tv First Up With Angie Lau Bloomberg October 15, 2015 7:00pm-8:01pm EDT
u.s. markets got a big boost from banks with citigroup leading the way. things weren't so positive for everyone. live from new york right now. sachs,group and goldman two different ends of the spectrum. the rally resumes thanks to citigroup, surging 5%. this after it came out with results that showed cost-cutting , the new name of the game, boosted quarterly profit. half of revenues from expensesoosted, cut faster than revenue fell. it really blew the estimates
away. sold assets and close branches. -- closed ranches. -- closed branches. >> we still don't have clarity on important in juice -- important issues. we don't know the impact of recent volatility on sentiment. in many large markets, high degrees of political risk with economic ramifications. and keycorp also rowling -- rallying, as did black corp.. -- blackrock. out todayliam dudley saying he does not know what the fed will do. he does support a hike by the year end.
economyo do with the improving. he thinks it is slowing. take a listen. economy performs in line with forecasts, i would support lifting up this year. blankfein, lloyd dialed into the conference call to discuss drop in third-quarter earnings. he assured everyone he will be around for a while managing things. missed for the first time in four years, global turmoil, goldman sachs, bigger impact on trading. 's in.g 3% by the day strong performance from investment banking. fell mored income than rivals, he noted strong
quarters in the past where they carried the firm. and the onat both he division have better quarters ahead. back to you. angie: thank you so much for that. back in asia, let's check in on markets trading. resumptiong, global 200.tober rally, s&p asx the australian dollar is also strengthening as well. to new zealand, cpi figures coming out of new zealand. they were better than expected year on year and quarter on quarter. survey byn the bloomberg. higher, a weaker new
zealand dollar spot now, $.68. rally that sawhe gains, a reversal of fortunes. , andng sessions, red reversed course midday. 225 up 1.15%. n, slightly weakening there. checking other earnings headlines. analysts increasingly confident the worst is over for macau casinos, but latest numbers from wynn resorts show turbulence ahead. shares plummeting as revenue missed estimates less quarter. 38%u operations fell versus one year ago.
turnover from vfp tables down. the first of large casino operators to report. despitensists on track, third-quarter profit trimming estimates with revenue down 11%. sales of barbie, the biggest brand, continues decline, falling 14%. further blow, mattel loses frozen next disney year. shares falling slightly. they have tumbled 30% this year. tripsg demand for has triggered semiconductors first drop in three years. tsmc says global weakness and strong u.s. dollar had hit the industry it supplies with chips.
0% growth in semiconductors this year. we will check shares later in the session. the kfc and pizza hut chains struggling to revive lucrative business in china. it could be a step closer to finding a dramatic solution. we are following the story with all the details. yum brands appointed a new board member, this is triggering speculation as to what yum brands'future strategy can be. >> according to keith meister, just named to the board at yum brands, strategy could spin off the china business. this would be stunning reversal for company that saw great fortunes in china in recent years, china business we know, past year, really struggled, slowdown in china, as well as food safety issues that have driven some customers away, particularly from kfc, big
popular brand. chicken is popular in china. kfc brought home the earnings for yum brands for many years, but not the case now. pizza hut really struggling. to theeister named board, a year-long strategic review. the company saying that it is close to concluding review of strategic options. satisfy some investors who are very concerned about the strategic direction of the company. angie: we know that china factors in very high for yum brands revenue abroad, more than 50% in asia? sales clearly struggling in china. what is the strategy? >> not good, weaker than before, challenges at pizza hut in particular. the company says sales in china
continue to be difficult due to the ongoing volatility, having an impact across industries, even fast food chains. sales,ivision same store 0% to 4%. positive growth at kfc, negative growth. pizza hut, low single digits for the year. it is a challenging time. remarkable to think about how the system and from being the to one theym brands are thinking of spinning off now. angie: thank you. the slowdown in china is having an impact on other rands. luxury names consider cost-cutting measures. we have the story. mark jerry and mark jacobs.
the company saying reducing bonuses and slashing incentives by as much as $46.5 million. been at the helm for less than 18 months. he got paid $12 million last year. this comes as burberry is cutting down on costs, including discretionary costs like travel, planning to cut that down $31 million. forecasting a second year of profit declines. they are in a weaker position than most rivals. take a look at the share price there. it just plunged as much as 13% wasr their forecast announced and the ceo would get a pay cut. 8.2% there. i weaker position than rivals, more than 30% of their revenue from china, only 2% from japan.
