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tv   Bloomberg Markets  Bloomberg  November 19, 2015 2:00pm-3:01pm EST

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♪ from bloomberg's headquarters in new york, here's what we are watching. it has the potential to be the largest health care deal ever. could the u.s. treasury department to derail the deal. where are matched and square training out? where is the islamic state getting its money? a look at funding and what the u.s. is doing about it. let's head over to the markets desk. >> i want to start with commodities. there were some interesting .alls on commodities today
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oil prices down more than 1%. callsbated by a number of , producers, and commodities themselves. goldman sachs sang mild weather -- saying mild weather could cause oil to fall below $40 a barrel. oversupply could continue well into next year. bloombergchart on the terminal. this is laguardia airport weather data. of 2015a heat map compared to the 10 year average. there have been a lot of months that have been green. whether fx commodities and retailers. in the new york area, average temperatures are 13.5 degrees above the average over the past 10 years.
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we extrapolate that out for new england and you get a significant difference. pressure,oil under gold prices are rebounding, the biggest gain in some time, which has been battered of late. we have some negative commentary. gold fall below $1000 in the first half of 2016 before rebounding. it has not fully priced into the affect -- effect. expressingups similar sentiments. the dollar is helping gold -- as, the climbing declining. what are we seeing in stocks today? julie: a stall, a very tight
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range. care, and i know you will delve in more. david: thank you very much. let's get a check of first word news. obama will veto a republican proposal to tighten screenings of refugees. the house of representatives 89-137,he bill to sustaining a veto. it would block syrian and iragi refugees from entering the united states unless law enforcement and security officials tell congress that the refugees are not a threat. the white house says that would not increase u.s. security. arrayed by french police, a house 145 miles east of paris.
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they were looking for anything that could be linked to jihadi networks or illegal weapons, this after the parliament extended the state of emergency that allows police raids, emergency's, and house arrest without permission for a judge. it will now be approved by the senate on friday. president obama and the french president has spoken again about the paris attacks investigation. they will meet next week at the white house to discuss the fight against as a mcstay. mr. obama will head to moscow for a meeting next thursday with vladimir putin. egypt is willing to cooperate see any party that wants to
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improved security at egyptian ports of entry until every loophole is blocked. more on these stories 24 hours a day at the new i am mark crumpton. david: it could be the largest drug deal ever, pfizer in talks to buy allergan. shares of both companies are down today. now, let's talk about the motivations for this deal. why this one? >> this is a deal for tax. there are reasons why allergan does make sense for pfizer. it looks like it's going to add to the bottom line. it's not necessarily a bad deal from a farmer perspective --
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pharmaceuticals perspective. have the treasury talking about changes to the rules, but so far it does not seem as though from what we are hearing that the treasury can do that much to change what is likely to be a much more attractive tax rate. david: it seems like we have been here before. could it have more teeth than last time around? you're right. we have been here before. i think the interesting thing is there is not much more the treasury can do to keep them
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from doing in version. they are looking at everything in the power to make it as uncomfortable as possible for pfizer. are they going to come out with a set of proposals to target this deal? will this something that try to stop more inversions? many deals were scaled back or scuttled completely? did its deal with boots, but said it would not move overseas. were in version deals that did happen. it wasn't necessarily the death knoll for inversions that everybody thought it would be. one of the tricky things with nottreasury are rules, but penalizing those companies that
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operate in the u.s.. that is what the treasury have to figure out, rules that create an even langfield. david: there are reports that pfizer is considering a split. to takenlit has taken a backseat to the deal. -- has taken a backseat to the deal. it would deftly take a long time to sort out where things belong. the split could take other forms. originally there was some talk about a split into three. there are some iterations. they could not split at all. to have an argument heavy cash flow business that funds the riskier side of the business.
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this might will not be a conversation topic right away. david: what we know about how long this could take to play out, the treasury could complicate that some. in timing from where we are now, i think it will be quick indeed. before the announcement from the treasury, there was some expectation for monday. that has been pushed back a few days to access the statement, but they want to move quickly on this. i think they are keen to get this done. question of who runs this thing is an interesting one. chief executive of allergan holds a lot of cards here. he is seen as one of the rising stars of the industry.
