Skip to main content

tv   Bloomberg Markets  Bloomberg  March 31, 2016 10:00am-11:01am EDT

10:00 am
this is bloomberg markets. >> taking you from new york to london to hong kong in the next hour. here is what we are watching. 30 minutes into the trading day in new york. u.s. stocks fluctuating. the s&p 500 heading for the the year.g in heading for a loss of more than 7%. >> elon musk set to unveil the new mass-market car today in hopes of lifting the company's profitability. be going -- he will be going head to head with gm and the chevy volt. bringing emerging market
10:01 am
investing to mainstream. now the finance giant tells us about his next move. going to the markets desk were julie hyman has the latest. julie: on a day we are not saying much movement as we go toward the end of the quarter here, the end of the first quarter of the year, the major three averages doing nearly nothing. we have had the big bounce back in stocks over the past several weeks. take a look at this #. the 10.5% drop into february 11. since then has bounced a nearly 13%. we have also seen a recovery in commodities. example, in the same time this has helped to fuel the games. taking a look at commodities for the year to date, as well as the dollar. here today to gold futures up 17%. -- year to date, gold futures up
10:02 am
17%. the best performance since 1986. crude oil has bounced example, e this has helped to fuel the games. taking a look at commodities for the year to date, as well as the percent since the low in february. now of 4.5% on the year. the dow havinge, a down month and quarter. this is helped to fuel the gains and commodities. and then the recent gains in the dollar. we have definitely seen that relationship and high play except for the past several months. this was the worst performing stock in the s&p 500 last year. down from 75%. urban outfitters bouncing back and michael kors as well despite the consumer spending numbers not looking can -- not looking terribly strong. on the bottom, we have a want of the specialty pharmaceutical blowback the valiant
10:03 am
there wills whether be further regulation, more regulation of drug pricing. so they are all falling into the category. then you have williams company. to be boughtagreed by energy partners transfers -- energy transfer equities. that acquisition somewhat troubled as we had seen the .lunge and oil prices talk about whether the acquisition might somehow be open. >> it is interesting. what has been a very volatile quarter. we finished the day with minus in the green. and everything else in the red. the stoxx 600 on the day. an industry breakdown basic. at theg onto gains
10:04 am
moment. the best-performing industry group on the year so far. the only industry group that has gained so far. the banks have gone lower for the year. oil and gas has gone lower. if you are looking at an individual stock, we have m&a speculation once again. great telecom unit being eyed up the french governor curve. mobile consolidation going on in france. the talks have not progressed as had been hoped. dealelecom unit can do a of 53 point 5% this morning. keep an eye not only on the stock market but an eye on the pound. what volatility we've seen today
10:05 am
managed to serve -- managed to move into the green and then trading back lower. gdp figures did not come out and push it into the green earlier. gdp beat for the fourth quarter. still ahead of expectations. even i am the u.k. bond. yields drop 64 basis points. the u.k. bull market has been this year's out performer on the southern debt market. -- sovereign debt market. david: vonnie quinn has more from the news desk. leaders have descended on the market for a summit. for president obama, likely on north korea and the nuclear program. the president will also talk about north korea with china's .resident mr. obama will also bring up and china's
10:06 am
territorial claims in waters far from its sure. a nonprofit link to republican senator john mccain received $1 million donation from the government of saudi arabia according to documents filed with the irs. he said he is a strictly honorary role with the mccain leadership role. federal law bans foreign contributions to and china's territorial claims in waters far from its sure. a nonprofit link to republican senator john mccain received $1 million campaigns. to brussels airports where they remain closed until at least tomorrow for passenger flights. officials are of value in temporary repairs made after last week attacks. the bonds destroyed the check-in area. they will be able to handle only a fraction of the normal passenger traffic. the death toll is at least 15 now in the partial collapse of an overpass and the construction of east turn india. residential area kolkata.
