tv Bloomberg Markets Bloomberg May 11, 2015 1:00pm-2:01pm EDT
to russia at meet with president putin and other officials tomorrow to discuss a full range of bilateral and regional issues including iran, syria, and ukraine. the state department released the news in an e-mail statement. european finance ministers are looking for some sign of progress from greece today. the government is running out of cash. aboutow, it has to pay $840 million to the imf. the saudi king is skipping camp david -- a number of issues will prevent the king from attending. the saudi's and other gulf countries have been concerned the united states is being too accommodating toward iran.
betty: good afternoon. i'm betty liu here with mark crumpton. mark: let's start with a look at what is moving the markets right now in currencies. let's start with the stocks -- the s&p 500 and dow jones industrial average both declined today, the dow industrials down a little more than .25%. the s&p 500 down .35% and the nasdaq composite is up fractionally. let's take a quick check of currencies and see how the dollar is stacking up against its major rivals. -- 1.11.ar the pound, on the rise. yields are coming up in
treasuries but not by a lot. there's some selling going on in the bond market. in the oil markets, prices are sliding. you can see nymex crude futures are down around $59 a barrel. let's take a look at some of the top stories we are following -- the global head of fixed income in currencies at deutsche bank says he's leaving the company. in a letter to employees, he says he's going to walk the earth and calls his departure and entirely personal decision. he's been with deutsche bank for 20 years. comcast is getting a new chief financial officer. michael cavanaugh is leaving the carlyle group to assume the role. he will join the media company early this summer. comcast recently dropped its merger plans with time warner cable. vladimir putinw,
and the german chancellor, angela merkel, met for the first time since a february and boy was it ic. merkel was paying tribute to the victims of world war ii and use the occasion to encourage ukraine and pro-russian rebels to live up to the terms of the cease-fire. merkel: i appreciate the opportunity at we must do everything. i think the russian president has influence on the separatists so that we will succeed in implementing at least a cease-fire and let the -- and that the political processes will start. merkel to getrged the west to lift sanctions against russia. citibank is off the hook for one investigation -- the justice department declined to probe the bank in the alleged rigging of the libor interest rates. deutsche bank was ordered to pay a fine in the case but citibank
says it's in talks with prosecutors over another investigation that focuses on rigging foreign currency markets. the bank says the settlement in that case could involve a guilty plea. mark: it's the first deal involving a big u.s. energy company since oil prices collapsed. noble energy has agreed to buy rosetta resources for $1 billion in stock and assume $1.8 billion in debt. it gives noble a position in two of the largest shale production areas in texas. david cameron begins his second term facing a big issue -- great britain's teacher with the rest of europe. >> i'm outside the home of the u.k. prime minister and he's inside trying to put the finish -- finishing touches to his cabinet after the conservative party won the surprise victory on thursday night. they are just trying to get their front edge in order and
we've seen senior conservatives coming and going all morning as the new team is put in place. that's the first order of business. clearly on the agenda, the subject of europe is going to be a big one. theeard over the weekend confederation of british industry has been arguing the u.k. business community wants them to stay within the eu because of the single market benefit that it brings. but they want to see that renegotiated. you can expect that to be one of the big themes at the early part of this parliament. will continue to follow this story on bloomberg television and give you the latest developments as soon as we get them. betty: hilton worldwide says 90 million of it shares are on the market. it's a secondary offering from the blackstone group. they will not get the proceeds. blackstone controls 51% of up
standing -- of outstanding shares. now,stock is down right one of the most actively traded on the market. are blamed00 deaths on faulty general motors ignition switches, three more than the total confirmed just last week. the attorney overseeing the compensation funds will get payments. awards are planned for 184 people who were hurt. " sequel keepsgers overpowering the competition. now -- it has now taken in more than $300 million here and another $875 million worldwide. on tuesday, it opens in china. those are your top headlines this morning. mark: coming up in the next half-hour -- betty: president obama wants to
invest in global market shares. from brian chesky from airbnb. mark: shares soaring today after a big investment from ali baba. we will look at what is in it for jack ma. betty: and john kerry will meet flood of your purchase -- will be vladimir putin for the first time in two years. president obama is honoring entrepreneurs at the white house . they have been working to help startups in the u.s. but tackling some of the world toughest challenges including poverty, climate change and extremism. talked withchang one of the entrepreneurs who met with the president of error -- the president of airbnb. we were invited here to be part of this entrepreneurship program and i'm incredibly excited. started as an
unemployed designer six or seven years ago, and now i may hopefully very successful entrepreneur. as a role model, my story is a story other people can have around the world. : you guys moved into cuba almost more quickly than any other u.s. business. give us an idea of how supplies meeting demand and will you be a to cuban hosts soon? 40 days ago, we launched in cuba with 1000 homes. today, we have 2000 homes. if youre cuban hosts, so want to travel to cuba like an insider and be in a home and be part of a local community, this is the best way to travel to cuba. the thing i'm excited about is president obama has a desire to bring these communities together , americans and cubans. what utter way to bring them together than in their homes?
