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tv   Bloomberg Markets Americas  Bloomberg  March 23, 2018 2:00pm-3:30pm EDT

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♪ we are live and bloomberg world headquarters in new york over the next hour. here are the top stories we are covering on the bloomberg and from around the world. u.s. stocks swing between gains and losses as dramatic development out of washington keep investors on edge. facebook fallout. we speak exclusively with the former twitter ceo dick costolo as lawmakers turn up the heat on social media companies in the wake of facebook's crisis of trust. and one of the most dovish members of the fomc speaks out. neel kashkari tells bloomberg wanted the rate increase this week. andks have swung lower higher, and right now they are on the downswing. taylor: recovering from our whiplash, it is really incredible. an hour ago, the dow was off as much as 6/10 of 1%, now up about 6/10 of 1% as we got a need that
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-- we got news that president trump was going to sign that bill, same with the nasdaq. we were off almost 1%, and now we are mostly unchanged. a bit of a recovery for markets. what else that you are seeing is some commodities are up, oil as well is gaining, and those opec cups -- cuts are deepening, they cutting theabout oil blood. and oil is higher as well, up about 1.5% as you are seeing the certainly hit the gold market. i know we wanted to take a look shortly at this chart. when we get that up, it will show us the holdings of these gold etf's. take a look at this. we are climbing up to some of the biggest holdings going back since 2013. some of these market swings, perhaps playing a role in that.
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i also want to talk about the individual stocks. morning some m&a rumors swirling with kroger and target. we have not heard from the companies themselves, but shares are higher on the m&a potential. there is some validity in the logic, but morgan stanley coming out with five reasons why this does not make sense, it does not problem,gets grocery and -- target's grocery problem, one thing the analysts point out. and finally, dropbox. those shares are gaining. they are doing better than the private market valuation, so it ends up being a good day, lisa. so much.lor, thank you a lot of maybe, maybe not today. let's get the first word news with mark trumped in. mark: after tweeting he was considering a veto, president trump said he had signed a $1.3 trillion spending bill that averts a government shutdown. the president said he signed the measure "as a matter of national security."
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president trump: there are a lot of things that i am unhappy about in this bill. there are a lot of things that we should not have had in this sense,ut we were, in a force. if we want to build our military, we were forced to have it. there are some things that we should have in the bill, but i say to congress i will never sign another built like this again. i'm not going to do it again. mark: the president added that he is not happy with the measure because it does not include protections for dreamer immigrants and does not provide enough money for his promised border wall. france's interior ministry is describing the suspect in the supermarket shooting today and the hostagetaking as a 26-year-old petty criminal who was considered radicalized and under police surveillance. authorities say the gunman killed three people, wounded another of others -- a number of others, and demanded the lease -- release of the last arriving theil and -- assailants of
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paris terror attacks. said eu members will take bigger steps over the nerve agent attacked -- attack of the u.k.. they will recall the moscow ambassador for consultations. [inaudible] tough brexit negotiations, the european union [inaudible] in the face of this attack. mark: the eu says it is highly likely that russia was behind nerve agenturth attack on a russian former spy and his daughter. both were hospitalized in critical condition. spain, several have been charged with rebellion. a supreme court judge issued the indictment today, coming from
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their declaration of independence from spain last year. who do not fled spain in october and has been living in belgian. 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. scarlet? torlet: let's get back president trump, wrapping up his news conference at the white house. he signed the 1.3 trillion dollars spending bill, funding the federal government for the next six months. let's bring you to our reporter in the room at the white house mckee, our international and foreign policy correspondent. so eventually the president friends do not signed it, -- threatened to not sign it, but then he did, but with the air of holding his nose to sign it. >> he talked about all the ways he believes the democrats made the bill more expensive and less valuable to his white house and for national
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security. the president kept everyone waiting until the last mean it -- minute, saying he was considering a veto that would shut down the government. at the end of the day, he decided to sign it and crisis was averted, but just another day in the trump white house where he keeps everyone guessing and keeps the markets rattled, keeps members of congress shocked about what he is going to do next. this time he ended up taking the conventional approach and signing a pretty half-day $1.3 trillion bill that -- hefty $1.3 trillion bill that democrats and republicans are happy about, but fiscal conservatives are not happy about. lisa: you sound battle worn. mike, i want to bring you into talk a little bit about what exactly is in this $1.3 trillion bill? aside from the hallmarks, what caught your eye? michael: the biggest thing is the defense spending. it is a huge increase, and we will see a lot of military contracts. that is why you have seen boeing shares hanging in, because they
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get a lot of money. they bought mcdonnell douglas, they built fighter planes in the contract, and as the president said at the top of his signing ceremony, a lot of money for ships and planes and tanks and all kinds of things. that is money that will be going to the economy that is good. on the democratic side, they get inut $400 billion increases domestic spending, and so there are a lot of programs that will keep safety nets up. there are also some infrastructure spending in here, the money to rebuild roads and airports and things like that. lisa: and the tunnel. michael: they did not fund the tunnel specifically, but there is money that could be tapped to go to that. your is still work to be done. what they had to do with structure it so the transportation department could not put the cap us on the money for the tunnel, because -- the tunnel we are talking about is the tunnel between new jersey and the island of manhattan under the hudson river. there is only one tunnel for is 100d trains, and it
