tv Bloomberg Markets Bloomberg April 18, 2016 10:00am-11:01am EDT
mark: welcome to bloomberg markets on bloomberg television. betty: we will take you from new york to london to brazil in the next hour. here is what we're watching. print --pec's bigger biggest producers of the weekend, threatening to run new the routing oil prices, snapping back from earlier losses, still down almost 2%. mark: hanging by a thread, that is how supporters are of theizing the future presidency in brazil after a lower house of congress voted in favor of her impeachment. 10 she do anything to stave off her roster? betty: deadline day. the company bidding for yahoos assets are starting to narrow, leading to google as the top
contender. one thing that seems more likely is burress a myers day at the helm. it may be numbers. i want to head to the markets julie is. julie: a number having to do with oil that we are not seeing more of a decline in oil, not seeing more of a decline in the talks paired a mixed picture of the u.s. average as the dow is trading higher. considering the close correlation between oil and stocks, it is indeed surprising. take a look here. groups are on the move. energy is not the worst-performing group. we have got consumer discretionary, which looks like more of a mixed picture when you
break it down by group. i want to look at a two-day chart. down today and oil prices. we have climbed back from the lows of the session in reaction to the talks. one thing that is definitely helping to mitigate or cushion the decline is what it's going on in kuwait. a strike there is reducing output by 60%. you obviously have supply constraints and that is helping is goingt under what on with oil prices today. i want to also take a longer-term perspective. this is oil year to date with various points on it from what we have seen from the talks are the 12 year low in oil prices that we reached back in january. helping to spur the rally on. decline in oil,
but look at how far oil prices have climbed from the low. that we still some talk are maybe seeing a stalling from of, but there are a number analysts coming in today and young within oil stocks, actually want to come in and do some buying selectively on the pullback we're seeing in prices. oil, the other major market event to watch us what happened over the weekend in brazil. julie: and here, perhaps the reaction is a little surprising. seeing brazilian stocks rally and that is not the case today. here is the u.s. dollar going up . one thing going on is the brazilian central bank is stepping up its efforts to weaken the currency. there is the view that even s -- even if it does get impeached, the next person who takes over still has significant challenge
in improving the brazilian economy. if you look at the stock market, lower today but it has rallied 41% since its low in late january and that also puts the move in context. mark: 1.4% lower at the start. of the pile bottom that earlier, the gas index was 4% lower. is some comeback for the main stoxx 600, and it of course rose last week for the first week in five. it has not risen to that magnitude of last wii's gains in over two months. this is the stoxx 600 versus valuation or the stock hundred. it is trading on 18 point seven times estimated earnings. i have chosen this chart because basically it is trading at above the average
multiple for the last five years. some might say the stoxx 600 is thoseexpensive despite classroom weeks of to climb before last week's gains. coming back to the oil and gas industry, i thought we would look at the constituents of the stoxx 600 oil and gas index since they hit the 30 year low on january 20. as you can see, as an index it .s up by 19% every single company on the gas index has risen since that 13 year low in january led by oil, up 77%. as we are talking about all of as oil, i a little bit treat for you, a technical analysis showing us where the oil and gas index is relative to the 200 day moving average.
the gas and oil index fell below the 200 day moving average on friday. the last time it fell below the 200 day moving average was in july. a 30%n embarked on decline through january on the relative strength index. the oil and gas index -- what is better than a bit on a monday? betty: for you, nothing. vonnie quinn has more from the newsroom. in a door, the government says at least 350 people were killed and more than 2500 injured. about 100 miles from ecuador's capital. many people were trapped in buildings. the u.s. delivered water and other emergency supplies.
tworegion was hit hard by powerful earthquakes pair more than 1000 injured in the quake thursday and early saturday. foruers are searching survivors. read take theg to effort to defeat the islamic state. cyberattacks.s, the fight over president obama's move. the court's decision could alter the fate of millions of undocumented immigrants. global news 24 hours a day powered by more than 100 and 50 bureaus around the world. mark: thank you. let's get back to the oil
plunging between the world's biggest crude producers without any agreements on freezing outputs. refusing to put any limits without the commitment from iran. elliott.ned by a simple question. what went wrong? elliott. with perhapse lower levels of -- expectations that things can be achieved. we got word on saturday night there was a draft agreement. the venezuelans, the very country that push that the meetings take place here all on board. without naming them, change their position just before the summit was to begin on sunday morning. i was told this morning that was indeed saudi arabia.
