tv Bloomberg Markets Bloomberg June 14, 2016 3:00pm-4:01pm EDT
david: good afternoon and here is what we are watching at this hour. one hour left on the u.s. trading day. the only thing investors are betting on is that the fed will not raise interest rates. this includes a two day meeting tomorrow. a final round of bidding through yahoo!. vying for the company. each maybe after something different from the company. what should investors do after the eu mentorship and central-bank policy meeting in the u.s. and japan. ramy: we are really at session lows.
take a look at volatility index. off just by a little less than that. row about four days in a with that weighing in on everyone. on june 23. take a look at what is happening with the imap function on bloomberg. you see financials are among -- down the most by 2% here. of the red with telik medications up by only one third of 1% here. what will happen with telecoms right now, i want to talk about what will happen with the position today. have apect that will
negative on telecoms. interesting we are seeing a positive for at&t as well as verizon. at&t said rising looks forward to the supreme court appeal of today's decision for many shouted rules. investors are saying they will try to push back against this. google down by .5%. it would actually help google there. take a look at what is happening with financials. financials are the biggest laggard now. it is down 16% here. down 5%. what is going on in commodities and currencies? falling in and nymex
tandem with equities. that is despite what is happening with the news coming up, the international energy association. disappearing faster than expected, they will see supply and demand almost balanced by this time next year. nymex crude is falling down 1% right now. this is up by .5%. i thought it would be falling. , riskier currencies. david: let's get a check of the headlines. mark crumpton. angle he rejecting insistence from republicans that the united states should describe terrorists who happen to be muslim as radical islamists. following a meeting at the treasury department with security advisers, they would
validate the islamic state that america is at war with the entire state. we acted out of fear and we came to regret it. we have seen our government miss treat our fellow citizens. it has been a shameful part of our history. mark: in response, donald trump "claims toesident know our enemy and yet he continues to prioritize our enemy over our allies and for that matter the american people." he continued -- shooter in the orlando, florida, massacre, even though he had been investigated twice by the fbi, was not on the no-fly list he was taken off the list because agents had no
evidence he was a danger. the team called 911 during the spree and swore allegiance to the islamic state. bernie sanders is meeting with senate democrats and plans to up date his supporters thursday night in the hometown of vermont. sanders said in an e-mail he would hold an online town hall about what is next for the campaign. the vermont senator is meeting with hillary clinton tonight. i would end with voting in the district of columbia. it is just nine days before the u.k. votes whether to leave the european union and five new polls show the leave campaign is running ahead. the lead anywhere from 1-7 points. remainingow to supporters, the biggest selling newspaper in the u.k. is backing the grexit. global news 24 hours a day powered by 2400 journalists in more than 150 news bureaus around the world.
david, back to you. david: the federal open market committee, we are expecting a decision tomorrow afternoon. let's bring in carl, the chief economics -- economist. let me start by asking you what you expect to come out of this? >> obviously no rate action at the june meeting. nonetheless, this was a very important platform to set the tone for the rest of the year. we look at what has changed over the course of last month, it is really one just report. one just report ahead of the july meeting, these could very much be back in play. suspect that janet yellen would take a somewhat tough or ,ess than dovish tone
especially given the market not even pricing in the rate increase all the way up through february of last year. if she comes out dovish, reinforcing the market view. instead, i think she will challenge that without explicitly staking her claim in july but seeing -- being somewhat dismissive of the last jobs report, highlighting good things happening in the economy and very much leaving two rate hikes as a possibility. i almost forgot about it. like what happened? you exclude the hike in gas prices, it seems like most of the other data is pretty hawkish, except for the jobs report. what is going on here?
