tv Bloomberg Markets Bloomberg August 10, 2016 2:00pm-3:01pm EDT
>> we are live at bloomberg world headquarters in new york. covering stories at san francisco and washington. while the goldng rally and the dollar declines. investor forecast will waver on taking action this year. this may be as safe that if rates will be lower for longer. retailers michael cores and ralph lauren purporting earnings results today. what do the numbers reveal about the state of the consumer? a new bloomberg national poll puts hillary clinton in a six-point lead ahead of donald trump while trump under fire after comments at a rally yesterday. we will discuss the tale of two campaings.
--campaigns. julie: i want to start in the bond market. sale an hour ago. with the auction of 10-year note, $23 billion worth through one point 503%, the lowest deals at an auction in four years. that implies the highest demand in four years time. we have a chart of the yield as well that we have seen an option. here is the one-year chart and decline. what is interesting about this, we have seen auctions -- recent auctions have not been as strong. pimco total return fund coming out and saying it is increasing holding treasuries to a 25 month high.
u.s. treasuries still competitive, even in what could be a rising rate environment eventually. still yielding higher than many around the globe. stocks, weu back to are seeing declines. not huge ones, but still a leg lower earlier in the session along with oil prices. the nasdaq is down the most today, off i about .4%. -- off by about .4%. we have a couple of different pieces of news. southwest airlines set a tookter outage on july 20 down the numbers. third-quarter revenue per available seat will fall to 4.5% . 3%-4%.vious forecast was people are extrapolating what this will mean for delta. the third daying
of a computer outage that has resulted in more than 1800 flight being canceled. though shares are down by 2%. other airlines falling as well. more oilnteresting is prices -- lower oil prices have not been helping the airlines because of the revenue and traffic problems. weekly inventory reports showed an unexpected build. quites something that is relevant for the airlines. from then about 16% high of the year. oil, it has pulled back considerably. >> mark crumpton has more from the newsroom. mark: an alliance of 15 progressive groups is pressuring hillary clinton to keep people connected out of wall street from the transition team.
eon.orgup includes mov and democracy for america. transpacific the partnership accord. tomorrow she will deliver us beach on the economy in michigan. bloomberg will have live coverage. a new poll shows mrs. clinton of the bounceost from the democratic convention. linton is leading donald trump. when third-party candidates are included, the lead shrinks to a error.of the russian military says finding this will increase for three hours per day to allow humanitarian aid delivery. the syrian army cut the rebel to parts of the country. opposition groups reached the siege over the weekend.
people have been killed in wildfires that have destroyed dozens of homes. portugal national civil protection service reported 14 wildfires on the mainland. almost 4500 fire fighters arborist wanting. john saunders, a 30 year veteran and a respected journalist is dead. of canada wastive one of the most visible faces. he was 61 years old. dayal news 24 hours a howard by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. >> going back to the markets. we are seeing the dollar weakened for a second day. it comes in speculation they are in no rush to raise interest rates. stocks are hitting the highest
marketince 2016 for some perspective we are joined by the senior portfolio manager at sky bridge capital. great to have you with us. let me tell you about the environment we are trading in the u.s.. we are seeing such low volatility. you take a look at my bloomberg, we see price swings of below 1% in this market. that is a redline you can see. what is the best bet when we see a return in every asset class and volatility at a two-year you look at other asset classes, equities are not agreeing it is per -- expensive but on the agreeing -- but agreeing to the range. low.est rates are
not going up anytime soon. the flight to yield is probably not going away. the problem is, not many things have a lot of yield. one thing we will still do is structured credit. this is backed by u.s. assets. good cash flows and very cheap compared to everything else. on a relative basis, we think that has a very good upside. vonnie: you are going toward the managers that are liking quickly are about quickly are about 35% right now. we are really waiting for the technicals to firm up. we start to add more capital. it was not until april where the coast was clear. now the bids are starting to come in and we expected to depreciate in the near future.
