tv Bloomberg Markets Bloomberg April 18, 2016 2:00pm-3:01pm EDT
from bloomberg world headquarters in new york, welcome. david: here is what we are watching this hour. crude oil is still down but well off its lows on the first day when opec members decided not to freeze reduction. oil could be tumbling back into the 20's. lisa: and the impeachment crisis in brazil -- the president is one step closer to being removed from office. david: and a verizon is said to be the leading suitor as other companies drop out to buy yahoo! , including the business known as yellow pages.com. we are two hours from the close of trading. it's good to the markets desk julie hyman has the latest. julie: an unlikely rally. when we heard about the no hot talks collapse, the expectation
was oil woodhead sharply lower and stocks would fall along with it, yet that is not what has happened. have&p and the dow each .5% -- not a runaway rally but if you look at the s&p 500, you will see what i'm talking about here. a gradual increase throughout the morning and what is interesting is as we have seen ad itslly, the dow highest and nine months, we have seen people dumping their short nuts on the s&p 500. but you have here is the measure of short positions on the s&p 500. we've seen a decrease in those positions at the fastest pace in four years, sort of a far and of
this chart. beenosition has substantial as people have been squeezed out as stocks go higher. mentioned stocks year with oil wiping out some of its losses. julie: you can see it was lower but climbing back substantially, down almost 2%. flirt with the positive before closing down by a little bit and we continue to watch the correlation between oil and stocks. looks at the two and we have the 120 day directional correlation, so let me blow that up. more often than not, especially we've seen them
moving in the same direction. saying itsts are might be a good time to come in and by the dip. variousanalysts making calls about which they think are the best ideas, but you can see participatingron in a broad rally across stocks. lisa: now let's check on bloomberg first word news. mark: republican presidential candidate donald trump and his campaign manager are being sued by a political strategist who is accusing them of inciting a virtual mob to leader. she says the behavior came after she question mr. crump posited as for office. the lawsuit was filed today in state court in new york. 300,000 voters in
california may not be evil to cast ballots in the june primary after accidentally registering with the wrong political party. the los angeles times found millions of registered members of the ultraconservative american independent party join i mistake. three and -- three out of four people did not realize they were becoming party members. this as one of the most critical primaries in the state history draws closer. two runners from ethiopia are the winners of the boston marathon. -- a swedish man when the wheelchair race. more than 40,000 runners are participating in the annual event. this is the 50th anniversary of the first woman completing the boston marathon. more than 110,000 houston area homes and businesses are without
power after 16 inches of rain in 24 hours flooded roads. hundreds of flights have then are closed. schools the mayor has urged people to stay at home and off the roads. untilns of taxpayers have midnight local time to file their returns and millions of others will ask for a six-month extension. was delayed until today, three days beyond april 15th because friday was a legal holiday in the district of columbia. poweredews 24 hours day by 2400 journalists in more than 150 news bureaus around the world. back to you. david: let's talk brazil -- there's a lot of political news and we will get that in just a moment. but let's look at how it is impacting the market. today in fund drops
flames -- in favor of the president's ouster. so where are the best opportunities in this situation? has the market gotten ahead of itself and are we seeing the beginning of a sustained reversal in brazil? >> a lot of the news is priced in because of the impeachment. a lot of the news we thought was going to happen did happen and we are counting it down as president. it's great news for the economy and on a foregoing basis, any political change will be more normal policies with more technocrats taking over and any change is positive for the economy. david: say there is an impeachment and transition. there are a lot of structural problems here that have been dealt with in a limited way.
how quickly could that happen in a new administration? guest: the change would probably happen very quickly. it's going to take months and some things will take years that the equity capital markets start discounting that and there has been a significant run-up in the value of the domestic market. we expect that to continue in the coming months. means you are bullish on brazilian assets. with that, what do you expect to appreciate the most? guest: equity is probably the best way to play. it's interesting you were talking about the index coming down in brazil. penalties pointing to the fact that if you look at it either producersby macro oil like petrobras come in probably not the best way to invest in the consumer story in brazil.
