Skip to main content

tv   Bloomberg Markets Americas  Bloomberg  October 10, 2017 2:00pm-3:30pm EDT

2:00 pm
we are live from bloomberg world headquarters in new york over the next hour. catalonia pulls back from the brink. it's president proposes to suspend the independent referendum. half the world's billionaires bank with them -- we go behind sergio armani's strategy at ubs. they may. have 30% fewer staff in the years to come. walmart expecting a big boost in online sales, a 40% surge in e-commerce as it tries to catch up with amazon. we're looking at a bit of a recovery here on the s&p. julie: intraday records for all three major averages today. the nasdaq could not sustain that level.
2:01 pm
large-cap tech is lagging the overall market gains. we see the dow perform the best. one of the reasons the dow is performing so well today is indeed walmart. seeing a gain of 5% on that forecast for e-commerce sales to rise 40% in the next fiscal year in the united states. walmart has been making investments in e-commerce for years and it looks like now they are finally starting to pay off. at the expense of amazon. amazon seen as a big competitor --walmart and analysts i'm putting alibaba up here as well. those shares also rising today. amazon the market cap of versus alibaba. we last saw alibaba as larger than amazon market cap wise in mid-2016.
2:02 pm
alibaba with larger than amazon market cap. we will keep an i on this metric to see if that trend is continue. we are watching oil prices, which have been supportive of break stocks, in particular drillers. crude oil pushing closer to $51 a barrel as we hear from the opec chair saying we see an expansion in the number of countries signing on to the production cut plan that is ongoing. transocean and diamond offshore among the gains. finally, we turn to a proxy for ewp surging in the wake of those comments from the president of catalonia, pulling back on an aggressive plan for independence, deferring and independence push, so to speak. we are seeing that up 1.5%. julia: thank you very much,
2:03 pm
julie. staying on spain, maria joins us now on the presentation from the president in barcelona. what did he actually say here? there were concerns that he would declare independence here. it looks like he's taking a step back and wants more dialogue. "i accept the mandate they gave me." he didn't give himself a 48 hour deadline. markets with a sense of relief because he backtracked on those two things. the 40 hour deadline and the unilateral aspect. the key here is him saying we think the vote is valid. as per the spanish constitution as it stands now
2:04 pm
was not valid. it violates the constitution. the courts to recognize it and the european union has said it . he insists the vote was valid, but i will suspend the referendum that will make catalonia and independent republic. not follow through on the pledge to create an independent republic by the end of the week. julia: he says we need more dialogue at this stage. the spanish government saying catalonia has declared deferred independence. that is quite stern rhetoric again from the spanish government here. where does this lead to the negotiating process? >> that is the key question. hopefully, we will speak in congress tomorrow. we will hear more in the spanish central government. madrid will tell you time and
2:05 pm
again, this is a violation of the constitution, the sovereignty of the country belongs to the spanish. we certainly don't accept the result. we don't think it was a valid referendum. the european union will tell you the mediator here -- [indiscernible] we don't think the vote was valid. what will happen from here is the question everyone is asking. [indiscernible] julia: we are having a bit of trouble hearing you. thank you so much for the update. we will continue to watch that. scarlet: from european politics to u.s. politics, president trump's feud with bob corker sparking concerns about the
2:06 pm
white house effort to overhaul the tax code. in a meeting with henry kissinger today, president trump aside those concerns when asked if the court reviewed will hurt his tax effort -- corker feud will hurt his tax effort. >> the people of this country want tax cuts, they want lower taxes. we are the highest taxed nation in the world. we have companies coming back. scarlet: kevin cirilli joins us now from capitol hill. that was an interesting change of strategy where the president doesn't respond to bob corker after a twitter feud early in the week. as thelittle bob corker, president has neck named him -- nicknamed him. the president clearly doubling down on his criticism against senator bob corker. there's some concern that this could hurt his legislative agenda. i've spoken to several aides on the republican side of the
2:07 pm
senate who say they don't think this is entirely helpful. saying we will be getting new details about tax reform efforts -- i spoke to one senior aide this afternoon who told me the president is frustrated about the impact of the state and .ocal tax deduction two dozen house members led by representative keatining are coming out against this. the president is hungry for a legislative win. he wants his legislative team to get something done by the end of the year on tax reform. scarlet: looking at a pretty tight deadline there. what indications has bob corker given on tax policy? what do we know about his red lines in particular when it comes to tax legislation? >> senator corker
2:08 pm
unfiltered with note reelection -- no threat every election hanging over his head. reelectiont of hanging over his head. i think when you look at his fiscal record, he's frequently advocated for fiscal restraint, but frankly, there's other conservatives here who are more fiscally conservative than he seems to be. the big takeaway, concerns about foreign policy, in particular on north korea and russia. that's what is driving this political feud. julia: donald trump tweeted about the power of the pen. if you can't rely on congress, he will do it himself. >> executive action will be
2:09 pm
announced as early as thursday. he will be surrounded by conservative folks, including senator rand paul. this is a sign of the times that the president is wanting to have some type of win to take to conservatives to say he is trying to get things done. it's not as far as he would want in order to allow folks to have a bit more choice in their health insurance plans, but it is significant action that i'm told will be unveiled on thursday. julia: kevin cirilli. onrlet: let's get a check the first word news this afternoon with mark barton. throughldfires tore california's winegrowing regions, killing 11 people, prompting the evacuations of 20,000 others.