we allow cubans to become micro-entrepreneurs. they can earn an income. this is not something we invented. andow make it a lot easier allow an audience of americans to be able to stay there. emily: cuba could be a potentially untapped revenue stream. what is it going to mean for airbnb's bottom line? give us an idea of the numbers behind this. cuba will be incredibly important. it's so new i don't want to speculate on how big cuba is going to be for our business. just to give you one point of reference, we have 2000 homes in cuba. it took us three years to get 1000 homes in san francisco, new york, and other big cities. i don't think we have ever had a market grow as fast as cuba.
by all indications, this is going to be a huge opportunity. for half a century, americans have had a desire to go to cuba and it wasn't real easy. it is easier now at least. emily: i want to talk to you about the fundraising environment because we've seen companies like you and uber raise money in fundraising rounds. bill gurley is saying investors are taking on too much risk and companies are taking on too much risk. are we in a risk bubble? brian: i hate to speculate on the economics of the environment right now. i would say right now, you've got the companies you have named and any others. you have some really strong companies making real revenue with real customers and it is hard to imagine that going away. we have 1.2 million homes around the world and on a typical night, we have about 400,000
with a b&b.ng we are really disciplined and we know the purpose of the business is to generate a profit and that is something we are all focused on. company --rs take take comfort in knowing we are serious about that. in this environment, you are meeting the president and you are the darling of the vc community. had you make a decision to raise more money now versus going public? not made anye specific decisions, to be clear. the focus is on what is best for our business and our community. we don't need to raise more capital, the company is doing great. it is a solid business. that said, we are open to opportunities. we don't have anything right now but it is growing fast and we
julie: let's talk about some of the movers we are watching today -- a couple of makers of mining equipment doing the best in the dow. day since julyt and hitting a two-month high with caterpillar on the rise as well, up utter than 2% and that a five-month high after analysts raised the stocks to outperform, saying there are signs the worst might be over and investors should be early to a mining bottom. remember that currency headwinds had been a big deal, particular for caterpillar. analysts are saying the headwinds are moderating and steel costs are lower. in technology, we are looking at zulily, those shares soaring after alibaba says it's
increasing its stake in the online retailer. sticking with online commerce, y today.ook at ets they went public not to long ago and $16 world where its shares were pricing. today, they are pulling back. raiding the shares as underperform and say there are questionable solar practices and many of the products offered could be counterfeit and could violate either trademark or copyright infringements or could violate laws on those matters, so that is causing a so often those shares. betty: thank you so much. julie hyman with them of the movers. let's get a look at some of the top stories crossing the terminal at this hour. nato's struck north wiese -- north east texas and southeast arkansas. there was widespread damage. dramatic pictures from north
texas were helicopters had to rescue people trapped by flash flooding. storms had dumped up to seven inches of rain. the bodies of two inmates were found after a prison rebellion. no escapes reported. they controlled part of the facility. smoke could be seen rising from two housing units. the prison houses 11 death row inmates. jimmy carter is back home today after falling ill during a south american trip. he was monitoring the election and yana. his nonprofit organization said only that he was feeling under the weather. the former president is 90 years old. china is the biggest market for smartphones in the world but that market is getting smaller. new data shows shipments of full-featured mobile phones actually dropped by more than 4% in the first quarter. it is the first time that has happened in six years.
