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tv   Bloomberg Markets  Bloomberg  October 23, 2015 1:00pm-2:01pm EDT

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p.m. in new york. pot a fiscal solution in the washington state? scarlet: we got a big shock announcement when china was cutting interest rates. since then, any drama?
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julie: not drama different from that drama. upward momentum is what we have seen. they have remained higher even though we have seen games. what we have seen happen in terms of technology, if you look at the s&p 500 and its intraday move, we have seen a move off the highs. , if got that early boost you could theoretically stretch this chart believed. future got that bump up when the rate cut happen. higherved a little bit and has since been carrying some of those games, but still holding on to this rally. it is technology that is fueling the s&p 500 and especially fueling the nasdaq today. we got earnings from these three companies in particular, which the most, theng preponderance of the market value to the. microsoft rising to its highest in about 15 years today, gaining on the back of its earnings announcement. alphabet, once known as google,
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or the parent company now of google, is rising to a record of 9% on the strength of its numbers and its buyback announcement. amazon is also at a record after posting an unexpected profit, driven in part by its web services sales. that's in other words, the cloud. lots of cloud boost that we are seeing today. alix: what the risk on, you would assume the usual suspects like utilities are in the red. energy stocks are not performing that well because oil prices are below technical levels. julie: we are seeing some falling, but something that caught my eye is this corporation, not a household name. not a cook, north face, wrangler, lee jeans -- it's down the most in six and a half years. it was down the most since october 1987. that's black monday. the shares are still down very sharply have hidden the company seeing a buildup in inventory.
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it is seeing waning demand for retail sales generally. some of its clients are also down today. it's interesting what we are seeing here. take a look at my bloomberg terminals of the supply chain v.f. corporation. i have looking at its big customers -- who buys this stuff and then sells it to consumers. a percent of its revenue alone. you saw target shares 3% of the f revenue. macy's and nordstrom and a lot of the big retailers. big dip.eing a skechers came out with disappointing numbers. there appears to be concerned about inventory levels in retail generally and also retail demand. alix: it is not that cold. who needs to buy a winter jacket? scarlet: maybe sell leisure wear. julie: there's oversupply and that market. scarlet: julie hyman, thank you so much. alix: let's check in on the bloomberg first word news.
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mark crumpton has more from our news that. -- news desk. mark: the first american soldier to die in combat against the islamic state has been identified. 39-year-old master sergeant joshua wheeler of roland, oklahoma was killed thursday and a hostage mission in iraq. dozens of officials were involved in a raid in a compound near cut. were70 iraqi prisoners freed from captivity. officials also say that the raid was undertaken at the request of the kurdish regional government. presidentialecial envoy for the islamic state campaign has been chosen by president obama to lead u.s. efforts in that campaign. he hassident said that been long one of my most trusted advisers in iraq. he will take over from john
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then after 15 months for global coalition to counter isil. warmer rhode island governor lincoln chafee is ending his bid for the democratic presence on nomination. gain tractionever against front-runner hillary clinton or vermont senator bernie sanders. lincoln chafee becomes the second democrat to quit the white house race. former virginia senator jim webb ended his campaign, although he may run as an independent. there is reportedly a major shakeup in jeb bush's campaign. the former florida governor is imposing an across-the-board pay cut for staffers. he is also removing senior advisers from the payroll and canceling on razors. mr. bush was once a front runner for the republican nomination, but has trailed badly in the polls. a hurricane stronger than the train and andrew is headed for mexico central pacific coast and could hit as early as this afternoon. victor michelle joins us live -- mexico cityco
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with the latest. day.r, good informationlatest we have about patricia is raised. this is the biggest hurricane in history. they are quoting information from the national hurricane center in miami. never before on the continent have we seen a storm so strong the mexican president has said that the storm's want to be historical. at this point, the wind gusts are measured at 325 kilometers an hour. the mexican government is saying outright that the storm is extremely dangerous and extremely powerful and that it could be catastrophic for the mexican western seaboard. we are expecting landfall sometime between 5:00 and 6:00 today. the city at this point has been evacuated due to the dangers that this dorm -- storm poses to it. mark: victor joining us from mexico city. thanks.
