tv Bloomberg Markets Bloomberg January 14, 2016 2:00pm-3:01pm EST
from bloomberg world headquarters in new york, good afternoon. here is what we are watching this hour. u.s. stocks surging today, the dow climbing 250 point as higher oil prices boost energy shares. jpmorgan kicked off bankshares with a rise in profits. we will tell it to expect from citigroup and wells fargo tomorrow. and the action in gopro is downhill as demand slumps for its cameras. plungedsees its shares 19% since the start of the year. first, let's head to the markets desk where julie hyman has the latest. julie: stocks rebounding from the declines we have seen, not putting much of a dent in the declines of the year. up at her than 2%. in terms of this bounceback affect we are having, andy cinko
put together some technical charts we have been looking at. ?ow oversold did stocks get if you look at technical indicators, technical analyst say we have not been this oversold or it has only happened three times the past year. he's looking at the russell 3000, so a very broad measure. it happened in 2008,000 11 and happened in 2015 when we had the big selloff. back, we see a big bounce but it is not clear how sustained it is going to be. we are also looking at the breadth in the market today. how broad is this rally? relatively wrought if you're looking at the s&p 500.
we have health care, tech and telecom doing well in today's session. , supportinghigher the gains we are seeing in those energy shares. this rebound effect is pretty strong. david: some of these areas that have been beaten down joining on the rally today. index the nasdaq biotech is still technically down in a bear market, but it is rebounding today, up 4%. after a rocky year, it ended up outperforming and having a down start to 2016. the russell 2000 yesterday entered a rare market and it's coming back, up by 1.5%. whether itestion is can be sustained at all. we are getting into earnings
season a little more nervous. david: that is julie hyman at the markets desk. let's check on the first word news with mark renton at the news deck. mark: islamic state is claiming responsibility for a terrorist attack in indonesia that began at a starbucks. a suicide bomber blew himself up in the coffee shop and other attackers opened fire. when it was over, two people were dead and 20 others were wounded. the worst terror attack in jakarta since 2009. london will deploy more armed police to counter the terrorist threat. 600 armed police will be added. the leading republican presidential candidates will do battle once again tonight. only seven of the parties 12 candidates will be included in the primetime debate.
he spoke on bloomberg's with all due respect. >> reagan had a little bit of this, but he also won. we have to see what happens. the closest thing i can think of his reagan, but i don't think it is the intensity we have. mark: you can see the entire interview at 5 p.m. on bloomberg television. three winning tickets were sold in last night's record $1.6 billion powerball jackpot. the stores that sold the winning tickets will be rewarded as well. , 7-eleven in chino hills california will get a $1 million payout. a publix grocery store will get $100,000 and an unidentified store in a small tennessee town will get $25,000. dayal news 24 hours a
howard by our 2400 journalists in more than 150 you -- 150 news bureaus around the world. problems with oil prices with the prospect of iran unleashing its oil on the oversupplied market and crude may drop even lower. so what does iran mean to the oil market? the publisher of the short report joins us from philadelphia. let me get your reaction to what we have seen in the oil market. let's be careful on what we are seeing today. theave the expiration of options on the february futures you have the board and 16 million barrels at the strike put. some is volatility and some as variance that we are seeing and that's related to the options expiration as well as the futures expiration of the brent
crude oil market. over the next couple of days will be the telltale of whether we continue this downward trend of the momentum. david: let's talk about iran and what the state of areas. the yuan is conducting its final inspections and we could see sanctions lifted in the next few days. what does that mean for the global oil market when iran is able to participate fully? at this point, the price action with regard to iran has thatbaked in -- and i hate term, by the way -- baked into the number simply because we signaled our willingness and desire to get these sanctions lifted. priced in. been we are looking at saudi arabia and iran competing for market share. that marking -- that market share you are competing
with? when you take into consideration know and rate cuts, we china has its economic headwinds ahead in 2016. the same with japan. it's now flirting in and out of its this recession since 2008. he have the sunni side of opec and the shia side of opec trying to undercut one another. that is clearly challenged. i can't see how the global does not remain glutted and it's going to be a bearish spectre. beid: you say that iran will able to raise production by a million barrels a day. i'm curious to know, as someone who follows this market, how confident are we about the capacity of the iranian oil market? skepticale are pretty at this point.
