Skip to main content

tv   Bloomberg Markets  Bloomberg  May 13, 2016 3:00pm-4:01pm EDT

3:00 pm
♪ carol: good afternoon. i'm carol massar. here's what we are watching at this hour. stocks and banged the week on a down note. lackluster results for major retailers. the s&p 500 headed towards its streak and four months. the acting president of brazil doesn't see change to investments -- does see change to the game in their economy. and apples bet on investing in ridesharing company didi. what does it mean for uber? there one hour away from close of training for the day and the weekend. let's head to the markets desk and check in with julie hyman. we are pretty much at our lows. yeah, and we some
3:01 pm
results of lackluster volume. we will look at that in a minute. the dow is down 171 points, down nearly 1% as we head towards the close. it looks like we will have a down week for the third straight week. let's take a look at the volume on the terminal. this looks at volume by industry. all are down. telecoms seeing a drop, energy also seeing a substantial drop. upticky group seeing an of 18% is construing or discretionary -- is consumer discretionary. outside from that, not much activity. if you look at the s&p 500 over the course of the day, you can see the interior rating prices. this downward decline accelerating after midday, as the s&p is down 9/10 of 1%. asant to look at oil prices well, because we see a lot of correlation between oil and
3:02 pm
stocks, but that has not been the case today. it has been down steadily throughout the course of the session. it has not seen that downward slide. we can't bring -- can't blame oil today. carol: talk about what's going on with the banks. reporter: there we can put the blame, because banks are doing more poorly now. you can see this is coinciding noonthat noon, -- that slide beginning to accelerate. -- therenot to see does not to seem to be that specific up a catalyst, but there are concerns about global growth, the banks take the glut of that. wells fargo, jpmorgan falling today, along with regional banks. it's not these big banks, but the regional banks as well. if we can flip over and look at the regional banks that are falling today, here we have region and centrist seeing declines will stop it might have to do with bond yields.
3:03 pm
-- the kleins. it might have -- declines. it might have to do with bond yield declines. yields are going down. we have seen some correlation between yields and the banks. the expectations on the part of investors and analysts seemed to be that when rates go back up, that will be good for balance sheets and online. .- and bottom line yields are going in the opposite direction. of theit is indicative markets we are in. they are not always logical. reporter: yes, good summary. carol: let's take a look at the headlines. mark crumpton has more. facing a growing backlash over extremely long airport security lines, the head of the department of homeland security says the transportation security administration will speed up the hiring process to deal with the upcoming summer travel season.
3:04 pm
countrys across the have been facing growing lines, which have topped 90 minutes at some airports. the tsa's union says the shift of $400 million to hire 800 screeners is not good enough. they want 6000 workers hired. donald trump says he does not keep money in offshore accounts, and his tax rate is no one's business. in interviews today, the nominee -- the presumptive nominee defended his refusal to release tax returns and tell an audit is completed. he believes the public does not have the right to see his tax returns until people vote in november. esther trump says he will gladly do so if audit is finished before then. bernie sanders is being pressured to end his bid for the white house. party leaders are worried sanders is undermining clifford -- undermining hillary clinton's efforts to be donald trump in the fall.
3:05 pm
also allegedly benched president obama and joe biden. people are lining the streets in coronado, california to honor charles keating iv. he was killed on may 3. she will be laid to rest in a national cemetery. officials have ordered the evacuation of 9000 people from homes grazed in a fire in madrid. to be set intentionally. the dump holds about 1000 metric tons of used tires. news 24 hours a day, powered by our 2400 journalists in more than 115 euros around the world. back to you. mark, thank you. emergency markets stocks on their largest losing streak since august. the route -- the market is faltering.
