tv Bloomberg Markets Bloomberg March 9, 2016 10:00am-11:01am EST
mark barton, this is bloomberg markets. ♪ vonnie: we take you from bloomberg to new york -- we take you from new york to london to washington in the next hour. -- candidates face-off tonight in miami ahead of a big five state showdown, next week. than 24 hours, we will learn if the ecb is ready to pull the trigger on more stimulus measures. faces choices as he tries to pop up europe's economy. vonnie: canada's prime minister is heading to the white house for his first dinner. this agenda is laid up for his administration and the hurdles he paces. let's head to the markets with
julie hyman. julie: a half hour into trading and seven years into the bull market. of 2009,he anniversary happy birthday, bull market. a step back from yesterday's decline, we also have an increase in oil prices which has been helping matters and investors and traders looking forward to the ecb for a little help on the european side. let's take a look at this market. all the way back to march 9 of 2009. at aboutmarket run 200%, although we had some pickups as of late. what has been interesting is that it is the most hated bull market of all time. take a look at the bloomberg. here is the bull market run in
white and the s&p 500 climbed. -- climb. going from 2009 then werly 2012, and have seen outflows. even as we have seen stocks continue to go higher, we have seen a decent about of money coming out of funds that track the u.s. market, interestingly enough. the question is, can we keep going? vonnie: tell us about the uighurs -- the leaders and lacquers. -- laggers.quers 1%, andp by about besides that, some of the defensive groups doing better, utility, telecom and technology consumer discretionary, the only group that is lower just slightly.
a half hour,bout we are getting the weekly inventory numbers. i will be bringing you those and we will see if there is a directional change. prices we have seen oil moving on the production numbers that come out, rather than the inventories numbers. we hope is that with production falling, supply will also fall. today, in effect, it means money is falling out of safety assets. by. is down 1.25% we are seeing some selling in treasuries as well. we've also seen selling in the yen. vonnie: thank you so much. let's get to our first word news. first up, it was a big night in u.s. provincial politics. bernie sanders upset hillary clinton in the michigan primary.
won in mississippi and now has more than half the delegates needed for the nomination. donald trump one in michigan, michigan -- mississippi and hawaii. theow has or hundred 58 of 1237 delegates needed to become the nominee. rossonaire investor wilbur with support donald trump if he becomes the public and nominee. interview that the public would see a different from it -- trump if he wins the nomination. >> i think there would be a new donald trump if he gets the nomination and i think that new donald trump will be a lot more presidential than the donald trump we have been seeing. to some degree, the characterization of himself he has been presenting has been what he felt was needed to stir up enthusiasm. >> ross also says mitt romney was wrong to come out against trump.
he supported that presidential candidate in 2012 and we will have more on the race for the white house, shortly. iran has testfired more missiles and the u.s. has come out with a warning. they carried out a ballistic missile test, launching two missiles with the phrase israel must be wiped out written on them. vice president joe biden held a joint news conference with the prime minister of israel. he says we will act if iran deal. the nuclear according to rupert murdoch's tabloid, the queen voiced reservations about written the palace says the queen is neutral on the issue. the man who produced the beatles has died. george martin helped turn the beatles into music revolutionaries. he produced albums such as
sergeant pepper and abbey road. global news 24 hours a day powered by our 2400 journalists. european president mario draghi is having no success convincing stock investors the ecb has the firepower to reignite growth. since the first year of qe, the stocks have been tumbling and have fallen every month since april. for more ahead of tomorrow's highly anticipated meeting, we are joined by bloomberg intelligences chief economist who has focused on europe. let's -- who is focused on europe. what are we expecting from draghi and his colleagues? >> the bloomberg survey is at -- of economists
they expect the deposit rate cuts and possibly under the deposit rate cut to a new portion of reserves at ecb, said to be a tearing system much like the one introduced in the bank of japan. i feel the risk is slightly tilted toward less action on asset purchases and the reason is because the outlook is not changed by as much as now. mark: it faces expectations by his preferred measure. necessarily -- this is a take the need to pump up the monthly qe? >> the thing about the five-year is that it it appears to be strongly correlated with commodity prices. i think there are some questions
about that indicator and how useful it is as a guide to actual inflation expectations. is there a danger that whatever the ecb does tomorrow is too incremental that mario draghi has lost his firepower? >> there is. the trouble is that you have to do more and more enabled -- evidence shows your first round tends to be the most effective and subsequent uses of it tend to be less effective. the argument is to go big. my feeling is that the appetite for such measures is small on the governing council. vonnie: will be hoping -- will he be helping the euro weakens? could we see a couple of big figures in the move? ecb treats the euro as a secondary instrument. it is not something the target directly.
