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tv   Bloomberg Markets  Bloomberg  March 29, 2016 10:00am-11:01am EDT

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this is bloomberg markets on bloomberg television. eddie calvo we will take you from new york to london and san francisco in the next hour. we are half an hour into the trading session in new york. stocks are lower as you can see at the bottom of these green and investors are keeping a close eye on the sliding price of oil. but a closer eye on janet yellen and clues about the rate hike. then, the justice department is dropping the case against apple, saying it was able to break into an iphone used by a terror suspect without apple's help. but it is not clear how they did it or who helped them. the debate will be far from over. betty: and the incredible story
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of banker andrew casperson, he appeared to have it all. now he is accused of a $25 million fraud. how his employers and clients missed the warning signs. what a story that is but let's head to the market desk with julie hyman. we will take a look at the latest numbers. julie: consumer confidence for march is rising. this is the confidence number. the 94 which above was the earlier revision. read and it doesn't tend to move the markets march but it adds to the general picture of the u.s. economy. if you take a look at what stocks are doing today, as people await janet yellen speaking, let's take a look and
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we are seeing a pullback but not much. the nasdaq is lower as we go into the meeting. i want to take a look at other meetings to see what they are anticipating janet yellen saying. remember in the most recent statement that janet yellen set a dovish tone that since then, we have heard from other fed officials, who appear to be more hawkish. who say even april is on the table. we are seeing a dovish slant to how things are going. if you take a look at the currency market, we have the dollar a little lower, and the euro is lower versus the british pound. and we have seen forecasts come down for how the dollar will trade. take a look -- this is the chart i use for battle of the charts. what we have seen is the forecast of the euro coming up,
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now at $1.09. ng higher here and interestingly enough, we could see rates go up in the u.s., it would be going in the opposite direction. betty: why is the lower dollar helping oil? julie: people are not looking so much at oil but at the supply outlook. we get supply numbers tomorrow. this is the correlation chart between stocks and oil which is that a nearly 1-1. today, theyre lower were off by more than 3%, still off by 2.8%. caroline: yes, oil prices have been playing into things in europe. over here i have the grr. it has the breakdown for the day.
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you see the metal slump but behind them, oil and gas. that has pulled the stoxx 600 off of the gains. for the first time in five days, the gain has been erased. it is taking the european markets after the easter break. i'm looking at what barclays is saying, when on the barclays called, kevin is at the desk and is saying copper and oil could slump. copper could drop to $4000 an ounce. this is the key concern he has. that the fundamentals don't support the rally that we have seen in metals and oil. we could see oil head down to the $30 area once again. clearly uncertainty in the market when it comes to analyst perspective. this is what i wanted to show. we have been focused on the bank of england.
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the committee came out and gave us what they have been chatting about. there are warning bells around brexit. get this. this is volatility in the pound. implied volatility. 15 and it is ato key concern surrounding brexit and that has been hitting some of the banks. betty: certainly some warning bgns for any holes -- any ulls. matt miller has more from the news desk. matt: the hijacking situation at the cyprus airport is over and the suspected hijacker is under arrest. seven people were left on the airplane but they left safely. the hijacker climbed out of the cockpit window. it was supposed to fly from alexander -- alexandria, egypt to cairo.
