tv Bloomberg Markets Bloomberg June 2, 2016 12:00pm-2:01pm EDT
survived as an organization. from bloomberg world headquarters in new york among what is currently happening also the. been -- here is what we are watching this hour. oil prices attempt a rally. scarlet: ryan joins us now from indiana. consensus in reach the secretary-general giving himself a pat on the back. did opec really a compass appointing a new secretary-general. anything at this meeting? the european central bank holds ryan: i think you can argue they rates at record lows. are, was something. mario draghi says policymakers are willing to take further action if inflation doesn't take the mostil ministers, up. important thing they wanted to pick up. we are achieve was that they could be -- was to show they could be unified. they make decisions by consensus and they know there are a lot of people out there saying that opec is dead and are busy writing opec's obituaries. are they going to reinstate the production target? halfway through the u.s. trading day. let's go to the bloomberg desk the saudi's had floated the idea cand of the meeting and how where julie hyman is tracking the indexes. opec be opec without its main
julie: you see all three major tool, the quote, and play to influence oil prices. using it for 35 averages are little changed after falling as much as half a percent. years. so that is one strike against them. they will say that they are if you look at the s&p 500, it unified in the believe that the is just shy of 2100. that has been a tough level for market is ok taking care of itself with oil prices racing. the s&p. -- oil prices rising. 2100 is sort of the upward bound have been bickering about of what we have seen from the who will be the index. secretary-general for the past it has had trouble staying above that level for any extended four years. the current secretary-general, his term is mandated -- expired period of time. many, many years ago and he wants to retire. they finally chose a new secretary-general. health care shares are on the rise. so some say at least they can you is still energy in the decide something. losing spot here. so they can kick the can down the road in reinstating the energy earlier, as a group, was architecture that makes opec meaningful. done as much as 1%. we will have the see what happens in the summer. now it is down .6%. but at least they will say they have a new leader. scarlet: good point. is outpacing the declines saudi arabia has a new oil are as well who made his debut at in energy, down about .6% as this meeting. well. how did he do/rya -- how did he looking at some of the declines we are watching today, oracle is do?
one of the laggards. that is helping drag down ryan: he is the most influential member of the group you they are technology come after a whistleblower, a former the biggest producer. employee, brought a suit against they call a lot of the shots. it saying that oracle asked her to cook the books at the it is fair to say that there company. were no disasters. franklin resources downgraded. guy.very business-like a and offshore continuing to decline after the slump in oil he got here early. check out the opec belding. he met all the oil ministers prices, still a slump, even though it has come back. scarlet: two big meetings today, over the course of the week. i place that i play close big results. attention to what they had to say about him as i came out. i can tell you both venezuela, nigeria, iran, none of them had julie: in the case of the euro, the ecb is not changing rates, any bad stuff to say about the saudi oil minister, despite the saying it will start its corporate bond buying program. huge differences -- think of the estimatesng inflation differences between just iran in terms of the for this year, but the not -- but not the subsequent couple of years. fall here, perhaps sectarian divide and the geopolitical situation. they were pretty complementary. so they avoided any disasters. disappointment that there was a more moves made. .3%. and for opec, given their of course, the euro falling, history, that may be a success. some have said there is something that would potentially hope the ecb.
less animosity at this meeting. we saw a steep decline in the is that because oil prices have price of oil. recovered and near $50 a barrel? to anad not come ryan: if oil was thinking, there agreement. would have -- there would have that was here. you can see it punch pretty sharply. but since then, it has turned not been any agreement in that around and now it is higher by room. .4 pratt -- .4%. haveold countries that been backing this policy of stepping away from the market there was a decline in and letting it take itself will , you know, the world inventories in crude oil, specifically. reason that oil it was smaller than estimated, but there was a decline. there was a larger than prices are doing well as we are estimated the klein in gasoline geniuses. the strategy is working. -- decline in gasoline. thee is the other camp, venezuelans for example, who if you look at the comparable were taught me, not so fast. that is because we have had a four-we period one year ago. lot of supply disruption. demand isng uptick in of oil tanks in the second half of the year, despite opec saying they don't think that is going to happen, i think something that is helping oil you can count on a lot of the prices. scarlet: we will check in with acrimony returning. scarlet: thank you very much. ryan chilcote for more on the results out of the opec meeting with oil, i want to let's checkantime, bring in word reynolds -- worn in with mark crumpton. mark: hillary clinton said to
unleash a major foreign-policy attack on donald trump, using a warrens -- wa speech in san diego, california, today to lightly cast the reynolds. nominee as potentially dangerous. what kind of greedy you give she has repeatedly called mr. trump a loose cannon. opec right now? warren: it's a little difficult because they don't have a purpose at the moment. president obama will give his there is so much going on in the final commencement speech to u.s. military members at this hour. market and they are unable to agree on anything close to a the president's address at the production target. u.s. air force academy in colorado springs comes as he reduces the relevancy in the market at the wages with her to -- as he moment. that doesn't mean in the future they can't come up with something. in the meantime, there is a lot weighs whether to increase the a volatility. there are a lot of disruptions number of troops in afghanistan. outside of opec, also within opec. you also have a lot of new volume coming online within opec. so agreeing to a production target going forward is difficult at the moment, especially given some of the locals go -- vocals coming out turkey denies that the killings were genocide and has recalled of iran recently. its investments in germany. scarlet: they did agree on a new secretary-general.
