tv Bloomberg Markets Bloomberg April 20, 2016 2:00pm-3:01pm EDT
>> bloomberg world headquarters in new york. welcome. >> here's what we're watching. stocks shooting up. recovering around five month highs. coming up. >> meanwhile, stocks fell in mostly two months. you -- it's the economy on a verge of a roar again. obama is in saudi arabia. former u.s. ambassador is here the delegate states of u.s.-saudi relations. markets closed in two hours. let's head to markets. rallyre not seeing a huge today. definitely improving over the course of the session. rising about a half of one percent.
gainingand nasdaq steam. energy stock contributing to the game. particularly in the s&p 500. we do see oil prices rising today. really turning around on a things.f different one, weekly inventory but also numbers for oil prices as production fell for the sixth consecutive week. some moreve commentary coming from iran that renewal ofould see a some kind of talks of production freeze. today.ces up by 4% that is what's really contributing to those gains in energy stocks as well. at the bloomberg. this is volume by the various groups in the s&p. groups see most of the are seeing an uptick in volume. for some technicians it's a positive sign when you have an rising.nd volume telecom volumes up.
because of the gains we've seen, for the major averages that each seen all year. at the the one year look major averages. the dow, the s&p are turning past 12 months. both of them are approaching records once again. they're a little more than one percent away from the record. nasdaq not quite making this there. it's pairing its losses. >> going back a year, what have been the leaders? you look at percentage wise, group wise, some of the better.have been telecom, consumer staples. the s&p 500at vision,ally, cable tyson foods. there's not a theme. more companies specific if. you look what we seen perform well listen the dow, you got rallying 34% and -- visa amazonas via
has been impressive. it's up by a quarter trillion past year.r the those are the ones that have contributed percentage wise to the gains we've seen over the pga year. much.nk you so let's check on the bloomberg. mark crutchton has more -- crumpton. >> two michigan regular layers in flint face charges in the with the led tainted water crisis. >> they filled to discharge duties. they failed in their responsibilities to protect the health and safety of families of flint. they failed michigan families. indeed, they failed us all. i don't care where you live. there will beif more charges, he said, i can guarantee you. democratic presidential front runner hillary clinton has a
double didn't lead over senator bernie sanders in pennsylvania. to. clinton leads him 52 39%. pennsylvania is one of title with primaries on tuesday. ted cruz is down playing donald victory in yesterday's primary.republican mr. trump says there's not much of a race anymore. associated press said senator cruz can't possibly he need. delegates cruz's campaign manager said the ofas senator has $9 million the bank. five former new orleans police guilty toill plead lesser charges in the deadly shooting of the bridge in the days followed hurricane katrina. most will be relieved from prison. guilty pleas comes after the shooting deaths of two up armed people and wounding of four
others on the new orleans bridge. the first meeting of the nato in failed to years bridge differences between moscow and the alliance. that's according to the secretary general. on the table, the situation in military activities of the alliance and russia and the security situation in afghanistan. decisions were announced and no date for another meeting was set. global news 24 hours a day, more than 150 news bureaus around the world. i'm mark crumpton. you.to >> tiger major index is finished in seven weeks. >> since 2010, an asian markets releaptlessly -- relentless. i want to bring in jahangir aziz. for joining us.
in china.bout of calm today, there was sort of a tone. in are we heading back to the days of severe driven turmoil in markets? academy --ket is re reacting to the rumors. that december thinking bad.ts will be really which essentially drive all prices. whether it's fx, equity, everything. comes -- then comes january and february where that view was reinforced. somewhere around february, where meeting,anghai or g20 people started getting much about market growth.
hand, we are putting it down. consequently, the goods is emerging favor of the markets. relative sense, if you look ahead, it's mostly going in emerging market. that's what you saw being improvingin the fx equity prices. lot of that story got a leg. when you saw data coming out of china especially the march numbers, which was like really big. course, you really can expect repeatedp being quarter after quarter. first quarter, 10% of gdp of new loans. imagine that run rate being continue for the year. it's 40% of gdp. of gdp of the day.
out.usly, that has to come thoserket is reacting to realization. >> let me ask but that. juxtaposed with monthly new loans. the new loans there in the gray, going up dramatically. how common is it the pboc of seeing that? you can'the pboc -- get credit for goods. other things in the entire country. my guess is that the last three months that you saw this massive increase in goods was a concern. was not to do what happened in 2015. let's go back to 2015 the first half. we had heart burns every month came out. nothing was happening on fiscal side. nothing was happening on the monetary side.
