tv Street Smart Bloomberg March 9, 2015 3:00pm-5:01pm EDT
>> welcome to the most important hour of the session. i am alix steel, and this is street smart. stocks are rising on the back of you making the s&p more than tripling from its low six years ago. in brussels investors getting new reasons to worry about greece as european finance ministers tell athens not to waste their time. tim cook introduces apple smart watch and a new macbook. "street smart" starts right now. here are the top stories we are
following ahead of the closing bell. euro area finance ministers telling greece it must meet -- move faster if it wants europe to unlock more bailout funds. reese is said to have slid backwards as it has not offered the details needed. athens has until june to reach a broader agreement with the euro area. janus fund suffering its first black month since gross joined the firm. about $1.45 billion in assets. bain capital seeking funding for its third asia fund. they hope to capitalize on a surge of eye out deals in the region last year. the fund will focus on china japan, india, and australia. we have got less than hour until the close of trading. breaking news desk, scarlet fu is looking at some of the action. what are you looking at?
scarlet: we are seeing a come back from friday's big selloff. the dow industrial is near its best levels of the session. you have 26 names higher, and only 4 declining, led by intel and coca-cola. you see the yield on the 10 year coming down to 2.19% after it reached the highest level in 2015 on friday. the dax is one of the best-performing western european stock benchmarks this year, up more than 18% in 2015. that gain is a lot of different in u.s. dollar terms. more than 20 record highs in two months on anticipation of ecb quantitative easing. in the u.s. market, m&a is helping drive the game. simon property group going public with a $22.4 billion hostile bid for its fellow shopping market owner. it would be worth $91 a share.
rti international getting a big bump up because of color continues to build its business of making specialty metals products for the aerospace industry. the price tag they are about $41 per share. pinnacle, this is a deal in the casino industry, gaming and leisure offering to buy rick and mortar assets for $36 a share. what apple shares are doing here is the turn as tim cook and his fellow executives were on stage giving pricing details of the new apple watch. apple was at a high earlier today of about 12957, and hit a low of 12506. it is up a quarter of 1%, but certainly the price range you guys were discussing, anywhere from $350,000 -- $350 to $10,000 plus. alix: we tend to see that kind
of selloff on apple after these announcements. apple's big event, tim cook taking the stage to introduce apple's pipeline products from a medical research at to its thinnest macbook ever. the apple watch, he delivered. here is tim cook on the $10,000 watch. tim: there will be limited quantities of the apple watch edition. it is priced from $10,000, and it will be available in select retail stores. the apple watch edition is the most beautiful expression of the apple watch. alix: joining me from san francisco is brad stone, covering the event, and corey west. $10,000, brad. did the crowd go wild? brad: apparently, there was a gasp of astonishment. people pay tens of thousands of
dollars for luxury watches. i do not think that is a story. the apple watch starts at $349 for the sports edition, $495 for the stainless steel version. did it deliver enough value for users? being able to track your uber driver, being able to identify a song via shazam -- these are things you can do by your phone. apple is selling glanceability. is it enough for an item you have to charge every night? the phone looks great. there are certain versions of it that are more affordable than the gold edition. we will if people really want to wear it. alix: cory, with the phone and laptop, we all deal with the replacement cycle. can we really expect consumers to go out every few years and by a mother $50 watch? cory: -- another $350 watch?
cory: that is the cheap version the sport edition, starting at $550, but up to $1100. i think that is where the main business is going to be in that space somewhere up to $11,000. the high-end watch starts at $10,000. starting at $10,000 is interesting for these guys. will people continue to spend that kind of money and upgrade? it is much less than their laptops, much less than a full price phone. i do not think it is ridiculous to imagine a really good business in that price range for a device people want to use and i imagine the device will get a lot better over time. if you buy a 10,000 dollar rolex, you might lose 20% on that if you overpay for it, you have an asset that is worth
something 20 years from now. that might not be true of the apple watch. it is an interesting pricing strategy. i think it is important thing back to where apple was 15 years ago, when they were trying to find a way to expand their pc market share by cutting into their profits, by taking their profits down from 20% to 10% or below. what they are thinking here is whatever we sell, there is going to be some profit, and we need stuff that is good enough to keep the profit margin. maybe by having the very high-end, they will be able to have a lower profit margin but sell more units. alix: you make a good point. can anyone recycle their gold watch? rolex keeps its value because you can resell it. who is going to want an old $10,000 apple watch? the thing in mind the announcements we saw today, which was the most significant?
doug: -- brad: the macbook stole the show. it is 24% slimmer than the last macbook. they have a haptic feedback touchpad, a new usb port. apple watch is the bigger bet for tim cook because it is the first new product category launched under his purview, but they are going to sell more macbooks. that is a steady your business. i would say apple watch and macbook have shared the spotlight in san francisco. alix: did you feel like tim cook successfully sold the apple watch? did he get the job done? doug: i have to say personally, i am skeptical. the smartphone exerts such a gravitational pull on our lives. this is why ipad sales have slowed down. we pay more attention to our phones. the idea of a watch that complements the phone, that does
not work without it, that offers a limited, curated version of what is already available on the smart phone -- that is a tough sell for me. i did not see any apps demonstrated today that expanded our understanding of it. i think tim cook from what i can tell, did a marvelous job. sales numbers will tell the story. i do not know if he completed the sales pitch. alix: what country do you think the iwatch is really targeted toward? i think gold, i think china. cory: i think it is a u.s. product. it really is a global product. the notion of this phone is meant to have a global appeal. i was really shocked they are going to sell this thing in nine countries around the world. i was also shocked to see they are going to sell this in department stores in paris and london, on a very high-end and sell them in apple stores on an appointment basis. you have to schedule an appointment to meet with someone
to explain this watch to you just place an order when it first comes out. i think that is very important. i think it is some important -- is important and shows they are starting something new at apple. what happened today matters, but it is not game over. even though we are in spring training season, i am not thinking about baseball yet, so i won't say it is the are standing, but this is the beginning of apple trying to do something very differently. this might expand other products. this macbook is going to be in three different colors. there is a gold version of the new macbook air. i think that is important as well. indeed, it may be a more important project this year. long-term, the watch tells us a lot about the future of apple, good or bad. alix: skepticism from brad, a more positive outlook from cory. good to see you. >> are starting to appear on the greek deal. european officials say the reform plan does not go far enough.
