tv Bloomberg Markets Bloomberg October 13, 2015 3:00pm-4:01pm EDT
betty: from bloomberg wrote headquarters in new york. good afternoon. i'm betty liu. stocks pouncing around as we head into the close of the trade. the dow struggling to expand the longest rally of 2013 while the s&p is heading the work after rising in nine of the past 10 russians. a few hours to go before rival candidates in their fire at hillary clinton. can she was stand the attacks coming from bernie sanders, martin o'malley and the others at the very first democratic presidential debate? to launch the first delivery service of the empire state building. we will figure out why the theding was chosen by coffee giant. one hour away from the closing belted a.
struggling along today. if the dow manages to squeak out again, the eighth straight session. allve been watching volume day. yesterday was lower because it was columbus day. is 25% low. another day of lackluster volume and lackluster activity. 500 are neard s&p the lows of the session but has been a pretty tight range today. i wanted to look at the worst-performing stock. a lot of it has to do with earnings. third quarter preliminary results below analyst estimates that says it is having those in the suite division. maker of pesticides cutting the forecast for earnings for the full year. seeing issues from the brazilian l'oreal. ship -- chipmaker down
by more than 12%. summer earnings news. is it all about the risk of trade today? today? off trade julie: we are nothing a sharp buyout in treasuries. we are seeing yields come down 2.05% as we see folks buying treasuries. a couple of fed officials bucking the recent trend is saying it is appropriate to keep rates on hold. that is the conclusion the market has already drawn. being emphasized by fed officials. the dollar, watching a ball once again. down for the third or fourth session. following this trend of thinking rates will stay low. finally, the fix up to have
snapped the recent losing streak. down for 10 straight sessions. finally higher by 6%. we see a little bit of volatility coming back. still below 20. not a huge return to volatility at this point. betty: thank you. a check of the headlines on first word news. mark crumpton has more. mark: president obama will be channel surfing when the candidates looking to succeed him take center stage tonight according to white house press secretary josh earnest who says the president probably will not watch the democratic debate and start to finish because there are some pretty good baseball playoff games on tonight. the white house says mr. obama skipped the first two republican debate. his hometown chicago cubs space up against the st. louis cardinals in game four of the playoff series. joe biden has not said whether he was running for president but
not stopping a super pac from trying to persuade him. launching a new tv ad after pulling the first one off the air at the vice president's request. he felt the initial spot was too personal that focused on the 1972 car crash that killed his wife and daughter. tonightad airs on cnn during the democratic presidential debate. it will be the front runner hillary clinton versus the rest of the field tonight in las vegas when the hopefuls meet for the first showdown. for other contenders will be on the stage. other contenders will be on the stage. jim webb and lincoln chafee. will bete in las vegas hosted by cnn. be sure to tune in this evening for a special one-hour act on the first democratic debate with mark halperin in john heilemann live from las vegas starting at 5:00 new york time. you can hear the debate live on
bloomberg radio beginning at 8:30 new york time. donald trump will be live tweeting. he says he is doing so at the request of many because he exit to be a total bore. he intends to spice things up by , uniqueis own commentary. mr. trump is taking credit for dramatically hosting viewership. nbc told donald trump you're fired, the network has invited him back. trump will host saturday night live november 7. it will be the second time as the s&l host. the first time was in 2004. nbc universal cut ties after he made what they called offensive remarks about mexicans and immigrants. the network dropped the annual miss usa in this universe pageants, both of which are trump ventures. first lookook at the
now. back to you. betty: thank you. mark crumpton at the news desk. investors are watching the economy closely. everything from politics to monetary policy moving the markets. the fed governors thing he does not currently favor raising interest rates this year. bloombergday stephanie ruhle and david weston sat down with chairman and ceo of starwood capital very stern like and explained what is wrong with the global economy. great fiscalhis and monetary experiment around the world. everyone knows it is toxic. you should not be able to do what is happening. when japan is printing money with 258 percent gdp and making more of this paper, if you are a normal economy, you should be
able to do this. scarlet: does that mean market volatility is here to stay so lets the u.s. is better off right now. we are the bright shot. fundamentals are pretty good for the property market. we have a big energy business and we can still make money in the gas business. the cost of production is so low. there is really good momentum but slowing in the u.s. economy. the global economy is weakening. you are like pushing gas into an overfilled tank. what does that mean for janet yellen? >> she should raise rates and return the markets to normalcy where people feel like the fed is not so involved in manipulating the domestic economy. 25-50 basisnk points, she should raise rates.
