tv Bloomberg Markets Bloomberg August 18, 2016 2:00pm-3:01pm EDT
lisa: we are live over the next hour. newly covering stories at a san francisco, washington and the u.k. here is what we are watching. another bombshell. zero prices fall velocity is the company alleging top executives hid its friend of drugs and artificially inflated profits. vonnie: the trunk campaign is under new leadership. they will take you behind the scenes of team trump. lisa: apple is updating the apple watch with a new version coming out this fall. we will break down the changes coming for the gadget. lets into the markets desk for julie has the latest. julie: we are trading in a tight range today, the second tightest we've seen all year. the second smallest difference
between the s&p high and low elliott seen all year. only of about 1.8 points. the dell also little changed. and the nasdaq up nine. yesterday we got the fed minutes that pushed stocks a little higher. we are sorted in a drifting area. volume at about 3.5% below the 30 day average. lisa: there are some movers. julie: there are some deal related movers. an interesting report out of reuters that had to do with williams company. they have been searching on the news that enterprise products has made an offer. williams rejected it. if you look the shares, you see the spike of the reports coming out. you can look at shares of the company that reportedly was making this offer for wayland's -- williams. here you have it. this had a spike up and then
they come down after people read through these headlines. down about 2/10 of 1%. and behind this is energy transfer. earlier this year its acquisition of williams fell apart. a way higher on these headlines as well. we will see if anything more comes of this. we are watching illumina. those shares up 2.5%. according to a person familiar with the situation, they will be making up to $30 billion bid for illumina. this is not a confirmed. there is one deal that is a done deal we have been watching. global wafers, a taiwanese wafer maker agreed to buy sun edison for $683 million, including debt
on a per-share basis at a 45% premium. sun edison semiconductors is sonferent from the sunedi solar company that went bankrupt back in april. just to avoid confusion. vonnie: there would be a little confusion. julie, thanks. let's check on the bloomberg first word news. mark has more from the newsroom. mark: hillary clinton and donald trump already statistical dead heat in nevada. according to a new poll, clinton is backed by 44% of likely voters, compared to trump's 42%. think america is great, calling into question the accuracy of trump's slogan "make america great again." a louisiana newspaper is asking president obama to shorten his vacation in massachusetts and visit the state devastated by deadly flooding.
"a disaster this big thanks for the personal resins of the president at ground zero." that is according to an editorial published in the advocate today. the president is vacationing with his family at martha's vineyard. turkish president is calling on the united states to hand over us-based -- in remarks televised he said turkey has honored past american extradition requests of suspected terrorists and now expects the u.s. to reciprocate. gulan, who lives in rural pennsylvania is accused of planning the failed coup attempt against the turkish government last month. gulan has denied any involvement. in egyptian military court has sentenced 418 alleged supporters of the banned muslim brotherhood. most first sentence in absentia for sentences from two years to life for their involvement in the storming of a police station in august of 2013. the violence came up to the military cleared to brotherhood
protest camps in cairo, leaving hundreds of people dead. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. vonnie: mark, thank you. the news just use piling up for valeant right now. shares of the drugmaker are down once again by about 4%. this time because it is being sued for fraud by t rowe price. neeson,us is mike colonists who covers pharma. and sylvia, health reporter for bloomberg news. let's start with you. this new twist that t. rowe price is now suing could create an effect that other companies, could join other funds will join? ylvia: it underscores -- su
there is a lot of legal activity in recent weeks and become part of the story again. we don't know yet. they are coming and they are here and they are there and there are 70 cases going on. and another one shows how vulnerable valeant is when they should turn their core operations around. lisa: they are one of the bigger debtholders. why are they coming out now? sylvia: they were. they are not one of the biggest shareholders anymore. extently i think to some they have gotten her hands on it on the investigative work. they have the documents that show what they want to prove, which is they are arguing the company was not perhaps doing some thing fraudulent and way was handling its relationship -- i-- they are probably have not gotten to the entire of it, this is the point in which
they had their case together and could move forward. vonnie: mike, you have been phenomenal on the debt of valiant and other issues related to it. what happens now? we have got this agreement with creditors that we were not expecting. mike: it was expected to some extent in the earnings call last week. they were seeking this agreement. we didn't know if it would come or when it would come or what certain terms. is a big deal for the company. when they slashed guidance previously, they would neither interest coverage ratio. that has been pushed off recently. they have more room to deliver guidance again. on the other hand it's been overshadowed right away. the good news and no lawsuit. is the same story again. lisa: i love the adjective, it's a valeant thing to happen. they are the fourth biggest company in the high-yield bond