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they say they don't think it has to do with hijacking -- with terrorism, but wanted to deliver a letter to a woman instead. brussels is under heavy guard a week after the terrorist attack on the subway system and the international airport. mole beaks station was hit by a bomb and it remains closed. the mayor says his city can never go back to normal again. more squabbles in korea. is said to have fired a short-range projectile and it is unclear whether the projectile crashed in land or over its target and planted in the sea. or whether it was a ballistic missile or an artillery shell. hey're reacting to ongoing military drills between washington and south korea. leaders of the brazilian
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democratic movement party have agreed to break according to a person familiar with the matter. oft would deprive bruce f the votes she needs. global news, 24 hours a day powered by our 2400 journalists and 150 news bureaus around the world. betty: thank you. let's return to the markets. take a look at the chart of the hour. exchanges have slipped since the decision not to move on rates. it has reached its lowest level of the year yesterday. where are all the traders and investors? joining us now is dubravko lakos-bujas, he is among the most bearish strategic it's on the street. , in tandemok at this
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decline, does that support your bearish view? sons for: one of the rea the decline in volume has been because of the portfolio. there has been a lack of risk-taking. the money has been sitting on the sidelines. and the only thing we have seen has been more in the u.s. market. so this is largely a reaction function to the feds. it is a commodity complex and that is what we see. the u.s. has been not slack on that front. betty: why are you so bearish? we cut our forecast at the beginning of this year. part of that was because of an earnings backdrop. some of that was because of
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weakening in the energy and materials sectors. a bigllar has also been headwind if you look at the last two years. we have seen a 20% appreciation of the dollar. and there are a number of different factors. when i look at a backdrop and i look at the fundamental earnings backdrop, i still see equities. it calls for a relatively unexciting environment in the u.s.. it focuses down the evaluation spectrum. caroline: i wanted to get your view for what you are expecting from janet yellen later today. she will be speaking at the summit. you think she anticipates
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in terms of the fundamentals of the united states? will we see further rate hikes? dubravko: over the short term, it is hard to say. there could be a lot of volatility and if you believe in the positioning that takes place around 20 fed is saying or theying, if you look at last meeting, they definitely did come out more dovish. now we are seeing to rate hikes. -- two rate hikes. considering the fact that this is an election year, i would be leaning towards a more dovish outlook. inflation might be picking up but what we might be issue we may be facing is the environment. caroline: what do you think about the commodities index? people are saying that fundamentals have not driven the
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rebound in the last month. it has actually been the fact that the fed has been helping move money into these commodities. are you bearish on that as well? dubravko: generally speaking, we are constructed on the commodities index as far as the index is concerned. , think that the commodities there are a number of different drivers but there are large relationships with what the fed does. so the fed is dovish and that will give relief to the commodity complex. and i think the energy and materials are on that side of the equation. some of the fed officials tend to feel that the markets are not connected. i know your view is that, yes.
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but john williams was speaking about this edit want to play for you what he said. >> movement in the stock market have proven to be unreliable indicators of what the u.s. economy is doing. in fact, there is a disconnect between the stock market and the multilayered complex u.s. economy which, as i pointed out before is in the service sector and not in the manufacturing sectors. betty: if you take his view, you should ignore what is going on in the stock market. dubravko: over the short-term, they can be very volatile. look what happened last year. so absolutely, you should not be too reactive. but historically, the market does lead a lot. you have a negative market with high volatility. eventually, this will spill over into the economy. i don't think we need to focus on what the market is doing. that over the long term and not short term.
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it does remain elevated in the next coming months if equities remain pressured. i think people will take into account. s-bujas,: dubravko lako thank you so much. always great to get your views. and you can tune into bloomberg for janet yellen's speech today. we will be carrying that live. ernmentup, the u.s. gov gains access to the locked iphone of a terrorist but is the legal clash over? personal privacy versus national security. betty: and breaking news on the political front. scott walker and the one-time presidential candidate, he has endorsed ted cruz for president ahead of the critical wisconsin primary that is next tuesday. so again, scott walker, the
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wisconsin governor, endorsing ted cruz. ♪
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caroline: live from london and new york, i am caroline hyde. betty: and i am the loop. you are watching bloomberg." the justice department says it has unlocked the iphone with the help of a third party. cory johnson has more from san francisco. , ison't get many details apple going to be pulling to know how they managed to beat the encryption that they have in place? cory: as we discussed in the last hour, there is a review
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that apple can pursue and the government may be compelled to share that information as to how they found that and who was able to help. so this case is not over yet. and of course, we can talk about europe -- this is an active debate in europe in the wake of and happened in brussels what we saw with the suicide bombers about what is the appropriate level of companies sharing and privacy. and does opening these phones up to the government inspection open them up to all governments inspecting the phones? even if they are on wanted or unwarranted? this is a debate going on in europe, particularly in europe and france. as a maybe be a different sensibility about it in europe. they are more on the front line of terrorism. caroline: clearly, the privacy
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concerns will rage on but what about who actually comes out victorious or the loser in this? are we likely to see apple claiming the fact that they didn't back this as a victory? or worried that their phone isn't as secure as they believe? cory: they are declaring victory. both the government and apple is declaring victory. but they are both losers. they didn't -- the government didn't get the result they wanted. way back, phone companies created registries. the government could subpoena those. so it is a government loss on this front but apple loss on a front because it shown -- it shows that there older phones are not hacker proof. betty: what about setting this president with working with authorities?
