tv Bloomberg Markets Americas Bloomberg June 19, 2017 2:00pm-3:31pm EDT
scarlet: we are live in world headquarters in new york over the next hour. here other stories we're covering on the alert. politics, tech week overshadowed by the drama around the russia probe. his lawyer claims he is not under investigation, contradicting the trump claims that the probe is a witchhunt. of leaving's test the brexit gens. she is being pressured to soften her stance today. across markets, blue apron, grand public debut. aiming for a market value of as much as $3.2 billion in the initial public offering, which could make it one of the top 10 ipos of the year. whichget to the markets,
close in about two hours, to get a check on what's leading equity. julie holland technology down, now it's leading on the way up. mitigating earlier advance, but nonetheless really climbing today, bouncing back from the kleins that we had seen as of late for tech stocks. that said, the dow and the s&p are making new records today. not the nasdaq, it still has too far to climb back. but something interesting has been going on over the past week as technology has been battered and come back. chart look at the one we of a five day return you are seeing financials and tech neck and neck after first being pulled back. it has been bouncing quite a bit. if you look at the banks today, we have got tech names, like apple and facebook, going higher , but also these guys contributing quite a bit to the gains we are seeing in stocks
the big regional banks trading higher today, it has to do with what's going on in the market area the 10 year yield is higher in today's session, which has been fueling the gains. the dollar has also been gaining some steam as the vix has been falling back. pushing the yield higher by three basis points. perhaps counterintuitive at this point, the yield is below where it was when the fed started raising rates. take a look at the bloomberg, this is one of my favorite charts today. the yellow line shows where the yields were when the fed first raised rates in december of 2015. yields again, despite the rise today, are still below where they were at that point in time. ladies? much, julie. her a in politics, is president donald trump under investigation for
instruction of justice or not? on friday he tweeted that he was the subject of a witchhunt over the weekend members of his legal team said that it wasn't true. >> the president is not under investigation by special counsel. the tweet from the president was in response to the five anonymous sources that were reportedly leaking information to the washington post about a potential investigation of the president. as james comey said in his testimony, the president has not been and is not under investigation. joining us with more, kevin cirilli. a little bit of confusion there. [laughter] kevin: a lot of confusion. is he or isn't he? : can we assume he isn't? listen to the legal counsel? kevin: listen to the legal counsel. ice -- i just spoke with a
political advisor to president trump. i said -- what's the deal? what the source told me was that there wasn't enough characters in the tweets. this is the reason i just got from the phone. there were not enough characters in the tweet because of their was, the president would have alluded to or linked to "the washington post" story, but either way i can tell you that this type of back-and-forth and miscommunication between the president's twitter account, communication staff, and the folks surrounding the white house, there is a lot of frustration that a lot of this is not forming a cohesive strategy in combating what they feel are also allegations, so they are not helping themselves when they are not on the same page. that frustration has quite candidly become palpable. also not helping matters, the fact that the president tweets at all. they could get in the way of any
strategies they are pursuing. has there been traction by the legal team and getting him to curb some of the tweeting? no.n: just look at friday's tweets and you will see. people who are fans of his twitter feel that this is a direct way for him to connect with voters. there is also increasing skepticism amongst republicans on capitol hill who feel that this is really just a trend of , of content that could be held against him, when the president made such a big deal about not being under investigation. you had intelligence committee officials testifying under oath, saying that he's not, then you had his own words coming back in tweets to hurt him. either way, this conversation we are focusing on is not what the white house wants to be focusing on and not what the president wants to use his bully part -- bully pulpit on, like the tech
summit. with ceos arriving as we speak to get underway for what they hope is going to be a successful meeting arranged by jared kushner on revitalizing economic growth in the forum. i'm glad you took us to the tech council. it feels like something is always overshadowing deal -- actual agenda of the government here. who is going? more importantly, who isn't going? and i think the white house agenda will be pretty different from the agenda of these ceos and the things they want to discuss. just a little bit. jared kushner spoke recently saying that he hoped it would newash the potential of economic growth. sean spicer, still speaking moments ago to reporters, saying that the current system is "outdated" and inefficient, referring to the government's
use of technology. they are hoping to use the meeting today and juxtapose it with mick mulvaney, the management and budget director, who has really launch what he is " bying a "war on weight hoping to streamline and use new technology to bolster efficiency within the government. in terms of who is there, microsoft, google, amazon. who is not there? elon musk, who left the small business council a few weeks ago following frustrations. scarlet: we remember that tweet where he made the announcement he -- that he was leaving the council. thank you so much, kevin cirilli. is headed toeo detroit for their gateway conference, where thousands of business owners will be attending the event to learn how to succeed in china. jack ma is following up on a promise he made to the president to create a million jobs.
