tv Bloomberg Markets Bloomberg February 2, 2016 3:00pm-4:01pm EST
from bloomberg world headquarters in new york, good afternoon. i am betty liu. blows are setting another in afternoon trade, the dow tumbling more than 300 points at one point. energy prices continue to crumble with wti settling below $30 a barrel, oils worst two-day drop in five years. reports showing that voters are lighting expectations. yesterday morgan stanley cut its price target to 333 from 450. is that still too optimistic on tesla? ipotle reporting after the bell. investors appear to be welcoming news as the company and the stock of finally on the mend.
and we are one hour away from the close of trade. as i mentioned, we sold off as much as 300 points on the dow, recovering just a bit. i want to head to the markets desk, where julie hyman has the breaking news on the markets. julie: just a bit. i mean, really, just a bit. the nasdaq and the s&p are often very sharply as well. i've been watching various groups that are on the move today. utilities turned higher as we continue to see rates move lower. that is the relationship we can do to see, but energy is lower and financials, bloomberg industrials, tech, consumer discretionary. you have other earnings weighing on stocks today as well. within energy can we just heard in the past few moments from the s&p on a number of different energy companies that are being downgraded, the chevron credit rating being cut at standard & minus from aa.
not seeing much of a reaction. the outlook for this company is stable. southwestern energy was cut to junk by s&p. most of these stocks are not moving more on these downgrades because they are already down on the day. let's get to oil prices as well, shall we? we are seeing declines above $30 a barrel. once again to i dip below that level earlier today. we have been watching these inventory reports closely. tomorrow is going to be another important one. betty: this is all driving us into treasuries, gold and yen. julie: pretty classic relationship, classic flow of funds out of stocks into things like gold, which is not gaining that much, but it has reversed here. it is more than direction.
we have seen the game to the three-month high and then it gets and now people are going back into it. the 10-year has been a steady trade throughout the day. another 6 since we last checked on it. lowest since last april as people are buying treasuries and finally, as betty mentioned, the yen as well catching up big today. doubt lower against the yen. the yen. lower against definitely people are looking for refuge in this market right now. betty: thank you so much, julie hyman at the markets desk. let's get a check on the headlines. mark crumpton has more from the news desk. hillary clinton's victory in the iowa democratic caucuses means she will collect 23 delegates and senator bernie sanders will win 21. with her advantage in superdelegates, the party officials who can support the candidate of their choice, mrs. clinton has a total of 385 delegates. senator sanders has 29.
82 delegates to win the nomination for president. side, republican caucus winner ted cruz made an appearance in new hampshire today, where the first primary of the season will be held in one week. senator cruz went on the attack against donald trump and marco rubio, who finished second and third respectively in iowa. he said mr. compton not do anything to fight immigration reform any accused senator rubio of leading the fight for amnesty for immigrants in the u.s. illegally. house speaker paul ryan had lunch with president obama today and then back to the house, where he will try to secure enough votes to override president's veto of the bill that would got obamacare. senator mcconnell was also at the lunch good officials say that the intent of the meeting to see if there is any common ground. the president is expected to
bring up the fight against cancer and puerto rico's debt crisis. bill cosby is back in a pennsylvania courtroom this tuesday. his attorneys want the only criminal case filed against him for alleged sexual assault dismissed. his lawyers claim a beat made a deal with the prosecutor in 2005 that you wouldn't be charged and would testify for -- that he wouldn't be charge and would testify freely in the civil lawsuit. meantime, i model has dropped her lawsuit, accusing cosby of drugging and sexually abusing her at the playboy mansion in 2008. an official at the department of veterans affairs still plans to punish 2 senior workers accused of manipulating the agencies hiring system. the managers were demoted last month after they forced lower ranking managers to accept a job transfers and then took the jobs themselves. federal judges later reversed the emotion -- the demotions. global news 24 hours a day, powerpoint 2400 journalists in
