tv Whatd You Miss Bloomberg March 15, 2019 3:30pm-5:00pm EDT
>> this is bloomberg first word news. theority in new zealand say gunman behind one of the mosque shootings that left 49 people dead tried to make a few things clear and a manifesto he left behind. australianyear-old white nationalist who hates immigrants. he was angry about attacks in europe that were perpetrated from muslims. he wanted revenge and to create fear. he also livestream to the world his dissent on the worshipers. >> as soon as we know any
different, we will let you know what is going on. all we can do is trust the police. thank you for your time. >> in all, four people were arrested, but only three were believed to be involved. a florida man charged with sending pipe bombs to critics of president trump is expected to plead guilty next week. he could face life in prison. he was set to go on trial in july. he is accused of targeting numerous democrats, critics of the president, and cnn, heightening tensions before the midterms. none of the devices exploded. national security adviser denies that he and
secretary of state mike pompeo created an atmosphere of hostility and mistrust at last year's nuclear summit in vietnam. a north korean official said president trump was willing to but waskim jong-un influenced by stringent demands and gangster like stand. bolton says those claims are inaccurate. bydents mobilized word-of-mouth and social media skipped class to protest what they see as a failure by the government to take tough action on global warming. were one of the biggest international climate change actions yet, involving hundreds of thousands of -- in more than 100 countries. the school strikes were inspired by a 16-year-old swedish activists. global news 24 hours a day in over 120 countries.
some analysts talking to us yesterday saying this is a crowdfunding campaign. scarlet: that was a great line. the pound moving highest. you look at chipmakers, they are the ones that are driving the tech rally. all 26 members are gaining. and we do see some buying and treasuries. scarlet: we had a string of weaker numbers, so you could blame it on that. caroline: keybank is upgrading amazon. analysts saying the tech giant is pivoting toward viability.
rbc raising its price target on oracle $257 per share. the analyst saying their quarterly earnings beat. scarlet: as we mentioned, tesla shares are lower right now. elon musk took the stage last night to introduce his latest iteration.hicle tesla will start deliveries of this crossover in the fall of next year. the delayed release of this new model has rekindled concerns about the company's cash position. tesla heading into its third worst day this year. certainly the delay is one reason why people are worried about it. also the fact that tesla is going to take preorders.
change. not a huge in the past, you had to put down a $1000 deposit. bat.t is $2500 off the it is fully refundable and applied to your order at the end. but the fact that tesla is taking the money up front for a vehicle that is not being volume manufactured yet, some people are seeing that as a sign of a cash grab. analysts told us yesterday that this is a form of crowdfunding. i think what to the market by surprise was a downbeat month -- musk. he is usually such a showman and a salesman. putting on known for these fantastic parties for customers and he usually takes the stage and is funny and humorous and sarcastic and unveils the car and people go
wild. and what was interesting about last night was that it was a y event. but he spent most the time going through the company's history. it was a little bit of a surprise. it was not the kind of high wattage events that tesla and musk are known for. important fors it tesla to offer another suv right now to its customers? american consumers are ditching sedans for suv's overall. this is a route we have seen for the better part of a decade. you've seen this incredible shift where the vast majority of consumers want an suv. that has to do with consumer preference. he will like to be able to haul around kids to soccer. they want room for their paddleboard our surfboard. you have to have an suv in your lineup in order to compete. every automaker is doing that.
tesla does have the model x, but it is there -- more expensive and has never been a bestseller. so coming out with an suv at a lower price port -- point is important. caroline: we thank you on all things tesla. we have an update because trump is talking about a resolution he is looking to veto. immigration system is at a breaking point. we will have much more coming up from that. scarlet: also coming up, a shopping slump. we have a roundup of retail, next. from new york, this is bloomberg. ♪
has learned that a bank wants $3 billion in free profit and that is up from $1.8 billion last year. -- thehe world oldest of murdoch's sons will not be a movie mogul. a lachlan murdoch and the renamed to fox corporation with a domestic wants to he increase the output of scripted programs. manufacturers are feeling the headwinds of growth and the trade war. markets are down 4/10 of 1%. the report showed mixed reports and construction replies the climbing. -- declining. >> it is such a mixed bag.