let savers not be penalized anymore. let capital flows resume. the dollar may or may not strengthen very much from here on that kind of race. one and done probably ok. i think it will give them something to do. one of the problems is the economy is really week a month ago. people worry, what else can the fed do you go she needs to raise rates. the economy is getting tight in certain places, too tight. we cannot find people to serve lunch and the restaurants and hotels and cannot find construction workers to raise houses -- build houses. we have to get back to normalcy. >> what about capital markets? >> against the world you have a completely different situation with the lack of liquidity in the market. the stock market, the pool arguing trading. now banks making markets and
securities the way they were. the moves of feels great but the move down feels volatile and lack of. so it is very uncomfortable. i think it is a very uncomfortable space. it feels funny, the ground does not feel firm. feels funny for who? investors. you get whipsawed in stocks get hits all at once. everything goes down because someone push the button. every text doc. every chemical stock. -- tech stock. tuneou changing your because a year ago you said if i were to start all over again i would like to be a hedge fund manager. it seems like an easier bag. they did not to
put their own skin in the game. i don't have to move very much. i travel the world for my business. they don't have to do that. they have a very high quality of life and good art collection. does it surprise you when the best of the best as i am out? >> it is a very difficult market. >> does that apply to you? >> real estate is far less volatile. move in ways. stocks go up and down 30%. real estate does not do that. the property markets we invest in, you're trying to catch waves . the property sector, i always said the stock market was my favorite sector because of the liquidity. real estate is not that liquid. estatek to think of real market is probably the best
market to invest in right now. .etty: very sternly, ceo tune in tomorrow when we speak cbsichard anderson and the ceo. starbucks getting into the alivery business, launching pilot program at the empire state building. why did they want to choose their? tony walk-ins has those details. bernie sanders draws a huge crowd from the democratic presidential candidate. not a lot of experience on the debate floor. can he stand up to the tough questions about his views tonight? we will be back. ♪
betty: good afternoon, and welcome back to the bloomberg "market day." our first story, bloomberg news reporting fiat chrysler can double the use of lower paid temporary staffers under a new labor agreement. to helpwill be used offset races for half of the companies used in a nice hourly employees in the u.s. and the vote nexts up for a week. ubs will pay $19.5 million to settle s&p claims the bank misled individual instructors in the note. the agency's first case of the security. the s&p says undisclosed trade lead to client losses. wall street banks issue $50 billion in securities annually. warren buffett says the executive looking to fend off activist investors should consider passing on strategies pitched by wall street. the ceo said activist investing
is too proud and has zero interest joining ranks. today in washington. he set a rebound in the real estate market is helping to sustain growth in the u.s. economy. you can always get more business news at bloomberg.com. now you can get your skinny cappuccino delivered straight to your door if you work at the empire state building. starbucks has launched the delivery program at the iconic empire's -- empire state building. what is the cost of this? two dollars. joining us now on the phone is tony moffatt, chairman and ceo of the empire state realty trust , which operates empire state building and other key commercial properties around new york and elsewhere. did you order one yourself to i have not had>> caffeine for over 25 years here
yet i did get someone in office to order one for me. betty: how did it go? >> it is terrific. the empire state building 2.5 million square feet of office space in the middle of manhattan. to have this as an additional the in, along with building fitness center, seven dining options, bank and tnt store, we provide a service to our tenant that make the employees productive as possible. how much more productive can it be for not leaving the death for your cup of starbucks? betty: right. another reason to stay glued to your seat. this is a vertical campus for the employees and the workers at the empire state building. how does this whole program come about? how did you work with starbucks on this? have had a great
relationship with starbucks in new york throughout two decades. we were the first building to have a starbucks in the building that did not have an entrance to the exterior. that being said, this really came from starbucks. they looked at the fact that we at 12,000-15,000 workers coming into the building, additional builders -- visitors. they came up with this idea themselves, and we were really happy to embrace it. you have taken me through the empire state building. theave gone to places public has not seen. what has gone into building this out? >> the biggest component is the technology starbucks put together in order to facilitate clustering orders in the building it is still going up to 80 tentative floors.
