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tv   Bloomberg Markets Americas  Bloomberg  May 12, 2017 12:30pm-1:01pm EDT

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from bloomberg world headquarters, you're the top stories around the world. the dollar is falling with stocks. salese data on the retail in the united states. as in p five his first decline in four weeks. crude is holding $40 a barrel today. in company news, sprint and its largest shareholder is said to be in informal deal talks with t-mobile for consolidation. we will have the latest on that in the bloomberg scoop. seven finance cheats, including the u.s. treasury, are gathering in a southern italian ports. expectations of any formal , whiles remain unlikely
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the progress remains unlikely, after two unsuccessful discussions earlier this year. on the books friday. let's get a check on the markets with abigail doolittle. she's been looking at disappointing retailers again. >> indy. look at these huge underperformance in the retail space. we look at the department stores selloff. .esterday was macy's and kohl's today it is nordstrom and jcpenney. both of the soccer done yesterday, significantly. nordstrom it's on its worse today decline since november of 2008. jcpenney is down 10% at a record low. they missed sales by 280 basis points. they can dump 3.5%. a bloomberg intelligent analysts earlier, told me on the phone
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that they are trying to control sales but they aren't able to do that. consumers are going toward digital and driving traffic isn't working. she thinks that they will benefit by closing stores, we will see what happens. week andg reports next they believe that the walmart report is quite strong. they have a big component that helps traffic. when gas rises, as it is doing now to some degree, it can have an inverse affect on traffic. italy interesting to see whether that plays out or not. of course, we will be reporting on the next week. there is are is that revolution in retail as consumers go toward online, it is pressuring brick-and-mortar. this is g #btv 5825. right near the pink line, that is 2%.
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segmentse bottom, all of brick and mortar retail at zero or well below. that's including the department stores down for the 1%. this is online. this is amazon online, the e-commerce giant of 330%. threat toan absolute the brick-and-mortar retailers out there. mallly, it extends to reads on the week. you see all these stocks are down huge. on the year, they are down to. that's between 10 percent and 25%. a bloomberg analyst told me on the phone that while the anchors -- while that angers them, there they could vacate on those anchors. lindsay dutch makes the point that malls see it as an opportunity to bring in traffic and perhaps even raise rent. it will be interesting to see how this plays out.
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vonnie: and it is the perfect segue to our next guest, because we are staying on real estate. the current real estate climate. i want to bring in todd henderson, head of real estate. we are also joined by bloomberg's banking reporter. foretail is a great topic todd because, for some reason, have a industrials overrated in the sector and, for some reason, retail is not marked down yet. when we see all these big names shorting malls, what do you see in the retail sector that is not having you downgraded that sector? when you talk about the retail sector, you have to look at it in different ways. the have smalls, big box retail, and you have necessity retail. andsesame retail is grocery a shopping center retail, which has not been this intermediated
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in the way that the rest of the retail market has been. when we talk about our markets wait in the real estate phase. about a barbell strategy. the high-end luxury area, as well as a necessity area. those two markets are performing. they are producing stable n.o.i., which we think is important for our clients in positioning them in a way that in a have stable income market where we are not going to see, we think, whole lot of capital appreciation going forward. theie: is it geographic or layer of real estate play that you are talking about? it is certain areas or just luxury versus non-luxury? moore the sector. geography does play into real selection.rns what is going on more broadly
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, inwe are over retailed particular the u.s.. we have 24 square feet per capita. as 50% more than the next closest country. we also have what's going on in consumer habits. also creatinges challenges for retailers. -- that is not a necessarily a geographic thing, more of a cyclical thing going on in respect to the real estate. think --hat do you do you believe that sector is going to have trouble? asking other asset managers to start selling their states that they have in this, what did do you think about that kind of arena? todd: i think there are class a trophy malls, and then there are the rest. i think the class a trophy malls will continue to do reasonably
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well. and they are changing, are going from pure brick and mortar, to on the channel retail , and that's will require their formats to be different. the rest of the mall sector is ed.h more challengin there are successful retailers out there, but they might not be the one inhabiting malls rates now. todd: it is happening faster. the rate of change is happening much quicker rate i'm sure you saw that even some of the top income --in, sales -- sale. where we have found success is changing the profile of the
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profile assets to include much more experiential retail and entertainment in order to grow from here. sonali: even with these opportunities, he said in the report earlier that you see returns of the real estate industry will be muted. with that said, how are you ahead of alternatives? real estateg how compares with the other alternatives, and if you are competing with other asset classes like private equity. question to alternatives, alternatives are gaining a bigger wallet share. real estate has consistently been targeted by our types of investors, institutional investors, and also moving into the retail specs. somewhere between a percent and 12% of every institutional investor's portfolio is targeted toward real estate. we also have private equity.
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real estate is not competing directly to date with private equity for dollars. we are not taking dollars away from each other, sector to sector. is happening, because real estate is producing a lot more yield than most other asset classes, it has taken the correspondingly, even though returns are muted, relative to historical standards, they are still attractive to other asset classes out there. as a result, we are seeing attractive moves to real estate. vonnie: what you think about industrial and wrote -- residential and are either looking attractive? todd: we are deftly overweighted industrial. the same headwinds are the tailwinds for industrial. benefitinghas been from the change in the supply pipeline -- supply chain for
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retail. , forts that is out there every billion-dollar increase in sales in e-commerce, it is 1.2 5 million square feet of industrial absorption. --t is what is driving historical level and absorption in driving our overweighted to industrial. sector youther downgraded was apartment. what on some of the headwinds that are facing that sector and how long will it continue for? todd: supplies the big question in apartments. it is a big issue in apartments. the u.s. census data reported 400,000 units delivered over the last 12 months very the last time we saw that level of deliveries in the u.s., was in the mid-80's. before the tax law changes. we see tremendous supply and it is concentrated in the irvine
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and areas, where a lot of people wants to live. you've oversupplied it currently and, as a result, we see lower n.o.i. growth in returns in the apartment space. we think that that will play itself out and absorb the units over the next year and a half to two. we think the apartment sector will be much healthier in 2019, 2020. vonnie: tom henderson, thank you very much. he is head of real estate for asset management. as well. to sonali here's mark crumpton. been a break and trade talks between the united states and china. an agreement will allow more experts of u.s. natural gas. american beef supporters
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will have greater access to chinese markets. the u.s. will allow the import of cooked chinese poultry. commerce secretary, ross, so to bloomberg news. >> we have a lot more and issues to deal with -- we have a lot more issues to deal with with the people's republic of china. i believe the fact that we have these long-standing aggravations out of the way so quickly, boasts well for the relationship pattern going forward. mark: it is the first negotiation trade deal for president trump who has promised to get tough on china. the president's lawyers say he does not get any income from russia or oh any money to russian lenders. lawyers say that comes from a review of the president's tax returns of the last 10 years. they did not release copies of the returns. 25 people are dead and dozens wounded in a suicide bombing in pakistan. -- the target escaped
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-- global news, 24 hours a day, powered by more than 2600 journalists and analysts in 120 countries. i mark crumpton, this is bloomberg. bonnie? vonnie: sprint and t-mobile talk in former mobile -- merger talks. that is next. this is bloomberg. ♪
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vonnie: this is bloomberg markets, i'm vonnie quinn. shermang and alex joined me for deals report. stock just halted on the new york stock exchange.
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this thanks to alex chairman. he was your scoop. where reporting a company called globalstar, about a $2 million reported. with the ceo of the company a few months ago and he told us that he was thinking about potentially exploring all different options. the wirelessasing spectrum of the company. they own a swath of wireless spectrum that they got permission from the fcc to use. it used to be similar to what charlie ergen did with dish network. we are breaking the news yesterday, straight path was acquired by verizon. not directly comparable, but still the general world of wireless spectrum for 5g uses. globalstar is hiring financial
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advisors to seek a sale. that's company at about a $2 billion mark. vonnie: it jumped 23%, who might be interested? i imagine that at&t and verizon may look again. perhaps even the other two mobile wireless companies like sprint and t-mobile. also, the cable companies might be interested in this. comcast,about charter, and the cable companies want to get into wireless. they are looking ahead to a 5g world. is some say, there doubt about how valuable this spectrum is. there's a camp of people that think this could be bedrock technology for 5g. another camp of people think, this is not really the same of what we saw a straight path. it may not be quite as valuable or valuable at all. there's a bets going on here, and that may or may not lead to a sale. vonnie: it is a question of
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strategy to a large extent as well. sprint is an informal deal talks with t-mobile. alex: that is right. it reported that earlier this morning, that informal deal talks have begun. we don't know what those companies have talked about, just at this point, but there are two outstanding questions at this point. -- first is the rally regulatory question, will the trump administration allow a deal between the two companies. back in 2014, sprint tried to tried to-mobile and put feelers out for the fcc and the obama administration told the cofounder of bank -- of the bank, don't try it because there is no way we would allow you to twoet -- a light to put the companies together. who will be the buyer, who'll be the seller? -- sprintught it
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might use spectrum as a potential character to maybe some of it will be leased out. all the questions need to be answered. vonnie: the questions have been swirling for a long time. alex, thank you. that is our reporter with a great scoop on globalstar. time for our latest business flash. deal.rst is a spotify says it's going public and help -- hiring banks to help it on the new york stock exchange. according to a person familiar with the plans, spotify is mulling whether to do a direct listing or more traditional public offering. selling a 60% be $1.5 billion.
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strategyf berkeley's to focus on new york and london. -- clay awaits regulatory barclay awaits approval. this automaker needs to reprogram a computer module, fiat. that is your latest bloomberg business flash. coming up, we hit italy for the meeting since the g-20 in germany. the latest on steve malaysian and what he is briefing the group on. this is bloomberg.
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♪ vonnie: this is "bloomberg markets." i'm vonnie quinn.
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in italyre gathering today, and this is the first meeting since the -- g-20 and germany. let's head to italy where matt miller has the latest. what's where the hopes of going into this particular g7 meeting? >> it is very interesting because the message was the trade is off of the agenda officially, but this morning, when steve mnuchin arrived, the treasury secretary said he was excited about the u.s.'s trade policies and mentioned a trade agreement with china. after that, all the talk was about to trade today. they are now struggling to cobble together their communique, their message to the world as to what they have discussed and what they will discuss tomorrow. the problems they face of the same that they have faced at the .-20 meeting as whether or not to call for
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free trade and a stop to protectionism, and use the u.s. language, more of a fair trade or reciprocal trade and leave out to the protectionism and mention of it. that seems to be the focus as the ministers just retired about an hour and a half ago and are going out to dinner and a nearby town. vonnie: steve mnuchin is not concerned with optics today. he didn't attend part of the seminar inequality. that was one part of the g7 meeting that he missed, but, tell us why they were there in the first place when so many are going to change like the french finance minister possibly. britain's representatives are possibly going to change as well. is true.t the european picture could shift around, and steve mnuchin came here, arrived about two hours after all of the other ministers. you can see the flights here
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behind us, the u.s. flag, for the first couple of flag -- ours wasn't up there. maybe because of when problems, but they didn't put it up until the treasury secretary arrived here. as far the european flags up there, they will stay in the g7, but your point is a good one. france finance minister might not be the finance minister very much longer because of the new government there. a lot of people in europe are hoping for a tighter, stronger europe, a stronger union between the european countries. for example, the european commissioner that we spoke to yesterday. whoever we get in germany, they are hoping we see more of a coming together. the issue of greece could be a sticking point. they're hoping to find a solution for that on may 22 in brussels. vonnie: any ideas what the ministers are going to put into the communique when there is a little agreement on globalism
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right now? they will definitely talk about inclusive growth. that seems to be the phrase that they fall back on. they are going to still struggle, and i'm sure they will talk about it with steve mnuchin, and this meeting goes on tomorrow through the weekend. . weekend in bari italy they will try to convince him to convince -- to get more. matt, please don't work too hard in the port city of bari, italy. here comingwill be up, and follow it all on tv glow on your bloomberg. bloomberg.o> on your ♪
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vonnie: it's 1:00 p.m. in washington and one hammond hong kong. i'm vonnie quinn. andi'm kevin's really -- >>
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i'm kevin's really. cirilli. vonnie: a broader effort to reshape the trade relationship between the two largest in the world. later this hour, we will hear from former, -- the former commerce secretary. the president is escalating saying that their conversations might have been taped. kevin will be talking about the man at the center of it all, roger stone.

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