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that has a look at our first word news right now. you can always find the latest news on back over to you. it is a monster storm. scarlet: thank you so much, mark, with the latest on the first word. the federal reserve made consider raising interest rates, but the rest of world is facing weaker growth and lack of inflation. methodhina is included a that people's bank of china lowering benchmark rates to a record low to the this is the sixth great interest rate cut -- six interest cut in the year. fromng us now is daniel bmp part of it what you make of this divergence of the are continuing to see and has a ripple effects to the currencies and the stock markets? daniel: what we are seeing is a transition of a world that will in a postacute you stated what we are seeing his that the u.s. is at the front leg of that because we are the first ones to do qe.
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europe is midway through it and there is debate on whether they will add to qe in december. china has their ltr which is in the equivalent of a cutie and they are also coming rates. we are in this transition process right now and we are waiting for the economies of all these major economies to really fire on all cylinders. i think america is ahead in that race. all the stimulus and qe from the central banks -- is that enough to compensate from the loss of qe in united states and the raising of interest rates? darren: absolutely. if you have the economy is working on all cylinders, that would create exit velocity for all the economies in the euro to accelerate, much like we saw back in 2005, 2006, 2007 before we ran into the crisis. scarlet: the other part though -- if those central banks can offset tightening here in the u.s., if we have lower prices and oil, which means that oil exporters have lost a lot of money, not only are they going to invest assets, but they actually have to go sell assets.
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that in some cases could be seen as quantitative tightening. what you think about that case? darren: beyond simply that fact, i think there is a huge element of geopolitics that is also at work. really, if there is a resolution or solution to a political transition in syria, i think you could see all the major actors of the world get in to rein in oilrt prices. what would happen is that if you do that, if you actually rein in supply, what would happen is oil prices will go up. you actually create more inflation. that is something that is hurting the global economy right now as a lack of inflation. that would trigger more inflation. it is a positive feedback loop as opposed to a negative feedback loop. scarlet: i want to get back to china's interest rate cut. the former vice chair of the fed spoke with us when he learned of the news. here's what he said. >> the chinese leadership is not exactly the believers in
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markets. they are moving in that direction slowly. i wanted to say slowly but surely, but i do not know enough about chinese politics to say shirley. is not ae top, there really do believe in letting the market price things. so blinders take is that the chinese leadership does not believe in the markets ability to price things and they are not looking at it as a market balancing measure. what is your take? darren: i think that their economy is also an transition. they are moving away from a fixed asset investment economy to a more consumer-based economy. what we are starting to see is the beginning part of that. that is the form of property prices and sales going higher. by lowering interest rates, you are encouraging for the sales, which creates a positive feedback loop. if you are buying a new place, you need a new catch. you to buy more paint. you need to buy lights. you need to buy all these things
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that you would buy and restore. transitions itself more along those lines away from a fixed asset investment economy. alix: if you need to build a house, you need to sell land. land sales feed into local government revenue. darren: you needed firewood and copper in a wome and aluminum. pbocet: how mindful is the of communicating to the markets as the fed has been overly concerned and that the way that the pboc is mindful? 'srren: i think the pboc finance way in a world -- is finding its way in a world of transition economy to an open economy. it's a step in the process. free floating of their currency, which they want to plant by 2020 if i'm not mistaken, that would be another element that is constructive and would allow more inflows and flows back between countries. i think they are also transitioning as well to check to figure out what is the ri
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ght place for them. with a reduction in rates, they are allowing a softer landing for their economy in this transition. scarlet: taking a look here and wind up meaning for u.s. stocks, we saw that in technology and health care. you have momentum names and a little bit of safety in biotech names. we someone money flowing into materials and energy and industrials. alix: now what? darren: that's a great question. right now, health care has a tough hill to climb. that's as far as the damage that it has done to itself technically. that said, we are seeing tech hit on all cylinders. between amazon and google and microsoft, i mean, they are crushing earnings. what we're seeing today is a rotation of flows out of health care into some of these other places. you are seeing that rotation also in the likes out of walmart and young and v.f. corporation and some of these which is pushing the price action higher. scarlet: we do have the issue of
