tv Bloomberg Markets Bloomberg August 14, 2015 10:00am-11:01am EDT
olivia: we will bring numbers down for you. erik: growth slowed last quarter. turmoil in greece takes its toll. olivia: jcpenney reports men's clothing helped the company deliver stronger than expected results. good morning. i am olivia sterns. erik: i am erik schatzker. we have consumer sentiment. julie hyman has more. alysts is what an anticipated.
people are focusing on interest rates going up even as they has seen a decrease in feel spending as we have seen oil prices fall. and is not helping movie confidence enough. me highs for the year back in june. we have had declining numbers since then. erik: thank you. if you were to look at financial itkets now, you will see feels like a friday in august. olivia: a kind of does. i am wondering why i came back. there is green on the screen. the dow below 18,000. trading below 17,500. erik: why are rising stocks a good thing? confident ine feel
the economy. erik: people make money and markets up or down. olivia: oil markets, some people losing sleep. near six and a half year low. erik: is that good or bad? olivia: oh, stop. [laughter] oil trading up 1% today. finding a little bit of a bid. erik: outside of financial markets. lawmakers are backing the bailout plan. it is up to european neighbors to get on board. greece $96uld bring billion in rescue money.
tsipras spoke before the vote, urging passage. finance ministers are meeting again today in brussels to study the details of the bailout. erik: oil prices steady today. showrange projections plenty of downward pressure. for oil to gog lower. gary: opec is saying we are not areg to cut production, we going to see who can stand the lower prices longest. is 10 to $20 a barrel. that is where we are going.
at some point, someone chickens out. they are playing an elaborate game of chicken. the market surplus globe will last through 2000 16. olivia: wholesale prices climbed. the increase of the price was just 2/10 of 1%. factory production rose more than economist forecast. the increase of 8/10 of 1% was the biggest increase since november. total output climbed by 6/10 of rosecent as oil drilling for the first time since september. the latest moves from goldman sachs show they want to go for what they know. financing.
they're washing their hands of the coal business. they are selling a colombian mining business. murray energy will pay $10 million for the asset. goldman is buying an online banking unit from general electric. it has deposits worth about $16 billion. that will give goldman a source of cheap funding. erik: what amazes me about that ed with gepeople bank that it had 16 billion to deposit. itsnney posted second-quarter loss. sales of men's clothing and so hora helped to boost sales. the stock is up 25% this year. a strange site for football
fans. not always, just yesterday. tom brady in uniform instead of a three-piece suit. he was a surprise starter in the loss last night. he has been in and out of courtrooms, fighting his suspension and posing for fantastic courtroom drawings. olivia, you missed those. preseasonat was a game. the four season ban is still in place. erik: as far as i know. olivia: in havana, cuba, the u.s. flag is being raised at the u.s. consulate there. it is the first time in 50 years be raised.ag will marines whoe three took down the flag in 1961 raising it again. this is the first visit by u.s.
secretary of state since 1945. history in the making. a live shot now. we are waiting for the flag to go up the pole. we are waiting for comments from john kerry. he will have to strike a balance on this flag raising trip. a long way from normalization. not exciting to see a flag raised up the pole, but if you look back on the events in history, they hold more symbolism. olivia: sure. a huge shift for u.s. foreign policy. euro area gdp faltered last quarter. the three largest economies fell short of estimates. rose by just 3/10 of 1%, falling short of the projection. erik: guess who is here.
hans nichols. important that the economy appears not to be stalling, but faltering. that is a cause for concern. hans: it is a cause for concern for mario draghi. stand up a little bit. in germany, they were there. , they came inth with consumer spending. they spent a lot in the second quarter. we will have to see what happens in the third quarter. the craziness, capital controls, everything that happened increase, that was the third quarter. have any idea how that will affect the numbers. i suspect we will have a decline in france and a slowdown in germany. olivia: you cannot take into account the instability in
greece. you can take into account a full quarter of quantitative easing. is an economy on steroids. erik: i get combativeness? hans: that is what happens when you do not wear socks. a below the belt shot, i agree. erik: we can make it a below the i am not wearing socks. it is august. quantitative easing took a long time to produce economic growth. helped revive it the economy at all. what it did do was -- financial markets almost immediately. hans: if your goal is to have , theymployment in europe
would be happy with moving towards it. what we have is unemployment that has stayed high. first round of quantitative easing, second round, eventually we saw some -- the labor market improved. stocks might be up slightly. it is not amazing. look at what the dax has done. spain is a reform story. you see when they reform the economy, that is not correlated to quantitative easing. erik: it is a beacon for italy, 's popular has collapsed and he is trying to sell the idea of reform. a lot of people would
say hispanics have made more progress on reform. in some ways, it is the biggest opposition to giving more money to greece. it comes from peripheral countries. countries that went through tough austerity and do not want to face political backlash. what to the irish say? they had massive problems in ireland. greece will have to recapitalize their banks. varoufakis is a popular man. what do you make of the greek gdp numbers? hans: quirky. consumer spending, big capital , they people buying cars wanted to make big purchases before things got crazy.