every sector is a little bit different. see the housing market turning to the downside anytime soon. probably one of the most resilient classes on the planet. cps is the probably one of the cheapest and most understood. there is confusion among the legacy questions. clo's are somewhere in between. some think they have slightly better credit quality. -- we say cmbs has the most upside. we like it because it is cheap, fundamentally sound and has good cash flow. part of that is the broader environment. they have hiked twice and
probably will hike two more times this year. you probably would not see the flight to yield you have been seeing. that factors into the equation. if we expect the fed to jack up rates, we may not love it quite as much as we do. shery: you made a killing in 2011. helpful. very we got out of it because you have this beautiful long bull run from 1980 to 1910. democrat. then you had a big selloff. we thought it was going to go longer. when it cracked, we were like enough is enough. sincee not got back in then. there are a lot of other things to do right now. gold, the next big leg for
will be if we get into another recession. may surpass previous peaks in go higher. vonnie: the rules that are kicking in, there is no concern about that? >> fundamentally you would prefer it easier for companies to refinance and access credit. from that standpoint, a raises default risk down the road. from a technical standpoint, it limits supply. you have all of these yield hungry buyers and less supply. if you own stuff that is really good, they will have to come to you to buy. so technically it is very supportive. itnie: we have to leave there. thank you. much more ahead in the next 20 minutes. despite lifting earnings for the most recent quarters, coach,
analyst estimates. ralph lauren and other luxury u.s. brands are playing defense as tourists tighten purse springs and mall traffic declines. we are joined by our bloomberg view columnist. conversation or brand conversation? >> i think it is both. mall traffic has been down for quite a while but now they are starting to fight back. it has been years of playing defense, and now we are playing offense. shery: it does not seem luxury is quite as luxurious anymore. how do the luxury makers reclaim the status of being unique and scares? >> i think that is exactly what we are trying to do.
they are saying give us a couple of years to be able to do this. they will pull a bunch out of the department stores, outlets. stop promoting so much and start making smaller batches that people will covet. currencies are weakening around the world so it is not so easy to come to new york and spend your cash. is that a major problem for the retailers? >> i think tourism is a major problem. also, in the u.s. people are not traveling as much. there is not a reason to go to an outlet mall or even shop online. what they are saying is if i am not going to get as much traffic, i will have to increase traffic. ralph lauren right now the stock is up 11% for the day because people believe what they are saying. they are showing skin in the
game, even though sales and earnings are not quite there yet. coach is also starting to do that. kors is kind of behind on that track. kate spade as well. we are seeing designers and creative directors leave after one season. are we seeing a similar sort of thing at that already established mid-luxury brands that go >> a whole bunch of new ceos are coming in. one to watch his step in larson larson who came from old navy. it is really interesting to see what will happen there. you're going to be watching this for us. thank you. time now for a look at the most interesting charts of the day. i am looking at the start of total government and related holdings against the u.s. 10
year yield. they have upped treasury holdings even as other large bondholders decide they want nothing to do with what is going on in the u.s. treasury markets. pimco taking the opposite approach. know what is really interesting about what is happening in the bond market and stock market, it turns out bonds and stocks are all rising. investorsrns basis, are making money and every asset class. in the current world of zero or negative interest rate, there is a paradox. rising 5%.are s&p 500 about 8%. toy saying quite similar 2006. is this a sign of pain to come? doesgilbert saying history not necessarily repeat itself, but it sometimes does rhyme and
>> it is basically like "texas but it takes a lot of the decisions -- basically a very simplified version of the game. people who are not masters of poker can sit down and get very good at it in the course of an afternoon. they take poker, a million different directions you can go at any given moment. you turn that down to any number of different decisions. >> how did roger get into poker and believe there was more he hadead potential? >> a short stint as a journalist. he moved to vegas hoping to make his fortune in some vague way and got a low level job at a casino called an analyst job. basically looking at the books. was payingthe casino
sums of money every month to accompany to rent games. like what is this? he got curious about how you invent these games and went from there. game?t does make a good what makes a game that will stick, someone will want to try out and play and get good at? >> there are different philosophies. believes in a couple of things. one is an idea of volatility. some people think the key to a game is simplicity. you want to give people the chance to make money pretty easily. he has found that is not necessarily the case. hit. is a certain dopamine so games that basically allow you to change your position pretty quickly.
