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tv   Bloomberg Markets  Bloomberg  November 9, 2015 10:00am-11:31am EST

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betty: from bloomberg world headquarters in new york, good morning. i am betty liu. how to ever another lehman brothers crisis? the biggest fact may have to come up with more than $1 trillion around the world. and type dream -- the energy industry looks for other options now that president obama has rejected the controversial keystone pipeline. paysarren buffett's bet off. profits at berkshire hathaway a record thanks to a big gain on the stake in craft heinz. but what are some of the losers? we are half an hour into the trading session and we will head to the markets desk, where julie hyman has a look at where stocks are. we are kind of dropping you. seems as though we are pausing, if you will, because we had weeks of gains on the s&p
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500, and investors are taking a step back. that seems to be reflected in the drop we are seeing today across the board, sort of a reassessment of what we have been through, sort of our valuations -- our valuations right now worth it? take a look at the bloomberg terminal. price-earning ratios for the s&p 500 -- you can see decline we have had over the past couple years, trading at more than 18 times earnings. that is a little bit above the average, if you go back over the past 10 years, for example. now investors are taking a step back and there is a debate that has been going on about whether valuations are going to be able to expand at the same rate once the fed starts raising rates. the other thing that is affecting to venture today is that earnings season is coming to a close. we have had catalyzed stocks over the past few weeks is going away. this is the summary and snapshot of earnings on the s&p 500. 400 the seventh of the company's
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on the s&p -- 437 of the companies on the s&p have reported earnings. if you look at all the companies together, earnings down about 4.5%. both of those figures are better than estimated, but that is what we typically have here. again, winding down the earnings momentum. investors are looking for what is the next thing. that is nottrategy winding down his returning cash to shareholders. that is still going after? -- going to happen? julie: that is, according to goldman sachs. they say we will see companies returning cash to shareholders at a rate of 7%. dividends up by 7% as well. take a look here. this is the buyback index versus the old rate index. pretty much in a connect your. the conventional wisdom has been that the returning cash to shareholders, whether it is by fax or dividends, has been a successful strategy.
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if you look on average, however, you are not seeing a significant outperformance. here,are moving in tandem and on this point there has been this debate about whether that is a strategy that will continue to work. will it pay off in the semi that has in the past? goldman sachs saying it has. betty: if it ain't broke, don't fix it. vonnie quinn has more from our respects -- news desk. -- withwe start between a visit between president obama and israel's prime minister good benjamin netanyahu will ask for a dramatic increase in military aid during the meeting. it is the first face-to-face meeting in more than a year. israel gets $3 billion from the u.s. annually and wants that increases $5 billion a year within a decade.
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u.s. military leaders want to send more troops to europe on a rotating basis. "the wall street journal" says it would be a bit countering russian interference. british by minister david cameron promises his campaign to stay in your opinion if his demands are met. cameron says he is not satisfied with the status quo and is taking a hard-line stance. cameron says the u.k. could survive without being part of the eu. cycling, the status quo isn't good enough for britain. we need to fix these challenges, fix these problems. then we can throw ourselves headlong into keeping britain in a reformed europe. cameron will layout out his demands in a letter to the eu tomorrow. climate change could push 100 million people into extreme within 15
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years. this production coming from the .the world bank global warming will disrupt farming and spread diseases. a summit in paris will tackle the issue. you can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. i am vonnie quinn. betty: thank you so much, vonnie quinn at that is desperate today, the financial stability board, a group of finance ministers advice and backed by the g-20 released its plan to prevent bailouts of large international banks. that would include increasing the amount of money they would need to raise to avoid a lehman brothers-like failure. exactly the main point of this plan here. >> the main thing is if you plosser mind back to the lehman moment and the
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bailouts that followed, what was being bailed out with the bondholders. the guys who own the senior debt that funds the operations with international banks. if you make them lose money, you got a make depositors lose money. we will change that around. if bondholders can be forced to lose money without us having to bring in depositors, you guys can keep an eye on this. betty: ok, so they are basically asking is banks, what, to put bondsa certain amount of -- raises an amount of money to debt, putn that -- into equity, which can be used in a veiled stereo -- bailout scenario? john: you are funding the operations of this lender, you are a creditor, you have skin in the game, you keep an eye on
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these guys. you make sure he doesn't take undue risks. betty: right, ok, so how much are we talking about that these things have to raise -- banks have to raise? fsd put together quantitative impact studies, they call it. they say it is around $1.2 trillion, one trillion euros in total. a large part of that has got to come from china. it is a lot of money. it sounds like a lot of money, but if you think about it, the banks raise money on the bond market all the time. betty: all right, thank you so much could john glover in london for us on this huge deal, this plan now for banks to enforce u.s. expert. i want to bring in brendan greeley. he sat down on the topic of
