tv Bloomberg Markets Bloomberg May 15, 2015 11:00am-12:01pm EDT
rivalry with industry leader, uber. olivia: he has been one of chris christie's big backers, but has he given up on the new jersey governor? pimm: russia has hired some of the city's top lobbyist to take on capitol hill and the white house. ♪ olivia: good morning. i'm olivia sterns. welcome to the bloomberg market day. pimm: we are 90 minutes into the trading day, let's get a look at the markets right now. , stocksok at the us not moving very much. nasdaq down.
olivia: treasuries are gaining, the yield coming down by about six basis points to this amid new signs that the u.s. economy is in fact slowing. industrial production showing the factory output has now fallen for five straight months. avengers -- has investors thinking that janet yellen will have to wait a little longer to raise rates. they are just not spending on factory goods. a look at the top headlines of this hour. is that official, russia's economy has had its first decline in almost six years. 1.9r gdp shrank almost percent. growth stalled last year after u.s. and europe imposed
sanctions over the fighting in ukraine. and a judge may end up having to decide how much money victims get from that amtrak to their list. federal law all caps damages at $200 million. eight people were killed, and more than 200 were injured. investigators say that in the next few days they may get answers to the questions above why the train was beating. speeding. >> we have contacted the engineer and he has agreed to the interviewed by the ntsb. we look forward to that opportunity. we will be meeting with him in the next few days. olivia: the engineer's lawyer saying his client suffered a concussion. the fourth ofer drugs or alcohol and was not using his cell phone. the wreckage of a missing u.s. helicopter has been found. it disappeared earlier this week on in earthquake relief mission.
carrying six marines and two nepalese soldiers. they say it is unlikely that anyone survive. the video this week showed at least one of those marines delivering food and supplies to quake victims. in a faked hanover band for a -- takeover bid for avon. shares spiked but the excitement did not last long. avon said it did not receive an offer, and no one could confirm that the capital firm existed. in factory output in the united states stalled last month. in a report shows that manufacturing was unchanged in april, and for the fifth consecutive month production declines. manufacturers have been hurt by the strong u.s. dollar. automobile makers increased
production of oliver neuville part -- of automobile parts. mitt romney has thrown his hat into the ring, the literal boxing ring. a you may think this is just joke, but i'm taking this very seriously. hello? pimm: the two are raising money for charity vision which brings vision work for children around the world. olivia: coming up, much more. the markets have any week to digest david cameron's shock
victory in britain. and washington's insiders are making millions of dollars off of western sanctions on russia. a look at the kremlin's man in washington. the 2016igh in on presidential race. day,o our top story of the more signs of economic slowdown in the united states. consumer confidence falling by the most in two years in may. we can also have some weaker than expected retail sales numbers this week, and economists are starting to push back their predictions were when the federal reserve will raise interest rates. anvia: we spoke with economist with bloomberg intelligence. >> i do not think so. for, ae fed is looking little more inflation, and we're getting that employment cost index.
you just mentioned the consumer sentiment. the unemployment rate is down in the region, that should make them comfortable. i would feel differently if they're starting point was not zero. while our economy is not boy is, it is certainly not an emergency situation anymore. we are not seeing consumer confidence like this in a wild. what does that suggest? >> it suggests that they've been missing to these numbers for months. the bloomberg economic surprise index is at its lowest levels 2009. that means that they are missing the big time. , but i amuch optimism bearish on the economy. and bob knows that as well. we have shared the stage a --tle bit, and i still
eric: why is that happening, that it is so much harder to invest now that the ecb and the bank of england are in the market, making distorting prices? is it hard to find out what is going on in the economy because wearying uncharted territory? >> we are in uncharted territory everywhere in the world. we have never seen a chinese deceleration as we have -- what we're told, anyway. olivia: it is probably decelerating, we just do not know what extent. >> you do not need to be an economist to know that this then the situation is not going to end well. if you see a 500 pound man on the street corner smoking a cigarette and eating a box of donuts, do you need to be
a doctor to say that is not going to end well? known. this is not going to end well. olivia: do you agree with that? bob: i would not be surprised. we have nominal growth in the united states. running for plus percent, that is not consistent with the ten-year treasury. the whole interest rate structure has to move up son. levels, more acceptable and that could cause some people in the bond market to get scared for a minute or two and that would not be great news for stocks. all-times are at an high is pretty amazing given what we just talked about. help us to understand, this is all where we are at, but
you and other people expect that things will have to change sooner rather than later. bob: it is a goldilocks economy. the bears are frustrated, bulls aree -- the frustrated, and we just about have to keep moving a long. are are not great, but they indicating the economy is making modest forward progress. that is a beautiful thing for financial assets. theia: what you think was key driver of the global bond selloff in the past two weeks, and why is it a painting right now? -- abating right now? as it was selling its euro and, nothing was going to happen until that move. the deflationary fears in europe got way overdone.
