tv Bloomberg Markets Bloomberg May 9, 2016 10:00am-11:01am EDT
mark barton. ♪ betty: we will take you from new york to london in the next hour. some of the world passes top bonding investors are saying, do not count the fed out. monitor among those arguing the u.s. central bank is still on course to raise rates here. saudi arabia gets a new oil chief. producing crude at near record levels to defend its market per --while -- it sans production by 40%. betty: a closer look at donald trump's powerful son-in-law. what washington and wall street wants to know about him.
let's head straight to the markets. julie hyman has the latest in the markets pushed around by earnings and oil. effect to lastve week's is declined. we are seeing a little bit of a recovery or this morning. not a huge one by any means but the nasdaq is leading the gains up .4%. the push and pull that that he was talking about is simplified if you look at imap on bloomberg, the groups on the move. for an upmarket, you have significant areas of red, including energy, because oil has been all over the map here we will look at that in a second as well as materials today. goingying commodities down producers. and you have health care counterbalancing that and then some as we have positive earnings creating a ripple effect in the industry. let's get to oil prices and take a look. a lot including what continues to go on in canada with the fire that was threatening the oil
sands, it seems to be a little more under control. we did see oil hire earlier and then it took a leg downward just before 8:00 a.m.. that is now under $45 per barrel. given support to stocks and then it melts it away. you look at some of the oil producers, the biggest oil companies and not just producers but services companies, you are seeing a slump in the various stocks. that is a push downward. also gettingrkets some help from what we saw were losers last week. quite apple is one of them. over the past few weeks, we have seen apple selloff in a decided fashion. it is bouncing a little bit this morning up .5%. analysts say stocks oversold after the slump we have seen, and amounting to just 13%. it happened over a couple of weeks. gotrgan was a stock that
beaten up last weekend is coming back today. i mentioned health care was doing well, getting swept up in that. it reports earnings tomorrow. the ceo in the financial times is defending allergan, including its half them and after the sales deal with pfizer. it's numbers will be quite interesting tomorrow. stocks are trading higher here after a two-week losing streak. that came after a two-week winning streak. we are up today by point -- .8%. export data, china, all investors and those in basic stocks, the worst performing industry group down by 5.5%, tracking declines in metals today. besides china, it is all about earnings once again. sure is earlier, when they were up by 5.5%, it looks like they're heading toward a record close today, betty. the most since 2012 when they
rose 5.5%, 3.8%, the italian spirits group, first-quarter sales the expectations, strong turkeyfor its wild bourbon in the united states. sales in the americas, which account for about 41% of revenue on an organic basis, including a 15% gain in the united states. the results were not enough for them to change the outlook for the full year. still quite a performance, 3.8%, a record high. the german distributor of chemicals, the world passes first-quarter profit missing estimates today. it was hit by a currency devaluation in venezuela and slumping demand for additives by the oil and gas industry. the company didst -- stick to the full-year forecast for an increase in earnings this year but shares almost 6% lower. the big piece of data came out of germany.
stronger-than-expected factory orders. i wanted to show you the citigroup economic surprise index. this is the gauge set basically tells you if we are above zero, data is on average beating forecasts. if we are below zero, we are missing forecast. we are below and we have been since january. the lows we saw in february, those were three-year lows. the data is certainly improving. we are near zero and we know the economy grew by .6% in the last quarter. the data and the german factory orders prove that. down to external demand rather than domestic demand. certainly it is improving the trend when you look at the data out of the eurozone. indeed less check on the news this morning. vonnie quinn has more from
our newsroom. vonnie: thanks. new poll says half of europeans
believe that a british decision to leave the eu could spark a domino effect. the survey says that roughly the same proportion believe their own countries should hold a referendum on the eu. the decision on whether to stay in the union is june 23. in paris with talks on the conflict in syria or he will meet with the french foreign minister and representatives from other countries, plus the eu. tomorrow, he is due to meet with the german foreign minister in 74before heading -- at least people were injured as flames ripped through a hotel and nearby buildings in downtown cairo. officials say it took six hours to put out the fire, which adjacentpread to three buildings, including a warehouse. the cause of the blaze is under investigation. wall street is giving a financial boost to hillary
clinton. in march, secretary clinton received 53% of donations from
the financial services executive come up from 33% in january according to the wall street journal. many that their support from public and candidates who dropped out. nowhere the north carolina governor pat will that down from enforcing a controversial state law limiting protections for lgbt people. the justice department gave him a deadline of today to declare that he will not enforce the law to federal officials say a lawsuit against the state as possible. global news 24 hours a day powered by more than what hundred 50 news bureaus around the world. don't count out the fed, a warning coming from bill gross and his former colleague. gross: i am not so sure it is out. from way him's in san francisco and they all seem to get it and they seem to know at some point, they should be raising interest rates in order