the russian oil minister said in his words, hot discussions. he refused to pin the blame on the pegida was not here, iran. >> i think we have not reached the expectations we had when we prepared the meeting. how can a country that did not participate in the meeting be the reason we did not reach an agreement? iran did not participate in the discussions. this is the position of saudi arabia. they think all members should participate in this. >> even if there has been a deal, they have done nothing to get away from the 1.5 million barrels per day of oil that there is on the market versus demand. imagine thean only volatility will increase because of this. what about, as the russian energy minister was discussing,
the tension between saudi arabia and iran, where do they go from here? >> it is hard to see how they will be diffused. because they have the relation with the saudi's and iranians and most other countries, that they offer themselves up to be some kind of mediator between both sides. it is hard to see how they could reach an agreement between now and the next main gathering of oil ministers in june or beyond that. you simply have two ,iametrically opposed positions now around $3.29 per day and a saudi's refused to. very hard to see how they square the circle. betty: thank you so much, elliott. let's take a closer look at what affectprices and how can the economy. joining us now is the director of the global oil markets research at the columbia center of equity policy and also the
chief analyst at the international agency. good to see you today. barclays among other houses with reaction, they say it is a serious low to the oil market. is that accurate? >> yes and no. i do not think anyone expect a major change in fundamentals. the idea of a freeze would not thely have changed production situation. it would put a nice spin on the market, but the fact the group cannot put up with a statement and the display of unity, that was provided, is quite unprecedented, as is the mixed messaging. betty: politics trends fundamentals and markets? >> yes and that is a new thing. it is not the first time members of opec are on the opposite sides of the issue.
it is the first time this is coming up so openly and interfering with policy in so blatant a fashion. mark: is that it when it comes to the host of a coordinated agreement? see it finished, dead in the water, we're done with that now? done with it're but i am not sure that is a bad from because we are seeing the lack of policy, the market is nursing itself back to health thanks mostly to opec. mark: doesn't this delay the time for when the market will rebalance? won was saying it would happen in 2018. when do you see it rebalancing? >> i see it as the end of this year or early next year. it will delay a short-term spike in prices.
we have seen it in the response of the markets since the meeting took lace. longer-term, recovery in the market. in the way, it is good news. up thei want to bring chart julie had earlier, which shows the enormous tumble we saw in oil prices, which hit the 12 year low. and then, when the idea that there may be a freeze, look at the rally since february of this year. is there a sense that in the short-term, maybe we will delay a short-term spike. >> i am not sure the rally is just about the idea of a rally in opec. if that were the case, we would see a bigger reaction today. i think the recovery in the market is really driven by low
prices. there are signs of a response there. mark: stuck in a fairly narrow band now? state ofin for a higher volatility, i think that is right. fundamentally, directionally, i think prices will start recovering and we recover as signs of a fundamental response, you know, getting more clear. are likely time, we to see spikes up and down. probably further weakness in prices before recovery will continue before the cleanup of supply happened. betty: thank you so much, antwaun. direction of research at the
mark: i am mark barton. betty: time for a look at some of the business stories in the news right now. confidence little changed in april. that is an indication housing market lacked momentum. the national association of home builders, wells fargo builder sentiment, greater than 50 mean more people build good market
conditions. the force was in the toymaker hasbro. it posted earnings that beat estimates thanks in part to demand for star wars license toys. disney princesses. that is not for you. that also helped. a deal worth 1.6 $5 billion. stockholders will receive $36 in cash per share, representing a premium of about 89% over the closing price from friday. is expected toon close in the fourth quarter. we will head back to the markets where julie hyman is. julie: i want to mention all three major averages are now higher. daymakes its highs in the as well. morgan stanley, not really hurting matters but it is not
helping matters either. shares are little changed down one quarter of 1%. higher at one point. let's run through. that was a smaller decline and had been estimated, like many of the other banks we have been hearing from. they cut costs. that was one of the ways they got the better than estimated profits. ae company expressed willingness to cut costs further if that is indeed necessary. as matt miller pointed out earlier, like many of the banks, the estimates for morgan stanley had been slashed going into the report. they beat the estimate. take a look at how other banks are trading today piers morgan stanley fell a bit. not much across the board but a generally more positive tone then we are seeing with the exception of citigroup. at kbw.et downgraded
getting back to morgan stanley and the trend we have seen cutting expenses, here is an exchange of non-interest quarter by quarter. in the most recent quarter, it was a 14% decline. trend for the bank and a trend at the other bank as well. in terms of the year-over-year change in revenue, morgan stanley with a 20 -- a 20% drop in the steepest among the peers whom we have heard from thus far. mark: still ahead, deadline day in the bidding for yahoo! who is in the running. that is after the break. ♪
with betty liu in new york. today is the deadline for the first round for yahoo! shares. shares are lower today as we wait for who is in and who is out. joining us now, alice, who broke the story. alix, who is in the hot seat? who is in the driving seat in the pursuit for yahoo!? >> of verizon's in the hot seat. they are the favorite here. that verizon is the force to beat in the race. they already own aol and would be able to combine a well and some! and extract synergies there if that is the direction verizon wants to go. there are other bidders and i expect to learn more bidders as the day progresses today and the bids start to come in.
