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tv   Bloomberg Markets Americas  Bloomberg  June 15, 2017 12:00pm-1:01pm EDT

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vonnie: from bloomberg world headquarters, he is top stories on bloomberg and around the world that we are following. central-bank watch, the bank of england policymakers deepen their divergence. robert mueller is expanding the scope of his investigation to see whether donald trump tried to obstruct justice. bid, the company is writing messaging startup/-- start up flash. phenomenal figures, here is another, julie hyman. we are halfway through the trading day. this is the same playbook we have seen over the past week or so, a big selloff in technology, not as much in the
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rest of the market also really a big divergence between the two. speaking of that, there is something else that has caught my eye. the bloomberg u.s. economic surprise index which looks at the ratio of reports that the economists estimates, it has gone below zero. take a look at the bloomberg here. that is the blue line. it is going below zero for the first time this year, the first time since the election is an you 500 he's going up. -- the election. the s&p 500 keeps going up. it is shrugging off anything that might be perceived risky, political and economic theory the s&p is going down today, but the trend has been more upward. reports have been being at a lower and lower rate.
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apple is one of the tech stocks that have been declining and is declining again in today's session. barclays is a in a note the iphone product cycle may not beat expectations year-over-year. this is the prospects of a megacycle diminishing. and the other commentary that has been coming out about apple, expectations are just too high for the iphone cycle. if you look at the pliers to iphone, they are following. stocks rose in late trading yesterday and early trading today with estimates. they say that results suggest no glaring issues for the iphone, but there is a difference between no glaring issues and masking it out of the park. lower -- theseg
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are trading lower today. and news in the last half hour or so that sends these two stocks higher. the sec came up against an obstacle after a federal court ruled they can revive a rule that makes it easier for media companies to extend their reach. thisis moves a hurdle for deal to go through of st. clair tribune media. the sox are still going up. vonnie: julie hyman, thank you. back to monetary policy, loves to discuss with the fed, raising rates and adding that addendum. and the bank of england and swiss national bank are tomorrow and japan. joining us is the economic michaelorrespondent mckee. let's start with the bank of england saying more to just
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does. -- to discuss. reporter: the bank of england and the u.s. fed have a relationship. william phillips of the phillips curve made a decision. of the bank of england monetary policy committee said there is danger of inflation accelerating to watch. look at the chart with what is happening, you can see the rise in inflation, moving up very quickly, part of it because sterling has depreciated. it is going in the wrong direction presents the vote last week. there is probably more inflation. what happens to the white line? we had disappointing retail sales, but the dissenters felt the growth would hang in, and that would create a problem for the british economy. vonnie: the story is being told in yield, here and in england.
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reporter: what we are seeing is the market telling us they don't when theylicymakers say things are going to happen. to bank of england not going raise rates, then you look at the fed and the arguments that are being made, the market is looking at inflation figures and say the fed is going to have to pause soon. look at this chart, unemployment. this is the phillips curve going down for the united states. that is supposed to push inflation higher. but recently we see it roll over and start all. you see that reflected in inflation forwards and the fed funds futures market. a ratee betting on increase. markets think inflation will stay low, and that will keep the fed more silent. vonnie: it was an exciting moment yesterday, because we were hoping for more details running off of securities, how
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much we reinvest and when that will taper, but we got a lot of details. reporter: we got all that we will get the time being. we don't know how much they will taper. we don't know when they will start this year. it could be sooner rather than later, maybe september. wall street banks going with september because the fed may want to cause its rate moves -- its rate moves. everything like a government shutdown or debt crisis. it becomes a better option for the fed. that may be what we see. vonnie: the idea it does not to coincide with the press conference meeting because we have gotten most of the information. i went to see if we should be looking for any and following closely tomorrow. reporter: they said there is a possibility they may release operation -- information on how
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they will balance the sheet. americans are interested in finding out because the fed has talked about and the ecb talked about it, so we need guidance on those lines. don't expect policy changes. vonnie: you are where the cherry blossoms are, but not japan. thank you, michael mckee. let's get more perspective on wall street policy with eric -- andcodirector of port portfolio manager at eaton vance. i'm sure you agree with most of us. you were talking about this inflation. he talked about how the epicenter of financial oppression is in england. >> we have financial repression artificially low interest rates everywhere.