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banks with the chair of the fdic. what did he have to say about this? brendan: he was of the banking conference last week and the from he has been banging a long time is equity capital. it is equity capital that is lost the first, the quickest, before anybody has to step in. and they laid out. about the hugeo growth in convertible bonds. this is debt that magically becomes equity in the event of a crisis. i brought this up with and this is what he said. the think you can write bond to where it is a convertible instrument. the problem is, or the issue is, let's say you are the it's is a signal to the market, all sorts of things. of will do a great deal effort to avoid that. one of the things that you have is pressure to move earnings up
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and serve those funds. that puts earnings pressure on the subsidiaries, sometimes at the most inopportune times. it is how it affects decision-making by management, how it affects behavior, and whether it is useful on an ongoing basis. once you fail and you are sorting things out, it does not matter if it is debt or equity. you take your losses against whatever is there. that is late for it to be helpful in the financial stability seen. brendan: i want to talk about dodd-frank. taruloay daniel said he would make the volcker rule unnecessary for banks with less than three feeling dollars in assets. how would you graduate the intensity of regulation among small and increasingly larger banks? thomas: wellthomas:, iowa proposal that says that if you are a simple institution, you
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should have far less migratory bird in. what i mean by "simpler," you don't trade, you can do some foreign-exchange in interest-rate swaps, but you don't trade, you don't do derivatives other than the hedge, and you show that by having no more than, say, $1 billion under books. if you do those things, you are a simple institution from you should not have to do the capital competitions. if you make a mortgage loan and you keep it on your books, it is qualified. you don't have to do all the machinations around that. there is relief on the appraisal front. i do it by how complex or the absence of complexity -- brendan: you're not saying size. thomas: no, i'm not a threshold advocate. $50 billion from $100 billion, tell me what it is, and do it by complexity of the organizations. brendan: what could you see the
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volcker role not being applicable to the banks the past -- thaticitor guest pass your simplistic test? --simplicity test? thomas: he does not apply to community banks now. trading, if you were to exempt them, you have a hedge fund -- a hedge fund owner that requires community banks, guess what he is time to do. -- tempted to do. size,is a nice source of liquidity, source of cash, why not use it? no my women. -- no, i wouldn't. brendan: this theme is simplicity, since the secret easy rules that the public and banks can understand. the argument i guess that is that this of the things are, the less efficient capital use.
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easy, comprehensive will, and safe. betty: that would be the ideal. much more ahead in the next half hour of bloomberg television. warren buffett is a living investment legend, but did you make a $2 billion mistake in ibm? dish said it lost 23,000 subscribers in the last quarter. can it fight the rush of netflix and cord cutting? we look at the politics began president obama's decision to veto the keystone pipeline. former energy adviser to george w. bush in the next hour. ♪
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good morning, and welcome back to "bloomberg markets." julie, i want to mention we look at the lows of the session right now. julie: we talked about before kind of pausing in the rally we have seen recently, but it does look like a little bit more than a pause when you see stocks falling, as betty was talking about. especially on a day when we have a lot of merger and acquisition activity. this is a $.4 billion here. weyerhaeuser also agreed to a $2.5 billion stock buyback after the completion of this deal. it will create a real estate investment trust that is the largest private owner of timberland in the united states. plum creek timber company rising on this deal. a takeoverot proposal, but we don't know who it was from. apparently got a letter of interest from someone for an
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acquisition. you can see each -- the shares are higher. it was a highflying producer during the 2000s. finally, steve cohen and oprah winfrey, not 2 names you would expect if you together, and yet steve:'s company is taking a stake in weight watchers, joining oprah winfrey in our ownership of the comity. she owns about 10%. look at my bloomberg terminal and you will see the opera effect on the shares. -- oprah effect on the shares. we are seeing the shares surge by more than 250%. to be made here. stock price got fatter -- [laughter] julie: you can do that. matt miller did it earlier. betty: got my attention with steve: and oprah winfrey. julie hyman at the markets desk.
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berkshire hathaway third-quarter profits doubled on friday, billion on the investment gain in kraft heinz. we knew that was going to happen. win for warrenig buffett, considering several of his largest holdings, including american express, walmart, and ibm are trading near their 52-week lows. joining me to discuss this is someone who covers warren buffett and berkshire hathaway for bloomberg news. you selected is by mentioning that kraft heinz was great to be a big gain. was it as you expected? >> it was right in line. the second quarter report guided us all that it was going to be a big number. it came in roughly at that amount. you know, really, that was the headline story, or the headline number for the earnings report. as you flagged, number of these investments have been struggling.