federal prosecutors are trying how significant is his to block the payments on life insurance policies taken out by appointment as long as saudi one of the san bernadino gunman. arabia visits own way and building a lot of the influence indirectly? syed farook names his mother as warren i don't: think the new up will have a significant impact on the market. saudi arabia has clearly stated its use and how they intend on beneficiary of two policies. 14 people were killed in the --ember attack here for an progress in with production in pursuing market share. i don't think that is something they plan to give up in the near december attack. future. ,owever, they have highlighted farouk and his wife are killed in a shootout with police. in an extreme event where you do have financial crisis or something along those lines, that they would expect that opec would be able to come together scarlet: as julie was telling and form some sort of agreement. , output ismeantime us, opec ministers have wrapped up their meeting in the end of your ryan spoke exclusively with the secretary-general. likely to remain elevated out of that country. scarlet: and i just want to bring you inside the bloomberg for a chart, a great one that >> i think you have to give opec shows opec has a history of credit for being the only imposing these production quotas organization that i know that . had witnessed such turmoil as the wireline is the group
production, which they did not members and yet change. of course, the actual production, the light blue line, has far surpassed that it that has been the theme all along here. heading into the opec meeting, there was speculation that opec would have run a new production target. how credible was that talk, given they haven't agreed on much since oil prices began tumbling? warren is difficult for them to come: to an agreement on something like this, especially with iran ramping up. earlier, i think a few days ago, maybe yesterday, iran's adjusted they reimpose the country level quote is, which i also think is very difficult to do, given the risk of supply disruptions and the ongoing disruptions we are today. scarlet: speaking of those disruptions, when it comes to supply outages, to what aches extentsupply -- to what
do supply outages -- atry opec member are looking prices. : the outages we have seen recently have allowed opec to dodge a bullet as far as, you know, low prices heading into june. when you look at where the of 2016, wen q1 were looking at a market where bound toe was not occur in total latter 2016 or in 017. we are in a deficit at the moment and we are likely to be in a deficit next year. there are countries that would bring supply back online, like nigeria and venezuela. highly unlikely to have that happen. .
venezuela has its own financial issues and nigeria has internal conflict, which we don't necessarily see ending anytime soon. those are two of the countries that are most stressed by low oil prices. unfortunately, they are the ones that are sort of being kicked while they are down with supply declining. scarlet: and the final question, when he comes to u.s. production, crude production .eaked . break it down for us on where you see it by the end of this year. war we are expecting total liquids applied toren: best to decline by 300,000 barrels a day. you are looking at growth in the gulf of mexico and potential growth in ngo's as well.
confident that what we will be doing as part of our review of the stress test system that we postis to change the stress requirements for the amount of capital that banks , even after absorbing the losses that are hypothesized in the stress scenario. and specifically, and we talked a little bit about this on your program last november, but i'm quite confident now this is the direction in which we are moving , ispecifically, we will think, be requiring that come even after we take the stress tests into account, but for the eight largest u.s. institutions, they will need both to have some straightforward minimum capital levels that all banks have to have, but also they would have to be above the minimum capital, plus the capital surcharge that we place on those eight institutions. that -- there will be some
offsets in parts of the stress tests so it won't be just a straight addition of the surcharge. but effectively, this will be a significant increase in capital. and to anticipate your next question, why? the same reason we put the surcharge is in place initially. we need to have those eight systemically important institutions more resilient than the other banks in the economy. you can have a smaller bank fail and the economy can absorb that. institutions,st obviously, there is much more of a systemic risk and we need to achieve that in a post stress and as well as any pre-stress environment. the second thing i would say, as rigorousesting, we can't anticipating -- we can't anticipate all things happening. for that reason, we have to be a little bit humble about how much we have addicted and how much
capital there is available to .bsorb an anticipated losses david: you have a surcharge already above international requirements. would you anticipate the same amount of surcharge or something less that you would require in normal circumstances? >> what i would anticipate is that the surcharge edition will -- addition will be required on an ongoing static basis. jump from thatot conclusion to the proposition that you should just, for example, take last year's stress test and add the surcharges required in the amount of capital care because we will be making some minor adjustments in the stress test and there are some things put in the stress test over time that are quite conservative assumptions that were meant to take into account some of the same factors, the
unknown unknown, the fact that we needed more resiliency in the biggest and the titian's -- biggest institutions. inuming we do go forward that explicit way, some of those things we put in place to or -- before might be adjusted as well. so while there will be a significant increase, it will not be as if it were dollar for dollar. david: if you go ahead as you would expect to, what would be the timing when this would take effect? would it the in time for the next round of stress tests? i would suspect not, although we haven't made a decision on that. i actually think it will getably important for us to a proposal out in enough time for institutions to begin planning for the increased surcharge. just as originally with the stress test we were freezing may be anere, there
today. there has already been a lot of bearishness surrounding this company. he is looking at the credit position of this company, in particular the financing it offers to many of his customers. essentially has no today is not new information. it is my compendium of things that people have been bringing up. indoor facilities have paid nearly 62% of sales in the quarter ending april 30. so a lot of people are financed by signet to buy things and it's store. the average fica score is 662, compared to the 640 threshold for subprime. there are 301 registered complaints against signet. at the same time, the company has hired goldman sachs. the shares are down 7% today. he says there was a buzz feed investigation of the company where people who had service
contracts brought in their jewelry to be serviced and alleged they were swapped out for man-made diamonds are lesser quality stones. it could really present challenges. we have contacted signet. they have not returned requests for comment. we will see what becomes of all of this. scarlet: a conflict takedown of signet. coming up on "bloomberg markets," the european central bank keeping its stimulus on changed. ♪
tells the associated press that prince died of an opioid overdose. the 57-year-old music icon was found dead in his estate in the minneapolis area on april 21. investigators had been reviewing whether he died of an overdose or whether a doctor was prescribing him drugs in the weeks before his death. new problems for the affordable care law. in largest health insurer texas wants to raise its rates on individual policies by an average of nearly 60%. that is a sign that president obama's health care oversaw -- overhaul has not solved the problem of price hikes. texas isn't alone. many insurers around the united states are ruesting bigger rhenium increases for 2017 hillary -- bigger premium increases for 2017. hillary clinton and bernie sanders are in a tighter battle california.