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doesn't apple frequently work with authorities? how does this change the relationship? cory: it is clear that the relationship is becoming not what it has been. but apple has cooperated for years with providing information. even with this case, they provided the iphone backups that the terrorist had created. it was merely when the government wanted the key to the phone that they drew the line. but the discussion is looming in apple where they realize they want to keep their information private, whether they are terrorists or law-abiding citizens. law enforcement across the world does not like that idea. that is the direction that apple is going and the rest of technology wants to go as well. for business issues, they reckon they lost a lot of business when the information came out with
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the prison program and how so many companies work for grading with that. companies lost business because of that and they don't want it to happen again. betty: thank you so much. cory johnson reporting from san francisco on apple against the fbi. still ahead, the banker accused of stealing $25 million. we will have a closer look at the case. ♪
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betty: you are watching "bloomberg markets." i am betty liu in new york with caroline hyde in london. andrew caspersen has been arrested and charged with scheming $25 million. he apparently had false e-mail addresses and falls domain
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names. shares plunged. so who exactly is andrew caspersen? here with more on the story is winnie o'kelley. st reading i was ju the details about his life story , so let's take it back a step. who is he? winnie: he is the son of a man well-known in financial circles. ran a longtime financial company and was a big philanthropist. 2009, killed himself in when he was being treated for cancer. but in the aftermath of his death, a tax evasion investigation emerged. that was left open. some trust accounts were frozen
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around then. betty: so you might trace some of the mental health problems -- not he, but when it came out, back to that, possibly. but fraud. what is the issue? winnie: what he did, according to prosecutors, is created bank accounts that you discussed. he engaged with hedge funds and others to put money in it, saying there would be a guaranteed return with little risk. he promised they would invest in a loan in private equities. and then he took the money and wired it into his own account. he traded in options and lost the money. caroline: a fascinating story and a tragic one it would seem. do we understand how and his life started to unravel? winnie: we really don't. we can just wonder.
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he had a longtime girlfriend who died in 9/11, in the attacks. as we know is that prosecutors say there was a substance abuse issue and there might be mental health issues. none of which we have heard from him and his family so at the moment, we are left wondering ourselves. caroline: we have to ask, what happens next? winnie: he was let out on bond although prosecutors said it was a brazen act. the money was all gone. the judge slapped that down and he was released on a $5 million bond. it is interesting to see what kind of money can be recouped. it was about $25 million from a hedge fund philanthropy which is all gone. betty: was he pretty wealthy? obviously, the family was wealthy? winnie: we don't have a lot of details about him in the moment. he had all of the right pedigree
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. he went to princeton and harvard law. and yes the family, they had quite a lot of money. caroline: a tragic tale. sadly, it seems some philanthropic money is gone. thank you so much, winnie o'kelley. still ahead, home prices are on the rise just in time for spring selling. what is behind the gains? ♪
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thank you. ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business. betty: live from bloomberg's world headquarters in new york, i am betty liu. caroline: and i am caroline hyde
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and you are watching "bloomberg markets." matt miller has it all from the news desk. matt: with the state primary a week away, scott walker is endorsing ted cruz for president. walker house white house run ended in september and says ted cruz is in the best position to defeat hillary clinton in november. on capitol hill, senator -- is the first senator to meet with merrick garland. he is the first to break with his party and call for a vote on president obama's supreme court pick. he is facing a difficult reelection pick in illinois which leads to the left. another republican will speak with garland. able get together sometime in april. president barack obama heads to atlanta today to address a conference for treatment providers, counselors and lawmakers and law enforcement
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officers dealing with the nation's drug epidemic. deaths linked to opioids soared 2014.e than 29,000 in barack obama is seeking $1.1 billion in federal funds to confront the problem. turkey's president is on his way to washington -- he will take part in a nuclear security summit. president obama has no plans for a formal one-on-one meeting. that reflects u.s. concerns on crackdown on kurdish insurgents. ,50 bombs have been removed planted by the islamic state, planted inside palm era -- pal myra. global news 24 hours a day powered by our 2400 journalists. i am matt miller.
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betty: it is time to get you caught up on the action around the world. let's start with asia where stocks were up barely 0.1% but everything else is down. one big story is that we had a mixed bag of economic numbers out of japan, showing weak domestic consumption. >> the numbers for february painted a mixed picture of the japanese economy. the labor market remains rather tight but retail sales slumped the month, missing estimates and showing the economy is struggling to rebound. this keeps the pressure on the with japan having to consider more stimulus measures. they did manage to rise 1.2% on the year.