retail, the parent company of droppednd taylor ulta, taylor, and across soaring to record highs. bloombergr opinion columnist joining us from washington. let's escalate into the optimism here. what is ann taylor getting wrong at the moment? the bottom end, the cheaper area that is not doing well, right? >> yeah. getting wrongena at this point is the real question. down 8%,e sales were and they said this was a fashion business,eir tops they made a lot of bad calls and they were not offering clothing that their consumers wanted to buy and that was a culprit here. bryant's business in
particular, plus sized is the category to a lot of other retailers are coming for now. old navy has added plus sized to their stores, so that brand cannot coast anymore and none of those brands can frankly. scarlet: let's talk about h&m, because it is in competition with zara forced it to lower holiday prices. >> and that appears not have gone so well. h&m is in this long cycle of having to work through this bloated inventory that they came into about a year ago when they were experiencing these growing pains. are stores, there were growing at a fast clip, and that has tapered. they also started to having focusing -- focus on e-commerce and their businesses out of whack. they are trying to figure out how to offset that. they have interesting new concepts in their portfolio like theain called cost, and
hope is that over a time, those can offset some of the lackluster performance in the main brand. for now, it is bleak. caroline: it was interesting, i remember reporting on how zara could do no wrong and it set the agenda for fast fashion, but it has been struggling. the number stagnating to a certain extent. we see a lot of fresh competition, and we remember when h&m and zara were the disruptors, but we have asos and hoo that are in the same vein of extremely fast supply, very trend right, so the disruptors are being disrupted. you also have them getting squeezed from the other end where the incumbents are getting better at speeding up their supply chains. is a good example were a lot of their private label close are more -- clothes are more
trendy. you feel like it is somewhat disposable because you do not have to wear it very long. you have been writing about renting clothing being the new trend. sarah: rentals present an opportunity for these companies who see in millennial shopper that wants to have a different out of -- outfit in every selfie, but is worried about the sustainability issues. can be a goods answer for midprice retailers looking to appeal to customers. scarlet: it is not just bridal dresses apparently. sarah halzack, thank you. caroline: i wished i had rented my bridal outfit. scarlet: it is packed in a closet. caroline: i am still trying to sell mine. scarlet: let's talk about the market because we have 15 minutes to go.
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♪ >> visit his countdown to the close and i am caroline hyde. scarlet: i am scarlet fu. to, there is a lot of data parse through but you have your eye on the jobs. coming out today giving us an internal look at different ways of looking at the labor market. and i always say it to gaugest way consumer confidence because if you are comfortable to quit
jobs, you are confident about finding another job. that is at its highest level since the financial crisis. quitting a job is actually a more tangible things, so people are still quitting their jobs at a fairly high rate, no sign of recession from that labor market indicator. caroline: we have trump using his veto power for the first time to uphold his emergency declaration. he has been talking about the so-called emergency at the border. scarlet: it has happened. let's take a look at the market right now because it is again on this friday. we end up with a gain for the week. you have chipmakers -- caroline: thank you, bulk on. scarlet: exactly -- caroline: thank you, volcom. scarlet: thank you and telecom and consumer services, all of that is gaining. smaller losses here so it gives
you a sense of where the feel and sentiment is today. caroline: the sentiment has been resolutely high with china wanting to add to its stimulus. that helped spur china higher. lumpedhas been a very area of the stock market, even though you do not see it getting any better over there. joe: and no one says anything positive, and sometimes that is the best investment opportunities. scarlet: we are moments away from the close. let's take a closer look at today's action with our market reporters. to take a look at some ongoing consolidation in the retail sector. ,ier 1 imports shares consolidation has not happened yet, but reuters reported that the company was going to hire a debt restructuring lawyer for a tense negotiations with lenders. bloomberg reporting that they and hired alix partners
yesterday, shares plunged 29%, and today, an additional 12%. to see how we are seeing a shakeout at the time when brick-and-mortar needs to change parts of the way they do business. shares upmazon more than 1% today. at their highest level since december at one point. a lot of this comes from an interesting upgrade basically saying that an analyst sees a some profitability for the company's retail business. most of amazon has been profitable for a a while, but it has, from amazon web services, and not because of the retail business which makes the bulk of the revenue. changing to go from the low single-digit to the mid-single digit over the next years. incremental boost of $5 billion to earnings. he was one of the few holdouts amongst analysts.
