tv Whatd You Miss Bloomberg April 5, 2016 4:00pm-5:01pm EDT
the: u.s. stocks closing work this afternoon. s&p seeing its biggest two-day slump in all six months. joe: the question is, what you miss? alix: -- scarlet: we speak to the hsbc global head of strategy about whether the currency wars are really over. joe: plus, is now the time to invest in energy. alliancebernstein think so. first casualty from the panama papers. what is the next shoe to drop? we begin with our market minute, and you have got to look at the dow, down more than 150 points, closing around session lows right now. clearly a risk-off kind of day. as we mentioned, the biggest
one-day decline in almost a month. joe: definitely -- not too dramatic to getting to be a bit more of a selloff. won a look at the inversion stocks we were looking at today on the new doj. allergan was off by 15%. the worst performer in the s&p. you also have progressive waste solutions and apple. all of these guys are looking for some kind of mergers or inversions that could be stymied by the treasury rolls. mike mckee has the best that of the day when it comes to allergen, erasing almost $20 billion of market cap in one day , and the treasury trying to save $20 billion over 10 years. they erased it from allegan and are trying to help the treasury department get it over 10 years. i love the juxtaposition between those stats. joe: i want to talk about interesting stuff in fixed income, interest-rate world. bund 10 year yields
falling to the lowest level in about a year. you expect to see the risk-on scenario, interest rates rising. not happening here. this is the ultimate safe haven. people are buying hand over fist 10 year yield at one point below 0.1%. the other thing that is happening, meanwhile, his treasured volatility or lack thereof. index, kind ofch like the vix but for treasuries, also plunging. pretty much everywhere you look you are not see much volatility. this is the chart on your screen. treasury volatility falling to its lowest level in a long time. very quite happening there. in terms of currencies it is all about the end, briefly breaching the 110 level. you are looking at the dollar versus the yen. the line going down indicates dollar weakness versus yen strength. so much for the bank of japan's
plan to boost inflation through negative interest rates. pretty critical because a lot of strategists say it may be the level where it increases the risk of some kind of intervention. alix: i'm looking at commodities could i want to point out that what happens to oil over the last 10 days, we have a 10 day intraday chart of oil. continued slow grind lower. oil right around -- 100-day moving average. it did spike higher today into the close. however, kuwait is saying perhaps there will be an oil freeze even if iran is not part of it. nonetheless, that illustrates the risk-off field when it comes to oil over the last week and a half. scarlet: those are today's market minutes. let's take a deep dive into bloomberg. about why oil prices are falling, i talk a lot about position. the truck comes to us from citigroup. -- chart comes to us from citigroup. three types of positioning.
the first is managed money. shat is basically the spec you've got in here. that is the blue line. falling slightly. the swap dealers, etf guys. that is also relatively falling. on the flipside, merchant longs. basically, producers who want to belong the market. they are probably shorting right now and that is why you are seeing the merchant longs continue to go down. chris's visit i think that because these are so many etfs in there, when they roll over, boom, you see this selloff, the continued decline in longs, boom, you see the selloff. that is light you see oil tread so closely. $35 a barrel. joe: for a long time we have been talking about this idea that the fed is the only game in town. all about what the fed does and that is what is driving these markets. for a long time that seemed to be true. this is a chart from societe
generale did it tracks the white line, the s&p futures, and the green light is the eurodollar futures. as the green line is going up that is an indication they are thinking there will be more hikes in the future. time this moved in lockstep because the market crashes or pledges, people say the fed is going to hold off a while. when the market rallies, people think, oh, the fed is going to hike. tilde pop up. lately we have seen a fairly solid rally off the mid-february lows. expectations for rate hikes probably are due to find job owning and really pushed back. betweento disconnect the market for equities mark udall expect from the fed. will discontinue -- will discontinue? if the market were to resume its rally, will people price in fed hikes again or does the market have further to go down?