. mrs. clinton cut short a campaign swing in new jersey to spend more time in california. wall street journal survey saw similar results. the state's primary is tuesday,. this place families in falluja are women and children. stalledtary advance was by fierce resistance by islamic state. more than 50,000 people are believed to be still inside falluja. scarlet: the central bank did upgrade its 2016 inflation forecast.
inflation rates should recover further in 2017 and 2018. scarlet: here now to talk about europe'sext is codirector. for the first time in a year, the ecb did not actually cut is cpi targets and raised its forecast for this year. draghi did mention a sluggish pace of reform. of course, we saw how the ocv also blasted rich nations for relying too much on central bank stimulus. as draghi continues to pound the dumb on fiscal reform, do you feel his rhetoric is having an impact? raul: since it launched its no the, the ecb has been
view that they have the assets to get the eurozone back on track and it is now up to the governments to take the steps. but it is not clear if that is having an effect in we see friends trying to push through some reforms and we see a huge amount of backlash there. but i think also in terms of the big questions the eurozone is facing, what is the future architecture of the eurozone and will there be future -- will there be some fiscal and political applications -- this has been left to the long grass. draghi is pushing for the eurozone to face up to this. realistically, i don't think that will happen until after the french and german elections. i think we will hear more of these comments from draghi over the next year falling on deaf ears until we have those elections out of the way. scarlet: falling on deaf ears is
a good way of putting it. we can illustrate for you how difficult going to be for the ecb to get much help from the fiscal governments or i should say the national governments with inflation below zero right now and a target rate consistent at 2%, the red line. mario draghi also discussed brexit. to anyecb is ready outcome. of course, we have said and i that the u.k.ain and europe and the eurozone are mutually beneficial. view wherebys a the u.k. should remain in the european union because the european union would benefit from its benefits -- from its permanence and the u.k. will
benefit, too. scarlet: mario draghi talking about the benefits of the u.k. staying in the eurozone or that you -- or the eu. we have heard about the economic dangers of the u.k. leaving the eu. what impact is that having on the discussion? we did see last month or a few weeks ago that there was some impact. there was a clear sense that people were feeling that -- of the view in the polling that leaving would have a negative effect on the country. recently, we have seen a change in the tone. strict inment is more what it can do in the campaign. leave is gaining in raising
fromrsation away economics and raising things like immigration. while people do think it would be back for the country as a whole, it would be an economic risk for the country as a whole. they don't actually think it will actually impact their take-home wage or their income significantly. actually, that is a bit of a concern, especially when it comes to getting people out to vote. if they don't believe there will be a huge impact either way on their fat is on the income other family income, they will be less lightly to vote. a big issue is turnout. ve side is very motivated and is more likely to get its side out to vote. camp frames leave as its argument.
is there an economic benefit from leaving the eu? and is there a immigration benefit to staying in the eu? economicsul:of the -- : in terms of economics, there may be a short-term shock. would be striking free-trade agreements with other countries outside the eu. these things will come quickly or easily, but there are potential gains. the leave side conceded the economic argument. they haven't really pushed back on that area. when it comes to immigration, i think it's clear that the remain side has a tough time with it. it does limit the control you have by being in the eu. the government has said it set
-- said it self it was to bring down the numbers. that bringing down the numbers is a bad thing. lots of other countries outside the eu, be it norway or switzerland, who have to take free movement as parts of their agreement with the eu. these countries have higher levels of migration per capita than the u.k. they cannot say that being outside the eu necessarily mean slower migration. sadly for voters, people have been talking past each other. remain hasration and been talking about economics. scarlet: coming up, u.s. energy secretary ernest moneys -- erne st monis.
