Skip to main content

tv   Bloomberg Markets  Bloomberg  September 21, 2015 2:00pm-4:01pm EDT

2:00 pm
>> we want the latest. iyer.t: shares of alibaba we will look into what the key stakeholders could do next. expire. of alibaba insights intoe what they will discuss in our special presentation, china behind the world. ♪ mark: betty lou going behind the wall in china. our special tonight 9:00 new york time. straight to a look at the markets. a state of confusion after what to ask from the fed next after fed officials spoke over the weekend arguing for raising interest rates this year. stos there. the rebound has faded a little
2:01 pm
bit. the dow rose as much as 190 points. the nasdaq lower. the terminal,side nine out of 10 groups are up. -- decliningning group is health care. what happened? hillary clinton tweeted out she would release a plan to combat the high cost of prescription drugs. moving on to treasuries, we are seeing a decline in treasury prices. fed is data dependent. a bigger than expected drop in august sales. very quickly on to four x. a stronger dollar. probably more accurate to say a weaker euro. it could weaken by as much as $.10. it is set to increase stimulate and meet the deflation target. now taking a look at the
2:02 pm
top stories we're following at this hour. the biggest shareholders in alibaba are free to sell up the lockup on 62% of the east commerce giant fails. the initial public offering a year ago was record-setting in size. has fallen 30% since then. yahoo! still figuring out what to do with its 15% stake. -- investors are bracing for the worst and considering more shares will hit the market driving prices down even more. scarlet: the european fights over the right to be forgotten. a regulator in france rejecting 3 or moral appeal. the highest court ruled people could ask that links on certain -- search giant's be related if there was outdated or irrelevant. mark: the central bank could raise interest rates as soon as neck month. james fuller said he would have dissented last week.
2:03 pm
he is not a voting member. when rates do rise, the top strategist from wells fargo said it will mean less risk for sabres. clients that need income cannot find it so they have been forced to find it elsewhere. you are taking on more risk than that. we get a few rate hikes behind us, they will be able to transition to the safer outcome for income. that is where those types of alternative income product could face more significant headwinds. could shed yellen more light on thursday when she is scheduled to make a major speech. scarlet: a positive momentum for the u.s. residential market. they declined more than forecast in august.
2:04 pm
it is down from a revised figure of almost 5.6 million, the strongest since 2007. and that number prices decreased from a number of your ago. ales down at s caterpillar. sales plunged in the asia-pacific region, down 29%. scarlet: some may say the leaders on congress are bunch of killjoys. they're are being told went pope francis enters the capital thursday there should be no this bumping or selfies. congressional leaders want to avoid anything that may slow him down. apple reportedly speeding up plans for the electric car. the company plans to ship the vehicles 2019. also plans to triple the current x hundred person team. the report while apple has hired experts in list cars, it does not plan to make the first car
2:05 pm
completely autonomous. piggybacking something that talked about earlier, i spoke to the former president of mexico last hour, mexico central-bank deciding to keep borrowing costs unchanged at 3%. those are the top stories we're following at this hour. scarlet: one of the main top stories, the emmy awards. it was hard to miss commercials for the latest audi hybrid. >> it is not that easy being green. >> it is now scarlet:. -- laughing a volkswagen. it admitted it out right cheated with software rigged to under salute -- underreport emissions. mark: shares have plummeted in europe and the united faith in college west and the future of the full plug-in ceo. joining us with more is not part of greek.
2:06 pm
thank you so much for your time. -- matt hardigree. he is very much in trouble. he just got in a fight for control of the company. basically this is the worst typing for him. he was just about to argue for letting local branches of volkswagen be more autonomous in their decision-making, which shows the decision-making a volkswagen is very centralized. now he will have to say we did was happening or scarlet: at least hopefully he can say that. scarlet:you have covered the car industry for the past eight years. we have seen plenty in the last couple of years alone. is a gma ignition switch. fairmont from different cars made by takata. the different airbags. hyundai for
2:07 pm
overestimating the mileage. the overestimation for kia was because they made a mistake in trying to fall through the epa procedures. they said it is an honest mistake. and did not make a mistake. they purposely went out of their way to cheat the system according to the epa. mark: no fall guys here? >> they will have to find someone because it looks really bad. been able to say this is old gm. we used to make bad cars. we are a good car company now. is a tightly controlled organization. they had a recall where they recalled 500,000 cars to something. who fixed it? so many questions, and i feel it goes to the top scarlet:. there was an article about the volkswagen strategy. he said is bw should never have in as exposed to the u.s. changes.
2:08 pm
--vw should never have been as exposed to the u.s. economy as it turned out to be. it turned into a problem that -- setback the competitiveness in north america. >> this is terrible timing. jack wire made a push to say we will offer diesels and everything except the extreme sports cars. bmw has pushed t of diesel. the will probably impact audi as well. this also one of these vehicles, and they are included in the deep -- in the recall. this is awful. scarlet: why have diesel cars always been more attractive in europe than in the united states? >> do you mean greenhouse gases? co2? in that case the europeans are far ahead of the united states. of united states because
2:09 pm
car, california, small. the europeans took advantage of this and sold a lot of diesels that have historically higher emissions that affect so -- local air quality. europeans are focus more on global air quality. this is the root of why volkswagen probably cheated. they wanted to sell them in the united they can make a huge investment. they said let's get this to market. everyone is asking how are you able to do this without the filter that bmw and everyone else is using? mark: i think now we have the answer. mark:now that they are in trouble with the u.s. regulators, will this filter back to germany because they avoid claim to be leaders? >> anywhere volkswagen sells a , they do not have the sophistication to figure it out.
