tv Bloomberg Markets Americas Bloomberg March 1, 2019 1:30pm-3:30pm EST
next election is between freedom and socialism between personal responsibility and government dependence. urgedce president also the attendees to support president trump's push for a wall at the southern border. want us --ics democrats want to say it is manufactured, but the only thing that is manufactured is their outrage. [applause] every day we don't secure our border we allow the crisis to worsen. scheduledpresident is to address the conference on saturday. another democrat enter the race, washington state governor jay his emphasis on climate change and criticism of president trump here the parents of auto one beer blame the -- ot wamrbeer said they blame
the "evil regime" for their son's death. the college student died in 2017 after being detained and tortured in north korea for more than a 17 months. a new pentagon plan reportedly calls for all american troops in afghanistan to leave within three to five years. according to the new york times, the offer is eating made in peace talks and could lead to the afghans sharing power with the taliban. it would reduce the troops by half in the coming months. global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪
vonnie: i'm vonnie quinn. joined by our audiences. vonnie: here is what we are following from around the world. u.s. officials preparing a final -- that president trump and president she easing jinping could look at. --o an inside look let's get a check on major averages. we started high this morning. we have been coming back in. the dow jones industrial average
is a quarter percent. nasdaq of .6%. growth, because amazon may be opening grocery stores, not to compete with whole foods but to compete at lower price levels. some stocks that might be impacted our. walmart 8/10 of a percent. kroger down 3.6%. but has calledr back to level. on the canadian dollar, negative free of gdp at the end of last year and that took a toll with expectations that the central bank will not raise rates anytime soon. you can see the reaction, .erilously close to a recession most concerning is that it was
nonresidential investment that fell and businesses not spending . it is a look over the long haul. u.s. at the top in canada is pink and mexico is green. there is definitely room to grow could we will watch whether mexico catches up with canada's gdp. another we are watching on trade, all eyes on the economic performance of china. if we look at the pmi in the manufacturing it is interesting is a manufacturing picture that has been improving but there is also smaller businesses not captured in the official data and that is also jumping today. it is a slight turn to the upside for smaller is this is an possible grounds for optimism. vonnie: there something called a credit impulse. charts together
and that is credit impulse in china versus emerging market surprise index. to lead, butends as you can see, the impulse has managed to turn itself over a little bit and is improving slightly in the last few month. index hasarkets price not been improving. will that take a turn for the better now that credit impulse index is improving? we shall see. china is in trade talks with the u.s. still and it set to begin an 11 day national people's congress next week, a crucial few days for the country's economy as leaders gather. --ning me is that kennedy scott kennedy, with study china for decades. i am curious about the national people's congress. we know what china has planned
out for 2025 to 2030, do we hear anything new, with particular to the u.s.? newt: they will take up a investment law. in decembers tabled a did revision. that addresses issues related to compulsory tech transfers and other issues at a want to get that passed as a way to go should -- show good faith to the united states. this comes as we heard from trade representative lighthizer that the u.s. is looking for structural changes to the chinese economy very with that fall into the category and is that enough? scott: i think the u.s. has taken the structural issues and divided them into two baskets. the first is the five-minute list -- the things the chinese can do immediately that are issuest for structural
like new licensing for credit issuers. long-term issues like intellectual property rights, lowering subsidies, making competition policy. those are the two ways, and the latter will take longer. this new piece of legislation they will probably pass falls into the latter category. that is a long-term project and not something they will finish anytime soon. amanda: the other piece you referred to that seems almost impossible is the notion of enforcement action ability on the part of the u.s. to take unilateral action against china if china breaks rules in place. is that likely to pass? scott: that will not be discussed at the national people's congress, but that will be for the presidents if they meet in a few weeks. question is -- what will that enforcement look like?
be third-party arbitration, going to the wto, but the u.s. has said that the u.s. was to be judge and jury and have snapped back tariffs if they decide china is not complying? that may be the political reality regardless of what china wants and they may have to decide they want to live with that if they want to stabilize their markets and relationship. vonnie: who is better at all of this? scott: you have to say the chinese have done a good job dealing with president trump and others. negotiations over many years to stall and draw things out and gain benefits. with president trump, they were put offguard for a long time, but i think they have taken the measure of him and they think the president, because of his interest in the stock market, once a deal and is willing to take something that looks big. when i was a professor and one of my students amid homer,
sometimes when they were unsure they would write something extra long. apparently, this is now at 150 pages. we'll have to see. there are still a few weeks to go. the resident walked away from what looked like a solid deal in hanoi, but we cannot say this is fully done, but the chinese have done a decent job. vonnie: will the chinese leadership allow the president to walk? --t sometimes look like looks like weakness when the other party walks away. scott: the chinese want a deal from the perspective of real economics. china and this more than the united states. it is important to the political foundations and the leadership in china. saying why lighthizer is they needed a deal so we should ask for more. if there is a meeting, and if xi
jinping will ply 16 hours to florida, there will be a deal in place and will not be like what we saw earlier this week. weeks and in three trump years that is a longtime. quickly, can we say the threat of new tariffs is gone for now? true. i think that is it is unclear if they will remove all of the 250 billion that is in place. the chance of new tariffs coming anytime soon seems very unlikely. thank you so much. he is for the center for strategic and international studies. still ahead, bill gross officially retires after four decades in the bond is this. part of our exclusive interview with him is coming up next. this is bloomberg. ♪
amanda: canadian pension fund held: investing equity. jason kelly spoke with some of the biggest voices in the industry this week at the super return conference in berlin. he also sat down with the global who sharedity concerns about the growing amount of dry powder. on valuationimpact and return. that is something one has to take account of. there are great businesses out there. the asset classes have delivered returns. returns are still there.
the marginspact on on pricing on returns as well. jason: do think that number continues to go up? there seems no shortage of appetite for equity. mark: that number continues to go up potentially. the fundraising environment is strong. it will be about discipline for the industry. it is about finding the right is mrs. and making returns -- businesses and making returns. bewe lose discipline and can damaging to the reputational private equity. jason: how much do you worry about returns going down? you had a good year last year. that.we do worry about in the end, it is again about discipline. right ones,find the we don't invest.
