tv Whatd You Miss Bloomberg April 28, 2016 4:00pm-5:01pm EDT
u.s. stocks closing lower. the s&p 500 falling the most in weeks. the dollar plunging the most since june. joe: the question is -- "what'd you miss?" scarlet: we break down amazon earnings in just moments. joe: plus, the bank of japan surprised investors by holding off on more stimulus. scarlet: president obama praised germany's angela merkel for being on the right side of history with her open doors and on refugees. is it enough at a low point in her popularity? stocks in the u.s. finally found a direction around midday, and it was down with the dow losing 200 points. the worst day for the average since february 11. all 10 major groups dropped, led by tech. big of a not that
drop, but compared to how quiet it has been, it really stands out. selling picked up overnight when the bank of japan surprised by .ot doing any more stimulus we came back, but in the final couple hours of the day, the selloff resumed. scarlet: it's kind of interesting, especially against the fed meeting from yesterday. investors still disappointed by the lack of further stimulus by japan. scarlet: the two most actively traded names by value were apple and facebook. apple tumbling after carl icon said he sold his stake from the company after apple cost disappointing report -- apple timely after carl icahn said he sold his stake in the company after apples disappointing report. you have to wonder to what extent facebook results really .et a boost
i'm getting word that amazon has just reported earnings. earnings per share of one dollar zero seven cents compared with an estimate of $.57. a year ago, at the same time, amazon lost, but the results do tend to be all over the place. billions, 2.50 7 dollars. the most profitable part of the business. the consistent -- the consensus estimate was better than expected. joe: the snap reaction is that shares were up over 11%, so instantly, markets like what they see. web services, $2.7 billion in net sales. growing crowdidly
service. also second-quarter net sales of 28 billion to $30.5 billion. scarlet: the consensus estimate was 28.30 2 billion dollars. amazon tends to be one of those companies that can give a wide range of estimates when it comes to, certainly, profitability because of what it decides to spend its money on. joe: we will come back to amazon. i want to look at the government bond market. we saw lower yields across the yield curve. two and 10-year yields tumbling. not that notable, but even when yields were not rallying, we saw yields rise a little bit. scarlet: in terms of commodities? tracy: i have one for the gold folks here.
up the cause the bank of japan. we saw the yen search and the dollar down. we also had pce inflation, which showed a pickup -- something like 2.1%. that could also be behind the move. when it comes to oil, we got production figures showing maybe finally those outputs are starting to lead to cuts. you mentioned the dollar. you have to pay attention to the japanese yen. it was a big gainer, certainly on the intraday basis. a big number move, pretty gigantic, biggest percentage move for the yen in about six years. did surprisee boj markets, but it did so by not doing anything. a lot of speculation that the bank of japan would add stimulus. did refrain from doing so, and the yen has erased all its losses over the past 2.5 weeks.
