tv Whatd You Miss Bloomberg November 10, 2015 4:00pm-5:01pm EST
alix: and i'm alix steel. [bell ringing] alix: u.s. stocks closing mixed today. poised between gains and losses. the s&p has lost 10 points of the average price for the last 200 days before racing the decline. joe: but the question is "what'd you miss?" scarlet: we will dig into supply and demand dynamics. plus singles day. china's annual shopping bonanza is upon us. we break down the big number. alix: and the great big screen. joinsle ceo john legere us to discuss his company's new streaming service to get your been john. scarlet: -- to get your binge on. scarlet: but we begin in the
markets. kind of a ho-hum day. the dollar is on a terror. joe: today was just so blurry -- it seemed like we would have another selloff. and then there were the fears of the rate hike story -- alix: we did have the movement around the 200-day moving average for the s&p, which i love to look at. we were slightly around that, we did close above that level, but just barely. that will be a key level to watch. joe: a little bit of tension. alix: a little bit. the real action was in the currency market. the dollar here, versus the euro -- i converted , the yellowed it line. the white line is the premium since 2007.hat is
it is really the yield pushing those currencies higher. it is about that monetary policy, divergence expectation. go thearrows, it could other way. i want to look in the terminal because there is interesting action happening in portugal. remember a month ago there was an election and it was going to be really boring because the incumbent party was going to win? i guess that is kind of wrong. everybody thought it would be wrong. out the coalition of socialist and communist parties were able to put enough votes together to out stem -- oust him. of loosely there will be less eagerness to comply with austerity. here is a chart of portugal versus spanish stock. -- obviously there will be less eagerness to comply with austerity. scarlet: all right, for my deep,
eating uphave been retail for a well. this is the s&p department store index. kohl's.nordstrom's, it hast three months, fallen by 25%. we did get a little bit of a tick higher. this gives you an idea of sentiment as the companies report earnings later this week. joe: can you blow that up? i want to see what that looks like. scarlet: yeah. joe: out of curiosity. scarlet: there we go. joe: that's pretty ugly. scarlet: we are going all the way back to levels seen in late 2013, and before that 2007. a long ride, but they have certainly come down a long way. joe: pretty grim. scarlet: you can see these charts and more on twitter. bringfor more, i want to
in michael regan of bloomberg news. we have been talking about the malaise in the market today. in your reporting and talking to experts, what has been priced in? mike: what really struck me about today, and joe mentioned it before, we had this really , and i think it is the haover from the summer volatility that is going to be with us for a while. when you have a down day like market at you had the the close, 20-some point up to read it's good to see, -- 20-some points up. it's not back with a vengeance. this is a market that is vulnerable to shifts in momentum quickly. there's a possibility it rebounded a little too hard.
but at least we are not seeing those wild swings like we saw. maybe it kind of eases the worries a little bit from yesterday. out, itscarlet pointed is the end of earnings season, but there are retailers reporting later in the week. what is the big take away from earning season? what do they tell us? mike: i think not great. obviously what power the rally was real workhouses -- workhorses of stocks. amazon. apple obviously had a good season. facebook, apple, netflix, alphabet. part of the big story of why we rebounded like we did -- it would be more encouraging to see a broader based rally. i had not heard that yet --
mike: [laughter] scarlet: you make an interesting point though. alix: credit markets might see it differently. if you look inside the gloom -- the bloomberg terminal. i'm looking at the investment-grade index. yes, we have come down from that peak we hit in october. we are still relatively elevated. we are at the highest level since 2012. hidden where the weakness is in the market? mike: absolutely. everybody is worried about cracks in the credit market. people seem to be shifting more toward investment graded stocks and away from junk rated stocks. and typically the junk rated stocks have the higher multiples. paradigms to be a shift where people are going into the safety -- at least in the stock market. but if the spread start widening
out for either one, it will be a concern. that is why it was good to see treasury yields come back a little bit today. i think that helped ease the sentiment. scarlet: it's about time we saw a little bit of a snapback. mike regan, editor at large, thank you so much. t-mobile wants you to stream for free on your phone. they want you to binge on. introducing streaming from 24 sources. joining us now, t-mobile ceo john legere. for joining us. how much is this going to cost t-mobile? free streaming can't be cheap. there's a few things. on carrier 10 here in l.a., this is driven t-mobile to capture growth in the industry.