they made sure at least, we won't get those heartaches and heart burns. goods may not be higher than last year. least it will be smoother. the fiscal policy, changes that in third and fourth quarter of last year, relatively easy. to that.l not go higher?wth actually be they want the economy to slow down. for us in the market, to say, the're going to go back to growth rate, that's not happening. the people say, that that i talk to, the concern that they have, there is that massive amount of leverage that's built system.hinese s&p is downgrading, chinese
pace sinceastest 2003. looking at all of this, what's risk. drive someth are bout of instability? question, does this very whatile asset prices, extent does it play in the real economy. problem a series associated with resolving the problems in many of the soe's clueing steel and gold. problem.massive flip side, is the growing in.rage of corporate sector no one is denying those two problems are critical problems. the poster on, they
will become serious problems road they believe there's some more time to have. -- they have taken measures so.he last six months or these measures obviously haven't resolve the main issues. to resolve the main issue. putquestion is, have they to putave they managed the economy on a even key. you can pick a number. that, they do restructuring, somewhere down two or three years, they will be forced to do the restructuring just to keep the economy on even key. all betting that the first baseline growth and not the second baseline. you?cluding you're bullish in other words? between now, that restructuring, they have enough tools and the global economy
generous enough not to a major crisis in china. will react and will be volatile. happen as soon .s i've been covering china you expect asset prices to rise 150%. >> ask you what the trade picture looks like. have you heard from the chinese government today. tradel be -- what is that picture look like and how actively is the government trying to turn things around? problem is a global with the trade picture. if you go back to 2000, global was about $2 trillion. it moved in a single straight about $14 trillion in 2008. go back up to about $16 trillion a year.
since then it has fallen. the has nothing to do with commodity prices. take your pick, china, picture and real gdp growth picture is identical. the question you need to ask, why has global trade fallen off so sharply? particular, -- that's just not there anymore. those are very difficult fundamental questions to answer. you can put little bit of and there.ere things.do all sorts of that picture can turn around and ask the question, why aren't developed market buyers where there are consumers or corporates. not buying the stuff that .merging market produce >> given the fact that you don't
hardsarily see a massive landing for china. do you see attractive area to be investing in china and if so where? at china andk countries, there is a new economy that's developing. matter whichy place. some of the economies trying to circumvent the old economy problem. sector. a large growing companies. if you look at industrial of industrial% production is made of coal, iron and steel. very large risk. if you take that out, there is clearal very large part -- very large part of
manufacturing. that is a place where i would be invested in. that's the place where will china through. that's the rebalancing that's place. the problem is does the in that rebalancing. that's where the questions are. thea used to be manufacturing -- the factory of the world. all of a sudden, you've telling in five year time, that's no world.the factory of the conviction in the rebalancing. >> thank you very much for being here. aziz, j.p. morgan division chief is joining us from singapore. back. come up of "bloomberg markets," the long term potential of india's economy with massive challengesure >> some oil prices to the u.s.-saudi relations. president obama will have a lot to talk about on this trip to
canadian pacific has tried to acquired several of the company competitors. he is speaking at the annual general meeting. also say he has concerns fort the long term outlook crude oil. what caught my idea, he's going to step back before his retirement. if you look at the chart of the canadian pacific, you'll see it here.me off its highs it's down by a little more than company's buyback plan. perhaps smaller what investors were hoping for. of the other moves we're watching today, discover financial services are leading a rally in credit card companies. that's after its 1st quarter profit. saw a gain in card spending. also saw a gain in number of people who are not paying off their credit card. well. surged as american press reports its numbers. -- this should be
beenal one, it's also rising today. it reports its numbers next week. watching yahoo! today. those shares are rallying by 5%. looks to do something with the earnings. the company sales beat estimates do with what to myers said on the conference call. company is moving swiftly. to reassure investors. monday with the deadline for bids. to receive some analyst saying the company are coming out with sales to estimate, you see here the drop, that was smaller than had been estimated. it's also offering a forecast for the coming quarter and for the full year. analyst say, gives leverage in terms of the sales process steady trajectory in terms of its revenue. it.ahoo! continuing
