tv Bloomberg Markets Bloomberg November 17, 2015 12:00pm-2:01pm EST
scarlet: good afternoon. i'm scarlet fu. alix: more arrests made in connection with terror attacks. moore are not welcome to we will talk with the international rescue committee ceo who says refugees are not a threat. alix: we will talk with the cofounder and president of lift, john zimmer. i want to get you started with a snapshot. welcome back. alix: all the major averages now
up more than .5%. relatively small economic data this morning. consumer prices, having the best back-to-back monthly gain since the spring. month in three, although overall, industrial production did pull back. all those are pulling stocks. the move,ctors on consumer discretionary highs today. health care, telecom, financials, the biggest rates and utilities. the dollar strengthens today and that is one of the reasons. bout --s trading at a about a six year low. oil,was looking at the there were only three sessions for the month of november that
oil has risen. it pretty abysmal month so far. analysts are pointing out the snapback can be really fierce. on the upside, retailers like walmart. change.y a coming out the highs of the sessions, up 5% after profit beat estimates. the company under the ceo are turning things around particularly in the united states. it held up relatively well versus things like apparel or home depot out with earnings and analysts out with estimates.
we're seeing evidence analysts are willing to sell out their homes. , shares up's margins for and for present. the retailers have better than negotiated retail power to get that inventory. seasonuff is more in than they do typically. >> don't find anything in department stores like macy's -- and blooming dales. >> thanks so much. >> that happens every once in a while.
thank you. belgium is deploying up to 300 a threat level over the weekend. we now send it to jones. thank you so much for your time. >> so far, they have come up empty-handed. one of the bombers in paris who subsequently fled back to belgium. at this point, there are indications it might not be there anymore. they are still carrying out the
manhunt, especially in the region, the area here in brussels. we have twot, arrests, people tied to the attacks in paris. the two individuals were charged yesterday. not beenntity had disclosed. they all have connections to this area in brussels. that things are still tense in paris and throughout france. can you give a sense of what it is like an belgium can sintering authorities say some of the suspect came from there? >> there is a sense of hear.ding if you will it is coupled with the spirit presenceeally feel the of military people on the street when you're walking around, especially in the eu institutions here. is a combination of people, you know, is it really safe here? we know this has been the center
of some of the extremist activity event though the attacks have not taken place here. ofk in january, in the wake the charlie hebdo attacks, they did foil a plot in eastern belgium and we have that on our minds as well. we have about 15 seconds to it are hearing a soccer match has been canceled. right.that is tonight, belgium plays spain because of these concert -- security concerns, they had to cancel the match. we were really looking forward to it. mark: bloomberg's bureau chief in brussels and belgium. thank you. that is a look at our first news alerts right now and more on these and other breaking stories 24 hours a day at bloomberg.com for diane mark crumpton. alex and scarlet, back to you. alix: we turn our focus to the federal reserve and malik --
monetary policy. 68%. not everybody is convinced and that is really the bigger question in the market. joining us now with more, the head of global interest rate strategy at td securities. thank you for being here. a target forve lift off in december. when you look for what the pace will be, you're looking at something specific, the difference between a three-month euro dollar consumer contract from march of 2016 in march of 2017, we have a chart that is a little confusing. explain. think the contract is an way to tease out exact market pricing. you look at the 10 year rate, that is the average rate between now and two years. if you look at the rate, you are looking at the exact three-month rate in march of 2016.
the exact rate in march of 2017. that is picking up your expectation of the spread. the spread is a little bit above you itmarket is telling would only be 60 days higher between march of 2016 and march of 2017. if you think of the basis we all get gradual will be less than 2004. they rent every meeting. 200 basis points a year. pricing and basis points, that is what i disagree with. does notrgue the fed want to get off for the sake of hiding. donewant to get a few
they canhe only way get it done is 21 basis points. you can evaluate the data and say how is the economy anduating how the economy financial positions, you need to it done. we are living in an uncertain world. we see it kind of picking up the not extremely robust. i can see why the market is pessimistic. the fed will at least want to get a few done. one perspective that has become conventional wisdom is that liquidity is a huge problem. what are they missing? >> regulators look at average liquidity.
