tv Bloomberg Markets Bloomberg May 31, 2016 3:00pm-4:01pm EDT
♪ good afternoon. are watching in this hour. the final hour of training in the last day of the month. session lows and economic headwinds may be on the way. the rest of the week could support the case for higher u.s. interest rates. druger merger in the industry. pharmaceuticals, another m&a frenzy? volkswagen still paying the price for its cheating scandal. profits from its cars plunge 86% in the first quarter. there are signs the automaker has turned the first quarter. the than one hour from close of trading, let's head the market desk where julie hyman has the latest, starting with
oil. julie: yes. an hour or so of trading. lower.ces are they were higher by 1%. approaching and broaching the $50 level. it got close in the past hour or so and then fell want again. in addition to the technical level, commentary from around the world were supply has been constrained. in nigerian oil minister saying it is too early, that oil has made a recovery. the latest on the alberta saying they are going to start to bring people back into that. various headlines, it really does look like $50 per barrel. look at the major averages. they have fallen over. all three have fallen in the red.
the nasdaq has been a holdout and now no longer. the s&p is deeply in the red. the dow has in lagging. take a look on the bloomberg here. the sectors on the move, energy, the worst-performing group. really coming from oil prices, consumer staples also today. this is coming in the face of what looks like positive economic data earlier this morning. big-time gainers, how does that work? >> it is a little unusual. we look at the s&p 500. cases, aren some some of these energy companies. this has more to do with natural gas. you look at natural gas inces, we have seen a rally
those prices because of the heat in the season. you see it up 5%, the latest in a run of gains, helping companies that are more skewed toward natural gas and oil. >> the price of oil continues to fall. thank you for that. in other news, let's head to the check of the headline. m a has more from the newsroom. anima: the world health realization labeled the zika virus a world public health emergency. we talked with dr. thomas, director at the cdc here he joins us exclusively from atlanta and talks about the choice to delay or move. >> we understand why people are there is nore it
reason to delay or cancel the summer olympics. trancewhile, sexual mission of zika is more common than verse -- than first thought. it is telling women who are planning to become pregnant to wait at least eight weeks to try and conceive. a major new development in the water crisis. now safe for handwashing, showering, and bathing. .14. officials switched to a return of more than think -- more than 80,000. destroyed by the fire, but 90% remains intact. ruleds. supreme court
land owners can go straight to court after federal regulators -- a peep of -- piece of property. it is big for property rights activists and also intentionally for people and companies seeking to develop wetlands. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. >> thank you. kara icon says he has taken a large position in allergan. a frequent investor in the drug industry. he says it is different. clear -- , he made it in a statement, he says he does not believe they will take a statement in the role. another drug story, about 1.5
billion dollars. an experimental medicine for rare jug cancer. thank you so much for talking to ought -- a drug cancer. thank you so much for talking to us. is it a good match. drug, two known products combined together. they have done a smart thing in terms of what they are developing here. if you look at the numbers on the terminal, in terms of the about 150ected, million or so coming out, but that is just one area little more vocal, looking to do more work.
if you take it to the a hundred million dollar per, it looks a thele more in line with deals in the space right now. >> this was quite a surprise, but what we're hearing now is there very much performing large-format. why is that? biotech in the first that wasno surprise going on here there was a bit of a pullback in turkey -- pullback in terms of valuation. essentially cherry -- cherry picking the company's, they were cherry picking -- >> we are talking about going to pfizer. >> exactly. large whilel the
techs, and they would go they knew they had certain things going on. look at the next six to 18 months and play into that. >> are we going to see more in the coming months? >> we could see potential. right now, we are a little hesitant to go in. companies are always in m&a discussions. pfizer has ample cash. >> exactly. pfizer is looking to do big deals. they are the most aggressive pharma company out there in terms of transactions. not just pfizer. a lot of companies have said .hey are doing good
ec see the jazz deal today. here we are, they use the capital that they have and do some sort of deal. it could be licensing deals. >> carl icahn, it looks like they are trying to give the impression that he will not get involved so much in changing the company. do you think that is the case? >> it is hard to say. i would say look at investing. right now, there is a lot of interest in allergan. people can become more of an r&d folk's company. will golike carl icahn and it will be an interesting few months. what we are all gearing up for right now is the american
society -- probably the biggest hereal meeting there is and we have all of these companies coming out and releasing interesting data. they will show some impressive data, some improvement in aml patients. data theyhave key will present us with as well. they're looking to help justify the deal. >> thank you for joining us and talking about the pharma, just the drug industry in general. coming up next, on bloomberg markets, trimming their monthly gains with the dow now negative. we next discuss how janet yellen and the fed might take a break on equities.
