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tv   Bloomberg Markets  Bloomberg  April 14, 2016 2:00pm-3:01pm EDT

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>> from bloomberg goldcorp quarters -- world headquarters, welcome. >> markets bouncing around today but higher in late trading from banks and airlines are helping to boost stocks. lisa: greece is once again struggling on the debt crisis. will be -- will he want to give be talking about a brexit. patrick joyce is a talk about the situation in china and the outlook for the japanese yen. the obama administration at least final rules are offshore oil drilling. this ain't essential to boost the safety of the developing market. mark: the new mandates in
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response to a deepwater horizon spill back in 2010. the measure requires oil companies to develop plans for close watch on deepwater drilling operations with real-time monitoring that pushes data to officials on land. it requires companies to boost the frequency of inspections of critical emergency equipment and requires offshore operators to centralized type inside -- pipe wells. officials investigated the 2010 wellre of bp's mocando in the gulf of mexico. david: julie has the latest. about two hours to the close of trading. julie: i want to see if there is any reaction in oil prices to this. it does not appear there is. in part because any of the parties involved have discussed these changes with the u.s. government in advance. they had an idea of what could potentially be coming.
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oil a little changed right now. it's taking a very small leg down after these headlines came out on the new regulations. what is at issue is the talks and the comments out from the international energy agency saying oversupply will be down in the second half of the year because of the drop in shale production. let's look at natural gas to see if there's any kind of reaction. you can say there is a small leg downward but gas is falling today. if you look at the energy, shares are not seeing much change there. we are seeing a little changed for the small leg down. lisa: there's still a lot to be determined. if of the cost of this at about $1 billion. the industry put it at about $32 billion. that has to be worked out. julie: it seems as though they have made these estimates.
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if they are factoring into their business plans or somebody that is already in the process, it is not a shock at this point in time. regulations are not coming out of left field. they have been developing them for a long time. i will talk more about that in a few minutes. i want to talk about what is going on elsewhere in the markets. we are seeing a little bit of an uplift in stocks today. checking on the big banks which a been driving trading, they are coming off their highs. wells fargo turning negative. his earnings did miss estimates but it had a riser much of the session. jpmorgan rising for the second straight day. bank of america missing estimates with its earnings, promising potentially more cost cuts which the street liked. some strengthg and health care today. this is after a report that prescription drug spending rose billion record $425 last year. drugmakers are coming off their
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highs. we should continue to see in increase in prescription drug spending in the single digits 32020 when it will reach about 610 -- $610 billion. lisa: let's check on the first word news. marcus more from the news desk. mark: the search for survivors is underway in japan following a magazine 6.5 earthquake. twoassociated press said people were killed and 45 others injured. witnesses say some houses collapsed. the quake was centered in the kumamoto district 75 northeast of the sendia nuclear plant. officials say there is no threat of a tsunami. russian president vladimir putin acknowledged information in the panama papers implicating people in his inner circle to us or
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transactions was accurate. but during his annual call-in show he dismissed it in tied to the goldman sachs as part of the u.s. effort to influence russia's upcoming elections. they aret may seem, publishing false information on off-shore's. they are not accusing of anything specific. they are just casting a shadow." the document shows at least $2 billion in transactions involve people and companies that had ti to mr. bruton -- putin. campaign manager will not be prosecuted after prosecutors determined there was not enough evidence to convict him of forcibly grabbing a female reporter. does according to a court document that was filed today. you are looking at a live picture from the prosecutor, the state attorney dave aaronb erg. michelle feels was approaching
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mr. trump to ask them a question. the white house has announced a final graduation addresses of barack obama's. presidency he will deliver one of the air force academy, howard university and rutgers university. it is the first time a sitting president has agreed to deliver the commencement at rutgers. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. david? julie mentioned, u.s. stocks advanced on growing investor optimism. we are seeing a week of positive earnings. the s&p extended a four-month high. lisa: skepticism has not gone away. is the market price for some type of upside surprise? where these potential investment opportunities? joining us is accurate from jpmorgan global strategists. what are you looking 40 give this markets and direction? patrick: that is a tough one.
