tv Bloomberg Markets Bloomberg May 24, 2016 2:00pm-3:01pm EDT
from bloomberg world headquarters in new york, here is what we are watching this hour. home surge in april -- new sales surge in april. markets flying high today, gains in all 10 s&p sectors with tech leading the charge. rejects bayer's takeover deal. they are open to talks. can a deal get done? markets close in two hours time. the dow up and running with a 200 point game. julie: the strength has been remarkably consistent today. stocks rising out of the gate from a taking another leg higher and then staying there with all major averages near their cries of the day.
-- highs of the day. last week, we had that changing perception of the fed perhaps being more aggressive than the market was pricing in. official from the philadelphia fed speaking last night, reiterating that view. he is not a voting member. there is not much that changed today that would cause this breakout that we've seen. what is driving that upsurge? we've seen banks trading higher in the session. we've also seen technology doing quite well in today's session. if the economy is strengthening, it would be good news for these economic and sensitive -- groups.ally sensitive
traders overreacted to the downside of microsoft earnings report. apple continuing its winning string recently. just wanted to check on the stock, monsanto taking another leg up after it came out with that statement saying they will that saying that the offer was too low. it is notable that the shares are still so far below that offer price because there are some questions about whether it can regulatory league best -- whether it can regulatory late get through. current market cap around $12 billion. they are not saying who the bitter might be. dder might be.
the stock is reacting. david: let's check on the first word news this afternoon. mark: president obama is putting vietnam human rights records front and center. the president said he still has concerns over the way the country treats its own citizens. >> the united states does not need to impose its form of government on vietnam. the rights i speak of are not american values, they are universal values. they are written into the vietnamese constitution. mark: the president noted thenam barred some of
people that the u.s. had invited to meeting. sumner roy blunt says robert onenald should resign -- says the comment is a clear sign that new leadership is needed at the v.a. 200 congressional democrats have written a letter asking paul ryan to end the investigation into planned parenthood. the panel was initially created to investigate the fetal tissue controversy at the center of undercover videos. iraqi forces backed by u.s. warplanes are battling islamic state on the outskirts of falluja. showso purportedly paramilitary forces and iraqi
government troops targeting islamic state positions outside the city today. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. crumpton david: good news for the housing sector. purchases of new homes in the u.s. surged 16% in april, the highest level since the start of 2008. the data points to a robust spring selling season. i want to bring in brad friedlander. a big issue for a long time here has been inventory. brad: this was big news this morning. a point of real untapped potential. best we had seen home prices doing well, but what la gged here was builders. issue,ries has been an
the demand is there. whether it be regulatory issues, financing, those have been hitting the industry hard. infusing nicet of energy into gdp from the housing sector. david: what prompted builders to adjust at this point? the sentiment -- brad: the sentiment has been there. they've felt confident for some time. to see thoseing early signs that this was something here that represented that housing can help the economy. seeing this beginning to stir this morning is good news. you have the average price growing faster than the median price. brad: it's a question of
geographics more than anything. you've had certain areas of the u.s. doing better than others. the south is doing well. you can slow down within the northeast. more geographic than anything. david: how are the fundamentals of this market right now? brad: i felt strongly about the fun metals for some time now. we've seen that resonating through the link when season homeowners extraordinarily low -- delinquencies for homeowners extra narrowly low. the fundamentals look good. what was bothering me was this home sales number. you are beginning to see that compounding with the strength we've seen right now with the homebuilders like toll which reported this morning. contextut this in the of what fed policymakers are looking at right now.
brad: the fed had the ammo to do this. it started already. this has supported their thinking overtime and the market is getting accustomed to that. rising rates is not something that will hamper the housing market. affordability is still quite low. we are still 100 basis points away from a breakeven affecting homeowners in any way. david: what are the biggest regulatory issues? brad: four homebuilders, they are still dealing with number of costs associated with green space and energy savings. that is 30% of building costs right now. that is something that is not going to go away. that is where we could see more stimulus and more direct stimulus to help the economy. instead of indirect ways like
student loan incentives and those kinds of things. the info we've seen this morning, it gives one confidence. david: how positive is this? how bright spot is this housing data? brad: this is solid information. you are not seeing too many bright spots in the u.s. economy. we are still dealing with the issues rounding energy. -- surrounding energy. this is a sector that has legs over the next several years because we see the infusion of first-time homebuyers loosening credit overtime and that untapped potential coming in the form of homebuilding which has been mediocre in the last fears. -- last few years. david: we've heard about
millennials who prefer or have to rent. looking longer-term, how big a problem is that going to be? our folks just waiting? brad: less and less, you will see that trend change over time. some who were too bold in assuming that a few years ago. double-double generations who are still on the sidelines and have never purchased a home. you have two generations to catch up with at this point. that could represent pent-up demand. there's already plenty of demand. the key here is supply. who would have thought 10 years ago that we would be in a position where we have a supply issue? a good problem to have. let's call this builders to get going. david: brad friedlander joining us in new york. saga --ma in the
time for a look at the biggest business stories news right now. anheuser-busch has one european approval for its takeover of sab european approval for its takeover of sab miller. they will create a fund to support the south african beer sector. ceo says he is disappointed by moody's decision to cut the bank's credit rating. long-term deposit ratings fell to a-two. >> operating results have been in decline for the past couple of quarters. that is what drove our rating
change. we think the capital and liquidity position banks are supportive of the rating. david: shares are down 43% in the past year as the bank's turnaround plans struggle to take hold. two new trustees have been added that themily trust bike come chief executive officer and george abrams are suing to block the removal. business flash update. scherzer viacom trading higher on news the ceo is being replaced as a trustee. -- shares of viacom. paramount is precious to sumner redstone. he fought this bitter takeover battle in the 1990's.