analysts, we have 47 that rate this stock by one cell and one hold out there lingering. amazon shares, while they are doing better, they are 15% below all-time high we reached in september. they need to gain more ground to get back up to where some of these high--- price targets are at $24 a share. >> amazon maybe trading higher but also -- not so for alphabet. that could be around antitrust our privacy issues for consumers, but this is not new. this is a multi-year at chart for the same trade. 2016, 2017 into 2018, a beautiful uptrend well above the 50 day moving average. issuesar on the data scandal with facebook, we see the entire context taking a leg lower, recovering, a little bit of selloff in june, and last
fall when facebook put of the dismal quarter, the entire complex came down. is alsoand down action known bearish head and shoulders pattern. it is not confirmed and it would confirm if below that level, but it tells you the people who bought well in 2016, a are getting nervous and they want to lock in their profits, so they are doing it over time. it would take a few more headlines along the line of what we had today that could set this trade going lower. caroline: abigail in the markets team, we thank you. four and three quarter minutes until the trading day, the trading week will be announced. interesting, communication in the regulatory headline, but really, chipmakers and all about tech. joe: it is amazing, it has been this way for a couple of weeks. you turn off your brains when tech's leading, and you are pretty much been able to do that. one thing that helps from a
major chipmaker, when you look at earnings estimates, they are down more than 2%, but the chipmaker stocks are down more than 6%. if you see one more area of weakness, you have a major player saying we are willing to stick to our view, and analysts saying that we buy into it. it helps stabilize the overall complex and help give people a little more faith. decisione a said it next week and a hot start to the year and equities is in part due to the change in stance from the fed at the end of last year. any expectation in terms of what the fed has to do to continue to deliver? been two majore camps as to what spurred the change in course. one camp, this is simple, it is hadequities and the said to pay the rebound. the other courses says, the fed thought they were near neutral
and as such, ready to put a lot more weight on inflation and their decision process. next week we find out which of those stories is closer to the truth. lukeet: look is s -- is sticking with us. let's bring in our global strategist from jpmorgan. today we have brought, and earnings, and as luke said, maintaining your full-year forecast is enough to get the rally started. what does it look like when it comes to analyst estimates when it comes to earnings in 2019, because it is down, down, down. >>'s equity run year is being built on two pillars. one is a very dovish head. the other is progress being made on the china-u.s. trade deal. these two deals do not work together. either you get the trade deal, or you do not get a deal, and the fed stays dovish, but you
still have trade tensions coming to the surface. i would feel better about those pillars if we had a nice underlining earner story, but when you are looking at estimates and companies forward guidance, you are seeing why -- seeing rising wage growth and debt. outnvestors need to clear there years. pause. said patient, not that would be the biggest single move at we have ever seen in its seven-year history. i think markets might have a little bit of an upset next week as the fed come out and say, actually, when we said patient, we meant we still had a couple more to go, not just 0. caroline: could the market have
an upset sooner than that? switching, people have been saying this could be falsely supporting the equities today because people are extending the expiration of some options and that is making people by today and come monday, that could fall away. luke: there is this theory that this is a great time for an air pocket. people have been saying that for a few weeks, so we will get a look and there are a lot of moving components to this theory. it has to do with the kind of blackout discretionary buyback period starting to and traditionally, seasonally. we had a bad week last time, so putting those together, people see technical reasons why we could go down. scarlet: the technical reasons volumedruple reaching is
-- in the s&p, 24% and the 20 day average. beingne: the one point made today is basically when you look at the dow jones and the s&p 500, they are basically the same thing. since theelation 1970's, so look again, they are moving in large step. scarlet: a little bit of a wobble this week because of boeing. >> it was strikingly rare to see huge gaps. scarlet: the best weekly gain for the s&p since november, right? caroline: yeah, for this year. scarlet: we have technology, consumer discretionary, and consumer staples leading the way. on the downside, industrials and energy. scarlet: considering volatility we have had -- caroline: considering volatility we have had, list dived deeper into our market action. perspective, we
have not just finished above it on a daily close, but a weekly close. technicians consider that important. two of the last year or volatility. we see these huge whips up. the s&p 500 is flat from a year ago. 20 800 level in the yellow, the s&p 500 just slightly above it. the point i would like to make here, the last time we had a big , the levelolatility but the s&ps 2100, 500 wrestled with it for months. volatility breeds volatility. it will be interesting to see what the earnings season brings. be s&p 500, i would surprised to see it russell was 2100. stle wase it wre
2100. saying ithe company is going to read earnings for the third and second quarters. the main reason we talk about this company is for two reasons. stock that is surged about 1600% in the first eight months of last year. that is because of the fortnight clamoringall of the for the headsets that the players of these games need. turtle beach controlled about 45% of that headset console market, and that was a big part of the reason you saw the run-up in the shares. down 60%.e come the other reason we talk about it is the second most shorted stock in the russell 2000. as of yesterday, 72% of the flow was on loan as of yesterday. that today, short-sellers had a market to market gain of $24 million.
