tv Bloomberg Markets Bloomberg September 3, 2015 11:00am-12:01pm EDT
we will ask continentals's cfo if you think china is having a cold or the flu. olivia: twitter needs to find a third shares have a fallen 22% amid the leadership turn while. -- turmoil. >> what about the other side of donald trump? we will go inside the trump empire, next. olivia: good morning, everybody. brendan: we are 90 minutes into the trading day in new york. we will begin with a look at the markets right now. , 1.3 percent for the s&p 500, dow up 1.2%, nasdaq just up a percent.
obviously, a lot of relief on wall street. the chinese equity markets closed. we are seeing bigger moves in the currency markets. a lot of action in the euro today because we heard from , nobody expected rates to change and they did not, but it was his comments that he would revamp quantitative easing -- the euro trading at 116. it's also having an impact on the commodities market. west texas getting a nice bump, up by 4%. what a volatile couple of weeks it has been for the price of crude. crude holding steady above $40 right now. easy,n: you look at is that whatever it takes part two? -- you look at the ecb.
low,a: bond yields are so spanish tenure is less than the 10 year in the u.s.. -- spanish tenure is less than the u.s. 10 year. market turmoil did not keep the biggest part of the u.s. economy from moving ahead. the service industries closing matt growing at the fastest pacn a decade. it makes up 90% of the u.s. economy. everything from farming to retail to restaurants. the european central bank has cut its forecast for growth and inflation through the next two years. draghin frankfurt, mario said that the euro zone economy .ill grow 1.4% this year he revamp plan to measures which have kept the economy growing. the monetary policy measures
we have put in place since june of 2014 provide clear support for improvements in borrowing conditions for firms and households and in credit flows across the euro area. olivia: there has been speculation that more stimulus is on the way in europe because of a slowdown in traits. -- trading. brendan: the kentucky county clerk who refuses to issue marriage licenses to same-sex couples is in federal court this margaret kim davis faces contempt of court charges fortifying the supreme court. -- is in federal court this morning. kim davis faces contempt of court charges fortifying the supreme court. defying the supreme court. in the three months since the search began, twitter's stock
has fallen 22%. the national football league has been left deflated by deflategate. a federal judge has overturned a four-game suspension for tom brady. fornfl had penalized brady using underinflated footballs in the playoff game last january. the judge ruled that roger goodell did not have the authority to carry out the suspension. those were your top stories this morning. olivia: it has been a big year for continental, the german auto parts maker. they have raised the revenue forecast three times. at their august peak, shares were up 20% for the year. like most european equities, they have taken it on the chin since then. is joining us to discuss the outlook, wolfgang schaper, the chief financial
officer. thank you for making the time for us this morning. let's start in china. how bad is the slowdown? wolfgang: the year started quite well. six --growth in the first six months of the year. we saw a weaker july and august. growth --fident 5% 3-5% growth. -- it is notelieve the first time in china we have seen production down for two or three months. auto production. we believe the chinese government -- they already announced measures.
to make sure the population sees further growth. brendan: what indicators are you looking at right now? what leading indicators are you watching other than toppling gdp growth? wolfgang: what we are seeing is the inventory level on cars and the whole sales channel. this is the upper end of what we have seen for many years before. olivia: let's talk about deals. billion for mergers and acquisitions, but there has been a deal between zf, they bought trw. are these little deals going to
be enough or will you have to do a megamerger? wolfgang: the last biggest -- i'm notbefore sure we will see so many megamergers. we've seen many on the level below us. segments.rs and some on the mega level, these are strong competitors. olivia: you don't think you need to do another big deal? wolfgang: no, we don't need that. we are one of the top three now. if you look at the 25 segments in the automotive industry, we are number one or two and most of them. olivia: what are those one or two others? what segments of the business? we are thinking of an
acquisition in the segments, there is technology moving. concentrating on software. the car is one of the biggest software elements we are using. we might do one or two other acquisitions. brendan: on a smaller scope culture matters and technology. how does a car company compete with a technology company to do automation? wolfgang: we have our own business unit in silicon valley. we are trying to capture the culture and bring it into the country, trying to get these cultural elements to the rest of continental. integrated --be we keep it separate and try to make sure that there is a different culture for software development that is kept well in those -- olivia: automated technology. our self driving cars for real?
