tv Bloomberg Markets Bloomberg September 23, 2016 3:00pm-4:01pm EDT
we are live from bloomberg headquarters. here is what we are watching. major averages hovering on the lows of the session. when apple is one standout leading and declines. the marriott completed its purchase of starwood today, -- ming my conversation with the ceo on those plans coming up. twitter shares are surging the most in more than two years. julie hyman is standing by with an update. >> declines have to do with apple at least in part.
this appears to be due to a report out from the german research firm. we're still trying to confirm that report but according to traders, it did talk about a drop in demand for the iphone seven in europe. hearing several sources that twitter is getting closer to a sale. if you go back to some of other companies we have been watching, those that have been named potentially as acquirers have been trading lower.
salesforce down by more than 5.5%. also not seeing that big of a drop, facebook and microsoft also pulling back today. ,inally outside of technology oil prices are also a cigna can drag. down 3.3%. an opec delegate said saudi arabia is not going to be or freeze halt production or come to any kind of production targets to stabilize the oil market. drop in energy shares as well. between energy and tech, those are the two big drags on the major averages today. >> let's check in on the first world news. >> leaders of the revolutionary armed forces have given a peace agreement to the government.
and new york's attorney general a settling a lawsuit with republican presidential nominee donald trump's hotel chain over data breaches. officials said the company will pay $50,000 after more than 70,000 credit card numbers were stolen. authorities say the company knew about the hack in june 2015 but fourt notify customers for months. global news 24 hours a day powered by more than 2600 journalists in more than 120 countries. this is bloomberg. david: let's get back to the market where the s&p 500 is thinking but still on track for a weekly gain. dividends per share in white, trailing 12 month earnings per
share. >> one of the big things i wanted to highlight was it's kind of the story we have seen all year. we haven't really seen that earnings growth year over year. what has held steady is dividends and dividend growth. , it couldhe market potentially be the company's ability to maintain or grow that overtime. vonnie: do we see a turn? these dividend growers, can they keep growing? at the data and what analysts are forecasting, i think you are kind of holding your breath when it comes to seeing and earnings turnaround. you are seeing that pace of
growth a lot slower. what we have is the historic s&p dividend growth year-over-year. withhat comes that forecasting dividends. dividends are continuing to contract. some of that could be energy related. potentially we could to these evidence continue to grow but really not eating that when it comes to forecast. -- seeing that when it comes to forecast. david: the economy essentially is doing fine but what has that had -- effect has that had? >> i think a lot of it could potentially be investor skepticism. the monetary policy that has
been going on, i think they're losing a little faith in what the fed has been saying. you have seen the probability for a december hike. what will we see for earnings season? what is the forecast? >> its forecasted to be a little disappointing into the end of the year. a lot of the catalyst for the industries that have done well will still hold. a lot of consumer companies, you will get home building, the fact real estate has broken out as its own sector has given us a lot of historical data to look at. quick question about volatility. something that's everyone has been watching as well. i think when it really comes to the volatility situation, i , ank when you see volatility
lot of that hasn't been on some of this fundamental equity historical data in terms of earning growth and things like that. we had earnings using kick up. earnings season pickup. thank you to kevin kelly. david: a bit of breaking news here. ted cruz said to endorse trump for president as soon as today. donald trump today prepared a list for perspective supreme court nominees. mike lee was on that list. the headline, ted cruz said to endorse trump for president as soon as today. completed marriott its purchase of star. my interview with the ceo of that company. that's coming up next. ♪ and tune in to bloomberg
america agreed to delay their merger plan. that gives the justice department more time to review billion deal. antitrust officials can now take several more weeks beyond the airlines original closing date to complete their review. mcdonald says it's considering in addition to its all-day breakfast menu, happy meals. the fast food chain will begin testing breakfast happy meals in oklahoma on september 26. if successful, it will be the first new entrée for the happy meal in more than 30 years. ceo says lululemon helps by extension oversees our customers don't necessarily associated with women can get 40% of its business from male shoppers. 80% of the retailer shoppers are
currently female. that is your bloomberg business flash update. david: marriott has completed its $14 billion purchase of starwood hotel and resorts. marriott is now the largest hotel. today, i spoke with the ceo and asked how he plans to integrate the starwood brand and loyalty programs. >> starwood managed to have about the same level of rewards contribution to their occupancy as we did with a bigger portfolio and we knew they were doing something right to get the regularce with traveler. we think w was a big piece of that. it was also about the way they structure their program so strategically, it was probably the biggest reason for us to do the deal, how do we create in even bigger loyalty program with that much more stickiness with
our customer. david: you now oversee 30 brands. how long will that continue? are you thinking about phasing out any of the brits? what's i don't think we will. the greater the number of brands, the more choice for our customers and that choice is a good thing. beyond that, each hotel is owned banker.l estate we'll have the right to change the brand. the brands are ready compete and exist. we will try and broaden distinctions between the brands but hopefully we can grow them all. whohere so many consumers are brand agnostic in travel space. how do you combat that. the loyalty program is the principal tool for that. we go to market with our loyalty program and particularly for folks who travel somewhat regularly. they know it's in their interest to belong to a program because they get treated well.
they get points but increasingly, it's things like free wi-fi and keyless entry to their room and rates lower than the rates they came to through a different channel. we have to make sure to earn that loyalty or delivery value. it's not a soft and squishy idea where people will say i am loyal to you but if we can deliver that, people will say it's in my interest to do that. competition is intense, pushing direct booking. how is that push going for you? the sign-ups into our program even before the transaction closing today have been up significantly over last year, which is a sign customers understand it's in their interest to be part of these programs. there is that much more that is because it to folks
know i have a place to stay in that portfolio and i can concentrate my points there. i think the growth will continue. thed: a lot of people say big tight ends will be google and facebook in the travel space. do you see that as well? >> google and facebook are fabulous companies obviously with huge communities of users and in many respects, they are simply making a choice of where they decide to use the power they have and they can use that power if they wanted to be more directly involved in the reservations process for hotels. expedia and priceline are two big customers of google. they will have to figure that out. we are in some respects, impacted by that and we have to ownedit carefully but we the stay in nobody can take that away from us. we are in a little stronger position by the loyalty pieces
are the principal tool for making sure we have an independent relationship with our customers. david: you have a front row seat to chinese interest in the hotels based through this deal. you expect that to continue or has this may be chastened the chinese travel market? what i don't think it has at all. you have a number of dynamics prompting outbound investment by chinese companies. fortunately, we prevailed. they are a good partner of ours and will be interested in doing more investment in the u.s. part of that is about currencies and making sure they are investing in a global portfolio approach. part of that is chinese travel. the numbers are starting to mount up. i think that will be the case for many years to come. you said it was too early
to tell what the brexit follow my be. what are you seeing? far, it's been ok. you have a european dynamic around some security issues and immigration issues but within the u k, you see a weakening pound, which makes the u k cheaper for many travelers around the world. in the same respect, you k travelers are more likely as opposed to u k coming to the united states and all of that put together means business is ok. david: that was my conversation arneon the sorenson -- sorenson. announce itsto latest earnings next week. so far this year, the company ground,ave been losing down about 11%. and a look at the broader u.s. majors. you can he we are lower but not
david: life from bloomberg headquarters in new york, this is a bloomberg markets. vonnie: it's time for options insight. , the: joining me today momentum stock strategist at zacks.com joining me from chicago. dave, good to see you. we are eating a bit of a dip in the end of the week following the increase we had in stocks
earlier following the fed. what kind of options activity is catching your eye today? thing jumping out is since that fed meeting is already in our back pocket in the rearview mirror, now it's really out towards december when butave another fomc meeting overall, the curve on the vicks will drop down as people have calmed down. julie: we have been talking about apple a bit today and how that stock has been dropping. i'm curious if you have seen any notable options activity on out specifically. newsen the apple triggered, there was a bit of a flurry of options activity but really what was taking a cake was all that twitter news. i saw something like 26,000
so a lot were traded of the attention got pulled twitter's way earlier in the tray today. twitter is potentially close to a sale. variousnsider these news and events, investors are very soon going to have to consider earning season once again. your trade for the day is nike, a company that reports on tuesday. what are you expecting from nike. >> overall, my theme from the earning season, we will have -3.1 negative earning season growth. theou take out energy, session is over and quarter looks really good. i think what we will see with shares of nike is we will not be so concerned with this and what the ps comes in at.
i see that as an opportunity. thinking that will get a little post earning drip following new report on tuesday and things will work out from there. julie: maybe the sentiment has been going against nike recently. there was a no doubt saying -- a note out saying nike future part ofight be we can because of competition not necessarily from under armour but companies like adidas. in this trade, what is your downside protection of some of
these numbers don't look as strong? >> my risk here will be the $1.30 i have on the table here. that is why when i bought the $55 call, i sold the $58 call so i could take in a little premium and drop my overall money at risk versus going out and buying that 55 call out right. it would be much more expensive and i would have much more skin in the game, more risk on the table. >> ted cruz such a george donald trump for president. >> i'm not going to get into criticizing or attacking donald trump but i will give you this
response. i'm not in the habit of supporting no who attack my wife and my father. look atlet's take a where the markets stand. about 34 minutes before the close, the s&p 500 down about .5%. the dow down. it is just above $12 index. about 95.5. the euro trading at $1.12. crude start this is bloomberg. ♪
headlines on bloomberg first world news. and donaldy clinton trump off the campaign trail today. comparing for their first debate. the new york times has clinton is it testing attack lines while trump is even clinton's previous debate. could be the-off most-watched presidential debate since ronald reagan and jimmy carter in 1980. tune in for special coverage of the first presidential debate. bloomberg politics will be on the ground with programming before and after the event but also teaming up with twitter as the exclusive streaming partner for the debate. ted cruz could endorse trump for president as soon as today. that's according to a person familiar. and vladimir putin wishes he was back in the ussr.
he's lamenting the collapse of the soviet union and says this wasn't inevitable. the russian president says the , the sovietlapsing union could have made a transformation. he's due to make his remarks at the kremlin. global news 24 hours a day powered by more than 2600 journalists and analysts and more than 120 countries. this is bloomberg. scarlet: we have markets closing in just under 30 minutes. if you take a look at the major indexes, red all around. energy and apple among the big drags on the s&p and nasdaq. abigaileck in with doolittle, live at the nasdaq for more on the nasdaq companies. >> we do have the nasdaq trading lower into the close near session lows and we will get to why in a moment. , it's a different
story. the nasdaq right now is on pace to put in its best weekly close ever. for the nasdaqek and it's been driven by strength and technology. this includes amazon, alphabet, adobe systems. stuff there for technology. apparently, this is driven by strength in the company's cloud subscription products and we have a bullish reaction. analyst still see some decent upsides. as for what is dragging, it is apple. , the biggest drag on the now that, week. -- on the nasdaq on the week.
a german research firm issued a negative report around the iphone seven. our team did reach out through phone and e-mail. we have not yet heard back that would like to confirm these reports so perhaps we will have an update on that report next week. scarlet: we also know you love charts. what does today's move mean for apple when you look at a longer-term chart of it. look at the bloomberg. this is a five year chart of apple and what really stand out here is the fact the 2015 through 2016 downtrend has been bullishly reversed. apple climbing higher.
perhaps this chart suggests we will see some consolidation not just today that may be even next week or the next couple weeks of last week's big move. scarlet: abigail doolittle reporting live from the nasdaq. etf beganed equity trading on wednesday. the etf follows a portfolio manager. for his decade plus history of selecting a concentrated high quality portfolio of stocks. eddy joins us now. this is a very novel financial product. you have been writing this blog for over a decade. into an is being turned etf everyone can invest in. how does this happen?
>> like you said, we have been doing this for 10 years, putting my stock recommendations on the web and people have been following it for years. it has a very good track record. over the years, more and more people have asked. and it just sort of talking with some people, i met up with advisor shares and we got the idea for an etf. we brought it together this past year and now it's trading. scarlet: i need to ask you have the feeds work and how your compensated because you are invested in these same companies. >> i'm invested in the companies and we have a brand-new thing that has never been done in the etf spear. -- cr. i have one of joe's good friends with skin in the game.
the expense ratio, which starts at 75 basis points, it is tied to my performance. joe: the fund just launched this week. you pick these 20 stocks at the beginning of every year and have been doing it for 11 years. how have they done? what they had done quite well over the years. through 2015, i was beating the s&p 500 164% to 102%.
scarlet: these are actively managed etf's. do you think it can buck the trend of actively managed funds losing out? what's i think it's possible. who buy feel like they are riding along with the captain. scarlet: and you have your blog post that you will be updating. tell us how frequently you will be making changes or at least commenting.
>> i will always be talking about the stocks, but the rules, we will follow exactly in the etf. we have made changes once a year so there are 20 stocks in each year and we only change five stocks. then we rebalance the portfolio. it is a locked and sealed portfolio. we don't make any changes. we think that's the best way to go about investing. joe: the ticker is cws. this must be a surprising and exciting experience. what was the most apprising thing you learned in the process to creating an etf? >> i guess the regulations involved and the things that , it's a muchproved more comprehensive learning
experience but it's a process they have. joe: you are a prolific blogger and tweeter. will any of that change? promoters have to dance on a fine line. how will that affect your internet output? >> is a learning process. there are things i cannot say which are directly marketing, that can talk about things are happening inside the fund and i can talk about the different stocks, anything that may be seen as marketing.
talk a bit about the 20 stocks you have got inside your etf right now. what is the common thread between them? beyond a bottoms up approach, is there a thread you have kept consistent? let's elect to find a company that has a lasting competitive advantage, a niche in the market, a well-defined area that note -- m an economic oat. have consistently rising sales, consistently rising earnings. i would like to look for a good history of divinity increases. the ones at some of you have this year, bed bath & beyond, microsoft, wells fargo. do all these stocks that into that category of companies with durable moats?
>> i think so. that is what i aim to get. and they are all equally weighted within your portfolio? >> they start the year as equally rated so it will follow at a balance as the year goes on. scarlet: do you go into any derivatives, hedging? >> straight stocks fully invested. likeis this your one thing that you see expanding further into new products or now that you sort of had the buzz of creating an etf and being on the buy side? could you see your empire growing? >> right now with the fulcrum see, it is that i'm committed to this. this is what i believe in and i have been doing this for the last 11 year so for now, i will stick with cws. joe: i'm intrigued to see how this goes. at the blog author
ups teaming up with robot maker sci-fi work to test the use of .rones testing began today. the founder of sci-fi work says the test will allow the companies to gather engineering and cost information and work with ups to look at where drones can add the most value. twitter said to be holding informal talks with several potential buyers. the company working with goldman sachs to work with a possible deal. people familiar with the situation say salesforce.com is one of the main parties interested. that is what business flash update. joe: it took a while but the republican base appears to be coming around to backing donald trump. ted cruz is endorsing donald trump for president. a few months ago, he was onstage stage at the rnc withholding his endorsement.
andf you love our country love your children as much as i know you do, stand and speak and vote your conscience, vote for candidates up and down the ticket who you trust to defend our freedom and to be faithful to the constitution. a greatt was such moment, the moment ted cruz got booed at the rnc because he declined to give an explicit endorsement to donald trump. he didn't endorse donald trump his wife,ump insulted he intimated his father was involved in the jfk assassination, and now he's come around to say i will endorse him. about a texas turnaround. ted cruz announcing on his facebook page he will be backing donald trump and what this does is two things for donald trump. first, it further solidifies the evangelical base of the republican party with whom ted
cruz is in very good standing with. trump has frequently said this crowd of voters should vote for him as a result of the supreme court potential nominees. him further is give inroads within the think tank world in washington, folks that work at the heritage foundation. this gives him access to those inner circles. scarlet: we're speaking with kevin of the bloomberg politics team. what is ted cruz get in return? now he's endorsing him. do we presume a position? giveshink surely this donald trump a couple new cycles and as a result will help ted cruz but also perhaps likens the tension between the millions of grassroots supporters within trumps a movement that perhaps could potentially build a bridge for ted cruz to welcome him back .n many of independent voters who
hillary clinton as well as donald trump are targeting right now are really disgusted with both of their choices for president and ted cruz's endorsement does little to nothing to win over people who are looking at this election and trying to make up a lesser of two people arguments. joe: people on twitter are retweeting what ted cruz was saying about trumpet couple months ago. the popular one is "donald trump and hillary clinton are both big government liberals." cruzuch is this about ted collapsing popularity in the gop , that basically he's late to the game and most of the gop has co-laced around donald trump. if he wants any future in was said earlier this week maybe there will be some sort of prohibition on future candidates running for
office if they didn't endorse trump. just cruise is saying if i had to have any political future, i have to do it. >> ted cruz lost at his own game to donald trump. a couple years ago when i saw ted cruz at a press conference, he took a much more mild-mannered approach and didn't denounce any of donald trump's rhetoric. we have since seen in 11 flow between these two politicians many of whom are speaking to a portion of the conservative party albeit in very different ways. there reaching the same voters and the voters voted against ted cruz. doesn't have anything to do with prepping for the debate? ted cruz was a champion debater at harvard. he was a champion debater and did well in the debates overall in the republican primary. >>.
he held his own but i argue the strongest moment of the debate was when donald trump took on ted cruz. i've not heard from any of my sources that ted cruz is prepping donald trump for the debate. scarlet: thank you so much for the coverage. kevin broke the story about ted cruz planning to endorse donald trump. bloomberg politics will be on the ground in new york before and after the event. we are also teaming up with twitter as the exclusive streaming partner for the debate. coming up, a rally in commodities. is it the dollar, china? we have charts with the answer. this is bloomberg. ♪
scarlet: matt miller is joining us and it is time for our chart chat. we want to take a look at a illustrateharts that the market trends. i want to start with a call from the cory on medals. they are saying medals are on the mend. because of better-than-expected demand particularly out of china. chinese construction activity is cited in the recovery in global industrial output. the blue line tracks the base metals index. it fell to a three-year slump. since january, it has been edging higher but still bumping along the bottom for the most part. tracks industrial production and you can see the
correlation pretty steady. what mcquarrie is looking for is a mini renaissance. be interesting to see. there is a bit of a bounce in the prices so maybe we will see if industrial prices pickup. speaking of commodities, i want to look at a great inverse correlation and that is between the bloomberg commodity index in the bloomberg dollar spot index. you can see they also lay back-and-forth and that makes total sense. what it really speaks to right there isis market is essentially only two assets in the world. we talk about this all the time, the correlation of everything. you have everything on one hand and dollars on the other hand. aretimes when people feeling agitated, they want to
buy dollars. you see how that switches back-and-forth day in and day out when dollars are up. i wonder how much you can swap out commodities and put in another asset. joke a little you totally could. it's all working together. matt: in social media, it feels there are two kinds of assets, facebook and twitter. i want to put this twitter move into perspective. it's a company that we all use a lot of but a stock that has an price at all this year. 20% because of the takeover talk this morning but it's nothing compared to the gain facebook has seen since its ipo in 2013. facebook is up 150%. and twitter is actually down
from its ipo even with today's pop. it shows you that market doesn't really value this company as much as it once did. the luster has worn off of twitter shares. it for bloomberg markets. the market closes up next. here are the major averages. less than four minutes until the close of trading. down across the board and near session lows as we head for the closing bell on this friday. this is bloomberg. ♪ . .
closing bell. global stocks and bonds retreat on this friday, after yesterday's post-fed rally. this is bloomberg. i am scarlet fu. >> i am joe weisenthal. >> i am matt miller. >> u.s. stocks closing lower, but the best week for equity since july. the question now, what did you miss? a this week, the fed induced global rally in stocks and bonds, with equities retreating and the dollar rising. twitter might be up for sale. the company working with goldman sachs and having informal talks with several buyers. columbia university professor joins us onman options pricing. we look at in-flight volatility before and after 1987.