3:06 pm
this slide comes as investors have pulled out 3 billion dollars from equities in asia and brazil this month. let's bring in paul christopher, head of international strategy at wells fargo investment institute. he joins us from st. louis. nice to have you here. let's talk about henrique more alice. nrique morales. what do you think of him and his appointment? guest: it's not going to change much in brazil. we continue to see operating's earnings and companies decline. are the real important variables here, not who gets named. who gets named to post in brazil while the political crisis is still raging. carol: fair enough, but let me challenge you, it is important to get the point and, because no growthealing with
3:07 pm
and inflation, so they need to have the right person in the right job to help fix that, no? guest: that is the long-term consideration, yes, but with the markets going up already, we think there is not a good reason to put new money to work in brazil. it will take a long time to solve those problems. it will take up to six months to finish the trial of dilma rousseff. we think investors should be placing their money elsewhere. carol: so where else would you put your money, if not brazil? guest: we will be selective here. we still like the u.s. and u.s. growth. we liked u.s. large caps. at the same time, we have to recognize there are risks in the world today, so we will pull back on those asset class and equities that we think are the most volatile and i have the most potential to be volatile months ahead, including small caps and emerging markets. carol: let's talk about one big emerging market on our minds,
3:08 pm
china. what is wells fargo's stance on china? guest: we are cautious on china. we don't have a specific country recommendation, but we think china has scheduled a spill over into the rest of the world. with all that new stimulus's building and infrastructure projects, we think china's economy looks stable, and that's a good thing into the end of this year. that's one of the reasons we like u.s. large caps and growth-oriented stocks. but in the long-term, all this money pumped in is increasing social financing. i think that is bad for china in the months ahead as they deal with additional debt. carol: do you think it will be a marketplace for the next six or nextmarket play for the six or 12 months as opposed to emerging markets? guest: we do. it's going to take at least that long before emerging markets are ready to start lending into their economies again. carol: there are family offices
3:09 pm
and the like who do have a longer-term perspective, and they are willing to wait out the ride. if they do have that outlook, where should they be putting their money in terms of emerging markets? guest: that's a good point. our clients, we also want them to have some emerging-market allocation. we just a want them up to -- just don't want them up to the long-term allocation. we like asia as a potential source of growth for that patient investor. developing ins asia in the years ahead in a way that we think will deliver good returns for u.s. investors, particularly those with a long, patient horizon. drill deeper,y you say emerging asia outside of china. what of emerging aged do you like? guest: we would be taking a closer look at taiwan and korea, which we believe are well-placed
3:10 pm
to exploit the interest and service development in china. at the same time, there might be additional opportunities that will appear, they be over a longer horizon, and southwest --in southwest asia, especially malaysia and india. about you've got to talk the commodity markets as well. it has been humble, to say the least. we have seen a bounce back since the mid-january levels. what do you think about the commodity marks and how that plays into the fortune of emerging markets? guest: commodity markets look less stable right now, but probably set to trade in wide ranges over the next several years as this bear cycle in commodity prices plays itself out. that's the usual way that these things tend to develop. as long as these rises sustain -- prices stay in those wide ranges, i think we will continue to see consolidation, and that's going to be not so good for materials companies. biggest risks the
3:11 pm
to emerging markets right now? that china miscalculates. the debt i mentioned has to be dealt with at some point. if they miscalculated the amount of debt they have to deal with, or if they try to deal with it too quickly, that could produce a faster than expected deceleration in china's economy, which we think would spill over into emerging asia and ultimately to the european and u.s. markets. carol: certainly something to keep an eye on. going to leave it there. christopher, head of international strategy at wells fargo investment institute. coming up in 20 minutes, we will take a look at u.s. retail sales. iny are posing a big gain april, but department stores are still struggling. we will talk about the changing shopping habits of americans. what is behind apple's investment in chinese ridesharing service didi. these questions are coming up at the bottom of the hour.
3:12 pm
and let's take a look at the dollar today, at its highest level in three weeks. up about another .5%. --s is "labor markets." bloomberg markets. ♪
3:13 pm
3:14 pm
♪ this is "bloomberg markets." let's get a quick check on the markets, 45 minutes away from the closing bell. stocks hovering at their session lows. about 1% on the dow jones industrial average. s&p 500, 9/10 of 1% to the downside. you've got the nasdaq down about .5%. it is time for a look at the bloomberg business flash.
