Manufacturing is not the largest portion of the u. S. Economy, but we know it is a portion that has been waning as the services portion has been taking resident president precedent. We see the nasdaq slipping into the red. Major averages coming off the highs where they were when we initially opened up. The highs that we saw in the futures overnight, the dow and the S P Still Holding on to gain. We have also Seen Movement in oil prices. You can see oil taking a sharp leg downwards. There were not any headlines that seemed to be the catalyst. Certainly a drop in manufacturing would not be good for oil prices and we tend to see oil and stocks tracking together. Stocks coming down after we saw, oil to this leg downward. I want to look at the other assets we are watching. Gold prices have been on a run, up 1 up half of 1 . Investors have trimmed their interest in gold just a bit. This is the price of gold and this is the net long in gold funds. We have had inflows going back to earlier, this year, but we saw those inflows drop by the most we have seen since the money started coming in. People pulling back to some extent. Despitetopic has been the Central Bank Stimulus we have seen around the globe, there is waning confidence in it working, whether in japan, europe and yours our questions about the fed strategy here in the u. S. Here is the 10 year yield and as we have seen, it is a rising ine environment in Theater Theater in theory. The euro is trading at the highest versus the u. S. Dollar cents last august since last august. You would expect rates and currency to be coming down. The yen is trading near in 18 18 month high. Topics sort of a hot morning, can Central Banks continue to prop up things in their respective areas . Theie another hot topic is Justice Department calling it unfixable. Julie if you look at how halliburton is trading in reaction, we are seeing a gain. They are announcing with the breakup, they are doing a buyback. Halliburton also on the rise. It has been a Long Time Coming for these companies, firstdegree to that acquisition back in november of 20 working, oil at that point, wti was about 75 a barrel, a different world. Mark we have been stuck in one half of 1 trading range, high as a quarter of 1 , as low as a 1 , now we are down by about a fifth of 1 . It is a bank holiday in the u k and japan and china, but the rest of europe is open, and it is a mixed day. Reiterated its 2016 targets, dont forget we saw the biggest fall on ride a in two months, we saw the European Equity benchmark stoxx 600 rise in april, the second consecutive month, something it has not done since april. I what the sure you the for the live index, the italian benchmark and you can see seven out of the 10 worst performers arent how banks because private investors snubbed an ipo by ankle papillary by unicredit is one of the main and you will see its shares are down by 5 . A regulators are sent to decide whether is eligible for a listing on the exchange after if the bank does not get a listing, they will buy all the shares. A separate story today for the italian lender, it has agreed to to a group that includes bain capital and advent international. 1. 7 4a deal valued at billion euros. Euros 1. 74ion billion euros. Upset by contraction in france. What was interesting was comments from Market Economics which brought out the report and said the gauge points to anemic factory growth in the region. The report also showed price declines used in april. This news comes after data on friday showed the economy grew by. 6 in the First Quarter. That was the best growth in a year. Still minus two 2 . Is still manufacturing data here as well, hassan aiding. A first look at manufacturing. I want to point to something some mario draghi headlines. He is speaking at an annual meeting and paying that lower or negative rates are not unprecedented and that it is felt all over the world. He says structural rebalancing is advancing too slowly, as if we did not know that and he says that reforms to u. N. Institutions is essential to boost demand. He is saying what he has been saying for some time. Lets get to first word news. Kayla rates is in the newsroom. Taylor Bernie Sanders says front runner Helder Clinton will not have at pledged delegates to win the nomination. He is counting on being able to flip some of these superdelegates who are supporting clinton. Tomorrows indiana primary has become a last stand for republican ted cruz. A new poll shows he has some work to do. According to wall street journal, he is trailing donald trump by 15 points in indiana. He is hoping his Grassroots Organization can counter Donald Trumps appeal to displaced middleclass workers. A car bombing has killed at least 18 shiite pilgrims commemorating the death of a revered eve on in baghdad. The car detonated shortly after mida in the neighborhood. 28 others were wounded. John kerry says intense work is beginning in an effort to retort restore the truth troops in syria truce in syria. Global news 24 hours a day. Vonnie thank you so much. Lets get back to the markets and i want to mention we are watching mario draghi live on our live go function. Faltered last week amid lackluster earnings and signs of tepid growth. We enter a new month, joining us now is tom, the biggest ball on the street whose s p 500 targets is among the highest surveyed by bloomberg. He has six reasons why q2 is going to be a good quarter for equity investors. It seems like everything is stacking up against a equity investors. That is the impression our clients and india has, but Economic Data has improved, tentacles are certainly a lot younger, but i think the sea single easiest thing to focus on his how good conditions are in credit markets. How yield on track to have a double this year and that is all investors need to know. Stock follows