>> the numbers have slipped a little bit. nonetheless, if you look at the rear -- real metrics of much.vity, it is not say q1 is pretty lousy. remember back to the last fed statement, they honed in on house income creation and consumer spending. we are seeing decent house, -- house income numbers. consumers are rising to the occasion to lift the economy out of the soft patch in q1. up 2.8, probably up north of 1% in the provision. sales, it on retail is in the vicinity of 2.5% to 3%. the fed's full-year growth forecast very much can remain intact. --they are not
>> the last minutes not mentioned hardly at all. to what degree are you weighing it at all? showing aest news is favor and excessive vote, maybe changes, but they have been scaling back their level of concern over global and financial risks, a prominent concern since the first meeting of the year. betty: words we will be looking for are what?
what if they come out and say the same thing as the prior meeting? is that a nonrecognition? >> mariotti is changes they have to make to growth assessment. the employment number's have changed a bit, consumer spending looks to be on stronger footing. if they purely make the adjustments to reconcile with reported economic data, i think maybe people would be surprised by the, not hawkishness, but the stern tone where the fed really signals they are not rattled by the jobs report and they are looking beyond that. looking at how often inflation is mentioned in these statements, as we move toward this, it is a diminishment. they would not like to be as big. at the you are looking wrong indicator or you have to be focused on the real-time
metrics of an -- inactivity, job creation, and economic output. it is a lagging indicator. if you are watching a portion of it now, really telling you what happened in the economy a year-and-a-half ago. betty: is it true though that the risk, once you get above that number, is there a higher risk of inflation? and then you have got to scramble a tight policy? isn't that the theory? >> the fed is sensitive to the fact that it could become a self-fulfilling prophecy. if you overshoot a little bit, fine. if you overshoot by a lot, maybe the fed would welcome it at this point and it would be harder to rain and ultimately. the fed has plenty of ammunition . when the time comes, they can sell on the balance sheet. the risks are still skewed to word the downside. offsetnot have a lot to
policy mistakes and that is why they have to tread very carefully. it is even more important isorrow because yellen inclined to sound dovish and she has to walk a little bit of a hawkish walk tomorrow. david: you had janet yellen's speech at harvard alluding to the fact they were ready. you have had fed residents out in preparing the market. what does it say about the communication strategy? we get a bad jobs report. does it throw more disarray into that? >> the fact that voters and and did their out part to realign the expectation tells you how serious the fed is about doing this. they are not just going to throw the credibility away. it tells you there was a concerted effort and they have a strong inclination to get rates
yahoo! long-term, they may have the most long-term value. that is what tpg is known to do. >> when you look at what is on the block here, are they looking at different things? how closely aligned are their bids with valuation? >> this is a key point and we are at the home stretch. it has slowed down recently. final round's this month, it was pushed back early and mid july. the reason it was pushed back his almost all of these bids are not apple to apple. bidders want to buy all of the real estate. verizon's's was for none of the real it take. maybe some of the real statement but not all of it.
and saying by point all right, what is it good for, what is it worth, does it make sense to sell some separately but they monetize more for that? that takes a long time. a final round of due diligence. kids are apple to apple -- david: the range of valuations not quite what yahoo! was hoping for. >> between $8 billion, that is coming down a little bit. that said, the price tends to go up the closer you get to the deadline for a coveted asset. there are enough bidders that yahoo! is somewhat coveted. i would imagine it would be closer to six. diligence at this point.
do we see a pity were in -- --pt here, >> it is a great question. yahoo! is a beleaguered asset. war breakwild bidding out in the asset here you have at&t and verizon still here. i have said this all along. verizon will buy yahoo! it could be in a length of, there are a bunch of bidders to get this to the point where yahoo! is comfortable selling it to verizon. will verizon via to that price? if yes, they win. david: two types of bidders here. dan gilbert, lest we forget. does either have an edge going into this? .> verizon should have the edge
none of the private equity firms have synergy. almost by definition, they are turnaround candidates. would be replicating the aol purchase with yahoo! it seems to me verizon not only has the resources but also the synergy capability to offer the highest price. thank you. covering this story very closely. ahead, shares of facebook up 10% this year. we will explore that next. ♪
struggling this afternoon. policymakers meet the federal reserve and washington, d.c. following her decision on interest rates tomorrow and washington, d.c. will also have live coverage on bloomberg radio and available at bloomberg.com. imap on bloomberg here. just the sectors changing. financials are down 1.5%. , telecom is the leader here, the event brings together leaders of the world to business.