scarlet: we will have to watch thursday night into friday when a janet yellen speaks. joe: yes, exactly. scarlet: at what point do u.s. stocks look expensive -- this is a line in the sand right there. this is the currency of the chief market strategist at oppenheimer. he says valuations turned into a burden from a blessing in less than three must because the s&p 500 climbed last week from a low of 16.5 in mid-february. over the past year the s&p 500 couldn't overcome the hurdle of 19. five 3, 4, and again, instances of it bumping up right against it and coming back down. something to keep an eye on as you head into earning season. joe: does it also suggest we will see earnings growth? you would think. you can see all these charts and more on twitter. david bloom,go to joining us from our london studio, and his big call, the
global currency war is over. scarlet: david, we need to start with the yen. the strongest it has been since 2014. at one point do you think the bank of japan will intervene and will be effective? david: if dollar-yen were to plunge in a short space of time, yes. at the time to shut the moment, peace has broken up and i'm saying give these a chance. all we are saying is give peace a chance. ecb, they are using the credit channel. they are not using the currency channel. the dollar has come off. the renminbi is starting to soften. a big evaluation has come out. commodities have rally. and emerging markets are rallying. that is beautiful. joe: this -- [laughter] this idea that the currency war
is coming to an end is a popular idea that more and more people are talking about. interesting call from david service of jefferies. he also has this view the currency war has come to an end. if the ecb and boj are going to focus more on balance sheet-led credit easing and less on "zero-sum-style risk-free real right easing," while other central u.s. is going to hold off on strengthening the dollar by running a hot economy, the emerging market is a much more stable place. do you agree that if there is detente -- david: that is what i just said in english. [laughter] somewas read to me was kind of economic or gobbledygook, but in english, that is what is going on -- joe: do you agree that em is the beneficiary -- david: absolutely. of course could this is a purple patch for emerging markets. large from some of
these companies and 10% yields in some countries. every time you go to sleep and then you wake up and the page view. -- page you. talk about that he spoke about volatility --you spoke about volatility could the markets are stabilizing. great for emerging markets. we are so worried about china anymore. now to ave turned out little purple patch for emerging markets. and we do have a chart that sort of illustrates what you are talking about. if you look at the msx volatilities, equally weighted index, you can really see every time there was a central bank move volatility increased in particular with the boj in 2013 and the recent negative right move in the euro zone. what is the trigger for the next currency war? david: the trigger would be if
you got some dramatic slowdown in some country or as suggested earlier, dollar-yen at 105, heading to 100, and the japanese go we can't take this anymore and they come in with massive intervention. that will break the truce. i want -- i wouldn't say the currency wars ended by a truce has broken out. might be on the state, i be on purpose could but using the currency as a tool -- the japanese got the yen from 80, 8-0, to 125, and they still don't have growth in inflation. why carry on something that is harmful and doesn't work? this is where i agree with the point you write out earlier. they are trying a new channel and that is causing the currency markets to relax a bit in the markets can rally and china is in a better space and it is just a fantastic time at the moment. things are a little calm her. scarlet: a little calm her.
