tv Whatd You Miss Bloomberg July 31, 2017 3:30pm-5:00pm EDT
communications director 10 days after he joined president trump's staff. mr. scaramucci felt it was best to give chief of staff john kelly a clean slate and the ability to build his own team. we will have full coverage in a few moments when we are joined from washington blithe -- by bloomberg's margaret tolliver. imposed sanctions directly on venezuelan president nicolas maduro after the vote sunday was a step toward rewriting venezuela's constitution. in an unusual move against a foreign leader, the treasury department designation freezes president maduro's assets and prevents u.s. persons from dealing with him. trump won't carry out his threat to use force against north korea. china called for restraint after the north korean regime testfired an intercontinental ballistic missile for the second time in a matter of weeks. the south american general called his south korean
counterpart to discuss a potential military response. reachedles has agreement with the lipid we just open the way for the city to host the 2028 summer games. the los angeles city council president confirmed the agreement. the deal would make l.a. a three-time olympic city after hosting the 1932 and 1984 games. global news 24 hours a day powered by more than 2700 journalists and asked him -- journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ julia: live from bloomberg world headquarters in new york, i'm julia chatterley. scarlet: i'm scarlet fu. joe: i'm joe weisenthal, 30 minutes from close of trading. data later this
week, and all eyes on the white house once again. joe: the question is, "what'd you miss?" anthony scaramucci has been removed as communications director. the u.s. dollar falling under hard times. we look atbetting -- how losses pile up amid political turmoil. the world's most valuable company by market cap reports earnings tomorrow after the bell. investors are looking to pass we guidance and the longer term upside for apple's new iphone. miss? what'd you anthony scaramucci's brief tenure, president trump removed -- let's bring in our white house correspondent.
and joining us, congressional .eporter in the d.c. bureau it is the shortest length of time that someone was in role of communications at the white house? nothing is regular in this administration. >> it is certainly high drama. but retired general john kelly's first job on chief of staff, he seems to have decided a little bit of drama on the front-end will save him a lot of drama on the backend. prompting the exit today of mr. scaramucci after an incredibly short and tumultuous time on the job. he could not have made this move without the support of the president himself. was that new yorker interview or rant or whatever that was something that was considered too much? >> in talking with officials across the various different
computing power centers, it became clear that pretty much uniformly, a lot of them were pretty uneasy about everything that happened last week from the cnn interview talking about cain and able to what the new yorker reported about that conversation. and i was told earlier today that that really core group of support for anthony scaramucci, not just the president but the president'sosts -- daughter and son-in-law -- all of the safety nets seemed to receipt. the decision was that it would call.ly's we are still learning the details of what happened after that. was a swift departure, and not just from his position
as communications director, but from the white house. scarlet: what happens to sean spicer? he was the press secretary. and he resigned from that role. i believe his last days today and tomorrow, he wasn't staying on the white house. reince is gone and scaramucci, might it allow him ?o contribute something ech newoth sean spicer and the press secretary sarah huckabee sanders, neither one of them would bite on this question that all of us were asking. sean spicer was always expected to stay on this job around mid august to help with transition. the question is, will that now become extended. kelly towas for john
install his own people. it is not clear that there would be that sort of future. but at least in the near term, he was planning on being around anyway. this changes the dynamic, for sure. the same time, this administration wants to enact some form of policy and is still wrangling in the gop over whether or not the path forward was health care, if the needs to be another vote, or if they need to close the book on that and move on to tax reform. divisions within the gop. where do they go from here? i think that the scaramucci supernova this past week has really been a huge distraction on capitol hill. drama was when the going down on the health care bill. histors were reading comments in the new yorker and shaking their heads. you have people like chuck
grassley, tweeting out, don't have scaramucci use that language around me. it might be some relief on capitol hill. they are will have -- it is not a disciplined white house up until now. and if the chief of staff, john kelly, if he gives an empowered chief of staff -- reince pre-this was sort of the chief of some staff. he was not able to hire and fire people. if john kelly comes in and has run the whiteto house, it would be a change that would probably be welcomed, frankly, by both parties on capitol hill. that is the question. the problem is that john kelly's boss has access to twitter and can change the message of the white house at any moment while
everyone is just getting to work. do people feel like john kelly has a shot at making the white house more organized? >> i guess. only so much. certainly the president's tweets over the weekend, ultimately warning republicans would be losers or quitters if they didn't do away with the filibuster and try once more to pass health care, i don't think that's the kind of action that people in the senate want to hear. i don't think john kelly will change the things that have not gone very well with the trump administration and congress. that scaramucci, his 10 days of performance were sending shock waves concern through capitol hill. we will see. course, what
bloomberg customers care about is the state of tax reform. our people now increasingly talking about a tax cut that might be more temporary in nature? >> i think so many decisions still need to be made on taxes. everybody has been distracted by health care and by the white house chaos. and right now, the tax discussion is at such a leadership level. members, rank and file the public don't have a good idea of what going on. talking about timetables, saying optimistically they will get something on the senate floor in may be october or november. they are very far from having tax reform done. thank you very much. julia: who replaces him? scaramucci?