scarlet: you are watching bloomberg. i am scarlet fu. mario draghi unveiled largely unchanged inflation forecast for latestozone, even as the stimulus measures take effect. r is receiving its highest overseas profile yet. we will explore the road ahead. nigeria long associated with poverty and corruption could be turning a corner. we will tell you why. first, we begin with the european central bank. it left interest rate unchanged
today. mario draghi emphasize that the stimulus measures are helping to improve the euro economy. but they need time to work before any monetary jolts are added. regular economic and monetary analysis, we decided to keep a key ecb interest rates unchanged. we continue to expect them to remain at present or low levels for an extended period of time and well past the horizon of our net asset purchases. bhs will be liquidated. bhs's collapse last month received outrage. arabia's sovereign wealth fund making its highest profile deal, investing $3.5 billion in
uber. companies trying to diversify its assets with overseas acquisitions. it is the biggest investment ate. has had to d johnson & johnson is buying vogue international. the price is about $3.3 billion in cash. j&j says it includes the shampoos and conditioning products. joe: time for a quick take. a country that is often --tten off as a place that violence and corruption. situation. thrace to the
media challenge of a treasury left "virtually empty" by oil revenue. -- in the first quarter of 2016, the reserve shrunk. they recently gave the go-ahead for a currency exchange system. today, more than half the people in the north live in poverty while the south is endowed with oil and skilled professionals that live in nigeria's largest city. the relative lack of development in the north drew resentment that gave birth to boko haram. toe is the argument can
optimists, rising income and a surging young population gives nigeria the potential of following in the footsteps of emerging markets like india. but first, the country needs to resolve its currency policy and make progress in fighting corruption. one thing that is certain is that nigeria is becoming too big to ignore. coming up, board members at microsoft pushing for more aggressive shift into cloud-based products. details next. ♪
it. speaks tois really his social media presence and his power in that arena. ey: certainly. he's got 30 million social media followers. it is the right thing at the right time for the right audience. emoji app was's my favorite until his came out. scarlet: it's not just him. it's his entire family. his wife is a host on the food network pick his daughter is a media sensation as well. we love us some riley across the country. she is a national star as she hijacked the press conference last year. the nba isaks to who
appealing to. of course, steph curry winning a second m.v.p. last week, going into a second nba finals. the chance to win the finals, too. it's only been done by lebron james, michael jordan, will willerlain, and -- chamberlain, and bill russell. it has caught the imagination of millennial's everywhere. it is the right kind of product, the reason it is doing so well, outselling even the great kim kardashian. $1.99 for thiss emoji keyboard. what are the companies involved? cory: apple will get a lot of money from this. steph is probably getting a licensing deal. but it lends itself to sort of -- as people communicate using and steph curry is the
social currency of the moment, that only a cruise back to him and probably back to under armour, his chief financial backer next to the golden state warriors. scarlet: cory johnson joining us from san francisco. we will stay with technology and check in with abigail doolittle who is live from the nasdaq, where she has the latest on some tech names. abigail: overall, we have the nasdaq changed -- unchanged, down just slightly. andman trimmed estimates its price target on lower smartphone growth. calling for a big slide in smartphone growth this year and next year, from 2015, to roughly 10% growth. estimates are still above consensus and the price target calls for more than 25% potential upside. so this could be potential upside for goldman.
the bigger drag is also microsoft shares down 1%. worldwide tablet simmons could year..6% this sayrman john thompson did microsoft is thinking about revamping it sells forced to move more quickly toward the cloud. some of the legacy products away. we know your twitter thechartress for nothing. do these reflect uncertainties? abigail: indeed. it shows a battle between the balls -- the bulls in the bears , the buyers and the sellers. some of the medium and long-term
buyers are interested. but on the other hand, the uptrend is turning to break. what will really count is how that range breaks into the upside. microsoft will probably trade to a new record high. it trade rightee back to these lows. uncertainly is -- uncertainty is certainly there. scarlet: we are going to stick with microsoft. it's board chairman john thompson is pushing to accelerate the company toward newer cloud-based products. isning me now for context mandeep singh. oracle ibm, cisco and and salesforce, how will microsoft accomplish this? it's not like it's the only one aiming for a bigger slice of the cloud computing tied. eep: you are absolutely
right good microsoft is the 800-pound gorilla when it comes to software. they have to figure out a strategy for each segment to move to the cloud appeared they have done that successfully on the info structure side. they have caught up with amazon. but on the application side and the windows side, which, if you look at their segment revenue, 42% is from windows and hardware devices. that part is the one where it is hard to come up with a cloud strategy to really kind of migrate that segment to the cloud very quickly. the infrastructure side, 30%, that is taking care of any office suite is another 30%. they have a good mix. really 43%ally 30 -- where they have to figure it how to accelerate the transition to the cloud. scarlet: what kind of talent will micro housescarlet: -- will microsoft have to bring in? do they have the talent, the manpower?
mand i think so. yes, on the office sideeep: -- mandeep: i think so. yes, on the office side. sidereally on the windows and i think, in terms of hardware, they need to figure out, now that they are out of mobile, what to do. acquisitions may be a good idea get a smaller acquisition, which kind of tie in their device strategy, the xbox, the mobile strategy, they don't want to get into hardware. just figure out how to deal with the windows transition to cloud. so when it comes to a market to cloud-based products, how fast is a growing? i wonder if we are near an inflection point, whether we have peaked yet. ep: i think we are still in the third or fourth inning. this is going to keep growing 5x
the revenue trend. every software company has to have a strategy. it is just a matter of how they can offset the decline with the growth in the new clan revenue. i think the windows piece is critical. scarlet: all right, thank you so much for the context. we've got some breaking news. julie hyman has a details. julie: the company that spun off from dupont at one point is being mentioned negatively by citroen research. cc is going to zero. there you see andrew left of citroen. it is now halted because of volatility. tweet cameafter this out. we don't have the full report. we will work on figure now
exactly what case was made here. certainly, valiant is one of his better known, if not his best known calls. he has made others that have not had much of an impact. but another interesting situation here we will continue to watch it. scarlet: looking at the mours, it chart of che is down more than 50% to since the spinoff. thanks for the update. to follow thate one for you. coming up on bloomberg west tonight, aaron levy will be sitting down with emily chang on first-quarter results. ♪
from bloomberg world headquarters in new york, good afternoon. here is what we're watching this has a new leader. the newhear from secretary general as the group fails to reach a new deal on production. is meeting secretary with world leaders at a clean energy summit in san francisco. he will join us live. plus, the wall street golden boy who duped his friends and family out of almost $1 billion. let's go to the markets desk and julie hyman. in terms of catalysts, to down one to go, opec and ecb is over and we are waiting for the jobs report. julie: since those were not positive catalysts, maybe there is hope for the jobs report tomorrow. showed private
job growth of 173,000. these other major three average is not doing much at the moment. some investors may be waiting when it comes to tomorrow morning. -- on the s&p 500, things have gotten better. we dropped this morning after oil dropped on the headline that opec was not coming to an agreement on its production quotas. since then, we have seen stocks climb back versus the earlier levels. if you look at the bloomberg and the groups that are on the move, we have several groups doing quite well today that are helping buoy the major averages. health care is up so that's the biggest contributor. energy has no paired is declined to half of 1% as oil recovers after the weekly inventories report. has startedre, abvi a share buyback once it completes its acquisition of
semcentrics. med tronic has been rallying over the last couple of days. johnson & johnson is making an acquisition of vogue international which is a personal care products company worth $3.3 billion in cash. they make beauty products. scarlet: there has been several stages of deals today? >> yes, some that are done and some are rumored and some that are falling apart. starting with click. this company has agreed to be bought by a private equity firm in all cash deal valued at about $3 billion or $30.50 per share. the shares are up about 5%. this is an enterprise software company. where watching the latest with cabella final bits for the company are expected by the end of the month. post, the teame of goldman and vast pro shops is
seen as a favorite to win the auction and kkr is in the running. once the headlines came out, the stock took off, up 5%. there is a deal that might not happen, gannett possibly not buying tribune. both stocks are down. scarlet: thank you so much. let's check in on first word news with mark crumpton. mark: rivers and europe have burst their banks from paris to the southern german state of bavaria killing six people. thousands more have been trapped in homes or cars forcing everything from subway lines to castles to shut down. the louvre will close friday so toff can move works of art safer ground and away from areas at flood risk. the brazilian olympic organizers have told the international olympic committee that the risk of zika infection will be reduced dramatically.
