy days are in front of us for wall street. One of the limiting factors remains that the fed wont allow sachs earnings will m a act unity among the big banks. Thats a subject many would be published in about 30 discuss on the political trail. Minutes. Analysts we surveyed are looking that would help Goldman Sachs or at 248 on the revenue of almost Morgan Stanley. Laura lets turn to 7 billion. Keller who covers Goldman Sachs. Want to turn back to the that is much worse than just three months ago. their earnings point earlier about the estimates by more than 50 in three months, and the stock has comparison between morgan suffered as the worst performer stanley and Goldman Sachs. In the Dow Jones Industrial worse stanley is slightly average this year. David the s p overall has than Goldman Sachs in several rebounded from its february low, areas. And u. S. Companies have been reporting better than expected earnings so far. Equities trading, both banks have been hit very hard. Submit a separate many and joins us. That is something we want to you have been relatively turn back to as we look at this and get these numbers. Bearish. A lot of the banks have talked i think three quarters of the about spencers and their better than expected but we really have covering are beating expectations and what you expect at this point . To keep looking at the fixed we expect a sizable lead this quarter. Income trading businesses and our estimate for the quarter is the equity trading businesses about 4 growth, 4 better that have not done as well. Growth than what the street is analysts have brought the expecting. I do not know if that is enough to drive the market higher without a real materialization estimates down but its worse than analysts were predicting. David picking up on the compensation issue, they have said they have lowered, the of top line. That is where we have not really seen the sales come in. Ratio has not changed. We have seen a lot of earnings. 42 of a lower number is a everyone has cut earnings aggressively heading into the lower pool. Quarter. This is what we see every david you have to worry about a quarter. Downwards revisions, low ratio if youre running a expectations, a little bit of the beat, and it is kind of business. We have talked about this like, who cares at this point . Many times. Ever goingreet firms vonnie we talk about slowing earnings quarter after quarter. To be shareholder friendly . It feels like they want to be. Earnings growth year is the return on equity is quite low. Negative and has been for the past it will be three where else can you cut expenses . Quarters now. If you take energy out of the is going your revenue equation, which a lot of folks out in terms of compensation, that is the obvious place to cut like to do, because that is a bad spot we are not in a and nobody who works on wall street will like that. This is a topline recession, were just seeing low Earnings Growth. Business. What worries me is that Earnings Growth at this point, theyre are kind of like desperation the expenses or compensation moves. Expenses were 40 lower in this costcutting after seven years First Quarter than they were in the First Quarter of last year. Of costcutting. The ratio stays the same because revenue has come down that much. It feels a little bit long in the tooth. They managed to cut what i would like to see get more positive, what we may be seeing inklings of is more noncompensation expenses 6 compared to last year and 49 demand. Jon a lot of attention is being lower than the fourth order of paid to Topline Revenue growth. Last year but you still have the same problem revenue came in the last couple of years, down. This is a statement from Lloyd Blankfein earnings have been driven by its pretty telling. Improving margins, but in 2014 that picture got a lot worse. A percent of sales coming down says the operating from a record 9. 7 in 2014. Environment this quarter presented a broad range of challenges resulting in headwinds across virtually every do you expect that trend to continue . One of our businesses. That these guys cannot improve he sees problems across all of their units. Margins even in a bad topline just erase lloyd environment . Savita i think that it is a casebycase basis, but a massive surge in margins that we blankfein and plug in wall have seen since the crisis, driven by costcutting, that is street ceo. Every single ceo has said the long in the tooth. We are seeing costs come back same thing, its the online. Environment. Look at u. S. Labor. We are seeing serious inflation is it a cyclical environment or Something Else happening . You compare jpmorgans in the lower end, kind of an results at around 5 billion. Unskilled labor force. That is a big source of cost universal big bank measure for companies. It is hard to keep margins expanding of sales do not improve along with that. And is in all sorts of businesses and has a big deposit the market story is not base. This seems to be working. For every other firm on wall going to improve, get specific the First Quarter was for me which Industry Groups will suffer the most . Savita where you have the most extreme we difficult. Risk of compressed margins is sachs to be to Consumer DiscretionaryMorgan Stanley in debt trading retailers, restaurants, hotels. By a small amount is shocking. If we are all making more money, you would think hotels and retailers are doing better, but they actually tend to have there largest cost is with i would have thought that Goldman Sachs would figure out unskilled labor. How to hit it out of the park. 6. 4 in average equity. They cannot replace man with machine. I think its tough for the that is where we see the biggest risk of increasing margin banks right now. Pressure, and that happens to be this was a bad quarter. It might just be we had five one of two sectors that is ipos this quarter and normally trading near peak margins. You have 35. Scenario, icase volume was way down as well. Vonnie we have been looking at think the next move is going to the government clamping down on be margin compression for some of those industries. M a activity. David what does the market tell us about where the s p is sheet is wheree headed . Journalists are always it gets nailed. Skeptical, and bears sound better at talking up. But the bears are capitulating. Net futures positions held by two executives are having an excel i an egg salad hedge funds are in white. Sandwich of the diner and they the s p is in blue, almost incidental. Are being consumed now. Oneorman looking at a 1 4 the important thing to watch is this part of the white line, which shows you hairs are selling