tv Bloomberg Go Bloomberg April 28, 2016 7:00am-10:01am EDT
a surprise profit. >> bold move. that is what marks a good book inplanning after an increase revenue. what could be next for the social media giant? david: welcome to bloomberg . here is jonathan ferro and carol massar. i'm excited to see you back. i was afraid we scared you off. carol: we have got a great lineup of guests on the program this thursday. we kick it off with mark fields 's. matt, those ford earnings. matt: adjusted eps of 68 cents. ford beating by a longshot there. we had revenue of $35.2 billion.
in line with the estimate of $35.7 billion. the board is affirming all 2016 guidance. the incredible thing is north american operating margin -- 12.9%. global margin 9.8%. those are records for ford. they may be records in the auto industry in general. i am going to look through this. there is so much stock news. jon: it is very much risk off. let's get you up to speed on what is happening in global markets. futures in the u.s., negative. negative 16 on the s&p. the nikkei to 25 deep in the red. the boj does nothing. here is what happened to dollar-yen. hyeading much lower. down as much as three percentage point. i can tell you where it is on my
screen. dollar-yen at 108.05. let's cross over to matt miller. matt: we are getting more earnings out. a slew2 of companies. 181 of the s&p 500 companies are coming out this week. conoco phillips with an adjusted loss of 95 cents per share. i want to also point out viacom has come o ut. viacom is looking like 76 cents for an adjusted eps. we were looking for 72 cents. can i point out something with my e.a. screen? ford's earnings, net income, was billion. that is more than double what they earned the last quarter. i've adjusted all the s&p 500 companies that reported so far by growth. the only company that has had better growth than that in profits without cutting the top
line growth is facebook. out of all the s&p 500 companies, facebook and ford as far as profit growth. that is about as new economy an old economy is you can get. david: mark fields, you are about to talk to him. mark fields was to have a stink about ford as a tech company. carol: are they going to work with google or apple to produce a car? matt: he assumes apple is making a card. siliconeen to ford's valley office which is big and bustling. let me continue on with company news because there is so much going on. it's almost like a monday. abbott labs is going to buy st. $25 billion. it could be a 37% premium, i believe. you are seeing st. jude move up.
we also have, we have a ton of deals going on today. let's kick it over. sanofe is going to buy me tivation. the deal news continues to roll in. let me get to morning's news. facebook, we were talking about beating on every level. wants to bring up a new class of stock to help the company, help him to be able to make moves he wants to, be more independent. facebook stock up 10%. gibig gains in facebook. i am going to dig through the company newsprint the market is going to be awesome today. carol: lots going on. we cannot forget about the bank of japan. they have decided to stay the course, keeping its monetary policy unchanged. leading to an immediate search
in the japanese yen. as consumer prices drop more than expected last month. enda curran is joining us from hong kong. we did have the nikkei selloff. the yen also jumping. what is the main message we should take away from what the bank of japan did today? certainlyrnor kuroda did not disappoint today. you mentioned the weak inflation numbers. bank of japan meeting, the economic backdrop remains quite tepid. growth is scraping along the bottom. inflation is not going anywhere anytime soon. there is a sense that all the conditions are coming together for policymakers to act. that is why there was such a sense of anticipation but among half the people in our survey that the bank would act. of course, they didn't. goingor kuroda says he's to see how the negative rates he
introduced in january washers through the economy. no censure of -- sense of urgency. see this asd we being a smart move, because there has been so many questions about negative interest rates and whether they will have any significant impact, particular in a country like japan? should we see it as him being smart and patient to see how the current moves are having an impact? enda: for sure. kuroda does have a track record of waiting to see how policy changes wash through the economy. he's been consistent. he is defending negative rates and saying they are bringing down borrowing costs and will help growth. so. he's not signaling panic. but at the same time, there is a feeling the bank of japan need to do something to try and inch closer towards its 2% inflation rate. there is also a feeling the government needs to come in and do more on the reform side of
things. the kind of the sense that japan is in a dangerous rut. kuroda has once again shocked america. so, maybe he is pulled off one surprise to many because some of the patience in the economist is beginning to wear a little t hin. mohamed el-erian suggesting this is very much about turning the pressure on abe. this is a message for abe? economists are saying that today that perhaps he is handing off to baton to the government and putting the onus back on abe to do more on the spending front. perhaps ahead of the g-7. they have so much more to do on the structural side. let's remember, kuroda said today that they could cut further if they need to. the bank of japan is still in the game. carol: proving that central
bankers can surprise occasionally. enda curran joining us from hong kong. inaction from had the fed. a lot of people thought the bank of japan would act. and the fed wouldn't. doher case, they did not much. now we have morgan stanley's fixed income portfolio manager. my question is, are both those central banks putting her pencils on the desk and saying we have done what we can do. lot think we are learning a and we have to put this into context in terms of the policy reaction functions. how are central banks reacting to the current economic environment right now? didfact that the boj nothing and the fed did not do very much that is a big decision to do nothing. what we're seeing is in terms of policy reaction fu nction, we are seeing the boj
moving away from negative interest rates. i do think they are trying to hand it off for more fiscal policy. i look at this as a case of the dog that didn't bark. what we are learning at this everyis that the fed had opportunity to retract many of its statements it made in march. we like the way things are going. we're going to keep going in that direction. david: i notice the vote of the boj was 7-2. the dissenter said they would go back for positive numbers. are they saying they made a mistake? jim: i think they are saying they made a mistake. i do not know very many people outside of the academic and central-bank world that think that negative interest rate is a good idea. i think negative interest rates tell savers they need to save more and spend less. i think it is a big mistake. central bankers are realizing that but they have to hand the baton off to somebody else. i think it is true that maybe it goes to abe. what about fiscal policy and fiscal stimulus? the u.s. can learn a lot about
that, too. carol: here they go, they swing the other way. matt: i wanted to show you how surprised the investment community was by this. it was a major shock, jon ferro. carol: he's going to fight with you. matt: this is global investors buying into the japanese stock market. we had the biggest inflows from foreign money in the year because they expected the bank of japan to move. the currency is even more interesting. this is one day percentage moves in the yen. is theve years, today biggest move we have seen in over five years. in fact, it is actually six years. the run up to this on the way in was the hefty us we have seen in five years, too. so, it is just amazing how much the market expected, and how disappointed the market got. jon: i'm more surprised that the
dollar-yen moves three percentage points. that is a huge move. it is the magnitude of the move that i think we need to talk about. matt: look at the magnitude of the move on friday. jon: it is the market that is feeding itself, overstretched on the way down. look, yen strengthens on a meeting, that means the boj. then an overshoot and an undershoot again. about the reaction -- the market has got to reset. david: can i go out on a limb and say i think the market is getting the initial reaction wrong? jim: the fact that interest rates are saying low in the u.s. and abe is not moving to negative interest rates. in february, the market sold off a lot to her the fact he steps back is a negative sign for this does not make any sense to me. right now investors need to settle down and they have to say, look, interest rates are going to stay stable. central bank's are more supportive of asset support. look at what is happening in the markets.