10:07 am
the nation's highest court says zuma violated the constitution by refusing to repay taxpayer his privaterading home. david: this morning in new york chicago fed president charles joined janet yellen in striking a dovish tone. economye looking at an that is close to fulfilling ,aximum employment mandate unemployment below 5%, and that is a very good outcome compared to where there is 10% for the basic measure of -- of unemployment. . basic unemployment has been strong. .nflation has been low that is the reason why continued caution is called for. we need to have confidence he
10:08 am
can have inflation up to 2%. david: investors are looking to u.s. jobs data the next clue for the central rate. go on the bloomberg to see the people on twitter and bloomberg edit 209he u.s. thousand. slightly above the economist survey. phone, a chiefhe u.s. economist for barclays. his payroll prediction 25,000 jobs. before we talk more about the labor report, i want to ask you about that we are seen in fine shall -- financial conditions and get your nse of what that has meant to the economy over the past several months. >> certainly it has meant caution on the part of policymakers. a lot of this is affecting global markets. it is making the fed cautious. this is what chair yellen referred to in the federal
10:09 am
and chair yellen is referring to as well. the volatility widens out spreads. thise past and has caused to increase. has also been volatile. the fed has to look at that to see if we want to add further tightening on top of that. it makes inc. cautious. the financial stress has to settle down before they can become comfortable with moving again. things cautious. david: how do you read that provision upward from? >> the february data surprised of it to the upside. the january data was revised significantly lower. we had a pretty good preview earlier in the month. we read it in two ways. , unnumbered number revision to consumption in the fourth shows privateow
10:10 am
spending at a 2.4 annualized pace. this makes it a bit softer by definition. we have a consumer and household that is comfortable with at aing in the 3% range maximum right now. i just think you are getting enough employment growth to see that but not enough out right wage growth to support something consumer isthe spending at a modest pace but still somewhat cautious. i want a sense about the employment, the amount of people in the workforce at the moment. chart for thet viewers. still the overall employment significant loads back to the 1970's.
10:11 am
how much of this is an impact for what the federal reserve stands on rate hikes. most of this is related to the aging of the population. the baby boomers retiring, the fact that over 55 age group participates at half the rate of 25-54 population. as the economy ages, work worth ages, the work is population will just below where. , there is some that is still soft for cyclical reasons. what we have seen is a half rise to theoint labor force participation rate. this is what janet yellen referred to as heartening. a stronger economy and stronger
10:12 am
labor market would pull discouraged workers back to the workforce. she said why would i want to move now and perhaps choked on off when we have been waiting five or six years for this to happen? i do believe this is playing an active role in her desire to move slower than they anticipated just as recently as december. you work at the board of the federal reserve. give me a sense of when we see rate hikes. evans saying one is due in the middle of the year. one of the year and. signals we market will not get one until 2017. why is the market more cautious than the fed? >> this is assuming no negative risks or name -- or no negative outlook. most see this as risk to the downside. hikes looking at two
10:13 am
today -- this year as the baseline. is as likely you might get one as opposed to two. it is not altogether clear the recent trend in inflation will be sustained. there is a lot of factors that need to come into play to get the fed to move twice this year. it needs either a one cut or offense that keeps pushing things out and flattening expectations as it has in recent years. risks are skewed in one direction. we're pretty sure some of those will manifest those and do so in that causes them to put rates on hold. caroline: bill gates and chief economist for barclays right to have you on the show.
10:14 am
coming up, calling all of electric car enthusiasts, tesla model three reservations begin today. the new lower-cost models and why they are overcoming mainstream. ♪
10:15 am
10:16 am
caroline: live from london and new york, i am caroline hyde. i am david gura. united technologies performance building engine has been played by recurring manufacturing quality issues according to the defense department quality retorts -- reports obtained by bloomberg news. it is under pressure to improve quality as the pentagon plans to spend almost 49 billion dollars
10:17 am
to five more than 2400 engines. it is a comeback for bill gross. jim's capital unconstrained bond fund having the best quarter since he took charge. ranking 11% of the spirit group. now to your bloomberg business flash. now heading to the markets desk were julie hyman has another look at tesla. so much excitement ahead of the unveiling. three going tol be unveiled later today. a lot of mixed commentary going into this announcement. calling this a potential game changer. ubs talking about potential competition for the vehicle. one issue could be too successful.