we will get you some more amazon color right now. that's television lingo for amazon details from its latest earnings report. you talked about the stock surging 10% in the after-hours trade. the first quarter earnings per share is comparable to the conservative estimate. this did not top the highest estimate, but the range was lookingwith analysts for anywhere from 18 since lost to $1.12 earnings. joe: amazon was one of the stocks that really characterized the selloff. amazon with this after-hours move will be clawing back fairly close to their all-time high. scarlet: also results from linkedin as well. the stock is climbing because
first quarter adjusted earnings per share also beating consensus. sees earnings it per share of $.74 to $.77, so sequentially potentially at the same of not higher. the shares more than 10% higher in after-hours trading. second-quarter revenue from linkedin will be anywhere from $885 billion to $890 million. joe: linkedin is another one that got absolutely clobbered back in february. lost almost 50% of its value in one day. so big that the ceo held a town hall meeting to talk to employees about the selloff and what it meant, but it has been clawing back and you can see in investors really liking this report. , but a long way to go certainly a different reaction than last quarter. scarlet: the talent solution
business was a big driver. toreased 41% year over year $558 million. they saw gains anywhere from 22% to 29%. >> up 16% nearly after-hours. 440 3 million members were linkedin in the first quarter. including the two of you, right? tracy: of course. it's quite a change from a couple of days ago. we are starting to see some differentiation. scarlet: let's go back to amazon because we had numbers on devices. we were talking earlier to paul's many about how investors do not care as much about the devices and how much amazon sells, but it's more about the web services. in case you're curious, amazon says customers want twice as many fire tablets than a year ago. joe: it's funny, too, because
one of the main concerns about apple right now is what is the ? xt product after the iphone the product people are most excited about seems to be coming from amazon, the alexa. it is still early, but people can control everything with their voice. i hear more talk about that as a device than anything else. of ant: you are the owner echo, right? tracy: yes, the echo. the trigger word is alexis. that's the confusion. scarlet: let's bring in cory johnson to look at these results. we have to start at amazon. for the bottom line. the consensus estimate was $.57, gaaphis is a caa -- number. cory: it is the biggest quarter they have ever had at amazon web
services. yearis a revenue change over year of 55%. that business is growing faster as it gets bigger, which is just a sight to behold. it shows the power of the cloud and companies picking amazon when they make that move. joe: how big of a deal now is ? is to the company how significant is the growth of amazon web services to the long-term story to the justification? cory: on a consolidated basis, you saw this company operating inside of $1 billion. $604 million came from amazon web services. shares aree that stronger, if that is the surprise, the profitability is great. it's all about web services.
it might be a small part of the overall picture in terms of revenue, but it is about 60% of profit. as important as the numbers are for amazon -- i in saying this for a while now -- i think it is the most important business and all of technology if not all of the world. it's the place where companies are completely re-architecting how they do business and handing it to amazon to run their services and run their computer operations on the web, reimagine their business process, putting it all on amazon. yes, they are doing it at microsoft and google and maybe a little bit at oracle, but amazon is really doing this. have another company whose shares are searching this afternoon -- that's linkedin. cory: i have not even looked at those numbers yet. i could make something up. scarlet: no need to do that. cory: they were incredible.
they were shocking. scarlet: they were shocking, and the stock is up 15%. we learned so much about the profitability of the business and the profit margins, but now that amazon is making a profit, will investors are looking at that profit margin and punishing just razor's -- punishing jeff bezos if it does not get to a certain target? are trying to have the lowest prices to gain market share, so they have crushed a lot of other industry groups. we can start with books, write? that is where amazon started. they have done so well. we might expect that one day, they could return to those markets and raise prices. theyrgument is that once start raising prices, consumers will go somewhere else to shop. some sneaky ways of increasing margin. is there a risk that amazon
gets too profitable for just zos ands -- for jeff be that makes investors nervous? he likes investing money aggressively. as stupid as that sounds, that's a brilliant question. scarlet: hey! i'm waiting for it. it is un-amazon like. he has fantastic ambitions for this business. what he has done with what was an online bookseller -- he has clearly had a master plan all along and pursued it with lots of different ideas. i think you are right on. this is not like amazon to take a lot of profits. we might just as well expect someone to caution against expectations of profit with a recurrent focus on topline growth. bloomberg's cory johnson on amazon but not
public hearing today. the panel is investigating it residents faced discrimination. toldnited nations official the security council today there has been a worry some deterioration of the situation in syria. the wave of airstrikes and shelling killed more than 60 people in less than 24 hours in the northern town of aleppo according to monitors and s in the region. personnelilitary member has been disciplined for mistakes leading to the bombing of a civilian hospital last year. no criminal charges were filed in connection with the u.s. airstrike. .2 people were killed full reports expected to be released by the pentagon on friday. it seems republican donors are not giving presidential hopefuls ted cruz and john kasich the funds they need to stop donald