there were great tories out of athens if you are spending a lot on big households. olivia: unemployment in greece tipped down from the 25 point. hans: crazy. olivia: thank you. jcpenney struggling, but not on relative basis. better than expected second-quarter results. if you turn around taking hold? ♪
erik: pardon us if we seem distracted. apparently there was a paddle boarding accident at some point. olivia: there was a paddle boarding accident and when you make it last -- when you make me laugh, it hurts. on --.yman has details -- europeans sympathy on stocks going down. king digital, not that recent of , stott down 9%. taking a big hit. earnings beat estimate. there is the outlook that is the problem. king digital may not be a household name, but kandi
crushes the game that it made. it is trying to diversify away crash.ndy the share is down a lot today. loco shares falling 19% to a record low. the forecast also an issue. not terrible performance. finally, party city, the chain of party supply stores down 10% today. cut its forecast for comp sales. i calculated how they have done since the ipo price.
where you see these charts begin is where they closed on the first day of trading. pollo loco.e el it is down the most. 39% from its ipo price. finally, party city, even though it is down from its first day of trading, it is up from where it sold shares. with that was julie hyman the ipo update. the government's top watchdog is resigning at the end of the month.
mark has been the cftc since mid-2014. he is viewed as a moderate voice on the commission. olivia: tesla filed to sell 2.1 million shares. tesla is giving itself more breathing room as it prepares to know its model s suv. james is giving kids with challenging backgrounds the chance to go to college for free. the program would provide a guarantee for year scholarship -- a guaranteed four-year scholarship. those are some of your top headlines.
jcpenney shares rallying today. than estimated second-quarter loss. cosmeticsen's and helped boost revenue. olivia: is the company finally taking hold? mary, great to see you. mary: what they are doing right, and just because they are in a mode, remember, they lost about $5 million in revenue. we think they will continue to be a standout among other retailers. what are they doing right? their private brands. it represents about 50% of their revenue. it is driving traffic, just as sephora.
that is creating a highly differentiated category. is trend right. the company has been taking some center, core strategies, that is expanding women's shoes, handbags, getting the style right. that is driving purchases. are on track to deliver good results. loss percused less on share. for the quarter, they came in at 134 million. we were looking for 105 million. comcast sales were up 1.4%. olivia: from a lower base at jcpenney.
mary says they have a long way to go. we think they are on their way. they're looking for 620. that is more than a double in --. you believe they can become cash flow positive heading into, or at least heading out of the fourth quarter and into the first quarter? it has to do with seasonality. for the year the company expects -- it will saw -- it will probably be around 50 million, what we are thinking in 2016. it improves from there. they should throw off 400
million dollars to $500 million of free cash flow. it will take time to get there. cash at not generating this point. they are saddled with over 5 billion of debt. that is what is holding them back. shares, we were favorable on the company and their turnaround. , if you look at macy's, the most profitable and most successful, they have a healthy real estate portfolio that represents ownership of about 55% of their stores. they are trading at seven times.