we know private equity firms are planning on bidding. these private equity firms could in the coming days and weeks partner up with other statistics. placeecause he did not the first-round bid does not mean you are out of it, but it will give you an indication of who the most likely bidders are. i am talking about tpg and we are looking at others that we hope to sit -- report as the day progresses. why do so many others like google and microsoft, i do not even know if microsoft will, but they all drop out? why? >> every single one of the companies has a different reason. google, we reported that last week. probably because of antitrust concerns. microsoft has gone in a different direction. they made a bid for yahoo! in 2009. the company has moved much more
closely toward enterprise. pretty straightforward a couple of months ago, saying he really did not see what value yahoo! had and if he could i yahoo! for a dollar or so, maybe he would but other than that, he would not get into a bidding war. comcast is one we thought might bid. comcast is not an international player. yahoo! was a weird fit show me movies with explosions.
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markets. vonnie quinn has the latest from our newsroom. vonnie: britain's treasury chief has put a price tag on leaving the european union. 6100 u.s. dollars per household. the estimate is based on an analysis of the long-term cost and benefits of eu membership and alternatives. the study was published ahead of the june 23 referendum vote. opponents say the estimate is absurd. turkey plus state-run news agency says -- wanted a second in a border town. the rocket exploded near a middle school. two other rockets hit an olive grove and a building used as a storage center for hospital oxygen units. there were no casualties. south africa's oscar pistorius to determine art sentence for murdering his girlfriend. the sentencing hearing will be 17th.rom june 13 to the found guilty of murdering revis
dean ted cruz says he has zero interest in being donald trump possible running mate. cruz spoke on good morning america. he says one of the reasons -- millions of taxpayers face todnight deadlines file their tax returns. the filing deadline monday was delayed three days beyond the traditional april 15 deadline is friday was a legal holiday in the district of columbia. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. quinn.nie betty: it's time to get you caught up on all the market action around the world. let's start in asia. the shanghai composite, the nikkei, falling partly based on the reaction of the meeting in doha.
another big story out of the region, the recovery in china's property market. from lund has the story hong kong. >> prices continue to rise in march due to a ramp-up in credit. affordable housing climbing in 62 out of 70 cities surveyed up from 47 a month. was the major cities that continue to lead the way. prices in shanghai and beijing surge. 63%.n year increase to the gains in third tier and beyond cities -- many struggling with the inventory glut. record lending late 2014 fueling this property driven economic recovery. it is a two speed one. policymakers have recently moved to curb speculative buying and
limit the eligibility of some homebuyers. mark: we are 57 minutes away from the end of this monday equity session in europe. .he european stocks the stoxx 600 was down 1.4% led by oil companies. look at the rebound up by one quarter of 1%. little change for the ftse. the best in worst-performing industry groups. travel and leisure, top of the leader pile up by almost two thirds of 1%. the recent underperformance of tour operators is overdone. energy stocks were 4% lower earlier after the nonappearance ha.a freeze in do a look at what is happening in the currency and bond market today. sterling's up against the dollar. the euro is down against the pound. money into equities means money
moving out of bonds. the 10 year yield in the u.k. up to one point 47%. the german 10 year, .15%. let's get more details on what's happening. abigail doolittle has the latest from the nasdaq in midtown manhattan. two tech stocks. , theil: netflix second-biggest drag on the nasdaq moving into the company's first-quarter report today after the bell. investors will be watching what will a total first quarter subscriber addition totals look -- what will the second and third quarter guidance look like for additions? will it match the 1.6 million consensus number or will it fall short on a planned price hike?
a lot of uncertainty that has caused the near-term buying momentum to stall. we see a break in the near turned -- perhaps we will see a surprise but probably likely and fitting to previous quarters have the stock has traded after reports of volatility. mark: nasdaq up. abigail: the biggest boost is amazon. the internet giant has said it is introducing a video only subscription service to rival netflix. while introducing a monthly payment option for amazon prime. this stock market has had a huge turnaround. shares of amazon are down year to date. a 30% bear market on the company's week fourth-quarter report. interesting to see what happens with the company's first-quarter report when they report thursday after the bell. mark: betty, shall we talked brazil? betty: we shall. one of the big events that happened over the weekend. crushing defeat for dilma rousseff. in a 10 hour session brazil's
lower house of congress voted in favor of her impeachment. a decision that could bring down the curtain on 13 years of leftist rule. rousseff is defiant calling the vote a coup. the solicitor general maintains she is not going to resign from the presidency. this break with the constitution is in our view a coup against the democracy. a coup against the 54 million brazilians who voted for dilma rousseff. a coup against a constitution that was it a consequence of the historic conquest after the dictatorship of 1964. betty: strong words. when news that the results broke , residents in the streets are -- erupted in celebration. in other areas, the skies lit up with fireworks. quite an emotional reaction. john freire joining us now.