i have no faith as far as their ability to increase production. what they are able to do is unload the 35 million to 45 million barrels of oil in floating storage. iran has spent the better part of the last 40 years investing in terrorism rather than their own oil infrastructure. we have not seen a new oil infrastructure build since the shot in the early 1970's. i question greatly, especially with the pullback in oil prices and especially with the fact that iran has close access to capital markets. i question how much they could get production ramped up in 2016. the immediate threat is the oil already sitting there in their tankers, but we have known about that. to ask you about
the two dueling factors we have here. we see oil go below 30, if only briefly. on the other hand, you have technical factors and you have china and all of that -- which side is most important? stephen: at this point, from a near-term point, it is clearly available. we are trading on psychology. we have decoupled and so we are only trading on momentum. clearly, bearish money is moving into this market and for a good reason. one year ago, what were the bulls telling us? the u.s. is going to cut back production. yesterday's production figures, production this january with a greater than production last january. we are still producing a lot of
oil and we are at a point now where we are going to take 250,000 to 300,000 barrels out of production. look at significantly strong greater than and the bulls were talking about just six months ago coupled with the fact that we are going into our maintenance season. from a fundamental standpoint, it is a bearish driver. macroeconomic view, things are ugly and asia. things are not great in europe and i don't think everything in the united states is rainbows and unicorns. saudi is going to produce, iran is going to produce, and we are going to produce more than we can consume. it is hard to make a bullish
meanwhile, the company's credit default swaps used to ensure against default on company debt surged. james alert could be thinking twice when it comes to inflation. the st. louis fed president says falling oil prices may delay the .eturn to the fed's 2% target he has been one of the most hawkish on interest rates. loss has carried over to 2016 with pershing yeare losing 11% this after losing 20% last year. publicly held long holdings are down, leading the forum that form specialty products to claim 38%. let's go back to the markets desk where julie hyman has look at some of the companies on the downside. julie: i have to do a headline we are getting out coming from dialogue so my conductor, which had made a did and agreed upon
for at nell, but then microchip made a technology which is superior. dialogs as it will not revise its bit higher. -- dialogue says it will not revisit -- revise its it higher. those shares are taking a leg down on this. dialogue so my conductor is a german company. gopro is most of italy on the list. the company saying its fourth-quarter revenue amounted to $435 million. analysts were looking closer to $510 million. gopro is also cutting jobs. fit bit, which is another company with dominant market share falling on concerns that perhaps it is going to face increasing competition.
gopro,ny that supplies one analyst says it's exposure to gopro is being overestimated. a decision threatening the development of solar rooftops in nevada. investors are not liking these headlines and shares are down by 14%. and and analyst call is affecting yelp today, being cut from cell to neutral. there's traffic dropped because of competition from google. m.d., they, web financials times says they are in talks with potential buyers. shares fell following those headlights.
david: thank you very much. jpmorgan kicked off bank earnings on a high note. the biggest u.s. bank reporting its fourth quarter profit rose 10% think to shrinking expensive -- shrinking expenses. let's bring in our banks reporter. we were talking about your seems to me here did we saw from jpmorgan happen and is reaping rewards for them. guest: expenses were down 7% and a quarter revenue was up only 1%. to the extent they showed healthy your earnings than they did last fourth quarter, it is mainly because of expenses. litigation was down and compensation expenses were down. david: there was a bit of reward here. don't see that often,
but they got about $500 million in a settlement with something related to their purchase of law move in 2008. fixed income has been suffering and we had seen that borne out today. rocks wereritized down -- one bright spot was interest rate training -- interest rate trading. cushioned jpmorgan's results -- they came in higher than analysts estimated. that could bode well for citigroup tomorrow. david: we have talked about the role that might have in s and saw anterest note from goldman sachs saying they are going to be laying off. specifically for bond trading banks, they have been waiting for a pickup in interest
rates and economic activity. are sort of running out of time and running out of runway. that's a little bit of what we are seeing from goldman. they have been committed to extend come trading even with the slowdown and now you are seeing them say activity has gotten so low that we may have to cut more than we usually do at the end of the year. david: i want to ask you about what jamie dimon had to say about the general economy. he talked about the prospects for a recession and how that bank is weathering the downturn we are seeing. guest: he talked down any concerns on the conference call today. they put aside some extra money to cover losses on energy loans and he said it's not that bad. to the extent it gets worse, we think we can ride it out. tried to say