serena, started it with what to gateway conference is and how it goes about fulfilling a promise. >> i was an enormously lofty goal, saying that he would create one million jobs in the u.s.. the midwestern conference is a way to woo these small and medium prize -- sized enterprises to sell to the have a billion shoppers on the website. a bunch of sellers already on the platform to explain how it actually works. there's a lot of challenges involved that may or may not get into the details, but in a story i spoke to a few who were already on the platform and said that there is a serious risk or conversation you need to have. like what? to start, how does this compare to those smaller businesses and they want to go to ebay, or amazon, or example? that this isaid
not just like listing on amazon or ebay, because amazon owns the entire the just go process. on the other hand, alibaba is just the form, just a marketplace, meaning that these sellers need to take it upon themselves to find third-party services to do everything from translation to regulation, logistics and delivery. there's a lot involved here. sounds at a whole new business rather than just tacking on a distribution channel. what other businesses has this created? one small business in the midwest can't do this on its own. selina: definitely. and in within china it has spawned these third-party that do end to end services from i.t. infrastructure marketing distribution for these companies . part of this is to help these small sellers find these third-party logistics and international sellers to make it possible. the issue is that these
third-party services cost money and they still have to pay out front. so nothing is free here. in terms ofted that the chinese market, going forward easily going to of that business if they want to grow internationally. how is he going to make this easier? are the companies going on there from international basis actually treated the same as chinese companies? i'm asking you lost -- lots of questions here. and how will jack ma be held responsible for these jobs he wants to create? selina: it's all about how you count it. the goal is that because of the added commerce, the u.s. seller will have to hire at least one person. not to mention the indirect jobs created by logistics and warehouses. in terms of making it easier, it's a combo process.
it will be a tough word and. logistics in china is decompensated, but it looks like they are going to be doing some partnerships with ups to make it easier for sellers. they also might end up building some of their own warehouses and logistics as well to try to lessen the burden. scarlet: great to get your insight there. of 1.2magine the luer billion customers. scarlet: of course, but then you wonder to what extent is there a demand for small brands that are not recognized. how do people even get acquainted? julia: and learning mandarin as well, i think. let's check on the bloomberg first word news this afternoon jessica sanders. brussels kicked off talks to come to terms on the brexit divorce. >> today marks the start of a journey for the united kingdom
and the european union. there is a long way to go, but we are off to a promising start. we have taken the first critical steps together. now we have a shared responsibility to deliver a quick program. jessica: davis said that the priority is to reassure citizens in the eu and people from the eu who are in britain. a third terrorist incident in london in three months. one man died and 10 were injured when a man drove into a route shortly after midnight. the prime minister condemned the attack. lisa go, there has been too much tolerance of extremism in our country over many years. meaning extremism of any kind, including islam a phobia. >> she said that the attacker was arrested and hospitalized. in france the president is
gearing up to reshuffle his cabinet after his centrist already pulled off a landslide in the parliamentary election. in a largely symbolic move required after a legislative election, the prime minister is expected to quickly resign in a new government will be named in the next few days. his party got an absolute majority in the national assembly. the supreme court has ruled that muslim men detained after the 9/11 attacks cannot sue top u.s. law enforcement officials. they sought damages against the former attorney general, john f croft, robert mueller, and james zigler. they were detained for months at a brutal -- oakland jail following the attacks. more than 120 countries, this is bloomberg. julia? julia: x-ray much, jessica. scarlet: -- thanks for a much, jessica. scarlet: coming up, we will get
♪ julia: it's not easy being a value investor in today's market .rea take -- market take bruce berkowitz for example. our bloomberg editor at large, erik schatzker, sat down with berkowitz and asked him about valuation and the flood of money going into etf. bruce: etf investing to an extent that it's a good idea, the idea being that you benefit