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interestingly, in the report that came out on friday, he said he was sticking by ibm, even though he has about $2 billion in paper losses on that state. walmart, as all, hasn't been great for him. neither has american express commuter. noah: the stock portfolio has been struggling. the question really is for berkshire shareholders, how much are they focused on that vs. operating companies? know, it is a collection of dozens of businesses that are doing all sorts of things, and every quarter you get a 40-page report , and he doesn't go into too much depth about what is going on at those businesses, but in the aggregate a seemed to be doing slightly better. betty: if we took kraft heinz out of the picture, would we be talking about these losses, these paper losses on these big holdings? or are there other areas we would be focused on? noah: you have to think about them.
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the stock portfolio is a substantial portion of the assets at berkshire hathaway. when it comes to ibm in particular, you are looking at a lot of capital that has been tied up in investment and hasn't gone that great so far. it is really a question of opportunity costs. warren buffett have been using that money for some thing else? that said, you have this group of operating companies did everything from railroads to geico, all sorts of stuff. in the aggregate, the balanced expectations for earnings from even the insurance has been struggling a little bit, other things made up for that. betty: is anyone talking about bnsf being a possible beneficiary now that obama has rejected the keystone pipeline? noah: certainly a possibility, something folks have been talking about for a while. from:ot a big tailwind oil.
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block andn top of the fields in north dakota. they have tracks in the northern part of the u.s. that could be hauling some of these oilsands from canada. the question really becomes how much of that oil is going to be taken out of the ground with oil prices where they are right now? the short-term benefit is harder to say but maybe over the long-term it is. betty: thank you so much. still ahead, we are talking about another billionaire. charlie ergen. why dish network can't stop subscribers from leaving? ♪
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betty: welcome back to
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"bloomberg markets." i am that you you. -- betty liu. dish network posted third-quarter earnings that missed wall street estimates. the company lost 23,000 tv customers in the quarter, and investors want to know what is charlie ergen going to do with the $50 billion in airwaves that he owns? joining us to break down the numbers is bloomberg media reporter jerry smith. dish is experiencing cord cutting, just like these other cable operators. lost videos, dish of scrubbers, and that is more and more the story of the pay-tv industry, as people are getting online services like netflix and hulu. betty: this is no different. i've a feeling it worse than others? gerry: the cable operators are doing a little better than the
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satellite operators are. doesn't have internet service it can provide like comcast or time warner cable. they are dependent on the video business, which is in decline. betty: is that it, that they are not internet providers? are so many more alternatives to watching tv online now, and the price of satellite or cable tv keeps going up and up. there is a lot of people saying i'm tired of paying $80, $90 a month for tv when i can piece together what i want to watch online through these different services. betty: much of it was made about sling tv. wasn't this his answer to netflix or hulu? gerry: it is about 20 channels for $20 a month. it was charlie ergen's way of saying that if my traditional pay-tv business is slowing, at least i have this way to help people who are cord cutters watch tv.
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it is hard to delhomme family subscribers it has right now. betty: they are not disclose numbers? gerry: they included with other video numbers but there are analysts who say that the growth already appears to be slowing and the service just came out in january. charlie ergen, the big question for him is he has a lot of these wireless airwaves. investors are wondering, what is he going to do with this? is he going to create his own wireless service? is he going to merge with someone like t-mobile? he has until early next year to decide what to do about that. betty: i think people want to see some sort of timeline. i think it is january -- does he have to file for an option? gerry: yes january as a deadline for deciding what he is going to do, whether to sell all these airways. that is what people are watching with charlie ergen i know. betty: speaking of another media
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mogul, john malone, someone we've not heard from much of the, was sent a letter by the sec over the time warner cable deal? gerry: the fcc has sent letters to various john: holdings. the question they want to know is a largelone stakeholder in charter. if they are able to merge with time warner cable, john malone also owns these tv networks like discovery -- he doesn't own them, but yes stakes in channels like -- he has stakes in channels like discovery and starz. betty: thank you so much could we were turn in a few minutes.
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betty: lightbank from bloomberg world headquarters in midtown
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manhattan, you are watching bloomberg television. i am betty liu. isch credit agency downgrading folks like into triple b plus -- downgrading folks i can to triple b plus. it is not junk but it was rated before. the outlook is negative. i want to bring in the julie hyman at the markets desk with the market reaction to this. the stock is down in german trade. julie: yet, but only taking a hit of half a percent. credit rating was downgraded by standard & poor's on april 12. as usual, the credit rating agencies rss import has only happened and making the determination based on that. not shocking given everything that has been happening with the company. it said it might cut the rating for the because of what happened with the cheating on the emissions test.