dillards owns 82% of their stores. as profitable as macy's. they are trading at 5.7 times. olivia: they expect to see zero, fails growth. erik: let us show you what is happening in cuba. john kerry is speaking in havana. the united states opens its embassy there for the first time in 54 years. >> we thank the great people of switzerland for their service and help. [applause] ♪
being made in cuba. john kerry is speaking in havana now. one-run have to present in a few minutes a flag will be raised over the u.s. embassy, the stars & stripes, for the first time since the early 1960's. olivia: the three retired marines who lowered the flag are going to be present to raise a new flag. last month, when the cuban washington,ened in they raised the same flag that they took down in the 60's. erik: and initiative of the obama administration. marco rubio unhappy about it. ♪
port two days after an explosion at a warehouse. it killed at least 50 people and injured more than 700 others. hazardous materials sparked the blast. one explosion equaled 21 tons of dynamite. the u.s. investigating whether islamic state used chemical weapons against kurdish forces in northern iraq. officials are taking the allegations seriously and are gathering more information. they know isis has been accused of using chemical weapons before. japanese prime minister expresses profound grief for those who died in world war ii. shinzo abbe spoke to speak about the country's sorrento. surrender.s he apologized for the country's action.
a wing fragment found on an indian ocean island was in fact confirmed from flight 370, the plane disappeared in march 2014 on board.eople more debris was found following the partial wing's discovery. ares look out where stocks trading. a mixed picture. nasdaq in the red. down 2.5 points. the s&p and dow trading higher. the dow up by a quarter of 1%. 18,000 seemingly nowhere in sight. still come, more, including the creator of "the wire" said down to discuss his new show "show me a hero. no -- show me a hero."
the fcc new pay ratio role requires u.s. companies to compare their worker's pay with their ceos. the highesto expose executive pay, executives play out there was a way to cheat the system. >> low we did when i was in treasury, setting compensation after time, we made that distinction between guaranteed compensation,ash and the remainder of the compensation stock over a long , tell the ceo
>> they approved a metric of a pay ratio, is that a populist revenge? >> it is. the more sunlight you bring to how ceos get paid, what the factors are, what they have to disclose, just to let the public and the shareholders and the employees know, i think that transparency is a valuable step in the right direction. >> they want to compare it to the median of everyone else. the things the sec is doing to throw things out for the public to consider, what characteristics of pay are relevant, i think all of that is a good idea. figures are out there.
it -- with the ceo makes is out there. it depends on what industry the company is in. >> the fact that the fcc is weighing in is a good idea. >> they are only weighing and because dodd-frank made them. tom: this is important. we go after ceos because they may too much money or ceos that showed poor stock performance while they make a lot of money. after -- whaty go does that mean? i have not heard anyone in government suggest the government should get involved. what did you learn?
>> cooperation with the lawyers. >> get the money out the door to eligible victims, get them compensated. we do not remember a time and, birder comes in as an eisenhower-nixon conservative. what are the surprises we are going to see in american law in the coming years. interesting to see whether app program, agm program, a 9/11 compensation program, whether you are going aberrations out of the mainstream -- you do not see them that often.
at the end of the day, cavern eyes the problem, get the money out and avoid the american courtroom and legal system. olivia: that was ken feinberg. ahead, china's currency devaluation, we will look at how it is affecting the bond yields. in u.s. flag being wasted havana, cuba for the first time since 1961. ♪
olivia: it is time to get you caught up on all the market action. started in asia. ended the day in the red. the shanghai composite rose to 10th of 1%. the biggest story this week has been the ride for the chinese yuan. >> it has been eventful. it is simply because of the broad implications of the week adjustments in the currency. global traders are now it's test with the daily reference rate.
they usually announce a few minutes before equity market start. a lot of what has been discussed this week is reform agenda, even how the currency trades. embodied in the daily fixing. olivia: let's get to mark barton for the latest on europe. european stocks are on track for the biggest weekly decline in over a month. to be fair, much is closer to home. coming in weaker. the economy is falling more than expected. the other side, events in greece.
lawmakers in greece did approve the bailout. there will be a vote of confidence later. weance ministers meet as talk now. will they rubberstamp this bailout? many hope they do. the euro up against the dollar this week. on track for its biggest weekly gain. only major currency that is rising against the euro. encouraging in flechette and date that has led many to believe the central bank will not cut interest rates. significant currency moves across the world this week.
rising in spain, the u.k., italy, germany. it may make european bond markets more attractive. so says barclays. julie: thank you. i am going to start with stocks. not doing a lot. a mixed picture. the s&p and dow are up a little bit. financials and materials leading the pack. only up about a third of a percent. energy is down. down very fractionally. not seeing an enormous amount of movement. the move we are seeing in applied materials. this is the biggest maker of machinery to build computer chips. short of estimates.