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we are still -50 basis points, real race in the u.s. i think we have had years and years of my, now we are seeing the end of that not only in the fed but also other sectors. vonnie: what gives you so much hope? there was that data and the cpi from last time, but this is the third month. and the reason the carriers got into competition is because people cannot afford to pay what they were paying. eric: when you look at inflation, isn't massively less demand? i think 2% real growth, 2% inflation, the fed will go on this slow path. if it slows down, maybe they go in december. if inflation picks up, it is faster. they want a course for monetary
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policy. they will use data. vonnie: they want inflation to rise, but will it? eric: 4.3% unemployment seems to be falling. ultimately it will rise. i think financial stability reasons as well, you want to know about monetary policy. vonnie: so the unemployment rate which has everybody saying of course we will see inflation, we could not with an unemployment rate like that, that is not true. you have people with two or three jobs, then we can see that , the unemployment rate that is official, go further. eric: you are seeing wage growth , cpi. fore is real income growth american workers, which is a .ood thing there was a lot of different things in prices that move
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around on a month by month basis. just because we are inflating 1.5% and not 2% i don't think it is the end of the world. vonnie: so at the front end of -- the curve is flat. [speaking simultaneously] so what happened next? eric: inflation. we had the double whammy, inflation and the fred being hawkish -- the fed being hawkish. we had stimulus, more reforms, things were we say there is no chance of happening, and there could be more. so the fed live rate increase and flattening of its kind. you might see more steepening. vonnie: how are you preparing? eric: we take a long and short approach to investing. long and certain sovereign violence -- sovereign bonds like
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new zealand, japanese. we think the bank of japan will ultimately taper. they want to transition out of monetary policy, extreme monetary policy. vonnie: let's look a quick ,esson into david earlier today the head of currency research at bank of america merrill lynch. >> the dollar and the rates have collapsed in the last three months because the markets have come to the conclusion there is no -- the stock market has been through the roof. there is a disconnect between the stock market and the fixed income market. vonnie: agree or disagree? eric: i agree. i had lunch with him a few days ago on this topic. there is a disconnect between the stock market and bond market. vonnie: we should have had the interview together. eric: i saw that a couple days ago.
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there is disconnect with the equity market. there is no chance we will get any type of fiscal policy reform, tax reform. it is lower than what we had earlier, but i would not count it out. there is a chance we get something done on the regulatory side, and maybe the tax side as well. vonnie: you can bring it whoever you meet, and we will talk to you. thank you to eric stein, codirector and portfolio manager at this place. real yield will be live in new york city. the decision, jonathan ferro will sit down with various people. trillion in asset management, gives us its income perspective. .hat is 5:00 p.m. london time
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let's look at first word news. the annual congressional charity baseball game which states to 1909 and is a summertime transition -- tradition on capitol hill will be played despite the shooting during practice. house speaker paul ryan assured lawmakers that the members will go on. whip steveajority scalise is in critical condition after that shooting. four others were wounded. police wounded the gunmen. president trump visited sculley's -- steve scalise in the hospital. it is more difficult than people first realized and said he is in some trouble. sexual assault trial is deadlocked after 30 hours of jury deliberation over four days refused to restrict
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aggravated indecent assault for allegedly driving and molesting a woman in 2004. each count carries a 10 year prison term. the judge told the jurors to continue. formal brexit talks between the u.k. and european union begin monday as scheduled. this was made after discussions in brussels. there was concern negotiations might be put on hold after u.k. prime minister's conservative party lost the majority of parliament. thousands of demonstrators marched through central athens to protest pension cuts. they voiced the shrinking size of their pensions, which many can no longer survive on. they are part of the next installment of rescue loans for european creditors. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪
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vonnie: thank you for that. new questions raised about president donald trump and whether he would like to settle the investigation into russian interference. this is bloomberg. ♪
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♪ this is bloomberg markets. politics and questions being raised by donald trump and letter he tried to slow the investigation into the 2016 interference. joining us is the chief washington correspondent kevin. this does nothing to be weighing on the president. we saw in celebrating workforce week.
