Skip to main content

tv   Bloomberg Markets Americas  Bloomberg  September 20, 2017 10:00am-11:00am EDT

10:00 am
vonnie: we are about 19 minutes into trading here, and a half hour in the u.s.. slightly shy of estimate, $5.35 august,for the month of down over the month for 1.7%, following a decrease of 3% a little earlier. we get the rate decision, and a half hour later, janet a newswill get conference. let's take a look at how stocks are doing into the u.s. session. here is julie hyman. julie: we are seeing not much change, just like yesterday. although yesterday, the bias was to the upside, today it is to the downside. but it is because investors are waiting for the fed meeting this afternoon, the fed statement, and the fed press conference,
10:01 am
and details on the unwinding of the balance sheet. we see all of our major averages slightly off their record highs as we wait for that. as we wait for that, let's take a look at the bloomberg here. we have a chart of the s&p 500 versus not just the fed balance sheet, but the return on the assets that the fed holds. andave the s&p 500 in white that securities owned by the .ederal reserve since 2015 we have seen them go sideways -- slight gains in some performance, certainly outpaced by those of stocks, and we have had a lot of commentary around what the unwind is going to do since the conventional wisdom at least is that quantitative easing helped the growth of the growth of the fed balance sheet has helped the stock market, so we might see this hurt the stock market. and speaking of shrinking, we are watching the food industry run into some struggles here.
10:02 am
general mills out with its numbers, three years sales slump is what has been experienced here. earnings missing estimates, sales missing eczema, europe -- estimates, yogurt sales down in the double digits. some of this is because of inflation and price wars against the companies that sell their products, that is grocery stores in the united states. them of it has to do with upstarts like kobani as well -- some of it has to do with i as well.ike choban serial has declined in popularity as well -- cereal has also declined in popularity as well. beingnd metals are watched, good move for gold on the fed statement, not moving much awaiting that. aluminum is considerate this morning, already the best performing commodity for the year and now at its highest in five years. of reason today, there was a smelterof a
10:03 am
closure in china, so that moving higher, and nickel also sustaining this rally, up by 2%. vonnie: let's take a look at where european equities are trading. we are about and hour and a half from close. i have the g.m. function here, and spanish stocks are leading by more than 1%. this might be about crack towns on separatists -- crackdowns on catalan protesters. we have been seeing this hover around these levels through the session. in the fixed income space, we are seeing yields move lower, generally in the core of the 10 year, down to basis points. the guilt meter is lower as well, and crude is up. here is cable, it spiked above
10:04 am
one point 360 met deader than expected retail sales data that on that retail sales data that we had -- 58 on sterling. taking a look at the gilt yields. this is trading near a seven-month high, but moving about one or two basis points lower today, about 1.31%. this is the most in two weeks. that us and to keep an eye on. finally, i am looking on euro over dollar volatility. this spike in volatility is actually the highest in 2017. this is spiking ahead of the fomc decision and janet yellen's press conference, something that traders are highly anticipating. that.: thank you for let's check in on the first word news with emma chandra. emma: go back in time in two being where he goes battered by a hurricane. hurricane maria came ashore in
10:05 am
part of the island day. top wind was near 155 miles per hour, category 4. maria has the potential to inflict $30 billion in damages on puerto rico. the hurricane is blamed for at least eight deaths on the caribbean islands of dominique -- water loopnk -- guadalupe. 7.1co got hit with a earthquake, lapsing buildings and leaving millions without power. hundreds are trapped under the rubble. president trump is endorsing and obamacare repeal bill that may not even come up. replace federal subsidies with blocks for the state. senate republican leader mitch mcconnell will not promise the bill will be voted on before september 30. in the u.k. k, there have now inn five arestin -- arrests
10:06 am
the london subway attack. two suspects were arrested in -- twoto others were others were arrested over the weekend -- a refugee from a rock and a person from syria. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. -- i'm emman the, chandra, this is bloomberg. vonnie: we have a massive lie mark -- lineup. up, justin trudeau, stephen schwarzman, and many more. the ceo of canada's largest alternative asset manager. he joins from the inaugural bloomberg business forum right here in new york city. this is bloomberg.