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now fitch is following suit and the shares are taking a hit in trading. betty: thank you so much, julie hyman at the markets desk. i want to continue with the first word news. vonnie quinn has more from the news desk. vonnie: thousands of british and russian tourists stranded in egypt are returning home today. the company stopped their service to egypt because of the crash nine days ago. the returning russians have carry-on bags because of security. the luggage is being return on cargo jets. russia is focusing on the threat of terror at home from supporters of islamic state. a bomb brought down a russian air -- speculation is growing that obama brought down the russian airliner -- that a bomb brought down the russian airliner in egypt. cd think tank has cut its global economic forecast. their positions as the world economy will grow 2.9% this
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year. the oecd cut its forecast for next year by three/10 of a percent. today's report says the outlook for emerging-market economies is a key source of uncertainty. the military backed ruling party signals it may be facing defeat in yesterday's election. opposition leader on sunk suurgy urged -- aung san kyi urges supporters to stay calm. it may be days or weeks before the results are official. these andt more on other stories from the new bloomberg.com. betty: thank you, vonnie quinn at the news desk. president obama announced the his rejecting the controversial keystone and some pipeline on friday. energy company's a looking for other options to transport oil from canada and through the united states.
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i want to bring in the founder of the rap unum group and former energy adviser to president george w. bush. what do you think could be something alternatives that these companies think about? if the pipeline is not going to get old, or to the energy theanies -- if thes pipeline is not going to get built, what did the energy, is due? i think the pipeline companies are working on options to bring west to the pacific and perhaps with less political opposition is out of the maritime provinces. but with over 170 million barrels -- billion barrels of oil, the second-largest reserves after saudi arabia, and the world needing hydrocarbon energy in the coming decade, it is only question of when and how the oil comes out of canada, not if. the decision is a slap in the face for canada and the company to work trying to link that
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heavy oil into the u.s. refinery. it is a good signal for venezuela, who has a lot of heavy crude. but long-term, the oil is coming out. it will come out in a less efficient way, costlier way, but it will come out. betty: out of the pipeline? bob: the 1000 barrel-a day capacity pipeline is possibly the easiest way to do it, right into the atlantic basin. with a little more political opposition because in the western part of canada there is more difficulty getting it to the pacific coast out into asia. betty: could you see this interfering with our relations with canada, bob? bob: i don't think so, because i think this is going to be a short-term issue. this is about president obama and the climate agenda. secretary clinton, which was secretary, was more favorably disposed to the pipeline. she rejected during a campaign.
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but i think it is broadly understood that not only do the mark and public support these kinds of infrastructure projects, but most political leaders do as well. we understand the importance of a close relationship with canada. i think this all goes away in 2017. practically plunging the country into recession because of these low prices. do you expect -- and my reading between the life that you think this keystone pipeline will be revived once a new president takes hold? bob: well, there won't be -- especially if her republican wins, there won't be the politicization of this pipeline. whether it is revived depends on the economics, not so much on washington. also, other options will be well advanced. canada is starting to turn away from the united states. political leadership and denver is starting to realize maybe we shouldn't rely on the united -- political leadership in canada is starting to realize maybe we
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shouldn't rely so much on the united states. i think it is a longshot to say for certain whether they will i'mve the pipeline, but pretty sure, especially if a republican is elected, that you will not see routine energy infrastructure politicized like it has been. betty: but is there even any political will anymore, bob, with prices at $50 a barrel? bob: right now it is a bit of a side issue because prices are so low. we are in a bust phase in the oil market right now and prices are going low. comes of boom. we are destroying investment in supply that we are going to need in 2017 and 2018. if the work gets on its feet economically, we will need that oil and we will be in a boom phase. we want to revisit whether we want to be close to canada in an energy sense. betty: bob, why continue to talk about oil?
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why not just take the money and energy literally and look at funding more alternative energy projects in the united states? bob: well, because, hydrocarbon energy is about 80% of the world's energy supply, and it is so for a good reason. dense,he most transportable, affordable, powerful form of energy we know. if you look at the forecast going forward, 20 years, 30 years, energy is going to increase by half. look at what it is doing to china and beijing and the pollution there. in cases of andean air pollution, you will see pollution laws like we have in the united states. governments will not accept pollution choking people to death. that is not mean you will get away from hydrocarbons. in these you will use less coal and more gas. believe me, look at anybody's
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forecast. they all see energy demand from 80% of it, coming from hydrocarbons -- coal, gas, and oil. we can and will make that less polluting. we did that in the united states in the last few decades. but the world will need that hydrocarbon energy one way or the other. betty: thank you so much for joining me. bob mcnally, founder and president of the rapid and group. cruise liners are being helped by low oil prices. far-reaching -- norwegian cruise lines is embarking on his neck chapter. we are live in miami on board norwegian's newest ship. ♪
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betty: welcome back. giantsindustry chronicle, while caribbean, and norwegian have made waves with innovations like simulated skydiving -- i have tried that! -- also, robot bartenders. norwegian's latest escapes miami with a rope course at sea. the also features a luxurious ship that offers guests access to a private sundeck and a 24-hour butler could this this enclave is called the cave in and that is the ceo getting pampered this morning. good to see you. >> good morning, betty, how are you? betty: good, good. i was looking at these photos of the escape.