more than 50 news bureaus around the world. betty, back to you. betty: thank you so much. as u.s. stocks are heading lower, volatility is swinging hybrid and next guest expects the volatility that began last year to continue this year. ,e have seen rallies, but not so far, a prolonged bear market. joining us from boston is the chief global investment strategist at charles schwab in boston. jeff, we were just noting here minutes, in5, 10 this market, something like 30, 40 points -- it is a really volatile market, but do you think something else is at play here? i think there are a lot of factors at play. there are so many factors affect in this market. one of the visit of the concern about central banks in the background. sure, we have oil prices down today and that is the primary driver of what is moving the
work it around, all the esoteric things that tend to move oil prices. lower, financial sector that is keep it has will prices come down from expectations for inflation fall, that means banks need to be more dovish, not raising rates as aggressively. it is hurting the financial sector and that is happening day after day this year. financials of the worst performing sector globally this year. betty: they are indeed. what are we to expect? is this going to stay volatile and so get word out from the fed? -- until we get word out from the fed? julie: it will not hint -- jeff: it will not hinge on the fed. to get further into the earnings season, particularly in europe and asia, and the things that are happening positively around the globe. europe continues to emerge from the recession it was suffering years ago. in japan, the imf believing japan will double its growth rate in 2016.
we may hear some positive things from corporations. that, combined with some of better economic data -- the reports we saw at the beginning of the month were mixed, but overall, a positive trend with some of the data. in europe is worth 2 chinas terms of gdp. betty: what do you make of the correlation, though? the correlation between stocks and oil is of the highest in 4 years. do you read that as a bear or bullish sign? what you read into that? are creditinly there concerns. we have seen it in the high-yield bond market, going to the stock market as well. as oil prices fall, there are concerns about many of these companies tied to oil and their ability to pay back debt. and the idea that maybe we will see more countries institute negative interest rates. 30% of the stocks in the world the next are based in domiciles
and companies with a negative interest rates and i can weigh on the financial sector. -- that can weigh on the financial sector. betty: but, jeff, that could be hopeful to us. jeff: it can come and so can lower oil prices. but the headwinds from laurel oil are outpacing the tailwinds from lower oil in the places it is not, i guess i would have to point to japan, where there is almost no energy sector where the headwinds are outpacing the tailwinds. otherwise, we're feeling the downdraft incapacity conditions, the downdraft in employment, the downdraft in profits. all of that negatively impacting the market. andill be a year of rallies corrections, not just corrections. betty: are you surprised some of these tech momentum stocks really propelled us to more games last year, that they are replacing pretty solid resorts, they are bucking the trend? jeff: yeah, some good numbers. technology is a sector that looks pretty attractive to us. it is our favorite of the
cyclical sectors. in the u.s. to more than 70% of companies and technologies are beating estimates. int is even more true europe, where 80% of the company's are beating estimates. there is good news in the tech space. -- faringd to be fed better on the down and upsides. looking for a little exposure to this market but may be a way to mitigate some of the volatility, given the positive growth trends that the sector is experiencing. betty: jeff, thank you so much. much more ahead in the next 20 minutes of "bloomberg markets," as we are getting yet another low on the dow. carl icahn lashing out at the aig ceo, saying he does not have the skills needed to turn around the insurance giant. aahn particularly upset about $6.6 billion charge that the ig was forced to take due to a reserve shortfall. apple's surpasses the most
15. even though you had good earnings from alphabet and others, that is not helping the indexes. part of the reason is crude oil. crude oil prices, and 11% slide that we have seen in oil over the past two days. we're going to keep watching how we are going to end the day in about 45 minutes. time for the bloomberg business , the biggest business stories in the news right now. larry fink is urging the chief executive officers of leading companies to stop offering quarterly earnings guidance and increase their focus on long-term goals. the blackrock ceo come in a letter to more than 500 company's, says the history of running earnings runs counter to a viable long-term approach. blackrock is the world's largest asset manager. folks like an brand vehicle -- sales fell inle january while other automakers beat expectations. the company is reeling from the