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the dollar. as we see from other central banks, it will push the dollar higher. we are not going to see a peek dollar and that is going to thesely an impact names. how do you reconcile that? darren: i think of the next three have been six months, it's a great time to get into commodities. when you think about it, you think russia hurt the european economy. then, you had greece. that hurt the european economy. then you had china. that hurt the european economy. the european economy is about to turn to the upside, i believe, to really perform well, assuming there are no more sharks -- shocks that take it out of the leg. if china is going to be a soft landing instead of a hard landing, and europe has better pmi data this week, if you get better pmi data and better inflation data, i believe that we will see all three large economies all executing on all
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cylinders, which is really what the economy needs. scarlet: going back to your point about the united states and the markets year, what about the case for looking into small caps? talking about volatility and these big multinational names has increased so much more than the small caps because of the headline risk in china and europe. is it a more compelling time to wait into small caps now? great: i think they are place to be. the reason for that is that you do not have the same currency risk that you do for these big multinationals. they have all -- i think it is for three quarters now that they have impacting currency on the armies. small and mid caps and a strong u.s. economy will only accelerate higher. alix: you do not want quality, you want small caps. darren: i want a little beta. scarlet: you are looking for lower quality, but better returns? darren: you make it a better return after the small cap than the large cap has it is dealing with a currency had one, which is severe. and you look at these multinationals where a third of revenues are coming overseas, that is a huge earnings headwind for them.
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along those lines, i do not want to fight the currency headwinds until i see some of these other currencies really appreciate outside. scarlet: darren, thank you so much. it's nice to talk to someone who is like, i'm going to take a little lower quality for now. i like that. coming up in the next 20 minutes, we are going to get an inside scoop that oracles open world conference that starts this weekend in san francisco. scarlet: guess who is not number one anymore? we will look at the latest poll that has ben carson trumping donald trump as a frontrunner. alix: washington state is getting high on tax revenue -- literally. marijuana sales are set to bring in over $1 billion. is no schwa ♪
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alix: welcome back to "bloomberg market day." scarlet: i'm scarlet fu and we will check with julie hyman on commodities. julie: we just got the baker hughes rig count at the top of the hour. indeed, it looks like it was down for the eighth straight week by one rate. we are seeing oil take a little bit of a leg lower now. it is already lower on the day could you can see a falling by 1.7%. we have had this decline in oil prices after it had been rebounding for several weeks. i want to switch gears and look at gold as well. really interesting action and goal because initially we saw gold take a slight higher after we had news about the chinese rate cut. it hovered around the highs and felt quite sharply. it remains lower on the day. they cannot maintain that momentum. we saw declines in commodities generally. the wisdom this week has been sort of that we are seeing
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commodities decline. that means inflation is going down. no need to hold gold unless inflation hedges. alix: unless you are in europe. julie: this is gold price in dollars. alix: we will be right back with much more on bloomberg television. ♪
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scarlet: welcome back to "bloomberg market day." i'm scarlet fu. alix: i'm alix steel. early tech reports show how crucial cloud reporting is. traditional services are being left in the dust as software giant oracle is having a conference as weekend to announce their updated cloud platform. headet: with more, lettuce to carol massar and cory johnson. cory: what a great time to have him here. all the results of the got from us might like microsoft and amazon web services and google