positionave a weaker than their rivals, more than 30% from the revenue from japan, only 2% from japan. we just had chinese holidays toh chinese tourists headed japan to shop and spend. rivals are not escaping the slowdown. they are reporting lost earnings as well. reportedbs third-quarter fashion and sales down, missed estimates earlier this week, and now reports that they will not be leasing their flagship store in hong kong. where hearing from the hong kong economic journal citing that the brand won't be renting that key store. ok, hugo boss, another brand that also looks to china and asia for growth, they cut their
forecasts. did, third-quarter sales because of china slowdown there. also because of the united states, weaker spending by tourists led to "negative development", so they cut earnings and saul decline by 1%. angie: thanks for that. not deterred by china slowdown and hoping it can quench consumer thirst for extensive wine. prices andng energy the fed decision. we will talk about fourth quarter tailwinds with pmc wealth management when "first up with angie lau" returns. ♪
he has now scrapped goal of leading afghanistan before he leaves office. he has announced 10,000 troops will remain through next year, and more than 5000 will stay after 2017. afghanistan said it can't fight the taliban alone. the president appealed for the united states to stay and help. israel has sent forces to its border with gaza amid escalating clashes with palestinian protesters. troops have been deployed in towns and cities across israel, with checkpoint set up in arab parts of jerusalem. said he istanyahu ready to meet the palestinian president. he blames palestinian officials for inciting the violence. european football chiefs have despiteheir president questions over a $2 million cash payment. officials announce support, but
offered no comment on the widening corruption investigation. the president was suspended over corruption deals. he received $2 million from the president after his contract ended. he said they had a verbal agreement. was the top loser on the s&p, falling 13%, most since 2011, why? revenue coming in below estimates. tumble, cuttook a funding outlook. gainers,one of the top rising 5% after meeting estimates on profit forecast. this s&p screen, up one and a half percent -- 1.5%, the highest level.
other questions on when the fed will move. theher fed official entered debate, advocating a gradual approach to any rise. >> delaying the start of liftoff risks having rates move up aggressively later on. i think we can take the gradual path. >> what does our next guest think? chief investment strategist at pmc wealth management joining us from philadelphia. bill, when will we see this? everybody is thinking not this year? >> we are still sticking with december. obviously, it is editor and a coin flip. it is certainly difficult. i watched the futures pricing before i came here, a 30% chance, so the futures have a lower chance than we think it is going to be. angie: ok.
cpi figures came out for the states and showed that it was still quite weak, not within the goals of what the fed had wanted to see before any liftoff, which was communicated well in advance. do you think that this is putting the doldrums on great prizes as well? rate rises as well? >> when you read the fed minutes, what do they care about? they are not sure they can make their inflation target and worry about global economic troubles might spillover to the united stes. i think the inflation side is the bigger part of what they think about. you are right. today, the cpi numbers don't make that look closer. a lot hinges on the oil side. ok.e: oil side, and how about earnings as well? earnings -- ik
almost feel like it is going to be maybe a copy in a lot of respects with the second quarter , where you are likely to see the headline numbers not look good at all really because of the energy being frankly hideous , and then strip out the energies, and you have decent earnings gains, low single digits are what are expected for earnings, but we typically surprised to the upside. i think we will. maybe you get to mid single digits. revenue, what we have seen so far and will continue to see will remain to challenge. angie: ok, but you are seeing bright spots, right? where are you seeing them? are you making any place there? >> we still like the consumer discretionary space, the space of the haves and have-nots, but i think that our view on the consumer is that u.s. consumer remains strong, even though you have a retail sales numbers that
on the surface did not look good, you have to adjust for inflation. nominal, adjust for inflation, they look a lot better, and we know they are selling like crazy. names like nike, home depot, still attractive. i did not expect the rally out of them today to be honest, but we do like the financials more in just on the fed will eventually move. why did they rally? maybe the earnings have not come out as bad as people thought they might. how important is forward-looking guidance for these corporate's? especially as s?u try >> a lot of them don't have that good of a visibility, because they are looking at what is really going to happen in the , youl economy, so yes
watch it, but in some cases it is hard for them to even know how it plays out. i think a lot of it is when i go back to these consumer discretionary names, we can feel that the underlying demand is there, like a nike, where people just want to buy their goods and are willing to pay higher prices for it. real wins in this environment. angie: gotcha. we will leave it there. pmc wealth management investment strategist. thanks, bill. if you can't beat them, join them. how rival convenience chains in japan are merging to survive. you're watching "first up with angie lau", back in two minutes. ♪
,ngie: another huge weekend rugby world cup, quarter files coming up. north versus south on saturday. south africa plays wales, while new zealand painful memories and they take on france. sunday kicks off with argentina at the millennium stadium, and finishes with australia versus scotland in west london. the tournaments become do or die, although south africa has been playing knock out rugby
since their historic defeat by japan. many people's favorites to retain the cup, but then they remember what happened in 2007. they were the team to beat then, but suffered a shocking loss when the quarter files against france -- quarter finals lost against france. ♪ welcome to the stock exchange, taking a look japan, south korea, intrepid reporters are here. korea -- i'msouth watching a company that is a retailer had of japan. nothing exciting really. started on october 27.