2:10 pm
volkswagen does not have any political clout in the united states either. >> all of their anchor in the tennessee basket. tennessee is not an important enough state right now politically unfortunately. mark: thank you for your time. appreciate it. asrlet: stocks rising today investors adjust to the lack of rate decision. a look at who are investors listening to now. ♪
2:11 pm
2:12 pm
mark: bloomberg "market day." welcome to the bloomberg "market day." --welcome to the bloomberg
2:13 pm
"market day." 110 industry groups down, that would be health care. 22 gainers. a mixed day. dow and s&p looks solidly higher. definitely a mixed with the nasdaq lower. the internal mix you were just talking about. we will get into the push and pull in just a moment. i wanted to bring you an update or what is owing on with apple. headlines crossing with the wall street journal. apple in white. jumping on the report in the journal it was not only developing an electric car but putting a timing on it. the ship date 2019. they cautioned this may not be when it shifts to consumers, but perhaps when it is signed off on by various engineers. the shares driving to the highs of the session on the headlines. the journal citing people familiar with the plans. tesla, which had been higher on
2:14 pm
it day with the announcement would hold both -- hold them event september 29 turned lower after the apple report coming out, concerned about competition and what this could mean for tesla. scarlet was mentioning about a tweet from hillary clinton and have profession, if julie: leslie and biotech. indeed. you can see the affected as having intraday. we have a sharp decline after the tweaked coming out. bouncing a little bit off the bottom. hillary clinton talking about her plans for prescription health care. here is what it said -- tomorrow i will lay out a plan to take it on. seen as the democratic front runner. hillary talking about this kind of plan. for folkss concern
2:15 pm
that hold the biotech and pharmaceutical stocks. also, the stocks have been out performers. for half and a more honorable position. the price gouging she is a hedge fundis that recently acquired a drug maker and raised the price of a specialty drug by quite a bit. we had the head of the company on bloomberg earlier today and talked about rationale for that. that is the drive. financials are faring quite well today. that is after they were the worst performing group late last week in the wake of the fed announcement. not huge percentage gains but in terms of how much they are contributing. scarlet: julie hyman for a complete snapshot of the equity market. globallyc is shrinking but growing in china.
2:16 pm
china plans to act 4000 jobs in the delta region in the next 3-4 years. this is part of a push to expand retail banking and wealth management operation in china even as they shrink the global workforce. the bank is trying to trim a headcount by 50,000 over three years and reduce costs i of two $5 billion. billion. to $5 the european central bank is ready to increase the new soa can reach inflation targets. they will maintain quantitative easing through the end of next year. the will begin releasing galaxy smartphone in the u.s. it is similar to one that apple announced for the iphone a few weeks ago. for the most for wireless carriers have moved away from subsidizing her phone sales. those are a look at the top stories. scarlet: traders betting the fed will hold interest rates on hold
2:17 pm
until 2016. the atlanta george president said he is confident the central bank would raise rates later this year. confused? mark: we are too. john williams over the weekend in new york. closemy view it was a call and reflects the conflicting signals. on the one side the u.s. economy is strengthening and getting close to all employment, but on the other side we face significant headwinds from the global economy and the risk to achieving the goals from that. bloomberg intelligence chief carl reckitt donna joins us. ricadona. are emphasizing they want to give the rate hike as a
2:18 pm
possibility before year-end. the market say nothing until 2016. the fed refuses reminds us. there seems to be and the committee with 15. s does this suggest there is a divided bed? that they are arguing over what to do next ? we saw one dissent of the meeting thursday. the committee is more unified this year than it will be next year. i do not think there is dramatic and waiting taking place right in the stretch. as we get closer and closer, you will see some differences. mark: know the virgins between janet yellen is tammy fisher. what do they need to do to build consensus? they need to see more data. are waiting for more
2:19 pm
information not only on the u.s. economy but the chinese economy. they always say we need more information. when is there enough information ? >> there will be enough information when they can say int happened in the market late august and early september was just a sneeze. passing sneeze and not the onset of pneumonia. once they have that, they can move on from there. there was a little bit of a pullback. some of the business sentiment gauges seem to pull back and if they are prudently, and i believe rightly so waiting to just confirm it was just a passing pickup. we have a function on the bloomberg terminal and it shows the events on the fed terminal. calendar.as busy lockhart speaking on the economy in alabama. seeking on the 25th. chair yellen thursday. george on the 25th. evans the 28.
2:20 pm
what would you pay aention to you so obviously janet yellen, but beyond that. >> she is delivering a memorial and university of boston. the likelihood of delving off would be less likely than other speaking events. we heard a lot from her during the press conference. there is very little economic data. gdp the third and friday. the only real economic indicator out this week that will be of any merit is the durable goods order. that's certainly not going to change her mind. what matters as much as the economic data is fed -- interpretation. scarlet: thank you so much. tried to make sense out of the monopoly of speakers -- that speakers. on 63 percentup
2:21 pm
of alibaba shares ended saturday. bringing up the biggest shareholders to sell stock. scarlet: what exactly will. who do that we will discuss. ♪
2:22 pm
2:23 pm
scarlet: welcome back toscarlet: bloomberg "market day." we are trying to exchange papers and shuffle them. mark: the story about alibaba, the lockup on shares. now all eyes are on yahoo!, still working out what to do with its 15% stake. the billion or jackdaw and the yield pledge to keep their stock to hold on to its shares as well. joining us now is or he johnson and san francisco. the reason to sell its pretty obvious. scherzer have not been doing well at all, partly be as a pressure from the chinese government over the sale of
2:24 pm
counterfeit profit. -- prospects for alibaba are in question. the size of the ipo, the massive size of the alibaba ipo was so offer, thecondary lack of secondary offer, the notion the lockup is off suddenly mean so many more shares coming to market. this is a lockup x duration like we have never seen in the public market. so many shares are now available for sale. available that many for sale, what are we thinking about the leadership at alibaba? ?hat are they to do y not to be confused with si, the rapper.