>> this is bloomberg. >> lot of optimism around economy. investors have been able to capitalize. to indiastopher wept to find out. i read the report on your trip. where are the flickers of growth, things you're excited about? back.nk you for being me the flickers of growth are consumerg to be the sectors and the i.t. sector, driving foreign directors in india. it's a strong push. ati got to say, i look india's growth and their gdp is
something incredible every year, been growing. you're seeing a high inflation rate. on indian bonds are 7.5%. that's crazy, that's a lot of this environment. why aren't people race into ?ndia >> people continue to race into they see those long term benefits. if you have access to the bond is not the bond market easy to access in india. of you have to bid to have access to it. the people will tend to go there for those yields and the long opportunities. our hesitation with india is that on a tactical horizon of we stillear or two, see a wet blanket sitting over much the economy. that's going to hold back those prospects. we're under way to emerging markets. >> coming back with anecdotes
from the trip. trip.as a subsequent what was different this time around? >> the payment system is developing very quickly. you can buy things on your phone. even people who don't have cards have payment systems available to use minus card.edit it puts a tremendous opportunity thate table for companies can develop that sort of internet commerce opportunity. that's new. also in thent is process of developing biometrics. they have billion people fingerprinted now. that's the security system a drive electronic distribution of subsidies. there's a wet blanket in the of bad loans from the construction companies and the poor trade prospects. have to see? you >> what we really need to see a
tick up in global trade. number one, sustainable. the indiansee authorities and the banking system get faster with processing -- recognizing and processing loans. >> 180 million indians acquired bank accounts in 2011 and 2014. you paul for coming in. global strategist at wells fargo. still ahead on "bloomberg markets," commodity closed coming up. here's a check on where oil is at now.
mark crumpton has more. you.ank path for democratic front runner nearly clinton hauled in $12 million last month. that brings the total amount raised to $67 million. donors have pledged another $49 million. cashroup is holding its until the general election when spree. spending donald trump won the new york primary yesterday. the one county he lost in the was his home burro manhattan. up 45% whileicked trump received 42%. showing shown is among moderate republicans. marco rubioenator in washington d.c. governor in areascorded wins around chicago. gripped indiat killed more than 100 people. the temperature is high as
13 degrees with relief from likely weeks away. severelso grappling with water shortages and drought 300 millionre than people. abolitions harriett tubman will of $20on the front presidentformer andrew jackson. she will be the first modern in modern times. alexander hamilton will remain on the $10 note. is the latest chapter in a 10-month-old trough e-- that erupted. global news 24 hours a day, our 2400 journalist around the world. i'm mark crumpton. you.to >> commodity markets closed in new york. starting with iron oils. high.ing to a 10-month
moving onto silver. bull marks. the metal rising to highest level since may today. thend for backed by commodity also approached a record. wti group oil, getting a huge bump, closing at 42, 63 a barrel. reportsafter u.s. showed production dropped for sixth consecutive week. that.n see a chart of >> staying on oil, it's going to be among the subjects of ascussion at president obama he visits the kingdom of saudi arabia. he met with the king. discussions amid tensions over fight against terrorism and release documents to implicate saudi officials. i want to welcome president of former u.s.ast and ambassador of saudi arabia, he boston. from just how fraught is the
relationship right now between u.s.?arabia and the >> i think it's a complicated relationship. i think it's important for know.ne to it's a critically strategic relationship for both parties. i think there are differences regard to iran and syria. fundamentally, in the areas of military intelligence and counterterrorism, the solid andip is rock get stronger. >> let's talk about the delicate diplomacy surrounding this trip the weeks leading up to. thee's an a recall of declassifications of the 99 commission report. pageser if you think the should be declassified? since saudis themselves, 2003 have been calling for the pages to be declassified. they feel they have nothing to answer to. the air. to clear i think everybody is moving in
that direction. pagesprobably see those declassified very soon. >> on the heels, piece of legislation finding its way congress that would allow u.s. citizens to sue a government like saudi arabia. president obama sat down with charlie rose and talked about it. hear what he has to say. >> this is not just a bilateral u.s.-saudi issue. this is a matter of how generally the united states approaches our interactions with countries. the possibility that individuals in the united can routinely start suing other governments, we are also opening up the united states to continually sued by countries. in other >> ambassador fraker, the saudi arabia said if that were to happen, if that bill pass, they would off load tremendous amount of u.s. treasuries. anyou think they would pull economic liver lik -- lever like