probably better off looking at the consumer story or domestic midcap companies and avoid global nationals. david: it seems like so much focus on brazil has been on the political story. what has got meant or the rest of the economy? movingreally it is not and some changes have to take place. we expect the impeachment process to take place and if anything, she could get herself out through the process and get ahead of the impeachment. there's a lot of legal implications where she could go measuring whatbe
it means for her personally. lisa: how connected our brazilian assets to the state oil? you talk about large caps, how fromcan it be removed whatever happens with oil? that's an excellent point. clearly it is a commodity driven economy. there's no question if you look at commodity markets across the world, they've been performing well. as oil prices have normalized, even if it is a domestic story, in energyking a bet markets normalizing, as long as they remained around current levels, you want to be careful about investing in brazil and all prices are going to revert back to the $30 level.
reaction tois your that? is it a surprise at all to you? guest: a lot of these economies need to produce just to meet their gdp budget needs. from that perspective, it's not surprising that iran made it clear what their position was and what this means for oil markets in general is just increased volatility. david: thank you very much. coming up in the next 20 minutes, will verizon or white tv able to snag yahoo! on the cheap. lisa: does the failure of opec to agree to a production freeze mean the end of the oil rally? david: a look at wti and brent crude rose in the red.
david: this is bloomberg markets. time for the bloomberg business flash. coreart with laboratory and a possible deal who say talks are pro-luminary and no talks are imminent. they are looking to solidify their position as the biggest diagnostics company in the u.s. lisa: carnival says it will delay the first cruise to cuba if they do not allow cuban-americans to travel aboard. regulations bar people from returning to the country by ship and as a result, carnival hard americans buying tickets from
henan to miami. bill campbell has died. his homespun advice on leadership nurtured an array of luminaries including steve jobs and larry page. he worked at apple as a marketing executive in the 1980's and was appointed to the board when jobs are turned to the company. bill campbell was 75 years old and we will talk with emily chang about him later in the show for top some breaking news just out. the digital business of what was formerly called the yellow pages -- alex sherman broke the story and is with us now. breakdown that distinction. alex: why pe is what the cool kids call it. pages the digital yellow
and you know the book actually got fun off last year. there's some overlapping salesforce with why p owning that's 3300 local people. it's almost one of the biggest selling points they have adopted because you can put 3300 people at work selling local ads were small and medium-sizeds mrs., that is similar to what white he holdings does and you can marry that with yahoo! and potentially get something yahoo! does not bring to the table already. i am sort of surpred yellow pages is still in business, but how much of a surprise is it that they are coming in and bidding on yahoo!? alex: i just got off the phone with a shareholder who said it's hard to get excited about why p.
relative to verizon, they are going to be a longshot candidate. but why is this even happening? if you can do something called a reverse morris process where they can then off a company in a tax efficient manner, in other words yahoo! would spin its core business away from it takes in alibaba and shareholders would continue to own a portion of that company. not felt like they were getting any really valuable bids and verizon came in and said we think you are worth x and it is too low. it one way shareholders could get some value out of it while still owning a piece of the upside. the second reason is theoretically, this does make yahoo! a stronger company if you believe the logic that adding a big salesforce and potentially some other advertising knowledge
why p brings to the table can boost yahoo!. are they going this alone or are they working with private equity? alex:yp is owned by cerberus and at&t. we learned that at&t was not going to bid for yahoo! but this would be a way for at&t to own a portion of the yahoo! core business. is the fact that we are at all perhapsp a sign that it hasn't gone as well as it wanted. that's probably not fair. today is the first day that they decide byd they could themselves whether they want to put forward a bit.
there's no real harm in putting forward a personal bid. we will have to wait. the other news is they are working with goldman sachs on a lot of different strategic options. they've held some preliminary talks with go daddy, so this is not the only game in town for y p. they realize a need to get scale and get bigger and maybe this will work. david: we are talking about it if really than we would talk about with verizon. they see a lot of complementary characteristics here. alex: i think it gets to yahoo!'s problem. yp sees it as a big digital advertising company but they also own a lot of other stuff
and some of that can be monetized through advertising and some of it can't. lisa: thank you so much for joining us. let's head to our markets desk where julie hyman has a check on commodities. julie: cotton is not one we talk about often but it's set to have its biggest one-day gain since going back to october. india, china and texas are the reasons. india's marchn of data signals that it would be bullish for cotton and china plans to sell high-quality cotton from stockpiles. and there has been all this rain and flooding in texas which could push back the beginning of the cotton planning season -- cotton planting season.