he and barry diller paid $10 he's never wanted to sell it. david: we are learning more about the way he's managed behind closed doors. what have we learned? chris: two new trustees that one was a teaching assistant with sumner redstone at boston university. joel is also known to the financial community. they're are the new face of this trust that will take over when sumner ultimately passes. he filed suit in massachusetts yesterday saying sherry redstone was pulling the
strings here. that andhe latest on him? chris: he's going to argue these new appointees show this is sherry taking over the family trust. sherry is the president of national amusements. sumner filed suit in los angeles trying to have these moves allocated. it is massachusetts versus california. this? how surprising is phillipe was such a close confident. sherry's been on the outs for a long while. chris: it is shakespearean drama. everyone has considered philippe as i can son to sumner redstone. son to sumner redstone.
you have the ceo suing the controlling shareholder of his own company. david: what does this mean for that paramount sale? viacom is in debt. he is trying to offload that paramount steak. for those who might bid on it, this has to be something that gives him pause. chris: that's what we are hearing. viacom told us the sale is still on. maybe if they get such a high price come every will be happy about it. if you are looking for a minority stake in a business that is projected to lose year, you will think twice about putting a lot of money in that deal. drama shakespearean onstage in los angeles. julie hyman has some breaking news. ceo hasnicredit's
agreed to step down. he's been there for almost six years at the head of italy's biggest bank. he will leave once a successor has been named. the board members held a meeting in milan on tuesday afternoon. the company is expected to come in a statement later on. leave theeman did company -- lead the company through the sovereign debt crisis. there's been concerned that the bad loan file will continue to present issues and challenges for the industry's profitability. you can see some of that volatility over the past month. credit -- unicredit shares have not done well. will be stepping down as ceo of unicredit as soon as a
successor is named. we will bring you any other developments. afternoon movers this that are the results of long-running stories. one has to do with herbalife, the long story there, the accusations from bill ackman that the company is a pyramid scheme. it is being probed by the ftc. the new york post saying the ftc is scheduled to meet regarding a law enforcement matter. they do have a meeting scheduled for 1:00 p.m. tomorrow. .t is closed to the public shares are spiking. cfo sayinges -- the in a conference today that their strategic review to sell the core business that's he says it .s going very well
editor ellen pollock. she is very california. ellen: she is extremely well known, the life coach to the life coaches. she makes something like $3.5 million a year. has two full-time staffers. she has a column in the oprah magazine and has written a .est-selling book th she has made a second career training people to do what she's been doing. a $2 billion industry. she's had such demand from people who want to do what she does that she is now training life coaches, training master life coaches.
people learn online and through of variouscations sources. it is a multimedia thing. once you get really serious, you have to actually come and see her. she charges good money for this. david: this is serious business and professionals pay big money for this. ?hat is life coaching ellen: she has legitimized the business. when she and other life coaches try to do is help you with your life, figure out your path. she wants to help you figure out what you want. she is constantly telling people to consult their own internal truth meter.
