One full percentage point. Ugly for apple, not great for twitter. Come outperformance on the dax. Switch up the board just very quickly and get the other asset classes. The bti at 45 a barrel for the First Time Since november. Wti at 45 a barrel. The aussie dollar down by 1. 83 . Rba might cut rates again. There are the big moves in the wider market. Julie ton of earnings out today ton of earnings out today. Adjusted eps at . 45. Weve been talking about this story that comcast is in talks to buy dreamworks, according to the wall street journal. Glaxosmithkline in london ofting as well with core eps those two stories are very different from what we are seeing across the tech sector. Let me start with apple. Obviously come apple missed by a longshot. Even though we did expect apple revenue to fall. It fell for the first time in a decade. Smartphone sales were down. Analysts knew that was going to happen. A disappointing outlook for the current quarter. Apple tends to do that. They did not beat outlook in this quarter. Apple down 7. 5 in the premarket. The worst performer in the dow. The apple is the worst performer in the dow since it entered. From anook it out number of indexes, they would have performed better in the past year. Dow, apple hashe lost almost a fifth of its value. Company. Ll a massive revenue was 50. 6 billion. Bigger than the revenue of 90 of the other companies. Forecast Second Quarter revenue that will fall far short of analyst estimates. Even as it added more active users than analysts were looking for. 5 million monthly active users in the First Quarter. Analysts were only looking for 14 in theis down premarket. My first order sales trailed analyst estimates chipotle also, firstquarter sales trailed analyst estimates. Samestore sales dropped for the second straight quarter. Analysts were looking for a 20 nacho stock, nacho problem. David apple is still a very robust company. It has become a Value Company rather than a growth stock. Numbersyou took those out yesterday and had no basis for comparison, you would say that is the nominal a phenomenal company. It is no longer a growth stock. It is a value play. Gina that is what we see for the large tech sector. This is happening across the Technology Sector in general. Generallyes are producing reasonable Earnings Growth, but the market has such High Expectations because there is no Earnings Growth anywhere else. They are still growing, but not as fast as they used to and not producing the value orientation in their broader evaluation. David the tech sector has been driving a lot of the growth in the market. If they are not going to do it, who is . Gina coming to this earnings season, it was seven of the the only growth in the index is coming from the Consumer Sectors and health care at this point. Gina Tech Companies are lower. Billion off the market cap of apple. An interview with larry fink. He has been speaking out against negative Interest Rates. The rethink joins Erik Schatzker now. Larry fink joins Erik Schatzker now. Erik i found an obvious place for us to begin. What do you hope to hear from the central bank . Larry it will be very similar to the last statement in january. Conditions have deteriorated since september. They are worried about corporate earnings. We are seeing a slowdown with u. S. Companies. You still have a global uncertainty, uncertainties of brexit. They will wait and see what happens in the world and how our economy plays out. I think corporate earnings have shown a pronounced weakness. I dont think it should be a surprise, we had a huge slowdown the first two months of the year. We have an election in this country where there is more fear mongering then talking about hope and a renewed future. I think consumers will hold back it is allvident playing out that the economy is not growing as fast as we expected. As fast as the fed expected. They will be on pause until they seen elevated increase in the economy. Elevated increase in corporate earnings. Plot tells us the fomc still plans to raise rates by 50 basis points this year. The market tells us we will only hike. E. 5 basis point jamie dimon says he is worried the fed will have to raise rates to quickly to catch up with inflation. The market tells us we will only see one 25 basis point hike. Around that, there is very little inflation. We have seen increases in Energy Prices from those very deep lows. I dont see any evidence at this moment for inflation. I can paint the scenario why inflation will pick up in 2017. I dont think that is an issue for 2016. They have essentially another seven months to determine that path. I would be in the camp of 25 at best this year. Erik at best, and possibly flat . Happensets see what with the spanish elections in june, the brexit elections in june, how the u. S. Economy performs in the Second Quarter. Mood intoe consumers the primaries and after the primaries . There will be plenty of time for the fed to act. It is appropriate for them to be on pause. Erik is the inflationary scenario the odds on scenario . The biggest private equity firms, blackstone, kkr, carlisle are predicting a recession within the next two years. A recession does not usually come with inflation. Larry there are two very binary outcomes. I dont know what path that will be. I have been saying this quite a bit worldwide recently. I believe what is happening in spain with the lack of inernment since the election november, they will push the new elections in june, there is not really any real government there. You have the fear of brexit in the u. K. , the phenomenon of new in the United States with donald trump and bernie sanders. This is an issue around how many people in these democracies feel like they have been left behind and are worried about their