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tv   Bloomberg Best  Bloomberg  March 31, 2019 3:00pm-4:00pm EDT

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nejra: coming up on "bloomberg best," the stories that shaped the week in business around the world. >> revocation to avoid no deal. nejra: brexit hangs in the balance as lawmakers scramble to improve our plan. the prime minister plays her last political card to get a deal. >> there is no majority for any brexit option. nejra: the u.s. and china hold another round of trade talks. more bad news for boeing. >> you could argue the chinese are certainly have to play nice.
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>> central banks make dovish moves. >> i did not have any increases for 2019. it does not mean i could not change my mind. >> officials speak frankly about the global outlook. >> think the turning point came earlier than expected. >> moving in a predetermined direction at a slower pace. >> it is all straight ahead on "bloomberg best." hello and welcome. this is "bloomberg best." your weekly review of the most important business news, analysis, and interviews from bloomberg television around the world. let's start with a look at the top headlines. last friday, robert mueller delivered his report on the 2016 election to the department of justice. by monday, the summary of the findings was causing a stir from capitol hill to wall street.
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>> president trump claiming victory after special counsel found no evidence of collusion with russia. attorney general william barr saying there is not enough evidence to charge the president with obstruction of justice. top democrats are demanding the release of his complete report. where do we go from here? what's i think both made it clear they did not find evidence there was a conspiracy in the trump administration to collude with the russians to interfere with the government. there is going to be controversy over william barr stepping in and making the determination that the president did not commit a crime of obstruction of justice. >> bob mueller decided not to reach the conclusion on abstraction of justice. the tricky thing is william barr came into the justice department with a predetermined view. he did not believe the president
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could be charged unless you have been found guilty of an underlying crime. i think it would have been useful for bill barr to withhold judgment until more people have access to the information. that has not happened and now it is a political book all. political football. >> the market has been strong this year. if anything, this may provide a tiny degree of support for risk tolerance because it removes a degree of uncertainty if there was that. but in general, the markets are trading on a lot of other things anyway. >> apple is reinventing itself as a digital services provider. today, tim cook announced a range of new offerings.
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but the new services push has not impressed everyone. >> it feels like they went to their major divisions and said, what is a new subscription service you can come up with for your area? >> one was the app store with gaming. we have this new video subscription service coming out in the fall. they have a new magazine subscription service. from apple pay, a new credit card. four new services. very interesting day for apple. >> another big defeat for the prime minister in the u.k.. parliament has taken control of brexit from her and will put forward its own plan. the votes are due on wednesday. they are nonbinding so what do they mean for the brexit
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process? >> parliament has taken control of the timetable. that means we will have votes on wednesday. it seems parliamentarians will be given a piece of paper with all the options so all the voting can be done in one go and not too much time is taken. no doubt the government disappointed they lost 30 votes to the other side. they actually lost three ministers in the process. >> breaking news out of london, u.k. parliament has filed back into the building. parliament voting against a no -deal brexit. they have been voting on eight different alternatives to brexit. this, of course, on the back of prime minister theresa may saying she would resign if they voted for her deal.
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what is at stake right now? >> what is at stake is how long brexit might take, what options there are left on the table and when we might see the resignation of the prime minister, theresa may. we are finding out slowly but surely what if any can garner some sort of majority in the house of commons instead of prime minister may's own withdrawal agreement. u.k. parliament rejected a proposal on brexit. these are all intricately worded types of votes, but generally speaking, we can see there's no majority for any brexit option. does this mean therefore prime minister may's own agreement will be allowed to come back to the house, voted on friday, be accepted and we will therefore see her exit may 22 and finally the u.k. leave the e.u.? >> just got some breaking news on wells fargo at the moment. it looks as if ceo tim sloan is
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set to retire. saying that we will instead have alan parker as the interim ceo and president and the new board selects, but tim sloan select to -- set to retire from wells fargo. >> if you think back to what has happened at wells fargo since september of 2000 -- 2016, excuse me, when the fake account scandal interrupted, it has been a never-ending, nonstop drumbeat of scandal after scandal after scandal, in addition to the bogus accounts, we have had inappropriate mortgage fees, people being put into car insurance and pet insurance that they did not sign up for, altered documents in the wholesale lending business that spurred a justice department probe, incorrect pricing and fees for foreign exchange in the wealth management business, people being foreclosed upon because of computer glitches. this stuff is just almost beyond belief when it comes to a bank and while sloan has been insisting time and again that he and the rest of his colleagues at the bank are doing the right things -- they brought in a new chairman, betsy duke, a former fed governor, they turn over almost all of senior management -- just simply not enough. >> let's turn our attention now
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to the house of commons where the tellers have lined up to give us the latest results. here we go. >> no's, 344. the no's have it. the no's have it. >> theresa may effectively bringing her deal back for a third time. once again, we have seen a significant rejection. this time a little lower in terms of numbers that voted against it. she lost this time by just 58 votes, but nevertheless, that is still a big defeat. what she said subsequent to that in the house of commons, that we are reaching the limits of this process in this house, either she is hinting at the possibility of a general election or she's hinting at the possibility of a second referendum. but it does now feel as if theresa may's deal is dead for the third time and is unlikely to come back.
