tv Whatd You Miss Bloomberg March 11, 2019 4:00pm-5:00pm EDT
anchor: there's a lot that does not -- got revised down. anchor: there's a lot that does not make sense. boeing back a little by caroline: every single industry group is in the green. the worst-performing group's goods and services, and it was gaining by .5%. we just cannot build on the gains, the strength as the day continued. perhaps it's at those up pretty well for trading in asia overnight. video acquisition and buying of smaller two companies, .vidia of 7% it is surging. those are the kind of days you have when the nasdaq is up 2%. caroline: abigail, as a close,
who are you watching? abigail: i'm back on 200 day moving average watch. let's look at this one year chart of the nasdaq. , tellingle last year you that even note was volatile buyers in that brutal fourth quarter going to the sellers, this or we have this beautiful uptrend but it is starting to reverse. that happened when the nasdaq went above the 200 day moving average. the uptrendappears is reversing. perhaps we will see a movement like we had last year, down toward 7000. ,oday the nasdaq very strong it's best day since the end of january. boeing, if you look at this day could have been a lot worse. shares closing down only about the worst day since october. investors finding a little bit
, saying there planes are care worthy even though some nations have grounded the flight. a lot of concerns not only about the cost of this particular one involvinghe the line air crash/year in indonesia. some of the suppliers fall, but when the line air disaster about, boing shares fell 6% that day, but they quickly rebounded and went on to rally after that. they did fall after some of the reports came out and there were disputes as to what happened. but boeing ended up rallying about 44% from late december up until through friday of this year. $490 billion sitting on the balance sheet of orders waiting to be filled. unless this accident has some impact on those balance sheet and orders, they will see the stock continue to go higher. quest i've been looking at tumbling coffee prices.
now below average, with prices below one dollar a pound. for many coffee producing nations, the cost of production is now lower than prices and it's getting closer when you , less better than expected weather means that even as prices are falling, production is increasing and another bumper crop is expected next year. one broker saying the coffee market is bottomless. is paying close attention because he drinks -- every and how many cups of coffee. joe: i just want to consume it. patrick, we are talking about the retail sales number and how it is the head
scratcher. we have more data coming up this week. how do you think about these reports going forward, given that the fed has been clear it's going to be patient, no matter what? patrick: what were looking for -- is ringing volatility down, and that is what is driving the market higher. what is the current state of the markets with respect to trade? some of the headlines are not that great. it is still unclear whether there is anxiety on the part of president xi, but at least for today it doesn't matter. luke: again asset class, it doesn't matter. joe: i think it's a lot different when you look at global stocks. at tenure at six basis points, and you also have
chinese stocks, a high share of u.s. sales and u.s. stocks with a high share of chinese cells. both outperforming their benchmark since when osiris. it's not clear the same optimism is reflected anywhere else. caroline: we are getting a geographical picture being painted by luke. how much do you care about what is really going on in the rest of the world? the brexit concerns, the trade debate, is in you is this going to knock us off course in the united states anyway? >> your point is a good one. we haven't been so far and it is unlikely that we are going to be. it is important to keep in mind our trend is slower. we need to be mindful of that. we are not strong because of global issues. we are strong because of our own issues.