people wait for these events. what we did, we doubled the size of all of our data buckets. we announced family match, which allows all of the family to choose higher-speed data, get twice as much, and we announced binge on. we have optimized the data streams to your mobile device to .atch dvd quality video 24 companies to start -- netflix, hulu, hbo, espn, etc. if you join and often for binge will stream for free, not using your data pocket. so far the big question everyone is asking is, how are you doing this? i want it. i like us in that spot. it makes our competitors very nervous. alix: your subscription growth
has been crushing the competition here it but you have been able to sustain your shanking profit margin because you have been able to sign up so many people. profitain your shrinking margin because you've been able to sign up so many people. somewhere in your sentence you said "shrinking profit margin." our growth and profitability has been huge in our ebitda is up year-over-year. less than, but it is verizon though. john: well, you know why. because verizon are the biggest robbers in the world. they have $2.4 billion in the industry of overcharges. of lyingon worth charges. it's low hanging fruit. what we have been able to do is
optimize the video stream, and here is the real trick. .t is highly profitable for us ultimately when i meet with investors, you will see a very, highly profitable business, better utilization of our network. as i have used the slogan in an old commercial, it tastes great and it's less filling. it's both. it could be proprietary technology. i want people to think about, how do they do this? alix: if you look at your on this point,r it is lower than the competition, but because you are able to sign up so many subscribers, it's ok with you. what happens when you run out of free stuff? unc: first of all, what the arrier is about is solving
customer pain points. that is what we do. do you think we will really run out of room to solve pain points? here is the most important part. your questions are relative to verizon and at&t who are losing customers. they are in a heap of trouble. our profitability is growing beautifully, as is our cash flow. as is our revenue. this move will not only grow our customer base, but it will increase our profitability relative to these guys that are in trouble. and most of what we are able to do is because of the way they do things, not focused on customers and gouging customers. we reach an and do a good --urn, but focus on return focus on the customer. alix: you realize the point of my question, john. youe will not be things of
can do to get customers away from verizon when they are doing aims -- things to compete with you. they are not trying to compete with us on video. which isy, go 90, verizon's platform is free on t-mobile. the last 11 quarter since we movement,is uncarrier we have controlled 202% of the industry. we have controlled 150% of the growth -- in the last quarter, 126%. so, the time of the low hanging verizon for&t and us has a long lead way to go. i bet you there are at&t gotomers ready to take their 90 to binge on, and i bet you're one of them.
alix: i do like my "scandal." you have said that the industry is right for consolidation. what would you do to do a deal with someone? what is your game plan? isn: so, your question pertinent. what i have said many times is all of our content is going to the internet and all internet is going mobile. this is a great example of how mobile devices are being used for content from the internet. consolidation in the industry will happen amongst the players trying to participate. it will either be players like us trying to get bigger scale in mobile, or the cable industry and content providers moving and the industry we are in, things that are great for customers and leverage the grant of t-mobile and are good for customers we are interested in.
right now it's from a very strong position of strength. i think that is the most important position for our customers, employees, strong. a great answer to the question of who is the growth ground in the -- growth brand in the mobile industry, and that is us. alix: thank you very much, john from losoining us angeles. we will be right back on "what'd you miss?" ♪
congress. it bans moving detainees from guantanamo to the united states, something the president has been trying to do since he came into office. josh earnest says it does not change the president broke position. debate willpublican be the smallest. ben carson will lead a field of eight onto the stage in milwaukee, wisconsin. the sponsors narrowed the field based on recent polls. the main event starts at 9:00 eastern. a battle with for lower rated candidates will start at 7:00. the obama administration has asked the supreme court to weigh in on the president's plan to shield undocumented immigrants from deportation. this move comes a day after the federal appeals court refused to let the program again while 26 states are trying to stop it. the judges said that the states
would probably end up winning the lawsuit. the international olympic striptee is ready to metals of any russian athletes convicted of doping. the board agreed to the suspension of the former athletes association president. he was placed under investigation last week on charges of corruption related to cases.sian doping russian officials are fighting back against the charges, calling them offensive and groundless. and you can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. from the first were destined, i'm mark crumpton. back to you. -- from the first word desk, i mark crumpton. alix: with slowing global demand, the market is expected to remain off balance for a wild, so what does that mean for new oil prices. is the global energy
