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tv   First Up With Angie Lau  Bloomberg  October 20, 2015 7:00pm-8:01pm EDT

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♪ bowing to pressure. calls from an activist investor. pomp and circumstance. xi jinping sing his state visit with britain will take relations to a new height. horse raisesing nearly $1 billion with ferrari prices at the top of the range. i am angie lau, coming to you
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live from hong kong. let's check in on markets in asia. australia, we are seeing fractionally lower trading after a selloff triggered by commodities. cents.. qe is keeping the rate steady. in new zealand, we are seeing things looking like this, .25% higher. we are counting down to the opens in japan and korea. let's go to japan. nikkei 225 last closed like this -- .4% higher. chicago pointing to a flat open. we will see if there is conviction in the day-to-day. dollar yen holding steady. there is a reminder that there
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is no trading in hong kong today. is closed for market holiday. but we are here for you. ! shares rose after news of a shakeup. the operator of pizza hut and taco bell will thin china business after coming under investor pressure. yvonne man has more on this. going on a bit of a diet? off,e: they are shaking one of the biggest shakeups since pepsico 20 years ago. there was a food scandal in july triggering activist calls for a spin off, especially from carl meister,protege, keith who said the asian market could
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be better served with a focused business. the company announced yesterday that the ceo of the china business back in august will now lead the new china business. the company is committed to returning substantial capital. er said that the opportunities for risk are different than what you see in the u.s. because most of the stores in china are company- based, not franchise, which can be good in good times but can pose potential risk when times are tough. taking a look at the market is still number one in china but are losing a piece of the pie. 40% in 2011. now about 31% last year. mcdonald's saw shares fall of it. still number two, but we are
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seeing local names like ting hsin increasing competition. yum! still struggling to cater to a local tastes. angie: how will restructuring help? yvonne: it will speed up the recovery. they say it will help to kind of strategize, a more country- specific strategy to be more comfortable in the local market. they will also have a chance to bring back some of the investors and customers lost in the fallout. they say it will give investors a choice. you can have a cash flow stream or a leading restaurant concept in a country with a fast-growing middle class. they say china has always been a !,ng-term strategy for yum upping stores to 20,000 in the
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future from 6900. world's biggest mining company said first-quarter iron ore output jumped 7%. the news puts bhp billiton on track to meet production targets as it expands in australia. iron ore prices have fallen 70% from four years ago due to falling demand in china. sony has agreed to settle claims from employees of her theft of personal information. the company will pay staff as much as $4.5 million and $3.5 million for legal fees. computers were hacked last year ahead of the release of "the interview." the breach exposed company data and siliceous hollywood secrets. list earning estimates
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with net income of 13%, the most in five years. they have in trying to get more users on its 4g networks and it appears to be saying off. the number of users search 31% by the end of last month. yahoo! shares are falling after hours after it missed estimates over sluggish advertising demand. the company reported its biggest quarterly sales drop since 2009. let's go over to su keenan with details. analysts say if this was the quarter investors were looking for for a turnaround as yahoo! tries to fend off competition from google and facebook, this is not it. sales fell short of estimates. biggest drop since 2009. a fourth-quarter forecast also missed. that brings efforts by marissa
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mayer into question. she has been running the company without a big boost in revenue growth for four years. earnings per share came in at $.15, versus the $.16 they were looking for. shares were down 1% after the numbers. let's listen to what the ceo has to say about the competition. >> we believe that, by establishing partners with leaders in the search space, we can achieve a competitive search present a better experience for users and advertisers. harley davidson had a difficult quarter, following -- following the most in 2008. down 14% since the regular session. it is planning job cuts, but the amount of people that might be cut has not been announced.
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thanill ship fewer bikes planned and cutting shipments down about 10,000 from original estimates. angie: lockheed martin also reported. what is the story? su: a story of no sales growth. there was a bright spot in aeronautics. had lower margins. what it did is it forecast sales in the margins of 2016 will be little changed. surpriseht analysts by because they pretty did a rebound after three straight annual declines. sales in lockheed aeronautics rose 7%. 11%ating margins fell to with sales comparable to 2015. angie: thank you for that, su keenan. xi jinping has stressed the
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increasing importance of the relationship between china and the u.k., saying they are increasingly interdependent. he made the comments during a speech to both houses of the british parliament. ryan chilcote has all the details from london. reporter: the president of china's visit is in full swing. he addressed members of the parliament in the house of commons and told him he was very satisfied with the state of hopesh-sino relations and this will take the relationship to new height. the visit will lead to $45 billion worth of investment. it will create about 5000 jobs. an increasing number of people on the street in britain believe that china may surpass the european union as the biggest trading partner in the next 20 years. relations have not always been this good.