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it sounds like an escape for any vacation go or. how important is this ship to ?he future of norwegian >> this ship is built for vacations. the freedom, the flexibility to do anything you want to do on a cruise vacation, or any vacation, for that matter. 16 restaurants, margaritaville, the only one at sea. the food is fantastic, and we have the largest and fastest aqua park at sea, a ropes course, the largest by far at sea. which we areplex, sitting in right now, just an incredible vessel, and we are so lucky to have her. betty: frank come i know you have been on board, literally, at this company only since january. you have outlined before a number of issues you wanted to tackle in the 11 months since.
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you mentioned that understanding ,as a big issue at norwegian the norwegian was understanding on its -- under-spending on its ships. tell me how you have been able to correct that on the escape and others. frank: can you repeat the question? i'm having trouble hearing you on the audio. betty: you mentioned that norwegian under-spent on its ships. what did you do to correct that? frank: well, looks come the reality is that vessels need to go into drydock twice every five years by law. we have 24 ships in our fleet. you do the math. seven or eight vessels will go into dry dock every year and that is a hell of an opportunity to make sure the ships are in tiptop condition. we are looking to attract vacationers who appreciate a quality lifestyle and a quality product, and you have to keep the ships in tiptop condition so .ou can demand tiptop prices
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norwegian cruise line, the friend for years has been the highest yielding of the major cruise line countries, and out with the acquisition of oceana and regent seven seas, we are by far the largest yielding. our model works. we don't want to be the bottom feeders. we want folks to pay a fair price for an incredible vacation on vessels like this, beautiful vessels. one of the necessary conditions is you have to have a great product. .hat starts with clean vessels i'm fastidious about having spotless ships, having ships into top condition so we can deliver the kind of incredible vacation product our guests want. arey: does that mean you rewriting where your ships go and also the itinerary on your ships, frank? frank: you know, i'm really having trouble listening, or hearing your question. i am so sorry. betty: no, no, it's ok, frank.
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it must be all that water around you. and all the entertainment that is going on. doesrank, the question was this mean you are rerouting -- you are going to new destinations with your ships and you are rewriting the itinerary for your ships? frank: betty, i wish i could hear you, but you are asking me something about ships, but i just can't make out, i'm sorry. the audio feed is not working as it should. i'm so sorry. come well right, frank are going to try to fix that and we will try to get back to you in a moment. frank del rio, ceo of norwegian cruise lines. time to get you caught up on the action all around the world. i want to start in as, where most asian stocks dropped with the strong u.s. payrolls report on friday. one big story out of the region, weakening trade data from china. trade numbers missing the
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mark by a mile. imports are also telling the story of anemic chinese demand. they plunged over 18% during all of this is adding to more pleasing to preserve data paints a more stable picture. that is five months of capital outflows exacerbated by the inck yuan devaluation august. this comes on efforts by the central bank to put a floor under the currency, but the test -- themes when the fed divergence is expected to prompt more chinese capitals to see high yields overseas. haidi lun, bloomberg, hong kong. betty: let's go to europe, where manus cranny sees the european stock rally as losing steam. ma investors are weighing the global economicnus growth and stimulus. manus? manus: has been downgraded to triple b plus or negative
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outlook by fitch could the debate is this, whether it is a slowdown in china whether you're a rate hike, which looks like it is penciled into the markets. volumes at 15% below your average days rally. we have the dax coming off .8%. continental, the tire maker, train maker, and auto-parts maker. ceo this money and credit dimension to the breaded work, talking about the slowdown in china. forecasted the sales three times this year. 94% discount. one of the partners in africa, selling assets for them and that reinforces the view that they have a good business there. betty: it looks like political risk is rising in portugal. take a look at this,
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betty. portuguese government bonds are spiking high. we have this training up at 18 basis points. it looks like the very, very left-wing portuguese socialist party is on the verge of forming a coalition. the right-wing government there, looks like the socialist and communist to be coming back to power in portugal and that may undo some of the deal they put in place to get the bailout money. on yields are rising and the good old euro, the dollar is a mighty strong beast. there you go. the lower range of the april levels. politics at play in europe. is it ever a dull day on the political scene in europe? betty: never. hard to keep up. thank you so much, manus cranny in london. nasdaq withe to the the latest, priceline plunging after earnings disappointed. right, abigail?