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as well talking about the cloud. you have been working on cloud stuff for oracle. while it is only 5% of sales for oracle right now, it is probably 90% of the commentary. what is it about the inflection point right now that is making cloud services so important for some accompanies? for customers to get access to compute, storage, databases, applications immediately and not have to have a huge staff to operate it and have that dana summers and storage and cable all this stuff together. it is about speed, agility and the instant access to resources. cory: phil gurley had this great line earlier and he is a venture capitalists and silken valley. spent 40 years filling our back offices with i.t. infrastructure and software and
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we spent the next 20 years getting it out of there." thomas: that is correct and that is because networks have become fast enough where you can reach from your data center of to a cloud and be able to use it infrastructure has become programmable. because it has become programmable, you get instant access to it. because of automation, you can get an order of managed great efficiency and getting infrastructure and applications and technology software to that is what is driving the club oud. talk about the cloud. it reminded us how important it cloud is. it's not the biggest part of your business, but how do you grow it and how are your growth expectations for oracle when it comes to the cloud area? thomas: we have had really good growth with it. weyou look at last month, processed 34 billion transactions a day. over 35 million users logged in everyday. we were up to 35,000 companies using our cloud. thead very strong growth
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last quarter in every segment of crm,loud applications, hr, platform -- all the areas of the business are growing well because of this great need that we have. we are introducing a ton of new capability over the next two months. there is lots of exciting product announcements at her big show next week. carol: who makes you nervous when you look out at the big environments and the new players out there? you saw the results from google and amazon and microsoft today. what company do you watch closely? thomas: we look at our own software because we have got a huge customer base. the amazing thing that we are seeing with the cloud is 70% of the people using our cloud had never purchased software from oracle before. that is enormously interesting for our customers. it is broadening our reach into both broader parts of our customer base, but also bring us lots of new customers. there is lots and lots of
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interest and our product line because of that. , on, tom. it is just me and corey. particularly the competitive databases, amazon in particular, making some really aggressive moves on the database front. that is always oracle strong suit. thomas: it is interesting. amazon has had this database. their new announcement was my sequel. it is meant available for 20 years. it is not like they wrote it. they took it and set it up on the cloud. the migration tool that they talk about, the big announcement that it they made, people have tried that for years and years. it is very hard to do it technically. cory: are you saying they can't do it? thomas: they can't do it in time will tell whether these guys are making up more pr or whether there is any reality to it. cory: i wonder also when you look at the other sources that they are offering, amazon in particular, i was really surprised that with all the price cuts of they have been announcing that they should 25%
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profitable to. does that give you an opportunity because they are making so much cash? thomas: our pricing is very, very competitive. today, people by the big insurance company. they are moving petabyte into our club. a dollar per year for a terabyte . cory: we're going to toss it back over to tv. thank you much. scarlet: that was cory johnson and carol massar of bloomberg radio. we are keeping our eye on the markets as well as what will be happening in terms of marijuana sales to and what that does for local states. how much revenue you can make off of that. scarlet: washington state is getting well already. alix: there's upon in here that i'm not working. we'll be back. ♪
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so i can rest easy. what. you don't have a desk bed? don't be left in the dark. get proactive alerts 24/7. comcast business. built for business. tand that's what we're doings to chat xfinity.rself, 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. 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. alix: from bloomberg world headquarters in new york, i'm
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alix steel. looket: let's get a first at the bloomberg first word. mark crumpton has more. mark: we begin with a stunning turn of events and the republican presidential race. ben carson now leave the field in iowa. bloombergngly of politics and joins me from washington with the latest. what is the cause of this, are we seeing the start of trump fatigue? it would appear that way, at least in iowa. down four points since august in the bloomberg politics des moines register poll. ben carson, up 10 points. his appeal, according to those that were pulled, is his life story, coming up as a poor kid in detroit, boston, pulling himself up by his own bootstraps, becoming a premier neurosurgeon.