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a meeting between the british prime minister and dalai lama in 2012 sent relations into a deep freeze for two years. but a warm reception this time with queen elizabeth herself hosting the chinese leader at a state banquet and buckingham palace. ryan chilcote, bloomberg, london. more topd you can get stories at our digital destination, bloomberg business, bringing together the best of bloomberg television, business week, and digital content. also on, full speed ahead for ferrari. share prices at the top of the range. its flagship model s. the force is strong with star wars fans. they topped sales records for the franchise's seventh
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installment two months before it opens in cinemas. website struggled to keep up when tickets went on sale yesterday. box already predicting a $250 million opening weekend in the u.s. and canada. it is slated for global release on december 17. let's see if the force is with the markets. mixed bag in the u.s. so far. we get a review from the mayor of wall street. ♪
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angie: checking headlines around the world, japan has confirmed for the first time that leukemia suffered by cleanup workers at fukushima is linked to the 2011 disaster. pepco says about 7000 full-time
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and contract workers are at the plant on any given day. a study found increasing cases of thyroid cancer among young people in fukushima since the disaster. the philippines says at least 22 people were killed by the typhoon. most of the deaths came in landslides and flooding. authorities estimate the storm caused 5 billion in damage in luzon alone. the typhoon is weakening slowly, but storm warnings remain. 12th storm in the philippines this year. the election of a new president will take place on february 26 fifa.nned for suspendeder remains along with his top aide, but
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michel platini says he has done nothing wrong and hopes to contest. let's get back to the markets right now. corporate earnings have slowed gains on the snp. little changed after a few months high. ibm closed at its lowest level since october of 2012. the company slashed profits forecast after a 14th straight quarter of shrinking sales. sandisk could be bought by western digital this week. says tablet deals helped the wireless carrier lure more subscribers. let's bring in a veteran investor and guest, ted weissberg. he joins us from new york.
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when you take a look at the quarter, what does this really tell you as a veteran investor? >> you have to keep in mind, and the tophave to look at line growth and guidance. when companies can put that together, they are rewarded big-time. ,n the other hand, if they miss and they have three chances to miss, they pay the price. third-quarter earnings have been pretty much valued lower by most analysts. the expectations have been lowered. and so far, it has been a mixed bag. we see it on a daily basis. the markets have been trading sideways. of course, the earnings have been a mixed bag. you get one decent earning and then something like ibm. it just sort of derailed the
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market. tomorrow will be another day. the second quarter was really driven by a strong u.s. dollar. we heard that time and again. third quarter, what was that about? summer volatility really did a number not only on the u.s. but global entities worldwide. , thethink the backdrop issues behind the curtain, have not changed. the strong dollar continues to be a factor. earnings missery from a high-profile company, there is a comment about currency issues, including ibm. it was a big factor in their earnings. they derive a tremendous percentage of their sales from offshore. so the dollar continues to be a problem. i think it will be a problem going forward.
