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tv   Bloomberg Markets Americas  Bloomberg  October 11, 2017 12:00pm-1:00pm EDT

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shery: here are the top stories we're following -- vonnie: here are the top stories we're following, president trump will meet with justin trudeau in the next hour, the fourth round of talks on nafta. much more in a live report. as regulators worldwide tackle the explicit growth of bitcoin, we will stick to the ceo of omega one. multiple challenges over legal accusations, what we are learning about the culture of the company that is now bringing it back down to earth. all that and a lot more in the next 60 minutes. halfway into the trading day. >> it could be the tightest trading range of the year. little movement, at least at the
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s&p 500. it is in the ring with all three major averages having been flirting with unchanged to slightly lower and now unchanged to slightly higher in today's session. awaiting the fed minutes this afternoon which could create more movement in the market. we are seeing movement and sports related, we were just talking about this, what happened with the world cup qualifier last night? i do not know if the cameramen will shake as the camera man is unhappy with the result of the u.s. men's soccer team being eliminated from the world cup qualifying match. this is having a ripple effect among broadcasters with fox sports paying more than $400 million for the domestic english-language rights to the next two world cups and telemundo spending $600 million for the english-language rights. fox said it world cup coverage next year will be the largest production in its history. it is down and contest is down
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and disney and cbs also taking a hit. a lot of corporate partners as well, coca-cola, at&t, anheuser-busch, etc. looking at sports apparel companies, a number of different analysts calls that have been relatively negative, dick's sporting goods down sharply, more than 6% and wells fargo, and was there saying that despite the companies having forecast for the rest of this year, nest years estimates -- 18 survey that get a lot of attention, where the teams rate of various brands. erin murphy, the analyst who leads the survey said that she found the biggest surprise was the decline of nike as a preferred brand. under armour was one of the brands that did not get high marks. both stocks down. outside of stocks, the dollar and rates today. we had been seeing a rebound for rates, the 10 year yield in blue
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and the bloomberg dollar index and white which had been rebounding. a downturn now for the past several sessions. some strategists are saying that maybe that was it for the rebound. one of the things urging them was the outlook for tax reform or tax cuts, it is a bit more muggy. .onnie: thank you for that president donald trump set to meet with canadian prime minister judo it just -- justin trudeau at the white house, justin trudeau pointed to the common ground between u.s. and canada on trade policy but donald trump may not be on board as the forefront of nafta negotiations get underway, the administration opposed to weaken the agreement threatened to derail talks. our u.s. economic policy reporter joins us from washington. there are signs that too much will be asked of our trade partners on the part of president trump. why would he want to hurt an agreement? >> we have heard from donald trump throughout his election
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campaign that he wants a better trade deals for american workers, american companies. his number one goal is to reduce the trade deficit which aims to be a measure of success for trade for him. with the nafta talks, we see that is the goal and trump has said that if he cannot get better terms for the workers, bring back manufacturing jobs, he will scuttle the deal. that is the rhetoric we are seeing from donald trump. we have had meanwhile since august trade talks going on. negotiators from the countries are working through a series of talks, around for today in washington, d.c. to get through the issues so we do not have to scuttle the deal. shery: we heard from prime minister to go that he wants to implement some progressive elements into the deal, including labor protections, environmental protections, what are the biggest key points of contention between the two countries? we heard a justin
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trudeau was meeting the house ways and means committee and we heard from house chairman kevin brady, saying that we want a successful negotiation and do not want uncertainty so let's get the deal done. there is a lot of support for this idea of a trade deal going forward. some of the top is the issues we know of are really, one idea called the rules of origin, we have a copy of the agenda for the around for meetings on the agenda. the u.s. wants to increase content requirements under nafta. must come of content regionally to get nafta duty-free benefits. also introduced a u.s. specific content requirements that we have heard could be as high as 50%. this may be tailored to the auto sector. that is a big area we are hearing from not only discontent from mexico and canada, but also from the u.s. business community, u.s. automakers. vonnie: can i point out, we do have an interview with the majority leader of the house, kevin mccarthy, in the next hour with our colleague david and
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shery ahn will speak with kevin mccarthy. , ouris our thanks to sarah u.s. economic policy reporter. for more on trade relations between u.s. and canada and what is at stake, let's bring in the former commerce secretary under .eorge w. bush he joins us from our washington, d.c. bureau and is the chairman of the board of the national foreign trade council. seen the samehave reports and her the same reporting we have on what president trump will be asking for in this round. business leaders are not too pleased. the you imagine that this is what donald trump wants, or it is an opening gambit? carlos: let's hope that it is a negotiation tactic. this is the fourth round of talks. since the first round, things have been getting progressively worse. we are at a moment now where