tot is what people tend enjoy. he talks about volatility. .e also talks about intricacies the games were certain decisions where they lead other decisions. you do not want things to be too simple, too easy. you want this sense where you can muster things. able to getnt to be better at something. the article and hear from the reporters on the most talked about stories every saturday and sunday on bloomberg television. turning to the u.s. real estate market getting hit by a slowdown , especiallyuyers from china. tomorrow will be one year since china surprised evaluation with control measures. saying it is are big reason why chinese clients
are struggling to pull the trigger-- to pull the on purchases. >> it is becoming harder to become a realtor in the united states if your business depends on selling to chinese buyers. a cheaper you want and capital control measures are preventing many from pulling the trigger on home purchases and the u.s. total buyers fell for the first since 2011 to $27.3 billion. brokers cites the biggest impact is felt in the 2,000,002 $3
million range. >> my mother is a doctor. brokers cites the biggest impact is felt in theshe is a surgeon. she used to be an engineer. >> she is just one of the many educated chinese that want to idle down and buy a house in the u.s. >> the air pollution in china is getting serious, so my parents really want to leave after they retire. >> she is prepared for the move for three years and has exchanged all of her you want into dollars. yuan into dollars. the national association of realtors say the average price chinese people pay for homes ,ose more than 12% on year showing the really wealthy are still able to get their money out of china. >> i have never it. a situation where transaction did not go through because of chinese mainland buyers.
those buying in the u.s. -- in new york are very affluent. the money is already out. we need to find a way to route it to new york. could be in united states, europe, anywhere else, but definitely out of china. california may be one of the hardest hit regions, and about a third of chinese buying takes place there compared to 10% in new york and other states. they also cater to the most affect did lower end of the market making it one of the most wonderful to the chinese buyer. [ hip hop beat throughout ] [ fans cheering ]
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vonnie: checkieachecking headli. mark crumpton has more from our newsroom. >> delta airlines is operation should be back to normal by mid to late afternoon. now. mark crumpton has more from our newsroom. >> delta airlines is operation should be back to normal by mid to late afternoon. delta still expecting to cancel more than 260 flights today. the airline struggling to recover from monday's computer crash that caused more than 2000 flights to be scrubbed. the carrier has spent hundreds of millions of dollars to avoid such failure. of justice report says baltimore police officers routinely discriminate against blacks. the report showed officers made large number of stops mostly in poor black neighborhoods and unlawfully arrest citizens for speech deemed unacceptable. this report is however an indictment of bad behaviors by a relatively small number of police officers over many years.
>> the commissioner said those committed egregious behaviors have been fired. the council set a new date for the opponent to collect signatures. then there will be a 90 day verification time that would push a referendum into the coming year. in turkey, turning up the heat on the nation's strength. he says that they do not lower mortgage rates, he will consider it an act of treason. the market rate is close to 14%. of the bank officials say preliminary analysis has shown that stones, not bullets, hit a bus carrying journalists. the incident happened yesterday as it traveled toward the olympic park. mobile security patrols are beings that that on roads around
the olympic venues following the incident. 2600ed by more than journalists in more than 126 countries. bloomberg. shery: palladium is at the highest level in more than a year. leading gains today and precious metals. rising car sales has raised speculation supply will not be enough to meet demand. chinese vehicle sales gained the most in 17 months. joins us to talk about all of the movers. very interesting to see this outpacing gains. leading gains today and precious metals. even gold surging 20 plus percent. interesting relationship between gold and played him. -- palladium. a lot of time gold leaves in
terms of precious complex. gold has been outpacing this year for a number of reasons. it was really a flight to quality. havenelivered the safe return. one thing you may want to look at in terms of palladium is the chinese numbers have been strong, but potentially could fall in the future. we could see the softening of demand. we have seen soft numbers that have been the work in commodities. the relationship between gold and palladium may start to soften of it. it is fascinating because andsee the big drop in oil, this hard landing in china story. you could not be more right.