10:18 am
a lot of questions about where this fits into the tesla universe and what it will end up doing. will it be enough to boost sales for the next several years. bounce sincebig the lows of the year. as you look at how the stock has done in february 10, that is how they reached the low for the year. quite a sizable one. one thing i want to point out, one thing it has relatively high short interest. there is a lot of hedging against the stock potentially going down. the other, the premium the people are saying -- the premium people are paying is relatively high. i am looking at the forward pe ratio.
10:19 am
about 200. trades above 200 times forward earnings. ferrari, bmw and i'm mark met in the. obviously they are trading at a much lower pe than tesla. this is an idea of how important this launch is. we are predicting they could sell 500,000 of these cars by 2020. highly anticipated. the reservation process a bit tricky. teslan either go to your store, does not depend on the dealership model that a lot of do.rs you can make a reservation online. that is when this car will be unveiled in california. i gather it will be a different amount of money on preserving one of these cars. >> one man for three days.
10:20 am
what interests me is $1000 for a u.k.it in the u.s. and the is 1000 pounds. that is a significant premium. we cannot get our hands on these cars until late 2017. that is if tesla manages to stick to the deadline. far wider availability to the market. of --la say they will expand where they are available. you will get access early. it will move across the u.s. and europe and beyond. we will see how quickly they do this. depositve to pay a high and wait our turn. we will be digging
10:21 am
into other key corporate news. escaping from the too big to label. more on the industrial giant overhaul next. more on the industrial giant overhaul next.
10:22 am
10:23 am
welcome back. you are watching bloomberg markets. i am caroline hyde. general electric on the verge of from systemically unstable. --have the ge aggressively aggressive transformation. this seems to be the next step from disposing and trying to back away. will it be successful you go >> they are very confident they will be successful.
10:24 am
they are about 80% of the way through that. they were waiting until they were confident that they would get approval to submit the application. it will still take about a couple of months. >> we are talking about the way ge has done this. metlife going through the course of getting a judge to rule on this. not following the traditional cycle. >> they took a very different approach. when they announced the sale a year ago, they specifically said they were going to work with regulators. they have taken a very collaborative approach on this and have been in regular contact figure outn order to what it takes. there really is no set procedure for getting out from under. david: you wrote a piece
10:25 am
recently getting out from under ge from jeff mills. what does this be to about the transformation we are seen take place? >> this is a key part of that. in addition to getting rid of a lot of the finance business, they are trying to focus on a handful of industries where they think they can be real leaders. heavy duty sheena rate. makee same time trying to it applicable to 21st century by putting sensors on and trying to utilize data to make it run more efficiently. >> this make that more of an industrial play than banking play. what does it free up in terms of oversight and capital? what can be the benefit of autting this potential as a stigma that it is too big to fail? requirementsonal are being phased in over time.
10:26 am
from the free them up real restricted oversight. they will be able to pay the 35 -- pay $35 million in dividends back to the parent company. >> still ahead, the end of an at templeton. mark mobius, the man who pioneered emerging market investing. will tell us what he is been doing next. more coming up after the break. ♪ doing next. more coming up after the break. ♪
10:27 am
10:28 am
10:29 am
show me movies with explosions. show me more like this. show me "previously watched." what's recommended for me. x1 makes it easy to find what blows you away. call or go onliand switch to x1. only with xfinity. david: back to bloomberg markets. we are following a news
10:30 am
conference in paris. finance meeting -- finance ministers are meeting to discuss. right now the finance ministers speaking and the imf director .hristine lagarde you can watch it live on the bloomberg. type in lives and go. a press conference, a news conference of global central bankers in paris. checking in with bonnie -- vonnie quinn. vonnie: more attention to in hong kong as the city prepares for elections in september. the government says hong kong is an inalienable part of the china and will take action against any movement that urges otherwise. the congressional delegation in saudi arabia. it comes ahead of the king scheduled visit of president obama next month. lindsey graham was in israel yesterday.
