tv Bloomberg Markets Bloomberg July 19, 2016 2:00pm-3:01pm EDT
hong kong. to bloomberg. are covering stories out of san francisco, cleveland and new york and washington, d.c. in the next hour. : say goodbye to stocks -- morgan stanley billing bullish and bonds saying the 10 year treasuries will fall to 9%. vonnie: facebook live is harnessing hundreds of thousands of viewers each day. gaminges ahead for the scene around the world? shery: with the mayor of the district of columbia thinks of the situation in cleveland.
first, markets close in two hours. julie hyman has been watching the movement. julie: we saw a pullback from those record levels yesterday. , sort ofower volume feels like a sideways trading pattern. the nasdaq is down .5%. volume of 14% versus the 20 day average. you see the other groups seeing -- defensiveume groups seeing that pullback in particular. what is putting pressure on the s&p 500? it has a lot to do with earnings. netflix beating estimates, but subscriber growth trailed estimates. philip morrison seeing the pinch and the stronger dollar
microsoft reports its numbers after the bell. point wise committees are the three biggest drags. in terms of point winners, mitigating the drop we are seeing today, we have johnson and johnson after that beat estimates, raised its full-year forecast. because arising, linked to what's going on with mcdonald's japan for the company is selling pokemon toys. facebook shares trading a bit higher as well. that is the balancing act today. right now, the declines are outweighing the gains. bloomberg news is reporting that there may be an antitrust challenge to all of these health care stocks deals, these two pairings we are talking about. antitrust officials are poised to file suit to block the acquisition of cigna by anthem
and humana by aetna. this concerns about what it will mean for consumers. they will make a decision about whether to actually filed this suit or know by the end of the month. all these stocks down on concerns b those deals might not go through. calling the offer financially inadequate. shares have been bouncing around quite a bit today. . those to continue their back-and-forth. -- those two continue their back-and-forth. shery: mark crumpton has more from the newsroom. mark: two people have been injured following the collapse of a construction crane off the new tappan zee bridge north of new york city.
shutting down all lanes until further notice. the new bridge has been under construction for three years and is suspected to be completed by 2018. donald trump has someone in my for treasury secretary if he is elected president. fortune reports the likely republican nominee is telling donors he plans to nominate -- the former goldman sachs ceo. a new name suddenly in the mixes of possible running mate for hillary clinton. ack.k -- tom vils has died from wounds sustained in the best deal day attack in nice.
the men had previously been declared missing. his wife and seven-year-old boy were among those wounded and remain hospitalized. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. morgan stanley is making its case for the year of the ball in bonds. -- year ofy tenure the bull in bonds. is it justified? david is joining us live from boston. it seems to be a u.s. equities market as well. l market as well.
david: our year-end forecast is 1.9%. thought it would maybe get to 2.5%. differentthese international events, we think 1.9%. that is higher, not lower. you cannot discount that type of a forecast. we have seen record low yields and they continue to defy expectations. vonnie: it seems that a lot of there isury market being supported by foreign buyers who are snapping up treasuries because of negative yields elsewhere. how much will that factor into bond yields? david: it is a huge factor. central bank buying pushing yields down globally, forcing people to come into the u.s. it has been a flight to safety to push yields down to the 135 level.
way has been working its out of the market, we think that should get us back to where we were before the brexit vote. if we are right that the u.s. economy tracks at a 2.5% rate over the second half, we think maybe we can get to 1.9%. the best case scenario that the fed raises rates one time this year. attempt --field coup vonnie: the failed coup attempt and brexit -- david: psychologically, the market does a good job of compartmentalizing these things and focusing on what the fundamental economic impact is. when you do that with brexit, you come to the conclusion that maybe it is a hit in the short run for the u.k.
but a minimal impact on the u.s.. the same type of analysis and conclusions have been drawn after the failed coup in turkey. artfully -- it is awfully hard to ignore -- shery: the market has been dealing with these shocks pretty well. we are talking about slowing global growth come expensive stocks. could this bull market overcome or even beat the 1990's bull market? david: we could get there in terms of longevity, yes. the upside is somewhat limited. we don't think rates are going lower from here, probably going higher. that is a bit of a head wind. it will all depend on what earnings due in the second half
we are looking at trailing earnings close to 19%. that is pretty pricey. we will need to see earnings growth. we better get and if we are going to justify and even whole these levels, never mind go higher. should investors stick with stocks given those prices? david: if you stick with companies that generate free cash flow and can translate that into dividend distribution, even stock buybacks, that is probably a pretty good place to be. certainly better than the bond market. central banks globally will remain exceedingly accommodative and that tends to put a floor under prices. earnings will be rewarded. you have seen that in the second quarter so far this year. the companies that are doing ok get rewarded.