high-yield, of 6%. high investment grade, up 5%. local markets up 11%. external debt up 6.5%. this is not a bad outcome. david: jim has a lot more to say. he'll stay with us. vonnie: donald trump says the major theme of his presidency would be america first. the republican presidential front runner outlined what foreign policy would be like under a trump administration. my foreign policy will always put the interest of the american people and american security above all. has to be first. has to be. that will be the foundation of every single decision that i will make. also said he
would re-examine whether international alliances serve u.s. interests. another unusual twist in a presidential campaign that has a number of them. ceocruz has named former hp carly fiorina to be his running mate. keep in mind, cruz cannot become the party's nominee unless he's voted in at the convention. north korea may have failed in its attempt to fire a mid range ballistic missile today. the botched launch came a week before kim jong-un's regime holds its first really parting congress -- ruling parting congress -- party congress and 36 years. there are doubts about his accuracy. global news powered by a 2400 journals in 150 news bureaus around the world. jon: a non-decision from the boj. a move in the fx market. ford showing a record profit and record margin. the ceo mark fields joins this
q1 earningsreleased that charles tantalus estimates. the company's trading 3% higher. joining us live from ford's world headquarters is mark fields, the ceo. thanks very much. i have to say the profit announcement just blew us away here. more than doubled net profits. you beat the street by 20 cents, 40%. margins, we were thinking the 9.8%, might be an industry
record for global margins. what is behind all of this? mark: we have had a great start to the year. and i think it keeps us on track for another outstanding year. what is behind this is obviously we grew our top line and our bottom line, based on a product line up and the efforts of our team around the world. we had tremendous performance across our portfolio of businesses. not only a record profit in margin in north america but our best quarter since 2008 in europe, where we earned over $400 million. we are reaffirming our guidance to have a year that is as good better than our record year last year and continued strength and continued strength into 2017. that is the formula we are using. matt: how much of this is a truck? yesterday i parked my rapter next to an excursion. man, people are so happy. the gas prices are low. get anwe cannot
excursion right now. maybe you will come back with that. how much of is the big suv's and tracks that are selling so well? mark: clearly is is important part of our top ability but when you look across our product lineup and across the globe, we've had a very, very good performance across our cars, utilities and our tracks. we are seeing this phenomenon literally around the world of people moving from passenger cars to small and medium and large sized utilities. we are uniquely positioned to continue our growth, given not only the product lineup and the brand image we have today, but also the products we have in our pipeline. we are going to continue to say focused on that product lineup and making sure that we perform across the range. matt: you wowed the new york auto show with the lincoln navigator concept. i hope that means we see a ford expedition, a new expedition coming as well. what about a bronco?
have you thought about bringing back that nameplate that people miss so much? that i haven't gotten question in the last two days. as we have announced before, we are going to be introducing four new segments we are not currently in. stay tuned for that. matt: how about going the other direction? even with americans buying these big tracks, there is so much excitement about the tesla model 3. wnr rival comingr out with a new bolt. mark: even are electrified vehicles when you look at plug-in hybrid and full hybrid vehicles, we are the number two seller of electrified vehicles. and the number one seller of plug-in hybrids. but we are also making sure we are planning for the future. we are investing another $4.5
billion electrified vehicles between now and the end of the decade. so we get to the end of the the decade, 40% of our nameplates will be electrified. matt: well you have a 200 mile range electric vehicle? mark: our approach is to always have a product that is best in class or among the best in terms of competitiveness. allegedthe case of five, for example, we have our focus in the marketplace right now which has a range of 100 miles. in that price point, is extremely competitive. what you can expect from us, are, going forward is we going to be a competitive across the range in terms of range, quality, cost as we spend this $4.5 billion. matt: record quarter for ford. the one company in the u.s. that did not need a bailout to survive. and now they are doing quite well. thank you very much. carol: bronco?
matt: i'm hoping for a bronco. david: get that bronco going, please? it is always fun to talk to a c eo on a day like today. carol: he talks about this brought a way of products. the f-150 is really the big driver still. matt: it is a huge driver of profits and sales as well. it is the number one selling, the number one selling vehicle and america and has been for 37 years. david: how long ago was it? they took a big gamble on redoing it. years ago they started reach ruling, shutting down factories, to build this new aluminum body truck that saves 800 pounds. david: a lot of people had doubts. matt: it was a big investment that paid off quite well in the end. jonathan: so many deals are coming up on this program, a big deal. jude medical st.
matt: another deal. -- abbvie to acquire will pay $2 million in cash for stem centrix. it looks like we have got $50 billion worth of deals already today. i'm going to give your roundup throughout the program. carol: thank you. we just had breaking news want to go back to. abbott labs buying st. jude medical. that deal valued at $25 million. a lot of deals going on in this space. what does it tell you about these particular deals and what
they are paying? >> yeah, you know, first of all these are two massive deals in the health care space that are not related to each other, but you do have the continued activity in health care we have seen over the last two years of record transactions going on. bvie trying on, ab to get away from their biggest drug, humira, that is almost 60% of the company's revenue. they have been making this big push into cancer therapy. last year they did the deal with pharmacyclics. thett and st. jude, on other hand, different reason for the transaction. medical devices have been sucking costs. hospital groups and her customers are getting bigger. if you're someone that makes pacemakers, other cardiac devices like these two companies then you need to cut costs out of your company's. do these mergers that are going to create scale and go to your customers and compete against the other folks with a lower cost.
they are going to be a leader in their category. number one or number two in most of the major places where they operate right now. they have sitting on cash. we were waiting to see what it was they were going to acquire. carol: thank you so much. david: coming up next, facebook reported sales and profits while past what was estimated. it was something that mark theerberg -- said on earnings call that was the real news. coming up on bloomberg . ♪
that is the leading loser. let's get to the board for you. is driven by the doj headline doing nothing. it indicated the 25 was closing down 3.5%. you can see it across the board. the futures are down by 155 points. the currency pair that everybody is looking at is shining right red. the yen is 1081 had the biggest one-day drop in five years down by over 3%. the rally in the bond market has treasury yields down by two basis point. so, big moves in this market. let's go to vonnie quinn. bonnie: thank you. the open seat on the u.s. supreme court will remain vacant until after the election. the media blitz by the white house has failed to crack
republican opposition. presidency said the filled by the death of antonin scalia a. be layingders will off hundreds of paid campaign workers. he is falling further behind hillary clinton. he is bound to redirect his remaining resources to california. is willing to take in 10,000 refugees. so far, only a few more than 200 arise. portugal has a coronation in europe. a bigger reason may be the slow economy. portugal's rate is almost three times that of germany. that may hurt the country's appeal. global news, 24 hours a day. i am vonnie quinn. facebook reported earnings after the closing bell. mark zuckerberg taking the opportunity with good news for a new class of stock.
here jobless explain that is david fitzpatrick. he is joining us now. we had the endorsement strategy jim carroll. we kick it off with you. to thatre reacting positive earnings report. 52% increase in revenue. this company cannot seem to do anything wrong. >> they gained 210 million users. looks good at this point. it is astonishing. especially compared to what other tech companies are doing now. that the stock change is something they have had in their back pocket. they were waiting for a really good quarter. it does have a complication that david was mentioning.
a lot of traditional thinkers would think this was a bad thing. >> one of things that struck me was market share. it was up 10-12% in the global digital advertising. david: it is important as the whole world moves to digital advertising. google was coming down. there almost three times the size. >> is facebook the next google? will it be the most dominant digital advertising platform? my guess is that over time it will. google has been a phenomenal company doing a lot of creative things. they are not on the way down. powerfulook has a more digital business. that is because it is better targeted in terms of its knowledge of individuals. that is the significant difference.
that: the difference is they have several arrows in the quiver. they are bringing on instagram. they have other things that people have not even started to monetize. >> they have billions of users. fluidasically have revenue. karen: facebook -- carol: acquisitions did not do well for yahoo!. >> you increase your user base. i think that facebook has shown that we're a creative company that has done a lot of the right things. the stock is set to open ahead of the high. here is the have result with the facebook stocks
reaction. get a huge reaction in the past quarter that you gotten the fourth quarter. a massive jump here. what i would point out is that this company is trading 40 times future estimated earnings. we 3-4 times the valuation of apple. revenues are growing like crazy. as john pointed out, we have a chart. ecb 1101. it should facebook revenue versus twitter. maybe, it is not fair to pick on twitter. they have billions of dollars in cash equivalents. that is one app. are they going to be making acquisitions? how do these guys grow? david: when you look at the
businesses, one of them grew organically. one of them they bought. they can do both. i think it will make more acquisitions. they have showed what they can do with oculus. they have big moves that were criticized at the time. they pay off wonderfully. more about this from the standpoint of the tech sector. now, all of a sudden, facebook is this outlier. is it a tale of two different kinds of companies? clerks we can broad in that out look atntire market we the s&p 500 index. then, you look at the average median stock. it is still struggling and down on the year to date races. there are only couple of big companies. like last year. i think that creates more idiosyncratic risk in the
market. look at the market and we hear it tonus a lot of things about the market. stilloader index is negative. it is town you that we have an economy that is struggling to get 2% growth on the gdp basis. yes, there are big winners. they are carrying the day and creating a new narrative in the market. carol: we have to ask about this new stock. i am an investor on facebook here at what will it mean for me? >> you have the same partial ownership from before. does is that it basically allows a zuckerberg to give away his money over time, which he said he will do without diluting his control. because, two thirds of his ownership will now be in the shop. it does not matter to give away. it also allows him to do what he wants to do. >> they control the voting power at the board. you know, people would never fault him for that.