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there is a lot of appetite to see a significant position. split, he is they running the products business part of the combined company. he will have a very big role in these two companies. >> thank you very much. that is at hammons. -- ed hammons. >> tomorrow, an exclusive interview with the ceo of canadian the civic railway, hunter harrison. united health maple out of out ofre -- might pull obamacare. president obama is threatening to veto a proposal to prevent syrian refugees.
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state seems to have all the cash it might need. ♪
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david: welcome back to "bloomberg markets". it is time for the bloomberg business flash. intel says sales will climb in the mid-single-digit range. foryst growth estimate was 4% next year. until faces the climbing demand from a pc market.
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revenue sales and revenue fell short, sales growth under 1%, revenue under 2.5%. says it is ok to eat genetically-modified salmon. the fish grows twice as fast as normal salmon. by thecreated massachusetts company aqua bounty. more business news at we check in with julie. julie: let's start with curator keurigountain -- green mountain. we are seeing a snapped back in
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the shares, even if it is facing issues in demand and pricing power. they have raised their dividend to 13%. this is one of the things you can look at when you see a gain like this. the absolute amount of short interest. up here is the price of the stock going down. below is the short interest ratio going higher. some shorte seeing covering as part of the gains today. one of the worst performing , thes is chesapeake energy battered oil and natural gas company. could be hit potentially by the natural gaserica's alliance is merging with its oil
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counterpart, the american petroleum association. what this means is that natural gas companies will not have a devoted lobbying group. their interests will be combined with that of the oil industry. chesapeake wasof a founding member of that company. with the chesapeake bonds, unsecured notes dropping to a record low. a lot of concerns about this company. david: thank you very much. united health group losing interest in the insurance exchange market. that we cannot subsidize a marketplace that does not seem to be sustaining itself. i'm joined by drew armstrong. let me ask about what seems to be an about-face. slow to get in to
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the exchanges. this is where insurers sell plans through obamacare. one month ago, they said they would enter into 11 new states. all of a sudden they say we are considering leaving and 2017. losingid they have been hundreds of millions of dollars on these plans. the stock has gone down significantly. there has been a ton of fallout from this decision. i think were going to see some serious political fallout as well. david: what are the costs? how big of a deal is it? >> the individual insurance driver, 30 growth million potential new customers. that is apparently not the case anymore.
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united didn't do this quick turnabout, so i think others will inevitably follow suit. many of their major competitors are in the midst of mergers and difficult to get out of of exchanges at the moment. david: what about hospitals? had beenese people who in the emergency room without insurance would be covered because they got medicaid over shopping on these exchanges and getting new coverages. we have a major insurer pulling out because they are saying this is not what we thought it would be, you're seeing the potential for not as many people being covered. hospitals if you are a and somebody is brought in with a heart attack without insurance
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, so you're seeing fear around the hospital industry that they will not get their side of the bargain of obamacare. david: how important is that since of fear and that this law is not working the way it was intended to? seas -- i niece as you see the insurance co-ops fail. now we are seeing some fallout in terms of actual performance metrics for insurers and the hospitals. since this is fresh in everybody's mind, i think there is concern. unanticipated was this? is this something the government did not foresee? that we knowow exactly how much notice the government had. , it we woke up this morning
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dropped like a bomb in washington dc. everybody was stunned by what is going on here. why they weren't the biggest player in obamacare, they carry an immense amount of weight. they are one of five big for-profit publicly traded players out there. it is an impactful decision. people are worried that there will be more of this down the line. , asle will be watching q4 well as these week-by-week numbers. david: thank you both very much. ahead on "bloomberg most americans don't want syrian refugees, but will president obama have the final say? ♪
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david: welcome back to "bloomberg markets". the house just passed a bill to block syrian and iragi refugees. the bill now goes to the senate. the president says he will veto it. me.t baffles i don't understand why his veto threat came as it did, especially live in the fact that his own law enforcement top officials testified to congress that there are gaps in this refugee program. david: phil mattingly joins me now. not terribly close here. what did paul ryan have to say? he said it is a commonsense
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bill. require the top officials, including the fbi and director of intelligence, to personally certify any refugee coming in saying they are not a terrorism threat. given the fear in the wake of the paris attacks, that makes since 20 of constituents, members. that number should conceivably give the house republicans a veto-proof majority. the question becomes the senate. harry reid, a democrat, said that this bill will not get past the senate. a big win for paul ryan and republicans, who want to not only pause the refugee program, but want to put bureaucratic roadblocks in front of it. david: this has moved rather quickly. already we have a bill that has been voted upon.
