The most in six weeks. Day closed above the 200 moving average. Brazil was killing it. European stocks also rallied. A lot of followthrough that we saw which can be constructive. Outlier, downe the most since january. All of these folks bidding for you and your stock is down. It hurts. Scarlet it does hurt. But it is a tracker stock for alibaba. The weakness. Lets get to those stocks you mentioned. The rally followed gains overseas. That is the biggest back to back advance since february. It also is above the trendline with 19 Industry Groups up over the today. A concentrated broadbased advance. 13. 8, 13. 9. The average is 18. Clearly we are far below the average. Amazing. In terms of the bond market a big story had to do with greece. 10 year yield falling below 7 , last july thes yield was 19 . Here in the u. S. The story is the yield curve continues to flatten. It has flattened around the lows of the year. The fed will hike in the short term. Longterm investors are worried about growth. The two year yield has rallied 20 . Just shows the difference in market expectations. Scarlet such a huge move. In terms of what it means for 3 ,currency market, gaining that has prompted china to take action. You can see beijing weekend to the lowest march of 2011. According to people for money with the situation they plan to press counterparts next month on the u. S. Rate hike in june. They would prefer a rate hike in july. Alix a commodities the story was about oil. A monster rally as well. Stockpiles dropped a big but also it was weird to me because you have these french refiners who are still on strike. Lets take a deep dive into the bloomberg. You can find all the following charts at the bottom of the screen. Resultm looking at the of the canadian wildfires in the u. S. This is the balkan wti spread. Oil in the midwest versus the generic u. S. A few months ago around january and february that spread was three dollars. You have so much oil lost in cushing. Now that is . 30. That goes to show the tightening in the market due to the canadian wildfire. Watching the spread as an indication of how tight the market is. Alix its pretty consistent. Meantime i am taking a look at tiffanys read a rough go. Foreignexchange changes left spending from overseas tourists. One bright spot is lower product costs. It has been down over the last couple of months. What will see is that has translated into higher profitability. Gross margins are in wife. It was about 61 . Atres closing up four cents 6389. You can see those charts and more on twitter. All ofoining us now, her, stocks had a nice followthrough from yesterday and that is a bullet sign in three months. Investors saying the economy is maybe not so bad. Pretty solid move. Perhaps that is why they have a more sustainable. The question since we started talking about higher rates, dont let the fired the fed go at the wrong time. This time last year we were in a similar predicament. People were saying here is a solid window. Then the fed did not go. Markets gottfried doubt and they didnt go until december. If we have learned one thing is that markets are ok with the fed going if the data cooperates their own views. Youve had some solid stuff with home sales. Solid numbers with pmi above 50. Thats important. That gives you a picture about the average american consumer. If the data is there and it is solid maybe we are ready to do this thing. Quick notes. This is the Hardware Division of the company. We have secondquarter adjusted earnings beating the consensus of . 38. Revenue was down 10 . Doubledigit declines. In the printing side following year over year. When it comes to the outlook hp is looking for profit of 37 to . 40 a share. , theps on the high end average analyst estimate. For the full year theyre looking for a bit of 159 to 165. At least a dollar 59 on average. Alix a different story from yesterday. About stocksng versus actual economic data. You would look for the homebuilders. A huge jeff yesterday. Homebuilders had a huge rally since 2012. If the data continues to support the what happens to the homebuilders . Scarlet homebuilders yield it is getting a large bump here but as you point out this is been a positive part of the economy where the past three years there has been strength in homebuilding, inhome sales. If you have Mortgage Applications you have the numbers on the home sales doing good. Pretty substantial part of the market. Just solid group of stocks people look through with the economy. These are the things people are looking at when you have these economic focus groups doing well. If you want a positive. Scarlet as we look for the Federal Reserve to raise rates, you focused on the differentiation by investors between midcap and big banks. This is interesting because you have had a strong outperformance. If you just look so far this , s p the orange line midcap, it has taken off. Part of that, two things are going on. , thatt interest story represents a big part of their business. Previously when we thought we were going to have a dovish fed, that is not going to be for those companies. Upt language pushes stocks and then at the same time, if you take the worst returners it is the big banks. , allan, Morgan Stanley these companies having issues in terms of Capital Markets business. That is not as big of a factor. Alix part of the trend has been the rotation from growth to value stocks. This is the year we see that take full effect. And banks trading below their book value. Quite sure. Valuations play a big part. When you look at the big gains we have, you can see a close. Orrelation between valuations. Hat is a factor taking a front if you look at a group of stocks and you have these metrics valuation plays a big part of it. Are still high for the start of the year. Scarlet you talk to investors, shortterm traders, people focused on nearterm. For whateaking are they looking for . They bracing for volatility this summer . You would think so by their actions. Funds haveatility covered a lot of that. People do want to get in that. An interesting question is what kind of investors buy into those . Are those people that want to buy a low volatility etf or are they doing it as a hedge . It is hard to know. We have also seen steep containment which would contain volatility farther out. Will get a better gauge on what is going on. Then the president ial election. Right now there are questions about that but june is definitely big. It seems the fed is set on going but the market now is still not 50 . The market is taking advantage of the past couple of years. The fed is not going to go. I could it could be a very rude awakening. Scarlet looking at the work function, the probability of a rate increase is 34 for july. It has crept up to 55 . Alix that dovetails. This is the next curve six vix curve. And the big part of it, the fact that there is a sharp move up in the futures talking to the fed funds futures, it is only 34, 30 8 of what it was the other day. Two thirds of the market is going to be taken aback if the fed does. We are seeing positive moves this week. You have to think after so long, of the fed crying wolf for lack of a better term, except that one last year, you have to think that is going to surprise quite a bit of people. They are still banging on the fact that stocks are below highs. The fed is not going to go. Still too skeptical there. Thank you. Torlet china turns from foe friend in the quest to raise Interest Rates. And where the fed will move on rates. A quick check on hb q. They are either down 13 after reporting a loss that was bigger than what was estimated. Im mark crumpton. Lets get to first word news. The agency will add 768 new screeners by midjune to deal with the long Airport Security lines. Several factors had contributed to added wait times including more passengers and a shortage of applicants for the applicator did expedited screening program. Hillary clinton is blamed for poorly managing email and other computer information. It cites longstanding systemic weaknesses. The started before mrs. Clintons tenure but her failures were singled out as more serious. The romanian hacker who accessed the computer accounts of the bush family and others has pleaded guilty to Identity Theft in federal court. He admitted to unauthorized access of a protected computer. He is best known for hacks that reveal bush family photos and tointings connected george h w bush. The hacking led to the revelations about mrs. Clinton prim private email account. At a News Conference with Prime Minister shinzo abe the president discussed a scheduled visit friday to hiroshima which was leveled by a u. S. Atomic bomb during world war ii. Our visit will honor all of those who were lost in world war ii and reaffirm our shared vision of a World WithoutNuclear Weapons and highlight the extraordinary alliance that we have been able to forge over many decades. He will become the first sitting u. S. President to visit her wrote him a. He has no plans to visit pearl harbor which was destroyed by a japanese air assault during the war. Im mark crumpton. Back to you. Alix china trying to avoid a fed driven market tantrum. Officials are trying to deduce when they will raise rates. The best Case Scenario would be for july. The chief global economist joins us now. What kind of consideration should the fed give china when it comes to the timing of the rate increase . To be brutally honest, not very much at all. The fed job is to set Monetary Policy. That is what they will do. China is in the boat of all the others trying to figure out when the fed is going to move. Globalfed has alluded to developments however they couched in previous statements. Clearly they are mindful of the ramifications of what they do. That is the way to think of the international implications. Is there some feedback loop that would come back into the night it states . That is a pretty indirect mechanism. For a central bank to be able to divide that with any confidence and make that the basis of moving the policy decisions, that is a big move. Alix they have to be concerned with not repeating what happened at the beginning of the year. Take a look. This is the dollar versus the yuan. You had a lot of money coming in. You had a big evaluation. A similar story happened in august. We saw china start to take some steps today to lower their ban. What steps can china take to smooth whatever transition comes their way . Isthe irony is that china moving towards a more flexible mechanism. The want to free up. The volatility we have seen, though people make a big deal about it is not that big. Have probably move that a 5 , which in the grand scheme of things is not a huge move. Chinese have to stick to their knitting. Sure the domestic markets are developing in such a way they can absorb the consequences of freeing up the rmb. Good communication would help but i dont think that china is going to get through this process without time to time, and stirring up the international markets. That was the topic of conversation with the u. S. Officials saying they dont see a problem while japanese officials have made clear too much volatility would be damaging. Move doe youll you feel like that will be our threshold . Finance minister broke one of the golden rules but dont put numbers on these. The position has been for many years that they do not target a u. N. Ic level of the they would be concerned that volatile and abrupt movement that were out of line were fundamental. They are putting some numbers on that. There has been a bit of a gap open up around the exchange rate. It was your sense, there a big deal when it first came out, do investors in japan believe in it . You have to divide it into two elements. Deflation,bid to end and that is going reasonably well. There is still some work to do. The second aspect is structural reform. Easures that can be taken the second aspect of that is structural reform, measures that can be taken to arrest the steady decline in japan potential growth rate. I think on the monetary side, things are going relatively well. Alix so maybe they trusted. Thank you very much. Scarlet coming up costco will report earnings later this evening. We dig into numbers and look at why some are slow to follow the shift to ecommerce. Scarlet breaking news concerning there are nos. The company being sued in a classaction suit claiming fraud. It is accusing the company of false advertising and negligence in the lawsuit. The company had devoid two years of testing and now they are being sued in a classaction fraud suit. Scarlet lets talk about kospi pursuing a different strategy than other retailers. The industry focus is on putting the brakes on store growth. Sales depend on adding physical stores. Lets dig into the numbers. Costco stock has fallen 10 this year. When you compare it to the broader market, they outperformed in the Fourth Quarter before running out of steam and meeting up with the s p 500. The reasons are stronger u. S. Dollar and falling gasoline and food prices. Growth is the white line there. When you back out there is a clear performance there. Impact in plans to raise minimum wage for the first time in nine years. They plan to add 20 new stores a year. You can see the companys Capital Spending at its highest in more than two decades. The concern is costco could be vulnerable and fall behind in ecommerce efforts. Where would they expand . Costco is big on the west coast and has room to expand in other regions compared to its rival. Bjs dominant in the northeast. Costco is about its members. They aim to keep renewal rate above 80 . Two thirds of all sales. They added 18,000 executive cardholders per week. Cosco will be reporting results later on this evening. Alix we are in a much we have much for coming up on whatd you miss . We have an exclusive interview with bill gross. Ong firesider li chat brought you live. Okay, ready . Whoa [ explosion ] nothing should get in the way of the things you love. Get americas fastest internet. Only from xfinity. News. House Speaker Paul Ryan has said he is not comfortable with his decision on the endorsement of bottled of donald trump. Those people said ryan may endorsed trump for president this week. This figure was said to be concerned about the split that was developing in the republican party. More troubles for the Embattled Department of veterans affairs. The Agency Mistakenly declared usands of thats that thats dead. Of vets dead. Obama and first lady president obama and the first lady have reportedly selected their home for their postwhite house built in 1928. According to a new united just overt 200,000 people trapped by war in syria. Be report says more needs to done to help 13 Million People in need. Global news 24 hours per day powered by our 2400 journalists in more than 150 news bureaus around the world back to you. Alix it was risk on, not just in equities but across the asset classes. Adding 145 points. Of 1 . Up by 7 10 the nasdaq at a onemonth high. We saw Energy Materials leading the way. Alix it was the rally heard around the world. We had solace over and emergingmarket, the most in six weeks. Aboverket index closing its 200 day moving average. That rallies that rally spilled over to european stocks. That upside followthrough when you have a monster rally and can build on the next day, it definitely makes it a shortterm feel good for the rally they are seeing. That did not do so well is yahoo . Since january 7. People are eating for you and your stock is down. Scarlet it has become a tracking stock for alibaba, and people are wondering how it positions itself. Alix alibaba was put out earlier. With thelets stay u. S. Stocks seen. Im looking at cyclical versus defenses. Cyclicals still track to be the defensive company. 18 . Gained about the blue line, defensive, has gained about 9 . If you look at the past year, a very different story, the defensive has outperformed. A according to richard bernstein, the ceo and cio there, he says all it takes for cyclicals to outperform is to not repeat what we saw in 2015, which was a stronger dollar and more oil prices. Alix fed raises rates, the dollar goes higher, and boom. Im looking at what is going on in venezuela. They are selling a serious amount of gold. They cut reserves by 16 in the first quarter. That was the biggest gold sale in eight years. This is a quarter by quarter look. You can see the biggest four out of the last five gold sellers actually came from venezuela. To repay we are going our debts, it is no problem. This is what they are doing, we gold. O sell we talked earlier with the director of the eurasia was talking about whether production would falter. Yes it will, but probably not to the zero level, which some people said could be the scenario in a worse case situation. It raises the question of how much social unrest this generates, because venezuela has cut off to save on cash. It is that blood testing Startup Company over technology. T company is being sued of sued over claims of false advertising, unfair business practices, and by resident in arizona who is doing a class action suit. Meantime we are taking you to Beverly Hills california, where Erik Schatzker has a sit down with bill gross. Bill if i told you the truth i erik l you again, tell you again. Your it is made, 2016, Global Bond Fund is up 2 . He is outperforming pimco total total lineperforming return, looks like you still got it. Bill thank you. It was a short period of time, to prove youve got it i think as you all know, it takes more than a year or two. Satisfied with the results, it doesnt sound like a lot of money. We will talk about in the next few minutes, there are reasons why. Im proud of the returns and hope to do better. Are you having fun . Bill it is always fun in a tension filled way. Im sure professional basketball players and nba playoffs have fun players in nba playoffs have fun. Me because it is me toitive and it allows try to outperform the competition and hopefully succeed. That is important to me. You described your competitiveness as borderline unhealthy. What point will you have proven to yourself that you have still got it . How long does it take . Lets remind everybody, you are 72. 71, still . Whoops. You are clearly not prepared to hang up the high tops i just want to know, what is the period of time in which you need to prove it to yours