highyield. Tom can you just make that generalization . If you asked me if highyield was making having a good year and one of only three in how thatdecades, i might think is because people are reaching for yield because they will not go into stocks. Tom that is possibly a dynamic. There is 30 years of highyield dynamic to analyze. There is not a single instance that highyield had a doubledigit year were the s p did not also have a doubledigit year. They are highly correlated Asset Classes and stocks can easily post a doubledigit year. Six out of six of your strategies have outperform the s p 500, this year. Can you quickly run us through when you call these markets agnostic strategies. Tom our clients dont necessarily want a directional view, they won guidance. What we have focused on as you strategiesare the and the most successful are the ones where recalls are stocks the new bonds. It takes advantage of the fact that there is a lot of reach for yield, globally. It has driven money into income fund. We think the best dividend stocks are stocks where the yield exceeds the companys own bond shield. Risk, butt taking a if you want to take advantage of the dollar, which is a huge story and something we said would happen, you want to buy value and if you want to take advantage of using credit conditions, we have a list of lowquality stocks, slightly higher leveraged companies. You had to think about the macro correlations an interesting opportunity to buy stocks with dividends. Mark a great story says the bloomberg dollars pot index has risen every year but one, since 2007. May is the month to buy the dollar, but as you said, the weaker dollar has helped earnings per share and has driven the earnings, which has driven the rebound. Has the dollar found its spot or does it have other to fall thus have further to fall have further to fall . U. S. Inflation is rising asked her than the rest of the world and that should weaken the dollar. Vonnie i feel like oil has bottomed. Oil is a case where we tell our clients we dont have to be right and we think market is wrong. Is, client demand has never explained the bottom of oil. What has actually explained it since 1890 is has always played out in the derivatives market. It happen on every 11, 2016, now that level of containment is down to 2 and has decisively marked every oil bottomed. We think oil is bottomed at 27 and would suggest it could go to 60 by the end of the year. Vonnie if the fed moves or we have a surprise in the brexit outcome, do you change your approach . Tom these are not directional strategies. They have little to do with the fed. We dont think the fed is going to move. For it to move now would have to have a confidence level that the market does not have. Mark great to see you and thank you for calling us. Cofounder and head of research at fund strut global advisors. Looking at some deals happening in the u. S. From International Paper the oracle. We will get you to oracle. We will get you caught up on this mondays session. Coming up live at 3 00 p. M. Eastern time, a qr Capital Management founder and chief investment officer. Mark live from london and new york. Vonnie you are watching bloomberg markets. Time for our business flash, a look at the biggest is the stories. Profits surged 21 in the first three months of the year and the insurer reiterated its 2016 targets, operating costs slipped as sales dropped. Income rose to 2. 5 billion. They could reach the 2016 outlook. Today usa. Today it will urge shareholders to withhold their votes for a nominees to the companys board. Afterent public unsuccessfully making a private offer. They own the Chicago Tribune and theyll l. A. Times and the l. A. Times. Time to head to the markets desk were julie hyman has latest. Julie we have the abandoning of the acre huge halliburton deal, but there are other deals being announced. One of them is International Paper agreeing to buy warehouse ors pulp business for about 2. 2 billion. It will add Production Company of what is called fluff pulp which is used in diapers and other products. You can see both of these stocks are rising at the moment. , although not getting a huge game. Oracle, one of the most inquisitive Countries Companies out there is acquiring power. Cloud Computing Services to electric utilities. You can see it is rising by about 31. Percent, going above the offer price. I was prompted to look at over coals. Deal history. You can do that on bloomberg. This is a scattershot of the companys acquisitions going back about 10 years or so, and there are a lot of little dots. The yellow ones are the ones that are pending. The one is that is easier to see is by timeseries. These are the annual acquisitions the company has made, obviously a little busier in the late 2000 and has become less so, but less busy for a company like oracle, still making this year, retro acquisitions or offers that are worth around 2 billion. Busyusy for oracle, still for many other companies. There is a deal in the Canadian Telecom business. Agreeing to buy manitoba cut Telecom Services for about billion dollars. It has been consolidating in the industry within that nation. Mark coming up on bloomberg markets, what comes next for halliburton and big issues after a 28 billion oil merger collapses. Mark halliburton calling off their 28 billion merger. The deal faced resistance from regulators in u. S. And around the world due to trust concerns. Loretta lynch said the companys decision to abandon this transaction which would a left many oil field in the hand of a duopoly is a victory for the u. S. Economy and for all americans. Wedding who david is in houston. Hughesl placed is baker to whether the fact this merger isnt taking place . Of 3. 