the company has almost created a cold around the guy. so, nobody will come pain -- complain about him having power. carol: thank you. john: keeping on earnings. deutsche bank has a form on the rise. they predicted a lost almost half a billion euros. we're joined now from london. let's get a look at these numbers. are more fundamentally the size of turnout. with stock in a company that has been hammered over the last few years. >> it is a tiny bit of both. i think a lot of the expectation games are being played here. the banks to not have a lot to do with the trading and investment bank. so, plus, the ceo is warning. more on the index
patient game with a real results delivery. john: the cfo is looking to accelerate cost cutting measures. you expect both sides of the atlantic for the revenue environment to remain tough? to get to that target? do they need to increase cost cuts? here that isar yet what a lot of analysts and investors clearly want. the revenue environment is poor this year. they also had an easing on the capital side. throughthat goes managing a liability. there could be some kind of cushion absorbing the plane. yes, there will be painful cuts ahead. most likely whether that will move through additional targets. the message i keep hearing again and again is to look at
the banks. what they're doing is great for credit. i have not heard a story of growth. you might give me an upside, but where's the story of growth? the economy will not do well are whatever the banks do well. banks are heavily regulated. have lots of reserves and lots of crack -- cash. the bonds look good. unless you really get credit creation, credit creation is making it profitable for the banks. there are two ways to go. you either become more productive, or you take out credit creation. so, particularly with the banks, many banks are trading at your .7 -- five. i think that is low. they could be a system of tepid growth.
sub 2% growth. what we are really saying is that where's the growth going to come from? will come from banks and credit sections go that is why there is such a discount. that is what banks are struggling. >> we are sure. even on the other side of the mid-atlantic, we have had a lot of regulations. that bank specifically come a lot of the upside is because their legal costs are down. they are still working through a lot of the lawsuits. we are working through cost-cutting as we have seen. you know, the regulatory environment, we are all for smart regulation. we not want to repeat the crisis. we also need to recognize that unless you get credit creation, you will not get the kind of growth you need to support the broad economy. i think that is what investors are looking at. it is very uncertain. we have regulations to some
degree that are little bit murky. john: thank you. if you want to follow the commentary, you can follow it the bloomberg terminal. you mighting up, think of it as macgraw. today, he is been joining us to talk ratings with the future company. met: sale gene in need johnson are down. they'll gene lower in the profit guidance. they have lower sales. that is because of the exchange rate. mead johnson topping estimates on both the top and bottom line. reaffirming its outlook as well. bristol buyers are reporting earnings. it is raising the forecast for the year. we will right back with more bloomberg go.
matt i'm here in the green room. coming up, sanford graduate school of business, former head of the council of economic advisors for the white house. bonnie: here's your latest business flash. the takeover in the medical device industry has heart device maker sinking for medical. the price is $25 billion in cash. makers have been debating to get bargaining power. saying they are sworn into market trading. for discussion in on america's love for pickup. they posted record profit. sales for the four explorer suv were up 39%. that helped offset demand in south america.
, they are down 1%. and, luxury hotels in london are having the first work since 2009. the most expensive hotels will open for the first few months of the year. , terrore reasons attacks in paris and brussels. , andmic turmoil and russia the chance that the u.k. may leave the european union. matt: we are breaking news. ups earnings are out. that is 13% growth for the same quarter last year. it beat the dollar 22 per share that analysts had forecast it. talking about its full-year forecast. revenue growth will slow. lotwill hear the store a because of the volatility we have seen. also because it had lower fuel surcharges. they have the drop in the oil price hurting ups.
even though, you'd expect it would help them. beating estimates and beating the year-end profits. mcgraw-hill financials has changed s&p mobile. of the shift towards benchmark ratings. they had and i percent revenue drop. doug peterson.is he is the president and ceo. welcome to bloomberg go. let's start with his name change. you cannot just change the name of the company. why do you change the name? doug: this is a three-year strategy. we narrow the focus of the company. we look at all the into related businesses. sir markets are the way people can make decisions for the entire company. community could have rate funds and hospital lows. ,hen you put all that together would have the portfolio that is more concentrated on data and
benchmark ratings. this is the perfect time to change that. david: take us are that portfolio. most of us will know you through ratings. doug: that is very important for the anchor of our business. we also have market intelligence. this is the common nation of capital iq. we serve with over 130 million points. jones indexw launched in 1882. thousand transportation index. literally have hundreds of thousands of these, one that you may publish all day. then come up with have another does a vision -- division called plaques. that is also 100 years old. david: of those, we have ratings. what percentage is that of your revenue? douglass: 50%. david: half. doug: half.
david: that was a tough quarter for 2016. because dead issues were down. how much were you hurt by that? .: during the first quarter, our revenues were down 9% in the business. we have recurring fees and nonrecurring these. overall, the position in the market was actually down a lot. the ratings were down. some asset classes like high-yield when over 60%. there have been many factors which have impacted that. the volatility in china. the oil stock volatility. uncertainty about interest rates. you saw that janet yellen came out saying that they were going to have interest rates. these are things that have been impacting that. in terms of our business, we have 2% for the total year decline in issuance. david: that is for the whole year?
doug correct. we looking very as factors to protect the issuance. we look at what of the maturity schedules coming up? we can go 10 years ago, three years ago seven years ago. we have certain assumptions about the percentage at 50 to 70% of refinancing will take place. we look at economic growth. we look at what is happening with any clones that might go to the capital market. when you look right now, there is a very important trend with a large institutions raising debt for the total loss of capital. that is another trend that we think will be driving a lot of these issues. david: talk about these issues were you see them in the credit cycle. you have a particular viewpoint of the index. i think the s&p has been putting people on watch or en garde four times as much as they have been upgrading people. that is for this quarter.
does that tell us something about where we are the credit cycle? doug: there are a couple of indicators. one of them is the actual default. homely copies have gone into default? we're at 51 for the year we are at 37. it is pacing well have last year. it is not wear was in 2007. can also see that there are certain factors particularly in the energy space. we have gas of my needs and metal. attention toy earnings. for example, ibm is something you're taking a look at because of a decline in earnings. doug: i cannot comment about that specifically. we look specifically at earnings and how earnings translate into capital. and how to use that liquidity. , they have to pull
different lovers. much of it. bottom line. how do they employ the capital to pay dividends or buy back stock? there is a decision that all companies make about the capital they hold. about regulations they want to have him and we see leverage has been going up. that has been one of the trends we're watching. david: i know you need to get down and ring a bell. s&p global, thank you for joining us. market isticket details of that next. they are beating expectations. they will join us in the next couple of hours.
currency is down some platforms by 20%. it has caused a disruptive pricing. it is down 2.6%. they will keep rates unchanged. matt miller has the breakdown. matt: here's the chart from bloomberg news. it shows that on three of the biggest platforms in the world, we're talking about job cap. volumes dropseen 538 billion from 600 69 billion just one year ago. and, of course, regulation has a lot to do with this drop. we are not sure if this has to do with the over market. this is a slice of that. that is located in london. matt: i want to highlight gm. it is something we use a lot behind the scenes here.
it allowses is that you to look across active classes. today, we have been talking about this gurney. move by theocking yen up 3%. stronger by 3%. that is over three standard deviations. and does not just slice things up by the percentage move. it just goes to show you how big that move actually is. coming up, jobless claims are coming from the school of business. do not forget them away have a lot of deals going on during this thursday.
corolla holds policy study. david: this hour, the first quarter u.s. gdp. how low will it go? david: i'm here with jonathan and carol. carol: great to be back. we have lots of news. john: a lot of earnings coming across today. they will keep on coming. mastercard is out with earnings. $.86. the estimate was for $.85. mastercard is beating the streets. have mastercard revenue at 2.4 5 billion. 2.38the estimates of billion. so, mastercard was meeting with
operating margins of 55.1%. keep in mind, this is a low-volume premarket trade. right now, it is down 2.6%. john: the priceline ceo resigns. following professional conduct issues. that is crossing us now. there was a personal conduct issue. ruslanceline ceo darren resigned. we will have more on that. let's get you up to speed. here's her scorecard. equity across the planet. equity in japan closing deep in the red overnight. of the board, i can tell you why very quickly. the yen is down to 10820. at one point, the biggest drop since 2010. there is market reaction clear to see. treasuries are rallying.