you can protect your return. our returns for the last 10 years have been positive and fairly consistent year on year. jason: what are the things you have been involved in and the canadians had led the way and direct investing, not just alongside equity managers, but originating your own deals. that going ats this point as more people come up to that idea? it isy, private at the vanguard of the canadian pension funds. deliver because we can a return. losing, we can
deliver higher returns for pensions. it is the reason we do it and we have to be able to form and deliver returns. we have done that for 10 years. jason: and you still feel like you can get the right personnel? you are competing with deep-pocketed firms who can pay a lot more money. mark: you are right. there is compensation. pay comes into it. we try to be competitive. culture is important. foring on the pension plans the workers is a meaningful thing. one shouldn't underestimate the value of that humor and -- humor. that attracts people. jason: look through the rest of 2019. as a dealmaker, what is the one
that keeps you up at night? mark: i would say not necessarily for the last year, that we are in a time of change, political change the world over. the tectonic plate is moving. all of those things are coming difference give us in the investment for rising and that is -- investment horizon and that is hard to get your head around. there is a lot of macro risk we have not had to wrestle with until recently. that is the biggest question for us. that was global head of private equity, mark redman at the super return conference. it is time for the bloomberg business flash. amazon planning to open dozens of grocery stores in the united
states, according to the wall street journal. they will explain the footprint beyond its whole foods reckitt chain. -- whole foods chain. agreement withan investors that could lead to a song off some of its is mr businesses. has begun a strategic portfolio.ts former bond king bill gross calls it quits. he has a few surprises left. he told erik schatzker he has osborne is -- a
asburger's syndrome. >> it helps you focus on the details and allowed me to take the secular to a long-term view. it was a good view to take as an asberger. be sure to watch the film bill gross -- the full bill gross interview. lyft iscoming up next, the first unicorn of 2019 to debut on the nasdaq. we will have the details of the ipo, coming up next. this is bloomberg. ♪
of the filing, including average cost of a ride last month, the of drivers it had in 2018 and how much money they have lost. we have a libya with us for a deeper dive. the ipo was widely anticipated. how much do you think the turmoil at the end of last year is driving this and will we see other unicorns deciding when they have an appetite? olivia: we are expecting a lot of ipos this year. lyft is trying to get ahead of uber. the most notable thing was the revenue growth, $2.2 billion, almost doubling from the year before. like any high-growth company, we saw huge losses. $911 million in
the losses, up 77% from the year before. vonnie: quarter over quarter it increased, but the trajectory does not look good. we have seen this over and over again, companies don't seem to make money for investors to believe in long-term prospects. i spoke with several investors who are very excited and seemed to think it is no big deal that the money is losing -- the company is losing money. they talk a lot about market share. we are seeing that lyft's market share is 39% in the u.s.. was closer to 22 percent. lyft is edging into uber's territory as it focuses on a global expansion. lyft is focused on being a ride-hailing company.
has lyft benefited from being the underdog in the u.s. market when it comes to some of the high-profile fights that uber has undergone with regulators, municipal authorities? olivia: we definitely saw that. we saw their market share increased to 39%. we looked at statistics that show their market share definitely picked up during the whole delete uber scandal. lyft is viewed as the from your , easiernicer to drivers to work with from a regulation perspective. certainly, there are risks that both uber and lyft are facing in regards to regulation. they certainly listed that. much,: thank you so olivia zaleski. we do have breaking news.
today was the deadline for the canadian government to commence its action on next edition for the cfo of huawei, who has been out on bail with limited restrictions and restrictions on movement. it she is being held in canada and the justice department has commenced the extradition case. how this normally goes is there are many extradition requests that come that are rejected, but those that get to this stage generally do go through. once they decide to proceed with the case, what i have been told, is that likely means it will be successful. vonnie: as we know, huawei pleaded not guilty to u.s. charges of stealing trade secrets yesterday. today it is getting hit with extradition receding's getting underway. olivia: still hanging out there is the possibility that donald trump and try to intervene in
the justice department's case executive and offer up a party which would cause an international problem for canada with its relationship with china. will of law is what is dictating the behavior. lawie: there are -- rule of is what is dictating the behavior. vonnie: and there are a few weeks before we have to get to any agreement. amanda: we will continue to watch that. just a reminder, you can track all the charge you see on the television shows on the gtv function. there is an and reference material the backs them up. from toronto and new york, this is bloomberg. ♪
the president you various questions and negotiations. he did not address the pushback from the north disputing his account of why the talks from the bar. the united states said is committed to making sure the south china sea remains open to all kinds of navigation that china does not pose a threat to during visits to the philippines, secretary of state mike pompeo says america will come to its defense of its forces, aircraft or ships as they come under any attack in the south china sea. territorial disputes have been a longtime issue with washington and with beijing. the u.s. is imposing sanctions on six venezuelan security officials for their alleged involvement in stopping unitarian aid convoys from entering the country. treasury call the actions of the officials tied to president nicolas maduro reprehensible and unconscionable. as the seconds set of sanctions
announced on venezuela this week. sudanese president omar al-bashir step down as chairman of the ruling party today after more than two months of antigovernment protests rocked the north african nation. sudan has been hit since mid-december by demonstrations against rising living costs and developed in the calls for him to step down. dozens of been killed during the unrest. dayal news 24 hours a on-air, online at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am margaret and. this is bloomberg. ♪ caroline: i'm caroline hyde.
