tv Bloomberg Markets Bloomberg August 29, 2016 10:00am-11:01am EDT
vonnie: we will take you from washington to johannes erg and cover stories from italy to brazil in the next hour. it seems janet yellen's speech was hawkish enough to boost the september rate hike and bond whattors agree, but not -- it could mean for the equity markets for this friday practice u.s. payrolls resort. chrysler's is looking into the time -- samsung. what sergio marchionne has to say as the italian american company widened its search for a technology partner. vonnie: shares rise today as it announces lance for the epipen in the coming weeks for half rice.
responding to scrutiny for increasing the treatment by 400% over nine years. 30 minutes into the trading day, let's head straight to the market death where abigail doolittle is with us and has the latest. abigail: we are not seeing too much of a reaction yet. we take a look at the dow s&p 500 and nasa that, we see all three are up modestly following weekly declines for all three indexes. for thet in nine weeks nasdaq. not seeing too much of a reaction after janet yellen policy speech in jackson hole last week despite the fact it appears rates could be pushed up earlier than investors previously thought. when we take a look at the today chart, we see a rebound. pressure on -- the idea that rates could go down. a bit of a rebound today. class.s are one asset
commodities, currencies, and bonds. oil is asset check, trading lower today. this could be on the suggestion we will see the dollar raise -- rate rise higher. oil is down and we go into the , wemberg and we take a look see this year oil has started to trade in a range. the uptrend is starting to reverse and selling pressure is really cap the on oil, suggesting that oil could drop down perhaps on dollar strength. rates may again that move up earlier than what investors had been looking for. caesars entertainment, scherzer plunging after news the game company could he in fact forced into --
operating unit as creditors and bondholders are coming for the $11.4 billion in lawsuits. the company could be forced to pay for the operating -- operating units losses. bee investors may not surprised. netflix are lower on accelerating on $80 price target suggesting a decent downside could be ahead for the shares of netflix. analysts believe increasing competition and pricing pressure is diminished plus due to content, they could have a challenging time meeting estimates. mark: we are 90 minutes away from the end of the monday below the daily average. you know why it is a bank holiday here in the u k. the stoxx 600 down today is stuck in a 3% trading range since july 12.
all its brexit losses on august 11, it has been trading, most industry groups are down today, following the market, down 1.8 percent today. he seesarchionne says samsung electronics as the potential strategic partner and an interest from several potential buyers from the u.s. italian carmakers, a components unit, samsung we heard earlier .his month is in advanced talks shares are lower. shares are traded in hong kong and rose 12% today. the italian luxury goods maker will return to sales and earnings next year helped by cost cutting and online expansion in asia. less than estimated 25%.
these are the goods which include luxury good makers. there has been let -- very little impact on goods shares. much a soul luxury goods company rising today in hong kong and italian manufacturing confidence in august fell to the lowest levels since earlier last .ear struggling with a stagnant economy, compounded by that massive structure from last week's deadly -- a lovely chart paints the picture perfectly. let's check in. alicia has the details from the newsroom. final appeal to save her job. addressing congress as her proceedings heading to its last days.
brazil'senate will hold a final vote on wednesday. the death toll is rising at a military staging area in yemen. 54 attack killed pro-government troops. they had been preparing to travel to saudi arabia. claimedmic state responsibility for the attack. whether fraud had anything to do with the number of people killed in last week's earthquake. 290 people died and authorities want to know if contractors broke building codes, making it more likely that building codes would relax. they also want to make sure organized crime does not get involved in the rebuilding effort. explosion a bomb turned out to be false. instead, someone set fire to the crime lab in an attempt to destroy evidence. they analyze dna samples. five -- five suspects have been
arrested. singapore have the zika virus to are the majority of the cases occurred among foreign construction workers. almost all have recovered. .tepping up its fight global news coward by more than 2600 and analyst in more than 126 countries. this is bloomberg. to the fed'sng out next move. janet yellen's jackson hole speech was enough for september. pimco says the speech included nothing of note. on traders agree with goldman for the moment. the probability of a rate hike increasing to about 42% right there. on friday, the bloomberg view columnist told us jobs data could weigh heavily in a rate
hike decision. with a muchlus higher wage growth, they would find it very difficult to resist a hike, probably september but definitely by december. such apends on getting report. joining us now, john from wells fargo management. we did not see all that much movement, a little increase in the idea we might get a september hike. the that is it. >> what she said was exactly what i wanted to hear. i hope the rates will go up and the reason is because the chair feels higher rates will not affect the economy. i think that means higher rates are actually positive. larry summers put out a