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abigail: the stock is often significantly after the company offered a fourth-quarter profit forecast that fell short of street estimates by 7%. increasing competition in the online travel space could be to blame from the likes of expedia, airbnb, but something that could be worth noting, the shares traded at a significant discount even with analysts modeling more than 20% growth on the bottom line for this year and expert is suggests that one guidance here -- investors could be attracted to the stock that is having his worst day in more than a year. turning to qualcomm, chairs for downgraded -- shares were buy.mitted to neutral from and analyst says that uncertainty around royalty collections in china are likely to persist and it is difficult to assign value to the licensing business. these shares are off 29% year to date. that's been a rough year for
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qualcomm. betty: thank you so much. much more ahead on bloomberg markets. donald trump took over "saturday night live" this weekend. did you watch it? omedicl look at his c chops and how that goes over with voters. and okcupid plans on going public it will company find love on wall street? benjamin netanyahu and president obama are meeting for the first time in over a year. we will look at the future of the u.s.-israel he relationship after the iran nuclear agreement. ♪
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betty: welcome back to bloomberg television. i am betty liu. donald trump will have some bragging rights. his appearance on "saturday
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night live" lifted the show to its best rating in four years. >> now that i am here, this is the best monologue in snl history. mr. trump: that is pretty good. ay yi yi, look at this. betty: it was saturday's most-watched primetime or late-night show on the broadcast live."s, "saturday night but did the donald bring in the laughs? i found it mildly funny. but does this help his candidacy? >> it does. candidates who show themselves to be solved at marketing, they can joke about themselves, this is good. every candidate should do this, every candidate tries to do this, going on the colbert show -- betty: and jimmy fallon. n: this is the pop-culture
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primary and donald trump went into that saturday night. betty: would you say president obama is the pioneer of this? and "betweencasts 2 ferns." steven: president obama took it off the mainstream could he went on, a central and these non-mainstream primary sorts of appearances. presidents were on "saturday night live" a long time ago. i remember dana carvey doing george h.w. bush -- betty: tina fey doing sarah palin. steven: politician showing they are not all serious, all the time, that they are real people, really helps. betty: we have another son by just because we like watching this. >> i brought you the check for the wall. mr. trump: this is far too much
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money. >> no, i insist. consider it an apology for downing you. nothing brings 2 countries together like a wall. mr trump: ♪ used to call me on the cell pheon ♪ betty: just can't unwatch that. onven: in some ways "saturday night live," he was doing an impression of himself. he has that bold personality and was trying to mock himself a little too much on "saturday night live." you felt like he was raining in a little bit instead of just being donald trump. betty: if you are his rival don't you think it is unfair that he gets all this time? steven: he has been getting free
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airtime this entire election season. i don't think this will tip the but i'm sure they are not happy about it. betty: they will have to perform tomorrow on the debate. much more in the next hour. on a serious note, president obama and israeli prime minister benjamin netanyahu are meeting in washington. we will bring you headlines from their historic meeting, the first between the two in a year. ♪
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betty: welcome to "bloomberg markets. "
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from new york, good morning. i am betty liu. benjamin netanyahu is at the white house. he is meeting with president obama for the first time since he tried to kill the nuclear deal with iran. jack dorsey kicks off a roadshow for the square ipo. raise $400 to million in its public offering. a countdown to the close. we will head to london to see how investors reacted to talks of government budget cuts in the u.k.. are 90 minutes into the training session. julie hyman has the latest. had thisave accelerating today.
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a pause after the six weeks rally that we have seen in the s&p 500 area last week we had shrugs of the idea that the fed may raise rates in december. janet yellen called it a possibility. off.w that shrugged today we are seeing a bit of a reassessment. the averages are trading lower. look at my bloomberg terminal. only one group is higher right now and that is utilities. discretionary stocks are getting the worst of it. all of them are down by 1%. energy seems to be following along with oil prices. that is trading at the lowest level in two weeks. this is after opec said the market will return to balance next year. prices are low enough that demand will start to come back. he is not saying it will happen until next year, that is why we
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are not seeing more of a lift. oil is not up by that much. it looks like enough to put pressure on those energy shares. betty: what about the individual movers? julie: it's not over yet. there is still room for companies to miss estimates. priceline it came out with a forecast that is below what analysts are looking at. you can see the shares are down by 9%. they are among the worst performers in the s&p 500. there is a lot of competition in the industry. that appears to be affecting priceline. that appears to be affecting priceline. we are looking at shares of juniper under performing. this is after cisco and ericsson signed a partnership. they are going to develop a network together. those shares are tanking as a result betty: thank you so much.