yields are down to 1.84%. there are little bit lower. their dell through 21 said. we have some stocks to get through as well. matt: they are resigning from the ceo of priceline. the mayor said the resigned following an investigation from independent board of investors, the circumstances regarding the personal relationship that he had with an employee of the company it was not under his direct supervision. we get a lot more out of this story as the program goes on. as the day goes on. it is always down when you get this kind of headline. i think the chair has been announced as the interim ceo. that is important. i'm not sure if that is what people will focus on. that is what they say.
that does not seem to have mattered in the past. i will not get into it until we get more details. i will hold myself act. but, i am looking forward to those. let's check out some of the stocks that announced earnings. we talked about facebook blowing away the expectation. was up 350 6%. facebook shares up 10%. massive gains through the record. logged ono has facebook today is a happy person. especially people who got at the ipo. and, they suffered through the six-month time. they thought how can they not monetize one billion people? they're doing it well now. also come with talked about paypal come out with first-quarter revenue. they beat the street's estimate. paypal is doing well.
the market is up 1.6%. horse, the company was bought by ebay. which, two years ago, ebay said we are not sure if they are ready. the streets had anticipated. ups earnings also doing better than estimates. here, you.s. result, can see ups gain 4/10 of 1% in the premarket. ton of earnings out. as i said, 181 companies out of the s&p 500 coming out this week. today, we have the two biggest jumps a profit. a told about facebook now. profit is up. ford's net profit is up 100%. more than doubling those two companies being the top gainer as far as profit gains. that companies that did not cut their top line. an amazing story. new economy, old economy.
carol: we have a lot on the earnings front of the deals front. let's head first word news with vonnie quinn. bynie: we have been greeted the heart device medical or the price is $25 billion in cash and stock. device makers have been consolidating to get bargaining with hospitals. buy donatorseed to for centuries. they will $5.8 billion. centrex investors could get another $4 billion, if those milestones are achieved. they're trying to go through the top-selling drug. that made an unsolicited nine point $3 billion. the company makes treatments for heart cure cancers. have a system growth. global news 24 hours per day. i am vonnie quinn. david.
david: the bank of japan decided to hold steady. they yuan is surge the most. and, equities around the world. chris maguire, phalanx capital cios in chicago. the heavily messaged bank has gone there for many years. former chairman of 87 institute. chris, let's start with you. when i looked at this this morning, i asked is this the thing recanted do anything more or the bank is here. we have other people to step up. or, is this one of the things where we wait while? >> this is a crowded trade. this post 3% in seconds.
it shows that all of us and the west were expect a great deal. yet, i think what we really have to wait and's the. i will probably happen later in the year. they do not know what to do now. it is very disappointing for all market participants. david: what does mr. all they do today? pressure and say i have the voters that are sitting in japan. his approval rating will fall. people have even more negative sentiments today, because they all will covet saw they have less money in their account because stock markets fell 5%. is push coronado in this japanese system. they're all scratch each other's back. he will push them up through
some kind of activity. matt: i've a chart where you can see the yen over the last five years. most importantly, what you see the is a long position, in short position for funds out there. right now, even though they have shown a lot of weakness on friday. we still have a lot of long positions in the yen. fall?ch further can it can you see any resistance. >> a lot of people think one of five will be the strong point. japan inc. would much prefer the end somewhere in the range of 150-125. they aretting a report really extreme.
it does not like 120 either. we're in this place where there is no real sweet spot. they cannot just be sitting here doing even more. on your point, we have a sentimental drive. why be invested at all? >> i will tell you, i started the market when it was 22000 and early 90's. what i have learned is that did not expect japan to go up. whether the demographics that we talk about all the time. population, the fact that they did not seem to be able to their way out. foreigners around the world jumped up saying japan is sort of their issues. we have seen now that it certainly did not help. how sensitive this market can be
when urine is the world's currency reserve. that does not work well. david: the markets may have been surprised this morning. with yesterday. essentially, we have gone as far as we can with monetary policy. statements a broader about what the monetary policy can do? >> i would tend to share letters perception. ishink even the governor and migrating slowly. he will realize there is only so much that monetary policy can do. he also may be waiting for the way drowned. there have been some indications that wages are moving up.
i think is somewhat hopeful. i was there three weeks ago. i saw a lot of senior officials. honest, i think we policya rod or monetary with the u.s., japan, and europe have approach to reach their limits. policy makers will have to step back and engage in some rethinking and about how they support growth. carol: after the policymakers to actually do something. they do not seem to do much. mark: we have seen a lot of speeches coming out from the world same need to break up that policy. he cannot possibly thought that they are only using one arrow. u.s. david will you do.
will the next round of the view team. but i think as much choice on the rock. he also take a hard look at what can be done. afraid thatot, i am there is nothing we can do. his capital management. you we will be happy for you to be here. carol: we will talk about deutsche bank. it is the best on european lenders. shares of the bank rising on the news. michael moore's in london. investors are digesting it. what are the key takeaways here? they are little bit relieved. is not as bad as it could've
been. thatey take away here is they may have more time to build up a capital. they have indicated that regulators may find those takes off the likelihood that they'll have to pass investors with an equity rate. this is major for the shares. i think that has been a point of relief for investors. also, with trading while down is not as bad. in terms of comparison from the u.s. banks, how did a fair? >> on the tray inside they were down a little more on the u.s. banks. so, they held up recently well.
they did not have any major league major legal charges. it is a consistent theme for them. that helped get them to their profit. i have to run. thank you so much. david: coming up, representatives for international representatives may have reportedly made important progress this morning. there is no better man to discuss that with then charles salah rock.
john: this is bloomberg go. earlier, authorities of left athens with a newfound bailout discussion. discussing important progress. . said it with a smile i feel like the conversation where about to have come we could have any point in time. the former ceo of the institute of international finance here with us. it is the biggest sovereign debt restructuring in history. it is a short question. what would it take to finish this? take germany,will the imf, and greece stepping back and realizing the mental strategy is not going to work. this strategy focused on the continuing running of the primary surplus budget.
they are simply not allowing them to gain the breathing space a need. at the end of the day, there is no doubt that europe will have to deal with what the private sector did two years ago. and is restructuring reducing the amount of outstanding debt that is on the balance sheet. expect them toot distill. to show tremendous vigor on some of these reforms. you raise a difficult question. they were from the private to the official sector. they do not want to take the cut. but, they do not want because themselves. >> the need to get back in the game. they have been using european funds. do not think this is the role of the imf.
i think they want to continue to be actively engaged. also as a lender to greece. the fact is that greece needs some reading space to be able to rekindle its energy. how much breathing space can we give them? they are so intertwined with their history. how long will it take for greece to have a sustainable, economic equation? i think some of the problems in the greek economy are deep-seated. the cultural tendency to avoid paying taxes i'm back to the ottomans. make this sound like an intergenerational problem, but come in reality, there is no quick fix to the economic problem. what they need to do is hold the greens to a steady but realistic course of structural reform.
that, they will regain confidence. we do not need the problem to be done tomorrow. i'm afraid that the fiscal policy with germany, and the imf are left in an endless cycle of underemployment and underinvestment. point, the society is stretched so that i'm afraid we will have more disruption. more societal disruption. david: typically, they're talking about restructuring in debt. you have merkel. who will have to give an. --? i try to avoid getting into personality.
>> i have worked closely with them all. the reality is i think all the parties have to give some ground. i believe especially at this point, leadership, and the imf, i support europe stepping up and facing the reality. time, i do not believe that they can or should persist in these systems of primaries. it is not realistic. i think we have to realize that this is part of an issue with the european economy. it is not just greece were talking about. if spain and italy and portugal. and common currency, no, fiscal policy. we are going through to political convergence.
john: the priceline ceo darren huston has just resigned for personal reasons. conduct issues. what do we know? they found out that he was contrary to the code of conduct. they did this long investigation . obviously, the decision was made that it is best for him to leave the company. he was out immediately.
they brought in an interim ceo who ran the company were long time. well regarded. so, the feeling here, right now is that you have someone who will bring in some solid leadership. he oversaw a lot of it spansion. he navigated them through a very difficult issue. there are a lot of growth concerns causing people to not travel as much. he navigated them through very difficult time. you want somebody who will continue that through the solidity. does the interim ceo. >> i do not have names of potential successors right at this point. there is a lot going on. there is a lot of new competition. john: it seems like there'll be
a purple -- permanent change. the ceo was at booking.com. they brought in julian here she is somebody that is solid. it is a big acquisition made in the last two years. that is the transition that will be made in place. cracks they were very clear about making sure saying this is not about how the company is performing. carol: we have jobless claims come up on go. we have the numbers for you.
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a lot on the economic front is coming our way. jonathan: for anyone who wants to follow the gdp, you can use these functions. matt: i like that. david: the one number we needed to pay attention to was gdp. carol: and what have we seen? matt: we got a disappointment. , we were looking for 0.4% which would have been half of the reading but this is a real disappointment. 0.5%. least we didn't get negative. we also have initial jobless claims. initialmong the lowest jobless claims that we have seen since the early 1970's which is good news, that are than they were looking for. but gdp was worse. check out the reaction in
futures. a drop across the board. futures are lower now than they were before. .75%, s&pes down futures down 13%. i want to take a look at the bond market. jonathan: a little bit of a rally. matt: let me pull that up. a little bitg at of a rally, coming back a little bit and we are looking at a bond market of 1.84 or 1.85. jonathan: so gdp annualized comes in at 0.5%. the previous quarter was 1.4%. lazear.us now is ed the economic adviser to george w. bush. to start with the numbers, there is a narrative.
it began in the first quarter of this year. talk what are prophets were ugly and we were heading into a deep, dark, ugly place. ed: i don't think we're headed to a dark, ugly place. i think that obviously, this is not a good number. it is disappointing. but the good news is that they are not very good forecasters of future gdp growth. ares aboutverybody c is what does this say about where we go next year. and the reality is that if you look at past gdp numbers and you use them to forecast the future, they are not highly correlated. he best predictor of where we go in the future if the market. obviously, a rough morning but couple,ok at the past we are up considerably. and if you use those numbers to forecast gdp, we are in 2.5%-3% which would not be bad.
that will be better than we have had. the market tends to be looking forward. the gdp numbers are looking backward. as a result, it would have liked to see a better number but i am not totally dismayed. jonathan: which market are you looking at because the treasury curve has been saying bad things. isn't that a good indicator? ed: they are but everything should be reflected in equity prices. he best indicator, i think, and historical data is the s&p 500. you want to see changes in the s&p 500. that is not a perfect predictor but it is the best predictor as to where we are going in the future. it incorporates most of the information we have out there. to the extent that we have a lot of going on in the economy, that
tends to be the best summary measure. there are lots of measures we can think about but if i had to pick one, that would be it. it has been up considerably and that is the good news. david: to what extent does the monetary invention skew that? ed: well, i think it skews it to some event. if you think about equity prices, the way most of us think about it is a reflection of long-term earnings. so the rates that are most relevant there are not the short rates but the longer rates. to the extent that the fed affects rates at all, they affect the short end and not the long end. so it is true that when the fed makes noise, we see it in the equity market almost immediately. but those things tend to die out over time. ityou look at the movement
tends to be the longer rates. and those have moved. i think that if we think about that, the fed is probably not going to have a major impact on that. or what they do. carol: you talk about what -- about watching the market. we have seen a move off the mid-february low. but that was just gaining ground back from what we lost at the beginning of the year. the market has not moved that much. i think you have to be careful about not reading too much. ed: if you ask me what i would be forecasting, i would say things look terrible. things had declined. i like to take a somewhat longer view. i look at six months rather than
three months. the number i gave you around 2.5% or 3% if the six-month movement. the question we have to think inout is, is there anything the world that explains volatility? the answer is no. there has not been significant changes to explain this change. and the reason i say that is if you look at china, europe and oil prices, they could all have an effect on markets but the reality is that the way they affect the real economy for the united states is still relatively minor. if you add them together, you are talking about a long-run effect on gdp, 1%. nothing like the 15% we have seen in equity markets. you just can't get there with the kinds of things we have seen in the world.
so either the market was right , it is probably closer to write at this point. jonathan: and what is really interesting is that the estimates range to games of 1%-5% and there isn't much visibility of their. there isn't much visibility for the fed either. they just have the position of doing nothing for a while? fed policy, to be honest, is not particularly effective right now. i don't think that keeping rates is doing something one way or the other. i think they could move gradually to higher rates. i don't think that it is a disaster. i wish they had gone back a couple of years ago and started moving up higher so they had more wiggle room.
thereant to move up and are always numbers that they can see and find to justify the isition of keeping the rate because the recovery has not been sustained to justify increasing rates at the fed level. the problem is, it will be true for the next few years. it will be true and when to they get on? i think they should be getting on it in the near future. for radicalot argue changes but i think a gradual trajectory, around the time that janet described earlier, is appropriate. jonathan: ed lazear, thank you for joining us. matt: the emerging market debt faced powerful handling earlier including a strong dollar and china's economic slowdown.
pablo goldberg believes the hard times are over and he joins me now for today's morning read. he will talk about headwinds turning into tailwinds. but i have to ask you, we have seen gdp slowing. and we now have a number that is lower than expected. you are looking at china and think we are starting to see growth pick up? does this help? out ofis put more cash the u.s. and into emerging-markets? pablo: absolutely. this is the greatest combination for emerging markets. this is the right setup for emerging markets. we needed a weak economy today we need the that expectations that things will get better in the future to hold
off the risk aversion shocks that we're seeing in the world economy and in the markets and emerging markets at the beginning of this year. matt: yes, dollar weakness has been an incredible story. the only thing weaker is the pound. and one other currency. but the dollar is underperforming every major currency. how is that affecting investments? pablo: this is extremely important. we are calling it the end of the headwinds. one of the headwinds was a strong dollar. if you think of local emerging markets, one of the problems that we are changing is that appreciation was eroding a good amount of the income. now with this being more stable because of what is happening here, and the counterpart that it was happening in emerging markets, allow us -- currency
and stability, it is one reason why investors are coming back. matt: i just pulled up the world currency rancor and i think the other currency that has underperformed the dollar was the mexican peso. you think that is a good long-term bet? why? pablo: when we look at mexico, we are not seeing problems highlighted for other emerging market economies. there, the economy never went back to the level of appreciation that it had prior to the crisis. right if we are going to expect the u.s. to be leading developing markets growth in the future, mexico is right. matt: pablo goldberg, blackrock senior strategist with emerging-market debt team there. back to you. carol: one name we have been
carol: this is "bloomberg ." later this morning, don't miss the ceo of -- coming your way at 11:00 a.m. eastern on bloomberg television. ♪ vonnie: here is your bloomberg business flash. there has been a shakeup at priceline, the ceo is out. darren huston is out after they revealed he had a personal relationship with an employee. he will be replaced by the
former ceo. first-quarter profit beat estimates at united parcel service. sales rose in the u.s. and ups had fewer weather destructions to the road network than previous years. international sales fell but they were flat after excluding foreign exchange effects. and a big boost for bombard ea, delta airlines has agreed to buy at least 75 of the companies jets. they are the first major carrier to buy the jets. the deal will be valued at $5.6 billion. coming up, we talk about the ceo at 11:00 eastern. david? david: in tech go, we take a look at facebook which brought up earnings yesterday which is across the board up. profitability is up and everything seems to be up. they are expected to have a
record opening today on the stock exchange. joining me now is james sack mac cakmak. we have heard from both our bed, google and yahoo! that there is excess inventory but i don't see much evidence. what we are seeing is the perfect storm brewing for facebook. but demand can't keep up. you are seeing this grow at 15%. at the same time, the advertiser base is up 50% and the reason that is happening is because advertisers want to go where the time spent is and it is clearly on this property. when you think about the advertising market, 40% of that is on television and they are in the best position to capture those dollars that are moving from analog to visual right now. david: do we have a sense weather costs are going down?