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we are not overly bullish. we are positive but i would not say we are extremely bullish. we came into the year thinking the u.s. equities would be up something like 5%-6%. that is not going to take a huge amount from here. expectationshat, in the army seasons are just taking off -- burning seasons are just taking off. it can become something like 9%. the biggest and at least five years. it doesn't always have the best relationship with what happens. you think if they get cut a lot and they surprised a lot, that's not the best relation. is not high for expectations. put that together with a little bit out of -- of news out of china about stabilization. in europe you had the italian bank bailout funds.
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they are reasons why market seven happier in recent days. last time i was on here we thought the numbers in the early part of the year were overblown. now that panic is coming about and we would not get exuberant on the other side either. david: let me ask you a question about the u.s.. we have retail sales numbers today that were down .2%. they were -- .3%. when you look at the u.s. economy writ large, how can find is the consumer sector? patrik: it depends on what time frame you look at. --looks like gdp will be again. that is not just confined to the consumer. i think people have been looking to the consumer to provide more support than it is doing. the fundamentals should be in place. if we look at the labor market, the boost that should be coming from liver oil prices.
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admittedly they are down but they are still pretty low. people are hoping for more. looking throughout the year, i think we're pretty upbeat about the u.s. economy. it will probably grow around 2% or 2.5%. people were worried it was going to tip over into some catastrophe. i think they were too worried. lisa: turning to china, everyone was freaking out about china earlier in the year. people have become much more sanguine. patrik: i would look at it almost as the removal of downside risks more than anything else. we have worries about the currency, the impending devaluation. we saw massive capital outflows. and some potentially accelerating capital outflows that has stopped. we have seen better sentiments out of china and crucially we
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saw in the trade data we had the other day we saw imports doing better. for the health of the domestic economy, it is imports that tells you more. weking at the volume data, move that around and there are signs that things are stabilizing. we don't want to get carried away. for our investment positions it is important not to worry about some inflows in china, some implosion in the financial system or a hard landing aridity like that. that data reassures us that is not so likely. the stimulus the government is putting in place is at least gaining some traction. that means the fundamentals are still challenging and its economy that is structurally slowing down, but it's not falling off the cliff. lisa: what about the yen? it's been driving a lot of markets recently and people are predicting the yen could get to
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the 100 versus the u.s. dollar. where do you see it ending the year? trik: it's really the dollar that drives everything. we came into the year saying the path of the dollar is so crucial for ever that happens. without the dollar is going to run out of steam in the second half of the year and it did it much earlier. has donehat, the yen more against any other currency. against the dollar is about 10% up. view the bank of japan has lost control of that. there is clearly a lot more skepticism. we underrated japanese equities although -- a little while ago since the policy experiment was getting a lot murkier and less clear.
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from in equities standpoint profit expectations were too high. people were expecting 16% in japan. put that yen move on top of that. those numbers just look crazy-us. -- crazy high to us. for it to go back to 115 while the dollar showing signs of weakening. if the dollar were to turn around, fair enough it is for us a pretty negative view for japan. david: thanks so much patrik. coming up in the next 20 minutes, the european union braces for the so-called brexit vote in june. the eu commissioner will be talking topics with us in just a moment. lisa: how the slump is impacted the financing capabilities of energy and mineral companies. we will talk with the ceo of noble group and asia's largest commodities trader as it fights
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to refinance its debts. david: gold, silver, aluminum, copper in the green. gold and silver in the red. -- ♪