trump. an analysis of campaign finance records found the donors who gave big bucks to jeb bush and have mostly disappeared from the political landscape. records show those who gave the if they had donated at that level, ted cruz and john kasich would each have as much as $39 million more in their campaign coffers to compete with the deep pockets of donald trump. dayal news 24 hours a powered by our journalists in more than 150 news bureau's around the world. back to you. scarlet: thank you so much. "what'd you miss?" jets ande from the central bank, but it was a yarn. they surprised investors by not stimulating the economy. the non-decision comes a day after the fomc decided to keep rates steady. in recent weeks, you have
been writing a lot about how you saw the market rallying, driving higher against negative sentiment that ultimately selling off with the s&p going towards 1700. do we have a selloff today? is this the start of your letdown? peter: i do not think this is the letdown. i think this is a natural reaction to a lot of things, mostly weak earnings. the fed almost got us through that, and then the boj kind of let us down. it seemed relatively easy for them to come up with something and they did nothing. the inactivity we saw today helped push us higher. i think there is potential. we go a little bit higher than i originally thought, but i do think we will get a selloff sometime this summer. scarlet: we have had good results from the companies you just mentioned. how much further is that rally going to go? you said into the summer, but
how strong will it he? ? will it be peter: i think we look for good earnings to come in, more m&a activity. then we will see all these buybacks start again. once that is done, you can start seeing some of that. i think you go through a theitionally slow period in markets anyway. europe shuts down next week. we have our own holiday at the end of the month. i think it continues as the strength of the high-yield market and the ability to issue debt. we got gdp today which was not impressive. this is the official read on what the economy is doing. the white line is the atlanta .ed gdp now it came in at about .6%, pretty much giving us an idea that the
economy would be slowing down by quite a bit in the first quarter. peter: the things to take away from that -- at one point, it was down 2.2, so we saw a little bit of an uptick in march. there is some evidence possibly in april of a bit of an uptick. the actual retail sales numbers hit $29 billion. that's one of the first real signals that someone could actually sell something. again, this retail -- scarlet: the consumer is alive. peter: that's what the hope is. everyone's wondering if we can turn it up rather than down. joe: another thing we have been looking at is volatility products. people piling into them as a hedge or a signal of fear. what is going on and what does that tell you about direction? peter: to me, it has been a clear indication that people
have been nervous about this rally. i think a lot of them purchasing these fixed tools -- these vix tools expecting the fear gauge to rise, i think that would help propel us to that higher level. should now be the time that investors start tweaking their positioning? the 2100.got to i would go through and anything int gave you the most fear january and february that major loose sleep, you are supposed to sell that right now. that we that potential return to that situation. take this opportunity to get out. good remindervery that these markets remain a liquid. if someone has some thing to do, markets are moving relatively fast. take advantage of the situation,
get out of the things that gave you the most fear. scarlet: thanks very much. coming up, can imaging markets continue to outperform developing markets? and shares of linkedin and amazon both soaring in after-hours trading. proving earnings may not be as bad as some fear, amazon proving it can make money while investing in things like the kindle and echo. ♪
continuing? >> i think they are starting to. emerging markets are up about 22% from their bottoms in january. it was driven by an easing of in the lastrs, but six weeks, we've seen more fundamental domestic improvement, leading economic indicators turning positive, economic data surprising favorably, and we have seen emerging markets up, so i think this has transitioned from an easing of fears to improve fundamentals, and i think this could have legs for some time. are you seeing investors differentiating between emerging markets? morgan: we really are. in this rally going forward, you will continue to see rally differentiation. we can talk about indices, but the reality is brazil is up 40%. russia is up 22%. china and india are flat to
down. that is a huge difference. i think this rally will continue to have that character where winners and losers and you cannot make just a broad-based bet on such a diverse set of countries. you one of the countries like is taiwan. how come? morgan: it's not so much that i like taiwan but we found some stocks attractive. one company we found trades at 12 times earnings with a five or send dividend. sort of a $3 billion market cap stock. scarlet: it is hinged to that china play to some extent. if china experiences another bump in the road, with that keep them down? morgan: chinese consumption
continues to grow, and i think that's likely to continue for some time even as the industry decelerates. chinese people continue to see strong growth in mobile devices and computers, so i think there is a strong position for growth going forward. scarlet: the federal reserve decided not to raise interest rates as expected. how much of the market remains i.e., come june when we might get a rate hike, will the whole rally fall apart? morgan: i don't think so. as long as the fed's hiking in the face of improving growth and associatedt will be with continued strength in the emerging markets, but these are volatile places. to bek investors need mindful of that volatility and approach securities with an eye toward managing that volatility. otherwise, they may get more returns but with more risk. scarlet: thank you. coming up, we discuss currencies.