10:07 am
10:08 am
10:09 am
♪ live from new york and london, i'm vonnie quinn. >> this is bloomberg markets. vonnie: it is time for a look at some of the biggest business stories in the news right now. general mills cannot seem to reverse the three year-long sales slump. revenue in the serial business business fell last quarter. general mills fussing and upheld that earl -- facing an uphill battle as consumers change the way they shop and eat. an eight-month battle over toshiba's memory unit is coming to a close. the price? $18 billion. according to people familiar with the matter, a large chunk of the money will come from apple. retail sales are expected to pick up in the u.s. during the holiday season. 4.5%,may rise as much as which would allocate last year's
10:10 am
increase of --. this may indicate that consumers are more comfortable with spending they were last year in the aftermath of the presidential election. vonnie: coming up shortly, justin trudeau, stephen --.arzman, and up for that fed decision, 2:00 p.m. eastern time for the news conference. we will see with ethan harris from bank of america merrill lynch. this is bloomberg.
10:11 am
10:12 am
watchingou are bloomberg markets. we would like to take you back to the bloomberg global business
10:13 am
forum in midtown manhattan, where you see ims managing lagarde christine along with other leaders. -- signed this new trade deal at a time when many countries, it in including in europe -- including in europe, is struggling with the idea that a trade agreement is relevant, appropriate, and help will. you have been a strong performer of the u.s. multilateral system, including all participants and stakeholders. how do you see the role of this trade system based on rulesateralism, based on -- how do you see that going forward in that changing political landscape? from your perspective as a leader of canada and a leader in general?
10:14 am
president trudeau: i think people know that trade leads to growth. that is the story of our world over the past century. that is a good thing. we made a deal with citizens, particularly over the past generation or so, that we would andude policies like this everyone would benefit. now, we have had growth, but comes from that other things has not necessarily reached everyone. that is the anxiety of the globalization,, around their kids futures are so to lashf and lead inwardnv, -- envy, turning. we need to make that next step of promoting a trade agenda by talking about the progressive side of the trade agenda. that does not just mean making a
10:15 am
progressive case for trade, that means putting the forward progressive trade deals. is -- ceta, which is coming into effect tomorrow -- the canada-european trade that and, we inherited it was in real trouble. we needed to make it more progressive and shift the frame around. changes around the investor-state dispute over thes, with environmental standards, the labor standards, the gender aspect. we got people to realize that good, progressive trade deals that are focused on including everyone and not just multinationals and the country's 1%, the bottom line, but actually citizens and workers, is a way to move forward in a growth that will include everyone in a way that is really tangible. that, for us, was where we were and why we are getting
10:16 am
to the finish line now. but it is something we have done in all of our trade deals. the president of chile was supposed to be on this panel, and we just updated our trade deal with the first ever gender section for a g7 country. this is the kind of thing that people are looking for to make that case that trade can be a positive source were citizens and workers, and not just for "the economy" at large. grexit that would be the new standard of trade agreement? it would -- >> so that would be the new standard of trade agreement? p.m. trudeau lowering tariffs is administering barriers absolutely part of it, but we have to make sure that while we are doing that, we are creating opportunities for people to succeed. vonnie: you are watching the
10:17 am
inaugural bloomberg global business forum, taking place in midtown manhattan. that was a panel, as you saw, with ims managing director chri lagarde and prime justin trudeau. we also had stephen schwarzman on that panel as well. we heard from apple ceo tim cook on things like climate change, daca, immigration, the global turn inward, and much, much more. a fabulous day. >> absolutely. and there you are seeing ims director christine lagarde monitoring that panel on trade with a number of leaders. justin trudeau speaking there just a moment ago, saying that trade furthered economic growth, and there is also a need to focus on more progressive trade, vonnie.