a group of 150 public health experts last week called for the games to be postponed or moved because of the virus but the world health organization said there was no public health justification for such a move. handled hillary clinton's private e-mail server while she was secretary of state will not testify in an e-mail related lawsuit. it was brought by the conservative watchdog group judicial watch. the deposition is monday, the day before the california presidential primary and five other contests. hillary clinton seeks to cement her nomination. you was workers are more competent can retire someday but not until they are 70. according to the human resources research firm, 23% of americans with job say they plan on working into their 70's. that is up from 16% in 2009. the survey found employees who expected to work longer or less
healthy, more stressed, and feel stuck at their jobs. global news, 24 hours a day, howard i error 2400 and analyst, in more than 150 news bureaus around the world. scarlet: thank you so much. opec held its meeting today in the and i were oil ministers failed to agree on a new output ceiling. they did agree on a new secretary-general. nigeria and we caught up with him moments after his appointment to discuss what opec did and did not achieve. >> it will not be appropriate for me to comment on decisions that were taken at this meeting except the one that directly affects the election of the secretary-general. going forward, we will have ample time to review these issues with you and other fellow colleagues in the media. >> what can you do to bring
we haveity within opec? heard for so long about the acrimonious atmosphere inside the meetings. >> you have to give opec credit for being the only organization that i know of that had weakness and turmoil with wars between its members and yet survived as an organization. happening isntly also being exaggerated. i am confident that the future is bright and that this organization will not only continue to survive it will continue to adapt to changes that are sweeping the global industry in the world at large. >> you are no stranger to the oil market. you have run the nigeria state owned oil company in the past.
what does the market look like right now to you? i think the general market consensus is that the market is gradually but steadily rebalancing. that,pect haitians are from the fourth quarter of this q1 or q2 of next year, we will begin to see some equilibrium in the market. he is the incoming secretary-general of opec. coming up, the downfall of the wall street golden boy. he allegedly conned his family and friends out of millions of dollars. we have an inside look at the scandal. . ♪
scarlet: you are watching bloomberg markets. let's check in with julie hyman to look at some stocks moving on analyst actions. you are telling us about some of them. julie: a company that was spun off from dupont was mentioned negatively by citroen research. camel-known short seller out with a tweet. company is toxic and
could go to zero. the shares fell sharply and then they were halted because of the velocity of that decline. now they have opened up in her down by 8%. he said we will keep tracking this story. some other downgrades happening today include exxon mobil at bank of america/merrill lynch, downgrading it to neutral because the valuation of the company and its strong relative performance if you look at it versus what we have seen for oil prices. the shares appear to be fairly valued. we are also looking at analog devices. that stock was initiated by sell and they're looking at the exposure to apple and saying they will see earnings volatility and there is a risk to the company's margins. and the price target is $50. devry education, credit suisse cut that dr. neutral citing the
departure of the company's cfo timothy wiggins who will leave on june 30. someone as capable and is ahtful as him significant blow to confidence. those shares are plunging today by more than 13%. scarlet: thank you so much. julie will keep an eye on the decline on chomora. caspersonnker andrew go from living a gilded life to being charged with stealing millions from his friends and family. attempts to answer the question. he joins me now. great to see you and a great article. tell us about the investment scheme. what did it involve? : the important point is
that it involved the states craft of wall street deals which he had learned as a lawyer at dewey valentine, as an associate/ vp and when he became a managing director at park hill which was a business that bought and sold and buys funds and bought secondary positions and things like that. all of those little tricks of the trade that he learned during those years doing that, he used to manufacture this business opportunity. it was totally convoluted. you could not positively do it if you thought of out it but we will give you a piece of a secured loan and we will pay you 15% interest. right there, you should stop and say bernie made off did not promise anyone 15% interest. if you dug into it, he said the loan was not needed after all.