in video, going up? james: yes, overall, pricing for the quarter was going up. pricing went up 5%. we are seeing the inventory go up in tandem with the pricing and that is something that we don't see about any other company out there right now. carol: what does facebook have to be careful about at this point? the expectations are now high. james: it will boil down to the ability to maintain growth on the expense side. i think people will be much more constructive with how they think about it can grow. they will bring the expense growth guidance down and when you look at next year, how can you maintain that margin? i was going to ask, do they have concern about candle
lysing? james: there is some cannibalization but there is also incremental dollars coming in. twitter on the other hand, they are the exact opposite. a lot of the new dollars were a result of the cannibalizing. carol: how much is your optimism about the country? you are bullish on facebook. it comes from the other venues? james: it isn't just the properties. it is also the quality of the execution. we know that they're able to take products and make sure that the consumer experience is so good that advertisers will continue to rise. carol: we're still waiting on facebook. james: absolutely. messenger will contribute more app. 2017 story, and what's a
ulus.e have oc so it is funny to say but it is still very much day one. jonathan: there is a great chart on the terminal. you can track the history of the performance of an analyst and i'm looking at yours and it has been very good. all the way up. the yellow line, as we get to your name as we bring it up on screen, the yellow line is the price target and the white line is the stock. when we bring this up under the stock, your price right now is when 20 and your price target will get taken out at the price open. what is the upside from here? this morning i lifted up to 130, i didn't raise it as much as appears because i think it narrows down. this is a dan amick industry.
i think maybe it could key off in 2017. and also increase as a result. so we are airing on the side of caution. but we are playing it safe. jonathan: i have it up on screen. i don't usually do this. i can do this because yours is actually good. you see the initiation on this all the way up. your price target is going to go up to 130. from that point, if the downside risk from 130? i want to understand how you work. on the back of these earnings, how do you see things could play out? james: after this quarter i have much greater confidence in my 2016 numbers and my 2017 revenue numbers. the one thing i would like to study more and make sure i have perfect clarity is the 2017 expense growth. if i am being too conservative,
jonathan: this is "bloomberg ." they used to have a show together and it fell out. carol massar and matt miller. carol: i thought it would be interesting to see which countries are revealing their balance sheet to see how much money is on hand. what pays off witheresting to sh countries are revealing their balance sheet to see how much money is on hand. what pays off with the cash on hand when it gets put to work? expenditures?
by backs or dividends? this is a chart that compares that. he went line takes a look at capital expenditures. the top line is buybacks and these companies do a lot of buybacks over the past. . and the bottom line is the dividends. in terms of the payoffs, they were close to each other. and i bring this up because capital expenditures, we have been wanting to see ceos say that we will take cash. the top line is buybacks. so, maybe capital expenditures? matt: that is that for the economy. just buy back your stock. it is an interesting start. i am looking at here the diversions between gdp and
initial jobless claims. i have inverted initial jobless claims so that going up is good isd normally, going down good. but just to show you that it tracks normally would gdp. as gdp gets better, initial jobless claims get lower. as gdp gets worse, jobless claims get higher. what we see here is a real divergence. gdp coming down and i did see a version of this chart which gave me the idea but jobless claims continue to go up. does that mean gdp will catch up to initial jobless claims? or do they start to rise again? jonathan: i think that chart is fascinating because the other one was corporate profit and what is happening in the labor market. and how those reconcile. so my vote is matt miller, primarily because how that
spread reconciles for the economy in the u.s. is the most important question in the next 12 months. david: i agree that is an important question but i vote for carol. because i think the question about where companies take money and invest in their own equipment or give it back to the shareholders, i won't say whether it is more important but in terms of global growth -- jonathan: the control room vote goes to carol massar. david: we are happy to see you for united. matt: we love you on "bloomberg ." jonathan: thank you. coming up, talk about the bank of japan. ♪
that blew past expectations. ♪ david: we are just under 30 minutes away from the opening bell. this is bloomberg go. i'm david westin with carol massar and jonathan ferro. jonathan: futures deep in the red. off by 128 points on the dow. on the s&p 500, -12 points. the nikkei 225 closing lower by 3.61%. the boj does nothing. dollar yen plunges. down by 2.8%. heading for the biggest one-day
drop since august 2015. initially it was a rally. that upsome of now. look at crude very quickly. up .71%. more than $40 billion worth of deals this morning and a big chunk. matt: more than 60 s&p 500 companies coming out with earnings. facebook it is one of those that has come out with earnings overnight. opening at a record as it blew past estimates with revenue up 52%, profit up 327%. as far as deals, abbott labs agreed to by saint jude in a deal valued at $25 billion.
the total is basically $85 a share for saint jude. -- stem centric investors are going to get an additional $4 billion in certain milestones are met. abbvie also reported first-quarter earnings. a hostile bid to buy medivation. therapy company. premium to the price average before the rumors started to spread. a billion-dollar stock. it will bring together the two largest retail pawn shop
operators in the u.s. they are both in texas. hanes brands agreed to by australia's pacific brands, gaining iconic underwear labels including jockey. jamie had the title already -- underwear down under. david: somebody thought better of it. carol: editors at work. jonathan: thank you very much. atning us is daniel skelly morgan stanley. your three stories, the boj holding off first stimulus. the u.s. economy growing at the slowest pace in two years. and a big beat for facebook.
theyen surging against dollar. governor kuroda and his colleagues offering to take more time -- opting to take more time. to 25 down by over 3.5%. 225 down by over 3.5%. i think it is a wait and see approach. i don't think they have no capacity at this point. i think it's expected that they will probably do more monetary easing in june when they meet again. monetary easing it is just one of the three arrows. you will likely see even more fiscal initiatives over the coming months. we are even more certain there will be a delay in consumption tax that will revive a lagging consumer economy. david: i wonder about the market reactions.
the market was clearly shocked. nikkei went way down. this is supposedly an emergency program that tokyo has in place. they kept the emergency program in place and didn't go further into emergency and the market throws a little bit of a fit. temper tantrum. when does the market figure out that maybe the monetary's are not going to come to the rescue? >> that's an issue globally. when you look at europe, the u.s., we have gotten to the point where investors globally are skeptical about the diminishing returns of monetary easing at this stage in global recovery. i don't think it is isolated to japan alone. will see additional easing in june and probably greater fiscal initiatives. carol: number two. the u.s. economy growing at the slowest pace in two years. gdp rose less than expected.
american consumers reining in spending and companies tightening their belts in response to shaky global markets. walk us through in terms of the economic growth. it was worse than forecast. do we care? we have seen this story before. >> the last two years we had a very weak start to the economic picture. we had very bad winters as well. this time we cannot claim the winter. we had a very mild winter. carol: i hate when they blame the weather anyway. >> it was lack of corporate spending and investment. we had a big inventory drawdown at the end of the year given everything with china. we had a very weak holiday spending period. think consumers are basically on hold as they wait to see better wage growth and consumer balance sheet initiatives. carol: what does it mean for economic growth later this year? >> morgan stanley has been
expecting less than consensus growth for the u.s. which expecting 1.7% gdp is significantly below consensus. implication is that it keeps the fed on hold for longer. onlyxpectation is the fed goes once this year in december. that could be a boon to stocks later this year. david: the number three story that matters to markets today, shares in facebook are higher. the company's first-quarter results blew past analyst estimates. joining us now is cory johnson from san francisco. it struck me that a lot of people are very engaged with facebook. they are also engaging with advertisers very effectively. they are monetizing this. these results are very interesting and the growth rate is accelerating across a lot of important metrics. advertisers want to connect
better with the audience. they are willing to pay for that audience. the growth in the size of the audience was impressive. 4% growth for monthly active users is really impressive. you can see it is accelerating. ishave the company that bigger than it has ever been and the growth rate is accelerating at a faster pace. very impressive growth numbers. look at how much value they get out of those users. that is also at an all-time record high. 71 for every one of those facebook users. those numbers are powerful and getting better with every quarter. carol: i love when you break out your models. what is it going to cost them to continue this growth going forward? cory: spending did not get to outrageous -- too outrages. ous.
facebook is investing like crazy into the bread and butter of what makes their service work. and the data mining that makes the content more relevant for users. mightst impressive thing be the way this business has genetically changed since the ipo from a couple years ago. they told us they had essentially no revenue from mobile. the quarter they reported three years ago was a shocker. already 30% of their first-quarter revenues three years ago were from mobile. this quarter, 82% of revenues from mobile. even as they are growing at this incredible size and scale they are turning this battleship to a mobile thing with great success. david: matt has breaking news. matt: comcast says it has equity value of $3.8 billion to buy dreamworks.