scarlet: this is "bloomberg markets," the close." caroline: the s&p 500 is stuck in a range of disappointingcar'. data falls to willow in february and includes a gloomy picture of europe. and read it to rise, lift files getting a look at the financials. all that money more coming up. scarlet: tech is leading the way here. if you look at the major indexes, the nasdaq is doing better than the other two major indexes and the s&p dow up for the first time in four days leading the way on the downside you got the defensive come so is the reversal of yesterday. caroline: a little bit more little risk on, but we did get that strong number out of china. with a bit more risk on sentiment. scarlet: treasuries declining for a third straight day and we are keeping a close eye on gas
catalytic israeli biggest rally in a decade when it rose to 20%. we are talking with morty singer at about 2:15 to discuss the separation of old navy. caroline: that happened yesterday. deeper, let's dive abeokuta what he watching. abigail: let's take a look at the disappointing manufacturing print. up .8% not chart, miss coming in at 54.2%. above 50's expansion, but nonetheless moving the wrong direction we see only the lows .1% humala .5% and50's that french is hurting and we go to the bloomberg and take a look at the ice and print going only back to 2008, these are the changes on a month over month basis and we see that we are dropping for the month of .1%february by 2.4 spots, that print in december was the worst
going away back to 2008 in september, the ice and manufacturing index gauges that your in manufacturing had been at 60, well above the 50 market now 54.2. if you take a look, romaine, at the surprise indicator at the bottom basically moving in the wrong direction, if that trend continues, it could just be a real worry for investors, not just headline noise. romaine: amazon is shaking things up in the grocery sector , seeing shares of the major grocery players out there fall today, kroger and walmart sprouts a whole lot of them. the s&p 500 and staples regional index down about 2.5% on this report of the wall street journal that amazon may be expanding its push and groceries by setting of a chain of lower-priced grocery stores but it's possible that today's reaction could be overblown. board,you to flip up the a member when amazon made that announcement is buying whole foods in 2017, a lot of the same stocks fell immediately.
but they rebounded pretty quickly and went on to save some pretty impressive rallies. on can see some the games up your screen a big part of the reason for this is that amazon is still a fairly small player. it only has about four and 50 whole foods locations compare that to something that kroger which has more than 3000. costco, kroger, legal sermon to beat amazon its own game and that online groceries. whenever amazon is doing in regards to the brick-and-mortar front, the need to watch the back when it comes online sales rate with the goal not done deals and i want to talk about which is the brick-and-mortar that is going away and the parent company of return is secret announcing it was going to close more than 50 locations in the alstom of gap zynga toward a close more than 200 locations and this is a big problem for real estate malltment trusts that own properties. take a look at tangier, gap accounts for nearly 6% of annual base rent just simply from the gap stores, the gap revenues in the percentage of overall annual
base rent is the yellow line. the orange line is the total amount of revenues from all brands. you can see changer and simon property group and traveling real estate investment trusts, flip up the board and take a look at the performance of some of these rates today, shares was in the biggest one-day drop of the year. most since december you can see it falling off in response to these stores being closed. it will be difficult to see most since december you can see it fallingexactly how they're go generate a bigger revenues and a time when it's unclear exactly was when you fill that space. caroline: retail in focus. as you come alisa. the sick a look at the other key stories, china number one taking center stage again, stronger economic data from the nation, msci finding chinese weightings in the benchmark indices and news that u.s. officials are preparing a final trade deal for president trump and xi jinping that could be signed within weeks. we are now joined by peter chair , head of macro strategies. we got off to his long -- a
strong sentiment that fated will look to europe and the u.s. it is china getting the stimulus right now, adding trade to one side? starting tolus is kick in and it takes time so you're certain to see some of that i think of real hopes that trade deal is going to occur would just take not a pressure of the markets and thirdly i do think we saw artificial slowdown in december and january across the globe in response to week stock market screen i think some of that is just coming back. all those things are working together nicely to greet a nice rally in china and u.s. stocks. scarlet: is this an artificial boost where the impact will fade or is this a thing that can sustain the economy? >> it will fade over time. china is trying to transition from a production led economy to a consumption led economy and there may be able to time they will have at months. when you are looking at s&p 500, it's up 10% in the
last couple of months but we and wedrink -- dwindled bet loads of painfully lacking in any volatility. do you think the upper trajectory of the s&p 500 can continue? mr. tchir: it's about to continue. we are looking for people who sell the news or fade the rally. this is been were the least love rallies we've seen i don't know even the bulls gave up 300 points ago. people have been kind of sitting there waiting for this to fade and i think people expect the trade deal to be announced and everyone will wait for it to sell a, don't agree going to get it. undera lot of people are exposed in their underestimate just how to this trade deal can be the global economy and our companies. scarlet: participation isn't there and they have to pay catch up later on what's that radio comes through. people are going to wait and see if they are going to see that selloff i just have all his positions with people like what it's a bad trade deal are not sure what they mean, there's no such mean as a bad gifts, for example. i think is very positive coming
out of this trade deal and people have been diminishing it too much. scarlett: defined good trade-off for investors. mr. tchir: is china buy more products and it has to be lng, liquid natural gas has a play that part of that because it requires a lot of spending domestically to build out of instructors we deliver that. i think that will give broadbase support to the economy. i think we need access to china and more resurgence on china coming here and i think we get that. i think everyone is going to be a bit disappointed about the little property protection. i think we would like it will not going to get it. not veryh a nebulous tangible. i think that is in the google .2 and they wouldn't get the trade sector and property protection and three-month literalness when you say so what and when moveon get a strong rally on the backs of being the cell into china and expanded to china with all the restrictions. theline: what about day-to-day and consumer sentiment fallen off? you think that's temporary echo? mr. tchir: the first few months of tariffs that can work around
the impact of tariffs is taking its toll that the easy workarounds are gone and we are seeing a slowdown. i'm not sure how much the government shutdown impacted that and then you have stocks, all indications i'm getting it is already a little bit temporary and really gets this boost from trade. bullish on equities, bullish on the china u.s. trade deal, thank you so much. coming of next have a we speak with retail investor advisor morty singer with companies including gap closing hundreds of stores. his insider with the investor industries to turn things around. from new york, this is bloomberg. ♪
risks arefor lists -- off by 1.5%. barclays upgrading people rate, raising the price target $18 a share expecting prices for used car fueling its refinancing and doesn't see a threat from ridesharing. and deutsche bank boosting its price target on gap to $34 winky to get a hold rating after the company announced it would break off old navy. the split amounts meaningful it overment cautions sellings -- overzealous a softer quarter. as your top quarters. scarlet: cap off one of several retailers announcing plans to close stores and amazon planning to announce a new grocery store business in the u.s. according to "wall street journal," being felt across the greater sector. joining us never insight on the industry is more singer, ceo of trout which advises that invest in retail fashion and luxury industries he is cofounder and
chairman of orchard mile, online luxury marketplace. good to see. gap, and others been a lot of criticism about inspiring product lines. i wonder, does demand for midpriced apparel, you got the value and pretty well populated and there's the luxury and, what kind of appetite is there for midpriced? >> to find midpriced. ultimately there's a need for family-friendly business that can cater to everybody and one environments that ultimately, it's about are the competing with each other too much? is a good, better, best approach with old navy come on, and banana republic. when the two lower companies are competing with each other, because gap to have distinct out promotionscularly without margin erosion in every instance and i think that ultimately, they didn't have brand equity to really keep up with a marketing campaigns of old navy. caroline: what is hill city?