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years old and falling apart. they are afraid that if anything happens to that tunnel, the commerce of and down the east coast stops. i would have thought that he new york are like donald trump would have been in favor of it, but it appears because chuck schumer wanted it, he did not. so there is money they can tap to start that process. scarlet: but they had to create this workaround for it because the president did not want to sign something for that. you mentioned the defense spending, and based on our reporting by jennifer epstein, the president spoke with james mattis, the defense secretary, who advocated for the bills increasing the defense money and then kind of changed his mind. is that mean his stock has gone up in the white house? that he is more influential of a cabinet secretary that the president is listening to, following the parts are of so -- departure of so many cabinet secretary? toluse: even amidst all the turmoil in the cabinet with secretary tillerson leaving, a couple other secretaries on thin ice, and
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several members of the president's inner circle in the white house looking very much like they might be out the door. secretary mattis has been one person who has had that stability. the president respect him, andect his military acumen, his ability to make sure that the troops are listening to his advice. making sure they have a military strategy for a number of different problems going on around the world. today, the president met with secretary mattis, who was able to talk them off the ledge when it comes to the idea of vetoing this spending bill, which would have upended the idea of getting all this money for the military. it would have put the republicans and democrats back at square one, maybe even a continuing resolution that would spending the increased for military for the rest of the year. lisa: he signed it, but he is never, ever going to do this again. he sounds like a parent speaking to his children. what is the sub sex -- subtext here? had multiples
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opportunities to negotiate the wall, but he has not been able to get it. multiple government spending cliffs that we have gotten close to, and we are close to having a government shutdown, a couple of times we did. through all of this, he was not able to get the wall. this appears to be the last chance he will have under this congress, because there will not be another spending bill before november. november is already looking very dicey for the republicans. if the democrats take control of congress, which looks more and more likely, there will be no wall funded by the u.s. taxpayer, because the democrats have called that a nonstarter. if they get control of congress, they will not fund the wall. at thatident is looking situation he finds himself in, and realizing this might have been his last chance to get the wall. he decided not to veto the spending bill in order to get the military spending, but he clearly was unhappy with what he had to do today. it was not the great art of the deal that he has long talked about on the campaign trail and before his time running for president, that he would be the greatest dealmaker president.
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this was a deal that he signed very begrudgingly that he did not like. scarlet: and he also handed things over to wilbur ross to talk about trade. where do things stand after the white house that that -- said that they were going to impose sanctions -- i should say $60 billion worth of chinese goods. how do the rest of the trade deals with america look right now? they are not looking bad, but the president talked about how close they were to a deal with south korea and rewriting that bill. it is not clear what is happening there, it has not gotten a lot of attention. we were supposed to get a lot more business, and there has been an increase in trade, but -- donald trump did not like that. nafta, they appear to have made a breakthrough on the auto content revision, which a lot of people said was a deal killer. if that is the case, they can maybe get something. there is still a lot of work to be done, but maybe something can
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be done there. we are not getting any other trade deals. there is no bilateral request from anyone who signed the -- to sign a trade deal with the united states. going back into the tpp is a nonstarter, and the president killed a deal with the europeans, so that's about it for right now. lisa: bloomberg's michael mckee and our thanks to a reporter at the white house -- our reporter at the white house, we hope you get a good nights rest. up next, a bloomberg exclusive with dick costolo, weighing in on facebook's crisis of trust. from new york, this is bloomberg. ♪
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♪ this is bloomberg
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markets. i'm scarlet fu. lisa: and i'm lisa abramowicz. the fallout continues in the wake of the exploitation of data on millions of facebook users. bloomberg technologies and any chang is standing by with a former big tex ceo to weigh in on the current controversy. emily, handing it over to you. emily: a former big tex ceo that has a unique perspective on this in particular. twitter ceo -- twitter's former ceo dick costolo is with me here. i am curious what your take is on this, given the perspective that you have from running twitter for five years. mr. costolo: i will offer something that has not been outside of that technology community. one of the concerns i have are questions i have is the impact it is going to have on the way people think about api and access to data in the future. obviously, facebook had built out this platform approach that enable third parties to access
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this data and use them to interact and engage with people on facebook, and they turned that off some years ago and are now seeing the consequences of some of that. i think it will have an impact on the way technologists and company founders and ceos going forward think about how that data will be used, how they can audit how that data is disposed of, etc. emily: how does facebook use data in a different way than twitter? as i understand it, twitter is more protective of user data. twitter has its own issues, which we can talk about, but do you think facebook has been too permissive and to careless about user data -- too careless about user data? mr. costolo: not to be an apologist of what has been going on, but this platform was public. the apis were public, people knew what those apis were capable of, and they had been