blog post saying he was disappointed with the speech because it was not dovish enough. clearer that the fed would wait to see 2% inflation before making a move. >> i do not think there is such a thing as a magic number. does the red want to encourage or discourage economic growth over the next 12 months? i think that question is easy. they will do it when they will get away with it. not one second before or a long time after. they will wait until they see it . nothing wrong with being did a dependent. every time i get off an airplane, i make sure it is actually out again and not earlier or late. that is what she is doing. the fact that the fed is on a tightening path hurts its credibility and economy. he sees they should have been more dovish rather than more bullish and he says it would be far more clever to tighten only
when there is real risk of expectation rising 2%. you think it is wise to say we will not rise rates until inflation closes on expectation? >> we have an idea of what she is up to. after jackson hole, there is a higher chance of a rate increase maybe next month or next year. she moved in the direction she wants to move us. i do not think she should tie herself to that. the economy is full of surprises . she has to anticipate a little bit. mark: talk to me about the equity market rising and falling in europe. the vix index below 15 for the longest time in two years. short interest declining, money managers adding to their positions. to what extent is this market at
an elevated risk of correction? >> it depends how you define a correction. i see every reason to go down three or four by tomorrow. i see no reason why goes down a lot. the fed willk tighten. a question of semantics. i think they will raise rates but not tighten. 16.9% earnings. that.ot see earnings seem to be getting better and not worse. and nowup a little bit it is priced for perfection. we are all nervous as cats around wall street but i do not see why it goes down an awful lot. i do not see that. vonnie: where you would invest, large-cap and energy stocks because they are cheap. what makes you think that will not the an extraordinarily long-term play? barrelack down to 46 per
. i am old and getting older. they are not cheap, whole bunch of stocks. i look at high quality and yield, i see the big oil's are pretty cheap. they could get cheaper of course. i look and figure why not take the opportunity when presented to me. but there ism now a reason rockefeller is still rich. i think there is a good way to get into a high-yield situation even if the world shifts its focus even with the recap. people use more natural gas and oil and so forth, you're still bullish? >> there are a lot of ways to skin the cat. there are things that come out of the ground and i think that will go on for a long time. i think the markets are
self-correcting. we haveget to cheap, less oil and it too expensive, more oil. the market still clears it just takes longer than most people. i think it is still a situation where there will be demand for the stuff long after i am gone. be -- has beenll stuck in this 3% trend. 3% trading range. since the beginning of july. what will give european equity markets a rocket boost, a boost? can you see it happening? there is to think pent-up demand there. europeans want to live better lives as we do, something to get them going. finally, the fed is done it. a tremendously powerful force. economicomes to growth, it is contagious and i think you need something to push them off center in europe and
you have a pent-up demand somewhere. i think we have a better system but there are more opportunities there. john, thanks for joining us. do not miss the interview with stanley fischer tomorrow morning. at 6:30e will interview eastern, 11:30 london time. mark: i will look at the stocks moving in the early session. herbalife. on the rise is billionaire increasing his stake in the company. this is bloomberg. ♪
mark: i am mark barton. vonnie: i am vonnie quinn. time for a look at some of the biggest this and stories in the room -- in the news right now. broken turbines on three of its 787 jets. other parts of the engine damaged when snapped off, the engines built by rolls-royce. check the engines -- met with facebook founder ceo mark zuckerberg. to discuss these communications technologies and relief poverty and some of the world's is most is it vanished communities. a meeting taking place in the residence. the popehouse where lives. thousands of want to be drone pilots in the u.s. are racing to get license. more than 3300 have signed up to take test today. within a year, the number of
operators for hire may exceed the nation's 171,000 private pilots. that is your business flash. mark: abigail doolittle has the latest. what have you got? abigail: we have quite a few movers here. chipotle mexican grill, shares are higher on the news, the report saying they believe the inpany had improved from 21% july and expect that strength to continue in september. the company chipotle mexican grill did, on free promotions for food saying they were not sure what the effect of that would the but saying perhaps that is helping. herbalife is having its best day in more than a note -- more than a month up 3%.
carl icahn had increased his stake. quite famously by another billionaire investor bill ackerman. 17% this year. a roughly $1 billion position. he may be down about $900 million and finally taking a look at micron, now up three as price targets had been taken hire. saying they really like the recovery in this helps to explain why the shares of micron are up 15% year to date. it is literally last chip pass is worse -- worst mastec 100 stock. mark: thank you. a drugmaker will start selling a cheaper and generic version of it at the 10 -- of the epipen.