if the currency war is over, those that enter low volatility? that is the case, what could disrupt that? david: well, that is the question you start off, dollar-yen. japanese get cold feet with a field at dollar-yen is slicing through quickly. the balance sheet, percentage of gdp, it looks like godzilla. it is enormous. 70-80% of gdp. if they get all that and it is not working, might as well intervene. back where we started great that could be bad news. for the moment, things are good, and i think some of the trades like absolute fantastic at the moment. david bloom of hsbc, thank you for joining us. back if wall street pulls from the troubled energy sector come one investors stepping in. is it the rise of the shadow banking system? ♪
and says his committee will work on his own plan. delete financial documents have claimed the first casualty. iceland's prime minister has resigned bitterly of the country's president rejected -- earlier the country's president rejected sigmundur gunnlaugsson 's attempts to dissolve the government. mexico will replace current ambassador to the u.s. with the country's previous consul general here in the u.s. the shift comes following mr. trump's increase comments on making the border wall and was in mexico -- and forcing mexico to pay for it. while meeting with the g7 foreign ministers in japan, secretary of state john kerry next week will visit a memorial for victims of the u.s. bombing of hiroshima. senior u.s.he most official ever to do so. local news 24 hours a day powered by a 2400 journals in more than 150 music euros around the world. -- 150 news bureaus around
the world. i'm mark crumpton. alix: what'd you miss? shadow banking system for energy. banks are running scared. energyre pulling back on exposures of others step in, like alliancebernstein. she shot is the head of fixed income as it -- i she show -- as hish shah the head of fixing, and joins me now. where do you see opportunity? ashish: we see it in a number of different spots. obviously there's opportunity in the liquid high-yield markets where the bonds have been decimated and there has been quite a bit of pain in that sector and we are seeing opportunities as the better quality copies move into the high-yield market. alix: where else? what are the opportunities do you guys see? ashish: you mentioned the banks and they are offering secure financing and now they are starting to pull back and we will see three determinations
coming in over the next month or two and that means there is going to be less capital available for these companies. that is an opportunity for investors to step in and provide the capital and generate attractive returns. thanks go in and reassess how much money they will loan based on the underlying commodity price and we see this petroleum, great example. they already cut almost by half. what are the returns that you are expecting? ashish: if you focus on senior secured type of lending you can make 10-15% type of returns with an under tremendous amount -- not a tremendous amount of downside risk. as they say on tv, this is not something you want to try on your own. you want to make sure you have a manager that has those skill sets. but as you move down the capital structure into the high-yield bond market you have opportunities to generate something more like 20% types of returns and we have seen those opportunities come in over the course of the last month.
alix: you are not the only ones out there looking for energy opportunities. we have seen other areas and kkr is the latest can announcing a vehicle of the point five $3 billion. i spoke with a head, jimmy once time, earlier -- jamie weinstein, earlier. if you are looking at oil and gas, we think it is too early. we think the pricing of the assets and credits does not yet reflect the much lower for longer environment in oil prices , so we have to wait and we have waited. alix: what do you think about that? csi for the public asset and the largest assets, but as you mentioned, there are companies that are getting their capital pool as we speak and over the next six, 12, 18 months, the opportunities will develop your you have to be on the ground to take advantage of them and now is the time you're supposed to be looking at them. alix: looking at more private companies, then? ashish: i think we're looking at a mix of the 2 and there are
opportunities in the markets, bonds rallying 20, 30% over the course of last month. those are still tactical opportunities. they are not the longer-term strategic opportunities. alix: is there a price where you say all something that is where it will be for us? ahish: anything below 30 over long horizon creates attractive opportunities. no question the lower the price goes, the bigger the opportunities going forward. alix: does that mean you wind up holding a lot of shale assets with prices going under 30? ashish: there are shale assets that can generate attractive returns. they are not going to make a tremendous amount of recurrence but they will make attractive returns. guilty if you are -- real key if you are buying them with the price and the prices that 50 that creates a huge upside opportunity. alix: the reason the companies are having such a problem now is
because the debt load? ashish: part of the reason they are having such a problem is the investors themselves, whether it is high-yield investors or banks , have to much energy exposure. it is more about what the investors are doing then a necessarily just about the companies. alix: what is your oil price call, short-term, long-term? ashish: short-term briefly to be in the $30, $40 price range . we see technological innovation. $50 a barrel in next two years. that is not an outlandish price. alix: it is happening, new capital into the energy market. , thank you very much. scarlet: still ahead, market inefficiencies and which managers he likes.