integrity checks and integrity cleanses. you stop what you're doing and question your assumptions and think about what you are saying self how you know what you think you know. her mushy things what she conveys is common sense and even she is surprised at how successful she's come. -- she has become. david: still ahead, the commodities close coming up here on bloomberg television. ♪
requesting a recount in kentucky's presidential primary. the sanders campaign says election officials should review electronic voting machines and absentee ballots both mrs. clinton and senator sanders received 27 delegates, but one delegate remains to be allocated. bill cosby standing trial in pennsylvania and a felony sexual assault case from 2004. the 78-year-old actor faces up to 10 years in prison if convicted. 15 federal appeals judge is whether a voting id -- and majority of the 15 member
court voted to rehear the case. arguments took place today. it is unclear when the judges will rule. human remains may be the clue to what caused last week's egyptair crash. body parts suggest it was and on board why it of four -- on board flight 804. egyptian officials have said they believe terrorism is the likely cause of the crash. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i mark crumpton. david, back to you. david: commodities markets are closing in new york. oil trading higher for the first time in days. investors looking at u.s. data
at 10:00 tomorrow. gold closing around 1228 a troy ounce. riselation of a rate dent demand. juan santos is today it is open to a deal with bayer but the -- monsanto saying today it is open to a deal with but says- with bayer the current deal is inadequate. >> it will be a rigorous scrutiny. the doj is going to want to jump in and take a careful look at all the areas where these companies compete and maybe even where there some vertical
integration. and really dive deep and take time. david: you mentioned the current environment. we've seen a number of deals scuttled because of this environment in washington. is there more scrutiny than there has been? jennifer: there's more scrutiny. regulators are more willing to go to court, have more, vince the judges will accept their confidence that judges will accept their theories. these facts are taken one by one. a challenge to a previous deal does not necessarily equate to the same thing happening in the next deal. david: we've had other deals hatching in this space. what will the scrutiny be for those? jennifer: ftc looks at chemicals
and the oj looks at agriculture -- doj looks at agriculture. we know doj is looking at dupont. aty will never look something with blinders on. they will at the context within and how thisdustry deal would play out in this concentration. these are primarily complementary in nature. the overlaps in all three deals tend to be somewhat minimal. it would be hard to see how anyone of those deals just because it is a broad consolidation and act science -- in ag science would get blocked for that issue.
in the antitrust aside, i don't think it is a complicated fact. they will look at, does this deal affect competition? when a non-us company acquires a stake in an american company, it requires clearance from the committee on foreign investment in the u.s. that is not an antitrust issue. they will have to get that clearance, too. david: the current proposal significantly undervalues our company and does not provide reassurance for the potential financing and regulatory execution risks. this is the concern to shareholders. jennifer: there could be that concern as well. regulatory could encompass many different agencies. when two parties are negotiating a purchase agreement, the
regulatory risk an antitrust risk is thrown in there. whether or not there truly is a significant risk, they may be thinking of what will have to be divested. david: jennifer rie joining us in new york. has dried up rice crops across southeast asia. google fields in ghana and sugarcane in thailand -- cocoa fields in ghana now, the ocean is starting to cool, which may cause a la niña. help us understand the distinction between these two weather phenomenon. brian: the surface of the pacific heats up in el niño.
when el niño goes away, all that convection moves backwards. that reorders the weather patterns around the world, say you get leases that were dry last year that places that were dry last year will be wet this year. this is what we will see in the coming year. david: we know this could be cyclical, but how much does the length of these phenomenon difficult -- differ? brian: el niño tends to be shorter than la niña. la niña tends to last a wild. the last time there was la niña, this -- wentle away for a while and then came back from a lasting about two
years. what fx might it have -- affects my did have? effects might it have? brian: it might help the indian monsoon. but next year, he should be doing better than it was. , la niña probably will not be able to undo the damage el niño did. going forward, it might help rings out. -- might help things out. see theexpect to see noahocn in -- to
come up with an above average forecast for the year. even though this they phenomenon located in the pacific, it kills windshear. hurricanes in terms of how much time they can spend getting stronger and stronger. last year with el niño, we did not see a lot of powerful hurricanes in the atlantic. there was one exception with joaquin. during la niña, you might see 12, 13, 14, 15. david: that is brian sullivan joining us from boston. markup has started on a new congressional bill to send a lifeline to puerto rico. passes? before that law man robask congress
david: this is "bloomberg market ." time for a look at the biggest business stories in the news right now. plans to stepo down after six years at the helm of italy's biggest bank. the chairman will lead the search for the new ceo. bull's wagon is back in court in san francisco today -- volkswagen is back in court in san francisco today.
track -- says bw is on vw is on track -- apple has run into a roadblock boosting its presence in india. regulators have ruled apple must comply with local sourcing rules to sell products in india through its own stores. congress took a big step last week, striking a deal with the white house to help rescue puerto rico from its $70 billion debt crisis. the legislation faces hurdles this week as congressional leaders iron out details. we spoke to congressman rob bishop. it will be tight. the significant issue is if we can have this bill passed through the house, maybe through
the senate or close to passing the senate, it will give the market the understanding of what's going to happen. they can then plan accordingly. david: are you treating july 1 as a hard deadline? rep. bishop: not necessarily. we have to be further along in the bill come almost passage of the bill by the end to get financial conditions to the market. if it goes on beyond that, the next deadline is next year. there is a big election between now and then. are you worried about momentum shifting if you blow past this deadline? rep. bishop: no. this bill needs to come as quickly as possible to solve the problem. i want it passed as close to that lifers deadline. -- july 1 deadline.