5e the break fee billion will soothe any concerns. That is definitely nice to have. Baker hughes of the big three theyice firms, their have been a bit more lagging, disappointed investors numerous quarters in the past, so it has been a selfhelp story they have been working on and having 3. 5 billion in the pocket will help, especially but the announcement that they will buy back shares. They can work on some of the businesses that have been lagging in the past. They are working on more of a Technology Portfolio which is already pretty good, but they can work on some kinks. Having that will definitely help them. Mark we have a nice chart showing how the shares have moved in unison since the deal was announced in the backend of question,h begs the are halliburton ok without baker hughes . They wouldve loved to of had some of the product lines product lines that baker offers but being the second largest oil being theiride sheer size and having all the product lines, they will be a lot better than a lot of the Small Service firms. North america has a global footprint, so they will be ok. Nobody wants to go through this oil market downturn, but. They will be ok. Certainly they are smaller than their largest rival and buying bigger would it help them get closer to them. Competitive,l be but they dont have that bullet in their arsenal. Vonnie so far, it has worked out beautifully for baker hughes. Now they have some money to play with and theyve also been able to buy some time to lay off people, restructure, have rigs go dry and so forth. What happens now . Do they get approached run ge or oceaneering, another can company that might approach them . Very potentially, they are seen as the takeover target, and from what i hear, it makes a lot more sense for somebody like ge oil and gas or in a vb a lot more sense for one of those types of Manufacturing Companies to be interested in baker because there is very little overlap, so it might rub the dig doj better. Past thatd in the potentially it might want to get into more Oilfield Services than just Oilfield Equipment making, so by buying the number three services firm, that involves you very quickly. It makes sense on paper. Ge certainly has the stuff to do it. National oil has been inquisitive in the past. Whether that happens, nobody knows. There is potential for that and baker hughes looks good in that regard. Vonnie thank you, our Bloomberg News in houston. 1. 8 ino and is up todays trading, baker hughes up about a third of a percent halliburton is up 1. 8 in todays trading, baker hughes up about a third of a percent. We have more on what might be turning to the biggest crisis in the markets. [ soft music ] e. T. Phone home. When you find something you love, you can never get enough of it. Change the way you experience tv with xfinity x1. Shoah, ha ha. Ew artist. Show me top male artist. My whole belieber fan group. Its not a competition, but if it was i won. Xfinity x1 lets you access the greatest library of Billboard Music awards moments, simply by using your voice. The Billboard Music awards, live sunday may 22nd, 8 5 pacific, only on abc. Vonnie live from bloomberg World Headquarters in new york and london. Mark i am mark barton and you are watching bloomberg markets. Lets get to first word news with taylor riggs in the newsroom. Taylor democratic president ial whole old held a clinton raised about 26 lien dollars in april for her primary race. The Campaign Says it has 30 million in the bank heading into may. Millionnow raised 213 in primary funds and more than 46 million for the National Democratic parties. If former secretary of state is campaigning in. Kentucky and west virginia, today the Supreme Court is leaving in place a ruling that advertising claims about paul wonderful were deceptive. They rejected the deal, ruling the company violated speech rights. Ftc work. Ally proven to in detroit says 87 of 100 Public Schools will be closed because of a threatened teachers strike. The Teachers Union encouraged instructors to call in sick after the district said they would not have enough money to pay educators this. Summer emergency funding was made available in march. Chinas communist party is placing a property mogul and outspoken critic on probation for a year. This is after he offered online criticism. The punishment handed down is one step from expulsion and is seen as a stern warning to him and other already members that political dissent will not be tolerated. But apart hall at Brussels Airport has reopened for the worst time since the terrorist attacks in march. Those. Suicide bombings killed 16 people. Authorities say the airport should be back at all capacity by the middle of next month. Capacity by the middle of next month. Now it is time to get you caught up on the market action. Many markets such as london and hong kong are closed. Japan led a selloff in asian equities. Held near a 18 month high. Really only one opportunity for japanese investors to respond to last weeks centralbank decision and the yens continued surge. The first trading day of the week. After fridays holiday and a break, mondays at session was met with sugar failing. Close closing lower for a bit session, the longest losing streak since january. Started just telling us at bloomberg there is a massive gap in communication between the bank of hand and the market and that is why investors are getting panicked. Us lets see how the european stocks are doing. No trading in the u. K. , but there is trading elsewhere. Stocks up a big drop on friday, biggest drop in two month. Small gains in germany, france, the ftse is lower, big news on banking. Investors,ng private the rescue funds in the country had to buy almost all the shares which leads me to the best of worst arming Industry Groups on the stoxx 600. Thanks among the worst performers. Selling most of the big decline is on the banks index and italian. Lenders energy down with the price o