alix: welcome back to "street smart." these are the top stories ahead of the close. angela merkel is still hoping for a diplomatic solution to the ukraine crisis. she made comments at a speech in tokyo earlier today. merkel also noted the onus is on russia, due to seizure of ukrainian territory. the president of the european commission has called for the creation of an eu army to demonstrate unity and seriousness when it comes to defending european principles against russia. however, the proposal was immediately rejected by the british government. right now in washington president obama meets with european council president
donald tusk at the white house expected to discuss ukraine, russia, the economy, and the transatlantic partnership. the ecb kicking off its bond buying program, buying debt from at least five countries, including germany and italian bonds. bond rallies. the german 10 year yield approaching a record low. questions remain over how the ecb will handle losses from buying negative yield bonds. a warning that ecb qe could increase the risk of global deflation. here to discuss the president and ceo of mark investments. and here onset, lisa abramowicz. axel, good to see you. how hard to prices -- how far do prices have to go to entice sellers? axel: fewer sellers are going to be there. mario draghi indicated he will go as low as -2.2%, since when the fed engaged in qa big banks
could sell bonds and parked the money at the federal reserve. the eurozone, people get penalized. i guess the theory is that at minus zero .2% there should be plenty of sellers to get rid of -- to sell their bonds to the ecb. it is good to have that framework. alix: how do you deal with a loss sharing program with negative yields? will that be some kind of issue? lisa: basically, you have central banks that have not agreed how much of the negative yield that they are going to absorb. they are going to have losses. this raises some questions. if you have one central bank that is going to buy up to the positive rate and others that are not, they might say you are buying debt that is too risky. it shows a different this program really is federal reserve stimulus and quantitative easing.
axel: this creates a political can of worms when there are losses stemming from greece. that loss should be shared. germany says wait a second, we do not want to buy these bonds so what should we do about these losses? later, others will say, you guys railed out on those losses. it does not matter. a central bank and have a negative network. the bank of israel has had a negative net worth for 20 years. but the ecb has this rule that losses should be shared, paid into the government. but rules can be changed. alix: changed with a lot of struggle from national central banks. axel, because you are our currency guy, i want your take on bank of america's call that says the foreign investors will be selling a lot of their bonds if a lot of currency is hedged. that would drive the euro lower pushing up the dollar and increasing deflation risks across europe. what do you think?
axel: foreign companies are issuing bonds in euros and might not be hedging their currency risks. that might have a similar impact . these are real players, real money selling the euro. at the same time, people are dreaming up all kinds of scenarios. my view has been that qe, all it does is weaken the euro. it does not help anyone but germany, that is ready to leverage this weaker euro. and the costs are big ones. alix: right now, what is the incentive from someone -- for someone from the u.s. to go to europe and by bonds yielding almost nothing, or potentially less than nothing, when you have the euro-dollar difference causing net losses, because the dollar is depreciating so much for the euro is -- the dollar is appreciating so much and the euro is depreciating. this is discouraging investment in europe. alex: a counter narrative is
there is good news priced into the u.s. dollar. on a real basis, interest rates are more negative in the u.s. than in the eurozone right now. it is just anticipation of the exit that we have this trajectory that is doing so great in the u.s. keep in mind the dollar has been rising in a risk on a environment. if we have the stock market topple because of an exit pursued by the u.s., i am not sure the dollar is going to benefit. mario draghi does everything in his power right now, and that might scare some investors away. there is structural reform and those sorts of things. qe does not do that. alix: greece, european officials say the latest proposals fall far short. the dutch finance minister saying greece must pick up the pace, and officials have to "stop wasting time." finance minister: we would
support greece further if they continue on the reform path. i think the talks about the program and the reforms that are needed should restart very, very quickly. we are losing too much time. alix: greece -- lisa: if greece does not pay, is that a default? alex: -- axel: they will find ways to get the money, learning by doing. he is wasting a great deal of time. it would be very helpful if he got serious about the thing. the letter he wrote is kind of sweet, but a first grader probably could have written as good a letter as he wrote. we need to live up to the task. he will probably do that, but he seems to like to do these things the last minute, and that is all for a great cost to the greek society. i do not think it will be such a burden for the rest of europe.
ultimately, if the ecb has losses, it is mostly a political problem. alix: is that why this greece is very different? lisa: to axel's point, the bond market is not responding much. you saw greek three-year debt rise to about a 15% yield as the value fell. but that is far below the 21% we saw about a month ago. alix: we have not seen the periphery take off iq did a few years ago. lisa -- take off like they did a few years ago. lisa: they are not buying it. alix: jeb bush in talks with amazon for an e-book inspired by his e-mails. ♪
under fire for using private e-mails as secretary of state, but jeb bush hopes to turn his into an e-book. he is in talks with amazon for a memoir. john allen is in the studio with me. no one is probably going to want to read a book of e-mails, so is this anything more than a push back at hillary clinton? john: hiding his e-mail in plain sight? i do not think many people would buy it. hillary clinton, republicans have known for some time that she had this issue. republican investigators in congress have known for some time. this is a smart move by jeb bush to get out in front of this hillary clinton scandal. even had he not known about this issue with her e-mails, the clintons are famously opec, not transparent. to get up there and say, read my e-mails, it is a contrast. alix: jeb bush, his national campaign, it seems he is
sticking by his immigration policies, sticking by common core education. does that mean he is saying, i do not care about base republicans? i am going to win this national election? john: you have to be able to lose the primary in order to win a general election. he is talking to republicans saying, i do not agree on this issue or this issue but we agree on these other things. alix: can he do that because he is such a good fundraiser? john: that is part of it, raising money versus other republican candidates. but i think there are other assets he has as a candidate. he is pretty nimble on his feet. he is not the best candidate you have ever seen. a smart guy, experienced in government. alix: there is no bush fatigue? john: i think there is bush fatigue and clinton fatigue. at that does not mean it will not be bush versus clinton.