2:10 pm
winds expanded 17 fires across the northern part of the state, scorching 115,000 acres. president trump and rex tillerson are scheduled to have lunch today with the defense secretary after reports surfaced last week that tillerson had called the president a "moron" and was considering stepping down. in a meeting with henry kissinger, the president reaffirmed his confidence in tillerson. in an online interview, he also challenged tillerson to an iq test. donald tusk says brexit ons will not move to the next age until december. he said in brussels, it's far too early to move to the next phase of planning and new trade relationship once the breakup from the block is completed. -- both sides might
2:11 pm
have to look at other options beyond december. kenya's opposition leader has withdrawn his candidacy from a -- he blamed the country's independent electoral and boundaries commission. has foiled the are free and -- fair. mark: the election reset for october 26 was scheduled then after he challenged the incumbent president's victory. the election will proceed as planned the spite the withdrawal
2:12 pm
-- despite the withdrawal. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. the ceo of ubsp, graced the latest cover of business magazine -- bloomberg businessweek magazine. this is bloomberg. ♪
2:13 pm
2:14 pm
scarlet: this is "bloomberg markets." julia: the latest cover star of "bloomberg markets magazine" is sergio ermotti.
2:15 pm
he discusses the role of math will play in tricking the banks over the next decade. the jobs are going to be much more interesting ones were the human content is crucial to the delivery of the service. here to discuss that, sergio ermotti himself, along with joel webber. great to have you on the show. i want to start by talking about markets. one of the interesting things you said in an interview, when you look at the markets from a risk premium perspective, there is a bit of concern about complacency. where do you see that? sergio: across all asset classes, to be honest. more remarkable is it has -- ied across the board
2:16 pm
see a lot of complacency and risk premium debt. julia: enough to cause alarm? sergio: not alarm. to be honest, the trend seems to be to last for much longer than we expect. therefore, it is too early to say if this is happening when not -- or not. we have to pay attention to that. >> what are you hearing from clients right now? what are they coming to you and asking for? sergio: i do see a bit more willingness to deploy cash. that hasn't really changed from the beginning of the year. our indicator is cash balances. we've been running for the last wer or five years -- now, are going down to the mid-20's. it is good news. a little bit more willingness to
2:17 pm
deploy money and invest money in bonds or any other asset classes . still looking for diversification. the conviction level is not very high, to be honest. >> one of the things we didn't get to talk about in the magazine was cryptocurrencies. is anyone coming to you and asking for more bitcoin? sergio: some. i don't think there's any meaningful desire by high net worth individuals to take big bets on this kind of phenomenon. >> are they curious right now? what is your view on cryptocurrencies at ubs? sergio: at the end of the day, we believe existing currencies may move into becoming more of a cryptocurrency, something that makes it much easier for intermediaries, for clients to exchange services and paper
2:18 pm
services that pay for services. don't really believe there is much room for the creation of new currencies. banking, no credible issuer for that. premature to do that. julia: the other issue we are talking about right now, monetary policy and the impact the fed will have on retracing stimulus. how concerned are you buy leadership change at the federal reserve? sergio: not overly concerned. at the end of the day, there is a sense of -- there was a high -- if there's any change, we need to see it. sure anybody will do anything destructive. the markets are overpricing the
2:19 pm
probability or the expectations that we will realize the alpha point, even three quarters of a point higher in the future. the equity markets are applying this kind of potential hike. i don't expect the fed to move aggressively. y are able to exit by the fact that a lot of the bonds they told will -- we'll be able to contract the balance sheets smoothly. julia: one of the wildcards, u.s. president who isn't shy about sharing his views on monday policy as well -- monetary policy as well. are you worried about the independence of the fed going forward? sergio: usually, when you look at this kind of political intervention not only in this country but generally in the world, they may attract the contrary reaction of people
2:20 pm
trying to show the argument. i don't think it's a smart move for politicians to interfere in monetary policy. >> you think about that policy specifically, is there anything that excites you? how will it benefit your business? sergio: we're not overly focused on those changes. the angle that matters for us is not necessarily monetary policy per se. it's more if there's an oversized ino be the prudential part -- the path there seems to be taken and therefore i don't expect any major changes. >> how much time do you spend actually thinking about the stuff? sergio: fortunately -- unfortunately, still too much, to be honest.