index with more than $30 billion of debt, yet when you look at the price of the bond, they continue to rebound of it. what is a going to take for bond investors to give up? mike: that's an interesting question. i think is whether or not the business can actually recover. it has continued to deteriorate. now some of the core franchises are doing badly. the other thing is if they can sell off assets at a decent valuation. they have been wanting to do that for some time. they just got some room with this credit agreement to sell assets. what is there that is worth someone paying up for it? that is the big question. i am not sure the numbers they put out, $8 billion in assets sold off, i'm not sure they will get that. vonnie: much point to our charts. bond for 2018, the 10 year bond. it has recovered back to the 100
cents on the dollar. sylvia: there is a little bit of a too big to fail phenomenon going on. there is kind of a mutual holding this together and there is good conditions in the credit market. they are able to get terms that you might not see in a market that is a bit dicier. they are fortunate in the fact that benefited from quite a lenient condition in the credit market as well. it certainly -- that screams to me very thing it credit conditions in the market. it is easier money than it would be in a downturn per se. we have to see. their timing was really good and i got terms of a give them a bit more time. which is set to see the business turnaround now. lisa: what is the next shoe to fall? mike: who knows.
t. rowe is not the only when it lost money on valeant. you have to look at the next gurneys call it the business should make any kind of turnaround. thank you so much for being with us. column on yours bloomberg. coming up in the next 20 minutes, uber put a date on the future announcing the launch of their fleet of autonomous cars this month in pittsburgh. we will look at their deal with volvo in a bloomberg exclusive. vonnie: oil extending's longest winning streak in more than a year as u.s. crude and and is -- decline. lisa: the time is to: 10:00 p.m. -- 2:10 p.m. s&p 500 about nine basis point in nasdaq of about .17%. a sleepy day in new york city.
♪ lisa: this is bloomberg markets. time for the bloomberg business flash. a look at some of the biggest stories in the news right now. an agreement to buy in a building apartment complex on manhattan's the site for $820 million. the world's largest manager of alternative assets is said to be kip'theyn on courts. richer is considering an acquisition of the company. people familiar with the
companies say the pharmaceutical firm founded by controversial ar entrepreneur martin's grilli -- for visitors declined to comment. shares of two major prison stocks are down. this after the justice department said he will end the use of private prisons. shares of corrections corporation of america and the geo group punched more than 40% with both stocks briefly holding. the attorney general's office said the are instructed not to reduce private prison contracts or substantially reduce. that is the latest. the solution for the euro trouble. joseph stiggas think so. >> if you look what's happened
as a result of the euro, the rigidities it has put in, its ability interest rate in exchange rate mechanism for adjusting. didn't put anything in its place. the output of the gdp of europe has been well below even the united states. we were the country where from where -- from whence the crisis began. we have done a better job in recovering. they are basically stagnant. growth for the last couple of quarters is .3%, .4%. that is not a good performance. what you have to contrast is ,ontinuing that dismal outcome depressions in spain and greece, and an alternative. of course a divorce is not going to be easy.
way that isne in a better than the current system. it would still be better if they put into place institutions that would make it work. the question is will they do that? let's say the set up with austerity and something happens, france the same. how many years of pain? six years of recession before we get to this new world you are talking about? joseph: the crisis began in 2008, 2010. we are in 2016. the market with the euro is not adjusting well. i think it example of countries that have an exchange-rate like iceland responding to the crisis, one of the countries with the deepest crisis responded very quickly. it's a small country. we are not talking about six years. we are talking but a couple of years. argentina,, wanted broke the peg
with the dollar, began an enormous growth beginning in 2002. it had a growth rate of 8%. put it right i said china is the fastest-growing country in the world. that continued until the global financial crisis. francine: you would argue for a break above the euro and stronger banking union. how do they marry each other? joseph: i would argue for a stronger banking union and doing the other thing 17 europe together. -- that would keep europe together. the question is is there enough political solidarity, enough political will within europe to do those limited number of things. they are limited. a limited number of things that make the euro work, make the eurozone return to the kind of growth that it had before the euro. comedy --inating commentary.