analysts, they are up by 2% and at the highest going back to august. here is the soybean futures and how they are trading today. futures trading higher. for the la nina pattern this year. soybeans climbing to the highest has been more than here. not only are you seeing the price go up, but people are betting it will continue to rise today as well. dancing --in bouncing back from the kleins we saw last week. david: still ahead, doma recess
lisa: you are watching bloomberg markets. -- doma recep's presidency seems to be hanging by a thread. fate of the brazilian president is in the hands of the senate after a lower house of congress voted in favor of her impeachment which would and 13 years of leftist rule. let me ask about a headline that just crossed -- records of the impeachment process are already in the senate. spell out what that means about the timeline of the proceedings going forward. what we saw yesterday was
a vote in the lower house that said there was enough grounds to move forward with impeachment. now it moves to the senate where she will race trial on charges of having manipulated the budget and used illegal credits, bypassing congress. investors are looking at is this a question of days or weeks or could this be dragged out as it was in lower house? the best guess we are hearing is that by mid-may, president recess -- the president could be deposed temporarily and then it would go to a full vote where the opposition would require two thirds majority to have her step down. are analysts apprise at how much support there has been to impeach the president and mark -- impeach the president?
guest: it was a little bit of a supplies -- little bit of a surprise. in a very final hour of the voting last night which went to midnight, it became clear the opposition did have the vote. there's an overwhelming feeling that this is not just about tinkering with the budget, but there are much larger issues at stake. above targetway and there's this huge corruption scandal that has shaken brazil's political elite and many people are tired of it and want a renewal of civilian politicians. how much are people talking about what the next day would you like? any sense of what it would look like?
guest: his party has presented an economic platform that emphasizes downsizing government and increasing the retirement age. the platform looks good to investors. the question is how much can you get through? lisa: a historic time. our brazilian bureau chief, thank you so much. still ahead, the commodities close. here's a look at oil. ♪
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bloomberg first word headlines with mark crumpton in the newsroom. mark: the associated press site israeli police who say an explosion aboard an empty bus have wounded 18 people in an adjacent bus was a deliberate attack. the blast occurred on hepburn wrote at southern edge of jerusalem about three miles from bethlehem for top there has been no claim of responsibility. hundreds of international aid workers are in ecuador joining search and rescue efforts following saturday's devastating earthquake. government officials say at least 350 people were killed. the associated press site spanish red cross officials who say as many as 100,000 people may need a is the. quake was the7.8 heaviest in ecuador in decades. a new poll has donald trump hillary clinton leading in tomorrow's new york primary.
of 55%mp has the support of likely gop voters. ohio governor john kasich gets 21%. ted cruz gets 18%. mrs. clinton leads bernie sanders 55% to 40%. comes as no supplies that most americans are fed up with the federal government. almost eight in 10 say they are dissatisfied or angry at the way the federal government is working according to an associated press poll. republicans are far more likely to be angry. half of gop voters compared with a quarter of democrats or independents. 'se national football league concussion settlement has been given the all clear by a federal appeals court. the ruling sets into motion lawsuits covering more than 20,000 retired players. about 1% of players off did out of the settlement designed to compensate players for head injuries over the next 65 years.
global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. back to you. commodity markets closing in new york. as gold is off to its best start in any year since 1975. oil is the egg driver with crude rebounding after it fell as much as 6.5%. it seems investors have turned to a labor strike in kuwait to put an output freeze together in doha. person who is not enthusiastic about where prices move today was on bloomberg markets earlier. guest: we think the strike that cause this pullback will be over quickly and when it is over, we
will be taken out of the markets completely and we will see prices going back to $40 a barrel. lisa: let's see if our next test agrees. he joins us now. are you a bear or a bull? but setting bearish in a more defined range. from the very beginning of this as we start to look at the what the market shapes up into is a market for increasing and decreasing ranges. we are not expecting a move act down to $25. that was predicated on people's perception of a hard landing in china for top we are not looking for a hard landing. we see the physical program working and we don't think it's back to 25. however, where we were positioned before with a shot at
50, now probably 30 or 40 with a shot at 45. bearish, but within a range. david: looking at the year today, we see that and then you mentioned pre-doha. were you surprised by what happened last night? guest: no. from the start, we prescribed a 15% drop ability. we were very skeptical from the beginning. caught wasthings we we saw the beginnings of a change in leadership in saudi oil policy. thingre was one specific that was really important for the market to grasp, it was what
is going on as it relates to oil policy. has come the authority on oil policy in saudi arabia. that is important. seen himhink i've ever say nothing after a meeting, so you are seeing a's low yet deliver it transition. what is important about that? opinionadfast in his that saudi arabia is no longer going to go it alone. he is telling the market that demand has to catch up with supply and that is important because the onus going forward is demand better stay on track and we go back to decline rates in the united states. talking about the doha meetings it was all political and saudi arabia was sending a clear message possibly to russia and possibly other
members of opec. politicale international message we have learned eschew mark guest: i think the overwhelming part of the decision process was geopolitical. the saudi's could rely on that being the only criteria. knows there has been this proxy were going on between the saudi's and the iranians and no one has been able to explain why the saudi's would do the russians a favor for they are able to wage this proxy war and use their muscle in a short and medium turn to walk away because they are low-cost producers. i was asked a really good and she the other day said what do you think the saudi's want? do they want to deal or oil or $40 oil? that was the best question i had been asked and last year.