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david: this is "bloomberg markets." time for the bloomberg business flash, some of the biggest stories in the news right now. husky energy have received interest as part of a package of western canadian oil and natural gas assets. the companies include time energy and raging river exploration. the bulk has been focused on the light oil saskatchewan properties. lisa: microsoft is suing the u.s. justice department. gets an attempt to stop the government from forcing it to turn over customer's e-mail to
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law enforcement without their knowledge. this lawsuit need to the doj and attorney general loretta lynch. they have been fighting for more than two years. david: bp shareholders voted in protest of the company's decision to award the ceo a 20% a increase. a came after the company reported a record let loss -- net lawson thousands of job cuts. they rejected bp's report. that is your business flash update. julie has a check on some company movers. julie: i want to mention passing quickly wells fargo, it be earnings estimates. it had a year-to-year decline in profits. the shares are little changed. the airlines are seeing a big increase. in particular delta was rising because it came out and said it was willing to cut capacity in order to preserve profit. is been pulling the other
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airlines up along with it. both the traditional carriers and a lower cost carriers. take a look at the bloomberg. we get this from bloomberg intelligence tool. if you look at the airlines dashboard. in his capacity. available seats per mile. we had been seeing an upsurge after a decline. this is 2013. there had been declining capacity constraints or re-strengthen expressed on the part of the airline industry. we have seen an uptrend. this is for delta in particular in that capacity number. helped in part by lower oil prices. they felt they could raise that capacity, get more profitability. if we see a turnaround in oil prices, that could change. i should mention at the same time there has now been a decrease in unit revenue for the past five quarters for delta. that is why it is re-syncing
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this strategy of growing capacity and maybe it will turn around and start cutting it. to folate is on the rise -- chipotle is on the rise. sales --- comparable the company's earnings will rebound. this year's are rising. there was not much news going on but we are seeing pressure elsewhere within the beverage industry. this is one of those that is standing out on the upside. we been watching the hard disk drive makers, seagate and western digital. seagate technology came out with a preliminary third-quarter earnings that trailed estimates. it out with a full report on april 29. western digital is coming up april 28. you can see a decline in those shares. lisa: thank you so much. still ahead, we speak with the european union commissioner and former latvian prime minister on the imf spring meetings. stick with us.
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♪ lisa: you are watching "bloomberg markets." the bank of england kept its rates at a seven-year low. while economist seen increase in the first quarter, traders are wary. david: the likelihood of the so-called brexit. joining us is the commissioner for the european union. we heard the imf managing director say the global economy is not in crisis. sentiment has improved. how is your going to go to boost growth? mr. dombrovskis: good afternoon. also in europe moderate economic recovery is continuing. we are expecting economic growth rates in european union close to 2%. this year and the next what is prioritiess economic
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is how to strengthen this recovery. we are concentrating in three directions. boosting investment, structural reforms to modernize the economies, and in fiscally responsible policies. lisa: how damaging what it brexitd the -- what a beach of the european union? mr. dombrovskis: the commissioners assessment is it's much more beneficial in terms of economy but also in many other for the u.k.cts and eu for the u.k. to stay in the eu. that's the message we are passing across. david: what effect would it have on trade for the eu perspective? mr. dombrovskis: excuse me? david: if the u.k. were to leave, what effect for that have on trade for the european union perspective? mr. dombrovskis: first of all, we are not engaging in detailed
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speculations and what if's. we are currently on the plan a, that the u.k. stays in the eu. assessments and consequences of leaving would be negative both for the u.k. and for eu. lisa: what is the commission doing our what do they have plans to do to prevent that from happening? to prevent the u.k. from leaving? mr. dombrovskis: as you know, european commission has been very closely involved in negotiations to reach an agreement with the u.k. and 27 other countries. that allows the prime minister cameron to campaign for the u.k. to stay within the eu. factualeady to provide information on the eu. we are not actually campaigning.