experts say the reason is simple -- there are no more first-time buyers in china. more than 90% of mobile users have smartphones already and those are your top stories. shares rising after ali baba increased its stake in the online retailer. they bought $56 million of zulily stock, bringing the company's total stake to about 9%. alibabahis comes as seeks to diversify its investments and bring in more revenue from outside of china. is kind of a silly name. i left my real teeth at home. the question is what is in this for jack ma? now, nothing. it's 70% or 18% of the company.
they don't get any financial benefit. the financial benefit they get is such that they won't add to alibaba' news were profits, but it is interesting. i was talking to the person who wrote a book about alibaba and he made it into a movie. he says part of jack ma's style andet's get a closer look by having a stake in the game here, they are going to pay much closer attention to what is working in the e-commerce world. betty: i don't get it. if it doesn't make sense for alibaba and it's not that accretive to the bottom line, should investors be upset about this? i know it's not big in the grand scheme of things. cory: it is an odd use of ali baba's cash.
it is a company that they could have bought the whole thing, but i think they see something there. zulily has a different approach amazon.merce than with amazon, the business model is they buy the stuff from the manufacturer and stick it on a ups truck and deliver it. believes they are creating an experience for the user on the site where the user will follow a handful of rands and return to those rands and the brand row as zulily grows. shares are rising today, so investors like it. cory: they are thinking ali baba will go bigger on this. had some issues because their sales growth rate has really come off. a year or so ago, they were going at better than 100%.
explain what they do. why do we care about zulily? cory: we care about it more today because alibaba cares about it. to have a different relationship with the brands that they sell. betty: thank you so much. cory: great to see you guys. up, a human scale bronze sculpture of a pointing man may fetch a record at christie's this week. that's change for you. chump change for you, mark. mark: no. ♪
the auction houses are expected to rake in $2 billion. >> if you are looking for something to hang over your sofa, this will catch your eye. "women public picasso's o" and its version could set the record for the most expensive piece of artwork. christie's estimates it could go for $140 million. that's roughly what the movie "furious seven" made. thing,pture is your christie's is auctioning this? iacometti.his g
it could set the record for the most expensive sculpture -- close to the picasso at $130 million. if you are in this for bragging rights, this is a billionaire with the record for having spent the most on a piece of art in auction. in 2013, the queen of las vegas spent $142.4 million on this triptych that francis bacon painted. betty: could you see any of those hanging in your living room? mark: i told you when we were watching david's piece, that picasso is absolutely beautiful and absolutely out of our price range. betty: i think even you and i combined, we could maybe get a quarter of that. not even that. the: you weren't feeling giacometti?
betty: it is huge. is pointingnd toward the exit because whoever can't afford it has to leave. hint? are you giving me a i am saying goodbye. is the realize this first day of the new format. it's such a pleasure to work with you. betty: i love working with you. up, john kerry and the russian president, vladimir putin, will meet ace to face again tomorrow. we will have details on what's on the agenda, next. stay with us. we are back after the break. ♪
mark: welcome back to your bloomberg market day. i am mark crumpton. a major impact in the u.s.. the netherlands reportedly in stopssion with a parent of & shop, and the other owns the food lion chain. they have about 60% of their the united states. sales are up sharply in european trading. today's gains pushed their market value to nearly 10 billion dollars, almost twice as big the other. u.s. treasury secretary hank paulson told bloomberg television that central banks run the risk of creating asset price bubbles if they keep interest rates too low for too long. paulson said relying on interest sound policy. not secretary paulson: i have clearly been a fan of the bernanke monetary policy, because we delivered in the u.s. while growing from the third
quarter, but there is a time when you just cannot rely on monetary policy. such an elegant solution. : paulson was also chairman of goldman sachs. comcast is getting a new chief financial officer. he is leaving the carlyle group to assume the role, joining the giant media company earlier this summer. he joins angela guess, a chief executive of a newly created investment arm. comcast recently dropped its merger plans with time warner cable. mobile is going to build its american plant in south carolina, and attempted to revive u.s. sales that have followed by more than 50% in the southecade the volvo carolina plant will employs thousands of people and is set to open in 2018.