2:21 pm
it is an issue for everybody. and how regulation may or may not continue to majore -- involved is a -- may or may not continue to us.ve is an issue for we need to understand what the regulation means in this country. scarlet: i want to ask you about how you've reshaped the business over the last six years. one of the great comments that came out of the interview was you said there's still not the right perception of u.s. and -- all as an asset manager. the will accurately reflect shape and the balance you've now found at ubs? sergio: fulton elite, to be
2:22 pm
honest -- ultimately, to be honest, it is up to us. what i meant is also to recognize that the capital allocation and the business may change. we are an important business bank that is instrumental and important to fulfill our desire to be the leading wealth manager in the world. at the end of the day, how can we translate the cash flow we generate today into capital returns? julia: that is reflected in the share price as well. sergio: investors are waiting for the time in which the capital buildup to fulfill regulatory requirements is over and the cost -- legacy matters is a threat. we are on a good path and we are almost there and we are actually there and now, people will start
2:23 pm
to see the cash flow coming back for dividends or share buybacks. i'm confident in the foreseeable future we will be able to sustain our desire to be reclassified. >> you are six years into this strategic overhaul which doubled down on wealth management. these six years in the past decade have been defined by regulation. what do you see in the next 10 years? what are the forces that will define those? >> regulation will continued play a role, but not as significant as technology. some it will sit here and look back at the last 10 years and say look at the amount of changes we went through because of technology. all of them are net nets for the positive. we will have an industry that
2:24 pm
will be much more efficient and effective in the way we use our cost and financial resources. forill have better service our clients done in a cheaper way. the industry needs to find this balance between creating cost reantage in order to buildup asset returns as an industry, past those cost savings to clients -- and pass those cost savings to clients. julia: you respect to see -- itr consolidation is going to mean job losses. what proportion are we talking about? sergio: job losses or people changing their draft. -- changing their job.
2:25 pm
we will go to the next 10 years of demographic contractions . how do we replace those people? in general, there's a lack of positive trends -- lack of demography, resistance to immigration. therefore, we need technology to step in and fill the gap. some of the jobs we lose our people that are going to retire in the next nearest -- are people that are going to retire in the next 10 years. i'm not overly concerned about job losses per se. we will have some job losses. that's why we also train our people. we need to make investments n organization and our own people need to
2:26 pm
invest more time in being competitive in the workplace. julia: message for banks and far beyond. that was sergio ermotti, the ceo of ubs. be sure to pick up the latest issue of the magazine on newsstands and online. still ahead -- the commodities close is next. from new york, this is bloomberg. ♪ is this a phone?
2:27 pm
2:28 pm
or a little internet machine? it makes you wonder: shouldn't we get our phones and internet from the same company? that's why xfinity mobile comes with your internet. you get up to 5 lines of talk and text at no extra cost. so all you pay for is data.
2:29 pm
see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. scarlet: from bloomberg world headquarters, this is "bloomberg markets." commodity markets are closing in new york. let's kick it off with west texas intermediate.
2:30 pm
crude oil futures rallied for a second day on signals that the world's biggest crude exporters could extend or deep in supply cuts. the thursday release expect it to show a slip for a third straight week. metals,ook to precious they are rising across the board , even more when you look at silver, platinum and palladium. silver rising for a third straight day as jupiter -- tensions linger from north korea to catalonia in the last hour. julia: we are seeing a major meltdown in japan's third-largest steelmaker. 20% lower. steph falsified data about the strength in europe about aluminum and copper products.
2:31 pm
our metals reporter joins us for the full story. interesting to hear these , companies andut saying we believe we've given up falsified data on products we sell. were: whose standards they not meeting here? >> they said customers and its third -- customer standards. 2000 tons of copper products they sold and 19,000 more units across these various products they sold to customers and began contacting them one by one . scarlet: this sounds abstract until you pinpoint what products these metals are used in. julia: who are the customers? nissan,ustomers are subaru has had we sell
2:32 pm
wings to boeing that could potentially have this in there. west japan railway came out recently and told us there's the possibility that some of this aluminum has been used in the bullet train in japan. julia: it's exported to the u.k. >> mitsubishi saying we make regional jets and rockets that may be using this as well. there was a successful rocket launch that may have been using some of this aluminum and copper. scarlet: we were showing a chart that highlighted the customers that kobe steel has. this is the supply chain function. these are their biggest customers. mitsubishi, toyota, general motors, ford, honda motors.