2:25 pm
mark: no. scarlet: he said no. cory: those guys have a great not to sell. but you do have other investors importantly who have sold in the primary offering of shares during the ipo who were pre-ipo shareholders who are now able to sell shares. they are now stered. when you look across that the universe they now consult stopped. with so much out there, so much of the wealth concentrated in that, they have artie shown or expressed dere to get out of that position at a higher price. can you tell us what yahoo! plans to do? planning to sell off its stake in alibaba into a tax-free spinoff. it has come under question now. a clever plan to match the
2:26 pm
with the tiny yahoo! small business and distribute shares to all of its shareholders as a spinoff. therefore they said it would not be attacking kerry move. might to the irs and asked for an early ruling. the irs giving them a letter saying no calls for additional taxation. the reviews to do that. we do not know if they're going back to square one or come up with a different solution. for now we know they are not spinning off the shares. what that means is that big sellers are still out there. he will be back with more after this. ♪
2:27 pm
2:28 pm
2:29 pm
scarlet: welcome back to the
2:30 pm
dianeerg "market day." skvarla's it. monday afternoon. in another republican outsider is rising in the polls. after thursday's residential debate, carly fiorina has risen to second place in the national poll of registered poster -- registered voters. donald trump still leaves, but the front runner went from 32% down to 24% feel the largest department store company in the u.s. has announced holiday hiring plans. macy's will bring on 85,000 temporary workers, about the same as last year. jcpenney will hire 30,000 for the holidays. the takeover in the semiconductor business. atlogue has agreed to buy now corporation. buy atmel forto
2:31 pm
$4.6 billion. for -- by china for economic gain is putting in an enormous strain on relations and must stop. president obama's national security adviser said today in washington. in his meetings he has repeatedly made claim that state sponsored cyber enabled us -- economic espionage must stop. irritation.a mild it is an economic and national unity concern to the indicted states. china is suspected in the current depth of millions of current and former employees. the current president likely to discuss this with the u.s. this week in a highly anticipated state visit. that is traveled to beijing earlier this month and folk exclusively with the top foreign
2:32 pm
official. she asked how china plans to respond to concerns over china espionage. >> china believes china and the united states are the countries who really try to work together rules for cyber security -- for better liberals on cyber security. china itself is a victim of hacking activities. the chinese government is firmly against hacking of any kind. any country, that , then itis a case should be given sufficient attention.
2:33 pm
internet fact that now is transnational. .he activities could be covert it takes time for any country to do the investigation. should every country take a responsible, prudent attitude and should proceed on factual grounds. how do you account for the white house? they say they have evidence of cyber attacks. trace the cyber attacks back to origins in china. how do you account for that caps ? >> i think it is better to let the americans that they are positioned and the two sides they in touch on this issue.
2:34 pm
it is important or any government to adopt a prudent and responsible attitude and let say china is a responsible country in the world. we are firmly against any kind of hacking activities. we are against cyber theft. china can demonstrate on this issue that is to make this cyberspace secure, transparent. this, how do we resolve is there one answer to resolve this? >> i believe there are many positive factors along corporation. countries should very interest of the areas people in
2:35 pm
mind. they should have more exchanges to deepen mutual trust and to understand each other's policy. know the real picture -- betty: espionage? countries view on this issue. china is against hacking of any kind, and we have made our view partylear to the american and others as well. scarlet: that was betty lou speaking exclusively in beijing to the chinese president. for more on the conversation, tune in tonight 9:00 eastern. china behind the wall. 9:00 tonight on bloomberg television. coming up, barrick gold has a plan to avoid following other miners into chunks that is.
2:36 pm
we will hear from the ceo next. ♪
2:37 pm
2:38 pm
scarlet: welcome back. i am start with you. breaking news on volkswagen. will benow there criminal charges against volkswagen stemming from the word facelifted put the device like cars that would only measure emissions when it was being tested are measuring.
2:39 pm
this is the latest year. volkswagen facing criminal charges from the u.s. government. thank you. shares closed down 17% in european trading today on the heels of the admission. we were the evening and i on this as it develops. it is the most important week in the oil world. twice a year banks decide how much money they will lend to oil companies. pretty baders are in place. covering the bank redetermination special over the next three days. alex steele joins me now because she has been talking about this for months ahead of time. how does bank redetermination work? alix: banks decide how much they will end an oil company based on the oil price and reserves. many expect that to be cut. we did see some cuts in a row, but not enough to put some guys at a business.
2:40 pm
you are a company, i will lend you $10. therefore, how much have you borrowed? you have borrowed eight, in which case you have to borrow three right away. it is all about the financial jiggling to find out which companies are going to be the worst off and may feel the squeeze? scarlet: talk about the companies that are the worst software better off? been showing the four worst. energy 21 that operate in the gulf of mexico. 75% of the lines cut by 67% in april. they are pretty sweet with $500 million borrowing space. did come out in a presentation to say they should
2:41 pm
--fine, not x acting expecting a cut. louisiana texas next will or. borrowing base 75% used, already cut by 10%. they abandoned alone offering in july they were supposed to use to pay back the loan. they are ready did not get the money they needed to pay it back . potentially one of the worst off is very petroleum. utilized.00% because their parent is when, they have posted a cash collateral of $250 million. it is these kinds of companies and debt loads that could be very hurt when it comes to the borrowing base being cut. the borrowingaid base was being cut in april. how much did they -- painted
2:42 pm
they and your back then? alix: back then it was temporary. they were able to sell 6.3 billion and bonds in march to help repay the borrowing base. the issue is this time they have very limited options. you have already started to see the bankruptcies trickle. there have been nine or 10 recently. samsung resources filed last week. $4.2 billion in debt. bankruptciesggest this year. what we are looking at is a great chart from goldman sachs. this would have raised how much production oil companies are able to do based on credit worthiness. the or aaas triple are responsible for the bulk of production in the u.s., not junk rated bonds. see theian now, will we credit market started to tighten around the investment great guys ?
2:43 pm
that could really hammer in supply. samsung does. no relation. when it all boils down, what is the impact on the oil industry at large. some of these companies, most of the companies, swift energy are not exactly giants of the industry. it is not the one that people are familiar with. alix: not the one at chesapeake. has its own issues. the issue if we find up seeing more bankruptcy, will the companies be forced to turn in to stop producing? doesn't have the ability to curb production even more. that is really what we are waiting for. that is what makes these next couple of weeks not just for the oil companies but the oil samsung whenwell, they are going to go into bankruptcy, they will be
2:44 pm
producing off of the asset. production ratio will not change. an incremental boost to help you curb the supply and demand pickup. that is why we care and why we will follow it every day. there will be blood. more like a statement at this point. -- irfourth will there will there be? looking into this tomorrow. -- or will there be? so much.thank you alex and her partner joe weisenthal will be talking about this more today. brian gibbons on the program at 4:00 eastern time. wewill with commodities. after gold prices climbed more than 40% from the peak in 2011, barrett gold sell shares plummet and bond yields soar. he said he is not worried about the risk of falling teck resources into chunks that is.