mark: former house speaker john boehner said he would vote for donald trump in the general election if he were the republican nominee but not for ted cruz according to "the stanford daily." boehnerent quotes john as saying that ted cruz is lucifer in the flesh and "i have never worked with a more life."le s.o.b. in my ted cruz: when john boehner calls me lucifer, he is not
directing that at me. he's directing that you. what boehner is angry with me for is not anything i have said to him -- i have not said anything to him. he's angry with me for standing with the american people, energizing house conservatives to stand with the american people and actually honor the commitments we have made. mark: boehner said he was texting buddies with trunk and had played golf with him. kerry -- joe biden that with the iraqi prime minister to ongoing political crisis. thailand's image as a tourist took another bow this week after video was released of a british couple and their son being savagely beaten. 4 people have been arrested.
two british backpackers were murdered in thailand in 2014. north korea's latest ballistic launch attempt was a failure according to a south korean defense official who says the missile was airborne or several seconds before crashing. it's the second launch after another failed attempt less than tito weeks ago. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. thanks so much. let's get a recap of today's market action. down, down, down for u.s. stocks with the dow losing more than 200 points. average sincethe february 11. for the nasdaq, the lowest close this month, since march 28. but you going to after-hours trading, it's a very different story with amazon and linkedin both rallying after both came
out with results that impressed investors. in addition, we also got baidu as well. baidu is china's search engine. it reported first-quarter adjusted eps five cents better than what analysts were looking for. joe: clearly a much different tone to the after-hours than what we saw in regular trading. i want to dive into the bloomberg and talk more about apple because it has been getting slammed from earnings, and it got hit today when carl icahn revealed he is out of the stock. peek at the top -- that's when apple joined the doubt. that is just a classic dream. it's the worst performing stock in the dow since march 2015, with the stock joined.
what else do you have to say? it says it all right there. scarlet: that's a great chart. tracy: i'm looking at something different, but i think you will both still enjoy it. we have been talking a lot about chinese speculators moving into the commodities space. everyone trading things like steel rebar and cotton. we had some amazing numbers about trading volume. there was one line that china traded enough cotton in one day last month to produce genes for everyone on earth, but if you look at the new trading volumes, they are down sharply -- to produce a new pair of jeans for everyone on earth. we talk a lot about china's whack a mole investment landscape. this is the perfect illustration. things go up. regulators start to look at them. then they go down. joe: where next? tracy: if only we knew. you have too much money in a
closed system, the money has to move from thing to thing to thing. we'll see what is next. bank's: deutsche supervisory board member will be stepping down. his term will end may 28 according to the company, and he is resigning as integrity panel chief, effective immediately. have a headline from earlier in the day that indicated a conflict over deutsche bank's would affect the general meeting. perhaps this plays into that. we're told a supervisory member of deutsche bank will be stepping down effective immediately. the world's biggest financial market has shrunk by 20% during the past year and a half. currency trading over the three monthatforms fell last compared to almost 670 billion dollars in september 2014. that drop in volume is fueling concern of further volatility
and also possible flash crashes in currency. the chief investment officer and director at acumen management joins us now. speaking of volatility, we saw an ordinary move in the japanese yen today, searching around three percent, the biggest move in over five years, after the bank of japan declined to ease further. what is going on there? ken: i think that move that we no action byck of the boj was a lot of pent-up aggression. a lot of people might have been preemptively selling out of the yen. having come back to where we essentially started and the lows we have previously seen, the 105,e is anything below authorities start to get a little bit touchy because that's where the corporate have done the bulk of their hedging over the course of the last nine to
12 months. -- not panict of but nerves coming out of the equation. further up, it is in a decent range where we can watch what happens. it is a dollar-driven move outside of that. i think there was some talk about some of these moves being related to systematic trading or systemized programmatic trading. ken: just look at the dollar index and where we sit. we are in a situation whereby the underlying macro picture does not necessarily justify a lot of dollars selling, but look for atraders statistical anomaly or better chance than not of something happening, so there is every chance we are seeing the pronounced selling of the dollar on the back of that happening.