do you then go into crowded trades in the u.s.? the safe blue chips and so forth or do you look elsewhere for more risk and reward? david: that is a difficult call and we have scheduled -- we have struggled with it. we have brought our allocations pretty close to the benchmark at sector level, seeing some opportunities in those crowded trades. ours is he him is tempered by valuations. valuationsee cheap come operating conditions are difficult, so we have trimmed ourselves a bit. shery: thank you so much for talking to us, david joy, america rise chief market strategist. shares of netflix plummeting in reaction to slowing global growth. we will have a recap.
vote. --et is warning that damage the imf is warning the damage this is all -- according to the funds quarterly world economic outlook which was released today. the field of bidders for yahoo! has narrowed. gilbert and victor capital management. at&t and tbg have also submitted bids. there could be a decision in about a week. goldman sachs reporting cut infollowing a -- more thancosts
400 people happen dropped this year. that's happen dropped this year. 400 people have been a dropped this year. shery: matt miller is live in minneapolis. netflix is one of the big movers today. netflix.uge move in i have a chart that hillary put together. this shows you the one-day move with the earnings denominated by -- the problem was subscribers. drop we have seen in netflix shares since late last year. because of this drop in subscriber growth, you saw a 14%
moved to the downside. is taking with his price target of $122 a share because he thinks they will get the subscribers to $140 million by 2020. this is a concern for netflix shares today. vonnie: talk to me about yahoo!. the closer we are getting to some kind of insert -- answer, the less volatile the stock is. matt: as you said in your global business flash a moment ago, the amount of bitterness is narrowing down. isthe amount of bidders narrowing down. they are about a week away from releasing the names. shows the stock price in white. more interesting, the 30
day volatility in blue. concern in may about this process. we have narrowed down the group of bidders. gene munster talks about the tax affects that should benefit his price target. >> the best framework is if they sell the core. if you assume that happens and you assume that goes off as , the goal of yahoo!, that adds $16 to our $40 price target. matt: interesting look at yahoo!. not a lot of move in the stock today and not a lot of move in ibm today, either. ibm's earnings were fascinating. they show an inflection point with the cognitive business, including its watson product,
finally showing growth after five quarters of decline. if you own this stock for the long term, you have not made any money. ibm in white compared to microsoft in orange and the s&p i.t. index here in yellow. even with reinvested dividend, total return equals out to zero. vonnie: still ahead, facebook looks to harness the power of its live video. is the social network relay global news network -- really a global news network? ♪
shery: the ongoing violence between police departments and some minority communities is highlighting the massive influence of facebook live video. max reports on facebook live in the latest bloomberg businessweek. great to have you with us. in the june blog post, facebook says family and friends come first.
with everything that's been going on recently, how is the sentiment their changing? >> facebook for months had a decline in personal sharing, how the company describes "i'm getting married," "i'm having a baby," "i'm having a bad day." in that a decline activity and they try to turn it around and events have happened to change the situation. during these incidents, facebook has been almost like a news network. there's a tension internally within facebook -- is it a sharing platform, a news network? it is kind of both. main: do we know how the players are coming down, what they want facebook to be? view ofthe point of investors, facebook is great as it is. they had a great quarter.
looming asme concern to how facebook balances this. you wanted to be a safe place to post baby pictures, but on the other hand, you also -- if there is not returning to be a news network, why don't you want to ?e that as well doesn't facebook have this content moderation system? these incidents are shining a light on that moderation. ,here are these four offices call centers reviewing facebook posts. if someone flags a livestream as problematic, someone takes it down or leaves it up. castile philandro and then it went down
facebook put it back up and apologized. make?e moderators able to this decision? working for a relatively low-wage basically in a call center able to do that? the somebody else have the power over that? bias -- do you only see in your feed what people like you think? zuckerberghe reasons was talking about sharing pictures and personal sharing is apologize for to this mini scandal involving the promoted stories, some conservative columnists were complaining that they felt facebook was biased. facebook has to be a little biased because they have to make
these calls, but they also have to be a big tent. 's artificial intelligence going to help with this at any point? >> mark zuckerberg is a huge believer in artificial intelligence. it is a hard problem, though. do you filter for violence or blood? it's the kind of thing that people who are thinking about this struggle with all the time. you can read the latest story in bloomberg businessweek. still ahead, the commodities close. and a look at where gold oil are trading right now.
closing in new york. julie hyman has the latest. julie: a mixed picture for stocks come a bit of a mixed picture for commodities. higher, goldal gas higher. we are seeing energy down .9% as oil prices fall. bit of a losing streak for the bloomberg commodity index, down for the fourth day out of the past five, down 2% over the five day period. strengthening in the u.s. dollar today. tomorrow, we will get the weekly inventory number. down 1.3% or so, below $45 a barrel. citigroup --ng
ver after citigroup said demand might sputter out. some profit taking as the summer goes on. and decline of about 1%. watching copper prices as well. in this case, they are going higher. day.ixth up more people going long in this environment, even as oil is coming off. ag all going lower. wheat, soybeans all lower.
usda not so bullish on commodities. shery: let's check the headlines. mark crumpton is in the newsroom. mark: we begin with the republican national convention and what could be a big night for donald trump. winll goes well, he will the republican presidential nomination and will watch as two of his children take the podium. son is an executive vice president at the trump organization. also addressing the audience tonight in cleveland, mitch mcconnell and paul ryan. it could be a rough evening commute for drivers who use the tappan zee bridge. theehicles were struck when
crane fell. fired's government has put 4000 teachers and interior ministry employees. deans 1600 university were told to resign. the national olympic committee is investigating top russian sports officials and wants to bar them from the rio games after a world anti-doping agency report accused the country's sports minister and his officials of overseeing a cover-up of hundreds of doping test failures. officials have already been suspended on the order of russian president vladimir putin megyn kelly reportedly told investigators that network news chief roger ailes made unwanted sexual advances toward her about 10 years ago. new york magazine citing two in the internal
investigation. harassment is said to have occurred when kelly was a young correspondent at the network. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. the imf cut its outlook for the global economy. gloom fallsglobal most heavily on the united kingdom. the imf lost a full percentage point from the 2017 projections citing the brexit vote. maurice i spoke with obstfeld. maurice: it creates an overlay of risk in the global economy on top of pre-existing risks. central banks are taking a cautious attitude, entertaining
the possibility that interest rates may stay lower for longer. why did you only down greater global growth forecast buy .1% given that you've downgraded you caved so much -- much?'s a much julie so maurice: it will have to completely renegotiate with the eu and the world trade organization. it causes businesses to think about investing in u.k. as opposed to elsewhere, it might affect the financial services industry in london. for the u.k., it is a huge deal. , it is significant.
-- broad context of the global economy, based on , it may be have now more of a moderate effect. that explains our baseline case by a we downgrade growth percentage point. vonnie: you said you do not see the need for any accord. when we see events like what happened in turkey over the ,eekend or the brexit outcome we see currencies weakening and all sorts of currency volatility, what can central economy to ensure their stay stable -- economies stay stable? governments have to adopt
policies that will maintain inwth, maintain stability growth and maintain price stability. exchange rates themselves will adjust to those circumstances. , it mayook at the u.k. with trade relationships with europe that are less favorable. it has a large account deficit. it is not unreasonable to think that sterling would appreciate. best depreciate. sterling stable what prevented from dealing with other pressing priorities. i want to ask you about turkey and what turkey has done to stabilize matters after the attempted coup. has it done enough and what further impact could we see economically and on financial
markets? havece: financial markets volatility. the central bank and other authorities have done a good job of reassuring the economy and markets. the central bank has provided liquidity to the financial system to prevent it from peeking up. the economic developments would be driven more by the political events that occur. the authorities have reacted promptly and energetically to contain the damage. vonnie: that was the imf chief .conomist, maurice obstfeld thought it was fascinating what he said about moody's sovereign rater -- you see how much
akened againstee the dollar. turkey --wngraded take a look inside my terminal, you will see when moody's upgraded turkey, they were whether that is a comment on sovereign ratings these days or just the turkish economy which plans on a lot of capital inflows. shery: we also have to talk yen. the end -- the downplaying the need for an intervention from the government as we see a stronger yen. he says the yen's moves have
been orderly. take a look at this volatility see it is will soaring to the highest level since the global financial crisis in 2008. the yen also stronger today, reversing losses from the last session. we have seen a lot of movement with the yen post brexit, safe havens also gaining, including of helicopterlk money and bonds potentially sinking the yen. we have the g20 finance ministers and central bankers meeting in china this weekend. fx could be a big topic there. vonnie: it's difficult for -- the imf can talk about how it's good to have flexibility. situation.s a tricky
pictures of the floor of the republican national convention in cleveland. ."is is "bloomberg markets shery: time now for the bloomberg business flash. the largest technology merger in , dell's purchase of emc cleared a major hurdle today. 90% of shareholders approved the merger. vonnie: the obama administration has announced new policies that allows homeowners to use property to pay for energy efficiency upgrades. federal housing administration also issued a guidance outlining andhomes can be purchased
refinanced with an fha insured mortgage. media websiteial teaming up with the nba in a deal to develop original content that will run on these platforms. two weekly shows exclusively on twitter as well as replace and behind the scenes video on ineing and periscope -- v and periscope. republicans are gathering in cleveland for a second day of their convention. some of today's headliners include paul ryan, mitch , dr.nell, chris christie ben carson. also in attendance is one notable democrat, the mayor of the district of columbia. margaretanding by with
talev. margaret: mayor bowser, we are so happy to have you join us today. you are in cleveland making the case for statehood. can you tell us about how you are making that case and why you think this is important? mayor 670,000 people live in the nation's capital. we are the only people in the capital city across the globe that do not have representation in the national legislature. the people in washington pay taxes, more than 22 states, yet, we do not have a vote in the house of representatives. for us, statehood is a matter of the quality. margaret: different case at the democratic convention. do you have an ally in donald trump and mike pence?