to preserve a semblance of profitability for pension funds and the like. one, certainly, maybe two. the fed has learned, it has a window. financial markets are relatively calm. the dollar has depreciated. when the fed looks at whether to hike or not, it looks at the famous equation that ben bernanke set out. it is about benefits, costs, and risks. hikes are possible even after the jobs report came out on friday. a slowdown in hiring. joining us from minneapolis is jim, chief investment strategist where he helps oversee $350 billion in assets. if you look at where the markets and traders are pricing in the fed rate hike, i want you to show our viewers and bloomberg,
the probability of a hike, only 4% think there will be a hike in only 4% in june. 96% of those believe it will be for 25 basis points. the 4%, we're underestimating the fed? i think so. i think there will be a couple of hikes this year. that is predicated on a belief that the u.s. economy is probably growing, continuing to grow 2% throughout, notwithstanding up and down of the various reports that come out, and on the view that international data is picking up . they just showed the economic surprise index for europe, also climbing now in china and the emerging world and canada. a globale will see
pickup and that will force the fed's wages go up, too probably embark in more than one rate hike yet this year. betty: it is precisely the concerns about wages that people are saying -- if you look at the , the conditions index, a third month of declines. labor conditions in the u.s. producinge are still jobs. that is all still deteriorating. >> there is no way job creation will keep up at the same way it back by a lot of majors.
job full down at employment. necessarily mean it will not push up wages. another 3/10 gain. at the atlanta fed for wage numbers. payrolls showing acceleration. there is quite a bit of evidence , as companies that has seen profit margins come down quite dramatically here over the last year, if there is not a labor cost pressure, i think there is more than labor cost pressures going on. that might be evident forcing the hand and the bond issue anti-to raise bond yields as well.
mark: i have a chart that shows how wages picked up 2.5%. how many months until the fed rates hike it says one month. very small percentage probability, which shows depending on when you look at it. what about productivity? wages are picking up his where is the productivity? i am not just talking about the u.s. i am talking about closer to home. there is no evidence of it. >> there is not and that is a real issue. i'm not sure which way to come down. whereductivity is for test for real, we cannot boost productivity, if we get no productivity, we will run out of resources and it will cost and court costs and the need to raise rates will overwhelm the recovery.
i wonder if productivity is understated. quite a bit of evidence that it may be real wages have climbed steadily throughout the recovery. 8%hink they're up almost since the peak of the last recovery. a major increase in real wages. real way -- wage rates have moved very closely together. until the recovery or productivity heading south, i , by 1% or more than 1%, suggesting real growth might thatbe closer to 3% or 2%, is why we return, growth has been stronger than expected or estimated. it might explain also why sales have been pretty strong throughout, why we are still seeing the service sector do well.
if it is really not there, this will end prematurely. if we are under measure yet, the recovery could last a fair amount longer. mark: i have got to ask you about the upcoming u.k. referendum. on a global scale, we know it takes place around the time in the next fed meeting. the fed meets first and the referendum a short few days afterward. could the referendum the enough to really slay the fed in putting off a u.s. rate in june, if all the stars are aligned on the data that you have been talking about? >> i hope not. it is looking to say the fed needs to tighten. the reality is they need to move away from crisis pols is. we have not in an crisis in the united states for many years. we are still practicing unconventional, massively
stimulative monetary policy that do not fit with reality. raise rates and still have an easing monetary policy that would fit with concerns of grexit and other global growth. i hope they follow through with interest rates overall. justf my great feelers fears is we would return with a zero interest rate policy of a $4 trillion fed balance sheet. that would be a perception monetary policy symptom -- spin out, there is nothing they can do, a new recession without any help coming from anywhere. the fed needs to normalize policy and if they do that, confidence will build here overall. be a nightmare scenario. let's hope we do not get there. the chief investment strategist at wells capital management. we have got breaking news,
reports say north carolina followed -- the controversial bathroom locker the state is accusing the department of justice. as you may now be familiar with, -- we will continue to monitor the headlines. more markets just ahead as we had to break the let's take a look at how the major averages are doing after a rough week last week. we are rebounding from the losses to the dow up now 18 points. ♪
mark: i am mark barton. betty: you're watching bloomberg markets. julie hyman has the latest on the market. julie: i want to take a look at big movers. lending club has been something getting a lot of attention. the removal of its founder and leaving the company after a review found an abusive tied between a failure to disclose a personal interest and investment fund. this involves $22 million of near prime loans. they were sold to jefferies group. jeffries did not take a loss because lending club then repurchased them according to a person familiar with the situation here. that was found dead from the
events that investors expressed instructions. of questions over exactly what happened here. the stock is down 25%, the biggest decline on record. why is this interesting on another level? who is on the board of the company? take a look here. you can get to this looking at the management of the company. the new executive chairman of the board here, and also, the former ceo, a well-known tech analyst and larry summers, all , thereolks on the board are questions on the part of analysts, that if top-tier peer-to-peer lenders like lending club can fall victim to something like this, what does it mean for the rest, are there other types of the legend abuses going on?