2:33 pm
this is something that extends to the vehicles on the road. this is the big question everybody is trying to figure out now. the stock market may have been down 20% or whatever, but the question is, how far reaching was this, how many customers are affected by it? we have a number of customers on the record telling us we don't have safety concerns but we will have to look further into it. there's a huge question mark right now. julia: this goes back 10 years. scarlet: raises a lot of questions about the integrity of japanese benefactors. -- manufacturers. takata had their own problems. one, tensis the big of millions of airbags. nissan came out last week and inspectors who are
2:34 pm
not been approved. -- who had not been improved. this raises questions for customers who are buying these products -- julia: and the reputational damage here and the legal costs as well. >> kobe touches on that in their statement. they feel shamed for this happening, absolutely. scarlet: the dod and the army also customers of kobe steel. the global supply chain network. thank you for giving us the much-needed perspective. let's get a check of the headlines on the first word news at this hour. mark: the story we've been following this afternoon, cattle alan's president suspended the region's push for
2:35 pm
independence today. puigdemont said it was time for dialogue but not before airing out some grievances. this is themont: first time in recent european history that there's been an electoral event amidst massive police violence against people commuting to cast their vote. mark: puigdemont added the landslide victory in the region disputed the october 1 referendum gave his government grants to implement its push to break with spain. hours before he addressed the catalan parliament, the european commission president spoke in brussels. he urged puigdemont to resist the urge for a formal call for independence and instead work with the spanish government to find a solution. may notivergent issue lead to conflict.
2:36 pm
it would be better for the catalans, for spain and for the whole of europe. mark: task and to the future of the european continent depends on what unites us. the canadian prime minister arrives in washington today for a new round of talks after president trump doubled down on his threat to walk away from nafta. in a forbes interview released today, the president said he thinks nafta will have to be terminated as a report surfaced the u.s. may be putting deal breaking proposals on the table. ahead of iran's nuke or agency warning the 2015 nuclear deal. chief said nuclear international nonproliferation efforts and washington's international standing would suffer as a result. president trump has called the accord "the worst deal ever."
2:37 pm
global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. julia: coming up later today, a bloomberg exclusive with paul krugman. he joins us on "what did you miss?" for a wide-ranging conversation. this is bloomberg. ♪
2:38 pm
2:39 pm
2:40 pm
julia: this is "bloomberg markets." consumer staples are rising, but our stock of the hour is -- julie: let's start broadly and look at the consumer staples. the etf that tracks them is up .75% today, one of the better performing groups we are watching in today's session. a lot of that is thanks to walmart. that company coming up with comments that their e-commerce business will rise 40% in the next fiscal year in the u.s. other staples related companies rising. costco getting a lift along with walmart and target.
2:41 pm
hormel foods among the suppliers doing well. theexception to the gains, one exception that is notable today is procter & gamble. the drop was pretty sharp earlier this morning. that's when the results of the vote came in that showed that on was nottz of tri going to be appointed to procter & gamble's board. they say the vote is still close. it looks like it's not happening and that's why we saw the drop off in the stock. he's been pushing for changes at the company and the company has pushed back saying they've already enacted a lot of these changes and he's looking at an outdated model of procter & gamble. , why not justlike have this person on the seat given the ownership structure and the amount of shares he owns?
2:42 pm
almost.ost rude not to, julie: they've been very aggressive saying we don't need this, you are not looking at the company correctly. he still says he should begin been a seat on the board given how close the vote is. and he has the support of three shareholder advisory firms. julie: unusual that he would have the support of them and not get the vote. procter & gamble coming up with earnings on october 20. deborah aiken covers the stock and the company for bloomberg intelligence. she's looking at organic sales growth that is pretty lackluster. it's fallen short of the industry average since 2010 with the last three years its slowest in recent time. we have a breakdown on bloomberg intelligence. the blue line is beauty, hair and personal care. family and home care in white.