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let's check on news courtney donohoe has more. courtney: the president and the israeli prime minister our meeting. it is netanyahu's first meeting since he tried to scuttle the nuclear deal with iran. he is expected to ask for more on terry a. a police officer opened fire on american contractors. a south african was also killed. the police killed the attacker. david cameron promises he will campaign to stay in the european union. he is not satisfied with the status quo. he says the u.k. could survive without being part of the eu. >> we can fix these problems. that's with the negotiations are about. because her ourselves into keeping written in a reformed
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europe. no pretending that britain could survive outside the eu. of course we could. we are the fifth longest -- largest economy in the world. courtney: he will a out his demands tomorrow. the ruling party in miramar is signaling it may be facing defeat in the election. supporters are urged to stay call. 25%military is guaranteed in the parliament. it may be weeks before the official results. the wealthy have advantages in the organ transplant system, even over patients who are sicker. the well-to-do can afford the tests and travel patients require. that's a look at news.
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you can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. betty: thank you. year as youa slow know for tech ipos. there have been 70 ipos. 80 theber was closer to last two years. arere in the match group up. i want to bring in alex from san francisco. square first.ut this one is going on a roadshow. so much as been made about them being a valued less publicly than privately. alex: right now, they are on the roadshow. they are showing their stock at $11 a share, to see where
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investor interest would be. that brings them in at a $4.2 billion valuation. that is short of the $6 billion they were seeking last year. that's only about two thirds. that big of a haircut underscores this concern that's been floating around that these startups when they go public. valuations, private will they stand up when they hit public investors question mark per square, it seems like no. there are people in the valley wondering where these private valuations are. there might be some over exuberance. betty: there is a lot of hope. cannot match western mark they just filed for their ipo?
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a 12 toey want to raise $14 price range. match is part of iac. that is. diller's internet grab bag. the idea is to build up different industries like travel or home shopping. he spins off these companies from the broader conglomerate. that's what we see here. investors are paying attention. short on value. this company holds match.com and okcupid. this group.so in he has really carved out the dating world. chances are, you are dating online through one of their he diller's companies. going to doare they
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with the spinoff? : it gives them some flexibility. this is going to help them pay that down. this gives diller his cut. this is kind of what we have seen with the likes of the ebay complex. this gets match on their own. they can focus on building the dating world. that is a fragmented space. they have dozens of different dating sites that focus on things like senior citizens or religions. that's something we will probably continue to see. there are properties like princeton review in this group. they might take some time to work on that going forward. betty: where does that leave iac western mark --? majority coming
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from search. they are a competitor to youtube. video, people will watch videos online. they cater to high-end filmmakers. it seems like that has been the next company within their landscape that has kind of been working up the chain. their videolding up on demand capability. you are seeing different things in this hot media space. we can expect iac to pay more attention to it. betty: thank you so much. thank you so much. we have much more ahead of the next half hour of bloomberg targets. benjamin netanyahu visit the president. he tried to scuttle the u.s. nuclear deal with iran earlier this year. flights grounded
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because of a flight attendant strike. ♪
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betty: good morning and welcome back. it's time for bloomberg does this flash. these are the biggest stories. volkswagen will offer gift cards to those driving cars with falsified emissions. $500 out your for service and merchandise. they are planning to spend billions to resolve this.
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someoneill be led by who does not have a longtime history with the company. the chemical giant has given at green the job on a permanent basis. green has been running dupont since last month. has revenue that missed estimates. this is the second largest satellite tv provider. you can always get more business bloomberg.com. you are looking at retail. julie: retail is a big part of that. his following some commentary from analysts going into department stores. priceoup is cutting its
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targets for macy's and colds. cyclical and tourist traffic is weak. they are cautious going into reporting. macy's reports on wednesday. they are trading lower than 5%. as for the city analyst, he is looking at other reasons. this is the commentary we heard from ralph lauren about the department store channel. look at my bloomberg terminal. this is a comparable-store sales. actualht line are the numbers. the orange lines are the estimates are in we are looking at analysts estimating a drop of 7/10 of 1%. as you can see by these white
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cars, macy's has been missing on a regular basis. ongoingeen an situation. gross margins are expected to drop because of all of the mark downs macy's has been doing. let's look at some of these other retailers. we see michael cores and ralph lauren decline. those were up when they came out with earnings. as for other department stores, nordstrom and jcpenney, citibank is not changing estimates. those stocks are following along with their rivals. betty: thank you so much with retailers. let's turn back to politics. netanyahu is meeting with president obama at this hour. we are getting word about comments. he is calling on the need to
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lower the temperature on middle east tensions. this is not yahoos first visit since he tried to block the nuclear deal with iran. i want to bring in margaret to talk about what is it state. lower the need to temperature and lower tensions between the two. : the meeting is underway. the beginning of the meeting was the part we were permitted to say. both gentlemen were on their best behavior. they have to put the iran deal in the past. there are two goals as part of the trip. one is to increase u.s. military assistance to israel. that's already $3 billion year. they are looking to get as much as $4.5 billion a year. how frustrated the israelis are with the iran deal.