scarlet: i am scarlet fu. what'd you miss? steve cohen is stepping back from his role as portfolio manager but he says it is not because there aren't opportunities in the markets. steve spoke to the "bloomberg go" team earlier today. >> hard to be a fabric with every more balance in the world economy when you are talking about the german 10-year bond yield being 10 aces points, negative yields throughout the world. that does not seem to be a place of equilibrium of where things will find balance. it seems imbalanced. stephanie: in the beginning
of this year people were concerned because they were comparing it to 2008 and why we don't have the leverage in the system like in 2008, are fundamental better or worse today as they were then? that for you was a booming year in part because you took advantage of the fundament else. steve: it is more difficult today to find, relative to 2008, more difficult to find rate and balances but there are some. i would say the opportunity is the inefficiency of market is growing, not shrinking. >> really? what accounts for that? we, particularly since 2008, seen the rise of index funds, etfs. we have seen less and less banks -- the lawsuit the wall street banks to find states and markets. i think the search for inefficiency in markets is that
has been decreasing for years. -- has meanthat is that that has led to some of the lack of equilibrium and markets. stephanie: but then why have hedge funds had a lousy couple of years? those banks don't exist anymore and everybody worth their salt interbank ran to the buy side, why didn't we see the buy side perform? >> should create opportunities for the hedge funds. --ve: we are in a phase there are times when hedge funds have a challenge because hedge funds themselves are not doing well, and what that means is sometimes they get redemptions. for example, we talk about the fixed income fund, and we have had -- our annualized return over the last eight years is 24% a year. stephanie: pretty good. steve: a dollar in 2008 is six dollars today. and yet last year we had our
first negative year. we were down between 2% and 3%. we lost about half our assets. stephanie: why? what are investors telling you? why with a look at the lifetime return and say that this works? >> partly a function of the fact -- in general, hedge funds have not had a great period. we have been talking about that for the better part of a year. that is part of it. people to have short memories. one thing i want to talk about today is typically, hedge funds riod of hedge funds doing poorly do incredibly well. 1998 was a terrible year for hedge funds for long-term capital prices. hedge funds to dwell in 1999. after 2008, most did not perform poorly in 2008 and a lot of them did great in 2009.
tend to be mean-reverting. the managers you should be investors in investing with our managers with a great track record who had a bad run. i think that is a great set of people to believe in. i have always been a fan of david einhorn. i'm big fan of him as an investor and a person. kuhnet: that was steve partner, import for women, but not for long. alix: panama papers have caused shockwaves around the world. we examine the fallout, next. ♪
mark: i am mark crumpton. wisconsin voters have been going to the polls all day for that states primary. surveys show ted cruz is leading donald trump. for the democrats, polls show bernie sanders with a narrow lead over hillary clinton. granted tons relief iran under the landmark nuclear deal won't mean access to the u.s. financial system, according to a senior obama administration official who today said reports tehran would be allowed to deal directly with u.s. banks are inaccurate. in china, pakistan, and syria have been named in the so-called panama papers. the documents released by the international consortium of investigative journalists sunday
say that syrian president bashar government created shell company's to avoid international sanctions. it also link to family members of pakistan's prime minister to offshore companies in the british virgin islands. jinping'sesident xi brother-in-law is also mention in the doctrines, which china has to announced as part of a conspiracy. global news 24 hours a day powered by at 2400 journalists in more than 150 news bureaus around the world. i am mark crumpton. alix, joe, scarlet? scarlet: stocks are falling with the s&p posting its steepest loss in about a month. this is a continuation of the false we saw yesterday and the declines picked up in the final couple of minutes. down are leading the way along with treasury yields because bonds and of the safe havens like the end rally. alix: i want to point out that the 1% decline in the s&p -- we have only seen 1% move in the s&p in march, three times. this is the first time we have
seen it since march 11. volatility has been so low and is not seen big moves and today was quite significant for the s&p in that respect. scarlet: there was economic data but it did not move the needle for anyone. t.e: no one treated off jol scarlet: pmi, what have you. alix: what you miss? i since prime minister a day after the panel papers linked him to offshore bank accounts. uncoveredt in aspects by this week could be the tip of the iceberg. our next guest is saying a percent of financial wealth is hidden away. joe: gabriel zuckerman is the author of "the hidden wealth of nations" and is an assistant professor at university of california-berkeley. you literally wrote the book about this whole world of wealth hidden offshore the what, is the
most significant aspect of this week? what have we learned from this that prior to this weekend or prior to when people start reading through this we didn't know? weriel: one of the things learned is that we thought we had made a lot of progress in enforcing institutions and tax havens to apply and regulations. what we discovered is that even to this -- even today, there are some of them violating these laws on a regular basis. the basic rules of know your customer, identify the owners of the wealthy manage, routinely violated by these tax havens. had estimated that about 8% of the world's total financial wealth is missing. has that calculation changed with the release of the panama papers? gabriel: these leaks, only about one firm and one tax haven, no
way you can draw any macroeconomic inference from them. i think the main way to have a sense of the global scale of the problem is to look at the macro data. when you do that committee, you see there is about 8% of the wealth and tax havens in the right order of magnitude. joe: what do you see as the fallout from this? there has been some international momentum to combat placement of wealth overseas, offshore. do you see this accelerating? what specific next steps needed to happen for it to be further stamped out? gabriel: i think we need to rethink the way we try to regulate tax havens. make an thing that could big change would be to create financial registry that tries to show who owns the wealth and shares.