2:43 pm
the organic growth rate at 2% is the purple line here. it is lower than competitors. there's been a lot of completion and discounting. the underlying declines in raw materials they used to make these things. they are not getting that in margin. julia: a missed opportunity, in other words. maybe slim itng down a little more. julia: something tells me this fight isn't over yet. let's turn to tech. bloomberg technology is forecasting from seattle this week. washington has been a growing hub for tech innovation and investment. --ly chang is joined by emily: we are joined by julie sandler, managing director at
2:44 pm
pioneer square labs. you've been at pioneer square labs for four months now. talk to us about what exactly you guys do. we've raised $12.5 million from the likes of jeff bezos and paul allen. fundsst pool of capital -- an incredible team of operating engineers and product people who work closely with a group of onto benares -- a group of entrepreneurs to launch new companies here in seattle and beyond. emily: jeff bezos, what has he asked for? bezos, they are excited about the quality of companies that entrepreneurs are partnering with at the studio,
2:45 pm
like a lot of the other venture funds who invested in our first round of capital. emily: any particular mandates from these investors? julie: he's really excited to see specific innovation across the managing director team. a lot of experience across consumer and enterprise with a passion for artificial intelligence and team learning. the six companies that we have spun out all stick to those names. emily: everyone is talking about ai right now. julie: silicon valley and the tech industry at large, we've seen a lot of tech trends come and go. there's a running joke that a management team building a company using simple data regression might say we are a machine learning company and then put that in their fundraising deck and hope for few million in free money. it's easy to get a sense that
2:46 pm
this fever pitch means it is overhyped. there's real substance behind this one. the ai revolution will be in the future compared to the way we talk about the revolution -- the mobile revolution 10 years ago or the internet revolution 10 years before that. leveragelication will these themes across -- emily: people like elon musk are warning about the dangers of ai. are there dangers? julie: it's interesting, folks talk a lot about the cyborg army coming or the big hack on the horizon. we have to think about what we can do to make life easier for the next generation. right now, the promise of ai is so strong in health care and innovation -- health care and
2:47 pm
education. we can grow businesses that are stronger and more compelling. right now, it feels like our response ability for the next generation is to do what we can to progress in ai and machine learning. emily: i would you say the areas in the seattle are different from's laquon valley? -- how would you say the trans-in the seattle area are different from silicon valley? julie: they are loyal to companies. entrepreneurs who start companies here tend to be much more nose to the grindstone then the bay area. emily: they might give you some push back there. julie: having lived in the bay area for a long time, there is such an echo chamber down there . in seattle, there is less of that. people can zero in on their
2:48 pm
missions and visions and spend a lot of their time internally focused. emily: what trends are you most interested in and what are you in av avoiding? julie: we are excited about the notion of using next generation software to disrupt legacy sectors. immigration has been one focus for us. focused onndless making the immigration process and applying for green cards and be says much more transparent and much more affordable for folks who have that priority over the next couple of years. we are excited about the trends we are seeing in augmented reality. beyond that, we are really passionate about finding talented, tenacious entrepreneurs. , thank youe sandler for joining us. scarlet: emily chang in seattle. julia: coming up, walmart stock
2:49 pm
surges after the company says e-commerce will increase 40% in the next year. from new york, this is bloomberg. ♪
2:50 pm
2:51 pm
julia: this is "bloomberg markets." scarlet: time for the bloomberg business flash. the international monetary fund its global forecast but warning policymakers not to get too comfortable. the imap listed its growth outlook for the u.s. and euro area and japan and china from its last forecast in july. 3.7% in 2018. the supreme court is asking the trump administration for advice on a consumer lawsuit against apple. -- suit alleges that apple
2:52 pm
approving apps if they agree to exclusive distribution. apple claims consumers can't heess the ente antitrust issue -- the movies anywhere service allows consumers to buy and store movies in a digital locker that can be accessed from devices. an announcement could be made as soon as this week. that is your business flash update. julia: let's focus on walmart, shares rocketing to a fresh eye in more than the europe of the company says u.s. online sales will fall by 40%. the retailer also has more plans for grocery. joining us, matthew boyle. as forecasts go, that is pretty stellar. >> 40%.
2:53 pm
doing high as they been in recent quarters, but nobody thought they would be able to keep up that pace. 40% was higher than analysts were expecting. that, on top of the buyback. they do buybacks every two years these days. highest level since may of 2016. julia: they will double the number of current grocery sites. matt: online grocery is a very strong weapon for walmart right now. they have 1000 stores that have curbside grocery pick up. they will add another 1000 feet nobody else has this. grocer in the biggest the country right now could whole foods is a tiny slice of the u.s. grocery market. walmart has much more of that. the more they are able to get the online grocery thing going, people who shop online and in the stores at walmart spend twice as much as those who just shop in the stores.
2:54 pm
--rlet: here's my question when it comes to e-commerce, walmart is looking at a much smaller base than amazon. do we know how big that has gotten? matt: they told us today their u.s. e-commerce sales were now $11.5 billion. globally, $17.5 billion. 4-wood mark, it's a $480 billion company, that is a drop in the bucket. -- for walmart. they are doing the right thing. they have the support of the waltons and they don't mind losing money online if they are going to be growing the top line. scarlet: they need to get the programmers and software developers and thinkers that amazon has. what are they doing to recruit? matt: they are going to college campuses, eel, princeton -- yale, princeton to recruit
2:55 pm
category specialists. they are hiring really bright kids, saying you don't have to work in bentonville, you can work in san francisco or boston. that will help change the culture and get new thinking into walmart. that will help them in this online battle. julia: customers spending on digital -- matt: it's not just acquisitions, its distributions, a lot of stuff we don't see behind the scenes. julia: is that gap with amazon insurmountable? matt: there's a lot of marketshare that's suffering right now. amazon is getting more than its share, but walmart cannot just sit there and think what we need to do to stay one step ahead of amazon. they have a good strategy in place and not many other retailers do right now. scarlet: does walmart consider
2:56 pm
amazon its biggest competitor? matt: best buy is on its game right now. target is looking to bounce back as well. google is now a partner with walmart. there's a much bigger ecosystem. --ia: the market share is up fantastic. scarlet: thank you so much. coming up, the starbucks ceo talks the business of coffee in our exclusive interview. how he plans to tie tech to the in-store experience. ♪
2:57 pm
2:58 pm
2:59 pm
♪ julia: i'm julia chatterley. scarlet: i'm scarlet fu. welcome to "bloomberg markets."