lisa: thank you. i was taking a look at the disappointing economic data coming out of the u.s. solidly negative and actually around its lowest levels since early 2016. the question is, does this portend more negative data going forward? i want to go back to something joe was talking about, the jobs data. there is so much positive momentum in the u.s. jobs market. even here when it comes to sentiment. this is from a university of michigan sentiment survey showing that workers are expecting to lose their jobs in the next five years at the lowest space in 10 years. in other words, they think there is only a 15.5% chance that they could lose their jobs and the next five years which is the lowest going back and a decade. very much a strong sentiment here. much thiso wonder how could possibly lead into better economic data, especially if
reprieve on the trade front. scarlet: still with us, two guests. alex: -- alex, let me start with you. you said that there is likely to be a potential to downwards comesses when the fed out next week. set as up for how the fed is going to interpret. actually, the president is going to speak. pres. trump: to express the sorrow of our entire nation following the monstrous terrorist attacks at two mosques. these places of worship were turned into scenes of evil killing. it is a horrible, horrible thing. i told the prime minister that the united states is with them all the way. new, we will be there,
zealand is a great friend and partner. what they are going through is absolutely terrible. our hearts are with them and whatever we can do. we are grateful to be joined ,oday by the vice president thank you very much, mike. members of my cabinet, and importantnts, very people to me, and to a lot of other people, i want to thank you all for being year. thank you for being here. we appreciate it. as we take action jurist store our national sovereignty and defend this nation from human traffickers, cartel, and a crime of all times going through our southern border and other places, but this is the place that we have the biggest problem by far. thent to complement incredible people at the border patrol and ice and law
enforcement for the job they have done. they have apprehended so many thousands of people that we= -- if we had the proper protection, we would not have to apprehend. protection ofthe the nation is my highest duty. congress passed a dangerous resolution that is signed into law, would put countless americans in danger. the democrat sponsored resolution would terminate vital border security operations by revoking the national emergency issued last month. it is definitely a national emergency, rarely have we had such a national emergency. to defend the safety and security of all americans, i will be signing and issuing a formal veto of this reckless resolution. and that is what it was. thank to in particular
the republicans, strong, wonderful people, the republican senators that were on our side and on the side of border security. and on the side of doing what they have to to keep our nation safe. they were very courageous yesterday and i appreciate that. theress'vote to deny crisis on the southern border is a vote against the reality. it is a tremendous national emergency. it is a tremendous crisis. last month, more than 76,000 illegal migrants arrived at our border. we are on track of one million illegal aliens to rush our borders. --ple hate the words of word invasion, but that is what it is. borderure them because security is good but they are put in a very bad position. we are literally bursting at the seams. what border patrol is able to do is incredible. i want to thank our military
because our military has been very much involved. they are putting up walls in some cases, temporary. cases, they were supposed to be temporary, but they are better than the permanent, so we are leaving them. we really nowhere left to hold all the people that were captured. and we are at a point where we are going to have to say that with these horrible decisions we have been handed by people that are not living in reality, there is nothing that we can do and there is absolutely nothing that we can do. we can only do so much. is to releasen them, but we cannot do that either, because when you release them, they come into our society. in many cases, they are stone cold criminals. cases, you have killer's and murderers coming in, and we are not going to allow that to happen. there have been nearly 2000%
increase in border related asylum claims over the last decade. part of the reason is because our country is doing so well economically that people are coming up in droves. vast majority are rejected, but smuggling organizations make it a tremendous -- making a tremendous amount of money, they are using these people to crash the system. our immigration system is stretched beyond the breaking point. as i said, nothing much we can do. we can just do our job and do it well. there is a point at which is the democrats would, they would be able to make a deal and 15 minutes. changing catch and release. changing the horrible asylum laws that are unfair. changing visa lottery. change migration. these laws are her renders. -- are horrendous.
they are dangerous for our country and they are inspired by democrats to have to change. one in three migrant women is sexually assaulted on the journey north. 70,000 americans a year are killed by drugs including mass heroine and cocaine. scarlet: that was president trump speaking at the white house. he is using his first veto to uphold his emergency declaration. paying for theth wall the u.s.-mexico border. let's continue our conversation on markets because we have closed higher for the day, and jpmorgans alex from and our bloomberg correspondent. what does it do with it? >> the fed productions for -- projections for the second half of the year, i would not rule out another rate hike.