if you look at a lot of these measures, look at trading volume, they do not signal a problem that i have argued and i think a few people are arguing is not necessarily liquidated -- liquidity average that is the problem. unfortunately, certain days you need liquidity much more. october 15, a coveted sample of the basis points over 10 minutes, which should not happen to the u.s. treasury market. we have noticed they have been 16% of these nfc and more of a tenure. if that were true, you should have seen volatility. he really do not trade -- >> i should point out this is another anomaly. it is actually cheaper now to swap from the fixed income rate
to a floating fixed, for example, versus the treasury. are we really pricing in the sovereign risk in the market where it is better to trade with banks than in the u.s. market? >> i think what it is telling you is swap spreads incorporate the cost of about she. treasuries holding has gone up over the last two or three years as banks are trying to incorporate a cost of balance sheets. all of them are cheapening and it does not have the costs. that is what they are highlighting. this ands that between corporate spirit you are seeing it in the treasury market, which is odd. the u.s. sovereign has been shown changes. no changes in our projection. i do not think it is credit
worthiness. cheapening, it is expensive to hold. scarlet: all right. thank you so much for joining us today. coming up, france is president security as aland announces the country is on a war against isis. we will take you to the latest in the investigation. scarlet: online shoppers will be able to score major cyber deals. we will take you live to the los angeles auto show where we hear from the president and cofounder of left that just teamed up with justin bieber. we are believers. >> i do not know what you're talking about. >> justin bieber fans. ♪
alix: welcome back. scarlet: let's head to the market desk where julie hyman has a check on individual movers starting with retailers. we looked at good retails and this is the bad part of the equation. after it saidrs it was buying a pizza chain. today, the stock is down about the same amount as earlier. after it came out with earnings after the close that missed estimates, revenue missing estimates as well. comparable sales up by 1%. weeku look at the one chart, that began last week when
we got those department store numbers, causing concern for demand of apparel. another one down with the earnings. we also got earnings from dick's sporting goods that missed estimates. the company cut its forecast for the next year. demand was strong during the back-to-school shopping season and then started to fall off and blamed warmer weather among other reasons. other sporting goods related companies are also down and under armour is taking a hit. lululemon also down. take a quick look at my bloomberg terminal. this was compiled by bloomberg intelligence. the downward volume change for supporting good stores modify my spirit in october, the first declined to february. obviously, members reflecting that and there was concern about what other sports retailers may say as well. scarlet's love for leisure aside, it seems as though people are buying cold-weather merchandise and the demand is
lower. alix: the terror attacks in paris ignited a global debate on how western countries should respond. scarlet: earlier today on bloomberg , neil ferguson financialed discussed and political and locations of reacting to islamic extremism in france. >> the major concern is we end up delivering what the terrorists want. which is, we end up slowing down economies by overreacting and the next thing we know, we trigger a series of tipping points and we have got to be careful about how we respond to the crisis. if you're so worried about any event, what will happen? gdp and trade classes. the french are worse off. doingone is proposing that to what we're seeing is a
crackdown on the thousands of sympathizers and active supporters of the islamic state inside france. let's face it, they do not always get their future rights. the middle crisis in east and right next-door to north north africa, right next door to europe. a massive influx of people in the millions, mostly heading for northern europe. some of them are a small minority. i will be terrorist sympathizers, and the emergence of a fifth column over generations within europe of supporters of extremist groups. >> this is the critical point. difference will on become -- on friday, didk, they become more anglo saxton with this terror event? >> i would like to see the united states get a little more french. the french have been eager to intervene effectively against the islamic state. it has been britain and the united states that have been holding back.
the french were highly effective against al qaeda. the french seems to have the right attitude, which is that you have to smack to these people. thefrench have been slow on uptake and they need to get tougher on domestic issues. -- barry sterned blamed the president. legitimate to say in his presidency, barack obama vanmade no bigger mistake in syria. he held back 2011 and 2013. he turned it into a pink dotted line and handed over to the russians. less kicked them out of the reach and in the 1970's. it has been the biggest mistake of his presidency and has cost more human life than bush's intervention in iraq. we go live to paris
where brendan greeley is on site. the french president says france is in a war. in a paris for a few days. does france feel like a war zone? like queensels after september 11. everyone gets a little scared when they hear a police siren. life goes on. there is acommuting plan for courage. people will sit defiantly in cafes. what has happened is the end of indifference. the french can no longer afford to be indifference -- in different about the threat. >> what does it wind up doing for keeping things normal for the markets? what did you make of that point?
>> we have to look at a scenario slightly less dramatic. i do not see the french shutting the economy. europe stops allowing the free movement of goods. one thing is to have the free movement of capital, which ultimately is good for an economy. what we are looking at is the possibility of the border control. one thing the european union has quietly done well for a long time, that is much bigger concern, particularly in the east. scarlet: we will speak with david later in the hour on the situation that has gotten worse. big, amazon is betting
scarlet: welcome back. breaking news. in talks to acquire airgas. airgas distributes industrial medical and specialty gases and related equipment. that company having a market cap of about $8 billion. scarlet: if you come inside the bloomberg terminal, you can see how shares of airgas have traded in new york, they are up about six -- 6.2%. a big leg up here at the stock was actually halted for trading and just reopened to now. alix: more details when we get them. , amazons zeroing in
, metropolitan areas home to 75 million people. will the expansion payoff? joining us now is reed stevenson from san francisco. will this payoff. people could not get their packages even if they got them delivered a week he for? >> amazon invested a lot of money shoring up its delivery system. this year, they are taking that a step further by introducing same-day deliveries. this is a challenge to target and macy's and other brick-and-mortar retailers. they want to give the immediacy of shopping through the online experience. that will be an interesting dynamic in the holiday season. >> is this a threat to brick-and-mortar? >> i do not think there is any
danger of people choosing to shop on amazon instead of going to the store. there will always be a reason to track over there and do last-minute shopping. it is an indication of where amazon wants to go as it tries to eat away at the market share of the physical retailers. >> how pricey is it? >> it is expensive and it costs about four times as much for same-day sales. we will see how the numbers shake out when we see earnings for the last three months in january. scarlet: thank you very much for joining us from san francisco. alix: up next, the robin hood investor conference where he talks about his latest call right after the break. ♪
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sales -- there are no companies named in the advisory. alix: but we do have companies moving on expectation of what those companies might be. this is green line you are looking at -- this green line you are at is gnc and then vitamin shoppe -- the orange line is herbal life. broke, see as the news all of those stocks took a big leg lower. over to let's head first word news with mark crumpton. mark: the french president will travel to washington and moscow in an effort to build up a coalition against islamic state. he is scheduled to hold talks with president obama on november 24 and then will meet with the russian president on november 26. speaking to parliament yesterday, he said a global effort was needed to defeat what he called the biggest terrorist factory the world has ever known.
he met with that u.s. secretary of state in paris after their talks, secretary kerry said even in the tragic aftermath of friday deadly attacks, progress is being made. have liberated significant communities, communities in syria, three quarters of the border in northern syria is now under control and we will be working on the last portion. so there is a clear strategy in step, the momentum will pick up. mark: two suspects have been charged in a global manhunt is underway centered in brussels for a another man thought to be one of the masterminds behind the attacks. a battle over funding for syrian refugees could lead to the next of the u.s.