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all the details are not expected to be worked out. there will be a lot of discussion. the prime minister's goal is to repair relations with u.s. democrats. that includes the president, but also other democrats. -- therescribe to us have been a lot of low points between the prime minister and the president in these last few years. when thet point being prime minister addressed margaret: he came at speaker banners invitation without consulting the white house. the white house has not gotten over it yet. that has a lot to do with the frustrations with the prime minister and his desire to set a different tone on this trip. he's not going to pretend to be in favor of the iran deal. president obama said no secret
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how strongly they have disagreed on it. he called that a narrow issue. they agree on a keep an eye ran from destabilizing the region. the prime minister has more than he needs to accomplish than the white house does. president obama has prevailed in getting the iran deal done. it's important that american jews and u.s. democrats understand what israel's commitment is to working with the united states. looking forward, what is his relationship like with hillary clinton? margaret: we wanted to get a taste of that. the prime minister is staying away from having a lot of meetings with residential candidate. it was perceived that he was in
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favor of mitt romney over president obama. around, he seems to be staying out of the republican primary for a as well as the democratic contest. he is speaking at the center for american progress. it has ties to aggressive democrats and hillary clinton herself. they are sending a message there. betty: thank you so much. she is our white house correspondent. president obama is meeting with management netanyahu. we have some remarks from that meeting right now. that's my strong belief israel has the right and obligation to protect itself. i will discuss with the prime minister his thoughts on how we can lower the temperature
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between israel and palestine. how can we get back on a path towards peace. how can legitimate palestinian aspirations be met through a process as we make sure that israel is able to secure itself. betty: i want to bring in michael. he is from the brookings institution. he specializes in u.s. defense policy. you just heard the president talk about lowering the temperature. what does the u.s. need to do? think mr. netanyahu has the larger obligation there. he may have had some legitimate arguments with the iran deal. noted, those were some unusual steps in how he tried to intervene in american debate. some of the lyrical favoritism
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was displayed by him. president obama is already bending over backwards. i don't know if i agree with more military assistance to israel. the bigger issue is how do we preserve a two state peace process down the road when everyone knows it's not owing to happen with netanyahu and obama. there needs to be some ability to prevent the kinds of terrorist acts on the palestinian side or settlement building on the israeli side that would make a negotiation in a you are or to impossible. be carefullyeed to undertaken. they have to be in places where everyone knows israel would get that land or keep in the event of a two state settlement. those are the issues that need to be addressed. betty: how is that going to improve relations between the u.s. and an ally they need if they want to work toward a
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middle east policy. israel has to be part of that. how do they try to lay that groundwork for the next president? michael: i want to challenge the premise of the question. i don't know that smoothing relations is the top priority. i think our strategic interests require some degree of cooperation. i don't think that's in jeopardy. part of what needs to be focused on is how to we keep alive the possibility of a two state solution. we are already offering aid to israel. thatyahu is realizing president obama is still president. he is being polite and courteous in that regard. some of the obvious steps are happening. we have to focus on the fundamentals. that gets down to what israel
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can keep alive the possibility of a future two state solution. betty: thank you so much. we have more ♪ after this break. ♪
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betty: we are moments way from the launch of bloomberg markets. mark barton will join me from london for the next half hour as we go over the most important global news today. this is us being global. mark: i am revving up my engine. you will have to hold me down. the excitement is building. we are minutes away from this show. --?excited western mark the markets are in reverse.
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the markets are doing exactly the opposite. check out the chart. it's all about the u.s. jobs report on friday. it's all about that china data. that's why stocks are in red. we've got a lot of companies we are focusing on. that strike has canceled thousands of flights. they avoided collapse today. with tims our chat maren off. hit parity to the dollar this year? you know only goldman is saying so. this is the one i'm excited about. ♪
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betty: it is 11:30 a.m. here in new york. the markets are finishing the day in london and we want to
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bring on mark barton. mark: european starts a been dragged lower by the prospect of higher u.s. interest rates. the european close starts right now. betty: we are going to be taking you from new york to london to berlin in the next half hour. things for us. mark: i want to start with the german airline. they canceled 1000 flights. there is a strike by cabin crew. anddispute is cost-cutting retirement benefits. the shares of's -- have shrunk by 20% during analysts said those earnings

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