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david: let's talk a little bit about greece. you have the migration issue in europe. you have a proxy -- possibility of a brexit vote. when they look at that third bailout review, it might offer greece a little bit more latitude. are there discussions about that? mr. dombrovskis: with regards to greece, a review of the program are ongoing. we are making progress. clearly if the conclusion of the first review is within reach and we are making progress with the greek authorities in terms of how greece will reach its medium-term fiscal target, which is 3.5% of three defeat -- of gdp, personal income tax reform, privatization fun, improved income tax collection and so on, we believe that the first review
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can be included already. quite soon lisa: what about the tone of month european leaders -- among european leaders? mr. dombrovskis: we know this 2012 whenlready since the eurogroup a love for the possibility of reassessing the greek debt conditionality while excluding -- this commitment was reiterated also last year when agreement on a greek program was reached. backurogroup will come after successful completion of the first review. right now we are i hope finalizing. negotiations with regard to the first review david: you met with janet yellen yesterday. that you summarize for us what your message to her was? mr. dombrovskis: we are
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basically discussing economic euwth across the u.s. and and monetary policy responses to this. it's also important to hear how the u.s. is having to perform in terms of monetary policy, interest rate increases, in terms of finalizing moving out of quantitative easing. david: thank you so much for your time today. valdis dombrovskis joining us from washington dc. here's a look at oil today. bouncing around currently at $41.68
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david: from bloomberg's world headquarters in new york, this --"bloomberg ."
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"bloomberg markets." mark: donald trump is the most unpopular presidential candidate in decades. moredavid duke was unpopular according to a washington post survey. er. trump is seen as unfavorably among 67% -- democratic presidential hopefuls hillary clinton and bernie sanders return to the debate days before next week's new york primary. mrs. clinton is trying to snap a seven state losing streak. mrs.atest polls have clinton ahead by 10 points. the political fight over immigration now at the supreme court come a dispute that could affect millions who are in the united states illegally.
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obama administration programs one million people from deportation. nfl. development in the the tennessee titans have agreed to trade the number one pick in the draft to the los angeles rams. the rams will give the titans their first round pick along with three other early round .icks global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. david: commodity markets closing in new york. let's take a look at oil today, lower before the meeting in doha. iea saying global
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coil markets will move closer to balance as they take production outside of opec. -- global oil markets. shares hammered as much as 60% last year after its accounting practices were publicly criticized. , wehe exclusive interview talked to yusuf alireza. >> it has clearly been a very challenging year. i'd been in the business 24 years, so i tune a lot of challenging years. it's an understatement to say that last year was a tough year. there are three core things that are important for us to focus on during difficult times and we have focused on those. focus on the business, try to spend as much of your time and your people's
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time on the business in the strategy and executing on the strategy. the second thing come in challenging times, you have to prioritize liquid the imbalance she trends above anything else. makes are you continue to attract and retain talent. you continue to attract and retain talent. >> you made the tough calls. is that the end of it or are you looking to do more? >> the markets are difficult. to sit here with confidence and say the worst is behind us is just not realistic. our jobs are just to come in every day, do our job, focus on the business and in the end, the markets will judge us by those results. >> what priorities do you have for the year? >> we have three core principles for a strategy. core principle one was to refocus the firm back on its
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core competence. what we've done for the last 30 , we moved the physical commodity from the producer to the consumer and we managed the market risk my credit risk and -- market risk and credit risk associated with that. the first strategy was to refocus on producers. look back four or five years ago, 45% of our asset -- the second core principle was to diversify away from investor commodities to more consumer commodities. >> it needs to be smaller and nimble. how will you get there? >> we are where we want to be. we went back to being asset light. we are much more focused on our oil business, we have a balance between investor mondays and
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consumer commodities. if you look at four or five of our volume us , the u.s. iswit larger than china. >> the elephant in the room is financing for noble. where are you in this? >> we've always had a policy that we don't talk about the deals we are working on until they are done. months, ourt 13 core stakeholders come our banks, our shareholders that know was best interact with us every single day understand the balance sheet, understand the business have continued to support this. >> what else do you need to do? markets, younging just focus on the business and that is what we are doing. we execute on our strategy and we continue to do that >>. the cost of financing has increased. give us an indication of how
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much higher it has gone. because we have got to assess light, we've changed the asset side of our balance sheet and are financing will change. the cost of our revolver has gone up, but historically, when we've had plans and mills, you need in long-term debt. now, most of our assets are inventory. the cost of the borrowing base which is secure financing is much lower. as we forecast going forward, we think are weighted average cost of financing is not going to change that much. >> give us an indication of how much it has gone up. some reports we are reading say that perhaps it has gone up more than doubled. that is only one component. last year was the lowest we had ever funded -- just one year ago, a lot changes in one year. last year was the lowest we had ever funded the firm.