i think they want $40 oil because they can still keep u.s. production at bay. taken slowly regain market share from the highest cost producers in the middle east and probably and subsidizeong their economy where they need to. for the medium-term, and i think they have been honest about this realize that the genie is out of the model and there's a durable change in the way we supply oil to this world and i think they are going to monetize the reserve as much as they can. that is the strategy and i believe they are going to continue with that strategy and i think it is a smart strategy. that is what is at play and the interesting thing is he was always a bit more conciliatory
and they presented very mixed messages to the world and i think he proved this is the way it's going to go. where does russia go from here? guest: they certainly have enough cash reserves to widen this out. they will incrementally increase production next year but i don't think that much and i think they are similar to the opec producers. they are hoping demand comes around and holds us out. if oil does stay around $40, who's the biggest casualty? high cost producers like venezuela. people are concerned about liquidity in the lower 48 that in reality, i think you got a bigger challenge of north in canadian producers. putbanks in canada have not away anywhere near the reserves u.s. banks have, so you could
get into a liquidity crunch. i think countries like columbia word have a hard time. it is certainly not saudi arabia. moment to focus on this meeting. does this say something about the relevance of opec? one of the biggest things is the prince is speaking at the end of this month and people have to pay close attention to what he says now because he is the undisputed champ at this point. i don't see any way around that. are going topeople focus on production declines in the united states and you are never going to escape one thing. the failure of this meeting is that it solidifies the cap. if the saudi's are saying demand, you are going to have a job to do, we have to produce,
so we have to make sure china stays on track. the economic indicators have been uneven at rest, so we have to look at that. .uwait is a short-term issue that's only going to do so much. not as a labor problem, reserve problem. going forward, durable concerns are u.s. production declines and making sure demand stays on track. david: thank you very much. coming up in the next 20 minutes, voters in new york state had to the polls. donald trump is expected to notch an easy win, but the democratic race is tighter. a wrenchzon throws into netflix -- how will they respond? david: a comparison of netflix
david: this is bloomberg markets. in politics, all eyes on the primary taking place tomorrow. hillary clinton and appeared to be heading to home turf wins. speakclinton is set to live right now and is joined by senator kristen shall and former congresswoman gabby giffords. mark halperin and john heilemann are still with us. what are you looking for this week in the new york primary? what would surprise you?
john: either one of those people losing. has the sanders or clinton margin tightened and does trump get all the delegates from new york? to try to get their respective nominations locked up. there was a big -- david: what is bernie sanders trying to do in these last two hours? talking that issues of judgment about wall street and the iraq war and dealing with the banking industry. surprisednders is that with all of this time he's invested on the ground and these rallies have not produced tightening in the private or public polling. the end result a be closer and i think the clinton folks hope the margin is big enough so people can speculating.
>> in a city -- both of them now thinking it is likely a general election matchup. is this game over for bernie sanders if he loses? dauntingfaces very math. whether he wins or loses by a little bit. he could make an argument about momentum but even if he wins by a point or two, he's going to be almost 200 pledge delegates behind her and mathematically, winning by a little bit still sets them back. he's to close 200 delegates. that's not the pace at which he needs to go if he's going to
ever close that gap. winning would be a great talking point that would not get him closer to being in the lead. david: how handicapped is he by this rule that you need to be a registered democrat? mark: he has done that are in places where independents and republicans can vote. this has been a problem for them. he's done better with independence but in so-called closed primaries, hillary clinton has done better and that is why she is favored tomorrow. is trump going to win enough of the delegates of new york to keep going and possibly clinching the nomination. john: we are going to talk about that tonight. if trump wins an emphatic victory tomorrow night and wins most or all the delegates from new york, he will be in a position where if he performs really well -- he can get to
1237 delegates at the end. there are a bunch of states he's going to have to win. he's got big lead in most of those states. he's setting it up to be within his grasp. he may fall a little short in the end but if he performs the way the polling is laying out, he could get there. i wonder how important endorsements have been and if donald trump is getting better at getting them. neither donald trump nor ted cruz have been getting many endorsements. help raisecould money have been on the sidelines. cruz,rubio endorsed ted but you haven't seen either of those guys get endorsements and that would break the normal practice of what would be happening at this stage.