the decline for the stock has been accelerating. it is seeing lower than expected outsourcing ship makers. this could be a forward-looking four -- forward looking in the industry. dutch chip maker and sky works all trading lower within the chip industry. touched onears, mark oil. i want to mention it again. a turnaround in oil prices. it looks like we will see another decline for oil appeal. the big streak of losses we have seen throughout the summer. forseventh straight drop oil is what we are setting up four. we have not seen a streak of declines like that since january.
olivia: thank you, julie. general motors recalling 73,000 chevy cobalt's in the wiring driver-sidet the airbag from deploying during a crash. -- is taking advantage of a irish business law. businesss its irish registration let's at sea shield information about the unit. things go sour for the makers of candy crush saga. revenues from the game are still declining. , kinge the splitted digital will keep investing in candy crush. fund managers betting
-- this year. joining us to explain what happened, lisa. what has happened? china through a wrench in some of the growth. yieldsek, two year plunged into a record low. one percentage point different two-year yields are leaning. why does this matter? basis points is the biggest gap since 2007. it is interesting. it means one of two things. either these cycles are diverging in the u.s. is doing
better, the data does seem to support that. was disappointing. the fact that you have it out of the u.s. is optimistic. that would edify this. if i am going to be a down our, the second potential implication is that the u.s. will make a policy mistake if they height rates -- if they hike rates this year. the yields have strengthened enough. they have risen enough to support any kind of temporary effect of the economy. it would not make sense for them to come in here and push yields up. olivia: we do not know how much further rates will move. we get a move in september or december. u.s. has been implementing these easy policies for longer than europe. they are just further along in a
cycle. you are seeing deterioration, the weeding out of weaker credits already. we are probably a year or two ahead of europe. olivia: are they wrong? lisa: two-year yields, talking about small money, how much could it be of a problem. lost --overnment debt had huge losses. what does this mean? buying this debt now, you are paying the german government for the privilege of being able to buy their debt. olivia: tube -- to lend them money. lisa: you see it all across the
german curves. when you get these levels, you see more volatility because they are not making sense from an investor logic perspective. olivia: euro gdp out weaker than expected. kicking in.tarts what happens to the european debt then? lisa: this is a problem. these people will not do well. back tosee a reversion the 4.5% losses and a couple of months. work, you easing should see an excel ration in the economy. yields starte the to rise again. ahead, if you were a fan of "the wire," you will want to hear about new project.
a lowlow income houses in income part of town. i asked about how difficult it was to go to hbo and get the shows made. this is what he said. >> you never know when it is going to go south on you. that is from my heritage. some point, i expect someone to come to me and say we look at your ratings, we have let you go a long time. you have not had a hit. >> you still feel that way? >> i do. i have been at hbo 17 years. going to work on some pilots and maybe one of them will get picked up. i am never quite believing. you tole look at respond. you find yourself in a position where people want to hear what you say, or not. do you embrace that?
not think in terms of embracing it. i live in baltimore. friends of mine lived close to the areas that were on fire. we stopped losing population a few years ago. to hear people in the wake of what happened in baltimore talking about the validity of that was disturbing. come to baltimore and say that. it is a cynical thing to say when we lived there and the fragility of the city is such as it is. our recovery is not assured. most of us know you cannot swing around the racial epithet. we have a vernacular that allows us to play the same games. it is all about personal freedom
and liberty and my property backyardd not in my ism. this seems very relevant, this show he wants to make that 25 years ago. all of this results in going into insolvency. olivia: it feels more relevant than in decades. he says he does not feel like he has had a big hit. what explains his success? >> he is very self-effacing. he has been elevated to a high platform. he met with president obama to
talk about some of the issues that have come up with in "the ."re" and "treme following.al cult olivia: critically acclaimed even if he does not have the ratings. newhing about how the series compares to earlier work? >> it is a miniseries area a return to form for him. grant.ntly got a being a modern american novelist, but doing television. ♪
television service, delaying rollout until next year. anchor: a surprising slow down in euro area growth. : the fcc's new rule requiring ceo's to compare their pay to workers'. ♪ good morning and happy friday. i'm olivia sterns. pimm and i are in the office. pimm: let's take a look at how markets are faring right now. let's look at u.s. stocks. s&p 500 unchanged. dow jones industrial average one points.