mark: in december, he said this is it, this is adequate and that was not the case. does he have to do the opposite, this time, telling us he is more open-ended, more open to further stimulus. >> i think it would be helpful to do that because we are seeing risks to the economy, we are not seeing anything only off the cliff. -- falling off the cliff. he could expand the range of assets that we purchased, making it easier, should further action be needed, later on. mark: looking forward to it. less than 24 hours before we know the results of the ecb meeting. coming up, underdog presidential candidate bernie sanders wins a surprise primary in michigan. will it make a difference ahead
vonnie: you are watching bloomberg markets. it is 3:12 in london, 10:12. in new york time for a look at some of the biggest business stories in the news. struggling drugmaker valeant pharmaceuticals -- one of them is the vice-chairman of bill ackman's head but -- hedge fund. defending the company while it's being investigated over a mail-order pharmacy news.
on tradingarning revenue. visit first-quarter revenue will making 2016p 15% the fourth straight year the trading revenue has fallen in what is usually the industry's strongest quarter. number of americans will take advantage of lower airline fares to travel this spring according to the industry group, airlines for america. the group says about 140 million people will fly during march and april, almost 3% higher from a year ago. airfare fell more than 4%, last year. that is your business flash. vonnie: it was a big night for bernie sanders who scored a surprise win in michigan's primary polling. in the race for delegates, sanders is still behind hillary clinton. she has 1220 12 sanders' 571.
on the republican side, donald trump picked up delegates in michigan, mississippi and hawaii. let's start with the bernie sanders surprise when. this gives him back some momentum after a disappointing super tuesday. how horrible that propel his campaign? >> it gives him back the momentum and what we will look -- ohio voting on next tuesday and the demographics of michigan and ohio are very similar, heavily white and he did well with working-class voters and the young voters which is the key for him and most significantly, he did better with african-american voters in michigan then we have seen him perform. hillary clinton still has a huge lead, but he has a chance at -- a ruining her support in places like ohio and missouri, states
in the industrial heartland of the u.s.. vonnie: what be her message in the heartland -- what will be her message in the heartland? >> she has to answer this question of what she will do to address this question of economic inequality. she says she will clamp down on big business, financial crime, but his message is much simpler. it is simply, i'm going to reduce the 1% getting the share of wealth and try to bring andybody back together boost the income of the middle class and working class and he is really doing well with that message. advocates of point in this campaign, she will have to think about addressing this surge of economic -- rami: donald trump -- mark: donald trump one in michigan -- mississippi and michigan. does this dress the ability of him to win across very different
areas, -- across distinctly different graphics -- distinctly different demographics? >> he has built this broad coalition of support and this is never going to a two-man race. -- of --erything from everything but the kitchen sink thrown at him. john mccain and mitt romney have come out, disparaging him and yetmeshes -- his message, it again is a great example of his whitewall support among white voters. he is winning even debacles over ted cruz. -- evangelicals over ted cruz. he has a broader support level than people expected and he showed last -- he showed a lot of resilience, last night. mark: as you say, it is
essentially a two-man race and we know the other man is not rubio. is it time to drop out? is florida his last stand? >> if he can make it to florida, it will be his last stand. there is another debate that has a chance for marco rubio to hit --ald trump, all those although those attacks have not gone in his favor. it reallyeople say hurt marco rubio when he went down into the mud with donald trump. his pathway to the nomination looks incredibly challenged, even if he wins florida. his campaign is floundering. vonnie: does he have any political future after this? >> he is a talented politician. he is an immense speaker. he has done well with late breakers, he did not do well with late breakers, last night.
he has a future, this just not has been his -- this just has not been his cycle. donald trump is hinting at how derogatory this campaign is going to get when it's just him and hillary. what can we see him pull out of the bag against hillary? >> people have hounded hillary for her record, her husband's record or decades and we will continue to see that. his targets will be very obvious. there is always political gain to make because to be honest, hillary clinton -- she struggles with trustworthiness, the e-mail scandal continues to hang over in but she has a huge lead certain demographics with african-american voters, latino, lgbt. as the demographics of america change and that place to her strength and donald trump needs to show he can perform in those areas to do better and well against her if we do get to that
matchup. i don't think people are willing to call that right now, but it is the way things are moving toward. mark: a question on john kasich, some said he had a good night. some are even calling him the new marco rubio. do you want to call -- be called the new rubio? probably not, but he has to win a primary, soon. >> is whole strategy has been let's take this to a contestant convention and see how it plays out. if he takes ohio, maybe he can keep that dream alive but this is based on delegates and people need to win these delegates and when you look at john kasich and marco rubio, their delicates are -- delegates are pretty challenged. vonnie: it continues to be entertaining. thank you so much.
it is all about mario draghi and his fellow policymakers, who meet tomorrow and will likely add stimulus. oil reaching its bottom at $30 a barrel according to wilbur ross. he joined bloombergs david westin and matt miller on bloomberg and the conversation focused on distressed assets and the price of crude. around $30the bottom a barrel. amountven day, given the of speculation, it could go anywhere. in terms of where the real level, i don't see it going much below the $30. it is pretty low for a lot of folks and sovereign debt, but we think that as the iranian oil gradually gets absorbed this year, as u.s. show production
we will nextdown, have to deal with the excess inventories. 2017 going to be well into before you see any kind of sustained uplift in oil. $15 on think it goes to a sustained basis. >> assume its 2017, what are we talking about? >> i think maybe $50. >> after the inventories have been drawn down. over $60, auch more lot more things can come on stream very quickly. >> that is one of the questions. to the show producers come back into the marketplace to drive it back down? >> everyone in oil patches is an internal optimist -- and eternal optimist. >> one of my favorite functions on the bloomberg terminal shows
you the distress issuers and distressed bonds and what i have done here is charted the number ,f distressed issuers traded the total number and including oil, but you see that we haven't been this high where we are right now, since the beginning of 2009, since the beginning of this bull market. do you think that, with your somewhat optimistic view on oil, that it is time to go in and buy some of this? >> we have. buying the bonds of the distrust expiration and -- distressed exploration and -- you have all of your money back out. it's not all going to go bust. i think where the next thing is going to be a problem, there was a ruling in a bankruptcy work, yesterday to the effect that a
bankrupt energy company in aggregate it's contracts and that is very important. it is important to the oil producers, because many of them have contracts for the hearing -- contracts were they given teed a certain amount of product. that could become a problem for the master limited partnerships because many of them are getting their dividends from these guaranteed payments. mark: that you strategy officer at wl ross and company on bloomberg . stick around, big 80 -- data about to cross the bloomberg terminal. oil market inventory data in a couple of minutes. ♪ ♪
we are awaiting crude inventory data. in the united states julie hyman is standing by. we have crude oil rising into this report, we are getting , larger thann estimated, 3.9 million barrels. a larger than estimated drawdown in gasoline inventories. -- about 1.1 million barrels. those presumably would be a bit better news potentially for oil. i'm also taking a look, we should be watching some of the production numbers, which i am not seeing cross as of yet, but the production numbers have been having a big effect on what happens with oil prices. you are looking at oil, but i
want to take a look at it on my bloomberg because we do tend to see it move a little quicker. we are seeing a leg up initially in those oil prices. nearly 3% inup by trading around 37 -- $37.50 a barrel. usually in the first half hour, we see a bit of digestion of the numbers. something else that we have been watching. this is a chart that folks have been watching very carefully. this is oil production versus oil supply in the u.s. and this encapsulates the hope that the has in terms of prices going higher. supplies continue to climb. production has started to go down.
the hope is that eventually, with production going down, the supply number will also come down. it has not happened yet and we have been hearing a lot of time horizons as to when it could happen. it will not be until 2017 according to wilbur ross. that is the chart you have to watch. in terms of some of these stocks we are watching, chevron is higher, got an analyst upgrade and a boost from oil prices. refiners have also been among the stronger performers. the companies we have been talking about that have been so heavily shorted, so it seemed a short squeeze, recently, they were down sharply. chesapeake williams and marathon getting a bit of a lift. crude spiking a little bit, a very interesting dynamic. julie: refined product fell.