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long, long disabled. the big difference between twitter and facebook is on facebook, there are lots and lots of personally identifiable information, and that ends up being particularly helpful to advertisers. advertisers want to be able to demographically target, micro target, and twitter does not have a lot of that information. to go back a few years, when i was running twitter, frequently that was thought of as a disadvantage. twitter does not know anything or enough about its users, so i cannot target my advertisements as accurately as i can on facebook. so there are two sides to this coin. in some instances, it is a real benefit to the platform's business, and in other areas, like we are seeing now, it comes back to haunt you. scarlet: we are seeing former facebook or is increasingly speak out about -- facebookers increasingly speak out about
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facebook. do you think delete facebook will take off? do you think this will have a ignificant impact on users' desirability to use the platform? mr. costolo: i am sure they will be returning their ill-gotten gains any moment now. i do not think this is -- these things happen, they come up every now and then when there is a big news events around these platforms -- event around these platforms. facebook is such a big part of people's lives. that at be the case certain number of people inside silicon valley, inside the bubble, if you will, will delete it. i do not think it will be a big movement. it is too important a part of too many people's lives around the world. emily: is it disingenuous for people who made a lot of money on facebook to now -- mr. costolo: i already made a joke about that, come on. that is my comment. is easier, certainly,
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when you are not a part of the company anymore, to sort of sit molotov lob in cocktails. there are people working extremely hard inside these companies to do the right thing. the guy who leads product that twitter has been talking a lot about the issues, along with the issues twitter is trying to deal with in this regard on the platform. for people inside of these companies trying to do the right thing, i tend to not love it when people sit on the sidelines and lob in criticisms. mark zuckerberg said in an interview that perhaps tech should be regulated. it is not a question of if, but how. how do you think tech should be regulated, and if so, how? mr. costolo: i think it probably will, there will be regulations here. de isems like that ti incoming, if you will. particularly in areas of technology, is it tends
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areas anduently concepts that are difficult to understand, which make them very susceptible to lobbying. there are lobbyists on all side ofthese equations -- sides these equations. and finally, i worry in most cases, the regulations start to fight the last war. in the past, this happened so let's prevent that from happening again. technologies are changing so quickly, they do not anticipate the next issue or challenge that might be coming up, and so they cause these companies work and are not maybe addressing what the companies have to deal with and what society has to deal with next. note, he said that he is sure that russian version two of meddling is happening on the platform. it is happening on facebook, it -- if it is happening on facebook, it is probably happening on twitter as well. now that we know that it is happening, can we really keep
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up? mr. costolo: it is an arms race, like spam was in the past, like hing and other things were in the past. but now state actors are involved on the other side, not just a few people trying to hack into the account. when you have state actors with enormous amounts of resources, it will be a real battle keeping up with them and going after their new attack vectors. they will never attack the same way they attacked in the past. they will try new and different tactics, and it will be a real challenge for this platform. emily: this is a committed by -- goodostolo: it is always to have a white guy in the gender equity conversation. [laughter] emily: some are committing to consider the diversity of a venture capital arm when taking money. whether they have a woman or person of color who can write a check -- the founders of airbnb, lyftounders of have all said they will do this.
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why is this important? mr. costolo: the difference between this and the different commitments or efforts like this in the past, now that you have a new generation of founders. you mentioned stitch fix. foundersgeneration of have women leaders to look up to. you have ceos like julia hartz , and all these existing female leaders and ceos who this new generation of female founders can look up to, and realize it does not have to be that way. you see folks like alyssa at hit cam going and raising money with benchmark because she wants to be able to work with women investors. and as that happens and as we see great companies making that demand, you will see investors are to be more gender balance. emily: so you think it will really change? mr. costolo: i do, and i think it is because of this new wave of founders that have existing
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women ceos they can look up to and trust, and who are there to tell them it does not have to be that way. former twitter ceo dick costolo, thank you for stopping by. scarlet, back to you. emily chang in san francisco. of next, dropbox's big debut. with the ceo later on his plans for the future. this is bloomberg. ♪
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♪ scarlet: this is bloomberg markets, i'm scarlet fu. time for the bloomberg business flash, a look at some of the biggest business stories in the news right now. the latest weeks from test low -- tesla cofounder elon musk are troubling on facebook. elon musk said he will delete company of his space spacex, saying he did not even realize spacex had a facebook page. both spacex and tesla facebook pages are no longer available.
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dropbox's entry in the big leagues has given the company its second billionaire. the net worth climbed to $1.1 billion today as shares of the filesharing company jumped as much as 50% in their debut. the kansas native joins cofounder and ceo drew houston in the three, club. houston saw his fortune -- three comma club. used in saw his fortune jumped as well. conversation, our with neel kashkari. announcing the sixth interest hike since 2015. this is bloomberg.
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♪ from bloomberg world headquarters in midtown manhattan, this is bloomberg markets. i'm lisa abramowicz.