to hireidering a plan thousands of lower paid blue-collar workers. according to the wall street journal, they would handle jobs that are traditionally done by the automaker suppliers. pay much,ould not only $10 to $50 an hour. assembly workers make $19 an hour, and those are your top stories. coming up in the next half-hour of the bloomberg market day, u.s. secretary of state john kerry is traveling to russia. he will meet with president vladimir putin and other officials to discuss issues including iran, syria, and ukraine. china central bank cut interest rates for the third time in six months in an effort to jumpstart the economy. we will take a look at how the markets reacted to the move. and the new saudi king is skipping this week's summit for persian gulf countries at camp david. the saudi's are concerned the
united states is being too accommodating towards iran. years, first time in two u.s. secretary of state john kerry and russian president vladimir putin will meet. president putin will welcome kerry in sochi. john, let me begin with you. what is at stake here? as we mentioned, this will be the first time they have had a face-to-face meeting. john: i think more than anything else, there are a lot of tensions between the two sides here, and this eating, even if it does not accomplish a lot substantively, maybe you can cool things off and make sure things do not get out of troll. i am not optimistic that there could be any major breakthroughs on any of the issues you mentioned, ukraine, iran, syria. indira, if president putin is receiving secretary kerry,
what do they have to talk about? as john mentioned, some of the issues are so intractable that is it basically just a photo opportunity? no.ra: it is thomas because they have these problems it is support for them to talk. is important. it has been two years since john kerry has been their meeting with the vladimir putin, and i kept john kerry waiting for about four hours, and it was seen as a snub, but there were not all of these pressures that have come up as, russiaare talking about giving asylum to edward snowden, and i am talking about the annexation of crimea and all of the work for the separatism in ukraine last year, so this has crowded relationship ever since, but there is no question that the u.s. really needs rush on it wholeo really solve a host of problems, starting with
the iran nuclear deal, also syria, also yemen, so this is onut getting russia act track. we heard ashton carter saying that russia was violating the k peace fire,mins continuing to ship heavy weaponry to the rebels, so i think that will be one of the top things on the agenda. hn, is this more for washington or more for moscow? john: i think each side note it is more for them, but i would bet it would be for moscow. john kerry is going to vladimir court. home i do not know if he will keep him waiting four hours. i think of i were a briefing secretary, i was a two watch out that it is followed shortly in short order with prounion separatists in ukraine, which is the a major embarrassing, so i think there are some dangerous for secretary kerry in meeting home turf,on putin's
when putin is holding most of the cards, frankly. whether or not he wants to moderate his support for cepheid president, which i doubt he will do, or whether he wants to back away from backing separatists in ukraine, which i am not sure he will do. dira, is it possible that john kerry could have more sway with vladimir putin van angela merkel did? ndira: that is a good point. it was just a few days ago that the victory over the knock was celebrated, and vladimir putin used that opportunity to hold one of the biggest parades in the post-collapse of the soviet union's history. not only to the u.s. leadership boycott this, but all of europe leadership boycotted it also situation with
ukraine, and angela merkel, what she did is lay a wreath at the tomb of the unknown soldier and also used it as an opportunity to present about ukraine and say, look, you are not doing enough. it does not seem to have gotten very far, because we are getting seeingadimir putin is that this is an opportunity to you are the ones you brought this about. you supported the uprising against former president yanukovych, and that is why we are in this problem in the first place, so as john pointed out, home is on vladimir putin's turf. on the other camp, he is a president, and secretary of state is only secretary of day. i think the u.s. needs more from then -- them then we need from them. so, john, is this a
win-win for vladimir putin? you're talking about a president whose rating are in the 80% range. it seems like domestically, he can do no wrong. john: he is playing the nationalist card, as indira said, and it is interesting. if you look at that, world war ii for the russians was victory over fascist. describe then ukrainian nationalists? he calls them fascists, so he is playing that part very successfully. as you say, it made him more popular at home. his economy is in terrible shape, in part because of the sanctions, so he does not have many other cards to play, so i doubt he is going to give up playing that card. have about 30we seconds left. i must ask, as far as the u.s. and russia are with iran, does the u.s. need russia's help to