economist at credit suisse and joins us now. relatively pessimistic are,obal demand, and you like, demand is going to be killer. what do you see? jan: we see several things. wesee more consumers and used to. we see increasing evidence of consumers driving oil demand, so to speak, across a emerging markets, especially in china. one .8k this year, million barrels, next year, 1.5 million barrels. -- 1.8 million barrels. i heard 1000 barrels a day. [laughter] expectation on demand, what does that say about the global economy, so many people
who are negative on em's and china? you do not think they are all that bad? jan: in a nutshell. they are not all that bad. they are bad, sure. but they are not that bad. oil has proved to be the wrong worry in summer of 14 and 15, right? no, things are not that bad. howlet: when you look get asia and demand is shaping up, it looks like a steady lineup. we had a headline in the last 15 minutes that says that opec is production raising targets to take in account the new member, indonesia. opec'ss that change mandate? jan: i don't know what the acronym would look like -- it would have to be -- 800,000 barrels a day or so, with luck? what it really means is opec
willset a new target that then be royally exceeded for some time to go. alix: basically the target is what they are producing anyway? jan: there is a subplot supposedly that the indonesian minister might become the opec secretary-general. they have not been able to find a permanent one for some time. it's just one of those things that is somewhat opec about opec. alix: you think demand is going to be killer. do you think demand will be the story for the next five years or there will still be chronic oversupply? jan: there is still this old economy that bogs down the the airplanesrs, driving oil demand. i see that lasting for a number of years. i find it very difficult to slow oil demand down, especially with
low prices. alix: so, compared with -- jan: this is supply-side. and we do have too much oil spill. we don't care about supply. when we try to make everything not sower for longer -- much. you have to show me supply to move lower for longer. , you arejan stuart staying with us. we will talk about brazil as well. ♪
-- credit suites. the big stories recently is the rejection of keystone pipeline. what does this mean for canadian oil? whatever is going to be produced is still going to be produced. it will flow through another pipeline someplace. it's not going to buy itself put a damper on canadian oil production. it raise the cost? for those specific producers, how much less economical is production with the foreclosed possibility of these pipelines? jan: marginal. fractional because there are other pipelines this oil can flow on. so altogether -- joe: in dollars in revenue -- themselvesre setting up, right question mark -- right? scarlet: if you look at natural
gas, a lot of money managers are short nat gas. --this short position in a short position a bad trade? jan: basically we have put a sunflower on it. the market will say there will be no win for this winter. except that is not going to happen. we are going to get a winter. it will be a normal winter, so to speak -- gas prices will have to rebound. it's a very, very crowded trade, short natural gas, yes. brazil, we have petrobras shutting down fields. we see strikes. refineries going on strikes. trucks going on strikes. this supply disruption
not been factored into the market? it could be 1000 barrels a day. be significant. we do not know how significant. there are massive inventories the world over that are a little bit of a buffer. unions say one thing. petrobras is another thing. a third-party says another thing. how long will this last? how many things will it affect? we have no way of tellg. it looks like it will last because the demands on the table are not ask once this, why once this for money -- x wants this, y once this for money. it is policy. alix: so, keystone, no big deal, natural gas, way too short, and brazil, we don't know, tune in. thanks for joining us, jan stuart. scarlet: coming up, persistently low interest rates.
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scarlet: i'm scarlet fu. "what'd you miss?" let's get to mark crumpton. jimmyformer president carter says that recent tests have shown that he is responding well to recent treatment for cancer. there is no evidence of new tumors. carter is 91 years old. he announced doctors have found tumors on his brain. the international olympic theittee is asking that coaches and athletes cited in russian doping be disciplined.
the ioc says it will withdraw and relocate -- reallocate metals were appropriate. russians are fighting back, calling them a defenseless -- of offensive and groundless charges. a showdown comes less than two weeks after the center-right portuguese government was sworn in. these socialist governor antonio cost that is expected to become prime minister, supported by communists and the left bloc. critics fear a return to borrow and spend policies. chancellor who guided west germany for eight years during the cold war is dead. helmut schmidt was among the leaders who lead the round work for europe's common currency. he had today at his home in hamburg. home it schmidt was -- helmut 91 years old.