childrens future. Elements,all of these this political instability is going to force whoever is the leader of spain, of the u. K. And the u. S. , we will see greater emphasis towards fiscal policy. I think this will be key. Increase in a major fiscal policy and i do believe the candidates in the u. S. Are trump and clinton come i think both candidates will be talking stimulus in policy the form of infrastructure. People of the larry if you spent in infrastructure, that will be frontloaded expense on the back end, it does produce positive gdp. You are creating better jobs, more efficient grid, better, more efficient airports. I do believe that is what we need in this country and i believe every politician is going to have to address this uncertainty, this Political Uncertainty of we have to ask ourselves, why are we seeing these phenomenons and some many countries . That will be the narrative after the primaries. Erik i want to take that view to the marketst and investing. We are speaking to larry fink, the chairman and ceo of blackrock. Erik this is bloomberg. Im Erik Schatzker and im speaking to black rock chairman and ceo larry fink. You see the economy evolving and it is not a pretty picture. If the economy is growing at 2 , how constructive can you be in the stock market . Larry if we see a path towards more fiscal policy and more investing in infrastructure see theto 2017, we can second legs of the rally inequities. In equities. We can see Monetary Policy changing rapidly. You will see rising rates, faster than the forecast. We would have industries that underperformed come out performed. Bank stocks doing well in that scenario. Many of the Commodity Companies themhave done poorly especially for manufacturing and infrastructure investment, you will see those industries doing much better. Erik what if it doesnt happen . Larry if we continue to have a dependency on Monetary Policy, it is very grim. Erik what is grim . We are harming savers worldwide with negative Interest Rates. We have forgotten why people safe. For rainy days, they save up for events. They save for retirement. When you have low or negative Interest Rates, it forces you to save more to get to that necessary pool of assets you needed for retirement. Monetary policy was meant to be a two to threeyear gap to bridge the economies. To be sonments dependent on Monetary Policy as the sole means to stimulate the economy and rebuild the economy, especially at a time when technology is advancing more rapidly, it is destroying jobs very rapidly in our country, we are using the mantra that it is global trade. It is more technology than just global trade. Erik what is the bear case . If we dont get this fiscal injection come if we dont get this infrastructure spending, what happens to the stock market . What happens to treasuries and credit spreads . Larry we will have a very anemic to declining equity market. Erik will we have a recession . May if we see more pure, more hoarding of cash. Central banks talk about hoarding of cash. I call it saving because they need to save more because of slow and negative interest rate. Understand that the and weogy of retirees have an aging population, the psychology of people near retirement is fear. Fear they are not earning enough to meet the needs of their lifestyle they so desire. Erik you believe this fiscal injection is coming. When you mention bank stocks coming is that where you see the greatest value in the market . , go across stocks iorld and select them think if we had that type of stimulus im talking about, we would have the Central Banks take their foot off the pedal and moderately raise rates at a more accelerated rate and that would be good for savers, good for Financial Institutionss earnings, good for Insurance Companies to offer annuities again. Erik that is not happening right now. Does thewhat on earth bank of japan do . Last time they double down, the yen strengthened. Larry that was an outright mistake. That was one of my points of information that gave me this change of use related to fiscal policy. Monetary policy has run out of runway. Erik when he tells the government we could still go to. 5 negative . Larry autonomic has not even begun. Autonomic has not even begun. We talk about the free arrows in japan, ilabe has not even the third arrow most of the savings are in bonds. As a result of that, the sabres are now saving more, they are consumption has not met all the forecasts in japan. Rs are now saving more. They are buying food and other items and still, japan looks ane it is going to be economy with zero gdp. Erik what about china, then . Japan may be benefiting from that. Putting theirs foot on the pedal as fast as any economy right now. I have been in china twice so far this year. The chineseas leaders have done a better job in trying to reboot its economy than most leaders of the world. Of thein the fourth gear 10 year plan. Moving the economy away from an export manufacturing economy to a Domestic Service oriented economy. That takes tens of years and it is not without a many hiccups. There was very bad communication. They restabilized. Believe what they are doing now is doing very aggressive Monetary Policy in china right now. The banks are lending at any rate they have not done before. In 2016, china will look well beyond what we thought it would look like in 2016. It may mean the bubble is bigger for 2017 and 2018. The chinese are the host of the g20 in september. They will want to make sure their economy is a beacon of strength, not a beacon of this erik the bigger the bubble, the bigger the burst. Larry the economy is still growing. You can navigate out of this problem if the next phase of growth is not by a ballooning Balance Sheet. Erik if not, you get the bubble