mark: live from london and new york, i mark barton. vonnie: i am vonnie quinn. -- the at the pens dollars --ix hundred $600 apiece. in response to intensifying criticism from insurers, lawmakers, and hillary clinton. in health care reporter for bloomberg news. first, when will this actually the able to be bought? the next few weeks and they definitely have control over this and they have this high chain and the drug and they're making a generic version. it is the most they could have
done without increasing the price but it gives them a little more control because they're andady were for generic delayed but there was going to be a generic competition. this was going to build out the presence of the generic market and the criticism they have been under in the last couple of weeks. as the at is known generic drug maker and you are reporting that basically it will be identical to the product including the functionality and drug formulations. it is just another packaging. will every -- will anybody by that random drug after this? unusual as this sounds, it is not a completely unique strategy. will do thispanies . this.ies do things like
it is a strategy in the pharmaceutical industry, not one coming in more recently down the track. they have increased the price so it comes in and still has a pretty good march and or makes as much money as they can while they can. unique.not completely mark: under pressure from congress. it will increase its program. the likes of keep congress and hillary clinton off their back? >> what is interesting is whether or not they got to this point. there are a lot of dynamics that work. in terms of the speed of working with getting the generic central market, they pretty much owned and pretty much had an effective monopoly on. epipen by far and away was the
product in this category. questions were raised by congress about how they had the pricing power. those are still valid questions. scrutiny in terms of coming out and doing it witchhunt, obvious week, trying to get ahead of that. i would not be surprised if congress still pushes to get information because it answers questions about how the health care system works here it -- works. is the company able to increase from $47 for a single pen back in 2007? how can that take place? thisey have not done through huge increases. when they originally bought the pen, they were selling a single pack. the price they started out at, they doubled when they made it
to a two pack. it is not the story of a drug price increase where he was able raise the price by a magnitude of 1000%. they did it steadily over the years because they built the effort around the epipen and made it the kleenex of this category. vonnie: thank you. still ahead, fiat for a tech partner to take it cars into the future. sergio marchionne, who is he flirting with? the answer is next. this is bloomberg. ♪
switch gears. flirting with samsung for a potential strategic partnership. increasingly turning attention to technology companies to help develop self driving cars. we already have a good relationship with samsung as a supplier but they stop short of confirming the talks over a possible sale of the unit. tommaso ebhardt. is this a one-way flirtation? >> we think this is a two-way flirtation. he is interested in keeping up with tech companies and has -- which could be part of a strategic alliance. it could also be put up for sale
and samsung is interested in entering the auto business. reducing the dependence on the consumer electronic business. samsung and fiat executives. [indiscernible] company, board of director. we reported that they are in talks. mark: -- isn't just keeping his eyes on samsung. with other flirting tech providers as well. hasn't he? tommaso: yes. iat sefs the first was the first. we know he has talked with uber and amazon.
he is also said he would love to build a carb but it looks like they will find a different approach. clearly, trying to keep up with the tech companies. he doesn't want anything with too much capital. fiat is the smallest. vonnie: and according to newspaper,rom a talks have slowed over differences about the valuation of the businesses. what exactly are the differences? tommaso: i mean, what the korean paper said is essentially that $3 billion. and samsung wants to pay much less. , it is just a matter of pride.
-- not the old company. what the specified in the interview is that they don't want that but they want to use -- possibly as part of a strategic partnership. presume that it has been discussed. daysll see, in the coming if something happens. vonnie: yes, they did have a chance to meet. i want to have listeners listen, he said that it is too soon to give a financial outlook for the rest of the year and consider a possible adjustment for fiat. have a listen. >> we are almost there. we have 30 days left. see, i need to get a better read of two things.