as the economy there got a little bit better, somebody woke up and said i think zero does not make sense for the yield on the german paper, and they moved -- moved it up 70 basis points, providing an entire framework to move up. our interviewas from earlier. if he thought it would take a rate hike off the table, he said no. lyft lands ahead, major investment by carl icahn. ♪
olivia: welcome back to the bloomberg market day. let's go right to julie hyman with a look at what is happening in the markets. lot is happening when you look at the broad level today. let's talk about some of the interesting movers in today's session. greenmount falling the most in the s&p 500, after lot is happeg when you the company in a presentation yesterday said there was going to be a delay in the rollout of its direct called system.- kureg cold it will be delayed more than analysts had estimated. el pollo loco has
dropped 14% in shares. we got a couple of earnings reports as well. dillard saying comparable sales fell by 1%. shares were down sharply. nordstrom on the other hand, not much changed, up less than 1% after it had a mixed report. olivia: thank you. now with a look at some of the top stories crossing the bloomberg terminal at this hour. in a rock, what appears to be a significant change in the fight over these the upper money. islamic forces capture the had headquarters there. state began a new offensive last night. ramadi is a key city in western iraq, where the militants already control a lot of territory. and barclays will probably be fine for violating a three year
agreement on interest. prosecutors will not seek a guilty plea, barclays finally be around $60 million, this all has to do with manipulating the benchmark interest rate. prices are down for a third day in a row, u.s. output remains close to a record high and shale l explorers are set to expand output later this year. pimm: carl icahn has chosen sides between hoover and left -- lyft.nd lyft. gone with cory johnson is in san francisco, and he has more. are you surprised? cory: this is carl icahn.
he is not going with lyft or uber, this is a guy who made companies. rating using debt to buy companies, to break them into pieces and destroy them in the way they wanted to run their business. fueled by junkbonds, you have him now making a venture investment. he is helping a company billed itself.- build it reflects this great time you're in out in silicon valley. disrupting business and the air model -- and their models. but he is not just doing
this for cakes pretty do not think he will go and shake things up and replace management? just as interesting as the state of this investment, the growth rates for over are off offchurch -- for lyft are the charts. over 500%.ng at and they are seeing revenues of over $750 million. 600,000e well over customers. it is a rapidly growing business. revenues were going through the roof, and they have a differentiated bi business model. have thefidelity, you people who would normally buy stock in the public markets getting into these late stage public rounds. olivia: explain what
differentiates between lyft and uber. cory: they really focus a lot on pleasurableave a experience, not just a professional experience. they also say no search pricing. surge pricing. elast summer wa tord that uber was trying buy lyft. good that be in the cards? cory: we do not know. wednesday will mark david
letterman's last night in late night. he has been on the air for 33 years now. a generation of comics and heevision hosts say that is fired their whole career. >> he gave us the anti-talk show, in so many ways. he was so not about show business, and outside of show business. his show felt like a revolution to be. i think it was. i think was a seismic occurrence. i think affected a lot of the in the 80's and 90's. pimm: you can catch the full interview tonight. olivia: common uses even more hairspray than i do. he has an impressive amount of
olivia: the united kingdom and the world have had a week to digest prime minister david cameron's sweeping election victory. let's tied to take a look at what the wind means for the country's economy. the day after the election, when all of the votes were counted, they pound surged against the u.s. dollar. it was up 1.38%. of course conservatives were happy to claim that was a referendum on their performance in the election. everyone was so certain that the outcome of this election would
be uncertain. of course, then the conservative a governing majority, which means that prime minister david cameron will remain prime minister david cameron. this is not the outcome they expected. businesses hate uncertainty. that six-week timeframe leading up to the timeframe was a huge drag on the u.k. economy. we have seen signs of a slowdown in the economy already. among businesses had been falling, and trade stated have not been a great. of the biggest problems in the u.k. are wage growth and productivity. they are 20% less productive than workers in the other g7 countries. when you look at the product to cap, it is at its widest than more than two decades. who seems happy about how things to out -- turned out?
