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tv   Bloomberg Markets  Bloomberg  March 4, 2016 3:00pm-4:01pm EST

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from bloomberg world headquarters in new york, i'm bonnie quinn. stocks are losing a bit of steam in the last hour but are still on pace for the third straight weekly gain. the dow crossed 17,000 for the first time in two months while the s&p 500 and dow are on track for a four-day winning streak. the jobs report send some mixed messages to the markets. wage growth slowed. here is chairman of the u.s. council of economic advisers. >> i think this is a good report and you need to look at it in the full context of what we've seen recently. bonnie: china taking more steps to intervene in its stock market. guest is vice chair of j.p.
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morgan chase asia-pacific. are one hour away from the close of trading for the day and the week. desk head to the markets where julie hyman has been following all the ups and downs. julie: we will see if we have been closing out these multiweek highs. of s&p 500 in onto a gain .10%. it was this push and pull of the better-than-expected headline number and the worst and estimated -- worst than estimated wages number. some say that was due to a calendar quirk come it that it didn't include the mid-may pay period. be that as it may, certainly market participants seem a little confused by the numbers and we have seen the s&p 500 fluctuating in a relatively tight range.
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i want us to look at the best and worst performer in the s&p 500 in terms of the index weighting they have. apple shares rising today. facebook is going lower. the company is going to be paying more in u.k. taxes. if you look at it by groups, we have seen materials and energy gain. they are hanging onto gains. utilities in the top spot. lagging, health care, providing counterweight. bonnie: some interesting moves and commodities. julie: that has been the tail wagging of the equity dog. crude oil and natural gas both rising. natural gas rebounding off a 17-year low. crude oil prices also rising. we approach a meeting of russia and opec nations may result in a production freeze.
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gold and copper have also been showing strength. what's fascinating about the rise is and has continued even as we've seen strength in equities in a more risk on environment. getting a boost from the dollar, the weakening dollar. the bloomberg dollar index versus a basket of commodities. it is trading at a four-month point 33% today. -- .33% today. romney says he would support an effort to deny donald trump the republican presidential nomination at the party's convention in july if trump doesn't have enough delegates to win outright. romney spoke with mark halperin.
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mark: you said you wouldn't vote for donald trump or hillary clinton. even a lot of your own political allies and advisers would say that's the most likely outcome is donald trump and hillary clinton as the nominees. what will you do when a general election? i would vote for a conservative on the ballot and if there weren't one i was comfortable with, i would write in the name. entire interview can be seen on with all due respect at 5:00 p.m. new york time. trump was scheduled to speak at the maryland event tomorrow but see pack says he pulled out at the last minute. the organization said his decision sends a clear message to conservatives. trump's campaign says he will be holding a rally in kansas followed by one in florida. hillary clinton delivers a policy address today in detroit, michigan. she is expected to outline ways
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to remove economic barriers for families. her challenger has accused her of supporting trade deals that have had in his words disastrous consequences for workers. hold a one-day summit in atlanta next month to help state and local officials fight the zika virus. federal health officials expect the first locally transmitted cases in u.s. by june or july. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. bonnie: thank you so much. chinese stocks have had a strong week. china is said to have played some part in this, reportedly intervening ahead of tomorrow's national people's congress. officials will release the country's five-year economic plan. the managing director of asia-pacific at j.p. morgan
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chase joins us now. what new will we learn out of tomorrow's release? a 13: this is the start of five-year plan. the government will come out with the work report in the coming days outlining the specific plan for the coming five years. monetary policy, fiscal alice e, growth targets. growth targets will be around 6.5%-seven .5%. bigal policy will play a role in the economy. i think there will be a significant deficit. bonnie: it needs to be targeted to specific areas. where do you think? fiscal area,ms of one area is social welfare.