the wealth of the panama shell companies is not in panama. it is invested in the u.s., in europe. we could say let's start from this well and try to find out who owns the wealth of the u.s. the u.s. equities, the u.s. bonds, let's try to find the official owner of the wealth and that would make a lot of change to financial transparency globally. alix: what is interesting is that we have seen efforts pretty much globally for this. 2010, congress passed the foreign account tax compliance as well has its own set of rules that the u.s. didn't join. why haven't these created traction? these policies are important and it is important to realize that a lot of progress has been made in the last evan, eight years. before the financial crisis there was no exchange of bank information to tax havens and tax authorities and now there is automatic exchange of ranking
information. that is big progress. the problem is that not all banks and institutions and tax havens abide by the law. some of them find them unfortunately, very profitable to serve as tax evaders and criminals and so we just can't rely on their goodwill. tohave to find other ways create financial transparency and we also need bigger and more concrete sanctions for the places and financial institutions that do not abide by the law. scarlet: what i thought was intriguing is that david cameron has seen his name sullied in that his late father had an account. it was in british i think in full territories. of the wrist -- british-controlled territories. more than half were set up in the british virgin islands and another 3000 were in other british jurisdictions. joe: something i'm very curious
about is the trajectory already of this sort of offer tax haven industry. bloomberg just last week did an interview with the partners of and they indicated they already saw this industry kind of being in retreat. this was even before the big leak happened. does this suggest that leaders around the world are to some extent making progress in fighting this issue? so sure.not maybe to does this is declining, but when you look at the data, for instance, the wealth management swiss banks -- managed by swiss banks, this is growing. $2.4 trillion today. 25% higher than in 2009. at the global level, $7.6 trillion in tax havens, plus 20%. macro data seems to suggest that this is a business that is doing
pretty well. a lot of money comes from developing countries, right now from china and russia and from the middle east. just have need to tougher sanctions for countries that facilitate money laundering and tax evasion. scarlet: so there is a question you can pose here -- should the u.k., for instance, impose direct rule on overseas territories to get them to comply with british tax laws? that is now in the debate. joe: and there is also an interesting angle in the u k and elsewhere in europe where there is so much anxiety about austerity and budget cuts. when you see these governments being forced to pull back while at the same time to really wealthy appeared to be paying less than their fair share, obviously, that fuels the anger. what do you see as the economic impact from all of this? we see these big numbers in terms of a percent of the world's wealth being hidden offshore. what does that do to the real
economy, from what you have studied? thisel: we care about because the consequences of inequality down the road are likely to be important. you know, if it is very easy for billionaires and for average people to pay lower effective tax rates, great for them, but that hurts all of us. we have to pay more in taxes to compensate for the lost tax revenue. it also makes it much easier for very wealthy people to make their wealth grow and it makes it harder for the rest of us to make our wealth grow. the risk is that 10, 20, 30 years from now, wealth concentration, already very high in the u.s., will be even higher , and the same will happen in europe and developing countries at the global level. if we want to seriously deal with rising wealth inequality, we need to regulate tax havens much more strictly. alix: gabriel zuckerman, you are