>> if it's not interesting why do to pick it? >> it is a winner. >> more conviction there. that is what we need. the operator of the circle k chain. in japan come all stock transaction, rallying company $1.4 billion, second-largest convenience store chain. they've passed the rival. the stock is up 12%. paying -- for each share. that is 5% more than closing price in tokyo. companies trying to combat aging population. they need to combine resources now. >> convenient partnership.
>> very nice. >> i'm sorry. it's friday. >> here's something that make if you indigestion. >> like my awful pun. ok. >> here we go, -- i'm sorry,al but that is the news. newing up to form a gastrointestinal medicine unit focusing on the upper and lower digestive tract. >> oh, my. >> that is the verdict from the stock exchange.
angie: it is 7:30 p.m. in hong kong -- 7:30 a.m. in hong kong. shanghai, china, where we are y day once again in china, perhaps less gloom in the market as a global rally continues with october. 30 minutes away from the opening of trading in japan and korea. .ou are watching "first up" ♪ the top stories, goldman
sachs net income missed estimates, falling 36% as revenues hit a year low. the ceo has resisted large-scale cuts and insisted trading will bounce back. spending cuts at citigroup paid billion,ing 50%, $4.3 a push to cut expenses by selling assets and closing branches help citibank to whether the turmoil better than rivals. pizza hut and kfc continue to struggle to attract diners and china, owner lowing forecasts as sales remained weak. another reporting difficult time last week, yum brands says fourth quarter growth may be slack. yum brands activist investors appointed keith meister, who advocated spinning off chinese operations.
continuing to feel the pinch, hugo boss cut its 2015 forecast after seeing a decline in third-quarter sales on the mainland. burberry forced to revise outlook as well. the company announced it is reducing ceo pay because of a sales slump. bonuses and long-term share incentives cut by $46 million. asia,in on markets in it's friday. ,hank you for that tail winds blowing through asia this morning. of 1%aland, 6/10 higher. what itculation as to is or is not going to do, rate cut's are not. australia, gains, nine tenths of one percent higher higher on the dollar.
japan, we over to expect markets to open higher in half an hour from now, according to japan futures in chicago. you can do the math, 200 point jump. -- 200-point jump. we against the u.s. dollar. inn resorts pummeled extended trading, missed expectations, falling substantially from last year. we have the numbers. not so aptly called wynn resorts . red as my tie, profits fell short. revenue -- itall boils down to the weaker performance in macau, were talking about the high rollers.
we sold this reflected in galaxy earnings which came out the day before, and that is what this stock is done. in look at revenue, down 30% macau. 3.9% in vegas. -- ditnover, down 61% turnover, down 61%. you're not seeing the high rollers show up and making the trip to macau. how does this breakdown? a year ago, it used to be 70% is 57%,0% vegas, that 58%. this boils down to the drop in the top line in macau. the conference call, management is expecting a new casino to , though theyhedule
don't know how many tables they will be getting from the gaming board. angie: now that i've seen casino earnings, what you watching in the fourth quarter? >> whether they will continue, haves, 3-4 days analysts changed their ratings on stocks in hong kong, mostly bullish, too bullish. finallys a note that after five straight quarters of --uential the kleins, sequential declines, finally a pickup of revenue. another thing you want to watch out for are these new restrictions when it comes to withdraws, how much cash they can bring and withdraw on the floor. just a quick look. is a quick lookup buy, hold, sell of wynn resorts. angie: thanks.