bursting. , the lossesd happen in the chinese Financial System what they were for u. S. Banks during the subprime crisis. The you believe that that should do you believe that do you believe that . Larry i said that is not going in mypen in 2016 worried about the manner in which they are accelerating their economy . Yes. Doesnt mean there is more potential for a bubble and a burst . Yes. Erik what do you think the odds are . Larry 20 . Erik 80 that china makes it. Larry yeah, but i dont like the 20 . In 2016, we will look back and say i wish i was in china. I think the equity market will do fine. Im not telling you it is a great longterm trade. Erik we talked about political extremism and how it is driving leaders in canada to take certain positions. It has been a tradition in this the next president to reappoint the chairman. Going to happen if there is a republican in the white house . Will janet yellen get kicked out . Larry i havent thought about that. Erik would that be bad for the economy . Larry it may be bad. Degree on the erik its about stability. That is why it was done before. Larry it would probably be thought of as bad. The transition from greenspan to bernanke was considered a frightening moment and then from llen if you get a qualified chairperson, you will be fine. Janet yellen has been a fantastic erik given the climate, can any president right now pick a treasury secretary from wall street . Larry i would hope whoever is the president would pick the most qualified person, whether it is finance, manufacturing or somebody with a long career in government. We need leadership more than ever to guide our nation forward. Fink is the chairman and ceo of black rock, the Worlds Largest asset manager. David a fascinating discussion. Coming up next, iphone sales. They took a big blow and it hurt apples income this quarter. What lies ahead for the tech giant . ai jon good day to you. The miners leading the losses this morning. Up by about seven points. Nasdaq futures getting hammered, down by 1. 25 . Ahead of the fed, the weaker dollar story. Bit lower,a little down by two basis points. The big one in the commodity of 45 ati breach barrel earlier in the session for the First Time Since november. It warm welcome back to bloomberg. Joining us today is Gina Martin Adams, making us sound a lot smarter today. David and because of larry fink. Larry fink was really interesting. He really went after the bank of japan. They have gone as far as they can go. It isroadly, he is saying the end of the effectiveness of Monetary Policy. Theres a lot of parallels, a lot of consistency between the bank of japan and the u. S. , Monetary Policy becoming too integrated and the need for fiscal policy to step it up. David the luck with that. Good luck with that. The whole process of what japan was trying to do was restimulated the economy through aggressive Monetary Policy, but the second phase erik what option do you have right now . Larry he has to talk to the Prime Minister and say i ran out of runway. Smart,u are getting very mainstream leaders of Financial Institutions saying low rates might be the problem. Does that resonate at all with anyone at the Federal Reserve . Gina it doesnt seem to so far. Maybe we need a bigger movement. The fed does seem particularly worried about the negative impact they will have about increasing rates, not thinking about the negative impact they may be having about keeping rates lower. David when all you have is a hammer, every problem is a nail. Jon the talk about the lending program, that is just to offset the problem on the other side. Maybe they will double down. Are we really going to see that . Gina when they did double down the first time, it was a very negative market response. They do seem between a rock and a hard place. They are in no place to tighten policy. Maybe they come up with something new. ,hey keep trying something new so why not . Jon the fed up first later this afternoon. For us, lets get across to vonnie quinn. Nnie a big night in the northeast for donald trump and Hillary Clinton. The republican frontrunner won all five primaries. Trump is closing in on the number of nominees he needs to win the nomination. I am me. I hear that, he will be president ial, he will be not president ial it is easy to be president ial. Im not playing a part. It started off at 17. It is down now its over. These guys cannot win. So, why would i change . Vonnie Hillary Clinton won four of the five states. Clinton has all but locked up the democratic nomination now. Clinton underneath all these worries, together, we are going to come together and we are going to Vonnie Sanders says he will continue his fight all the way to the convention in july. Global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. David after the bell yesterday, apple announced earnings. We expect them to be down, but they were down more than people expected. We have an analyst here now who has a buy on it. Brian white. He has a 185 target on the stock. It was pretty dismal and the stock is down in premarket trading, particularly on iphone. What do you see on the horizon . Brian in the very late stages of the iphone 6 series when they upgraded in september of 2014, i remember going to china and i go ask my contacts at they will upgrade and 70 said they would. Came out come i dont think there was a single person. You had a massive upgrade cycle , and now you are up against very negative,. Comp. Y negative there is volatility and weakness. David does that put it all on the shoulders of the iphone 7 . Ryan you have massive volatility around the world. You also have a Smartphone Market that is maturing. The incrementals people did not know the impact of the iphone 6s, but7 is around the corner. Iphone units year