bill clinton was asked what can be done to get economic growth going. >> we had flat wages declining income. but then we had very high interest rates for stifling growth. now we have interest rates growing for inflation. far from growth. so we still need more public investment. we needed infrastructure program which should claim energy. we need to double down on our whichment on technology, has kept our country strong. billion of your money, the human genome or you can do it for less than $1000 now. billion in200
economic benefits. pretty good return on investment. the first $500 million with newt gingrich, on nanotechnology. kentucky.n eastern washed undergraduates making , doing a lot of what these communications, $400 million. undergraduates right at the base of the appellations, making these powered by computing power transmitted to a box. you get a big rate of return on that. we need to emphasize that.
need to stop screaming at each other and demonizing each other and figure out how to do it. still ahead on bloomberg markets, we will go to the morningstar investor conference in chicago. talking to the manager of the templeton global bond fund. u.s. planning for higher interest rates this year? special coverage of it here on bloomberg tv and bloomberg radio tomorrow after that meeting concludes. ♪
bloomberg first solar news with mark crumpton at the news desk. president obama been with a national security council and got an update against the islamic state. the president was also briefed -- he investigation president obama: we do not have any information to indicate that the killer.cted the killer took in extremist information and propaganda over the internet. to have been an angry, disturbed, unstable young man who became radicalized. mark: the white house described this as lone wolf attacks. france while law and calls this an act of terrorism.
claiming allegiance to islamic state stabbed two police officials to death at their home. the attacker was killed after a three-hour standoff with police. they had a list of other targets including journalists's, rappers, and public officials. russian government hackers penetrated the computer network of the democratic national committee according to the washington post, which sites dnc officials. the insurers gained access to the entire database of opposition research on donald trump at hillary clinton reportedly target by russian spies as were the computers of some gop political action committees. house speaker paul ryan unveiled a republican plan to roll back government regulations. paul ryan wants to scale back the dodd-frank financial regulation law, expand energy reduction on federal land and losses against businesses. the agenda needs releasing to unify republicans before
november's election. news powered by more than .wice 400 journalists back to you. scarlet: the stock market getting ready to close in under 30 minutes with the latest from abigail doolittle. >> the nasdaq is down slightly at this time. really well off the lows. spending much of the session bouncing around in the red. it will be the fourth down day in a row, the longest losing streak since the end of april, helping to create a ripoff feeling the two-year chart, we see the nasdaq in a sideways range in much of that time. aat makes the range perhaps bit more bearish, the last three ranges within the big range are a series of lower lows. the last two broke down to august lows and the current
congestion could take the nasdaq right down to those lows. timeuld be in for a long to we will have to watch and see. one stock that suggests this could happen, microsoft in the index now down six days in a row. investors are digesting the recently announced acquisition of linked in. saying the acquisition failing to address the largest balance of developments. 25%, it would probably require weakness in the index's largest number waiting. investors in ago , worldwide developers
conference after they gave refreshes on the mac and a few other products there. one back downand to this year's lows, biotech, we cfo ine index up, washington did earlier speak at the conference. perhaps something was said there that investors are not quite taking in a bullish manner. scarlet: all right. thank you so much, reporting live from the nasdaq. we were just talking about the fed meeting earlier this hour in the u.s. and around the world are the huge topic for the next guest. let's head back to the investor conference in chicago. joined by michael, chief investment officer. take it away. vonnie: thank you. investing in the
bond market. very happy to have him do a tour of the world. against it going higher and that has not happened. for right now, why are you still positioned against what is happening in the united dates? not believeat we do the economy is in that bad of shape. some of the preceding years, crisis,to the financial we do not see the economy as on the prep space of a recession. we actually see inflationary trends rising and we hope it reaches 3% by earlier next year. -- pushing yields
confident the fed gets behind the curve, that and also move yields higher. partially dedicated on oil going higher, but to what level? below continuing to fall 30. quickly get to as early as next year. we bring met time forward and extend the magnitude. it is really just taking away the inflationary impact and then pricing the inflation on a tight labor market, on a housing market, service actors, then you look at the core inflation and has steadily been rising above 2%. vonnie: the markets keep pushing out rate increases. globally as much as what they are telling her.