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chinese citizens aren't enjoying a lot of social protections so savings rates are high. one area they will focus on is to use the money to invest in social welfare and infrastructure. another area is tax cuts for small and medium-sized enterprises. you get a lot of support from the central government for people who will be laid off. on an ongoing basis, we will see a lot more spending toward a social welfare, small and medium-size enterprises. bonnie: even with the need for that, you still think china 6.5%-sevenle to make .5% growth? guest: they have a lot of policies announced. i think we are on track to achieve that sort of growth target. bonnie: i want to play something from this morning's bloomberg
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program. let's have a listen now. >> unfortunately, i think there's some serious challenges in front of china. a big leverage in debt since 2008. in the exchange rate regime with the dollar rallying and expectations of the fed tightening, it has caused a of monetary passing conditions. nominal gdp growth is slowing sharply. are investors saying? you speak to them around asia and the world. is this a concern? and chinat ratios have been increasing. according to some estimates, debt to gdp could be as high as 300%. most of the debt is in the corporate sector. corporate debt to gdp is around
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160%. there needs to be a lot of deleveraging coming up. bonnie: when they say china needs to push funds for the real economy, why would he want institutions to lever up more? guest: i think he actually wants capital markets to play bigger role. for example, you may not have seen how much the bond market has expanded in recent months. it a lot of these companies are going to the domestic bond markets and raising funds. bank credit has been booming and that is going to sow the seed. everyone knows china has a debt problem. i think one way to solve the problem is increased profitability of the companies. second is to give these markets a bigger role to play. bonnie: i want to show our it has how much strengthened and weekend.
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hear about what china is going to do regarding the currency and exchange rate? guest: many investors have been very used to looking at the bilateral relationship between the u.s. dollar and the chinese yen. when he to be getting used to a basket of currency, which consists of 13 currencies including the dollar, the euro, the pound. against that new basket, the chinese yen will be relatively stable. many other currencies will be depreciating against the u.s. dollar, which means the chinese yen could also depreciate in the coming year or two. i think we will get used to the new regime. i don't think there will be a large devaluation for the chinese yen. the chinese government has pledged them will not be a large devaluation. we have to take their word for it but i think in the future, we
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need to look at this new regime trading against a basket of currencies. one thing that is challenging for the regional economy is the chinese yen being devalued, other currencies could devalue more, do trading the purpose of gaining any export competitiveness. bonnie: do you see any kind of catastrophic event happening, does the leadership have everything under control? guest: so far, just in the last global sentiment toward china has improved slightly. in january, we have the stock market collapse, the currency weakening, sentiment was very much a negative. but i've been traveling across many u.s. cities and i sense there is a marginal improvement in sentiment among global institutions toward china. next week is a crucial week. the leadership with, -- will come up with many more policies.
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i think the world is watching china's challenges of reform and growth. reform will actually bring down growth rates. but growth is also paramount with a very fine balance between structural reform and retaining a minimum growth rate. bonnie: there will be a lot more communication from the leadership as well and the .eople's bank of china, thank you so much for joining us. minutesp in the next 20 , we will talk a little more china. the company poised to expose its influence in the movie business. we will hear from amc entertainment ceo adam aron. this got tape maker is the topic of today's options inside. and a look at crude oil.
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big gains for the third straight week. ♪
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bonnie: this is bloomberg markets. mike.yment is buying car the news is sending shares through the roof. ceo joined alix steel earlier. have a listen. guest: we think we did get an attractive price for carike. it's a free country.
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anybody can do what they want to do. we will see if someone comes in to top our bed. we are quite comfortable when this shakes out, we will be the owner of carmike cinemas. abouttt: i want to talk the rationale. he said time is the enemy of all deals, adding urgency. why does this deal make sense now at a time when the u.s. box office may have picked -- peaked? guest: and three of the past four years, hollywood has created the industry record-setting performance domestically in the u.s. and canadian markets. as we just saw, star wars launched in mid december, the highest grossing film of all time. "deadpool," the highest grossing film in
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february. transaction and expected to close until 2016. this might a perfect opportunity for amc to get larger as the real blockbusters hit movie screens around the country. --rlett: guest: i think what you are referring to is one week in the chinese box office was larger than the u.s. box office. the u.s. box office in a 12 month period is still quite large. since we have a 75% shareholder that operates the largest set of movie theaters in china, we are our partners at the wonder group that the box office is strong in china and the u.s.