global weakness and slowing demand for chips has triggered first profit drop it tie one semiconductor in three years. -- it has cutget its equivalent budget. what is behind the week numbers here and the bleak outlook? china.ne word, another word, smartphones. the combination of those two, china has been weaker this year. we know that. it was for quite a while the biggest growth driver for the global smartphone market, and frankly still is, but as it is slowing down, the smartphone market has been slowing down, as it has globally. 60% of the revenue from communication chips, the little chips that go inside your smartphone, including iphone and so many other phones getting sold out there. with that slow down cents q1 of this year, sustaining,
sustaining, sustaining, and there hasn't been that uptick they have been hoping for. in the end, it came to the bottom line and topline, and they have had to cut as a result. it is a big blow to tsmc and suppliers. angie: what does capital expenditure and the cut of capex say about the wider industry? >> it's not really for today. -- you spilling being are spending billions of dollars for future generations of semiconductor technology. capitale cutting cpa expenditure's today, you are saying things will not be as good as expected. that's how long it takes to bring it in, build it, install it. if you're cutting capital expenditures today close to 30%,
you are signaling that the next six, 12, 18 months are not as good as expected. if you think it will be strong, you need that equipment installed in your factory to meet demand. of course, this is about the whole industry. angie: is there a silver lining here in this cloud? >> not really. it is hard to see one. shares trading overnight, they fell. we will see taipei open, and we will see how that share action is, but overall this is coming on the back of until -- intel. the whole chip industry is looking week. the numbers yesterday and the outlook and capital expenditures
, it's hard to paint a pretty or bright picture coming out of that. angie: doom and gloom. thank you for that. for a look at some of the top corporate stories on the bloomberg terminal. boeing stretch dreamliner airways boost, ava plans to take it a deal. the wide-body version interested in 2013.ed boeing shares jumped more than 2% on the news. vw, 8.5 million vehicles will be recalled. it will restart -- starting january. it will last beyond 2016. shares more than 3.5%.
the $6 billion takeover, worth as much as $55 billion, biggest ever for corporate bev.isition, ab in they will send bonds -- sell bonds in multiple currencies with different maturities. angie: the maker of one of the brands,best-known releasing for the first time ever outside australia. we are at the launch. what was it like? angie, not bad at all. event, theyt's gala won't have any trouble at all convincing consumers about its
latest collection, 400 people gathered at the china pavilion here in shanghai for the unveiling, the first time they have done this outside australia, the spiritual home of south australia. spoke to the managing director and ask him why they chose saying hi -- asked him why they chose shanghai. in the past, we have always launched it in australia, and we wanted to go out and do it in another market. for us, the asian market is one of the biggest growth markets in the world. china is our largest growth market in the world. it made a lot of sense to bring the penfold launch expressed to shanghai. -- launch experience to shanghai. by 2017, they expect china to become their largest market, passing australia, europe, and
the americas. for theaken five years winemaker and his team to bring , includinge 2011 grapes from grapes planted last century. he said that last night's event was a showcase for these spectacular ones they have unveiled. spanss is a winery that 170 years. parents, for growers, grandparents, a lovely collegiate effort. there is a lot involved. it is client contact. he said it himself, along way from australia, a very big gullah event with the latest penfold collection in shanghai. event with -- galla
angie: checking some other stories making headlines around the world, german chancellor angela merkel says everyone must pay their fair share to solve the migrant crisis. eu leaders meeting in brussels to restore order in a region settled -- unsettled by biggest refugee crisis since world war ii. german chancellor angela merkel said it was not fair for a small number of countries to do with refugees. the preferred successor is ro xas. his main rival once held dual
citizenship, and even though leading the polls, critics are questioning her qualifications. japan has won a seat on the united nations security council, all ran unopposed. permanentjoin the members along with ukraine, egypt, senegal. japan joins the council at a time of increasing tension in asia, including china's new controversial defense laws. china's growth might be slowing down, but to us appetite for travel only seems to be growing. the government says travelers onl spend $1 trillion domestic trips alone by 2020. hsrd rock international sees this as an opportunity with its first hotel opening next year. joining me is the president and ceo, hamish dodds. why'd you think chinese
travelers flock to hard rock? >> i think they are looking for new things. travelers, newe experiences, different themes, different shopping experiences. if you look at the opportunity inside china, where travel is larger than outbound tourism, we think the growing ss ability to social media -- accessibility to social media and other brands allow them to try it. angie: hard rock is american, rock 'n roll, eric clapton's guitar, first of your collection, now 77,000. what are the chinese travelers looking for? are you adding chinese performers and pop-culture icons? what are they attracted to when it comes to the hard rock brand? >> the fact that it is an unusual brand with history and heritage, and attracted to learning and understanding more
about it, expensing restaurants or hotels. from our point of view, we are introducing memorabilia and artists from china, korea, from other asian markets, so we are trying to make sure that our showing is contemporary and international, the same in south america and europe. entertainment, great, great, great stories and foods. we can do that. about i have to ask you revenue. what is that? the measure in which -- comed industry measure revenue per available room, the combination of occupancy and the great you are getting in that particular property. it is a way of equalizing and seeing how operators are performing. that it isthing is just now starting to come back.