wolfgang: they are for real. the fully autonomous driving car. highway driving is not so complicated. 3-4 years now, he will have them. brendan: what is the right regulatory environment to proceed? wolfgang: when the technology is there, regulation will be there in the big markets come in the europe and the u.s. and japan. olivia: have you seen how slowly u.s. regulators move? believe --e still there is talk about it. it is a good thing. brendan: you see that happening in european markets as well. wolfgang: we expect that for european markets as well. you don't need the full
regulation on the first day. sure you have to make are at the steering wheel. olivia: this will be a windfall for liability. when these driverless cars to hit the roads, what will be continental's role in production? lots of: we deliver these technologies, software and components. to make the car autonomously driving. tirepeople think about the -- olivia: specifically, what will you provide? wolfgang: all the sensors unique. the camera, radar systems. -- all the sensors you need.
all these things are provided by continental. brendan: diversifying beyond wheels. olivia: indeed. how about the business environment in europe? do you think positive easing in europe is working? wolfgang: it is working. aftertomotive industry quite some years of very slow development, we have seen its pickup. this is helping the car market develop. olivia: you are coming up a 20 year low in the european market at last. thank you so much for your time. trumpn: coming up, donald makes an impression on the presidential stump. how is he as a manager?
matt: check out stocks, on a tear considering yesterday's almost 300 point game. adding another 156 points. this after mario draghi said although the ecb has a lower growth prospect, his on a tenant leasing program could get bigger or go longer. -- his quantitative easing program could get bigger or go longer. toe gains in the indexes take a look at the individual
movers. visa and cisco -- re-signed fire fireeye, they will have a big cyber defense conference october. they expect a large pact with visa. a lot of people on twitter, unverified traders are spreading rumors that cisco may be eye.rested in fir john chambers is out of the drivers seat at cisco. that's why you see the gains across these three stocks. olivia: thank you so much. brendan: we will take a look at the top stories crossing the terminal now. consumers are less confident in
the economy. the consumer comfort index fell slightly. the air force now has two proposals for its next-generation long-distance bomber. they will replace the b-52 self palmer which first flew in 1989. the other proposal is a joint project from boeing and lockheed martin. the winner may be named . three children are already using the force. online tv, they were the first to open new star wars toys. disney declared tomorrow as force friday. the merchandise goes on sale. and since have been hits theaters just before christmas. my life will be complete. i am already a star wars fan. olivia: i forgot you were a star
wars geek. brendan: yes, i am. olivia: not a fan come aching. definitely a geek. no offense. the republican party is of of theng each other candidates to sign a pledge to not launch a third-party campaign if they don't receive the nomination. donald trump is meeting with gop chairman, rice previous in new york. preibus. discuss hish us to max abelson who sat down with donald trump and wrote the businessweek cover story. explain what he does to make money. max: people have this image in their hands that he plays a businessman on tv.
that is not true. he has this big organization that is profitable and makes money. i got to wipe away all the noise about donald trump and only focus on what that organization look like and how it makes money. what it looks like, he's got these deputies that are totally fascinating. his bodyguard is his chief operating officer and his bodyguard tackled hecklers at a tennis match. tackledbodyguard hecklers anything this game and trump was very impressed. i generally had a great time with him. people.p sees the best they really love that about him. his cfo is fascinating as well. does the coo call donald
trump mr. trump? >> a lot of them call him mr. trump. brendan: i did a piece on the second season of the apprentice and one lined up around the block waiting to addition for the apprentice, calling him mr. trump. how does he make money? max: i was calling him mr. trump in his office. let's talk about how he makes money. note is not a sham, he is the greatest builder living in the world. he wants to build the wall and mexico, i'm the biggest developer in new york city. he is not those things. he always wanted to put up the biggest skyscraper in manhattan and he failed three times.