try to reach some sort of an agreement with iran? indira: absolutely. if we do not have rusher's -- buy-in, we are not going to be into get that deal. a putative nuclear deal, assuming we get one after june 30. joining me from washington, thank you both so much. still ahead on the bloomberg market day, china cut rates againstnd it is greece everyone in brussels. we will get you to the global market wrap, after the break. ♪
♪ mark: welcome back to the bloomberg market day. i am mark crumpton. let's get you straight to the markets. bloomberg's julie hyman is standing by. julie: we have seen markets kind of stumbling by. the macro level, we have in watching the news out of china, where we saw a rate cut. we have been watching the andving situation in europe how finance ministers are trying to address the question of greece, but if you look at the nasdaq in the u.s., it is holding up a little bit better than the other major averages, and we have some of the leaders there, including monster and netflix, and among the many on
meeting ofhere is a cancer doctors this week, where research may be presented to help some of these stocks. monster rebounding, and a citigroup analysts saying you should go ahead and buy those shares. netflix, shares are rising. you have that, and then you have the dow and the s&p, and the biggest weights are sort of all over the map. you have got exxon mobil, which has been falling on lower oil prices along with many other oil stocks, energy the biggest drag on the s&p 500. apple is trading lower because of its size, tending to have it out side on the major averages, especially the s&p, and ge also pulling back by about 1.4%, and that is the sort of balancing act you have going on in today's issue. : julie hyman, thank you. and let's take a look at the european action. here is bloomberg's jon ferro.
cax 40 is down, and this is down by about a quarter of 1%. typically when china cuts rates, you would expect it to bounce across european indices. not so this morning. you will notice the biggest gainers, of course china the biggest consumer of commodities, and it is the commodity producers that are getting the balance today. , fiveing up the access basis points, 0.59%, and over in brees, you know the story. running out of time, running out of money. yields are higher today, but the sessions highs are 10.9%. a quick look at the market through the day, a weaker euro has been the story for a third of 1%ht day, down by 4/10
against the dollar. and, of course, the other big story from friday, sterling, one pound by you more, up 8/10 of postelection gains, we have some this monday. mark: moving to asia, our report from beijing on the central bank rate cut. aporter: they have multi-pronged approach in monetary policy. so far, they have cut rates three times, and they have been injecting liquidity into the operations. shore up economic activity, and this is to keep money market rates low, so we are likely to see more moves ahead. goldman sachs says we will see a triple cut in the quarter followed by another cut. citigroup is looking for another 50 basis points cut this year, and bloomberg economists are looking for rates to go down again is the economic trend
continues. back to you. mark: and now, to the headlines, rebels in yemen say they shot down a moroccan plane. morocco has said only that the waswas missing, and it flown by saudi arabia to stop the rebels. if true, it will be the first jet shot down by the shiites since fighting began in late march. the fate of the pilot is not known. air forces across europe are grounding and airbus military transport after a fatal crash. crashed ina 400 m seville, spain, just moments into a test flight. four people killed, two others thated, and it was said the plane had multiple engine failures shortly after takeoff. and a key aide to bernie madoff is dead. after spending years helping them take down those involved in
upon the scheme, he had lung cancer. he was the government's star witness in the made off -- the madoff case. will create one of the world's largest real estate firms. they are buying cushman and wakefield. it is valued at about $2 billion. the majority is owned by the holding company of an italian drivingand demand housing prices higher. the national association of realtors said home prices claimed in 85 percent of u.s. metropolitan areas in the first quarter. the median price was $205,000. that is up 7% from one year ago. home prices will rise 6% this year. it is the beginning of the and of a television franchise. dol" will be going