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we do not know what the fed is going to do. the consensus is that, at some point, we will see them straighten up. that will reinforce the strong dollar. the dollar trade has a big influence on corporate america. therefore, it will continue to have a big influence on earnings. the trick is how does corporate america grow the top line in a world where there is slow or no growth. so it is going to be difficult going forward. does not mean we are going to fall off the cliff. there is a lot of damage being done on the market. sure where wey will find the right levels that it is so compelling we cannot resist. i do not think we are there yet. angie: sounds like you are still on the sidelines. sector-specific? are there some that are more
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healthy than others? is this company by company? >> it gets back to the s and p. it is down 1.5% for the year, perhaps 4% of its trading highs this year. 60% of the stocks are down more than 20% across-the-board. it is sector after sector. rally after trading lows of august was led by energy and commodities. is that a debt cap bounce? short covering? these are sectors that do not make you feel warm and cozy. it is a market of stocks, there will always be things to do. in general, i am not sure there is any place to hide. a lot of folks look at financials. interest rates are higher, and
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that is where you want to be. but every time the fed vacillates, they bang financials. i do not know where you have to go. maybe you have to find the facebooks of the world and what have you. but clearly, there is risk too, if there is slight dislocation in any of their earnings. angie: when a veteran investor like yourself says there is reason to keep your powder dry, we listen. ted weissberg, thank you for that. up, there is not much cheering going on at yahoo! as it enters a fourth year without substantial revenue growth. ♪
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angie: welcome back. yahoo! is falling after hours after missing estimates. cory johnson looks at the challenges ahead. reporter: yahoo! reported third-quarter results that were disappointing for those expecting great things. results of the weak.ess work w -= worst quarterly growth since
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2009. to $.15 aalso down share. all eyes are on the spinoff of alibaba assets. there are possible tax implications which are huge. alibaba gave a great game to yahoo! in its investment. is still sticking to its guns it will spin it off before the end of the calendar year, meaning shareholders will get a little chunk when the spinoff happens. the remaining assets appear to be in trouble. revenue is shrugging despite billions of dollars in acquisition. earnings are not terribly strong. you see the company striking an interesting deal with google where they will send a search traffic to google. will show up on yahoo! mobile and desktop sites. in some ways, it is a capitulation of yahoo!'s ability
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to own that business. they can get out of this deal but anrtain caveats, interesting development where yahoo! is turning over a lot of research to its biggest competitor in google. sort of shows you the state of affairs down there at yahoo!. in their third-quarter results, a lot of shrinkage on the top line. not much in terms of profits. in a struggle to spin off tax-free fashion the alibaba assets. cory johnson, bloomberg, san francisco. and we are counting down to the semifinals in the rugby powerhousesth competing for the trophy. south africa needs new zealand saturday before argentina takes
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on australia on sunday. the winners returned to london one week later. not beatencans have the wallabies in 17 years, but they're averaging 44 points a game in this tournament. they're playing their first semi since 2007. australia only made it to the thanks to a ntroversial last-minute penalty against scotland. world cup officials have admitted they made the wrong call. checking other headlines right china is forecast to add stimulus this quarter. signs of stabilization, but growth is short of the 7% target.
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this follows a 2008 financial crisis. this time, the measures are more targeted including reductions in minimum down payments for first-time homebuyers. china pledged $50 billion to support the development of infrastructure projects in africa. ministry saidade the commitment was made by the vice minister of commerce. south africa will provide technical experts to build industrial parks and power plants. coming up next, for robbery -- ferrari's listing hits top speed. details when we continue. ♪ the only way to get better is to challenge yourself, and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20.
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it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around.
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is 7:30 in hong kong, and you have joined us on a holiday in this city. it is a market holiday. but there is still treating in the region. that is why we are here for you. we are 30 minutes from the open of trading in japan and south korea. "first up."hing top stories this hour, shares frozen on news of
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its biggest shakeup in two years. the owner of pizza hut and taco bell announced it will spinoff operations in the u.s. after calls from activist investor keith meister. losing market share in china because of rising competition. president has stressed the importance of the relationship between his country and the u.k., addressing both houses of parliament. ay jinping says his four-d visit will promote bilateral ties. he has highlighted the eagerness to join the infrastructure bank. >> the people in china are eager to create change.
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i'm sure we can take a while operations to a new level. china can look forward to a brighter future. rrari makes a trading debut in new york after raising $900 million in its ipo. majority shareholder fiat chrysler is selling a 9% stake. the company will have an enterprise value of about $12 billion. shares will trade under the ticker. to markets iner asia wednesday morning. new zealand right now, we are seeing .3% higher. holdingand dollar .67 u.s. continuesmodity slums -- slump continues.
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we are counting down to the opens in japan and south korea. gains .4% less saw higher. futures in chicago looking like it will shrug off the selloff yesterday. it will start flat on the day. 119.83.en, no trading in china for the holiday, so the hang seng is closed. early trade it looks like this. iron ore production climbed. the world's biggest mining company announced a 7% rise in iron or production for the quarter, climbing .8%.
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for more on this, let's get to paul allen. a strong result for iron ore. but kind of a mixed bag for the rest of the bhp products. >> it was. steady start to the year. tons, beat,000 estimates. similar story for petroleum -- 65 million barrels for the quarter, also beating estimates but down 4%. in the petroleum sector, bhp to $2.9 billion for the year. iron ore is once again the strong performer for bhp, 61.3 million tons. 7% yeartimates, but up on year.