last year in 2018 we had a fair bit of fiscal stimulus come through. that provided a shot in the arm for the u.s. economy. allies around our the slower trend rate for gdp. scarlet: you mention you want to pick your asset class and it will tell you a different story. you are looking at credit. u.s. investor credit fears are coming way down, according to a bank of america survey. showed a sharp retreat, when asked a fund manager what china, biggest risks, the fed tightening too much, that dropped fairly precipitously and the sum of all fears drop to its lowest level since 2014. this was essentially all the positive news flow we've had in january, and credit never really bought into the idea there was a u.s. recession around the corner
so it reduces the risk of the pop is that causes that recession reduces risk from an asset class that is very sensitive. joe: so what is the biggest risk out there? patrick: we were talking about optimism. there is a lot of optimism in the market should we see trade discussions deteriorate, should we see greater political discord coming from washington. those are likely to knock us off course, assuming they are severe enough. at the moment it seems like we are sort of steady as she goes. scarlet: political discord can take many forms. caroline: is that something you thought of as a serious concern for the likes of amazon, facebook? the risk of regulations? itrick: i'm not sure how will impact those countries individually. the risk of regulation is in
there at the moment. is it a major concern? no. if your asking whether could be greater issues, health care and general is an area where you are likely to see greater risk. do you think there is a lot of policy anxiety out there right now? patrick: not a lot. we've had a big run-up, we got to around 2800. i think it all honesty the policy that people are concerned about his china and how much their fiscal policy is going to stimulate the economy and tried to for some kind of reflation trade. that's what i hear the most about. scarlet: everything is green and going forward. kawa. to patrick and luke that doesn't for the closing bell and for me. romain is up next for "what'd you miss?"
the market should have reason to hope. we speak with nobel laureate robert schiller. and deadlock for theresa may. last-minute talks with the european union a day before she puts her brexit deal to another vote. with boeing, the crash of the 737 max in ethiopia over the weekend is rattling confidence in boeing's best-selling jet. flight 302 wind down in a field shortly after takeoff sunday, killing all 157 people on board. this is the second max crash in five months. the faa reiterating its confidence in the 737 max, saying the aircraft is still airworthy. joining us on the phone is randy babbitt. thank you very much. tell us a little about putting this latest news into context. how does the faa come out and make a decision and say
isething like, the plane still airworthy. what goes into a decision like that? they: recall that when aircraft was certified, it went through extensive testing to make sure the aircraft is stable and recoverable. suggesting that perhaps they should ground the airplane would be incredibly premature because it would be conjecture. we really don't know what , clearly it was a very bad accident, but we are not certain why. there are other alternative solutions that the faa could use. for example, most of the equipment in the airplane under certain conditions can be inoperative, and operate with different limitations. they concert he disarmed the system and use more stringent limitations. you might have to operate the
aircraft slightly differently to maintain the safety envelope, but there's a lot of options short of grounding the airplanes. romaine: usually when we have a catastrophic aircraft crash like this, it's usually a one-off event, but when you have two back-to-back with a lot of similarities, we know how long it can take for the faa to sort through all this and come to an actual cause. in the interim, do you think there's enough reason why any of the international body should maybe disable this particular feature of the software system? be a: again, it would little bit of conjecture. it is extremely uncommon to have two accidents back to this, but statistically, is not impossible. happens million everyone in a million times. so i think it would be conjecture at this. remember that the faa itself does not investigate the
accidents. that's the national transportation safety board. in this case the aircraft will inspected by the ethiopian authorities. i'm pleased that they did ask for assistance. there's recognized as some of the top investigators in the world, so they will get into it quickly and have the advantage -- unfortunately, where the accident was it will be relatively simple to recover the black boxes and they should bring those up very quickly and hopefully give us a little more insight into what actually happened. but that will be done by the ntsb and they certainly will share that with the faa. at the moment, many consumers are desperately looking at what type of aircraft they might be taking a flight on and worrying about that. andcan an airline educate make the consumers feel safe,
when you got china and indonesia taking their own steps and grounding those claims? randy: i'm not certain what criteria they used. again, our aviation system is absolutely the gold standard of the world. everyone looks to what the faa , and setting criteria there's been nothing so far and is shown -- i think there will or at some point in time, that any sensor that is allowed to have command should at least give thatal or visual warning it is making it could to assist him. that was certainly be more of the things that comes from the investigation. but i haven't seen anything that says what has happened thus far would be reason to ground the theraft based on neither of
