The global underperforming coming from the nikkei, closing down three for a percentage points, catching up with dollar yen. Switch up the board and we would get to the fx market. We it is a weaker dollar story on the euro. That is a yeartoday high. Just coming in a little bit following where crude is going down by. 6 of 1 at 45. 66. Lets get across matt a couple of them are the stories we have been watching all weekend long. Yesterday afternoon is when we found this out, right . It feels like yesterday afternoon was the whole weekend for me because i took friday all the way to sunday. Halliburton, baker use baker hughes calling on their merger. The second and Third Largest oil service on sunday, the plan company jon baker hughes is planning a. Uyback they have that 3. 5 billion to play with now. David so much for the speculation they would be investing in technology and being more competitive. Lets buy back some shares. Megan 3. 5 billion coming back was always hugely controversial in that deal to begin with. Never heard of a breakup fee in my career at bloomberg. Megan there was one that was 20 , the technology deal. This is not the largest ever in terms of market share. Terms ofould think in dollars, which would be the most important, right . Percentage could be a very small dollar amount. In any case, it is massive. It is three years of halliburton fee. Ts and one breakup another m a story to talk about, a group led by Apollo Global management raised its bid to 10 share up from 9. 54. It is 52 above apollos price in january. Gold is a story we have talked about all day today. Hire for the sixth consecutive day, matching his longest matching its longest winning streak since 2014 and topping 1300 an ounce for the First Time Since january of last year. On theers are higher open. If you look year to date, with gold up more than 20 in 2016, rebounding from three years of annual the klein, you see Massive Gains of annual decline, you see Massive Gains. Newmont has doubled. Gold is up 75 . Jon lets get back to the big story. Two of the Worlds Largest oil copies come a 28 billion merger on sunday. Hughesrton and baker have announced determination of that merger. Halliburton will pay bigger use baker hughes 3. 5 billion. We have with us robin shoemaker, an analyst from key maker from keybank. We now know what they are going to do with 2. 5 billion of the money. The headline broken the last couple of minutes or so. The conversation we had in our planning meeting this morning, what are they going to do with the 3. 5 billion . Is that a productive use of cash . It will actually be about 2. 8 billion after taxes, in that neighborhood. Very little has debt, so this cash at this point in time can be used to repurchase stock. It is just the beginning of a revamp or resurrection of the company, which has been in limbo for 18 months and needs to come back with their customers, with their employees, with the Financial Community after a period where there has been a great deal of uncertainty. Megan do you think they stay in play now . Robin i dont believe so. We are in a stew downturn in the oil and gas drilling business. Downturn in a steep the oil and gasoline business. They do not need to. They have plenty of cash and ample liquidity to survive the downturn and come out on the other side. Thed when the announced deal in november of 2014, they had 1578 rigs. They have 332 today. They will have to whether a storm here. America is the worst downturn, but also internationally. Baker hughes is a big player internationally as well. There is a growing downturn there. It is everywhere, basically. Jon i wonder what this means for halliburton. The president the week ago said that my definition of a losing market is when all companies are losing money. Is that completely out of their control . Robin it is in terms of demand for oil services. Oil prices have rebounded lately. If we get to the 50 level or higher, it is likely that u. S. Oil companies will want to start drilling again. Megan in terms of putting in was that age mistake, the level of confidence they must have had to say they were going to get the regulatory clearances that we need, and now they say it is not happening here it is not happening. Robin halliburton miscalculated, thought they to satisfyt enough any trust concerns, and they were wrong. David there are some lawyers now to answer some tough questions, but they went in from the beginning and said we will sell anything that we need to sell. But the authorities are say we do not care what you sell. Robin the justice departments claim was that this merger would end up in a duopoly between schlumberger and halliburton, and that was a major concern, and that is the reason they blocked the deal. Jon to me it is obvious, you have the number two and three plan and schedule down to two, schlumberger and this combined company, there is going to be resistance. Fromhave we learned this merger, megan . There is another story. Are seeing regulators more active and looking at plans to invest in saying that is not going to cut it this time around here it they have a plan in place. A very complex plan. Regulators are saying we think it is too heart. We think it is too hard. I think it is regulated been quite active. David who is celebrating today . Not have as does fiercely competitive. But who else . Are Oil Companies saying it is going to be cheaper to get services now . Robin it will create and establish and maintain more competition. Im not sure who is celebrating today. Sure they are happy that the company is going to be isependent again, so that the winner here, if there is one. And now the business goes back to where it was. Except that we are in a severe downturn that has no end insight. No end in sight. David lets go to puerto rico. It is a big day in puerto rico. They are looking forward to a default of a 20 of a 244 million bond payment. Joining us to discuss what it means for the island is pimcos