Here is scarlet fu. This is a betterthanexpected read on the Manufacturing Sector here from the philly fed. 7. 5 when it, as were looking for slight uptick to 6 from the prior months rita 5. This is the Philadelphia Fed business outlook. You can see this slight move up is from five to 7. 5. We are long way off from the peak of the end of last year at 40. Weve seen softness in the Manufacturing Sector take root because of the stronger dollar and a drop in oil prices. That seems to be improving for this particular index. Earlier this week, the Empire Manufacturing number came in with a negative read. There is still a lot of debate over whether manufacturing has bottomed out and were ready to see an uptick. As the dollar stabilizes and oil stabilizes, perhaps we can look at some stabilizing and the Manufacturing Sector as well. In the same index, new orders index at 0. 7 versus 3. 9. In terms of effect on markets the s p 500 down, nasdaq holding onto their losses. No real change as a result of this report. If i look at the dollar index which has been so sensitive to a lot of this manufacturing data it is lower by a third of 1 . Stephanie thank you. Erik lets take you to the bulletin. Stories you will want to know about, shares of Goldman Sachs surpassed 200 for the First Time Since 2008. It beat analyst estimates. Coleman surpasses rivals by posting a bigger increase in revenue from trading debt commodities goldman surpasses rivals by posting a bigger increase in revenues from trading debt commodities. Citigroup earnings also beat estimates. What does that tell you . The thirdlargest u. S. Bank costcutting, First Quarter expenses fell 10 . Legal costs were down 65 from a year ago. Lets have a look at where shares are viewers around the world are flocking to netflix. Global and u. S. Subscribers rose more than expected in the First Quarter. Sales up 24 . The original shows such as house of cards has helped netflix attract 62 million viewers. The company is on a roll. When all of these markets, the internet and Internet Television is catching on, and we are leading the list of two competitors, and we have competitors all around the world. In each market, theres a series of competitors. We are feeling very bullish on the longterm of these markets. Erik netflix killing this morning at stocks up almost 68 and rising to a record high. Expected to recommend the board split netflix stock. Amber nagys next gig . Ben bernankes next gig . He will become a Senior Advisor at citadel will stop he will meet with clients and offer analysis of Global Economic and financial matters. He said he chose citadel because unlike wall street banks, the firm is not regulated by the fed. Stephanie i know we dont have much time to talk about this,. Talk about the white knight going to the dark side. My mind is blown over this one. Is he moving to chicago . Erik i would guess not. He is a Senior Advisor. How much time is he going to be clocking in at citadel Gekko Stephanie if ken griffin is your boss, a lot. Sc shares are leading the way. Weaving their way into the market as the ecommerce copy goes public. It raised 267 million and its ipo last that which priced at the high end of the range. While were waiting for the first traded go through, investors may be hot on the brooklynbased startup, but some are worried about the actual numbers behind the company. Lets bring in james geller, see your rapid ratings, company that analyzes ipo risk. Etsy, are you hip to them . I think it is a great niche product, Niche Company but it doesnt have the sustainability at this stage or the profitability to be a longterm great investment. I suspect the ipo will probably do well today. Theres not a lot competing with it. We rate them on our scale of zero to 100 with financial help rating of 23, which is high risk. It has good liquidity properties. Well have more liquidity after the field, but it doesnt have profitability generating any returns, and slow in growth over the last couple of years. High risk isnt necessary erik high risk isnt necessarily a bad thing. Right, but as leslie picker wrote it is probably an acquisition play. Stephanie by phone, ebay . There are players out there who could look at this and say this is an opportunity to capture this niche in the overall ecommerce space. They have a first mover advantage. They have a lot of very exciting things going for them as per the enthusiasm of the vendors that are part of their network. A do they really have a longterm defendable position . Erik why wouldnt they . From what we can tell, that are pretty decent business model. Theyve carved out a niche for themselves. Stephanie i dont who their competition is. Erik they dont appear to have any direct competitors. You could envision an ebay to your point about first mover advantage, they built a pretty sizable platform in this niche market. Ebay can do this overnight. No, but they can throw a lot of money at it if they really wanted to. This is to say someone comes in and room this isnt to say that someone comes in immediately and replaces etsy but there is no real competitive barrier other than the artisans are reselling through them. We dont want to belittle that, i think there is extremely high enthusiasm, but it doesnt mean someone else cant come in and start to chip away at them. But then you get into the by were built question and the acquisition question. If an ebay was to be in the market, does it make sense to compete with etsy or just buy them . Stephanie do they have the first mover advantage . I cant think of another competitor. In terms of being a small craftsman, someone who makes her own product and wants to sell it, etsy seems like the only game in town. At the moment it is. Stephanie they did not start up overnight. Why would they change . They will prove there is a niche market and has via, but lets keep in mind, it is only a 200 