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there is a risk. a risk that nafta, believe it or not, could breakdown. all of the tough issues are being left to the end. one is, as the reporter mentioned, the rules of origin. they are regional rules of origin. for example, for autos, 62% of parts need to come within nafta and the u.s. wants a u.s. rules of origin. that is unheard of in this kind of a free trade agreement. absolutelyne that is a nonstarter for canada and mexico, is a five-year sunset clause been you can imagine investors that want to make an investment for the long haul, they will not like the idea that every five years it is up for grabs. there are some very serious issues that, if they do not get resolved, my concern is that canada and mexico will walk away
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and we will not like what the world looks like without nafta. shery: the maxon economy minister saying that there is life after nafta. does this really matter? even if president trump decides to withdrawal from nafta, it would get opposition from congress and opposition and challenges from other importing groups and vested interests. >> you are absolutely right, the stakes are so huge, economically talking about 14 million jobs linked to nafta. out of 31 states, mexico is one of the top three exporting destinations. there are so many computer systems that have been linked over 25 years. supply chains that have been linked. this would be an economic tsunami. to then you had geopolitics for the 2018 mexican elections,
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everyone is running on who can be the toughest on the u.s.? nafta help the two countries come together after a very difficult history. now, we run the risk of going back 30 years where we do not have good relations with our neighbor to the south. of course, security, they help us on drugs and immigration from central america. .hat could go down the drain there is a lot at stake and i hope we do not let nafta fall. vonnie: you can imagine the president agreeing with some of the things that we have heard reported upon, including something like the sunset provision. why shouldn't every country have to step up to the plate every five years and make sure everything has been going right and all parties are happy? shouldn't there be something like that? carlos: there is a clause in the fda that is a withdrawal clause. they have ways that a country
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can opt out in the future. to say that every five years we will review it, that -- investors do not make five-year investment decisions, they make twenty-year investment decisions. there is a concern that, in this five-year sunset, what will come up is the trade deficit. if our trade deficit is larger, we will review it. the trade deficit is not the big metric. canada has a tremendous trade surplus that we are always growing faster than canada. the last time our trade deficit had a big decline was during the great recession. why? because we have less economic activity. we want to bring manufacturing back. our problem is not trade with manufacturing. our problem is technology. with technology that will replace a lot of jobs in the u.s. that is the problem we need to
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solve, not trying to bring back steel and coal and textiles. i feel at times that we are solving the wrong problem. shery: thank you for your time. carlos gutierrez, former commerce secretary and chairman of the national foreign trade council. let's get a check of the first word news with mark crumpton. >> authorities say the risk remains extreme for new starts as some 17 major wildfires burn north of san francisco. officials investigating what caused the fires but they say it could have been anything such as a discarded cigarette or a chainsaw pull. the major blazes spread over a 200 mile region and none have been contained. they have left at least 17 people dead. president trump plants to make the case tonight that corporate tax rates would benefit middle-class wage earners. in a speech, the president expected to stay the typical american household would get a $4000 pay raise from his tax
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plan. the president's advisers say that on an annual basis, the average benefit is closer to $500. the u.k. chancellor philip hammond says he will release more money to help say a prayer for what he calls a no deal brexit if there are not clear signs of progress in talks with the european union early 2018. he spoke to the parliament treasury today. >> no deal, but a friendly reach at, if we do not deal, we will work together to cooperate and make things run as smoothly as possible. we also have to consider the possibility of a breakdown in negotiations where we have no cooperation. >> hammond pushed back at the suggestion he should release cash now and said we will not spend it earlier than necessary to make some immigration point. the iranian president says that president trump presses ahead
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with threats to do away with the nuclear deal, it will be a failure for america and not iran . speaking to his cabinet in tehran, the president of iran says it will be clear which is the rebellious government and which is the side that violates international rules. this week, president trump expected to decertify the iran compliance with that agreement. global news 24 hours a day, powered by more than 2700 journalist and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪ shery: thank you. hill, how on capitol the cap to tax reform will affect big banks third-quarter results. this is bloomberg. ♪
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♪ shery: this is bloomberg markets, i am shery ahn. vonnie: the hazard the surrounding the future of tax reform could make an appearance on wall street as banks europe to kick the third-quarter earnings season. willmorgan and citigroup report results tomorrow and bank of america and wells fargo take center stage on friday. for more let's bring in our u.s. banks leader. timeve a surprise the last , remember when we got better fix trading revenues from one of the banks. which bank will surprise and verbally come from -- which will it come from? >> you could see a surprise in the trading because expectations for that business have been brought down. you have a lot of the executives talking in early september about the business being slow.