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willingness to not only be an anti-politician but to say it as it is. one of the interesting pieces in the poll, his comments a couple w he wouldabout ho not support a muslim as a president, that was supported by 60% of those polled. something that you might think would be offputting, but in the republican primary, it is helping him. no sign in the early primary states that he is going anywhere anytime soon. heels of one the of the biggest fundraising months, pulling in $20 million over the course of the third quarter. mark: phil mattingly, thank you. meantime, donald trump is calling on super pac's supporting his candidacy to return all the cash they have collected. he is also demanding his opponents to do the same. he has said repeatedly that his campaign is self-funded but
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recent disclosures show and the bulk of his campaign have been covered by contributions. carl icahn says he will use his new super pac to help america and himself. a 100 $50o form million super pac to lobby congress. one of his main issues is cutting taxes on companies foreign earnings. he says if that happens, he would make money on his apple stake, but they would be held as well. paul ryan is on his way to becoming the next speaker of the house. gotten support from all the different factions of the republican party. the formal election is next week. the first two items on his agenda, congress has to raise the debt limit by november 3 or face possible default. plus, lawmakers have to pass a spending bill by december 11. if not, the federal government could shut down.
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french authorities have arisen. --l from that bus crash 243 french authorities have risen the official death toll from 43. buss crash to most of the passengers were elderly people on a day trip. that is a look at our first word news now. you can always find the latest on china cut interest rate this morning, the sixth in a year. the announcement comes ahead of next week's federal reserve meeting where janet yellen and company are expected to hold rates steady. they are now plowing cash into junk bond etf's. withet: let's check in eric balchunas, our etf specialist. tell us which he ts the money is
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heading into. jnk, the spider project and the hyg. moves, i equated to the fed being the cap, and they play when the mice are away. more triple c, more they see more flows, 2 billion. we have that on the terminal. you can see that inflow is massive. >> we are on pace for the biggest month ever. areells you that investors really just not concerned with a set of a kite this year. -- fed rate hike this year. isx: is this from demand or this because of issuance and there is more around? >> that is a big help, but we
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saw a lot of junk bonds come out over the summer. with no rate in hike, it comes back in at work speed. that is what we see over and over. as the etf's get bigger. a lot of people talk about the liquidity issue in these products. about 90% of the bonds in these etf's do not trade every day, so there is a liquidity mismatch. but if you think about some of the investors, the opportunity cost of not using them is something that is not discussed much. if youome math here, and had heeded the warnings of the liquidity issues and gone into intermediate-term treasury etf's, you could basically forgo about $6,000 a year in real income. there is a real dilemma with investors, but certainly, the
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hot money, they use these etf's to play the fed, they work around the fed with these products. scarlet: the fed is next week's news, and the consensus is it will be a dead meeting. the big news today was chinese cuttings rates at the central bank. two perfectly timed etf launches this week. sharee is a chinaa share international hedge product. they devalue their currency, so if they get into the qe game or anything like it, basically it shares.he yuan and a 60 stocks are dual listed on the hong kong exchange. for those 60, it picks the one that is cheaper, so you have your exposure, and you are playing that premium discount.
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you do not lose out on that. two intriguing products which are only a few days old. timing means a lot in etf land. scarlet: thank you, eric balchunas. , the yuan may be getting a blessing from the imf, but what does it mean for the currency? economist alan blinder weighs in. scarlet: marijuana legislation has washington state tax revenues skyrocketing. ♪
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scarlet: welcome back to the bloomberg market day. for the is time bloomberg business splash, a look at the biggest stories in news right now. more probably from the volkswagen diesel and emissions scandal. germany's repair for a 3.4 billion dollars tax reduction in never knew. several towns like closer to the automaker are halting projects like ice rinks and playgrounds due to the shortage. volkswagen has more than 270,000 employees across germany. scarlet: amazon's founder is climbing the ranks among the world richest pay or jeff bezos is now the third richest person. yesterday, amazon reported profits that beat estimates. microsoft's push into
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cloud computing is paying off. profit beat estimates. the ceo has been focused on selling cloud services and subscription-based products. cloud sales more than doubled from year ago. you can always get more business news at scarlet: let's go to the markets desk where julie hyman has the latest. checking out a sector that has been struggling today. this is even more notable in the face of the rally we are seeing overall in stocks. we are talking about retail. we hinted about this earlier. you can see the retail etf xrt is down by nearly 2% today. corporation came out with numbers earlier that disappointed investors. 13%, theres are down biggest decline in six and a half years.