aftermath of the global diesel omissions cheating scandal. hell man's has figured out that if you can't beat them, might as well join them. after suing for false advertising, if you run, unilever, is launching its own eggless bread. it will hit shelves later this month. yum. carefully crafted. that is your bloomberg business flash update. carl icahn has been pushing for a carefully crafted breakup of aig and is taking aim at ceo peter hancock. the billionaire activist investor said in an e-mail, "he does not possess the skills to turn aig around." just last week we spoke to former chairman and ceo hank greenberg and he weighed in on his doubts surrounding hancox leadership. hank: he is going to have to prove that he is. until he does, there is a
question mark. betty: there is a question mark to you. you are doubtful. look, i would like to see aig regain some of the strength in stature that it had. i don't see it yet. it is nothing like it was in the foreign field. and it is very hard to rebuild that. ,etty: bloomberg's sonali basak who covers insurance companies, has more. what else did he say about peter hancock? sonali: he is upset about the reserve charge, partially because a lot of the reserves are tied to policies between 2011 and 2014. that is when hancock was leading the unit. they want him to turn around his unit and that is why they are saying now, when you were in charge of the unit yourself, you were taking these charges on what you are going to charge us. basically saying you miscalculated the assumptions. betty: he made mistakes. sonali: absolutely. trendwants to ensure the
down to just property casualties, so mortgage operations. who is going to lead this company? you are not the right one. betty: this is based off of peter hancock and his unveiling last week of a new plan for aig, marketncluded the ipo and surer and also returning $25 billion to shareholders. i want to remind our viewers what he said on the floor of the new york stock exchange. >> what we will do over the next two years to make this country more focused, more profitable, and return $25 billion to shareholders. that is speaking to all of our shareholders come all of our policyholders, all of our regulators come all of our stakeholders will so i'm sure we won't satisfy all of them, we need to deliver a sustainable franchise if we are going to make the right decisions for the trading of long-term versus short-term urgency to deliver results. betty: outside of the reserve n criticizes,t cah
what else did he not like about hancock's plan? sonali: getting rid of the mortgage operation does not get rid of the nonlife operation. that keeps it under control of the u.s. government. awever, there's not really path -- ge is the one company that is looking at it by selling operations. they have not applied yet. we don't know if getting rid of the life operations will make aig not -- betty: not a systemically important company. that is something hank greenberg address and he was more aggressive about that,, sonali. hank: it seems to me that aig should be contesting the designation. they are half the size that they were. why are they being held to a size that no longer at? betty: is that a real possibility, really something they could do? sonali: something metlife is doing right now, not only did
they say they are contesting the government, they also announced a plan to separate the business the00 field for -- separate business of 240 going dollars worth of assets. ge is shutting its business, too. aig has always said we don't know what the capital rules all. regulated by any state anyways. -- and byeign company foreign countries so it is not a big difference with the system. betty: does aig have anything to say about carl icahn's comments? sonali: they posted new materials supporting the current plan. the chairman supported the current plan again. we will see how this plays out. the main reason we think icahn is doing this is that next friday he has to enhance his slate of her actors and we will see if you can get the support of aig and, ultimately, investors. betty: thank you, sonali basak of bloomberg news and conversation with carl icahn. markets are selling off big time
betty: stocks are selling off in a big, big way, dragged down by oil. julie hyman is standing by with how the options market is trading all of this. jules? julie: thank you, betty, appreciate it. joining me is the chief officer at recon capital partners. we've been watching stocks ix go out.d the v not a huge bump up, but you are watching call buying in the vix.