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: what does this merger due to get you scale in china? guest: it doesn't get us scale at all. amc is almost entirely a u.s. movie theater chain. we have 385 theaters. carmike's theaters are all within the u.s. this is about increasing our position to create a national footprint here in the united states. but because we will be so big, we'll not only be the largest movie theater chain in the u.s., we will be the largest in the world. scarlet: perhaps you get more power with studios relying on these blockbuster films. what does that mean in terms of revenues blitz -- revenue split? guest: i look at the studios as our partners and not adversaries to be negotiated with.
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i'm much more interested in growing the pie for all of us rather than worrying about the split between the studios and theaters. one of the things we like about acquisition is we can take proven consumer friendly initiatives and extend them into a larger network of theaters. for example, amc has been known in recent years of putting really comfortable leather recliner chairs, creating dynamic theaters, expanding our food and beverage offers. our number of imax screens and cinema screens. bonnie: still ahead, options inside and a look at the best-performing dow stocks of the week.
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goldman sachs of four point 5%. american express up 5.2%. we're still waiting. 40 minutes left of the session. the dow jones up 47 points right now. the s&p 500 up about a quarter of 1%. ♪
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bonnie: stocks are up just a little bit now but having record straight weekly gain. julie hyman is standing by wit. julie: joining me for today's options inside is dan pastor rally, founder of maker taker.com. unusualeen kind of an day here. we had this jobs report where the headline number was good, the wage number worse than
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estimated. it seems as though traders are not quite sure what to make of it. i think traders aren't really sure. we are sitting at an extremely pivotal level in the s&p 500. personally, i think some of the technicals are a little more important than what is going on state and that's what of thing. julie: what technicals are you watching? if we close above, it is that mean we continue to see this uptrend going on for the past few weeks? think 2000 is a big psychological point and i would look for some follow-through if we close above it and if we don't, i would look at that as a strong resistance point and look for heading back lower. what i think is that for the next several months, we are in a volatile range.
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it is a pretty big range. volatility,ing of we are not seeing a lot of activity. we were sort of looking to this jobs report as being a catalyst for the market and it hasn't proved to be that with the vicks still remaining at a pretty low level, near the lowest of the year today. it's always traditionally been -- it is one of the drivers of the economy. i think it's somewhat of a bigger deal in the last half of last year because traders were looking to that because that is what the fed was looking at and we're -- we were waiting for the big rate hike. 2% chance the a fed might raise rates at its next meeting. it's extremely unlikely to happen. goes, thethat
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unemployment figures are a lot less important than they have been lately. to the tradeturn in the specific stock we are watching. this is a stock that sort of has climbed back almost to the highs we saw last fall but hasn't surpassed the level we saw a early last year. do you think we will see more of a breakout and what will cause it? banking on their not being a breakout. technically speaking, the resistance level is at $160 a share. he stock hasn't been above $160 since june 2015. with the market the way it is, even if the s&p 500 does break out above 2000, i don't think 3m will rise above 160 dollars through that resistance level. the trade i like is selling the regular march expiration call
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credit spread. you're notkly, looking at the equity, you were looking at an option on the credit of the company. guest: exactly. here's what i'm looking at. if i sell this spread, if 3m $162.50 rise above between now and march expiration then that trade is all profit. basically, it's like selling an insurance policy. julie: we will be watching 3m with you and the overall market. thank you so much. more bloomberg markets next. ♪
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bonnie: live from bloomberg world headquarters in midtown manhattan, you are watching bloomberg markets. on vonnie quinn.