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over the course of many years, that is not true. is not important for us just one transaction revolver, it is the average cost of our debts. the weighted average cost of our debts will be about the same going forward as it has been in the past. speaking to alireza bloomberg in singapore. the ante inoft ups its privacy battle with the government. microsoft says it does not have to turnover customer e-mails to the feds. has released ans smaller version of fiscal pure for only $8,000 each. my sit down with the artist is coming up. hismaller version of for only $8,000
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each. lisa: the nasdaq is down just a bit. ♪
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david: this is "bloomberg markets." time for the bloomberg business flash. pouring $1 billion in the hedge fund founded by billionaire paul tudor jones after the exit of several money managers. the deputy chief operating officer is reportedly planning to leave. a setback for one of the oldest and best regarded firms need industry. lisa: bnp paribas eliminating
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positions, 11% of the workforce in france. has been seeking $1.1 billion in annual cost savings by 2019. david: the nba said thursday it broke its attendance mark for the second straight season fans in 22 million an 2016. capacityge arena sellout. a year of growth for and be a digital. -- nba digital. news, we to technology learned today that microsoft is suing the u.s. justice department. the software maker wants to change a law that prevents them from telling customers about data requests.
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what is the crux of microsoft's argument here? microsoft is suing the doj, naming the attorney general saying that if the government requests information from microsoft come information and , microsoft-mails should be allowed to tell their customers that the government is asking for this information. asks now, the government them to keep this a secret, to keep the request between them. microsoft says we are under and in limited gag order here. our firsttes amendment rights, the customer's fourth amendment rights to know. microsoft's chief legal officer gave this statement saying it is very important for businesses to know when the government is accessing their file room.
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whether it is down the hall or nothe cloud, people should lose their rights simply because technology is in the cloud. nursing this act is unconstitutional, it was put into law three years before the world wide web even existed and decades before the copy can the cloud. -- they are saying this act is unconstitutional. i spoke to the attorney general about this very issue. increasing amount of evidence that is being filed away electronically. we are in a situation where in so many cases, in all cases, we see electronic evidence becoming paramount. get files of papers and boxes of documents and rely on interviews with people, but electronic evidence is what we are seeing in every case. the tech companies are
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getting more and more of these requests from the government. microsoft has had 2600 secrecy orders in the last 18 months whereby the government has asked for information and tells customers -- tells microsoft you cannot tell your customers. this --y keeps saying if you look at the apple fbi case, the government -- the attorney general's office had been working closely with apple and tim cook for years and they still cannot come to an agreement about what working together actually looks like. out for theeen first time draft legislation of that wouldn bill force companies to hand over information -- this is what a lot of people in the government and the legislature want.
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there is a difficult balance to find here between security and privacy an increasingly, the tech companies are holding this information. david: i wonder how silicon valley is reacting to washington, d.c. i think about the interview you did with ash carter, he's putting more emphasis on working together with people are innovating in the valley. president obama nominating a lot of executive's, some from tech companies, to his board on cyber security. a --u think the seesmic in do you think d.c. is making a saving face effort here? emily: the secretary of defense never came to silicon valley. the government has realized this is a very important place and has made good-faith efforts to meet with venture capitalists, security company ceos from a company ceos like tim cook, like
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larry page. cannot intois, they an agreement about how exactly they can cooperate. it is definitely a very difficult predicament that can very well defined cyber law -- define cyber law for the next few decades. tech companies believe the government is trying but in many cases believe they are overreaching. twitter has an open kiss against the government where the government is asking for hasrmation from twitter -- an open case against the government where the government is asking for information from twitter. increasing right spots. twitter, for example, recently off potentially isis linked accounts from twitter. the question is, where do you draw the line? david: federal courts have