this builder,ng he is this landlord with the fascinating realty portfolio. he a golf bigwig. course that isf bizarrely lush and perfect. obviously, he does license his name to buildings and products. brendan: do you think it is a management style that will translate well from the private sector to the white house? hard once i spent time with people around him as big and you get from spending time with him is that he gets involved in the most minute details. he would be involved in picking out the chandeliers about us. or he picks out the fountain,
the marble. story,ng we say in the it's kind of hard to imagine how that micromanagement and his disregard for hierarchy, how that could or would translate to the white house. micromanagement is kind of impossible and ignoring hierarchy is an efficient. , one of the other things he was picking for the golf course, you cannot pick big urns and distribute them to americans. the chandeliers and urns at the white house would be amazing. amazinger.y would be an amazing piece. check out the latest issue of bloomberg businessweek. 1980's photos of donald trump. brendan: i had trump, the game.
brendan: twitter's search for a new ceo continues. company board is meeting today. a discussion of the search process is on the agenda. brendan: twitter's stock has fallen 20% since the search began. sarah joins us from san francisco. what are we expecting out of today's meeting? sarah: it has been a turbulent two months for twitter. they are missing a ceo, they have an interim person there now.
it is with a sense of urgency that they address this question of whether the search is completed, whether they need to do more work. one of the internal candidates they are considering as cofounder is zach dorsey -- jack dorsey. it would be complicated to let him continue running twitter as ceo of square. nothing super serious -- it will be interesting to see if they decide to give an update on something people are very carefully paying attention to. brendan: does the board have a sense of what they want the next ceo to do ? sarah: it is very complicated. you need someone who is really familiar with the product. which is widely used by celebrities, politicians, sportspeople.
not widely used by executives in corporate america. it's a very political organization, to. whoever comes in will be reporting to a board with at least two former chief executive officers on it. costolot low -- dick plans to leave the board, but that is still a lot of pressure. it's a company where they have cycled through a lot of executives. olivia: i think jack dorsey wants his job back. thank you so much for your time. brendan, this has been fun. brendan: it has been a long time. olivia: stay tuned. ♪
wing part that washed up on the beauty ocean island did indeed come from the ablation airlines late 370. from the malaysian airlines flight 370. a judge in california has signed off on $450 million settlement in antitrust claims involving google and apple. the judge ordered $40 million in fees, half of what had been requested. imports of mobile phones and from cynical spell. exports were little changed. mobile phones and pharmaceuticals fell. the nfl got sacked in the deflategate case. overturning the suspension of tom brady, saying roger goodell imposing his own
brand of industrial justice. the markets are closing in europe. for the latest, we go to mark barton. mark: european stocks rising for a second day. investors in joining a breather from china, watching markets e for two days to commemorate the end of the second world war. attention fully on mr. mario draghi. gifts instead of receiving gifts. he said the ecb can buy a higher proportion of each euro numbers that -- you're a member pot's each euro member's debt. the euro fell, stocks rose. it's clear what happened because of mario draghi.
here are some of the big individual movers. has raised its full-year guidance up by 5.4%. air france, another company in the news. considering starting a low-cost carrier to be a competitor of this stop right here, unicredit. jobs.utting 10,000 when will we hear more detail about that? this is the stock 600, up by 2.4%. i want to show you the mario draghi impact. he cut growth forecasts, but what he did was he adjusted the qe program. that is different for the birthday boy. brendan: you will be the only person allowed to pronounce --
on television. the biggestt says investment opportunity is in europe. let's take a look at what happened today. marioump from draghi. is that the demand story in china or the monetary story in frankfurt. chris: what's driving interest in europe is the same issue that's been important for more than 12 months now. suffered 4-5 years of earnings downgrade. i think earnings are poised to recover. we have not seen any downgrades further in the market. we have seen some stimulus from qe, which is starting to support demand. we are seeing wage increases in germany, we started to see the acceleration of
medium businesses. brendan: where do you see the most opportunity? sweden or further south? chris: there are appealing investment ideas throughout the region of europe. one of the most disliked countries in europe is france, but france is currently where there is the most opportunity right now. you have reforms that have gone off the radar in france. they have done a lot of reform, have considered moving the retirement age from 65 to 67 years. they have corporate tax cuts. they have reduced public funding by $50 billion. brendan: the biggest problem in france has been the labor rigidity. emmanuel, the ministry of economy has made one of his initial objectives to reduce the cost of laying off french ablaze. years. to take 3-4