scarlet: time for a look in the biggest is the stories in the news right now. u.s. antitrust officials are said to have prepared a lawsuit to stop halliburton from taking over while oil services covering baker hughes, according to a person familiar with the matter, who says that the actions to block the deal could be filed as soon as this week. the government is set to believe that the deal violates antitrust laws by eliminating competition between the companies. alix: a billionaire hedge fund manager's moved from new jersey to florida could complicated tax
collection estimates for the garden state, according to the head of the legislature's nonpartisan research branch. took residence in florida last year and in january relocated upper-level management. florida is free of personal income and estate taxes. scarlet: it was a game for the ages but relatively few people side. villanova's last-second victory over north carolina 237% fewer viewers than last year. it was the first time in that aired on cable tv. a total of 17.8 million viewers watched on tv and tv -- tnt, tbs, and trutv, all time warner networks. last year the game on cbs drew 20.3 million viewers. that is the bloomberg business flash. what'd you miss? gabriel zucman is back with us page he is interested professor at -- he is an assistant professor at uc-berkeley. ,ladimir putin, david cameron
through his family, for instance, xi jinping, have been enrolled in this panama papers leak. why have we not seen big american names? gabriel: again, it is one firm and one tax haven. no way it is going to be a representative for what is happening on a global scale. that is one thing. the other things you don't need to go to panama to create shell .ompanies it is very easy, way too easy, to create an shell companies here in the u.s. why go to panama? scarlet: that is really good point, joe there are companies in reno that are exempt from the international disclosure. joe: right, is anything being done on the u.s. front? jesse at bloomberg has done a lot of reporting on the ability to hide money easily in the u.s. people are calling the u.s. the new switzerland. is anything being done on the u.s. front to crack down on this?
gabriel: you know, there's this international attempt at constructing a system of automatic exchange and bank information. the u.s. is not at the moment participating in it. it has its own laws. the tax compliance act is very important and has been a real game changer. it is not participating in the global approach. that is a problem. i very much hope this is going to change. i also hope that the government at some point cracks down on what is happening in u.s. states where it is way too easy to create shell companies, anonymous companies, that are then used by tax evaders and drug dealers and criminals. that is just not ok. the other parties is banks -- particularly european banks. credit suisse, hsbc. how important do you think the banks are? gabriel: the banks play an
important role. we have seen this in a number of cases of tax evasion, european and mentally of criminal conspiracies to defraud the irs. in many cases the banks themselves create shell companies on behalf of their clients. are the kleins of firms like panama corporation agent that create anonymous companies for clients. that is part of what they offer. and you wonder what that does to the institutions of banks themselves. about howr wrote because of the leak of the panama papers we will see more forced transparency, which will make institutions less effective in developed countries like the u.s., the u.k., and considerably more brittle and vulnerable in the developing world. joe: i think this quotation speaks as of the you said in the first segment, julie combats the kind of off shoring.