3:15 pm
agency see is hiring people for focusing on anti-money laundering and sections compliance. that is according to people familiar with the matter. u.k. lenders are required by law to isolate their banking units from riskier trading businesses. owners oftelling numeral legacy and outback vehicles not to drive them, because the steering can fail. the company is recalling about 52,000 of the models from 2016 and 2017. it is also telling dealers to stop selling them intel repaired. americans are growing more confident in the economy. to themer indexes rising highest level since june, and the measure for the outlook over the next few years saw its biggest jump since 2006. those surveyed predict real income will rise by the most in a decade. and that is your bloomberg business flash update. let's take a look at retail
3:16 pm
sales. retailtail -- april sales numbers coming better than estimates. the biggest monthly gain in more than one year. retail earnings have been lackluster, to say the least. , we discussed what retail has been struggling. >> there are a number of moving parts. a weatherll, there is issue, but it is much more than that. nordstrom called out last night that they are full price business -- that there for price businessr full-price is doing fine, but there is price transparency on the internet. if you do consumers -- if you give consumers what they want, that's fine. i'm it should michael cores being down, we had a three-year run in handbags -- i mentioned michael kors being down.
3:17 pm
they are a very high price point with a high margin. i think there is weakness in the department stores that sparked this trend. >> there is not a big replacement cycle in handbags. >> that's true. handbags are becoming smaller, because the need for handbags comes less. i think there are a lot of moving parts in retail. >> i am struck by what you said about nordstrom. aam wondering if that is larger phenomenon, that the internet allows price comparisons that squeeze margins. is that a broad phenomenon in retail? ] >> absolutely. macy's called out how the price transparency on the internet is hurting gross margins. you dovetail that with what nordstrom said, if you give the customer what they want, they
3:18 pm
will pay for it. however, once it becomes commoditized to any degree, they can buy it cheaply on the internet and they will. shopalways struck when i on amazon, the same item across the board will be starting at five dollars, going up to $25. that is remarkable. askl: and jim, i want to you, we'd are treating these as though all the problems are the same. i guess that is a temptation, and we are worried about topline growth for companies right now. jcpenney is supposed to be a turnaround, and it is cash flow positive. it is digging its way out of a hole. can we look at this and say there is an overreaction going on to what we are seeing, or is it genuine concern about the softening of sales, not what we want to see? the will go right with point that we are headed to a recession. a mixed shift.
3:19 pm
the consumer is still spending. they are much smarter on how they consume. but there is certainly a market share game. not only did they have accessibility with that with regards to smartphones to shop for products, but it is easier for them to do that and be able to get product delivered to their home in 24 hours, as opposed to going to the mall and having to visit a store. i think there is a different trend for department versus amazon, that makes shift of how people are consuming. >> that takes to the question, we have seen a number of retailers, for example, target, saying they will have a hybrid where the there are stores with online. are they having success in trying to hold off amazon? >> think they are. i think they are losing share more slowly by doing so. when you get to the internet, it is clear that it is a different animal. it is price, price, price.
3:20 pm
for years, there was a phenomenon because of the amazon sales tax situation, they were not playing state income tax, and best buy was a big market share donor during that time. what people would do is go to best buy and spend 30 minutes or 40 minutes with one of the gentle man or ladies in the blue shirt deciding to buy which tv, saying "i'll get back to you," and then they would go back to amazon. this show room phenomenon is one of the things going on. carol: that was rick snyder and jim cannon on bloomberg earlier this morning. still ahead on "bloomberg markets," we will check out out the options market is handling today's trading. in the meantime, here is a check on the sectors, pretty much down across the board, but the most is the financial names. this is "bloomberg markets." ♪
3:21 pm
3:22 pm
3:23 pm
julie: it is time for today's option inside. joining me is a managing partner at option did. you.ark am a good to see happy friday, although it's not a very happy friday for the markets today. we are seeing deterioration as the day goes on. looks like another negative week for stocks. what happened? midday, everything turned south. guest: yeah, i think we've got kind of a risk of for the weekend going on. even though the s&p is selling off, we are not seeing much out of the march -- out of the option market at all. moving.ures are barely let's take money off the table over the weekend and put them back to use in other places. and you have seen apple all off as the day has gone by.