global strategic advisor, richard clarida. There have been defaulted the past in puerto rico, and there may be some in the future. What is important about this one . Richard this one indicates the real challenges in puerto rico, the big item on the radar screen is in july there is a scheduled series of payments. The last u. S. State, for was inal purposes arkansas in 1943. The Republicancontrolled Congress is putting together a bill which might address the puerto rico situation. It is significant. Megan paul ryan has really staked a lot of his future and Political Capital on getting the bill through. It is caught up in infighting between republicans and democrats. Where do you think it progresses from here . Richard you do not think of this as being a front burner issue for the republicans, but they have put a lot into it. I think the view of going to puerto rico i think that is the motivation. But he has his work cut out for him. There will be resistance. Jon every morning we used to wake up in europe with the g word, greece, and i used to have to explain to people why it mattered for everyone else. As a wick up this morning, seeing this headline puerto rico default, why should we care . Richard the broader issue is you have a huge municipal and local bond market, trillions of dollars. One of the key anchors of that market is in the general obligation part of it. Good ates have been making payments on these debts, and to the extent that this muddies that water, it creates potential issues, which is why the legislative action is being drawn forward. David the Supreme Court has said they will have a decision down by july 1, on whether puerto rico posco internal bankruptcy process will go forward. Abbaye is that how big is that . An unusual circumstance in the United States is that they do not go through a traditional bankruptcy process. With puerto rico, it is an important issue. Clarida, you will stay with us the entire time. Things again to robin shoemaker. We go to matt for first word news. Matt the u. S. Is turning to russia for help in trying to revive the ceasefire in syria. Secretary of state john kerry wants the russians to pressure their Syrian Government allies to stop or limit their attacks. Last week dozens of people were killed in the city of aleppo, when syrian warplanes attacked. The departure as the brussels air has as the Brussels Airport has reopened since the terror attacks in march. The suicide bombings killed 16 people. The airportsay should be back at 100 capacity by the middle of next month. Used pepperpolice spray to break up capitalist demonstrators that turned violent. Protesters or gasoline bombs hurled ethylene bonds and bricks. At least nine people were arrested. Global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus david . The world, up, we hear why ed bastian says delta has been burned in the past. That is next. Jon this is bloomberg. Challenging traditional paytv, developing a subtraction carrying Broadcasting Cable tv channels predisney and 20 century fox are expected to sign up for part of the venture. Consortium led by Apollo Global management has increased parenter for the university of phoenix, the forprofit college. The company is not commenting. In january, apollo education says it would explore strategic options. On a new set its eyes headquarters in london, according to the sunday times. Apple is in advanced talks for the old fantasy powerstation. The company would take over all the office space plan for the power plant. The Residential Property if this goes through, they will get rid of the commercial property. The worlds, Largest Airline by market cap, has a new ceo starting today. Is taking over the chief executive role. Erik schatzker sat down with him to discuss his vision for the company and what he is focusing on for the future. Are going to continue to do what we do in running the best airline on the planet. We can do better at that. We will invest in the operation, invest in the product to make sure that the reliability at the Service Levels continue to grow. While we set records for three years in a row, 2016 will be another recordbreaking year. Our Customer Expectations are rising, and we are getting paid for it as a premium. You will thing that see me focus heavily on his continued international expansion. We have been active in the last five years. We are in the process of doing a similar deal in mexico. The u. S. Industry is largely a mature industry. There is growth in this industry, but there are not new cities or new markets or new airports being constructed. If you are going to look to grow for the future, it has to be outside the u. S. In terms of where we can go. There is Great International opportunity still to be had. Erik where . Latin america, brazil. There will be longterm growth and opportunity, through Central America and mexico, which is a deal we hope to close by the end of the year. The largest city in the world, mexico city, is sitting across our border. A big opportunity year bank. Opportunity. An the u. S. China traffic next year will be the largest we have made an investment in china eastern. I think shanghai will continue to become not just the commercial capital of china, but longterm the commercial capital of asia. Erik a lot of capacity has been added between the u. S. And china. Are you making money on those routes right now . Ed we are. Not as much as we would like to, but there are restrictions about how much capacity can be added Going Forward. Chinese airlines are running up against their capacity caps. You will see the capacity start to moderate in the next couple of years. That will allow both chinese and u. S. Carriers to harvest a little more of the investments they have made. Erik what is the longerterm plan, as you look out 10 years. You have this investment in china eastern, and do you anticipate or envision an open skies agreement between the u. S. And china . Ed i sure hope so. You listen