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take a look at the decline in skechers. it was the first sales miss for skechers in two years. the company's shares have gained more than 60% year to date, so that is a sharp contrast from what we have seen from retail bond -- broadly. there is concern about higher inventories, especially among -leisure apparel and ath companies. there is some concern that maybe some of these companies have more inventory than they need. because there is so much competition and supply in the sector. i spoke to an analyst to pointed that out. , some of the other department stores that sell some of their products and mass-market retailers are doing poorly. walmart, target, nordstrom taking a hit, down more than 5%. talking about
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department stores, jcpenney falling sharply after the company said yesterday it would be cutting 300 jobs at its headquarters in plano, texas. finally, under armour, concerns about growth there. the company fell yesterday after it forecast revenue would grow 25%, which is nothing to sneeze at, but lower than analyst expectations. the stock is falling again today, taking the decline to 7%. notas downgraded at bb&t just on the sales forecast on the operating margins as well. pushed intoour has footwear, which is lower margin than clothing, some concern it may affect their margins. alix: retail not necessarily holding the stock market, but holding of the economy. some questions and concerns there. managerslot of fund have said they like consumer discretionary early in the year.
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and they are still holding it, not a good day. as the markets react to china's sixth interest rate cut this year, there are indications that the currency is about to receive a major endorsement. the imf has given them strong signals it will add the renminbi to its basket of reserve currencies. chinese officials have begun preparing statements to celebrate the decision. earlier today, princeton economist alan blinder discussed the fx and implications of an endorsement by the imf. is a bigt think it deal for anybody except for china. the chinese have been wanting as a merit badge, -- allen: a seal of approval for a long time. for them it's very important, but much more psychologically than economically. betty: it will not have a huge impact on the renminbi?
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there will be more demand for it now. alan: i do not make decisions, i think it is premature. the renminbi is not really convertible the way that other currencies are. we saw it moved a little a couple months ago, and under the right circumstances, you can convert it from one currency to another, but it is nothing like the dollar, euro, japanese yen. to me, it is kind of premature and much more of a political statement. i am notrse of that -- so sure that the chinese are about to open up the financial system, the way the japanese did a generation ago. betty: but they want to. you have doubts? alan: i have a lot of doubts. they want to get a merit badge, or sure. but the chinese leadership is
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not exactly deep believers in markets. they are moving in that direction, slowly. i don't know enough about chinese politics to say slowly but surely. but at the top, there is not really a deep believe in letting markets price things. let's talk about the interest rate cut again this morning by the chinese. is that a big deal for us, do you think it will have a big impact to us? it is a bigthink deal for china and the right thing to do, so happy to hear the news. the chinese economy could use a little boost. the chinese are not used to that , for the last 20 years, needing a boost to the economy, but it could now. it is good that it is happening. one of the things that seemed out of what to me, when the bad news came from china in august,
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was how much american markets reacted to that. this was really important to the health of the u.s. economy. it wasn't. it matters a little. but not a great deal. similarly, to the extent this boosted the chinese economy, it matters a little to us, but not a great deal. see any link between what happened with mario draghi yesterday saying there is more stimulus to come possibly, the chinese now lowering interest rates, do you see any connection here, and where does that put the fed? i would be surprised if there was any connection, except or the obvious one, which is both the chinese central bank and the ecb are seeing weak demand in their economies. both of them are reacting the way that we think and hope central banks react to weak
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demand. is that going to have an impact on the fed? they look kind of out of step with the rest, thinking of tightening while the others are easing. i don't think so. it should have some implications for the dollar, which will be negative for u.s. growth, a higher dollar, but again, i think those effects are there but not large. the bottom line is, i don't think this will affect the fence decisions much at all. scarlet: that was printed in professor alan blinder -- princeton repressor alan blinder. the reporting we have done here -- professor alan blinder. if there is a change, it would not be effective until the end of september. alix: the ripples go across all of europe. scarlet: $1 trillion of global