the banking sector. when you look at sectors that are not performing well in the united kingdom, manufacturing, construction, these are not back to where they were before the recession. before the election, they surveyed cfos of the largest companies doing business in the u.k., and ask what they were most worried about. postelection policy change was number one. in other words, they were worried about political uncertainty. averted, we have smiles all around. but number two was the eu and the uk's membership in the eu. this is not to say that uncertainty has completely vanished. he promised that there would be a referendum on eu membership by the end of 2017. olivia: that was david reporting. the responseble that the british government had to the crisis. the austerity prescribed by george osborne.
at first the imf said what are you doing, no austerity. and then the imf had to apologize to george osborne and the british government for effective -- how effective their response was. pimm: and now they are using the same argument for greece. olivia: sometimes it feels like the imf forecasts are actually retroactive. pimm: the figure of them out based on what already happened. yesterday's news tomorrow. olivia: that is actually hu europe's economy. it is even more severe, the lack of productivity in the u.k. than it is in the u.s.. pimm: with your experience, having lived in the united kingdom, have you noticed if there has been any change in the
government's role in business? part of what david cameron has talked about is moving out of the way of business. olivia: avery think you're in the city is thrilled to see that ed miliband is not going to be in charge because their bonuses are going to be safe. the big charge question is going to be the role of scotland in westminster. pimm: after the s&p win. olivia: thank you. thank you for being here. ahead, washington insiders are making millions of dollars off of western sanctions on russia. how? by pressing lawmakers to change things. ♪
fallen by the most in more than two years. university of michigan index was lower than the lowest estimate of economists surveys. the u.s. economy stalled in the first quarter should many americans outlook, and people are more worried about losing their jobs than it any time since 2009 the increase in gasoline prices since march also hurt. virtuallyy output flatlined last month. when you add in mines and utilities operations, total production in the u.s. declined for the fifth consecutive month. manufacturers have been hurt by the strong u.s. dollar, but there is one bright spot. automobile makers increase the production of cars and auto parts. and amtrak hopes to fully reopen its northeast corridor by tuesday. service from philadelphia to new york has been suspended since tuesday night, since an amtrak train derailed, killing more than 80 people.
killing eight people. it was going more than 100 miles per hour. in colombia, the government has defied the united states and of cocoaial sprays farms. the markets are closing in europe, and for the very latest let's go to john. a 5100 am looking at that is indeed read. the whole map in europe this whole color red. off a 10th of 1%, the dax up off by 1%. this the sheep of the session for the dax.
the loss exacerbated by the loss of consumer confidence number. ,he u.s. consumer confidence the dollar drops, the euro pops. is stocks and euro in play. wasone relationship that not in play, stocks dropped, bonds did not. a rally in european fixed income throughout much a day in the periphery and in the core. down by five basis points, likewise in france, french bond yields down by five basis points. we keep a lid on those yields, keep them under 1%. in the global bond market, and nobody called about that recently. we could be close to the end of that bond route right here in europe. that is a big call. pimm: thank you.