describe the scene because there was -- there were also tears for rousseff supporters as well. tears of sadness and joy from both sides last night. an extremely emotional affair. when you actually listen to what the lawmakers were saying as they walk up to the podium, people mentioned the key charge against rousseff, one of mismanaging the budget. very emotional scenes. also interesting to point out that the proceedings were overseen by the head of the lower house who himself is facing a corruption charges. lots of political gray areas along with the passion last night. betty: it is kind of a gray area what happens next.
tell us exactly what is next. rousseff isbt dilma receiving lots of different pieces of advice from her close aides. the main avenue for her is to challenge, to fight been peaches motion in the senate. right now she does not have the numbers to win. the other avenue she can take is to go back to the supreme court. she tried to do that thursday night. that did not work out either. a third option, no doubt she will be considering, one of holding early election. mark: once the initial euphoria fades, if and when rousseff is impeached, the big job remains, tackling fiscal issues and economic issues. who is best placed to do that?
that the man in line to do according to the constitution is is the vicent -- president. he faces accusations by rousseff herself. she says he is the face of the coup so there is no love lost between them. he is seen as being a more business friendly president. seen as someone who could tackle some of the fiscal problems that the country has. bear in mind he will have a relatively limited mandate. he will inherit the country that will be difficult for him to push through meaningful reforms that investors are looking for in brazil. mark: if he cannot push through meaningful reforms, does that mean the rally we have seen in brazilian assets has got limited time to run? john: that is a concern of some investors. bear in mind, brazilian assets,
so low. the market route was so savage it might well be some upside to where we are from here. looking at the long-term for brazil, it -- we are a long way away from the euphoria we saw over the last decade fueled by the commodities boom. with oil prices over the weekend showing no signs of sustaining the rally, the medium to long-term prospect for the brazilian economy are not fantastic. betty: i want to play some of the analysis from some of those on the outside and how they viewed what happened over the weekend. richard hoss, head of accounts on foreign relations. let's hear what he said about this. >> brazil has not begun to transition. it has to get through this messy impeachment issue. let me give you one example about the dysfunctionality of brazilian politics. in their congress there is no threshold for political
participation. better than two dozen parties. imagine trying to govern with a coalition that has to be framed with more than two dozen parties. you can't make the government work. on top of that you have state-owned oil company that is corruption on steroids and you have a political culture that is deeply flawed. betty: this is much more than just getting rid of the current president. this is fundamental change of the political system in brazil and the way the economy works. john: that's right. this is what richard haass says. parties within the brazilian parliament that can make government difficult. you can turn that on its head and compare a country like brazil to south africa where the anc has this almost inbuilt majority. we have seen the problems jacob zuma has. argue the chaotic
nature of brazilian democracy. it looks like there is this impeachment mechanism that you can use to get rid of a president if the parliament and congress so decides. you can look at it both ways. john: speaking to people on the ground, is there optimism in the air? our people aware of the structural fiscal economic challenges that face the country? is.: i think there each part oracy faction of society says it is not up to us to make the sacrifices. supporters of rousseff argue the workers party in their 12 or 13 years in power have done more than anyone else in recent resilient history to lift
millions of people out of poverty. they would say it is not up to them to make sacrifices. middle-classe members of society would say the same. there is deep-rooted cynicism within brazil about the ability of politicians to fix their problems. as i said, with any democracy, perhaps a reluctance to tighten belts to make sacrifices needed. mark: great to see you. thank you for filling us in on the big day of impeachment. proceedings. john fraher in brazil. using the term block chain or imris if gives you anxiety. we have everything covered. we will teach you how to sound like the smartest person at a tech conference. ♪
.ark: this is bloomberg markets it's time for the bloomberg is the splash. a look at the biggest business stories in the news right now. carnival says it will delay the first crews from the u.s. to cuba if the cuban government does not allow cuban-americans to travel abroad. cuban regulations bar people born in cuba from returning to the country by ship as a result carnival barth cuban-americans from buying tickets on the may 1 crews from miami to havana. claiminghas been sued discrimination. the u.s. supreme court says google can proceed with efforts to create a searchable library
of the worlds books. the court turned away and appeal that said copyrights were being violated. the justices, without a donation, left intact the federal appeals court decision that disputed aspects of library projects of fair use of the copyrighted work. five years ago amazon began movie streaming. now it is grown into a lucrative standalone business. amazon is starting a video only subscription service to rival netflix prime video will cost 899 a month -- $8.99 a month. targeted atis frequent online shoppers. that is your latest business flash. conferencer best tech jargon. betty: we have these quiz words for you. av testing. burn rate.