10:31 am
mr. obama is due in real april 21 two as tend as a met with king solomon and leaders of five middle east countries. vice president biden has a yesterday in washington. president obama refused to meet individually with him during the nuclear summit. australia became the latest citizenso earn -- one of traveling because of terrorist threats. has reversed himself after making controversial comments on abortions. he said there would have to be some sort of punishment for women who gets an abortion if the procedure is outlawed. later he issued a statement saying the doctor and not the woman should be held responsible. federal mediator ken feinberg has another tough job. the already provides 9/11 payouts. now he has to decide whether to cut payouts for thousands of
10:32 am
teamsters. the pension funds -- this would keep the pension funds from going broke. global news 24 hours a day powered by our 2400 journalists. i am vonnie quinn. david: 10 to get you caught up on all the action around the world. starting in asia looking at the naked, down under 20 points. 16,758. -- starting in asia looking at the nikkei. the china shanghai composite of 3303. a big story out of the region, the s&p has cut the credit rating from stable to negative. rebalancingic likely slower than expected. there are signs of recovery in the shanghai composite index. a rose nearly 12% in march. the biggest monthly gain in
10:33 am
almost a year. >> march was a great month for the bowls but still not enough to compensate for a terrible start to the year. marginal ending has rebounded from 15 month blows. ended.wings have there is still concerns that they are pricier than emerging by a most 15%. that could throw this in the to be included in the msci global index. they want a commitment to permit -- prevent this that contributed to last year's plunge wiping off $5 trillion in market value. caroline: going to europe. it is been a down day to finish the month. the stoxx 600 is actually down more than seven percentage points for the quarter. clearly a difficult set of first quarter for 2016, even though we did see the rally that was fueled in the second half of
10:34 am
february into march. aen though we are seeing turnaround in oil today, seeing a little bit of a jump on wti crude as we see the dollar hit a nine-month low. while and gas company still training lower. keep a lie -- keep an eye on u.k. asset classes. in the green earlier. gdp beat forecasts. the pounds currently still lower versus the u.s. dollar. keeping an eye on the u.k.. seeing yields down two basis. the u.k. sovereign bonds, the best performer among developed nations so far. doolittle has the latest from the nasdaq. not a whole lot of movement headed the jobs report tomorrow. >> through.
10:35 am
we do have big stocks moving in opposite direction in the biotech world. starting off with endo international. the news that the ftc or free drop -- federal trade commission is doing endo among other drug makers saying that they are generic access to versions or cheaper versions of the pain medications. it is down 73% from the peak last april. a huge slide. investor concerns around increasing reliance on generic and fallout from valiant. what will turn the situation around. david: insight is up. but as a bio start -- biotech start. what is going on there? >> what will turn the situation around. what is happening here, basically a late stage study showing effectiveness in the rheumatoid arthritis drug in partnership with eli lilly.
10:36 am
the robust presentation. it appears to be sending the shares higher. shares are trading in a training range. --appears this may not be there may not be too much of share that to go. david: abigail doolittle in midtown manhattan. keeping the international feel of the show going. mobius, the money management icon who popularized the market. caressing the templeton management group as he steps down from day to day management. he's look the changes earlier on bloomberg. >> we had the emerging market group. a local asset management group. what we are doing now is combining them, bringing them to one big group so we can use the resources effectively.
