Everyone is watching to see whether we will rebound from last month disappointing jobs report. I have not seen and adp report with this much focus in a year. We will watch that closely and that 10 00 a. M. , we will get numbersnonmanufacturing and the earnings continues. After the bell, disney. First twitter public Earnings Report will be interesting to see as well. Lets do a data check print its a quiet market as we wait for the adp report. Andres are at negative two a 10 year yield was up slightly yesterday. Nymex crude is 96. 97. Vxx is at 21 off the ugliness of friday. The yen is a big story because of what it has not done. That should be a bigger number. But its not. We have a continued strong and off economic eta. Economic data. There is the data check print it is a busy day. We scour the papers. And washington, the Congressional Budget Office is projecting obamacare will cause a drop of about 2 million full time workers by 2017, maybe 2. 5 million by 2024. What they are saying is that people who take a job just to get Health Insurance will not have to do that so they will choose not to go into the labor force. Republicans are already attacking this as a big job killer. Meanat does equivalent when they say equivalent full time jobs . It is the number of people working 40 hours for week under alternative scenarios. It is a broad shift in the labor market and harry reid said you should not be locked into your job because of Health Insurance. These numbers are hard to estimate. Inc. Time warner Fourth Corner earningspershare coming in at 17 per share. 15 1. 17 per share. They will not put the money to work . Bit will be fascinating to see what disney does this afternoon. Earnings, wef dont have jcpenney earnings yet but we have their sales report. Even though it was better than expected, the stock is tanking, falling the most in more than four months, down 11 . Its at its lowest level in about 30 years. Thes rose two percent in Fourth Quarter, first time that has happened in 2. 5 years. Mike ullman brought back private label brands and is doing what they used to do and closing stores. They are cutting jobs but there is no love for jcpenney. Are they relevant anymore . Sales is a good idea and the fact that ron did away with discounting was a bad idea. This should be good news. Its against Fourth Quarter sales that were down 34 overall. Is an important line for institutional shareholders and even some hedge funds. When was the last time you are in a jcpenney . I dont remember. I had hair then. For anybody in the bond market, puerto rico Credit Rating for general Obligation Bonds was cut by s p to junk. Thats about 70 of the u. S. Municipal market funds. They are taxfree nationwide. Security e the iu can see how many mun market funds hold exposure to puerto rico so this could shake the whole market. The puerto rico economy is struggling. They will try to sell bonds but if they dont get that, they will get downgraded by moodys. I did a panel recently on puerto rico. The pros are defensive about the value of puerto rico bonds. They like them a lot. This is the economic backdrop this is puerto rico unemployment and this is way up at 15 . Here is the u. S. Unemployment rate coming in. You can see the stress. Puerto rico has been in recession since 2000 four, basically. The economy has not grown so they are having trouble coming up with revenue to pay their bills. Deathave just sold more more death debt. Have 70 billion in debt which is 70 of gdp and 30 billion in unfunded pension liabilities. They are in a detroit like situation. The difference is that greece was a sovereign but puerto rico has many municipal single issue bonds out there. With whom do you negotiate a restructuring . It is going to be a real problem and could affect the muni markets across the board. Lets get to the weather. It seems like we do it every other day in new york city. It is the third winter storm in one week so lets go to Bonnie Schneider. What is the newnew as we look at white white . This is a different storm and that today we are looking at ice with freezing rain as well as sleet mixing in with snow. That is a reason why it is dangerous. When you get a slight coating of ice on the roadways, it makes for dangerous conditions. Several inches of snow can be expected today in the new york city area and more when you head further north and west and that will accumulate into ice later on, possibly 1 2 inch. What do we look forward to this weekend . Michael mckee said there would be another storm on sunday . Yes, we dont know how bad it but there is a cumulative effect of all the storms. The Airline Industry has been impacted. A day after the super bowl, we had thousands of Flights Canceled due to the weather. Luckily, the storm came in after the game. When you look at january as a whole, we saw over 50,000 Flights Canceled. For has been a big year winter. Its not over yet. We will have Bonnie Schneider throughout the day. Our guest host this hour is richard dodd. Michael chase is joining us as well. He has an entrepreneurial spirit on tech. In davos, this is what i read. This is an 80 page essay. Is the guy who put these together. We will talk about emerging markets print what can you tell us about the American Labor economy . That theod news is talent from around the world wants to come in. Unlike other countries where talent does not want to go, america has a source for that. That is very good news because there is a problem with the American Labor economy in the number of people with the relevant degrees for what american employers want, a farm, technology and others is a small per cent. We have not flung open the golden door. Lady liberty is not welcoming at this point because