tv Bloomberg Markets Americas Bloomberg July 18, 2017 2:00pm-3:30pm EDT
markets." ♪ scarlet: we're live in bloomberg world headquarters. here's the top stories we're covering from around the world on the bloomberg. the health-care failure on capitol hill delivering a setback to president trump's agenda. mitch mcconnell proposal for a simple repeal obamacare lacks the number of votes to pass. mcconnell's that disputed the press just moments from now and we will bring you those remarks live and we begin. in markets, a role reversal, bank of america leading wall street estimates on trading well goldman sachs reported record incomes and lending and both disappointed on core businesses. in on theiel ways recent retail rut. why he's bucking the trend in keeping stores open despite
slowing traffic. u.s. markets close in two hours time, let's get check on where stocks are very we seem to be a standstill today. >> never record, we have some red on the dow and s&p 500, the nasdaq on pace for a potential record close read -- record close. the tech heavy nasdaq again on pace for a record close if it happens, the first since june 9. not so far from a potential all-time high. let's take a look at the chart on the bloomberg. of until just recently, tech have been pulling back. represents the money flows and the qqq q are associated with the nasdaq. green flows income red flows out. you see the tech fullback, -- the qqq to higher
. netflix shares are absolutely soaring on the day, it would take a look at the today chart of netflix, we see the stock is up in a huge way on a big subscriber beat. 15% over the last two days. they put up 5.2 million subscribers versus the estimate of 3.2 3 million. really knocking it out of the park. much of that from international growth, which is what investors want to see. this by the company put a relatively small profit, investors are cheering the fact that subscribers came in strong. let's end on health care with the latest version of the gop health care bill dead and the -- theood of the repeal potential repeal or straight repeal obamacare lacks the votes to happen. we have a weakness for insurers. told our team not so long ago this represents the
fact that if obamacare stays in place, it means that insurers fees stay in place. without seemingly stay in place, we've got some pretty decent declines for some of the big insurance companies. julia: thanks, abigail. investors were not familiar with that one. senate majority leader mitch mcconnell is expected to speak at any moment following a policy lunch. republicans are trying to pick up the pieces after their health care bill failed to pick up support. on as seeking a vote simple repeal, but that has been rejected. earlier today donald trump spoke about the senate setback. trump: we haven't had a victory on health care, and we are disappointed. i am very disappointed, because even as a civilian, for seven years i've been hearing about health care, and i've been hearing about repeal and replace. julia: kevin cirilli, chief washington correspondent, and here with me in the studio is
bloomberg executive editor craig gordon. kevin, i do know where to start. plan b is dead, does it look like it's got the vote behind it? of whichlost plant number we are our. -- i lost track of which number we are on. this is been a disaster for this of administration. president trump tang he is "disappointed," and mike pence was speaking across town to retailers, urging to congress to get the job done in a speech that was supposed to be about tax reform. committee finance meeting today to continue discussions about tax reform. no question that the senate majority leader, with whom we're awaiting comments, is there's pressure to turn the tide and
his inability to pass health care reform. i've spoken with conservative aids and members like senator rand paul who suggest now they feel the majority leader is more likely to negotiate with centrist democrats, people like senator joe manchin and heidi health care a fixed bill. but the timeline for that is now extending beyond the august recess, with hope inside the beltway that they will pivot to some type of tax cut. kevin, we will leave it there for a second. how likely is some kind of bipartisan backup plan? we got a real problem here now. they are -- craig: they are talking to the right democrats. it would be called conservative democrats in this town and they are open to making some kind of deal, i suppose. the democrats and republicans are so far apart on health care, it's really hard to picture a middle ground, was like west virginia where joe manchin is
from, obamacare is putting a lot of people in health care and it's really important bill to him. he's not going to cut a deal that leaves his residence high and dry. i don't see a lot of ground for compromise, but mitch mcconnell is a pretty good dealmaker. we will see what he can do. julia: we're talking about health care and remove onto the budget and the potential for tax care -- tax reform. does this lead to a face-saving vote on the gop? and then we move on to something else? talk about that, and whether or not the disarray we've seen in health care lead to the tax reform? winning is contagious and losing is contagious. once you start down this road where they barely squeeze it through the house, or not going to get it through the senate, they are talking about a vote that would fail. it's out of the budget. the are not giving trump spending cuts he wants and that is on the tax reform. republicans have said if they are not giving in the tax reform plan they want. mitch mcconnell wants to not
have a penny to the deficit and donald trump says he doesn't care. it's hard to imagine two people in the same party being farther apart. as a serious possibility to get into the end of this year with no major legislative a compliment for the dolphins presidency. that's real big. scarlet: it's out of the budget and then tax reform. both.yan talked about let's listen to what he said. speaker ryan: to set the change -- the stage for tax reform, we are working on a balanced budget. -- chairman black release a budget that balances are debt crisis. scarlet: kevin cirilli, the house moving ahead and trying to get contraction with dealing with the budget and tax reform. what is the appetite in congress for dealing with tax reform before the health care bill is resolved? kevin: i don't think they have a choice at this point. craig: several suggested to me that the idea of comprehensive tax reform is essentially dead.