there is a lot of activity in the vix market today and everyone is buying calls right now. there is three times the amount of calls versus puts. about half of those are in the 21-40 -- what that essentially means is they expect a move precipitously higher. moveexpect a big blowout to come and you are seeing that happen. we see that because this did fall to around 20, the average. a lot of the answer to the has not been removed from the marketplace and on the macro level it has been quieter because companies are reporting earnings and people have been focused on the unsystematic risk. now we are seeing oil trickle back in. the s&p 500 has reported earnings, especially the big mega-caps. people are focused on the systematic risk. betty: this is really at -- julie: this is really a change from also come because we have not seen big spikes in the vix and we have not seen at
locations for big spikes in the vix either, necessarily. kevin: no, and what is happening with the vix market is the vvix, the volatility of the eye out. what was it -- volatility of the vix. what is interesting is we are still around that 95 level, saying we will not see big spike up or down but it is still elevated. we will see more volatility. what it is a signaling is vix above 20 is really here to stay. julie: gotcha. i want to talk about the one stock today, alphabet. you are looking a bit further out and you are doing something a little bit unorthodox with it, which is selling a put on it, if i'm not mistaken. kevin: that is correct. it will always be google in my heart, by the way. what we want to do is if you beatthis move where they
on earnings and are more transparent but he missed the move up, you can go up to june and capture the next learning cycle, but what you want to do is sell a 750 put and capture the options premium. at 750 if itbuy it goes to that level and you want to own it there anyway. as is the great way that people want to -- this is the great way people want to add additional it is people who want to miss the move and don't go chasing a year, what you can and go to 4%is put and this gets you into the stock where it was trading before the move up, before earnings on this cycle. if he does happens have a downturn now? there is an interesting chart on bloomberg today that shows other company's when they have gotten to a certain market cap, they end up falling to some extent. kevin: yeah, that is a great
point. you have to purchase for $750 but you pay about $30 to do that. $720ll cost you a total of . with the google, they are having sound fundamentals. that is the most clear thing that came out from the report yesterday. we could see earnings double in the name and they are not too expensive given their growth. they kept the margins from 2012 and that is what came out even though there has been pricing pressure and increase, edition from facebook. julie: kevin kelly, thank you so much. betty: still ahead on "bloomberg markets" we are watching stocks very closely. we are just coming off of our lows of the session. ♪
headlines. mark crumpton has more from our news desk. brazilian president dilma rousseff told lawmakers today the country is in partnership with the united states to create "zika vaccine could she said, my entire government is engaged in facing this emergency." february 19, students will join a quarter million members of armed forces to eradicate breeding down -- breeding grounds for the virus. end to en -- talks to serious a civil war have barely begun an already opposition groups are threatening to walk away. the high negotiations committee wants a halt to russian bombing in support of president bashar al-assad and and and to government assaults on civilian areas and sieges of rubble-controlled towns. increasingn union'
pressure on greece to manage borders. last year an estimated 850,000 refugees arrived in greece, which only has a shelter for about 10,000 people. the fbi is working with a multiagency team investigating the lead contamination of flint, michigan's drinking water. the environmental protection agency was assisting in the investigation of the water crisis. officials have not said whether criminal or civil charges might be filed. flynt switched its water source from detroit's water system to the flint river in 2014 to save money while under state financial management. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i am a mark crumpton. betty, back you. betty: we have less than 30 minutes until the close of trade and stocks are selling off.
the nasdaq is still the worst performer of the three major averages. financials are down and, of course energy shares. theail doolittle is live at nasdaq with the big tech stocks. abigail: another big selloff of the nasdaq in 2016, one mainly accelerated through the afternoon. the nasdaq is down about 2%. so strong that it reversed the multi-day winner facebook into the negative. this is true of alpha that, cutting into his gains. alphabet had been up to 5% earlier. all of this intraday volatility is shown very well by the facebook one-day chart. when you start to see strong phenomenal stopped by a very risk-off sentiment, sometimes it suggests selling may just continue. the ghost sentiment is not helped by the biotech bear market. index is downtech about 35% from its record peak on truly extreme intraday volatility.