7%. is the managing editor of fandango. let's talk about the best picture category. a stock -- a stark the by here -- a stark divide here. now, revenue is going to have the most momentum in terms of the bump. --"the revenant" is going to have the most momentum. "the martian those quote also hit dvd and look for fox to release that for a second run. three -- those are going to be movies that $100 million worldwide. people are seeing best picture nominees this year. these films will go back
to movie theaters and people will go and see them in this way and age? even in this streaming age? martian"think "the especially as when you want to see in the theaters. as they find themselves in more theaters, oscar nominations will help people find them more. 85% of people said if a movie is nominated for an oscar, people are more likely to go see them. david: not a lot of diversity in the nominees. this was criticized last year. to write a letter lamenting the women of color. no diversity. they are calling it a wide-out and it is kind of ridiculous because it's not like there are films they could not have nominated -- there are a lot of names there and i think the
academy has to think about expanding these categories. we have eight best picture nominees, how come we don't have eight best director nominees? chris rock is hosting this year. look for him to have a field day with the diversity issues right off the bat. david: i'm curious about the absence of "star wars" -- this film has been a total juggernaut. totally absent from the nominees. why is that? popcorn,'s light, blockbuster fare. people don't consider it a best picture here's the movie that's the biggest movie ever -- it rubs me the wrong way. the highest grossing movie worldwide. it has had a massive effect on pop culture. shouldn't that have something to do with what makes up a best picture nominee? did a poll at fandango in it was the favorite movie of the
year for house and the people. five nominations in the technical category -- just locked out of all the main categories. i liked it. i thought it should be in there. "beasts of no nation" -- what's the significance of that being among the nominees? even reallynot there. it's because it is a big screen movie. the movie they chose to release is a movie you needed to see on the big screen. i give more people would have seen it on the big screen, it would have had a bigger impact at the oscars. coming up, disappointment in its product line for gopro. that's up next. ♪
the news desk with mark crumpton. president obama is in baton rouge, louisiana, where john bel edwards is getting a public thank you for starting the process to expand the state medicaid program. the president will ask congress to provide full federal funding for the first three years after states expand their programs. the effort to close the guantanamo a -- guantanamo bay cuba base has been expanded. 10 prisoners have been released to oman, putting the prison population below 100 for the first time since it opened in january of 2002. efforts to manage the biggest refugee crisis since world war ii are failing. the situation is getting worse. he blames the failure on the increase in the number of eu countries tightening border securities.
it's a trend he says could unravel in the block. more than a million people landed on europe toss shores, many from syria, iraq and afghanistan. a new poll shows hillary clinton and bernie sanders locked in the race in iowa. from a significant drop last month's lead and within the margin of error. senator clinton has stepped up her criticism of senator's -- of senator sanders. news 24 hours a day from the first word desk. back to you. david: commodities markets closing in new york. a replica coffee rose after earlier touching its lowest prices in year. prices slumped 35%. wheat dropped the most in a week as supplies are higher.
wti for february delivery rose as investors reassessed reasons for a drop. eight quick check on the stock moves here -- the dow up 1.7%. the s&p up 1.8%. i won't dare mention the nasdaq. i will go to my colleague, abigail doolittle. certainlytocks are trading higher at the nasdaq. nasdaq stocks are down year to date. intuitive surgical is one of the few stocks trading higher after the company announced beating consensus sales. in whate are fitting jonathan palmer called the real
success story in a robotics company out there. despite the ongoing debate around robotics surgery, they have recently stepped up growth slowed after procedures by moving into general surgery and going abroad. the real standout here is the possibility that competition is on the horizon after 15 years as the solo act in the robotics surgery space. medtronic showed a slide suggesting they may move into robotics surgery. indicated theyo may move into the robotic surgery space. intuitive surgical is going strong. ofy booth is the president intuitive surgical and joins me from san francisco. you have been existing in this closed market space for a while.