the engagementee changing this in the next several months? i said, either the fed acknowledges the inflation to normalize more consistently with the economy, or at some point, the markets will do that for them. they cannot move short rates but they can move longer rates. vonnie: at what point do we see that this year? >> probably when we get inflation at the end of the year. nothingabove 50% but much beyond that. ?e will see those bewe are not saying it would a runaway inflation, but we are making a statement we are not in than -- in an inflation. vonnie: ok. in that case, your positioned along u.s. interest rates, longer and. >> short interest rates.
vonnie: let's now move beyond the united states. there have been several stories recently about how the china market is growing. included. you are not sure of that story yet? let's we are very interested in china because what happens affects the world. for a long time, we have been calling for a two speed economy in the old industrial sector, part of the economy surging in parts of the consumer and surging investor growth, balancing out to prevent a hard landing. that is the core macro view. of financial markets, it is probably a little early coming into the chinese market. at one point, the chinese bond market would be one of the largest in the world. it would be an important asset >> i am sure he would be involved at some point or gradually depreciate and yields are quite low. probably a little earlier as an investor but certainly excited
about the prospect of the market opening up. depreciationl 5% over the course of the next year. vonnie: and you are not concerned about the china economy? economye parts of the that will go through a hard landing but that is not the whole picture. the demographic changes have pushed up wages which have pushed up consumption, and there is tremendous growth in the service sector. we can grow to 6.5 even though there are large swaths in capacity in the manufacturing sector. vonnie: the china story not involved yet, but you are involved in southeast asia, like indonesia. >> absolutely and that is for two reasons.
you have to get comfortable before you can look at emerging markets. then in places like indonesia,, the countries are worse off than 1998 politically and economically, conditions are nowhere near as bad. exhilaration, growth has moderated, trade numbers have been down. the market is saying it is not just exhilaration. this is worth the 1998. i know we are nowhere near that type of price. t vagreae for long-term investors. korea, ifoiding south you invest mostly -- >> we have hedged out most of our currency exposure in south , we see tremendous once in a decade of opportunities in terms of valuation. a big bet, a lot of political turmoil. you are not giving up on this just yet.
brazil, it is true, they are in the worst economic position since 1980. it was driven there by a toxic mix of policies. sheets, off budget spending done by the government. they just ran off the rails and -- the situation is so bad, it is not possible to continue. it is now in the sort of re-centering the program. the bank raises rates, controlling inflation that forced a recession that is couldn't -- that is controlling inflation. trade balances are moving back in the balance. the fbi is still coming in. send it --get spending policies of the past, no longer continuing.
the currency had already depreciated massively and we came in at the end of last year when it was above 380 and above four. real valuehink the is in the currency but it is more in the mid-double-digit interest rates. vonnie: how have you managed with the mexican peso? difficultis being a one. result has done well. brazil continues to be used as a proxy hedge for wrist -- risk assets. a lot of capital is moving the market around completely inconsistent with the fundamentals of go. solid inflation is under control. good capital flows. they benefit from a tighter labor market. the u.s., more people go from mexico to the u.s. story, justiceod jordan for market prices to we tend to have a longer horizon,
3-5 years out. we think valuations will ultimately reflect fundamentals. staying in. we have been taking -- in europe. have taken profits there in ireland, and hungry, taking profits there and using that capital to move back to latin america. there are a few small positions but by and large. vonnie: a quick tour around the world in eight minutes and not 80 days. , moreinvestment officer than $140 billion in asset management funds. back to you, scarlet. scarlet: thank you. coming up, heading to the conference in los angeles, speaking to the coo f -- of twitch coming up next. ♪
>> it is all part of a sweeping strategy review by the ceo, of course helping to navigate the company out of its emissions cheating scandal. let's move on to technology because it was upon a time, twitch was a game starting startup where people can watch games in real-time. now it is a part of amazon. kevin joins me now. great to see you. you started as a game serving -- game service. what is the single most
significant way in which your business has changed since being purchased by amazon? >> great to be on. yes, since the acquisition, the biggest thing that has changed -- they very much believe what they are doing, trying to go as quickly as possible. we are able to do that. we are at the point where we are -- watchingillion two hours per day. tell a written -- television viewership in terms of engagement, a lot of chatting and a number of broadcasters going to nearly 2 million per month. we have about 17,000 broadcasters actually earning money, whether they are earning a full living for supplementary
income. >> what are the more interesting ways they are using the platform? differently than originally envisioned? >> it was an offshoot of tv, all about the idea of streaming yourself twee 47 for the world, building a community around yourself. advent that develops low latency live streaming, that could allow for engagement. we are seeing a weird kind of interactive experience. of what helpspart people stay engaged and stay interested here at you can affect the course of the show by acting in the course of a chat. fan may be able to play with a celebrity. just imagine if you could play a ascii ballgame was occurring.