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still, economists say the basic trend for private consumption on -- consumption is remaining week. caroline: let's bring you up-to-date with what is happening in europe. can we hold on to the green that we see on our screen? it is the first grain in -- the first gain in european stocks in days. they are off by 2.5%. anglo american is among them. .7%. look at hsbc. analysts over there are cutting their stocks, worried about the dividend policy. and also worried about the capital requirements. the financial policy committee said banks will start to have to raise the buffer. let's have a look at the next
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set, the pound is holding onto the gains against the u.s. dollar. they are holding out for the janet yellen speech happening midday, we will have janet yellen discussing economic policy. the euro-dollar is holding onto the gain. the dollar is on the weak side but brent crude is down. we have had none other than kevin noris worry that we could see oil back below $30. bearish news happening in the markets. the s&pere in the u.s., is down and in the red but the nasdaq is coming into the green here. abigail doolittle has the latest at the nasdaq. we have some tech movers including skyworks solutions. abigail: sky works has been
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trading down today. this is the apple chip supplier. and analyst has taken his rating down, warning the risk level is more balanced, following the rallies over the new iphone. he is also saying that the smartphone market appears to be shrinking. not a good thing long-term for sky works. interestingly, the price is above where the stock is trading now. so perhaps a housekeeping issue there? betty: any other tech stocks in the news? abigail: the wall street journal is reporting that yahoo! is setting an april 11 deadline for primarily bids. plus the stakes in yahoo! japan and alibaba. one backer for the bid who has been in the news is microsoft. this could be a possibility.
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this sort of partnership would not be surprising considering a 10 year search deal between the two companies. it is less clear whether there is a possibility and how the stocks we converge. caroline: thank you so much. i know it is a british obsession -- the housing market -- but it seems it is an of session in the u.s.. there is a report showing that home prices are up from the year prior. the schiller index shows a steady growth in the housing market. prices jumped the most in portland, seattle and san francisco. the world economy -- but here, it is looking ok.
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and house prices are going up in a number of places. i think that is a sign of our general optimism. >> with concern to what is happening in the u.s. market, talk about what is happening in the hotbeds like new york. as you look at the luxury and high-end, it could be a problem for china to, at the moment. >> well, the times we live in encourage upper end home prices in world centers. people are fleeing something or other. they like places that look stable like new york or london. and i think the high-end housing market -- that is not what we are remarking on. cities that bring the closest year-over-year gains
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were san francisco, portland and the bottle -- and seattle. is there a danger that we are seeing more indications in the data that is those hubs that are creating bottles and the rest of the country is not benefiting? the country is not benefiting? >> it is interesting that tech cities -- i would add bank over to the list, they are experiencing quite a boom. these cities in the united states are high-tech. glamorous. right now we are in a move in the world economy of trusting technology and not trusting our hands to do labor. on the other hand, other high-tech cities like boston did not do well. it seems to be partly regional. it is interesting to me to see how movement correlates over hundreds of miles, immunities that are hundreds of miles in
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diameter. vonnie: this data is slightly backward looking, it is three months rolling. what should we anticipate going forward? we had the big upturn and then it has been stagnant with a little rise over the last few months. >> well, if i look at the recent expectations data, they are modest. both for the one year and the 10 year. 4%-5% range. it is not overall a bubble. but it seems that there is , that is pushing up home demand in double-digit rates. so it is looking like it will be a few years before the boom in home prices that we saw after the financial crisis. feel theportant do you
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housing market is in terms of adding to growth in the way that there are a lot of second order effects? and now there doesn't seem to be very much additional consumer spending associated with that directly? >> i have a paper with the same case with the schiller index and it argues that the wealth effect is stronger for housing benefits for the stock market. the stock market is driving consumption but most people, either they don't own any stocks or they own them in retirement account. it is not something that is as substantial as a home price. when they see the home price going up, that affects expenditure and it can affect it a lot. betty: that was robert shiller earlier. much more ahead. the legal marijuana industry may
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be about to go through a radical transformation. ♪
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caroline: this is "bloomberg markets." i am caroline hyde in london with betty liu in new york. the bank of england says ledgers should tighten standards. this will be part of a wider clampdown on public investments. there is growing concerned that it is pushing up house prices in the u.k.
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provided earnings that were better than expected. they had a higher-than-expected profits margin. and it is the beginning of a new era in virtual reality. the virtual reality headsets are beginning to shift. they cost $600. the company was bought two years ago for $2 billion. that is your latest bloomberg business flash. betty: the legal marijuana issue is already having to adapt. we are talking about the growth of pot. and brettlead story begun joinsd bret us now. bret: rosin is the extract digital or -- the extract.