>> let's get a quick check of the u.s. stock right now. all industries are down right now. .he dow jones is down nasdaq this afternoon. time for a look at the biggest business stories in the news right now. goldman sachs president gary is she financing and low rates are feeling mergers and visions in 2015 and the outlook for that
business remains bright. optimistic about goldman's fixed income business. he says some investors reached trading revenues in those regions -- they could rebound. and number of candidates are scheduled to take the exam this weekend paired more than 170,000 people plan to sit for the exam's levels. it is popular among finance professionals seeking new jobs or better understanding of the market. he is said to bc -- seeking as much as $1 billion in initial -- the company is working with morgan stanley and jpmorgan . the narrow revenue rose 28 percent last year.
that is your business flash update. withstocks today left paring a third straight monthly gain. the index is on the verge of its longer -- longest month we industry into those years with positive eco-data and oil training at these and prizes. a june rate hike, something the markets should get used to. management --io manager. thank you for coming in. weekt to that range last fade,it seems u.s. stocks the rallies are just not sustained. where do you see it going now that we have more positive eco-data? classes interesting. the market rally is losing some as a consequence of the economic cycle that is aging. a little bit of complacency in the markets.
we have a third contraction in a row. i think it is a watchful waiting time. >> what do you think of the data we have this morning? inng on a spending spree april. at the same time, consumer confidence at the lowest since we 14 to what does that tell you about sentiment hearing? >> mixed data has been an seemsy -- the consumer like it is in very good shape, it is the backbone of the economy. catalystsousing are for this recovery to continue. the manufacturing side, export side, business investment side, that is holding back our potential at this moment. are long-term investors
looking to buy high quality assets that are mispriced temporarily. for events we think are fleeting. we figured -- we take value overgrowth. defenses.over we think there is a lot of value in those areas of the market. >> you favor international stocks over domestic. does that mean you're going to europe and japan? >> we are going to europe. we are concerned about debt levels in emerging markets and a little concerned about the slowing there. a shakeout from the credit cycle. the cycle, earnings are 20 for -- 20% from the peak.
a lot of the events that have held them back, sovereign debt risk, financial crisis, and things like that are behind them. >> not a possible grexit? >> that is a risk. highly stabilizing for europe here we will wait to see what happens there. but it is a risk. >> what about china's risk? there is so much volatility with stocks plunging and going back up. >> it is a concern. china is slowing. the financial system is slowly levered. it will take a long time. the tremors and the stronger dollar concern, that impacts the chinese market. about itworried
becoming too strong and forcing them to be uncompetitive. the response would be to loosen that. that could be highly on stabilizing. another big devaluation that could be huge for global markets. we are seeing this oversized impact on equity markets. how do you play that? >> it seems like the dollar is a new transmission for the fed. you have to watch them carefully. it is impacting currency markets. see what theng to consequences of currency moves. we have the dollar moving up 20% over the course of a year. a highly destabilizing event. it is impacting markets around the world. it is something to watch and it is hard to predict. something we are looking at very closely. >> it is hard to predict anything these days. thank you for joining us.