this has been reported by the wall street journal. katzenberg is going to be chairman of dreamworks's new media. nbc universal is going to pay $41 a share in cash. it is the comcast unit that is going to make the deal. we were talking about this the other day. i would have thought dreamworks was a much bigger company because it has names we all know so well like kung fu panda and shrek. david: originally, this was spielberg and katzenberg and geffen. to an whittled down animation studio with some very successful movies, but only a handful. the interesting thing to me is katzenberg. early reports were that he would leave. i'm not sure what new media means. carol: there's a lot of m&a
today. what does that tell you about the corporate environment and what it might mean for the economy later in the year? >> we had a pretty serious lull the last couple of months in m&a and ipos. you can have negative ipos. the rate of change on improving ipo market could only go up. to see this m&a evokes the feeling that corporate confidence is coming back. carol: come in on this dreamworks deal. still owns over 5% of the company. they have a couple of big names. not a lot else. it is also interesting to look at comcast double down on their media. what is the future of the is the notion, looking at yahoo! assets. comcast with their nbc assets
and now dreamworks. it is interesting to see them double down on content. david: is it content or is it distribution? comcast started out as pure distribution. they merged with nbc and went into content. there are continuing to go in that direction. the regulatory environment could hamper that. if they are favoring their own content in terms of faster service. over competitors like netflix or amazon prime. or should they keep the pipes open? the benefits they have of being the pipe are not going to be legal for them to pursue. david: you are completely right. netflix and amazon make those discussions about the pipe feel almost antique now. cory: spending on content. you can see the value of this content.
and netflix are spending on original content. you have hulu, hbo. is the content creators and dreamworks is a rare provider of that that was still available in the public market. david: we need you back in here. matt: this is a one-year chart. pop aftere the big the wall street journal report. it is up 27% and change. 18% of that comes from the last three days of trading. it was up year to date about 10% but it was not a huge gain until the takeover rumors. a lot of people realized dreamworks was in play. jonathan: i look at the premium on the table. the aprilcirca 51% to 25 the are not just deals. they are deals with decent
premiums. people really want something and they are offering the money to get the deal across the line. david: that's a preemptive bid. carol: they want it done. david: those are the stories that matter to markets now. thank you, cory johnson. dan skelly is going to stay with us. will takeing up, we you down to the opening bell. coming up on bloomberg television, we will be talking with cme group chairman terry duffy. that's coming up in the 11:00 hour. we are just 16 minutes away from the open. you're watching bloomberg go. ♪
futures on this thursday. 14 minutes away from the opening bell. down about .7% on the dow. the s&p down .6%. nasdaq down about .25%. i'm carol massar. hasmarket in u.s. equities become the second-largest -- rally. dan skelly is still with us, head of equity model portfolios at morgan stanley. nike you like. stocks down about 5%. their latest quarterly earnings not so upbeat. >> they had a really strong run last year. it gave back a little bit of last year's performance. it had some dollar impact as well. weakening dollar since december and we think that should be less of a drag going forward. the other reason we like nike is
we think of it is as a sustainable growth idea. last year you had a lot of momentum growth stocks do well. it was a rising tide that lifted a lot of boats. i think a lot of growth stocks are undervalued. nike is the most diversified across product lines and has the global footprint that some of its competitors cannot reach. david: what drives it? international growth, footwear, apparel? some key sporting events in the future, the world cup and the olympics. we have seen stocks trade very well relative to those type of events. you have a great emerging growth story in china. the women's business has been on fire. have seen very steady growth there. does adidas play
into this? do you have to factor in what is happening with their biggest competitor globally? >> i would be more concerned if i saw adidas taking in more share in europe. you are seeing nike take share from adidas. it speaks to its grand -- rand equity and its appeal -- brand equity and its appeal to the millennials. carol: the quarterly earnings story here?at's the their acquisition history has been very successful. we feel you need to do your bottom of homework on management. they've got a really good successful m&a track record. the gas meters business they bought was a really wise deal. they took cash that was trapped
overseas and used it to acquire that growth asset. over time you will see that m&a pay off. when you look at the positioning of their portfolio, they play into a lot of key secular trends. aerospace. carol: dan skelly at morgan stanley is going to stay with us. had a couple of really big health and pharma deals today. when we come back we will be talking about those on bloomberg go. ♪
drug maker. debbie wang joins us now over the telephone. jeff mccracken. still with us, dan skelly of morgan stanley. debbie, explain why this deal makes sense. >> the deal makes a lot of strategic sense. mostly because in reaction to health care reform, you see the medical device companies are following a couple of different strategies. unfortunately at it was not bott was not anb following either of them. the right have products or the depth of innovation you need to secure reimbursement nowadays. it was critical for abbott to make some sort of acquisition in order to remain competitive as its competitors were changing and it was becoming more irrelevant. david: saint jude is really a
medical device company. overlapre an here? >> abbott has a medical device division. within that division there is a portion of its business concentrated in heart devices. and that does pair quite nicely with saint jude's heart disease platform. david: antitrust authorities sometimes think pairs nicely means a regulatory issue. >> we are not too concerned about that. we think the portfolios are complementary. carol: jeff mccracken, you and your m&a team have been kind of quiet. we are starting to see deals happen again. >> four deals were announced today. the dreamworks deal and the three health care deals. abbott andesting,
abbvie. the year started with the market kind of up and down. that stalled a lot of deals. today is obviously a pretty busy day. health care is leading the way and that is not a surprise. as she was indicating with the obamacare and all the push for consolidation, you will see more companies consolidating. it's going to keep happening this year. carol: is there anyone that comes to mind in the health care space? >> sanofi is really going to try to be aggressive. also astrazeneca. jonathan: the big problem was the spread. it seems like we are getting big premiums offered. the acquirers are willing to pay big.
>> they are willing to pay more. it is also interesting to see what's going to happen with the changes the treasury put in a couple weeks ago. a lot of bankers said deals got paused. cheap. also very david: thank you to debbie wang and jeff mccracken. dan skelly, you are still with us. toathan: a lot of deals break down this morning as we count you down to the opening bell. that is next on bloomberg go with futures negative across the board. ♪
equities across europe and japan are low. we have readily markets here in the united states. bell, iear the opening will get you into the asset classes. the end is down 2.6%. the biggest one-day drop since august. we have given of those gains. the basis points are up 1.68%. crews are unchanged. >> we have so much going on with deals and earnings. we do not have a lot of movement. look for that to change up. all of thealmost industry groups falling now.
as you can see, information tech is up. due to anhat is all-time record high. gaining 1/10 after aaa quadrupled profits and revenue is rising by 52%. in fact, let me talk about facebook. they beat the consensus. by strong contributed demand with video and instagram rapidly gaining traction. so, facebook is a huge success story today. also beating first-quarter profit expectations for analysts. of u.s.a strong supply package shipments. earnings include certain items with a share that we think is only one dollar 20 to dance. because you the stocks are down
now. revenue growth is also down. -- 14.6 billion is what we are looking for. are low onrges revenue. the first solar is another stock that is down. first-quarter sales were down below consensus. even including the sale of the stateline project. the shortfall in this interview is revenue recognition timing. we put sales in tier 1, 2, 3. also, the coming said mark whitmore will be here with jen hughes. so come and change at the top. investors are not too keen on the historical numbers. they will look towards the power change or the stock is down .7%. john: when an analyst gives an
estimate, that actually have to say what they mean. they are required to do so. matt: right, right, i got it. because we all follow the law to the letter. john: matt miller. thank you very much. very skeptical about that. and congo phillips have all beat analyst estimates. companies are analyzing the crude market route. it is slashing jobs and putting up a big project. bloomberg intelligence analysts join us now from the bloomberg princeton bureau. i have to tell you that from the european side of the story, it is all about responding globally. matt: as you mentioned, there is refining and trading with petrochemicals. there are some in moving parts. so, those are the main sources
across the board. you strong -- you still have strong gasoline demand. well.e supplies as i think that before the reported season, crews were under $30. we're filtered into the estimate. that is some of the beat we're seeing now. david: one thing that is interesting is how quickly they have adjusted their cost. they are drawing up a barrel of oil from the ground has gone down. >> yes, sure, these guys are going as quickly as they can. you have seen that very prevalent the earnings reports. we have prices prevalent in every geographical region. not just in north america. after 45% down
decline last year. your seeing the internationally as well. there really does not seem to be any set of respect coming in the near future. that is benefiting the company. two david's point, the cost management on one side is still borrowing in the debt market. we're seeing a lot of that. exxon had their credit ratings go down a notch. what does that really tell you about what is happening? >> i think that speaks to the fact that they are likely to come down a little bit lower. earnings, but you might see it come down a little further than anticipated. again, that is coming at the expense of reworng the project offshore. they are there internationally or reworking some of the longer-term contract. the is with some of companies.
carol: you like them, how come? david: we believe you need to focus on quality. almostles have had proven management teams. they have a good balance sheet. they are some of the best reports among services. comfortableet looking out across the other end of this recovery, that is one of the names with a gain share. they will come out stronger on the other hand. tearful and earlier about managing costs and balance sheet issues, you have a lot of points cutting dividends. they cut it 25%. cutting costs does not just impact the bottom line, it also impacts the supply side of how much oil costs. otherwise, supply will stay of.