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if you are 30 years old or a millennial, it is the primary way you will be interacting with marijuana. betty: i like how you say interacting. bret: most extracts, you can find them in a number of products. income, crackers, it is incredible. rosin you can only smoke. becoming why is this the pot of the day for millennials? bret: it is a better high, a cleaner high. in the story we wrote, smoking a joint would be like nursing a glass of house red and smoking and extract is like a premium shot of vodka. it is a potent vibe. betty: so in terms of market
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share, is it still small? or rapidly growing? bret: rapidly growing. which indexese all of the available pot in the universe. the extracts account for 20% of what is on their right now. but the guy that we profiled in our story suggested that by 2030, extract concentrates could account for 90% of the legal market. caroline: this is a phenomenal story. is there any health benefit? a lot of this has been thought as pain control. bret: sure. with extracts you can control dosage in a way you can't with something you might smoke in a flower form. so there are a lot of benefits and upsides. i think that a lot of why we are
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seeing this, it is the future. caroline: can you give us a scale or proportion of the amounts that is being brought in by this particular type of marijuana? bret: it is hard to gauge. numbers are hard to find. the legal -- the marijuana business is a $5.4 billion industry and extracts are making up a larger percentage of that. the guy that we profiled, he sells his rosin for $60 per $10 solowers sell for obviously, extracts are higher. , it has: bret begun been great having you on the show. thank you very much, indeed. you can read more on the story this week. still ahead on bloomberg
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markets, wish you could afford diamonds and rubies from harry winston? we will tell you about a new consignment jewelry shop that may make it possible. betty: and back with politics, a live picture of senator ted cruz at a rally in wisconsin, feeling good right now. wisconsin governor scott walker just announce he is endorsing ted cruz for governor -- for president. this comes ahead of the important primary next tuesday. you can watch his remarks online. ♪
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caroline: let's talk about luxury. secondhand harry winston rubies were some of the thousand of jewel souls.
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it is the online marketplace were you can't buy and sell one-of-a-kind items. the company ensures all the items. the cofounders join us now. let's start with what you offer. it is solely secondhand jewelry. why did you go down this particular angle? >> we went to jewelry because it is a specific category that requires special treatment around insurance and appraisal and photography. and a high level of trust around the evaluation. all of the pieces are handled by experts. the majority of customers prefer to purchase fine jewelry. caroline: give us a sense of how many sales are starting to go and how youour site
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have been able to accelerate the liberation of your website? >> yes, the philosophy is that jewelry should be accessible and available at honest prices. ebay topartnered with co-promote our baubles. so that has definitely been a great avenue of sales for us. betty: who are you trying to target? id people who own these jewels, are they being well served? where is the whole that you are trying to fill? >> older millennials. he customer who is increasingly looking to trade in and update. a lot of people receive their jewelry as aift or an
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inherince and we are trying to empower wometo make their own joy selections. we believe the woman deserve to get fair value with exceptional pieces. we don't ignore men. we have men calling in for free concierge services where they can get help with gifting or a watch, for example. betty: so older millennials -- are you saying they had nowhere to selby jewelry? >> they didn't have a great option. you could go to the diamond district and get $.20 for one dollar on your piece. but what the offer is 70% of the sale will go towards the seller or, if they are looking to trade in and trade up, they can get a 90% credit. caroline: how about the auctioning side? in europe, we have a tech website at the moment which is
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trying to give sotheby's and christie's a run for the money. >> our main competitor is local jewelry shops. so we actually compete with the high street jewelry store by offering a broader assortment. we don't own any of the majority so that allows us to remain more flexible on pricing as trends and index prices rise and fall. and for auction houses in particular, they actually focus on the top 0.1% of the inventory out there and for this reason, we choose to view them as partners rather than competitors. caroline: what about geography? are you predominately within the united states? do you find buyers and slers coming from abroad? >> from a marketing perspective, we are keeping it within the u.s. right now, growing our presence here. what we do buy and sell
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internatiolly as well. caroline: we are interested to see when you hit the u.k. sure. across germany and italy -- i'm sure there may bmany interested buys and sellers. nikki lawrence and case sullivan, we wish you well. you can read mh more about , just head tos the bloomberg. coming up, the bank of england is issuing a warning about the brexit. we will tell you why this is so worried at the moment. let's have a look across the other asset classes. and real estate is gathering steam. and miners are down 2.5%.
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downgrading their outlook for that stock. betty: we are watching janet yellen, who will be speaking weut an hour from now and are watching ted cruz at a rally in wisconsin as he is talking about how he has gotten an endorsement from scott walker. is endorsing ted cruz ahead of the primary. donald trump is there as well in the state, trying to gather support. you can watch his remarks on the bloomberg. >> a liberal, democratic politician. ♪
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caroline: it's 11:00 in hong kong.
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you're watching the european close on bloomberg markets. we are going to take you from new york to london. this is what we are watching. debate isled brexit taking a new turn. it could drive up foreign costs. areie: u.s. stocks recovering right now. they are awaiting a speech from janet yellen. the justice department dropped its case against apple. they say they can break into an iphone without their help. the global debate about privacy and security is not over.


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