>> all europe 13.12. when you start to see those type of things, you can never predict volatility is purity start to look at the indicators including that abnormally low level as well. >> it seems that has been the theme in the past week. is it getting tougher to find unique ways to do that? >> no. i think a lot of people were saying that. we saw a spike in volatility and it happened out of seasonal ranges. in january, the worst start on record. summer in to the
august. everyone is kind of anxious and nervous. >> you are looking as a way to do that. >> absolutely. this is to get through and the nasdaq 100 trades the volatility of the nasdaq 100 and it typically trades five points higher. it is only one point higher than the vexed. it is a cheaper way especially with more volatile names. tesla, facebook, it will sell off. the trade is really 110. you want to buy it and sell the 100. twoill cost you about dollars and $.62.
a great way that you could actually get more of a leveraged hedging affect using this type of trade. that is the great part about this. the most you can loses two dollars and $.50. these names are growing the revenues as well as the earnings. you will do well going into the fall with the next earnings season, people do not get volatility back. after where we started the year, in the last 2000 volatility where they were unprecedented, is a cost-effective way to do it. covered when you do the etf fridays. i was looking at the past month performance and the stocks contribute and happen to be companies within the nasdaq. apple and amazon enough of that have all had a strong month.
does that mean things could get a little top be on the tech side as well? >> absolutely. they were starting to play catch-up where people sought refuge earlier in the year. is thing you want to do cause they have had the run up, it is a great way to hedge yourself. if there is a hiccup in the market, this is the first thing people will sell. >> ok. thanks a lot, kevin. we will have more. >> coming up next, volkswagens profits plunging in the wake of the emissions scandal. ♪
more from the newsroom,,? claimed to raise for veterans, and arrogated -- aggravated donald trump listed fundraiser -- from a held earlier this year. >> great veterans groups. the few people picketing were sent there by hillary clinton that theare picketing money was not sent to her the money has all been sent. i wanted to keep it private if we could because i do not think it is anyone's business. >> this campaign has refused to disclose which charities have received the money. committeeon the house investigating a benghazi terror attack want to review the report before it is released. five democrats on the committee
requested the joint report. republicans and democrats have been at odds since the perception. four americans were killed in the city. court -- thepeals 15 year prison says it -- sentence. killing 32 people. in remains free and has one final appeal to its court. a violent and deadly memorial holiday weekend in chicago with six killed and 56 others wounded. presence in the neighborhoods. chicago on pace to end the year with more than 500 homicides for the first time since 2012. dayal news 24 hours a powered by 24 hundred journalists in more than 150 new spirit around the world. >> thank you. markets close in 30 minutes.
abigail doolittle is live in the the daypositive for after fluctuating all morning. abigail. >> well put. high.sdaq is ever so briefly turned down around 2 p.m. health more so by biotech than the other averages. ofe than 3% for the month may. overweighting technology, some of the best shares are apple, off of that, microsoft, and amazon. apple of daily 6% for the month of may. plus, warren buffett in apple .as disclosed any position taken on really
seems to have helped the psychology around apple and the investing momentum there. the stock is down on the year, down in january, flat in february. up in may. we take a look at a one-year chart and we see wild swings up and down. it is not clear whether the buyers will push shares of apple to the top, 108 at 110, or if -- sellers might manage apple shares. >> for the index, it seems it is higher in may. we have any standout losers for the month? >> there is. no international shares, plums who company down after it reported a disappointing first-quarter report -- report. all of this is weak legacy generics business.
down nearly 80% from last year. >> thank you so much. turning to automakers, quarterly after the brand declined 86% and revenue slipped. how much longer can they whether the missions scandal? detroit, at least here in the u.s., negotiations are still going on. ?here are we at could we see the criminal prosecution? >> it is still on the table. volkswagen would like to move on and get beyond this but they are nowhere near the end and the next chapter, they are not even done to move on to the beginning and something beyond that.
they are in negotiations to regulators because they had 10 wheregs with volkswagen they lied or denied they were cheating, so there is a lot of suspicion and they are going through line by line to make sure they have an agreement on what every word in line means. the cars and paying customers, stillter that, there is the possibility of criminal prosecution. the department of justice has gone at this and they participate in the civil suit but have a criminal investigation. that is a risk. there is a possibility they would go after individuals. >> the results called respectable given the conditions. what do you think and what does it say that they are having so much weakness when we are talking about china?