alix: apple unveiling its smart watch. the device has a customizable face and a feature called "lands it" for features such as whether checking. -- a feature called "glance it" for features such as checking the weather. a deal for base ridgewood combine two of the largest u.s. shopping mall owners. the offer may be the opening salvo in a protracted takeover battle. the u.s. stock rally turns six years old today. laszlo birinyi says he expects
the bull run continue as long as investors remained skeptical and pessimistic. he predicts the s&p 500 will climb to two to 40 over the next 3-6 months. we are 30 minutes -- will climb to 240 over the next 3-6 months. scarlet: on the new york stock exchange, every three stocks are higher for every two that are down. some positive breath as we head into the final half hour of trading. tesla is trading at a nine-month low despite gains in the broader market. the electric carmaker confirming it is cutting jobs in china, but no details on how many jobs would be affected. usually when a company confirms job cuts, it tends to rally on the news but tesla, a lot of people are waiting for big news out of china and this was not the news they were looking for. any indication that sales were slumping there is hitting the stockard. big oil names like chevron
exxon, and conoco phillips. business fundamentals could improve this year because of three main reasons -- higher oil prices, increase production and global refining margins. of the three, only exxon would generate positive free cash flow's after paying a dividend in 2016. mcdonald's i know you will be speaking with betty about it later on, but it is rebounding from weakness, up despite a night straight month of comparable sales. the u.s. and asia were the weakest with declines of at least 4%. alix: thank you so much. love talking big oil. time for the roundup, stories we are tracking ahead of the closing bell. i am here with lisa abramowicz, lisa -- and with matt miller. the smart watch, who is doing it?
lisa: -- i am all in. we need to talk more about it. when one of the biggest companies in the world makes a huge new product, we need to talk about it. none of us are saying we are going to buy it. how long does it take for the adoption to take over? >> this is the most brilliant marketing campaign ever. everyone is talking about it. there is a huge company with endless cash, and they get all this free advertising. hats off to them. matt: and there are no details that are new or exciting. i knew that. alix: you get this. matt: i cannot think of anything you would not have expected that is actually involved in this watch. lisa: the macbook, when i thought it was going to be two pounds, i thought, that is going to be huge. sales could reach over $6 million. we write this off, but that is a huge development. matt: i will buy one as soon as
it comes out. it is like the original ipad. that is unbelievable. that is the exciting part of apple today, not the watch. leslie: it is interesting they are placing their bets on a laptop, when all we have heard is mobility. the watch is a bet on mobility. we have heard all this investment in the iphone 6, people buying that. with the whole watch aspect, analysts project they will maintain 56% of the market. they are ramping up to capture this market so quick, just because of that adaptability. matt: the watch market? behold watch market or the smart watch market? leslie: smart watch. rolex is safe. matt: there is no market. i predict they get 85% of it. it is a smart watch. who has a smart watch? alix: we could go on with this
forever, but i want to talk about an awesome story. venezuela has an offer from the prime minister of trinidad and tobago. hold on. in exchange for oil, trinidad would give venezuela tissue paper. in venezuela, there is a plague of shortages for basic goods citizens lining up for hours to seek the detergent, cooking oil. this is quite a fascinating story. you guys are looking at me like, really? lisa: i love this story. matt: remember when elaine needed tissue paper on "seinfeld"? but when you have put a paper it is not a pleasant world. they are lining up to get lunch products. alix: inflation is 70% in venezuela and the economy is going to contract 7%. lisa: this is what happens when your currency no longer has meaning, or you do not have any ability to exchange or goods
other than literally. alix: we are seeing the same thing in iran because of the sanctions. an ultralight plane covered by the sun took off from abu dhabi and attempted to fly around the world without using fuel. the 21,000 mile flight will take 4-5 months, and is scheduled to cross india, china, and the u.s. before returning over the atlantic. leslie: this story reminds me of a millionaire hurt. what is interesting -- reminds me of amelia ehrhardairheart. they have to make sure they are landing and getting that some power they need to get going. it is the tesla of the future for planes.
matt: i hate the idea of it taking 10 years longer to get to london. lisa: a study showed that pollution from planes kills more people than plane crashes, plane accidents, so this is a real concern, that the pollution is contributing to the deterioration of our environment. alix: thank you. that was really interesting. the google ventures president -- 500 years old. he makes a point that ray kurzweil is to help google understand a world in which machines surpassed human biology. i do not want to live to 500. lisa: what about social security entitlement programs? matt: i cannot wait. the guy looks literally like a 20-year-old. alix: they are also working on
antiaging things, doing remarkable things in the life sciences world. it seems like this holster passing artificial intelligence aspect is cropping up in our daily lives now. what they are doing over there is really -- matt: "chappy" won the box office? alix: -- lisa: i grew up in a family of science fiction geeks, and this is the holy grail. this is beating the ultimate end, beating biology, beating the one thing we cannot control, which is that we all are going to die. if you have billions of dollars what is the final frontier? conquering your mortality. and robots, if you cannot beat them, join them. you want nanotechnology to be part of you, absorbing your thoughts. it raises the question, i think therefore i am. matt: creating the android
alix: let's take a look at the headlines we are ahead of the closing bell. a new report indicates that saudi arabia has become the largest importer of weapons and defense systems. india previously held the top spot. saudi arabia spent over $6.4 billion last year on defense purchases. republican lawmakers telling iranian leaders any nuclear deal they sign with president obama will not last after he's nine's office. senators from both parties have been pushing to have their stay.