since is one firm had committed to the loan, they were going to do it anyway. he offered 15%. scarlet: it sounds dodgy now. made him uniquely qualified to pull this off because of his pedigree. fin: his father was casperson who was not all he was made out to be but he was the ceo of beneficial finance and it was sold to household finance for a billion dollars at the end of the 1990's. he must be a billionaire because he did not start it that fin's father was the ceo and then fin became the ceo. somehow this family had become the embodiment of beneficial. they had 4 sons and all four went to harvard law school. andrew had the pedigree of
harvard and princeton law school and these first-rate firms supposedly where he learned his craft. scarlet: he swindled his family and his friends. how did it all unravel? bill: apparently that wasn't not enough money and he had to continue to swindle. he sent this out to a lot of people and most of them obviously turned him down. then he sent it to a friend of him from princeton, james mcintyre, who was working at moore capital and he was working partially to invest some of the more capital foundation funds. for some reason, james mcintyre who is the golden boy of princeton who was a lacrosse player, bought off on this idea and sent him $25 million.
andrew took the money thinking he can't believe someone game it is money and gambled with it and lost it and went back again to mcintyre and this time the whole thing unraveled. scarlet: why did he do this? that's probably a question for a psychiatrist. 9/11irst fiance died in and his father committed suicide and was not what he thought and i'm sure he has addiction problems both to alcohol as was said by the court and gambling. could not resist the opportunity to do this. it's very sad, actually. scarlet: did anyone declined to talk to you about this? the family is closed tighter than a drum. they would not talk about this but as a result of people who knew him as well as what an investigator for the southern
district in new york was able to dig out, a lot of the story can be put together. scarlet: fascinating article in vanity fair. thank you so much. in can read the full story the june/july issue of vanity fair and the hive online. we want to return to a story. we have official comments from andrew left of citroen on his call on kamura. he told our producer to read the report. he said it's corporate greed at its worst. he said he wants people to know the importance of the report. this is in response to kamura dropping his much is 15% today, the most since january april fourth -- 2014. he said it's likely to go to
zero with 18 months. chemours did not return calls but andrew left contacted us. the short interest was about 4.1% of its float as of yesterday. is down about 23% versus the s&p 500's gain of 2.5% since may 17. the materials group is up about 2.2% in that time. basis, it's down. we will have more bloomberg markets after this. ♪
questions about future drug pricing may weigh on sentiment and the sect to her and the presidential election. for more on biotech investing, let's go over to carol massar. carol: we want to talk about the latest achievements in cancer. welcome everybody on bloomberg television. us who isen is with the managing director at mpm. this is a big conference when you find out about new developments in cancer treatment. >> this year it's going to be the seminal event for cancer drug discovery in the industry every year. one of the most recent themes we have seen for the last year is surrounding immuno oncology which is using drugs that target the bodies own immune system. carol: this is grabbing headlines. you use your own body to fight cancer. >> the first generation of drugs have been approved by
bristol-myers, squibber and others. we are seeing patients being jordan of their cancer, small percentage. exciting for the companies and the industry and we are seeing efficacy across a number of tumors. cory: what diseases are being targeted? how is that changing what we have seen in previous years? >> we have seen initial improvements in melanoma and lung cancer and even improvements in hutchins lymphoma.
+++ this year is that we realize that immunotherapy is not going to be effective for all patients. we are going to need multiple therapies for other types of tumors. what we will see in the future is that we will move toward combinations of drug therapies. carol: kind of like a cocktail. >> that's right. we will also see combinations of drugs in other class of therapy. carol: i think about what our audiences hearing. i love that we are finding better ways to treat cancer. what does it mean in terms of the lawyers? there are big and small players. anybody in particular we should watch? >> we will see ongoing progress from the big players. we see a smattering of other big companies who want to get involved because these will be multibillion-dollar drugs. we will also see in the companies and drug development, some of the smaller companies emerge. we will have drugs partnered with these big corner store drugs. cory: why has this event become the event. is the event annually were
all their clinical oncology's come together to present new clinical trial results. we are actually seeing other like the society of immunotherapy and cancer or aacr. cancer research is becoming so broad that we will see multiple conferences become important. we hear about the joe biden moonshot. remind us what that is about. >> i am excited about the attention that's being paid to cancer by washington. as an industry, we have to remember that the early-stage innovation for biotech comes primarily from the nih. any investments we make into those institutions is what will fund new drug development over the next 25 years. it's also exciting about the moonshot that they are focused on improving some of the industry collaboration dynamics. we will see increased data
sharing and potentially more efficient clinical trials and that will be important in the era of combination therapy. a discussionads to of what it might mean to the different candidates who are up for the presidential office who have different takes on funding the nih and spending money. >> we have seen strength in across at the nih political parties but we need to encourage both parties to support this going forward. carol: do you have a favorite name coming out of asco? >> it will be exelexus. they recently had a drug approved for kidney cancer. immunotherapies don't work well in kidney cancer but the main treatment has been a targeted therapy. they will have the best in class targeted araby for can't -- or liver cancer. -- for kidney cancer. drug willat the improve the rate of death by
over 30%. this will be a block buster drug. carol: so we will look for news over the weekend. thank you so much. to look director atmpm for news out of that conference over the weekend. scarlet: thank you so much. ahead, canada moves to improve relations with china after the prime minister's recent trip to the g-7 summit heightened regional tensions. ♪
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is set toary clinton attack donald trump in a major policy speech. california, he is casting him as unqualified and dangerous. she has repeatedly called him a loose cannon and plans to contrast her foreign policy experience with his. the top justice department official who defended president obama toss health care law at the supreme court is leaving. virillir general donald is ending his tenure at the high court. he will step down in late june. generalty solicitor will serve as acting solicitor general. a judge says he will appoint a special prosecutor to handle the case against a chicago police officer accused of shooting a black teenager 16 times in 15 seconds. jason vandyke is charged with first-degree murder in the 2014 shooting.