there is always a knee-jerk reaction. we hit the commodity lows last year and this year. i would say supply is still an issue. fromve had a real inflow an investor community. a lot of times it has to do more income.ity and fixed in this case it is gold. commodity became of it oversold. demand has come in a little bit better. shery: you send us a very nice graph for total return. precious metals are outpacing. also led by industrial metals. grains and the energies lagging.
>> going into july, we had a lot of things happening. july was a real move for commodities. it to go a half of the gains. if you look at grains specifically, the expectations are quite good. you have a lot of lead up in terms of the old feeling like it could disappoint. we had such a sharp drop. metal istal or base copper. copper,going on with and is that more of a guideline when it comes to future market moves? copper, you are right. it has definitely lagged the others. i think going into the second half of the year, based metals
will continue to be strong. we have had some minors that have cleaned up their act. they have shed non-core assets. prices are higher. production cuts. those are starting to dissipate. overall the metal is quite good. copper is still up for the year. recently writing a wall street journal op-ed talking about the return of glass-steagall. the chairman and ceo spoke to me earlier. have a listen. >> the third misconception is somehow investment banking is risky, and warm risky than commercial.
that is also not true. these are often symbolic as opposed to actual plans. they are really just trying to play on main street fears. we can bring it up i think. glass-steagall prohibits commercial banks from engaging in high-risk investment. that paragraph also said an parent link the freedom of the internet was attributed to the federal communications commission. is that not what the gop meant >> i think itph? is for political reasons. there is a perception it is risky to be in investment banking. traditional investment banking all.t risky at what investment banks do
traditionally is the best efforts are used to write -- underwrite debt and equity. they buy and sell securities for investors, and they help hedge foreign exchange interest-rate and commodity risk. these are not risky elements at all. they do not even a on the balance sheet for very long. they are doing this for political reasons as you suggest. ,onnie: moving on to dodd-frank because that is a reality. donald trump has said he would repeal dodd-frank where at least put a moratorium on fresh regulations. is that a potential? i would not vote for donald trump under any circumstances. hass correct dodd-frank been very negative for the
economy. i think it is one of the main it is growing so slowly. there is a perception that somehow commercial rank caused a crisis, and they did not. we're punishing banks for something they did not do. .t does need to be repealed there are some aspects that are reasonable. most eight no sense and are contrary to economic growth. -- most make no sense. does that make sense? it seems you would need to vote for donald trump in order to have that in the works. >> this is politics, and it may time.ore i believe if we continue to have subpar economic growth, even a democrat president will decide these things do not make any sense and will decide what is right for the american people if
they want to get reelected. time. ii am not optimistic but i am hopeful. >> project really european banks banks are less systemically important now. >> yes. vonnie: what would you want to echoplex there is many things. the first thing is the excessive regulation that does not allow the markets to work. we have regulators coming into banks and saying they are more concerned about banks not taking risk. do?efore, what does a bank ist they should be doing
taking prudent risk. to takelators want them in essence, no risk. they have extremely high capital levels that are beyond any reasonable means. banks are not even earning the cost of capital. the way they do this is to reduce the balance sheet. that means individuals are not getting loans. these are counterproductive. they fail to recognize what crisis.aused the it was not mainstream commercial banking. it was excessive risk taking and banks taking excessive risk. vonnie: former chairman and ceo of wells fargo speaking earlier on bloomberg tv. much more ahead in the next 20 minutes. the latest on the race for the white house. another controversy surrounds ;s campaign while
hillary clinton prepares for four -- four hurt economic address. ♪ isnie: the time in new york 2:41. down .3%. the s&p 500 in more than a week, down .42%. -- bank shares down on speculation rates will not rise again this year. approaching the 101 mark. haven flows across the world. 130e is really threatening
the company says it is seeking a higher price. vonnie: tyson foods could profit from a new rule. mrs. designed to track down airborne illness. say the business could improve because regulations take the burden of stricter record keeping off of the customers. vonnie: migraine grain to cut cell phone roaming charges. a move that both nations are recommending to the african union and other countries. this is set to combine cost of international communications, including voice, message, and data. business flash update. hillary clinton holding on to a lead over donald trump. nationally up 6%.
