tv Bloomberg Markets Americas Bloomberg August 16, 2017 2:00pm-3:30pm EDT
scarlet: this is bloomberg markets. i'm scarlet fu. lots to cover including the federal reserve releasing minutes from its july meeting. wall street looking for clues around when the fed will unwind its balance sheet. julie: we are following news that president donald trump will disband advisory groups of business leaders after ceos quit this week following events in virginia. let's go to chris condon at the fed. the top take away from these fed minutes is that the fed is on track to hike again once more this year despite deepening concerns over low inflation. i will come back to that in a moment. the second thing the committee was actually quite close to for theng a start date balance sheet reduction plan and its meeting in july but they decided to hold off to an upcoming meeting. that will cement expectations in the market that the balance sheet program will be announced. the timing will be announced in september. the next interesting point
somewhat grim reflections on the state of policymaking in washington, d.c. showed up in these minutes. some committee members see the likelihood of new stimulative fiscal policy dropping. this also appeared in the minutes. participants noted that uncertainty about the course of the course of a federal government policy including in the areas of fiscal policy trade and health care was tending to way down from spending and .iring plans in terms of what fed officials are hearing from businesses in their districts the dysfunction in washington may be beginning to hold back the u.s. economy. a quick point on financial stability and asset valuations. the concerns raised in committee again about real estate valuations. when it comes to the stock market no real red flags. some committee members said that valuations reflected favorable economic factors and there were
no new signs of additional leverage being implemented in the stock market. no red flags over start valuations. back to the debate one minute on inflation. taking clearly two sides hardening positions on what low inflation is telling us. i thought these were quite remarkable minutes in the sense that there was a lot of candor about what these committee members don't understand about what is keeping inflation low to the point that some are beginning to question the very framework, the models they used to estimate inflation. the good news for the fed is when it comes to deciding whether to pull the trigger on another rate increase this year they have the luxury of time. they don't have to decide until december. scarlet: that's chris condon reporting from the fed. it looks like the markets are taking the fed's reticence to perhaps raise rates the rest of
the year to hard. taylor riggs is following reaction that we are seeing in markets at this point. i'm looking at the bond market. yields are dropping. the s&p 500 taking a little tick upward. not a big move. equities were up about .2% heading into those me that -- minutes. here to the s&p 500 index you can see a little bit of a tick higher. market usenoon lower, we are near the lows of the session. nonetheless a big tick higher up about .2%. let's look at the 10 year. chris condon had raised a few concerns about that inflation data. the lack of inflation being an
increasing concern for the fed. you are seeing the 10 year yield here. by abouter for the day three basis points. a little bit of that risk off slight risk into quality with bonds. give this credit to the fed. they communicated pretty well for their interest rates and that balance sheet reduction. let's look at gold, another safe haven we're looking at to see if we can see any immediate reaction. most of that when trump announced he was disbanding the cycles. 1278 hovering around the level for gold. the bloomberg dollar index on an intraday chart. we were looking at a weaker dollar. we continue to see a weaker
dollar down near the lows of the session. the dollar-yen was weaker as well. thank you for that quick reaction. in the meantime back to washington. president donald trump saying he is disbanding advisory groups of american business leaders. earlier he tweeted rather than putting pressure on the business people of the manufacturing council and strategy and policy forum, i am ending them both. thank you all. several ceos from his manufacturing council quit this week following blow back over his remarks about violence in virginia. we are also getting word that the jpmorgan ceo is said to have favorite the disbanding of the council. who chaired the council. that call happened earlier today. joining us now from washington and here with us
in new york is that townsend who has been -- matt townsend who has been following the developments. as we were getting the president tweeting, we were getting simultaneous and in some cases after-the-fact statements from some of the individual ceos like jeff in the that they were leaving the council. how much do we know? thehat we know is that strategy group that was headed by steve schwarzman of blackstone essentially had made a decision to disband itself. they held a conference call today and said, who wants to stay with this, who wants to get donald trump's explosive comments about race and the charlottesville protests over the weekend. it turned out many of the members of the group were prepared to disband and essentially walk away. they were in the process of calling the white house to say
we think we are done here when trump went ahead and said, you can't fire me i quit. you are disbanded. events we sequence of understand from the bloomberg's terrific reporting from inside those councils. trump went ahead and actually disbanded a second council with people like kevin plank from and others. you have incredibly messy divorce between the ceo class and donald trump, the man who said he was the businessman president who would be the only one who could truly talk to those corporate leaders. scarlet: it seems like the president completely misjudged the mood music when he said that for the grand standards who wanted to leave, don't worry i have many of people -- plenty of people to replace you. was he looking to replace anybody on that panel? >> we don't have that reporting. we know a lot of ceos aren't exactly happy to be on them. they were looking for a way to get out without getting negative attention.