john: you have george attacking giving his endorsement to john kasich which would increase of chances of putting them over the top. [laughter] i'm being sarcastic. david: you can see more of their interview with senator ted cruz at 5:00 p.m. eastern time here on lumber television. let's head to the markets desk where julie hyman has a look at the latest. i am. here let's look at alphabet -- those shares have been rising even though it's not a big gain today in terms of magnitude. bernstein analysts say earnings per share are likely to meet expectations. also an increase in the
theuence for the ceo of company and those are due out at the close of trading on thursday. we are also watching apple shares today, at their lowest in about three weeks. comments coming from bernstein, by shares are trading lower 2.5%. apple reports its earnings next week. there was a report from mac rumors saying best buy had taken the 12 inch macbook models off its store which does suggest there could be another addition of its notebook lineup in the near future. just a small piece of potential news coming from the company. we are watching amazon as well, announcing they will be offering their prime video service as a standalone service instead of just bundled in with its prime annual service. primeoffering monthly
service overall and there are concerns about what that means for netflix. down, meaning the goingday for netflix forward and there's been a lot of talk about what this could mean for the company. i think amazon and chill -- is that the new -- i did not come up with that. but i like it. lisa: thanks a lot, julie. coming up, netflix, we are going to stick with it. but as julie said, the stock is down with amazon lowering the price for its rival video service. stick with us. ♪
netflix reports earnings in just about an hour. one of the first numbers investors will look at is the company's overseas subscribers. joining us now is -- with a secret look at netflix is bloomberg west anchor emily chang. what are we looking for in these overseas numbers? it's anydon't think secret that on the day of the earnings call, amazon have said we are going to have our own standalone video service. this is something amazon had offered for a long time but was rumbled up with an amazon prime membership. now you can pay for that separately. it's not really that economical. bezosthat is just jeff trying to underscore the great deal that you get with an amazon prime membership. the main thing we are going to look for is domestic subscriber growth. priceecently raised their
to nine dollars nine nine cents a month, which is about a dollar more than amazon. this is the first month that price is going to go up. of course, netflix is big when it comes to original programming, competing only with hbo. they are aiming to get to 600 hours of original programming which would put it on par with hbo and this is something netflix has had on the streaming competition, whether it's hulu or amazon. i cannot imagine that it is a quinton's amazon is making this announcement today. what does it say about the competition? emily: until today, it was
really only hulu with the standalone subscription service but hulu has ads that you can't skip and a don't have the original programming lineup that netflix does. they do have prime time shows from the night before and amazon has had success with shows like "transparent" and "mozart in the it does have a call following but they certainly don't have the original programming lineup that netflix does. but they can prove that it is indeed possible. i was speaking with the ceo of showtime who competes with netflix when it comes to original programming and said they have to at some point show earnings and that these billions of dollars they are investing in original programming is going to pay off. they are also investing abroad in europe and south america, so we are going to look at
international subscriber growth. we will see if that international subscriber growth can keep them going. bill campbell died today. how is that resonating across silicon valley check mark -- silicon valley? emily: he actually gave a eulogy when they held a memorial for steve jobs. he was a strong invisible hand behind the scenes of so many companies from startups all the way to big tech companies, so a big loss for silicon valley today. bill campbell dying at the age of 75. ♪
♪ scarlet: from bloomberg world headquarters, get afternoon. i am betty lou. bidder.as a new the company formally known as yellowpages.com enters the race for the company's core business. ha dip sending oil prices lower. is more volatility ahead or can there be a floor? and hanging on by a thread after losing a vote in the house. will the senate feel it? we are one hour away from the close of trade. i want to head to the markets desk with julie hyman. she has the latest on the