3:00 pm
julia: we are live in bloomberg world headquarters in new york area here on the top stories we are covering on the bloomberg and around the world. brewing a fresh business strategy, kevin johnson took over as starbucks ceo this year. the coffee giant, and our exclusive interview. has proposed a formal repeal of the 2015 clean power plant. we speak with one of the architect of that plan, gina mccarthy. , and an exclusive interview with a nobel prize-winning economist. his view on tax reform and the fed, and now when our from the close of trading, let's get a check of markets. the nasdaq is a lower --
3:01 pm
is a little lower, but little changed. all three major averages hit intraday highs today but the nasdaq could not hold on. how it is shaking out. we have staples shaking out as the best consumer group today. tact is weaker in today's session. this is a switch from a we have seen this year, by the way, today. because if you look at the year to date performance of the groups in the s&p 500, consumer staples are the third worst performing group read it is up on the year, with a gain of only 4.8%. tact is in the top spot, and has been rocky in recent days. the consumer staples is turning around today, due in large part to walmart.
3:02 pm
been making a lot of comments about e-commerce business, as well. a lot of other consumer staples suppliers are higher today as well. arman the molson gainers. target, also getting a gain today. on the flipside, you have the so-called bang stocks. , kind of theer counterweight to walmart, which is more successfully competing, it looks like, against amazon. facebook, alphabets and intel .re all taking a hit as well because of their weight, they are definitely holding back the s&p and the nasdaq, to some extent. scarlet: let's turn to our exclusive interview with starbucks ceo kevin johnson. he talks about how the coffee chain is intimate -- jane is
3:03 pm
innovating in the age of technology. running how he is starbucks differently than his predecessor, howard schultz. >> howard has years of intuition howardwould characterize as a much more spontaneous, intuitive sort of leader. with my background in tech and digital, i am much more thinking about using data to help inform me about decisions and the potential for what we do. but at the end of the day, we worked together for a long time, i value his creativity. i value his point of view. and i think i bring many things to the table that will help us as a company as we make this transition into the future. emily: starbucks has taken a stand on political and social issues, a plan to hire refugees, for example. you got pushed back from conservative shareholders on that. had you navigate that, and continue?
3:04 pm
a lot of times people misinterpret things we are doing, as a political statement pillar ofve an entire our social impact agenda around opportunity. and that opportunity started with the work we are doing to hire veterans. we said we would hire 10,000 veterans are spouses. we have exceeded that number, and we have up that commitment to 20,000 by the year 2020. we have identified the fact that there is over 6 million and agese, agents 16-24 -- 16-24, who are not at work or school. we have committed to hiring 100,000 people of those. so, the refugee mission was very consistent, given that there are refugees in countries around the world and we feel like we can help those communities. give those people jobs and opportunities, so in many ways this is core to the we are, and it is not about making a political statement. emily: did you get any push back
3:05 pm
from the board on this? are they involved? kevin: the board is heavily involved in this. we make sure the things we do are consistent with our mission, and they are not politically-driven things, that we do. we have hired military veterans and they have made our company better. the young people we have hired from "opportunity youth" as made our stores better. emily: you are also getting pushed back over your paid leave policy, 18 weeks for moms at corporate headquarters. six weeks for moms in the stores. had he reconcile that -- how do you reconcile that? employees on the front lines are getting the same benefits? -- the fact is benefitsbest-in-class in our stores. what is important to our
3:06 pm
partners in the stores is the increase in wage and we have made a significant increase in weight, in those partners in the stores. we have invested over 200 $50 million in wage increase, for our partners in the stores, trying to do right eye them. but it is a journey. we continue to listen to our partners and do right by them, and their unique situation. even after the closure of t vona, the future of retail is changing. everyone is at home, shopping on amazon. what does that mean for starbucks? good news for starbucks is, we are and have always been a consumer destination. and we think that is a key ingredient in retail, going forward we continue to innovate our customers want to visit, as opposed to traffic in a mall. this past year we have opened up more than 2000 starbucks stores, at a time when there is record closure by stores, by other retailers.