overcapacity in china, with the slow down, generally speaking, that has been a challenge for a lot of hotel operators. >> i think so. if you take a look at the long-term picture, big structures that will be around for a while, you have a supply-demand dynamic that is building and in terms of how the market is growing. this short-term indigestion in china will find its way out of the system quickly. against globally large-scale operators like married in hilton, how do you compete? >> yes, we are a smaller brown. we intend to stay that way. we don't want to be on every street corner. weare not starbucks, materia want unique locations and unique service. our ambition in china may 30-40 hotels. -- we are not starbucks, marriott.
we want unique locations and unique service. our ambition in china maybe 30-40 hotels. areas,looking in several and another two projects as well. angie: do you expect to expand in china even more? >> yes. if we can get to 30-40 hotels, that would be a great number. it's around great product, great location, and keeping our brand really iconic and not monetizing it. angie: rock 'n roll, hamish dodds, rock 'n roll. joining us in the hong kong studio today. education,porting that's interesting. the shanghai business school on china's latest service to be shipped to the world. ♪
many: china exports things, but education isn't usually the first thing that springs to mind. that changes today. mainline school acquiring a big name abroad. established 21 years ago as a venture between the ministry of commerce and the european commission. over the years, it has established itself as the business goal and china. one inanked the number ba program in nature according to financial times and forbes magazine. the school is taking on a new challenge, the first to export chinese business education to the world. joining us from shanghai is the dean. what your plans? is that we will have expansions globally, mainly working in europe these days for
globalization, for technology upgrading, for brand building. that is why we need to do a better job. not only we export chinese education abroad, specifically what you think in this globalized economy that you would want to impart on your students? >> they need to gain more knowledge about the multi-cultural management, know how to work better with the foreign companies, because for years, the best weight was to receive foreigners at home in china, but now they are working more and more globally, and we also need to upgrade the knowledge about europeans on china, because they need to work with a more complex , bigger chinese economy. the first are
mainland school to control a stand alone business goal in unit -- europe. -- stand-alone business school in europe. i we going to see more cultural exchanges as part of the program question mark -- are we going to see more cultural exchanges as part of the program? >> of course, but we will also work with european companies for deep relationship, acquisition alliance with chinese companies in europe. angie: is this a reflection of the warming and growing relationship economically, and could we see more merger and acquisition activity? >> for sure, and if you look at the statistics, last year was a turning point in chinese history , because china for the very first year became the net fi fdi exporter in
2014. angie: what does this mean for china's aspirations to go up the global value chain? >> there are a lot of things to work on. i mentioned how we can upgrade the technology, the brand, research and development, innovation, but also how we can morein a bigger, larger, complex, multi-cultural environment. her chinese executives, there are a lot of things to learn. also at home, a lot of new challenges that we can certainly find solutions among our european counterparts, wealth management, these issues are already old issues in europe, but new issues in china. is this also attracting chinese students who want to study abroad specifically? will they have the opportunity to study only in europe? >> we have no plan to open a ,ull-time program in europe
john: with all due respect to jim webb, we are still waiting for your fundraising numbers. were going to give you 10 minutes. at national i love lucy day. first the cash withdrawal. the presidential candidates have until the end of the day to show us how much money they have raised in the past three months. ben carson is up there with $20 million in q3. jeb bush, $13.3 million and ted cruz put up for teen point --