some customers in pittsburgh may be able to soften -- seven self driving cars. cars.omeone self-driven to bring in julie who also just wrote a story on uber's valuation. an actually rode in autonomous driving car? >> it was a little bit boring, which sounds weird. it's partly because they have safety drivers right now. you know there is someone there who can seize control of the car is something goes wrong. the truth is you get used to it. happens almost instantaneously. you just start trusting the car and thinking everything will be fine. i also rode in part of the story that uber bought a driverless truck company for $700 million. i rode in a truck in it was scarier. partly because i was not local in. vonnie: packing to go on a car
that drives itself? max: it has no seatbelts. was scary because you are going down the highway very quickly in this giant lethal weapon. even in the truck, you sort of get used to it. lisa: you think it will be pretty prevalent in a year? max: there are two issues. one is the regulatory issue and what is the technological issue. the truth is one we are talking about true self driving cars that can go anywhere without any human intervention, there is still work to be done. is probably several years worth of work, may be more. i do think we will start seeing more bounded use. this company that uber bought is talking about talking about trucks on highways. most long-haul trucking goes on a handful of interstates. they could map the interstates and a detailed way. that could happen for real within a matter of years. technologically it is getting
closer to being possible. vonnie: max, we will come back to you in a minute. i want to bring in julie with her great story about uber's valuation. it is one of the few unicorns we know is definitely a unicorn. and experts as the valuation on it out there in the universe may not be what it should be valued as. liquid.ber his less a professor at nyu who specializes in valuations says it is worth about $28 billion versus the $62.5 billion that it is valued at right now. lisa: what is the biggest gap in their estimation? julie: because it this bar mitzvah moment, which i wish someone had coined a long time ago because i love it. is the point where instead of just focusing on growth like a lot of young companies see, you see growth plus profitability.
pcs that is the biggest issue. uber is profitable in a few markets pretty does that you can become a fairly profitable in all of its markets. vonnie: you don't know what is valued at until he goes public. are there plans for to go public ever? julie: i think they want to go public but at this point it is valued more than about 85% of companies in the s&p 500. that's a pretty high bar. vonnie: lummis lsm is actually raised funding? julie: it was pretty recently, about a month or two ago. lisa: i want to talk more about the bar mitzvah moment. going back to the idea of autonomous drivers, how does that shift into this new technology? factor into the profitability? , most peopleuber look at driverless cars is a research thing. that it is aatic business problem. if they are able to get
driverless cars working quickly, it will dramatically improve the economics of uber to the point where it gets cheaper to take on a long trip to own a car. it's like one dollar in change to a lot of cities to less than the iris reimbursement level. vonnie: to the passenger what difference does it make? max: i think they have totally figured it out. in the pittsburgh pilot program is free. if you get a driverless car, you don't have to pay. i think the thing they are excited about is it will dramatically reduce costs. uber has made investment in carpooling and things that are getting closer to public transit things. they carpool -- the car pulls up and it's actually a passenger seat. you have four different passengers getting in.
it is like supercheap, as chief as a bus or subway. lisa: would you drive in an autonomous car without reservation? max: i did the probably not without reservation. i would definitely keep my hands available to grab the wheel. the truth is the technology, while amazing, they are still working on it. vonnie: i thought you meant you were bored. ax.nk you very much to m check out his story in bloomberg businessweek. you the magazine reporters every weekend. also thanks to julie. ♪ [ clock ticking ]
we should fit into your life. not the other way around. ♪ everything is cool when you're watching a screen ♪ ♪ everything is awesome, ♪ when you're sharing a meme ♪ ♪ a voice remote, "show me angry kings" ♪ ♪ you know what's awesome? everything! ♪ ♪ apps that please, more selfies, ♪ ♪ endless hours of the best tvs ♪ ♪ brand new apps, shows to go, ♪ ♪ awesome internet that's super whoa... ♪ ♪ everything is awesome xfinity. the future of awesome. lisa: from bloomberg world headquarters in new york, this is "bloomberg markets."
the drought in california could cost the state agricultural center about $550 million this year. researchers attend the state will see a loss of more than 1800 farm jobs. whename study says spillover effects are considered from the losses grow to $630 million and 4700 jobs. chicago police superintendent plans to recommend firing seven officers linked to the death of macdonald. show he wased to not a threat at the time of the shooting. will moveendation forward for a final decision.