one of them is how many legs the u.s. market continues to have and secondly, the speed of the recovery of the brazilian market which continues to be depressed. you see those coming out of the country and we need to see those moving forward. so let's wait until the end of september and then we will see if we will adjust. silly talks a little bit about u.s. demand and resilient demand. willave to imagine there be some impact in the last month of the quarter. he doesn't sound all that hopeful. tommaso: here he is talking about the plan to raise more of the target. in july, they raise the target for the year because the first quarter was bad. is he said the new target conservative. so if he sees an improvement and probably at the end of september they are due for another upgrade of the target. market ishe brazilian
a big problem for fiat and the real question is, again, if u.s. markets have reached the peak and when will they start to slow down? that is the main question. mark: always great to talk to you. joining usardt today. let's check in on the bloomberg first word news. >> at least 15 people are to after a suicide armor struck a wedding south of baghdad. saidaqi suicide official five bombers took part in the attack and another four attackers were killed by security forces. members ofrs were the islamic state. spain's acting prime minister is closing in on the number of votes needed to form a new government. the people's party has sealed an agreement with the liberal party.
him 170 of the 176 votes he needs. the first round takes place tomorrow. sandy hook elementary school reopened today, quarter years after the shooting rampage that killed children and educators. students returned to a replacement of the old school on the same property. who are now fourth-graders were students when the shooting occurred. the fbi is, reportedly warning election --icials across the country foreign hackers have breached two state election databases recently. homeland security has reportedly offered to assist with securing state voting systems. and beyonce was the big winner music awards.eo she won eight awards. she performed five songs from her visual album.
her performance are inter a three minute ovation. global news, 24 hours a day. powered by our more than 2600 journalists and analysts, in more than 120 countries. vonnie: thank you. political drama continues to swirl around south africa's prime minister. and now, goldman sachs says the country's credit rating will be cut. if he is removed from his post. we will go live to johannesburg for the latest. .
here is what we are watching. the federal reserve effect is reverberating through markets. janet yellen says the heightened speculation of a rate hike is increasing focus on this week's jobs report. bmw fallen behind mercedes in the luxury car market. we will tell you what it is doing to the flagship seven series to catch up. vonnie: and south africans are losing faith in the african national congress. charges of corruption and incompetence, many doubt they will ever be able to deliver on the promises. almost unthinkable that two months ago, the prospect of a rate increase next month is now back on the table. janet yellen said on friday that the case for an increase is getting stronger. vice chair stanley fischer indicated that tightening is possible.
those comments sharp and focus on u.s. data reports this week. particularly payroll reports on friday. >> rates are simply going to normalize. we need to see a time in which interest rates go up. and whether that happens in september or december, it doesn't bother me. what matters is how far they go. and what that means for the long end of the curve. it isth no bond yields, converted into equity markets that are protected at the moment. mark: a measure of manufacturing confidence fell to the lowest level since early last year. bmw is china to put its flagship seven series back into the luxury car race. they are coming out with a two door version of the seven series.
that is according to a person familiar with bmw. bmw sevensells the series. next year out he comes out with an updated version. predicting a sales turnaround. -- struggled the first six months of the year due to weak demand in china and terrorist attacks in europe. the company says they will return to growth in sales with earnings helped by cost-cutting and online expansion in asia. now for the bloomberg quick take where we provide context on issues of interest. the african national congress puts the power on nelson mandela's first multiracial election in 1994. the party ran on the slogan -- "a better life for all/" l."
the amc is holding onto power nationally. amid charges of corruption and incompetence. on august 3, elections were held. centers,he biggest including johannesburg -- they will now be handled by the democratic alliance party working with the economic freedom fighters. they expressed anger over the expanding economy. -- expected and reimported -- who has served as finance minister since 2009. british immigrants settled in a coastal areas while dutch settled inland. a war broke out and the british
one in 1902. making south africa a colony. they adopted a constitution that disenfranchise the plan. the prime minister severed ties with the u.k.. south africa in jordan decades of economic sanctions before the governments agreed to free them and nelson mandela from prison and hold multiracial elections. has won every election since. here is the argument. the south africa a conley was estimated to have grown 1.3% last year. less than half the rate for all of so harris -- for all of sahara africa. the party is nervous. you can read more about south on the bloomberg.
that is your global business report. head to bloomberg.com for more stories. mark: the rand is continuing to weaken against the dollar amid political drama. the currency has been slumping since news emerged that -- is being linked to an investigation . regarding tax collection irregularities. and earlier, goldman sachs said they could buckle if he is removed from his post. is --the prime minister if the finance minister is arrested you will see the brand buckle. it is potentially a watershed in terms of the balance of power there.