they cannot get Immigration Reform through. We will have a rich days a mismatch in skills and jobs. Happens, the jobs will move elsewhere. If the companies cannot get the talent here, they can put their engineering facilities in other parts of the world. They just move the jobs elsewhere. I think the big challenge in the u. S. Is there are not the skills needed. Is thatof the problem the ultra low rates have not translated into Companies Making investments . A lot of companies have excess capacity. Theyre looking at the Economic Outlook and it is not great around the world. Theyre wondering why they should add more capacity. With companies piling up cash, they are not doing investments. Joins usl chasen today. You are in the trenches on this. Is there a shortage of talent out there . Challenge trying to get the right type of people that have the Technical Skills to develop a great product like Hardware Technology or software technology. The problem is not just in the labor market, it goes back to the education system. The United States has become a little less competitive in recruiting top talent from other countries to stay in our school system. Therefore, other countries are invested heavily in drawing that talent. We will talk about this more on this busy news day. Michael mckee and i are focused on thedadp report in the 8 00 hour. Microsoft is a company that may need additional workers from overseas. They have their heads in the cloud over there changes and we will look at those coming up in how the Company Strategy may change. This is bloomberg surveillance, on Bloomberg Television, streaming on your phone, your tablet, and bloomberg. Com. Up, bob eiger, chairman and ceo of disney joining us and earnings are out after the bell. This is bloomberg surveillance. Scarlet fu will return tomorrow. 8 15 a. M. Will be the adp report. Lets talk microsoft they had a search for a new ceo and thats over and satya na and billthe new ceo gates as technical advisor. What does this mean as we enter the new era of microsoft . Nadella made in ephesus that microsoft needs to move away from tc and towards mobile and cloud. What do you think his strategy should be . Certainly, he needs to continue the changes that have been in place. They recognize the difficulties they are facing in the pcs and recognize the importance of mobile. Its interesting that bill gates a sticking around. He is the founder and the one who said it all at much and and under who some of that stuff was not happening. It will be an interesting dynamic to watch these two. Debal said he will lmerize microsoft. You need products. You need Smart Technology and stuff that works and stuff that people believe they need to have them after by. And they have to buy. R brought a very sales oriented environment. It is a different feel under nadella and you could see it from the first day. Is mr. Ballmer out . Bill gates will stay on the board and still be around. He set in motion a big reorganization. Mean, steve ballmer. Symbolically, bill gates stepping down as chairman sends a strong signal. He is not the guy who will be setting the tone. The most interesting thing on this we found is that pc nadellassaid microsoft will develop into a platform company. They said microsoft was becoming more of an apple and the nadella will become more of a google company. You want the platform everyone will use print we talk about the emergence of platforms and amazon and apple and google have one. Its not just an individual product, its something that ties them together. How likely is that with mobile . They have three percent. They have a long way to go and many to push the tablets. Its not just about smartphones and people have not wanted to buy the microsoft smartphone. Let me bring in michael dodds. What would mackenzie advised . . When you look at the idea of advice to companies in turmoil and transition, what is the first step . They have to make a decision around innovation. In innovation there is the early bird gets the worm. And there is another strategy that the koreans have done well which is the second mouse gets the cheese. You can be very successful. If you look at smartphones, it is dominant by an early bird. The back story here is that microsoft is still minting money. Theyve got a lot of it and are returning a lot to shareholders. Shareholders not just want to but show asit back you will invest in Something Real and innovative. That people want to buy. Hardware or software . They say they want to be a hardware maker and provider of a vast range of services. Xbox has a lot of potential. Dont estimate the ability of xbox to deliver a wide range of services into your living room. Michael chasen is with us as well. How many employees did you have at the biggest moment . Blackboard, we had 3000 employees in the Current Company only has 20. What would be your advice to microsoft . Microsoftllenge that has is not just figuring out how to restructure the company at couple of their existing platforms like the operating system and Microsoft Office are under attack. These are not systems that the kids coming out of college today are utilizing. Even if they meant money today, we know these things are slowly transitioning out. Kids out of college today are using google docs an windows is one of the top landforms. Its not even available on the tablets. It will be a big challenge for the new ceo. You have to think of in terms of mobile and Cloud Strategy and the consumer is missing already you are seeing microsoft divide their earnings in terms of Business Services and consumer services. Thats why you see so many Fund Managers going for a spin off of the consumer business. This is a discussion on microsoft and thank you for