a matter of dispatching in an orderly fashion and working with us to make sure we handle things from a service, security and perspective. they have been great partner so we had a lot of confidence it -- experimenting with them. betty: did they have to build a different kitchen? >> we actually have two starbucks in the empire state building, one that is a retail location on 34th street, and one that services primarily the building and has a small express window on 33rd street. we have two starbucks. they built an entirely new store. betty: so far, what have you heard from the tenant about this? what they love it. i have gotten e-mail from folks that i know. a terrific collection from lincoln to global brands group, and i know all of the ceos
personally. getting e-mails from people saying this is fantastic. it was a surprise to them when it opened. they knew it was coming, and i think it was very well received. betty: you mentioned you are not a coffee drinker. but you know starbucks sells more than copy? >> i know. we thought we would give them a softball and just ordered coffee. betty: good to talk to you. , hillary clinton thes her first debate of 2016 presidential election cycle. can the front runner stand -- with the of the attacks from the front runners like bernie sanders? we're live in vegas next. ♪
markets will remain oversupplied next year partially due to the economy. omega advisors ceo and hedge funds manager leigh cooperman had a more optimistic output -- outlook. growth, 3%t economic global gdp growth, i would expect supply and demand would come into balance the middle of next year and the prices would be higher. betty: joining me is someone who would strongly disagree oil would be higher. predicting oil at $10-$20 per barrel. economist gary shilling, bloomberg review contributor and columnist. you completely disagree with that. >> i do. opec has gotten tired of cutting production and then having everyone else moving in to grab market share. the basic week said we will play chicken with the other producers. betty: they have been all year long.
>> opec production has been flat. so they say we have a lot of foreign currency reserves, over 500 billion in the case of the saudi's and we will see who chickens out first. when you are playing that kind of game, it is not the cost of meeting budgets, the full cycle cost and overhead and labor cost, it is the marginal cost. once the holes are in the ground in the oil is flowing, what is the point at which the cash flow goes to zero? that is where it is. completelyou just discount what leigh cooperman is saying? that is a big if. yes, opec is playing chicken here, but they cannot completely overcome higher demand if it happens. look at growthu
in this country and people evidencing over 3% since the expansion started in 2009. i wrote a book in 2010 about a strategy for it decade of growth and slow inflation. i predicted 2%. it has been 2.2%. i just don't see that. we are still working through the access still in the 80's and 90's. that normally takes a years or 10 years into it. it will probably take longer. betty: i know you are predicting 10 year treasury note as 1%. >> 1% on the 10-year and 2% on the 30-year. -- you are uber pessimistic. the fed officials have said we will get licked off by the end of the year. do you just not believe them? >> they have been saying that for five years. they may have to do something
simply to save face. they have cried wolf so many times. if they look at the situation rationally, and they have been forced to do lately more inflation than deflation and the labor markets along long way from fully employed, there is no rationale for raising rates. they would like to have higher are veryause low rate distorting to the economy. they make people chase out the yield curve. hedge funds have had lousy results in the past five years, and yet, people continue to put money in because there is always hope. hope springs eternal. betty: some are getting fed up. we saw fortress close down. bill gross tweeted out deep out of the money hedge funds shut down 20% of copper out of reach. sure. i am continue to be amazed that people continue to put money in places like that.