Million Company in 2014. It is still relatively small. Erik was once small, too. If you are a believer in ets, iy think this is the best illustration. After give credit to a firm that kind of competes with yours trait and research, for putting this truck together, but i think it helps to speak to the debate were having. Here is ebay today. Ebay generates 21 22 gross merchandise fine as revenue, pretty good, i guess, whatever throughput. Etsy is about half that. If you believe etsy is going to be the next ebay of sorts, that is the room to grow, right . I think there is room to grow. Competition aside, any investor coming into the ipo today needs to be paying close attention to how well etsy is able to use the proceeds from the ipo and begin to drive toward profitability. Ultimately, Companies Need amazon wraps is the notable exception. Anyone coming applicos attention anyone coming in now should a close attention. Erik what are the warning signs . Between now and the income stephanie [indiscernible] erik im a realist. What do you do see and what should you not see . Anytime youre investing in an ipo, look at the second and third quarters after they go public. The First Quarter is a must always in the back. The Investment Bankers who bring a deal unless it is like a box which had come to market when it came to market, theyre going to make sure the First Quarter numbers are going to be hit. Dont look too closely at that. It is the second quarters and third quarters. If they are exceeding are falling short of analyst expectations and if theyre not able to hit their own growth targets, that is when you need to be paying close attention. How hot is the apple market at that stage yet the work and of competition is there for that capital at that time . Stephanie thank you for joining us, james. Ceo of rapid ratings. Etsy is of the only ipo were talking about. Isnt the only ipo were talking about. Party city has begun trading on the nasdaq. Scarlet fu is in the newsroom with the headlines. Scar, im hoping there are party hats, streamers, and confetti at the nasdaq. If not, what is the point . Scarlet i would imagine there are a lot of streamers as well. 30 city shooters open for trading, curly trading at 20. 14. They raised it have priced at 17 a piece. Right now about 20. 18 a share. Looking at a gain of about 18 to 19 . The private equity owners did not sell any shares in this ipo. Were keeping an eye on etsy. It is not yet open for trading but it is indicated to open at 33 a share. Remember, it was priced at 16 apiece. That is more than a 100 jump. It would be double what it had been priced at. That company sold 16. 7 million shares at 16 of peas at the higher end of the marketed range of 14 to 16 sold excuse me raised 267 million overall. Stephanie did you see the party city team on the podium . Not a single woman up there. That is not really a fun party. Fyi, party city doesnt look that fun. They could not have one woman in the party city network that couldnt have gone up there . Erik they could have gone outside and the times square and invited somebody in for the party. Were going to be talking about buybacks. What does black rock think . Stephanie how does the Global Economy look . We will hear from the head of the imf, Christine Lagarde. Stephanie welcome back to Market Makers. Time to bring you uptodate on the top stories. There is another sign of strength in the labor market. With the six trait week, pure than 300,000 americans filed for first time jobless benefits. The total number of people receiving benefits was the lowest since 2000. Shares of a restaurant and bakery chain panera bread arising today. Panera boosted its stock buyback in to 750 million. The Company Announced plans to sell 73 of its stores to franchise holders. Their stocks been down more than 6 this year before yesterday. People dont like gluten, i guess. Speed ahead for u. S. Cleaners cruise lines. Coming in faster than a year ago. Trade Group Estimates 4 increase in bookings in 2015. The reason cruise lines has industry provides a very strong leading indicator for the economy since many passengers booked cruises as much as 18 months in advance. And those were your top stories. Coming up in 10 minutes, shares of netflix hit an alltime high. House of cards fans. Sales are showing soaring. Jawbone wants to track more than your fitness. One of its new wristbands works like a debit card. We will be speaking with the ceo. Hedge funds are going to war against fannie and freddie. How much of the government profits from bailing out the mortgage giants . We will be asking senator charles grassley. Erik you heard larry fink earlier this year week, telling them to stop bowing to the domains of shortterm shareholders and start investing to create longterm value. What do we do to stop the buyback binge . Lets ask our guest. Mark, first of all, do you agree with larry fink there is too much in the way of buybacks and special dividends or dividend increases and not enough money pouring into r d and reinvestment in the business . Violent agreement. Stephanie there you go. It is a good company. I think svm, shareholder value at reservation, is a little bit scammy in my mind. Accounting gimmick. If you have the same amount of earnings and you have the number of shares issuing debt to buy shares, you havent actually increased earnings per share. Technically, you have, but there is no more earnings. In fact, yet the service the debt. Earnings in total actually go down a little bit. I think it is good shortterm, particularly for management but longterm, not so good. Stephanie who is to blame . F i am the ceo of a publicly traded company and i want to have longterm plans, do i have the opportunity to do that when it seems like right now, my main concern is making sure very rosenstein or carl icahn arent knocking on my door . Totally agree. When you have behavior that goes one way to extreme, theres always a misalignment of incentives. People respond to incentives. Stephanie then how do we get out of this bad cycle . It is hard. Someone has to be brave and take the first step. Take ge for example. They just authorized a 50 billion stock buyback. The biggest of all time. How about this . How about instead of sending that money back to shareholders, how about they set up in Innovation Fund . 