kevin: if anything, they would be corporate tax cuts, which is very different than reform. beyond that, the speaker is suggesting that there is unity within the republican party and craig gordon just said that is just not the case. whether you are talking about the border adjustment tax or revenue neutrality -- and oh yeah, let's throw in a partial government shutdown in the fall, with ultraconservatives in the house of representatives, saying the only way they are going to get on board with steve mnuchin's push to raise the debt limit is two in fact cut defense spending. if they don't do that, if they don't offset those costs, we have a situation where a republican-controlled white house without a significant policy win, backed by a republican-controlled senate and a republican-controlled house could actually shut down the government. julia: that is quite a fascinating prospect here. , becausen this craig
the blowback for this? is it which mcconnell couldn't pull everybody together or lack of strategy from the administration? craig: fundamentally, donald trump takes the blame. you are seeing some grumbling about mitch mcconnell. it's unusual for a leader of his savvy to be on the floor and 10 of his members said no thanks. mitch mcconnell should have done his nose counting better. he dropped the ball here. julia: are they learning from these areas? we were just talking about the fact that they don't have something as far as tax reform is concerned. do you think they learned from the mistakes that were made? voices already getting in washington saying there's likely be the same level of secrecy about tax reform as there is with health care fail one and two. craig: we have a little bit of evidence that the white house is taking this more seriously and doing things that a white house would normally do.
we know sean spicer is working behind the scenes to try and set up groups lobbying ways for people to say we support this. kind of republican dogma. it's an easier thing for republicans to get around. have a little bit of a sense they are learning. the white house with a their learning, but for put me in the wait-and-see camp. the buck stops here, and i'll probably blamed for failing obamacare. -- donald trump will be blamed for failing on obamacare. julia: he tweeted if we could , hislet obamacare fail point was they won't take responsibility, the gop want the responsibility -- won't take responsibility, it will be other people. with his failure of obamacare in the stage look like? kevin: if you go on the bloomberg and look at the poll in which less than 30% of americans gave the president approval rating for his handling of health care -- even more
dismal than his 40% approval rating. if you look at exactly how bleak the support was behind the health care proposal put forth by the senate majority leaders office -- there's a lack of political capital. when you look at how this could fail, when you look at states int president trump won, particular, rural communities and how those exchanges are being impacted with insurance -- with folks leaving the market of the obamacare exchanges and access and premiums skyrocketing -- this is really going to activate both grassroots of both political parties. the question becomes whether or not someone like senator joe manchin can rally the former governors who have since become senators to begin to craft some type of bipartisan alternative. it's not going to me a massive vote -- it's not going to be a healthl overhaul of the care system, it will be a fix it type of bill.
but there is an opportunity for some type of bipartisanship that the white house could credit claim on, but is not going to be a dramatic overhaul of the system. privately behind the scenes, i can tell you the conservative es, are conceding that point. senator likely, they are giving up their political capital because they are cedeing it's a centrist democrats. julia: you mentioned the joe manchin. scarlet: craig, i wonder what have the joe manchin's and other conservative democrats is that in terms of what they are willing to entertain my comes a bipartisan health care reform? a lot of it is based on increasing funding for medicaid, which is how obamacare gets paid for. fairly poor states -- west virginia, heidi heitkamp out of north dakota. these are places where a lot of people are on this program and
to get it through medicaid and medicaid subsidies and payments. the original bill and revised bill were fairly stingy unmedicated. mitch mcconnell have $200 billion he could throw into the kitty. there is the money to play with and that could be enough to pick off a vote here and there, to tell some people that in this state, it will be enough money in the medicaid coffers to support health care for the citizens. that is what i do think the senators are looking for. julia: how much discussion and criticism are you hearing? is there a finger-pointing? a lot of people that expended political capital at this point. is there increasing reluctance to expand further political capital on this president, a respective of what we are talking about here? craig is concerned that nothing gets done this year now. kevin: i can't even put it into words the amount of pressure on hearing behind the scenes. weeks,ed about this for about the latest developments in
the intrigue stories with the russian investigation. how injuryexample of does impact policy, because as a result of the narrative, so to speak, here in washington, people outside the beltway will roll their eyes at that term. the narrative is dictated by these investigations, which are realreal and very questions that have to be answered, but also by this palace intrigue stories, when the president is using the bully pulpit or his twitter account to continue to hammer it journalists or other situations. a deal making, which is what he campaigned on what he would do. that sense of frustration amongst republicans here in the senate, as well as a couple of weeks ago when they were trying to get it out of the house of representatives, is very much dominating a lot of the conversation, both when congress is out of session and in the halls of congress. julia: it makes total sense. kevin cirilli, and thanks to
scarlet: this is "bloomberg markets," i'm scarlet fu. retail in the u.s. facing a watershed moment as e-commerce disrupt traditional brick-and-mortar. almost 9000 stores set to close, but cold is talking the trend -- kohls is bucking the trend. keeping stores opened run their reach. we spoke with kevin manziel. --mansell.