14 out of the last 22 trading sessions in this new year have produced moves up or down by 3% or more. big intraday swings there. is itg question remains et al. of what is to come for the nasdaq overall? tell of what is to come for the nasdaq overall? one of the losers is tesla. shares are off after pacific crest said there could be a demand problem for tesla. estimates were lowered right through 2012 so he feels strongly about this, especially ahead of the earnings report next week. tesla is clinging to his word built over the last two years but with a very high bearish shortage of 30%, it may just break at some point in this year. you, abigail doolittle at the nasdaq. we will have more on tesla in a moment. surprisinglyd a
good january despite the monster snowstorm that hit the east coast late in the month. sales of fiat chrysler and general motors rose compared to this time last year. ford sales declined but were better than expected. the monster blizzard dumped more than two feet of snow on the mid-atlantic. it closed a number of dealerships for several, several days. does this mean the auto industry can expect a second straight record here, 17 million dollars-plus in sales? i want to go to bloomberg news reporter jamie butters. what happened in january? julie: it -- it was another great month. there was a sense that there was going to be a little bit of applause. there usually is after the rent closeouts. betty: december to remember. decembers tobers, remember. let's not ever forget them. some there was a shorter month, one less weekend. out fromfactor it all
entrance into a very strong month, almost 4000 units better on an annualized basis then analysts were expecting. in the click we are heading to another record year. reasonablyhave done profitably. investors have been concerned that automakers are going to keep cutting prices to keep the sales going and so far it has not much happened. just a little bit of the time here and there. wholesale slashing of prices. betty: how can the auto shares have not performed that well? as you have been reporting all day, the whole market is down. we have seen this last couple weeks and months with autos. there is a sense that things have gotten as good as they can get and well maybe they can keep being great for another year, another two years, it is not going to get that much better. tore is not much more growth be had, much more margin to be had. everyone is taking profits and getting out no matter how good or bad the news is. betty: right, so it's ounces
that even if there is all this momentum sales-wise, they selected -- they still have to convince investors. it seems like that is the same thing for tesla. they seem to be hitting their numbers from it may be lower end, but analysts in the wall street community continue to doubt teslas growth. with tesla you have to step back a few years and look at what an incredible run it has had as a stock. as a company they continue to set records but they are not growing exponentially, right? there's always this down, can they keep growing, keep growing as fast as the best projections fans/invemusk or his stors have made? betty: fans and investors. jamie: fans and investors, investor-fans.
it is based largely on a company that elon musk, another line of business that elon musk is not even said he is going to create. this week he cut his target back and half of that cut was the decline in the value of the business that doesn't exist. [laughter] stock.s such an inflated for a company that has made relatively little real money, that is still in growth and investment mode, it is all about the future. it is about wrapping up the model x. can i get a production speed as high up as it is supposed to be? are they going to get the model on time? betty: it is supposed to debut at the end of march. what exactly -- are they missing some sort of target with the model x? jamie: it had a slow start in the fourth quarter. he said they would begin deliveries in september and half a dozen of them on the next to last day of september. tesla dozen announced sales of
announced sales every month the way the big automakers do. they do it quarterly and globally. when they did announce at the end of the fourth quarter it was a very small model x number. they say the production is building but they had troubles with the doors and seats. it is such an innovative vehicle that there are a lot of challenges involved. they are working through them. not as fast as some would like. always a tesla story, right? betty: it is indeed. so much is about investing in the future, in the company that doesn't quite existed. thank you so much, jamie butters in detroit. still ahead, chipotle reporting after the bell. how much will the e. coli crisis way on the bottom line? also reporting is yahoo!, and ceo marissa mayer expected to roll out a turnaround plan. "the wall street journal"
betty: good afternoon, and welcome back to "bloomberg markets." i am betty liu. we want to look at the selloff, the worst day so far for stocks since january 15 pit we are, though, coming off our lows of the session. at one point all the averages were down over 2%. time for the bloomberg business flash, the biggest business stories in the news right now. yahoo! is reporting earnings after the bell but a judge is ordering yahoo! to hand over documents detailing ceo marissa mayer's firing of a former second-in-command.