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inmodity markets are closing new york. here are some of today's biggest movers. oil jumps today on news that john would be president trump's new national security adviser. bolton could push trump in a more hawkish direction on iran if the u.s. unilaterally opposes sanctions on that nation, the exports could drop by 250,000 euros a day by the end of the year. oil's biggest -- this would lead to oil -- barrels a day by the end of the year. this is also affecting metals. gold had the biggest weekly jump since september. tensions between u.s. and china are becoming increasingly noted. this index tracks aluminum, copper, nickel, and think, and shows the earliest a clients in february. the soft spaces called -- is calm this week, but one of the chinese tariffs levied were on u.s. pork. scarlet: let's get the first
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word news with mark crumpton. a veto threat, president trump signed a one point $3 trillion spending bill that funds the federal government for the next six months and never to government shutdown. the president's about-face came after meeting with defense secretary james mattis, who advocated for the bills increases in defense spending. the president made clear his displeasure with the legislation, saying "my highest duty is to keep america safe. nothing is more important, but i say to congress i will never sign another bill like this again." the justice department announced criminal charges and sanctions against iranians accused of a government-sponsored hacking scheme. the indictment alleges that defendants worked on behalf of the iranian government, thisfically -- >> indictment alleges that the defendants work on behalf of the iranian government, hacking the computer systems of
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approximately 320 universities and 22 countries. 144 of the university victims are american universities. mark: the justice department says the hackers were affiliated with an iranian company called magna institute, which prosecutors say contracted since at least since 2013 with the iranian government to steal scientific research from other countries. -- airport says that has taken down its wi-fi network and disabled parts of his website as a precaution following a ransomware cyber attack on the city's computer network. a spokesman says the airport was not affected by the attack, and included the encryption of some city data. a college dropout who built a is this empire that included blockbuster entertainment, automation, and three professional sports franchises, is dead. starting with a single garbage huizinga19 68 -- 1968,
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began waste management incorporated. eventually, it became the biggest waste disposal company in the united states. wayne huizinga was 80 years old. 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. scarlet? thank you, mark. scarlet: 1 -- scarlet: thank you, mark. said president neel kashkari joined us after neil powell -- jay powell's first rate decision. we explain why he supported this week's rate increase. supported the decision because it represented continuity. janet yellen was the federal reserve chair. her term concluded. chair, and i think this represent common annuity with what the federal reserve has said they are going to do. i support the decision, and all of our colleagues are trying to
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balance our dual mandate of stable prices and maximum employment. personally, i think we have a ways to go before we have achieved our dual mandate objectives. one of the things that surprised us throughout the recovery is the unemployment rate has fallen from 10% down to 4.1%. we would have expected a lot of wage growth with that drop job market getting stronger. we think we are getting close to maximum employment, and all of these americans come back into the job market, suggesting we are not at maximum employment. or me, the thing i am focused on looking at is wage growth. we are trying to assess supply and demand in the labor market. if you want to assess supply and demand in the market, start by looking at the price. wage growth has not accelerated very much. to me, that tells me there is some slack in the labor market. i want to see more wage growth. when i see more wage growth, i will have more confidence we are approaching our 2% inflation target and i will be more supportive of the increases. >> but you did support --
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neel: i was not a voter. askedgry hawkins was about voters versus nonvoters. not all of the 12 district bank presidents, they rotate that vote, unless you are the president of the new york fed. what he says was i do not even pay attention to who is the voter. i listen to the arguments. what did you argue for? did you support this decision? neel: i argued that if i had been sitting in the chairman's seat, i would have raised rates because we told the markets that we are going to raise rates, and for continuities take it is important. , it isinuity sake important. if i look at the data, i do not think it supports rate increases at this point in terms of a complishing our dual mandate objectives. i want to have confidence that we have used up slack in the labor market, and then we will support -- i will support more interest rate increases. , everys look at dots three months, the forecast is
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updated for gdp, unemployment, and inflation. they all individually say i think this is how much we should hike rates this year, cut, or not. that is where we get the dot plot the big question with the fed was -- the consensus going into 20 was that three rate hikes is what we need. -- 2018ight raise it was that three rate hikes are what we need. now we might raise it to four. neel: there is a lot more fiscal stimulus now and more spending now than we have realized there would be six months ago. i broadened my path a little bit moving forward. the big open question is what do all of these fiscal packages need over the long term, and that is unclear. will it change the growth trajectory of the u.s. economy? will it lead to more proactive invested and a higher productive -- investment and a higher productive capacity? we do not know. we can model some of the short-term stimulus effects, but does that lead to a long-term
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faster growth rate? we do not know. >> do you have more than two hikes this year? neel: i will not get into my decisions. [laughter] are anonymous for a reason, and i want to respect that. >> one of the things that puzzled people -- if you believe in the tax cuts, they will boost albiet for -- albeit for wealthier people. this depends on a lot of things, including the cost of capital being one. meanwhile, we have retail sales negative for the past three months. the atlanta federal reserve bank has a cool thing -- agp now cap. -- a gdp now cap. it started a close to 4% for the first quarter, it is down to 2% now. what could look like a pause or some loss of momentum in the economy, the fed is moving ahead
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towards tighter policy. in fact, some people still want four rate hikes, a narrow division between three and for now. neel: -- three and four now. neel: we get so much data. if you turn on bloomberg or any of the other channels, we get so much data every day. we have to look at this but not react to short-term movements in the data. what i focus on are the twelve-month inflation measures -- are we actually getting back to the 2% inflation target, looking at wage growth, looking at inflation expectations? i personally try not to overreact to short-term movements up and down in the data. i agree, the data you have articulated over the past few months is what it is, but i think we are looking at the next year, two years, and over the longer run. that was minneapolis fed president neel kashkari speaking with kathleen hays earlier today. a quick reminder, you can catch all of our interviews on the bloomberg with the function tv . you can also find breaking news,
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charts, and related functionalities to discuss on the program. from new york, this is bloomberg. ♪
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♪\ scarlet: this is bloomberg markets. i'm scarlet fu. lisa: and i'm lisa abramowicz. it is time for our stock of the hour with abigail doolittle. abigail: we are taking a look at the xl pay, or the technology -- xlk etf. what really stands out right now, this is down for the six the day in a row, the longest daily losing streak since november 2016, around the time of the election, when there were many fears that president trump might not be good for some of the big tech names. we are seeing volatility on the day, and we are back near the lows. the story of the week, facebook.