they put money in. if they do well, they get the 20% or 15% performance fee. if they don't they simply close its and keep coming back and putting more money in. they are so zealous for returns they will take a chance, even though the payoff so far has been very poor. betty: great to see you. view columnist gary shilling. credit squeeze may have to cut it that unit has a tougher banking rescue -- regulations in switzerland. squeezeess that credit once you as the cornerstone of u.s. operations. more on that in a moment. ♪
starting with a check of the headlines. mark crumpton has more. mark: russia is taking issue with report -- with report on what happened to malaysian it airline 317. on board were killed. the russian official says investigators set out to make " biased conclusions for political purposes.:" the russian company who makes the missile as its own tests were not able to duplicate the damage to the plane. benjamin netanyahu his company is working on what they call aggressive respect -- aggressive steps in response to the worst violence since the gaza strip war. -- comments took parliament with parliament came in the middle of a meeting with security officials. this came as another spot them of deadly attacks occurred in
just 90 minutes. israeli authorities say to palestinian men boarded a bus and begin shooting in staffing passengers. another attacker ran it into a bus station and stabbed bystanders. two israelis and two of the attackers killed. pulling out in northern afghanistan. the group claims are retreating to avoid further civilian casualties. this fell under taliban control late last month. the acting governor of the province as shops and markets have reopened and the life and his words is returning to normal. after the u.s. and afghan victory, officials are setting their sights on reclaiming ramadi, one of two iraqi cities under isis control. the u.s. military says conditions are right for the iraqi army to make a decisive assault. s -- a spokesman says u.s. has airstrikes over the
past 10 days. pentagon officials have begun visiting sites in colorado as potential alternatives to hold prisoners from guantanamo bay. this is part of a long-delayed effort to shut down the u.s. detention center in cuba. president obama wants to close butcontroversial facility has faced opposition from congress. planned parenthood says it will makeain programs that fetal tissue available for research but also says it will no longer accept any sort of payment to cover the cost of the programs. the announcement comes after antiabortion activists relief idiot they say shows jen to make profit from programs that use post aborted beetle tissue. planned parenthood -- planned parenthood says they were edited deceptively. that is a look at first is right now. you can always find the latest at bloomberg.com. betty: less than 30 minutes to go until the closing bell.
going straight to the markets desk where julie hyman has that look at the worst performers. julie: the worst performer ryder, coming out with preliminary third-quarter numbers that missed analyst estimates and cut the forecast for the full year. it set us all over the next acted earnings in the fleet management solution. a greater than expected number of out of service vehicles proving to be a problem. the best-performing stock has to do with the beer megamerger. this is on speculation we will have to see asset sales as a result of the big beer dear. perhaps we will see molson coors reminding -- find the remaining stake of the partnership in the u.s. that it does not already own. those shares are up by 10%. we have been talking about export and import data, import
calling for the 11th straight month. a mixed reaction among chinese stocks. shares are down 6% in relation to that news. finally, twitter getting confirmation the company is cutting eight percent of the workforce. this could be a positive for the company to help it cut cost. highlighting the revenue per employee. take a look at the bloomberg terminal. the revenue per employee lacks peers of facebook and google, in part because of the workforce. the stock-based compensation costs are higher than it appears as well. fewer employees would presumably boost the cost per employee and cut down on revenue cost. julie hyman at the markets desk. tonight in vegas, bernie sanders, martin o'malley take to the stage to address questions economy, ande
social issues. our bloomberg politics team will be there for an hour long with all due respect debate previewed wynn hotel.the here for preview is mark halperin and john heilemann. where they come to spend their candidate? they come into chats and tell us what happened in case we were not paying attention. starting off with bernie sanders. sanders, how is he going to jump from second place to front runner status in tonight's debate? it is a pretty high bar to clear. he is behind hillary clinton. goal.ally his i think his goal is facing a crowd, an audience on television unlike anything is ever seen.
this is an audience of millions of people most of them do not know what bernie sanders stands for. his objective pretty straightforward. he wants to introduce himself to the american people and democratic voters in particular. is anyone going to be pull a carly fiorina tonight? >> we will see what the moderators do. i think the person with the best chance to do that is martin o'malley. he is not playing up to his potential in the polls. he is an attractive candidate in a lot of ways. he has not done well in the polls at all because sanders has become for most immigrants the alternative to hillary clinton with joe biden not in the race. i think he is the one with the best chance to break out. jim webb, i just do not see him doing that. same with lincoln chafee. i do not think they will get
enough time to dominate the stage the way carly fiorina did when the republicans first met. you mentioned jim webb and you guys have a great piece on jim webb and how he does not seem like he really likes campaigning. he has not spent much time in new hampshire or iowa. why is he even in the race? a very good question. former senator webb is an interesting guy. an incredible resume from being secretary of the navy through being senator. a military background. an unusual blend of the appellation democrat. working-class roots and populous economics. interestinger look and great. webb is just not going to be a guy that is going to catch fire. bernie sanders has accepted that.