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that means probably we are headed for a long extension and that the u.k. is going to take part in the e.u. wide elections taking place in may. theresa may had promised that neither of those things were going to happen. they are now becoming a reality. >> guy, given those realities, do we think theresa may will step down any time in the near future? >> she has already indicated that she will do that. she has indicated she will step down when brexit has happened. >> still ahead as we review the week on "bloomberg best," conversations with central bankers from frankfurt to the fed. plus, lloyd's of london's ceo promises bold steps to address sexual-harassment claims. and up next, more of the week's top business headlines. investors looking for good news in u.s. housing data cannot have been happy with what they saw.
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>> unfortunately, it's another negative sign for the housing market. >> this is bloomberg. ♪
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juliette: this is "bloomberg best." i am juliette saly. let's continue our global tour of the week's top business stories. in paris, where the french president hosted chinese president xi jinping. the leaders crafted a major deal for aircraft. >> airbus got a $35 billion deal with china during xi jinping's visit to france. the 300-plane order is a blow to boeing and sends a not-so-subtle trade war message to the u.s. >> this is a bigger contract than what was originally and -- in discussion between the countries last year. this is definitely a very big blow to boeing but a definite win for airbus. >> how political is this deal?
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it can be nothing other than political, i suppose. >> it's very political. just from a technical point of view, clearly a huge contract. $35 billion. but also, it goes down well for the french president because he spent the day yesterday in paris asking for two-way trade with china. he does not think europe should be just a takeover target for china. you also have the chinese perhaps sending a message to the united states of america. you could argue the chinese are saying you have to play nice. >> boeing says it will submit a final software fix for the 737 max to the faa by the end of the week and says the update has already been flight tested. however, the regulator has suspended the airworthiness certificate saying it must carry
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out its own review. tell us what china and regulators are looking into. >> we saw china come quickly out of the gate after that ethiopian air crash a couple of weeks ago. it was among the first to ground its own fleet of 737 max planes. this seems to be taking it a little bit further. the airworthiness certificate has been suspended, so it does suggest that these groundings could go on for some time and that the chinese really do want to make their own checks, not just the faa, before they allow the plane to fly in their airspace again. >> boeing's legal and political woes are deepening. it is being sued on behalf of a passenger who was killed in the ethiopian airlines crash earlier this month over claims the 737 max was not designed safely. >> it claims the 737 max 8 was unsafely designed and that boeing failed to warn of the defect, which is interesting because we know boeing was working on a fix of that anti-stall system even before the ethiopian crash happened. if boeing is found guilty, a
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second crash could prove damaging because it was aware of the fix is needed. >> the election commenced or says -- the election commission says the identity of the next government still is not known. officials say the pro-military party gained about 8.5 million votes while the opposition won 7.9 million. they say they have enough seats to form a coalition. >> we're getting a more constructive tone on trade talks. steven mnuchin posting on twitter that the u.s. trade reps and i concluded constructive trade talks in beijing. i look forward to welcoming the vice premier to washington next week. >> they have tabled text of a potential agreement and are looking at both sides to see if they match up. the u.s. apparently worried chinese officials are
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translating u.s. texts differently than they intended. there is still work to be done. the question is we do not know what is in it and how much progress it makes and if it is a face-saving compromise. or if there are actual geek -- deep structural reforms the u.s. has demanded that they need to wait until next week. >> when you talk to people, is there a sense investors have been sitting on their hands waiting for this to culminate before making a move one way or the other? >> very much. i think the question will be if trade is what pushes people to go back from the safety of the fixed income market into equities. we have seen a flight into safer assets this quarter. >> turkey's lira led declines in e.m. currencies as government measures made it almost impossible for foreign investors to short the lira. this is ahead of key elections.