2:45 pm
here he is speaking with denverrg reporter at the gold forum. the first interview since becoming sole president last month. >> we have already reduced guidance for the year. -- 860 down to $190 per ounce. us to go.ore room for we have identified a $2 billion cost savings target between now and the end of 2016. it is an aggressive targets and are confident we will achieve it. we have identified 1.6 billion between now and the end of the year. we booked 1.1 million of it. was ontial focus capital. we brought down capital 20% this year over 2014. now we will focus the same level of intensity on operating costs. >> that sounds like job cuts. could be part of the
2:46 pm
equation. we have been aggressive in terms head of thell organization. today we have 100 50. we have had 60% reduction. the next move was to look at the middle layer. so we have had a number of there.ons just last week we announced closure of the salt lake city regional office. we this branded what was a stand-alone business unit, and now we are absorbing the copper asset into the structure. we have been working aggressively. developing the budget and like-minded plans and we will to see what they can do for optimizing staffing as well. cuts in the as if future will come at the mid-level? >> i think that is probably fair to say. there could still be more to go, but i think the majority will be mid-level and operational level. wedo you have a number? >>
2:47 pm
are not looking at that. we want to run the businesses as successfully and sustainable way. it is one of the reasons we put a lot of authority to the general managers. they will decide what is best and review it. at this point there is not a number. we will look for how the budget look. >> you must want to get your operating number down. the target out. we will work aggressively with operating costs. just so you know, 70% of our own sustaining cost is cash cost. of that, 30% relate to labor. labor is typically stickier in terms of bringing down the cost. we are looking to see how we can do the same or more with fewer people. we have been active at innovative ways to do things and reduce headcount. how much time do you need to
2:48 pm
get to where you want to go? >> i think you will see by the end of the year we will have met the debt reduction targets, a key one. we will have made very good progress toward 2 billion. operations are running extremely well. we are hoping as we come to the end of the year and assess the position, the market will see you doing what we want to do. you have been so clear you essentially have six properties you essentially consider court. you could get a lot more aggressive. why not put it all on the block? >> we said we would be very disciplined. we do want to sell the non-core assets when it makes sense to do so. we do not have to so far. the liquidity position is great. in the credit facility. as we continue to sell assets, there will be more cash we are building. from a liquidity perspective, we are perfectly fine.
2:49 pm
it makes sense. we can get good value for the shareholders, we will do it. was the ceo of the company. heading back to the breaking news desk with another update on what is going on with volkswagen. the u.s. government getting involved here. >> the u.s. justice department conducting a criminal investigation. devicealled a defeat into a number of the volkswagen and audi models. this is something that when a car would be tested it shows they were in control. are looking at emissions. what we have our people speaking on condition of anonymity. the department of justice telling bloomberg news they are declining to comment. this is had a profound effect on volkswagen stock since the news came out. the company think they do plan to continue to operate with regulators. the news here is the department
2:50 pm
of justice looking at conducting a criminal investigation into volkswagen in light of this omission. scarlet: thank you for getting up to speed with the story. volkswagen shares tumbled in trading in europe. they closed at the lowest in more than three years. much more coming up on bloomberg market day. strictly adding insurance benefits for employees who want to transition to another gender. who really winds, and what is the motivation for this? we will discuss next. ♪
2:51 pm
2:52 pm
scarlet: welcome back to the bloomberg "market day." u.s. companies are adding that if it's for the number who want to transition to another gender.
2:53 pm
chief jeffreyreau has written about this and joins us live from our detroit newsroom. isporate america progressive. give us numbers to show us just how widespread it is and how many people are taking of companies on this benefit? out of 781 companies that have been measured, almost 420 the benefits. if you look at who uses, something like one and 27,000 employees are using it. a really low cost, high public perception change to make. it is an easy benefit to offer if not that many are using it. having said that, when there are claims, how much money are people being reimbursed? the incidence is really low.
2:54 pm
it costs $150,000 if you decide to go the whole way, and most people don't. in the scheme of medical treatment, it is probably not that expensive, especially when it happens very rarely. this is a comfort me -- i think you can do and look like your friend to your lgbt community. are some of the big names doing this cap out human rights campaign has made this a very public event and companies are eager to get on the bandwagon. >> the companies you would , four. apple, ge we looked at walmart and they do not yet have the benefit, but that is all they need to get a perfect score, so that is something they may consider in the future. there is a lot of companies that -- pressure on the companies that do not.
2:55 pm
it is just not that many years ago it was only 50 companies. scarlet: right. from parental leave to different kinds of benefits that companies are offering to retain employees. is this benefit to attract potential employees? giving the company a higher score in diversity when recruiters rank the companies or is it to retain employees? not just this particular benefit of benefit? >> it can go anyway. there are many companies in the 90's and the only thing they need to do to get to 100 is to add the benefit, and the company's already are. this appears to be a more difficult choice for the companies to make. when you look at the industry, you can tell they are and they aren't. it looks at the friendliness of the environment. even for someone deciding whether to stay or go somewhere else, the kind of think you look
2:56 pm
at, even if the vast majority will not have the surgery or make any kind of change, they may like to be an environment where it is welcomed. what role has the government played if any, and encouraging the transgender treatment? >> the state government prohibits excluding transgender covering. now it is being talked about excluding from insurance companies across the board, which means some of the things that have to be separate. mean a lot more would have to be processed and insurance companies could not exclude it specifically. green, thank you so much. a lot more including a discussion of alexis tsipras. ♪
2:57 pm
2:58 pm
2:59 pm
it is noon in san francisco, 3 a.m. in hong kong. target ofgen said the a u.s. capitol probe.