ivy growth in the u.s. economy and the u.s. economy improves, the market improves. etf goes up in value and there's a direct correlation. only -- and etf is only as good as the constituents within it and it doesn't take into account illogical extremes. there is a point at which it makes no sense to buy etf. the general markets are overvalued or highly capitalized etf's are overvalued. it does bother me that a lot of sort of blind decisions are in that thinking is being delegated to a sort of mathematical it asian that every thing should average out ok, but last time people got caught up in this they didn't lose all their money. it took 13, 14, 15 years to recover from not thinking about the valuation in what you are
buying. erik: are we at the point now where it doesn't make sense to buy etf? it doesn't make sense to me, but i'm not a growth investor or visionary. i'm the guy is looking to buy a dollar for $.50 and if i'm wrong , i will get my $.50 back. if i'm right i will do better than the dollar over time. erik: you are underperforming but hardly alone. why's it so difficult for active managers to hit benchmarks? the big problem as an investor in public securities is that people have to agree with you. in other words, i can be right, but until other people agree that i'm right, i'm going to look very wrong. what it takes for me to be right is for the companies i invest in to fix the problems that are
fixable. erik: but you are a value investor. there are lots of other active managers who are not how you investors, yet they are underperforming as well. it's like a disease. bruce: i don't know why. i must admit, i don't pay a lot of attention to other people. i try not to be biased. whatever's going on, whatever's doing well, i just go by the math. i basically follow the cash. i stick to that process and as long as i still think the value is there, i stay with the investment. is they what happens investment declines tremendously in value during my investment assess. eventually the problems and the and there resolved clouds disperse. people get a better look at the assets and liabilities within the company.
things work out well. at least that has been the case for 30 years. i'm curious, when you look at the must own stocks, amazon, apple, netflix, google, or some of the other highfliers, like tesla or nvidia, who do you see? companies that are priced for a very rosy future. it's a great rosy future, people will do well. but you know, a couple of problems and it's going to be difficult for investors to recover. scarlet: that was erik schatzker, speaking with bruce berkowitz. ahead, blue apron getting ready to deliver a u.s. ipo. how does it measure up to others? they have already delayed the initial public offering. we will discuss. ♪
♪ scarlet: this is "bloomberg markets." julia: competition in the food delivery space is heating up after amazon announced it was buying whole foods. blue apron, targeting at $3.2 billion valuation in the u.s. offering, the company hopes to salvage its shares for 50 to $70 apiece. joining me this morning is out -- eric granger, hot off the press with breaking news that were -- they were too in the likes. a person familiar with the deal tells me that management is tweaking its pitch. the company is starting a roadshow today after it set the terms. they have got 10 days into the deal prices and the things that they are pointing investors towards our differentiation
between what they do and what is redelivery is. boxeser, blue apron has of prepackaged recipe parts. all the ingredients are broken down for you in the right size. they are focusing on the differentiation and planning to increase how much they are talking about the potential of their total addressable market. right now they say they are only in 17%, 70 basis points of the u.s. addressable market. that they haves changed in their messaging or are refocusing their messaging on because of the big specter of what amazon holds foods means for the food delivery industry. reallything they are pushing themselves as a grocery delivery company. are they that or a technology company? >> the premium would put them in on a 12 month basis in evaluating a 12 times sales in line with amazon and alibaba. grocery companies are .3 times
the revenue. you can see the difference there. themselvessitioning as the new winner of wallet shares. people like to buy recipe boxes. the weston is, that market, is that actually a big enough is -- think to target? whole foods is such a competitor for what blue apron does. they both target the upper 10% of households in terms of income. your middle market doesn't want to spend $60 a box and potentially have food spoilage. it's increased competition with increased convenience is what whole foods brings to the table. when you have got the whole foods brand with the amazon supply chain, you've got to look at this and go -- why would i be buying into this? to go back to your point about if they are a grocery or a technology company? according to the fact that they
are doubling revenues but losing money? they would prefer to be considered a tech company. alex: exactly. and what they have been considered has in a big out of their spending. 70% of their operating expenses go to marketing. saying -- look at how easy and convenient this lifestyle is. whether or not it is, we will see whether or not investors decide to value it. julia: so exciting. alex with a scoop there. more to come. this is bloomberg.