interesting, evolving, developing situation. moverr mission of the big of the day, that is krispy onee, being acquired for .35 billion dollars, $21 per share in cash. this is a company that owns a lot of other coffee holdings. adding to a coffee and doughnuts, what is becoming an empire, i guess. man, i am more of a tea myself. on a friday, maybe a doughnut, but not monday. monday, you have got to be serious. we're speaking with bishop, now chairman of j.p. morgan securities coming up next. ♪
is sittingrd bishop on a panel of eight latorre accountability. could afternoon and thank you for joining us. >> good afternoon. mark: we are eight years on from the financial crisis. close to retaining the trust of the public? >> what a difficult question. in some areas, the trust of the .ublic has been restored probably more in a financial performance and some of the other aspects of the performance. on financial performance, global regime, the greater
with the boards are paying, it is doing something to restore trust. still some way to go. mark: i am sure you would not have escaped your attention the book released by the former governor. i want to read you a quote. the strange thing is arguably after the biggest financial crisis in history, nothing fundamentally has changed in terms either of the fundamental structure of banking or the reliance on central banks to restore macroeconomic prosperity. do you think that is a fair assumption? i have a heart -- a high regard for the governor. i happen to disagree with him on part of what he is saying. there have been changes, as i have mentioned. certainly the capital regime is different, liquidity regime is different. and banksat boards and their ceos look at things,
that is, what i would say, much more circumspect than it was. there have been some changes. obviously, the authorities are very anxious to make sure that the central banks, the taxpayer, effectively, is not last resort and that these institutions can be resolved on their own. please come on another time when we have a bit more time to speak to you. so short, buteen thank you for the brief chat and hopefully you can come on another time. us on bloomberg television. continuing to rage through alberta, wildfires. ♪
let's check in with vonnie quinn. vonnie: iran has testfired another ballistic missile. the test took place two weeks ago. it had a range of almost 1300 miles. they set off international outcry by testfiring two missiles. they say the test do not violate the terms of the nuclear agreement with the west. firefighters battling the wildfire in canada may get a break as a cold front in the area may bring rain. the fire -- lead to 80,000 people fleeing the city of fort mcmurray. three spanish journalists have returned home after being held captive in syria for almost 10 months. spain and turkey and cut her celebrated their release.
treasury secretary -- heading to puerto rico trying to deal with the effects of artery goes $70 billion debt crisis. house republicans are expected to announce a bill that will create a control board to help manage the island's that and oversee restructuring. by bernie made off -- has persisted years after their death. made off himself is serving a prison sentence for that giant ponzi scheme. global news 24 hours a day. let's check out what's
happening in european equity markets, rising today after falling on friday for a consecutive -- second consecutive week. -- stocks zero 600 up by 6/10 of 1%, ftse is lower because of a decline in mining companies following metals and china data. have a look at the best-performing index groups, health care up 2.5%, technology gaining, energy-based resources, we will talk about oil in just a few. currencies of big bond markets, -- it is a big meeting ahead of the referendum. down against us dollar and euro is down against the dollar.