off the air after 15 years. it was once the biggest thing on tv, with more than 30 million viewers, but it is now drawing under 10 million every week. and those are your top stories. staying in media, cable facing increased competition from upstarts like netflix and amazon. dick parsons told bloomberg cc more consolidation ahead in the cable industry. without distribution, you have got nothing, right? and they have got a terrific distribution platform. i think what they will have to do is figure out what makes sense for their shareholders. consolidation has been going on in the cable business since there was a cable business. there used to be thousands of us, and now there is a few. it will continue. my own view is that ultimately, there is probably room for two big telcos to be cable companies. me now is my
colleague scarlet fu. he says consolidation has been going on since there has been cable. yes, and two big cable companies, that is a very specific number. it is not seen that the doj wants that kind of number. they have been looking at three-hour four as their fragile, because they would not t-mobilehe at&t and deal, because there would not have been an up competition, so i do not know how you get to two telcos and two cable companies. loaded,ter that deal in there was enough out there for people to want to start making bids right now to get larger. yes, and we wonder what is the next place for brian roberts to go to. mark: right pain you are going to be joining me. : yes.et there was a very controversial op-ed in "the new york times,"
which was suggesting that instead of plowing money into refurbishing laguardia, close it down and diverted traffic to jfk, to newark. about you, but jfk does not have a lot of excess capacity. the pilots joke about it because it is so close to water that you feel like you are landing on top of an aircraft carrier when you go over jamaica bay. and it looks old. scarlet: it is old. it is not one of the greatest ways to see new york. it is not one of our greatest infrastructure projects, but if they shut it down, can you imagine jfk getting more crowded? george will be on a the next hour, and we will ask him why he thinks that new york can follow
the lead of a place like hong kong, which just shut down the airport and opened a new one. looking forward to it. the: still ahead on bloomberg market day, the saudi arabia king says they will not i -- will not attend a summit paid what it means for relations between the two countries. we will be right back. ♪
eater, i guess the first question is, is this a snob? well, the white house is going out of their way to say this is not a snob, but you have to look at the timeline. not only was the king willing to participate in this gulf leaders coming to camp david this coming week, but he was also planning to have a personal meeting with the president ahead of the meeting. now that is off. he is staying and saudi arabia. reason is that it conflicts with the humanitarian cease-fire that is going to be triggered in yemen, and at the white house, they say the president himself is not disappointed with that. here is josh earnest. : so it is in the interest of the countries to send senior members of the national security team who can represent the views of their country and a sure they can live up to any commitments they make in the context of the meeting, and based on the list of
attendees we have seen so far, we are confident. peter: despite will be heard from josh earnest, others today, it is pretty clear, mark, that this does expose some tensions between the u.s. and saudi arabia, a longtime ally, with the, administration and what is happening with iran. they are concerned that the u.s. with iran could in the and risk their own stability, and that is just one of the tensions. there are some questions about what exactly plays out at this meeting with not only him but some other gulf leaders choosing to skip it, as well. those other gulf leaders, what do they want out of this meeting? peter: they want to make sure the u.s. maintains its pledge to basically stand by their side, and the question whether or not that is going to happen if the u.s. improved its relationship with iran. they were looking for, among
other things, for a defense treaty. that is unlikely to happen. that the assurances u.s. is ready to stand by their side in the event of instability in the future. they have not yet gotten those assurances. now, there'll be some others in the room, but not the king. : washington correspondent peter cook joining us there. peter, thank you. coming up, scarlet fu joins us nes,e talk about mega fi with one notable exception. we will have that story and more when bloomberg market day continues after a short break. ♪
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market day. mark: they will not prosecute banks or the rigging of libor, the ranch mark interest rate. scarlet: vice president joe biden talking about an experience like being in a third world country at laguardia, and now there are calls to shut it down area -- shut it down. vanagh.a good afternoon. i am mark crumpton. here is scarlet fu. withet: let's start equities. we have a decline in the major indexes. take a look at the s&p 500, off by one quarter of 1%, with energy shares the leading decliners.