when you look at the data that comes out, we are as aggressive with selling as a function of that data. we see it in the aftermath and today is a perfect example. u.s. gdp -- not a whole lot got solved on the back of it. crucial point you are making. we talk about how data so far this year has not been great. you say that the weakness is not even about that based on the fact that a lot of the selling we are seeing is in the time before the data opened. ken: if it was a macro-driven move in terms of selling out of be dollar, you would supportive of that case, and yet, it has not really come as a consequence of the data but in the aftermath. we are faced with a situation are justro players taking a step back and taking a breather. they are not buying any fresh
dollars, but they are not convinced that their underlying future has changed that dramatically. scarlet: i need to ask you about the pound. what do the fundamentals indicate about where it should be? we are's tough because talking about an anomaly now, a binary result that will come out in a couple of months, but if we can take that noise out of the a datan, the u.k. had plateau where in the previous six or nine months, it had been growing well, and then we hit a level where we just sat and did not a whole lot. i believe that data is starting to turn. if you look at wage inflation, industrial production and other retail sales numbers, we are seeing probably a little bit of a turn. brexit out ofke the equation and look over the next quarter, i think anything south of $1.50 is justified.
north of that, we would have to look at what u.s. policy looks like. staying with sterling, we have seen for all the talk about the anxiety over the regular referendum, the rise in sterling volatility -- we have seen a pretty good rally lately in sterling. how much of that would you attribute to this is one of the last major currencies against which the dollar was strong? people sold the dollar against everything else. sterling held up as the last one you could make money out of. ken: i do not think that is unreasonable. squeeze,bit of this talking last thursday onwards, consequently from layers being taken out of the market and a good chunk of that dollar index being sold off, in
time for a look at some of the biggest business stories in the news right now. shares of amazon surging in extended trading after the online retailer posted first-quarter sales and earnings that beat analyst estimates, proving that they can make money even while investing heavily. revenue climbed 28% to more than 25 alien dollars.
linkedin also climbing in the post-market, forecasting earnings that beat analyst estimates, indicating a slowdown may not be as dire as some analysts had feared. fallen 55linkedin had percent this year prior to the results. mark zuckerberg added more to his net worth in one morning then in the first four months of 2015. the facebook ceo saw his fortune grow today by more than $4 billion, hitting 51.5 alien dollars as the social network's shares jumped in new york -- heating 51.5 alien dollars -- .itting $51.5 billion angela merkellor waiting even deeper into political quagmires. she was once touted as germany's mother, but recent controversies
are causing her popularity to plummet. here to talk about what is next is the director of communications for open europe, thatnk take -- tank focuses on current affairs. for joining us. angela merkel's popularity has been buffeted by the migrant crisis, which continues. tell us about what is going on with this issue of the cartoonist that satirized erdogan and why it becomes a national story. nina: germans are very touchy about privacy and are also very serious about freedom of press. this satirist made fun of erdogan, and with the backing of merkel, it has become a criminal case. you can imagine with the german public, that's outrageous, and merkel toss approval rating plummeted by almost 20% in the two weeks after it happened. it has crept up again now to
about 51%. her handling of the migrant crisis has taken a huge toll on her popularity. scarlet: merkel has always overd to value pragmatism popularity. her decision to say all syrian refugees can come to germany is by some accounts a pragmatic decision. people were coming anyway. on the other hand, let's not forget she is coming to the end of her national elections. nobody knows if she will run again. she really sees this and the euro as part of her legacy, and if she is standing on the right side of history, if this is an ideological stance she has taken, only time will tell. scarlet: we had one other bit of news come out on the political front. germany's closest neighbor by many measures, austria, saw the
far right conservative party .ave a big win will that have any impact on germany and merkel? absolutely. austria has taken a very hard stand on the migrant crisis. berliners were shocked, but they do not know what to do about it. the rise of the far right is something that we see all across europe, including in germany a populistse of party which looks like it will get about wanting percent nationwide at the next election, and in the german context, that's a very alarming and a huge shift from traditional consensus-building politics in the center. joe: it looks like once again we will have another summer where we are talking about greece, and they will have to get a deal with creditors about continuing the bailout.