u.k. 10 year yield at 1.2%. let's get back to the u.s., abigail doolittle has the latest from the nasdaq in midtown. the nasdaq trading slightly higher, the index has. gains to some degree, but health care boosted by biotech, the index having its best day in two weeks, helped by all the big names. one of the top-performing performing names from a percentage standpoint is horizon pharma after they beat first quarter estimates earnings by 12% and reaffirming the full-year view. ceo tim walberg says the expect operating cash flow to increase sequentially through the year. also authorizing a 5 million share buyback with lots of good stuff going on, may just trade higher. in the range mark: any notable
drug? tesla are down for a seventh day. it seems that because of this could be despite a solid first-quarter, tesla did offer the new goal of producing 500,000 vehicles each year starting in 2018. some investors see this as a bit lofty or ambitious. delaysew as production in the stock is back down on the year by about 11% and back below its 200 day moving average. there could be some downside ahead for the shares of tesla. mark: thank you very much. betty: let's turn back to the global oil markets. lower, canadian wildfires cutting about one million barrels a day of reduction, however, we had that
news over the weekend about the reshuffling in the saudi oil ministry. mark: let's get all the big oil headlines with the bloomberg chief energy correspondent. the saudin on top of oil ministry, will they continue this policy of prioritizing sales over prices? >> there will not be any change in policy and that it minister is going to follow what the original -- what his predecessor was doing. in his last recent talks, in january, of this year, he sounded a bit more bearish and indicated that he is prepared and saudi arabia can take any -- they are not really worried about low prices, they have --
they are the lowest cost producer and at the price stays low, they can survive for a very long time. mark: hoping for a freezer some kind of deal, not a chance. basically if you are expecting a freeze, you will be disappointed. betty: i want to turn back to the canadian wildfires, what's happening here, that seems to have an impact in terms of a spike in oil prices, right at the start of the session, but we have now lost ground, why is that? least here is, at that the fires are heading to the oil operations. with a chance from the wind and weather pattern, they have changed direction and are no longer threatening the oil operation. well this is happening in canada, we have oil disruptions in venezuela and nigeria.
iran are putting a lot of barrels and you put that --ether, the next effect is what is happening in canada is compensating for the increasing production in iran and iraq. betty: let's go down to the numbers, how much potentially net could we lose of production from these wildfires knowing that this is continuing? >> you are right, and it will take him out -- a long and modify before the fire is under control and production can resume. the authorities will want to carry checks on the operation but also there have been significant disruptions in the community. about 100,000 people that have been evacuated from the area. production,n resume the end of this week, we will
need another 10 days, we are looking at one million barrels a day, so that is in the range of 14 million to 20 million barrels. at aboutntories stand 540 million barrels. it will be a dent in those high inventories, but inventories will still be very high and close to historic. mark: i want to come back to the former saudi arabia and oil minister, especially those the end of opec meetings were the press would hang on his every word he originally went on his morning run. up very early, sometimes as early as 5:00 in the morning going jogging. trajectoryarkable that at the age of 11 years, he are and rosearamco
to the ranks, got education, became the first president and the saudien became oil minister from a 21 years and deal in traders have to reacting to what he says. what --ne last thing, what are we watching for for the rest of this week? what will be the biggest swing factor for oil? commentsl be watching from saudi arabia, we are expecting some comments from the new oil minister, probably tomorrow or the day after tomorrow and certainly the
canadian oil fire, we will be thing a lot of attention to that cold front that is moving through canada, whether it is bringing some rain and whether we can see a research of production, earlier than -- ated or whether or not the fire remains under control, then we will see increasing prices. mark: great to see you. markets, on bloomberg donald trump powerful son-in-law, everything washington and wall street wants to know about jared kushner. ♪
business flash, a look at some of the biggest business stories in the news. kennett is not taking no for an --wer, taking steps to -- give shareholders the right to buy more shares at a discount, it is a defensive measure against a hostile takeover. -- so i have other assets to reduce some of its $20 billion debt. the largest mining in the u.s. has agreed to sell a coppermine in the democratic republic of congo and china. the price is almost $2.7 billion in cash. last year, shares 71 -- shares fell 71%. the latest turchynov from disney's -- disney marvel studios debuted in north america, captain america, -- cap america: civil war took in over
$180 million. captain america has already taken in almost $200 million prior to its u.s. debut. that is your latest that bloomberg business flash betty, are you a captain america fan? that is in a things for my children are going to watch, yes we are. i am a fan by default. or proxy. are knownmp children to a him on campaign rallies and so is his son-in-law, jerod kushner. reporter devin leonard joins us now with more. those here in new york know the kushner's, they know the name, tell us a bit more about them. . -- about him in the family >> he is a guy that is likely to be --
have a big role in the trump white house, not because he is has a grasp of foreign policy are extensive experience, but because he is donald trump's son-in-law. he's sort of roundup in the right place at the right time. betty: he comes from a real estate family, owns the new york observer, what role is he playing right now other than sitting pretty in photo ops? -- heis doing a lot to has a close relationship with his father-in-law and is working behind the scenes. he has friendships with people like rupert murdoch and has been trying to smooth over some of the tensions between the trunk campaign and fox news. also, he helped the trunk craft his social media strategy after trump lost in iowa.