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-- vonnie quinn. mark: hillary clinton is the jobs in michigan about the economy. mrs. clinton says the first economic challenge is how to ways -- raise wages. she says is make companies that have inverted get back tax breaks they get by moving their headquarters to other countries. she also said he was workers have not seen promised trade benefits and she would expand u.s. reaction to charges of currency manipulation. we will continue to follow mrs. comments throughout the afternoon. mitt romney would support an effort to deny donald trump a nomination at the republican party's convention in july if he doesn't have enough delegates to win outright. romney spoke to mark halperin. continue tohe might super pac efforts attempting to block trump from getting the
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nomination and added he may write in a name on the presidential ballot if trump and hillary clinton are the nominees. ben carson is the new chairman vote.faith float -- he will head the group, focusing on raising voter turnout by christians. we will hear from ben carson today. thisolitical newcomer said week he sees no path to the nomination and is expected to go into more detail in his a speech, scheduled to begin a little more than an hour from now. spacex plans to make another falcon nine launch attempt tonight. the company says it plans to launch the satellite during a 90 minute window that opens at 6:35 p.m. new york time. they are hoping to take advantage of a better upper-level moon profile. this will be the fifth launch
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attempt for this mission. news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. i'm mark crumpton. bonnie: markets close in about 30 minutes. abigail doolittle live at the nasdaq with employees for its first three-week winning streak this year. abigail: it's been an interesting day. the index opened slightly higher and was down and around 2:00 was up. just a minute ago, it was back down. now, slightly higher. it does appear either way, unless there's a huge plunge , it will have its best winning streak since last year. the biggest point boots are at apple, amazon,
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microsoft. many other tech companies support apple around its fight against the government and constructive comments from gene munster and out of sterne agee. micron shares are up more than 8% on the week after it was .ighlighted for an opportunity stock is down more than 15% year to date on what was literally the worst performing stock in the nasdaq in 2015. bonnie: what about laggards on the week? abigail: this stock down about 20% on the week. there is one analyst out there who is saying this is a broken story in the near term. bonnie: thank you so much.
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the nasdaq for us. theident obama applauding february jobs report, saying the nation is enjoying the fastest job growth. have a listen. president obama: today, americans are creating jobs at the fastest pace since the 1990's. the workforce is growing at the fastest pace since 2000. it is showing the kind of strength and durability that makes america's economy the envy of the world. bonnie: wage growth though slipped, posting its first decline in over a year month over month. i suspect some of them are not great jobs. some of them are minimum wage and a little higher. the average income of american
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workers is proceeding higher but not at a very rapid pace. bonnie: so just how strong is the u.s. economy? i love the title of your note, you said nothing receives like recession. are you so sure after today? guest: i think there certainly has been a lot of fear. when you look at the broad range of economic indicators, there is no indication we are in a recession right now. some of the leading indicators are flashing a bit yellow but most of them are very much green. the job market is part of the overall positive outlook for the consumer. we are seeing higher wages. they were down in february but a
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lot of that is month-to-month noise. iny were up more sharply january. you're still talking about something close to 2.5% year-over-year. i wouldn't put too much weight on february numbers. bonnie: at which participation rate will we see real wage growth? you probably will as the job market tightens. there is still some slack in the job market but we are taking up that slot at a pretty rapid pace. we are averaging over 200,000 jobs per month. we need about 100,000 just to keep pays with the growth in the working population. and we can do that but eventually, job growth will slow dam -- slow down. be bid up inht to
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the month ahead. serviceshere was also dated this week. the little disappointing. the feds will have taken this data and will repair for the ecb meeting next week. what will janet yellen and her coworkers be thinking? guest: i think one of the big issues is the labor market and said officials will differ in their views about how much slack remains in the job market. the numbers on inflation we have seen suggests higher rent, hire services, those things are starting to pick up. inflation and services is geared a lot toward the wages. costs are increasing. i'm getting a lot of reported that a lot of firms are having a tough time finding skilled workers. i think the fed has to look out now.r from
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it's still going to be very much in tightening mode. the financial turmoil, the drop in the stock market, those things should keep the fed on hold for a while but the fed is still looking for the next move to be higher. conditionsancial tightening will be a good excuse for the fed not to do anything in march. will we see tightening of the national conditions continuing through the year? guest: i don't think so. i think part of the movement we saw since the fed acted in december was really a repricing of risk. that's not necessarily unwelcome if things were out of line before. the fed hasn't really talked about it but i think one of the concerns is because rates had you so low for so long, were starting to see people in the fixed income market reaching for yield, taking undue risk. by raising rates 25 basis points, they nipped that in the bud.