spain's acting prime minister will face a confidence vote at the end of the month. a governmentablish as he moves closer to breaking the country's eight-month medical gridlock. he's expected to sign a six-point deal that will intove an investigation corruption in his party. twitter says it suspended 360 violating its policies on promoting terrorism and extremism. that's 360,000 accounts. it says the suspension spiked immediately following terrorist attacks. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg.
the commodity markets now closing in new york, you can follow these using the xmv function on the bloomberg. dipped -- sugar is another gainer. oil extending its longest run of gains in the year thanks to a drop in u.s. buys. it is a rebound, right? go back three weeks, we were down $10, now we are up eight dollars. , veryare has unwound large short positions are now more neutral. the big question is whether this is the beginning of a new bull or reversing into a bit
we think market -- prices will stay in a range of 45, 50 bucks through the end of the year. scarlet: there's been a lot of speculation that opec is ready to agree to an output freeze. is that credible given what we know has happened over the past year? the meeting in april and with nothing. >> this is a family channel, right? opec's talk and noise. wake me up when the saudi's begin to talk for real. the minister of industry and saudi arabia also controls oil. he thought it was relevant to mention that the july production record was a seasonal thing.
they are not looking to flood the market. another step to try to get andrs under the tent arrange for some kind of deal to restrain or even lower production. i think we are very far from that because a lot was broken in april. several things needed to happen and become to those happening at the desk we don't see those happening yet -- and we don't see those happening yet. >> we talked about the importance of the saudi's, it shale that pushed saudi's and deposition in the first place. what's going on in the shell market? -- shale market? it's often been slows by almost
100. -- it is off of its lows by almost 100. >> that's why i remain skeptical that the saudi's are suddenly going to try to rig this market all over again. to be management has losing game. the best you could do is to alert short-sellers today. if we are pushed, we can maybe take a few barrels away. that is a change from what was two weeks ago a record short position. go forward again, at best, i think we can expect the saudi's and russians to agree that maybe push the winter
market into a new low. to all of aet sudden begin to get balanced all over again by something called opec with what's happening in american shale, not so much. i want to point out that we are in a bull market for wti. wti up 2.9%. -- you see a beautiful drop to below 40 and that climbed to about 48. climb to above 48. i find it fascinating how much the gains in oil has
underpinned the market moves so far this year. especially in higher-yielding credit. energy junk bonds have gained more than 28% so far this year. gain sofor almost 40% far this year. that is just shocking. underpinnedcally the gains we've seen in three high-yield bonds this year, out paced the gays -- out ins -- the yield has contracted more for the junk bond index, just demonstrating what is underpinning the drive to work the stock market despite the high valuations. -- thethe drive toward
drive toward the stock market despite the high valuations. vonnie: the spread is widening wti.een brent and th lisa: you have to wonder, at what point does this reverse? you have pressure to keep churning out oil. meanwhile, we are going to look ahead at the trump campaign manager killing its new team. could the campaign trail get even uglier? jon: ♪
vonnie: this is "bloomberg markets." time for the latest bloomberg business flash. harley davidson will stop that -- harley davidson has agreed to pay $12 million civil penalty. the company was accused of violating air pollution laws by --ling the engine tremors treimmers. showtime taking legal action against charter communications. echoes similarm --suits by
the tech giant is still planning to announce new watch models this fall. will integrates gps-based location tracking. turning to politics, the presidential campaign about to get even uglier. is that possible? stephen bannon is at the top, he's known for his rough-and-tumble tactics. a bloomberg article describing him as the most dangerous operative in american politics. we are joined by jeff green in .ashington bannon that'sen
what do you think he will bring? by trump awaye from this idea that trump needs to be buttons down and make and sell dust make himself more andtable to mainstream -- make himself more palatable to mainstream republicans. will try to direct that aggression toward hillary clinton and pulled trump away from stepping in a lot of the potholes we've seen him step in since the republican convention. lisa: there are many new faces trying to corral trump. >> trump does not strike me as someone who is easily corral of able. bannon has helped trump strategize, he helped him plan his border visit to mexico shortly after trump announced his candidacy last year. bannon is somebody trump trusts.