coming in. Giles is with us on microsoft. The big number today is 51 billion which is how much rush is spending on the sochi olympics. That would be the most ever for the Winter Olympics and what do they get for it . We will look at the staggering cost in a moment here on bloomberg surveillance, on Bloomberg Television, streaming on your phone, your tablet, and bloomberg. Com. Morning, everyone. Its not new york, its not boston, its the windy city, chicago. , and ugly 14ice degrees with four inches of snow in chicago. We say good morning to all of you in the Early Morning of the midwest of america. This is what bloomberg surveillance. Olivia sterns and Michael Mckee is with me. No snow in puerto rico but no good news is there as the s p is the islands debt to junk level. This comes as puerto rico struggles with a long recession and unemployment, over 15 . This is triggering a big exodus from puerto rico. Many people are moving to the mainland. The downgrade has broad implications this matters. The puerto rican debt is held by 70 of u. S. Municipal market funds. The pace of Economic Growth in china is another big concern. ,ne of the biggest questions bill gross called china the mystery meat of emerging markets. That went viral. Abouthad questions whether the actual chinese growth rate is five percent or seven percent and makes the country a wildcard among emerging markets. The second winter storm in three days is sweeping through the northeast, the midwest and much of the country. It dont have a snow in the chicago and midwest area before getting to us. The new york forecast about six inches of snow today in boston maybe hit harder. They might get as much as one foot of snow. This is having an impact not only on the economy but a lot of companies saying they are not reaching their customers. Happened but what they said the december jobs report was affected by weather and this may be the same story today. What is your smart one . I found a story in the financial times. This is about the feds bad manners. This comes off the heels of the Central Bank Governor of india calling for more policy coordination. The Bank Governor of south africa also called for more policy coordination. Mention of the turmoil in the emerging markets at the last fed meeting. Should they Pay Attention . Mr. Dobbs is with us from mckinsey. This is a real battle, should the fed have a more global view but thats not their mandate. In the end, the disruptions and emerging markets at some point could cause problems in the u. S. It will not at the moment so there is a risk of that. I think the fed needs to be wary of that. Element that an the fed has to be aware of other emerging markets and hold u. S. Bonds. We will continue this discussion, this is a will bloomberg surveillance. Good morning, everyone. I love this book it is a snow we day in new york city. This was central park yesterday. It was spectacular. Today its just miserable. Maybe six inches or three inches and maybe we will get more. Snow is expected this weekend as well. Lets get a data check. Adp is coming out at 8 15 a. M. Foreign Exchange Markets are stable and nymex crude is 97. 95. Remember the sony vaio . It is close to selling the japanese pc unit and the buyer is supposed to be a japanese investor group. It is part of a wider restructuring of sony that could be announced as early as tomorrow. Radioshack will close as many as 500 stores. You saw the commercial during the super bowl. The closings will take place in the coming months but no details are given on which locations. The struggling Electronics Retailer has about 4300 stores overall. The new ceo is scheduled to take over this week. Morgan stanley joins the parade of companies settling with regulators over mortgagebacked bonds. It will pay 1. 25 billion to settle a lawsuit wrought by the federal Housing Finance agency alleging he sold bonds to fannie mae and freddie mac without adequately disclosing their risks. The headline we have expected for years is the three year battle of google and the European Union. That is settle. Google will not have to pay a fine, they will broaden their search to allow other rival Search Engines more easy access and it will probably be good for the stock. This is a great statistic an emerging swing from five percent45 , that is the emerging market share of the Global Fortune 500 companies by the year 2025. Is director of the mckinsey institute. I religiously read their work. It comes out in monographs. This is a good place to start reading this ever to cover, some of the smart stuff from mckinsey. The emerging markets is a stereotype, what do we need to know . The British Industrial revolution, the impact that has had on the world economy, we are seeing that going on. We are seeing it go 10 times as fast and 300 times to scale. We are seeing a global force that is happening with emerging markets, it is 3000 times the size. Lets get to the money question for america. Dearth of investment or desire to invest in the United States. We go know it is not the emerging markets but vallone, that money is going abroad. Is that money going abroad creating jobs abroad and not here . Some of it will be creating jobs abroad. The u. S. Needs to in fast and infrastructure. Invest in infrastructure. That would create jobs at home. The u. S. Dealt with the peopleructure backlog think of korea as an emerging market and you get there but the emerging market when it comes to infrastructure is the u. S. And the u. K. , it is not countries like korea and china. They are investing in infrastructure and thats the key challenge. Those of the type of jobs that the u. S. Needs to create. Lump all theg to emerging markets together but many investors wonder whom