citys amazing that hill and f f came to be put into a new coat with gap and everyone is going on earth is hill city? are these good opportunities that are being leverage at the moment? >> i applauded and i hope more companies loosening similar is to create innovation and merely with men, enthusiasts, and and trying to keep up with lululemon and building your own innovation and not having to necessarily buy it, do you think should be investing in digital native brands. always midmarket retailers and behemoths need to add innovation by doing it internally or investing in it and buying it. artifact will be the ceo to leave the new company and even though he was already presiding over gap, you talk about the need for innovation, white is big-box retailers
struggle to think outside the box? is because they earned their stripes the reopening new stores marking the path of success? mr. singer: syringes in question. there has been a change in of -- it is a very interesting question. there is a change in the mindset about these companies. brands therefore have to keep up with them. if you think of the ascension of an executive through the ranks of some of these companies they've been trained in a certain set of principles that when you are rising in the 20th century now you were sitting in somewhat through the 21st century and we have on the channel and click and collect and mobile and 5g implications, how do you give it -- pivot into a different mindset to build the brands with the customer, the millennial engines the will care about? caroline: the current guard of any leading retailer is looking rather concerned lead at what
amazon does with fashion. amazon has not really made inroads there but they have their eye on it. we have this use of amazon say they are launching more grocery stores. how to use the amazon is behemoths? only continuing to do the right thing at the right time? everyone likes to dislike amazon though the consumer continues to adore amazon. if they keep on being a customer centric company, they are probably the customer centric company in the state. with the new example of these grocery stores, there's a whole emphasis on the parking lot and then control in the parking lot so you presumably might be able to say i'm going to arrive at parking lot 15 a, sit in my car, the groceries will come out. it's all about the parent with children and are not going to get out of the car. it is customer first. scarlet: it sounds a lot like execution. we talked about best buy one of the performers earlier this week.
best buy is defending itself against amazon. that was on a was the case but they have made things a lot more streamlined and figured out a way to defend their market share. is this model replicable to other brands and parts of the retail industry? or is it all just execution? it isnger: i think usually about execution. i also think it's about innovation. one of the company find huge fan of his athena retail group. scarlet: they own ann taylor. mr. singer: ann taylor loft and used their they billion dollars in of are structure to have industry-leading infrastructure on every category of business. set up a backing brand institution to allow european brand or korean brand coming to america saying don't measure that against the wall of the euro plumbing down, borrower infrastructure which is best in class and it becomes a revenue
stream. and they did it with their incredible brand loyalty they have. and to brands in particular starting out, went about to do their first store, you did within their brands which will go out into the world. don't forget, old navy was dreamt up by mickey drexler 25 years ago within their walls. now it is as big as the main company. the value creation with ideas to follow the consumer and frankly, follow the need for remaining as competitive as possible in this market is why the retail group is just fantastic. and taking a leaf out of some of the guys like best buy who are really focused on best in class execution. caroline: they seem to be about knowing your customer and being able to innovate from within, it's interesting that some of the innovators and the
disruptors are themselves having to disrupt themselves or being forced to buy activist investors, ebay today we are watching outperforms after its earnings and agreeing to back to people in the board, starboard value looking at sending off some of their key assets. is ebay old guard? are they managing to refresh and disrupt themselves from within enough? mr. singer: they were incredibly disruptive when they own these other businesses like paypal would . but today, there are other real,rms such as the real one example in the fashion space that allows people to mine each -- there are other corrosive things happening in fashionet not just in but in every other sector that will chip away at ebay. the ebay brand has to have another reason for being and think therefore comes back again to a brand equity question, what is art -- what is it you are
represented other than having every single auction in the world on your platform? thiset: you mentioned could pay off dividends, one of the trend should be watching out for? when you look at what's going on in retail? mr. singer: i'm a huge fan of you know alibaba and jd and far-fetched that went public out of the u.k. and this is the newer city equivalent of far-fetched. market was allowing multiple brands to sit on one place and shop on the channel and multibrand in one environments and obviously, rental allowing lands and it's a new channel distribution. lands, thank youinger for sharing your thoughts with us on the ever-changing retail industry. these are everywhere you want to
caroline: a quick check on the business headlines. andreas scholz turned down a seat on the board. they were negatively see decision -- reneged on the decision to hire him as ceo. they would allow to take a different role at another bank without forfeiting tens of millions and benefits. hiring or sell -- orcel. learned thes possibilities include a joint venture or a minority stake sale in the luxury automaker. they are the largest. the biggest u.s. super market chain is winding -- what
negative ban on visa cards. merchantser sign of growing unhappiness over the fees they are charged for credit and debit cards. in july, kroger quit accepting visa charge cards after its food company in california. that's your business flash update. scarlet: i feel like that's what you have to have a mastercard and visa and american express in your wallet just in case some random store decides not to accept one of them. caroline: completely agnostic, have every single one just in case. scarlet: and have points on top of that, and then mow. passing on the torch, we hear from legendary investor bill gross on who could possibly in place in as the next bond king. we have another 90 minutes to go before the u.s. market closes in right now we are looking at gains. equity indexes have taken a little bit of a rise higher with the nasdaq à la .9% on the s&p adding two thirds 1% as well as that china data really giving a list to some of the chinese names.