soft commodities. cocoa, dropping more than 4%, extending its losing streak to four days on concerns of a supply glut and after futures sold below the 100 day moving average. shifting now to the metals space, gold has been selling off according to a one-month low. the weekend victory of president france, helping to ease political uncertainty. gold is also down after the last that will reserve rate increase. wti crude is down in a rocky trading session, currently up by 1%. this is as output in the u.s. has been rising, hurting the opec effort to get the supply glut under control. let's take a look at the positioning on oil. position inhort white once again rising since the start of this month. that is as crude oil futures continued to decline, down about
14% in june. now,? julia: joining us gina davis, the managing editor for energy. we knew that the hedge funds were increasingly concerned in the price of oil, but that's something else, spilling into gasoline. and this was meant to be the high demand month. >> right. trips andlong summer for the first time since we have an looking at record data they are actually bearish on gasoline in june, which is really unheard of. and if we get another month of of baddata or a week data this week in terms of entries, the concern that we could slip low $40 per barrel. scarlet: starting to close out the month, what everyone is really waiting for is the signs of demand uptake and signs that the stock stockpiles are getting drawn down. there will be a lot of attention
paid to the report on wednesday morning. glad the you bring up seasonality. oil obviously follows a seasonality pattern. i have the chart of wti over the last four years. the light is where we are this year and this is the previous three years. there has been a pattern but in late 2014 we saw crude oil tumble and since then the pattern has been broken. what does the demand picture look like? everyone talks about supply all the time and how it drives so much of the pricing under pressure, but the demand is not quite picked up the way it has supposed to, has it? >> at what we have seen in the u.s. is very sluggish demand. people have been looking for years to outside places like china where they thought this -- extra shale oil would end up. so much of what's happening is
the focus on the developed markets and in the u.s. the sluggishness year has really been hindering the ability to soak up the excess oil. >> people are losing confidence in what opec is saying because .he data is not backing it up we were talking about this habit of saying that we are still in but cautiousness is increasing. are we potentially heading to a new lower range of this point? is it too early to say? >> it might be too early to say. it will be interesting to hear what comes out of opec this year -- this week and if there is talk of potentially changing the deal that they just presented and doing something more extensive to counteract the lingering stockpile they have. scarlet: all right, tina davis, keep us of -- posted on those changing dynamics in oil area if we stay with commodities, the white house is zeroing in on steel imports. wilbur ross spoke to us about the challenges that steel
producers face. >> it's more obligated and just tariffs. under 232 there is also the potential for tariff rate photos -- quotas. all types of potential that could be brought to bear. the original cases being ineffective, the wto has rules that are so precise, you have to identify very clearly the product and very clearly the place of origin. there are quite a few serial numbers out there. to find one all i have to do is try to ship it through another country and i have a the duty. or send them to another country for processing, however trivial the processing might the.
or give it a little further processing in my own country help, but trade cases they have not been able to cure the systemic problem. that's why there are 37 different countries involved in the dumping of steel from one country to another, making that second country the excess capacity and the country they dump it into continues the saga. steele ton of dumped probably results in three or four tons of dislocation in different markets throughout the world. 232 could see the potential for a broader solution that is less geography dependent and less individual product dependent. julia: that was wilbur ross on bloomberg today. tomorrow david gura will interview steve mnuchin, who
will be speaking at the select usa event. the interviews at 7:30 a.m. wall street time and we will bring it to you here and on the radio. let's check on the first word reviews this afternoon with jessica. jessica: the supreme court has agreed to take m janet -- gerrymandering. democrats in wisconsin have challenged the boundaries for state legislator districts. the courts said that they were drawn unfairly to minimize the influence of democratic voters. three days after president trump signs the new cuba policy, the cuban foreign ministers rejected the presidents rules, saying that cuba will never negotiate under pressure or threat, saying that americans who received asylum in cuba would not he returned to the u.s.. angela merkel says that the u.s. is the important part of the group of 20 summit, which are
, and ithost next month would be welcome. she spoke at an event and reviewed -- renewed her criticism of the decision by president trump to pull the u.s. out of the paris climate accords. they have condemned germany for their export german economy. officials declare security forces have been killed all the extremists responsible for a terrorist attack in a popular resort. taking 30 people hostage in a west african nation, most escaped but two people were killed. there has been no claim of responsibility. global news 24 hours a day, 2400 journalists and analysts in 120 countries. julia? erik: brexit negotiate -- julia: brexit negotiations began in brussels. negotiations, as theresa may faces a test of leadership. more on what to face, next. ♪