3:00 pm
this after an admission by the company to designing cars that circumvent u.s. laws. we will bring you the latest headlines. >> and greek voters reelect alexis tsipras a month nearly after they forced the country after the euro. what is this mean for the fragile economy at its market? therom a cynical's raises price of one of its -- by 5000%. we will hear from that company's ceo. ♪ scarlet: good afternoon, i am scarlet fu here with alix steel. alex: it has been quite a day for the markets overall. if you come inside my bloomberg terminal you can see the move of the dow in particular. you can see it really autumn and out.
3:01 pm
-- you havee it dennis lockhart speaking. he is the more hawkish of the team. honey fivethink basis points is a big deal. i want to point this out. a technical note out of talking about technical patterns. we're talking about some technical patterns like head and shoulders. if it ends of hitting a certain resistance we could end up seeing a era should market -- a bearish market. scarlet: i was looking at volume and volume in the s&p stocks is lower than the 10 day average. nasdaq companies are above the 10 day average.
3:02 pm
i attribute that to the biotech stocks. ,long with health care shares they are tumbling. hillary clinton said she would combat the high cost of drugs. as a democratic front-runner, this captures the public's anger of high health care costs. alix: or that with some technical -- that was some technical resistance. you can see it play out as the money comes out of the asset class. you had fred bullard talking about the vote was really close. foraid he would have voted a hike, he would have dissented. i should point out if you look at w.a.r. p -- if you look at is at 20% and 40% for december. that is slightly higher than it was on friday. meaning the fed does make a
3:03 pm
difference. this is the possibility use on friday. scarlet: the three fed officials you mentioned, they will be joined by other federal officials. george will be speaking and evans will be speaking and williams once again. no shortage. be having this conversation until october and probably december. -- alix: it could defined by $.10. the ecb is going to expand its fund buying program and completed only to mid 2017. scarlet: some monetary diversions at work. back to our big story of the day. .olkswagen the u.s. justice department is set to be conducting an to the automaker cheating on an air pollution test.
3:04 pm
phil, talk to us about how this kind of thing shakes out. what does the justice department do when it announces a criminal investigation like this? phil: my colleague dell wilbert coverts the -- covers the justice department. here's the national resource division within the justice department. launched a criminal investigation. that means a couple of things. first off, on the corporate side, this proves problematic for volkswagen. the justice department will be moving with a full scale investigation p looking at e-mails, looking at timelines, anything the company is looking for this. i want to point to something else that is very interesting. if weeks ago the deputy attorney general talked about a shift in justice policy when it comes to going after prosecutions of corporations and corporate wrongdoing.
3:05 pm
they are trying to shift away from just going after corporations to more so focusing on the individuals. that means if prosecutors's can find a case, be it on e-mails or specific conversations, it could be the first test case as to whether that policy shift means something area whether the justice department will be targeting high-level individuals at the company depending on what they can find. alix: speaking of targeting high-level individuals, jamie butters, i want to play something our previous guy told us he matt is the editor in -- which follows the auto industry. listen to what he said about the position the volkswagen ceo is now in. matt: volkswagen is in trouble. i was just going to argue about local branches for looks like in being more autonomous. in decision making volkswagen is very centralized.
3:06 pm
he is now in a position where e'going to have to say we didn't go this is happening. as far as car scandals this gets as bad as it gets. , martin jamie butters winterkorn has a vote coming up on the renewal of his contract. does he survive this? is a: that meeting rubberstamping. we will see what comes out. not clear they're going to have enough information by friday to make a decision, but it is going to put a lot of pressure on him. to the stockion falling by 20%. it could get messy for him in a hurry. it all comes down to whether this was done at just a local level, to meet local regulations, or if it was approved all the way back at the corporate headquarters. scarlet: what are the chances we are going to see this spread to other companies, the doj looking at them? really think they will
3:07 pm
go after this and make an example. are there any other connections to any other companies? their goal will be to find them. it will be interesting to see the interaction between the epa of thisside investigation. sometimes you have some territorial issues here, but something this big, you are going to see a lot of cooperation between the two. have seen so we far coming out of the epa, the justice department has a lot to work with. certainly if they can figure out a way to expand this i think you're going to see prosecutors do just that. volkswagen has had a tough go. they opened a factory in tennessee. howdy as a brand has done much i as a brand has done much better. jamie: they've just struggled
3:08 pm
for years and years to get a real foothold in the u.s.. iny build a factory tennessee. think of that would lower their cost, give them a better feel for the u.s. market the way toyota having one in kentucky did for them. it just had to work. they have been out of step with the market. they don't have a full-size pickup truck. they don't have an suv with three rows in it. the vw brand has continued to struggle. theirsought is nine -- of ninth orpassad is tenth. audi has done well. less reliance on diesel. scarlet: what to do you want up doing with the company when you not only have fundamental issues but now you have this potential criminal investigation hanging over your head? jimmy bank they are doing it by
3:09 pm
jamie: they're-- doing it by gm's playbook. they chose to put the company and great para like this, they may not admitted. the regulators, the government agencies may end up defaulting to that external investigation. can get theou facts, get them out there, hope to deal with everything up front, that is your best defense. thank you so much. phil mattingly in washington and jamie brothers -- jamie butters in detroit. alix: coming up, donald trump in first place that creaming up in fiorina. is carly we will discuss next. ♪
3:10 pm
3:11 pm
3:12 pm
scarlet: i'm scarlet fu here with alix steel. alix: we are all green across the board, it has been a bit of a day. julie: we had a doubt earlier 192 points. the nasdaq dipped negative. 500.&p health care mostly to blame. now in the positive, at least for the moment. i want to look at semi conductors. have a lot of movement in that sector and it is mixed, incidentally. i'm looking at the chip equipment makers. susquehanna is cutting its spending estimate. -- that implementations has applications for the chipmakers. and -- laimh
3:13 pm
research dipping. and pricing will be better going into 2016. we see those micron shares sandisk getting an equal rating. just inpush poll, not the broader markets but in this particular industry. scarlet think there is a deal continuing the hot streak -- scarlet: there is a deal continuing the hot streak. julie: a semantic conductor -- a semi conductor -- larger than dialogue's market cap, especially after we side plunge in the shares in german trading. we can see those shares rising by 12.5%. what dialogue really wants to do