that? >> that's a very real threat. i think congress needs to take account the damage that this would do and the risks, the diplomats and our military put at.l will be economist will look at whether it's feasible for the saudis to unload their various u.s. government holdings. course, it would put them in a difficult position because holdings, if those were to be attached, it would put everyone in very difficult position. i think there are good reasons this legislation. >> saudi arabia highlighted a sort ofwith iran and rivalry when it comes to grabbing oil market share over the past weekend. or does that sort of rivalry clear tension between iran and
saudi arabia fit in with the u.s.? u.s.?s good for the >> i think we need some perspective on this as well. is a persian era conflict that's been going on for thousands of years. over the years, iran and saudi managed to rub along together. they clearly in competition for the region. iran has stated very clearly, export theiro islamic revolution to the arab gulf.ies in the that's a hugely destabilizing issue for all the arab countries have to deal with. which is why you're seeing the level its athe today. >> bloomberg had a number of interviews with the prince over few weeks. he talked a lot about his plan forward.ountry going he suggest that almost whole scale reinvention of that economy. moving away from oil,
establishing a gigantic comp wealth -- sovereign wealth fund. is thaticult transition? >> they'll they'll is a -- i ofnk they'll have a series challenge. there's no doubt the king needs to access alternative sources of revenue. i think the plan that will be soon, the national aansformation plan, will give lot of detail as to exactly how this.ntend to do we shouldn't underestimate the challenges. that is notuntry one that is comfortable with change. new young dynamic king in place moving the direction in the right direction. have a lot of support in that regard. we need to see how old this will implemented. >> there was a story on the terminal today that saudi arabia borrowing $10 billion, first
loan in 15 years. it's seeking to fill a budget hole. estimated $100 billion. how dire saudi arabia's financial situation given the prices?d low oil >> i don't believe it's dire at all. their total borrowing is only 2.5% of gdp. have an enormous range and capacity for further borrowing. they also have enormous reserves still. about talking $700 billion of reserves in the central bank. they have a long runway to out.e this i think this particular loan is putting a toe in the water. see bondobably issuances come up. it's part of a program to see what different levels they can use. >> you spent several decades in
the region before you were named ambassador of saudi arabia. banking sector. what is the private investment takenike in saudi arabia into consideration this new plan that will be unveiled. taking in the transformation been suggested? >> one of the objectives of the plan will be to encourage more local investment as well as outside investment in the kingdom. that was something that as i worked on extensively trying to attract theican companies into kingdom. making them understand the potential that is there. highlighted will be in this national transformation plan that should be out in the week or so. >> ambassador fraker, thank you so much for your time today. pleasure. >> presidenyou can catch charlis interview with president obama airing tonight at 7:00 p.m. eastern on bloomberg television. still to come, donald trump says it's not much a race anymore ted andge victory over john kasich.
secure electronic messages that concealed markup. >> volkswagen is reached deal u.s. authorities. the compensation could be $5000 customer. the automaker admitted it illegal software to cheat emission test. $200,000 tor paid tesla model suv's. buy cars made by andetitors for road testing tear downs and how they're put together. your bloomberg business flash update. only story in politics, donald trump and hillary clinton won their new york presidential primaries tuesday allowing the re--ront runners to reassert control. >> both candidates post wins. look.take a >> we don't have much of a race
anymore. oned on what i'm seeing television. senator cruz is just about eliminated.ly again,y, you proved once there's no place like home. does this mean for the path to the nomination. next week's primaries and other states.t johnng us now is heilemann. going forward. is ted cruz mathematically as the next nominee? all, guys happy 4/20. been celebrating? >> no. >> i have been. great. hasn't been it's not true. senator cruz always been for a long time mathematically pretty much impossible for him to get delegates. which is the amount you need in
order to be the republican nominee. had aight, donald trump huge victory. everyone expected hip to have a huge victor. some people didn't expect ted cruz to finish third. a bad night for ted cruz. no one thought he would get a delegates. his goal is to stop donald trump from getting 1237 delegates. possible.ill it's the case that, his climb to number to get there by the end of the nominating the variousll of primaries and caucuses left to it's still tough. he can get there. reallyl got to have a good next six weeks. >> what explains manhattan? wins everything except his home county. why was that? >> you think about, there's not republicans to begin with. the republicans that are here, tend to be pretty liberal.