>> this is "bloomberg markets." scarlet: let's get a check on whereby a workers stand with julie hyman. julie: up by 46% today, a study shows that they are developing a pill to delay the progression of a vance ovarian cancer. apparently it took twice as long for the patients to start growing again with those on it -- as with those of a placebo. shares are obviously spiking on that. we are seeing generally relatively strong performance from biogen after it was
upgraded to neutral from cell, saying that there was an improved risk reward profile here. increasepointing to probabilities of success from experimental alzheimer's treatments. with the rest of the sector. we have been watching the medicaid insurers today. that is because of what is going on in washington with senate democrats landing to object to this new version of the health care legislation, the hca. if you look at the other health-care insurers, here they are. health plans trading higher, bloomberg intelligence saying that in general we have seen valuations for these arise 12% on average since the election, as there have been concerns about the medicaid expansion repeal, that it had a higher
probability than it did at this point. so, these stocks are actually performed better. julia? theresa may's test of leadership began in brussels. david davis sounded optimistic about the process. >> today marks the start of a journey for the united kingdom and european union. there is a long way to go, but we are off to a promising start. we have taken the first critical steps together. now we have a shared responsibility to deliver quick and substantial unrest. julia: his optimism comes as prime minister may faces pressure to stop the stance on brexit. joining us now is caroline hyde. you would expect him to put a they stillon it, but haven't organized any kind of power-sharing agreement and voices within the party are
still trying to force her into a harder brexit. sounds like they are going into this with backs against the wall. >> everything is tough when you look at the internal politics of the united kingdom. you are right, though, they are tearing apart inside the conservative party at the moment because while the leader eroded her own power by using the majority she had the or to all a snap election and of course her popularity has slid even further , facing criticism in what has been haggling around a dramatically devastating fire in western london the claim 79 lives. all of this with the building distaste for her in the party ranks. really pulling apart what the conservative party has at its core, a division about how they go into wrecks it talks. they want access to the single market.
-- david davis, the hardliner, wants to continue to push forward for hard brexit. making statements earlier today, sticking to the customs union. we know that there have been disagreements within the heart of the conservative party but they are trying to put a brave face on it. scarlet: caroline, what can you tell us about the amount, the financial settlement they would need to make? pretty big number seven thrown around. move the eu,n made that is something that david davis has ardently said he would .ot looking to be paying back that would just be installed on injury as far as the uk's
population that voted for the exit for the eu, because they felt over the years that too much had been contributed to the european union from the u.k. that's a key dividing line. that's a real pressure point. so, too, is whether we would have access to the single market and how it might look going forward. really, the divisions are start. it's notable, really, the that at the moment we are hearing who said inbarnier, the statement after the press conference that he was not in the mood for making any sort of .oncessions interestingly, the consequences of the decision are substantial. these words were really echoed by an cb member who we spoke to earlier. have a listen. >> a think it's very important. -- unfortunate.
not good for the u.k. or the euro. impact issay that the much more important, i think, for the u.k. than for the area. >> trade still seems to be at the heart of it. you definitely heard from the ecb members that the u.k. has the most to lose. i want to stress that there were try andtions made to show that they are indeed friends. notably, david davis from the u.k. and the eu came up together .n the 90's they are keen hikers, exchanging gifts. with what i can call the british putting that involves meringue and strawberries. seems that they were trying to talk about strawberries as the fast positives.
early deals that they were uttering with 4.5 million people who don't know their rights at the moment, living in either the eu or the u.k., members of the other country, they need to know what their employment and residency looks like. julia: those of the negotiating points and that's right. georged to ask you about soros's comment. caroline hyde, of course there. for more on the currency angle, we have got the founder of [indiscernible] data. meantime, time for a bloomberg is this flash. considering a jaguar land rover ipo, according to people with knowledge of the matter. executives have really been on ang meetings
international stock exchange. they acquired jaguar from ford for $2.4 billion and they seven timesnue over, weighing in london and new york as a listing venues. the paris air show got the first look at a new jet in four years from boeing. it's an upgrade of the 737 and it will compete with the airbus. in the meantime, it received 300 pledges to buy the plane. an excess of 240 orders from new carriers hit the workforce in the carrier is confident that the new 7:37 will prevent defections from rival, airbus. shares of snap trading higher today according to "the wall street journal or, -- journal." includes advertising commitments from hbo, warner bros., and turner network.