to the political rhetoric, i am not sure where the view was are. But from a longterm commercial perspective and a trade perspective, absolutely. When you look at the success we have had with our partners in europe, building the most successful jv and the world, our , look tontic jv recreate that now in latin america, where it would be mexico or brazil or another developing market. There is no reason we cannot longterm have that in china. It is a little difficult because the cost of the airplane when you fly between the u. S. And , it is an incredibly expensive investment. That will moderate that will modulate level of growth over time, but we can certainly enhance our prospects. Erik would you go so far as to say it is something you are counting on . Ed it is something that is going to happen. You need to be out in front of it. Erik is that when you mean when you talk about turning shanghai into a hub for delta . Ed longterm. Shanghai will be an important market for connecting. There are so many cities within china, a multibillion population mass probably that cannot afford direct service to the u. S. They are not large enough markets for u. S. Travel, with a feed into shanghai and beijing. We have a great partner in guangzhou, in the chinese self. South thirdinese longterm we are going to look at our asian center of operations from tokyo to shanghai. That is ed bastian with Erik Schatzker. David up next, Warren Buffett is offering what he considers probably the most important investment lesson in the world. We will talk about that next on bloomberg. Jon this is bloomberg. Let me get you up to speed. Dow futures up 36 points. S p 500 futures positive come around four or five points. A weaker dollar is the story. The dollaryen, what a move last week. Biggest weekly drop since 2008. Crude you think dollar yen had a week . Up. A month, april, crude we are down 1 10 of 1 on the session. Lets get across to matt miller now for some stocks to watch. Down 19 se shares were on friday, and the stock is getting downgrades today. J. P. Morgan cut their shares to underweight from neutral. Rbc downgrading. J. P. Morgans analyst ron hall that ron hall says it continues to deteriorate. Bb tt shares of analyst gary nelson says shares Goldman Sachs is switching some things around among defense contractors today. Goldman has updated l3 communications to buy, saying the guidance is that it has underperformed and it is ready to change that trend. Reachedes have almost the 107 target. David it is time now for bloomberg trends, and you can go to read go and see this yourself. I want to talk about i think he was number one when i just checked. It is Warren Buffett, and he is dumping out hedge funds bigtime, saying you cannot make money given the fees being charged. About which will do better, the clarida, richard hedge funds are having a bad time of it this year. Termrd hedge funds is a to describe a lot of different strategies and approaches, but worn path but Warren Buffetts point is understood. Jon it depends what your strategy is. Our hedge funds getting an unfair rap at the moment . Richard the sector has evolved. Go back 15 years ago when equities were being hammered. It was all about doubledigit turns. Hedge funds are recommitting to being uncoordinated uncorrelated with returns. Jon coming up next, we will break down what to expect this week. It is payrolls friday this week. Show me movies with romance. Show me more like this. 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. Show show me more like this. S. Show me previously watched. Whats recommended for me. X1 makes it easy to find what blows you away. Call or go online and switch to x1. Only with xfinity. David this is bloomberg. Bombuthern turkey, a car exploded, killing two Police Officers and wounding 22 others. No one has claimed responsibility. In but that, protesters in baghdad, protesters have ended their sit in. They were protesting corruption and the political paralysis on iraq. Tomorrows indiana primary has been, a last stand for republican ted cruz. According to the wall street poll, hebc newsmarist trails donald trump by 15 points. Global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. That is first word news. So indiana do or died. Last stand for ted cruz. It will be interesting to see how this plays out. If trump has a big win, he will clothe this you will close this out. Jonathan i am a little unnerved. Tom keene, a weeks vacation . Tom i came into the office twice. Jonathan i did see him. The big question is how you reconcile what the dollaryen is doing. It follows from the shock of last weekend into this week. A stronger yen against weaker everything else. The i find interesting is separate analysis of it when you look at other nations. Jonathan the mustread from Mohamed Elerian about how you reconcile those differences. Tom he wrote this at the white house dinner. Megan said you could not write this here. He said it is for bloomberg view. Combination of lower Interest Rates, including negative ones in europe and japan, and steps up asset purchases, the free banks made a valiant effort is tonight demand. Beyond a clear point, Interest Rate differentials can lose their effectiveness in driving exchange rates. Now. Body is in that trade jonathan if you look at nominal yields, you cannot explain what is happening to the yen. But if you look at the rate of change, arguably the pickup is better in japan than the u. S. Are brutal moves. Saieh and this is a fed with a tendency to raise brutal moves with abrupt moves. Can janet yellen ignore what is going on in japan . Weathan two years ago, would have talked about divergent money policies. That narrative has changed, where we shift away from it. Tom this came up in conversation all last week to you the distinctive feature of negative rate analysis is it nks. Cts tanks ba pushey have the courage to negative rates lower to affect retail, mom and pop, and one example the small ba