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the ceo, andrew mckenzie, says they are on track to meet cost guidance and the market is responding well to these numbers. shares are up just under 1%. angie: paul allen, thank you so much for that. japan has confirmed for the first time that leukemia found in a worker at the fukushima nuclear plant is linked directly to the 2011 disaster. the man was in his 30's when he was employed at the facility. let's bring in stephen. you are following the story. what does this mean for pepco? >> this sets a precedent for the company. this is the first time a worker will be getting compensation from the government, which means other workers will likely apply for compensation. some analysts say they could sue the company on damages received.
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i have talked to some doctors that have said the incubation time line for cancer involved with raation can be between three and five years. we will likely see more of that. and there have been reports that the amount of radiation the , tens ofceived thousands received the same amount of radiation while doing work at the fukushima facility. more may be coming in the future. more cancer linked to fukushima. and not only at the plant, right? guest: right. there have been other cases of cancer linked to fukushima amongst adolescents and children. a recent study found there was an increase in firewood cancer among youngsters -- thyroid
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cancer among youngsters under 18 in the area. there is debate as to whether you can directly link the amount of radiation they are receiving on-site and off-site to leukemia or thyroid cancer, but the government has drawn a link between the two. stephen, thank you for following that story for us in japan. ashai iswith japan, looking to form an outside panel to investigate the cause of an apartment building tilting in yokohama. panel to appoint a work with an internal committee already being set up. they're looking for data from the last 10 years for any similar problem. they say it cannot be sure there are no flaws in other buildings.
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sinceret to express my apologies for the construction flaws. our top priority is to investigate the facts and regain trust in our buildings. we will consider the responsibility of the management , including myself, after the investigation is complete. angie: time for a look at the top corporate stories on the bloomberg terminal. here is yvonne man. biggish shiporld's maker will invest $5.5 billion in its china operation. intel's most recent results showed increasing demand offset sales of pc processors. google could be heading back to china with a lounge -- round of
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developer that operates a voice activated search engine in mandarin. provider for the launch of the android smart watching china. in 2010, google closed its search page and china after refusing to censor. tesla fell the most in eight weeks after consumer reports dropped the model s from is recommended list for below average reliability. an array ofreported complicated problems, including the sunroof and motor. that,er reports also said with the problem, satisfaction remains high. 97% would definitely buy the car again. those are the top stories on the terminal this hour. most famousorld's sports carmaker hits the road on the stock exchange today after raising nearly $900 million in
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its ipo. is following the story for us. shares will be listed on the stock exchange and demand was outstripped by supply. chrysler sold them at the top end of the range and $52. 58.1 million shares. fiat chrysler really wanted this to be a luxury brand and restricted the number of shares available. a value offerrari $12 billion. it is trading under the code raise" fiat chrysler will $4 billion from the sale. quite a fanfare on the stock exchange. we will have the chairman, ione, ringing the
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bell with the son of the founder. fiat chrysler shares have done incredibly well in the last 12 months in new york. trading up by 70%. 80% in italian trade. this contempt carmakers like gm, which have only seen a rise of 7% in the year. demand fora lot of ferrari shares. angie: i wonder how many investors bought shares just to say they own a ferrari. that is very affordable. what does it say about demand for the ipo? >> you would think this shows americans are back in the ipo market, but they are seeing lackluster demand. ferrari is a different story. a mobile phone company actually had to cancel its public sale in the u.s.. ynacorp and albertsons
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postponed an ipo still pending. certainly, soft interest. angie: $52 for a ferrari. thank you very much. south korea boosts defense spending. after the break, we will see how honeywell aerospace seems to cash in on all of that. ♪
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angie: america's top soldier sees no prospect of russia expanding its campaign beyond syria. joseph dunford says baghdad has not requested russia's help fighting islamic state in parts of northern iraq. the u.s. and russia have signed an agreement to avoid accidental
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clashes of planes over syria. the u.s. secretary general has called for calm during a visit to the middle east amid surging violence. he met benjamin netanyahu ahead of talks with palestinian leaders in the west bank. tensions have risen over access to a jerusalem site. eight israelis have been killed this month by arabs using knives, guns, and cars. others have died in clashes with israeli troops. cambodia welcomes the return of lootedient stone statues three decades ago. a ninth century hindu's culture and another from the 13th century were handed over by a norwegian collector who refused to say how he obtained them. it is thought they were taken
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from the temple of ankawa. welcome to the stock exchange. we are a little early today, but we are looking ahead to the opens in japan and south korea. our reporters are here to tell us what they are keeping an eye on. >> we need the music. >> i am talking about the steel producers. the stock has been down close to 27% this year. half the earnings out yesterday. operating profit in the red. ¥66 million. that was a deeper drop than estimated. sales also missed. they cut their sales target by 4% for the full year. so we are seeing the stock of steel producer struggling. we talk about china being a big factor as we see demand decrease. angie: they are in trouble.