been seeing over the last year. stop down more than 30% over the last year. i did reach out this afternoon to a bloomberg intelligence analyst. this is coming down to competitive pressures from amazon, alphabet, and apple. a have been pumping of music in a big way. g #btv 8548.k at this is a chart of pandora. see the stock has had a wild ride, at one point, up in a big .ay by more than 40%. and in blue, we have the revenue growth year-over-year. investors simply not investing for that. it tells the story more of a macro standpoint. what are the metrics people want to see at this point?
abigail: investors are looking for a loss of $.25 on 367 million. this is a great function on the bloomberg. it is the earnings function. we have the stock price in red. we have the best estimate over the last year and it has been trending down. uphaps setting the company potentiallyt in a big way. we will find out, soon. we lost management and we got investment from sirius xm as well. where is that headed? abigail: it is a big deal with a possible buyout from sirius. $480 million.t that is the most likely outcome, sirius will buy them in the near future. it is probably the most likely scenario.
they will look for information on it as well. scarlet: lots of questions on that front. thank you so much, abigail doolittle. julia: a look at some of the biggest business stories in the news right now. wells fargo is facing a second lawsuit after the bank account scandal last year, accusing the firm of forcing them to buy auto insurance they did not need or want. the charges resulted in 250,000 dealings and 25,000 vehicle repossessions. wells fargo disclosed it charged customers for unwanted insurance. after of bonds fell today scrapping plans to redeem some of the $14 billion of debt. the move sparked speculation that it could be worse than expected. banks want more liquidity reserved. carsble to overhaul rental and upgrade to newer suvs.
it reports earnings on august 8. a $42 billion stock manager who -- womenthe bank study leaders return to 25% a year since 2009, more than double the index. the reasons are not exactly clear. they suggest women tend to be more conservative in their predictions intent to be higher caliber and their top roles. it is your bloomberg business flash. scarlet: dillard's stock down more than 6% today after are targetingtors the department store chain. i spoke with jeffrey pierce, managing partner at the firm for his changes on the company including locking in the value of dillards real estate portfolio. as you guys reporting her article, there is 10 million square feet of retail.
and another 4 million of industrial. this is a large real estate company. convert all the real estate to rent, it will be about 350 per foot. there is a sears wrapper instead of a dillards rapper but i would argue the dillards wrapper is worth a lot more. the average rent is 470% for. as they capture that space, we think the average quality within a diverse portfolio has better demographics, higher growth, and higher household income. over time, if you just converted this. this isn't the strategy we've been advocating for. over time, if the retailer didn't work -- if you converted that rent to $11 a square foot and we have done a mall by mall analysis, we think that would be
market rent that would get you to 500 million in net oi. and that gets you to a $300 stock price. not pushing for dillards to spin off the assets and put it into a real estate investment trusts, right? >> was $400 million. there is no reason to, you know, over leverage the story. you can do this with cash flow. you can put any market rent you want on it and you will get to a number in the hundreds. a lot of people feel it is undervalued, but it has a lot less at the top rate. ,f you put the first valuation that is about $150 per square foot. the marginal buyer and seller is estate -- we are real
guys. we don't need to have that view. but if you just put the per square foot valuation that it is traded at, it makes it closer to 200 than 100. scarlet: who would likely be a tenant? who would take up that space? if you look at dillard's store locations, most are in the midwest and the south. more than one third of its stores, in fact. who would be appropriate tenants for this real estate? >> if you look at the demographics of dillards, they are great. growth where population is and income growth is. this is where retailers want to expand. at who is taking of junior anchors or many anchors, you can look at the prime market and it leases $20 to $30 per square foot. we think the real estate is at least that value. dave and busters is expanding, marshals, dick's.
i can name 20 retailers taking space. you have a lot of throughput in a mall. they own the dirt and they own the box, the 200,000 square feet on the las vegas strip. right across the street from wynn. $235 a footdoing and you can run the math ball on that. if you run the portion on that, you would get to a much higher number. scarlet: why would the family be inclined to amass real estate value would you have sears and mace is dumping millions of square footage onto the market? you could argue there is too much supply. scarlet: if you look at the core -- >> if you look at the core portfolio dillards has, it is an attractive portfolio. i have a list of malls that are doing similar or above that number. there is a lot of throughput and a lot of dollars there.
i could open up a store and generate a lot of income at the right rent. at five dollars a foot, i could find a concept that would generate a lot of income. you have those dollars flowing through that mall and it is just a mass game -- math game. look at where sarah tosh -- look at where they are signing with. that was my interview with jeffrey pierce on bloomberg markets today. if you haveeminder the bloomberg terminal check out tv . you can watch the breaking news. you can watch the live interviews. here is us a few minutes ago talking about the breaking news on anthony scaramucci. it is the best way to get tv. you get charts, headlines on the side, you can send messages, complaints, anything you want. line at see that blue the bottom? asked the guest a question. joe: where else can you do that?
♪ scarlet: i'm scarlet fu. what'd you miss? .rends in retail market looking ahead, what this chart shows you is how rising home prices, which is the bottom panel, the yellow line, is creating a bit of a conundrum. according to the university of michigan latest sentiment report, more consumers will list because of the rising prices. selling conditions have increased. that is the white line. the blue line shows buying conditions are dropping to 111 year low. what to do? joe: it's a problem, if you are a seller, you think higher prices are good news. but when you sell, you have to move. you end up having to pay more.
julia: i want to move on and talk about currency. it is the final day of the month today. on track for five straight months of losses, the longest losing streak since 2011. it is also six months into donald trump's trading advisor saying the euro is grossly undervalued. this is looking at purchasing power parity, oecd metrics. each of the g10 currencies are undervalued or overvalued relative to the u.s. dollar. actually, the euro almost 14% undervalued relative to the u.s. dollar. good calla pretty from navarro. maybe traders will listen to him when he says that kind of stuff from now on. he does that pretty well. julia: still going, as well. joe: here's a chart i so from a bloomberg news reporter. nasdaq 100 etf that
tracks the big tech stocks just had its worst weekly outflows since november of 2007. it's really important. this is a very noisy -- outflows don't tell you necessarily anything about what has happened or what is going to happen. it is one potential indicator to watch. scarlet: that is a big drop. big move.a it is interesting we see this persistent weakness going to the close. despite all the tech euphoria, they seem to be a little skittish. julia: and rounding out the scarlet: big tech names tomorrow. scarlet:apple shares off -- julia: and rounding out the big tech names tomorrow. heading to thet close. the s&p 500 unchanged and the dow up i .33%. the nasdaq, as just mentioned,
u.s. market showing a mixed bag and monastic underperforming under 4/10 of 1%. apple in focus as we round up the big tech earnings this week. joe: if you are tuning in live on twitter, we want to welcome you to our closing bell coverage. markets begin with our minute. a mixed day and market equities. the s&p 500 with little change here. there are some m&a news to announce today because it is monday. let's get to it. we have been speculated on and
reported in the days leading up to this. the bid has been put in and accepted as well. charter communications up by 6%. we should mention that snap, the company that ipo did not so long ago is up by under 1%. joe: let's take a quick look at the bond market. real quick, because nothing happened. let's move on. [laughter] julia: some weakness here as a mentioned earlier on. the dollar index is down from 0.4%. that is the highest level of the euro we are seeing since january
of 2016. the bank of england's meeting on super thursday. we get an inflation report but nobody expecting the bank of england to move here. i want to point out some of the emerging-market currencies. we see some weakness and dollar-ruble. i want to show you a chart that refers. up. pulling this i am trying to multitask here. .his is the correlation this is the weakest dollar-ruble has been since may. talking about all of the sanctions and tensions with russia. that is the dominating factor, rather than what is going on with the oil price. we have had brent rising 6.3%.
commodities on the front, the big winner today is iron ore. up 0.7% --ron ore crude and west texas above 1%. crude has been in a bull market lately. it was in the low 40's the week ago. those are today's market minutes. julia: a couple of headlines claude -- crossing the bloomberg terminal. we have been talking about the fact that anthony scaramucci, the communications director at the white house, was removed today. he is expected to keep his wall street export-imports post. if there is anything mentioned
in this press briefing, we will bring you those headlines as they go. for now, we will carry on with the show. scarlett: will carry on with the markets. what'd ya miss?? the u.s. dollar has been a big loser with all currencies this year. a big factor weighing on the currency is the continuing impasse in washington. thence, how much of the dollar weakness is due to political impasse versus other factors? >> the political impasse has to do with the lack of policy stimulus. it is not the politics so much as whether we like trump are don't like trump. it has to do with the fact that nothing is going to happen. a lot of enthusiasm was built into that trade and it is turning over. scarlett: when you look at equities, this is a great chart. it has come off that high a little bit.
the white line is the s&p 500 adjusted by the bloomberg dollar index. not quite as hot. guest: this also goes into another chart that is very interesting. if you look at european stocks and gains, relative to their own currency. this means that there have been gains and good moves in the equity market. to the surprise of many. updates to more bullish estimates. some of the gains this year due soften a little bit when you take the comparison what has happened with the dollar. strategist -- he is looking at the dollar. if the dollar is where it is,
this will be -- bullish for the most part. >> multinational earnings is a reason. cfo's and treasuries are slow to move, even when it turns and goes the other way. they are in a weak dollar environment. joe: you brought us a chart comparing the trade weight versus financial conditions as measured by the chicago fed national with financial conditions. what is the significance of this relationship? tradersof the envelope with the change of the trade-weighted index compared to 25 basis points in the fed funds rate. we have over a 4% drop in the dollar which converts to a 25% loosening of the fed funds rate. this opens up the floor for janet yellen and the fomc.
if they choose to raise they are just compensating. >> this is an important point. thee is a lot going into index in addition to the dollar. at the end of the day what you see is that chart moving down. but as part of the answer that a lot of investors are seeking. they keep going into the stock market in spite of these broader level concerns. this is not an environment where credit spreads are widening. this is where things are getting more difficult. people do not feel comfortable putting more money to work. volatility index stays where it is, it sets up for a black swan type of moment. >> what are people saying about their expectations as we push toward the backend of the year? this is a u-turn we have seen as well as the offset to that. it is quite phenomenal.
>> you will see -- nothing generally going to happen until december, then we will have the debt ceiling to talk about. that movell -- and then we will into fall/winter. julia: if we have debacle over the debt ceiling is that a reason to buy the dollar or sell the dollar? >> will that is going on you cannot talk about anything else. wechsler should be a flight to quality at some point. >> there will be a flight to haven. joe: oliver is there any side of concern in equity markets? americang at bank of today, looking at the low volatility spreads.
there are these exceptional things that have happened in the market. take is thatca's this is not about idiosyncratic situations where people are selling. they are saying when you have low and for deflationary environments you can tie into the low dollar with that as well. you have an environment combined with robust earnings that feeds itself into a low volatility regime as long as the fed is able to exit at the rate at which the economy is still climbing along. thank you. some breakingave news. pandora is reporting smaller analysts had anticipated. advertising revenue is up 5% year on year.
mark: it is time for first word news. anthony scaramucci has been removed from his new job as white house communication's director just 10 days after he joined president trump's staff. the white house said that mr. scaramucci thought it was best to give the new chief of staff john kelly a clean slate and the ability to build his own team. we will have full coverage in a few moments. we are joined by megan murphy and bill:.
on capitol hill republicans may have to choose between pursuing another health bill and pushing through tax reform this year. there is not time to do both and to make matters worse there are some must do items in september. theress must fund government at the end of the month and lift the debt ceiling. china mr. president xi jinping says his military has the ability to strengthen the rise into a world power. he saw -- oversaw a military parade which saw chinese forces. he is interested in making the military a leader force capable of projecting power overseas. errors are deliberating in the federal securities fraud trial of martin shkreli. on friday they heard closing arguments by prosecutors and using him of looting his own drug company. the defense insists there were no victims because everyone got their original investments back and even made the -- hefty
profits. i am mark crumpton, this is bloomberg. >> is mark was reporting, anthony scaramucci has been removed from his new job as white house communication's director 10 days after he joined president donald trump's team. bill cohen is the contribute and editor for bloomberg elevation and he joins us now from nantucket. the editor ofs bloomberg businessweek. knowing what you know about him, how is he going to take this and why do you think this happens with the announcement for the signing on of john kelly? a you believe this is condition with which he decided to become chief of staff? >> i don't know about the conditions under which he would have become chief of staff. this is got to be totally
devastating to anthony. this is something he worked for for a very long time, ever since he signed on with trump, super tuesday of last year. he has thought this position for many months. he announced the sale of his company to a chinese conglomerate which has not closed. he is unfortunately divorcing his second wife, he missed the birth of his second child with her. he sacrificed a lot for this, he he is white-hot and now paying the full price for his blind ambition. >> did anthony scaramucci completely misjudge how to operate in washington? >> i do think he misjudged how to operate in double trump's administration.
--re will be a lot of talk he gave this incredibly controversial interview with the new yorker. we should emphasize he was not immediately removed after that. it was only over the weekend that people like a bunch got -- ivanka and jared kushner weighed in on the president and people like john kelly who said that this particular language, this is the trigger, and barrister the president personally and made them look bad in a wider sense. they will tolerate the kind of like which that scaramucci use but they will not tolerate damage to the family. >> i wonder what happens to scaramucci no. we heard from the wall street journal that he will get to keep his u.s. export-import bank post. when you that he wanted to originally be a communication's director and was not put in a student opposition from wright's previous.
-- from wright's previous -- reince priebus. is there something on wall street waiting for him? the hedge fund has not happened yet. nice of you proved approved by a panel that steve mnuchin heads. it is possible that the deal will fall through. he would be in for a capital gains tax if he did sell it which i'm sure he does not want. with -- while he waited up getting confirmed in the oecd job which -- now i don't know where any of that stands. if anthony is smart he will
retreat, rebuild, keep a low profile and rebuild his reputation and credibility if he can. >> he restated the importance of yvonne scott kushner and jared kushner in the operating process and how you have to operate. who replaces anthony scaramucci. in light of changed the new white house chief of staff? >> this is the fourth white house official out in 10 days. it is so important to remember what is going on here. as we are having this discussion, steve mnuchin is outlining sanctions against the venezuelan president. we are trying to get the legislative agenda restarted. watchingld leaders are what is going on with this chaos. there will be joke and laughs and talk about convulsing in the white house but this is incredibly serious and terms of
trying to get the white house to move forward. it appears if they are addicted more to the 24 hour news cycle. whether there is a window to get anything done legislative -- legislatively is thrown into question. >> and to underscore that point, sara huckabee said that steve rolemucci has no rule -- at this time in the administration but what we have seen is that his export-import role remains in place. t-rex henderson and that all white house staff will be reporting to john kelly. this is a huge point of contention. anthony scaramucci had reveled in the fact he would be reporting directly to the president. anthony scaramucci and donald trump, are they natural bedfellows? do they make sense as a pairing.
meeting is there a reason for donald trump to want to keep him close by? >> people were referring to anthony as a mini donald trump. they grew up not far from one another. just over the border into nassau county. anthony has wanted to be involved in politics for many years. he was on the finance company for mitt romney. he was supportive of scott walker and jeb bush. when they were not going to make it he switched his loyalty to donald trump and has been incredibly loyal to donald trump. the objective lesson in what happens when you fly too close to the sun and put your foot in your mouth. i think he knew it and was
it is great to have you on the show. what are you expecting from the government directed toward china. there have been so all sorts of trade impacts and potential tariffs. --we have been inflating conflating things in the commodity side. something bad is going to happen to china. i think you will sanctions against chinese firms. you'll see a directed policy to get the chinese to be more active on north korea. the president has been very clear that the chinese are not doing enough. there's going to be more to push them in that direction. >> is there a risk that they use steel and trade in some way to pressure china directly? all you seen in the connections between north korea or the chinese banks and no one had heard of. are we looking at something
broader? >> if they do that it is probably a mistake. for all the talk that we will get them there and they are killing and you fracturing jobs, china is on a major steel exporter in the united states. the trump administration can announce something that sounds very ferocious but it will not do much. --uld punish for north korea stay away from the 232. they need to stay away from that for now. >> on the whole do you think the trump presidency has been good for china's economy? have a done anything yet. >> this is a dangerous question. i'll sit at china has had an absolute best case scenario. they were worried about domestic problems but also external problems whether trump a la cease, trump tariffs.
it has been absolutely perfect for the chinese so far so they have been able to accomplish and have been doing better than people expected. these are a specific set of circumstances and are probably not going to go on much longer. >> later this year and china to have a national people's congress. what is that doing to the economy in the short term? >> we called it the party congress put, even better than q1 data. it is something we almost never paid attention to which is expectations. usually you can breast these aside. but what this is telling us is that even with deleveraging even not weaker data, firms to think the chinese government will allow there to be weakness and 2013 so they think the coast is clear for the rest of 2017.
>> if donald trump decides to an act some sort of restrictive policies, how does xi jinping react in the vein that he doesn't want to look week before this congress. >> or is that going to be a disaster from the chinese standpoint and less external factors push them that way, something could -- from trump could do it. they are nervous that they will get into some kind of revocation with the president. to answer your question specifically, if the resident comes out with something, president she will have to act tough and make sure there is not a weakness. it is a difficult position for the u.s. and china to be facing off. >> lots of posturing in the months to come. coming up, the biggest company in the world by market cap. we'll give you a preview of what to expect from apple and what analysts have their eye on.
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...on the hotel you want. go on, try something fresh. tripadvisor. the latest reviews. the lowest prices. "first wordtime for news. anthony scaramucci has been removed from his new job as white house communication's director just 10 days after he joined the administration. the press secretary said that mr. scaramucci felt it was best to give the chief of staff john kelly a clean slate and the ability to build his own team. scaramucci last week profanely criticized then chief of staff reince priebus and stephen bannon in an interview published by the new yorker magazine. the trump administration is imposing sanctions directly on nicolas maduro after the vote
that was a step toward rewriting venezuela's constitution. department's designation freezes any of his assets subject the jewish -- u.s. jurisdiction and prevents u.s. persons from dealing with him. reported missing -- a reporter who was reported missing a few days ago has been found dead. the chairman said that his body showed signs of torture. there are concerns about future violence as kenya's transition moves to a new technology to identify voters and remove fraud. two big losses in the world of arts and entertainment. died last week of convocations from lou gehrig's disease. he was 73 and his death was announced today.
, whoh actress ginny monroe --ked with france watch rufo truafau and others, is dead. i am mark crumpton. this is bloomberg. ♪ scarlet: a mixed day for the final trading day of july. the dow jones industrial average finishing the day up at a record high, up by 3/10 of 1%. by nasdaq being weighed down amazon and apple which we will be reporting but for the month, the dow, the nasdaq and the s&p are all higher. >> let's for you up to speed on pandora media's earnings.
investors are liking what they are hearing from this one. second-quarter revenue coming in at $376 million which is near a 10% rise and second quarterly revenue. the estimated loss was $.25. they are saying that the gains and the revenues are driven by improvements in the cpn's. they are managing to bring in those ad spending dollars. the pandora chief executive stepped down last month signaling a shakeup. we also saw that investment by sirius xm, a lot of speculation that there will be a broader eye out. apple is expected to launch its most expensive iphone yet but none of these expectations are helping iphone sales now. as a preview of what earnings
may look like ahead of the actual release of the port -- of the report. weak quarterally a for apple because people hold off until the new release. joining us with a snapshot of what investors will be looking for -- and in cross the managing director of i.t. hardware and imaging technology at cross research. -- by phone from from melbourne new jersey. shannon, let me start with you. we talk about the quarter that ended being a week quarter, but the outlook for the fourth quarter -- the expectations are being downplayed because of concerns that apple will not release the high-end phone as early as anticipated. >> i think that is fair. we expect to see a quarter over
quarter decline in units. it has to do with the timing of the new lunch. apple is very careful at getting things right. the don't always do it but that is one of the things that they focus on. given the fact that you will have the oled screen and a lot of to technology, oled is not new, but apple tends to make things more complicated, and focus on the user experience as opposed to how many units they can kick out in the first quarter. we think what you will happen -- what will happen is a lengthening of the upgrade cycle through the year because you will be ramping the availability as you go through the quarters which makes march fairly strong as well. >> we're all going to be watching the financials. we will all be watching that iphone unit sales number. what are you most interested to learn tomorrow?
>> it will be interesting to see what they have to say about services and what they will say about the homepod. but six months before a few earnings calls before it hit the talked about how they will not release of a watch sales. it will be interesting to see if it but the home pot in the same where the homepod's and ipods are in. i'm interested to see what they have to say about where they are selling new iphones and if they have new businesses to sell to. there is a lot to learn beyond the financials. >> talk to me about the wild card that is china. they brought the iphone 6 to tackle that mid to lower market price range. what are you expecting and how does that feature it iphone sales for 2018? ofhave seen increasing use we chat as well. reporter: we have been talking
to investors who are writing about we chat for a few months. we were talking to people who do business in china and it is remarkable how much we chat has taken over. i think you are going to be seeing apple respond with some tothe changes they have made messages, acting qr codes. apple. challenge for at the high-end, apple remains strong and they continue to dominate with the iphone 7 in the larger screen sales. i think we are going to see pricetry to be more competitive. it is definitely a red flag when you get to the 2018 cycle. that is really when they will refresh the entire lineup that
they have. >> mark talked about services and certainly that is something apple would like to pay a lot of attention to but when it comes down to it, apple is a hardware company. i have the growth rates of the various hardware that apple does sell. it into the negatives of is off by 12% year over year. in theone was doing well heyday. later, it crumbled to negative. it has moved back into positive growth, but barely. with the iphone making up two thirds of total sales and apple trying to push on these faster growing services, what kind of mix doesn't want? what is the optimal mix? quick's with -- >> what they are looking at is the operating services portion.
is one of the reasons you have not seen as much degradation in the growth market. apple puts more and more features into the phone and does not necessarily raise the price much at all. the corporate has remained relatively steady give or take currency moves. it is giving investors some comfort that growth margin will not come down significantly incoming quarters. to be made argument that apple has significantly more revenue than you would see from the services line because you have this base that installs every year. that is a significant amount of potential customers to sell to. i think the services business remains solid and it is slowly but surely becoming more of a discussion point among investors
that this concept of recurring .evenue and brand strength joe: you mentioned the apple home pod. the name did not ring a bell i had to look it up. it seems like it is an afterthought in this era dominated by the ecco. -- by the echo. what does it say about apple's ability to capture new markets? it will be interesting to see how the home pod does. the first quarter will be the q1 or q2 quarter. in june.unced it it goes right after the amazon ecco -- echo, with better sound. julia: what about potential talk for the next iphone, the 10th anniversary version.
there was a great article this week talking about the extents -- extent to which they go to to keep this name a secret. run us through what length these phones go to because it is quite fascinating. >> that is a great question a delegate to some interesting timing on that topic as well. what apple does is the register trademarks for future product names in places like jamaica, and other islands. they do it there because these trademark databases do not have online websites. apple feels like if you want to know the name of the next iphone , you have to fly to spain which reduces the chance of it happening. this leak this past weekend that the file system apple accidentally released for the product.
because the product comes out in december it comes after the iphone. so there are a lot of references to that home pod file that apple posted publicly. there is a picture of the iphone 8 and some teases to what will have. there is confirmation that will have a 3-d, face getting system. it is pretty ironic. juliet: -- julia: up next, turmoil in the white house as president trump removes the communications director anthony scaramucci from his role. this is bloomberg.
julia: here now to talk about the dizzying pace of departures and what it means for president trump's agenda is the director of policy studies and a lecturer at stanford. he was the policy director for the romney-ryan campaign and governor mitt romney chief policy adviser. he joins us from california. are we going to look back on this moment as the beginning upon which palm was restored -- calm was restored at this white house? do you think there is energy left for actual policy? >> i think that this white house has removed the term slow news day from all of our lexicons.
this is a remarkable period. i think the general kelly will be a great leader for the white house. the challenge continues to be you have a president who remains highly unpredictable. but will continue to drive some degree of instability. on policy ision can they focusing on one big a competent? they thought they could focus on bigacare repeal and -- one accomplishment? they thought they could focus on obamacare repeal and replace, now it looks to be tax reform. joe: there is a divide between the trump white house and the establishment republican party. i wonder if that is just a dated term and that is -- that it is all the trump republican party and what we call the
establishment, the mitt romneys of the party, are not players anymore. >> the old divisions that we thought existed maybe even during the campaign do not exist anymore. more and more republicans are trying to espouse a mental of populism and trying to appear as though they understand the concerns of everyday americans. the new divisions have more to do with geography, they have more to do with tenure in the theress, then with any of previous issues they thought they may have had to do anything with. this will help to elucidate this. there is a conflict between republicans who think conflict resolution needs to be done in a quick manner and tax cuts. that will become abundantly clear. julia: we thought health care would be complicated. watch out for tax reform. donald trump may feel more liberated from the constraints of the establishment republican
party, whatever they may be. do you think he goes rogue and turns his base against the politicians of the party and members of congress? >> there has never been a strong tie between donald trump and the republicans in congress. this is about donald trump figuring out what does he need politically to make a case for reelection? you look in his rhetoric, the way he talks about the republican party, it is always "they." it is never "us." willsort of other-ness continue as long as he feels republicans are not serving his aims. julia: what have they actually achieved? do you believe they actually manage something on tax policy
given all the difficulties? you think it will be more tax cut rather than tax policy. 2017, what can they achieve? guest: it will be difficult to have tax reform or tax cuts done by the end of this year. that process extends into 2018. you saw last friday a statement known as the big six leaders on tax reform in congress and the administration talking about some of the areas of agreement and i think that process continues into next year. they have done a lot of regulatory reform and that does not get nearly enough coverage. a terms of legislative competence, i think it will wait until next year. >> how do movers of congress and senators feel about being browbeaten by the president and told how to do their job. when president trump is telling
mitch mcconnell to change the filibuster rules and saying what should be the next vote and no votes before anything, does that have the opposite effect intended? >> a lot of these guys are saying that it is what it is. look at lisa murkowski. she voted against the effort several times. she got a direct callout from the president in a tweet over the weekend saying she has not been on our side and she shrugged it off and to her credit, that has made her more popular in some ways. the president does have a microphone, he is using it. members of congress are responding with a shrug. they say, we will do our own thing. in some cases, it will work out better for members of congress if they do that. scarlet: you mentioned how the
president does not have links to the republican party. reince priebus was a tenuous link. he has been replaced by john kelly. mike pence is a member of the establishment. do you see a more fortified role for mike pence? i know we are looking for out with the trump administration, but he has been pretty steady, as far as congress has been in terms of representing their views? of friendsas a lot in congress and he is a huge asset for this administration. he has the trust of members of congress. he was a member of the house. he has been a governor. he has a deep republican pedigree, and he has a fantastic staff that has a lot of stability. i think that mike pence can be a huge asset going forward. he can be very useful on domestic hierarchies like infrastructure, like tax reform.
revenue for heineken increased 5.7% in the first half of the year. the cfo says emerging economies in asia and africa helped to drive growth. >> cambodia is growing very fast. africa, you can see it is performing very well. scarlett: heineken's first half results helped it become the first performer. i major concern for corporate america. findsompiled by bloomberg amazon mentioned more than 600 times and earnings calls and financial events, compared to 160 mentions for trump over the past three months. the trend holds over the past year even when trump won the presidency. i think donald trump might be upset at that because he sees
himself as a catalyst. concern ing about washington of stocks. they are concerned of amazon will systematically destroy every business out there. julia: there is a question about whether those mentions of trump when negative rather than positive. are some can was that it was negative. -- our assumption was that it was negative. scarlet: you wonder if donald trump will do anything about jeff bezos. joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪
in the administration at this time. scaramucci was removed today as communications director after 10 days on the job. sanders says all staff members plan to remain. they will report to new chief of staff general john kelly. meantime, president trump says retired -- says kelly will do a fantastic job as chief of staff. the former homeland security secretary was sworn in this morning, replacing rights previous. ebus. lacing reince pri according to a person familiar with steve bannon thinking, he supports a 44% top income tax earning moreicans than $5 million per year. the money was used -- was to be used for middle-class tax cuts. sam shepard has died. the playwright and actor and author died last week of complications on lou gehrig's disease. he was 73. in los angeles, they have reacheal