10:18 am
is amazing day overall because we also have a very much anticipated fln the -- fomc concluding. we will get lots of questions from reporters on the more fine-tuned details that we will possibly here in the statement. we have some excellent guest s coming up on that subject as well. mira: in terms of the balance sheet, so many people i have been speaking to have said that is so well telegraph, this is not going to be the moving decision of the fomc meeting and chair yellen's decision. we have some adjusting commentary as well about this meeting, and it is something we will talk about right now, in earlier,we showed overnight volatility spiking to its highest in 2017. it is a highly anticipated meeting. vonnie: on that subject, let's
10:19 am
bring in our esteemed guest. bank of america merrill lynch head of research season mills with us -- ethan mills with us. harris of our bloomberg intelligence agency. we have some details about the balance sheet online, and that is maybe not the most important thing that comes out of today, but it will be closely scrutinized, exactly what those details are. will we get them? mr. mills: i think we will find out the probability of a december rate hike, which is what the bond markets are focusing on right now. i do not think the fed is really to -- ready to telegraph it, because they can get some more information, but we will hear how much they lower their inflation forecast. if they lower it a little, that
10:20 am
might keep december alive, if they lower it a lot, it will take december off the table. so the balance sheet story, as you said, is pretty much price out. vonnie: and you will be watching for clues about the next rate hike. do in thats yield case after today? ira: i agree that runoff is priced in. of information that the fed will give us about that. we are waiting for the treasury department to tele's how much they are going to issue, how many 10 year bonds will they issue? i think the clues are in the summary of economic projections, how much did they move the dots down? you get a lower inflation forecast, but this is also marketing the fed's view to market. i do not think the fed will move too much unless there is a hawkish surprise. hawkishness,ing of will we see any kind of a shift
10:21 am
and more convergence among the fomc to turn to a more hawkish tone and encourage the markets to reprice, to be more aligned with the dot plot? ira: i think there are members that would like that to happen, but the preponderance of the members of the fomc will be to not do that. and this is not just for the meeting directly, but janet yellen is sure to get asked who will be the next fed chair, who will be the next fed vice chair? mira: she will not answer those, will she? ira: she will not. she will be asked but she will not say anything about it. i wanted to show you this chart, just basically showing the 10 year treasury yields that have actually of bondd in periods buying and when the feds have stopped those purchases, yields have come down, which is not what you might expect if you think about it in a different
10:22 am
way. where do yields go from here in terms of the curve? will we see it steepening? ira: i think the bonds -- mr. mills: i think the bond market will have to price in a more hawkish fed. a they have basically said we do not fear you at all, we do not expect you to do hikes at four out of the next five meetings. they do not even seem to care about the balance sheet shrinkage. i think that is because the current fed is making promises for a future fed that might be a different group of people. forward, as we go they ramp up the shrinkage of their balance sheet and as they deliver at least some of the rate hikes they are promising, the whole yield curve elevates. i am not sure if it is going to steepen or flatten, it is it is both the bond story and the rate hikes story going on, but there is a lot of upside risks to yield in the bond market. vonnie: you are not in? ira: i think -- nodding? ira: i think the risk is flat
10:23 am
nurse -- flattening rather than steepening. 10 year yields do not have to move very much at all, whereas the front and will have to move up with the fed hike. have the risk of further flattening here. that being said, the ecb is the one thing that can throw a wrench into that by starting its own caper. 2013 there. when you look at where term premium currently is, how much extra juice investors demand or the amount of risk that they take for extra maturity, that is near zero. the yield curve is not as flat as it should be given the term premium being so low. i think we can get to 25, 30 basis points on 2/10 for example, which is about half of where we are today, 70 basis
10:24 am
points. vonnie: that is pretty phenomenal. even, you have studied the for many ak's heads decade. this is the first time we have seen quantitative easing in effect in the united days to this extent -- united states to this extent. if somebody else comes in, it is likely to be someone like john taylor or more rules-based -- do they change that completely? ira: i think there is -- mr. mills: i think there is a good chance we get a change in leadership. i think yellen is still in the running, but the way she has talked about regulatory policy does not line up what with the trump administration. if they bring in another person to run the fed, i think it will still be somebody who favors easy monitory policy. they want 3% growth, they do not want someone coming in who will slam on the brakes. your questions about qe is right. will the fed the willing, in the
10:25 am
future, to be as aggressive as they were during the crisis? will we get three qe's? the answer is it will depend on a lot on the new structure of the committee, and we will have to see who actually takes the nomination. mira: when it comes to the dollar, i know you have said you should buy on the dix straight after the meeting and the press conference, but longer term where does the dollar go from here? mr. mills: if you look at the markets right now, they have totally ignored the fed story. i think markets are thinking that low inflation is here to stay, so the fed is really kind of laughing in a way on its exit onategy -- bluffing in a way its exit strategy. so the dollars on an upside risk, like the 10 year yield. if we get any hint of inflation, the fed will follow through and we will see a stronger dollar and higher bond yields. mira: what happens to other asset classes will there be some kind of popping of any bubbles
10:26 am
anywhere? ira: i do not -- mr. mills: i do not see any popping of bubbles because i think the fed will follow through on a very slow exit path . i could imagine in the next 3-6 months a little bit of choppiness in the markets in general because it has been like goldilocks right now. the fed is not doing anything, according to the market. inflation is low, growth is strong. we believe there will be some rocking us in the markets. vonnie: ethan harris, bank of america and merrill lynch head of intelligence research. we have a special 2:00 p.m. new york time, 7:00 p.m. london time. this is bloomberg. what did we do before phones?