not answer your question is why he does not see that and why he is out there doing things in a halfhearted way. one of the mysteries of the human mind. betty: and this campaign. great piece today where you go into tongue-in-cheek going into the mind of hillary clinton. you are creating this monologue in her head about what she is thinking ahead of the debate. one part of it you say this is hillary clinton speaking as you imagine her to be in your head. if i make one mistake in the debate, that is all the media will focus on. one mistake. one mistake. you think she is thinking that? eight years ago she was the dominant democrat in the debate. joe biden did pretty well also but she dominated the debate. there was an october debate in philadelphia where at the end
she mishandled a question on drivers license for people here in the country legally. it was a controversy for days. she knows if she makes a gap, looks like she is too theessive, that is way -- way people will seize on. she is very well aware her standard tonight will be different. her margin of error close to zero. betty: she has to be basically perfect. josh earnest was asked about joe biden. i want to play for you what he said about a joe biden run. >> no matter how good the first two terms have been, nobody is going to run a successful campaign predicated on essentially a third term. each of these candidates will have to go out and make their own, independent case. if vice president decides to get in the race, he will have to do the same thing. of stating the
obvious, but what do you make of iss common? >> josh earnest always a difficult position when he is asked about this. does not want to be seen as putting a thumb on the scale. the president likes joe biden a lot. he wants joe biden to do what joe biden wants to do. he is worried he might get into the race and not only not win but might get slaughtered. there is personal concern there. the white house is trying to say we want to get vice president biden space to make up his mind on his own. there has been so much talk and speculation and mind reading on his part that it benefits all of us to step back and say no one really knows. he may run, he may not run. we will know soon enough. john heilemann and mark halperin. comanaging editor's of bloomberg politics. make sure you tune in for the special debate coverage. the debate preview tonight at
betty: good afternoon, and welcome to the bloomberg "market day." timeout for the business flash. plans to liquidate the micro business run by michael nova grants who will retire from the firm by years end he can the fortress macro strategy in 2002 and helped to build it into a business of more than 8 billion in assets at its peak in 2007. fortress plans to return all of
the capital to investors by the end of 2015. shearing pharmaceuticals has captured the attention of the new york attorney general. making plans with 55 fold price hike with a rarely used cancer drug. now it is under investigation on concerns a move made violate antitrust laws. a big change for the imac. adding retina displays to the computer. that will enhance photos and video on the imac. you can only get more news on bloomberg.com. credits we facing a tough decision. uisse facing a tough decision. joining us with more is the bond reporter for bloomberg news. they are doing this partly due to the swift laws about holding capital? swiss banks we will
hold you to a higher standard with respect to how much capital you have to hold relative to your assets that even is rick higher under the committee of banking supervision mandate. they have to now hold 5% of the capital in equity versus assets. versus 3%. this basically means they will have to hold more against all of their debt. this has been an ongoing problem , articulate the riskier credit markets. it is typically at capital intensive business. you have to allen market sheets -- balance market sheets and high-yield debt. we have seen credit suisse retreat a bit but they have not gone the way of you yes. ubs thing we will emphasize wealth management. the securities unit. betty: is this the straw that
breaks the camel's back? >> october 21, credit squeeze will present a new business plan that will chart some kind of way forward. the people i speak to seem to think that will include a reduction in the debt unit. you see a retraction somewhat in the u.s. that a union -- credit area. this rose to the top of the junk 2002world back in 2001 and and 2003. now they are eight. they have fallen quite a bit. betty: i wanted this to be there big business in the u.s.? >> back then. it is not that lucrative of a business anymore for anyone. particularly not lucrative for european banks. the u.s. is being held to the same 5% capital requirement that
the swiss banks are. they are dealing with a very different capital markets. they are dealing with the biggest, broadest capital markets in the world. they can securitize assets and do things in this market that swiss banks cannot. it puts them at a competitive advantage in certain ways. betty: sound like we will find out more when they reveal the structuring plan. that's one of the top stories on the bloomberg terminal. a lot of people interested about this. more warning signs about the economy of the federal reserve considers whether to hike interest rates this year. in new survey found american consumers expectations for inflation and spending growth well to the lowest level since june 2013. joining me is joe weisenthal, hat'd you miss?" there is no evidence the fed