>> to the extent they are at rock-bottom in trying to build up, it is somewhat stackable and nice for them to basically with the brand. this companies on the brink of becoming the world's largest, the most profitable, the most valued by shareholders automaker on the planet. they have been deeply humbled, really having to reach that. haveannot think about, we got to get past this and run the business. dealing with the scandal is the business to her that is what volkswagen has to do to exist. when they get through it, they connectedp around cars and self driving cars, who knows. discounts.e to grant how much of an impact will that -- will that have? less it could have a serious ripple effect on other automakers are you think of a company like me w being caught
in a scandal like this and how much that hurts them but it can affect the whole industry. a hugely important market for them, it is down. is buzz around the industry what will they do to stop the slide? it is probably cutting slices, very aggressive at the retail level, which can hurt the margins of all the other companies. >> 2016 deals are calculated. thank you for joining us there out of detroit. credit investor, managing partner of capital group says exchange funds are exacerbating volatility in high-yield bonds. at the same time, he is asking his client for permission to use as an investment toll. erik schatzker sat down for an exclusive interview with us. he is in los angeles and asked
mark how he benefits from volatility. >> when there is a jolt in the market, it affects everybody. we were affected here. portfolio managers were concerned. they reacted emotionally, as everybody did, but we did not take action. when the market backed up as far and as quickly as it did, the sharpness of the volatility was a benefit to us. it is so sharply backed up to about a 10% yield in the high market, it allowed us to focus on buying opportunities rather than trying to decide whether there was a fundamental challenge in the market that we had to address. >> will we see more of that volatility for the same or
different reasons? about that know sharp a backup, but clearly, etf's are a bigger percentage of the trading volume in high-yield market. investors are paying a lot of as ation to credit spreads function of what is otherwise going on in the world. we are positioning our portfolios in the market and more frequent, sharper swings. there is a little bit of an art that. stay true to our credit discipline. you try to be in less volatile name, which we use private
investor strategies. you have to market your private decisions with valuations. transparency, we are trying to look at benchmarks and trying to find names within the sectors that are better for our clients. energy has always been 10% of the benchmark. at the end of the year, it is probably 11%. we started adding investment-grade names into our -- we saw wti to push our concentration to 10% now. the benchmark is probably 14%, a
common issue of price appreciation is on angels coming into the market. >> it is not as simple as looking at the rebound and saying, the high-yield market once again primed for a correction? >> i think that is right. the way we approach it, we are trying to break the market to its component parts and adjust the component parts. wheretep back and look at we are. we increased the energy exposure and some split investment-grade names. investment-grade names. that is often before the names fell into the benchmark. buy two cents on the dollar now trading at 90. that is good news. we have added some duration to the portfolio and facing a potential for interest rate
increases. we have to consider that as well. there is a lot for portfolio managers to can that are when they look at the high-yield market. it is a lot more competition than it used to be. >> coming up next, the fed says it is all about the data when it there is fate -- plenty on the plate this week. we preview it all next. ♪
let's get a check of the markets. slightly positive for the month. the dow is down .5%. .2%.&p 500 down the s&p 500 caring a third monthly gain. the nasdaq up .1%. time for a look at some of the biggest and best business stories. e. coli concerns. approximate half of the 30 were feted with a specific stream of e. coli. general mills has not actually found it in any of its manufacturing plants. photo sharing at instagram will now let mrs. create special
profiles so customers can contact them directly. the company says it will also offer business users data on which is getting the most traffic. facebook says it is working to leverage instagram, 400 million monthly users. in a deal led by goldman sachs, uber received $1 million to fund a line of drivers. this caters to people who have been rejected by other lenders. they say the finance program for more than 100,000 drivers on the road. that is your business flash update. there is a lot of data in the next few days. this morning, personal spending came in stronger than expected in 1%. tomorrow, the latest manufacturing figures followed