10:37 am
>> taking the big picture is one way you can look at it. >> i feel great. i feel it is going to be a great opportunity. covering more countries. >> just talking about the broader market, we have seen janet yellen, a shot in the arm for emerging markets. does this feel like 1998 all over again? does.some ways it they are confused. they do not know what the next move can be. >> the good news is for emerging markets. the expert tatian's interest .ates while not go up
10:38 am
>> how does a strong dollar play into all of this for you? think what we have asked.'s now is the peaking of the u.s. dollar strength. a lot of the currencies are against thenger dollar. that is number one. number two, also aligns with the peaking of the stock market. a lot of people are very underweight. dollar. that is number one. number two, also aligns with the peaking of the stock market. a lot of people are very underweight. >> of course you have a vested interest. underperformance for three years. time thet is about money will be flowing back. >> taking a look at history, it will fizzle out pretty soon. starve seen severed major -- sharp rebounds.
10:39 am
our things just going to lose steam from here on? >> i don't think so because growth is still there. a lot of people talk about slowing growth in china. what is wrong with 6% if you want to be conservative? but it will probably be more like 7%. brazil has been shrinking by 4% but now the best-performing market. ridiculous that you have these wild strains -- wild swings when it comes to market performance. that is why you're the massive miss premium. isi think bottom line derivatives. i loved derivatives and think they're great but we need more transparency. that is not available to us right now. 2008.s is from you are saying no lessons have been learned. look at this with the cbo
10:40 am
market. regulatorsto get the to understand more about what is happening in the derivative market and make it public. >> there has been an increase in funds when it comes to etf. this seems to be linked to bonds. why do you think there is a disconnect there and what does that tell you about the health of the emerging markets now? >> if you look at the pension funds, many of them are targeting 5% returns, 6% returns. they've seen volatility in equity markets and they say we cannot go in that direction right now. going to the bond market and go to higher risk bonds, which by the way is a danger area now you have a situation where you are
10:41 am
going to lower and lower quality. there is really a dilemma for institutional investors come particularly the pension funds because they have to meet a certain return of sand or, which is not available. -- a certain return of standard. [laughter] you have to yield. do you get more and more come alternative ideas coming across your desk? >> yes, we are getting more and more of that. one area would be dividends. they are dividend stocks. 3%.paying that is quite interesting for many investors. --oline: templeton margin market group mark mobius.
10:42 am
a record monthor emerging market and bond currencies. maybe a great time. more thaning up, why 1000 women are suing johnson & johnson of her baby powder. look at a news conference in paris where local leaders are discussing transforming global markets. a continuation of the g-20 meaning. in attendance christine lagarde. the finance minister and a big topic of discussion today, the shop drawing rights china got access to them a few months ago. the decision to review the short foreign currency efficient for the first time. 28.9 billion by the end of last month. you can watch more of that coming up. ♪
10:43 am
10:44 am
10:45 am
caroline: this is caroline hyde in london. david gergen in new york. time for the bloomberg's nest/. a look at some of the biggest is no stories in the news right now. flash.berg ibusiness looking for partners to help and 10.the x 20 800 restaurants in the region. most of them owned by the company instead of franchisees. five major players on the u.s. women's soccer have filed a federal wage discrimination against the soccer federation. the women's team generates $20 million, more in revenue than the men's team. the women, the reigning cup and champions are paid four times less. that is according to the complaint filed by the will employment commission.