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it is sad that david cannot make the stock exchange. angie: it is not fair. >> i am talking about another steel company, nippon steel. 30%it is excited to drop by . china really impacting demand. our-year profit will fall short of the forecast of ¥300 billion. the stock has not done well your today. holds, zero sells let's see what happens. angie:. stocks highlighted are based on news events. we will be back in an hour to see how they have done.
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there is play more to come on bloomberg television. you are watching "first up." ♪
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angie: breaking news from japan. we have september trade figures coming out right now. we have david ingles standing by. david: just crossing right now. let's start off with exports here. fairly big miss. .6% increase. four or five to straight months of decelerating export growth out of japan. .6%. imports falling less than expected, 1.1% for september.
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you're talking about the value of imports. deficit, 115 billion yen. ofwere expecting a surplus ¥87 billion. we got the opposite. out ofkes us to eight nine months of the year that japan has turned in a trade deficit. that takes you all the way back to the start of 2012. i have only counted it three or four months where they have exported more than they have taken in. let me just check on futures right now. looks to be a mixed open. the yen is not moving a lot. exports to china down 3.5%. that is the second straight
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month that exports have actually fallen from the year before. trade deficit narrowing close to 9%. not the most encouraging set of data here. angie: thank you so much for that, david. an offer by nexone comes with e seoul will raise defense spending after pressing north korea. newywell has just signed a contract with korea. we will take a look with the president, brian greer. we talk about this region in geopolitical terms. a lot of tension between a lot of countries, but korea has been ratcheting things up, north korea at least. how is that stoking deals for you? well, it is just the impact
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of what is happening from a broader geopolitical perspective. did it to asia and the growth of china from an economic perspective and militarily, many countries know that their future is tied to china. at the same time, they want to make sure they have a defense posture which allows them to respond to crises that may have been. that is driving a lot of standing across the region for a lot of militaries and air forces with western aircraft that would like to update the aircraft were a capable force. angie: what does that mean for the market outlook in the asia-pacific of a mid- to long-term for you? >> very positive. aen with china being down little bit from an economic perspective, from a long-term perspective, there are a lot of aircraft any upgrades.
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there are a number of militaries that would like to upgrade their fleet overall. not only the commercial side, of course. this is the century of asia. even though economic indicators have been down recently, looking from a long-term perspective, the number of people moving into the middle class and honeywell's products, we are very bullish about the mid-and long-term. we got earnings reports from lockheed martin. theof the bright spots was aeronautics division. this is a sector seeing growth. to your point, the region is looking to expand. still, there are challenges here. you may want to build and help reduce a lot of aircraft. but the infrastructure is still very weak. how do you meet those challenges? well, from an infrastructure
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perspective, there is a lot of building. if you look at the forecast from an air force perspective, that is all coming. particularly in china. there is a lot of airports that are going to be built. a lot happening from a traffic management perspective. that is critically important. again, that is another area where honeywell has a number of technologies, including our smart path technology, which helps with the efficiency around the bottleneck of airports, which is where the constriction happens most. angie: all right. your joining us from seoul. korea plans on increasing its defense spending, how are you planning on increasing the relationship with south korea? >> we have a long-term relationship here. 0e have been working on the t5
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trainer fighter for many years. they recently won a contract to have fighters in thailand. engine on a our t55 helicopter, and we are talking to the military about upgrading the chinook.on we have a product called talon gps toombines nav and provide precise information for artillery and other ground-based vehicles. many other things that we were working on in here in korea. greer, we will leave it there. good luck with e defense exhibitionhis year. thank you so much. honeywell's asia president. breaking up is hard to do. ! prepares to split its china
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business. we are counting down to the open in japan and korea. this is "first up." ♪ ♪ (ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...) man snoring
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(don't fear my darling...) (the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store.
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>> jim webb, a man with a simple dream. all he wanted was to be heard. now he is doing the only thing he can. >> i am withdrawing from any consideration of being the democratic party's nominee to be the president. >> tonight, we bid farewell to a democrat. godspeed senator. jim webb. he has been waiting for 10 minutes. ♪


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