once we saw a couple people quit earlier this week we are hearing that more and more ceos are basically saying let's end this thing before it even continues. the president saying there's more people to sign up seems dubious. what was the final straw? pressures from shareholders and consumers on social media? >> it was all of the above. people are pointing to his press as notnce yesterday being very decisive and unequivocal and denouncing what happened in charlottesville. the campbell soup ceo said there's something about there's no reason to be unambiguous about this. this doesn't mean corporate america will stop working with trump. go aftergoing to infrastructure spending, they will be on board with that. julie: we have more comments from jp morgan's jamie dimon.
apparently he put out a memo to bank staff in which he said i strongly disagree with trump on charlottesville. he is said to have expressed an opinion on his call with steve schwarzman earlier today. how does this position corporate america when it comes to lobbying for tax reform for example? thatthis not cost them much because they will be dealing more with congress on this issue and they can sacrifice their relationship with the president to some degree? good point.es a it's not like these corporate ceos will never talk to the white house again. be mostly onll capitol hill. the white house put out some broad principles. we expect to hear more next month from them. that is quickly going to shift to the house and senate where all of these companies have very well-paid lobbyists all over washington that will help them try to get their way in those tax reform hearings and meetings.
i think the biggest damage to donald trump would be under the category of credibility. he has set up councils. he said he wanted to hear from these folks. he then made it essentially impossible for them to stay on an associate themselves with the comments he has made. particularly yesterday. ceos will be very reluctant to get too close to trump because who knows when the next outburst will be. i'm not really sure what he got for it except for some very bruised feelings. privately it might be a different matter. julie: does this come down to just public relations? >> i think so. julia: it seems like it didn't cost them really anything to come out and make these statements at the same time as the pointed out they were probably pressured by a number of constituents to do so. >> especially when you think
about a consumer facing company like under armour. they are in a public sphere. thisthey make a move on it's going to have potential impact. that's a pretty significant step. , not companies like merck really a deep connection with consumers. councilmour leading the , we saw people saying, i will never buy your gear again. julie: did the council actually achieve anything? was there anything accomplished at the meetings or was this a photo op for the president and ceo's? >> i would be hard-pressed to sit here and take off a list of changes to policy that came about through these councils. the bloomberg reported that essentially the councils hadn't met in some time. there was a lot of grumbling that they felt like they were a little bit of a prop around the table with the president.
i'm not sure if substantively in a policy way what is being lost here. usually ceos would love to have a chance to have the ear of the president to sit at a table with him and get your picture taken. that the last place they want to be and for trump that is very damaging to his personal political appeal in a way that's going to hurt him for a while. and craigt townsend gordon, thank you so much. coming up, what the fed minutes revealed. next toer joins us share his insight and analysis. from new york, this is bloomberg. ♪
julie: this is bloomberg markets. i'm julie hyman. scarlet: i'm scarlet fu. .ulie: september is in play the inflation debate is deepening. many saw the chances that inflation may stay below that level for longer than anticipated. some officials see the scope for patients.e joining us now is bob miller, head of black rugs multisector fixed income team. multisector fixed income team. as chris khan and was just telling us the fed is doing some about the way it measures inflation. certainly the way it has tried to forecast inflation.