by the u.s. jobs report on friday. -- what didnates you make of the data? >> is hard to go with anything definitive from the consumer data. spending, a really big month over month jump. it fits with the story that the economy is clearly rebounding, which is a relief after the week numbers we got. then look at the data we got today about consumer sentiment. it was not so great. easy to get jobs, and hard to get, and by that measure, it is
sold out. >> at is what we have been looking forward to all week. what are we expecting? >> the big thing is 160 k. unemployment rate at 5%. that is interesting. basically, since the financial crisis, a steady decline in the unemployment rate. it has been basically stable since last october. people have dismissed it a little bit. it is interesting to watch the longer it goes. close attention to wages if wages continue to rise. >> by the sheet -- what are we
expecting from janet yellen? >> clearly more hawkish than expected. a selloff in equity markets since then. as you know, off to the races, last -- last week was a huge week. markets have digested the pricing. greater than a 50% chance of a hike by the july meeting. markets have been fine with it. make the fedto comfortable that they can move the needle on the expectations financialout causing conditions. >> thank you for joining us, joe weisenthal. up, the close of trading is minutes away on the u.s. major averages are seeing the dow jones down .5%. may. now in the month of gain.g a third monthly
>> the markets close in about 10 minutes. julie has the markets check. the last trading day of month. julie: looking better than they were. last half hour or so of trading, the deck going back to the green, the s&p 500 paring their losses. the s&p fair -- paring its losses. we are on the last trading day of the month. once again, mostly in up month for stocks. to date movements that we have seen, even the dow just squeaking out a gain on the month. the s&p is having his third
straight monthly gain. the nasdaq is higher by three point 5%. i want to look more deeply into the down particular because it is the laggard on the month. month, it the past has been companies like boeing and caterpillar on the industry well poldman sachs as are financials had a bump later in the month, and going to that, they has been performing poorly. ,ooking around the commodities a big up month for the dollar and big up month for oil prices as well. continuing with the recovery we have seen all year even if oil has not and able to hold above $60 per barrel. gold and copper, wanted to check on the metals as well. most of them have down months. having a down month along with copper prices. copper is lower thus far. >> thank you.
from the bloomberg news stocks, danny, the dow seems to be in the positive for the month of may. we are seeing the nasdaq reversing its losses. what industries have contributed most to the gains? >> if you break down the s&p into 10 industry groups, tech is 5% for the month of may. a lot of these have a rough month. in the beginning, there is turbulence. you had a lot of chipmakers and electronic arts. maker, to top it off, we saw a earlier this month , solid demand from apple, giving other chip make is a list . classy mentioned the earnings
season, any industries that were particularly hard hit? classic couple of weeks ago, some of these lifted results that say the foot traffic is down, we are not getting as many customers. some of nordstrom among the worst performers, posting around 20% losses with macy's and kohl's. not far behind the company. if you look at the retail companies and the s&p as a whole, they are up for the month. you drill down closer to who is in that group, you have netflix and amazon. the consumer is shifting to these small retailers that can help lift these up as a whole. >> the volume is pretty light. what are we expecting? the calm before the storm? fell at theers
beach house. the volume is 13% less than the 30 day average. it is calm right now but we have a lot of events coming up. we have the june rate decision and grexit and other central bank meetings. on thursday, we have an opec meeting. there is a sense we have decisions coming out there. it is calm now. and as chance for investors to ease themselves back in. >> thank you so much. is it for bloomberg markets p are what did you miss and the market close is next. less than four minutes until the close. ♪
bell]ng mixed session over the holiday weekend, with a third straight monthly advance since 2015. >> the question is, "what you miss? >> within spitting business -- spitting different -- spitting distance of an all-time high area joe: plus we dig into -- hi. joe: we day into what's driving prices higher. oliver: we live into the debt secret that reshaped saudi revelations for generations. we begin with her market minutes. major indexes of an climbing higher in the last hour so that they have almost to the positive value mark. however for the month of may we're looking at gains for the nasdaq.