off their short off . Positions at the fastest rate we tothis a structural shift have seen since 2012. Link income statement realities they are capitulating, it seems. Will they join them anytime with the Balance Sheet realities . This is the central quay soon . Savita that is a great question. Question facing theres capitulate and buy the market is not a wall street executives. Great signal. James gorman thought it was what you want to see everyone structural and we will get out of the table, out of bigger in brokerage and fee related businesses. At has not really paid off yet. Equities, fearful, in the fetal position, and that is when you buy stocks. Dumbe is it smart money, at Goldman Sachs and jpmorgan, they think its cyclical and we will just ride it out and the money, a short squeeze . Savita i do not think any economy will get better and we will be like we were in the old days. Tom if we get better gdp, does particular group is smarter or dumber than the other, but what it ride to the rescue . You want to see to get bullish i think it does. On the market is the super berry sentiment. The super bearish sentiment. The economy is improving. Go to the s p 500. There is less competition on wall street. There are fewer banks able to there are certain things you call quality stocks that are cheap right now. Savita within the s p are Great Service the needs of Companies Across the world. I think they are wellpositioned opportunities, and one is to do it. Multinationals. To slowlytill growing everybody hates them. We have all bought u. S. , for these firms. Domestic. We have heard this for years and kind of ait with a years, and it is generally working. Shocking market volatility in but now what we are starting to the First Quarter, they were not prepared for this. See is some inkling of we will not go back to the improvement in emerging markets. Our emerging markets strategist 16 . Never. Just upgraded his call on e. M. The banksson to buy after five years of being is because they are better bearish. This is driven by better capitalized and can potentially currency situations, more return more cash to shareholders. Likelihood of reform. They have never been as capitalized as they are today. So there are other pockets of strength around the world. From that standpoint, the some of the consumer stocks that Balance Sheets are a reason to buy rather than sell. But they are not shareholder have exposure elsewhere can do a lot better. Friendly. Too much goes to compensation. Servetus super mania and is this a slight is going to be with us for the hour. Donald trump is counting embarrassment for Lloyd Blankfein on a personal level . On his home state to provide a i dont think if he can be big boost to the republican embarrassed. Nomination. He has a big lead over ted cruz and john kasich in the primary. That would give him momentum the Goldman Sachs exceptionalism that we used to know may be a thing of the past. David this has been an going into five key contests next week. Exceptional discussion and thank you to laura keller and bob Hillary Clinton, who represented new york in the senate, is cohan. Hoping to increase her lead over Bernie Sanders, who has one bank next, netflix may run seven of the last eight primaries and caucuses. Attack by the, an into an International Dilemma but what does this mean for investors . Telegram. A car bomb blew up, and it was followed by a gunbattle. 28 dead, three hundred wounded. The taliban has claimed responsibility. Brazil past president , de la rue roussef, says the fight is only beginning. The lower house of congress voted to put her on trial in the senate. The senate could temporarily remove her from office with a simple majority vote. Global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world, david. David after 15 years of being shut out of global credit markets, argentina is returning with the bank. Katia porzecanski joins us next on bloomberg. Hewlett am here in the packard enterprise greenroom. Chairmanbi sheila bair will be with us. You are watching bloomberg. The largest Health Insurer in the u. S. , United Health, Beat Estimates. It offset losses on obama care plans. The company warned last fall that it was losing money on Affordable Care act fallout. It plans to withdraw from at least five states next year. Public he traded tobacco, has raised its forecast. Philip morris is protecting the strongest dollar would not vonnie it is your bloomberg will not hurt them. Business flash, as we look out firstquarter earnings missed estimates. China wants to take control of over beautiful new york city this tuesday morning. The countrys most popular fast verizon is going to have some food chain. Led by china competition in the bidding for yahoo ypvate equity firm tpg and investment corporations interested in taking a majority brands China Holdings has made have made offers. Business was includes kfc and pizza hut restaurants. Yahoo has said yesterday as the deadline for companies waiting we arein tech go, to buy its web operations. Looking at netflix who shares our plunging. Serabeing investigated by the sec and federal prosecutors. The International Subscriber growth will be weaker than whats expected. Online tvs largest pay network expects only to add theranos the country has been 2 million users that quarter compared to the 4. 5 million investigated by multiple health authorities. Added at the start of this year. There have been reports that Technology May not work for it. , the worldsflix cory johnson is with us now. Network, reports we knew going into this that the slower earnings, especially International Growth was key to netflix. They say they had problems. Outside the u. S. Cory turns out people around that is your Bloomberg Business flash. Jon thank you very much, vonnie the world dont all speak english. Quinn. They dont all watch the same throughout a decade of isolation, argentina plans to content and thats an issue with this company. Sell as much as 15 billion in area theses are so big bonds today, the biggest emerging market offering debt sale since at least 1999. The money will help pay 10 company is burning through hundreds of audience of dollars every quarter. Its a profitable business. Billion to creditors. We bring in the emerging markets reporter, catch up with the can skate. These rising losses in terms of free cash flow, they need to pay porzecanski. A for all that stuff. Also, savita subramanian. Guidance,e out with how do we expect there were questions about the impact of a price hike and what it could mean to subscriber katia they are building at a growth domestically. Nice curve. Year, ahave a thre