the shooting was captured on video and its release last year led to protests. the michigan house may vote on a $617 million state bailout and restructuring of the ailing school district. of detroit. they have a 457 million operating that. debt. the amount that was approved previously will run out june dirty. i'm mark crumpton. thank you so much. canadian prime minister justin trudeau is trying to make amends with the chinese government. after his visit to japan heightened regional tensions and he met with the chinese foreign in ottawa which is the second meeting with a senior chinese official in the last month and sets the stage for his trip to china this fall. for more, we are joined by
pamela ritchie in toronto. do we know what specifically what the role of canada was at the recent g-7 meeting? >> it seems there may have been a perceived coziness. story, at this in a trudeau agreed on fiscal stimulus as an element to boost global growth and perhaps agreeing on other things as well. some of this is a question of we don't know why. es had al communiqu condemnation of aggression in the south china seas. just injured of his making sure he puts a lot of energy into building a relationship with china. he wants to make sure that no footing has been lost. scarlet: there is plenty at stake. can you give us a sense of how much trade goes on between
canada and china? >> the growth between canada and china in trade has been exponential compared to canada's traditional trade partners. on this chart you can see how much that has out taste others. exports from canada to china total $16.5 billion at the end of last year. it's a relationship that potentially might get to the point of talks on a free trade deal. moment, free-trade deal between canada and china is an ottawa conversation, not something where there has been an official announcement. there is thought that they are trying to move closer to that. justet: when we talk about intrude oh, he is part of a canadian political dynasty. trudeauus about the air 's legacy is part of this connection to china. trudeau isliott revered in china.
he published a book when he came to power back in 1968. regarding china. he was enamored with china and it seems the prescription for trade between china and canada back in the 1970's was created under the auspices of pierre trudeau and the leaders of china helped open up other western countries to china and trade. that's how it fits in the history. just injured oh is trying to build on that legacy as he looks to further trade -- justin trudeau is trying to build on that legacy. the former ambassador to beijing said this long relationship with china is something that probably needs revising but it is something that is front and center in their foreign-policy world. scarlet: do we know anything about the justin trudeau stance on the tpp, the asia trade
partnership of the u.s.? tohe has been careful not comment. it is fair to say they will wait and see what happens with the u.s. elections. concern for a canada because so much time has been spent on these different trade deals. focus on a canada-european trade deal that needs a couple of more steps but that looks more likely than the tpp at this stage. scarlet: thank you so much. coming up next, we will talk about today's opec meeting and the future of clean energy in the u.s. with the energy secretary. ♪
$69 for the company following the earnings report. you've got l brands on the rise. analysts anticipated a drop of ratcheted upo's its campaign for the company. they are putting more pressure on the company from the board. looking at other retailers, kate spade is on the list. the shares fell after a citigroup reason tatian. citibank said they should buy on the weakness. you can see the stock is still down and we are looking at the era bradley with first quarter comparable sales that missed estimates. one analyst said that week mall traffic is still an undeniable headwind to sales improvement. comparable sales missed estimates but if you take out
fuel, it beat estimates. the shares are still down. we have been watching the shares continue to tumble. financing of jewelry purchases is an unsustainable business. in addition to that, some reports were highlighted that if the company has been swapping out stones when people bring their jewelry into the service. that's one to watch. audible, if you take a look at the bloomberg, this is not a retailer. i want to look at monsanto. in the after a report past few moments that says bayer has gotten some financing for its acquisition of monsanto. you can see the shares spiked but are still down 1/3 of 1%.
the debate continues among analyst investors whether this is a good fit. scarlet: thank you so much. let's turn to energy. the headline today is the opec minister meeting in vienna failing to reach a deal capping production. despite the internal discord, the outgoing secretary-general insist opec is still relevant. >> don't take the notion that opec is dead. because it is important part of the economy of the world. scarlet: joining me now from san francisco is the u.s. energy secretary. mr. secretary, let's start with opec. do you agree that opec is still relevant and in what way? >> the opec countries obviously continue to be major suppliers of oil in the world.
and in someabilized cases some of the countries increased production recently. i think the story is that the united states remains well above oil production levels of several years ago. we are well down in terms of imports of oil and oil products. even inry noteworthy is this time when oil prices over the last 1.5 years have dropped dramatically, it has not impacted the incredible growth we see in renewables which is the subject of the meeting here in san francisco of more than 20 countries driving the clean energy future. scarlet: we will get to that in opec,nt but sticking with what do you see is the impact of their failure to agree on any production quotas? you said the u.s. is done well with shale production.
is it significant that opec cannot agree on a quota? >> first of all, we are already at a high level of production. frankly, a freeze at a high level i'm not sure would have much impact. laws ofom line is the supply and demand continue to operate and we continue to have some oversupply in the global system. most observers think that supply will come back into balance. supply and demand will come back into balance say within a year. some say more some say less. point, as demand picks a globally, supply remains stable and balance should come back into the market. scarlet: that's something everyone is looking for. we are looking oil prices at around $50 per barrel. what does that mean for clean energy? so far, in the united states and globally, even as oil prices
have come down, we still see the substantial growth of renewables and also the growth of efficiency. tampedgrowth has been somewhat. we had up presentation that reinforced those points. , besidesited states oil prices, we have very low natural gas prices. principallympacted coal and nuclear while we see our solar deployment up by a factor of more than 20 in the last six years. we see robust growth continuing with the renewables and with efficiency as lead drivers in our clean energy evolution. scarlet: thank you for the shout out. have all of that, he also government making agreements
like the paris climate accord. what is the status of that being ratified before the presidential election in november? >> it was a big step forward on earth day when 170 countries signed the accord. now, the various countries including the united states have to go through filing a set of articles to join. that we willtted join along with many other countries this year. we may not reach the full ratification threshold this year which requires 55 countries and 55% of the missions. maybe next year, we will see the accord come into force. it's a big driver and a big deal. frankly, i think the paris agreement and the response by 170 countries means that the clean energy direction is really inevitable.