3:24 pm
it was up nicely this morning, gave away all that it had midday , and now it is looking to close down on the day. julie: apple is down something like 19% over the past month. its decline is happening even before carl icahn said he had sold out of the stock, and they just kept on going. theow apple is one of things you have been watching as both indicative of and driving the underlying weakness in the market. how is apple when you look at the overall selloff? guest: not as significant as it was a few weeks ago. it is a little bit of a hedge fund hotel, so when that starts getting under rusher, they either need to liquidate the acquisition or liquidate something else to finance that position. i think that is something else of what is going on. it is a widely held stocks, and i think that is one of the reasons why it will drive things. i think there will be continued
3:25 pm
downside. until somebody says, i'm willing to buy, or apple initiates a huge buyback, i think apple could meander toward 80 before all is said and done. i see at least 10% more downside. julie: when you see apple making a move like it did overnight, when it invested over a billion dollars in that right healing -- -hailing company in china, presumably that does not change your thesis? guest: i would like to see them by something like paypal. apple pay is fine. nobody is really using it. everybody uses paypal. all the young faulk are using paypal. are using paypal. i would like to see them make a move into mobile pay. go after something added to its business and push the value -- and pushes the value of the phone and apple platform up a
3:26 pm
major notch. julie: let's get to your trade. is going toe stock keep going down. how do you play that? guest: yeah, i like buying a may-june barrier calendar. about $1.10. net, i pay $.90. i am really just financing those two. toon't think apple will get 87 point five or sell their next friday, but i think it will settle at 85 by that end of june. nice, cheap play. julie: thank you so much. interesting play on apple. ♪
3:27 pm
3:28 pm
iaae-m"
3:29 pm
♪ carol: you are watching "bloomberg markets."
3:30 pm
let's check on the headlines. mark crumpton has more. reporter: the obama administration is telling public schools to let transgender students use bathrooms and locker rooms that match their identity. not legally is binding, but it implicitly has the threat of lawsuit or federal funding cut off for those who do not comply. today the texas lieutenant governor said the states are -- said the state is prepared to forfeit millions and urges superintendents to defy the new federal guidance. a federal appeals court has rejected efforts of the american civil liberties union to release the full version of the senate report on the cia's use of harsh interrogation tactics. the 100 page report, prepared by the senate intelligence committee, is not subject to freedom of information laws. president obama meets today with the leaders of five nordic countries of the white house. they are holding a summit on
3:31 pm
security, environmental, and refugee issues will stop -- refugee issues. president obama: nordic punchies consistently above their weight in meeting the challenges of our time. our nordic partners are not large countries, but there are almost no issues that we deal with, in terms of security or economics, or humanitarian assistance, where the nordic countries are not some of our most reliable and effective and important partners. of norway,he leaders sweden, finland, iceland, and denmark are in washington for a day of talks, capped by a state dinner. u.s. honeybee numbers continue to drop. the survey says the number of honeybee colonies declined 1.8% in 2015. beekeepers needed to replace 14%
3:32 pm
of all their hives to retain the pollination of apples, almonds, and other key crops. it is said that honeybees pollinate about $15 billion worth of crops annually. global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you very much. the nasdaq is falling for a third straight day. abigail doolittle has the latest live on the nasdaq. we have some minor volatility. the nasdaq opened lower, with trading higher for much of the session, and the nasdaq took the dead lower, down three days in a row, negative on the week for a for a four-week losing streak, the longest since october 2014. we look at that losing streak,
3:33 pm
it actually proved to be a bottom, or support for the nasdaq to trade higher. this time around, it appears to have a range of uncertainty, lower than the last two. the last two broke to the downside. stay tuned to what is in store for the nasdaq. one of the best stocks helping the nasdaq, a lecture on the cards' shares are up 18% on the week after getting fourth 'uarter -- electronic arts shares are up 18% on the week after eating fourth-quarter estimates. weekly chartat a of electronic arts, we see something bullish. the stocks bullishly reclaimed its long-term trend, but it is still below its record high. however, brian pitts of jeffries sees a new record high ahead for the shares. arts certainlyic helping out the nasdaq this week. what about another name that did not help out?