you could do that. then you have a more professionally produced -- yes, exactly. it is a lot of fun. what is interesting is you are building a deep relationship, much deeper than you see another media, with celebrities. you see traditional media companies coming on in creating content. fun stuff with archive content. we have launched a new category on the site, twitch creative, all about streaming the creative process and woodworkers and musicians writing songs. one of the original guys who talked to an audience that is invisible but engaged with you and taught you how to paint. taught you about life. we are starting to see that extension. level ofe seeing a engagement. facebook this month announced a new partnership with blizzard to live stream video games. is this competition a good thing for twitch?
>> i think the fact that our cohorts are coming into the market is good for the market. it is a difficult thing to understand. we build tools that we understand the community wants. a direct line with them. we talked on a regular basis. we hear from them what is it that would help them build their career and help them build fame? how do they feel more loved by us and the audience? that.l continue to do facebook and google and others coming in, i think ultimately helps everything and brings a lot of attention to what we are doing and it brings a lot of different takes on what exactly creators need and what fans need. how do you fit into amazon positive ecosystem? twitch is free and amazon is on-demand and subscription driven. any steps being considered in terms of making some of your content premium content?
>> revenue models are advertising. a subscription but it is not content dating subscription. we give the audience additional features. it might be playtime with broadcasters. a different type of content and we have tossed around different ideas. we are doing for me very different. amazon prime is on-demand content. that is paid by amazon prime. we are more about developing something new and we are learning as we go. >> thank you so much for joining us, the coo of twitch in los angeles. coming up, the close of trading is moments away. take a look at the major averages he appeared we are looking at the dow and the s&p. ♪
>> first up, markets are just off session lows. you know, it is really hard to see if we will get a reprieve it one reason why is we still have the lingering overhang from the whole grexit situation, we see when earnings season is over, that is when volatility really picks up. during the earnings season, we are sitting 15 envelope. they may suppress falsely for a little bit but not for long. to your trade. facebook is what we are looking at. nine point 3% or so. we are getting negativity. andrew saying he's going little bearish on it saying it will not be -- a year from now. what are you looking at? >> i am looking at the numbers and what is happening out there.
truth will set you free especially with what is happening with digital advertising. the number one platform especially when it comes to mobile. you see they have not even scratched the surface when it comes to advertising in that -- and the internet. even from what is using the ad platform to face the fear they analyticsnalytic -- and have the best platform. if the stock is trading below where it was at the amount, a to sell a $110ty input, use the proceeds to buy a call for the strike, this gets you through the next earnings, goes up and caucus -- cost you market ando pentium you have all the ups had from there.
>> you say traders are buying into the s&p notes. but it is a proxy for what is happening. i want to go back to the fall we are seeing. explain that more to me and the viewers here. >> a lot of investors are starting to use the s&p 500 to hedge themselves, whether they are in the equities space. they're using this as a hedge. that is why you are starting to see the volumes picked up. >> thank you for that. that is it for bloomberg markets. what did you miss and the bloomberg closes next. -- close is next. ♪ . .
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ringing] ell fresh concerns in the german bonds below zero or the first time. joe: the question is "what'd you miss?" continue toestors consider the possibility of u.k. may leave the european union. recent declines have dragged things back near record levels. joe: and the proposed ban on muslim immigration would make the u.s. less safe. scarlet: we hear from former president bill clinton in an exclusive bloomberg interview. first, let's take a look at how the markets are faring now. u.s. stocks closing lower ahead of the fomc tomorrow. we have declined for a fourth straight day, but in terms of catalyst, the