mark: i will just nod and pretend. betty: if you have trouble using bogart,rms, we have sam he covers all of this tech conference jargon because he goes to it, hosts so many of these conferences. and you use these words to sound smart. >> i totally do. that is the point of jargon to satellite you know what you're talking about. betty: stringing them altogether. >> that is what we tried to get out in a humorous way in this magazine. betty: let's talk about block chain. >> it is a word people throw around. it sounds important. people think it might have some thing to do with that point but the truth is it is very convoluted. people just say it to make it sound like whatever they doing -- it is block chain based. betty: it shuts the conversation
down. immersive. sam: one of those many words the come along over the years that means not bad. dynamic.o call it can we make it more immersive? the website could be more immersive. that means improve it. mark: what about big data? it's got to have big -- sam: big data is much better than the small data. it is data. databases. maybe calling it big data sounds a little cooler than just saying we have consulted the database but effectively you consulted the database. mark: i like the internet of things because it's something my parents can understand. sam: we define it as access points for iranian hackers. the idea here, if you're going to expand the internet into any number of new objects and product and services you will have to make sure it is all locked and secure or otherwise
you are creating a place for people to come in and exploit the rest of your network. continuedseem to be to talk about millennials. some of these millennials are not becoming a lineal zen anymore. -- not becoming millennials anymore. sam: they have aged out. millennials, that sort of unknown group of somebody under the age of 30. betty: basically not me and mark. sam: nor me. they seemed to have some superpower which is to determine the success or failure of your business. betty: good stuff. mark? mark: i wanted to pitch. i wanted sam to teach me in 10 seconds. sam: this product leverages technologyd-based within immersive user experience. peter driven development processes is poised to take advantage of the coming wearable tipping point. do i have your money? mark: you got my money and my
about 78 feet. they tend to be jampacked with everything you could possibly want to do. you have to have water toys, the best in technology, the finest kitchen. the superyacht is a large and well equipped yacht. mark: if i am super rich live at i bother renting one when i can buy one ? polly: you will spend about 10% of what the yacht is actually worth taking care of it so if you have 180 foot yacht that is almost $5 million a year. you really have to love yachts in order to do that. for some people, they just don't want to deal with it all the time. they only really want a yacht maybe two weeks out of the year and if you have $30 million in the bank it's not unreasonable to spend $190,000. betty: that sounds practical. how do you do this? thetact yard chartering company and there are a lot of different firms and if you own your own yacht you are going to the same firm. it is similar to renting an
apartment. essentially real estate agents for yachts and that is how they would go about it. you can contact people in different parts of the world to make sure you have a yacht that can go to tahiti or antarctica. you go to different people. betty: who is renting these? polly: very wealthy people. betty: i'm sure they are. do we have names? polly: we don't have names because all of this tends to be private at they tend to be people who are extremely private individuals. not really celebrities. they will hang out and all of the big coastal cities. the people that really want to go to remote destinations tend to be financiers, people that have families. they want to be somewhere where no one can find them. betty: very discreet. polly, they give her a much. hard to be discreet on a superyacht though. polly, thank you so much. hard to be discreet on a superyacht. mark: have a peek at what is happening to the stoxx 600
before i to you what's coming up in the next hour. down over 1% earlier because of the collapse in talks in doha. many anticipated some sort of deal whether it was going to be -- stocks are rising now, predominantly due to travel and leisure stocks. .he stoxx europe 600 energy stocks are down. most of the other indices are trading higher. the european closes next. we will speak with the eu financial affairs commissioner following the imf spring meeting. will it aid in the search for potential bailout for greece? ♪
we will take you from new york to london to doha and send paolo. -- san paolo. talks in doha failed to bring in a freeze for oil production. we are live with the fallout. betty: time is running out for greece. leaders are working with the imf and meetings in washington to come up an austerity plan everybody can agree on. can a deal be reached before a massive debt payment is due? mark: the ousting of dilma rousseff is one step closer after a crucial vote in the lower house of congress. we will bring you the latest from san paolo. from bloomberg world headquarters in new york it is 90 minutes into the trading session. julie