10:27 am
10:28 am
they save us from getting lost, getting hungry, and getting tired of places like this. phones changed everything - shouldn't the way pay for them change too? introducing xfinity mobile. where you can pay for data by the gig, and share it across all of your lines. no one else lets you do that.
10:29 am
see how much you can save when you pay by the gig. xfinity mobile. it's a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. they save us from gettingones? lost, getting hungry, and getting nervous in places like this. now phones can save us money too. introducing xfinity mobile. with unlimited data for just $45. that's the lowest price out there for one line. and you can get the same price on up to five. see how much you can save when you get unlimited on a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. ♪ vonnie:vonnie: live from bloomberg's world headquarters , i'mw york and london nejra cehic. vonnie: and i'm vonnie quinn.
10:30 am
survey this week are codling for a survey of barrels of crude. you can follow the release on the bloomberg. $50 ais flirting with barrel. let's get to julie. >> we are seeing a larger buildup than estimated, but about 4.6 million barrels. down,ne inventories are distillates down about 5.7 million barrels, and gasoline down about 2.1 million barrels. he growth in crude continuing over the past several weeks here, but the drawdown products asfine well. we see refiners try to catch up after being shut down post hurricane harvey. we find it here at 5.5%, although it looks like this could potentially be relatively
10:31 am
bullish for oil prices. it is frozen there. if you take a look at the bloomberg and what we are seeing, it looks like oil is taking a leg down initially -- or a leg off the highs, but is still higher on the session and holding steady around $50 a barrel. when we checked back with you in about 30 minutes, we will give you an update on where oil is trading at how these numbers are being interpreted by the markets, but again a building crude oil inventories is larger than estimated, and we are seeing a drawdown in gasoline and distillates. vonnie: julie, thank you. we will continue to keep an eye on the price of oil as it fluctuates. let's check in with emma chandra with the first word news. emma: one of the strongest hurricanes to ever hit puerto rico. maria came ashore on the southeastern coast of the islands today. the category four storm has of 144 miles per hour. officials warned that the hurricane could cause billions
10:32 am
of dollars in damage and force the government to rebuilt several communities. for the second time this month, mexico has been hit by a killer earth wake here in measuring earthquake.ck -- ed 7.2, killed at least 240, and collapsed buildings. in the british government has been averted. the foreign secretary has backtracked from his fret to quit -- threat to quit theresa may cabinet over her brexit strategy. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm emma chandra, this is bloomberg. vonnie? thate: emma, thank you for . president donald trump is continuing his meetings with world leaders after his united nations a view yesterday.
