tv Bloomberg Markets Bloomberg June 10, 2016 2:00pm-3:01pm EDT
david: from bloomberg world headquarters in new york, i am david gura. vonnie: i'm vonnie quinn. david: government bond yields around the world sinking to record lows. where should investors be putting their money? vonnie: oil and commodities also declining today. we will hear from the ceo harold resources hamm. move to rare bipartisan help puerto rico. .e will hear from judd gregg let's head to the markets desk where shery ahn has more. shery: stocks retreating for a second day. after pressing given global stocks have announced their biggest two-day decline in a month.
the s&p 500 down 1%. the nasdaq down more than 1%. we are seeing those attempts for a new rally, but they are not holding on to those gains. take a look at the s&p 500 intraday chart. we are not getting to that high we saw in may of last year. right now, trading below that 2100 level. lower, losing 1%. for the entire week already in negative territory. the s&p 500 reversing three weeks of gains, down .3%. the dow still clinging onto those gains of .1%. says there is -- the scrutiny from
stock down more than 2%. that fund has been under investigations internationally from switzerland to four other countries. the bank is being asked to report on its $6 billion in bond sales. take a look at intel today. have a chip order from apple. this is a big win for intel. apple had used qualcomm in the past, but they are trying to diversify their supply sources. we are seeing government bond yields across the world just plummeting. -- 10 yeary tenure yield losing for basis points. that's four basis points.
bond yields across the world plummeting again. bond at one point touched a new record low. it is currently down one basis point. japanese government bonds, we have seen them already in negative territory. they are just pushing further down, -0.14%. david: let's check on the first word news this afternoon. mark: hillary clinton a planned parenthood event in washington today. linking abortion rights and birth control to national economic growth. she said donald trump wants to "turn back the clock in advances in women's health care." she criticized one of his campaign slogans. >> when donald trump says let's make america great again, that
is code for let's take america backward. opportunityme when and dignity were reserved for some, not all. mark: in january, planned parenthood announced its support for mrs. clinton. mrs. clinton has a razor thin new over mr. trump in a national poll, leading by three points in a fox news survey. trump led clinton by three points in the same poll last month. the survey shows the e-mail scandal continues to haunt the former secretary of state. 60% of voters say she is lying about how the e-mails were handled. senior u.s. and defense officials say the white house has approved plans to expand airstrikes against the taliban when necessary. the decision was made in recent days to offer better support and
to assist the afghan forces when needed and critical operations. the 9800 u.s. troops don't afghanistan -- still in afghanistan would not be in direct combat. president dilma rousseff --gesting a referendum such a boat could lead to a new presidential election. -- such a vote. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. david: the dollar is heading for a weekly gain against the euro. treasuries weighing upcoming risks, incding next week's fed meeting. vonnie: with so much uncertainty ahead the summer, how should you position your portfolio? joining usoreale
now. the way younged look at how portfolios are comprised in the last couple of months? philip: sure. are focusing on now best don't fight the ecb or bank of japan. 5% of merrill lynch's global bond index is trading in negative yields last year, that is now pushing 30%. parents are paying for summer camp, central bankers are buying bonds like parents are paying for summer camp. absolute necessity, don't look at the price. are using the global government bond market as a way we believeecause interest rates will plummet lower. one thing that has been proven
is equity markets feel the jitters, rates globally are going to rally. david: how much are you and others looking back to last summer? philip: the biggest difference between last summer in the summer, the fed was priced to move in december. four times in 2016. the pace of that tightening has slowed so much that it takes the pressure off currencies. last year wasreal down 50%. a lot of the currency jitters based on a strong u.s. dollar fed by the fed moving four times a year is different from last year. you are willing to hold potentially more bonds. how much are you willing to go into negative territory?
are you willing to give the during this german government your money? philip: we're using positive somewhere in- places like australia and the in., it makes less sense places like germany. if they hold cash, they will have to pay -40. if the ecb is going to be buying bonds as rich as -40 come it make sense for other investors. for us, we are looking for the highest global government bond yields like the u.s. and australia. david: are the recession risks on the horizon? philip: there's always a risk. one thing that is more important that will come up on tuesday is retail sales.