talks are scheduled to resume within a week. tesla planning to cut jobs in china, as sales have been slower than expected. reports the electric carmaker is a limiting third of the current 600 positions. tesla has seen departures of its president and vp of communications. tesla started delivering cars in china last year. at the rate sales are going it may take mcdonald's longer to reach a trillion customers served. same-store sales fell 4% last month, worse than estimated. local sales also coming up short. the new ceo is facing a huge uphill battle. mcdonald said current performance reflects the need to evolve with today's consumer. for more, i am joined by betty liu and stephen anderson a senior analyst with miller quebec. what is it like in the boardroom now? what is the biggest tension the board is grappling with? stephen: investors are looking
for that "plan to win" moment, a strategy put out in 2003. that was the turning point for mcdonald's to turn the corner back then. back in early 2002, mcdonald's at that time bore the only quarterly loss in its history. right now, they are looking for that moment, that catalyst to drive sales globally. almost all markets except europe -- alix: talking to analysts, they like the customization track mcdonald's is going down, but in essence, that is what is killing mcdonald's. betty: it is slowing them down. john thompson did part of this during his tenure trying to simplify the menu. i all accounts, mcdonald's is doing the same thing. one of the things that has been prevalent among their competitors like chipotle, wendy's, and others -- others have been investing in their
stores, renovating their stories, wendy's in particular. mcdonald's clearly has not. they have done some things, and they are trying to renovate trying to rejigger their drive through, their kitchen. at the actual restaurants have been lacking in atmosphere. alix: part of that is, 90% are franchisee owned. you can get a loan and change her, but it is up to the franchisee. stephen: and the franchisees are under a lot of pressure to keep discounting aggressively but they have been pushing back. over the years, we have seen franchisees struggle with the one dollar may double versus -- mcdouble versus the double cheeseburger. this goes back to when they put in mccafe machines. the challenge for steve easterbrook is going to be balancing the need to keep costs low while keeping franchisees happy. alix: how do you do that?
stephen: you try to find efficiencies maybe automate some processes. that is going to take time. betty: the bottom line is that life is a mcdonald's franchisee these days is miserable. they are dealing with single-digit margins running a restaurant. they have corporate headquarters that have not come out with a really huge, knock-down marketing campaign to get people into their restaurants. and they are also dealing with other issues, from the obesity issue which now seems kind of in the past, to dealing with minimum wage. that has hit franchisees very hard. alix: they are trying digitally, right? trying to do something along those lines. betty: at sxsw, starting on friday, mcdonald's is going to be sponsoring this gathering for the first time. the digital chief at mcdonald's has been doing several things. he opened an office in print --
and san francisco. he is opening one in chicago. he said, we are planning to showcase how we are using digital to enhance the everyday and naturally add value for the young people who they are missing in the restaurant. stephen: better late than never to adopt a digital strategy. they have to fortify the way starbucks has done. if you consider the market leaders doing digital, you think of starbucks, domino's pizza. dominoes gets half of their customers now from online, whether it be pc or mobile channels. that is where the future is. alix: got to leave it there. thanks so much. good to see you. coming up, i deal with an activist investor to reduce cash stockpiles. ♪
in exchange for the active investor -- activist investor henry wilson giving up his request for a board seat. is this really caving to wilson or was gm going to do this anyway? matt: gm already said it was going to buy back shares, and/or raise the dividend. they already raised their dividend earlier this year. when they did that, i spoke to the cfo, who said, we are looking at more ways to give that cash, because we are generally more than $3 billion in free cash flow a year, and we already have tried $5 billion on our balance sheet. we always want to hold -- we already have $25 billion on our balance sheet. only $20 billion is what we want to hold. alix: does wilson go away? matt: this is what old-school activist investors do. they agitate, threatened to get
a seat on your board. you kind of have to pay them off to go away. that kind of activity has been called other things, but activist shareholder in this case. i think mary barra has handled this well. she has said that her goals of giving cash back to shareholders more often, for in a way that was sort of road marked better really combined with his goals of getting back cash quite well. she negotiated with him over the last couple of weeks, and they came to an agreement that they are going to get a $5 billion buyback. they are also doing dividends. alix: what does this say about potential for growth? an oil company says that and you are going to stop exploring. matt: they are going to invest $12 billion in new products. you want them to not stop building the great products they have built since new gm was made, and they seem committed to that, but they are going to hold their bare minimum of cash, $20
alix: welcome to our viewers around the globe. you are watching bloomberg television. this is "street smart ergo i am with scarlet fu. it is time for the top 10. a yahoo! activist investor applying pressure on the company. in a letter to marissa mayer, he is pushing for the company to spin off its japan business, after yahoo! announced it would exit alibaba. scarlet: blackberry shares falling by the most since january, goldman sachs
downgrading it to sell from neutral. did you know that when it changed to daylight savings, the alarm that was set up did not go off? users overset because the alarm never went off for blackberry. alix: but that happen on saturday night. scarlet: i know, but it never carried over to the alarm. alix: simon property group offering to buy a west coast mall operator. they have rebuffed simon's previous offers. scarlet: mcdonald's shares paring some earlier losses. a ninth straight quarter of shrinking same-store sales. the second week on the job, the new ceo is working to revamp the menu and operations to compete with fast casual chains like shake shack. alix: shares of a mining company falling to the lowest level in nearly 11 years.