we need to have some set of global international financial registry. how do we actually get there? is there an international treaty of sorts? when ecb to offer done for countries to come together and agree that we are going to track who owns the stocks and bonds and mutual funds in the world? to be doneis relatively easily print we don't need a big international treaty or agency. what we need is the u.s. unilaterally right now could say we really want to know who owns well in the u.s., who owns buildings in new york, who owns u.s. equities and u.s. bonds, and we are going to find out. them to send information they have and we will collect information in a register that identifies the official owners. the u.s. could do this. u.s. -- europe could do this now. europe and the u.s. are engaged in these transatlantic free-trade talks and as part of these talks they should be talking about those questions,
sales of dr. 50% since the end of 2008, following the bankruptcy of linens and things. as you can see, lived the revenue has stagnated. -- lately revenue has stagnated. the chain is investing in its online channel and working to boost sales at stores. a critical problem is attracting foot traffic. even with north america getting a recent bounce from overall traffic is negative. bed bath & beyond struggled to effectively compete in an industry where there are heavy promotions and the shift to online shopping shows up in the margins. you can see the downward pressure there. ascepts like 25% since 2011 the company scrabble to update its systems and maintain competitiveness especially against online peers. other company buybacks are supporting bed bath & beyond shares during the struggles. a $2.5 billion share buyback on top of the money remaining on its existing program. since bed bath & beyond generates $1 billion in free
cash flow per year, buybacks can likely continue. we will know more on wednesday reports of the close of trading. alix: we want to bring in the sema shaka mocon's regional for bloomberg intelligence. how has that -- bed bath & beyond been hurt by the shift to companies of e-commerce. ma: that often be on was slow to organize the front of online retail. starting in 2012 they started investing into e-commerce but i think in some sense this is too much too late. they predominantly sell national brands that you can get anywhere and price check in other places. i think what they were trying to do is now they are investing in their infrastructure so they can have more consumables to drive traffic. at the end of the day, you go where the price is the best for home furnishing and home depot to multiple places
and you are seeing increased competition within that space, for multi retail is an online players. joe: when you look at the earnings tomorrow, that than the obvious numbers, what do you will be the most interesting data point to look at?/ seema: they don't have analyst questions public comment on what the growth of online contributes to same-store sales. online was growing at a 40% rate and in recent quarters the growth of online on same-store sales was for a 5% growth rate. in-store, same-store sales are negative. i think that the client is despite investing in online and e-commerce, maybe the brand is less relevant. maybe it is a victim of the amazon affect full to and asked the category killer in the 1990's, maybe it is less relevant at this point. scarlet: of course, they keep spending out those 20% coupons every month. margins have been declining for bed bath & beyond the last couple years. with the online competition and investing in so many locations
and online channels, how much lower can they get? seema: in terms of their margin, they are in a tough position. 20% coupon, everybody waits for it and they take it even if it is expired. if you are a customer, you are accustomed to having it and you will not go there if you don't have a good high frequency of use and redemption has pressured their gross margin and is able move to online they pay for free shipping. they are getting hit for both sides. if you notice target and a few other players have mentioned -- even walmart, how strong their home furnishing businesses. they have that more frequent traffic. , whereass up 4% everybody else has been reporting negative. alix: miller tabak out with a no calling for retail continuing to underperform the s&p. bed bath & beyond stock is down 36% over the past year. seema: i mean, i think a lot of
it is baked in. but the investors tend to be focused and it generates a lot of cash. they are buying back 25% of their market cap. maybe entices people and they have the physical stores. they are still profitable. they're still generating a ton of cash. but i think you can look at best buy as an example of where things can go. they also were in double-digit margins and i think they are in the single digits right now. bed bath & beyond let cord was 9.9%. i mean, 400 basis points down. it's something to consider. alix: all right, thanks so much. seema shah, consumer retail analyst for bloomberg intelligence. you can find bloomberg intelligence's full analysis on the terminal. type in bi to five full coverage of sectors and companies. scarlet: coming up, when you need to know. ♪
i'm scarlet fu. what'd you miss? alix: do not miss this. what kind of rebound might we see as manufacturing has been getting incrementally better over in china. scarlet: speaking of manufacturing, german industrial production comes out at 2:00 a.m. year-over-year, looking for a gain of .4%. joe: i will be looking at the release of the fed minutes from the march fomc meeting tomorrow at 2:00 p.m. eastern. we know that the fed is not particularly anxious to keep going based on what janet yellen said that those minutes will provide on how they are thinking about the economy and what the reaction -- what they may think about the next rate hike. alix: and the markets, how they
john: i'm john heilemann. mark: and i'm mark halperin. and "with all due respect" to lead brooks, kasich nailed three weeks ago. >> i got a feeling that when march madness ends, villanova maybe the national champion. ♪ mark: hello and good evening. welcome to the wisconsin primary day. takers in bernie sanders are both expecting big wins tonight, while their chief rivals, donald trump and hillary clinton, have been throwing up some butter beater attempts. there is more than j