>> we will occasionally close stores. maybe lease obligation change and we close the store. i don't want to give the impression that we never close a store, but more generally, i think the fact that we leverage ,ur stores for on the channel or fulfill out of our stores customers online orders, we think that stores are really, really important. across a large platform the country, its free will dispersed, so we are represented everywhere. believe in the future of stores, and i think if customers move even more to a buy it now and get it now mentality, and they are moving more that way, stores are naturally going to be more important, not less important. even this year, we are up to about 25% of the online orders
are fulfilled out of our stores. julia: you think that will be enough to counter falling traffic, declining same-store sales as you look forward over the next few years. >> combined with other strategies -- i think i'll longer-term basis, we don't really see traffic declines consistently over time. there are strategies we have put in place to start to moderate that trend, but generally we are no different than other brick-and-mortar retailers. we are exposed to the growth of online, that has resulted in less traffic into our stores. i think they are generally, the combination of leveraging existing stores and the fact that we are capable, because of a strong balance sheet, to invest in the stores, makes the store experience better. there was a time, three or four years ago, there were a lot of pundits who said rick and mortar retail is dead -- brick-and-mortar retail is dead.
that clearly is not going to happen, and more and more, the future is going to be omni channel future that people decide how they need to buy, buy online and ship it to me, or pick it up, or go into the store. hit 45% of all retail sales in the next 10 years and you a strong first quarter at 13%. we did see walmart online sales were over 60%. how are you staying competitive when it comes to online? >> there are multiple layers of answer to that question. it's a good question, because online growth will continue. it's going to continue to accelerate. relative to the walmart 60% growth, they acquired another big business. we are organic, growth is coming from our own business. we expect 15% to 20% growth for the for seeable future.
and the way we compete, we are back to what makes kohl's different -- we have a really well-capitalized company and a great balance sheet. in online effectively ni channel world, you have to invest. >> is amazon one of your name -- or main competitors? >> i would say they've been our number one competitor for the past three or four years. earlier on in categories like home, more recently progressively growing in apparel. but we look at it as no different then another competitor. they are a threat to our share. us is to be win for channel in class omni retailer out there.
that is not something they have. being able to create a seamless experience between online kohl's and the physical kohl's is i think our pastor success. >> amazon also wants to be physical, they are buying an opening brick-and-mortar stores. are you really concerned that they could come after your omni channel approach? >> to be honest with you, a year ago, there were lots of pundits who talked about the death of physical retail. i think the more recent acquisition by amazon of the whole food business really tells you there's original retailer who has realized if we're going to continue to grow and be competing effectively, we have to have a physical presence. the positive side of that is we already have that, and we are leveraging that. the negative side is is going to get increasingly competitive. there is also been massive store closures and that's just region that doesn't exist anymore.
>> let's talk about the u.s. economy. we run a 16 year low in unemployment. how is that putting pressure on kohl's for hiring in wages? really about wages. we are competing with other companies, retailers included, but fulfillment companies, for the worker. as a result, we are seeing steady increases in average hourly wages. i would say over the course of the last two or three years, the average hourly wage in the stores has gone up in the range of 5% to 9%. we see that continue and that will be continued pressure on a higher average hourly ways -- hourly wage. you are competing for jobs. to a number of ceos and a number of them have told us how frustrated they are with washington.
there has been a number of campaign promises that were made at the end of last year that they haven't seen for phil. his effort -- haven't seen for filled. is that the frustration you would have? >> we are more focused on our business. the area that has gotten the most attention from our standpoint has been the dialogue and discussion around tax reform, in particular one aspect that has been floated is the idea of the border tax. we've taken a strong position on that, and it seems to me pretty simple -- it's just a foolish idea. if you think about this at a high level, retailer is one of the largest employment sectors in the entire economy. and raising prices for the goods retailers say sell through border tax is going to lower demand. and the response from retailers is going to be, naturally, to make changes and cuts in their
business, and i think employment will be affected. manziel that was kevin ll speaking with emma chandra. julia: the bloomberg business kerleythe city's mental: -- will voluntarily recall visa cards. they reassure owners concerns by aboutring the government emissions. the recall is going to cost $255 million. investors are switching out hedge funds inequities in favor of real estate. of their portfolios were invested in real estate at the end of the second quarter driven by poor returns and geopolitical risks. hedge funds fell to an all-time low of 4%. credit suisse will hire more relationship managers and saudi
and the recruitment push comes after credit suisse created a platform to offer private banking and other related products to the saudi's. enlist theledged to private sector is it diversifies the economy away from oil. business flash update. still ahead, bank stocks suffering in spite of reporting better than estimated earnings. we dig into the numbers, next. from washington, this is bloomberg. ♪ . .