what do you think of the inflation picture right now? are we not measuring it in the proper way tha? >> our point of view on inflation is the relevant thing for fixed income investors is that there are a number of positive supply shock go not in the u.s. economy and it's creating headwinds to portions of the inflation index whether it's the pc or cpi which was released on friday and these aren't likely to change anytime soon. as bill dudley said last week in a speech these aren't a bad thing. positive supply shocks are creating lower prices in a number of goods and services for u.s. households. this increases real purchasing power for the household. it's very different than low inflation emanating from demand
shocks. these are supply shocks. they are not bad things. statistics.le of core inflation on friday 1.7 year-over-year. the 10 year average is one point 73. core services represents 75% of the inflation basket is printing 2.4 year-over-year. it is a if the fed soul-searching on inflation and doesn't quite know why inflation is persistently low doesn't that by extension mean they are at risk of making a policy mistake? the probability that policy stays easier or more accommodative and creates financial imbalances. i don't think we are there yet. that is the risk if we try to fix the degree to which technological innovation is impacting inflation negatively although it's a positive for the long-term economy. the probability of
financial imbalances building overtime. julie: not only do you have to project with the fed is going to do you have to addict what the market is going to do in reaction. even though the fed has raised rates we have seen treasuries remain range bound. even if you do see this balance sheet unwind begin what is the market doing in reaction? >> financial conditions. the broader measure of interest rates credit spreads equity prices the dollar has eased since december when the fed raised rates the first of three times in the last seven or eight months. that's interesting. domestic financial conditions in the u.s. economy are more supportive of growth going forward. judgment around the balance sheet reinvestment which looks likely to be introduced in september in fact some of the members wanted to do it in july. likely to be introduced in september is that it will slowly
begin to reverse the portfolio balance channel affect that has been clear in markets over the past eight or nine years. we are not talking about an abrupt change to interest rates or the supply demand dynamic in the fixed income markets. scarlet: bob miller, thank you for your time. still ahead, game on. how to score $1 billion. jason robins joins us to discuss the company's new product offering for the upcoming nfl season. in the walls a $1 billion grand prize. from new york this is bloomberg. ♪
the just launched a promotion the gives players the opportunity to test their skill at building the perfect nfl lineup. with the chance to take home the grand prize of $1 billion. here with the in studio is jason robins. what are the odds of someone building a perfect lineup? >> it's really hard. it depends on the skill. it could be different for different people. it's definitely hard. it's very difficult to build the perfect lineup. it is doable and we had to get insurance just in case someone did it. scarlet: which companies did you go through? >> we did a bunch through the lloyd's of london syndicate. no one surprisingly wanted to take on the whole billion themselves so we had to split up. scarlet: payout is guaranteed. can you quantify how important the nfl season is to draft king's? is it 70% of what gets done or is it 50%? >> the nfl is definitely our
busiest time of year. and ifmost like taxis you are an accountant. it's our most intense time and everyone has been working really hard. once the season is underway it's pretty much like there's a lot of work still going on but it's also kind of what do we do to prepare for the next thing. there is always something going on in sports. i wonder if you were disturbed or worried at all about the drop in television ratings. does that have any impact on consumers engagement with daily fantasy sports? >> definitely. last year there was a lot going on with the election in the news and obviously still a lot going on in the news. hopefully the ratings will start to reach more of the levels they exceed the levels they were at the year before. certainly a lot of political
news dominating the headlines. i saw that the news networks were up three x a year-over-year during the nfl games last year. people were choosing to watch news over the nfl. think the election hopefully was the big one and while there is still a lot of news coverage dominating i think you'll see a comeback on the ratings this year. are people less willing to play fantasy sports if they are watching the news? >> it's a correlation. it's the other way around, too. if people are playing fantasy sports they are more likely to watch the games instead of something else. it is hard to disentangle. there's definitely a relationship positively reinforcing the games on tv. scarlet: just over a month ago called off your merger. where does that leave you when it comes to preparing for something like the nfl season? i'm sure there's a lot of work
that tends to be done in the lead up. you have this merger and now you have to scramble. there is definitely a lot of work and time spent on the merger. we had taken a team on both sides of about 20 to 25 people from each company and they were the ones primarily focused on it. other engineers. a lot of the company was just focused on preparing for nfl and getting ready. shift.bit of a mindset we actually didn't change a lot of the plans that we had. now we don't have to worry about that. so instead of figuring out how we are going to integrate these companies and put them together during our busiest time of the year now we are just 100% focused on the customer in the product. scarlet: are you going at it alone when it comes to working with lawmakers when it comes to legalizing fantasy sports? >> we are still collaborating 100%. it has been like that before we did the merger. we share a common interest and
we work very well together. ceo of: jason robins, draft king's. who would be the quarterback in your perfect lineup? >> brady. scarlet: back to you. julie: still ahead, president trump ends his business councils as ceos turn against him. let's take a quick look at the markets now that we are nearly 30 minutes after the fed minutes release. we've got stocks heading to their lows of the session. the nasdaq just flicking into the negative. the s&p was there for a brief moment and is not above. we've got treasuries as well. we saw the 10 year yield falling by five basis points from new york this is bloomberg. ♪
markets, this is bloomberg. futures are climbing and analysts that spoke to bloomberg said that north dakota could slow harvest activity -- overnight rain could slow harvest activity. after the eiag reported a rise in u.s. crude production last week. production rose by the most since june of last week -- last year, i should say. and finally, a quick check on gold that was already hired before the fomc minutes were released. as thosea leg up right minutes were released, headlines crossed and they are at session highs. 12% by the way hasn't about so far this year. more on news for you in the last hour. president donald trump ending his manufacturing counsel and his strategy policy forum.