it may well be that we stay with this uncertainty for a while. let's get more on the situation. mbatha.now to amogelang what is the latest in the probe? good afternoon. what we know is that the finance minister has made it clear that he wants to carry on with his mandate. the mandate of steering the economy three difficult time. the economy growing at the slowest rate since the recession of 2008. over the weekend we did the key alliance coming from the african national congress. beforeliticians support -- support the finance minister while others say he basically doesn't want to abide by the law, regarding to the proposal -- regarding to the refusal to present himself to the police. mark: another thing we saw this
past weekend is that -- is selling south african businesses. what is the significance of this big news? we do know that the family is closely associated with the president. if it had come about, the deputy finance minister earlier this year made reports that he had been offered a cabinet position as minister. reportsing about with of -- by the family. they have not been a favorite in the south african news and they have not been a favorite even within the anc. links to the family. then coming out this week and saying they are selling some of the shareholdings in the country. analysts say this may be a sign that the president is weakening within the party and associates
linked with him are trying to get out of the country or at least stay out of the public eye. problem hereigger is that the fundamentals of the south african economy is getting worse. the rand is weakening and if you it is breakchart, even. inflation expectations have been rising since the police charged the finance minister. what can be done quickly about the south african economy? well, what is clear is that investors local and international have a lot of confidence in the finance minister. at a time whenon the country is trying to save a possible credit rating downgrade. withow that it is limited global ratings, which affirmed their ratings of the country's credit earlier this year.
said political turmoil is something that could help them with a possible credit downgrade. -- any battles currently ongoing with government. mbatha, thankg you for joining us. tomorrow, we speak with no nazeem howa.ell -- will sell all its local assets by the end of the year. hereby tomorrow. a big interview tomorrow. donald trump has been sending out mixed signals on his immigration policy. we may get clarity this week. this is bloomberg. ♪
vonnie: to politics now. donald trump has sparked a flurry of confusion about his stance on immigration. there has been talk of a softening when it comes to undocumented immigrants but trump's top aide says little change is happening in his stance. let's bring in sahil kapur. donald trump gives a big speech on wednesday on this immigration policy. will be softer rhetoric make its way into that speech and become policy for him? think it is likely we will hear the new rhetoric that donald trump has been offering. a softer and kinder tone. keep in mind that behind this rhetorical shift, there is very little in a change in policy. the only change in policy is a retreat from his promises for a mass deportation program. to remove all over 11 million people in the country illegally.
that plan was never realistic in the first place. it would cost $600 billion to immigrationd hardliners are not clamoring for something like that. they know that it is unrealistic. donald trump is proposing a hard line and is sticking by a hard-line vision, including building a fall and a mandatory verifying and tracking systems. basically a wish list of what hardliners want. so the shift in tone is to make his policy see more tolerable but don't expect a realistic policy shift. vonnie: now talking about expelling undocumented felons as opposed to deporting the 11 million at however, he is talking about a cut back amnesty. that people who are doing well would leave but then may be allowed back in. is that realistic? thing that donald
trump has sent mixed signals on. over the last year he has suggested -- vaguely, not in his blueprint -- but suggested that arele who are here who talented and working hard and contributing could be able to come back. is talkingear he about an expedited process that would allow them to come back quickly because current law requires people to stay out of years after5-10-20 being deported. is possible he is talking about that, welcoming people back after they do their time outside the country. i cannot get clarity from the donald trump campaign on this. maybe we will get it in the speech but i would not hold my breath. to what extent is donald trump's muzzled approach going to win supporters from hispanics
, while at the same time lose support from his fan base? sahil: a great question. the hispanic group leaders and immigrant rights leaders are not at all impressed by this. they seen this before. they have seen hardliners like -- steve king in the house and they talk about these things in semi-gentle ways but it is the policy that matters to them. made atrump has not meaningful shift on policies to make himself more attractive to them. and as to the question of whether he will lose support over it, i don't think you will. i think this is a status quo phenomenon. his most ardent fans are raising eyebrows over this. they are wondering amidst all this over whether he is changing policies. and a centerpiece of his
presidential campaign and identity in the campaign -- this is the reason why he shot through the polls. vonnie: great story on donald trump and another story by you on clinton. bloomberg politics reporter, sahil kapur. coming up, oil executives are meeting in norway saying markets will continue to be played by volatility in the short and medium. we will get more on the outlook. this is bloomberg. ♪
close." we are going to take you from london to new york. here is what we are watching today. oil is falling today nearly $47 a barrel mark. producers need to agree on a deal to stabilize the market. and the biggest oil executives in the industry -- what are they saying about food markets in these volatile times? ofnie: then, shares herbalife rising today after carl icahn bought shares. will this lead to a heavyweight showdown? and fighting to save her