he is endeavored to get that down to under one year. brendan: looking at france and italy, who has done a better job in the last year? chris: both countries have done a great job. france has done an excellent job. france has done a great job. it has been very much under the radar. in europe, you have to be very careful about labor reform in the press. progress is being made. not paidt has attention to them. companies in europe have used that opportunity to cut costs, they have moved factories to low-cost countries, reduce labor. we don't need to argue about the intensity of the recovery. even a mild recovery will put european companies in situation where they have to -- have the
tendency to a preferred. brendan: china is a huge market for a few large industrials. can they pivot? what is their long-term outlook capital has exported out of germany into china. seeing a reduction of 25% since the year started. european copies have been talking about it since the year started. china as a customer for european exports is only 7%. look at the u.s., it's over 14%. china is not an issue. coming out ofow europe, small and medium sized business recovery, household getting stronger, that demand will be more important. brendan: we are used to talking about europe as a place where monetary policy is the only policy that's happening, structural policy is not
bloomberg market day. let's get a look at the top stories crossing the terminal right now. big-city homebuyers might be half are losing belly. 2% over the last year. value in losst angeles, phoenix in miami. are saidg dreamliner's to be stranded at a factory or seattle. financing for the planes fell apart and the u.s. export import bank cannot help bridge the gap. congress has refused to reauthorize the bank to make new loans. samsung has joined the smart phone sensor battle. the company will start selling its starter kit this month. google and apple already sell this. those were your top stories. back to the housing story. if you're shopping for a home in a major u.s. city, there may be some bargains on the horizon. index reports that in june
of 2015, half of single-family homes in the new york and washington areas were valued less than they were in june of 2014. a signal that prices may have hit their ceiling. it's important to point out, this does not include manhattan. where the laws of physics are suspended. betty: maybe the loss of space. in manhattan, you don't have single-family homes. they don't include this tiny island at all. if you are living in the new york metropolitan area, according 5% of the homes they value their have dropped 2%. that compares to last year when it was just 15% in washington and 20% in new york city. -- 45% of the homes they value there have dropped 2%. brendan: you have my full
attention. betty: incomes have not risen that much. people are still fighting a hard time getting financing. got onto your home but a lot of people who want to buy homes now are finding it really difficult. what does that mean? more people are still renting rather than buying. those who own their homes are seeing even in their neighborhoods where you hear that prices are continuing to rise, that doesn't mean that there aren't prices -- on houses in your neighborhood the nursing prices fall. brendan: help me understand how this works with case schiller. the 20 city index goes like this. very impressively up, almost ityroken with that seasonal to it.
betty: all property is local. you may be in a neighborhood and they may be measuring a neighborhood in a metropolitan are where 70% of the homes rising and therefore you get rising home prices in that market. that doesn't mean there aren't houses in certain spots where they are seeing the clients and that is what you are noticing. i see that in my own neighborhood where there will be a tier of homes where millennials and younger parents are buying those houses. in some areas where $1 million or above, they might be trickling down in the cheaper homes -- and the cheaper homes are not moving at all. brendan: hoping the cavalry will arrive. the sense that millennials will come and fix everything. i don't know if i buy it.
betty: the 90 million strong us?ulist millennials have the overhang of student debt. about getting a job, sure, you can for me to household, but the you have the mortgage?get a medical that dust tails with a guest we will have the next -- betty: that dovetails with a guest we will have the next hour. costs mba at harvard $60,000 a year. why is that relevant in this economy? people getting their mbas are desperate to go out west. betty: why not? brendan: we are moving to san francisco.
bloomberg market day. i have your options insight today. first off, as we approached the top of the hour, let's take a quick look at housing. major averages extending the rally. dutch let's take a quick look at how the major averages are extending the rally. another 138 on the doubt. the s&p 500 up 1%. dow.other 138 on the the manager of kk and financial joins us. financial joins us. what you think about this rally we are seeing on the back of mario draghi lowering growth expectations but promising more juice? >> exactly. that's what you are seeing is the reaction to that given the fact that there will be more using coming down the pipe.