>> absolutely. the key to watch is north american supply. when you go through saudi arabia and iran, non-opec and opec production continues to be strong. we had great counts decimated 80%. well, production and united states this only down 6%. usually, production follows a recount. it is in an 18 month low. when i look at this, trading the premium to the likes of summer day on the bloomberg, versus halliburton and 25-20's six. what is it that gives him -- them the premium. future,r one, in the there will be a shift in how technology is issued through the week. long-term, they have had a real technology edge over
their competitors. number two, when you look at their portfolio, they actually have the highest international exposure. seen pretty good growth. halliburton was brought down with his baker hughes deal. carol: ceo action said there was a all scale cash price. we talk about visibility over the long-term, when do we get to the other side? >> we're thinking that the supply demand balance will be more balanced by the end of the year. so, that's -- i think that the supply issue is the key variable going forward. on the recent earnings call, schlumberger management said they could see the imbalance go through the end of the year. they are going through this.
bonnie: -- -- bonnie: the maker of the shrek movies paper reported billion dollars. that is a premium close on april 26. dreamworks will now fall under comcast universal pictures. the cofounder will become chairman of their new media. the online travel booking has removedeline its ceo after he had an relationship with another employee. he was the ceo of priceline for two years. it was based by the former ceo and chairman. has canadian airplane maker gotten a marquee u.s. airline company. delta airlines has agreed to buy 75 of their planes. the deal would be valued at $5.6 billion.
but, the negotiation go through discount. pierre is here at 11:00 p.m. eastern time. that is the latest business flash. matt: thank you. about $45 billion worth of deals have been done today. abbott labs agreed to by saint jude and a deal that values that company at $25 million. saint jude shareholders will get a portion of the cash in the share. see, it is trading at 77-72. as the cancer drug maker goes through $520 billion, they will pay 2 billion in cash. there may 3 .8 billion will go through stocks and investors are going to -- could get an additional $4 billion in cash. todaythey had earnings
that disappointed the market -- beat the market. buya fee made an offer to medivation for $9.3 million in cash. they'll get experimental cancer therapy. at 50 toe price set 50. it is a premium of over $.50. in the two months that rumors have started to spread with word of a takeover. will have brand specific brands. label,oing to gain a including jockey underwear. can see haynes is up 8%. it is a six deal by haynes in three years. it is very getting very inquisitive to buy more and more underwear. you. thank 15 minutes into the session, the
nasdaq is an slightly positive territory. 4% of the index. here's abigail doolittle. abigail: facebook shares are surging this morning, boosting the nasdaq. the most on the opening after the company posted a blowout for the order. they're very impressive with europe are your revenue growth. this comes after weeks of chatter that the company could miss first-quarter estimates, set off by deutsche bank who said we got it wrong. they said this is a strong quarter. they were up 10% to $160 per share. the stock is trading at a record high as their overwhelming the sellers. now, another stock in the move today person shares are slightly lower. they were done in on the premarket after darren huston resigned immediately. to he was having a personal relationship with the employee. a violation of their code of conduct.
they said it was shocking and unfortunate. neither does not believe it is a reflection of the state of the business. they remained bullish on the shares of priceline. david: thank you. we got gdp numbers. they're the slow space for two years. yesterday, the fed held off on a rate hike. if yours before that, erik schatzker spoke with the ceo. he warned that the economy is not growing as fast as the fed wants. >> i think consumers will pull back. i think the economy will go up 8/10 of 1%, after an anemic fourth quarter. it is playing out that the economy is not playing out as fast as we expected, is fast as the fed expected. more, we go with real senior level. welcome.
what you make of these numbers? david: i think the slowing down of the economy through february and march will bring the data as it began to come out. so, the question is where will the growth come from? that will go through the rest of the year. is that it will come down. the investment is not there. what we need to do in order to make the economy go faster. capitalcular, expenditure. there are new business formations. one of the key ways to get the economy going is that you have optimism and evil starting a business. we might deal with equity from personal savings or from personal credit cards. or, they run the credit card and start her new business. that is not going on right now. so, that is where we have future growth. we have to do with earnings then. how can companies turn earnings into profit if there is not
enough new business? matt: we have been looking at earnings. 271 companies have reported out of 500 reporting that bloomberg's earning analysis are doing with ea go. what we are seeing is that earnings growth is down 6%. sales growth is down as well. and, analysts do not ask you to rebound. even then, though probably just lower their expectations and push the rebound out earlier. what gives? david: i've been critical of the monetary policy. the feds created the system were bonds were favored. that automatically disadvantages other forms of credit. the government can borrow money. over 75 percent is the new
credit. they goes into government and big operations. david: you have had a lot of experience in washington. we are in the middle of a election year. what can leadership do to help growth in this country? david: i think the starting point is to wanted. i have been critical of the view out there that this is good enough. the economy has only been averaging 2%. emerson's 2010. so, that is a week expansion. it looks like is even slowing from that point. so, the starting point is that they want businesses to do better. there needs to be more profit with the economy. more small businesses come with
chief executive. david: you hear people talk about this in a way that resonate you? david: well, trump is saying that they want to make america great. he has not gone into any details of how he would do that. i do not think it can be done. there is not that much permanent damage being done. it is more the idea we have created an environment that does not invite new businesses. hillary clinton has not said how she would change with the current policies have in. you have to be candid. their unfavorable towards business on the idea that businesses need to be regulated and pay more taxes. that is causing a low confidence with the economy. carol: i think a lot of americans out there would say that. having said that --
david: the government has been very pro-big business. that is the bond market. the bond market is red-hot. wall street loves it. they believe the fed should buy more bonds. all that is favorable for big business. that come almost by definition hurt small businesses. what would you recommend to the campaign trail? for that and for the economy. david: the fed does not need to be holding somebody bonds. they can allow a reinvestment to leadoff. some people think that means bond yields will be higher. we have to get ready for slightly higher bond yields in order to get more credit. loans, cn i loans, personal loans, all of them need to go up in order to get small business is growing. david: thank you. carol: coming up next, bloomberg
markets with eddie lu and mark barton. betty: we had square in bloomberg markets over the next hour. we have the cfo of under earnings. also, terry duffy joining us. they just reported their results as well. and, later in the program, we're talking golf. my skills are not good enough to make it out on the golf course. so david talk to the european captains. few will be joining us in a hours. i will to get some tips from them. i think our executive producer is interested in that there david: i think he loves it. carol: we'll be watching closely. thank you. coming up next, a look ahead at what is on the agenda for today. we have the mixed market down. the industrial average is up 3.5
john: this is bloomberg . nearly 25 minutes and the session. the sky check on markets. where opening lower on the s&p 500. down just a touch. the nasdaq in positive territory with facebook stocks up 9%. elsewhere, you still had japan with a switch on the board. here is why, the doj does nothing. the dollar is down 2.5%. it has been a fascinating session. carol: on the agenda today, do not forget that today at eastern time, we'll get information from the kansas city fed. you also have joe biden going to vatican city. actually just arrived in
baghdad. david: unexpected actually. earnings season continues. hear frombell, will amazon, pandora, and linkedin. among the and chevron companies scheduled to report. that is just one hour into the session. without he wrapped up the week. tomorrow, the former director of cisco blanche the president and also, the ceo there. that is bloomberg markets. for myself, david coming carol, it is goodbye. ♪ âi
betty: we will from new york to london in the next hour. earnings are going in at the highest quarterly rate in two years. they will have the license to hold on for free. both stocks are falling today. mark: they are going $45 in deals. to acquire agreed dreamworks. we will dig in to the reaction of the shares. first earning corporate profits are increased by a ground shipment. we will talk to the company's cfo. let's go straight to the markets where julie hyman hath