the economic data has been solid but it is not spectacular. that allows the fed to keep moving higher. you look at market pricing and the market pricing is a better chance of a fed cut than a hike -- that seems wrong considering a solid inflation backdrop. and a labor market that looks like it is heading in the right direction. we end the week, people are talking about the 2800 number, and now we are above it. the people who are looking say this is a potential breakup? people looking at the nasdaq are saying it looks like a potential breakout. stocks, people are saying the jury is out. we could be an air pocket. it is the follow-up on how much the market is relying on the said right now. the correlation between the real rates and the stock market is at
world headquarters, i am caroline hyde. romaine: i am romaine bostick. joe: i am joe weisenthal. caroline: china firing up from its stimulus and it held the s&p 500 above the level. joe: the question is "what'd you miss?" caroline: google taking early steps to investigate antitrust violations. bottomwe will get to the of who borrowed all of the world paschi money and why it matters. and wall street blues. admissionof that of the cheating scandal. we begin with the cheaper money air -- era. all of this is independence from central banks is being called into question.
let's take a look at what the last 10 years has brought us. ben, the theory is that low to prop topposed prompt people. what happened instead? >> what happened instead is there was an enormous run up in borrowing by the government and all of the world's major economies. terms, but really if you look at the levels of credit as a share of the economy, you will see they have gone down for businesses. they have gone slightly up in the united states for businesses , they have gone down for households, and sharply up for governments. romaine: one of the criticisms that is out there with regards to this era is that it calls into question the legitimacy or monetary policy
on central banks and the role that they play. there seems to be calls from legislators in the u.s. and elsewhere to get a little more on to the turf of what was normally left for central banks to do. >> i think that is right. the odd thing about it is in the it was veryis, clear that they were acting in close collaboration and the nobody had a problem with it. it worked pretty well. the more they were able to work together, the better it worked. you had much better recoveries been europe and japan when you look at improvements on a per capita basis, because japan has a shrinking population. you have better recovery in those places where the central bank and government were able to work together. a much worst recovery in europe because there is no government
of europe to work together with the central bank of europe. was supposed to immediately disappear once the heat of the crisis had passed. caroline: yen a great chart in your story that shows how much governments have been -- you have a great chart in your story that shows how much government have been splashing cash everywhere else, but not in europe. on the fiscal side, it sounds as though they might start stimulating. business investment in europe held up rather well than the rest of the world. you might not think that, what is going on and how the government going to make the most of the negative yields? >> certainly, the european central banks thinks there nould be, but there is single fiscal authority in europe that is able to borrow and spend the money on by half of the whole euro zone economy. where things work better is where you have the government
and central-bank operate in the same turf. and coordinate policy. you cannot do that in europe. because there is no european finance ministry. joe: we are looking at this chart of government's borrowing additional leverage from the households. is it fair to say that after all of this time, we still do not know the mechanism of monetary policy? >> i think it is fair to say that we do not know the transmission of monetary policy in the circumstances of the last 10 years. if those were temporary circumstances that we thought were going to disappear tomorrow, i suppose we might not worry about that too much, but something that has been very policiesis the mixed in most places was implemented with the idea that this is a
crisis and things will go back to normal. and it did not happen. it has been a long time, twentysomething years in japan. romaine: thank you. that is van -- ben holland joining us in washington. an interesting story -- shake shack and testing something on their menu to attract new workers. a four-day work schedule model. they will work the same amount of hours as the five-day work week but compress it into quadra days. i understand the potential benefit for shake shack -- into a four days. i am is than the potential benefit for shake shack, but for the economy? joe: i guess it is an indication as the labor market gets tighter that they have to be more experimentative. romaine: so the idea of people who want to get into the job market but do not want to get a
five-day workweek? caroline: yeah, more flexibility. a lot of my girlfriend some to go back into the workforce, but four day work week. you see the stride -- this europe and sweden. one company in new zealand said it worked so well, they are sticking with it. it keeps productivity up. this is value added information here, caroline. by the way, this is a five-day a week shell. [laughter] caroline: i know. where it says it is heading for a turnaround. we will hear from the ceo up ahead. this is bloomberg. ♪
♪ vowing come back, that he promises -- david westin sat down with the ceo. >> i think as we put the plan together business by business from the ground up, we understand where each of the businesses are. aviation and health care are performing well. renewables are in a growth cycle. our challenge has been in power. ande look at the backlog the improvements, we think we get through this this see a better 2020 and 21. 2021. david: what changed?