10:33 am
this comes after the president is said to have warned saudi arabia and the united arab and or its to not take military emirates to not take military action against qatar.-- cutter -- is the president being diplomatic, maybe presidential by doing this? >> he basically wants to make sure that the mideast is unified in iran.tempts to rein r,is conflict between qata saudi arabia, and the uae is not helping. you would like to see that the escalated and get solved. we are confident that our thatting is accurate on story, and we are not sure that a one-word answer is donald
10:34 am
trump definitively understanding what we are asking him. we are standing by that story. vonnie: as we speak, the president, as you can see, is -- the president of iran, as you can see, is talking. let's listen in. >> stranger things have happened, and it is a great honor to have you with us. [speaking foreign language] >> the president they're saying we have a chance, but who knows? that is the palestinian authority leader, mahmoud abbas. marty schenker, let me turn back you -- theask fundamental disagreements that exist between countries are not going away. are there new solutions to be found in this new administration? words andre are good
10:35 am
good intentions, but they do not make for peace, and many administrations before this one have found that out. donald trump is hoping that his diplomatic skills and personal relationships will count for a lot, and of course, jared kushner is working in the background as well. his initiative of enlisting the is kind of pivotal to try and resolve this issue, but it has been intractable. it is centuries old, they are hugely emotional -- there are hugely emotional issues involved. there have to be concrete steps. to havehe doesn't seem a fan in both the israeli leader and the palestinian authority -- doesn't seem to have a fan in both the israeli leader in the palestinian authority -- does seem to have a fan in both the israeli leader and the palestinian authority. that is a good start? in the past days of the
10:36 am
obama administration, john kerry deadout there and hit a end. netanyahu is especially happy with donald trump's stance on iran, israel thinks iran's nuclear ambitions threaten them directly. he will find a willing partner in israel, but there are certain issues with israel that they will not agree to. as vonnie was saying, netanyahu's reaction to the president's u.n. speech, one of many varying reaction. americaave mentioned first and sovereign or sovereignty maybe 21 times in the speech, but are his actions showing a less protectionist stance or not? marty: i think he was trying to walk a very fine line while he was urging all nations to exert their sovereignty, at the same time talking about unified action against north korea and iran. so he had a more traditional,
10:37 am
gop globalist view on some of the issues that have been unsolved for a long time while he is urging everybody to look out for themselves. somewhat contradictory, it is where theclear foreign policy is. donald trump seems to be more concerned about his performance than the actual policy, from his tweets this morning. nejra: moving things forward to health care and even tax reform, what are the key things to be looking for now? on tax reform, for example, we are in week one of what is supposed to be a seven-week pr roadshow? marty: yes, we have been promised a more detailed tax plan from congress, which is the plan that donald trump and his administration said they would endorse. to the extent we get more details, that will be much more help all in terms of donald trump's roadshow. everybody supports tax cuts. it is the details that are the devil. once we get more meat on that
10:38 am
, he will have a better chance of explaining how classill help middle americans. nejra: $1 trillion in tax cuts, how will that help middle class americans if corporations will get a bit of a benefit? will they really hire more? will wages go up? marty: the key part of this, and many economists agree -- intelligent tax cuts will help the economy grow. when the economy grows, perhaps not at the 5% donald trump would like to the, but 3%, 4% over the 2% we are getting now, it does help everyone. to the extent that tax reform does increase economic activity, that will be helpful. i want to ask you a quick question about health care. is it dead on arrival? let's play what jimmy kimmel had to say in his monologue. >> not only did bill cassidy
10:39 am
failed the jimmy kimmel test, he failed his own test. you do not see that happen very much. this bill is actually worse than the one that, thank god, republicans like susan collins, mccainrkowski, and john torpedoed over the summer. i hope they have a defense to do that again with this one. words fromng someone who now has skin in the game from someone's opposing this. whyhis dead on arrival, or are they trying to bring it to the table again? not dead on arrival, they are in shouting distance, but if they are not able to get to 50, they cannot vote on this proposal. this is going to be another embarrassment to the gop leadership they cannot it -- if they cannot get this done. i think the kimmel diatribe over this bill is really an important
10:40 am
moment, and i think it will make it much more difficult for senators murkowski and mccain, for instance, to vote in favor of this. collins is a no, and paul is a no, so i do not see how it will happen. vonnie: did you get a response from cassidy yet? kimmel does not understand what is in the bill. i think he does. vonnie: marty schenker, thank you very much. the bill has not even been forwarded yet anyways. it is very hard to know. nejra: fedex delivering good news to investors. shares are rising, despite the fact that the shipping and issedht company m quarterly estimates. the facts behind our stocks on the hour, next on bloomberg.