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issued almost 2600 secrecy orders to microsoft alone. catch emily on bloomberg west tonight at 6:00 p.m. eastern right here on bloomberg television. stocks fluctuating around for months i -- four-month highs. the semiconductor space -- julie hyman has the details. dulie: we are looking at the xf today. the semiconductor etf falling by 1% today. a number of different things are weighing on this industry. let's start with taiwan semiconductor. of of the biggest suppliers chips to apple, forecasting revenue well below analyst estimates. a drop in demand for high-end smartphones, those that cost $500 or more. those shares down by 4%. ents fromre are comm
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pacific west, saying intel results will likely meet that miss the midpoint -- will likely -- they arepoint saying there is going to be a contraction across the industry. intel is not down as much as some of the other semiconductor makers today. then, there is the case of lattice semiconductor. lattice recently had a lift after the china unicom took a 6% stake in the company. -- chairman said there is no it is a financial interest only, there is no intention to buy lattice, you can see how the stock has dropped. day. down 9% on the definitelyors
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weighing on matters today. it had a good run going into this week. david: julie hyman at the markets desk. coming up, my conversation with jeff koons. what he think's about the business side of art and his relationships with the people who collect his work. about the thinks business side of art and his relationships with the people who collect his work. ♪
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david: this is "bloomberg markets." let's turn now to one of our bloomberg pursuits stories today. turns out you do not have to be a billionaire to own a jeff koons balloon dog sculpture. the american artist has teamed up with a french porcelain maker to produce plates that are 1/10 the size of the original stainless steel statute.
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each dish will sell for $8,000. i sat down with jeff koons to talk about the project and more broadly the business of art today. jeff: to work with somebody where you have a reliable quality product and we are able to achieve this quality each time and i don't have to worry about variation of quality, this is really important to me. david: how interested are you in the business of art? is it secondary or something you enjoy thinking about and being a part of? jeff: i don't enjoy thinking about it. i try to be courtney did as an individual -- coordinated as an individual. secondaryss park is a that i believe if i make really comerful artworks automatically if society enjoys them, people will want to support me and i'm able to make more.
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that is my involvement with business. with theet involved you can make the best art. david: your pieces at auction go for a good sum of money. do you care about that? jeff: i care that it is nice that it is able to sell at a nice price and not have a market that the work come if it is a platform that is somehow working the desk helping the work itself -- somehow helping the work itself, yes. david: let me ask you about the other side them what kind of relationship do you have with
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those who collect your work? jeff: when i was younger, i was weary of collecting. i did not know if i should mingle with them. trust andhow to befriended good collectors. we all were interested in the same thing come interested in the power of art and interested in how art can transform our lives, not just as individuals, but our whole community. many collectors are my closest friends. you mentioned eli earlier. beings, they are the most philanthropic individuals i know. they are completely generous. these are the people i love to embrace and celebrate. david: i read that you have an exhibition coming up. at the gallery in london. jeff: i'm looking forward to showing in damien hirst's gallery.
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this has been a year of being in the studio. creating the works -- i created a hill of -- a hold line ofle new paintings. they are very metaphysical. i'm really enjoying myself. can read more about my conversation with jeff koons on ni pursuits go on the bloomberg. al used the word "iconic ly" perhaps too much. who jeffk, do you know done, a or what he has lot of people were recognize -- will recognize what he's done. he has become so wildly successful, his pieces are
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selling for tens of millions of dollars. lisa: how does he feel about the fact that his work is being commoditized in this way? is very wealthy and wildly successful. throughout his career, he has played on that, he did pieces of artwork that were based around hoover vacuum cleaners in the past. he believes in the emotive power of it. reacted strongly to sing that balloon dog in person. that balloon dog in person. there you are. more "bloomberg markets" coming up after the break. ♪
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carol: it is 3:00 p.m. in new york city. welcome, everybody. two bloomberg markets. ♪ -- welcome, everybody, to
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"bloomberg markets." ♪ carol: good afternoon. i am carol massar. here is what we are watching the hour. markets are moving higher. big news from hedge funds. steve cohen is starting up a new firm that will allow him to take outside money again. jones facing more than $1 billion in redemption requests after a lackluster performance. our airline shares about to take off. delta leading airline higher as the company is performing artists. we are just an hour away from the close of trading. stocks are fluctuating around here.


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