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to whicht the degree this was discussed and debated on the hill. >> a limited amount. you can see that when congress wants to act fast, they can. is house of representatives not a place where each individual member can hold things up for days. the house response to specific ,ncidents and a quick fashion then you have the senate that is there to calm everything down and have a recent debate. thisis interesting is that bill was able to pull off democrats. this is not just a partisan issue. this is paul ryan's point. this is an issue that every member is getting phone calls from their constituents on, legitimately scared in the wake of what happened in paris. what the senate does will be interesting to watch in the weeks ahead. kerry oncretary john
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the hill today for a closed-door briefing for what happened in paris. is he the administration's front man on this? >> the president has been the most outspoken. to republicans and democrats, he has not been helpful. you have seen a number of lower-level officials trying to explain this. more democrats ended up going to the republican side. david: thank you very much. still ahead on "bloomberg state is oneamic of the best funded terrorist groups and history. ♪ ♪
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(the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store. well, it all started with my free credit score from credit they gave me so much more than a free credit score. credit sesame's money management tools and personalized offers saved me tons of money and helped me reach my goals. i just signed up with their free app. what's my credit score? your credit score is 650. that's magic! no, that's credit you get so much more than a free credit score so do more with your score at credit david: from bloomberg world headquarters, this is "bloomberg markets". mark crumpton is at our news desk. mark: french police carried out
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another raid, blowing up a door to enter a house 145 miles east of paris, no word of arrests or injuries. a seven-our raid yesterday left the leader of the terrorist attacks dead. according to a document obtained by bloomberg news, justice ministers are weighing plans to expand security screenings and database matchups for every passenger arriving in an eu nation. an announcement on the proposal could come tomorrow. belgian authorities detained nine people during raids around brussels. a prosecution official says two detentions were related to friday's attacks.
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it's an unlikely way to show defiance against terror attacks in paris. memoir hasngway's become a bestseller in france, a movable feast is the fastest selling biography and foreign language book on amazon's french site. you can get more on these and other breaking stories 24 hours a day on david: commodity markets are closing in new york. let's take a look at the biggest movers. coffee climbing to a record after drought conditions of production. 30% to 50%.ned by industrial metals declined to a six-year low. the index dropped to its lowest
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since february 2009. oil dropped to a three-month low today. crude inventories rose to the highest since 1930. one way islamic state makes money is from oil. u.s. treasury department says it brings in $500 million a year for the group. it has resources the on crude and revenue that could help keep it fighting for years. matthew phillips joins us now from washington. you write in your piece that the u.s. treasury department made a colossal miscalculation in determining how much they had and how much came from oil. why was that? was a miscalculation to the tune of $400 million. they downgraded islamic state oil revenue to $100 million a
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year. it quietly read estimated that. of we are hearing estimates $40 million a month, $500 million a year. the administration grossly overestimated the permanent damage that was done to oil operations through airstrikes --t year, and first amended underestimated their ability to fix things, bring in new talent to recruit help their oil operations get off the ground. david: let's anyone think this is a ragtag operation, set us straight. this is an advanced oil operation they are running there. they have outsourced their refining capabilities. targets in syria and iraq were big refineries that were targeted.
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they have outsourced refining capacity to a local, rudimentary furnaces that are operated by operationsgerous where you are heating oil out of vapor, coolingg it, condensing it into diesel feel. that can run everything from generators to trucks and provide raising services. it didn't take too long for the department of defense to give new coordinates to the french to make strikers on tankers carrying oil. that is a change in strategy. >> the rules of engagement have changed. for the past year, we've been watching these tanker trucks move around. what we were hesitant to do was target them. it wasn't clear that the people driving them were militants. they were in the employment of isis.