10:41 am
10:42 am
10:43 am
♪ nejra: live from london, i'm nejra cehic. vonnie: and i'm vonnie quinn. this is bloomberg markets. business leaders ringing the alarm on recent market rallies and valuations. joining us now is erik schatzker, sitting down with david rubenstein at the bloomberg global business forum taking place today in new york city. >> you were among the first people in private equity to flag a recession risk. several years ago in fact. what are you seeing in the economy now? david: it is in reasonably good shape. i have been saying for a number of years that a recession is due at some point. we have one every eight years on average, we are now 8.5 years along a gross cycle. just like a broken clock is right twice a day, i will be right at some point, they will have a recession. but right now, the economy is
10:44 am
doing pretty well. we are growing at 2.5% for gdp, and i would say i do not see any signs of a real slowdown right now. some people are talking about synchronized global growth. are you seeing that as well? david: the emerging markets are doing better, but i do not see any recession anywhere in the world right now. that surprise you? david: historically, some parts of the world do not do well in some parts are doing well, but things are in pretty good shape. hasdeepest recession probably been in brazil, and it is coming back, slowly, but coming back. vonnie: -- erik: what if trump is really turning into a bipartisan. what would that mean? david: i think it would be a good thing. washington has become very deeply divided the past 20 years or so, and it is very hard to get republicans and democrats together. if he can bring the white house
10:45 am
together, they deserve a nobel peace prize. erik: do you think you can do that? david: whether it can be sustained, i do not know, but bipartisanship would be good in washington. erik: are you encouraged and what you have seen so far? david: i have a program where i in front ofstorians members of congress on american history, and we try to have a bipartisan discussion. erik: barack obama can still draw a crowd. did you still pay him $400,000 to speak at carlyle? i did not personally pay him, but we have had president george bush, president jimmy ,arter, president clinton we have had presidents at all our conferences. i do not know what the payment arrangements were, but he was happy with how we handle that.
10:46 am
he is very well-versed on every issue. erik: tell me what he said? david: he said he felt he had job to help the business community. when he came into office, the recession was deep, and he got out of the recession with a lot of job creation. + given the kind of -- erik: given the kind of criticism hillary clinton face andgetting paid speeches the regrets she has now, should former presidents be paid to speak? a modest pension from the u.s. government, that is that, and they have their offices paid. they do not have a there in teen salary. he will have to make a living, and there is nothing wrong with being paid for speeches, just like you're being paid to interview me. is there anything wrong with that? david: it is -- erik: it is how i earn a living. david: people have to learn all -- earn a living. i do not think you would go into government and do anything
10:47 am
improper because you are being paid a speaking fee. i do not think that is an issue of former president what have versus a candidate who would be president in the future. + units -- erik: you described a high equity paradox. thes an axiom, incident, paradoxes that cannot continue indefinitely? or can they? cand: sometimes they continue for longer than people think, but what i would think is that private equity right now is attracting enormous amounts of money. why is that? over the past 5, 10, 15, and 20 years, private equity has outperformed every other asset class. the right now, money is coming in from all over the world because people think we can continue to get these attractive rates of return. erik: have you ever seen this level of interest and the assets to manage? david: i have never seen this level of interest in 30 years. everything will probably slow down at some point, and as one
10:48 am
famous economist once said, if something cannot keep going on forever, it eventually want. right now, the interest is very high. erik: you announced almost a year ago that carlisle intended to raise something in the range of $100 billion over the next four years. given this level of interest, can you say with any certainty you are likely to exceed that target? think we will certainly make that target. we might exceed it, but we will certainly make that target. tok: and is there any need take advantage of the opportunity now, raises much of that money in the short run, because you cannot know what things look like 2, 3 years from now. david: when the economy slows down and people are nervous, it is hard to raise money. right now, the economy is pretty good. when it slows down and is priced cheaper, we will have the money to invest at attractive prices. but prices today are high but
10:49 am
still reasonably workable, and we can get pretty good deals now as well. of the fewre one people in private equity who has ever said that to me. david: over the past year or so, our company has appreciated in value quite considerably. so although we are paying high prices by traditional standards, we are making these companies more efficient and therefore more valuable. erik: how comfortable do you feel committing capital today relative to how you felt two years ago, five years ago, given where valuations are? it is more expensive today than it was five years ago. historically, the multiples for private equity were may be around 8, 9 times. before the recession, they went to 10, now they are close to 11. so many operationally skilled people now, former ceos, coo's working on this company, we can make them more efficient. and investors are willing to accept lower rates of return. net income generates of 20% is
10:50 am
what they wanted 10 years ago, and now they want 15%, that is more than acceptable. erik: less than 15? %? want 13%,e people 14%. if i told you i could get you 14%, would you be happy? erik: better than the treasury. david: you talked to me years ago about the transition between private equity and asset management. you are still talking about seen but i have not carlisle do anything meaningful in that regard, and i have not seen it anywhere else either. why? many of theber, businesses we own generate carried interest, and that is something some investors do not like as much. so what i was trying to say is more fee income oriented businesses would describe it, and you are seeing some of the big businesses that we own that have more fees than traditional businesses.