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you may have had a little bit of a pickup in the last couple of weeks. i think a lot of it will depend on loan growth. who outperforms on the loan growth side. analysts expect jpmorgan to be the outlier. in terms of having strong loan growth, versus the industry not being great, because a lot of clients seem to be sitting on their hands and waiting to see d.c.happens in washington, shery: didn't some banks say they expected a 15%, 20% drop in revenue? michael: d.c. shery: that brought expectations down. oldman said the third-quarter was challenging. said then third-quarter was a challenge. if anyone can exceed those. vonnie: what will be the line item you go to first? michael: it is bank by bank. bank of america, a lot of focus on the expense line, something
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they have been trying to pull down for the last few years. it will be interesting to see what progress they have made on that front. , iorgan, they kick it off think there will be attention on the trading business because of the biggest of the street and they set the tone for the quarter. there will be attention there. it is a little bit bank by bank. wells fargo, it will be about new accounts and whether they are starting to recover from the last year scandal. shery: what about credit friends when it comes to the impact of hurricanes? michael: on the insurer side, insurers talking about the hurricanes but not as much from the banks. we will see if that has an impact. , thethe last few years banks have been releasing a lot of their loan loss reserves. analysts expect that to start to turn around.
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that the results of got low enough that they will half to start adding to them -- have to start adding to them. our colleague today laid out what to look for. one of the things is the trend of turning around on building reserves and a lot more regional banks building the reserves. vonnie: talk about return on equity, a great chart in our return on equity which was fantastic until the crisis and then went negative and is flattening out now. the white light is the s&p 500 bank price. michael: the big question for a lot of the banks is -- how do they get back to a double-digit return? given they are carrying so much more capital. before the crisis, less capital and less denominator, the equity. devon the regulatory requirements have gone out, how do they get enough profitability to put that into the teens for better performing once or 10%
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for the weaker performance. that has been the question of the last couple of years. a lot of things going right for the banks in terms of credit and in terms of the benign volatility. on the other hand, they would like to see rates go up. that is the biggest these for boosting returns. vonnie: thank you to michael moore, a u.s. banks team leader. shery: time for the bloomberg business last, the egg is -- potential merger between sprint and t-mobile could face opposition from the justice department who rejected the deal three years ago. according to people familiar with the matter, a merger announcement could come at the month and in the telecom giants betting on a more favorable reception from the trump administration. antitrust chief would make the final decision. we will have more later on this. blackrock focus on exchange
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trader funds has paid off this quarter, the ishares etf business pulled in 52 alien dollars, helping revenue -- $52 billion. the firm says technology and risk management also rose 15%. total assets under management surge to almost $6 trillion. name will have a new tapestry inc. at the end of the month as a part of the company to become a house of brands. they acquire the stewarts wightman label and the case for brand.-- kate spade that is your business flash update been coming up, how i from our interview with the billionaire ceo, we will talk about his push for spread and t-mobile tomorrow. that is next. this is bloomberg. ♪
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♪ shery: masayoshi son could see some deja vu and is really push for a merger between sprint and t-mobile. we are learning that a revived the deal is likely to be scrutinized by the same justice department who battled -- batted down the softbank ceo last attempt and a deal could be seen as a threat to competition in the mobile market with shares in sprint and t-mobile plunging on the news. masayoshi son sat down with david rubenstein. >> another company which may has not worked out as well, a company you bought in the united states, in the united states for mobile telephone companies, at&t, verizon, you bought sprint, and another one, t-mobile. you own sprint for a number of years and by your own violations , it is worth less than today than when you bought it. now you are trying to buy
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t-mobile and merge the two. to make yourd way friends investment work if this is allowed by the u.s. government? >> our investment on sprint, despite many people image, our return on equity investment is over 40%. there a good profit. already. -- very good profit. already. the company has turned around and is profitable. and growing very well. from day one, i wanted to acquire not just rent, sprint -- sprint, sprint and t-mobile as a set. that was my strategy and i have a believe that the u.s. government would approve the merger. somehow, i believed it. the government rejected it. i only had half the piece. >> a new government, the obama
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administration did not support the merger. you think now you could get it approved> ? >> i do not know. it is their decision. i think it makes sense, not to have a duopoly with such a big market share and making a lot of ones. and two little instead of two gigantic wobblies, three is better competition. shery: that was masayoshi son talking to david rubenstein. plenty more coming up. this is bloomberg. ♪ retail.