3:34 pm
reporter: that would be apple. down about 2% on the week on renewed concerns around slowing demand for iphone and iphone sales, really sparked by a bearish, negative report from the nikkei asian review that semi conductor manufacturer for iphones is likely to slip. and we see the stock is down more than 30% since its record peak last year on a bearish uptrend reversal. the last bearish uptrend reversal came in 2012, that time on margin compression. the stock did slide from that peak by 45%, so there could be more downside ahead. carol: thank you so much. here to talk about apple's rapidly deteriorating price, an analyst at rbc capital markets. an outperforming rating on apple, and we are also joined
3:35 pm
by cory johnson from san francisco. i was taking a look at some of the numbers. apple is down about 14% so far this year, down 19% since april. is the decline justified? yeah, not been a fun stock so far. a simplehink there is answer. you are seeing a replay of what you saw in 2014, where people were worried about apple and talked about the demise. it seems to be going through a comparable dynamic and set of headwinds, i think. we think if you hold this perspective, it will still drive mid to high single digit revenue growth for apple. cory, you like to take apart the balance sheets of apple. we have seen growth in terms of the smartphone market.
3:36 pm
is there a catalyst for apple in the near-term future? see in think what we didi, we see a company that has a lot of resources, particularly cash all over the world, yes -- less than the u.s. because they are spending it for buyback of dividends. , in one of the worst quarters it's had since 2013 fiscal year, generated $9.3 billion in the quarter, which is to say the money they spent on didi is equal to about nine or 10 days of cash generation. they are creating so much cash, they are creating opportunities. whatever investor looked at the steel and said, what are they doing with this cash, it is 10 days of cash for apple. it shows you what a money company this is. carol: great perspective. talk to us about this investment that apple made. what does it say to you? you got -- do you like this investment?
3:37 pm
you look at the offshore cash they have, it is logical for them to do things like this. them to a better presence on the table in china, a better presence in the transportation market, all things apple has aspired to have. almost surprised apple does not have aggressive when shares. ory: it also matters, what cut of a partnership this is. we see apple wanting to be using apple -- wanting people to be using apple music, apple backup, and apple phones. they want to more tightly integrate the phones with the services people are using them for in china. if that would work out for apple, it would boost their
3:38 pm
ecosystem. if it is a change in direction, it would be greatly disconcerting. if this is a company flailing around, looking for some way to get investment returns and business returns, that would be more concerning. i think we will look for the details to see how this partnership will unfold. it is a very big is this that didi has built up -- business that didi has built up all stop -- built up. carol: do your clients still think apple is a growth story? guest: one of the biggest debates is how far extended do that apple replacement cycles get. is probably 27 months or 28 months. that seems to be the biggest debate. left apple or not? tendency tol have a extrapolate things too far out. the reality, you take the 20% , and the 14%one 6 iphone 6 esta klein, that's
3:39 pm
probably not the right way to look at it either. s decline, that's probably not the right way to look at it either. carol: we should probably take a bake -- apple should probably take a break and invest in other businesses. is that fair? : i think it shows a change in direction. it was not too long ago when tim cook sent an e-mail saying, don't worry of china stock rall as china is actually a real problem. china stock rallies, china is actually a real problem. a smart phone refresh cycle. if that stretches out longer and longer, that is a fundamental change for apple. i agree that the quarterly numbers are only that, but the might start to connect as we get results and see some sort of exterior day to away from apple about what people are doing with their phones and
3:40 pm
when. talking aboutok china, and then the numbers coming out later, we do need to worry kind of about the core business of apple at this point. -- it'she china comment been such a big part of the growth story, that when you saw the headwinds and people reacting around it, do you worry about growth for apple in china or probably? i think it comes down to the replacement cycle dynamics. we stilld part, can get more dollars for iphones? see theyou continue to services line sustained double-digit growth for the foreseeable future. carol: we will leave it there. thank you so much.