i want to bring margaret into this conversation. tim clinton, what are they most ,orried about -- team clinton what are they most worried about? margaret: perhaps been and will be the guy who gets trump to stick with one message and be aggressive. and whatsaid publicly clinton aides have said behind-the-scenes is they are not terribly worried. they are always bracing for trump to play a very aggressive campaign. personal attacks on bill clinton, the clinton family, the clinton foundation.
paul manafort give them the that.ial of a pause on now, they're going back to what they've always prepared for. they're worried for the possibility he could throw her off her game. lisa: is there any potential for the clinton camp to beef up its ranks to counteract these changes? the answer so far is no, absolutely no changes to redirect staff or add staff. one thing to look for is what the third party groups do. they've been looking for ways to go negative against trump to calibrate that based on what trump does to clinton.
what the clinton campaign is saying is they've always considered this race to the bottom to be a trap. lisa: bannon is not mainstream. , he'seen on the fringe attacked republican and democratic parties. is this a concession by trump that he is going to lose? josh: i don't think so. what trump believes is he needs to return to what was successful or him before -- for him before. been and will be the little red year.talking into trump's will be the little red devil talking into trump's
ar.u're e this is the worst news for gop leaders. --in has gleefully attacked bannon has gleefully attacked house leaders. they would bee very nervous and already, you hear some voices encouraging the rnc, cut off trump, redirect his money to house and senate candidates. does this move give hillary clinton more license to move more center with some of her views? >> it does give the clinton campaign the ability to go after trump. meanspating what benin bannon means.-
-- if heive them drives them to go more nationalistic, they can use that. believeson campaign she can be the kind of mom, the protector of the so-called victims of trump's rhetorical attacks. re assee the bannon hi advantageous to them. y want to pick republicans -- don't forget, you can follow all the political action
new versions of the apple watch this fall that included cellular connectivity. you would be able to use your apple watch without an iphone, you can getind, text messages, e-mails, mapping data from the watch over the cellular network. vonnie: what is the snag? life --at really battery life. data chipellular would add a lot more power consumption to this device, making it easier for the battery to train more quickly. felt theed -- apple current chips drained too much battery life. it hurt it too much to create a trade-off. lisa: i'm looking at apple's
stock price, it does not seem to be down that much. how crucial is the apple watch to apple's profitability and future business? mark: i don't know how much it could grow. looking a few years forward, it's not significant to apple's bottom line. is the iphone.w the apple watch is just the conduit of the iphone success. they are adding advantages like better health tracking and a better gps feature. right now, to leverage the gps, you have to have the iphone in range and have it specifically calibrated. these new models being announced later this year will have gps built-in, which will allow much
improved health tracking and much more accurate data. lisa: is this a make it or break it? mark: for future apple watch buyers, it is a make it or break get the people want to apple watch, leave the iphone behind, use it as their only device, potentially. that is apple's eventual goal, to make the apple watch a completely independent product. apple wants this watch to be able to be on that same playing field, eventually. check out mark's great story on the bloomberg. let's look at the great charts we have on the bloomberg. speaking about treasuries and yields and bonds in our next
segment, so i thought we would look at the butterfly spread. we had a note out today from morgan stanley, which has called the treasury market pretty well this year, pointing out that now might be a good time to buy securities. the spread at the cheapest in the month. -- in a month. that may not stay the case. lisa: you have a lot of people doing a par beltre, going into the long end, going to the short end, trying to -- it makes a lot of sense. i wanted to also show a chart as well about how the earnings to show how bonds have
been benefiting so much more than any other asset class, this highlights however single part of the curve is being exploited for every little bit of extra yield. vonnie: look how the five year yield has decreased. they are saying this is still the best place to be right now. why youa: the reason have the continual rise in the stock market. vonnie: much more ahead in the next hour of "bloomberg markets ." we are approaching the final hour of trading. the nasdaq is up about .2%. a drop of about eight points for the dow. this is bloomberg. ♪
vonnie: we are live from bloomberg world headquarters in new york for the next hour and covering stories that of san francisco and brazil. global -- the dollar at an eight week low against the euro in keeping u.s. stocks near record. its cuttingannounce 7% of its workforce. advanced micro devices are calling its new chip a breakthrough. we will hear from the ceos of both companies. vonnie: walmart stock rising after a faster than expected sales growth. we will dig into the secret to their success this quarter. there one hour away from close of trading in the u.s. let'