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future policy moves will be data-dependent. if credit conditions continue to tighten, they will be less likely to raise interest rates. if things stabilize, they would be more likely to pull the trigger. i think a june hike will definitely be on the table. bonnie: what do you think the ecb will do next week? do we get further into negative rates? disappointed investors back in december. initially, i think they tried to caution expectations into this meeting but the markets expect the ecb to come in with , perhaps morer negative interest rates. i think they're setting themselves up for disappointment once again because the ecb as a general rule doesn't really surprised by doing more. they often fall short of what the market expects. bonnie: an interesting thought to leave it on.
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thank you. we appreciate your thoughts. scott brown of raymond james saying perhaps the ecb will disappoint. coming up in the next 20 minutes of bloomberg markets, with opening day a few weeks away, a piece ofwning the new york yankees sound? a piece of the franchise up for sale. look at a big week for stocks and the bond market. and here's a look at this week and currencies. 114.02.at the hero back up -- the euro back up. the british pound stronger too. moves forf big figure the british pound. the canadian dollar is stronger
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at 1.3323.
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bonnie: this is a bloomberg markets. funny quinn -- back.p 500 the markets desperately trying to close above 2000. the nasdaq up 25%. for a look at the biggest business stories in the news. agricultural and livestock
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investments are among the lead bidders and glencore agriculture units. the companies are presenting final bids for the units in this month. glencore is open to selling. exxon mobil is the first major u.s. oil company to ship crude overseas. last month, exxon sent oil to a refinery in sicily. u.s. oil ban on exports ended in december and independent traders have taken the lead in exporting american oil. amazon says customers were not using the service. they made the switch when it inroduced its new fire september 2015 with new flyer tablets.
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that is your bloomberg business flash. a minority owner for the yankees are selling a 1% stake in the franchise. scott broke the story and joins us now. who are the owners, the minority owners? scott: we'll know who is selling this particular stake but we did get the teaser. bankers whosent to might have clients for the purchase so we got hold of that. we do know with on the market, we are just not sure whose share it is. >> how can you market more than one share? scott: it is like an option. how do you bid on it? they will sell the full 1% as is but there are married reasons people would be involved.
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some lps use it as a training ground for future purchase of a majority of the team. be ablek it's cool to to close a business deal or bring them in the clubhouse. it's something else they can do. mistakes don't come up too often i imagine. scott: every now and then. but a full 1% of the hankies -- -- the yankees. what's more important is the valuation. it is a 3 billion-dollar franchise. , explain how we came to that. scott: the seller is offering a 20% discount because it's a limited stake. from an lp inote
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the yankees years ago when he said nothing is more limiting than being a limited partner. you don't get a lot of say in operations, sometimes you don't even get tickets. believe it or not. it is a play in the prestige factor. because of that, it's a being discounted by 20%. that brings you down to $2.4 billion. $24 million. theie: nothing to do with yes network. scott: nothing to do with the network. strictly the team as an asset. vonnie: any ideas on who was wanting to bid? scott: i don't know whether they were trying to keep it quiet. more bidders means a higher price but you can be sure there will be plenty of interest because it is the yankees. vonnie: thank you so much. coming up on bloomberg markets,
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-- ♪
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vonnie: this is bloomberg markets. about 10lose in minutes. stocks are firmly in the green again. julie, you brought the greenback. julie: i've been doing a lot of buying. we have your three major averages that are higher on the session heading into the weekend and on an increasing commodities. weekted to check on the because it is the third straight weekly gain for the major averages. we have had this upswing really ever since february 11. that was the bottom for the stock market. what groups have done the best this week?