the move triggered nearly $60 million in severance payments. the court says shareholders deserve more information to evaluate company funds that were raised. the judge said mercer mayer'-- marissa mayer's conduct is worthy of investigation. byew funding round led alibaba values this company at $4.5 billion. the ceo is says the money will help bring its first product to market. magic is promising a headset oft puts 3-d images on top the real world, providing that the company calls "mixed reality." netflix is getting an update from piper jaffray, inc. raised from overweight to neutral. -- being raised from overweight to neutral. and analyst leaves the company's slowing domestic growth is offset by international gains. that is your bloomberg business flash update. while the market is selling off, chipotle shares are heading higher.
is getting a boost from optimism that the food safety problems are nearing an end. the u.s. centers for disease control and prevention investigated outbreaks of e. coli. the way reported fourth-quarter earnings after the close. joining us is our consumer reporter. craig, is it finally feel like it is ending for chipotle? like he does.s they were waiting for that "all clear" from cdc. there is a criminal probe in california and litigation against the company but for the most part, we can say the recovery phase has started and we will see what the earnings were for the fourth quarter. people not expecting too much there. betty: they know the sales defy -- 50%? craig: first time they declined publicly. people want to get a sense of it if the recovery is going on,
sales and starts to max out a little bit. betty: craig, would it be that quick? craig: that is the thing. i'll think people would hit them that hard -- they don't think people -- i don't think people would give them that hard if they didn't. betty: the ceo said it was inconclusive, the source of this outbreak could not exactly heartening, either. ifig: i think chipotle they had their brothers with us like to the cdc to find the cause. half the time cdc is unable to find the cause. keepsy chipotle records and how people move in and out of the restaurant very quickly, that is not help. betty: this is going to derail chipotle's long-term plans? craig: the company has said they can recover. i don't think we will get a
sense of that today, but as we get to q1, q2, we will get a sense of if they are getting their margins back. analysts will say yes to him they can bounce back, but it will literally take time. betty: have they lost their market share? craig: sales are down and evil are eating elsewhere. -- people are eating elsewhere. we have talked into evil from fast food companies anecdotally who have said -- they: hard to pinpoint it were going somewhere. maybe not one single place. all right, craig, thank you. for us.hipotle the close of trade moments away, 15 minutes away, and we look to be coming off of our lows of the session. this has been one of the worst two-a selloffs we have seen since the middle of last month. ♪
betty: welcome back to "bloomberg markets." i am betty liu. markets selling off big-time today. the plunge in oil prices having a massive effect on oil companies like bp. chairs are turning him in, down the most since 2010 when the company was in the midst of the gulf oil spill. ryan chilcote spoke to the ceo bob dudley. bob: we have big projects going on and we don't want to threaten the growth of the company but we will manage that capital tightly. ryan: you have been guiding the company to $90 billion this year. at the end of 2016 where do you see the number coming in? bob: the low end of that guidance. ryan: that would be contingent
on what? rred this year we have defe a couple of big projects. there maybe a couple of those this year as well. bob: if you look at your --ryan: if you look at your leverage, a group to 21.6%. that is an increase of 5% over just one year. where do you anticipate it being years from now? before the accident in the gulf of mexico, it was between 20 and 30%. we took it down and we are drifting back up to where it historically has been. i'm comfortable with the 21%. ryan: where do you see it in a years time? bob: i don't know. we will see what the results are. second quarter is very tough and choppy. supply and demand are tightening in the second half of the year. i think we will see higher oil prices. ryan: how comfortable are you --
how high are you prepared to let debt go before looking at the dividend? bob: let me put the dividend in perspective to give you some of the numbers. people talk about the dividend, which is really important to show holders. they make it very clear when we meet with them. $6.6 billion a year is our dividend payment. operating cash flow in the fourth quarter was $5.8 billion. with that in perspective. we generate about $20 billion of cash last year. we have about $17 billion to making billion dollars of capital to move around. $24 billion of cash costs across the company. we have all those pieces to work with to ensure that we continue paying the dividend. we have lots of leverage. ryan: let me ask you, are you prepared to see gearing go about 25% to maintain the dividend? the mathe distantly do and say, ok, over the past year it has dropped by 5%.