good deal. did a kasich was very strategic about cruz.also liked ted he thought if i can win four o5 able to do it be in manhattan. he spent most of his time focusing on socially liberal, hot, well educated. those are the most highly educated part of new york. are voters are traditionally like john kasich. he was able to pick off a few delegates. -- of manhattan. lot not like you run into a of people in manhattan who are big trump supporters. was extraordinary. he won the state much bigger than anybody thought he would win it. to donald trump. >> with respect to the democrats, bernie sanders? >> that one it's funny. trump said that ted cruz was potentially the race was over. not true. hillary clinton made a point of
not saying that the race is over. over.e race is senator sanders did worse here do. he expected him to she did better than she expected to do. her delegate haul was bigger. his math has been daunting far while. but it's really daunting now. looking in this next week, if look at the public poling, she will win, rhode island, pennsylvania, maryland, delaware. all the states next week. that will put him in a position he needs to win 2/3 of the remaining delegates after that. a single state where he won 2/3 of the delegas for new hampshire -- except for new hampshire. sanders is now in a position where she is very close to say, she will -- it is possible for him -- impossible for him to be the pledged delegate leader on june 8th. all that's left for the superdelegates, sanders will time who pledged to her.
decide to change and move away from the person who's the leader delegates. may campaign-- he hard, he's not going to run out of money. he's got a lot of things to say. of aotion there's much path is now pretty close to over. >> daunting math. >> you heard it here first. theven with my -- even with map, you can't get there for bernie sanders. managing manager, john heilemann. is stevehey're guest schmidt gop strategickist. let's head over to julie heilemann. onwe're looking at movers the back of the existing home sales data today which represented a rebound. a negative relapse. we sawst passed month, contract closings up 5.1%. better than the
$5.07 million that was oh mated. on thishe rebound particular chart. that's having a ripple effect. really across the industry. related industry. here are the home builders them. you see a rise today. are seeing pretty broad gones builders today. we're looking at the stores that with to filling your home stuff. also seeing some gains today. other real estate related stocks like zillo and realology had rising. zillo in particular getting a gain of 7% today. your home with stuff. coming up on "bloomberg markets," google five year battle over anti-trust allegations is escalating. strong armedoogle using its apps.
>> this is "bloomberg markets." european union took another shot u.s. tech giant google. androide over the software. >> emily chang joining us from san francisco. there's history looking at google. what have they said? >> a long history. history. the european commission is saying that google is abusing abusing itsosition, dominance. works, android model google give it away for free. you have to include these 11 on phone.aded which it's search or a search or mail. european commission saying potentialfling other app makers. >> the remedy in this case is quite simple. it is to stop these practices.
damaging forto be competition.d that's quite simple and straightforward. found evidence that it has been going for quite some time. >> google's general counsel responded saying our partner are entirely voluntary. wie looking forward to working european commission. is an ongoing battle. this is the first time we're seeing formal charges over android. but the european commission started looking at google, six years ago when microsoft brought forward a complaint that google was abusing its dominance in search. this commissioner has looked closely at google shopping they're and whether favoring those shopping services. they're advertising model. that google doesn't charge for android, all of these
get at salesn through those apps. it's very much driving google's revenue. mobile accounts for 50% of revenue. to thisas contended up point that what regulators are confused. android,o the head of a couple of months ago about this. take a listen to what he had to say. >> we think there's a lot of terms of how the android ecosystem works. of ecosystem.e it hasn't existed before. open source ecosystem where take themanufactures customized it.e, >> over the last several years, thing has tried to smooth over the european commission has tried to settle. cases.nt
has not been successful. google, itsbout parent company alphabet does report earnings tomorrow. looking for >> number one, we're looking at that mobile number. seeing if we can get more about just how important the android operating system is to google. releaseoesn't actually a lot of its information but beene financial model has built on being the front door to your digital world. bet's why google wants to the gateway and wants the apps on smartphones. google is ceding that territory companies like facebook. we got a piece, it's really not thaturopean commission google's biggest threat it's facebook. it's the tech giant in china, has becomef course an advertising juggernaut. commanding a greater portion mobile ailed sale -- ad sales. to think about new
ways to secure its place in that world. >> real quick here, what is the next step here? time toe google have respond to this complaint? >> exactly. we heard from the general counsel they're looking forward working with the european commission. we know that they've been trying work together for a long time. to yea -- europe. to see if they can get to a middle ground. >> thank you so much. emily chang from "bloomberg markets" tonight on eastern time. hereg up, steve joining us on bloomberg. from bloomberg world
headquarters, good afternoon anyone, here is what we are at this hour. -- the rally hold even as folks awaken reportedly to reach a compensation deal over its clean diesel scandal. how much will this cost the company and can it rebuild its reputation? and will the european central bank extend its stimulus package yet the we hear from one former bank of england governor on the limit of monetary policy. we are one hour away from the close of trading. the fine bloomberg's julie hyman with a check on the bloomberg market desk. julie: we have a rally going on, it has booked the dow and s&p even higher.