the president faces criticism on both sides of the aisle equating neo-nazis to counter protesters in virginia. with the latest, senior white house correspondent margaret calla. we have been talking about the back-and-forth between trump and the various ceos. what are we hearing from the rest of washington on this as they tried to make progress on their policy agenda. >> today was sort of you can't quit because i canceled the board. beyond the ceos, they are signaling to the administration and the public. making pretty strong statements. one was mitch mcconnell, the senate majority leader has been the target of president trump's criticism over the failure to get the votes to repeal the
affordable care act. mitch mcconnell saying that i have heard these similar protesters and white supremacist. they want to come to kentucky in do a similar protest and they are not welcome there. speaking very directly, and more direct terms than president trump has been comfortable doing. the bush family, both presidents george h.w. bush and president bush coming out with a statement . it you will recall president trump's provocative comments about george washington and thomas jefferson statues being next. a tip of the hat and a reference from president bush to the declaration of independence. and one of charlottesville's most famous residents in terms of talking about the message of equality for all and not accepting bigotry. pressure both from politicians among republican ranks and from
business leaders as president trump now tries to recalibrate for a fifth day in a row. what about members of his own administration? he clearly took his aides by surprise. he was meant to make a statement and step aside to answer questions on infrastructure. not look pleased, though it is hard to read his expression because he was looking down at his shoes. margaret: yesterdays are marks caught a lot of people off guard and left them dismayed or uneasy. surgingrt of a overnight into today. it is now wednesday afternoon and we do not see, at this time, any high-profile departures or any department chairs -- departures.
folks inside the white house try to work through their feelings on this and they have to ask themselves if they still believe in the president. do they still feel it's do they feel this reflects on them personally? is this something that the administration including the president can buckle down and get back to the mission and get the message right. this is obviously a very awkward process and not one that folks are excited to talk publicly about. this is still working itself out, but many folks signaling they will be staying on but they are not comfortable with what happened yesterday. let's get more reaction from another business leader. it united steelworkers international president leo gerard. his organization represents 1.2
million working and retired members and he joins us from pittsburgh. great to speak with you. thank you for taking the time. when it comes to reaction from the president's characterization of events in virginia. >> our members are just like the general public. we will have people that will be tremendously upset. it will have a lot of people saying thisng to be is not what we voted for. inroadstrump made some into the industrial workforce by saying to them that he was going to repeal and replace nafta. that he was going to take hold of china and do something about china's continuous illegal dumping and to our market. our members have been waiting for that. he can sign executive order into steal and aluminum. we are anxious and waiting for
that report to come out because we are sure that it will demonstrate the countries i just named and many more are cheating and dumping their product into our market and are violating our trade laws. i want to dig into that a little bit more and the news that the various advisory being disbanded. how important do you think those councils were? it's a little bit of a different point of view versus workers when you're talking about ceos talking with the president, but do you think that will harm the progress of some of these trade initiatives that you are talking about? >> no. i wasn't part of the trade advisory committee and i'm on to others that remain from the obama administration. but from what i hear, those that have resigned or are playing to resign, the trade counsel appeared to be more like a photo
op. that there were some informal meetings about it and two representatives from labor warranty even notified are invited to those meetings. i don't think at this point it has any bearing, but i know it bearing.e a lot of infrastructure that could rebuild america, forcing trade laws and bringing forward the results of the investigation. we know that they are dumping from china in a aluminum and steal. need these investigations done and released as quickly as possible. the opportunity for the future is to rebuild american infrastructure. didlet: the president thomas quite a lot during the campaign and no action has been taken thus far.
is this an acceptable approach? >> let's try to use the right language. threateningk about sanctions, all we are asking for, all the manufacturers are asking for, they want to prevent those countries that are cheating, violating international trade norms from using america as a dumping ground. when i talk about china and steal, china has 400 million tons of steal that they can't consume. they are prepared to dump that in the markets. they don't care what the price is. they are not only exporting steal, they are exporting unemployment to america. we had 14,000 laid off because of china's actions. understand what you're saying but is it acceptable to link that with cooperation on north korea?