it was a reallocation of what reality would be. -- our reality would be. we think it really set us up longer-term, but there is also some inheritance taxes that we need to pay off, but they are what they are. that coupled with the other operating improvements we are going to make set us up. it is not a number that we are particularly pleased to put out to the market, but it is one that sets the tone for transparency and reality as we prepare ge for the long-haul. david: from your description it sounds like power was a big factor. how are you losing cash on power, what went wrong? larry: a couple of things. in the wake of the austin acquisitions, we inherited thatgs of customers
we are not going to make money. see is put cash out in 2019 and in addition, we are heavily restructuring the business. that is a business that we have seen demand for new gas turbines fall, and we need to reset our cost structure to make sure we are profitable at lower demand levels. put all altogether, the team has worked. the numbers in 2019 will not be pretty. but the team understands and is ready for the challenge. worried about the debt trading situation, because there were some of those ratings that were dependent on casts that are not right anymore. larry: the investors understand that the deleveraging plan is one that is underway. we have announced that the sale of our biofarma oh business. -- biofarma business.
up,of our stakes is worth -- $12 12 million. we have resources to help us bring down the leverage on the , and we think we are on a path to see our deleveraging goals through. david: you do not think there will be a rating review? agenciese rating certainly have an eye on the and we are in constant communication with them. as toed to communicate where we are and where we headed. they understand what we have done that put this on a path to fortify our financials. romaine: that was general electric ceo larry culp. coming up, global stocks ended the week on solid footing. we will talk strategies. this is bloomberg. ♪
♪ romaine: -- >> i am mark crumpton with bloomberg's first word news. the firsttrump signed veto of his presidency overruling congress to protect his emergency declaration for border wall funding. joined by law enforcement officials as well as the parents peopledren killed by the in the country illegally, the president called it a national emergency and he added, our immigration system is stretched beyond the breaking point. nancy pelosi says they will attempt to overwrite the president's veto with a vote. the senate judiciary committee says it will investigate a claim
by andrew mccabe that justice department officials once discussed using the constitution's 25th amendment to remove president trump from office. said after james comey was fired, officials at the department including mccabe and rod rosenstein discussed bringing cabinet together to consider using the amendment to remove president trump. he is not from here. he came here with hate in his heart. mayor of of the christchurch, new zealand, as she described the gunmen who slaughtered muslim worshipers at two mosques. at least 49 people were killed during friday prayers. more than 20 others were wounded at what the mayor called an act of cowardice. >> there are no words to revulsion that i feel for the propaganda that he to us, and ing
will not to give voice to that propaganda. his was the voice of hate, and the only way that communities can respond to the voice of hate is to come together and love, compassion, and kindness. authority is this shooting suspect as an immigrant hating, white supremacist. the u.s. treasury ramping up pressure on russia over the november attack on ukrainian ships and soldiers. sanctioningnt is about a dozen russian individuals and defense firms involved. treasury secretary mnuchin says that russia's continued aggression against ukraine cannot go unchecked. after sanctions were announced, a russian businessman said he is suing the treasury department, seeking a court order to have the sanctions lifted. global news, 24 hours a day on air and on @tiktoc on twitter powered by more than 2,700 journalists and analysts in over 120 countries.