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the story of the day, chips. starkly lower -- the semiconductor index really performing, and two of the big performers here, mike braun and --tern digital -- macron micron and western digital. one of the issues here is the fears or fears around demand pricing. historically, nam pricing tends to be cyclical. we have been in an uptrend. downtrend back into a , or will there be more demand from the cloud? nobody knows, but we do see these shares off. of course, western digital had bought sandisk, so those shares are trading lower in sympathy with micron. the big story on the week, 12.5%, itswn worst week since 2012.
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if there are fines, they could be potentially massive. even bigger questions, regulation. will the government step in to regulate the social media network? we also have some of the faang trades here, amazon and netflix are consumer discretionary stocks, but we do see them trading down in sydney, and alphabet -- sympathy, and alphabet down with facebook, 7% on the week. whereock of the hour, sky --s skyward. this has to do with the trade war. we have the possibility of a trade war between china and the u.s., and a piece of this for sky works, the supplier for start lawmakers -- smartphone makers, could this be a negative for sky works? if we look at -- we have a very nice graphic of this, showing who skyworks sells their
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components two. up top is basically apple, 45% of their revenue, but not too chinesew is huawei, a company. if there is a trade war, there is some fear that the revenue could be diminished in some way. but i amres are down, guessing they're down in terms of overall weakness with chips. lisa: you have to worry about the broader effects of a trade war. what have you heard in terms of analyst commentary on that? abigail: i have not heard much yet, but in the asian session, we saw a lot of the asian suppliers trade off. will apple stop buying their parts? overnight, we had some of the big names, like aac technologies and hon hei trade off in a big way. the concern is taking this to apple, because apple is on its worst day on the week since the beginning of february. the bigger concern, apple,
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smartphone demand. lots of reports that it could be diminishing. of course, they just reported in ofuary that they had a bit disappointing guidance. if we look at the technicals -- i love the technicals, because it is a big waiting for the major averages. think of apple as writing, rising, writing, but this is a six-month chart. it has been trading sideways in this range, now going back down into the range. on wednesday,ser down more than 2% below the 50 day and 100 day moving average. buyers stepping out in the near term. this suggests that we might see apple go down to the 200 day moving average, maybe even a bottom -- the bottom. this could be the trade war, but it also might be the smartphone demand. lisa: thank you, abigail. we really appreciate that. time for the bloomberg business flash, a look at some of the biggest business tories in the news right now. the ceo of the company behind brett stalls and little tykes is
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eating $100 million -- bidding toys "r" us that survives the liquidation. help byonal money will the toy store company's assets, and he expect between 200 and 400 source -- stores can be saved. --ry in and the group of at he also teamed up on gofundme to raise $1 billion by memorial day. goldman sachs and blackrock are among the companies chosen to manage about extreme billion dollars in back taxes apple will have to pay to ireland. the world's most valuable company will work with treasury officials in dublin, and the preferred bidders to finalize the contract. use executive arm slacked apple with the bill, saying apple -- ireland had granted unfair deals that reduce the effective corporate tax rate. ntn raised its target for the upcoming ipo to 707 ipo -- $707
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million. this values it at about $2.2 billion. the assessment was raised after a fresh all uh and of the company, according to people familiar with the model -- it is likely to start in april on the of [inaudible] the world's largest energy drink maker delivered last year for its 12 million shareholders. red bull distributed vix hundred $17 million of special dividend last year, which -- $670 million of dividends last year. the rest of red bull is shared among 11 members from one family in thailand. red bull sold more than 6 billion cans of its signature caffeinated beverage last year. and that is your caffeinated business lash update. -- business flash. up, this rateg
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hike could affect a lot more than the markets. what a steady increase in -- costs would mean for underserved communities from the ceo of operation hope, john hope bryant . this is bloomberg.