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what we saw happen days after paris, probably in the works before hand, targeting of these convoys, where we dropped leaflets that told them to scatter and then came back with a tense and targeted 116 of them. a and then came back with -10's and targeted 116 of them. david: how does the islamic state make money? getting moneyp from other sources as well. >> they have an entirely self-sufficient sustained economy. that is the backbone that allows them to provide basic services to their people, but they also tax everybody for everything, extortion, ransom payments for
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kidnappings, not to mention all the agricultural land they have, wheat, barley. it could fetch $200 million on the black market. it allows them to be sustained and feed their militants but the people living under their control. >> thank you so much. joining us from washington dc. you can read the article in this edition of bloomberg this week. challenging times for investors. -- bloomberg businessweek. challenging time for investors. of therestructuring financial services industry, it's another leg up. there was a wave after 2009 where people said the u.s. and european banks would restructure.
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what you are seeing is that most of the banks, there is a change in management, creating nontraditional lending opportunities, and you are seeing that go off market. lendingcall it private or traditional things that may have gone to a bank where it is too complex now, that is going to private equity funds. there is an interesting opportunity. >> they've been saying that for the last four years. i am telling you is that it is finally accelerating in europe. there was a huge thing about this being an opportunity. the banks aren't ready to sell. they needed equity. what is changing today is that for the first time we are seeing that pickup. that is an interesting opportunity for a firm like ours. >> is there more of an
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opportunity for nontraditional lenders, kkr, hedge funds, because the fact it does not have a corporate bond market? >> the high-yield market in europe has grown exponentially. they are getting a high-yield market, but in aggregate i would agree with you. as the banks restructure and shrink their footprint, you will formore alternative avenues capital, but the high-yield market is growing. your will have a high-yield the stress cycle given the size. -- high-yield distress cycle given the size. where you're starting to see deterioration in the u.s., i think it will be forthcoming in europe. china, there's a slowdown in the raid of growth, government intervention and nonintervention, switching from manufacturing to a service
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economy, what does it present in terms of investment? >> it makes it challenging. i would think of china in three buckets, fixed investment, traditional consumer, high value added services. traditionally we have said watch out for the fixed investment , and focus on the services. i was in china in september, fixed investment is certainly slowing. the traditional consumer, profits are not there. they may be selling things, but profits are not coming through. amazon-style. this is a great example. if you think about amazon relative to walmart, amazon is half the size in the u.s.. alibaba, it went to
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market sharet, so gains of e-commerce in china doors what you have in the u.s. you are seeing a lot of malls and china that are becoming restaurant malls instead of retail malls. it is pretty dramatic. have 16-17 companies in china, focused on the high-value added financial services, environmental food safety. one thing we need to think about is not just a fixed investment, but what is china and all this currency did mean for global trade. people are on to the fact that commodity cycles are down. i would put forth to investors to think about the implications of global trade. we have lowered currencies around the world relative to the dollar, but exports have not gone up. all you have done's razor price of imports, greeting
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dislocation, and i think that is something worth noting. head, henrywas kkr h. mcvey. coming up, hillary clinton makes her case for a broader assault against the islamic state. how the strategy is different from president obama's. square has gone public. in my chang spoke with the jack dorsey. we will have her interview coming up. anchor will bet speaking at the international council summit. ♪
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david: welcome back to "bloomberg markets". time for the bloomberg business flash.
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has a fight of veto. it would directed the fed to be more open in communicating monetary policy decisions. janet yellen calls the approach "unworkable." and said it will lead to "poor economic outcomes.:" thisn five americans said month the economy is improving. even toy drones are a greater threat risk than bird strikes according to a new study. they are made of plastics, batteries, and metal, which cause a greater damage in collisions. you can get more business news at stocks fluctuating between gains and losses. one sector weighing on the
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market is health care. julie hyman has more. about i want to talk of the effect of health care on the averages. a couple of stories are pushing stocks down today. health said it was examining its participation in plans in the affordable care act , saying they have been more costly than anticipated. there is a ripple affect through the industry today. -- ripple effect today throughout the industry. chains thatspital are also declining today. , thersal health services other big story putting pressure on things. pfizer and allergan are closer to announcing their deal. yet, the administration is considering putting curves on tax in version deals.
