tv Bloomberg Markets Bloomberg March 23, 2016 2:00pm-3:01pm EDT
david: from bloomberg world headquarters in new york, good afternoon. i am david gura. credit squeeze blind-sided, -- credit suisse blind-sided. competition from under armour. at nike, shares falling as much as 6% today, erasing any gains this year for these pointy goods maker, and will helicopter money soon take flight? a former governor is here to aboutbout policy and at central banks moving further into uncharted territory. the markets to desk, where julie hyman has the latest. declines,are seeing
albeit rather muted ones, and commodities also playing a role. the cometary begot this morning on bloomberg tv and radio from federal reserve represented james bullard, he said once again it is possible we could see an interest rate increase in april, for example. that adds to commentary we have heard from several that officials ever since the more dovish commentary we got in the official fed statement, and the nasdaq is down the most of the three. when you look at the action in the s&p 500, it is relatively muted once again volume wise and range wise, so here, it is an index in the s&p 500 on a daily basis over the course of a year, and as you can see, this is the of the range, one tightest trading ranges we have seen all way. -- all year. if you want to have access to this, you can send me a message, but definitely in this
holiday-short trading week, a t of people appear to be a way already. david: how about other assets, julie? much, oil prices trending lower, in fact falling to their lows of the session as "into the close. to thee get closer close. inarger than estimated build the weekly inventories number, and this harkens back to the the bullard comments. 9 is the yield. one would think that the rates would be higher, but that is not the case. the dollar is strengthening n, and wee japanese ye
are seeing that play out not just in gold but also in copper. thank you, julie. that is julie hyman at the markets desk, and mark crumpton has more. david, thank you. in belgium, they are hunting for a suspect in the worst terror attack ever, the one who placed a bomb that did not explode. two brothers were among the bombers, one at the airport, one at a subway station. they found their hideout in brussels and found more than ernie pounds of -- more than 30 pounds of explosives. sayambassador had this to about the war on terror and the criticism. >> our government has been setting in place new instruments
, including, for instance, at the airport yesterday, i was myself witness. and i saw theg security people, including military people around. terrorists can walk into any airport and lasted themselves up. authorities say 31 people killed, more than 200 wounded, and they say that number is likely to rise. and it was said that one of the attackers was caught in turkey in june and was deported. it was said the man was detained at the turkish border with syria and that turkey formally notified the authorities of his deportation. dutch authorities later allowed him to go free because belgian
authorities could not establish any ties to terrorism. jeb bush is endorsing ted cruz for president, saying he is "a consistent conservative who has shown he can unite the party." he said they must overcome the divisiveness and vulgarity that donald trump has brought into the political arena, or, according to the former florida governor, risk losing to hillary clinton. from quinnipiac university, 37% say trump is very responsible. he is not so responsible, 27% saying he is somewhat responsible. and john kasich is third at 16%. global news 24 hours a day powered by our 2400 journalists
in more than 150 news bureaus around the world. i am mark crumpton. david? david: julie? a takeover that is poised to create the nation's largest utility, and the regulator was not expected to approve this deal. the district of columbia public service commission apparently approved the deal at a meeting today in washington, the final hurdle that this was needed for it to go through, and earlier in the month, they had made a revised proposal to this commission. the commission though was not very receptive to it, and the air and others said they -- the mayor and others said they opposed it, but it has gone through, so pepco shares are surging, and if you look at the exelon shares, they are bouncing , down by about one third of 1%. julie hyman with the
breaking news. the ceo of credit suisse said he was blind-sided, and francine lacqua spoke with tidjane thiam. thiam: we are confident, but this is a dislocated economy and market. david: and for more information, we are joined by michael from london. you aboutet me ask these trading positions. he is saying there he did not know about them. to of alarming is that investors, that he did not know about it? -- how alarming is that to investors, that he did not know about it? i think investors are concerned about that news. he did try to clarify his s had put saying trader
on the positions before he came into his role and had not done anything wrong, but he was merely questioning the risk limits that were there at the were on say that these acceptable given his strategy going forward, so, certainly, is portraying this as something he inherited, though this morning with francine he said that if he had grasped the full portfolio of what they had, he would have --en more actions in october getting rid of those positions, so, certainly, investors do not like to see a change in strategy five months after a strategy update. david: michael, you mentioned his strategy going forward. is this strategy with less risk? yes, they are further
shrinking their trading business at this point, cutting the capital to that business by another 20%. this is really focusing on wealth management, and especially wealtmanagement internationally, some of the emerging markets, so it is much than thet the trading business that has driven the firm in the past. went to look at a chart, showing what has happened to the -- i just want to look chart. at a are they getting impatient? michael: i think investors would like to see a quicker turnaround than this. he has only been on the job at about nine months, so still in the early days, but i think one thing that may give him a bit of a reprieve is that you are