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♪ scarlet: this is bloomberg markets. i'm scarlet fu. lisa: and i'm lisa abramowicz. scarlet: the benchmark rate was raised in the fed, forecasting -- the economic outlook improves. higher borrowing costs might propose signature challenges for poor and underserved communities in the u.s.. it is one of the issues that will be front and center as the the whole global conference next week. joining us now is john hope bryant. great to speak with you, thank you for taking the time. let's talk a little bit about the effect of something like federal reserve increases in the
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benchmark interest rate. what affect does that have on the communities that you look at, on communities with a smaller margin of financial resilience, and less buffer? john: when your interest rates go up, you are buying power goes down. -- you're buying power goes down. buying power goes down. 70% of this country living from paycheck to paycheck already. whether you are white, black, red, brown, or yellow, you want to see more green. this is less of that at a higher price, or more of that at a higher cost. the way we will offset that is to get the financial resilience he up. up.esiliency we have a study coming out that shows we can improve low credit scores 120 points in 24 months. life moreanges your than got or love in moving your credit score 120 points. lisa: on that point, credit scores are often used to
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take out credit by consumers. perspective, is consumer credit for people who are not at the upper earning s, is iter financial freedom or a new's? -- noose? john: it depends on whether you are using it for enjoyment or some form of uplift. if you are using a personal credit obligation to upgrade your job skills, we talked about witha lot at this meeting the ceo of at&t and the ceo of delta, to get some educational upgrade, that is a good investment. if you are using your consumer profile to back a small business and the new bill coming through has some additional support for small businesses, those small business owners use your personal credit profile. if you are using it to go shopping, it is not so good. lisa: just a push back of it, we saw student loans skyrocket and
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delinquencies have approached 22%, according to some studies. is this really bettering people? enough?an -- it has moved up faster than salaries have. john: that is a great question. i'm not talking about that kind of loan or education. i'm talking about a technical education that you can get at eight community college -- a community college to become a plumber, $25 per hour job, painter, $18 per hour job, a rish in, $22 per hour job. i have a company that hires people to do maintenance work, but they are often not from the community where the profits are located. a simple move from business owners to hiring those neighborhoods by people who have that skill that you can get with a one-year certificate degree from community college changes all of that. we need to look at education itself. we need to look at more skills-based in this practical world that we are living in, grossularly at a time of
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an important transition. back to the credit scores, all of our problems in this country, white rurals or black carbon are 500 credit score neighborhoods. it is not political, but a 500 credit score neighborhoods. on have these places preying financial literacy. we will upgrade those credit scores, because you have never had a right in a 700 score neighborhood in history. scarlet: these issues will not resolve next week alone. i want to get a bigger picture from you in terms of your work with the government. the last five u.s. presidents have recognized your work. you have served as an advisor to the last three sitting presidents from both parties -- president obama, president obama, president george w. bush, and president clinton. are you working with this white house in any way? john: i have not been invited, but i am working with secretary,
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the comptroller of the currency, who is forming cra community investment act. i am working with vice chairman of the federal reserve, who is coming to the meeting, and we are working with the secretary of the treasury. this community reinvestment act, which has been used as a do-gooder in neighborhoods, i think it is business and development. i think of 100 million americans who have some kind of blemish, which does not make him a bad person, we can clean them up, get their credit score up, confidence up, and every big business that was once a small one, that could be the next gdp driver in this country. if we can help reform cra as a business development tool, not a charity or handout, you are doing good and driving gdp growth and economic prosperity for all. the fear goes away that is driving a lot of our political environment today. lisa: john, really quick, can you give us a sense of how much people put the interest rates go down if they go up to a 700 credit score -- people's
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interest rates go down if they go up to a 700 credit score versus 500 credit score? john: i was homeless for six months of my life when i was 18 years old, and my credit score was horrible. i had 18% interest on a car loan back then. that is like a bomb. but now i have an interest rate of 1.299. i do not know how that is making me money, but it is cheap for me. it is literally -- and by the way, when the credit score goes up, the crime goes down. all things move forward with a credit score. lisa: john, unfortunately we will have to leave it there. john hope brian, thank you so much. ♪
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scarlet: it is 3:00 in new york. lisa: welcome to bloomberg markets.
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scarlet: live in new york over the next hour. here are the top stories we're covering. for its worstpace week since february 2016. of the frying pan into the fire. qualcomm plagued by a lot of problems. take ainess big wigs ink at the latest rankings march madness. it looks like we are heading south. >> you are right about that. another day of big declines. , down foron lows another day after the big selloff.