delivers consistent network performance and speed across all your locations. hello, mr. deets. every branch running like headquarters. that's how you outmaneuver. scarlet: we are awaiting remarks on the health care ill from senate majority leader mitch mcconnell. the podium has been set up and they are still at their tuesday
luncheon. when he appears, we will bring you his remarks life. in the meantime, let's get caught up on how commodities are trading. we begin with the tag sector. thanks to hot and dry weather. gold climbs for a six time in seven days as the dollar starts with the setback because of the republican health agenda. strong demand for chinese steel mills, up 8% over two months. same with industrial metals. let's show you the rise in copper and put it into context. it has taken the highest -- taken metals to their highest. technical suggest it could the early days with copper breaking above the upper level as prices exceeded $6,000 a metric ton for
the first time since back in march, potentially spurring more buying from computer model driven traders. something to watch as we monitor copper prices. let's get you a check on the headlines with bloomberg first word news and mark crumpton. mark: as we have been reporting all day, it's all about the collapse of the gop obamacare repeal effort. congressional republicans accused democrats of being obstructionist send unwilling to help improve the health care system. and already leader chuck schumer accuse president trump and mitch mcconnell saying we don't need you, we don't want you. to the ideaception democrats did not want to engage on health care. the majority leader admitted he decided the matter for us when he locked democrats out of the process. let's bring you now to
the senate where mitch mcconnell has emerged from his weekly meeting and let's listen to what he said. mcconnell: repealing obamacare, essentially the same votes we had in 2015. i would remind everyone in that proposal that there is a two-year delay which would give us the opportunity to work out a complete replacement on a bipartisan basis with our democratic friends. that is a vote i think we are very likely to have in the very near future. >> we got a sense of what the future might look like if we are unsuccessful in repealing and replacing obamacare. we saw for the second time in a few days democratic senators coming to the floor asking for tens of billions of dollars in tax dollars for insurance company bailouts. no reform, no change in the status quo, and after seven
years, i think we can safely conclude the structure of obamacare is a failed experiment. change why we want to the structure of the health care delivery system as we stabilize markets and protect people from premium increases and pre-existing condition exclusive -- exclusions. is alternative, i fear democratic efforts are going to bail out insurance companies with no reform whatsoever. >> after seven years of obamacare, the american public knows what they have. have fewer choices, higher premiums and less control over their own health care. a number of years ago, i voted to do a repeal of the obama health care law. i'm ready to make that complete repeal vote again, but that is not enough. the people of wyoming want more than that. the people of wyoming want to buy what works for them, not what the federal government says they have to buy.
i am ready to vote to repeal. we need a medical system not just as good as it was before obamacare was passed, but we need a medical system that's even better than that. >> i think the only thing i can add to this discussion is we need to find out where the votes are. this is important work to be done. it affects families and health care. we need to find out where the votes are but there are other things we need to do. the president is talking about manufacturing and made in america. if you could pay the utility bill and the transportation system works, those are the two boxes you would check. the best place to get insurance is still at work where someone else does the negotiation and reads the policy, ways more people could get insurance at work is important and tax structure is important. has had a considerable
amount of time spent on it and sooner rather than later, we need to find out where the senate is and move forward. there are a lot of people out there j you seem to be spiking the football, trying to celebrate a moment that for now seems to leave the affordable care act in place for today. but let me tell you what happened if you continue to spike the football. in the state of colorado last week, it was announced the .remium increase will be 27% that's if you are lucky enough to live in the front range of colorado. if you live in the eastern ranger western slope, you will play -- you will pay 30% more. that is spiking the football. work to getinue our our job done to make sure the status quo no longer stands and we provide a -- we provide relief to the american people.
>> you went through two iterations of your bill and you heard from some of your members. some of the more critical that the process. do you feel you and your leadership have been damaged in this process and now after considering those criticisms come you could get this through? >> this has been a challenging experience for all of us. it is obvious we do not have 50 members who can agree on a replacement. a lot of people have been involved in very passionate discussions but everyone has given it their best shot. as of today, we simply do not have 50 senators who can agree on what ought to replace the existing law. vote that have is a aty of us made two years ago a time when the president of the united states would not sign the legislation that would repeal
obamacare and with a two-year delay give us an opportunity to build something better on a bipartisan basis. that is what i since most of our members would like to vote on now and we will be doing that in the near future. >> you don't appear to currently have the votes. if that vote fails, do you then begin working with democrats? mr. mcconnell: we will have to see what happens. we will have demonstrated that republicans by themselves are not paired at this particular point to do a replacement. doesn't mean the problems all go away and you will have to look at our committee chairman and their ranking members. my suspicion is there will be hearings about the crisis we have and we will have to see what the way forward is.