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energy stocks have been trading higher on the week. that's the best performing group. financials a big part of the game. commodities a big part of the story and finally technology. technology in financials have been so important to the rally. also, commodities worth mentioning here -- oil prices rising for the third week in a row and it a big gain. yet not seen a weekly winning streak like this since last may. natural gas falling for the straight week and bouncing a bit a 17 but still close to year low. gold and copper notable as well. straightving its third weekly gain and gold continuing its winning streak. copper has been bouncing as well on the hope for more chinese stimulus. if you take a look at the dollar index, all of that again -- certainly the decline in the dollar isn't hurting matters
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there. the dollar index down 1.4%. in the 10 yeart yield. the move over the course of the week has been the biggest since november, that move upward in yield. interesting because we talk about the mixed jobs report, the choppy market we have seen. yet that seems to imply people are expecting a rate increase to come perhaps at some point this year. continue toill look. thank you. in the last stretch of trading for the week. ng.ults rallyi for more on how equities and bonds performed this week, let bring in our guests.
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finishing in the green. mike, a 2000 mark and the 17,000 mark. mike: i wish i had a dollar for every time i talked about 2000. it's amazing how these round numbers -- it's amazing how the market just gravitates toward these round numbers. we have had this sharp rebound over the past month, almost 10% in the s&p 500. is obviously level a place where people take a and decide. a pause it's also around the 100-day moving average. it is followed by a lot of people. it is not totally insignificant, right? it could be a sign markets are stabilizing? mike: i don't know if we will
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see rational trading this year but certainly it's in a huge rebound. the good news is it's not built on some sort of crazy speculation about china's central bank or anything like that. it's on a solid economic data. lisa: wait. hold on a second. oil has driven a lot of it. we have had a high-yield market. the high yield bond fund in the u.s. received their biggest grow on record. people flooded in. the correlation between oil in junk-bond has been at his highest level ever. you see higher bonds moving in tandem with stocks. the correlation there also rising to the highest ever. when you say it's not totally irrational, that's true. but does market has been a reason for why it's moving in a certain direction. vonnie: the reason partially is because their negative rate and
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that youf the world almost need to go into junk bonds, right? lisa: here is the weird thing. yield around the world have gotten even lower. junkaret said jum bonds are great but she was astounded by how low the junk-bond yields are for companies that aren't aaa rated. been really low. the yield have gotten pretty high. you got an average of 8%, 9% yield and you would think the japanese investors or european investors would come flooding into these high-yield bonds and haps that is part of what was going on this week. it's hard to escape the fact that oil and junk bonds have been moving so much in tandem and what stocks. there are rational reasons people can point to yet they
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will point to opposite ones when it goes the other way. mike: lisa is absolutely right. general, the earnings is the downside. we are looking at 8% drop in first-quarter earnings. the economic data is decent but that's still the cloud, the earnings outlook. vonnie: thank you so very much. a tough week for the banks. , do follow them on bloomberg. that is it for bloomberg markets. "what'd you miss?" and the market closes next. here are your major averages four minutes out. ♪
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♪ we moments away from the closing bell. . am scarlet fu
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alix: and i am alix steel. joe weisenthal is off today. stocks are closing higher this friday and we are going for our best week since december, 2011. scarlet: but the question is, "what'd you miss?". alix: hourly earnings declining for the first time in over a year. scarlet: and we look at the new world order for oil. it could be no longer in a freefall. alix: and digging into a cheap price, if it means good value. scarlet: we begin with the market minute. these are recovering from early losses, now gaining for a fourth straight day, the longest stretch since october. the jobs headline number was strong, but wage growth was really not there. ioo

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