bloomberg market founder weighs in on the 2016 presidential race. why he is weighing in on chris christie. butrket full opportunity, not very much business. netflix looks east, how the company plans to tap into the $6 billion online video market and navigate china's censorship system. russia's economy contracting for the first time in almost six years. the decline of oil prices and western sanctions take its toll on the country's economic growth, the sanctions are also hurting individuals and enterprises can considered close to vladimir putin. that is turning into a windfall for former for u.s. -- former
u.s. lobbyists and lawmakers. just lay out for us exactly who was involved in how much money we are talking about. we're talking about millions of dollars for washington dc law firms and lawyers on the other side of the atlantic and the u.k. at the new. we are to billions of dollars in lost revenue for companies like exxon potentially hundreds of millions for other companies to lots of oil companies are affected by this. big company that has been affected by this. chevron, they all employ teams of lobbyists in d.c. and across the atlantic at the new to try to argue their case to lessen the sanctions or at least to ine sure that the sanctions the european union are as tough as they are in america so that neither side has a particular disadvantage pimm:.
as formeramples lawmakers who are right work for the russian interest? >> we have former senator trent lott who was the senate majority leader. barbour, the former mississippi governor, these are all powerful lobbyists here in d.c. who are now able to cash in a painful situation for people in russia. they have clients that are ly thely indirect kremlin. you have people from trent lott's firm that have been hired by some of the companies that are owned by the kremlin and that are basically controlled by the kremlin. you also have people at haley barbour's firm that have gone to owned by the kremlin and that are controlled
by the kremlin. they are trying to ease sanctions. has hired haley barbour's firm in addition to other lobbyists to ease sanctions against the company that is wholly-owned by the kremlin, but it is in a partnership with chevron on a pipeline that transports oil from kazakhstan through russia through the caspian sea. if they have been part of the sanctions, that would have greatly hard chevron's operations in kazakhstan. that is what we're seeing here in washington. pimm: can you tell us exactly what do these companies get for hiring these lobbyists? to begin meetings with the president? >> maybe not the president, but with the president's director of the national economic council. they get meetings with one of the president top aides. top officialswith
at the state department, the treasury. the office asset control is one who is composing the sanctions. they get meetings with lawmakers and people who are very influential in helping to draft legislation and the rules. as i said, chevron was able to keep them off of the sanctions list. on the sanctions list for monetary issues, but not for actually operating directly. exxon was not so lucky. costhad a huge deal that billions of dollars that they were able to get delayed implementing the sanctions, but eventually they had to pull the plug. losing millions of dollars in revenue on what is going to be a very large drilling project in the deep water off the coast of russia. pimm: thank you very much.
he still has not ended foreign minister. he is holding out the post as bait to get another party to join his coalition. ast night netanyahu survived confidence vote in parliament by a to vote margin. raiseor carl icahn has the stakes in the car booking battle between hoover and lift lyft.r and when the managing directors of -- carl icahn sperm will join the board. went for $50 million last night at christie's here in new york. for a an auction record modernist painter and it was sold near the end of a week reported a huge frenzy in buying. since may the fifth, $2.7 billion worth of art has been auctioned at somebody's, christie's, and phillips. that is $400 billion more than
the old record that was set last november. chrisrsey governor christie was once a presidential front-runner, but these days he is plummeting in the polls, and you could blame the bridge kate scandal. his reputation is looking a lot less impressive after a series of credit downgrades. he still has several backers, including the ceo of home depot. he talked about his support. america needs the truth, and american indians candor. we have a lot of issues that need to be dealt with. it is a type two-putts the politics o -- it is time to politics aside, and have an executive in the house. an example ofs
what we need. the american people should not be totally dependent on government. intelligent programs do damage to sell some perspective somebody people in america. if you're not working and you just get a check from the government for doing the big, at some points, something has to kick in and say whatever i got -- what have i done? >> wise chris christie the only person who can fix this problem? >> he has the talent to say it is what it is. i think the american people get it. that weremendous faith are set for the next 25 to 50 years, but we have a lot of work to do. a guy like christie who says is needed towhat
be done, a guy like me, when you giving me social security for? what i am saying is we have to be a realistic about what government can and should do. the government should not be sending my wife and i check every month. this is outrageous. >> let's say i agree with you. don't you have to be realistic about who can get elected? >> help me out. last election, he runs against a woman and gets to join percent of the women's vote. the deeper to percent of the latino vote, and his vote from african-americans went from seven to 23%. that is as blue a state as you can have. he connects.