what if it rose by 5% this year if the oil price persists at these low levels? are you comfortable with hearing 25%? 25% -- gearing above bob: we will be flexible with of the gearing levels. does not make mean a risk either. we operated for years at levels like that. ceo bob dudley with bloombergs ryan chilcote. markets are closing in less than 10 minutes time. julie hyman has the check. up off the lows. julie: the dow is down 288 but earlier it was down more than 300 points. indeed, a little bit of a leg up as we head to the close of trading. this is the first back-to-back decline for the s&p 500 since the beginning of january come even though the beginning of the year felt so rough, we have had actually seen a lot of consecutive declines for the market. oil is a big part of the story
today as we continue to see it move lower as well. down to its lows of the session. 5.4%. below $30 a barrel. we will get the inventory report tomorrow. chevron, remember, it's debt is being downgraded. exxon mobil is out with earnings that beat estimates but the default year-over-year. hard,r group hit technology could this has been happening a lot this year. most of them showing some strength last year but leading the clients this year. amazon.com in particular is off by 4%. we have been watching yahoo! in the past two moments on reports is consideringy putting itself up for sale. it will be reporting earnings in just a few moments when the headlines, but it has come lower again. another big part of the story today, financials,
second-biggest group of the s&p, and it is falling as well. steep declines across the big banks here. there is concern because of what we are seeing with the yield curve that that is going to be negative potentially for-profits of banks. finally, a couple of rays of sunshine in today's session. google is rising after it reported its results after the close of yesterday, benefiting from the movement today. those chairs are -- those shares are paring the advanced considerably but still up, market cap surpassing that of apple, especially because apple shares have been going down. michael kors is out with earnings that beat estimates. it is helped by accessories and footwear. never all bad, betty. today was mostly bad. betty: less bad in some. thank you, julie hyman at the
markets desk. off of it is the world's most valuable company. shares -- all that is the world's most viable company. alphabet is the world's most viable committee. david kirkpatrick said this about google. it basically came out of nowhere and became the world's largest media company, selling and. they do it better than anybody. david wilson joins us with more. a look at the sustainability of any country that hits the half-trillion dollar mark it is it likely that you win the oscar if all goes downhill after that? david: alphabet, or google, if you like, is the 70 u.s.-based, need to surpass -- seventh u.s.-based company to surpass have to billion dollars. -- half $1 billion. apple was the previous want to
go above and the track record is not good for these companies. look at the chart, it shows you how the six of them did in the first year after going about $500 billion. cisco systems, microsoft, general electric hit in each case, the company was below $500 billion a year out, and sometimes rather substantially so. betty: why is that? visit a peak indicator or something -- is it a peak indicator or something? david: it certainly looks that way from history. you may have to keep in mind, only two of the companies that add $500 billion in the past, gen apple, managed to get back above above it beyond the $500 billion threshold. it is all most how big is too big? maybe that is the way to judge. betty: is there anything these
countries did or can do to prevent being part of that statistic? david: it comes down to how well the business goes and how willing investors are to pay up for the earnings and the sales they generate. great results yesterday. 2e question is, looking out and numeral three quarters, are they going to be the same? betty: the biggest of any out there with $2.5 trillion in market cap. thank you so much, dave wilson, our chart guy here at bloomberg. that is it for "bloomberg markets." miss" is up next.
u.s. stocks glowing closer today glowin closing lower today. >> the question is, what did you miss? chipotle's first earnings report since the e. coli scare. in justve those results moments. should not devalue its currency. our guest says the weaker renminbi will not fix the problems of china's economy. we begin of course with the markets. julie mentioned this earlier, hard to mention but this is the first back-to-back loss for the major indexes in about three weeks. it felt a lot worse. today we had a steady risk selloff. there's that