seeing this across the european investment ranks in terms of the stock performance this year. deutsche bank and barclays also down, but certainly, he feels the pressure, which is why you are seeing this acceleration of job cuts, acceleration of from theeing removed trading business, so certainly they are acknowledging they did not go far enough in october. david: ok, bloomberg finance with us,ichael moore, and you can check out francine tidjane interview with thiam. and we have more from the new york auto show, and the world's largest sporting-goods maker. nike's latest quarter, and donald trump attacks hillary clinton's record on foreign policy and say she does not have strength or
♪ david: welcome back to "bloomberg markets." i am david gura. atlantic soared , with the airline back by forard branson reaching out a potential sale, and virgin atlantic went public less than 18 months ago. looking at is selling part of their chinese operations. the wall street journal says they are considering private andty orders from kkr
several chinese companies. the china business is worth about $10 billion. flashat is your business update, and let's go back to the markets desk with julie hyman and some movers this afternoon. printing., 3-d we have the 3-d printers trading lower, and it is said that demand is weak for these companies, and some company coming from a company, where that management acknowledged some synergies with 3-d systems. theirsting enough, exone, shares initially rose but then fell as it got underway today, ratasys is lower. and krispy kreme doughnuts did not do so well, the company coming out with weaker sales and a disappointing forecast, with issues pertaining to its expansion.
they y this year, they will have $.91 per share, and analysts had $.93 per share. and nike is a big mover, and the full-year number forecast a little below estimates, pulling down some of the other athletic companies, athletic retailers, in particular, along with it, and i know, david, you are going to be speaking more about nike in just a moment. david: yes, thank you. julie hyman at the market desk. mercedes bends unveiled a smaller luxury suv at the new york auto show today, and matt miller caught up with them, and he asked about the latest brand offering. >> we have brought four premieres, so this is a really
big show, and the star is this coupe. it is an suv. it is for people who want to be individualistic, and this car is a symbiosis of those two things. matt: these are taking out some of these? >> it is a niche. get is a niche where you utility into one, and where we can get some customers who like a true luxury car. matt: i see some luxury brands reaching to the luxury side, taking a bite out of the playbook in order to use it for their regular customers. ?re you trying to go sportier
that has gone tremendous growth, and we just have to continue that growth. we are expanding the portfolio. fromll have more models top to bottom, so, yes, it is becoming -- i would say a grown-up family member. time, thehe same luxury market has gotten tighter. there is still growth, but it is not the kind of growth we have seen in recent years. how do you respond to that? have seen tremendous growth, 13%, unbelievable last year. wider, butportfolio we are also developing markets, very strong growth in asia, and we have had a tremendous run in the last few years in the united states. well also,ebounding
so we are cautiously optimistic. you have a brand like cadillac trying to push the price up. they have got a feeder brand. you do not have a feeder brand. worry about, do you that? that's something more affordable is going to hurt the mercedes image? foremost, there is no luxury brand in the u.s. that has so many cars in the upper end as mercedes-benz, and -- compact ones like me cl like the cla. maybe they were dreaming of a c class, but it was out of range. we have captured new customers, and we think they will stay with us. is the market in china different than the needs you have to meet in europe or in the
u.s.? the common denominator for who buys a mercedes, they want innovation. they want to be brand. they want the safety, all of the things they expect from mercedes. that is a common denominator, whether you are in china or europe or the u.s. have seen concern about the sales momentum in china slowing down a little bit. do you feel that at mercedes, as well? you had an incredible year there. we grew in 2015. it was a phenomenal year in china, and in january and february, we had double digit growth, another or to percent or 40% in february, so we started out well, -- another 30% or 40% in february, so we started out well. here what about the market ? we had $17.4 million last
year. investors are worried about a slowdown in the u.s. market. four years orlast so, it has been good for us. we intend to grow also in 2016. we launched to the all new e class, and there is a group of cars coming. we have the gls. especially in the second half of the year, we see a lot of momentum, but it will be moderate growth, so maybe we cannot expect the growth rates of the last three or four years, but on a very high level. ola.: that was mercedes' we break down some disappointing results, next. ♪
:bloomberg markets -- david welcome back to "bloomberg markets." i am david gura. in a guest. these are some pretty high estimates. i was talking to an analyst about nike's problems. >> there is nothing to see here. this is a great company. they are doing really well, but they have high expectations. they have had great years. -- going been gone gang busters. they are the market leader. if you do not knock it out of the park -- they have mentioned been doing well, and i know china has been an area of growth.