for us, it is not a democrat or republican issue. american issue and about how people who pay taxes are represented in their national legislature. we are very grateful that the democratic party has included supportive language in the democratic platform. there less happy about language republicans chose, but the reason we are here is to educate americans. republicansry day don't know that their fellow americans and washington, d.c. who pay taxes do not have a vote in the national legislature. the you think you can take that to the bank? mayor bowser: we continue to educate republicans that hold office, that want to hold office and these delegates right here in cleveland. mike pence has gone pretty far, saying the fact that d.c.
residents do not have a post in the congress -- voice and the congress is a national tragedy. before donald trump got going in his presidential race, he has been pretty pragmatic about the condition washingtonians face. my job is to be ready. at the voterscome and washington, d.c. will take a vote on statehood november 8. we have worked on our state constitution and we have updated our boundaries. the republicans frequently question whether it will because additional -- whether it would become constitutional. the congress can do it by simple legislation as long as we maintain a federal district. margaret: something to build on. it is still a long-term process. mayor bowser: it could happen as early as january.
we will present to the new congress and new president. margaret: it could be donald trump come january. you've been watching the convention. what is your reaction so far to the first night of events? any reaction to melania trump's remarks? mayor bowser: obviously, i'm very focused on philadelphia, but i have watched him of what more hopeful- i about america than what i heard at the convention last night. there's a lot of room for us to come together as democrats and republicans. people from the east and west, blue-collar and white-collar. there is more unity to be had and what i heard from the republicans last night. anybody who wants to lead our nation has to bring people together. margaret: thank you very much.
about this latest bid for yahoo! emily chang covering everything from san francisco. give us the latest about the bidding process right now and what we can expect from yahoo! emily: the final bids have come lesser-knownon, a from -- thet&t and favored bits are from verizon, vector capital management and dan gilbert. istor capital management based in san francisco, they spun off two decades ago. invested $1.5 billion in technology companies over the last couple of decades. they would not be able to make this kind of a purchase on their own. they're working with another
and ay called sycamore few other companies involved in that bid as well, we are working to get more details on it. what we understand will happen now is a couple of companies, yahoo! will ask a couple of companies for their best and final bid. it remains to be seen which of those companies that will be. , theyrizon bid is lower are simply bidding for yahoo!'s core business. some mothers are looking for the core business and the real estate assets. verizon may change their bid. all of that remains to be seen. vonnie: are the amounts of the best public? is there a chance of these bidders teaming up? emily: interesting question. we have learned that anything is
possible in this process. the ranges anywhere from $4 billion to $6 billion. bryson is slightly lower around $3.75 billion. -- verizon is slightly lower. take a quick listen to what marissa mayer had to say. >> our boards independent strategic review committee was leading a well-run robust process, continues to manage this effort and we are making great progress we have no announcement today but i can say we are deep in the process of evaluating proposals and alternatives and we will update our shareholders as soon as it is prudent. when it is a prudent time, we will hear more. us a quick overview of yahoos in second-quarter earnings. still on the negative trend after beating estimates. emily: yet another disappointing quarter.
this could be the last earnings yahoo! ever reports as an independent and public company. to $1.3dropped 19% billion. revenue from display dropping 7% and a miss on profit. -- they missed on profit. vonnie: it just gets more and more interesting. you can catch more, including an interview with a former board member on "bloomberg west." jason shanker will join us come in next. this is bloomberg. -- will join us, next. this is bloomberg. ♪
11:00 p.m. in hong kong. i am vonnie quinn quinn. welcome to bloomberg markets. we're going to take you from cleveland to washington, d c, and cover stories out of london. votempact of the brexit has become more apparent. we will get reaction from one of bloomberg's top-ranked economic forecasters. shery: home prices are hitting record highs in u.s. cities. what is going on in the real estate market, and are people buying? vonnie: and we're watching oil. after a steady rise, some dark cows are hurting its recovery. shery: we are one hour from the close of trading. let's head to the markets that's julie hyman is watching the market action. ju