50 billion to focus on what they said was there knew new thing. Stephanie if they set that up and it is three months which is no time at all, lets say that Innovation Fund doesnt come out was something extraordinary, carl icahn is knocking on your door saying, what have you done . I know, i know. It is very hard. It takes bravery. It takes leadership. And leadership erik but it can go wrong. There are three things in the mix. The desire not to be savaged by activists and ultimately face a proxy battle and get kicked out of your own company on the one hand, theres the interest that all ceos have in growing the business and somehow finding the next great thing whether it is the apple watch or whatever that is going to take you to the next level and the third thing which we havent talked about capital structure. There is such a thing as an efficient capital structure, and maybe taking on some debt and buying back stock and reducing equity as a percentage of your capital isnt necessarily a bad thing. It is not a bad thing. It would be a great thing in japan right now. U. S. Companies, to over leverage. Come on, the average debt ratio on companies is really high right now. Look at pepsi. Alltime most levered it is ever been. Some debt is good and of Japanese Companies take some of this approach and start levering their balance sheet, the great assets, great Growth Opportunities in asia and we think that market will crush the u. S. Market over the next 10 years, but it is because they are in efficiently today whereas i think the u. S. Erik lets take apple as an example. Would you argue what carl icahn asks make sense . No debt, ridiculous amount of cash. If crowe once cash, issuing debt, fabulous. Who is better at innovation and apple . I was walking down the street to get here. Everybody has the iphone ipad. Everybody has a screen. Everybody is using these products. It is enhancing productivity. Were the Network Effect of 10 billion of those things connected all the time. Why not let them do the innovation and let them keep the capital and keep reinvesting . Stephanie what is your opinion of activists . Their incentives are to produce returns, because they keep 20 of theups for so they do create value stephanie for themselves and their investors. What theyre supposed to do. And in many cases, with companies were under utilizing assets. Theyve done some really good things. When you go to an extreme and anything extreme and debt, extreme in activism, basically extreme politics. But i like activism and i like the fact they can create value. Look, when shares are overvalued erik we have to leave it there. Stephanie mark come always a pleasure having you. Mark, always a pleasure having you. When we return, a stronger dollar, weaker recovery. Two of the issues facing Christine Lagarde. We will be hearing from her in just a moment. Erik coming up, Christine Lagarde is standing by with tom keene of bloomberg surveillance ndc in d. C. Stephanie shares could go to 900. Live from bloomberg headquarters in new york, this is Market Makers with Erik Schatzker and stephanie ruhle. Erik welcome back, everybody. You are watching Market Makers. Im Erik Schatzker. Stephanie and its thursday. One of my favorite days of the week. Do you like thursday . Erik middle friday. Stephanie i have never heard it called that. Thursday night in new york nothing better. Shares of party city big on their first day of trading. Its private equity earning owners did not sell any stock in the ipo and we are waiting. The first trading for virtue financial. Is the first highspeed trading firm to go public. The ipo delayed from last year. And atetsy is the first big Public Company hitting the market today. We are waiting for that. And earlier the blackstone ceo said that his private equity firms likes apple, google, or another company. I am screwing up. Erik im sorry. When you think of an investor like state, you think, oh, he is an investor to read he likes apple. No, he thinks blackstone is like those companies. Unique at the top of those. Like apple. You know the best. You know where to come. Stephanie when David Rubenstein can make the christmas video for carlisle, him doing a hip of video, you know that is those guys at the top of their game. All right, american international, aig has had seven chairman since 2005. Thats a big number. The former ceo of Southwest Airlines will be replacing david miller. It has repaid the government bailout. And the greek threeyear bond. It is yielding 28 , the most since the height of the euro debt crisis. Yields soared as investors wait on a resolution on the greek debt crisis. They must come up with a deal before european creditors will release the last of the bailout money. And live from moscow its vladimir putin. He took questions on his annual call in show. And at a time when the economy heads into its first recession in six years, one color wanted to know about economic sanctions imposed by the u. S. And europe. One caller wanted to know about economic sanctions. Vladimir putin it is a strategic issue for our western partners, and is probably not much to do with the ukraine anymore. Stephanie the good news for putin, the ruble is at its best performance this year. The russian currency is up 20 in 2015. Erik what you say about netflix other than wow . Netflix late yesterday reported earnings and announced it added more than 5 million subscribers bringing it to 62 million more.