we are a consumer driven country. relate anumber we got lot appears from the first quarter. fears from the first quarter. we look at things like initial jobless claims. to offset what we saw their. the fed is worried about inflation expectations. vonnie: how much have you waited the u.s. versus elsewhere -- weighted the u.s. versus elsewhere? philip: everywhere else is 40%, driven by equity markets -- , you have any economy where you are trying to create inflation expectations. headwinds.wo nasty rallies --currency
we had a 26% rally in the dollar last year. impulse. deflationary hit a 2%is trying to inflation target and their currency is rallying by double digits, that is the market telling bank of japan that negative interest rates are not a good idea by itself. , thank philip camporeale you for joining us. david: coming up in the next 20 minutes, valiant shares have lost 11% of the value. startinghe pitfalls of a starbucks in egypt. we look at whether tech can take cold in one of the world's oldest civilizations. hold -- whether
several investigations into alleged corruption and money laundering by public officials. the bond yields raised $6 billion. airlines have received permission to resume service to cuba. will five from five u.s. cities to nine cities in cuba other than havana. vonnie: it has been a roller coaster ride for a valeant. stock price climbs tenfold to a high of 200 you dollars a share last august for plunging to $24 a share in june. -- $252 a share last august before plunging to $24 a share in june. david: when did you first hear about valeant? tessie: we were a bit hesitant because when valeant and biofilm
urged, they had a bad reputation. the ceo had been involved in a lot of scandals. valeant had a strong story in terms of contraceptives and generics in emerging markets. those are things investors were really excited about. we realized it was less about products then financial engineering. in 2012, there were 100 acquisitions in five years. it is something that one from a really positive story into something that did not make as much sense for us. what would be the types of companies that would pop up? tessie: we look at a lot of
things. most responsible investors are not thinking about investing in things like tobacco. company like a solar that we like companies that are innovative. companies developing vaccines. how do you not get caught up in the momentum trade? we try to do a good job and ourcing innovation fund -- we will do the environmental social governance in house focus just on that and they will pick up the best stocks. we are picking the innovative stuff daking sure there is a good management story. ago --i remember a while
in history class, the teacher was an activist investor. he said you cannot make money through social activism. how has performance caught up? tessie: one of the things that -- one ofat bought the things that we do -- was your teacher saying you cannot make money in something moral? david: someone asked the question about whether you should invest -- defense stocks make so much money. tessie: all activist investors make choices. you make a choice whether you will invest in ge or lockheed martin.
at the end of the day, we are picking long-term bets, thinking about risks. it's a large risk to think about a company that is not investing in r&d and creating products. now may be aleant better choice? tessie: they have quite a few things to sort out. the credibility is gone. pearson is gone. they have to rebuild a company worth investing in. right now, it is working through a lot of issues. we do reward companies for making changes over time. for valeant, not enough time has passed. gilead is a good story. because of its focus on hiv
medicines. the more mainline pharma companies -- merck is the world's largest maker of vaccines. it is a business that absolutely make sense. why wouldn't you want to invest in a company that is preventing instead of solving problems? let's head to the markets desk. shery ahn has a check on company movers. shery: with treasury yields falling, it's not surprising that we are seeing banks taking a hit. the 10 year note falling to the lowest since january. falling for a now second consecutive day. citigroup falling almost 3%. along with financials come insurers are having a tough day as well. trading at the lowest level
in more than a month. prudential at the lowest level 12.e april metlife also falling 2.2%. energy companies also falling for a third session. not surprising to see this longest run of declines for energy cup is given that oil is now trading below $50 a barrel. chesapeake energy seeing the worst day in a month. a plunge of more than 9%. yesterday, we saw ubs cut the stock to a cell. -- a sell. they sought continued weakness in the independent power producer. southwestern energy company its worst day since march. now reversing three weeks of gains.
vonnie: bloomberg businessweek is out with its annual technology issue. one of the stories is about the --uggle of being asked shery being a tech startup in egypt. ellen: last year, we looked at "what is code?" this issue, we are looking at tech all over the world. it is 70% beyond silicon valley. europe,asia, ar everywhere. one of those places is cairo. tell us something about cairo we
don't hear an awful lot about. ellen: it is pretty young. theocus on one place called -- lots of inventors working together in a safe space. you work there with 3-d printers. it is part of the new tech scene that sprung up since the twitter revolution five years ago. where are these young tech startups beginning? at the schools and colleges and cairo? even earlier than that? ellen: they are learning to code young images by people all over the world. -- just like people all over the world. you have to have a passion for starting something on your own. capitalhere is venture money there.
it's not like it is in silicon valley. there are people starting small projects, looking for funding. it's important that they band together. -- ban together. david: there are risks here for folks in this sector. if you are carrying around some contraptions, you run the risk of running into police and having them being quite skeptical of what you are up to. ellen: they had visits from -- they look at the equipment and they leave and they don't know why they were there. someone was walking around in cairo with a vault meter. they were arrested.