axiom cutting shares to sell from hold, predicting a collapse in the price of iron ore. scarlet: petroleum is surging by the most in more than a year. the number one oil producer in the bachmann shale formation may be looking to sell itself. the drop in oil prices, taking a toll. alix: this is significant, a huge operator in the balkan. it would see a struggle with the lower oil pricing. while companies are going to banks and getting their loans reread it. things could say, this year i'm only going to loan you $100,000 because of the oil price. this is when we are going to see very leveraged companies get in and out of trouble. scarlet: no response just yet. we try to contact them as well. alix: -- scarlet: alcoa shares falling to the lowest level since may. the aluminum maker agreeing to
acquire rti international medals for $1.25 billion, expanding the aerospace unit. alix: and never three is tesla. the company sales have slowed in china. scarlett: number two general motors. the company announced it will buy back $5 billion in stock by the end of next year. activist terry wilson was pushing for the buybacks will stop -- for the buybacks. alix: and our number one stock of the day, can you guess it you it is going to be apple. -- can you guess it? is going to be apple. shares are up in the anticipated -- in the news of the highly anticipated iwatch. and we are gearing up for the closing bell.
seeing a rally underway making up the losses that we saw on friday. the dow of triple digit. the s&p up by about eight points, and the nasdaq by 14. [closing bell] you are looking at the bill ending today" stop -- ending today's close. and still with me, scarlet fu. also lisa abramowicz and carl riccadonna. greek clouds are still looming. the greek finance minister varoufakis is defending the greek government, saying they had -- they are wasting no time. also saying they will not accept the troika again. i feel like this deja vu from two weeks ago. greece has 300 46 million euros they have to pay the imf on friday will stop what happened if they cannot do that? -- on friday. what happens if they cannot do
that? lisa: it's like, how many times can we watch this movie before people say, look, you guys can top fostering now to get some deals done. hobble through and perhaps there will be some real resolution. alix: to be fair, it seems like everyone made fun of greece's deal. and they had people with microphones trying to catch people in evading taxes, but this is a very new government not getting any slack from anyone in the europe at this point. karl: -- carl: we are on much more even footing out. pay to use the expression, but we are seeing green shoes throughout the european economy, but also -- in germany, but also in more peripheral countries, france, england saying -- and spain.
if they miss a payment, it will rattle financial markets, but nowhere near the degree we seen in the last couple of years. alix: hanging on, scarlet fu has earnings. scarlett: comparable sales in the fourth quarter rose 6% of -- and it looks to be in line with what analysts were looking for. nevertheless, the prophet -- the profit beat is up in after-hours trading. i wonder if the stronger dollar had any impact on it. carl: gas prices have backed up a little bit over the last couple of weeks, but the profile of gasoline prices this year is muted relative to what normally happens in the first part of the year.
alix: i should point out that the majority of the revenue comes from the u.s. talking about the stronger dollar, and scarlet mentioned, and we have the drama because of what is happening in greece what is the longer-term effect of this currency destabilization? carl: this is a big problem for exporters, but also domestic users who are competing with cheaper imported goods, whether it is automobiles or apparel etc. it's much larger than just an export story. alix: we do have some breaking news on qualcomm. scarlet? scarlet: it has announced share buyback program and also raising its dividend by 14%. it had $2.1 billion available as
of march night for a stock buyback program. that $15 billion stock buyback, presumably it would finance some of that by using the debt market. lisa, this is in your wheelhouse, this idea of tapping the bond market and taking advantage of low interest rates to buy back shares. lisa: why wouldn't you? this has been one of the main drivers of the incredible surge in stocks. if they are basically taking away from debt holders, basically borrowing money to finance share gains, that's not a very good use of capital for the long-term. you are not necessarily investing in your business not necessarily doing things that will broaden your business overall. you are basically just lifting your stock share. alix: but you are lifting your stock mark -- your stock price, and we've seen the bull market turning. and we've had some saying we are nowhere near a top. there are so many worry that we cannot be near a top.