there seems to be a lot more competition, from under armour, and the upstart from adidas. tt: some slowing of growth, but they are still growing 10%, 14% a quarter. north america is their biggest market. they have chalked it up to some problems with their supply chain and inventory. is reinvigorated in the region, so that is one thing to look for, but in china, their orders growth is about 36%. we were all riveted a few days ago when we saw these self-lacing sneakers. will it create a splash? is it something they think it well -- that will really catch on? matt: the first iteration, and acingthey will make self-l
pot of their products, and the skeptics say maybe it is just a gimmick -- that they will make part of their products, and the skeptics say maybe it is just a gimmick. brazil, having difficulties. how is that affecting nike? said -- wereey asked about it, they said, yes, brazil, the local economy is not doing well. but they were very bullish about the brand. they take a lot of their new innovations and put them on display, so they are obviously very bullish about it. it isdoes not go so well, definitely going to hurt every sports brand, including nike.
david gura. mark crumpton. mark: president obama is pledging the united states will go after islamic state aggressively. the president made his comments in one is aris, with a -- -- in one is aries buenos aires with argentina and president macri. president obama: we will do what it takes. speaking with an ambassador, vice president joe
signing thes wife, condolence book. and accusing the ukrainian government of dragging its feet on implementing last year's cease-fire agreement. at a joint press conference, sergey lavrov said there is a main stumbling block in eastern ukraine. beenthan 9100 people have killed, with large portions of land under rebel control. gone -- the -- the tester finds flaws in the f-35. they say they are onhe right track. powered by our 2400 journalists in more than 150 news bureaus around the world. i am mark crumpton. david?
looking at some of the day's big movers, oil has plunged. strong u.s. crude oil, coupled with throughput only intensified record domestic oversupply. oil dragged copper down, $2.24 a pound, and gold futures the lowest in almost a month. investors were not as keen. the dollar was strengthened, and james bullard says policymakers should consider raising interest rates at their next meeting. he made that comment during an exclusive interview with bloomberg this morning, and he said they depend on progress and data. i want to get out of the game of how many rate increases this year, and we will take a reasonable policy that will get inflation that to target and get the economy on a good recovery path.
now a professor at the columbia business school, it is good to have you with us, fred eric mishkin. i have got the function up here, the dot plot taking on a lot of sayingcance, jim bullard he did not know if that was wise and that he has thought about pulling his dot out of the mix. is there a different way of communicating this information? mishkin: yes, there is, and i was a co-author for a paper for the u.s. monetary for him, and what jim is saying is something that we strongly advocated in that paper, which is we have a problem with the fed use of calendar time and the market using dates and on the --providing guidance,
to tell people how you will change what you do depending on the data, and actually putting in fixed dates creates a real problem, because if, in fact, the data changes, you should change what you are doing, and, in fact, if you do not change what you are doing, you will have bad policy, and if you do change, people may think you are flip-flopping, and you use --dibility, so we advocate we would love to see the markets do so as well, so i agree with him completely on that issue, and i have a feeling he saw our recent paper on this that we presented a few weeks ago. it has also become a mantra, and we have heard from janet yellen that we are very data dependent. playing off of what you just said there, went to more information of what the fed might do depending on what the -- wanting more
information of what the fed might do depending on what the data is -- mishkin: that does not tell the markets much. what is more important is for the fed to indicate when certain things change in a certain way that that would cause them to change their policy, so i think the key issue is not just a throwaway line saying, of course, things could change, but actually describe to people how they could change, and this could be beneficial, because think about a situation where in 2007,ribe -- where in august, you start to see a big change in terms of what was happening in the economy, and the fed could say, if financial markets get into more trouble, --will ease asked her than we will ease faster than expected. that would have helped offset the negative shocks of the
financial disruption that occurred at the time, i think it is not good enough to say, of course, we are data dependent. you have to be more specific in terms of what that means in a way the market can understand. i want to talk about helicopter money. this was brought up in an interview with erik schatzker, my colleague. let's hear what he had to say about it. >> the making of purchases that put money directly in the hands of spenders, because the link between having money in the financial baskets and having spending, it is becoming weaker and weaker. : ray dalio there, something brought up by milton friedman. it might be useful at this point? mishkin: it is not that
you're going to increase liquidity by buying treasuries and that that increase liquidity in the system. here you print money, and then you fly in a fleet of helicopters and drop it in people's hands, and they go and spend it. is actually fiscal policy. i remember during the year of the recession that the bush administration actually put in place rebates. my mother got a $300 check, and that is really more like helicopter money. you give people money, and they can spend it, and i said to my mother, well, why don't you take me out to a nice dinner? fiscal policy, and the federal reserve is not legally allowed to do that. if you actually wanted to send out cash to people or checks, that is something the congress can do, but it is not something the federal reserve can do.