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under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store
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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. manhattan. we are broadcasting from the
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book world headquarters in new york. markets." "bloomberg the dow up a 10th of 1%. higher.d p marginally fomctors focused on the coming out in about an hour and a half. we will be covering it wall to wall on bloomberg tv. let us get to mark crumpton with the first word news. ark: paul ryan is taking hands-off approach in the escalating feud between the president trump and bob corker. talk it out among yourselves. my advice is for these two gentlemen to talk through their issues. mark: president trump slammed corker. he referred to him on twitter as
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corker after the senator suggested the white house had become an adult day care center. canada's prime minister is meeting with president trump today. he is playing up the similarities between his policy objectives and the president's. this is the fourth round of talks on nafta. the u.s. ambassador to turkey says he hopes the two countries can resolve disputes over the arrest of the u.s. conflict staffer. embassy hasn't received any evidence to support charges of espionage. the u.s. suspended most of its services to turkish citizens after the arrest. criticizing the
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officials questioning the fifa nationsnt as for arab have been -- four arab nations overbeen boycotting qatar allegations it supports extremists. global news 24 hours a day, powered by more than 2,700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. wealthiests investors are staying on the sidelines when it comes to cryptocurrency. bitcoin is drawn the attention of hedge funds and wealthy individuals. but there is still caution. >> we haven't invested yet. i don't think there is any
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meaningful desire to invest in this phenomenon. the former morgan stanley ceo is taking a different approach. he has been investing in the cryptocurrency market, including in a company called omega one. joining us is the ceo of omega one. why would people want to invest in your technology when big banks say, no thanks? why our part of platform is addressing a bottom excitement is that we are addressing problems in the crib. crypto space.
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the infrastructure needs to be fixed. there are problems with security. and there is a problem of compliance. a complaint holder of cryptocurrency has yet to be defined. julia: regulators seem to be regulating everything but cryptocurrency. we are moving more toward a sensible approach. and we are careful about securities. shery: when it comes to institutional traders, who has signed up for your services? lan: we have been in conversation with a number of important institutions.
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the general framework of the platform aggregates liquidity. otherwise, -- and having the block chain part of that technology. it separates users from the escrow contract. there is no actual risk to the funds of the user. julia: is there an ipo? >> token sale. julia: we are marketing. >> we have people interested in the presale. julia: what are you telling people for marketing? >> perspective.
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julia: if you are marketing the token sale -- this is not an invest on people's return. it is a claim on services in the future. you can use the token to pay transaction fees. amount is needed to be a member of the platform. in the way we do the allegation of liquidity, the more tokens you have and the better axis to liquidity you get -- access to liquidity you get. julia: how much interest? ofn: 10th of millions dollars. of dollars.illions lots of investors. what would you do to protect yourself from a massive spike or drop in the value?
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designed to be market neutral. is a massivere liquidity event? alan: that would make a greater claim for our service. we would be the most liquid platform you could possibly trade through. longer-term, there is a significant. of depressed interest in the crib. -- cryptospace. capabilitiesnd the so that when the interest returns, we would be well equipped to manage on that. shery: thank you for joining us. uber has legal troubles at home and abroad. this is bloomberg. ♪
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shery: welcome back. this is "bloomberg markets." vonnie: barracuda networks is one of the worst-performing stocks of the 2000s. miss?id they it is a big slide for this stock. investors don't like is they miss margins. these came in at the lowest in
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14 quarters. steady business going down a little bit. they are at the bottom of the range below estimates. at -- about how much investors are not liking this on a volume perspective. jump into the bloomberg and take a look at the volume of function -- volume function for barracuda. investors are selling these shares in a big way. at this point on the open, the volume was almost 1700% greater than normal. vonnie: a buying opportunity? abigail: it could be. bullishhe analysts are based on the possibility of a
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margin recovery. this is the analysis function on barracuda networks. back in 2015, it had been 78 percent. pretty typical for tech. it is now down below 75%. they are looking for a recovery. what could try that is the move toward the cloud. is the move toward the cloud. the clock was disappointing last quarter. -- cloud was disappointing last quarter. increasinge has been competition. >> true. margins under pressure. shery: thank you for that. that. now to a story we have been monitoring. uber -- well, for months. uber was already facing three
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criminal probes by the department of justice. it is now facing to more investigations -- two more i nvestigations as to whether it violated price transparency laws . joining us now from san francisco is eric newcomer. tell us the details about these two new criminal probes. eric: we are up to five now. crazy. new ones involve question about how uber was setting prices, the difference between driver and writer -- rider fares. another is wamo. within that court fight
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alphabet's self driving car company, the judge had referred the issue as potentially criminal to prosecutors. whether are looking at there was anything criminal in terms of stealing trade secrets. uber get to this point? eric: it is a long answer. decideda company that they would operate in the legal gray area. they were going up a taxi industry that had a regulatory apparatus. that level of maneuvering extended unto all sorts of
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things, from software to growth strategies. and there was insufficient legal oversight from the company's lawyers which allowed all sorts of rule breaking. say this is we partly kalanick's fault? eric: he played a huge role. he was the hands on, micromanaging leader who would jump into the fray in controversial rape cases, for example. he played a hands-on role monitoring that incident. directly, and recruiting people.