10:51 am
erik: why not -- some of these traditional asset managers are under a great deal of rusher. why not go and buy one? david: right now, they are areing at multiples that twice the kind of multiples we are trading at. if you are a public we traded company, -- publicly traded company, you would dilute your earnings. that is why we make their fees go down before we buy them. one last question for you. there is always a natural tension of a private equity firm among the potential target over the degree to which your buyer does you are a buyer or seller. over the past couple of years, carlisle has been harvesting more than it has been committing. is that changing? david: for the last five years, private equity firms have raised more money than they have invested, and year in abe the sixth row. prices are higher, and money is
10:52 am
available to raise. i suspect next year it might change, but right now we are investing a fairmont of money, about $60 billion, $17 billion a year. -- $16 billion, $17 billion a year. when prices come down a bit, we will be in good shape. erik: why you think it will come down next year? david: it does not have to be next year, but at some point the cycle will come forward world prices -- where prices will come down a bit. so when they do, firms like ours will be a good position to take advantage of it. vonnie: carlyle group's david rubenstein speaking with erik schatzker. still ahead, more from the ,loomberg global business forum the inaugural one, in midtown manhattan. in the next hour, we will have and some interviews panels to, as well. this is bloomberg.
10:53 am
10:54 am
10:55 am
nejra: live from london and new york, i'm nejra cehic. vonnie: and i'm vonnie quinn. this is bloomberg markets. it is time for our stock of the hour, and popping higher are shares of fedex. and caught estimates its outlook. abigail doolittle is with us. what is going on? like a big seems divergence. behind the midst of a cyber attack that hit their tnt business, let's take a look at their reaction since the post-market yesterday. this is an intraday chart over the past two days, and we see yesterday after they announced, the stock was down as much as 4%. 16% earnings missed, but shares are now higher, and probably it is because analysts and investors on the street seem to hit --his $40 million
10:56 am
$14 million hit is a one time thing, and is not holding it against them. nejra: but what about the caution side of this? to someonedid speak at bernstein. he thinks there could be some reoccurring impact in this. he thinks consensus estimates are a little too high looking at the 2020, 25% growth. an impressive is story, unachievable growth. he remains on the sides. doolittle, thank you. up next, the european close. this is bloomberg.
10:57 am
10:58 am
10:59 am
nejra: 11:00 a.m. in new york. in london. 30 minutes left in the equity trading day in europe. i am nejra cehic. i am vonnieew york,
11:00 am
quinn. this is "european close" on "bloomberg markets." ♪ here are the top stories from the bloomberg and around the world. from the bloomberg global business forum, be sure to catch tony ressler and marc lasry. macronpresident emmanuel outlines a bold vision for his country's economy. macron andar from look at how his grand plan fits in with europe. and we are just three hours from the fed's rate decision and potential clues about the unwinding of its balance sheet.

4 Views

disc Borrow a DVD of this show
info Stream Only

Uploaded by TV Archive on