lisa: he might be right because we've got the quantitative easing program that is pushing people out of debt that they have relied on forever. where are you going to go? you cannot go into government debt in europe or you will lose money, essentially. that will keep pushing it forward. that is the theory. scarlet: to your point, michael hartnett of bank of america merrill lynch has put out a chart that show the s&p 500 total returns relative to bonds shows that there is still room to go. and it's shy of the record high we reached during the.com -- thedfot during the dot kong gcom gains. carl: you make a very compelling case. but if you look at the underlying drivers, which is macro fundamentals, it is
middle-aged. if we dated by the calendar, it is getting a bit old. but if we look at the one idols in the market, labor costs are low, and other costs are low. scarlet: the s&p 500 relative to five year yields, there's still room to grow. he says you -- michael hartnett says gold prices and runs are signaling high inflation. lisa: and the earning fields on the s&p 500 are also an indication of that. if you look at corporate bond yields in the u.s., stocks are yielding more relative to straight investment-grade bonds. alix: to that point and wrapping in what qualcomm just said as well, goldman is saying they're still value in the nasdaq 100 compared to the s&p. nasdaq 100 companies are expected to increase 50% in the next 12 months versus just 5% in
the s&p, because they do not have things like oil and they do have more of an upside. lisa: this is not to say this is the end all be all go by for stocks. debbie downer. there are companies that are paying for their stock gains purely by raising money in a beneficial environment for them not so much for the bondholders. what happens is that capital market gets distracted -- get disrupted on any level. what happens if oil prices do go down and some of the most dedicated company started -- start to fault you go -- start to falter? alix: but there is a lot of money out there. you have a funds, hedge funds, that is what my sources are saying, that they are literally drooling over getting involved. carl: bankers are not going to accept negative yields. that tells you that there are plenty of -- there is plenty of cash out there. scarlet trading is almost one
third across the eurozone. alix: they have to invest in euro denominated debt. what does that do for their risk appetite, -- lisa: they have to invest in euro denominated debt. what does that do for their risk appetite? it is not the clear-cut. at this point in the cycle when yields are already this low, it doesn't have -- qe does not have the same effect. carl: i disagree -- alix: there we go. you say that the currency not necessarily the yield play. carl: exactly. a lot of people look at you yes a way to force lending in the economy. maybe that is normally way it can work, but the more compelling tory -- story, which is something that economists have learned is that the exchange impact is very substantial. alix: do you see parity with the dollar? karl: given the
because of risks to growth in regions, including europe. and the activist fund pushing for changes and yahoo! is renewing the call for the company to spin off its business in japan. urging yahoo! to return $3 billion of its cash to shareholders through share repurchases. and president obama with a plan to address day -- wage stagnation through $100 million in grants. apple blowout day, ceo tim cook unveiling a number of additions to its product portfolio. a medical component called research kit, and and even thinner macbook and finally, the apple watch. it comes in two sizes small version and $349 to the high-end edition at $10,000. it has a battery life of eight hours and will be available in
stores on april 10. brad stone bloomberg businessweek advisor and sam grobart here with me. as well as cory johnson. brad, you just got to touch the smart watch. tell me about it. brad: actually, i had the gold edition $10,000 strapped to my watch. managed to resist the temptation to make a break for it. i'm was surprised at how versatile it is with the apps, the way to communicate with others with another apple watch. but it is a complex device. you will have to learn an entirely new lexicon. you have additional ground that you zoom in. the crown also has a button and there is a button below it. alix: usually act -- apple
products are so instinctive. corey, what was what you saw today? cory: the macbook kind of stolen show there. the notion of -- take the editorial aside, these guys grew the macbook about three times faster than any other in the industry. and now they have added the minute is very much in the cutting-edge. it is 10% thinner than the old one. it comes an interesting color variations that they have not done with the last few macbook airs. and technologically some very interesting stuff. it's got better he battery life. it is putting more battery space into this thinner device. and it's got this usb that is the very cutting edge of how information can get into and out of a computer. and they already had one order where the macbook sold better
than the ipad. this could be big business for these guys at an important time for this company. alix: it will be interesting to see if they actually sell 6.2 million units this year. does this give some validity to the smart watch market? or is it still a xiaomi story for apple? -- "show me" story for apple? " sams: i think it is still a "show me" story. alix: brad was skeptical, but he saw substantial there. jim: are these going to be people looking at other smart watches will stop -- smart watches? for a lot of people, this is the
first watch that they actually know about. they have not been paying attention to android where -- wear. alix: or wallet. sam: exactly. alix: when you were checking out the watch, how were the apps? brad: as advertised, some of the same that were on the phone. you had uber, san diego, the music record mission at -- the music recognition app. to me, i'm not sure that is a selling point. it is a drawback that we are drawn in completely differently by this product on your wrist as opposed to choosing more deliberately to pull the phone out and take a longer look at your smart phone. alix: thanks guys.
annual dividend by 14% to $192 per share. in chicago's tallest building will be a record office property sale for the windy city, this according to persons knowledgeable of the discussions. blackstone declined to comment. we've been talking about the first new product line from apple in five years. here is why tim cook says it is such a big deal. tim cook: apple watches the most personal device we have ever created. it is not just with you, it's on you. and since what you wear is an expression of who you are, we designed apple watch two of deal to a whole variety of people with different tastes and preferences. alix: here with me on the buzz over the apple watch, dan roth
executive editor at linkedin. you run the linkedin influencers. i want to know what the guys are saying about this watch. dan: a number of things. number one, you heard tim cook say this was the most personal device they've ever created. the idea of your personal data is a big deal. david compactor can wrote a good piece -- david kirkpatrick wrote a good piece last night. it's a smart phone that everyone can have. my smart is as good as elon musk's smartphone. but the watch is different. if you buy this $10,000 watch, you have is amazing experience. that's not the way apple typically plays the game. what does it mean that they are getting into this very high end is? -- high-end business? a lot of people are saying not to watch -- not to buy the watch right now.
it's not going to work well, and then what is the upgrade? alix: is that a concern, that suddenly what people will buy now will be obsolete in a few years after -- in a few years? dan: exactly, and what you did not hear them say is how long they exist to last and what they think the us -- the upgrade cycle is. what will happen when them having much better battery life? -- when the next one has a much better battery life? alix: that is a good question and you were raising the point about how it is now luxury market. the gold watch, you could argue, is more of a fashion statement. are you hearing different types of people talking about the apple watch on linked in? dan: we had 70 people about the apple watch alone in the past week. about 1200 since september.
some people are apple fans and they are ready to buy. there are a lot of marketers talking about how they will market this. and a lot of people saying this is my data and i don't want apple having it and i don't want to be stuck with something that looks beautiful and becomes nonfunctional in six months. alix: the other thing we did not talk about was that hbo partnering with apple tv to get your own hbo on apple tv. give people seem to care about that? -- do people seem to care about that? dan: people seem to care about it, but there is this idea of cord cutting and how you will do it. apple has just announced they will make it much easier. the other interesting post i thought was the ceo of nissan just came back from the geneva auto show and said the question he got asked about most often was how he was feeling about the apple car. not the watch, but the car, and his one of you was, great.