in fact, you do not want the federal reserve be involved in fiscal policy. it is actually not feasible. is moreio may want fiscal policy. if he wants the government to send out checks to people, that is a whole other debate. few morewent to as about what jim bullard said, saying the labor market -- i want to ask you more about what jim bullard said, saying the labor market could get that her. -- could get better. do you share his view? he was talking about that 2% target and that if we overshoot it, that would be fine. shkin: targets should never be ceilings. you should as likely be about it as below it. this has been a huge problem with the ecb, which is always
treating their target as a ceiling, and they are always behind the curve, so we have a problem, however, where the real issue of e ed should not be how strong the employment report is what -- the real issue of the fed should not be how strong the employment report is. how confident we are to return to a 2% inflation target -- for some but he who has been a -- fory policy economist somebody who has been a monetary they cannotmist, get inflation up. it is hard to do it. central banks are going to almost desperate measures, putting in negative interest rates on what banks have to pay for deposits they keep at the central bank. that is something that could actually be dangerous. the federal reserve should be cautious about raising rates,
unless they are truly confident that inflation is going to bounce back up to 2%. confidenti am not that is going to happen at this point. it is an issue with japan. the bank of japan has not been able to rise 2%. the u.s., inflation is too low. we do not want to be in a position where we tighten too early and then have to resort to much more expansionary policy and have to deal with something like negative interest rates, which we do not know if they are going to work, so i would a much more cautious about raising rates. david: from columbia business school, frederic mishkin. coming up in the next 20 minutes on "bloomberg markets," jeb bush gets behind ted cruz. bringing in hackers to reveal findings to apple so it can, in turn, fix the flaw.
are looking at live images from stanford university, hillary clinton speaking on the a speech onvering counterterrorism a day after those three attacks on brussels. she was going to be in the area anyways for some fundraisers. again, hillary speaking on the stanford university campus at the center. donald trump says he will
beat hillary clinton on security. mark halperin and john heilemann yesterday. let's listen. mark: she was a secretary of state. look at the job she did. you are a businessman and a television person. i think i am smarter than she is and more competent than she is, and i think she has been very weak. i do not think she has the strength or the stamina to be a good president. her at 3:00 in the morning, i think she is sleeping, and i do not think she wakes up. mark: do you think you can beat her head to head on national security? trump: it is not what i
want. i would rather have no problems. but i think every time we have a problem in the world, i am there. you have seen that. anytime there is a problem, i go up, because people view me as much as stronger, and i think they view me as much more competent. wen you look at hillary, have so many ads that she did, the 3:00 in the morning add, she never -- the 3:00 in the morning ad, she never woke up. benghazi. they were calling and calling. she was sleeping. should sayinkou that if you want to hear what hillary clinton say, you can find it. it has been proven that he is stronger on national security. aboutoes he have to say
how this might shape up in a general election fight against hillary clinton? >> in some ways, he is more hawkish than she is, and in some ways, he is more dovish. think toaid, and i some extent, this may end up being the comparison if they are the nominees, he set a president should be unpredictable, that is to not give them an idea on what the american president will do. he said with hillary clinton it constancy,e obvious, getting along with people in a way where they can anticipate what the u.s. will do. unusual. heard a candidate say vote for me because i will be unpredictable in foreign affairs. been meeting in
washington this week, and the conversation seems to be about national security. how comfortable is he having that conversation? us yesterday, when brussels happened, i got a curl -- called early -- i got a call early from a friend, and he was doing a bunch of morning shows, and he had not consulted anybody in the interim. he went on and did that. he is very comfortable with his instincts. need morehere do you knowledge? and he said, to some extent everywhere, but to another extent, nowhere. instinct and a sense of what you want to do, and he believes that when the american people judge him, if it comes down to that, side with hillary clinton, they will like the notion that he has got good in thinks. david: hillary clinton saying in stanford that luster in american policy does not make us safer.