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reserves would be converted to chinese assets if the yuan ends of joining the sgr. alix: we spoke to stephen engle what this meanut for the long-term health of the currency. he says the government is propping up the yuan now in order to get included in the sgr. done, all bets are off. they don't need to get into the basket anymore, and that is when you could see the next shoe drop in the currency. course, the government, at this point, trying to stimulate the economy, weaken theto currency as they try to boost to this domestic demand driven economy. alix: we also have the pboc selling its first off share notes recently. notle your balance in yuan,
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dollars. scarlet: they have spent a lot of political capital to make sure they are in the best position to be included in the sgr. alix: great way to end the segment. washington state is getting high on tax revenue. marijuana sales are bringing in over $1 million. will other states follow suit? ♪
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scarlet: washington state was one of the first in the nation
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to legalize the sale and possession of marijuana in 2012. it expects to collect over $1 billion in marijuana related revenue over the next four years. alix: the new gun revenue could be a welcome and much huge windfall for cash-strapped states. joining us now is our reporter kate smith. what is the process of how states monetize the legalization of marijuana? the way they monetize it is by taxing it and licensing for the selling of it to the major driver is a taxation. in washington, they are charging a 37% sales. so this is a huge tax. you think tobacco is expensive. nowhere close to what it is for marijuana. scarlet: is that higher than other states where marijuana is legal? kate: that is an interesting
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point. 67 billion dollars in revenues and they really expected to exponentially grow. see, from 2016 to 2019, that is over a billion dollars. they are expecting this huge growth is because they are changing their tax structure. of course, marijuana is still illegal federally, so you don't have the tax code that would support an illegal business. so what you need to do from a states perspective is find ways to adjust your tax code to make it easier. if you think about a grower, they cannot deduct their employee wages or health care, so in washington, the only people that have to pay the tax are the realtors. only the consumer. it used to be each step along the way, for the grovers, packagers, and the sellers come all have to pay 29 set -- 25%. alix: on the retail lever, 37%.
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i can imagine is a big boon for washington. what about other states? when they consider it? this could be a big thing for states that are struggling. what is important to remember, among all states, they have to contract budgets hugely after the recession. only 27 states have come back to their prerecession levels for tax collection. in washington, annually they spend about $40 billion, so the revenue is not a game changer, but in states where they are really pennypinching, every bit counts when you need to build a bridge or a new road. anything is welcome. scarlet: you wonder if chicago would consider it. maybe they will be tors of central for marijuana. scarlet: what about sentiment toward marijuana, how has that shifted, how is it making easier
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for states to consider this? kate: the biggest way to make money off it is if people want it. we have this great chart that shows how people view it, if they think it should be legal, or illegal. this goes from 2000. you see that point where the lines cross over and that more people think it should be legal. i love this stat. woodstock happening in the late 1960's and only 12% of people thought it should be legal, so a big shift. alix: and pretty quickly. thank you, kate smith. nextet: coming up in the hour, lots of movement in china as the pboc cuts interest rates. toong signs for the yuan enter the sgr. what effect will this have on global markets? ♪
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in newit is 2:00 p.m. york, 2:00 a.m. in hong kong. welcome to the bloomberg market day.
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from bloomberg world headquarters in new york city, good afternoon, i am brendan greeley. the imf reportedly is ready to give its blessing to naming the yuan a reserve currency. chinese officials are happy. is it just a symbolic gesture? britain that's big on nuclear power, but will it get burned on its investment? finally delivers a profit that makes jeff bezos one of the richest men in america. let's head to the market desk where julie hyman has the latest. seeing a rally on the back of the chinese rate cut, on the back of earnings, and it's holding pretty steady right now. we had seen him give up some of its momentum early in the day but now seems to be resuming at the nasdn


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