tv Bloomberg Markets Americas Bloomberg May 30, 2017 12:00pm-1:01pm EDT
vonnie: from the bloomberg world headquarters in new york, these are the top stories we are following. u.s. stocks halting a seven day rise. is this a sign that the trump rally may be coming to an end, or did it ever really exist? in politics, president donald trump ratchets up his dispute with angela merkel, putting u.s. relations with europe potential he in jeopardy. at home he deals with mounting 'srutiny of jerod kushner reported ties to russia. an exclusive interview with the st. louis fed president. what he told bloomberg about the president's agenda and the fed's rate hikes. we're halfway into the trading day. tradings been a tight
range again. the s&p and nasdaq closed at records on friday and had a tight range of trading over the course of that day with relatively low volume. the persists today, though nasdaq is the out performer of the three major averages. if you look at the bloomberg, we have an illustration of that. g #btv 7259. you have the nasdaq composite in white. both of them outperforming by a considerable margin of the s&p. both of them up 19%. the s&p up 8%. the dow of by 6.5%. technology has been the out performer appeared what is doing well in the nasdaq 100? bag of stocks not being driven by fundamental news, but .he upswing intact generally comcast is rising.
it lost a couple of court cases a couple in and won the same suite of cases. stocks.atching telecom they were upgraded to neutral sell. relatively, still a hold, but a little better. this is by a longtime telecom analyst. he said expectations are appropriately low for the telecom industry following initial unrealistic expectations after the election. outside the world of stocks, oil are 1% as oil traders waiting to see what effect the extension of opec cuts will have. the dollar, very little change. 4/10 down a little, fo of 1%. increase, a good
time for a consumer comeback in the second quarter. the next guest believes the u.s. continues its expansion. those looking for quick reform may be disappointed. is grant bughman. welcome. like more people are coming to terms with the idea that we won't get things done in washington as fast as we thought. there are only 30 when legislative agenda days left? be very difficult given the backdrop for legislation to pass in the near future. what do you see today is a democratic party that is staunchly opposed to anything republicans want to do. that is leading them to put up
their defenses. it will be challenging to get tax or regulatory reform done in a meaningful way. vonnie: what do your clients say? grant: if you look at the markets, the run up postelection and the end of 2016 with the expectations reform would be passed. to see the market rotate with those procyclical trades that were more related to trump's election getting pushed back in the more growth-y sectors doing well. the market showing a different backdrop in 2017 then the end of last year. vonnie: what does that mean for them and their money? grant: what we are our investors is to focus on stocks. when we are looking at our portfolios, we see a wide dispersion among equities.
that means it is creating a fertile environment for stock pickers like ourselves to add value. seeing a lote are of opportunities within consumer, segments of health care, and technology. vonnie: technology, and a lot of people are saying it is a very crowded trade. health stocks,o doesn't it depend on washington, even though it looks like nothing will happen? grant: there is over hang regarding on the cynical's and the cost of prescription drugs. are seeinggy, we secular themes play out in the u.s. and abroad. looking at e-commerce, mobile penetration of digital advertising, these are secular growth stories that have years to play out. it is not necessarily a month to month or quarter to quarter basis, it is longer-term.
industry or country we are focusing on, we see backdrops positive for technology. vonnie: what about new tech? grant: that is a well played out story, but one we are believers of. if you look at the amazon effect, there is talk about retail in general, with malls having difficulty because consumers are not shopping in the manner they did 10 to 20 years ago. we think amazon will be a large player, and their expansion is one that has impact for their margins. vonnie: so you're telling consumers to buy amazon? run a portfolio of u.s. stocks for clients, and it is one of our largest holdings. vonnie: let's look at the s&p 500, groups moving since the beginning of the year. some were really depressed and the like oil and gas down 33%.
areas toose potential get in now? grant: if you take the longer-term view, particularly in energy sector is, our portfolios are slightly tilted to overweight energy in the small cap arena. some of the weaknesses is commodity price, but we believe there are players that look attractive at these levels. vonnie: in certain areas, geographies, or price ranges? grant: geographies. crimea has been one of the best places for low-cost production. we have diversification for producers in the u.s. vonnie: just curious, why do you care about the macro environment? grant: we are stock pickers. someyou look at companies, from the top line have had
relations. when you look at energy, you have to look at the commodity prices if you are going to make a call on a specific company and their earnings in the year ahead. vonnie: thank you. now, let's check in on the first word news. emma: let's get you caught up. president trump criticizing germany again. on twitter the president says the u.s. has a massive trade deficit with germany and the germans pay less than they should for nato. president trump says it is bad for the u.s. and will change. theresa may ripped into labor leader jeremy corbyn, warning 8ters if he wins the june election he would go alone and naked into brexit talks. corbyn said there would be a when asked if he would
be happy to leave the european union without one. more freedom for those who haven't voted in a while. justices will hear an appeal by the state of ohio to reinstate the technique used by the state before the federal appeals court blocked the practice. the former dictator of panama has died. manuel e noriega -- ally,a was once a u.s. but then had ties to drug traffickers and had his opponents killed. he was arrested when the u.s. invaded in 1989 and spent 22 years in u.s. and french prisons. he was 83. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. vonnie: coming up, a rare and philsive interview with
vonnie: this is "bloomberg markets." i am vonnie quinn. tensions rising between the white house and one of our biggest nato allies after the president tweeted, "the u.s. has a massive trade deficit with germany." this is according to party officials. is the president alienating our allies? kevin cirilli traveled with the president as he met with merkel
and other leaders. he joins us from our washington bureau. doesthis escalate, or one of the leaders put this in their back pocket and forget about it? kevin: it is clearly an escalation after the president's tepid welcoming at the g7. notident trump is particularly a popular president, not only in the u.s. the president will continue to work with auto leaders like bmw. standpoint, ity will be interesting if we see a these 2 countries working together on a host of policy issues. it was several weeks ago when it seemed like chancellor merkel and president trump had turned over a new leaf. vonnie: are we witnessing a race to the bilateral? you had chancellor merkel meet
with the prime minister of india, and president trump racing around the world and having leaders come to the u.s.. is that what is in our future? --arly tesla merkel's chancellor merkel's words were meant to hurt. kevin: the president has to get his head around what have been a firestorm accusations around the pressure probe. several sources tell me this is a white house in desperate need of some kind of shift regarding not only national policy, but domestic policy. the president wants to work on health care and tax reform, but with congress in recess and the russia probe, there is rumbling that there will be a shakeup in the communications department as well. vonnie: what did you make of the 51 votes. is the president pushing for the
legislative filibuster to go away? toin: it will be interesting see if there are senior members of congress that will get behind that within the president's own party. leadership has been skeptical in the past of going this route. whether or not the senior members, who will be asked about it, fall in line behind this remains to be seen. the president wants to change the subject and get to work on the issues people voted him on. he has his hands tied because of the russia probe. vonnie: we either have to work sidegislation a lonlong these probes or he will have to give up legislation. threatening supreme court hearings and overturning court rulings, and now threatening the legislative filibuster as if he
really has any -- does he even have any sway there? kevin: it is interesting that ae white house has set up separate operation known as the political war world to deal with the firestorm of the russia probe. they're not going to be able to move beyond this until the results of these investigations are made public. once congress returns from recess, i anticipate several of these folks whose names have been in the news, including paul manafort and others, james comey, they will have to testify publicly. until that happens, the white house can have a war room, but it will be difficult, from my sources' standpoint, for them to move beyond it. washington this
week, including a decision on climate and dodd-frank. that was kevin cirilli. now our bloomberg business flash , a look at the biggest business stories in the news right now. allagan investors double down on the ability to maintain growth. amazon's market value is twice the of walmart, despite largest retailer have sales three times as many as amazon this year. up 40% on the year ago. that makes jeff bezos the second wealthiest person alive. china investment court in the icorp.o acquire log investments is also in the race. that is your latest bloomberg business flash.
competes. the following data comes from bloomberg. i figured it was a good time, the day after memorial day. goldman sachs and number one. not that much of a surprise. at number two, knocking at the door to be number one. in 2014.inished first citi at number two is unusual. they finished fourth in 2016 and 6102015. in 2013, they were ninth. why is citi rising in the ranks? has advised 89 deals that goldman's 100, but they have been on the biggest ones. citi wasclude debt, the advisor to the atlanta offer. lazar.vised with
they also advised with perella. all three of the biggest deals of the year they have advised on. citi also advised intel. a $14 billion deal. i reached out to citi for a statement. a spokesman said current conditions are creating a favorable m&a environment and we are seeing activity and a variety of sectors including tech, telecom, and industrials. a 17 to remain strong, barring any disruptive events. vonnie: is that global? is a global we have data on just the u.s. to pull out. -- pull up. if you look at just the u.s. charts, citi has not been doing
as well, but still well. the numbers look more similar to what you might expect. , butr one is still goldman very close is morgan stanley. jp morgan in number three. citi falls down to fourth. that speaks to citi's global reach. vonnie: can i ask about the "other" category? in the u.s., 15%. fattery, other is a chunk of the total. alex: there are other big banks that are listed. they are little further down this year. still a decent amount of time. think about credit suisse, ubs, not just the, boutiques that make up the other
category. then you get your livelazars evercorps. vonnie: there will be a lot of annoyance that citi has risen -- alex: as long as you don't work at citi. vonnie: is it luck of the draw? alex: they have a good health care practice, and also the surprises the intel mobilize deal. i spoke with bankers at other firms, and they were surprised that citi landed advising intel. citi not really known for its tech practices. it is known for medical instruments and health care. i think they had strong relationships at intel. they often work with bigger banks. gohaps, this was citi's
around, but i think they have strong ties to that company. it is a credit to some of their hastionships that citi built. that is the biggest tech deal of the year by far. they were advisers on both sides , they were not typical. that one seems like an outlier. vonnie: they could all change by the end of the year. absolutely. the wall street banks are working hard at this, as they always do. bloombergex sherman, deals reporter. isyou look at where the vix trading, it is just about 10 on this sleepy memorial day tuesday. another $.48. it has become some the lead market with dollar-yen, a weaker yen by .4%. we have been mentioning that the
spread is very narrow. 93.5% basis points. let's look at the south african rand, a second day of gains after zuma was reinstated, or re-upped his control over the anc. coming up, the fed president warms the honeymoon will come to and washington will have to deliver on the policy expectations that have driven the stock market higher. plus, an exclusive interview nextphil falcone in the hour. this is bloomberg. ♪ these days families want to be connected 24/7.
the dow down .1%. the s&p 500, 21.14. very unchanged. the nasdaq is unchanged, down two points. looking at the s&p 500, energy stocks are a drag. energy is the worst sector for the s&p 500 right now, down 1%, in sympathy with oil down almost 1% off of lows. little we will see a rebound, but right now oil is down three out of the last four days. the bloomberg intelligence commodity strategist has said this is an opec news event after the opec extension of supply cuts. it is appointed investors a little who might have been looking for something more. it has been range-bound between 45 and 55. when we hop into the bloomberg
3667, weok at g #btv see the crash incurred, and we have the range between 45 and 55, a little lower going back in time. what is interesting is the 50-day moving average below the 200-day moving average. the 200-day moving average is above the 50-day moving average. the 200-day average in charge is when sellers are taking charge. prove to be somewhat bullish for crude leading into a range. prettyt death cross was bearish. the head of technical analysis is he doesn't make too much of this cross, but when you have a crossover in a range it tends to not he that important.
turning to some of the drillers we have action with oceanics soaring up. the best day in more than a year after the second largest offshore driller is buying atwood. this space is pretty beaten up as crude did decline, the industry more towards the shale producers, shale is cheaper than the offshore drillers. investors are a bit relieved. ers there is al sympathy relief rally. we see upside action. plus, we had the clarkson upgrade saying the selloff has taken place in the segment within the energy complex. it is a bit overdone. ending on the bright side for o
il and the energy sector. vonnie: that is abigail doolittle. the federal reserve bank nsesident james bullard war that the honeymoon period will end and washington will have to act. d is one of the more dovish members on the fed and talks about the pace of raising rates and unwinding the balance sheets. d: one of the good things about unwinding the balance sheet is it will create commodity space in the future if we need it. on the rate itself, we are not very far from appropriate rates for the u.s. economy that will keep inflation not too far from target. and the labor market performing well. but i disagree with is the idea we have to go to hundred basis points higher to get to a neutral rate.
i don't think that is the environment we are in. i think we could stay where we are, possibly a little higher than we are today. >> i want to ring up this chart for our viewers. i'm not sure if you can see it as well. it shows what we have been hearing over and over, that we the a hot jobs market, but inflation numbers are cooling, if you are looking at for cpi, cpi, or pce. you are the outlier among the fed speakers that we have seen. we hear from john williams and others who echo more of the consensus, 2 more hikes. what do you see that they don't? bullard: i think those inflation numbers have been surprising in 2017. you can see in that chart they are down in a year-over-year basis here to have been arguing we are making progress to the 2% inflation
goal, but these have been going in the opposite direction in the early months of 2017. i think in the first quarter, we had a relatively weak gdp report. a little, but up even with that revision the first half of 2017 will be relatively ordinary gdp growth of 2%. the idea that the economy is and it faster than tran will push up inflation, i don't think it is matching up with the numbers we are seeing. furthermore, inflation expectations actually started to ratene after our march increase, an important variable to keep track of in this discussion. m, you talked ji about how inflation has been missing the target for five years.
it is 4.5% below where it would have been otherwise. we have a chart we threw together. it is not the one used in your speech, but it shows volatility inflation going from 1995 through 2012. at risk for being blamed for missing the inflation target and not letting the economy grow fast enough because it has been missing that target so badly the last five years when the economy is in recovery, past the great recession, and the fed is talking about more rate hikes? bullard: i like to look at the 1995 to 2012 trend in the u.s. i like to start in 1995 because that is when the consensus form that we would target 2% inflation. as a 2012, when i originally used the chart, we were on the
path.level that he gave me confidence we pursued a good policy. right after i gave that the price level started to fall off path. in the last five years we have drifted lower because inflation has not met the 2% target. now, the price level is almost 5% off the path. if you think price level target is optimal monetary policy, which a lot of theory tells us, it doesn't look as good today as it did when i first started talking about it in 2012. it made me a little concerned and worrisome we are off that path. vonnie: that was the st. louis fed president speaking exclusively on "bloomberg asia."k: on the watch in full
bloomberg at tv . senator mccain urging australian not to abandon the alliance with the u.s. despite .nxiety over president trump in sydney on the future of u.s. relations with asia. >> we need your help, my friends, more than ever. the americans are counting on us trillion and our allies to stick with us, to encourage us to stay true to who we are at our best, and remind us always how much is at stake. says australia isn't alone when it comes to questioning if america is committed to peace around the world. he criticized mr. trump for withdrawing from the paris agreement. had been working with
press secretary sean spicer. in baghdad, the islamic state claimed responsibility for a deadly car bomb attack. 15 were killed and 24 wounded in the midnight explosion outside of a popular ice cream shop. the explosion came days within the holy month of ramadan. another car bomb exploded near the baghdad public pension office. at least 12 people were killed. grande will return to manchester on sunday to perform for a charity concert for victims of the manchester bombing. you just finished singing when a bomb exploded killing 22 and wounding others. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. vonnie: coming up, bitcoin
has grown wealthier and stronger, it seems to be acting more like a bully and refuses to open more of its economy so foreign businesses can compete fairly. it is stealing other people's intellectual property and asserting fast territorial claims that have no basis in international law. criticized president trump's decision to withdraw from the transpacific partnership. a possible proxy fight with whole foods. a fourth nominee has been added to directors. the grocery chain has come under pressure because of a prolonged sales slump. that is your bloomberg business flash. .itcoin is back it has risen more than 100% in the last two months. critics are showing that the
digital currency is showing signs of a bubble. cory johnson joins us with more. what is behind the move? it is a spectacular move. market says a lot of the investments in digital currencies, and we see it across all of the digital currencies, most of it is in bitcoin, we have seen a dramatic rise in the values of digital currencies across the board. it has been very sudden. it has been creeping up. if you look at the last few months, you can see it doubling in price. it is astounding. it does seem to be speculation. bitcoin is happening. every day there is news of cars being purchased with bitcoin,
houses being purchased with bitcoin. the rise in the currency is noticeable. so is the volatility. they had a huge move the other day, nearly 20% down in the course of an hour. vonnie: if it is going to be used more as an alternative currency to buy houses and things, you don't want it to be volatile. what is the story in terms of regulation and bitcoin being accepted on exchanges. getting the green light among regulators? cory: the alternatives to bitcoin, the alternative alternative currencies. they're trying to stick to the fundamental problems. one is the anonymity. your customer rule to prevent things like money laundering. andoin is fundamentally
technolog technologically again. there are interesting elements that allow customers to verify identity, keep a record of all transactions encrypted within the currency itself, and therein lies the interesting development in alt alt currencies. vonnie: any big hedge funds, any fund managers or major investors? chartlet me look at this first. this chart is really important. this is the average confirmation time of how long it takes to complete a transaction. you can see it is taking a lot longer for transactions in bitcoin to go through the system. it is harder to use bitcoin now than a few months ago. it is a vexing problem. bitcoin community has tried
to solve this by coming up with technological solutions, but the problem is within the way bitcoin is created are big chunks of code. with each new coin, the code is increasingly complex. using the coins is more difficult for the system and slowing down here that is a fundamental problem the bitcoin community will have to solve. it might be too difficult. that is one reason you see a lot of currencies getting traction. people buying bitcoin will have to face up to this. if it doesn't get easier to use and if the time for a transaction doesn't go down, the values will have a problem in the long run. vonnie: cory johnson, editor at large and san francisco. on the comeback trail after managing outside money. what he is doing now. interviewxclusive
vonnie: this is "bloomberg markets." i am vonnie quinn. planning his comeback. fromund manager was barred managing funds after security fraud in 2013. that is almost over. he has plans to return to the industry. joins us withli more. it is almost like waiting for someone to come out of jail. certain years, only a amount of money he can manage, and now he is as passionate as
he always was. how do you hold that passion to manage other people's money again? fabio: he only turned around 1% last year, and if you go back far enough he compounds on the order of 25%. the 1% does bother him in so far as they had government regulators and there. family money, the question of motivation must be an issue when the emily money he is running is $10 million of his own money. why do you have to go to work? you are six years old. vonnie: you need fees from other people's money, no? fabio: with $10 billion you could probably find a way to keep the lights on. will he be able to raise money is one of the big questions. i think you will see a rotation in the kinds of people that invest.
previously the investors were blackstone and citicorp. be people more comfortable with headline risk. you have to be comfortable with the headline risk. senator elizabeth warren called his sediment where he got two years off literally a mockery of the legal system. vonnie: will he be watch closely? will be watched incredibly closely. one of the positives from where is -- is gone. for what it is worth, stephen cohen donated $1 million to the trump inauguration festivities. he stayed $1.8 billion. vonnie: thinking he has great ideas in a market like this, how much insight will we get into what he is doing? when he gets back to running a hedge fund, he will
have more insight. out.eality is they come with all of the various filings that he filed in pandora, that instantly caused it to jump besides he said it was "a passive stake." he wants to raise a lot of money. his style of investment is fast trading. people at his own family office. another entity literally across the parking lot to set up his new hedge fund. how much of that talent will go there? how much of his money will go to the new hedge fund vehicle, or will he be attempting to run two pools of capital? vonnie: will he stick to the same strategies or starting with new strategies? alto: he has opened a palo office. he seems to be thinking maybe i
can replace some of these 1000 people with machines. vonnie: is there enough to go around all of the hedge fund managers? will he raise $9 billion plus that he wants to raise to go along with his $11 billion? phillipe chabret was banned from running money at all after he was caught within market manipulation. he was banned from running money in england. billion in3.7 switzerland. he was banned in august, and in january raised $3 billion. you won't get the new york fire and police department. you lose some institutions like
blackstone, but with a 25% compound track record, an awful lot of money will go there. vonnie: there's a great story on the bloomberg you can read. it looks like he may have people pay fees up front as opposed to the two in 20 and one in 10. fabio: it is a double-edged sword. he can charge all expenses back to the fund. sit it out did that for many years -- citadel did that for many years. load was nothing short of spectacular, though cohen was running pretty spectacular fees. vonnie: thank you. still ahead, another billionaire got in trouble with the fec. falcone on the comeback trail. find out where he is putting his
money to work in a rare and exclusive interview next. you can catch all of our interviews on the bloomberg with the function tv . let's look at what markets are doing on this tuesday afternoon. oil, a drop of .8%. not far from the close. 1.11.-yen back to low the rand after the election is stronger once again. if you look at the major indices, they weren't moving much. the dow is down .2%. the s&p and nasdaq down marginally. this is bloomberg. ♪
tense g7 meeting. blasting germany on twitter, threatening relationships with a key nato ally. the president's 2018 budget, former senator judd gregg said that it's not a good idea to spend as if you won the lottery in the hopes that you actually do. he will join us live later in the hour. plus a rare interview with phil falcone. and he is back, putting his money to work. find out where. ♪ david: analysis now of the relationship between the u.s. and europe, i'm joined by our chief washington correspondent, .evin cirilli let me start with you, if i coul