the addition of hedge fund billionaire john paulson helped the company's turnaround plan? they are the largest shareholder since bill ackman bailout in march. bailing out 94%, almost 95% since hitting a peak in august of .15. joining us now is jeff jonas, of gamco investors. they own more than 50,000 shares in valiant and have $40,000 under management. you have got a lot of stake
your. addition here really do? does it move the needle? >> you drinks some strong financial discipline with asset sales and acquisition licensing that they might do. helping them to further act was -- further with the capital structure. i think they already have the right strategy that he seems to do with and they really are making the best of a bad situation. >> why now? why joined the board now if he is not satisfied with the progress of the company? >> clearly there's an opening on the board. he has committed in the medium to long-term here and it is just an opportunity for him to help restructure the company. >> speaking of, a lot has been made at the debt load that the company has. i'm looking at the bloomberg .ere, gdi as for valiant what you will see here is that this year there is some debt
that is due, mainly the think bar terminal that's outstanding, but starting in 20 20th gets ugly because that is where you start to see the bottom principle being do and it continues. what kind of new ideas are there when it comes to this debt restructuring at valiant? or is it a matter of just tuning to sell off assets and cash? >> i think the 2022 is the first significant maturity they have faced, which buys them a lot of time. it's a lot of time to give a couple of billion dollars investors that are pending that should close this year. they have plenty of time not to try to implement the plan and turn things around. they have bought themselves enough time, but to the chain strategy? >> i think you've continue to invest in new products and new launches there. you try to stabilize gastrointestinal business and
the dermatology business and i think you milk some of the brands and the generic drugs as best you can for cash. i don't see any great changes to that portfolio or strategy, though. >> every look at some of their past investments, bloomberg estimates that only one in nine of the biggest health care positions is above water. i get the point that you are making about the understanding, the business know-how at the board, but when you look at it previously regarding investor companies, he doesn't have a great track record. does that concern you? yes, his record has that a bit mixed. a lot of that has been on the mergers side, so he got involved in those deals with how oregon trying to be bought by pfizer. i think that those are really some of the ones that turned on them. julia: the kind of go back to the point we were talking about
with the seats on the board recently, how concerned are you that that is perhaps what he sees from the inside as a board member of the company, making him decide to go the way of this one here and pull the plug? are you concerned about that? >> i think that john paulson has had a longer-term view. he's also not as high profile as lachman, so i don't think he gets as much criticism or negative press. i think he can stick around for the medium to long-term here. >> john paulson joining the board is another big shareholder joining the board. the company already has robert hill as a member of the board. what do these two long-term investors do for a company that is still struggling to find its seat? >> the company knows that they have a lot of unhappy investors and in's touche and's. i'm glad that they are openly investing in having these people
on the board, but it's a matter of just letting it out, taking the time to generate the cash and stabilize the business and paying down debt over many years. you -- scarlet: what are you doing with your position? lexus around 50,000 shares. they are going bankrupt, i think they will pay it down over time. i'm not sure exactly how much equity value there is. we have it in a small position that may on a -- mayor may not pay off down the road. julia: it's worth saying onto for the call option. jeff, brilliant. plenty more to come on the show. you are watching bloomberg. ♪
julia: we are live and bloomberg world headquarters over the next hour. here are the top stories we are covering on the bloomberg and around the world. in markets they released the u.s. -- one of the toughest components of the stress test. getting payout by up to $30 billion. incorporate news -- in corporate news -- the ceo spoke with bloomberg's rod he -- with bloomberg why he felt threatened. and theresa may is facing pressure at the start of brexit negotiations. what is at stake for the pound. at the close of trading let's get a check on markets with julie hyman. e: the nasdaq is also
bouncing although its gain is smaller than it was earlier in the day. at one point nasdaq was seeing its biggest one-day percentage gain since the election reaction we saw, the upward reaction. it is interesting here. it just goes to show how it was up at one point during the day. we have seen some decoupling in the market over the past week. , theis the s&p in purple nasdaq in yellow. we have seen a performance of the nasdaq that has widened out. although recently it has come back together. on the bottom we have a correlation the between the two. in the correlation has been falling most notably when we saw the sharp selloff in the nasdaq. 8.06 is still a hike correlation. nonetheless it has been trending downward here. they have been moving in tandem less frequently. is on the move,