>> [indiscernible] months wasted with no accomplishments. how do you explain this to voters next year? mr. mccall: we have a new supreme court justice, we have 14 repeals of regulations and we lastnly six months into -- time i looked, congress goes on for two years. we will be moving on to comprehensive tax reform and infrastructure. there is much work to be done for the american people and we are ready to tackle it. you were just listening to the senate majority leader, mitch mcconnell, saying this has been a very challenging experience. it is obvious we don't have the numbers to vote for a replacement. he said they wanted to vote on
repeal in the near future and most members would like to do that. he did refer to the previous vote done to repeal obamacare in obama's residency. no one raised the point with him that there were republicans that voted for that repeal knowing they were shielded by obama's veto. so that remains an open question. we heard from the cbo in january and they said it would result in 32 million uninsured, premiums doubling and 70% of the country lacking insurers in the decade. i have nowhere else to go on that. scarlet: certainly an interesting time to be in washington. let's turn to it does are talking about in new york, which is bank earnings. bank of america beat while goldman sachs reported record income from lending. joining us to break down the is dakin campbell.
they did not have a great quarter when it came to big trading and we are looking at a 40% drop in trading? what happened? guest: that's a good question. theirlike every desk in business did not perform. they specifically called out commodities trading and they had some trouble there, not just low client volume but as they say, difficulty navigating the quarter which we think means some problems with their inventory or hedging their inventory. explanationther big because we did not get a big explanation, but income america did fairly well. how did that come about? in comparisonwell to goldman being down 30%.
similarly, when we asked the question this morning can you tell us which banks were not doing well, bank of america, we cannot really call them out. all of them did badly. i think they did point to rates and emerging markets. scarlet: four bank of america, bloomberg intelligence and many others have said this bank is more sensitive to rate changes than any other bank. if that's the case, why did the net interest income disappoint? questionswere asking -- this long-term rate, we had these two rate rises. one of them with results a little strained four bank of america. eventually, the back end of the curve where we are concentrating securities, that was not the humming the way we thought. they also had the sale of the
u.k. credit card business which hurt as well. scarlet: so of all the things we can look ahead to, we have morgan stanley results due out tomorrow. what do the goldman results suggest or is that not a fair comparison because they focus on different parts of trading? guest: i dig is a fair comparison. it is worth noting the commodities business, morgan stanley has largely gotten out of that or they have gotten much smaller there, so you probably won't see that showing up tomorrow. in the first order, morgan stanley have higher revenue from fixed trading than goldman for the first time since 2011. you could see a second straight quarter of morgan stanley outpacing that quarter which has a lot of wall street talking and there is some schadenfreude and we will see.
all of the bond trading businesses on wall street are not doing well. if goldman was down 15% or 20%, no one would he talking about -- we would be talking less about it. much.t: thank you so fora: coming up, a slamdunk king james. his restaurant stock in blaze pizza is heating up. this is bloomberg. ♪
doolittle for today's sector spider report. abigail: today, we are looking at the consumer discretionary flipping between the best and second-best on the s&p 500. the fact that it's only up .3% speaks to the quality of trading with the s&p down slightly. however, helping the xl why take that position, look at netflix, on pace for it best day of the year after the company blew away net subscriber add numbers. really blowing that away and investors are looking past the relatively small profit. the street is bullish and the stock is having its best day since october of last year. the xl why overall gains are not very big. to -- let's look at two stocks
-- harley davidson and chipotle. harley davidson did report second-quarter earnings and guided second half sales well below what the street was looking for. thinkstion, one analyst in-house financing could he reaching a tipping point and that could be a future concern. 6%.otle down it had been on pace for its worst day in a year. they were forced to close down a restaurant in virginia after an out rake of illness. it bears similarity to the nora virus. this is not a new issue for chip outlay. this is the longer-term chart and back in october of 2015, there was an out rake of e. coli and the stock plunged 50% and then look at today's big drop. time will tell of course.