when third-party candidates are pollded, her lead in the shrinks. this all came a week before dueling economic features, controversial comments from donald trump on gun control and new findings regarding clinton's e-mails. talking more about this, we a reporter from washington. how much can we read from the six point bump? protectively when you consider it comes close to the margin of error in a two-way race? sense is good news in a that it is the latest in several polls that show her hitting the magic number of 50%. to be there is a pretty remarkable thing. it did not happen with barack obama and mitt romney in 2012.
it usually does not happen until later in the game. it is a sign donald trump is going through a rough patch and has a very steep hill to climb. it is not insurmountable, but at this juncture he needs to be doing better in battleground states. according to the poll, how do people feel about trump? >> they have questions about trump. he is weak on temperament. the people in the poll stated 31% had a better temperament to be president. is thing that concern voters his seeming to be mocking a disabled reporter, which was a long time ago. they are highlighting this. extent it isin
reflecting the pump hillary what have gotten from the dnc -- bump. will that continue to impact her campaign gekko will she ever be able to put it to rest? quest it has been a year and a half now and has not been able to rest. those are raising new questions. usually when there is questions about this in the news, this goes down. the unfavorable goes up. they have not been able to put it behind them. we will see. history is any indication, this is not good for her. >> what should we be looking for tomorrow? >> it will be in warren,
michigan. it will be in many ways of rich -- rhetorical to donald trump's speech. visionl talk about the on the economy and policies. it will be a pocketbook speech him her and about working-class families. she will talk about minimum wage, childcare. she will put this stuff out in some detail and try to make the case she has the better ideas. thank you for joining us. talking about that speech, that is coming up tomorrow 1:15 eastern. you can watch it live on bloomberg television and radio. also talking about the damage that she says trump's policies could cause. coming up, we are heading to the to talk tech,
vonnie: this is bloomberg markets. i am vonnie quinn. shery: apple is preparing the first significant overall of the mac broke pro line in over four years. -- macbook pro. they are trying to reverse to quarters of falling sales. joining us from o is bloomberg "west" anchor emily chang. great reporting by mark bourbon. first overhaul in four years. pro fans excited about this. one of the interesting things
will be replacing the volume line. the brightness button. these will now be software that apple could update these buttons in potential update. buttons show you the that you need depending on applications you are using. there is a more advanced graphics processor and there. appeal, especially to videogame users. to offerconsidering inse high-power computers colors. potentially the . really interesting development,
especially in light of the fact they'll have not been doing well. pro sales have far and away surpassed the expectations that even apple had. oris this change of policy ? >> macbook sales are up six percent in the past ipad sales are down 23%. when i spoke to the awful cfo after earnings he talked about of the bigger ipad.
in general, people are taking longer to upgrade ipads. they are taking up to three years to get a new one. when you look at phones, and upgraded 18 to 24 months. consumer demand for computers like some people were acting. potentially see a bottoming out of the pc market where we have hit bottom and potentially sales are not going to decline any , and the people who want computers will continue to buy them
live from bloomberg world headquarters in new york from the next hour and we are covering stories in san francisco, greece, and japan. stocks are pulling back in the final hour of trading could financials and energy lead the declines today, while earning season causes of these stocks to breakout. vonnie: the people of japan are preparing to head for the hills for the mountain day holiday. retailers and tourism operators are gearing up for a windfall, any billion-dollar windfall. reportingke shack is earnings after the hour. the company has installed since its idea. we will get the state of the restaurant industry. an hour from the close of trading, let's go to the markets desk, where julie hyman has the latest.