tv Bloomberg Markets Bloomberg March 15, 2016 3:00pm-4:01pm EDT
from bloomberg world headquarters, good afternoon, i'm betty liu. stocks are trading lower today with energy and health care. all this as investors await the key fed decision and news conference tomorrow. we are very constructive on the domestic side of the economy. household balance sheets are in great shape and that will keep the fed emboldened to deliver more rate hikes this year. we just don't think they are going to be able to do it. betty: valiant cuts its revenue forecast. michael pearson takes responsibility. >> it starts with me. has changed to some degree since december, but we have to do a better job.
betty: and we will hear from the jcpenney ceo. find out how he's been able to turn around the retailer even as sales remain sluggish. we are about one hour away from the close of trade. stocks are lower after the doj decides not to move on interest rates. ramy inocencio has the latest on the markets. highswe are at session but we are still in the red for the day with just about an hour left in trade. second is down for its day in a row and this is its first back-to-back loss for this entire month. and the dow has been flirting with a little positivity. we will call that flat right there. to, talkedalluded
about retail sales coming in worse than expected, down by .1%. definitely weighing on stocks. let's take a look at what's happening with the dow in today. although we are still down, we are not as down as we were earlier. in the numbers were down, we 17 and 120 mark are, down around the flat line. definitely trading in a very narrow band. but that said, there are some major movers today. let's take a look at what is happening here -- down 51%. this happened earlier today when they reported a week fourth corner as well as lowering it estimates and saying it could reach some of its debt agreement. that said, apple is one of the best performance -- best
performers on the dow. apple said it is going to make it mobile news app available to a lot more publishers of all sizes and that increases the pool of its content. let's take a look at commodities and safe havens. down two days in a row and for the first time in a month, it is down a little more than 2% off the back of what is happening with iran with iran saying it will not freeze production after u.s. sanctions were lifted. looking at safe havens -- the 10 year basically unchanged. investors have over the past several hours been pulling out of treasuries, pushing the yield up to 1.69%. betty: thank you very much. let's get a check on headlines with bloomberg first word news with mark crumpton at the news desk. mark: president obama has reversed course on drilling for
oil off the southeast coast. the white house is with drawing its plan to open the coast to offshore drilling for the first time. coastal communities and environmentalists oppose the plan and so to the pentagon. donald trump posted a big win in caucus on the northern mariana island, winning almost 73% of the vote and will get online elliott's from the territory. ted cruz came in second with 24%. york financier george soros is returning to big-ticket political giving after an 11 year hiatus. he has spent or committed more than $13 million to support hillary clinton and other democrats. that's more than his total disclosed spending in the last two presidential elections combined. soros expressed alarm over the last few months at the candidacies of donald trump and
ted cruz. belgian police say one man has been found dead after a police raid linked to the paris terror attacks. a manhunt was launched in a brussels neighborhood after one gunman opened fire on officers during the anti-terror raid. four police officers were injured during the operation. global news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. foreign-exchange traders are signaling that the dollars two-year extent may be running out of steam. the greenback dropped to a four-month low. is it giving the fed room to hike interest rates? joining us with some insight is analyst atcurrency rbc. i think what has changed
since the start of the year's people are scaling back their expectations for how fast the fed is going to be hiking. if you go back to december, the fed was telling us they were going to hike four times in 2016. now the market is only priced for one hike. that led to the dollar pulling back a bit and it gives the fed a little more room to act. betty: does it seem justified to scale back this much? guest: that is not our call. we see a lot of reasons why the fed would want to hike several times this year, at least twice, possibly three times. betty: your call is what? guest: three hikes for 2016 and a stronger dollar across the board. betty: the doj just scrambled your call on the yen. guest: not at all.