david kirkpatrick was saying that apple takes big ideas and spread them all over the world. the apple car fits that mold more than a watch. if apple can can drew -- can come through with the car that is for the masses, but does incredible things, that will change the face of the auto industry. carlos was saying, bring it on. alix: does he see it as an -- as a car that apple makes or that nissan makes an apple installs the controls? dan: he did not say. apple want a car that is zero emission for everyone. alix: really quickly, on the research is that apple announced today, getting over your medical information will stop is anyone -- your medical information. if anyone scared about privacy
alix: welcome back. greece's finance minister is holding a news conference after his counterpart met in brussels. scarlet fu has the headlines. scarlett: the headlines into new rolling. a new batch of seven or eight reforms and last week's reform list was never meant to be complete. he had that other greek reforms will talk of tax evasion and nonperforming loans. greece has submitted a list of reforms to european creditors that failed to pass muster. the market got wind of that and there were many questions over whether greece would get the
money and planned by the end of this month. in addition, varoufakis declined to answer any questions about cash reserves, but did they that the government will be able to meet all obligations to lenders. finally, he adds that the greek government plans to hold no referendum and there is no plan for an exit. not much churn -- not much changed on the euro. it is still trading around 11 year low. qualcomm announced a share buyback and increased dividend. $15 stock repurchase program. the company only has just over $2 billion in cash. that means it will cap the debt market, take advantage of the low interest rate can at least for now, to fund the buyback. the dividend brought the stock of -- up and is rising in after-hours trading.
here's another to keep on your radar for tomorrow. fairly group got a late pop today. credit suisse advising the grocery train -- change on possible deals. there is no deal in process of the moment, but kroger and other companies seem potentially interested. alix: thanks so much scarlet. the obama administration is announcing a letter sent by 43 senators to political leaders in iran saying, we will consider any agreement regarding her nuclear weapons program that is not approved by the congress of nothing more than an executive agreement between president obama and the ayatollah khomeini . what is the response of the white house?
peter: they are not very happy with it, and other leaders are not either. they see it as a push by the public and to undercut this president's ability to conduct foreign policy, specifically these negotiations with the iranians. they see this as a direct attempt to undermine the president and to blow up those talks before they even reach final conclusion. there -- they are looking for the white house to have a framework by the end of march. the president himself took a shot at the letter writers. take a look at this. president obama: it is somewhat on my mac -- somewhat ironic for members of congress to deal like this with hard-liners in iraq. it is an unusual coalition. we will see what deal we are able to get, and if we do, we will make the case to the american people. peter: i should note that not
all of the senators signed on to this. bob corker did not agree with it. alix: interesting rhetoric there. peter cook in washington. shifting to the war in africa, today, the terror group boko haram have taken over 13,000 lives, it which include nearly 5000 and -- in 2014 across nigeria. and they pledged their support to islamic state. ambassador morelli's career at the state department spans from secretaries all right through kerry. ambassador, it is great to have you here. what does this announcement from boko haram actually signify? ambassador: it depends who you ask. it signifies to me a cry for
help and it looks silly stunt. -- and a publicity stunt. here's what i mean. there is not much that the islamic state that is under attack in syria and iraq can do 10,000 miles away in africa. number two, boko haram in the last couple of weeks, because of the concerted efforts of cameroon and syria has been thrown -- and nigeria has been thrown on the defensive. my guess is they are trying to take attention away from the losses and gain the city -- getting publicity. tactically, he does not mean much. they are looking for some way to gain the offensive. alix: has there been a response from islamic state on this? ambassador: not that i have seen. the islamic state has its hands full having their refineries
bombed and supply lines formed and being under attack in mosul and tikrit. what we are seeing with both islamic state and boko haram, the impact of nations working together to take the fight to these extremist movement and some progress on that score. alix: do you think that boko haram seems to more easily kill civilians versus the islamic state? do you think that might be a deterrent for islamic state wanting to have some kind of union? ambassador: i don't think there's much common cause between islamic state and boko haram. boko haram got his start as a bunch of criminals and thugs and political dissidents in the north of nigeria. but they don't have traction in nigeria. there is no islamic state that
will be sent in nigeria -- set up in nigeria. i don't see a similarity between the two groups other than they are both islamic. but don't look for them to reach across the isle to each other and form some kind of united block. i don't going to happen to stop -- i don't think it is going to happen. alix: it is curious that islamic state came from al qaeda, for example. does that mean we should be dealing with this threat differently? ambassador: al qaeda is a spent force. what we are seeing in islamic state is the mutation of islamic extremism in order to appeal to a wider audience. al qaeda was associated with the taliban, with osama bin laden
will stop alix: -- with osama bin laden. alix: is it something that the u.s. should take more seriously? ambassador: i think the u.s. is taking everything seriously, whether it is al qaeda, islamic state, or boko haram. these are all movements that are islamic in nature, fundamentalist in nature, and utterly savage in their approach. and they pose a threat to our own security. regardless of what you call them and where they are, it's a full front war across the board. alix: ambassador, we have to leave it there. coming up next, hillary clinton teaming up with melinda gates, taking aim at the glass. how they plan to get more women in leadership positions. that is ahead on "street smart." ♪
hillary clinton, chelsea clinton, and millon negates were releasing a report card on the state of gender -- and melinda gates were releasing a report part of the state of gender equality. currently, fewer than 30% of the worlds lawmakers are women. the finding tracked the 20 years since clinton laid out a plan for gender equality in a conference in beijing. here with me is the founder and ceo of cornerstone capital, focus on sustainable finance. she served as an advisor to the global -- the clinton global initiative. it is the remarkable that twice as many women hold office compared to 20 years ago. double is good, but that is really not great. >> the progress on structural issues like this can be slow. because we are talking about the nick issues, just like with infrastructure education, health care.