is doing a good job of meeting the target for inflation. this ending inflation expectations going in the wrong direction. we know things like public inflation expectations matter to officials area they look at the survey and feel like they are not hitting their targets. betty: do we know why? the weird thing, because there are plenty of surveys that show the u.s. consumers doing better. consumer confidence indicators levelso the highest since the crisis. it could have something to do with prices, in which case it is not that bad, not something to worry about. it is not a sign that everything is falling apart or the economy is rolling over or anything like that, but it does not help the make -- help to make the case that they're getting inflation next best patience --
expectations to where they want them. rates are basically a 0%. saying actually money is tight because in this economy right now the natural rate of still ifshould be -2% we didn't not have the zero lower bound and the fed to keep cutting forever. we talk all of the time with the .remise money is loose when will they ended the era of really cheap money? they are saying actually, no, money may be a zero but that is not that cheap given where we are economically and where inflation is. it holds the wrench into the premise of the discussion we have. betty: joe weisenthal, the bloomberg editor. hour, jp in the next morgan kicks off the big bank earnings after the bow. what the results can tell us about the broader sector.
betty: welcome back to the bloomberg "market day." im betty liu. markets are closing at the top of the hour. a few minutes away from the closing bell. -- has a look at where stocks are trading. we continue to see declines. the declines are accelerating in fact as we head toward the closing bell. definitely not a lot of optimism being baked thin as we get into the sick of earnings season. take a look at volume. earningse thick of season. volume has been done pretty sharply trending at 25% below the 10 day average. telecom volume down 35%. that is stocks lifted -- listed in the s&p 500.
consumer discretionary volume down more than 20%. interesting we're seeing the selling accompanied by the drop in volume. we are checking on this almost every day now. right now trading at a two-week low as selling resumes for the index. initially it rose before then falling off. oil.ar prices and initially we saw strengthen oil, and then we saw that melts away. now down more than 1%. mixed commentary and outlook for allprices as of late area of this is broad-based selling. is not the worst-performing group. in industrials, financials, energy heading into the close, the all important earnings as well. jp morgan and intel.
hyman at the markets desk, thank you. moments of wealth from -- away from the closing bell and jp morgan results. tomorrow citigroup and goldman sachs. thursday. morgan family next monday. michael moore joins us with a preview. jp morgan usually sets the tone for the rank of earnings. what are we looking for, trading revenue? been the victim? going into the quarter. a lot of volatility august and september. waiting to see how the banks handle that. we have some indication that trading overall would be down at the end of august. some banks forecast about a we do not know how september ended up. that is one big read through. another is how banks will deal with interest rate environment being lower longer.
will they have another round of expense cuts? what can they do to generate revenue if interest rates stay low. betty: we going to get a sense of how banks did in this really chopper -- choppy summer, right ? right. most of the bank had a good first half and equities. of for volume being that. the fixed income business was a little more challenging from everything we can gather. on the stress test -- that that took a beating in august and september on that. betty: what about getting the scores down? >> yes, specifically for jp something they have been trying to do. are measured by
the scores the fed put out last year. jp morgan with the highest good. they have been trying to lower that. they say they will not do it if it damages their both -- business, but if they can tweak around the edges and lower the score they will do it. we have seen them push out customer deposits. we will see what else they can do and if they feel more pressure just above the effort. michael moore from bloomberg news. that is it for the bloomberg "market day." ♪
joe: and i am joe weisenthal. et: stocks closing, the s&p rising. joe: the question is, "what'd you miss?" scarlet: will the report strengthen or weaken the rally? joe: and intel. we will talk to the chip giant. alix: and don't forget about the emerging markets. we are going to get a top fund manager's perspective. but, of course, we are going to take a look at what the markets wound up doing at the end of the day. it was pretty weak overall, down versus its 10-day moving average. the china trade data.