caroline: data coming out of the u.s. in terms of consumer sentiment and the isn, european pmi week data as well that china looks strong and maybe even with oil coming off that little bit lower we could be seeing a little bit of risk on as we head into the weekend. we had a real lull in productivity. scarlet: that risk on is the reason we are seeing the etf and treasury come down 1%. gap is the best performer in the s&p 500 on plans to separate old navy from the rest of its brands, cap and banana republic and athletic. caroline: this is bloomberg. ♪ so with xfinity mobile
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a pressing security challenge for the alliance. >> we do not want an arms race. we call on russia to come back into compliance. the new russian missiles are nuclear capable and can reach european cities mark: last month, the u.s. formally suspended its obligations under the 1987 imf treaty that bans land-based missiles with a range miles.to 3400 russia has denied any egregious has followed suit. parents of otto warmbier claim the "evil regime" of kim jong-un is blamed for their son's death. they are rejecting president trump's comments at he took the leader at his word that he felt bad about warmbier but had no
role in it. the college student died in june of 2017 after being detained and tortured in north korea for more than 17 months. pakistan has released the indian island who captured when his fighter jet was shot down. he was returned to india at a border crossing in what pakistan's prime minister calls a gesture of peace. reports say after the indian private's plane was hit, he ejected over pakistan and fired shots in the air to keep angry residents away and destroyed secret documents by eating them. in canada, prime minister justin trudeau's liberal party still behind him for now. former this week, the attorney general said he plans to interfere in the justice is -- by indie criminal case ending a criminal case against a québec firm. the scandal can consume liberals and around to the election and
which he would otherwise be the front runner. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. caroline: this is "bloomberg markets: the close." today is the official to the bill gross retires. he announced his retirement last month, into his 47-your career. he spoke exclusively to erik schatzker about whether he sees anyone who could take his title of bond king. >> if i said no, that is presumptuous. but probably not in the same way, because to be a king, you have to have a kingdom. was about $2erm
trillion. that is a kingdom. erik: certainly relative to the size of the market. >> sure. myself. convince i would walk on the weekend and go, my god, $2 trillion? i that america. biggest institution in the world aside from some japanese banks. how did this happen? i go, uh, but it did. so a kingdom. i would think you would have to have a kingdom, and i do not know if that is really possible with the index funds of which if you are the king, you're really just a puppet because the market is making the decisions. so probably not. but there are still experts in
the bond market. i like scott minard. think in the rate environment 20 years ago, he could have been a bond king. is got a great -- he has got a great long-term perspective. --hink he has got the market there are some that would say, who would want to be king? i guess i did. carries aect, it certain burden. the crown. erik: he who wears the crown, yes. any other contenders to the throne that you admire, that you are watching? oh, i don't think so.
i do not necessarily have a gundlach,against jeff but i don't know. i will stick with scott minard. scarlet: bill gross speaking with erik schatzker. for more on bill gross, we welcome erik schatzker and our expert on all things fixed income. that was kind of refreshing to see bill gross with a different demeanor. bill grosshthearted come almost. scarlet: like the burden has been lifted. erik: the burden has been lifted. there were some incredibly revealing moments in that interview, but it allows him to be a little more honest with andelf about the things -- don't forget that he is retiring, so he has had to come to terms, right, had to find
himself at peace with everything that has gone on over the course of his career, the relationships he has had, both good and bad. walk off -- he is a basketball fan, so duke fans, hang of the hightops and walk off the high court -- hard court and into the bleachers for the last time. he will manage his own money and his foundation's money. he is going to give it away to one of his sons or his daughter, and that is a lot different. whatine: quick aside, about nike? erik: i gather he was at that game. caroline: from a bond market perspective, his legacy? erik.tastic interview, it was interesting how he said you have to have a kingdom, and he talked about the $2 trillion -- pimco,from panko all actively managed.
and he oversaw the mutual fund, which i believe was over $300 billion in assets. you think about scott menard, which he mentioned, from guggenheim partners. a little more than $300 billion for the total a.m. of the firm. a behemothas being and markets that were exploding with respects to returns and buys, so will there ever be a fund like this, a similar size and relative to the scope of the bond market, ever again? positive to have that or a negative? i think that will be a key debate that will stem from his legacy. erik: i think he will say probably not, just as he said there. the reason is that the market has changed dramatically. i don't think you mentioned in that particular clip, but we
passivebout instruments, and they account for so much of the aum today. they did not really exist 15 years ago at the peak of his sort of royal domain. did talk about the fact that so many of the things that allowed him to become the bond king, which is to say the king of outperformance, both versus the benchmark in his peers, have also disappear thanks to systematic arbitrage. there are not -- these spreads are not as wide as they used to be. the bases between cash and treasuries does not exist in the same way. mortgages -- mortgage bonds, and were dramatically lower-priced because nobody understood them. they were ridiculously cheap and we got in early, and that was a huge part of his advantage of pimco. now, thanks to so of the things
that have since transformed iskets, the structural alpha gone. scarlet: a lot more market efficiency now. back to the conversation and how loose he's aimed to be, he was also revealing. he told you a lot that we had not heard from him before. erik: it is well-known to a lot of us that his exit from pimco was unceremonious and bitter. he also had a very unpleasant divorce from his wife of more than 30 years. i wondered, does he think this affected his performance? does it explain why his second act of janus henderson was something of a dud? he said, no, as a matter of fact, i have asked burgers, a -- ger's,. and we compartmentalize. i i was dumbstruck. it was the first time he ever revealed that.
turned out he found out that he had it late in life. >> reading a book, right? erik: reading "the big short." one of the heroes of the book finds out that he has aspergers while investigating his son's aspergers. that is how bill gross developed the idea that he might have it. he was diagnosed by a psychiatrist and then went on a voyage of self-discovery, mentally, introspectively. who am i? does this explain how i am? does this explain the way i interact with people are have trouble with interacting? fascinating for someone like me and perhaps the rest of us, does it help to explain his success? why don't we play in next are -- an excerpt of that part of the interview. experience, it has
allowed me to stay at 30,000 feet. basically, the condition is one of which is sort of up here, and as other people will know, when i come into a room, they say, bill. i will go -- uh, you know, i am up here. that is not necessarily good in terms of one-to-one. people think you are angry or an le.but it helps you to focus on longer-term things. yeah, i think it was very important because it allowed me to take what we call the secular approach at pimco, the long-term view, and it was a good view to take. erik: and many people do think of him as that type of individual to whom he referred. but it helps you understand and
certainly helped him understand why he was the way he was, why he did not like being disturbed. you had to pass a note if you wanted to get his attention. if you read about the characteristics of people who have autism spectrum disorder, and aspergers is on the mild end of that, a characteristic is remarkable or rare focus and persistence. on things and stick with them, and that is what bill is describing about himself. i should add, every case is unique and not all people show the same characteristics. but that is going into one of the characteristics broadly. scarlet: the fact that we have been following every iteration of his career and of his personal life, his interpersonal relations with other people in his office, it is also a throwback to another era, especially in active management. the rockstar kind of fund manager. that has lost its muster.
era ofare i call it the human capital? lisa: there you go. one person could move markets. don't forget when he could move markets and have his own kingdom. some people would have different opinions on how he treated the people under him. i think that has come to an end. caroline: i am not sure if the era of trump and tweeting pace service to that, but it does move markets. with social media, maybe more voices are heard. thanks to erik schatzker and lisa abramowicz. great interview. the full interview will be on tonight at 9:00 p.m. new york time. curling pup let's check in markets. we have a rally. nasdaq up .9%. amazon giving a lift. we understand they are looking
at expanding the grocery store double, according to "wall street journal." maybe some internal competition. that has hit kroger, walmart, and target. dollar,at the canadian up by .9% versus the u.s. dollar. downside, and that brings on the canadian dollar. scarlet: from new york, this is bloomberg. ♪
hour ticker x-ray. move.look at the why the move higher? this is a company that has struggled the last couple of years to build its business. their u.s. arm is not doing so well. the supplies that they work with are cutting back to some extent. they have been able to grow internationally and cut costs. the dissection of the biggest gain for the -- that is actually the biggest gain for the stock since 1987. back then, a company sold that to data hearst. scarlet: looking at the stock price. it hit its high in january of 2018 and then went on a descent. there was a close cutting
program in november. how is it going? >> so far, so good. early days. reduce theiring to staff and looking to take out at least $200 million a year of costs, possibly as much as $200.5 million. last year, they talked about how they were able to reduce costs by $70 million. it is a tough business with a lot of competition. danaher is one example. patterson, not names you would know because it is not like you go to the dentist's office and see the brand names of the products. but it is certainly a challenge as a business. it is really about being able to manage through that, and they are turning to cost cuts to some extent to be able to deal with the issues they are facing. caroline: investors like it. thank you. coming up, apple's annual meeting some of why tim cook --
scarlet: a check of the latest business flash headlines. first u.s. sales decline in a year with demand falling even further the jeep vehicles at chrysler. fiat chrysler falling 2.2% in february. toyota and honda also performed worse than expected. at&t shaking things up with a new acquisition. two powerful executives leaving their jobs at order media. a ceo is stepping down, any help create memorable programs like "came of thrones -- "game of thrones." david leavy nothing his departure, a big move in the business of sports.
canadian government allowing the the u.s.,n of -- to and it will be a long legal process. she was arrested in december over allegations huawei defrauded sanctions in iran. those are your business flash headlines. caroline: now to apple, holding its annual shareholder meeting in california today. promised a rolling of the dice, plan to give new -- planting of new seeds. >> we are outside the steve jobs theater. there was an interesting question that was fascinating. is apple picking up risks with new products? taken up so much of apple revenues, and there was
a sales slowdown last year. tim cook said there is a lot of things the company is working on. he calls one of the products blow away, and then he said there are strong roadmaps in place for the ear pods and apple watch. this shows apple might be becoming more bold in its approach to new products or they were not as bold, saying no to many things. he said they do not know what may or may not work out in the end. scarlet: apple but 18 companies in 2018. they are small acquisitions, not necessarily brand names. it is not like they buy beats every year. is that a strategy for the next don't miss product? buyhat apple likes to do is smaller companies that it can turn into components of major products. talking smaller things, like they bought a security company many years ago that ended up being the fingerprint sensor.
another company ended up being face id. they bought a company called siri which ended up being siri. so these committees become key features of future products. but they have not made any major acquisitions. isuess you could say beats major but it is nothing like netflix. caroline: he had to field questions about diversity and privacy. anything that struck you as interesting? >> the biggest topic of discussion from tim cook or different shareholders was about diversity. there was a controversial votedal that apple against that was about disclosing the political or ideological leanings of board members. one proposal wanted them to come up with a chart that indicated the political leanings of their board members.
tim cook said apple is not a political company. appleeholder said despite not agreeing with the trump administration in terms of been able toy have navigate those waters, whether it is a trade war or tariffs, so far. scarlet: it would not be apple if we did not talk about the next big product. reality glasses is something you have discussed before. did we learn anything new on that? >> he said there is a strong roadmap ahead for wearables. he did not dive in. -- one thing he talked about were the chip efforts, the processes that power the speed of the mac, iphone, and ipad. and he said they are working on chips that will come out in four or five years already today. scarlet: from outside the steve jobs theater in california, thank you so much. just over one hour for about the end of u.s. trading.
a gain on our hands, and they have picked up steam this afternoon. the s&p up. all indexes higher. we are in overboard territory, but we coming off the relative strength index indicator of 70. we're above 2800. aarlet: calling .6% of again breakup, that tells you what kind of a week it has been. we will be watching it. from new york, this is bloomberg. ♪ want more from your entertainment experience?
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just say "teach me more" into your voice remote and see how you can have an even better x1 experience. simple. easy. awesome. mark: i am mark crumpton with bloomberg first word news, jay inslee has officially joined the crowded 2020 democratic presidential field. the 68-year-old announced his bid after recent travels to two
of the four early nominating states. he is emphasizing climate change, highlighting his liberal record in washington state and offering an aggressive critique of president trump. he sat there is some and then it's to being a fresh voice outside of washington, d.c.. >> people are looking for ways to rake the gridlock and dysfunction of washington, d.c.. it is an advantage to being a not been i have daunted by not being the best known because i started out as an underdog in the races i have been in. mark: he plans his first trip to iowa with events geared to climate issues. trips to california will follow. trying to democrat -- portrayed democrats as out of step, vice president penn said -- pence
between choice is in personal responsibility and government dependents. he urged attendees to support president trump's push for a wall at the southern border. >> democrats want to say it is a manufactured crisis. but the only thing that is manufactured is their outrage. [applause] >> every day we do not secure our border, we are allowing the crisis to worsen. mark: president trump is scheduled to address the conference saturday. a new pentagon plan reportedly calls for all american troops and afghanistan to leave within three to five years. according to the new york times the offer is made in peace talks that could lead to the afghan government sharing power with the taliban. the first step calls for
reducing the number of americans from 14,000 to half that in the coming months. health officials say flu season in the u.s. has been milder than last year but it may be picking up speed. the centers for disease control high levelson say of influenza were circulating in 33 states and new york city at the end of february sickening residence and -- in the south where the illness typically takes hold. lester's epidemic killed nearly 80,000 people in the u.s. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪
>> it is 8 p.m. in london. i am cal and nine -- caroline hyde. amazon gives technology companies a lift, helping push the u.s. equity market higher. s&p 500 is breaking above 2800. lift files to go public getting a desk giving investors a look. and adding to the gloomy picture out of europe. all that and much more coming up. have the nasdaq as the best performer of the major indexes of i pointed a 4% so we have a direction on the final trading day of the week and it is to the upside. nasdaq closing the week higher and you can credit the strength to what we saw in china, and improvement in manufacturing data. we managed to shrug
off the poor data coming out of europe and the u.k. we are seeing on the moving lower, yields are higher. we have seen risk aversion breakdown but stocks are rallying, we see a settlement of government bonds. scarlet: manufacturing data came in weaker than expected. closer look at what is driving some of the market action. we are looking at everything from equity funds to mondays. abigail: i am taking a look at oil, you were mentioning underperforming the other risk assets. as you mentioned taking the nose dive down on that disappointing isn manufacturing print that went to a two-year low.
is the division between expansion and contraction. we havee oil lower and stocks higher and this afternoon that baker hughes rig count for oil and gas came out and this goes back to the crude crash, was down sharply down to $25 a barrel. rigs are coming off line, oil producers not wanting to have rigs on with oil still low. there is little bit more traffic, the most recent data down 10 rigs, this is trending down. this may suggest that oil producers think that oil may stay at current levels and maybe even a decline. thehen you take a look at equity market and the win streak, a lot of it has been determined by sustained power of retail investors. there are market sentiment indicator started like to pay attention to but the weekly index we get out of the american
association of individual investors, that gives you the best look into how retail investors are viewing this market. when you look at the spread between bullish and bearish sentiment within that index you are seeing bullish, than -- the percentage of members are bullish rise. the percentage that are bearish fell to 20%. a 22 point gap is the whitest we have seen since june. there are areas of concern, investors say they are neutral. that has risen which is a sign we could be near the top of a market cycle. the percentage that we have at 42% is not as euphoric as we saw in january 2018 when the indicator got up to 60%. a lot of people not only watching the index but money flows into those passive investments to determine whether a ninth week of gains in the nasdaq and a fifth in the s&p 500 goes into effect.
scarlet: right now bonds are winning, take a look at the percentage or the number of leveraged loans that have been launched or started to be marketed. you can see it is falling to the lowest since 2016 so far this year. this should not be surprising. take a look at the performance of the asset classes, since the beginning of november, high-yield bonds returned 3%, leveraged loans have returned 1.1%. a big outperformance for the bond market. investors going into that debt market not so much into that loan market especially as they get less concerned about the federal reserve raising rates. they are pegged to floating rate benchmarks and promised to pay more as rates rise. that does not seem to be an issue. valuationd from a perspective, a lot of people hiking off of loans and issuance falling. >> when you look at the markets and the economy, there is little to sway the fed from its patient
path. core ce which is the referred inflation gauge came in with estimates. and reflecting moderate growth and whether related disruptions. for more on all this and what it thes us about the state of economy, we are joined by constance hunter. great to speak with you. this was data if you pull in chicago fed and jp shows the recession is not imminent. what does the data especially the mixed bag of regional manufacturing surveys indicate about the quality of the economy's growth? if we look at the manufacturing sector, there are some headwinds that are coming from the global situation and we tend to see a global manufacturing cycle so it is not surprising we would see some weakness in the u.s. if we look at the consumer side, we are still healthy and by healthy, i mean growing above potential gdp.
if we look at the report from yesterday the bright spot was business investment. everything else was going as we expect which is growing at a slower rate and moving toward that potential gdp rate of 1.8 percent to 2.8% -- 2%. >> we are seeing, you talked about external pressures we are saying and many talk about the u.s. being an island away from other geopolitical regions. which one worries you more? when you're looking at the relatively better-than-expected chinese data, is a europe we are worried about? constance: i would say we are not an island in terms of geopolitics. we are somewhat of an island in terms of economics but where we are not an island is financial markets. i would say the worry here for the u.s. economy and the main
thing the fed is worried about is that transmission mechanism through financial markets to the u.s. you could argue that china's pmi improved bit, i would not put too much stock in one number. there is other chinese data which would suggest that they are not out of the woods in terms of their growth scare and europe is not out of the woods. we had poor growth show up in germany in terms of industrial production and trade and gdp. italy is back in a recession. spain was a surprise for some. spain had been growing at a fairly strong pace so that move into the red below 50 for spain on the pmi index was important as was france. there is a lot to be concerned about in terms of europe's growth outlook. that the ecb is not going to be able to return to policy normality anytime soon.
>> that is something to keep in mind since the many people see the fed is the central bank to the world. you came back from the nap policy -- n.a.b. policy conference. we saw concern over what happened with the china trade deal. what did that policy meeting indicate to you in terms of how the fed might position itself? >> there is the fiscal situation about which there was much discussion. i had a discussion with me and alan greenspan. we are sprouting out future growth by growing our debt levels and there were other panels which talked about this is an and -- and inevitable problem of a social -- aging
population when you have a health care system that are funded by the state for an elder population. this is a global problem and it is a developed economy problem. what makes it hard from a policy perspective is that it is not an immediate problem. at some point in the future, there will be a negative repercussion from this, in the near term, many economists believe it is holding back current growth, certainly in the case of japan, europe, and the u.s. we have enough debt that it is crowding out private activity and is one of the contributors to lower growth. not aa problem but it is today problem. that is from a policy perspective what makes it difficult. we did have the privilege of hearing from president bostic from the atlanta fed as well as from former fed officials bill dudley and nelly lang who was on the board of governors and had
previously been at the fed. there was a lot of insight into the fed's policy of taking a pause, waiting and seeing what happens with the economy. and not moving rates every quarter. and certainly all of the data that is coming in or has come in this week would support that and the gdppce data data. wasof the things that discussed which is important is this idea of symmetry. the fed is going to allow interest -- inflation rates above 2%. not 100xpressed he was percent sure the market believes the fed. if we get some core pce prints that are above 2%, we could see the market test the fed on that and see how much they believe the fed is willing to allow symmetry.
one today. thes bring in our guest, nyu professor of business and author of the book the sharing economy. joining us from washington. you thinks though this is a smart move, get in ahead of uber. >> they are much more globally diversified so there is a lot more information that can be gleaned from the revenue numbers about the health of the business. it is hard to separate what is driving revenue growth and what is driving profit. might be easier to get on board with this investment. what i thought was fascinating is you thought it should do everything it could to include drivers in its ipo and post ownership. one orou have taken
another most divers arrived for multiple platforms. i think a big part of what is going to drive success in the future is being able to convince drivers to spend more hours on your platform. to drives drivers exclusively on their platform, over wants the same. but one likely to put my hours into lyft. is it has the company perceived as sharing the wealth. a third important reason could be it makes business sense in terms of cost. if the driver has stock options they are going to be willing to accept a lower per hour pay rate. the cash bonuses offered to the bonuses ranging from 1000 to
drivers ofcash word good standing. i am interested about the controller of the founders, -- control role of the founders. doing no how they might hold control of the company? >> it is a tough question because if you look at a company like amazon, tightly controlled by the founder who has spent 20 years losing money to build a position of dominance. that kind of founder led control can in fact lead to long-run success. i firmly believe that both should not be chasing short-term profits. what they should be doing instead is changing behaviors and going after market share of the broader transportation market. you add up how much they are running in the u.s. today. it is just one percent of what
people are spending on transportation. so it is all about topline growth, changing behaviors, and to lose money to change behaviors and gain market share, that may be central to the success of the business. here, isvery quickly tore room for both companies have $100 billion or more in valuations? guest: absolutely. there are going to be multiple companies in this space that have valuations approaching not just 100 billion dollars but close to $1 trillion and the reason i believe this is globally, the transportation market is a multitrillion dollar market. it is more than 10 times bigger than the global advertising market which is supporting valuation.d google's
>> time now for options insight. joining me is great cauldron of bloomberg news. happy friday to you and thank you for coming into the yen on your thoughts on volatility. the s&p 500 wrestling with its important resistance level of 28 hundred, what do you see for one month volatility as it takes on that selling level?
>> we have seen s&p 500 index one-month implied volatility drop almost one point. talking about from the middle 11's to the mid-tends. the index has not done much over the last week. i think through earnings season and some of the geopolitical risks have called down a bit. also the rhetoric around washington, d.c. has leveled off. it does not seem to have too much of an impact on investor sentiment. interesting, a case of complacency when there is lots going on in the world. you brought a great bloomberg terminal chart showing interest on the s&p 500, i did beyond, and the vix. this means something else. the flipside of that lower implied volatility. we have seen a little bit of hedging going on across a few of the major indices. open interest has risen 10%
over the past two weeks. iwr that same time frame, am, the etf that tracks the russell 2000 which is up 18% year to date, that has increased 18%. >> you think that is hedging as opposed to outright short. >> correct. >> you're seeing open interest on beck's call suggesting that some people are going long volatility. is it a hedge or of that on volatility rising? >> you can look at it both ways, the vix is a high beta hedge. with the vix open interest over that same time, we have seen the call side of it rise 30% just over the past few weeks. not necessarily catastrophic, but it seems like people are adding to hedges. >> that matches with the skew index. we will leave that for another time. gregg calderon, thank you for
joining us. great job, great comments. will and the week on an up note with gains for the week. certainly for the nasdaq which is getting ready to close out its 10th straight week of games, -- gains. boostne: amazon helping tech stocks. not helping walmart and target but tech has been an out performer. dollar on the higher side. we have seen the canadian dollar on the lower side is oil falls. scarlet: the 10 year yield moving higher and gases the best performer -- gap is the best performer. this is bloomberg. ♪
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bloomberg first word news. president trump claims his relationship with north korea's kim jong-un is "very good" despite the collapse of the summer -- summit in hanoi. the president tweeted they had very substantive negotiations. he did not address the pushback from the north which disputed his account of why the talks fell apart. the u.s. is imposing sanctions securitynezuelan officials for their alleged involvement in stopping humanitarian aid convoys from entering the country. the treasury secretary called the actions of the officials tied to