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he was in good spirits except for tweets. kevin: the president earlier this morning tweeted out witchhunt, referring to the washington post report last night suggesting mr. moeller's investigation is looking at the possibility of whether president trump obstructed justice. the administration said there is no evidence, which they had previously reported investigating general flynn regarding. evidence or be no investigation into obstruction of justice. republicans agreed. must becrats said they heading in the impeachment direction. vonnie: what is the risk on? have you been speaking to people ? otherwise it is he said, she said and it gets murky. kevin: i spoke to experts about the possibility of 30th obstruction of justice.
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they will be more evidence. the investigation does not have a timeline when it will conclude. we should also note the president visiting steve scalise in the hospital making it worse than people have thought. he is in critical condition and at the hospital, the baseball game still scheduled later this evening. republican governors are meeting at the white house to talk about health care reform and ways to alleviate this. the house passed it, the senate republicans try to work on their version. the governors at the ground zero is,this, where obamacare here today to make their cases, implements what the senate is doing. it off, we to cap should inform people of the executive action on
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apprenticeships. workforce week is concluding and having produced executive action. the top ceo's gabbard at the white house and lead meetings with donald trump and gary cohn. they were work on a partition programs. -- they will work on apprenticeship programs. the president wants to see them working together nationwide. vonnie: kevin cirilli, thank you. still ahead, the latest on a bloomberg first report amazon is thected to get slack, messaging service. it could be the biggest ever. ♪
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♪ time for the deals report where we look at him in a
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business, reporting first today amazon may be looking to acquire the messenger status/. -- started slack. tell us about for those who don't know what slack is. slack is a general messaging service that is used in offices all over the place at this point. it is like a silicon valley darling. here is what we know so far. we reported last night, amazon and one other tech company have reached out to slack in recent weeks. one other one so far that we have heard, but amazon may be in the lead. the idea is they may pay $9 million, amazon or some other company, to do this. slack as i mentioned is a way to chat with colleagues in the work with. it also is a good drop elements. it allows for secure file
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sharing like a virtual conference room. that might be the best way to amazon has try to get into this business and has an enormous web services business. they released a skype like service businesses earlier this year called time. -- chime. so the idea that they would work together is not surprising, but the size of the acquisition, $9 billion, would be bigger anything amazon has ever done. the biggest they have done is $1 billion, so nine times the largest ever. vonnie: where is that number being pulled from? alex: they will have to pay a major premium to do a deal. amazon and one other company at this stage have expressed interest. that one company is
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than theown the road others. i don't know if this company is amazon, but i am told discussions have stalled recently. little progress has been made in recent weeks. the one company that is further down the road, whether that is amazon, they are starting to get antsy about a deal and want slack to commit, or else they will move on. $9 billion is the amount. their lastioned, public fund-raising round, $3.5 billion was their valuation. people that know this business and have gone through acquisitions of their own told me they thought select -- slack should sell. but it might not. cofounder has been keen on selling. that is natural. , it can be an
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opportunity to refuse. vonnie: are there any companies close to slack when it comes to competition? alex: microsoft has developed a direct competitor. so if there was another company interested, you might think microsoft makes sense, but they seemed to have moved on. earlier, but maybe microsoft has their own competing product. vonnie: thanks. that was our reporter with the bloomberg first story. andill talk about goldman, we will speak with a bloomberg contributor. this is bloomberg. ♪
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♪ onnie: from bloomberg world headquarters in new york, i am vonnie quinn. look at u.s. stocks now, coming down all day, the s&p down half
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a percent, the nasdaq down 0.9%. ine of the worst performers those indices, let's go to abigail doolittle. some of the worst are in the text face. we have been downgrade. interestingly, these names were downgraded to neutral. not a huge move, we have outside declines. mattel down 8% after da davidson neutral.ating they also cut the dividend more than expected. brinker international, this is chili's and others, the worst day in october 2012 with j.p. morgan saying it is a value drop . and we have time down 5% on a downgrade to neutral. we also have laggards or losers
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in grocery stores starting off , on kroger, plunging 17.5% pace for the worst day since 1999. this is after its last the full-year earnings. they also posted a decline for same-store sales for the second quarter in a row. and grocery deflation is really behind that weakness. we see that in sympathy we have spread trading lower and walmart trading lower. it is interesting for walmart because the competition is said to be one of the things eating into kroger. overall space declined. here is a five-day charge of the 4%.500 check index, down outperform 2%,s the best sector. in the bloomberg very quickly, looking at the tv 9101, this is
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the trump trade after the election. blue is s&p 500 that is a 13%, then we have energy lacking on oil declines. in yellow we have the banking sector, but here we have tech took over. as with the tech selloff sector rotation, we have banks on top of the trump trade. banks: we will be talking , thank you for that timing. goldman sachs facing some tough new issues at goldman about first quarter bond trading areas -- trading. the rising threat of syntax and others, the next guest said be wary of writing off goldman sachs. he is a contributing editor for bloomberg television and an author. he wrote about how goldman sachs came to rule the world. he must have known you were coming. >> he follows my every move.
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vonnie: i want to read off the last few tweets about washington. this comes back on the screen. -- hundred gcicer victims with infrastructure health care, tax care, unifies. so a little message about the events. why did he suddenly join to talk about policy? is fighting his twitter fingers. he is having fun. i think he was, as many people were, appalled by the decision to get out of the paris climate accord. that was his first tweet. after that, he is accelerating. people get used to doing it and like to do it more. and somebody like him should have a voice on twitter and be a voice for reason and show leadership. he is the kind of guy people will listen to and hopefully
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take seriously on twitter. vonnie: we love talking to you, but one reason was to talk about fortunate. you go into goldman and look at the bank assets and deposit taking bank, there is a lot changing about goldman. too.lot staying the same textbased, goldman has prided itself on being a technology oriented firm and having strong technology weather for trading or now they are using it for syntax, the markets which oldman is named after, which sort of competes. making small loans to people so they can pay off credit card debt and lower interest rate. whichlso have the bank their effort and a commercial
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bank and retail bank, but there are no retail branches like we think of. vonnie: and citibank -- >> the diminutive. 100 and -- $100 billion plus. but where like j.p. morgan and wells fargo and bank of america pay their depositors close to zero, whatever it is, 16 basis points, 20 basis points of interest, goldman is offering depositors three times, four times as much for their money. 1.05 recently. people took their money out of bank of america and moved it to goldman sachs, they would make billions more of money into their pockets. people don't do that. vonnie: $125 billion for goldman. >> talking about a pipsqueak.
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vonnie: but lloyd invested and has been in it very many times. they have a mission statement they are sticking to. this is what goldman is, it strength. -- its strength. >> goldman has prided itself on being the rest -- the best risk manager, and it still is. it is the leading m&a advisor, one of the premier, still the premier investment banks on the street. ,t is ticking to its knitting whereas morgan stanley want to get more into brokerage and wealth management by buying smith barney. fargo,rgan chase, wells bank of america are starting global universal depository banks. i am not sure the fed would allow goldman sachs to do that kind of a deal to buy was --
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depository bank, but maybe he should, maybe he shouldn't. the fact of the matter is he is whatldman's strength it has always been. he will stick to that and is hoping the cyclical currents that have been undermining the strength of that firm the last few years, what we will see coming out as there is regulatory reform on the economy starts to pick up. vonnie: we bring this up on the screen. lifeline once goldman to be the intermediary of choice. it will still be wall street's leading investment bank. alex: what will he say? vonnie: how he is. i have interviewed him extensively for my book and see how many times over the years. i did not see him when he was sick, but he seems back to his old self. his hair has grown back.
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,t is on his face and eyebrows he is sounding good, he is in for the long haul. he is not going anywhere unlike jamie dimon. he survived a cancer scare, and neither of them are going anywhere. leaving gavel -- goldman sachs to go to the white house and other people leaving j.p. morgan, both look as entrenched -- vonnie: an article is then mrs. gary. >> it is bittersweet. he recognized it was time for was a greatnd it opportunity. lloyd is not going anywhere. vonnie: thank you, bill, for joining us. our tv contributor. let's get a first word news update. mark: president trump said house
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majority whip steve scalise, who was wounded in yesterday's shooting at the baseball practice in arlington, virginia, may have brought some unity to our long divided country. speaking at an event on workforce initiatives, he gave this update on the condition. : it has been much more difficult than people thought at the time. he is in some trouble. he is a great fighter and we will be hoping he is ok. mark: the president and first lady visited scalise yesterday. he is the third highest rates of was shot in the hit. -- the hip. more surgeries will be needed. secretary of state rex tillerson was in miami meeting with leaders from central american countries about how to improve their economies. this comes as the trump administration proposed a 30% cut in foreign assistance to
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honduras, el salvador, and guatemala. they are also taking a harder line on illegal immigration and want to end protected status for 200,000 central americans in the united states. theresa may is ordering a full doublet inquiry into the high-rise -- public inquiry into the high-rise fire. she made the decision after making a visit to the site where 17 people were killed yesterday. the cause of the fire is under investigation. officials are hopeful about finding survivors. the north american student released in a coma from north korea has suffered severe psychological injury. that is from the cincinnati medical center where they said he is in stable condition after arriving at the hospital two days ago. the 22-year-old was serving a 15 year prison term of hard labor
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and tearfully confessed he try to steal a propaganda banner while visiting north korea. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪ vonnie: thank you. coming up, former money managers that. the lightning owner jeff. this is bloomberg. ♪
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♪ vonnie: this is bloomberg markets, i am vonnie quinn. this guy made a name for himself taking clients' money as a fund manager at fidelity. jesse joined to others as an
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investor -- natalie has joined: two others. they are looking at multiplayer videogame competitions with investors like magic johnson and many more. i spoke to him about the potential for this industry. >> if you look at the amount of money for 200, 300 million people playing eastport, $15 billion divided is $3 purposes and -- per participant. if you look at this fans, it is 10 times as much. we may not get to that level, but there is multiples of upside in terms of generating revenue in the industry. vonnie: as owner of the interested in derek jeter's, i asked what
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sports violations are like. think about the uniqueness of sport. i talked about it two ways. the ability to bring people together and warm a community -- form a community. look at the championship. the community formed in that stadium and beyond, the predators, the nhl, to over a huge city. that was going on in nashville the last month. sports can do that and create this. there are no other entertainment or otherwise that can bring people together as a community to be involved and passionate for something. and in terms of showing sports pcs, or mobile phones or content, there is no you have to watch live. there is nothing like sports. of the fansqueness and media experience i don't think it is undervalued. vonnie: what are the mall -- the
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marlins worth if it is not enough? >> i am not saying they are valued correctly. i'm talking about sports in general. ,onnie: we have seen a selloff people working watching this closely. you have other ventures going on. tampa, an incubator in and congratulations on that -- is the nasdaq showing signs of overvaluation? do we need to see a correction in tech stocks? >> short or i can't predict that. i look at the world economy right now. innovation, technology, artificial intelligence, virtual reality, these are the leadership parts of the world economy over the next 10 or 20 years. if you go back to the next four -- 40 years in the 1970's it was commodities are in the 1980's
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was consumer goods. 1990's was technology. 2000 was commodities and emerging markets. now it is technology. so frankly valuations are acceptable given the growth prospects of the industry, but we have a number of years i had with technology leading the world and the stock market. vonnie: so this would be an opportunity to nibble at apple and/or job -- i can't fit it will be a 15% correction. but investors with long-term horizons, valuations throughout the tech field, they are reasonable. vonnie: i have to ask you for the hockey fans watching, and i know you are the owner, so you don't want to get involved in decision-making, but we have the expansion draft at the moment and lightning players might be attractive to some other teams.
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what do you as happening? -- anticipate happening? >> our general manager will figure that out. if there is something i have with it is not meddling the hockey department. we have got everybody working for them does a great job. no doubt they will figure it out. vonnie: you can give us an idea of what you make of the las vegas stars and how things will change as a result of las vegas having a team. vonnie: i think it will be great -- >> it will be great. a lot of fans and owners checking when their teams are playing las vegas and making reservations right now. las vegas is a big media market. it has got plenty of income, no professional sports teams. hockey is coming in. it will be great, football after that. it will be a strong market. vonnie: that was the tampa bay lightning owner and east sports
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investor jeff. has been convicted in a fraud trial. they looked at his offices in new york. he was conspiring to defraud customers by lying to what they purchased or sold bonds to bruised profits. the other trader has been cleared. flash,r the business looking at biggest stories in the news right now. 2% of its cutting workforce to focus on key markets and speed up production. -- halve to have the the production cycle time. they are focusing on 12 cities including new york, london, and tokyo which is 80% of rent growth through 2020. the aclu has filed complaints
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with the eeoc, accusing j.p. morgan chase of discriminating against fathers. a man was denied 16 weeks of parental leave because he was not considered the primary caregiver. they embrace this last year, giving them two weeks if not primary. they consider biological mothers to be the default primary caregiver. more than 10% of new jobs in the u.k. are in technology. indeed,ording to the which said expertise in ai and -- plans are primary brexit primary drivers. brexit has raised concerns on this. several tech companies will state >>, but they show jobs nesting available talent has been a struggle. that is the business flash
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update. we have breaking news now. the senate passes a bill to strengthen sanctions against russia and iran. that will go to the house. the senate passing a bill to strengthen sanctions on russia and iran. coming up, transition of power and energy consumption. details on how we should be looking at renewable energy resources and the fight we should be taking. this is bloomberg. ♪
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♪ this is bloomberg markets. i am vonnie quinn. outlook, it energy paints the picture of pretty dramatic changes in how we get energy over the next 20 years. joining us is the head of america lead author of the report.
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thank you to your wonderful work. showsl up a graphic that how changed we have become when it comes to consumption of energy. for example, fossil fuels have come down a little bit. solar and wind have grown exponentially. >> so far we have seen enormous growth, the last three or four years with wind and solar. the costs have come down, making parts ofompetitive in the world. some parts the cheapest source others, but and many not yet, but we are getting there. vonnie: what does this mean for the consumer? when the price of oil and natural gas come down, seeing solar has collapsed with competition from china, but people say things like cold are never going to galway -- coal will never go away. anit is a good time to be
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energy producer. wholesale has come down. in the retail, there is motion as well. gasoline is down. we have seen households ending on energy the best in 40 or 50 years. we have seen costs come down for sure at the same time we have seen the u.s. economy d carbonized. vonnie: let's show this similar graph that shows consumption. we have seen it come down. does this mean there is less incentive to be clean? >> i don't think so. consumers are driving the change , but also industry. looking at the u.s., we have to swap out interesting generations. it will be whatever the lowest source is. when you look globally at other markets going correctly -- correctly -- quickly, they will go quickly.
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vonnie: what about the idea of the u.s. is pulling out of the paris climate accord codeword what does it mean for new energy? >> charlie: in the short run -- >> in the short run not much at all. this was a bunch of collective promises different governments made to do things. the question is, what followthrough do we see in terms of domestic policies? we don't think they are directly joined. in the long-term come of the u.s. has a negative signal about how it wants to produce fake. it looks to essentially out data the rest of the world. vonnie: the energy finance editor. this is bloomberg. ♪
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. .
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david: from bloomberg world headquarters in new york, i'm david gura. here are the top stories we are the top stories we're watching at this hour. special counsel robert mueller
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is reportedly expanding his investigation to look into whether president donald trump obstructed justice. the treasury secretary steve mnuchin is encouraging his colleagues to subject china to greater scrutiny in the u.s. and we will look at president trump's foreign policy and how it is ending geopolitics. special counsel robert mueller is said to be expanding the scope of his inquiry into -- i looking into whether or not donald trump tried to slow it into michael flynn. give me the latest on this other report. bloomberg news adding over the course of the evening hours -- with the


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