that is why we have to emphasize innovation so that we can stay at the head of the train and take advantage of what will be a multitrillion dollar market of clean energy technology. scarlet: you are targeting early next year and we have the presidential election before that and donald trump is the percent of republican nominee and has said many things including canceling the paris climate agreements. among the initiatives that the department of energy has taken during the obama administration, what would be at risk if donald trump becomes president? >> i will not comment specifically on the campaign statements by any candidate. at the appropriate time, i would be happy to do so but not now. i think there is a misunderstanding in many ways. energy, we setof
efficiency standards for appliances and various equipment. those standards are not something we uncovered in the morning and issue in the afternoon. it takes years of rulemaking. would have to those to take a similar long-term process. it would be foolish to do so since the impact of these efficiencies are estimated to save consumers more than half $1 trillion of energy up to 2030 not to mention using 3 billion tons of co2 which will not change. the innovation agenda we are talking about, the clean energy innovation agenda, has received strong bipartisan report on capitol hill. you can look at the senate bills that have passed in the last few months. both the energy policy bill and the appropriations, the budget act for our department, they both explicitly called out the innovation agenda as something
that is very important that happened with high partisan support. i see the actual actions we are taking to be commitments that this country will continue in our own best self-interest. with the domestic market and the global market expanding rapidly, inevitably, we should be prepared to use our innovative edge to make sure we get an appropriate part of that market share. i want to speak on that the going back to the idea of initiatives that may be at risk, would be -- would the iran nuclear deal be at risk? it's been said it's an international understanding. i will not comment on any individual statements. our policy and our position is very clear. we have reached an agreement
that has significantly rolled iran has forration nuclear weapon and we have blocked it with some confidence. that is the existential threat and we come but our goal. that goal was accomplished with collaboration of the p-5+1. the economic sanctions which we had not placed were successful because of international collaboration. as my good friend general scowcroft said, security advisor to the first president bush, he said if we walk away from his deal, we walk away alone. doing that would not be very helpful and then we will have lost their leverage on the nuclear program and we are unlikely to have any significant sanctions restored if we are viewed as the ones who have
walked away. i think in our clear self-interest and the self-interest of our allies, we have to hold iran to the deal while we execute our own responsibilities. scarlet: final question -- chevron and exxon have said there needs to be a step change development and energy research to bring about a new technology that would combat climate change. do you agree or does it already exist? >> it's a bit of both. we have a lot of technology that we need to continue deploying now. it can certainly be used to satisfy our commitments in paris through 2025 and 2030 and the like. what we have to remember is that as we drive to even more carbon reduction, we will have to increase our ambition
domestically and we have to have the technologies that will be attractive to all the world's countries including developing countries. that means cost production, innovation and that's why president obama and the leaders of 19 other countries at the end of november committed to our doubling our energy r&d investments in this country over the next five years. with athat in parallel new investor coalition. it was put together by bill gates, drawing upon 10 countries, that we will increase the opportunities for investors by enhancing our r&d but there will be investors who are willing to put their money on the table in a long, sustained, patient way so that we have the transformational technologies as well for five decades down the road.
it's really both, we have to focus on deployment and continue our innovation push that will reduce costs and may also introduce genuinely new services to consumers here and across the world. scarlet: thank you so much for your time. we want to get to julie hyman who has breaking news. concordeam looking at he a health care which is based in ontario. according to the wall street journal, lack stone and carlyle are walking away from the sales prospect according to the wall street journal. the sock -- the stock is sinking but it had been rising because inside is reported that lack stone was said to be near a deal. it looks like the wall street journal is reporting the opposite and the shares are plunging by 10%. we will have more on that and the rest of the market moves when we come back arian ♪ . ♪
scarlet: this is bloomberg markets. joining me now is joe weisenthal. labor's sharebout of net income. the portion of the economic pie going to workers has been declining. joe: we will talk to the author of a new paper saying that is a myth. his argument is essentially that the way they have been calculating labor share of the national income has changed over time and they added in depreciation. what he says it's if you adjust the numbers, it has been stable for the last half-century or longer. ,e will have him explain why according to him, this has gone nowhere. scarlet: even though it feels like it went way down. joe: if you look at the official gone wayrs, it has
down. he says it's not the case. we will see why that is. scarlet: that must be the only economic chart that does not show any dip during the financial crisis. kind of skeptical but maybe he will convince us. with thewe will speak heritage foundation and we will speak to the global head of energy strategy at citigroup to get his take on what didn't happen at opec. ♪
from bloomberg world headquarters in new york, here is what we are watching this hour. opec failing to reach an agreement to put a cap on production. yet, oil prices have paired their losses and turned positive as ministers insist the global oil market is on the rebound. stocks are paring losses in , leadingre and telecom the charge higher. new york's laguardia airport has been called a third world country by vice president joe biden. renovation is underway. one of the ceos in charge of the overhaul joins us. stocks are turning positive here.