i guess he helped put together a strategy for facebook and he is doing a lot of stuff like that and he also helped the trump right his speech, syria he has his fingers and lots of stuff. mark: how does he run the observer? what is that all about and what is the observers take on donald trump? the new york observer has historically been a newspaper for the rich and famous, especially donald trump and lately, the paper has become much more -- much nicer to donald trump, they endorsed him before the new york primary, the also-ran other pieces that were pretty flattering, that is different than the way it used to be. mr. hasor says that nothing to do it that, but it is under his ownership, so it is hard not to make the comparison. mark: doesn't he have roots in
the democratic party? a's father was intimate -- big democratic fundraiser. endorsedthe observer president obama, so it wasn't always as conservative as he is, now. betty: how is the observer playing this, where -- how does the editor-in-chief run the paper amid all of this? the editor was a personal-finance writer for a lot of magazines but also helped rudy giuliani righty is -- right his memoirs and was consultant or --
consultant for a political committee. i guess looked over trump's speech that he gave in march before aipac. he has been intentionally involved in the campaign. betty: tell me about jared, his political power brokering, even before this campaign with trump. >> i would not say he has been all that involved, i mean clearly -- betty: it is hard not to be as a real estate developer. he has been a contributor to campaigns and obviously a think he has tried to like anyone, try -- they endorsed obama in 2008 but switch to mitt romney in 2012 and now it is his father-in-law, but he is very discreet.
the only thing he said about trump and a interview was that he does be great, so -- do a lot of interviews, he is very active behind the scenes. betty: is letting his father-in-law do all the talking. thank you. read more about jerod kushner in the latest bloomberg businessweek. still ahead, if you want to -- d kushner in the one of paris's most famous restaurants is auctioning off a very rare, special and old cognac. ♪
mark: welcome back to bloomberg markets. a quick check on how the european session is plant -- panning out, today. roughly 30 minutes or so left of the monday morning session. mining companies are dragging the ftse lower on the back of falling metals. the big industry gainers today are -- let's have a look. health care, two point 4% up, technology up by 1.7%. amongst those canada wildfires and the basic resources index down by 1.6%. both currencies, sterling and euro weakened against the dollar.
-- we call it super thursday, the 10 year yield is one went for 2%, the german yield is one point -- .13%. one of paris's oldest restaurants will auction off about 100 red spirits. on the menu is a lot of cognac predating the french revolution. imagine sipping spirits from the marie antoinette era. joining us now from paris is lori matheson. thank you very much for joining us. i: hello. mark: give us an idea of what this cognac is like. ri: it is drinkable, i have not had it, myself, but we are told it is fine and very elegant and a pretty natural taste and
very straightforward, sort of spirit, but still very lively which is amazing. mark: how much is it going to cost and who will buy it? our: i hope some of planners are passionate, they cost about 20,000 euros, and that is the estimate. they have already been sold for more than that by auction houses, previously. we reach 2 -- we hope to reach 30,000. betty: that is pricey for some brown liquor. i do want to say plenty, but give us a sense of how rare these really are. lori: they are extremely rare. i have never seen any, previously.
i don't think there are that many left in the world, even the famous runs houses don't own that old bottles. betty: does this coincide with a greater interest in not just auctioning off rare spirits and liquors, but an overall interest spirits?nd wines and lori: the market has been dynamic for the last 10 to 15 like this withts such prominence are up because the pedigree is really part of it. coming from this restaurant, they have never moved and this is absolutely amazing, or us, it is exciting to handle these bottles. a lot of emotion involved. mark: give us an idea of what else is in the seller. this is a record -- cellar.
this is a restaurant that has been around for over 400 years. lori: i recommend -- i reckon iny have the biggest cellar the world. i don't know the proportion, but the eggs their wines, they have allocations with very high range shadows, they have had these wines, forever -- very high range chateau's, they have had these wines forever. mark: you can read more about the luxury pursuits at bloomberg.
barton, you are watching the european close on bloomberg markets. ♪ we will take for -- take you from new york to london, athens and in the next hour, he result we are watching. greece returns to center stage with new bailout talks. made enoughinister austerity commitments to gain the trust of finance ministers after six years of initial turmoil? the ceo on the brexit vote and what it could mean for the u.k. mark: a closer look at saudi arabia's new oil chief and why he is expected to keep production levels near record highs and what it could mean for the saudi economy. betty: we are now 90 minutes into the trading session of the u.s.. we want to head to the markets with julie hyman. julie: