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tv   Whatd You Miss  Bloomberg  December 19, 2016 3:30pm-5:01pm EST

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died after the truck mounted the pavement and crashed into a crowd. while police refused to speculate on any connection with terrorism, the incident is reminiscent of an attack in nice, france in which a truck drove through crowds causing multiple deaths. the white house is strongly condemning the attack of the russian ambassador to andrei karlov. he was several minutes into his speech in the capital when a man wearing a suit and tie shouted and fired at least eight shots. that is according to a photographer who was in the audience. turkey says the gunman was police exhibition. three people were also wounded. police officials as a government has injured three people at a mosque in switzerland. -- zurick.
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attacks by armed gunmen are rare in switzerland. electors are gathering to never u.s. state today to formally elect donald trump president. despite the efforts of some anti-trump sources, you now is to 19 electoral votes of 270. hillary clinton's total is 120. january 6 is when they certify the results of the vote. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. ♪ >> where 30 minutes from the close of trading here in the u.s. just a little
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change after being earlier. where close to all the record highs. treasuries are now rising the most and gold is rising for a second session. >> the question is "what'd you miss?" hewe will have tom lee what sees ahead for equities this year and next. 10%, nikethe s&p up is going the opposite direction funding with an 18%. how the company is trying to turn things around at the gets ready to report earnings tomorrow. >> and what to expect for markets in 2017. we take a look at the long range of possibilities. let's look at where the major averages are. abigail doolittle is standing by. >> we have stocks trading ever so slightly higher into the close. very modest gains. fetedst rally has truly as both the dow and nasdaq
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earlier had been on pace to finish at record closes that have lost grasp of those records. the rally has stated. timid trading. among the top point drags we're looking at some health-care names including united health care. one of the key cancer drugs, the quote, unquote bubble could burst. on the year down even more come about 40% on pace for his worst year since 2002. another pocket of weakness of the miners including freeport mac -- although this as copper is trading down. we take a look at a three month view, traded up into the election and then started to trade higher out of the election hopes that the donald trump administration would be good for infrastructure. see copper starting to back down, down three days in a row at levels last seen closer to
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the election. some people are revisiting those views as stockpiles for copper have been climbing for six days in a row. as for what could be ahead, we head into the bloomberg, this is a long-term chart of copper. it he sending trend. copper is in a bear market but we see most recently this year, we see the trend channel is starting to break out. last week i did have the honor of moderating a technical panel. rich ross of evercore partners thinks the breakout is for real. technicalhe head of analysis at oppenheimer take the opposite view. he thinks this is some kind of -- maybe not a false reaction but not a reaction that will remain. he thinks copper will come down. although he is bullish on stocks going ahead. perhaps we will see a divergence in 2017. >> thank you so much.
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tom lee, managing director of fundstrat global advisors with the most bullish strategist on wall street. now the s&p 500 is setting highs near levels he saw two years ago. tom is here now. let's start by checking out this chart that is basically showing where your calls were in the s&p. credit where credit is due. 2014, pretty much ended where you said it would and. now we are climbing -- it would end. where moving up their closer. the reason you have discussed or is this just the trump boost? gains think a lot of the made in the last few months were signals -- signaled really clearly by credit markets. i think trump gets credit for some things but i think this is really a postelection rally.
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2016 to justson of ignore these political events that people get really worked up about and parade around them and just look at the basic fundamental signals and not get too worked up? tom: i think that is one of the lessons. i think the other is you really have to start to question the crowd, right? spent most of this year thinking we were going to have a recession, the expansion is over. after november all of a sudden everyone is excited about the economy. nothing has changed. >> when you look at the reaction that some of your colleagues have had on wall street and overall just the flow, it feels like people have gone bullish the past couple months. obviously you have been in that camp. was this just the catalyst that people needed to wake up? when you look at trump, what gives you signs?
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tom: this is proof that the difference between half empty and have all is one micron of an atom. not that much has changed. >> that is a pretty big atom. me ofes, but it reminds the malaise that happened after the panic of 1907. the country almost went bankrupt in four years people were gloomy. suddenly four years later, they got really optimistic. deregulation are good catalysts and now i think people are pretty optimistic. i think it is appropriate. >> what you make of the impact potentially of the rise in rates on stocks? multiple expansion has been one of the big parts of this leg of the stock market, but the radically as rates go higher on bonds, it theoretically makes equities less attractive. what do you think about that? tom: i think we all agree, low
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rates, we have reached the limits and i think it is actually been negative. i rates is that family better for risky markets. the level where higher rates becomes a headwind is unknown. companies earn cash now. they earn interest on the cash, which is a good thing. what has been worrisome is the yield curve has really flattened. that is probably the thing i would worry more about the need level of rates. we have got about a month left, so it is time to start thinking about the next year. you brought on your target a little. is it just a matter of momentum that we have moved a little too quickly in the past month or so? what is working in the opposite direction? tom: in year end? weeks from the end of
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the year. i'm not going to think about it because it is really hard tactically. but i think headwinds have developed. it is not that easy to say the markets -- this year was an easy trade because high-yield was up 18% this year. i know we have talked about it many times. high-yield is a great indicator for equities. i think high-yield will be lucky to be up 8% next year. lucky. depending on rates it may end up being a single digit. >> besides high-yield what are the other headwinds you see? that therei think are areas where disappointment could clearly develop. one is infrastructure and stimulus. the other is tax policy. u.s. tax rates are already pretty low. analyst, i stock never really paid for tax earnings. i do not think it is actually
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worth much to the stock market. >> is that because expectations haven't put so high for some of these groups, regulations on banks, industrial and fiscal spending? tom: let's face it, some people have written to 17 -- 2017 thesis based on tax cuts. i think that is silly. can you imagine someone saying, i'm getting really bullish on apple because their tax rates are going down. it is not a fundamental basis for people to get bullish. , he will be sticking around with this little longer. we will talk about what markets could look like next year. this is bloomberg. ♪
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theead back to berlin for latest on a truck that rammed into a berlin christmas market killing at least nine. joining us is chad thomas. what do we know. we have seen headlines coming in, the death toll is rising. what do you know? a reste just had conference from berlin police five minutes ago. they had arrested the driver of the truck. he fled from the truck and get cap -- got about 200 yards away and was arrested. there was another individual in the truck, a passenger, and that person has died in this incident. along with the nine dead that unfortunately there are more than 50 people that had been injured in this incident. the police are asked about a motive, they said they are still investigating.
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some in the german media are reporting that some police officials are considering this an attack. the police officially in this press conference a few minutes ago said they are not sure yet what the motive is behind the attack. >> has there been any sort of response yet from german political leaders? chad: there has not been any response yet. over one hourjust and 45 minutes ago. we have yet to hear from them this evening. just to give you a little bit of flavor where this happened, this took place in the west of berlin in a busy shopping district. it happened at a christmas market near a very well-known church that was destroyed during world war ii.
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that church was not rebuilt, it has been memorialized. the incident happened around the square and this church. >> are there any details on where they are taking the injured as a assess the damage -- as they assess the damage? chad: we don't have any details on that. there are several large world-class medical facilities in the city. it is the german capital. there is also a large military hospital that is not far from the scene where we are here in the office. milesprobably about two away from the incident. even hear from the office we could hear the police sirens heading towards the scene little earlier. >> chad thomas, berlin bureau chief, thank you for being on call. turning back to the markets
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here in the u.s., 2017 is set to be another volatile year in politics and possibly markets. we're back with tom lee. tom, we know you have not put out your 2017 outlook but give us some hints. tom: it is going to have 12 months. [laughter] some days up, some days down. behind of the thesis your calls the last few years is not just cash on the sideline, but an enormous amount of people moving out of the equity market. a couple weeks back you had a note talking about the titanic shift you're looking at. does that happen next year? what is the nature of the shift? tom: it is a big number. $7 trillion. they took $2 trillion out of stocks.
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not only did they save money, they liquidated. , householdsyears could save another $7 trillion. but do they put $4 trillion into the stock market? >> why does it mean reverting? could there be a democrat -- a demographic reason? the u.s. population is going to get older for a while. is there a reason for this trend? tom: you can do it based on the saver or based on the financial markets. was $1.5 there trillion new bond issued in the u.s. across all fixed income classes. that number will shrink this year. andcits are shrinking agency outstanding's are shrinking. but the coupons paid on existing bonds will be 1.4 chilean
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dollars. -- $1.4 trillion. interest rates are going to go to zero in the u.s. even with inflation. there are mechanical restrictions. people cannot just save and buy more bonds. stocks are now a lot cheaper. a bigger dividend than the cost of debt. it is easy to see how the money gets into equities just to generate income. >> when of the big conversations over the past month or so since the election has been the crop of of dispersion within the marketplace. stocks moving from other sectors or opposite directions. how do you view that in your strategy you think about whether or not that brings people into markets? if you see stocks going in different directions, maybe some of that money comes into stocks. dispersion and flows, are they related? tom: they should be. dispersion should be correlated
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performance.anaged i don't know if it is going to be because it really depends on the experience level of a manager. the reality is -- and i have seen it with our clients -- because people have only been using one playbook, which is growth, china thomas stocks, health care consumer, they have been trying to buy 2015 greatest hits at it as been hurting them. i'm sure you have guests saying they want to buy health care. health care is led by 4000 basis points. -- it isof the biggest one of the biggest periods of outperformance. it is not going to continue outperforming. >> tech has been mediocre since the election, but the financial said been on a tear. another example, staples not doing so great.
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can you expect some of these new shifts to last for a while? tom: yeah, i think you could almost count on it. you take any of these industries -- we haven't looking at 100 for now. i think next year -- looking at 104 now. it is going to get very zip code specific next year. every group will be reverting. >> what do you mean by cisco specific? -- by zip code specific? tom: states are more like sectors. --p code is what you call bige groups look like waves. you want to buy the bottom and avoid the ones at the top. is that even though there is perhaps some adverse headwinds?
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10% in the next six months, the buy them than? -- do you buy them then? tom: the next five years, the lesson everyone should have learned by now is you have to buy the dips. i'm sure there'll be a time in the next five years were one of the tips will be preceded by something warning you it is a while up -- wallop. it will come. >> it is interesting that the fed's role seems to have shifted. janet yellen gave a talk to college graduates today. she did not really get into economics, but yields shot up a bit. she is not the reliable dough that people may be thought for the last few years. does the re-orientation of the fed towards a more inclined hike , perhaps a more hawkish stance change the calculus at all? tom: i would think that makes
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sense, doesn't it? >> it does. takei would say you cannot -- there are things that have changed and i think central banks are changing. now maybe it is a source of volatility. it is a different fixture in the next two years. >> we will be watching as her 2017 outlook gets published. we will have you back to find out what you are looking at next year. watch -- up, switch swiss watch exports hit a 30 year low. we take a look at the struggling industry. this is bloomberg. ♪
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♪ sales us with watches at the lowest level -- of swiss levels --
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this is early 80's. last time they were list low in the 1980's there was a big swiss watch phase. maybe you remember the scene and "trading places." 's still a- there luxury market. they are just not what they used to be. all tontinue to decline the 1990's and 2000s. they really tumbled, sort of reflective of high-value exports. asian consumers are really important for them. from a volume standpoint, this is an industry that clearly has seen better days. that is a pretty fast drop. i'm looking at something similar. this is a cool little chart that
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they have. looking at the christmas price index. inflation is very tied to the holiday season. this is the raw price of the 12 days of christmas items. about 1985.o it goes up and up. it is actually flatlined a little. on the bottom panel is the percent year-over-year change next to the cpi in purple. cpi is picking up a little, some inflation, christmas prices are the same. it is kind of a cool inflation for christmas. >> i'm still curious how they get a price on lord a leapin'. five gold rings is easy to price. add there islso also the core christmas index. >> let's take a quick look at the markets as they close as we wrap up the trading day. in the green once again across the board. less than four minutes and so
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close. this is bloomberg. ♪
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♪ >> u.s. stocks pushing higher to
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start the week. janet yellen calls the job markets the strongest in nearly a decade. >> we want to welcome our viewers who were tuning in live on twitter. you can watch our closing bell coverage on twitter every weekday from 4:00 to 5:00 p.m. eastern. >> we begin with the market minutes. it has been an interesting day as we start to pair the gains from earlier. i want to check out what is happening with some of the sectors. we were up close to 40 basis points earlier on the day that we moved back around. vix doing some interesting stuff. we had an interesting story only bloomberg about how the vix versus volatility has been doing weird stuff. they are basically separating. the vix is muted, volatility is actually going up. also check out the sector moves today because this has been in
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adjusting story when you look at what is happening with the values and the safety plays we thought were dead. but guess what, they are back. three paid high dividends. >> the reason for this is right here -- mons railing today. one of their bigger rallies in a while. the 10 year, 2.53. let's look injured a 10 year because that is where the action is. some very interesting stuff. yields were dropping throughout much of the day. incident inas the opera with the russian ambassador getting shot, that caused -- then there was a bump up in yields. that was when janet yellen spoke to some college graduates. she was pretty upbeat on the u.s. economy and the labor markets in particular. so people did that as kind of a hawkish sign.
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saw the decline in yields after the incident in berlin with the truck going through the christmas market. nervousnesstical and a flight into safety. a lot of interesting sub-moves. >> a lot of back-and-forth. looking at some of the currencies, basically have green in the dollar and that is it. the japanese yen, some weakness. you look at the euro doing pretty weak next to the u.s. dollar. if we flip it over we have what is going on in turkey looking at what happened with the lira, a massive spike in the dollar relative to the lira. weak currency in turkey as we have reports of the shooting. that has not really changed. >> at one point the euro was below 104. finally on commodities, big
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loser today copper futures. some of the industrial metals. perhaps china will take efforts to cool its red-hot real estate market, causing some of the industrial metals to slip. other than that, not a tongue going on. crude oil barely changed. anything, even with the geopolitical stuff. >> those are today's market minutes. now let's take a deep dive into the bloomberg. you can have all the charts using the function at the bottom of the screen. >> today is a puzzle chart. it was sent in friday by bloomberg user mark. i think it is very interesting. check out this chart and ask yourself, do you think it is heading up or down? it looks like it has bottomed really sharply in early 2016 and has been surging lately.
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it is actually jgb futures shipped. japanese government bond futures peaked in early 2016 and have been selling off really hard. if you look at this chart and you are inclined to say this is then perhaps this is a sign that one of the great bull markets and bonds, even greater than the u.s. bond market, may be coming to an end. it is interesting to flip the perspective. from a truck like this it is easy to construct an argument that maybe bonds have a further way to go. >> if that had been on a different scale, it was the currency and not the futures, maybe i would have guessed. i'm going to reuse a chart. this is basically looking at what has been going on in the stock market. an incredibleust
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move into the equity market since the election. what you are looking at here in the purple, the etf trust, flows versus aa, ii. it gives you an idea. look at the green box, it really pops. not only are you seeing the bullish sentiment increase but also the money to back it up. even know we have seen a spike like that in the past you can see it all going into spy. bottom, this is a ratio of the russell value to the russell growth. this is interesting because the says people going in, finding companies that may not be overvalued, they're not growth companies, there are actually deals to be had. a long time since they like those bodies stocks. now finally finding some love post election. let's keep looking at the charts and see what else they have to say with equity indices near record levels.
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it little bit about what we can expect from 2017. joining us now, the chief technical strategist. what we have in store for 2017? >> more highs but more strongly trending markets. that is an important date with us over the past couple years it rotating. i think we will see that narrow a bit as the major indices extend their uptrends. >> let's look at a chart you brought in. there are a few things going on in the sharp. walk us through. katie: it stands through moving average -- recently it turned to a bi-s ignal. that suggests momentum is quite -- a buy signal.
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from a shorter-term perspective you're seeing a different picture where they are rolling over. short-term momentum may be weakening, long-term momentum is strengthening. >> we have a positive flip in 2009. looks at another example where we have a strong sell signal. katie: the design is to eliminate the nose of the market and isolate long-term trends. it is telling us we could -- >> this is shifting away from the equity market. we are looking at the 10 year treasury. what you're seeing is a little resistance that we are kind of approaching you that 3% yield level. this is the 40 week moving average and you are charting that against this breakout that we might have had, maybe not. how do we know when we actually breakout? katie: i was with for consecutive above a certain level.
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consecutive weekly closes about 2.5% to signal a breakout. we see that potentially on friday which would then target next resistance of the 3% and that is a psychologically significant level as well. a very good possibility. but the same time we are seeing signs of upside exhaustion in yields based on a couple indicators. not a guarantee. >> win or lose indicators? -- what are those indicators? , it just kepttion moving past the levels. what are the signs of exhaustion, as you put it? katie: i look at short-term overbought measures. one that has been relevant recently has been the to mark indicators. you know tom the market very well. some of it indicators are
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suggesting there is exhaustion. >> talk about rsi's. is a great way to characterize, put mathematics into momentum. this is incredible. this shows you in red the number percent ofs, the companies with an rsi over 70. they rallied real fast. this is a massive chunk of stocks. how long can that keep going when you have roughly on average , about 25% of companies in the s&p trading above that level? katie: and overbought condition is sustainable on positive momentum. of course we now have a situation where momentum is
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waiting on a short-term basis so that makes it more difficult to sustain. there often associated with breakouts, which is good for a while. i think we do need to see a pullback, broadly speaking. >> this is always one of the more interesting charts. a chart of rotations. also another way of seeing momentum, where the money is leaving and flowing. there has been a lot of rotation since the election. people leaving formerly hot sectors into ones that have not been getting love for a long time. when you look at a chart like this or visualize the rotations this way, what kind of information can you glean? and by the way, look at financials way out in front. almost off the chart. katie: this shows the sector dispersion where citing received the banks in the upper right corner, having that perform
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dramatically. >> how often do you see any sector so extreme in the corner? is rare. at a certain point the momentum falls off and that is what we are looking at for the financials, at least temporarily. we think it can occur for the benefit of the more oversold sectors of the market, those in the lower left which would include telecom and utilities. take on ito get your that syria have about the market, which is that we talk about their markets, the benchmark gauge loses 20%. we went down 19% but it never hit bear markets. you look at this rally for seven years, people say we are due for a bar market -- a bear market. almost march of 2016, in the s&p 500 had
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gone to their own bear market. we areossible that entering into a new cycle that could be an upswing coming out of a bar market? katie: -- bear market. katie: that is what it feels like to me. to me i agree that there might have been a latent bear market when you look at the bottom-up perspective. >> very interesting. we will see if it can last. katie, thank you. >> the russian ambassador to turkey was shot to death at an art exhibit. vladimir putin called a provocation. we'll bring you it -- the latest on that. this is bloomberg. ♪
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♪ to the first world knows. tragedy in berlin today as a truck rammed into a christmas market causing at least nine deaths and injuring 50 others. the truck jumped the sidewalk and drove into a crowd at the market which was set up near a church. a suspect has been arrested and a passenger was among those killed. police are still investigating whether the incident was an accident or an attack. the white house is strongly condemning the assassination of the russian ambassador to turkey, andrei karlov. he was several minutes into a speech when a man wearing a suit and tie shouted and fired at least eight shots. that is according to an associated press photographer who was in the audience. turkey says the gunman was
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operationa police inside the hall where the attack occurred. the mayor said the shooter was a police officer and he also said three others were wounded. a government has injured three people at a mosque in switzerland's largest city. police were swarming to be seen in pursuit of the gunman, who remains at large. attacks by armed gunmen are rare in switzerland. news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. for more on the assassination of russia's ambassador to turkey ben, who to d.c. and is covering the latest. what are the latest developments? ben: the latest of elements are
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that both the russian president vladimir putin and turkish president erdogan have gone out of their way to betray this is something as an attempt to undermine what has been a recovering relationship rather than a direct attack from turkey on russia. both governments are determined to play down the affect of this killing on their relationship and emphasized that they're going to continue to cooperate, particularly in syria where the cooperation is crucial. >> that is really what is at stake here. you have two different nations backing opposite sides of a terrible crisis. they have made some progress. give us the rundown on where they were, what strides have been made recently? ben: the most important strides they have made our visible in the negotiations over aleppo. civilians and of
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fighters from aleppo is a very complex negotiation. it is tied to other sieges taking place in other parts of syria. besides the negotiations only really work when the external backers behind the parties fighting in syria are engaged in it. in the case of aleppo, that has really been turkey, which supports the rebels. and russia, which is the main ally of president assad. they have taken the lead in brokering what is a very difficult attempt to get the civilians and armed fighters out of aleppo. >> there have been significant protests in turkey lately related to aleppo, relating to russia's involvement in the situation. how does today's incident affect the domestic backdrop? ben:ben: i am not sure it will e
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a direct affect on the domestic backdrop in turkey but certainly a lot of sympathy for the defenders of aleppo in turkey, and that will not change. in terms of domestic politics, it probably does not have a huge impact in turkey. it is the international politics where it could have an effect. >> what can you tell us about the security provisions for ambassadors? when they go out to something like this, what kind of security would typically be in place for them? ben: i cannot tell you anything in terms of numbers but it is very clear that the host country is considered responsible for the security of an ambassador. ,hatever provisions turkey made especially given the fact that it appears the gunman was in fact an active duty police officer in turkey, you can rush is thinking it is not adequate. in fact president putin said security have concrete for ambassadors going forward. >> when you start to think about
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how russia can respond to this, if they do believe it is more than an isolated person, is anything that they essentially within the realm of possibility that they could do on the ground in syria and aleppo to send a signal? ben: i am not sure there is very much they will do on the ground in aleppo. in terms of the relationship between russia and turkey, we saw after the turks shut down a russian plane a year ago, if russia believes that turkey is threatening or attacking its interests, that they can carry out direct economic reprisals against turkey, which it did. so far the comments from putin is that neither side wants to treat the incident like that because they're are tried to get their economic relationship act on track. forthere will be an effect turkey in terms of tourism because i think even though the russians have lifted some of the restrictions on russians visiting turkey, you can imagine a russian seeing this and saying
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i do not want to visit turkey. russian tourism is a huge business for turkey. >> thank you very much for bringing us the latest on the situation. >> coming up, it has been an up and down year for the japanese yen. google figure out if -- this is bloomberg. ♪
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>> this time for the bloomberg business flash. vendee to buy additional shands --
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they say it will lift its stake to 30% of share capital. they're trying to keep control. they told market regulators to act in this dispute. boeing is shedding more jobs in the new year. at least 8% of the commercial airplane staff will be trimmed. the cuts will come through immature of attrition, they can positions and voluntary buyouts. they may also make involuntary layoffs. the carlyle group is selling its majority stake back to the top executives. foray into hedge funds. decline is due to losses in client redemptions. that is your bloomberg business flash update. >> it is been a very volatile
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year for the japanese yen. let's take a deep dive into the bloomberg. you can find a list and all the following chart using the function at the bottom of your screen. here is a cool way of looking at volatility. it looks at how many months in a year the currency moved either 5% up or down. months this year with 5% swings for the yen, the most since 1998. there were a lot a big events this year. move intof japan's negative interest rates, which was quite a shocker. there was the election. to cap long-term rates. a very significant year in monetary policy history and innovation. interestingly, not a particularly volatile year by many metrics, but from a
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currency standpoint it was pretty big. it also perhaps speaks to this general -- of global markets where the currency is the key measure of a country, even more than bonds or stocks. and a coolatile year way of showing how long it has been. last time we had the bubble and also the asian financial crisis. it speaks to the year. >> not a great reference point. you have some good colors on here for christmas. i want to check the u.k. pension deficit. they are getting pretty expensive. this is from the equity side. he is looking at u.k. pension bounces versus guilt yield. right now,eresting look at the white line, that is the u.k. bond. u.k. pension bounces, this is an issue around the world.
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bonds have gotten hit hard. look at the deficit right now across the u.k. pensions. it is extreme. we have not seen anything like this before. you see in the past where there are tips but they come back up. are they going to get up to a reasonable level after this? i think it will be a big deal not just in the u.k. but the u.s. as well. it shows why the pension managers love the idea of higher rates because of course they all have these assumptions based on returns of 5%, 6%, or 8%. with rates at low levels it is implausible. -- start tots she shrink if rates go up dramatically. >> you're hoping it is not just a structural low. up next, how the rapid growth in marijuana legalization will have a significant impact on the tobacco and alcoholic beverage industry next year. this is bloomberg. ♪
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>> let's get to the first word news this afternoon. a tragedy in berlin. and 50ere nine deaths injured. the truck jumped the sidewalk at a market near the wilhelm memorial church. the passenger in the truck was killed. they are investigating whether the incident was an accident or an attack. condemns these assassination of the russian ambassador to turkey. he was in ankara.
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a man shouted and fired eight shots. the turkish television said that was killed and exhibition hall where the attack occurred. three others were wounded in the attack. a manhunt is underway in zurich. people shot praying in an islamic center. news, 24 hours a day, powered by 2600 journalists and analysts. i am courtney. of stockset a recap closing in the green. the s&p and dow jones were up. the nasdaq did well. capst to point out small
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jumping out on track again. bloomberg intelligence is out. we have asked analyst to break down global consumer staples. ken.e joined by thank you for joining us. let's start with trump's plans for deregulation and immigration reform. how does that affect consumer staples? are a lot of investors looking at the sector as a good outperformer. in thetion reform is big food and beverage industry. ae agricultural sector has lot of undocumented immigrants. if there is a policy to deport,
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that could raise costs on agriculture and be a significant inflationary pressure. staples and wehe think of them as things that do well, when there is risk out there and we got a good glimpse of that in january and february. staples were falling off. they were doing decently. kenneth escape the label of "safety stock?" ken: it will be a challenging year. there is a big headwind at levels over the next quarter's for the industry. there are a lot of multinational theanies and i think that pressure on profits and sales goes forward. there are cost-cutting
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initiatives that have accelerated over the last quarter's. one -- quarters. one is as a hedge from price materials.r on the second is that there is a lot of heat from shareholder-activists. companies feel that they have to act quickly. >> one industry that did well over the long-term is tobacco, despite all kinds of regulation, lawsuits. the industry has been in the crosshairs. now, it has the threat of the liberalization of marijuana laws in the united states and with our neighbors. inacco has a new competitor, the form of marijuana. stocks havearijuana exploded. are people going to switch to a
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different drug of choice? ken: there is a threat of that. the u.s. food and beverage industry are large industries. is a dropana business in the bucket right now. nevertheless, the growth rates are compelling. if you consider that legal sales 2021, you can also consider canada looking to legalize and mexico looking to legalize. you are seeing a north american legalization of marijuana over the next few years, which would be a threat to tobacco and alcohol. competitor.s a so is alcohol. ken: we have seen evidence of
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the substitution effect. marijuana, it's pretty reasonable to think. even low-priced alcoholic beverages, even beer, we think there is a substitution effect. >> you don't have to choose! are tobacco industry's going to say, this is an industry that is growing and we could put this into our lineup. will there be transactional stuff going on? >> i think the tobacco industry will wait until it is legalized at the federal level before it does anything on that front. i suspect that shareholders, among others, will expect the companies to look into that. before that happens, tobacco companies will remain a thing.
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>> i appreciate you coming on. coming up, nike investors are asking the company to just turn the stock around. the nike stocks are down 20%. this is bloomberg ♪
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>> what did you miss? fallen 18%.e and there is concern about market share losses to adidas in the united states. we are looking at the numbers and the numbers don't lie. and has faced competition
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averaged 26% over the last seven years. storyas been a different and the sentiment has gotten worse for the brand. andprice target has fallen bank of america downgraded the stock and said the company lost ground in innovation. is a decline of futures orders in north america. the factor of demand rose 1% in the first quarter. they remain confident that north america will be a strong region. you look at the futures and other regions, china generates a quarter of the operating profits and they are a egg growth driver. merchandise sales are above 30%. an area for growth is the
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training segment. fortune largely rides on running and basketball. building on the endorsement ofls, they became a seller basketball shoes. we will watch the nike results when they are released and return. bloomberg didh at conversations with luminaries in the technology world. scarlet got the opportunity to of anto blumenthal eyeglass retailer. >> we have a layout at bloomberg and we have regular meetings every week that we lock
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ourselves in a room to talk about all the issues and we take those issues seriously and prepare an agenda. we expect our direct reports to do that in their meeting. it allows us to interact throughout the day and there is , you say onewhere thing to one of us and the other one knows quickly. one of the things we are always worried about is you tell mother one thing and then you go to dad. had a clean reporting line. one of us on the senior primarily team is responsible for specific areas of the business and that executive or department head. it is nice to have two people who can be the face of the
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company and we can swap them in and out in a speaking engagement , if there is a meeting with an investor. it just gives us a lot of leverage. sure, there is probably more of a communication burden, then if , butust had a single ceo it also forces us to be more thoughtful. before, i would go and implement. now, dave and i talked it through and it is a good stress test. >> is there an instance where it didn't work or you had to work through something that was difficult and you have an anecdote? don't have a great one. is try what we have done to create release valves so that
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there is never a blowout. i think everybody envisioned havings or co-ceos massive conflict and people go added and they do irreparable harm to the relationship. we make sure that we are in communication, so that we know what is going on and there are knows to prices. we would, on a monthly basis, go to a bar and put each other in you shoot me an email and i want to reach -- ugh and
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.t can lead to massive low loss you start to learn about people you work with. i got a tempe gmail at 2:00 in the morning with a bunch of ideas about an area of the business i was responsible for that i was already doing, i was like, "does he not trust me or not the guy am capable of doing my job, that i would need these ideas?" then, you find out that he is just excited and wants to share. it is often human nature to go negative and get defensive. it led to a core value at the company of pursuing positive intent. the people we hire are great people and they come because they believe in the mission and they generally act with
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integrity and the right intent. sometimes, the outcome is not the desired one, but, in the beginning, we should not question intentions. was warby parker's >> tensions in the syrian conflict are heightened. we talked about what this means for the geopolitics across the region and we will bring you that conversation next. this is bloomberg.
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>> the russian ambassador was shot dead. vladimir putin said the killing was an open provocation into the
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search for peace in syria. bremmer aboutn if we knew anything outside of an individual committing this act. ian: we know that he infiltrated the turkish police forces and turkey needs to do a better job with internal security. that is not a surprise, given the amount of terrorism we have seen in the last 12 months. russia and turkey have to have strong reasons to want to work together right now and they also have terrorist organizations that they want to do their best to paint as villains. they are not always the same organizations. the turkish organization is largely kurdish separatist groups. in the case of russia, it is much more a number of rebels on
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the ground in syria. many of them are involved with al nusra. many are not. an andill not stop erdog putin to do everything possible militancy inslamic their own countries and syria. >> recently, we have seen new crackdowns in turkey, following presstempted coup on the and the education system. can we expect further crackdowns? ian: we can. keep in mind that this is part of the problem. concerned about
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those who would fight against him and he has had significant purges inside of the military, aen before the attempted coup few months ago. he has stepped it up and it makes the military less directly dangerous to him, but also weakens the turkish ability to root out terrorists and there are millions of refugees in turkey right now, over 2 million from syria. it is extremely hard for turkey, even if they had done none of that. they cannot effectively defend against radical islam. you think about what is happening in germany, france, the netherlands, and turkey has targeted. today, it was the russian
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ambassador. it is all pieces of the same puzzle. >> we have just gotten a headline from vladimir putin that said that the killing of it isbassador, the envoy, an attempt to ruin it russian-turkish ties. we see this as not successful. what do you think this assassination of accomplish es? does it bring more attention to syria and aleppo? aleppo is a past story. the world has been talking about the humanitarian crisis around the country that has been destroyed. with the exception of the russians supporting syria and a ad, very few ass
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have been willing to do anything. nobody is strengthening the democratic institutions in syria. they are very weak. they are not going to put roots on the ground. you are not going to see success or more attention to this issue, going forward. vladimirill see is putin talking about not ruining the relations and you saw the same language from the mayor of ankara. this is being coordinated between erdogan and putin directly. if this same attack at happened six month ago, before the attempted coup, when they were having a cold war, this could have led to a significant escalation of russian military into thegion on and turkish airspace. that didn't happen.
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we had rapprochement. to countries that do not have to worry about the freedom of press or opposition parties. putin, if theyd decide they want to work together, can. eurasia groupe founder. goldman sachs is raising more than $1 billion for capital dedicated to buying space in funds managed by other buyout firms, according to people familiar with the matter. this is compared to the original $5 billion target. has some receiving less than requested, despite increases. general motors will temporarily close factories to reduce
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inventories. they will close for 1-3 weeks. workersmake 10,000 idle. ile hasager of cargl agreed to a settlement. wasas forced out and he paying his own legal fees, under the terms of the deal. that is a business flash. >> coming up, what you need to know for the trading day. this is bloomberg. ♪
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>> an interesting day in the markets with stocks bouncing around and ending up positive on
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the day. >> the bond market saw a decline in the yields and movements around events today. turkey, russia, a lot of things. >> unfortunately, a lot of geopolitics. post uppolicy decision >> tomorrow, i will look at theresa may being questioned by the house of commons liaison committee on plans to exit the european union. >> don't miss this. innish unemployment drops below
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>> you are watching bloomberg technology. >> a truck caused nine deaths
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and the berlin police said that the truck jumped the sidewalk and drove into the crowd. the passenger inside of the truck was among those killed. they are trying to figure out if this was an accident or an attack. the white house condemns the death of the russian ambassador to turkey. he was several minutes into a speech when a man shot eight shots at him. that is according to an associated trust photographer in the room. the gunmen was killed in the hall where the attack occurred. says that the shooter was a police officer. a manhunt is underway in switzerland after a suspect shot in a training station.


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