>> fairly clear they are not the same thing. the reality is, if he's going to be the president for america, he has to defend america's jobs and america's economy. that is the most important part. and this stuff with china, i'm not sure china isn't just playing us for suckers. we have a $400 billion a year trade deficit with china, a $50 billion trade deficit with mexico. julie: how confident are you that the president will be willing and able to put forth this agenda? he has been delaying and have not shown any legislative progress.
i'm involved in is convincing and trying to congressmembers of the both on republican and democratic side to convince the administration to convince those that of conduct it the investigation to come forward and give us the results of the investigation and give us an opportunity to defend american workers and american jobs on a level playing field. we are about to start nafta negotiations today. there's not a trade deficit or a trade surplus, but there is a huge trade deficit with mexico. we need to have balanced trade with mexico and raise mexican workers rages -- wages. payo to mexico where they $3.50. that is literally social dumping. julie: we have to leave it there. he alluded to the nafta negotiations ongoing. united steelworkers international.
must check bloomberg first word news with mark crumpton. mark: the mother of the woman whiles killed last week protesting the white nationalist rally today urged mourners to " make my daughter's death worthwhile by confronting injustice and channeling what she called anger into righteous action." >> we don't all have to die. we don't all have to sacrifice our lives. they tried to kill my child to shut her up. you just magnified her. [applause] president trump tweeted for the first time, calling her and aiful and incredible truly special young woman." the president added that she will be long remembered by all. in response to the violence in charlottesville, they have taken
the platforms most like to post ever. obama tweeted a quote that says no one is born hating another person because of the color of their skin or his background or his religion. the post has been liked more than 3.6 million times, surpassing arrieta grande a following a deadly bombing at her u.k. concert in may. antonioretary-general guterres says tensions on the korean peninsula are at the highest level in decades and it important to dial down the rhetoric and to dial up diplomacy. >> civilian death rates are higher than world war ii. and it was left in ruins and many nations, engaged and experienced heavy losses. repeat the lessons of
history, not the mistakes. mark: he added that the the results could be too horrific. and investigating islamic extremists for possible crimes against humanity. they are working on a draft security council resolution seeking assistance. earlier this year, human rights asked themal clooney council to set up an investigation into the crimes. global news 24 hours a day powered by 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. julie: much more on the president ending two of his councils.
machines that the pharma and biotech companies use. they also have other segments and other and markets treating academic government and industrials. a machine to be used for those purposes. relative to that quarter, let's show off the bloomberg here and the earnings function. if we hop into my bloomberg here, first up, we have lots of ratios. we see shares are trading relatively -- maybe they deserve to considering that we have them beat. by 13%, $1.1 billion. and this is nothing new. guidance is conservative. quarter.solid julie: and it was spun off from hewlett-packard. how did the two compare?
abigail: let's see who the winner is. this is g #btv 9356. it was spun off from hewlett-packard in 1999 and we see the initial spike on that's been out and the go-go dance of 2000. back here, we see that hewlett-packard actually took over a little more certainty. at this point, hewlett-packard is up 76%. of 224%. and it's not just medical testing, it has different types of testing businesses. how does that break down growth right now? abigail: the bloomberg intelligence team told us the investments are strong. scarlet: distancing themselves
scarlet: as ceos walk away from the advisory panel, let's talk about that. do you understand the dilemma ceos face when it comes to aligning themselves with the president publicly, privately, and pushing their agenda as well. what are you hearing from the folks that you talked to? what is going on in their mind?
>> certainly the business community, it was highly concerned. saturday's horrific events were a line in the sand. up until then, it's politics. you can before against, corporations have their point of view. this changes the whole game. unacceptable. to be aligned with an unacceptable stance, to all of their stakeholders, it was impossible. i mean shareholders, customers, employees, investors, and the general public as well. whether you're talking about ceos, commerce, the president's own cabinet, calculus. on one hand, what damages will it cause internally or morally?
getting the agenda through. -- way theseive various factors? >> it is changing minute to minute, nanosecond to nanosecond. that is number one. number two, when you have so many different exogenous forces and you have your own moral values and your corporate ethics , your corporate code, your corporate credo, many different things. your vision or mission statement. it says one thing about diversity, respect, and integrity. scarlet: talk about how ceos have this allergy to being political. they seek political neutrality
and want to keep business separate from politics. does this necessarily pay off? can a ceo or company be ?olitical most companies know they have democrats and republicans in them. they often give donations. they want to have a balanced view because they will have to continue on. the ceos right now are the adults in the room. they have to be furthering the longer-term health because the companies will be around not beyond the next eight years. they will go on and they will have to look at a bigger picture. that our rhythm is a balance. but it also doesn't mean that you tolerate things that are antithetical to what your organization believes in. it is a very delicate lined a walk. ken frazier have the courage to
walk and make a stand? he did it. once that logjam was broken, it allowed others to follow suit. don't forget there are lots of conversations behind the scenes. not reported by anybody amongst many of the people on those councils to try to change things. if you want to be in inside player or an outside player, and how effective you can be as both. scarlet: there is an argument to stay on because you can influence the president in a positive way. julie: it's an argument that has been made. ceos talking about these as giving them the benefit of the doubt with a certain nobility of cause. but sometimes it is just sort of a monetary decision. my customers are not going to patronize me if i don't do this. and hasn't social media really exacerbated that affect? would bet think we
having quite this conversation in this time if it weren't for social media. and the wonderful thing about it is everybody does have a voice. you can mount campaigns really quickly and there are people adept at doing this. they will take issue with you. people were forced into changing. people said they were going to stay and then they started to leave. i'm sure he disbanded it because there would be the drip, drip, drip until there were no councils anyway. much, wethank you so appreciate your time. julie: coming up, following the latest as president trump disbands business councils. ceos resign. the fedversy and showing uncertainty over inflation hurting the dollar today. from new york, this is bloomberg. ♪
welcome to bloomberg markets. ♪ julie: we're live at bloomberg world headquarters in new york over the next hour. here are the top stories we're covering on the bloomberg and around the world. an eventful and to the exodus from president's advisory council. the president tweeting he was ending the manufacturing and strategy councils after a string of ceo departures. the rift caused by president trump's sharp rhetoric is having an impact on his agenda and the distractions way on lawmakers as they try to move ahead with tax reform. we are one hour from the close of trading. plus, fed minutes. things from the market to chew on. emma: it's all green, but not too many games here on the majors.
.1%.en .2% and the dow jones looking to extend its rally for a fourth straight day. the s&p came within 16.7 intraday high. -- 16 points of an intraday high. tocan see that we were close that high a bit earlier on but we had two pieces of news as you alluded to that really kind of sad things moving. around 1:00, we started to hear from president trump that he was disbanding the manufacturing council and policy forum. at 2:00, we had the minutes from the last fomc meeting when we heard inflation is still a concern. we are kind of on track for another rate increase this year. let's have another look at the haven for today. treasuries are close to highs, down to about 2.2 earlier.
looking at gold, we saw a really big spike in gold earlier today following the news from the white house and president trump disbanding those councils. the dollar a little bit more weakness there. the vix is on track for a fourth straight day, falling for a fourth straight day. about urban outfitters. high.ould be a record also had good earnings results up about 4%. sales topped analyst estimates. and finally warm up, looking for a third straight day. they are given targets. in the first quarter, that e-commerce earnings.
scarlet: unusual to see retailers feeling so well on a day like today. julie: forever. scarlet: u.s. stocks holding on to gains after the latest round of washington drama. charts indicate they may remain for years to come. not every company is getting involved in this bull run. let's bring in oliver renick. oliver: we're seeing a bit of strength in the markets. idea.st brought up this at 2015, mayorok of 2015 to mid 2016. this is an important time in the market that could explain some of the longevity we have seen so far this year. this was a time in which we had to corrections of 10%. the august selloff on chinese growth concerns.
we have brexit later on in 2016. the worst start to a year -- of an entire bull market. period inns here is a which there are a bunch of companies, roughly 270 that went through their own bear market. everyone is waiting on a bear market in the actual index which is a 20% decline. maybe we were looking in the wrong place. here are the individual bear markets that we talked about. 260 nine companies dropped at least 20% and did not recoup those losses. 2011, the last time we had a bear market. in 2011. hair under you had the exact same number. at the end of the day, it feels very similar. ont to try to put the icing the cake is the idea that this also happened during an earnings
recession that rebounded. time, 15, 16.e seven quarters of year-over-year quarterly decline in profit. that turnaround that happened year,here, you look in a 2020, you see those bullish earnings expectations. the takeaway is that we look at something that may have actually been a bear market even though it wasn't a bear market in name. not that they could potentially be the reset that we needed to get to the market and the position that the bulls can take hold and go higher. there was a chart on this exact same sort of topic saying that it could potentially be the halfway point for the bull cycle. scarlet: that would be pretty remarkable. i what point are people factoring in the weak dollar? is a bithe picture more murky as to whether or not you want to see a strong dollar to tell us that sort of
reflationary trade that is taking hold or if the weak dollar can benefit those companies. i don't think it's quite as clear cut as when we were focused on the multinational companies. and as we talk about the age of the bull market. oliver: here it comes. julie: happy birthday, oliver. thank you so much. we appreciate it. let's get a check on the headlines with bloomberg first word news with mark crumpton. mark: president trump's disbanding to advisory groups of american business leaders after ceos quit this week. the president faced blowback after his comments about charlottesville, virginia. he made the announcement on twitter. rather than putting pressure on the business people of the manufacturing council, i am ending both.
group said it was breaking up amid the controversy saying the debate over foreign participation has become a distraction from our well-intentioned and sincere desire to aid vital policy discussions on how to improve .he lives of everyday americans congressional republicans continue to react to president trump some marks about charlottesville. south carolina senator lindsey graham said the president took a step backward by again suggesting there is moral equivalency between the white supremacist neo-nazis and kkk members who attended the charlottesville rally. mcconnell said the groups behind the violence are planning to rally in lexington in his home state of kentucky. of hatetheir message and bigotry are not welcome in kentucky and should not be welcome anywhere in america. the british prime minister theresa may has criticized
president trump's remarks, blaming "both sides" for the violence in virginia. >> i have for racism, hatred and violence we have seen portrayed by these groups. the united kingdom has taken action to ban far right groups. describe them here in the united kingdom and there is no equivalence between those that have fascist views and those who oppose them. mark: they said they will counter far right views wherever they hear them. people around the world have more confidence in the handling of world affairs from vladimir putin dan president trump according to a research center survey. germany, france, and japan say that they trust president putin more. it people have more confidence and president trump in 13 countries including the u.k. and
israel. only tanzanians saw them as equals. research from february 16 to may 8. local news 20 for hours a day powered by 2700 journalists and then over 120 countries. -- journalists in over 120 countries. toolet: did some ceos way long to jump off the trump train? we will get perspective from bill cohen next. from new york, this is bloomberg. ♪
relationship between the white house and top business executives. after a trickle of leaders resigned, the floodgates opened a few hours ago. the president tweeting rather than putting pressure on the business people, i am ending both. thank you all. among those leading the charge, jamie dimon says he strongly disagrees with trump, writing in a memo that constructive economic and regulatory policies are not enough and will not matter if we don't address the divisions in our country. it is a leader's role in business and government to bring people together, not tear them apart. joining us is bloomberg television contributing editor and a vanity fair contributing editor bill cohen. jamie dimon making clear that he wants to unify people and not tear them apart but as ceo, his job is also to make clear to the president as much as possible, influence him on business environments that would be favorable to him.
others saw benefit in advising the president. do you believe they will continue to give advice, just in a more private setting? virtualnk it is a certainty that that is the thing that they will do. it's what business leaders and ceos of big banks and big companies have done forever. these councils are more of a charade, more of a potemkin village than any sense of reality. i heard they have really been ineffective for the past few months. something that was probably inevitable and was going to end everybody. it gives everyone a convenient cover story for which to end it but i guarantee that the jamie dimon of the world will still be talking to donald trump iphone or another a -- by phone or another way to get their point across. to ask you about gary cohn, about he was a
principles that people have to stand up for. but obviously, gary would like to be fed chairman. it would be an incredibly crowning achievement. i measure he is qualified for it because he's not an economist and never was one. not that it is the be-all end-all of that job, but i think it would definitely give them trump, a job he cannot be removed from easily and his removal, if it were to happen, would be after the next election. julie: bloomberg tv can chew getting editor bill cohen. apple plans to spend $1 billion on original programming in the next year according to people familiar with the plan.
the company is intensifying efforts to compete with amazon and netflix in video streaming. apple has celebrated video as it seeks to double revenue by 2020 from service businesses. earnings forecasting that beat estimates, also reporting second-quarter sales that were better than estimated. a $7eo brian cornell has billion turnaround plan aimed at refurbishing target stores, opening small locations, and improving the online business. topic, joseph feldman told the advisory group analyst that he spoke about the battle to keep up with amazon. canhey are doing what they to compete with amazon and it is coming back from where it has been. they obviously had a very good quarter and a lot of the initiatives seemed to work out quite well for them. there is optimism the second half will be better. but amazon is that big looming threat for all of retail right now.
>> what is target doing that is bringing it more foot traffic? have really enhanced their merchandising in the stores. they focused very much on apparel and home categories, baby in kid areas as well. they have upgraded the brands. that has all been helping to drive more sales. and they've done a very good job with their mobile site. the desktop site. it is helping to drive sales. down a littleme bit and stabilized on that level. the consumer is looking for values and they were finding it at target. >> a lot of people have been focusing on digital sales. how much is this about target benefiting from people using credit cards? it's close to a record high if
not at it. of wherea big portion we have seen the borrowing happening. of where we have seen the borrowing happening. it has been helping them. online sales are up 30%. amazon has been doing well there. walmart we think will do well tomorrow. we see this shift and it has been the grudge area and it drove a portion of sales for target. 110 basis points, 1.1% of the full 1.3% that they did in the quarter. >> you have a market perform on the target. are these the markets you see outperforming. >> and walmart we think is among
the best positions within all of retail to do battle with amazon. they have been leveraging surveys and doing a lot to upgrade and enhance the field of stores, upgrading merchandising. the tech investment has been there. of good doing a lot things and they have expanded to the internet, making good acquisitions, we think. there are others that will help give them access to this new and younger customer. scarlet: that was advisory group analyst joseph feldman. still ahead, where will the s&p 500 and the year. that is the focus of today's options insight. from new york, this is bloomberg. ♪
institutional equity derivatives at oppenheimer and company. and of course we have been thehing the aftermath of volatility spike we saw last week. it looks like it is short-lived, but it has changed the investing landscape and the trading landscape to some degree. what are your takeaways from what we saw happen and what happened then? >> over the last few weeks, we have been pitching the vix for the first time ever. this was a vehicle that has not made money, it has mostly been a so-called dollar bet where you are betting on fear. it is spiking more than market declines. we saw the vix went from 10 to 17 while the s&p went from a high down 2%, kind of a bear market trap where they faked them out on the decline right in time for north korea attention. as usual, these are short-lived.
we are looking to sell bounces right now. julie: do you look to the vix specifically or do you look to capitalize on may be more increases in volatility coming up in a different fashion? >> we like using a combination right now. we like load exposure through the vix trades, the september 15 25 call spread. it near term because if you get that spike, it will mark a lot better. you do want to maintain exposure and by triple q. we do have a very attractive hedge trading. we have effectively downplayed the trade. have by 1000k you december 2 30 put and sell by october 2 20 put. we are doing a calendar put
spread here. we want to take advantage of any expansion involved facility and we want duration. we don't know if we could go down with the real market decline. like 11% cushion on the october 2 20 strike. and what that does is finance the 230 put. youeffectively, it leaves naked in the fall and a lot of flexibility to make money. you are looking at the iw in which is the etf for the nasdaq 100 and etf for the russell 2000 respectively. does this betray the kind of thing you can look at for either of those etf's as well when you see a broad market move? this is something you would be doing? >> we try to look at someone's correlation to each of these vehicles and find the best etf that matches that so they get the best protection. julie: thank you so much, head of equity derivatives.
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assistant that was killed last week and when a car ran into a crowd of people protesting a white nationalists rally in the city. >> she loved people. she wanted equality. of the day ofsue, her passing, she wanted to put down hate. need tomy part we just stop all this stuff and forgive each other. mark: president trump has tweeted for the first time about trulyalling her "a special young woman. he added "she will be long remembered by all>" confederate monuments quietly removed overnight just days after the violence in charlottesville that was sparked by plans to take down a statue ther.e e. the mayol