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one.would potentially be just wanted to come back to the overall health care performance. the -- x l at the xl the. despite has risen rocking us this year. 117%.up hillary clinton is calling for an expanded air war in the fight against islamic state. , she said we cannot play into fears when it comes to refugees in the u.s.. >> discriminating against an moslems come that is not who we
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are. we are better than that. now, she wasg me up here speaking, how different was the speech? >> she is rightly criticized by people on the left as being relatively hawkish. her views are consistent with the views she has had in the past. she opened the door a little bit to grassroots. secretary clinton is not as wary as many democrats are. this was a tough speech.
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republican policy has become of .ore concern after paris there is a new poll looking at that. 53% oppose the resettlement effort. striking in the poll was the addition of this small number among republicans who agree with the position advocated by ted cruz that we should have a religious test. they don't make a distinction between christians and moslems. does say this religious test
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thing is not american. 11% of republicans agree with the ted cruz position. david: let's look at the overall result of the poll. donald trump still in the lead. donald trump, ben carson, there is a top-tier. they are essentially tied. there is a big drop down to the second tier comprised of marco rubio, ted cruz, and you might argue jeb bush. rubio has established himself as a strong number three. when you ask about their ability to combat terrorism, 55% say trump would do a good job, 29% for carson. it would bet interesting to think about the and askedandidate
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republican leaning voters what they thought about particular characteristics. every issue of strength, combating terrorism, immigration, handling the economy, running the government, trump wins on all of them. anything that has to do with temperament, person way ahead. they are liking and yang. david: thank you very much. you can watch all due respect tonight at 5:00. still ahead on "bloomberg markets", square and match groups urging more on their first day of trading coming up next. ♪
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david: welcome back to "bloomberg markets".
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square surging in its public debut, raising a third less than planned. spoke with jack dorsey. it has been a long road, a milestone. what fuels us to serve our customers the right way. david: a lot of talk about tools, team. the question how long will he stay in control of both companies. no indication that he will leave either company anytime soon. i hope that for his sake that he he finds a successor for one of these companies. i asked him if he was hiring a president. he punted and said, we have a really strong team.
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where we did get some interesting information was where they will focus. their main business is payment processing. thisf revenue comes from processing business. where they how and will invest the money they raised today. >> we will focus energy on our new reader. we want to see that on the other side of every transaction, allowing them to accept every type of payment, chip cards, apple pay, credit cards. they are looking at japan, australia, but it's going to be growing the business among small business owners. 20 million small businesses don't accept credit cards still. about the way this played out today. we talked about the valuation
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being reduced. at a $4ere looking billion-ish market cap. aty placed at the low end nine dollars. there is a disparity between what this says about the valuations between the public and private. it is raising questions about whether investors, late stage investors specifically, whether they are valuing these companies correctly. david: the other is match group. the judge artery was similar. -- trajectory was similar. what does today say or indicate? emily: i think people will be scared. they will try to stay private as
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long as they can. you have an venture capitalists saying that is ok, and people on the other side saying you could do a lot of damage to your business is by not creating liquidity in the public market. took it for the team here. let's put it that way. we will see what happens in 2016. david: thank you very much. that is emily chang. cfowill be joined by square sarah frier. ♪
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and >> it is 3:00 p.m. in new york, welcome to bloomberg markets. ♪
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betty: good afternoon. i am betty liu. here is what we're watching at this hour. stocks are really struggling for any direction today after the fed filled rally we saw yesterday. jobless claims are hovering around four decade lows. basically failing to take off in trade today. -- allergan could be brought in what could become the drug industries biggest deal ever. in the pastf rally areh, energy's shares struggling to stay in the green. why the outlook could get even worse. we are about an hour away from the close of trade this thursday. i want to head to the market desk where julie hyman has the latest that is the scene today, we just could not carry the upper direction today. julie:


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