government. alabama republican senator jeff sessions wants lawmakers to add language to the next government spending bill that would block plans to take in 10,000 syrian refugees. 25 republican governors have promised to keep syrian refugees out of their states. russian president vladimir putin says he is confident that a bomb brought down the passenger plane over egypt last month. a $50 millionring reward for information leading to the capture of the person or persons behind the crash. a look at our first word news. you can get more on these and other breaking stories at the new bloomberg.com. i'm mark crumpton. back to you. the top investors in the world are announcing their big bets at the robin hood investor conference. andloeb took the stage
spoke about big pharma. let's head over to stephanie ruhle who is at the conference. what was your take away? stephanie: the robin hood investor conference, while it is off the record, when a guy like speaks, people get to hear. he led with a joke -- people in the market, especially in tech investing have spent so much money because of the fear of missing out. what is it were valued at? i have to get in there. dan says we are starting to see a crack in terms of tech valuations. fohos turned from fomo to -- fear of getting hosed. when a company like uber needs to clear $5 billion, how is it going to make money? saying the bubble is bursting, but we are seeing a crack. i love that.
last year, you spoke about -- he spoke about amgen. did he given up eight on that? dan loeb he did. amgen, he says let's stay the course. while the stock is up 8%, they have for drugs that have come to market. we are just seeing signs of these drugs really getting popular, but he thinks they have a lot more room to grow. scarlet: what did he say about allergan? stephanie: he was very complimentary of the ceo in terms of being able to operate well and optimize. in $40 billion in cash with the generics deal. can also do that he it through acquisitions and we talked about the pfizer deal. is so hot in the
space, what did he say? stephanie: pfizer makes a lot of sense. he likes the deal and thinks it could make the company be worth $375 a share. through,al does not go he sees even better values. he thinks allergan and amgen together would put the shares worth $450. so if the deal did not go through with pfizer, you would see the stocks go down. up aroundit would end $2.80 a share and as when a fundamental investors would step in and he thinks it could get as high as 450 if you saw the merger. -- he did not like valiant it looks cheaper right now but if you think about it right now, the allergen ceo used to run bausch & lomb, but he says no way -- maybe valiant has good assets but the hair on that
company right now is so nasty he would not touch it. scarlet: that is one colorful way of putting it. about malaystalk in the sector in relation to other companies putting a pall over all the companies? with talk of all of mergers, with valeant, he sees big issues. as it relates to allergan, when allergan had a chance to look at them, they ran to activists. so there's a ton of news and a ton of noise in that space but dan feels good about allergan as well as amgen.
you have been at robin hood for the last two days. anyone else on your to do list in terms of speaking with? stephanie: i'm actually about to get on the stage with the one and only bill ackman. breaking newshe on herbal life -- we are going to have to dig a with herbalife because this is one of his biggest shorts. he went short on herbal life two years ago and at robin hood two years ago, he came out swinging saying he would be willing to take the stock to zero. you know what else i want to talk about is his style. why is it every investment he's becomes the dehe facto spokesman for that company? you have to wonder if there is some level of anchor bias. deep with jcpenney
and simply got out of the trade. we cannot say things are not working for bill. he was the best-performing hedge manager of 2014. if you look at the kinds of things he has gone through, it how choppy and volatile the markets are. past two years have been higher energy and more positive. the super bowl epicenter of hedge fund managers who have had a very difficult 2015 and it doesn't look like it's getting any easier. scarlet: stephanie ruhle reporting live from the robin hood conference. fly on thet to be a wall for bill ackman's conversation. obama up, president arrives in manila today where he is meeting with 21 pacific rim economies. trade in china is expected to be covered. scarlet: david miliband and what he thinks of the current refugee situation after the french
in a row, showing prices are rising at a rate getting closer to the fed's target. investors got good news after the stock was crushed last month, posting third-quarter profit that was better than expected. the low end ofed its annual forecast, say next year's earnings would fall by as much as 12%, sending the stock falling by the most in years. scarlet: home depot posting that topped analyst estimates. higher real estate prices are encouraging many to spend more money on their homes. same-store sales were up 5%. you can always get more details on that another business stories at bloomberg.com. alix: let's look at what's going on around the globe. abigail doolittle has the latest from the nasdaq.
abigail. abigail: scherzer off today after barclays downgraded the stock to an underweight from equal weight. one analyst said the growth is unsustainable and the shortfall and enterprise editions could impact 2016 results more than expected and sees growth slowing in 2016 and 2017 on a year-over-year basis, suggesting essene a health could slide from current levels, in light of the short interest on this stock. another stock we have been watching trade down today is green mountain. is in the wake of a more than 20% decline after otr capital cut its rating on a sales slump and decelerating trends. the company reports its fiscal fourth-quarter tomorrow after the bell. are wondering what is
the expected year-over-year decline in earnings and sales. the shares are off nearly 70% year to date. for reporting you live from the nasdaq. let's take a look at the action are around the globe. the european close, stocks turn in their best rally in six weeks and the euro declined to a seven-month low on speculation the ecb will add to monetary stimulus. >> when an ecb board member says they will lose faith in the projection for reviving inflation, is that a member telling us to get ready for more stimulus in december? guest: i think so. the comments on bloomberg were very important. there's this dangerous cocktail
you just referred to and while there is an acknowledgment that there's an economic recovery going on there, there are downside risks to that. more important was the focus on inflation and the deterioration in expectations and oil prices making a new low will weigh on that. it's going to be difficult for all the major economies, so getting it to inflation targets is important. you are questioning whether it's the best approach for the eurozone's disparate members. what is wrong here? this is a long-running debate as to whether the union is optimal or whether the one size fits all rate is for countries like germany and greece. sticking with the greek debt
crisis, there has been a growing division between creditors and debtors and that levels are higher. it is much more difficult for the debt countries to get their way out of the mess and it is a real problem. dla auto show is in full gear right now. torlet: and we are going talk to a major disruptor in that space. i joins us from the floor and -- the floor of the auto show. emily: i want to dig into some of the new numbers. you're operating at a $1 billion run rate in san francisco. how did you come up with that number? john: in october, we hit a billion-dollar run rate, both in
san francisco and a newer market -- those are the examples we provided today. emily: how do you come up with that number? john: there's third-party data on credit cards and e-mails that allow us to get the market share number. them to predict how many rides they are doing and it's so accurate that we were able to trust the data. emily: carl icahn took a big stake this year. what is your relationship like? john: it is good. i saw him last week. to approachdea them. they had been a disciplined investor and make good noise about the truth behind our business, which is what we want to tell people about today, the 40% share in san francisco. it's a massive opportunity and we are taking share because of it.