you can get more on these stories at the new bloomberg.com . scarlet: let's give you a quick recap on the u.s. markets close, and it will be really quick because there's not a lot to say. we did have a little bit of a bounce back from yesterday. six-dayes ended a slide. the dollar extended its rally. it is at a six-month high versus the euro. anx: interest rates are at historical around the world. what is the cost of these low rates? joe: joining us now, charles from london. you wrote a paper about why we may see in the not-too-distant future a downturn. why are interest rates going to
rise over time? ok, the key thing as to why rates have fallen where they are -- this is a report co-authored with three other primarily an -- in the world. this is driving the underlying low rates of interest. this is something that predates the financial crisis. an important aspect of this has been the relative size of the people doing the savings, typically the middle-aged, older , who have been saving. over the past 20 years, the difference between the middle-aged and the old has been going up. now that bulge of middle-aged people have started to pass into
retirement. to nobody is starting de-save. over a number of years, it should be quite strong, reversing the downward pressure on global real interest rates the past 20 years. scarlet: that is what should happen, but we have several decades of abnormally low interest rates. does that disrupt the normal pattern? does that affect the way that they will spend? charles: the key thing about this is we have literally just past the turning point where you have the maximum size of the .iddle-aged relative to the old now exactly how quickly a reversal will come through is difficult to know because it depends how quickly elderly people start running down their savings. people made was bone moving into
retirement a bit longer to accumulate more savings -- people may postpone moving into retirement. this is not a prediction about what will happen in the next year or two do. it is more about the forces over the next decade or two, unwinding the downward pressure we have seen over the past two decades. the financial crisis and then subsequently. look at theu economic effects of aging demographics, one country that stands out is japan where there is a continuing older workforce and interest rates there continue to grind lower, to the surprise of almost everyone in finance. why haven't we seen some of these demographic effects you are talking about if that is what is going to happen globally? seenes: we have actually that in japan. the report includes a chapter on japan.
one of the team is a japanese academic who is the vice minister -- who was the vice minister of finance in japan for a while. japan is an interesting case because the demographics have been running ahead of what is happening in the rest of the world. you do actually see household savings rates have been falling as the composition of the population is shifting. there have been factors moving the other direction to do with slowness, to do with problems in the banking system, structural issues, which have acted to work in the other direction in the japanese case. alix: staying in asia, what is the significance of china? it seems like we have seen a lot of money leaving china, wanting to invest in other kinds of assets. what has kept interest rates so low and how will that change
over the next two decades? charles: china has been a big art of this, in part being key source of savings, and in particular, the interaction with a relatively underdeveloped household safety net means that households have to do a lot of self-insurance for their old age. on top of that, you have higher official savings. of course, that has been skewed toward u.s. treasuries. that is less of a factor now than it was back in the early part of this millennium. but certainly, the accumulation of official reserves in u.s. treasuries has helped to drive real rates of interest down relative to the return of capital. that is another factor we point out in the report. there is not a single factor
driving safe real rates down. there's a number of things coming together, which include demographics, includes ships in in preference toward , laterally being added to by central banks, the bank of england where i used to as part of their easing, commercial banks increasing holdings, the relatively liquid assets. those portfolio shifts have been important in the post crisis period. scarlet: should china set up a 401(k) system of its own? charles: i certainly think there is a case for some development arrangements. there is a long way to go in developing appropriate household safety net arrangements, if you want to call them that.
charles, there is this other theory a lot of people have been pushing lately. to demographics, also related to interest rates, global workforce strengths, workers will have more bargaining power which will lead to higher inflation, higher rates. what do you think of that theory? we see isaiah on a lot of things. there is quite a lot in common with the paper that he wrote with his colleagues and our paper. -- we see eye to eye on a lot of things. antainly it is potentially important factor. a lot of people have focused on demographics and slowing population growth as a reason for why invest it might be weak
-- investment might be weak. one has to recognize, of course, if labor is scarce, that tends to drive up the price of labor and carries substitution away from labor into more capital. it is not at all clear how the slowing population growth factor feeds into investments at the end of the day. you've got factors going in both directions. scarlet: charles bean of the london school of economics, we will continue this conversation. you are sticking with us. we will be right back. ♪
trolley and which has approached apache about a combination according to sources familiar with the matter. -- anadarko petroleum. apache is working with goldman sachs on other options. alix: goldman sachs will not create a real estate investment mcdonald's will not create a real estate investment trust. mcdonald's announced a gain in u.s. sales after quarters of decline. and allergan is moving toward making brent saunders the ceo. he would take the helm of the faster growing business for brand-new drugs. the older unit would take drugs
to the end of their patent viability. and that is your bloomberg business flash. we are joined by charles bean from london. theme isher global rising inequality and an increasing concentration of wealth at higher ranks where there is less density to spend, more propensity to save. how much of this money being concentrated with people inclined to save more of it affect the outcome? ofrles: that could be part the story. the reason we do not think it is a major element is the timing does not look right. inequality has been rising .eally since the late 1970's yet the downward trend in global real interest rates really only starts in the late 1990's. somehow or another, you've got to explain how the rising inequality was not having an onlyt earlier and
recently. it may be a bit of the story. there are many things going on here. but just in terms of the timing, it does not look the most persuasive factor. to more's shift quickly immediate concerns. there is wide expectation the federal reserve well hike -- will hike interest rates before the bank of england. some argue that the bank of england has a better argument for hiking rates now. do you see this situation? what do you see as pressures on the boe? do you think it is possible for the boe to go before the fed? andles: certainly the rate the u.k. is pretty reasonable, has been for some time now, growing at around about the , 4.7%.historic average that is a quarterly rate.
not an annual rate. unemployment has been falling steadily. the naturaldabout rate of unemployment. the thing about the monetary thing committee -- the the monetary policy committee has been hoping for, and i was a member of that committee, we have been expecting productivity to pick up. which means the economy would grow more before you started putting capacity constraints. there are signs that productivity growth has picked up. a growth has picked up. a the moment there is not sign that wage growth is significantly outstripping productivity growth. so, there is no real concern about current underlying domestic inflation.
the real issue for the committee is how those pressures are going to develop further down the road . and of course monetary policy acts with a significant lag. so it's not correct pressures that matter. it's where the economy is going to be in a year or two. i'm not surprised that there is at least one member of the committee who has been voting for rate increases, really for some while now. and it would not altogether surprised me if one or two other members of the committee had chosen to join him. i'm sure the debate will be getting livelier. but getting back to the question you asked, the distinction between the u.s. and the u.k., the u.s. behaves much more like a closed economy. the u.k. trades a larger fraction of its gdp.
it's obviously more exposed to what is happening in the eurozone. potentially it may also be more exposed to any slowdown in china, because some of our banks have significant operations .here, standard chartered those risks may loom a little colleagues on the monetary policy committee than they were during the discussions on the fed board. scarlet: we talk about monetary policy. what about the fiscal side? lawmakers get wrong the most when they are creating ?iscal policy solutions what keeps us mired in a deflationary type of environment question mark charles: -- deflationary type of environment? that is quite a complex
question. it depends on the setting for a particular country. if the country starts off with lower debt levels, not too large a deficit, it obviously has more fiscal space to take action. that's not going to be true if a country is running a very large gdpic deficit or if it has levels of around 100% or more. so, that is a key issue. but then on top of that, there is the inevitable tendency when public spending needs to be fored in, it's easier to go public infrastructure, cut that first. whereas in practice that's probably not something you really want to cut. it has long-term costs. places to go for
phenomena. they'll last year reached $9 billion. when you compare it to black friday in the u.s., you can see the significance. it is four times the size of cyber monday. week spurike a golden spending. play an evene will more critical role. the growth for online retail is at least 40%. the numbers are buying low -- mind-boggling. it is an estimate there will be 7.1 million deliverymen and 200 airplanes deployed by partners to handle deliveries. according to one survey, customers are expected to spend on average 22% more than last year. alix: well. that's a lot of planes. i want to bring in bloomberg editor at large cory johnson.
may set another record, almost $14 billion. how has alibaba been able to make this marketing thing into a revenue hotspot? they certainly have caught the tiger by the tail. the growth of the economy, the growth of the middle class in china, the growth of mobile have all helped fuel this. they were very much at the right place in the right time. of and richards's anecdote about george bush. he was born on second base and thinks he hit a double. here is a quiz for you. how long is a day? alix: 24 hours. alibaba's case. it is a lengthy time of ordertaking -- alix: a big buildup. cory: they have been taking orders for days and days and
days. the notion that it is a day is kind of malarkey, as they say in china. not take the final exciting total of eight k's sales so seriously, because in the same quarter, they had the biggest singles day ever last year, they missed estimates. alix: to be fair, we do the same thing in the u.s. cory: they are going to record all of those sales on one day when they did not happen on one day. scarlet: the preliminary numbers for the first 90 minutes of singles day -- because it is already november 11 and china -- you mentioned that it may have been done in the weeks leading up to it. this is shopping online. we are not seeing people flood into stores like they do on black friday at walmart and stampeding everyone. this is all done online. cory: there are two interesting
high charts that show us how unique the situation is. if you look in the u.s., the percentage of people buying e-commerce items on mobile devices, it is something like 15% of e-commerce purchases are made on mobile in the u.s. 15%. i was going from memory. i've still got it. differentn entirely situation where nearly half of every e-commerce -- every e-commerce purchases made on mobile. scarlet: all right, cory johnson, great stuff, perspective on single day. ma will beway, jack onerviewed by emily chang wednesday. they will be speaking at -- guess what? the singles day festival. ♪
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