that to you and what is it going to do to the marketplace? guest: we have known for years that robot-assisted surgery is important and can make minimally invasive surgery more accessible to patients. it is natural and inevitable, something we have anticipated. we feel really well positioned and have a great product line that spans all kinds of different procedures and lines. it is something we have thought about and are ready for. david: if this goes to the market, it strikes me to companies of that size could drive prices down. how will you prepare for that? if you look at how value is created in the surgical space, surgery is an important
therapy. i think what you look for in terms of value is outcomes overprice. are tightlyhing we focused on. other companies will make their own assessments. they will decide if that makes sense. we anticipate other competitors will probe different places in the marketplace. if they can find a place where that value equation makes sense, we will get some traction. but we really think in the very long term. david: i know you have been looking to expansion in asia. what is the timetable on getting to the asian marketplace? directwe are already a
seller in japan. the whole set of technologies that go with it and advanced imaging, the ability to see beyond tissue in japan and china and india. ande seen a lot of interest uptake and we think the runway for additional growth is really substantial. want to ask about the da vinci single point system. do you have a timeline from when we might see that rolled out? a product that enhances our ecosystem, it is an accessory that goes with it. doenables surgeons to natural surgery, so if you had a cancer in the throat, it allows the surgeon to go through the mouth or -- instead of through the throat.
have been developing that technology and put to rest some technology milestones and now we are partnering with surgeons to to generate the validation and lab work. we will shareer, with investors what that looks like. look at otheru types of surgery that could be done robotically in the future, what are some promising areas there? anything on the horizon that stands out? the thing that has been growing nicely in the last year and a half has been in general surgery. : and rectal surgeries, hernia areaspair, these are where surgeons are finding real value and leading us to great outcomes for their patience. to asset surgery is going
matter. we are thinking lung cancer -- those are tough surgeries and our technology can enable surgeries to do it minimally invasive lee. david: thank you very much. coming up, another nasdaq stock we are watching -- gopro. is that accompanied barely holding on or is a rebound right around the corner? ♪
first presidential debate of 2016 just 18 days before the all important first votes are cast in the aisle caucuses. it's proving to be a battleground for both parties. hillary clinton is now and that with bernie sanders. live from the site of the debate is john heilemann. let's talk about this whole -- with the margin of error, it seems like it's a dead heat. john: it is a dead heat, it is a jump ball -- any of those metaphors you want to use. if you think back to our last poll where hillary clinton had a considerably bigger lead, bernie sanders is the one with the momentum at the moment and he is in the process of reassembling the barack obama coalition from 2008. he leaves with first time caucus-goers, he leads with
first time caucus-goers and independent voters. those are the places where he has an appreciable lead right now. this contest had about a nine point difference a short time ago. has bernie sanders caught up or is hillary clinton going to be able to capitalize on the momentum to take the lead? inn: from having been out iowa, traveling around and spending time with the sanders there's a lot of enthusiasm around what he is doing. hillary clinton is holding on with her voters and she has a big lead with female voters, a big lead with older voters and older voters are more reliable caucus-goers. but if you think about where the big mo seems to
be with bernie sanders. i don't think a cap -- either campaign has any doubt that by the time we get to either of them, we may have a race that's too close to call heading into caucus day. set down with donald trump yesterday and he very humbly through -- drew some parallels to ronald reagan. mr. trump: reagan had a little bit of this, we have to see what i think the closest thing i can think of his reagan but i don't think it is the intensity we have david:. is that a fair parallel to draw their? john: the question i put to -- he often refers to what he is doing a starting a movement and not just a campaign. in thes no gain
excitement around donald trump. there are thousands among thousands of people who come to see him. thousands of people did not even get into the arena. there's a big difference between building a sustainable political itement and capitalizing on the way ronald reagan did on conservatism in the 1980's. trump is right to drag about the fact that at this phase in the campaign is a generally -- a genuinely impressive thing. hit the new york times website before you set down with donald trump about a loan that ted cruz received and did not disclose to electoral officials. you asked donald trump about that and tried to get a sense about the degree to which is going to make hay of that. what did he say? hit ted cruzid not
as hard as we expected he might. the story had just literally broken an hour or so before we sat down with him so i'm not sure he had time to fully digest that story. the big question is whether he is going to punch crews hard in the nose. everyone expects this debate to be the main event because ted cruz and donald trump barnett can that can iowa and ted cruz has finally taken off the gloves. everyone is waiting for the fisticuffs tonight. ted cruz to imagine if goes after trump tonight, in response to the attacks on the eligibility to be president, it's hard not to imagine trump will come back with something related to this goldman sachs story. i hate to say it, but that is a juicy political target. david: john heilemann, thank you
very much. john and mark are hosting "with all due respect" tonight. you can catch the full interview with donald trump tonight, starting at 5:00 eastern time. time now for the bloomberg business flash. should near energy planning to export liquefied natural gas in late february or early march. that delayed from its previous estimate of late january. they are citing recently discovered instrumentation issues that will take a few weeks to fix. a business startup finish the new round of funding giving it a value of $1.1 million, the company is considering an ipo. an unexpected rise in first time applications for unemployment benefits. totial jobless claims rose $284,000.