the nasdaq 100 also at one point was up the most it has been since the election. right now it is up the most since april 24. still in a little while and the big gains, apple, alphabet, and microsoft. still a bounce back in many of these large cap shares that have contributed so much to the gains this year and contribute so much to the losses in the nasdaq over the past week or so. 500, the best and worst performers each have to do with an acquisition. both of them are making acquisitions, but they have different reactions. which ising a company, private, for $1.3 billion. this gives it a foothold in diagnostic. a position -- out for a different situation there. buying --t is
the shares down 8.6%. natural gas is also trending lower today. scarlet: figures to much julie hyman. let's move onto the banks. the 34 largest u.s. banks are more likely to pass this year's federal stress test, which would be the eighth annual stress test. what this would mean if shareholders could expect more cash return in the form of dividends and share buybacks. we have bloomberg's human all have bloomberg's reporter. is this related to the trump administration taking over? to --e people gotten used have begun the hang of it after several years? >> the easing started before trump came into office. fed, the governor in charge of regulations said there are to do some things to
at least ease the pressure on the regional banks. this change we are seeing this year, some of the banks are exempt. this year maybe we are not going to see the numbers, but that's probably where we will see it going forward. julia: and we see the qualitative review, the toughest part as dead? still banks,are the biggest one that have to be part of the qualitative review. and the treasury secretary for mentioned that might be the case. it looks like it might be on the
way out, so the test might be easier. scarlet: up until recently, u.s. european operations were tested. how is that going to work? there is a little bit of a change here. yalman: one of the changes the fed did was to bring all the u.s. operations off the european banks and asian banks. if they are over a certain size into ones. consolidated group, a bank holding company just like the u.s. banks, and the bank holding companies are going to be tested big ones.at five the world bank be in that. it is their first time. they're being mocked tested this year, not real test. next year we may see if you -- cfu failures because of that --
failures because of that. they understand what the fed requires paid they have raised their capital levels. all the innerw workings of the stress test. to get back to what you are saying about capital deployment. use adjust that 85% of profit are going to be turned over the next four quarters, that compares to some 5% in the last four quarters. how does that compare to cash deployment? yalman: before the crisis, all cash was deployed. there was so little profit to build capital. banks were so undercapitalized. when people started the faulting on their mortgages, when all the weird mortgage security -- banks do not have capital.
before the crisis 100% was all the stupid it. all the money being made was given to shareholders. since the crisis there was such a big effort globally to improve capital levels that now we have bigger cushions. is -- 85% >> not every bank has gotten out of a crisis mode. likely to pass the stress test? >> it is one of the most highly capital banks in the u.s. area they have the scandal. -- in the u.s. they have the scandal. of --le years, thousands millions of accounts. management didn't know what was
going on. that was the part where the fed fails the bank. that's where a couple of analysts think it may fail. not because they don't have enough capital, just because this scandal shows maybe they always on top of what was going on in the bank. who is going to give us the biggest jumps in terms of payout? cities are one of the biggest underperformers in term of payout ratio. who is going to give the most cash and tens of increase over the next few quarters? intensive cash increase over the next few quarters? yalman: slowly they started inching up their dividends.
now analysts are expected in the next four quarters they will disturb more than 100% of their profit. that is possible because they built their capital cushion above the limits so they can use the previous earnings. bank of america is going to see a big jump in their returns. all the big banks and some of the regional banks, they are increasing their payout. >> to have a lot of room to make up for it. thank you so much. let's get a check of the bloomberg first word news. of people areeds taking to the streets of london, marching in honor of the victims of that massive building higher. the march comes as the death
toll was raised to 79. it is now the deadliest fire. theresaprime minister may visited the london mosque that was the scene of a deadly terror attack hit a van ran into a crowd of roman donald worshipers, killing one person and injuring 10 more. the suspected driver is under arrest. scene in paris when a car carrying gas canisters caught fire after ramming a police van. the french interior minister says the driver may be debt paid he also says the driver appears to have acted deliberately. france's anti-terrorism prosecutor -- and the u.s. supreme court has struck down a law that bans sex offenders from social media websites. law violatesa first amendment rights.