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a lot of uncertainty. facebook fallout from plus the trade war. a lot going on for investors to digest. story over thehe last five days. monday we had a down day. loss after intraday volatility. a big decline and then today the bulls tried to get it together but not able to hold on. sellers overwhelming the buyers on these uncertain factors and this is leading to another down week in a row. year we see these weekly gains for the major averages. 2018 happens. january. s&p 500 had its baths -- its
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best month. then the big selloff. we have two down weeks in a row. the sellers are trying to take advantage of this massive volatility we have had this year. on the week my let's take a look at the bigger movers. up top we have nice gains for the energy sector. up 5% or more. , weottom, the drugmaker have facebook down 13%. the worst week since 2012. oracle down on a disappointing quarter. dragging onds are the s&p 500. s&p 500 on paper, the worst week since january of 2016 depending
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on how trading shapes up. finally, the other asset classes , in the morning it was a risk on day. now we have bonds unchanged. near session highs. rallying in a big way. 25.the vix at something to take note of here in terms of volatility. thank you. let's get to first news mark crumpton. after getting he was considering a veto president trump signed a spending bill that averts a government shutdown. he said he signed the measure as a matter of national security. >> there are a lot of things i am unhappy about in this bill. a lot of things we should not forcedd in this but were
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if we want to build our military to have. i say to congress, i will never sign another bill like this again. >> the president added he is not happy because it does not include protections for dreamer immigrants and does not provide enough money for his border wall. federal officials are not saying chose a bordery wall in california and not saying whether they knew the connections to a construction firm flagged in a government audit for potential fraud. the house committee wants answers from the department of homeland security on what vetting was used. the islamic state claimed responsibility for an incident in southern france where an armed man took hostages and killed three people, wounding 16
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others. the suspect was shot and killed by police, known by local authorities as a smalltime drug dealer. the french president praise a police officer who was wounded after offering himself up. the officer is fighting for his life. curiosity nowver has spent 2000 days on the planet. for it to are eager begin drilling again. the rover has been exploring mars sense 2012. global news powered by more than 2700 journalists and 120 countries. this is bloomberg. scarlet: time for our bloomberg deals report. qualcomm holding its annual shareholder meeting.
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reelected 10 directors but the company still has an issue. kroeger getsrnaut a boost on reports it is discussing a merger with target. motionser is weighing after a plug was pulled on a deal. here to take it -- take us through it all feels like a monday. let's start with qualcomm. >> qualcomm is now left with the problems it had before they showed up and they are pretty serious. it is entangled with various regulators around the world about its licensing business. it does have some real issues. discontent and questions about you have this
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plan. you are trading more. how are you going to achieve anything close to what was being proposed? lisa: this is a story that cap giving. now we have to think about it all over again. is it off the table it would get acquired? >> the deal aspect is off the table. , he hasre some nights been stripped of that. trying to find $100 billion of debt to take this private. the interesting heating -- interesting thing here, qualcomm is in the process of buying it for a long time, that is held up at the moment by the ministry of commerce. they are taking a close look at it. whooke to a few investors thought this would have closed
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already and it has not. think it feeds into the trade war, the better between beijing and washington and it is scary because they just don't know how this is going to trade. howsp is critical that is they are going to go at it alone. let's talk about the next company. kroger and target. later on that was dismissed. what is the word out there? do people think a deal makes sense? >> there was one report this morning that said they were looking at teaming up. it had been discussed quickly. the only thing they have discussed is a small partnership involving the same day delivery service target already has. they're looking at that and doing something but it does look like something will result in a
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full merger. if you look at how the stocks responded, they bounced huge leap. it tells us every deal in the retail space is on the table at the moment because of amazon. because of the fears in this market. there is no deal that is too outlandish. anything could happen because all of these countries are thinking how do we deal with this? lisa: it is fascinating. talk about pfizer. i do love the headline. , whatfizer and a quandary is going on here? >> it is a huge unit. it is stuff you would buy when you going to a drugstore. i have amazon on the brain.
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we can look to amazon as being a factor. jfk pulled out of this. i did they pull out? is thethe reasons dynamic of people buying drugs from drugstores is changing. amazon has recently made a push into health care. we are seeing that model being disrupted and it changes the way people are making adjustments. does someone else emerge? does the likes of colgate, do they say this is what we do? anyone who does they know they are coming in their and a busted process and they could offer less than they would have wanted. scarlet: you are going to stick with us. we're going to talk about dealmaking when it comes to private equity. we want to show you what is going on with equity markets. you have a selloff. take a look.
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pretty much a straight line down , which is interesting. that was right after the president signed the spending bill. .> this has also been a pattern we see this decline rapidly. >> technology off by 1%. ground.s losing yields heading lower as well. let's take a look at the vix heading higher with people buying protection against the losses. approaching 26. it has moved up. from new york, this is bloomberg.
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lisa: this is bloomberg markets. scarlet: march madness is underway. college teams take the court. over 40 of the top titans in business take their best shot at bloomberg's brackets for a cause. joining us with more committee executive at her. still with us, and hammond. before we get to basketball involving twol well-known names. blackstone and kohlberg. >> this came across the bloomberg this morning. it is not blackstone and kkr. kkr, back in the mid-1980's, the first guy actually left. his younger partners, two cousins went on to run it.
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he died a few years ago but throughne has a fund which they buy my minority stakes in private equity. it was reported blackstone has bought 15% of kohlberg and company. they do smaller deals and raise a fund last year of $2.2 billion. have somethat interesting kismet. >> it is like the ultimate private equity deal. it is the definition of inside baseball. i thought it was a fascinating trade. they cap did extremely off market. >> it is interesting to see how these firms come together. ofckstone is in the business buying and selling real estate.