i just came back from china and i was talking to uber drivers. yourondering how partnership is going so far and what is the most important part of that partnership for you guys? john: it's going really well. before i saw carl, i was in beijing and in a few months, we are launching what we call global coverage where you can take your list app, take a ride your lyft apptake and go to beijing. those 8 million travelers the year will be able to use our platform. anywhere or you have more traction than uber? these are the two cities
alix: welcome back to bloomberg markets. in the wake of the paris attacks, over 20 governors have announced their opposition to admitting syrian refugees into the u.s.. speaker of the house paul ryan cause -- called for a positive entry to america. joining us now is david miliband who believes these refugees are not a threat to our nation's security and it is the duty of the u.s. to help the people in need.
reasoning,aul ryan's that safety needs to be assured before letting them into the u.s. can you lay out a policy that counters that view? mr. miliband: safety is the first consideration, but refugee resettlement has been a success story for america because there are processes in place that involve the fbi, department of homeland security and over 12 different government agencies. the reason this country has such an incredible history of refugees coming here and becoming business and political leaders of this country speaks not just to the humanity of this country but the competence and running effective security systems. the suggestion that we can substitute the word terrorist for refugee is quite wrong. the truth is that there are effective systems in place and america is insulated by the
benefit of geography from the extra american portions in the middle east and it would be a terrible sadness if one of the consequences of the paris attacks was for america to close down. this is a country that can show the world how to bring in refugees. alix: if you look at what we have seen in terms of border closures already, and slovenia and hungary, literally building a fence, how do you reach out to leaders? choicemiliband: the between europe is between properly regulated and screened refugee -- refugee resettlement. the challenge is to make sure the proper systems are in place. the border free travel has been a big benefit for business but that does not bar effective checks on people as they move around europe. that needs to be done properly. we are working in greece where literally 210,000 refugees
arrived last month and we are trying to give them basic water and sanitation. you have seen the scenes of people dying crossing the aegean. europe needs compassion, but also needs competence. scarlet: secretary of state john kerry says there can be a cease-fire in syria in weeks. is it possible that resolution is imminent? : obviously, john kerry knows better than i because he's on the inside track. , you are the wars stop going to have people fleeing violence. this year, more people are fleeing violence around the world than ever before. we should hope john kerry is right but a lot of people are on the track at the moment and the president here has said 10,000 people should be allowed from syria, of course with the proper security arrangements. you make it sound simple
-- all you need is competent people doing the right thing, but it is obviously hard to do that. is it a failure of prime or's and presidents, of parliaments and congress? miliband: there is a failure in europe. europe has had its attention on the euro crisis and the intervention in ukraine. despite thecrisis, fact there were hundreds of thousands coming in previous years did not get the attention until this summer and europe is playing catch-up and paying the price right now. has intensified airstrikes in syria and the u.k. is looking to potentially do that. what would be the impact of that on the refugee crisis? miliband: it's a great question because the refugees are fleeing a sought on one hand and isis on the other and now airstrikes. we can look at the way the strikes are done with respect to the so-called safe zones that
are talked about. the imperative is to protect civilians inside syria. there are 400 50,000 cut off from any aid at all and 7.5 million in syria in need of humanitarian aid. we are running health the next inside syria and the desperately need a cease-fire. short of that, they need more effective protection for civilians. much, davidyou so miliband. scarlet: we have much more ahead on the bloomberg markets. republican presidential hopeful jeb bush will be joining "with all due respect" with mark halperin and john heilemann. ♪
from bloomberg world headquarters in new york, i'm scarlet fu. alix: i'm alix steel. here is what we are watching this hour. russia joins france in striking islamic state. scarlet: walmart needs earnings estimates. how to buck the trend? has a newvaleant problem -- women are not into its libido drug. we have come down a little from highs of the session, the second day of the rally spurred by the economic data we got this morning with factory orders up for the first time. in addition to retail earnings from walmart and some others, if
you look at the bloomberg terminal, consumer discretionary is the best performing group on the back of those numbers. telecom and health care faring well and utilities the worst-performing group because we have selling in the treasury market. tend to moves lower on those kinds of headlines. we do have some breaking news moving stocks. julie: the department of justice says at 3:30 today that it will criminalet supplement and civil actions. it is not naming the companies involved but it says they relate to dietary supplement sales and unlawful ads. so stocks are falling on speculation about who it could be. gnc holdings is falling. a few weeks ago, oregon sued the company saying it had unlabeled drugs and some of its supplements.
concernse falling on it will be named, vitamin shoppe, falling with gnc, down about 6.5%. at some point, they will be sanctioned by the government gone through. talks to make the world's biggest supplier of industrial gas. a representative for each of the companies did not respond to calls. you can see airgas shares surging on those headlines. onx: now we want to check in the bloomberg first word news with mark crumpton. say theynch officials are seeking a second fugitive directly involved in the paris terror attacks. seven attackers died friday night. three are on the national stadium and three inside a concert venue and one at a
nearby restaurant. french and belgium authorities have issued an arrest work for one person whose brother was among the attackers. brendan greeley is in paris and joins us live. this state of emergency that has been imposed -- president to changes seeking some of the laws involving a state of emergency. how would that impact the search right now? what you have now is a state of emergency that allows searches without a warrant, without approval by a judge. he's looking to do something proposed by the farther right government of nicolas sarkozy, which was to combine what they call a state of siege, where there is military control, and a state of emergency. basically expanded hours to fight what they call a new kind of war. is news ofve seen
small acts of courage across the city -- parisians defiantly sitting in cafes tonight, precisely what they were doing on friday night when the attacks began. you're seeing effects on commerce. the blur going to work. larger events have been canceled. airbnb and amro have canceled event in the city, but we are understanding the longer-term effects the attacks will have on the city. mark: talk about the longer-term's affect these would have on president hollande's long-term standing. what is this feeling a few days removed from these attacks? brendan: he has moved far to the right. he picked up a proposal of his processor, but has also taken on suggestions that the national front of marine le pen had been suggesting -- her response to the speech yesterday was basically this is a welcome
change, but she can't say much he is doing exactly what she wanted. i talked to a lawyer in private practice who is a sarkozy voter and said it was about time. one thing that has been described to me is that the right is finally getting what it wants and the left can't say much right now because everyone is so scared. we will know better in december. were expected to do poorly in regional elections coming in december, but we don't know what the effect is going to be and we will understand what is actually happening. mark: brendan greeley joined us live from paris. you can get more on this and other breaking news stories 24 hours a day at bloomberg.com. i mark crumpton. back to you. markets emerging rebounded from a six-week low today, but they remain deep in the red for the year as
investors increasingly turn their eyes to established economies. a globalrielle santos, strategist at j.p. morgan joins us now. what would be the trigger to reverse the slide? shop -- we saw a short-term one in october driven by cheap valuations and sentiments becoming negative, but we believe it is short-term in nature. long-term, we would need to see a fundamental shift in earnings gapgrowth, especially the at record levels. to see the gap start to increase. and a stronger dollar should take us there. guest: the strong dollar has been a head to performance in u.s. dollar terms.
their currency and helps certain sectors but broadly speaking, it tends to be a headwind. a lot of the relationship with commodities. america looked at broader fund flows and showed how overweight investors are in relation to developed markets. the most extreme level on record. at what point do you say fundamentally we may not be there yet but you have to buy a because it is an unusual trend we are seeing? assetla: we believe the class has become unloved. , wethese to be long-lasting need to see something improve fundamentally speaking and we don't think we are quite there yet. scarlet: i want to take you inside the bloomberg terminal. there's a lot of talk about
financial conditions and whether they are tight or loose. the federal reserve cited adverse international conditions. you could see it certainly tighter than the united states. do you see that heading into december? gabriela: i think what troubles us broadly speaking has to do with loans and credit and bank loans. speaks to all the leverage a lot of countries to gone since the crisis. that's the tide starting to turn. what kind of debt is priced in local currency? where is the fx headwind and it comes to how debt laden these countries are? there is a sizable u.s. dollar and foreign currency component when it comes to corporate loans. it is a bit concerning and that
could see through to local markets and local banks. el-erian spoked to us this morning and here is what he had to say. el-erian: it has become much larger -- not only do they continue to have an influence on the financial side but they are starting to push their weight around in the global economy. frustrated by the slow reform by the imf and world bank, they are constructing different pikes and creating new investment banks. they are saying we are going to influence the construct of the global economy and that is important. have seen emerging markets rely on exports. is this the new dynamic for how that area can grow and they just fund it themselves? gabriela: i think you are
starting to see that trend, led by china come a starting these different financial institutions, and that is a trend we expect to continue. ont because we don't agree the concept of investing in breaks anymore, we believe it is only going to increase. scarlet: if you were to look at how the brick countries performed, it's the only country in the group rising for the year. what is your take on that market? russia is interesting because it's one of the four that got significantly cheap. if you compare it to its own average and the rest of emerging markets, it had reached crisis valuation levels and that has led to this rebound inequity so we say it is cheap but not crisis cheap. but there are still
fundamental issues. does it fit into your overall issues that is a balance that is not sustained? gabriela: it can last a little longer because it had gotten so cheap but it's not a fundamental two or three years out. still pretty negative. basically you got to grow. thank you so much. we have much more coming up. doug ramsey called the market correction in august and said there's more to come. we will hear what he had to say, next. having amart is now banner day. we will break down the good news. trading at aer three month low. what's behind that metals weakest performance since 1950? ♪
alix: welcome back to bloomberg markets. scarlet: it is time for the bloomberg business flash. new york's attorney general is trying to stop fantasy sports operators from doing business in the state. the firm's, he says, are involved in illegal gambling. the companies say they offer games of skill, not chance. the parties will be back in court on november the sixth alix:. alix:monsanto is making another attempt to acquire a company after china national chemical corporation made a bid for the world's largest pesticide maker. withdrew a $46.6 billion proposal after their approach was rebuffed. janet yellenchair is encouraging leadership to oversight of the bank.
she called the legislation a grave mistake and said it would undermine fed policies and contends it would be detrimental to the u.s. economy. you can get more on that story and more at bloomberg.com. to theet's head over markets desk where julie hyman has a check on some of the company movers. how thee talked about department of justice is going to act on some companies and herbal life is out with a statement saying it is not aware of being named in this department of justice civil action. shares have bounced to some degree off their lows of the day a potentialitem, bid for air graph -- for airgas. scherzer halted, so we will let you know what that news is when it does come out. some other movers we are watching today -- cf industries, the fertilizer company raised to positive from neutral.