let's move from the rita's to pizza. blaise pizza is among the fastest growing restaurant chain seemed to be valued at $100 million. it go from here and is an ipo in its future? joining us is the blaze pizza ceo. rate to have you on the show. congratulations on the investment and valuation. what do you plan to do with the money? money.it's not about the it's about what we have done with the folks that rent would and they are going to help us grow. we've changed from an emerging brand to a high-growth brand and we are looking for expertise that can be more successful as we go towards being a billion dollar rentals top scarlet: it's
not just the valuation from brentwood, you signed a 100 store deal with an international retail franchise operator based in kuwait. what is your timeline for getting to those 100 stores? great question. we will get a handful of restaurants open next year, up to five or six and deal talks about over 10 years, we will build at least 100 restaurants and we believe with the success of reading american brands overseas that we can do much more than that. i look at some of your business history and your expansion in two different locations, how big can you go in the united states? and into international business, where else do you see potential areas for growth? guest: we said from the very
beginning when we opened our first two restaurants that we will have at least 1000 restaurants in the united states. pizza is a huge category. the five legacy players make up almost 40% of all pizzerias and there's no reason why blaze cannot have its fair share as you look over the next five or 10 years. internationally, once we establish our foothold in the middle east, you have to look at mexicoouth america and and over to europe. a believe there is significant opportunity and you could say we could have a couple of thousand restaurants. scarlet: we have seen dominoes and have a john's feed and have a lot of success using technology to make delivery better. are your franchisees willing to enable people to pay
for pizza over the phone? guest: we launched an app with mobile pay and it has been very successful. we are transitioning so we will be able to go into third-party delivery with our pizza and we will explore that in a greater fashion at the end of this year. as you know, pizza is delivered. it is a big opportunity for us. it's quite small and we believe we can get our fair share of that as well. learn and are already coming into the restaurant that it is a significant opportunity and we will be leveraging that later this year. do you think that enterprise value of $100 million is little overinflated? and my second question would be does this push back the timeline of a
potential ipo or is that a possibility in the future? gets to valueket all brands and we went through a process and brentwood and associates the value on it that we accepted. i don't think it hurts us at all. i think it helps us. we believe there is huge opportunities with a thousand or 2000 restaurants over the next five to 10 years and if you take the valuation and look forward, come back to we think we can be a billion-dollar brand sometime in the future and that what we are shooting for. julia: and on the ipo? guest: i think the markets have to remain good for restaurants. i think the key thing everyone needs to understand is as long as we continue to deliver great quality pizza for our guest and build quality and sales for our restaurants, then we will let it
scarlet: time now for a look at the biggest business stories in these right now. whatsapp messaging service has been partially blocked in china after the government began cracking down on virtual private networks which allow users to route data overseas. authorities have been ramping up social media censorship in china as it prepares for its length team communist party conference. consideringrs are
dropping insider-trading probe after he allegedly bought shares ahead of the london stock exchange group. they say the agreement to drop to investigation would cost fines totaling $12.2 million. jane austen getting quite the honor on the 200th anniversary of her death the bank of england unveiled a new 10 pound note featuring the author of pride and prejudice. she's the only woman other than the queen to be shown on an english banknote. that is your business flash up eight. coming up, we will hear from barry diller. this is bloomberg. ♪
live from bloomberg world headquarters in new york over the next hour. here's the top stories we are covering around the world and on the bloomberg. center republicans playing defense after their efforts to repeal and replace obamacare failed. we speak to a republican congressman about the path forward on the rest of the gop agenda. and bank ofs america missing wall street estimates on their core businesses. bank of america beating estimates on trading and goldman sachs reporting record income from lending. ibm reports asked bell. we will see how they manage slowing growth in their legacy business. we are one hour from the closing bell. it's a check on the markets with abigail and the big tech names. nasdaq onook at the
track for an all-time high. the pullback started on june 9. if the nasdaq does finish at current is, it will be the first record high june 9 and less than 10 points from an all-time high. but look at the dow and s&p 500. all three major averages off the lows. take a look at what's happening for the dow and the s&p 500. this is a quick sector shot and the worst sector for the dow 1%,ncials, down more than helping to explain why the dow is down more than the s&p 500. there's not a huge exposure, helping to explain why the tech strength for the nasdaq is down. , goldman sachs, jpmorgan and morgan stanley, we have had a string of disappointing earnings reports with that income declining and
goldman -- goldman sachs mistreating estimates. morgan stanley reports tomorrow, so some investors may have missed trading estimates for goldman sachs and jpmorgan. plus we have had yields to me down act as a bearish headwind for these stocks. let's take a look at some stocks moving to the upside. health care for the dow is the best sector and novartis is rising after the company put up a mixed quarter. 8.5% after their cancer drug was approved. they put up a beat and raise quarter and that is helping the doubt in a big way. is the fact the health care bill, the latest version is dead and it is unlikely, they do not have the votes to do a straight up appeal
-- straight up repeal, but this long-term chart of the health care etf, a big trend in a time of uncertainty ahead of the election, but we have the xl be breaking out. even though we had this uncertainty around trump's agenda, we have this sector breaking out. not highs today but highs recently. politics and media where front and center at the global business travelers association convention in boston. erik schatzker set down with terry diller to discuss the fate of the economy and what motivates him. very: more than anything, i'm completely motivated by curiosity and i'm lucky that curiosity for me has always been prevalent. all of those things people describe you as, they are all
from afar but the only thing i can think of it as, i'm not only i'm notly curious, but driven to agree with anyone. so i would have to imagine your curiosity was on high alert because you were at the allen and company conference with a number of the most influential, most powerful, smartest, and i should add wealthiest people from across america and around the world. anythingind there is approaching a consensus among this people about the state of the world, about the health of business and industry or the political environment, our security?
barry: i think all of that. not a monastic retreat certainly. it is in sun valley, but it's on a mountain. it does cross so many different areas from a wonderful conversation with mike pompeo, the director of the cia, and my wife who along with me are somewhat skeptical of the current administration. and she has been wildly vocal about this -- she literally side and said now i feel safe. such decency and such grasp that it does make you feel better. the other people there also said that because the deep -- let's
call it the worrisome apparatus, whatever goes wrong in this country is not as bad as something going on internationally or north korea or with foreign policy or other kinds of terrible surprises. to be in the hands of mcmasters at national security and defense, and matus at we are in good hands. so that was for everybody very reassuring. certainly on the economy, the economy is good. growth than amore lot of the skeptics think. all of the numbers are not terrible, there's definite complete, and i mean complete in a pragmatic but stimulating way, there was up in his him. that optimismhare
or are you at odds with the consensus you found there? barry: yes. for business, there's no reason not to be optimistic. this is a row my our resources and our basic way has othering business than pockets from south korea and technology, certainly china in certain areas, nobody compares within a thousand miles -- 12,000 miles. so i do. scarlet: that was barry diller speaking earlier on bloomberg markets. let's get a check now of the headlines on bloomberg first word news with mark crumpton. mark: president trump is
reacting to senate republicans pulling a repeal and replace health care plan after they failed to gain the necessary republican votes to pass the bill. during a lunch with service members at the white house, the president said republicans should let obamacare fail. trump: we have had a lot of victories but we have not had a victory in health care. we are disappointed, i'm very disappointed because even as a civilian, i've been hearing about health care and hearing about repeal and replace. leaderenate majority mitch mcconnell says there will likely be a vote to repeal obamacare in the very near future. russia has issued a new warning to the united states that might expel u.s. diplomats or shut down its property in russia is diplomatic compounds in the u.s. are not reopened. in response to reports of russian meddling in last year's election, the out going obama administration last year
expelled 35 russian officials and shut down to russian a states in the u.s. president obama said were being used for spy operations. the u.s. is said to be preparing sanctions against some venezuelan the ip's. ministerry's defense and allies of nicholas maduro could be included. that comes after majuro plan to continue plans to establish a new congress to rewrite the constitution despite a warning from president trump. more than 7 million people participated in an unofficial referendum to oppose the legislation. tokyo, uncertainty over the final budget of the 2020 olympic games will continue until 2019 according to the head of the olympic organizing committee which is searching for more cost-effective options. the estimated cost of the tokyo games has soared to $12.6 billion, twice the amount tokyo
proposed when it was awarded the games for years ago. news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. julia: coming up, more perspective on health care. congressman mike kelly from pennsylvania is coming up. from washington, this is bloomberg. ♪
republicans to get a new bill. president trump exposing his frustration over the impasse. failrump: let obamacare and i think we are in that decision where we will let obamacare fail. we are not going to own it. the republicans are not going to own it. we will let obamacare fail and the democrats will come to us and say how do we fix it or how do we come up with a new plan? mike: joining us now is kelly of pennsylvania, a member of the house ways and means committee. he voted in favor of the house plan to repeal and replace obamacare. a huge blow to the gop today and its failure to agree on health care bill. do you believe mitch mcconnell can pull together the notes were a straight repeal and do it in the coming weeks? guest: we are going to find out but i think the disappointment is across america right now.
folks whothe same voted to repeal obamacare and all of a sudden, they have lost their way. if you take a vote that's not going to matter and then when it does matter, you take a powder, that's not the way we run things. i don't aim the president for being disappointed. he's an action guy and want to get rings done and he's looking at a mall that doesn't come close to anything in the private sector. i love our president and i love what he's trying to do and i'm very disappointed in the senate right now. republicans do own this. when he says we should let obamacare fail, that's a ridiculous thing to say. that could cost lives. guest: i think all of us know that obamacare is in its death throes. what we were trying to do is rescue it. this is not our piece of legislation. it so that fix
millions of americans would have that coverage, but it's not working that way. right now, the president is saying this was not my plan. all of a sudden they'll in my lap and i have to fix it. i have to tell you i'm so disappointed in the senate. if there's one thing i think you sectorn the private coming you cannot look at the model in washington dc and begin to comprehend how works. it just does not make sense. scarlet: there are a lot of things in washington that are broken. who is to blame for the fact health care overall has not moved forward in the senate? is it mitch mcconnell and we drafted the bill in secrecy or is it moderate and vulnerable republicans? guest: that's a good question. they could answer that for themselves. you do the right thing for the right reason and get things happen but too often, you have
to make sure you are doing something to get reelected. you fix this and make americans have some confidence and americans will reelect you. wait foru are going to a better offer to come along does not work. he went all the way into march of the following year and we had to go into the nebraska cornhuskers deal and the louisiana purchase. here's what i think went wrong -- underpromise and over perform , don't overpromise and underperform. we made promises and now you have to own them and live up to them. the president is right. he does not own this. this happened under president obama and it is a shame there are so many americans feeling disappointed we did not fix this right away. we are going to work on this until we get it fixed for the american people. scarlet: i would argue that the president did thomas quite a bit on the campaign trail. the argument about who is to howe, it has an effect on
congress moves forward whether it's on tax reform or health care. what should be the next step or should just move ahead to tax reform? guest: i think we are going to give it to tax reform, but with infrastructure, we see their tax dollars at work because you see things that went on in ridges being rebuilt and runways and rebuild and all the things we need to do to get our economy going. let's get people back to work and get incomes rising. inherited when i came here in 2011, we inherited a badly put together health care plan that put us behind the eight ball. i just came out of a ways and means midi and we will do something that is progrowth when it comes to taxes, something you could do in a postcard with
certainty and say i understand it. it's going to be fair across the board. aboutnow we are talking corporate tax reform. i'm talking about the other 90%, this hard-working american men ,nd women that get up every day that is the hard-working american taxpayer i am concerned with and that's who we have to protect. you should not have to hire someone to prepare your taxes. it should be simple. marketi'm looking at the performance and how they are assessing the failure of the bill. i think it is going to be difficult for this administration to get anything past. when you're talking optimistically, whether you are talking about corporate sore individuals in america, there's a lack of a capacity to come together for anything. do you believe tax reform will get done this year?
guest: i do. i believe in the current administration of president trump and what he is trying to. in six months, look at what we did on the energy sector and what we have been able to do to roll back executive orders that were holding people down. getting a supreme court justice in there, we have done so many good things, that gets washed aside because you did not get health care done. we got americans thinking ahead again and i know the markets are going to go up and down, but there's more optimism in western pennsylvania when coal miners go to the white house and they know this is a guy who is going to keep his promise, we are winning and we are going to continue to win. we are going to keep moving forward for the american people. scarlet: you are considering taking on senator bob casey in 2018. what do you need to see for you to jump into that race? guest: i want to get through
july and tax or. running against senator casey is something that is down the road for me. when you get up every day and they can see things happening, they are going to take notice. it comes down to what did you do today. the jew keep your word to the people you promised when you ran for office? i get up for one purpose and one purpose only and that is to make sure i've done something that folksit easier for the back home who sent me to represent them. i don't know who all voted for me. some of them democrats, some of them independent. nobody in pennsylvania thought he could win pennsylvania except the voters and those folks turned out in great numbers because they believe in donald trump. i believe it's right here for us right now. julia: thank you so much for your thoughts on the health care bill. congressman mike kelly of and
julia: this is bloomberg markets . i'm julia chatterley. scarlet: and i'm scarlet fu. time now for options insight with abigail doolittle. abigail: joining me now is kevin kelly from recon capital. last time we spoke, you were comparing the vix 2015 and and other wall street are has raised you one. vixaring the vix 2017 to 2007. we have a great chart. you seen it and you say you can talk about it until the cows come home.
kevin: one of the reasons i was talking about vix is that it tends to come back up a sonically. there's a 30 day indicator of what the markets are anticipating. we are in the heart of earnings season and what really moves its earnings and part of it has to do with the interest rate environment as well as the dollar. if you compare it to 2007, what was the sentiment like? the dollar was significantly higher and interest rates were significantly higher. weakerar, the dollar got and that's why i was trying to compare in that regard. the vix only closed one time below 10. we closed nine times below 10 this year. abigail: you could see a big spike higher.
some are positioning for some kind of out of scale event. the skew market, people are using out of the money skew because we have not seen a move of five cents one way or another, so that is indicative of how people can protect themselves and that is what a are doing for top to see the vix move up significantly, whether it is to 20, we want to or 115 is that20 shows complacency. abigail: turning to your trade, netflix out with a great report. your trade? kevin: people are starting to position themselves a lush into facebook's earnings and that is because they are destroying snapchat. you want to play earnings going into the 162 50. it's going to cost a dollar 70 and your position for a higher
without a replacement lined up. speaking to reporters today, he admitted his process has not been easy. >> this has been a challenging experience for all of us. it is obvious we do not have 50 members that can agree on a replacement. a lot of people have been involved, a passionate discussion, but everybody has given it their best shot. >> let's be very clear about what the president is proposing and where the path will lead. the president would not be "letting obamacare collapse." he is actively trying to undermine the health care system in this country using millions of americans as political pawns in a cynical game. mark: senator schumer added that health care needs "bipartisan medicine, not a second surgery." rick perry says the trump