i am mark crumpton, this is bloomberg. you miss?hat did the trade of the decade, and we are talking about 6040 portfolios as they continue to kick higher. it is basically the vanilla ice cream of investing. [laughter] romaine: you can see on this chart, the 6040 portfolio is doing well. bonds, andks, 40% to it is represented by the spider bond marketvanguard etf. joining us now is the managing director of global macro strategy at medley global advisors. 0/40 was lasth of 6 year, but it has held up pretty well. years ago, bernanke
speaks about the green shoots and recovery is coming, you should put your money into that etf structure, 60/40. it is an amazing story in terms of what it actually means and investing. you can go with the strength for a very long time, and that is a 60/40 portfolio. joe: how much is this predicated on inflation being mild, and is that what it would take -- as long as inflation isn't benign, with a portfolio continue to work? > -- work? it is the benign inflation environment that is doing that and driving the rally. get volatility and inflation, we will get timing cycles that will be much more aggressive and the profile will change. -- the macro backdrop, low
inflation and stable inflation expectations. caroline: does this work everywhere -- should you be doing 60/40 in europe and japan? ben: that is a unique question and the u.s. it has been about currency and of currency was approved and returns, that would maybe work. complexitiesd about the sovereign market that may have not well played in the 60/40 market. andad a very nice recovery a nice run, and therefore, i think it has worked best in europe. going for from here, you can become about the 60/40 in a more global sense because as we have recovered was 10 years, the still in this is phase of recovering further and have matured and are becoming a better economy, so there is opportunity to apply this. theine: when you talk about
40% side, that traditionally means treasuries. kind of boring government bonds. typically what we have seen in ears ist couple of y the 40% is now high-yield. it is a moved to the endowment style, which i think pay off for a while. fair enough, but you would not be in the presence anymore. i think it is a function and an evolution of the fixed income market in high yields that have outpaced a lot of the time. moreover, the fixed income down further in emerging markets, and think about what is happening with and what kind of opportunity that will be as more investors come in there. you can get opportunity there. in the u.s., you are right. qe: when you look at the lag q4, a lot ofag of
people at taken that as confirmation -- that the stock market drives the fed in chang ing gears, that ultimately they a collapsingte stock market for too long. is there a fair characteristic of the fed and also, does that make this worse -- that the investors, the fed is on your side? the fed policy response to that because of correlation is quite high. that is what they are really responding to. if you plot the financial conditions against that, is time a dip happens, the fed response. this is not different from what happened in 2015, 20 11, etc.
yes, that strew. in 2015,appening -- 2011, etc. yes, that's true. the markets aren't dissipating a global recovery this year even in china. caroline: and optimistic note. we thank you, ben emons. now coming up, google and hot water. earlyfficials taking steps into investigating antitrust and consumer violations biotech giant. this is bloomberg. ♪
are said to be taking early steps towards a google probe. let's bring in joshua bernstein who wrote the story for us. -- was it that we that is new that we learned? >> for a long time, we knew there were concerns about google in silicon valley. what we see now is steps towards this is the first step. joe: user data, user privacy, a lot of people like to criticize but when you drill down to its, it becomes harder to identify what the company did wrong. does the attorney general have a specific view of what they think is the bad behavior? >> at this point, they are still trying to figure out if there is
something that would be actionable. the antitrust concerns and privacy concerns and up being related. the things that people are unhappy with with privacy would not happen in a market that was more competitive. romaine: talk to me about one of the leaders of this effort that you mentioned and that is the number ask a attorney general, of all places, seems to be taking the charge. doug pederson, the attorney general of nebraska seems to be taking a lead here. he did not what the talk a lot about it on the record. he said he was concerned. he told the story of a nebraska family around a dinner table mentioning some consumer product, and in the next day, they started seeing ads for on their phones. things that creepy might be happening and this is something we should cut off. caroline: when you think of the likes of roger mcnamee who has
this book about the ramifications of facebook, and he has a book called " zucked." this kind ofve data feeding into our insurers and having it linked, unbeknownst to us to our health care providers, that as the great concern. is that something that people are thinking about? >> yeah, there are a lot of things swirling around with general discontent and concern, but whether that leads to legal action or some sort of regulatory push back, it is not clear how we get there. romaine: bloomberg's the josh brunstein, thank you. facebook facing a backlash after the new zealand terror attack was live streamed on several social media platforms. the chilling of aspects of this story beyond the massacre itself -- this is not
the first time that these streaming platforms have dealt with live streaming of some horrific event. have they gotten any better at proactively tamping this down. today's experience would suggest not sell. >> with streaming, -- suggest not so. >> with streaming, there is not something that they can do. couldf an algorithm recognize, the question becomes do people start calling for live streaming to be stopped altogether. romaine: the problems is that these companies and say they have algorithms policing this, so the issue was not that it was live streamed, but it was up for so long and in some cases, it was up for hours on facebook. >> and on youtube, right? the original stream of the video was taken down quickly as soon
as law-enforcement noticed it, they let facebook know, and facebook took it down. by the point it was taken down, it has been copied by other people and popping up all over the internet. it is difficult at this point even though they have the best ai minds to spot a new video that is just starting to trend and they need those human fighters stuff fight it and take it down manually. caroline: facebook is had a difficult to week with toxic much do wet how think that one point, the general consensus will be that the upside of streaming is not downside,offset the or will that never be the case. >> how much worse to you wanted to get, this is a terrible event. can you compare the other murders and killings that have been live streaming before? it is weird to say that this one
was worse and therefore going to force them to make a change. live is still a big part of the business models, and they seem to defend it and say it is a part of their business. joe: do you think that youtube has gotten off fairly scot-free compared to facebook, given that there are quite a lot of issues of the spread of misinformation and conspiracies and horrific live streaming? we focus so much on facebook, is a reckoning coming for use -- for youtube? whether that is because mark zuckerberg is a much more public figure than the executive at youtube or google, or whether that is because people do not like their personal experiences with facebook anymore whereas google is a series of products that people find useful -- i think there is some social, cultural factors going into that, but i think that youtube will get a lot of criticism. from the critical perspective as josh was talking about, the
attorney general already going after them for related issues. caroline: good to get your analysis, we thank you. time to look at which stories are trending. jpmorgan close to down there desks dedicated to the handling of orders. handling trades electronically instead. on june talks world phenomenon. ryan williams will return to the court after his nike shoes fell apart at the opening of the season game. and tictoc on twitter is reporting that children around the world are skipping class to demand government action on climate change. hundreds of thousands of outraged young people are participating in the global climate strike which was
♪ a veteran reporter on the inequality of college admissions. it aren't him a pulitzer prize and became the best-selling book how price of admissions: america's ruling class buys its way into elite colleges and you gets left outside the gate." many of its more affluent readers embraced it as a how-to guide. he joins us now by skype.
how frustrating for you that people basically thought, this is the way that i can get into these very expensive colleges. -- people were regarding bombarding you with questions? >> it was not a huge number, but consistently every month or two, andone had read my book would i be an admissions consultant for the family, and if i agreed, the compensation would be generous. and i wasaid no, amazed that anybody who read my book could think that that is what i would want to do. to ask you thee question about the culture of the obsession of getting into colleges. one of the things that surprised people with this is that it was not just ivy league schools. it was almost as if people could bend over to crime to get into yale, but some of the smaller schools, people were surprised.
what is it about the culture of admissions that causes people to commit crimes, allegedly, at a range of schools? dan: what has happened in recent have is that many schools become increasingly selective, not just the ivy league. the school 15 years ago that might have accepted 40% of its applicants, they might take 15% or 20% and that creates desperation among parents who are worried their children will not be able to go to a highly respected school. also, the prevalence of things like u.s. news & world report and giving extra cachet to any schools that are staying in the top 20 or 30, not just the ivy leagues. romaine: what is the solution here? we have known for a while that college admissions process was not completely equitable. i think to put that mildly. but there have been attempts to
create a little bit more equity here. after the scandal, is there going to be any sort of lesson that can be taken away from this that the admissions boards will implement? dan: there are two kind of changes we could talk about. andwould be a tweaks response to this specific type of scandal. by those, reining in and regulating these independent college counselors like the guy at the heart of this case, whose only job is to help the parents that hire them help them get into elite colleges. unlike a high school guidance counselor whose job is to help students at every academic level find the right college fit, independent counselors just will eholden.h another tweak would be to have closer scrutiny of a candidate recommended. coaches said the
we should admit this guy, and the admissions committee would rubberstamp it. and it turns out, the kid did not play the spore at all. those it be the tweaks to eliminate the culture of itoring the wealthy, but would be eliminating legacy preference, alumni children, eliminating preferences for athletes in elite sports that most kids do not have the chance to play like crew or horseback riding. i doubt those are going to happen because there has not been much change since i wrote my book. caroline: this is also a global theme. we hope not the committing of crimes, but the frustration that perpetuates the inequality in society because those that have been well educated, whether it be in the u.k. or the u.s. and and a higher there
portion than those who have been disadvantaged. but being able to move up to social society because of the prestigious universities. to entice the economic perspective and make it a government focus -- view thing that ever my to be the case that something people will realize that if you have a lower economic background getting into universities, you can drive economic growth more? dan: that is what college is supposed to do. statusve a nonprofit which means they do not pay taxes because they are supposed to fill american ideals and roughfy diamonds in the that they can help arise. but that happens too rarely. some colleges have undertaken to things to try to fulfill this role. for example, giving preference to applicants who are the first
in their generation, the first in their family to go to college, but a lot more to be done. werewhen the charges unveiled, someone made the comment -- this is fraud. this is not donating $10 million to get a building named after the school which is not fraud. is there a clearer betweenine difference making a big gift to the school to get your kid inverses what these families did? dan: that is a good question. when you donate to a school are giving theou money to their university endowment which might use it for a purpose like financial aid. i never advocate prostituting admissions for that, but the end purpose is well spent. case, other hand, in this they bribed individuals. caroline: dan golden, we thank