it's a surprise in an industry that has long been dominated by companies or than 100 times larger than that georgia firm. do you want a new honda for almost nothing? and airbnb like service for cars, as new car prices soar and barring costs rise, consumers are looking to car sharing tools to get high quality for a low price. bm and porsche are experimenting to reach new buyers. tictoc on twitter reporting that captain marvel ruled the weekend box office with $425 million worldwide. it currently has the biggest opening weekend so far in 2019. captain marvel is the first film in a marvel franchise dedicated to a story of a female superhero. follow all the story is -- all these stories on your terminal at tictoc on twitter. romaine: uber's new ridesharing
company renting out kitchens .pace it puts were in competition with the startup by co-founder and board member travis kalanick. eric newcomer joins us now to talk a little more about it. this is apparently enough of the thing that you have the former man who ran uber and cofounded it now competing with his former company in the space. >> were still trying to get the language. virtual restaurant, you have travis with his cloud kitchen business. they are running sort of a kitchen facility for restaurants that want to deliver quickly and quickly spin up those kitchens. serversyou can get quickly, now you can get a restaurant quickly. uber is similarly experimenting with that idea in paris on their
own. exist now, like if i order something tonight, could it be that i don't know if i'm ordering from a cloud kitchen or virtual restaurant? >> for sure. in l.a..business is they will expand to san francisco and chicago and keep growing. there is the potential that you are ordering without knowing from delivery or arrest right. caroline: i heard about this a while ago. ber has been rumored to eyeing buying another company itself. is he taking former employees, getting them to stealthily not say who they are working for anymore? issued a notice, you're
not allowed to recruit our employees. as far as we can tell, they have been thoughtful about that. employees are very secretive about where they work. they will say they work at company x or a real estate startup. it is much more on the down low. romaine: has there been any push back to this so far? if the business gets to a certain size, i would think there would be an incredible conflict of interest to straddle both these companies. eric: uber is a company that's familiar with conflicts. issue ift could be an uber really goes headfirst into the business and they start competing. backis travis currently pc -- vc-backed?
has many of money to fund his own business. as far as i can tell, we don't about that. caroline: a fascinating food trend. eric newcomer, great to get your breaking news on that. let's stick with tech. it has been revealed that larry age has decided to approve $150 million severance package for andrew rubin. he's the creator of "operating system and was part of a cover-up of alleged misconduct. this is according to new information revealed in a lawsuit filed in january. you have been hearing about the case, what can you update us with about this? >> it is an unfolding situation. the news is still kind of developing here.
this was a lawsuit filed in january. the initial $90 million payment, the severance package to andy rubin is not news to us. what was revealed unsealed in this lawsuit was that larry page, by himself, the saudi to pay him $150 million in a stock grant to andy rubin, and that information was sealed and revealed today. far as what we know, at least through the lawsuit in what is being alleged, did the board have any involvement in signing off on this pay package? joel: that's the key question. that page got a board, fromfrom the the leadership committee of the board eight days after he the 150 million
dollars stock grant. so it is a board approval in form only, just to make it look like he got the approval. that, on theact question of how he got the approval, what are the ramifications of that, this idea of not going to the full board? joel: that is what the lawsuit is seeking to address, and how -- court see that is initially it seeks to expose this and the wrongdoing done to the people that suffered allegedly under andy rubin. , we willis redressed see. it's a shareholder suit wrought on behalf of the company, alleging that the company was harmed by this action. it is a derivative suit. what the lawsuit would seek to do is get the money back to the
company, to shareholders. caroline: suddenly it's something employees have been angry about, and we will see how the investors react as well. a quick check on the latest business flash headlines. jpmorgan will sell america's cheapest exchange rated fun. less than 2000 existing etf's in the u.s.. the bank of england reportedly want some u.k. banks to hold three times more liquid assets in the event of a brexit market meltdown. the boe is concerned about the possibility of a note to brexit later this month. banks have reportedly been told to prepare for a scenario in which they could not stop -- swap the british pound for u.s. for several days. there's so much happening when it comes to brexit in the next few days. coming up, robert shiller
mark: the united nations today paid tribute to the 21 staffers who were among the 157 people killed sunday when an ethiopian airlines jet crashed shortly after takeoff. an undetermined number of others who work closely with the u.n. also perished. the secretary-general spoke in new york at the opening of the annual meeting on the status of women. >> our colleagues were women and professionals, hailing from all corners of the globe and with a wide array of expertise.
they all had one thing in common , the spirit to serve the people of the world and to make it a better place for us all. way: some had been on their to you and environmental conference set to begin today in nairobi. jordan's king abdullah is in washington, reportedly to discuss middle east peace prospects. he and mikeaid pompeo discussed a wide range of -- wide range of issues in the bilateral relationship. meantime, senator lindsey graham said he will lead a push for the u.s. to recognize the goal line heights as part of israel. senator graham gave his commitment during a tour of the territory today with prime minister benjamin netanyahu and u.s. ambassador david friedman. he said that for a lot of reasons he believes there is bipartisan support in the congress to recognize the golan heights as part of israel. >> in the state department, there is a map, and this part,
goal lineine, -- the heights, labeled as disputed territory. persuadeis to try to the administration to change that designation. is not in dispute. it is in the hands of israel and always remains in the hands of israel. more: in a move that would of been decades of american policy, republicans in february introduced a bill that would recognize israel is opportunity over the goal line heights. one of two women accused -- of thegolan heights. one of the women accused of killing kim jong-un's half-brother was freed today after two years of detention when malaysian prosecutors unexpectedly dropped the murder charge against her. she and her vietnamese codefendant have said they thought they were taking part in a prank for a tv show. government had
lobbied repeatedly for her release. the two women have been the only suspects in custody after four north korean suspects fled the 14,try morning of february 2017, when kim jong nam was killed. global news, 24 hours a day, on-air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. yearsne: saturday mark 10 since u.s. stocks hit their lowest in the financial crisis. a decade later, fundamentals of the american economy are strong, but slowing growth abroad and uncertainty over trait is worrying markets. -- bring in robert shiller let's bring in robert shiller, who joins us from new haven. wonderful to have you.
you said before that perhaps the spirit of thinking with say that the longest bull market in the stock market on to come to an end soon. do you expect negative returns? robert: it's very hard to predict the stock market. the talk about the longest bull market is something that pete last year, and it seemed to have a temporary effect on the market, but now that narrative is fading. we've gotten past that. we are now in record territory, and we are still going fairly well. joe: what is the narrative right now, in your view? robert: unfortunately, there's not just one narrative. some narratives are very a particularike policy rule. other narratives that might help , they tend to be more
psychological or social or political. that will about facts be very familiar to you. you might doubt they are driving the market, but they may well be, what else can account for the huge upturn in the stock market that we have seen, and an earnings as well, that reflects buying patterns. whatne: when you look at is been happening in the market recently with regard to sentiment, can you connect that to any other time in history where we have had a market that has been driven so much more by sentiment, rather than underlying fundamentals? robert: i don't like to be alarmist, do you really want me to answer that? very that was a psychological -- the market predictingut i'm not that. but that has to be the answer to your question. the other sample would be the 1990's leading up to 2000.
boom.-called dot-com the internet was the new new thing. people were right that the internet was going to be important. but they overreacted. caroline: what about the talk, you said the u.s. is due a recession. can sentiment continue to move a part from fundamentals, not only just slowing, but actually seeing negative growth for two successive quarters? robert: that's what happens in history. it seems like recessions are generally short-term events. typically a few quarters. the longest recession, by the 1873-1879rically, was when the economy was going down for six years. but that hasn't happened since. it tends to be a short event.
usually they are not that bad. the financial crisis we just saw, 10 years ago, was unusually bad. joe: the last two recessions we have seen were catalyzed by the bursting of bottles. the most recent one, the collapse of the housing bubble. during this 10 year expansion, mini-bubble bursts, short times when the euphoria gets taken out. thoseaybe was one of periods. do those extend the broader expansion? if you have smaller bubbles allowd earlier, does that your view for a longer, more durable expansion? robert: the experience, this is a key phrase in the 1920's. one step down, two steps down. one step down, two steps up.
referring to the stock market. you start to think, i've learned. i've had the experience in downturns, and it always recovered, but it can be an illusion as well, as it was then. romaine: when i look it valuations, and someone pointed this out last week, you have the price of sales on s&p in around 2.1. pe somewhere around 18. it is still well worth it at the norm, somewhere around 30. these are multiples and valuation that are relatively in-line with long-term averages. is there any reason to think we should be worried, given those valuations? robert: i don't think that one should worry, but i think that one should lean against higher-priced countries or sectors.
the u.s. is about the highest priced country in the world. i recommend investing in the u.s., but a lot of people are overweighted in the u.s., maybe out of patriotism. but there is a whole world out there and other asset classes. romaine: thank you, nobel laureate robert shiller joining us today from new haven, connecticut. data is plenty of economic on the docket for investors to digest this week. matt, as usual, you have joined us and you have some charts for us to check out relating to data that has come out and data that we are looking for. we have one on the wall right here, rental relief. i'm guessing the gist of this is that rents are starting to get more affordable. matt: that's right. the first one here is looking at cpi report. inflation is always a big deal.
the white line shows one of the biggest components of underlying inflation. and the last several months even years now, rental inflation has been coming down. if that continues to come down, that is obviously going to be important for the fed, which is worried about inflation starting to get a little low. it is a good thing for renters. the blue line shows average hourly earnings, and it is now basically above that rental inflation rate, for the first time in many, many years. so unmitigated good for the consumer, maybe a little concern for the fed. we will see how it shakes out tomorrow. joe: we have another chart that has to do with animal spirits. what do we see in this chart? matt: wednesday we get durable goods orders data. that really accelerated in 2017
and the first half of 2018, but it has been coming down a bit, which may be a little bit concerning. if you look at the blue bar there in the far right side of the chart. for other the last five months have been negative for business investment. joe: this is nondefense capital goods, just core business investment that is not related to defense. matt: that's right. the best indicator of underlying animal spirits, so that will be one to watch on monday when we get the data. this is related to construction spending. what do we see here? on wednesday we will get construction spending data. this is key for looking at first quarter gdp alongside that. in 2018, private construction spending on residential investment actually turned negative. it was down 3.5%.
time since the recession, so that is not a great sign. you can see nonresidential construction spending has been slowing and remains positive. this is obviously a sector that is impacted by higher interest rates. the fed has been starting to talk about it more in terms of their interest rate policy. i think it's an indicator that they will look at it more going forward. joe: great stuff with those charts. thank you very much. up, two: coming countries are holding back crude.y to pump that is next. this is bloomberg. ♪
what are thene: most prestigious conferences is underway in texas and alix steel is there. she sat down with the executive rector and asked about the latest projections. years, 75%ext five of global oil production comes from the united states. u.s. direction will dominate again. this is very good. there is a second part of the story. the u.s. is not only the major aoducer, but also becoming major energy exporter, not only in terms of oil, but also for natural gas. in terms of oil, our numbers show in three years time, the united states will overtake russia, and in five years time,
will catch up with saudi arabia. in terms of natural gas, in the 75%, threeears, force of lng exports will come from the united states only -- three fourths will come from the united states only. discipline, pipeline bottlenecks, terminal and storage bottlenecks, how do you see that factoring into your thesis? >> first of all, in terms of resources, the shale revolution started seven or eight years ago. today, i can tell you, in the last seven years we produce a lot of shale oil and gas. you use from the reserves, but we have discovered new reserves
and the current reserves are seven times higher than eight years ago. in terms of pipeline bottlenecks, yes, there are problems, but there are infrastructure developments and our numbers show that as of the the pipeline capacity in the united states will increase about two thirds, can ask muchan we faster. next is the u.s., and does the rest of the world need our oil? world oil demand, there's a lot of hype about electric cars. we expect global oil demand will increase average every year. where will the demand come from?
it is mainly driven by the petrochemical industry and aviation. both of them need lighter is rich and the u.s. for that. the world will need u.s. shale both in terms of volume and in terms of quality. >> what role does opec and saudi arabia play over the next five years? >> first of all, my humble advice would be to understand the new realities of the oil market. that's number one. number two, saudi arabia still a very important country and will be for many years to come, especially feeding the growth in asia. at the same time, in my view, in the history oil, this is the hardest time for those countries , whose economies are almost exclusively relying on oil
revenues, need to be broadened. for two reasons. guide is coming to markets. also on the consumption side. there are new technologies that will heat up the consumption of oil for cars. it's not the time to diversify the economy's in the oil-producing countries away from oil, the petrochemical industry, yes, but to prepare for the future. was the iea executive director, speaking in houston. the white house's larry cutler said president is looking for a good deal, not a quick ill. the president is not saying whether the u.s. will impose tariffs on foreign autos. let's cut through the uncertainty and look at the big
picture with a professor of economics. she joins us now. thank you very much for coming on. we see an assault on free trade coming from the left and the right these days. i suspect there is a good chance that whoever the democrats nominate may have a hostile attitude toward many of the free trade deals that have been signed in recent decades. what should be the progressive view of these trade deals? >> i think international trade gets a bad rap when it comes to the american worker. away fromk at moves free trade, like the tariffs we have seen over the last year, they hurt workers in a number of important way. retaliation hurts soybean , lowering profit expectations, and it hurts u.s. workers. terror, people
pay less for goods when they go shopping. tariffs have been shown to be a regressive tax egotist the poor consume more imports than the rich do as a share of income. is an academic case for what you said, but the practical case i think is how most people see it. how do you sell that to them? sort of like technology, it comes with some harms. occasionally jobs can be lost as people get displaced by robots. want to throw away all the gains it technology brings them on a regular basis, like your phone and computer are really important. and so are imported goods. the problem with blaming ,oreigners for economic woes there are a lot of other things responsible for those changes. thingsdistracts us from we could do for workers that would be much more direct and helpful, like expanding tax
credits or making investments in infrastructure or research. we've heard some new thought pieces coming out, maybe extreme in nature and you butider the green new deal, within some of the policy ideas that come forward, what would make economic sense? >> harris has suggested for instance expanding their income tax credit. that could be an effective way to both encourage work but also make sure the gains in gdp that have trickled down to the is basically giving people a negative tax rate at the bottom of income distribution, but it is not very generous to people who don't have children. you could expand it to be nicer to childless people and you could make it phase out more slowly. on -- common argument
that is positive for the economy but they did -- that the intribution was skewed be -- that consumers maybe wealthier buying cheaper goods. is there way to crack it so the better -- to craft it so that it is spread more evenly? where typically lowering our trade varies very little and our partners are lowering their trade barriers quite a bit more because we already have very low trade barriers. i do think there's a lot of ways to make the whole modern economy, not just trade, but technological change and other forces work better for workers by countering some of these trans with our tax system and by supporting workers in communities by investing in them. romaine: do you think we can do that within our system? capitalism inng
her mind was irredeemable. this is a sentiment that is shared by a lot of people on the left, and even on the right. dewey have to shift the system altogether, or is there a way to work within the normal confines of capitalism to correct some of these inequalities? >> i think there are some great ways to work within the normal confines of capitalism to correct some of the inequalities. we know the tax system is a powerful tool. labor laws and antitrust can handle some of the hardest parts of capitalism. i would not throw out the baby with the bathwater. capitalism has a lot to offer. joe: thank you very much. this is bloomberg. ♪
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