this is a call and how fed policy will handle japanese investors. we know a lot of japanese investors are hedged. the cost of hedging is fairly cheap at the moment. as the fed hikes rates, that is going to change and we will see the cost going up and a hedge coming down. these hedges scaling back their dollar bets -- i think they scaled back to their lowest level since 2014. they are all wrong here? guest: we have seen a lot of scaling back across the board. a lot of short euro trade in the long dollar trade has in scary -- has been scaled back and if you look at the yen trade, that switches around entirely. that is what makes the market, if we are thinking the economic trade -- trend is better than indicated, then that gives room for the fed to hike
more. what did you make of the retail sales numbers? makes the revision breath a lot weaker than it was, but that said, it still tracking 2.8% growth. this largely consumption driven. confident that will be ok. we were talking about inflation this morning. one of the fed's mandates is they are watching inflation carefully. she was saying it looked like we are at peak inflation already. >> if we look at core pce prices and are forecast, the fed anchors, we have already seen the heat for the year. and that was buried in a
footnote last week -- 1.7% was the peak for the year. when that is moving lower, it's difficult to commit you should do a further rate hike. guest: there are range of opinions on the fed. we heard there were stirrings of inflation and if you look at unemployment and how far that clearly not it's far from where we are at the moment. why this many reasons said would want to try that policy. is not to say they need to tighten policy. raising 21%. about betty: what do you think they are going to do tomorrow? yet, but they will lay the ground for a june hike. that's what we are looking for. in order to get closer to that june hike and have the market for that, we think janet yellen
should lay the ground for that. she's going to have the press conference and be questioned on it. she'll be asked about the fed's expectations for the year ahead and will have to give strong signs the fed is committed to a slow but gradual hire plot of interest rates. betty: what could derail your forecast? guest: there are any number of risks out there that could develop. there's been a lot of concern over capital flight from china and so far, chinese authorities have able to keep that under control. if something happens in china or brazil -- betty: more unexpected than what we have seen already? guest: what we have seen -- the fed does not make policies for the rest of the world. as long as u.s. economic conditions show signs of meeting tighter policy, the fed is going
the red apple group and chairman of united refining company. particularly in the great old state of ohio, they've got their primary tonight. let's talk politics. i know you are a big clinton supporter and a friend of the clintons. you have also supported a great number of republican candidates. john: i was friends with the bush family. betty: who do you support now? away from't walk friends. the clintons, i will always be there for them. with donald,kers you can't walk away from donald either. betty: do you feel like your hands are tied? .ohn: sort of
i'm not going to be against him. you have to remember something -- remember the movie network question mark people stuck their heads out the window and said we are mad as hell and we are not going to take it anymore. those are the people supporting donald trump. washington is rogan, especially the last eight years. don't favorite, kratz or republicans, but the problem with president obama was he did not allow them to sit down and work out problems as americans. i believe you have to sit down at the same table and democrats get a little bit and republicans get a little bit and you work out problem. president obama was opposed to that and directed harry reid that way. and nancy pelosi that way. let's talk about the future. i will give you the one more thing.
john: how many democrats are going to vote for donald trump because they are mad as hell and they are not going to take it anymore? some point you've got to make a decision. if it was trump versus clinton, who would you support? john: that would be a tough decision. >> have you given money to either candidate? >> donald doesn't need any. he's going to make a profit on the election. do you know, hats he's selling? he's the only presidential candidate to ever make a profit. you haven't given any money to the clintons? john: some. betty: how much? john: the federal limit. betty: what do you like about clinton's policies? >> though clinton is a very good friend.
if he was running again, i think you would get 70%. hillary is learning politics. i think other people supporting hillary are depending that her husband will be next to her and helping her make decisions. what do you make of republicans putting money into taking donald trump down? john: i think it is horrible. john kasich, i've sat with him in my office for hours. he's a very decent guy and when he ran in ohio for governor, 86 out of 88, including democrats, voted for kasich. a very decent guy. rubio, he's ok. he's young, fast on his feet. ted cruz, i'm a little i'mppointed on and
disappointed he got into fist fights just about in the debate. betty: but you gave him $5,400? john: yes. donald is a showman. when he says i'm going to cut , the truth is i know donald. he's already negotiating. betty: would you want to see him as your president? john: i don't think you would do a bad job. i think at the end of the day, he would do a much better job than president obama. betty: you are the ceo of united refining. you are in the oil business. only what you think about the oil markets. john: oil hits when he seven
dollars and because we are on the pipeline, we are buying canadian crude oil for $18 a barrel. you can't store it anyplace. i was right and it went straight up. , with the ok of the united states, we are going up. yesterday, putin pulling out of syria, you want my interpretation? my interpretation is part two of the saudi arabia handshake. you pull out of syria and we will take steps. i predict oil will go higher. you think we have hit the true bottom? john: yes.