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now they have this fund. they also bought part of leonard green. this is a cool business. eatingrivate equity is private equity. taking a little nibble at the corners. among the winners in the bracket. >> no winners yet. blackstone,of remind us what is this? do everyst thing we year if i say so myself. more than 40 people come together and pledge $10,000. we pool it together and whoever distributed.ey is doing the math, upwards of $400,000 a year on the line. recruiting the,
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bankers and private equity guys into this monday get super into it. recruits is ranked last at the moment. he is at the bottom. he can make a comeback. he has quality teams left. if you do the math he can work his way up. a brackets have been broken. >> uva have knocked a bunch of people out. because ofked out that. mike bloomberg had virginia winning as well. these are the winners, the leaders right now. winner billt
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mcdermott, he actually has a shot to win. scarlet: we will see how it plays out. thank you. we just want to give you an update. stock indexes have come up a little bit. we are no longer at the lows but it is the second straight day where indexes have lost steam in the final 90 amend its of trading. -- 90 minutes of trading. there isn't necessarily an obvious correlation in the bond market. yields are actually rising on some levels. you are not seeing the flight to quality types of moves. >> let's bring in somebody who
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knows better than we do. >> our bloomberg intelligence chief try to just, we are searching for catalysts. i suppose that might be a full's errand. there is a confluence of factors pushing the weight. >> the last two days has been about trade. the market is jittery about trade. exhibited across asset classes. notonly are bond prices following, yields rising, but oil prices are not following. there is not a big risk off movement. it is specific to equities. weekme into this technically vulnerable. we traded down a lot more. testing critical support levels.
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it is difficult for the market to find its footing. >> we have seen some huge to clients. looking at morgan stanley shares down 4% so far today. four point 3% yesterday. what is going on? conundrum.a big the 10 year treasury is holding up. to,thing i can point financials are high data sector. they selloff a lot. they tend to be correlated with industrials which are falling short. there could be a little bit of everything impacting financials. dumping some of the strength. lisa: you don't necessarily see the safety am a people coming out of equities. maybe they are going to cash. there is a bloomberg chart i
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have on my terminal that shows the dividend yield, that is the blue line here. you can see they have intersected. is a not as if cash proposition were you lose money. >> it is a relative value decision making it harder. in an and government where relative values are somewhat elevated. can throw out whatever esoteric valuation you want. stocks look relatively expensive. varmint you are dependent upon earnings to drive prices. isthing that is a stress going to be perceived as more damaging. stocks being technically vulnerable, is there anything we can infer from the acceleration in terms of selling or specific sellers and the type of selling they do?
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believe't necessarily it is the close of something around a specific type of seller. it is consistent with history. breaks, in the last hour of trading, you start to see downside acceleration. a lot of that is simply evidence that it is a technically driven market. if they are weak towards the afternoon it extends into the close. >> i have pulled up on the .loomberg, a candle chart the yellow line is what everyone is eyeing now. below that, that might be another lower thing. average00 day moving also marks the lows of the year on an intraday basis. it is close to that.
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folks are narrowing in on that level as critical. longer term. it is not as critical. we have long channels. you could easily trade beneath that average and still be in the scope. it definitely is a threat to the near term bull market we have been in. >> happy friday. thank you for joining us. for options insight. partnerhe managing joining me today for volatility, as you pointed out to me, while gina was talking the short-term volatility is even higher. short-term vix measurement measures nine days of volatility. it is actually two points up where vix is.
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26 showing this near-term volatility is here to stay. further out we are going to get earnings from banks which are one of the leaders of the market and we are going to hear from the management teams what they think about the trade tariffs going on today. julie: it has been one of the leaders to the downside along with technologies. the markets are pretty consistent. >> of course. 41% of the market. you are saying volatility elevated to the top third. they are above 28. the risk, people have been worried about the 10 year treasury. we are not seeing volatility in
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those markets. the focus is on the leadership and what is going to happen to that leadership. >> a lot has been going on today at your trade today, this is logistics warehousing company. it is a real estate investment trust. >> yes. goesu look, one put 7% through their distribution center. that is pretty telling. what you want to do is buy this stock. it gives a 3% dividend yield because the macro. if you go out to november and 4.25%his you can generate in options alone. the company gave a management presentation on march 5 talk about how they are going to seven .8%. they are reaffirming their previous guidance.
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this is a great opportunity to buy conservative real estate investment trusts leading in the industrial revolution because of e-commerce. >> i'm going to ask you about interest rates. back to you. >> u.s. indexes are back near session lows. those in theting fourth decline this week. lisa: banks are really getting 4.3%red, both down end-to-end.
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mark: a 16-year-old girl shot this week at her maryland high school is dead. shesheriff's office said
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died last night after being taken off of live support. were in a the shooter relationship that ended recently. the justice department announced criminal charges and sanctions against iranians accused in a government sponsored hacking scheme. >> this alleges the defendants worked on behalf of the iranian government. specific -- they hacked the computer systems of 120 universities. in 22 countries. 144 are american universities. >> the justice department added they were affiliated with an iranian company which prosecutors say contracted since 2013 with the iranian government to steal scientific research.


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