3:14 pm
is diversify, because a majority of its revenue comes from a single client. mel is able to play -- atmel is able to pay premium. take a look at my bloomberg terminal. take a look at us-based semiconductor deal activity. this overs -- this goes over the past five years. is thenge line here premium that has been paid. if you look at the average premium, it is around 19%, so that also highlights the premium the dialogue is paying at 43% and one of the reasons why those shares were down. scarlet: julie hyman with the latest. a new poll by cnn on the last gop debate shows donald trump is still eating at 24%, though
3:15 pm
slightly lower rate -- a slightly lower than before. increased.na's alix: according to the poll, trump was the user that was the loser. -- trump was the loser. joining us is bloomberg politics managing editor. what is the momentum that you see fiorina holding? mark: this is a national poll, and people expect her to get a national pump out of her performance. let's see how she does in the early states that matter disproportionately. let's see how she does know that she has an getting scrutiny. she had an incredible debate performance. donald trump now as a rival, a we'll business person, see how she handles it. alix: ben carson is coming under fire for some comments he made that he would not support a
3:16 pm
muslim for president. how does this affect his favorability numbers? and annotation that he does have a business background -- an annotation that he does have a business background pretty served on some as ms. boards. the comment has not been denounced by a lot of republicans. it has been to the house by lindsey graham. one interesting thing is the candidates, the republican brand overall, this is the kind of statement dr. carson has made in the past. as you see with carly fiorina, as you do better the more scrutiny you get. the things you say have a greater impact. there are a lot of people in the republican party that share dr. carson's view. that is a dark reality of where the country is on this issue. he already backed off a little bit on what he initially said. by going forward he is going to
3:17 pm
have to deal with a lot more questions. not just a statement but other aspects. alix: let's talk about hillary clinton. she has been doing a little bit better. would you account for that rise with the chatter that joe biden is getting in the race? i think the vice president's potential entry has bit.ed her mind a little which is not letting the controversy over e-mail drive the news cycle, she does really well with democratic voters. the polls are talking about cnn -- the democratic primaries and caucuses, those viewers like to see her stand up to donald trump. they like to see her talk about changing the a for the care act, trying to improve it. they like to see her out there talking about anything but those e-mails. it is easy to forget that on her darkest political days is how formidable she is as a general election candidate. banks -- scarlet: donald
3:18 pm
-- willampaign manager be joining us live on the show. mark will be able to pronounce it correctly for sure. alix: we have much more, including a discussion on greece, including why alexis tsipras may be frank underwood of house of cards. ♪ alix: greek voters have given
3:19 pm
3:20 pm
their prime minister a second straight term. alexis tsipras, took 35% of vote. withll renew his coalition the nationalist party. tom mackenzie is in athens with the latest. tom cole and alexis tsipras has now been sworn in as prime mister agrees for the second time after that resounding elect oral victory on sunday.
3:21 pm
he is expected to bring his new government together. then time is of the essence. creditors of october will review the situation of the bailout and reform the implementation of that bailout in exchange for a 6 billion euros, then they are going to have to look at capitalize asian of the country's banks. a 25 billion euros has been set aside for that. at the moment the ecb's going through its reviews of the greek banking system and stress tests that will be finished by the end of the year. along with that, alexis tsipras is new government says they will -- alexis tsipras's new government say they will push on new reforms and privatization. there is expecting that there is expected to be some tension with creditors. targets may be missed, they may exacerbate that tension. it will be a tight rope walk for alexis tsipras. creditors will be watching carefully to what he says.
3:22 pm
alix: our thanks to tom mackenzie in athens. joined by thee senior fellow at the institute of international economics, in challenge for a change. you heard what tom said about what prime minister alexis tsipras has as a mandate. and won on an anti-austerity platform and now he has turned around completely. jacob: he is the most popular politician increase. it is remarkable the amount of trust the greek population has shown him. he basically has gone right to the rink -- gone right to the with the same voter support, basically. for doing everything he campaigned his heart out not to do in january as a political escape act.
3:23 pm
was stillhe exit risk at 20% to 30%. what do you think about those odds? jacob: i think those are too high. greece, five years in at the end of the day when you get close to the exit, close to the abyss, people always turn around and do the other thing. at the end of the day it is always going to be more cost effective to let a country go. at the end of the day when you , theat the process decision, which always these to be done by the people, all of us wake up on monday morning and don't have our banks anymore, it tends to clarify their mines. -- their minds. --hink the possibilyt
3:24 pm
possibility of a grexit is close to zero. us how alexisld would need to be like frank underwood. - alixas talking about - thought you were talking about murder. jacob: he struck a deal and force them to break their own rebel party. has beenty annihilated. it is not in the parliament and -- and that party has been annihilated. it is not in the parliament and not in greek politics. alix: the elephant in the room is can the eye of come back in -- can they come back in? jacob: i think it is highly unlikely the imf will walk away from a member state.
3:25 pm
ithas political stability, is going to get a sizable monetary stimulus, and it has a pretty new fiscal target for the next 12 months. and they are at the bottom. the only way is up. is the imf going to walk away from that, being the global rescue organization that quits? i don't think so. 2% to 3% next year is well within reach. 2014 beforeck in the election greece was growing. aw they are going to have more lenient fiscal target short-term and a significant monetary stimulus. scarlet: has his understanding of global economics involved in a similar way? jacob: i think it is clear his political incentives to make this deal work is very clear. he's to implement the things --
3:26 pm
he needs to implement the things the troika want. he needs that relief relatively shortly. and for that he is going to have to pass a lot of bills through the greek parliament. i think he will be able to do this within his parliament. is does theebate greek sector have the capacity to limit these things? in the short time i think he will play ball and do what the troika wants to do. alix: thank you so much. he is senior fellow at the institute of economics. -- institute of international economics. scarlet: we are watching the markets. we will be right back.