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it is hard not to say he didn't play a big role. vonnie: talk about these software tools. start havingt its employees go to drivers working for other companies and asking them to come work for uber. they were engaging with the competitor. that, you have uber's attempt to learn about their competitors with this software. try to get a sense of where their drivers were and how active they were with competitive intelligence and api . singapore andn out of the asia-pacific. the other was in the united states. competitorolate
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terms of services? -- thate laws would would indicate you have to adhere to those. shery: didn't uber enlist outside help? they hired a first general counsel in 2012. didn't that help? ric: they still have that general counsel. they are looking for a new one. it went from a very small teamization to a global that was prepared to monitor things all over the world. rapid growth made it difficult for the legal team to keep pace. software tht the
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al -- that allowed uber to invade law enforcement officials, but they didn't monitor how it was actually employed. the lawyer responsible for managing problems was gone. terms of herted in responsibility. i don't think the legal team was equipped to handle the scale of regulatory experimentation that went on. vonnie: thank you, as always. it is time for the latest bloomberg business flash. a summer offirming price wars.
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it expects its benchmark revenue gauge to rise 2.4% in the fourth quarter. bridgewater's shaw is said to be departing dalio's hedge fund. marketing. head of n since-- he has been o 2002. teenagers can shock or stream content from amazon with spending limits. also shareer would the same benefits if their parents are prime members. that sounds pretty scary.
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that is the latest bloomberg business flash. u.k.: and why did the secretary of state engage in international trade? we'll have that next. his is bloomberg. ♪
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vonnie: this is "bloomberg markets." the u.k. shadow secretary of state for international trade calls for boeing to be reinvestigated for a number of its is ms. practices -- its business practices. aircraft comes to the market these days without support from government. china, it is canada or it is all through governmental support.
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we need a way of recognizing this in the international community. the governmental support has to be within wto rules. states are slapping the countervailing duties for bombardier.nto and they are dumping 300% on to delta airlines. >> is this a complaint against boeing? is this a complaint against the current administration in washington? boeing launched the petition with the support of congress. they knew this petition was ill-founded. they knew it would run long.
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>> we do need to get going in. eing in.o u.k. is negotiating a deal. we not need the european commission to look at these accusations? >> i have already been to the commission. don't we want the commission to handle -- >> we are a member of the which negotiates international trade factors on behalf of all the member states. it is right these things are done through the wto and the
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european union. that is why i was pleased to get the assurance from the party that the u.k. is still a member of the heat -- the you -- europe meantime, andhe they will be supporting any action to have taken there. we need a real investigation by the european union as to the involvement of boeing in dumping aircraft. >> accusations we can't verify at the moment. >> we're just trying to get a good seat in the business class on the boeing 747. >> i will need a parachute the next time i fly. gardiner.ry
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boeing responded to the allegations. coming up, the ways and means committee chair joining bloomberg markets. what he has to say about tax reform and much more. vonnie: you can get all of our interviews on the bloomberg, with the function tv . this is bloomberg. ♪
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>> it is 1:00 in washington, 6:00 in london, and one a.m. in hong kong. i am david gura. shery: welcome to "bloomberg markets: balance of power." here are the top stories
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we are watching. president trump meets with justin trudeau on the fourth round of talks on nafta. the house ways and means committee chairman will joins us -- will join us live on tax reform and nafta. we are keeping a close watch on the federal reserve as we await the latest on the search to replace janet yellen. ♪ david: president trump's infamous feud with senator bob corker is preventing him from uniting senate republicans on what he calls the biggest tax cuts ever. he will make a pitch on his tax plan later today in pennsylvania. joining us is sahil ka

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