3:41 pm
still ahead, will a strong april u.s. retail sales report open the door for the fed to height in june? we will talk about that with joe weisenthal, coming up next. stocks hit a 52-week high in trading today, but the markets are overall lower. nvidia airgas is bucking that trend. stanley black & decker is on the down said -- is on the downside of. -- is on the downside. ♪
3:42 pm
3:43 pm
let's get a check of
3:44 pm
markets, 17 minutes away from the closing bell on this friday. we are coming off our lows in the session. the dow jones industrial average up about 9/10 of 1%. the s&p 500 declining 7/10 of 1%. and about 4/10 for the week down for its -- on track for a third consecutive weekly to crime -- weekly decline. this is the bloomberg business flash, the biggest stories in the news. we start with general motors, halting sales on some sport utility vehicles because they had incorrect epa mileage labels. gm is telling steel -- is telling dealers to stop selling the models. replacement labels may start arriving tomorrow. buying skin drug assets for $900 billion. they will pay up to $50 million in future payments.
3:45 pm
the renaissance union had about three and $70 million in sales last year. million in sales last year. that is your update. is consumer spending in the u.s. making a comeback? by one measure, yes. it is reported that retail sales climbed 1.3% in the month of april. the big move coming despite troubles at some big retailers. joining us to talk about the numbers is joe weisenthal, "what'dof -- cohost of you miss." we know there have been troubles when it comes to the department stores. reporter: about this did a good job of clearing up what this is really about. is this a secular shift? the department store is not a thriving business model. with all the sales of -- sales and liquidations, maybe i should shop at them a little more.
3:46 pm
but people go to specialty shops and by home goods, but a lot of what people buy a department stores they buy online or at cheaper places. we bring back that charge, because you guys did a battle of charts earlier. reporter: i think it is the crucial charge today, non-store retailers, amazon and whatnot, up over 10%. department store year-over-year sales down 1.7 percent. not that confusing about what is going on, and that chart shows it. carol: you are kind of looking into some of the brick-and-mortar versus who is doing well and who is not. isorter: one area that really strong under retail sales is restaurants and drinking establishments, which you can't do online, obviously. you can't go out to eat on amazon. that was up over 8% year-over-year. carol: and that is a continuation of a trend. people want experiences. yeah, switching to
3:47 pm
services over things that you own. f the decline in department stores were related to the economy, you would expect it to show up there. it is not. carol: people are spending on their homes, too. reporter: another strong category. look at the stocks of home depot, there might have been a little weakness, but they have been amazing performers. carol: this report came in above economic forecasts. what does that mean for the consumer? reporter: it is a relief for people looking at the u.s. economy, because we know q1 they don't was pretty bad. people were hoping it was a fluke, that there might be seasonality. we have been talking about how the q1 has been week. .his is april, q2 if it was going to be a week number, that would be a signal that the q1 weakness was something really bad. the fact that is spiked up so nicely lends some prudence that
3:48 pm
maybe the economy is not that bad. 2.8%dp now cast sees gdp for q2. carol: really? reporter: we are still early in the quarter, and it fluctuates a lot, but for the moment, q2 is looking much better than q1. , coming upweisenthal in just a few minutes. coming up right now though, we have the close of trading about 12 minutes away. take a look at your major averages. coming off the lows of the session, but hovering near their worst levels. down 1%,ee the doubt the s&p declining 8/10 of 1%, and the nasdaq down 4/10 of 1%. we will be right back. ♪
3:49 pm
3:50 pm
markets closing at about 10 minutes from now. julia hyman has a market check.