are looking at certain oil assets in canada. we have $70 oil. i believe we have prime minister trudeau in this building tomorrow morning and i'm supposed to meet with him. are one of the biggest drawers of canadian crude and we -- is one ofsure canada's biggest assets. you are serious about buying something there? john: canadian companies need the money and we have cheap canadian dollars in new york. betty: always good to see you. if the of red apple group. toll ahead, we are going check in on the options market
ramy: joining me for today's options inside is the chief executive officer at recon partners. i want to get the read on the markets. i think the owl is up and positive territory but the s&p and nasdaq are negative. they've been trading in a relatively small band. guest: the fed will be coming out with some minutes and we will see if there is a short covering rally but for the start of the year, we are having the either direction since 1938. we didn't even have this many in 2008.nd eight --
that shows the nervousness happening across the board. >> the fear gauge is at around the 17 marker. just a couple of minutes ago, that was around the same time frame as this past december and has been falling. what is your take on that? have we see bottom of fear for a while? guest: what is interesting to note is that is higher than last years average the top it was about 16.6 but we can see it go extreme to near 30 and that's what we saw this year. people are staying relatively calm in this market environment, so everyone is just kind of biding their time. aty: you are looking caterpillar. it was down as much as 2.5%. it has paired the losses but
before we get to your trade, what's so attractive out this company? guest: what is attractive is that it's a big read through into the asian economy and is a proxy on how you had your bet as well as the industrial side. a good pairually for the asian economy because the asian economy is trying to transition into an industrial and is trading at a high pe valuation basis. great way to hedge your portfolio if you are worried about industrials or worried about asia. ramy: it is interesting with onna, there economy is based the services sector and want to transition to a consumer oriented society. the trade is it exactly what we only lost two dollars
and $.60. buy the $70 put and 5750 put against it. it cost about three dollars and $.60 and you can make that entire spread. it's a great way to hedge and the most you can lose is the three dollars you put on that spread. up, you's another hick get back there and it costs less than you can hedge out to your full exposure if you want to. we will have more bloomberg markets up next. don't go away.
word news with mark crumpton at the news desk. mark: another super tuesday finds republicans marco rubio and john kasich fighting for their political futures, desperate for wins in their home states of florida and ohio. hillary clinton is hoping to keep bernie sanders from building momentum in the midwest. there are more delegates up for grabs today than a most any other day on the calendar. missouri, illinois and north carolina are also awarding delegates. don't miss a special two-hour edition of "with all due respect" tonight. mark halperin and john heilemann will break down the key races and look at what is at stake. the republican party has filed a flurry of new lawsuits related to hillary clinton's tenure a secretary of state. messagesants all associated with mrs. clinton,
former president bill clinton, their daughter, and the clinton foundation. they want to medications between the state department and officials at the u.s. agency for international development which distributes foreign aid. u.s. secretary of state, john, will travel to moscow to disk press -- to discuss the russian withdrawal from syria. and troopsplanes stationed at an airbase in syria started leaving for home today. surprise move was announced yesterday by vladimir putin and puts the pressure on the syrian president to come up with a deal in the peace talks in geneva. so far, no sign of compromise from president assad's negotiators. prime minister justin trudeau is expecting to announce canada will run for a temporary seat on the united nations security council. the prime minister will be here in new york for meetings with the un's secretary-general and,
on tuesday, don't miss our exclusive interview when we sit down with the prime minister on bloomberg television and radio at 9 a.m. new york time. dayal news 24 hours a powered by our 2400 journalists in more than 150 news euros around the world. alix: markets close in 30 minutes. abigail doolittle is live at the nasdaq the latest. abigail: the nasdaq has been trading all day down, dragging health care and biotech. really interesting here -- the big drag in biotech with big names -- now it is and though pharmaceuticals. the stock has simply plunged someghout the day and investors may worry about the
company's move toward generic drugs. one analyst says these drags are unfair. the other big story here is apple. the stock has been strong all day on constructive comments from morgan stanley. demand for thes iphone appears to be tracking above expectation and above guidance. tradeould help the stock higher in the near term and could help investors get used to and above average delivery and could put the pressure on apple to deliver when they report on april 25. alix: tech was down this morning. have we seen an extended reversal here? aboutl: amazon was down 1% and is now up about 1% as the company plans to launch a dated
pace migration system using the cloud. one analyst says this is amazon flexing their muscles and it could be to the detriment of oracle. it is the worst point drag on the nasdaq year to date and this chart may suggest the stock is likely to trade in some sideways-on volatility ahead. it is a big week for central banks today. investors are anxiously awaiting and up they from janet yellen. we want to ring in jim the mostn, one of accurate economic forecasters on the street. what's going to happen tomorrow? they are not going to do anything on rates. i think two things as pharrell's forward guidance go -- people will zero in on how many
quarter-point increases are being signaled this year. in december, they were showing 100 aces point and i think that they will do tomorrow is show three. in the second part, this is going to be important as far as forward guidance -- what do they do with the risk assessment? itmarch 2003, they dropped ahead of the u.s. invasion in iraq. i think it will come back with nearly balanced wording and the net will be we hope to be typing again but it's going to come back to the economy and financial markets. alix: other economists are getting more dovish. one analyst was talking about a rate hike this year. listen to what she said. constructive on the domestics i do of the economy. fed's going to keep the
emboldened to deliver more rate hikes this year. we just don't think they are going to be able to do it. so they are going to keep showing us they want to do more but we think they are ultimately only able to deliver one more hike this year. jim: i don't think she was saying the fed will only show one hike. alix: even though they want to hike more? jim: time will tell you personally, i think they could still do three and obviously it comes back to the employment rate in particular. i see absolutely no sign of a slowing in them lehman numbers at this point. i think unemployment numbers continue to fall and we are starting to see signs of stirring as the vice chair in core inflation
numbers. i think we are seeing economic numbers consistent with tightening over the course of the year, but it will also depend on the market. the other question is how do you interpret the yield curve? it is domestic, which means it will hurt the fed and it will be harder for them to tighten. or can the fed do what it wants and it is ok? have priced markets in slowing to the point they assume there's very little tightening. the market is sometimes right and sometimes wrong and sometimes they overdo it and sometimes they don't. when i look at the markets say a few weeks ago when they showed marketsening at all and will move depending on the numbers. personally, i think they will do more than 30 basis points and i
must admit it's complicated in that it's not just about the fed in the u.s. economy. there's a complication in terms of global central bank policy. there are all of these capital flows coming into the u.s. and that's a factor holding down long-term yields in the u.s. with you are in the room janet yellen tomorrow -- what is the one question you want to ask? jim: do you really expect the unemployment rate to stop falling? they are not quite saying it, but the goal is presumably if you get growth to come down to over $200,000 a month, -- it's not clinically correct to say the unemployment rate has to stop falling and employment growth is slow. you wouldn't hear any presidential candidate saying we need weaker employment growth. framework given their
of inflation, it ultimately gets overheated. how much do they expect limit growth to slow overhead? if we see 4% unemployment rate, that's the issue? jim: fed officials are showing a 4.7% unemployment rate and are assuming full employment. that could change over time but they are assuming it will only go a little below full employment estimates and just given their framework, i think it is basically right, if they thought it was going to go a point below full employment, they would be tightening more aggressively. you so much. just a reminder, look for full coverage across all of bloomberg's coverage.
we obviously have to deliver on our commitments. the world has changed to some degree since december but we have to do a better job. we have had some underperforming businesses and that is on us. have to earn back the credibility and deliver on our results. we have to meet or exceed guidance and i think we all recognize that. isx: he says the company already looking forward to cutting costs. >> we've taken steps to restructure a number of our underperforming small businesses and are taking steps to launch a broad-based reduction program. these will be offset by key functions like financial reporting, government relations in our organizations. there also exploring vestige or's of non-core assets which will enhance our
liquidity. ackman says he will take a larger role at the company. he holds a 9% stake. retail sales this morning show the consumer struggling, but one retailer is coming back to life -- jcpenney. roses are up while sales 3% in the last quarter. bloombergison joined markets for an exclusive interview. marvin: the key for us is creating great shareholder value and return. margin byed our gross almost 300 basis points. we reduced our corporate overhead significantly and we're moving in the right or action. this is less about trying to get to a specific sales level. it's about executing well and creating a great environment for customers to come in and shop
and we think we are doing that. johnson,e-ron woulderg estimates it take 10 years to get back to that level should all things go well. what level are you targeting? marvin: the business is different. consumers shop in a much different way. onre's no significant focus mobile on the channel. are going to create a strategy that would allow customers to shop where they want to shop. we are not setting a sales target. we want to grow for 2016 anywhere between 3% and or percent. we think that is achievable and we want to sustain a strong shareholder return. there are a lot of great companies out there with revenue of less than $20 billion.
we are simply trying to create great shareholder return and consistent growth year-over-year and we bank we can do that. grew 4.5%.we growth rejections similar to that for the next few years. : he's a consumer habits are changing. how do you see that or do you intend to? marvin: we tend to make sure we demands.with consumer we launched our first fast fashion brand, a private brand and private designer from our new york design team. we will have different styles and different collections throughout the season. this is the first time we tried to do that and it's shortened the design and delivery time to virtually in half.
this is something directly attributed to seeking feedback from customers and trying to understand millennial customer and what they are looking for. the earlyited about testing of this brand. this is something our customers requested from us and is going to be designed specifically for a woman size 14 and above. we think we can design a brand is going to be flattering to her and she will be excited about wearing and will give her the fashion where she can really go out and enjoy shopping at jcpenney. designingited about our clothing based on the feedback of our customers. : at a time when the likes of macy's are taking a second look at turning some of their
properties around, it looks like you are moving in that direction. looking at our entire capital structure. we paid half $1 billion in debt in 2015 and we have goals to hopefully paydown at least that much in many 16. sale and thea plano real estate market is very strong. there leaving no option off table. we want to take our debt down and increase our revenue and drive shareholder return and we are going to look at all options to make that a reality. : does that mean you are selling more stores? marvin: if that's the right decision for our shareholders what is right for our customers, we will. we have a thousand stores that
give us a thousand distribution points. traditional to come in and shop with a crappy -- with cash and carry or credit transaction? we are comfortable with our set of stores today, but it is an ongoing evaluation. our goal is to leave nothing off the table. we want to reduce our debt and grow our revenue. the key initiatives to make that happen are the ones we will be looking at. alix: that was ceo marvin ellison an exclusive interview. the close of trading is minutes away. jones actually flipping into positive territory -- unchanged on the day. quite a comeback. the biggest loser by far. fedlatively calm day in two wednesday. -- in two fed wednesday.
alix: this is bloomberg markets. i'm alex deal. we are doing the close of trade. ramy inocencio has your market check. ramy: markets have been fairly volatile over the course of the day. we are sort of at session highs but they are in negative territory. the dow had been flirting with positive territory with the s&p 500 down a third of a percent. the big weight today was retail numbers for february. they'd dropped and january's gain was revised down from a prior positive. let's look at some of the best and worst performs -- reforms. let's look at the s&p 500 health
sector. 's surprise after valeant earnings call this morning. plus there were some analyst downgrades to speak of. leader,h is the biggest followed by apple. further --a look look at that. it has been on a gentle slide, down 50% here. this is its biggest drop ever after reporting weak fourth-quarter earnings and cutting its forecast for 2016. let's take a look at some safe havens in this relatively risk off market environment. gold off by .9%. 2% for the down by
first time in a month down two days in a row because of iran saying it will not freeze oil production. a mixed day for the most part, but we will see what the fed says tomorrow. dannylet's ring in berger. when i see oil down x percent and be markets are relatively flat, i'm like are we decoupling here? there's a lot of uncertainty out there with oil, china and the fed, heading into a decision tomorrow, everyone i spoke to today, i said what is on your mind and what are you thinking about. the answer again and again was the fed. there's so much uncertainty that you are going to see light volumes today. alix: i'm looking at the s&p and volume is down versus the 10 day average.
wanting to take a lot of positions into the fed. guest: another artifact of that is the vix. the vix looks calm right now, definitely below historic averages. when my colleagues looks at these other securities that you can trade the vix on, making a bet on whether you think volatility is going to go up or down. the demand is really high which would lend itself to people saying don't get used to it. we have jobless numbers, who knows what the reaction is going to be but ac volatility in the future. alix: in terms of what is moving today, it seems like you have apple which was supporting the dow and on the other hand, you had valiant really bringing down itself. it felt like health care got a bruise from that. health care was the worst
performing sector. when you look at that end say what is grabbing headlines, you'd be hard pressed to find someone who says anything other than valeant. down a record amount. we saw other companies drop a lot from that. more of ach is hospital company, it is dropping in sympathy as well. a lot of rod based fallout. alix: thank you very much. we will be back. just hold on for it. he will see you on "what'd you miss?" before the close, relatively flat across the board in the dow now positive on the day.
joe weisenthal is off today. ♪ alix: u.s. stocks closing mixed, oil first back-to-back decline in months. scarlet: "what'd you miss?" all eyes on the fed. this meeting is more important than it looks. candidates tax plan, we break them down. >> oracle earnings are out. we will see if the company is still on cloud nine. oracle results just crossing the bloomberg earlier than anticipated. third-quarter revenue $9 billion, less than analyst anticipated. looking to buy back $10 billion in shares.