invest early on to think long-term. alix: 5% of ceos in top fortune 500 companies are women. 5%, that's pathetic. erica: that is one word. we can think about the progress that we have made. the issue of gender inclusion or gender exclusion, the issues of discrimination by a is the op -- bias is obvious, but it is a long-term issue. we will not see a single inflection point that marked the change. alix: you had to kind of live it. you climbed the halls of ubs and worked on wall street. did being a woman make it more difficult? erica: i think there are challenges. the ability to leverage informal networks, the extent to which
that is critical has been a challenge. it is more difficult. and these are things that will fit in every piece of infrastructure in the private sector. the private sector has to improve. alix: why is it harder? erica: he goes to the informal networks, soft power. whenever you have entrenched power, any kind of inertia in the status quo, investment in the status quo, it's hard to change. you have to make people inc., -- you have to make people not just think, but field. alix: do you think women who got to the top did not necessarily afford other opportunities to other women, but circle around a boys club, for lack of a better word? erica: some of those who have been so successful have gotten away from those networks that serve them so well. i would like to see them in positions of authority where they have more recess -- more
resources. i would like to see them do more. alix: what do you do? erica, i started different that is based on collaboration and inclusion. we talk about sustainable finance. we talk about corporate sustainability. that is just corporate excellence. when you try to be really collaborative, really transparent that is when you can start to make a difference. empowering entrepreneur ship, whether inside an organization or in another organization, that is critically important. alix: and speaking of critically important, the great ban in india last week, do you think these things are helping? erica: i think you need pragmatism and voices of reason and then i think you need voices on the extreme because they raise consciousness. you need to solve complex progress by parallel processing
in many ways. and i think it stems from perspective for all perspectives. alix: the biggest question hillary clinton in 2016, do you think she's going to run? erica: i think she will run. alix: do you think she will win? erica: we have two years and it will be fascinating on all sides. alix: staying political, i should say, but definitely a run there for hillary. coming up next, we will talk about tim cook next big project. no, not the watch. we are talking about apple's solar ambitions. ♪
blow against organized labor. florida's government may have figured out a way to beat climate change. ignore it. state employees are saying they were ordered to refrain from using the term climate change and global warming in official communications. the unwritten policy went into effect shortly after governor rick scott scott, a global warming skeptic, took office. a solar powered plane to golf today in an attempt to fly around the world without using you will. it will take four or five months and is scheduled to cross india china, and the u.s. before returning across the atlantic. apple announced a new smart watch and macbook and deal with hbo. apple is investing $850 million to build a giant solar farm to power its new headquarters in silicon valley and is building a
-- to european data centers that run exclusively on renewable energy. will other corporate giants follow their lead? here with me is the ceo and founder of cornerstone capital. erica is this a novel finance from apple -- is this sustainable finance from apple? erica: sort of. it's a piece of it. energy efficiency is hugely important. it's a wonderful some will that they can power their local community, their headquarters with -- a wonderful symbol that they can power their local community, the haircut -- their headquarters with solar energy. but there are other issues. alix: like what? erica: issues of retention succession, diversity engagement with shareholders. these are the things that get to sustainability even more so than a single excellent initiative. alix: when you look at the
renewable energy landscape, what are you most focused on? erica: problem is magnitude. if the magnitude of spending that we need to see in alternative energies. get away from a fossil fuel driven -- alix: does the lower oil price actually hamper that? erica: it does, actually. alix: do you think spending would most likely be best coming from let's say, a federal level, or a private label? ever, and -- erica: two solved big problems, you have to have big processors. it can't just be the government. private sector is critical. alix: great to have you. we are talking about sustainable finance. coming up next to a driverless mercedes was spotted driving
alix: this mercedes-benz was unveiled at the 2015 international auto show and was recently seen touring around san francisco, which created quite the buzz on social media. the car is riderless. it is unclear if this car had a driver behind the wheel. joining me right now in new york city sam grobart. he will be heading to germany later this to find out more about this driverless car craze. that is crazy. that car looks crazy. sam: it is a concept the will and has been going on the circuit for a couple of months and is meant to get a lot of
attention even though everyone understands nothing like that car will be on the roads for decades. alix: i can't go to my dealer and a couple of years and -- sam: absolutely not. we have no way of knowing whether or not mercedes is sending it out, but i would assume it is being driven. safety wise, we don't have laws and liability system set up for that. but it is intended to be an autonomous vehicle. and the technology is very close. alix: what kind of market man might there be for these driverless cars? i can only assume they will have enormously high price points. sam: they will start at the high-end and we have seen semi autonomies -- autonomous systems coming into luxury cars, but eventually they do start to filter down so that you are starting to see systems like that on cars like the ford focus , which can actually park itself.
everything starts at the luxury end and eventually filters down. alix: our government regulations behind us or getting out in front of it?; -- sam: i talked to engineers regularly and they say it is holding back. insurance and laws will govern how these things happen and also making sure the driverless car is failsafe, absolutely foolproof. alix: how to you that? regular cars are not foolproof. sam: you have to develop triple and quadruple redundancies almost like we do on aircraft now. where pilots are not actively piloting the plane for most of the german -- the journey. so many redundancies built in that nothing bad can happen. alix: you are headed to jermaine kearse month to check it out. is there one country that you find is -- you are headed to germany this month to check it
out. is there one country that you find is ahead of the curve? sam: i would say germany is. mercedes and volkswagen and audi, they have been spending a lot developing this technology. and they do have a tech sector -- tech center in palo alto. bmw and volkswagen have facilities in a california. alix: interesting. do you think it will work? sam: i think people will have to have it. i like driving, but if i'm commuting in the morning and i'm sitting in traffic, i would be more than happy for my car to take over the more mundane features of driving. i certainly would love it to take over the driving of my daughter when she turned 18. alix: as long as the car is nothing like this. sam: absolutely. alix: our company scared of google? sam: i don't think companies are worried that