vonnie: let's take -- check in with first word news desk with remy's lisicki a -- . rami: u.s. special forces have captured the head of the islamic state head trying to develop chemical weapons. he was captured in northern iraq, this is the first major success out of the pentagon's they plan to go after islamic state heads. the u.s. plan to deploy tanks, helicopters and infantry vehicles capable of destroying russian troop carriers. nato has been working to determine russia in the wake of vladimir putin's intervention in ukraine. -- senate republicans to block president obama's supreme court nominee. 55% oppose the gop's tactics according to a new nbc news wall street journal poll. the white house is already
vetting candidates, but republicans who vote for a republican president say the next commander should have the power. meanwhile, attorney general loretta lynch says she is not interested in the job and has asked the white house to remove her name. the u.s. government will test alternative payment plans to try to lower cost or expense of medicare drug program. it has to do with doctors administering high-priced drugs for cancer and other conditions. medicare says the current system financially penalizes doctors who choose low-cost drugs. full news 24 hours a day powered by our 2400 journalists. vonnie: thank you very much. investors seeking rescission proof assets but billions of dollars in properties last year. they look more like brees -- spring break hotels with
luxurious amenities. -- chrisguest merrill's cofounder and ceo of harrison street, a real estate private equity managing term. farm -- firm. we start the business about a decade ago with the focus of had we fight asset classes that are really resilient, that will do well, independent of economic cycles, so the focus was on education, health care and real estate. the focus on student housing, senior housing and health housing across the country and we have invested about $14 billion in over 600 properties across the country. it has been a very opportune time for these assets. vonnie: is a student housing getting overbilled? there are reports that
enrollment is down. >> you have to look at the whole education system and we are seeing increases in enrollment in public universities and increases in high school graduations and a lot of foreign students coming to the u.s. what we have tried to do it or find our strategy, focusing on public universities and one of the things we liked about the opportunity was the fact that the schools we are at or above 10,000, mostly public universities across the country. only about 25 to 30% of kids to be house on campus and public universities don't have the capital to build new housing. so, we are seeing a huge demand in the need for space, going forward. moment for a perfect me to segue into european strategy. you will focus on the acquisition and on the development of student housing properties throughout the u.k. and europe. how will your strategy differ from your u.s. centric approach?
>> it has been a very interesting evolution over the past decade. we see a lot of similar fundamentals in europe, the u.k., ireland, germany, etc. for us, it is like we are getting into the market 15 years before we started the u.s. business. when you look at the life of housing, the demand versus supply is overwhelming. inare beginning to invest government -- in dublin right now and when you look at the number of students in the market, over 100,000 students, there is only about 1000 purpose built student housing beds. there excited to bring practices we developed in the u.s. to the european marketplace. mark: what essentially can't be replicated from your approach? your demographics is strategy, education, storage and help. can it easily be replicated?
>> it is a challenge. accessing these assets takes time. platform of over 80 people in our organization with operating partners across the country. these are fragmented asset classes. ownership is 5% 15%. -- 5% to 15%. cases, it is the attractive way to access what we see as an opportunity where when we began investing in business and went through the gse, we saw how resilient these asset classes were and there is a very interesting arbitrage that exists now. that you hadt asset classes that performed very well in a down market. student and senior outperformed multi family. self storage outperformed --
income,can get better so it is a fantastic arbitrage that exists. vonnie: what is the rate of return? >> it is hard to answer because there are many different ways. you can develop assets, but typically what we see is within all of our asset classes, about a 100 basis point premium about traditional real estate. these are asset classes that performed in the downturn and health occupancy. because ofage exists the hard asset nature of these classes. are you playing obamacare in terms of your health-care investments? >> health care has been about 50% of our business and what we have done is focused on medical office and senior housing. we focus on private pay, assisted memory care, that has been the way for us to play that market. we stayed away from skilled nurses -- skilled nursing because there are public pay
issues. we have good hospital tenants, good position credit and what happened with obamacare is it was an unintended consequence that helped our business. with more insured, there are more doctor visits, more people attending these facilities. the cost of health care is forcing these groups to consolidate and so the credit of our properties is increasing as you see these position groups -- physician groups consolidate. vonnie: thank you so much. a new endorsement in the presidential race breaking a moment ago. fiorinaandidate carly is endorsing ted cruz. they are at a rally. endorsesr hp ceo she ted cruz over her own name on the ballot and that she thinks he is the only candidate that
mark: this is bloomberg markets. police bank of canada and -- policymakers kept their benchmark interest rate unchanged, saying economic recovery remains on track but growth is being slowed down by low oil prices. we did see a move in the be aian dollar that may little unanticipated, but we don't expect much out of today's meeting. >> in january, the governor said he would wait for the stimulus
budget which is coming later this month, so that is still on the table. the canadian dollar has moved up because towards the end of last year, there was worry that canada was on its way to joining central banks with negative interest rates but now we can hold stable until at least through april. mark: the bank of senator -- the bank of canada says the risk of it -- cut ornces of a further not? even through yesterday, the odds of a rate cut by december 1 about -- were about one in three. that has been scaled back in the last couple of weeks because as you mentioned, the inflation risks you appear balanced -- risks do appear balanced. at fourth quarter came in about 1% and the bank of canada said it was going to be.