bluster in american policy does not make us safer. this race goes on. mark: it goes on, but every week that donald trump is not stopped, he gets closer to the nomination, and ted cruz finishing third is not great news for donald trump. winner take all in arizona. it is now a challenge to the party. ted cruz is better as a choice than john kasich. he got an endorsement from jeb bush. look at the calendar. donald trump is going to have a most delegates, and may be the majority, though we will not know that until june -- donald trump is going to have the most maybe the and
majority, though we will not know that until june. down -- he satt down in an interview. ted cruz. let's listen. : there is about as broad a spectrum in the republican party as you can imagine, and it is the entire ideological spectrum, and it is simple. 70% ome time, 65% to republicans see that donald trump is not the best nominee to go head-to-head to -- with hillary, and that i beat hillary. that is what it will take to beat donald for the nomination and to beat hillary in november. has picked up some endorsements. he is doing some fundraising, but it has become a three person
race. still face a challenge of stopping donald trump, and no hist that ted cruz feels chances of beating donald trump would be a lot better if john kasich got out of the race. david: do not miss "with all due , when john andt mark will have the full interview with donald trump. and breaking into the iphone by the feds, and they may have to tell apple about how they did it area coming up next. ♪
gaining access to the phone. we turn now to our "bloomberg west" anchor, emily chang. explain how this may be used. they discover these vulnerabilities all of the time, and they bring in hackers to help them for their own purposes, and every so often, they will discover a flaw in the astem, and the fbi brought in third party that discovered a vulnerability in the iowa's operating system that is on this phone in question, and that -- a vulnerability in the ios operating system that is on this phone in question, and i using that vulnerability, they may be able to get information off of this phone -- and by using that vulnerability, they me able --
they may be able to get information off of that phone. purpose is to break into phones when they are locked or when they appear to be unh ackable. sure, butknow for sources are telling us, and i want to read this because it is very technical. conceivably bombard the phone with as many passwords as possible without erasing the data and get the answer in question that you need. we are monitoring the speech that secretary hillary clinton is giving on the stanford campus, and she talks seeing each other as adversaries, tech companies and the government. that isly assume that
what apple and others might be doing. emily: apple is unique because they do not have a program where they pay hackers to pack the system and find the vulnerabilities, and those hackers in turn get paid for it. paid hackers something like $6 billion, just to find vulnerabilities in their systems, but apple, for the longest time, has not been the target of hackers. you do not hear about malware affecting them. the reason that is the case is that the vast majority of people still do not use apple computers. and android is .he biggest system but as these become more popular, this might be something apple eads to consider. they have no idea how they are theyng into the phone, and
could turn to the u.s. government for that information. as far as we know, the government comes across dozens of these vulnerabilities all of the time, and it is up to them whether they tell the companies, and in a couple of instances, we believe the government has not told them about the flaws so they can continue to use them for their own security purposes. joining us. chang and once again, hillary clinton is speaking on the campus of word from the state department, secretary of state john kerry planning a visit to brussels to take place on friday to express condolences to the belgian people. ♪
welcome to "bloomberg markets." from bloomberg world headquarters here in new york, good afternoon. markets are getting today and stocks are suffering -- are dipping today, and stocks are suffering their biggest losses in two weeks. fels says weim need to keep close watch on the three c's, commodities, china, and the central banks. luxury suvs, trucks, and small cars -- we will hit the road with some new cars. we have matt miller and the ceo of jaguar north america. matt miller, our special guest? when i read