what does angela merkel's falling popularity augur for germany's ability and willingness to grant greece relief down the road? nina: the german position is clear -- they say no debt relief is needed for greece. the germans were promised that they would never have to be the fiscal backstop for the rest of the eurozone. i think we will see more of the extended pretense, but try getting that passed the german public -- try getting that past the german public. we will continue to see more of the same. schauble questioned the policy of negative interest rates and easing monetary policy, suggesting that is partly responsible for the rise of the national policy -- policy.ist
nina: this is a big problem with the ecb, and it's interesting that mario draghi gave an interview to the biggest german tabloid defending the ecb's monetary policy. from the german perspective, this is unforgivable. published, andg they feel the ecb cannot go on like this long-term. ecb'sre worried about the monetary policy. scarlet: thank you so much. coming up, deutsche bank supervisory board member george thomas stepping down. we discuss why and give you some color next. ♪
scarlet: "what'd you miss?" told half an hour ago, we you george, will be stepping 'swn from deutsche bank supervisory board. the context is deutsche bank's tonting legal costs have led open conflicts on the supervisory board. there's a lot of criticism back and forth between different members. let's bring in allison williams, fromoins us by phone princeton, new jersey. is. us who george thoma allison: he's a supervisory board member of deutsche bank. we have been following the story this week. he was basically brought in in 2013 to help improve controls and work on various cases. there has been some
hasgreement, and thoma become isolated. it is hard to know what is going on behind the scenes and what is exactly happening, but you do have a bank that has had significant pressure, use of underperformance, undergoing massive restructuring, new management, lots of changes. it's not surprising that you would see this sort of disruption in the boardroom, especially given all the legal problems. they did report earnings this morning, and their legal costs actually were very low because matters.led some i really think the bank is trying to get past these legal issues and get the past behind them. scarlet: it cannot be good optics for deutsche bank to be losing a supervisory board
member, especially on the day when it reported better-than-expected earnings, partially based on lower legal costs. what does this actually mean for the bank? alison: i do not want to speculate what is going on behind the scenes, but i do think their management is very focused on trying to put this behind them. legal costs, they have said, still remain the biggest question mark. and it's not just legal costs sut the higher compliance cost they have had. they have been hiring a lot of personnel in this area and really had to staff up and get things under control. i think the challenge for isagement and all the banks to help investors feel that they have made the proper controls and proper changes and that they are making the right cultural that to change behavior
might have contributed to any of these issues and really just move past and move forward. joe: do you see much more cost-cutting in deutsche bank's future? does deutsche bank still have further to go down that front? alison: one of the most important things that they did say today was given the tough environment, that they may accelerate some of the cost-cutting. management declined to revise their target and to say that they are going to do more, but they said they will try to pull forward. they also enacted certain things that they are doing within their trading unit, cutting certain assets there. they do have a major cost-cutting grant in place. this is a major transition year for them. scarlet: thank you so much for joining us. coming up, what you need to know for tomorrow's trading day. that's next. ♪
scarlet: "what'd you miss?" don't miss this -- a big oil reporting tomorrow. exxon oil, 8:00 a.m. get a little bit more of a clue into the health of the american consumer. joe: personal spending is a function of how people are feeling. we will also get university of michigan's sentiment tomorrow at 10:00 a.m. eastern time. there's evidence reelection is