that they did get a bonus in that column which takes up the risk of them going back to a record low 0.25%. vonnie: we are seeing unemployment rising and seven point 2%, inflation is also rising, but real gdp is not going anywhere. the bank's office of the inflation risks are very complicated through the solar shock. consumers are benefiting from low oil prices, a lot of slack in the economy that is holding down prices. at the same time, the canadian cents.fell below 17 u.s. that is making him points -- making imports more expensive. even machinery and equipment we need to become more productive has become more expensive. there are many competed for -- competing forces on inflation, but both core and a total measure have stuck to 2%.
againion might trend down with the slack remaining in the economy coming up. vonnie: thank you so much. the canadian dollar is just $1.33,g with 133 -- stronger by about 7/10 of a percentage. the white house is holding a state dinner for the prime minister this week. the first state dinner for the canadian prime minister in 20 years. .loomberg chief editor joins us he is really standing out as someone who was a born politician. >> he comes with a inheritance, and they look and that is the interesting thing, the similarity between him and obama may feel about -- obama says he sees something of a similar nature and i think critics also
caught on this because they look at him and see something of a dreamer in the same way as people criticize barack obama as being somebody who can make these fantastic speeches, but then in terms of getting them done is in a harder place. trudeau comes in with a lot of optimism. vonnie: his father was a native politician as well who comes from a long lineage. his father compared to canada to sleeping next to an elephant. this huge shadow of the u.s. over any canadian prime minister. >> you see some people inside canada saying what they like about trudeau is that he makes that definitions longer in the same way his father did -- that definition longer that stronger in the same way his father did -- stronger in the same way that his father did. he looks much more strict -- mainstream from the point of view of europe.
his father was the kind of old canadian liberal. you say he is more mainstream from the point of europe, but he is an advocate of more government funding across the world and less monetary policy which is a different stance to his predecessor and the likes of david cameron and anglo merkel. they have gone down this saving and not spending and not too many deficits, but he has challenged that. >> you are right. i have been called out by mark. he is not like david cameron, but he is a european innocence or thece or the renzi -- renzi. he is trying to combine a lack of austerity with some degree of youthful flair and hoping he somehow muddled through.
mark: less monetary policy and more fiscal spending ties in beautifully to the ecb meeting, tomorrow. we have this wonderful editorial piece that says that rocky needs to be brave and tell governments to spend, spend, spend. will they listen? we have been hearing this for quite a wild. -- quite a while. >> the truth is, they are probably too cowardly to do this and that is the past cointreau or five years in europe. mario draghi has tried repeatedly to give governments time to do the reforms that they desperately need to do and they just aren't in that has been his problem. nothing has happened in france. little bit in spain, little bit in italy and that has all been on his watch. he has tried and bought them the time to do these things and they have not done it.
he has every right to turn around and say he has very little ammunition left. vonnie: mario draghi was the most excellent banker, all the entity was say something in the markets would anticipate his every move. is he losing that, now? >> the last time around, he slightly muddled it up. it is a very complicated game. you hit one thing and just about give enough of a surprise in the opposite direction to create some momentum. messed ups slightly is implying that something big is going to happen, then delivering something which is quite big which the markets already built-in, so they don't to theto this time extent he says he is running out of things, he might be trying to play that game, better. vonnie: always that honeymoon period with central bankers.
>> it is bizarre how we use to have economics and markets driven by data and now they are driven by what people say. markets react far more on the use of one word than they do on an actual statistic. vonnie: i look forward to your interview with the canadian prime minister, next week and the state dinner is tomorrow night. >> a pale imitation of what you could do. vonnie: thank you. check out our wonderful profile on bloomberg.com of just introduced -- of justin trudeau. ahead, luxury fashion brands in the lifestyle business, -- gives us a tour of -- ♪
vonnie: in today's -- expanding into hospitality, the fashion brand its open -- is opening its first hotel in rome. the ceo takes us through the new space before its opening. >> i wish this was my home. i would like to stay here for hours. i am the president and ceo of fendi since 2005. we make uber luxury materials and combine it with fun. is --
mark: the chief executive of bacardi was there and you can read more about luxury with bloomberg. pursuits in a bloomberg. coming up, a busy hour with key insights on the oil industry. we talk with lorenzo simonelli, the chief executive of ge oil and gas. we find out how oil prices are affecting drilling, exploration and equipment. that is coming up right here on bloomberg television. ♪
mark:mark: live from london, i mark barton. this is the european close. we are going to take you from new york to london to madrid in the next hour. here is what we are watching -- what will draghi do with less than 24 hours to go before the ecb faces a choice? draghi will try to pump new life into the economy. what are the odds of a rate cut and more bond buying? for thethe new strategy world largest clothing retailer. how they are moving toward more online sales and cutting back on store expansions. mark: how are little -- how are low oil prices affecting companies that do drilling? drilling is here and an interview