3:27 pm
3:28 pm
3:29 pm
alix: let's get straight to a look at some of the top headlines this afternoon. it has taken more than three
3:30 pm
years to get to this point but today new zealand extradition hearing for on-chip and internets make it tycoon kim.com is officially underway. a u.n. agency said iran is making significant progress in cooperating with a nuclear deal. the atomic agency inspected a key research building and said linking to atomic weapons were found. iran's president is not ruling out a prisoner swap for a jailed reporter. cbs news was told the reporter could be freed if the was freeze and iranians the sin who is being held. beingerican reporter is tried on espionage charges. the u.s. has agreed to take and thousands of more refugees from
3:31 pm
syria over the next two years. secretary of state john kerry made the announcement in berlin where he met with germany's foreign minister. this year the u.s. cap the number of refugees being allowed in at 70,000. secretary kerry: we are going to go up to 85,000 at least. it is not a ceiling, it is a floor. over 10,000 that in syria specifically. -- over 10,000 in syria specifically. in the next fiscal year we will target 100,000. as manyrmany may taken as one million refugees this year. will direct more than $100 million in humanitarian aid to the refugee crisis. the money will go to health care and rick and water. commitmentrings the -- the amount brings the total commitment to $4.5 billion.
3:32 pm
displaced persons has reached 60 allion people globally create ball of that crisis is centered in syria. a recent survey told -- survey howed how recent -- governments are handling immigration. the politics of people flows, where she highlights the four key risks globally. i asked her about election risks. you mentioned public attitude toward immigration, which has been more negative. we see this playing out in the u.s. election campaign, as well as in europe. and the reason we identify political risks come out rather than market or economic risk as particularly important is because of what we call box
3:33 pm
popular risk. pulihat we call vox po risk. are they expressing themselves through mass protest or the ballot fox? in europe, where we track closely the rise of these nonmainstream parties, anti-immigration sentiment, which is strongly correlated with euro skepticism, is rising and has been rising rapidly. and that is even in countries where we have seen growth. at is why there is the potential crisisration and refugee to be the thing that could break europe in a way that hasn't happened in either the greek crisis or russia, ukraine. >> to what do you attribute this rise in radicalism we are seeing on the left and the right in these countries? a lot of this was before the refugeenflux of the
3:34 pm
crisis be it if it is not about growth, necessarily, why is it happening now? tina: as you remember in new occupy wall street was a flash in the pan, perhaps. it got some people out with its message. --t it did succeed in duty it doing is instilling this notion that we are the 99 -- we're the 99%. if you add this almost structural antiestablishment world,nt in a low trust which is part of what we are and that the moment, low trust is with institutions, and that includes the media and business, people are looking for alternatives. they are more willing to experiment with alternatives. in europe where we have many countries with parliamentary systems and more choice than a
3:35 pm
-- parliamentary system then system like in the u.s., we see the rise of these options. i think it is underpriced and underappreciated. at core countries of the eurozone, germany to a certain extent, but perhaps more specifically the netherlands and austria, the creditor countries, these nonmainstream parties, which tend to be on the right, are doing well. alix: that leads you to the conclusion of what it may for a it -- it -- for a greg's for a grexi.t favored staying in the eu might change their mind because of the immigration issue. yes, this is one of the ironies of public opinion, which we do incorporate into research
3:36 pm
and track closely. this may cause a dissonance in public opinion. people can hold two conflicting ideas at the same time. i don't like immigration, but i want to stay in the eu. even though those things may not be completely consistent with one another. >> do you see any prospect of this turning around in the near term? is there some hope that politicians and business leaders in the media will gain trust or do you see this worsening for a long time? i was having a conversation with a pollster her -- looking at the structure at this trust issue quite closely, what struck me was the growth point. most economists would say when growth returns and unemployment returns to a more manageable level, the sentiments should be road --should the
3:37 pm
should erode. take the u.s. as an example. i think there rise of donald trump on the right, bernie anders on the left, this is little bit of what i call flatter politics. politics.rth these people are campaigning on policies they can't implement. what is interesting is their followers don't seem perturbed about their electability. they like is these leaders are espousing ideas they agree with. there has been a lot of academic to an extent on this that our ideas are reinforced, not challenged. alix: what is the end result of all of this? what gives here? tina: one of the most important
3:38 pm
factors is going to be global growth. even a modest come of growth may be necessary but not sufficient, if growth were to worsen, save china were to have a recession, what i would expect to see is more of the fringe and more radical aspects of the nonmainstream political party to do better. was truly a fascinating conversation. for more i am joined by my cohost for what you missed, joe weisenthal -- for what you saw, joe weisenthal. joe: this refugee crisis could accelerate this whole phenomenon of radical anti-immigration right-wing parties. something that was fascinating and the greek election was on the greek island where the refugees are making their theance was a big spike in
3:39 pm
number of supporters for the golden dawn, which many would describe as a neo-nazi party. -- gotden dawn gotten third place overall. you saw those gains were people were experiencing the refugee situation firsthand. people may be changing their stance based on the immigration crisis and how germany and france are different. we will be talking about this story with david jervis of jeffries. joe: he has a better understanding of the intersection between politics and finance then i would say just about anyone. alix: it should be a great conversation. thank so joe weisenthal. eastern.t 4 p.m. we will be hearing from jeffrey, the chief market strategist. anything you name it, we got it.
3:40 pm
coming up, health care officials are outraged after from a cynical's raised the room -- raised the price of one of its 5000%.y we will hear from one of the company ceos. ♪
3:41 pm
3:42 pm
alix: time now for a look at the markets, we are just 15 mins before the closing bell. i want to head over to julie hyman. julie, we are losing a bit of steam. the s&p just up by about four. julie bank on a big shock -- julie: not a big shock. that today losing streak.
3:43 pm
various that officials coming out and say we do think it is likely we will see in a just great this year -- see an interest rate increase this year. we see three major averages. nasdaq has been the laggard throughout the day. take a look at the terminal for what is working and what is not. it is what is not that is explaining what is going on with the nasdaq today. it is health care shares that have been declining. clinton,rom hillary saying she will be looking at the high price of prescription drugs. she said she will announce some kind of plant tomorrow to deal with that since she is viewed as the democratic front runner. biotech in particular has been an outperforming group. on the plus side financials and technology doing well today. take a look at the top performers intact.