if not come of situation will get worse and the solution will be worse. david: you mentioned the market. addressthis bill will that? rep. bishop: the language is there to make sure we do not parameters --he bring financial order to the island so everybody gets a back -- paid back. we are not picking winners and losers. wholeody has to be made it has to be an orderly process. investors want to be in the island and get through this process. it will work, but we have to do it as quickly as possible. does the bill deal with financial liabilities? rep. bishop: it does.
they have to be put on a financial order as well as helping grow the economy. that is what this bill does. the board goes down there and worked with the government and comes up with a plan of repayment and has the authority to implement that plan and make sure it stays online. that is what the pensioners need to realize. we will solve a problem in an orderly fashion. thed: it seems you enjoy support of the white house. jack lew says "we are disappointed the bill does not provide a long-term medicaid solution." does this do enough to foster economic growth and puerto rico? rep. bishop: it does. the key issue for the job loss has in the high cost of energy.
to streamline the process of we can work cost of energy and lower jobs back to the island. we will work with the island government to make those. that is the crux to bringing jobs back to the islands of people can go there and have good jobs. other issues are secondary. the markup starts tonight and goes into tomorrow. i wonder if there are any big changes on the way. rep. bishop: once we pass this bill, and we are in the cusp of doing that, we will show the market and anyone else that we have a path forward to solve this problem that has been decades in the making. we will put conservative problems into effect -- prin ciples into effect.
david: homebuilders be estimates. best beat estimates. julie: this is helping homebuilder stocks. the etf is up by about 3% today after the new home sales rose to their highest since 2008. pace outpacing what economists estimated. --back to do thousand eight this is new home sales in white, which saw a take up this past month. this is homes sold that have not yet been started. they are at the highest since 2007. that augurs more construction coming down the pipe.
toll brothers reporting earnings that beat analyst estimates. it's all a 9% increase in the volume of homes delivered during a 9%onth -- it saw .ncrease a big increase year-over-year. you are seeing a lift in the other homebuilders today as well . kb home leading the rest of the pack with the 8% gain. up to all-time low. shares dipping to an all-time low. ♪
." shares of twitter today hit a record low. twitter is looking to combat the recent sentiment, announcing new changes to its character limit and more accessibility to tweets. will it be enough? brian wieser is optimistic. let's talk about what's been going on here today. advertising still positive? brian: it has come down from where we or anybody else thought it would have been this time last year. they are experiencing some deceleration. david: how much change has happened since jack dorsey has gotten back to the helm? have we seen the level of changes you would expect? brian: from the outside looking in, it does not look like a huge
amount of changes. turnover has slowed down. stability.ere is twitterhe thing about that most people don't understand or appreciate. the stability in the commercial bain,zation under adam they are still doing what they've always been doing. of scale of one trajectory, not trajectory in general. --is still growing, not just just not growing as quickly. david: is it more attractive than facebook or instagram? brian: it is different. twitter is to facebook what radio is to television. mean there isn't some
interchangeability, but for the most part, they are different. they serve different purposes. david: we've talked a lot about user growth. how you simplify things to keep people using it. have we seen much success there? brian: we don't have good turn data -- that would be incredibly useful. more granularity would go a long way toward helping investors get comfortable with this stuff. millionso many commit and millions have power users producing content the rest of us consume. it is a niche medium. it will never be that easy to use, ubiquitous platform facebook is and that is ok. investors have to come to realize this is a niche platform and there's nothing wrong with
being a niche. david: are people coming around to that? brian: it all be surprised me -- i had a cell on twitter shortly after the ipo because investor expectations were entirely unrealistic. there is a view that this could be as ubiquitous as facebook. it was never anything like it. i don't think even now investors fully appreciate this radio-tv analogy i throw out there. the marketers do. over time, the investment community will come to appreciate it. deal with thethe nfl, the interest in creating moments people want to gravitate to. is there interest? brian: it's one of the elements
that differentiates them from others. facebook and argued that it has more absolute potential live activity. concentrate a budget focused on some sort of life strategy with twitter because disproportionately commit the activity occurring on a twitter will relate to live activity whereas only a small share of total facebook activity will relate to live activity. think, help twitter, i that they had that positioning in the market. hour, coming in the next best buy shares falling the most in four months today. the cfo is leaving and second-order profit forecasts failed to impress. how much trouble is the company in? ♪
oliver quickly on in hong kong. haslinda: welcome to bloomberg markets. from bloomberg world david: from -- bloomberg world headquarters, good afternoon. last rally. -- track00 is on it for its biggest gain in nearly two weeks. twitter is giving users more say. they will no longer account -- count me attachments as characters. can they do anything to help a stock with an all-time low? monsanto reportedly ready to reject a takeover offer from , but it leaves the door open for more negotiations. we are one hour from the close of trading.