the company is in the process of buying oci's north american and european operations and this accretive.16.5% also looking at fitbit, that stock being named by an analyst, being upgraded from neutral. it priced at secondary offering and shares were recovering to some extent but have paired the again to about 1%. complex, wenergy are focusing on chesapeake and southwestern -- both stocks downgraded today. in the case of chesapeake, downgraded to a neutral and in the case of southwestern, it goes to an underperform. this has to go to the outlook of natural gas prices continuing to
move lower. another we are looking at is valeant. talk today,he other its new viagra for women is not selling well. the price target was cut to $98 from $200 at morgan stanley. that would account for the negative impact. 2%, butares down about they did make a run as positive a little earlier today. scarlet: it was pretty short-lived. aix: doug ramsey called for market correction in august. his guns,king to explaining his bearish stock market outlook earlier today. doug: the dow and the s&p look resell it but the average stock has lagged behind. you could argue and i would argue the internal peak of this market was around year and 2014.
when you look at the transportation stocks and deep cyclical stocks popping out, utility stocks topping out and most of your equally weighted measures in market breadth topping out in march or april. i think we are working on a topping process and we are close enough to a high on the s&p that i would allow we could make a new cyclical high but a lot of things will not join the s&p at the new high. betty: what is peaking in your view? doug: v peaking process has been underway for many months. you could argue i haven't even brought up to action high-yield bonds, but the high-yield bond markets which was prescient in the equity markets back in 2007 peaked in the summer of 2014 and
we have seen cyclical stocks come a small cap stocks and the average portfolio, like exxon at their s&p 500 weights. the average portfolio has lagged behind and that's a typical narrowing process that you see into the final bull market peak. but it is a process and could carry on a number of months before you get that final narrow high in the blue-chip stocks. average portfolio is lagging well behind those blue-chip averages. if you want to hear that full interview, you can find it on bloomberg.com. are thats arguments valuations are higher now after the correction. revenue and profits, as we have seen over the last couple of weeks have been deteriorating. it hasn't gotten better even with prices coming down. it also has to do with
what companies want shareholders to do with their money. it to into paying off debt, so bank of america and that fund flow report i was talking about capex andghlight investors want to see companies invest their money and they want that kind of growth. they are not happy with the way it was done before. financial engineering is not something that passes muster anymore. his call was for the s&p 500 to fall for the 5%. to me, it sounds like peak earnings because you need gdp to revenue andrder for earnings to follow suit. walmart's stock is in the grain. at one point, it was having its best day since 2008. it's behind that rise? earnings. we will discuss that next on bloomberg markets. ♪
scarlet: shares of walmart are rallying after quarterly earnings topped estimates. walmart has been a laggard this year he can is margins remain under pressure. what we can show you is the below its ebere is itda overall. the ceo has pushed to modernize walmart and it has eroded profitability. still, he did maintain its revenue growth. the bottom part of this bar is stagnant whereas the growth is international. that is going to drive everything. when it comes to international, he is talking about china and not brazil, were net sales continue to suffer. is no consistency here
whatsoever. this might be where walmart decides to make further cuts in operations. it shows some improvement in the most recent quarter, but it still trails cosco, which has yet to report. is to spine solution off sam's club and reduce the drag on earnings. drag fore is a big walmart. those sales slow to 10% last quarter, but it still a small part of overall sales. the big picture, they are gaining in significance. walmart plans to offer black friday discounts hours before they become available in physical stores. joining us now is shannon pettypiece, walmart having its best day in the year. our the store improvements
really helping walmart? what is the toll on the company financially? shannon: they are going to spend 2.7 billion dollars in the next year on wage increases alone. the company feels that's something they have to do in order to get better customer service and recruit and retain better workers. that is really dragging down the profits. when the company lay down their earnings outlook, they said expect that next year and going forward. it's going to be a couple of until those investments start to translate into higher profit. alix: we also saw the u.s. international business. even in the u k -- what's up with that? : the economies there are not great and you saw the growth chart online. 10% sounds good but it's slower than a 20% growth they had a year ago. big one. the
analysts are talking about whether they should spin off the brazil business because it just dragging everything down. the u.k. is tough because there's a lot of competition there and china, we have seen retailers exit china like best buy and yum! brands. we are not going to see next quarter china shoot with those international earnings. you so much. shannon pettypiece joining us and scarlet fu, great segment. still ahead, falling silver and gold prices. we will talk to the ceo of the mining companies about how the commodities slump is impacting his business. ♪
let's start with first word news. mark crumpton has those. mark: the associated press is reporting and overstating in germany being evacuated. the site is the location of the germany-netherlands soccer game. a stadium announcement is telling spectators the game has been canceled. we will continue to follow developments and bring them to you as we get them. in the wake of friday's terror attacks in paris, paul ryan is calling for a halt to the flow of syrian refugees coming to the united states. speaker reince is the obama administration's current policy is not working. ryan: we believe the president, the responsible thing is to take a pause in the particular aspect of the refugee program to verify terrorists are not trying to infiltrate the refugee population. mark: a number of republican presidential candidates,
senators, and governors, with chris christie to be the latest this afternoon, have issued additional calls to delay or stop accepting syrian refugees in the country or in their states. an international manhunt continues for a man french investigators suspect orchestrated the attacks in paris. he has an extensive resume and is familiar to the intelligence community for his affinity with social media. he is also linked to a failed assault on iteris-down as the train -- paris-bound high-speed train in august. russian president vladimir putin is vowing revenge for those he blames for less month's crash of a passenger jet over egypt's sinai peninsula. the head of the russian security system -- service told him that traces of foreign have committed explosives were discovered in the wreckage. russia is often a $50 million reward for information leading to the capture of the person or persons responsible. hillary clinton is launching an attack on bernie sanders health
care plan, saying that the proposal to create a single payer health care system would mean higher taxes for the middle class. senator sanders said his proposal would save money in the long run because it would end wasteful spending. you can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. from the bloomberg first word desk, i am mark crumpton. scarlet: thank you, mark compton. let's talk about silver. silver prices are teetering on the worst losing streak ever. over the past five years, the metal has dropped more than 44%. what is leading the decline? alix: we are joined by the president and ceo of core mining , which owns properties by mailing the u.s., australia, and south america. mitch, i have not spoken to you for years. thrilled to have you on. i commissioned a chart with a propriety model on how to
measure commodity moves when it comes to the dollar, interest rate, stocks, and fundamentals. what it shows is interesting to four silver, -- interesting. silver, it is actually fundamental picks like stocks that are moving silver more. what you think about that? : it is an adjusting metal. few years itlast has been more of a precious metal, trading more on gold. dollar is up to 10-year highs relative to other currencies and that has been the head went for precious metals, both gold and silver. alix: this was the chart. the red line is the fundamentals. the orange line is the dollar. the yellow line moving higher is the macro, the vicks, the stock record. liquidity, which deals with interest rates, is the blue line at the bottom. i would have thought that
interest rates would have moved silver much more, it would have moved with gold. what do you make of that? being 60%h silver demand driven by industrial uses, mostly electronics, you have a lot more happening there makes it, now,t starting to evolve more into a a base metal, little bit less of a precious, which sets up well for the short term. i think there will be headwinds for precious metals, including silver. longer-term there are trends around things like solar, demand for silver. the iea says over the next five years they expect to see 400 gigawatts of new solar panel installations globally. each gigawatt consumes about 2.8 million ounces of silver. you do that math on a billion-ounce market annual, there are some really interesting trends shaking up. on the supply side you have
finally, after about 12 or 13 years, silver supplies starting to decline, which is a little bit of a lag from when you think about the peak in 2011 in terms of the crisis, but i think a few of these industrial tailwinds on the demand side, declining supply, longer-term, silver is starting to set itself up for a move long-term. scarlet: what do silver tell you about the state of the global economy, especially as you see the divergence between manufacturing, which has been slowing down, and services, which has been rising. on the electronics demand side, we see some weakness and we all have silver around us. there is a little bit of silver in a lot of different things. globally, when you see electronics, computer pc, mobile demand declining a bit, that is going to clip a big segment of the industrial demand for silver. one of the beauties of silver,
it has thousands and thousands of different uses. even though we see some of those more economically sensitive areas of the man to dry up a little bit, we are seeing other things come in to replace them. alix: your target for this year? mr. krebs: this year there is not much left, thank god. it has been a tough one. until the fed does something, you will continue to see week silver and gold prices. we run our business based on that section. prices, or talented when that comes, great, but we are focused on our business making money in the low to mid-teens. alix: that is where we are. thank you, great to see. scarlet: we have breaking news. mark richt and has more. wcvb tv in boston and
their website is reporting a passenger on a boston-bound british airways flight was restrained as they try to enter the cockpit. the flight was 213. it departed heathrow airport in london tuesday morning. no immediate information on the nature of the incident. the plane, due to land at logan airport about seven minutes ago, 1:30 local time in boston, the wcvb.com says the plane will be met by massachusetts state police, the joint terrorism task force, and homeland security agency. again, conflicting reports that a passenger on a boston-bound british airways flight tried to enter the cockpit and had to be restrained. continue to follow the story. you are looking at a live shot of logan airport in boston. that does appear to be the plane in question on the runway. we will continue to follow this story and if we get more developed, we will bring this to you. crumpton, thank you for that breaking news.
we have more coming up on bloomberg markets. in the next 20 minutes, the viagra for women is seeing a dismal first month compared with its medical -- male counterpart. is the alcohol is chicken to blame? -- alcohol restriction to blame? some bankers compensation is higher, but other bankers not so lucky. scarlet: and coming up in the next hour, with a holiday shopping season be a bah humbug for retailers? ♪
enter the cockpit. alix: we are learning this from in boston, saying the flight departed heathrow airport in london on tuesday morning. at logane to land airport at 1:30 p.m.. there were reports a passenger tried to enter the cockpit. the plane will be met by massachusetts state police, the joint terrorism task force, and homeland security agents, who seem to be on this story. scarlet: if you come inside my terminal, this is flightaware .com, and you can see the path it took from boston, departing from heathrow and into boston. it was scheduled to land at 1:14 pm eastern time. it landed at 1:29 p.m. eastern time. we are showing you live shots of that flight that is now at the gate. it had been taxiing earlier. we do not know further details, but there have been reports that
a passenger was restrained as he tried to answer the cockpit. of course, this comes on the heels of the attack in paris, so lots of question marks. alix: we'll keep you updated on these headlines as the cross. it is now time for the bloomberg business flash. general electric has pleaded a spinoff of consumer finance arm synchrony's financial. the move includes a key step in the shift to industrial form part of the plan to return my two investors by 2018. scarlet: dick's sporting goods was third-quarter profit below estimates. the ceo said sales were down -- strong during the back to school shopping period before slowing later in the quarter. alix: u.s. homebuilders are feeling slightly less confident headed into next year, even at the overall sales outlook remains favorable.
the index is looking to 62 in november, down three points from a revised 52 in october. more builders view sales conditions as good. you can always get more business news at bloomberg.com. to the: let's head markets desk, where julie hyman has been tracking the markets. see any impact from the headlines that crossed? julie: we have come down off the prize of the session, so we have the headlines regarding this point from britain to boston, and also headlines at the football match, soccer match, in hanover, germany, has been canceled. it was scheduled to be between germany and the netherlands, and various german authorities, including angela merkel, were scheduled to attend that match. it has been canceled. there you see once again a shot of the british airways plane, now at the gate. although this does seem to have had a little bit of an effect on the markets today. earlier, just a couple of hours ago, we are trading the highs of the session. now we have come off. although all three major
averages are higher, it does reflect that we will see some news flow in the coming weeks as the investigation of the paris attacks continue, and also as we get other various headlines related to that cropping up from around the globe. so, the do seem to be a little bit of caution been reflected as a result of that. i also wanted to talk about the intraday chart of the s&p 500 because there, too, you can see the various gyrations reflected. earlier today, little change overall, and that we took a substantial leg up, before now coming down, not at the lows of the session, but definitely coming off the highs of the session. something else to throw in the mix today, economic data this morning. consumer inflation rising back to back -- the biggest activex gain since the -- back-to-back gain since the spring. it's a good the probability being priced into fed funds futures of an increase in coming meetings. for the december meeting, the probability falling tackle
little bit too 66 -- falling act a little bit to 66%. one caveat, by the way, about this function, it runs with a 10-minute delay. if you look at the bond markets, you can see the 10-year yield is now unchanged after earlier rising. i want to point out, in talking to treasury traders, reporters are saying because of the now postponed financing for an lbo tas, which is owned by symantec, two people coming into the "safer end" of the fixed income market, treasuries calling the -- causing the yield to go down. -yearu look at the two note, it is not being felt on the short end, but it is coming down to unchanged. it also might reflect that we are seeing in terms of various
headlines around the world. if you are nervous about global events, you want, from an investment perspective, go toward what you perceive to be more safe. alix: we have more updates on the plane, the boston-bound plane. massachusetts state police is now confirming on twitter that a female passenger was restrained after allegedly trying to enter the cockpit. are there, troopers to take custody of the passenger and investigate what happened. scarlet: you can see massachusetts state police tweeting out what they discovered. you can see the twitter page of p, massachusetts state police, saying this was a woman restraint during the fight -- flight. the plane has since landed you also see the plane at the gate. we'll keep you -- alix: we will keep you updated on any headlines as they cross. scarlet:
we want to -- alix: keep you up to speed on breaking news regarding a passenger plane. mark richt and looking at the headlines and has the latest. mark: the associated press citing massachusetts state police say the passenger on the london to boston flight has been restrained. she reportedly did try to enter the cockpit. airways, whichh told state police the woman tried to enter the cockpit on landed i hadhich of schedule at 1:30 local time. a spokesman told the associate press the troopers were getting ready to order the plane to take the passenger into custody. in a statement, british airways call the passenger unruly, and said the flight crew asked that
police meet the flight in boston. the airline says it does not tolerate abusive behavior, but it did not elaborate. again, the associated press, citing massachusetts state police and british airways who say that on unruly -- and unruly passenger was restrained on a london to boston flight and you see the live shot there of the plane on the tarmac. there are no other details immediately available. we will, of course, continue to update you on this story and bring you further developments as soon as we get them. back to you. alix: thank you so much, mark crumpton. scarlet: 2015 was a great year to be a wall streeter if you were in health care. bankers in distressed debt, not so much. estimate,rding to an media and technology bankers are among the few poised for a raise, while many traders on the extent come desk are facing pay cuts.
we are joined by bloomberg news's michael moore, who covers the banking industry. in theory, that makes sense, but what stood out to you about the report? michael: it is broadly reflecting the trends we have been seen. you were talking about valeant earlier. that is part of that. it has been tough for the distressed debt and high-yield. certainly, those are following the business trends, and one of the factors here is whether there is going to be a competitive bid, whether there will be anywhere to go next year , and how that factors in. that might be compressing pay. scarlet: remind us of the timeline because the big wall street banks start managing people's expectations for the bonus payout right about now at the end of the year. they get paychecks early next year, and that is when the great movement happens, when everyone changes jobs. michael: right. at the top, managers are
formulating the broader pools -- this division gets this much. scarlet: how big a piece of the pie you will get. michael: they are breaking up the pie. they can always reorganize in december. december tends to be harder because of the trading desk. in general, they get the numbers, sometimes february for the european banks, but the first quarter is when you see a lot of movement. alix: we saw fixed income traders not in part of the options bonus pool. it is it -- is it all bad news in extent,? -- in fixed income? michael: it is not. some rates are up. options traders were some of the people that expected to get a decent size jump, and a lot of that is around the central bank. there has been a lot of speculation -- when are they going to move, how much? you had this with national bank at the big -- the swiss national bank at the beginning of the
year. that might be up, whereas credit and commodity is likely to be down. scarlet: there is a hypothetical question posed by options group about what you would trade a pay raise for -- what did you learn? michael: a few options -- some younger employees said they would give that up for a better work/life balance. of thes about one-third younger employees, but the older employees that i want the money. alix: college education for my daughter. thank you, michael. bbc. scarlet: coming up, "with all due respect at 5:00 p.m. eastern time, you'll want to watch that. jeb bush will be there guest. ♪
welcome to bloomberg markets. from bloomberg headquarters in new york, good afternoon. it was a we are watching this hour. stocks rallying around the world for the second straight day and speculation the ecb will add stimulus is the probability of a red rate hike next month -- fed rate hike next month increases. pickens saysbone oil will not go below $40. find out how high he thinks it will be by next summer. we are over a week away from the start -- start of the shopping season. it could be a tough year for retailers as shoppers choose salons over sweaters. first, let's head to the markets desk with julie hyman. julie: you know, we have had quite a lot of volatility today. stocks are trading unchanged out of the gate this morning, then gaining, now coming back down a little bit. all three major