10:46 am
jay-z having second thoughts about titles for streaming music service. a year ago he bought them for $56 million from a nerd -- a norwegian company. now he wants them back. he said the seller stated the number of subscribers. that is your latest business flash. avid: johnson & johnson heads to court. this is in the latest issue of bloomberg is this week. what exactly has johnson & johnson in accused of in many cases? >> johnson & johnson has been accused of knowing the study that suggested there is a link between using baby powder gently and ovarian cancer and have never put a warning on those labels. >> what have they said indeed? saying thisve been
10:47 am
in response. >> they defend the safety of talk him powder, which is what baby powder is made up. owder.cum p they said whatever association there is is weak and they feel very confident to sell it without a warning label. it is an absolutely fascinating story and got wrenching tragedy as well. we understand there is going to be a hearing coming up in the neck month. woman who there is a is 62 years old and was diagnosed with ovarian cancer a couple of years ago and has used baby powder for 20 years. she will -- like the other women claim that they should have at least put a warning on the label and then they are free to make the choice . but they did not know and now are suing the company. an earlier story that
10:48 am
prompted this. fle to break into tears when he got that award. tell us what this means for johnson & johnson. the fact cashed in an that it can be used by anyone and everyone. how much will this hurt the bottom line? >> they have been selling this almost since the company started? it is the foundation for the baby business. this is for the image. we all know the products that they sell. this hurts it from the image, but does not necessarily have an impact on the bottom line yet. sizable for the
10:49 am
families, but not by johnson & johnson's anders. i think the greater potential harm comes from what people think of companies hiding important information from its customers. david: is there any indication that they have any signs that may be carcinogenic? the company overall saying it is not. is there a debate going on over how it should proceed as the cases come up? >> i don't know the real answer to that. have the marketers who now
10:50 am
a problem on their hands. you can read the latest three in the latest issue of bloomberg " business week" online and on stands. considered one of the rarest gem online said to go on sale at christie's in geneva. what the four carat stone is it acted to fetch coming up next. ♪ three in the latest issue of bloomberg " business week" online and on stands. considered one of the rarest gem
10:51 am
10:52 am
caroline: check out this bling, the world's largest blue diamond. christie's is putting this gem of for auction in may. it is hoping it will destroy the current record of 48 $.5 million for a diamond sold at auction. bloomberg reported the news of the sale. give us a sense of the significance of the sale. going to be able to achieve such a phenomenal amount? is to carrotsd larger than the previous record-setting.
10:53 am
this is the description of clarity. last year sotheby's in geneva, a spent $48billionaire million. this estimated 45 million is to and kind ofer conservative when you think about it in those terms. >> what do we know of the providence and how important as a collector of tools to know who owned a piece before he or she did? >> generally in matters the more important person was. this important person was owned by philip oppenheimer. his family-owned beers. in 1995 itsied state in the family. now they are bringing it to auction. give us a sense of the
10:54 am
actual price point here. there may be hope sick smash the record of $48.5 million. the actual price they could achieve is a little bit lower. >> you do not ever want to be overly optimistic. then if you meet at dictation, exciting, when if in reality it meets expectations and in reality it is a very high number. verynk they are being conservative based on the material they have. >> i can understand you buy a painting. hang that on the wall. something folks display? who is buying them? >> there has been a huge interest in asia recently for colored gems. i guess you can find occasions .here $45 million diamonds
10:55 am
i could not maybe. maybe you could. sense of what others are selling. a shirleyelling temple manner. >> sotheby's blue diamond, which has a similar parity and color saturation is offered at $35 million. it is smaller. this is important to some people. this will be offered much sooner than that. so we will see. that will give an indication as to how this will do. >> what is a blue diamond? >> colored diamonds are quite that is the chemical composition of these ends.
10:56 am
they are not modified in any way, they are found in the state. diamond, the hope diamond, famous.he most blue diamonds. this is technically a gray and blue diamond, and these have been highly coveted. david: you can read his latest article famous. blue diamonds. this is technically a gray and blue diamond at bloomberg pursu, your destination for the finer things in life. uitsgo on theipurs bloomberg. 30 minutes left on european trading.
10:57 am
still lower. ♪
10:58 am
10:59 am
>> 11:00 a.m. here in new york. i'm david -- caroline: you're watching the european close on "bloomberg markets."
11:00 am
♪ caroline: we are going to take you to london to frankfurt in the next hour. is the final day of the first quarter and what a stretch it has been. sizing up the market performance in the u.s. and in europe. david: emerging markets are capping off a strong quarter as china faces roadblocks. it continues to prop up the yuna. -- yuan. why is the cost of goods in such a region a driving force for the euro? david: is 90 minutes into the trading day. let's get a julie hyman with the latest. julie: we are watching a lack of much activity on this last trading day of the quarter

40 Views

info Stream Only

Uploaded by TV Archive on