first word news this hour. mark: the fbi's investigation of hillary clinton's e-mails reportedly is focused on classified information about drone strikes in pakistan. the wall street journal reports the e-mails were between diplomats in islamabad and their superiors in washington. some of those e-mails were forwarded by clinton's aides to her personal accounts. canned remarks about donald trump for mitch mcconnell. he tells bloomberg politics why he believes companies to pick an experienced running mate. >> he doesn't know a lot about the issues. you see that in the debates in which he has participated. that's why i have argued to him --t he often this ought to that he ought to use a script more often. mcconnell also says trump's attacks on ethnic groups
and other republicans needs to end. teams hunting for the missing searchan airliner will hun thepieces of debris off australian coast in the southern indian ocean. the head of germany's track and field federation wants the ioc to bar russian and kenyan athletes from this year's olympic games in rio. unjust tot would be athletes -- the campaign for written to --ve the european union britain to leave the european union took a 10 point lead in one newspaper.
in less than two weeks, the country votes in a referendum. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. david: commodity markets are closing in new york. let's take a look at today's biggest movers, starting with oil, falling down over 3%, having its worst day since april 1. soybeans futures trading around a two-year high. global demand is on fire. crop forecasting agencies in brazil say the production in 2016 will fall for the first time in four years because of persistent drought. vonnie: corn is moving in the opposite direction. supplies may be smaller than previously forecast. oil getting hammered today. its worst day in more than two months. expects oil prices
to hit $70 a barrel by the end of the year. maybe $80 a barrel by next year. ed the oilask tycoon -- demand has been higher than a lot of people predicted. with the disruptions in north hastened the day the two curves crossed. >> the blue line is the demand forecast. the yellow bars are the deficit. you see a deficit of 2 million barrels a day in 2017. harold: we went into a deficit the second quarter just briefly here. about 100 days quicker than .nybody anticipated
everybody thought it would be the third quarter. i thought it would be in the third quarter of 2016. , we i was here in january thought it would be 2017 or even 2018 before that would happen. it happened a lot faster. that sets up another scenario out there. in short supply -- >> do others agree with you? i wonder what you see that others don't. harold: a lot of other people do agree today. at that time, i was out there by myself. the rest of the industry analysts caught up. some of them are much more bullish than i am.
i think $60 at the end of the year is conservative. i may be 15% low on that. e supplyentioned th disruptions. i'm curious how sustainable that is. nigeria could be temporary. it already looks like u.s. production might be creeping back up a little bit. do you see that as a threat to your call that some of this production might come back? harold: there are people who s willbe fearful that rig go back in the field at some point -- rig count is at an all-time low.
i don't anticipate a lot of people throwing rigs back in. relies onesis light crude and heavy crude. oversupply is in heavy, but the tighter supply is in light globalt is what most refiners actually need and that is the dynamic shifting the market right now. >> we have a lot of complex refineries in the u.s.. that is not the case and the rest of the world. -- in the rest of the world. that is where decline has taken place. here in the u.s.
the supply of light crude has been interrupted. we have seen differentials in the past. last year, before the ban was lifted, there was a differential of discounted u.s. crudes. when the ban was lifted, that when the way. we know what those differentials can do and mean. this will set up the playing field for a differential between those two. with light crude being at a premium. call due to your dealmaking -- do to dealmaking? harold: we talk about long-term money.
a lot of people have long-term money. we did not see a lot of forced amd. there may be some deals made and done. as we go forward. right now, there had not been a lot of that going on. in oklahomahe mood is getting better, but there have been some bankruptcies. do you expect even more over the next six months? >> there have been some bankruptcies. a lot of people predicted a whole lot more than what we've had. i think we are back in two a positive situation -- back into a positive situation for many companies. >> do you think it is because of the rally in the credit markets and stock markets?
harold: we may see commodity prices getting back to where countries are making money. >> to what extent has continued --y policy from the fed we've only had that one hike. how much does that play into keeping the credit markets open, preventing bankruptcy? harold: it helps. the whole situation. rates a lower interest help the whole situation. was harold hamm in the exclusive interview. david: the house passed a bill to save puerto rico from default. vonnie: intel is said to get a chip order from apple.