that is climbing the market for the short-term. willconomic conditions dictate the direction of the market but is getting a boost to this rally off the lows we saw on tuesday. matt: we will see we will retest the lows of august. one central bank has shown willingness to pump up equity markets. do you think that is a possibility as long as we are worried that the fed is long? dan: it is still in the cards. we have to see this market take out the highest that it made last week and that was just below the 2000 mark. this 1971 inove the s&p 500 committee we get a push higher. there's nothing on the forefront here considering we are going into unemployment tomorrow to lead me to believe that there is not more downside to this market. matt: what do you expect for the nonfarm payroll number tomorrow? not only in terms of the number -- we are looking for 218-to 20.
218-t20220. dan: if it comes in much stronger than expected, and ships the potential rate hike closer to death based on the numbers we've seen, it might weaker than expected. potential rate hike -- based on the numbers we've seen, in my coming weaker than expected. i know you have a play on bank of america merrill lynch. you see? dan: some of these financials have been beaten down pretty
good. bank of america is the worst looking -- a lot of options activity and jane record looking to buy the 19 call spread -- 15-19 call spread. the trend is there. any move by the fed, the banks will benefit. matt: thank you for joining us. brendan, back to you. brendan: serena williams continues to roll at the u.s. open. she is one step closer to completing the tennis grand slam. if you want to watch serena or anyone in this year's open, you can into us espn. -- you have to tune into espn. joining us is the chairman and ceo of the tennis channel and david westin.
i want to talk about serena. does tennis potentially have a tiger problem when serena finally decides to retire? an: there certainly will be point when a person like at least. i don't know when that will be. i've been answering roger federer for a long time. i'm not sure when serena is going way. i don't think so. david: a tremendous amount of personality in this game. she had a terrible physical injury. she almost did not come back. >> here she is coming giving us a can of drama. yesterday, down in the first set . what all of our guys will tell you is it is remarkable that she
continues to win, not necessarily playing her best tennis, but she refuses to lose. >> and she is an american. there aren't that many at the top of the game. >> it is rare because of all the countries that want to be there. look at baseball today or basketball. brendan: let's talk about the business. you did not pay a be to espn this year. that's a sublicense to espn this year. is that a fancy way of saying it was too expensive? >> we have an ongoing annual relationship that goes around the year with espn. we do 7000 hours of this sport. it is huge, some would say unruly. came to the open, we are now doing three hours of live coverage leading in -- there is a three hour pregame show.
a whole host of incredible personalities. >> terrific coverage, but it must have been painful. i was at abc when we gave up monday night football. it was a right decision infour years, the u.s. open a three network venture. stool.ar, a two-legged if you are tuning in any time on espn, you will see it. >> let's talk about digital. this last year, you have tennis channel plus, apple, roku, amazon. tennis channel everywhere, which is a terrific app. what is digital doing for your business? >> it's been interesting, looking at the macro
perspective, there has been some value at the hands of our -- for us,d espn it's an advantage and an opportunity. we've been building a longtail business -- i wanted to catch up on roger federer's last match. i was watching back this morning. digital is the trojan horse. it?an you get money for >> we are monetizing it right now. -- people paying us saying that is so cheap for 800 plus matches. brendan: call the time of death for us. when do you move beyond cable? >> i don't think that is happening. and i have been in
this business for longer the night care equipment is longer than we care to admit. the magic formula is the same guy relationship between a network that continues to live on a cable platform with the spokes going out to other medium. that wepartnered with are building an over-the-top platform because we cannot fit it all in one channel. brendan: thank you so much. espn --xcited that thank you for joining us. more market day coming up. ♪
>> ready to expand the stimulus program and u.s. investors await tomorrow's key august jobs report. >> game on for tom brady. heat -- a judge tosses out his four-game suspension for deflategate. >> more work options in fields like technology and consulting. is business school still worth it? we will speak with the dean of harvard business school. ♪ brandon: good afternoon. betty: i know you have been at it since early this morning. we look like we are continuing the rally. we are coming off of our highs of the session. is up just about 137 points and part of that is the energy rally. energy shales -- energy shares ve