in florida last winter, and i had a lot of people from the midwest at the southwest, and it was like he's going to honey. >> what about the bridge kate scandal? >> what about it? >> will rub off on the governor? >> the thing that bothers me , i thought to myself, how stupid and how cruel could people be to deliberately say we are going to do it? and we're going to do it on the first day of school? york busloads of kids in a school bus, most of the school buses do not have air conditioning. why? it wasll know that ridiculous. but perception is reality. if americans outside of new jersey tech chris christie with the responsibility - - is biggernk that that
than -- >> and talking about the perception. if people think he was responsible, does that not do his chances to become the republican president? >> people have approached option that i'm a self-made man. it is the first thing from -- for this thing from the truth. not at all. i had teachers and professors, i had people i work with, i had people all over me all my life. perception eventually results in reality. eventually it gets down there, we have it issue to deal with. we have to explain, clearly if people want to dwell on bridge ok, but the facts
are the government knew nothing about it. and in three investigations, not one of them said he knew. campaigns are all about perception. one concern that this election is the amount of money, the massive amounts of money that are going to be raised for the selected. you're going to be a big donor. does this disappoint you at all the amount of money that is being dumped into advertising? >> you telling the rules, and i play vital roles. to a change the rules, and i will change my behavior. understand something. those guys in washington in both houses, they are not known for courage. they are known for one thing, how do i get reelected? election thing on
headlines. the most american thick burger. agrilled hotdogs on top of beef patty with potato chips and american cheese. will joinerican dish the carl's jr. and hardee's menus on may the 20th. for $5.75. the real damage, the hybrid hamburger hot dog frank and berger has over 1000 calories with 64 grams of fat. as someone who does not eat burgers but has interviewed those from chains, here is betty liu. eaten quite a th few burgers, but these are
getting ridiculous. it is the age of the burger. hake shack, in and out, carl's jr, five guys. pimm: but at the same time that mcdonald's are trying to revamp their menu because they are not pulling in the people like they used to. he wants toeo says have been better burger, and everyone is asking what that means. in this day and age where we are all about gluten-free, vegan -- pimm: that there is room for a 1000 calorie burger. betty: people want burgers. thatnk it is this idea tha has to be more natural. i do not know if it is natural to put potato chips on her
burger, but they have to be innovative and more natural and more interesting than just a typical big mac. pimm: we will see if people like it. the 20th. sale on may let's go to our senior markets correspondent for a look at what is happening in the markets. julie: i'm going to withhold my commentary on the burger for now. we're approaching the top of the hour between bloomberg television's on the market. we have a quick look at the action on the street. the three major averages are down, but not by much. we closed at a record yesterday, we are now off by 1/10 of 1%. joining me for the options take today and are options insight is executive derivative strategist. coming up by that record, and looking up to the summertime, what are we seeing priced into the mix in terms of are we going to take you to go sideways or are we going to see more records? >> the short-term breaks, which
, it is very low, the longer that they are out in the futures, they will continue to find some bids. that is somewhat systematic. is always a value for people seeacts as what is going to happen in the future. the longer they maintain that it -- that people see what is going to happen in the future. bid, we're just a 10th of a percent down today. it is really not much happening in the short term. julie: what about rates? we have seen some volatility coming in. >> the options are being very active. on wednesday there was a lot of activity when it was moving. also continue to
fight a bid -- find a bid. people are adjusting to the new level of rates. it is in the realized form for them. let's talk about what those rates and the broader economic picture will look like for one particular stock. target. your trade is on target, which is reporting earnings next week. you do not seen terribly optimistic. >> i am not terribly optimistic about the big retailers to begin with. i'm somewhat bearish on target, and my trade on target, even though it defaults next week, is a two-month trade or i want to put.he july 75 i think it is a great risk reward. result of coming out
held on theg off, target is about to 17 on the 10 217 on the 10 year. you would see even though the product indices will maintain the levels near the all-time high, the stocks that are dependent on the economy, like the retail stocks, or going to continue to have a compression of the multiples. that is quite possible that we will see some sort of slow selloff into the summer. julie: thank you. more bloomberg market day after the break. ♪