it could be met with resistance in the senate. joins us now from manchester, new hampshire. senator gregg, good to have you back again. you optimistic the senate will take action before july 1? senator gregg: it is a hard deadline. if this bill passes, there will be a stay of the obligation until the finance control board is put together. toing forward with how address the issue. the senate is a very deliberative body. it has the capacity to slow things down. that was the purpose of the creation of the senate in the first place. you have the majority leader
mitch mcconnell and democratic leader harry reid supporting this bill. you have the white house supporting the bill, more than 60 votes to pass it. if a senator wants to filibuster a bill, the majority and minority working together can get past it. about a week to get past a one senator alabaster -- filibuster. vonnie: what concrete details can you give us? it says it will promote growth on the island. how? senator gregg: it sets up a structure to accomplish that along the lines of what we've given the city of washington and new york. bring in a financial control board which is independent of the government of puerto rico. a fair arbiter of dealing with creditors. they bring the creditors into
the room and the government into the room and the people of puerto rico into a room and they work out an agreement. agree --rties cannot vonnie: haven't they been talking for a long time now? senator gregg: of course, they happen. club.oard will have the the first step is to do it through cooperation. get everybody recognizing that will have to give something here. ifthey decide not to agree, there is no agreement that can be reached, this board has the capacity to unilaterally move forward and force an agreement. it has significant authority to for something to happen. that authority will encourage people to come into the room and be reasonable. suppose this is passed by the senate, the white house signs the legislation. seen such a loss of
population in puerto rico over these last few months. what do you see is the path forward for the commonwealth to get back on its feet economically? senator gregg: they have to reach an agreement on how to restructure the debt and the actingent so it is responsibly and spending within its means. there should be a distinct track up to standinget up to the puerto rican economy. the people of puerto rico are americans. they have the right to come here. extent the puerto rican , theyy goes into chaos will fall into our social safety net and be supported by our taxpayers. to avoid that, it is worth it to us to set up a structure where we encourage employment in puerto rico. move back to what we did in the
to create jobs and raise the economy up. it will take a while but if we set out a pathway to a compass -- accomplish that, you will get on a pathway where people feel they have a decent future by living in puerto rico. i have to ask you about today's developments in the world of politics. do you see hillary clinton and elizabeth warren on the same ticket? i see someone like elizabeth warren on the democratic ticket. a personst nominated who was a socialist up until about eight months ago. the quads i socialist wing of their party will write the platform.
hillary has to pick someone from that wing of the party to have that wing of the party be enthusiastic about her candidacy. this is a serious problem for the democratic party party and our country, much more serious --n the republican party has if you watch what hillary has been saying to mimic bernie sanders, it is her position now, too. into a fringe type of economy. like france and spain and puerto rico. portugal, but you can throw puerto rico in there, too. you have to have an economy built on market forces to promote prosperity. they subscribe to the bernie
sanders view of the world. you were here a few weeks ago and i asked you about donald trump in light of what we've heard this week, his comments on a judge overseeing a case he's involved in, in light of commentary for mitch mcconnell, how confident are you? senator gregg: the jury is still out. being a candidate of a small percentage of our -- heis being the leader broaderpeak to a percentage of the party. mitch mcconnell's point was very good. whoeeds a vice president understand how to govern. he doesn't appear yet to have accepted that approach.
for those of us who believe in governing rather than chatting, it is hard to jump on the bandwagon. david: you are not volunteering? senator gregg: no, i'm not. , thanksenator judd gregg you for your time today. shery: oil seeing its worst day since may nine. -- may 9. trading below $50 a barrel. a rising dollar countering this supply disruption from nigeria. we are also seeing news on the supply side. war production in the u.s.. -- more production in the u.s.
the number of oil rigs have been declining since peaking in 2014. for the first time since august, we are seeing two consecutive weeks of gains in the number of oil rigs. up three for the week. oil was rising more than 6%, but now giving up some of those gains. now up less than a percent for the week. take a look at the oil performers now. chevron and a sunrise and today. -- exxon rising today. cracked theintel mobile code finally. apple has reached a deal with intel for the next iphone. what does it mean for apple, intel and qualcomm? ♪
david: "bloomberg markets this is "bloomberg markets." shares of intel getting a much-needed boost today. apple will use some chips from intel. vonnie: this deals a blow to qualcomm, one of apple's meager supplies. -- major suppliers. ian king.bring in judd gregg great scoop, ian. ian: what it means for intel more than the size and the numbers is the validation of a program that is really struggling. you can go back 20 years -- they poured millions of dollars into r&d and got nowhere. apple is the best validation you can get. aren't going to turn
around -- it is certainly a strong validation, strong mark of approval for a struggling program. david: it seems like the writing on the wall is that the future was going to be in mobile and portable devices per dwight was intel so slow to get into that market share? ian: the have not shown up at all in that business. intel is very good at making chips very quickly. that is not what you need in a small device. you need something that can get by on a small amount of battery power. intel was really slow to get behind that and redesign what it offers the markets. qualcomm became the industry standard. vonnie: is this a competition issue for apple? will there be a walmart affect? ian: from apple's point of view,
one of the most crucial parts comes from one supplier. that is not a good negotiating position. out, they will be better positioned to renegotiate with qualcomm. in san ian king francisco. great scoop. david: coming up, we are talking test love with one analyst who with cell -- talking tesla one analyst who has a sell rating on the stock. ♪
>> from bloomberg's world headquarters in new york, good afternoon. >> here is what we are watching this hour. the dow is down 100 points. optimism may be fading among investors. >> a gawker files for bankruptcy after losing the hulk hoganda privacyv case. iitd is now reportedly putting itself up for auction. -- gawker files for bankruptcy after losing the whole cogan privacy case. it is now reportedly putting itself up for auction. >> stocks retreating for the second consecutived session.