3:07 pm
so, our ability to continue to innovate and create a great retail experience in our stores, our ability to extend that experience from the brick-and-mortar to the digital mobile experience, are the two key ingredients we think will power us forward into the future. emily: markets around the world are becoming saturated, and have got their coffee now. it is putting pressure on accelerating the expansion in countries like china. what is the plan their? here?an tg china is our second fastest growing market. we have 2500 stores there. china is the biggest growth opportunity before us. the u.s. will continue to grow. the u.s.. and china are the two growth engines for starbucks. new stores inld china for decades, and still have opportunity for growth. julia: that was bloomberg
3:08 pm
technology's emily chang with starbucks president and ceo kevin johnson in seattle. let's check in with mark crumpton. mark. the cap to land president has suspended the region's push for independence to that -- the atalan president has suspended the region's push for independence from spain. of the nations leading gun-control groups is suing the makers and sellers of bump devices used by the las vegas gunman. the brady campaign to prevent gun violence says it is filing the lawsuit on behalf of victims to pay for counseling and other treatment julia. devices replace the stock
3:09 pm
and pistol grip of a semiautomatic rifle and allow the contentment -- and allow the weapon content to fire continuously -- and allow the weapon to fire continuously. bump stocks were used by las vegas gunman stephan paternot. at least 13 people are now infirmed dead in wildfires the california wine country. 20,000 have been evacuated to read as many as 1500 homes and businesses have been destroyed. officials say in those numbers are likely to increase. wineries and vineyards have been affected but industry groups say it is too early to assess the damage. the trump administration has proposed repealing the obama administrations clean power plan, a sweeping initiative for cutting back on green has power -- greenhouse gas emissions. the rollback will prolong in the fossil fuel burning industry. the rule never to effect because the supreme court put it on hold in february 2016.
3:10 pm
global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. i am mark crumpton. more on those rollbacks of powerplant regulations. we will hear from the architect former epaa plan, administrator mccarthy. from new york, this is bloomberg. ♪
3:11 pm
3:12 pm
♪ "bloombergis is markets." i'm scarlet fu.
3:13 pm
in a statement today, epa administrator scott pruitt says, we are committed to writing the wrongs of the obama administration by cleaning the regulatory slate. any replacement rule will be done carefully and with humility by listening to everybody affected by the rule. mccarthy,w is gina former head of the epa under president obama. gina, thank you for joining us today. i know the clean power plant took years to develop and touched every aspect of power in use. how frustrated are you, by this? i'm not frustrated. i expected something like this. but it is clearly disappointing to see this administrator is eyeing to narrowly look at what the clean act requires and it defers what we know the science demands, and what we have to do to meet our legal and moral lab legation protect our kids and families from public health problems, as well as they
3:14 pm
problems associated with client change. so it is disappointed, as opposed to frustrating. just a proposal. they will have to take public comment on this. and in the end they will have to tell the courts that this is an improvement of the clean energy act, that we should look at at the way the industry works and do our best to follow that. cities and states are doing great and many of them are already past where we expected them to be in 2022. that byhe epa says killing this plan, it will save electricity producers $30 billion annually by 2030. be lesssaid it would than 1/5 of that price. were you underestimating the costs associated with changing up the energy mix? let's not forget, we were
3:15 pm
reducing carbon pollution and looking at how the energy system was working. we knew then that some of these old coal facilities were not marketable. they were not competitive. and dealing with the shift in the energy world, to renewable energy. since we put this plan out, there has been analysis, including analysis done by the american petroleum shows we, that actually overestimated the costs. weis less expensive than ever anticipated because renewable energy is less expensive than it was when we first put this rule out. so it is actually more beneficial, and more cost-effective than we ever anticipated. it is just taking a look at reality here, folks. way the world is heading, and clean energy is the future. to look at only the coal facilities for reductions, we have to ask consumers now, to pay for those? those old, dysfunctional
3:16 pm
units that are no longer marketable, in business? it doesn't make sense for the american public, not to mention the challenges we face from mate change. just look around. julia: do you think the epa was just too ambitious, and illegal disputes that we have seen have suggested you are pushing too hard? the market was already going in that direct and, so you could argue that the rules did not to be so fierce? actually, it wasn't fierce at all. if you look at the way the energy system is working, they are producing a levels that we did not anticipate would be available until 2022. argue,could very well the energy system has gotten cleaner than we ever anticipated. but the one thing you can't argue is that the future is about supplementing consumer to go to old,
3:17 pm
coal-fired power plants that are no longer marketable. and the utilities themselves aren't spending money to keep operating them. that is what is being suggested here. and the other challenge here is that this is a proposal to repeal the clean power plan but it is not a proposal to do anything else. legally obligated, under science and the law, to take further steps. so this action, even if it were is going to is, face fierce criticism in the courts. it is actually i think, going to get the court's attention early on. that is why epa is not doing the job congress gave it to do, and we are going to reject our moral responsibility as well to keep families safe. cut the president trump epa budget by about 30%, practically speaking. as a former head of the epa,