that's the bloomberg business flash. stocks bouncing back room yesterday's loss. julie hyman has more. julie: we are talking about retail, thanks in part to best buy and its numbers. domestic same-store sales in november and december were down by 1.2%. best buy is so reliant on the holiday season, so this seems to be a continuing secular trend of people not buying in best buy stores. it is also a reflective -- a reflection of waning demand for smartphones or at least it's waning cycle. those shares are taking a hit by 11%. gamestopee shares of the climbing to -- declining today.
more and more gamers are migrating to online owning games rather than picking up cartridges at their local gamestop. we're also looking at sears -- they have confirmed they are going to close a handful of kmart stores by mid-april. this is more just a confirmation of some of the fierce struggles at its retail operations even as it spun off retail operations. onanother sector, supervalu the grocery store situs falling by 15% after third-quarter sales missed estimates. was downgraded as a result i analysts at deutsche bank. supervalu has been falling as well. are looking at the retail etf that includes supervalu as well
as some other retail stuff we have been watching. xrt, we seeat the it turn a little higher but definitely not reflecting the same strength we see more broadly. if you look at it over the past year, here is the xrt. how has retail performance been over the past year? it depends on how you measure it. it includes things like supervalu and cvs, staples retailers down. index uphe s&p retail about 19% because it includes things like amazon and netflix. in terms of relative retail performance and the etf that tracks retail, you want to look at what is inside.
david: welcome back to bloomberg markets. so far, 2016 has not been kind to go pro. after missing sales estimates and saying it will lay off 7% of its workforce, the action camera company has seen its shares nosedive. the ceo losses billionaire status after seeing his net worth cut almost in half. emily chang is standing by. what seems to be the problem with this company?
there's a lot of concern they cannot diversify their revenue significantly a lot. they bet a lot on their latest camera that came out last july and people were just got buying it in the numbers they expected. they had so much access inventory that they had to cut the price twice and they are selling it now for less than half of what they originally marketed it at. there also making a return to becoming more of a media company, licensing the footage shot on the gopro to other media companies and they have not been able to turn that into a significant revenue stream. i sat down with the ceo and talk to him about the volatility of the stock. take a listen to what he told me. are fortunate that we have a long-term vision that makes a ton of sense. when we sit down with investors
and they understand our vision, it becomes a question of are we the ones to execute? more often than not, i think people believe we are. the stock will go up, the stock will come down, but as long as we execute against that vision, we will try. a question not just of whether it is the correct vision but whether they can execute on it. there are a lot of other companies out there making the very same thing for a lot cheaper. david: what this company has not enabled to do is get the software right. emily: that's a huge problem. i have a gopro at home and i don't use it much because the software is difficult. i can't get onto my computer and it is a pain. the technology is incredible. we use them on shoots for bloomberg west all the time, but
is it a multibillion dollar company? that is the question. david: i want to ask you about twitter. we saw it at an all-time low. a few months on the job and the ceo is still unable to figure things out. jack dorsey has been ceo for not even six months now. we should give him some time. the very excited about twitter moments feature and they have a live streaming app they bought a while back. you can see live periscope feeds and i know that is something dorsey is excited about. is going tok it improve twitter engagement? take a listen. thet: this improves experience of being a person on twitter. if you enjoy being on twitter more, you will use twitter more. you will engage with more content edits it's a good thing
for the ecosystem. we talk about what it has been like since jack returned to the company. guest: this improves the experience of being a person on twitter. if you enjoy it, you will get access to and engage with content more frequently. that's a good thing for the product and a good thing for the ecosystem. emily: he says he loves jack and they -- and that he spiritually that's twitter, but they have a lot of work. david: coming up today, intel ceo stacy smith. that's later today on bloomberg tv. ♪
from bloomberg world headquarters here in new york, good afternoon. i betty liu. here is what we're watching at this hour. here comes the rally. stocks are gaining the most in a month. energy shares are leading the market higher. our stocks finally turning a corner in this rough 2016? skipping out, gopro. sales are dropping 15% as competition heats up. can the company get into new products? what about a gopro drone? big earnings from wells fargo, citigroup, blackrock. a lot like what jpmorgan did this morning. we are about an hour away from mcleod debts the close of -- from the close of trade. julie: