tv Bloomberg Markets Bloomberg April 27, 2016 10:00am-11:01am EDT
bloomberg television. ♪ betty: we will take you from new york to london to san francisco in the next hour. here is what we are watching. it is decision day for the fed. a rate hike is not expected at all. investors will be closely watched for any signals on the future. falling afterres 51 consecutive quarters of sales -- sales growth comes to an end. betty: yahoo! reaching a deal with activist investor starboard value to put for new independent reference on the board. that of earth a proxy war. shares of you who are fluctuating on the news. let's head to the market desk where julie hyman has the latest, including breaking news
again on the housing market pending home sales today. >> right. we have watched all of these, this one coming in and it looks like it is better than estimated. different than some of the economic data we got today, an increase of 1.4%, and that is to half of a percent estimated by analysts. the number coming in better than estimated but not showing much lunch overall. nasdaq issingly, the down three quarters of 1%. comprising 7% of the nasdaq composite or the s&p in the dow are little changed. the other earnings news we also have out today. take a look at the groups that are on the move, energy is gaining today once again. information technology, not surprising, providing the biggest drag. to apple, a lot of different disappointments for investors. second-quarter sales down 13%. in 13ide we have seen years in the annual revenue
number sales in china sliding. a lot of areas of concern for investors. perhaps not just for apple. you look at the major averages but you have to consider all of its suppliers and the ripple effect a report like this has. it is toway to look at look at the supply chain for the company. is in the center p are we look at suppliers on the left any look at how much of the company's revenue come from apple. revenue is from apple. he look at how the shares are trading today, it is interesting not all of them are actually lower. can i wase, sears earnings that the estimates and the shares are higher by 16%. semiconductor, the german company, trading higher. bit of a mixed bag. it is always a mixed bag when you are looking at the earnings reports. other ones a couple come united technology out with
first-quarter profits that beat analyst estimates. boeing is falling short of estimates. the cash flow appears to be should -- supporting shares. little changed even after that company raised its forecast. check, ebay out with numbers and raising its sales forecast, coming out with a sales forecast above estimates. twitter is plunging after its numbers missing and chipotle continuing to show steep declines in sales. mark: stocks are rising for a second consecutive day, all about the oil price. up at theof uti highest since november. a list in the oil sector today. we're waiting for the fed, the big event, a to earnings, besides all that, moving the equity index. barclays profit falling 25% in the first quarter and posted a
larger loss in the division that holds the business is in no longer wants. revenue at the investment bank falling less than expected, probably taking some of the pressure off of ceo. he has felt pressure to even sell the investment bank. berkeley shares down by 2.75%. a busy day for earnings. what a turnaround for adidas. it has raised its full-year forecast for the second time in three months. first-quarter results beat expectations. ofsumer spending, more ahead 2016, the upcoming soccer or football tournament as we say in europe in the summer. andes are up by 9.2% today continuing the trend of oil companies beating earnings estimates, first-quarter profits, it fell by 35 to 37%, but rising production, resilient refining earnings hope it offset the slump is in the crude price, by 1.8%.
beating exxon mobil on friday. cannot wait. that he: me too. let's get first the bloomberg news. vonnie quinn has more in the newsroom. for donaldg night trump and hillary clinton. the republican front runner swept all five primaries. trump is closing in on what he needs for the nomination. he calls himself the presumptive nominee and says he does not plan to change anything about himself. mr. trump: no, i'm. i hear that, be presidential, not presidential, it is easy to be presidential. started off at 17. i am winning, it is over. as far as i'm concerned, it is over. these two guys cannot win, there is no path. why would i change? making senator ted cruz
a major announcement at 4:00 p.m. eastern today. hillary clinton won four of the five states with bernie sanders loan victory coming in rhode island. he also left of the democratic nomination now. here party members to unite in an effort to maintain the white house. all theton: underneath worries, together, we are going to come together and we are going to solve the problems. vonnie: sanders says he will continue his fight all the way to the convention in july. sentenced today in chicago in a hush money case tied to sex abuse allegations. folks in allegations he molested at least for students when coast -- coached wrestling at an illinois high school. he pleaded guilty to breaking banking laws and could get a sentence ranging from probation to six months behind bars. ceo of valeant
pharmaceuticals will tell lawmakers say he was too aggressive and made mistakes in drastically high -- hiking prices for critical medicines. this comes before the senate committee on aging and comes day -- days before the ceo is to be replaced. the committee is investigating the dramatic price increases pushed by valeant and several other drugmakers. global news 24 hours a day powered by moore the 150 news bureaus around the world. i am vonnie quinn. thank you. 2:00 p.m. today, the federal reserve will be announcing its latest monetary policy decisions. the fed is widely expected to keep rates on hold with no news conference after the announcement at all eyes will be on what is in the fed statement paired as the blackrock ceo the fednk pointed out, faces a challenge on raising rates multiple time this year. >> there are pockets of inflation especially in -- in the wage area.
there is very little inflation. we have seen an increase in from the steep lows. i do not see any evidence at this moment for inflation. i do not think it is an issue for 2016. they have essentially another seven months to determine that path. i would probably be at 25 at best this year. betty: joining us now, the chief market strategist where he helps oversee 120 $5 billion in assets. here,you agree with larry 25 at best? >> that is probably right but to follow up on his comments, there are two mitigating factors in the fed is got to be aware of them. -- more people entering the workforce could alleviate some of the wage pressures going forward.
second one is more important. we have not seen the ability of companies to pass through higher cost. a result of really pricing as opposed to input costs. that is creating a lot more of a challenge for the fed even though the most important signal, which is weighed -- wages, is starting to rise. you're not seeing broad-based inflation picking up. betty: it is almost a chicken and egg situation. aspect the fed may be watching is the earnings season. a little over one third of the way in, i want to bring in this chart, which i think kind of shows a little bit, i'm being a little dramatic air, but it is like apple versus the fed. you had apple earnings last an anticipation of bad earnings from apple. the tech stock has been dragging down the nasdaq 100 and it has been capping any gains perhaps in the s&p. it is a little bit of apple versus the fed it which do you believe?
>> it is the critical point. you do not see the companies to actually pass through. if you listen to larry's remark, pockets of wage pressure and high tech. you are not seeing the ability to go through that pricing. this is also the reason that for the last four years, a remarkable statistic, globally we have had zero earnings growth. globally, zero, fourth or years. the entire improvement in the market came from multiple expansions. -- why why the fed so the fed is so important. expansion stress to deteriorate and we will need to see earnings growth, not yet visible. stat andill borrow the keep saying it no earnings growth in the last four years. i love that. check out the chart. it shows how financial conditions in the united states have been in recent months from their lows in february. i have johnny aligned to any figure above that line showing
conditions or below that line, showing conditions relative to precrisis norms. how vulnerable are financial conditions right now? are we over the worst of earlier this year? >> i think the fed will it knowledge we have seen an improvement globally and the u.s. and financial positions. we have seen credit spreads start to narrow. is flowing andty credit creation is fairly robust outside the emerging markets. that is why think the fed statement is actually going to be, i hate to say the word irrelevant, but well anticipated. what is not is what will be the market reaction. if we start to see a significant rise in the bond, that will create tightening policy and that will be seen as broader risk assets. on the language, some are saying the fed should bring back the balance of risk clause,
omitted in january and in march, they have used nearly balanced, a term in october, to preempt the december hike. doing we need to see the balance of risk reinsert -- reasserted into the statement to show us that june is a live meeting? >> i think that is exactly right. we would probably need to see the fed go as far as that. i think they will leave themselves a little bit of room by knology improvement in the economic outlook, acknowledging improvement in isn indicators and other forward-looking measures of economic growth. but emphasizing the continuing fragility in terms of economic growth and fragility in terms of global economic conditions, therefore allowing themselves theywiggle room as approached june. grexit is also right around that time, so i am not sure they want to tighten conditions in front of that. mark: no global earnings growth in the last clutch or years.
chief market strategist. that is your new title. i love it. there is a chart there. be sure to watch our special coverage of the fed decision later, starting today at 1:00 p.m. eastern time in six clock p.m. london time right here bloomberg.com. coming up, activist star board works it out with yahoo!. we will have the latest, a new board seat, that is next. ♪
is this an earthquake here in yahoo!? development. it is somewhat of a victory particularly former a semi or insofar as she gets to keep her job at least for now. starboard was coming in guns blazing, they wanted to replace the entire board, including marissa. sayeast now, she gets to they are actively looking for a buyer, they have gotten a lot of bids. we have reported on it aggressively here. be one of theto main companies that wants to buy them. marissa gets to keep the seat on the board and keep her job for now. mark: what will her relationship be with the new independent directors to the board? >> she said very clearly that she is actively engaged in seeking a buyer. there were reports of early on that she was removed from the process.
but yahoo! and everybody we talked to close to the situation has indicated she is very committed to a very thorough process. at the same time, she has got to keep the trains running inside the company. she has got to keep people from jumping ship. she has got to remain very involved in day-to-day operations and keeping everybody at yahoo! from just kind of getting out of there. the four newnk people on the board will throw a wrench into any kind of acquisition plan? sense is no. the ceo of will also be on the committee involved in deciding who buys yahoo! and how that ends up here and you have got an investment banker on there, bank, a of deutsche former media executive, and a technologist on there. their credentials are fairly impeccable. betty: tom, thank you so much. much more ahead on bloomberg markets. -- attracting
betty: earnings remain in focus this morning. just before first quarter, b by two cents. clothingest -- missed, to deals, announcing two others. as you can see there on the chart. we are pleased to welcome back the nasdaq ceo. i know, it has been a while. does that give you more powder to make more acquisitions? >> may need to close the four, integrate them, and first off, we have to do what we set out to do. betty: what is on the horizon? earnings. record
a tepid business environment. the diversity of our business model allows us to get there. we have chosen away from cash equities and sections that have good growth to it. rewarded by that. betty: what about the ipo market? >> we had 10 ipo's. power competition had zero so we are happy that the ratio. typically 30 to 40, so it was weak. we certainly hope that the quarter gets stronger. about 120g is companies, still relatively strong. we have to see how many of them get out to just because you have 100 20 companies, does not meet all of them can get out. that was good news about the ipo we had, it did not raise exactly as they wanted, but it did come out. ipo's come out -- >> is that the by now, that they come out? >> it is progress, that we move
along. pipelines feeling a little better, cautiously optimistic. i have got to ask you about lsc and deutsche border. of course -- of course a decade ago you were interested in acquiring -- that did not happen. m&a among thether big boys, the big exchanges like yourself? think we have been a beneficiary in that we acquired ifc.- we bought that from deutsche boards. whetherly speculate that would have been available or not. i do not think it was strategic to european asset and we're very to have completed that
transaction for we hoped close on it at the end of the second quarter. mark: do you think the deal will go through and do you think there will be regulatory hurdles? >> are always regulatory hurdles with an exchange deal. this will be no different than others. i cannot speculate with any meaningful insight with respect to whether they can get through those hurdles or not, nor do i have a special insight whether ice will come into the deal. we are proud of the acquisitions we have done. record earnings in the first quarter and we are well-positioned. betty: what about ie x and the formulation of this new exchange ? you and other critics have said this would add two more complexity. more complexity. speed they will put in place? >> i would not say we are opposed to it. the thing we want to make sure of, it is a policy decision and
if the commission approves coupons, us and others will use speed bumps in our exchange operation. betty: do you think they are good for trading on the markets? introduce extraordinary complexity. when you place an order to buy 1000 shares of apple at a price, you have three dimensions to it. if speed bumps are approved, you have a fourth dimension, the time delay. buy 1000ays i want to shares of apple with 300 microsecond delay, someone else will say, 200 microsecond delay, someone will say 500. i think the question that has to who will delay? microsecond delays that -- it will be the professional trading community that will take advantage of it. in a situation, we will compete
and do well, the commission just has to make a decision. we want them to make it a decision applicable, full consideration of what might ripple from that decision. our technologists are fantastic. the easiest thing for them to do is to slow down. it is not a technological question. it is easy to slow something down but harder to speed it up. betty: it would not because he to do that. >> no. it is not a technological question. mark: structure is a big thing. we are pressed for time. what do you think can be done to improve the fairness and the transparency and the stability in the u.s. stock market? all, i would say the u.s. markets are at an all-time high with respect to the efficiency in the market we have seen transaction costs in
the market come down 90% in the last 20 years and we are proud of that. we can definitely improve upon that and we think it has to go through a re-think and how do we improve in that environment and we want to work with the commission and other stakeholders to move that a wrong -- move that along it we will be moving from a position of strength. u.s. markets working very well. good to see you. thank you very much, the ceo of the nasdaq. mark: still ahead, apple sales streak is over. fewer iphone upgrades leading to a decline in growth for the first time in 50 one quarters. that story is next. ♪
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julie hyman is at the news desk with once -- with one more. julie: the industry data showed a drawdown. it looks like it is a bigger than estimated build. weeklion barrels is the over week increase in the inventories. it looks like in particular, the ,ig hub, 7 million barrels higher than anticipated even with gasoline. of 1.6 million barrels. refinery utilization also by 1.3%. looks like a build on that -- not only in crude but in refined products. that would appear to be bearish
for oil prices. this shows a look, us the real time. you can see it is still higher by a of 1% but taking a very sharp like downward on the headlines. i will keep going through not only the inventory numbers but the production numbers of crude is important week after week. i will see what else we can find, most definitely. thank you. vonnie quinn has more in the newsroom. reports of process in venezuela as the government officers close the rest of the week. the presence of the public sector will work only on mondays and tuesdays for at least two weeks. threatening power generation as the main source of electricity. the u.s. is issuing a new warning about credible
indications of terrorist threat. seeking reports the terror groups are seeking opportunities to attack tourist destinations throughout turkey. turkey has been hit by sixto the suicide bombings since july. belgium has transferred a suspect -- subject in a terror attack to france. of renting cars and hotel rooms for the attackers. he was arrested march 18. investigators say that let other members of the cell to launch terror attacks in brussels four days later. european union president has rejected greece's request for a meeting saying euro area finance ministers should convene to resolve discriminate on the bailout program. a person familiar with the matter says he was seeking a meeting to confirm the terms of the bailout review in line with
the nation's rescue program. mark: we are one hour away from the end of the session. stocks are up for the second consecutive day and earnings continue to drive sentiment here. oil on a brent level on the wti level, highest since november. the second day of gains ahead of big news from the fed a little later. the stoxx 600 up by one third of 1%. gains in london and paris. leading today's advance. over 2% and construction companies up by over 2%. barclays, the big banking story of the day, profit falling by 25% in the first quarter, a theer lost death loss in business it no longer's -- no
longer wants. better than expected, insurers down by one point 2%. let's look at the currencies earlier today. just coming up on the highs unchanged. the euro earlier fell for the ninth day. -- sterlingg hat has turned around, the 10 year u.k. is 1.62% today and the german 10 year yield is at .29%. nasdaq as at the ever, waiting. what have you got? for the fifth day in a row. ebay sharesnasdaq, are up after the company beat first-quarter estimates and raised guidance. made more than two play dollars in revenues in the first quarter. the high-end suggests nice
sequential growth. the efforts to boost traffic are really paying off. more than 10% upside for the shares of ebay from here. the stock is bullish. the stock did move up nicely. the stock should move higher from here. how is it spilling over into the action where you are. nasdaq's egg is number waiting at this point. it is dragging. shares are plunging down the most since the beginning of the bull market. even more so, investors are concerned about the june guidance that came in well below were well below consensus, suggesting the slump
in iphone sales is like to continue. thank saying an iphone decline for the fiscal 2016 seems inevitable, something aaron called a painful reset. hasy's's plunge charges out down toward the recent lows, suggesting that could be more downside ahead for the shares of apple. mark: abigail, thank you for joining us. let's talk to an apple shareholder. betty: let's stay with apple the get more -- and get more perspective. michael holds shares -- a longtime shareholder through holland company. ok. let's talk apple. do these earnings disappoint you? >> an apple realist as well as holder. a happy holder.
times, -- i made many times my money. the recent hiatus is something i do not think goes over way overnight. i think we have another crummy corder coming up in front of us in terms of the news. i think the wailing and screaming from people who are negative on the stock has reached a crescendo. for someone to say, would you sell it here, i would not advise that. andomeone wanted to do that had a great alternative, wonderful. but over the next couple of quarters, we will get some new issue -- if that may get people excited once again. china was coming. we know it. -- crummy. we know it. betty: speaking of wailing and screaming, calls on apple, one analyst was on earlier who does have a sell rating on apple and here's what he said.
there is competition especially from chinese makers and indigenous players, etc. that is the first sticking point and the other is the dilemma has inled miserably to innovate the iteration of iphones. withtic upgrade, compared the predecessor. >> i have got one of these. i do not think at all. i have paid a lot of money for it. a lot of people have upgraded. the upgrading numbers, i do not understand, -- >> you do not understand where he's coming from. >> a lot of people have said similar things and people predicted how ugly the quarter will be. worst actingthe stocks in the universe over the last several months.
this was sell on the rumor, sell on the news. i talked before about, maybe it is not a great time to sell it if you own it, in the middle, it is possible you will get pressure. but nobody knows. next growthis the spurt going to come from? virtual reality, self driving cars, live television, what are you most excited about? >> you mentioned three areas, each of which has potential. just using exactly how you posited the question, you have options on any of those three being a success in the future ipad,me way the ipod, the and the iphone, each of them was something that people said, i am not sure people will walk around and hold things listen to music. they revolutionized it here at any one of those three. the icloud an apple music are things that are growing faster. you can have surprises to the upset.
i own a company with a fat current return which will probably increase in the condition of 10% a year, in which case, you are getting paid within increasing cash dividend to buy an option on those potential increases in success. have another company you got your eye on, earnings earlier, profit beating estimates. does this prove the theory that cable television is not debt -- dead after all? >> the quick answer is yes. it is more to the point, great management is not debt of all. the family has shown incredible prescience in where they have taken the challenge. the announcement about the acquisition is just i think incredibly smart.
with disney, think of how successful that was. dreamworks with comcast. i am delighted with the management in each turn. we talked a second ago about when things get tough with apple. when things get tough with comcast, they got through it. --ty: my kids love concrete kung fu panda. let's talk exxon. that is one of your big holdings. why do you want to hold onto exxon? they just lost -- their aaa credit rating. >> in the stock went up. what is the news? the rating agencies, the price of oil is low and it may stay low for a while. that is right. once again, then at schmidt. location, location, location in real estate. every time they have come through an incredibly ugly action for the underlying product, it is crude. they have been able to make it an opportunity and over the next
several years, shareholders have benefited enormously. each of the three companies were tired of management that continue to surprise when they were challenged. exxon is doing exactly that -- >> you do not think the dividend is in danger? absolutely not. they will cut their dividends and it burns way more than a dividends. betty: ok, michael, good to see you. up, the growing black market for virtual weapons and how it is turning some teenage video gamers into real --d -- real-world ♪
mark: i am mark barton with betty liu in london. busiest selling season. home sales growing more than expected in march. up 1.5% to a 10 month high. recalling nearly 200-2000 pickup , suvs's, and cars in north america. the reason the automatic transmission can suddenly downshift, the 2011 and 2012 f1 50 and the 2012 expedition mustang and navigator. the automaker says the problem caused three crashes but no injuries. also recalling more than 81,000 explorer suv's to fix a rear suspension problem. in love says hedge funds are
the company says the increasing complexity of markets over the past few months is here to stay. is the latest bloomberg business flash. have you got your virtual weapon at the ready? betty: that is matt miller love this stuff. at least one game maker is taking this to a whole new level. a virtual rep -- weapon bizarre turns a teenager. we're joined now. .xplain what this is about could counterstrike is a game in which two teams are basically in
an area and they are just trying to shoot one another. it is a game that is good for competitive players, people who play against their friends. it is also a really popular game for the professional videogame circuit. encouragings this kids to gamble? you can getme, virtual weapons or declarations for your weapon. these are called skin. you can get them directly to the video game or you can trade them with friends or people you meet online and including trading them for cash. is, it isally happens a convoluted process but you can turn cash into the weapons and turn the left is -- the weapons back into cash. people have them and they take them to the website and say, i
will wager this gun or this knife that my favorite counterstrike professional team will win and someone else will take the bet and whoever wins gets all the weapons. that you can gamble like and there is a way to movies things back and forth to other types of currency, they serve as kind of like poker chips at a casino. mark: is this unregulated? >> absolutely. it is a bit of a convoluted process. it happens kind of below the radar screen of any regulators at this point. mark: what does it mean for you sports? -- e-sports? it is growing in popularity. what does it mean for that? >> like many other sports, there is an interest in gambling on them. evolutionee a natural
of some way to gamble. there are some companies interested in setting up regular -- regulated gambling or they are a little nervous about this whole industry. it is an issue of concern for some people within the industry. thank you so much, josh. you can read his article in bloomberg's this week. mark: still ahead -- bloomberg businessweek. mark: still ahead, you may have .een them in today's pursuit we are joined in how he is building out the business of wine club. wine, green reflections in the edge, medium cost ration of color. almost coming out of a lime candy and lime zest. >> apples.
'srk: identifying the wine region it came from and the year it was made. masts only 213 worldwide, and the cofounder of the wine club. he joins us now from san francisco. thank you for joining us. i have got to ask you about being this master. what does it take to get through this exam? >> a lot of stress and about a decade of study and a little luck once you get there. i feel blessed to have gotten through. i have dozens of friends who have attempted six or seven or eight times, putting their families on hold and never passing. it comes down to a five or 10% pass rate once you spent five
years just to get the invite to the test. about it. us what does it involve and how much does it cost and how did you come up with the idea? is a free subscription service. a lot of people want a curated style and i passed on my exam and might business partner had just graduated with a wine business. he called me and he had an idea. he wanted to use my brand to market nationwide and find small producers around the world to you could subscribe for free and every day, about 9:00 a.m. until 10:00, you get an e-mail that relates to a story about the history of the place, the type, food and wine pairing knowledge, basically everything you would want to know. it people with italy and france or germany and south africa, wherever the wind might be, usually focused on organic wines. betty: what kind of response are
you getting from customers? are they clicking and buying the wine? quickly.ttle too the challenge is finding enough great wines around the world. most are 50 to one hundred cases coming to america and we try to get as much as we can. the challenge has been selling that to quickly and having customers e-mail us. niche in the market, offering very small production wise that you will not see more than a place like the french laundry or danielle in new york, and a few high-end retailers. that is our focus. otherwiseave seen club speared what is different about yours than the others that have come up? is it because of you? ian: i guess so. i am the differentiator. i travel around the world and find small production wise where most wine clubs are focus on larger production, we are focused on really small farm to table experience. about price to
quality. we have 21 clubs. one is called the wine six, where we send six bottles of wine wrapped in paper and it is 600 $99 a month including shipping and we teach you how to wine taste. another club we offer is six wines we sent to you, a lot of people do not have time to read the five minute every day so we select them for you. the main business is the daily offer. you could sign up for free and click the link at the top for free sign up. are allowed to take one bottle of wine on a desert island where you will stay an extended time. what would the bottle of wine be? no expense spared? ian: probably 1985 -- that is a tough question. if there is ice involved, it all depends if i have a refrigerator. mark: tell us what they cost? ian: roughly $25,000.
another will probably be roughly 1500 thousand dollars -- $1500. that is your gift. betty: i will hold you to that. mark: your gift to en, not my gift to you. betty: thank you for the clarification. ian. thank you, betty: you are still on the hook. mark: i lost out on that one. coming up, rapid swings in global markets. expected to continue. see our interview next. don't miss it. ♪
european close on "bloomberg markets." we take you from new york to london in the next hour. estimates, the firm managing to avoid any misconduct charges. crude rose above $45 a barrel for the first time since november this morning. could it signaled the worst is over for oil? valeanhe spotlight is on t today. bill ackman set to testify in washington and answer any questions on drug pricing. what can we expect? betty: i want to mention that oil took a dive after those inventory