3:18 pm
what kinds of basic functions does that mean the agency can no longer do? how does that restrain what the epa is capable of? it is entirely consistent with the way this administration is looking at sign's, and looking at the ways in which we continue to address issues related to clean air and clean water. they would want you to know that the only area of disagreement as climate change, but take a look at the budget proposal. it is going to decimate the agency. it talks about getting rid of half of our scientist, dozens of our fundamental programs, it looks at rolling back rules to clean air and clean water, not just climate change. so, this administration is really on a fight to dismantle the very protections that led to the creations of epa, which are fundamental public health protections. our ability to deliver clean air and clean water to people in this country, maybe we just take it for granted and never expected anything like this to
3:19 pm
uppen, but we have to step and renew our voice here, that we still care about these issues. they are not partisan. there are not partisan. they're about how we keep our communities safe, and our kids safe. and that is what it is really all about. it is a significant battle, and we need to make our views known. obamat: president implemented many of his climate change policy through executive order, rather than congress. he couldn't get through congress. and now the trump administration rolling them back. how do you see this playing out? because there was always the risk of this happening. i think you misspoke, just a little bit. he did not do it by executive order. he did it using executive authority. epa is required under law, and the supreme court has said this carbonimes, that if pollution is causing a problem, which we know it is, the science is clear, they have verified
3:20 pm
that epa must regulate it. this is the authority and the responsibility that congress gave us. we did not influence this in any way, outside the common order. we are under a an obligation to regulate in this way. we took the best way we could to actually follow the energy system so it would be affordable , energy would be reliable. but honestly, the clean energy train has left the station. this administer -- for this administration to think that they can now dismantle that, and take a narrower approach, which is to bring back investment in coal, i think it is a full of's errand, at this point. it is long gone. and we need to embrace that market because it is about jobs for the future. it is about protecting basic of locale. and it really is about keeping our country safe and strong. just look at what we have been experiencing. we cannot tolerate this. billions and billions of dollars
3:21 pm
of our budget are being expended every year, because we are not living up to the challenge of climate change. great to chat with you. thanks so much for your perspective. gina mccarthy, former epa administrator. cheatm looking my sheet for the difference between executive orders and proclamations. today's options trades are looking at citigroup. we will discuss. this is bloomberg. ♪
3:22 pm
3:23 pm
♪ is "bloomberg markets." i'm julia chatterley. scarlet: on scarlet fu. time now for "options insight" with julie hyman. julie: how are we looking for this earnings season? it is expected to be up about
3:24 pm
3.6%, per bloomberg's estimates. the's deceleration from last two quarters which were up and 14%, and- 11% there is reflation in the coming two quarters, also 11% in 14%. overall, very nice momentum in even upket, earnings, 3.6%, look pretty solid. another measure we look at is implied correlation, and that is and also suggests a very active learning -- very active earnings season for stocks. julie: single stock volatility is still at healthy levels. kcjcan see the case index. on the bloomberg we have a chart
3:25 pm
of some of the biggest banks in the u.s.. the xls, which is the financial etf, is the red line. citigroup, is a going to keep going up after this earnings report? >> i think what this allows us to do is talk about strategy. we have mentioned recently, here, stock replacement. with the stock up 27% year to date, and more, if you talk on thinkows back in 2016, we its a nice opportunity to take some profits and replace that economic exposure, via options. one way to do that would be to buy in the money calls. go out to january with stock around $74. you buy a 70 strike call, 73 delta, and you can create very similar economic exposure but use about 10% of the capital.
3:26 pm
how does it work with the timing, why the january call? jim: we are talking about investors who want to make it to year's and. thanks so much, jim strugger. paul krugman, nobel joinswinning economist, us to talk about president trump and the fed, and much more. from new york, this is bloomberg. ♪
3:27 pm
3:28 pm
3:29 pm
♪ crumpton. mark time now for first word news. hundreds of firefighters added to northern california to help battle wildfires that have
3:30 pm
killed at least 13 people, including a 100-year-old man and his 98 worldwide, who were unable to escape their burning home. when hundred 15,000 acres have been scorched. wineriesapa valley have been damaged. the blazes are among the deadliest in california's history and are burning completely uncontained. the british prime minister, theresa may's office has released a statement detailing a phone call today with president says thee statement prime minister stressed the importance of the iran nuclear deal president trump has criticized and threatened to withdraw the u.s.. the feud between president trump and senator bob corker's escalating. the president fired the latest shot in a tweet today, writing that the failing new york times and madee bob corker him look

8 Views

info Stream Only

Uploaded by TV Archive on