3:44 pm
facebook, 11 straight sessions the stock is gaining. that is the longest winning streak ever. microsoft on the rise after some positive comments. and apple rising after reports in the wall street set a shipment date for electric vehicles. today, went up 4% when all was said and done. we don't have a big change in the fundamental backdrop. in the numbermb of rigs out there. there could be some optimism about the supply demand equation. also looking at the dollar gain in oil. interesting that the dollar was also rising, up by 1%. i mentioned those fed officials, coming out in talking about a rate increase in the cards for
3:45 pm
this year. ollar, sending d people away from the treasuries and yields. 2.2% in the treasurie market. alix: thank you very much. a drug company you probably never heard of is making headlines. raising the price of a drug more than 5000%. some doctor groups are blasting the move, as his presidential candidate hillary clinton. she sent out a tweet earlier today saying price gouging like this in a specialty drug market is outrageous. earlier today betty liu spoke with their ceo and founder. >> we needed to turn it profit on the drug. it came as a package and a lot of companies didn't know they
3:46 pm
owned it. is -- it >> we are the first coming to really focus on this product. ultimately the companies before us were just giving it away almost. the price they were pricing and that, you only need less than 100 pills at the end of the day -- 100 pills. i didn't of the day the price to save your life was hundred dollars. -- at the end of the day the price to save your life was $100. understanding to produce this bill -- this pill is only a dollar. how did they lose money if they were selling it at $13.50? >> you have manufacturing costs, distributing costs, the ingredients, also the people who
3:47 pm
make sure it is made to specifications. betty: up 5000%? martin: i don't think you can make that you can find a drug company on this planet can make money on that revenue. they: you were fine with king -- with raising the price on this, and you will put that money into alternative research to see if there's a better way to treat this disease. with this drug. martin: we are developing three or four different kinds of drugs. no one has cared about this illness from the pharmaceutical perspective. i think that is a terrible thing. now you have a powerful ally in our company that is looking to make new drugs and willing to spend that money. develop it is very expensive. the estimate a new drug can cost
3:48 pm
estimate a-- they new drug can cost $1 billion to develop. the spotlight on me is interesting. i know what we are doing is right. at the end of the day -- that he banged at the end of the day doctors -- betty: doctors would say at the end of the day why break it if it works? ontin: if we focused penicillin back in the day we would be in trouble today. if you become immunosuppressed it can kill you. bug evolves, it will be a ticking time bomb. i think we need to prepare now and click -- prepare now in case it mutates. it is about an 80% rate. i think we can get up to 200 with research.
3:49 pm
more ahead on the bloomberg market day. if we will become about technicals when it comes to the dow. -- we will be talking about technicals when it comes to the dow and could there possibly be a bearish market?
3:50 pm
3:51 pm
alix: a report released today say warnings keep coming that the u.s. stock market is putting in a bigger top than eight years ago. head and shoulders top pattern on the dow industrial with a rare downward slope in that line is a recent to run for cover. what does that mean? i am joined by scott roessler, a live partner at teach free -- at t treee live live. a lot end down? there
3:52 pm
are two shaded areas. is that what the head and scott: theyok like? are showing the dow jones industrial average. it is way too early to tell whether or not we are going to get a decline like in 2007, 2008. from a fundamental perspective i don't think we are in the same environment. had the housing market, which imploded because of the interest only loans. i think fundamentally this is not the same landscape. i think we are in the same -- i think we are in a correction. we are not in the same pent-up bull market. this one may just be a look at lower. alix: i have charted the s&p versus the two day moving
3:53 pm
average over the next year. that is pretty much the longer term trend but only in the past year. scott: you need to be careful. you need to have some cash. if you look at the chart, where he broke down in august, that was healthy. they are not just kind to be long every set. if you look at lower, you will see there is that lower you havetion, where the low of 1867, then the reflex move on the fed where they didn't raise rates. that was 2020. we are back in this range. a retread ofe out each and 67. i thinkmble opinion of the market closes higher than today. you have a lot of dynamics working.
3:54 pm
alix: i look at the strategists who rate the s&p. everyone is higher. to your point it just like people want the market to go higher. scott: they want to get a break when the markets go down. traders are watching closely. they are going to be under water for 5%. if they wait and we] 1990. 1990 -- close back at alix: i went back 10 years. , what does a0 day technician see when you look at this chart? scott: the active trend goes up to the 200 day.
3:55 pm
240 -- thataround was right around 2040, 2060. we found support around that 1860. if you go over here, a little bit higher, you will see where that support is. right now we are below the broken trend of the 200 day. saying issbc guy is this could be the right shoulder of the -- of that pattern. if we build the right shoulder, that support could turn into the nextaybe at some point year, if we do have deflation in china as still a problem, then maybe that 1860 gets broken, and then we could get all the way 17 three, which would be a significant move to
3:56 pm
the downside. alix: the number one stock you look at in the morning used to be apple and netflix, what is it now? scott: it is still apple. apple last week on wednesday showed some signs of weakness before the fed didn't raise. i still think apple is a decent barometer.- a decent it could be a problem if the banks don't hold. alix: of stuff breaking down the technicals on a monday. -- good stuff breaking down the technicals on a monday. we talk about the greeks and the fed coming up.
3:57 pm
3:58 pm
3:59 pm
alix: we are moments away from the closing bell. i'm alix steel. joe: and i'm joe weisenthal.
4:00 pm
[closing bell] u.s. stocks closing higher after hawkish comments from fed officials. joe: the question is, what did you miss? confusion, the markets just don't know what to make of the rate hike. alix: will the new syriza government able to enforce so much austerity? alix: and the single biggest risk for the u.s. energy business is laying out right now and everything is on the line. alix: we have to begin with the markets. the dow is recording a triple init move for the 18th time the past 23 sessions. the idea that we are moving these immense volatility daily session

28 Views

info Stream Only

Uploaded by TV Archive on