3:51 pm
where are we? reporter: we are at the low of the session again. 1%.dow is down earlier, the nasdaq was up 1%, so we have flip-flopped throughout the day. selloffseen a accelerate going into the end of the day. i want to talk about the week as well, because it is the third straight weekly decline because of the drop we have been seeing today. week. been a negative here is the past year, although -- i think we have the past week for amazon and apple, hopefully. that is the best point performer on the week and the worst point performer on the week. apple has been the biggest drag. we have talked a lot about its underperformance. amazon was on a winning streak. some of the other winners and losers on the week percentagewise, on the upside we have had electronic arts higher this week, beating estimates, and monsanto is having talks
3:52 pm
that a buyer might be making a bid for the company. we have staples falling after its deal with office depot was canceled. nordstrom is having negative numbers. gap also falling on negative numbers. that joe was shift just talking about in retail, you obviously see it reflected in the stocks. carol: investors certainly reacting. we want to talk more about the markets. mike regan is here wrapping up the markets. start witht to lending club. that is down 50% this week. it has been in the news a lot. reporter: right, and the concern with them is that they have had phenomenal growth, i think 60 something percent increase in originations in the last quarter, but how will they keep funding those loans? who is going to buy them? it was originally called of
3:53 pm
peer-to-peer lender, but it is actually other peers borrowing, with peers being hedge funds, banks, and other investors. down 50%.said it is at some point, is there value in their asset? what is left? reporter: i think there will be a lot of speculation with what happens with them. maybe a bank or competitor will be taking a look at them, that's all speculation. anytime a stock drops that much, you got to wonder about that, but it's hard to really say where this is going to go, because there is so many question marks about this country. obviously, the news with the ceo resigning and jeffries questioning the loans they were buying. other investors are saying they are not planning to buy loans this week. their whole growth depends on people investing in these loans, question are too many
3:54 pm
marks about whether that is feasible. if you buy a loan from lendingclub, you are basically stuck holding it until maturity. even if it is a securitization, an asset-backed security based on loans for these peer-to-peer lenders, there is nowhere to sell it, limiting the number of people willing to invest in these loans. the question is, if the banks start coming in and make securities out of them, how can they keep funding this loan growth? it's not just an issue with lendingclub, but throughout the whole business. people are questioning, is the credit cycle turning? is now a good time to invest in these loans? carol: is the model not perfect? reporter: the "new york times" had an interesting column today talking about how lendingclub has left a lot of questions. we saw a lot of retailers
3:55 pm
fall apart. to me, it's like some of these retailers have had broken models for quite some time, and it's a reminder that some of them are not doing that well. reporter: absolutely. the chart go showed pretty much howed pretty much tells the story. people want to spend, just not at boring department stores. you have the strong retail sales today, which is waiting on the markets because people are viewing it, being more hawkish. the comments from the fed speakers this week were probably not as dovish as people hoped for. at the same time, yes, consumers are spending more, just nordstrom, macy's, and kohl's were disappointing. carol: and volatility, we have
3:56 pm
seen a market swings. reporter: yeah, today, almost a 200 point move in the dow. the question is, we have been stuck in this tiny, tight range, 2050 to 2100 on the s&p 500. a lot of people are looking at that 2050 level, the moving average roughly, and that's where momentum gets sucked out of the markets. interesting to see today if we manage to close above 2050. carol: thank you as always, mike regan. that's it for "bloomberg markets." take a look at the major averages left four minutes into the close. keep in mind, the s&p and dow on track for a third down week. ♪
3:57 pm
3:58 pm
3:59 pm
scarlett. we are minutes away from the
4:00 pm
closing bell. u.s. stocks closing lower this friday. the s&p having his longest weekly losing streak since january. "what'd youstion is miss?" three charts you cannot miss on the state of can -- of the concern. call fromhat francisco blanche. we begin with our market minutes. down on this friday leading to the third straight week of losses for the s&p 500. the longest weekly losing streak in four months. the dow losing 180 points. all groups lower even after retail sales can better than expected. joe:

6 Views

info Stream Only

Uploaded by TV Archive on