many states have restrictions regarding internet suit -- regarding internet usage by sex offenders. powered by 2700 journalists and analysts and more than 120 countries. this is bloomberg. julia: we will head to the paris where the gulf sanctions against qatar are impacting business. coming up at 5 p.m. new york time, an exclusive interview with facebook's chief operating officer. from new york, this is bloomberg.
julia: now time for the bloomberg business flash, a look at the biggest business stories in the news right now. elizabeth warren urged the federal reserve to remove 12 wells fargo board directors. when directors held posts the bank allegedly set of millions a fake customer accounts pay lauren said the board did nothing to stop the rampant misconduct. over 2 million unauthorized accounts were created between and 2015.tween 2011 the federal trade commission is challenging the proposed merger between -- the ftc says the combined company -- and the merger would deprive customers of direct competition between the two companies. it is game back on for atari, the iconic company known for
iconic titles like pong is making a video game concert for the first time in more than 20 years. launched its first consul, being00 in 1977, before dominated by nintendo and sega. the file for a groep see in 2013, emerging as a company with a mobile and online casino game focus. that is your business flash update. scarlet: challenging the largest single aisle -- the competition doesn't faze him in the least. >> we haven't made a market share right now. -- we have an 80% market share right now. is at least 10 passengers more.
80 passengers more. >> is there anything more you will be able to do? ideas, were plenty of discuss it individually. >> with a moving -- >> an ongoing discussion, as you know. i think we will have hundreds. it speaks for itself. for our of the game customers, we are heavily engaged in that. >> despise looking at the middle of the market, do you think the 321 will compete in the middle of that market area?
teach thatbe able to people take some interesting -- be able to take some interesting roots there? >> we have competitive aircrafts there. onwards from next year we have the 330, a competitive beast. with a very state-of-the-art engine. very competitive. we feel good about the middle of the market. the development is certainly worrying. this is a temporary pick up over there. we will see.
>> that's going to be a tricky one. john a 6, 67. somehe will retire at point. but he prepared over the last couple of years. it will happen extremely smoothly. >> you guys are getting in the service business. because of the low oil prices and the result of which this cycle is going to start to roll over. going to go to the service side of the business. re: singling -- are you signaling by doing that?
>> what is really driving it as we discovered like many in the industry that data is key. years,vice in the coming we will be very much data-driven . i see that is very promising. it is more and more the data-driven services at we will go after. >> are you expecting a soft brexit now? >> our interest has not changed. new barriers come up. we like to keep it like that. i am optimistic.
i am optimistic that we can hopefully get something a la dress are concerned. scarlet: that was tom enders speaking with erik johnson. for the downside and energy stocks should oil prices continue to decline. and david gura will be interviewing treasury secretary steve mnuchin. that coming up in the 7:00 a.m. our eastern time, we will bring it to you on radio, -- on bloomberg tv and radio. this is bloomberg. ♪
the chiefning me is energy strategist at macro risk advisors. .e're talking oil and gasoline as well. what we saw last week was a build, the weekly build in inventories. this is perplexing. the beginning of summer driving season. what exactly do you think is going on? the two builds -- we have seen refine products as well. if you look at the net refinery utilize asian, we are currently running at 90 percent. basically we have seen refiners ramp starting to produce tremendous amount of gasoline and pass through the overhang into the product market. year demand is supposed be very strong.
u.s. over driving season is supposed be rationalizing the , which is what opec is trying to force to slow down production growth. it is the fly in the ointment that we are not seeing the pull through we saw in 2015 and 2016. for --a fine ointment this has been an obstacle continuing to move higher. certainly we saw that last week. the correlation between oil prices and the x o p. the correlation has strengthened after weakening. do you think oil will continue to go down and the xo p will go with it? akzo p is one of the higher beta trade etf's.
weighted etf. that means the constituents are but we want to get short xo p. gasoline prices will roll over and to august when the driving season starts. >> i have to leave it there, we are out of time. chief energy strategist at macro risk advisors. back to you. u.k. prime minister theresa may is already facing pressure at the start of brexit negotiations. talking it through with us from new york, this is bloomberg.
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