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it turns out it is now something like 1000% turkish swap rates. >> overnight, the turkish swap rates went from 23% last week to 1300% today, which is a stupid number because it essentially shuts off the overnight lending rate. any foreign investor in turkey will be unable to hedge their currency exposure at levels like that. it keeps them exposed and i have -- and they have to look for alternatives, so other currencies are getting hit today because it is a proxy hedge. >> the u.s. housing index showing mixed signals this year with a decline in starts numbers casting a shadow on the real estate market. give us the latest data showing these mixed signals in the real estate market and what it is telling us.
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>> today, we had housing starts, and unfortunately, it is another negative sign for the housing market. we saw that dip in 2018, sort of the year that home builders and home buyers and sellers would rather forget. we expected to come right back up out of that, or at least economists expected that. we saw with housing starts this morning another decline. most concerning is the decline in single-family home starts. this is homebuilding for single-family homes, the lowest in about four years. also it tends to be the less volatile category. in the past, we have had declines in condos and apartment buildings. you can chalk that up to some volatility, but single-family homes tend to be pretty reliable.
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>> saudi aramco is acquiring a 70% stake. we started talking about an aramco ipo, then we went to this transaction. explain the journey we have been through and why this outcome is different and why the difference in the ipo? >> the way to understand this transaction is it is a clever way of channeling a big chunk of cash from one part of the saudi state to another. a few years ago when the crown prince announced he wanted to sell a stake in aramco in a giant ipo to finances economic transformation program, he could not do that in the end. the valuation was too rich for investors, so he needed another way to find that money and this deal is it. what it does is uses aramco's balance sheet to pay the sovereign wealth fund $70 billion in cash for this stake in the chemical company, so instead of $100 billion in an ipo, they will have $70 billion to make investments inside and outside saudi arabia as part of mohammad bin salman's economic transformation agenda. >> the ceo of that bank has been dismissed. she will be replaced by the chief financial officer. this is just one day after a raid by prosecutors.
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sweden's oldest bank is in the grips of a money-laundering scandal, or at least allegations of misleading investigators. how much of a surprise is it that they finally dismissed as ceo? >> this is the point. they were literally about to go into the annual meeting. it is almost a surprise that it has come so late in the day and i guess given what we heard yesterday and the multiple investigations the bank is facing from the u.s., the investigation of home, the insider trading investigation at home, that is pertaining to management's handling of the scandal as it broke which i guess is more alarming to the investors then perhaps the scandal of the allegations themselves. it seems management has lost the confidence of shareholders and how it is handling that now. >> michael avenatti charged with trying to extort nike. the california d.o.j. just announcing the charges.
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>> michael avenatti was charged by criminal complaint in california and in new york. in new york, he was charged with trying to extort nike of as much as $20 million. he claimed to represent a former aau basketball coach who had once worked for nike but no longer worked for nike, and that he had damaging information about nike and how they had paid off the families of several promising basketball players. he then entered into negotiations with nike, and nike said that he threatened the company with economic and reputational harm, essentially saying he would go public with some very damaging allegations unless they paid him immediately a lot of money. nike then contacted law enforcement, which proceeded to surreptitiously record avenatti making several statements. then separately, as we understand it, there was a criminal complaint filed in los angeles charging him with
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stealing at least $1.9 million from a client, which appears to be unrelated to the nike case. ♪
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juliette: you are watching "bloomberg best."
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ecb president mario draghi said this week that the central bank needs to maintain its accommodative policy stance and also said he is ready to take measures to soften the impact of negative interest rates. shortly after he spoke in frankfurt, bloomberg sat down at ecb headquarters with chief economist peter pract. >> what is clearer now is that the perspective of low rates for longer has triggered a debate about the side effects of negative rates, so i think it is fair to say that this issue has to be analyzed carefully, but you need in any case to find a monetary policy case. you cannot just conclude because it is slowing that the rates are low for longer. i think it's fair to say we have to go into this issue, but we need to have a convincing monetary policy case to do that. when you look at the economy today in the lending channel, we do not see any particular problem in the lending channel today, but as we know, with the weakening economy, it may happen in the future, so you have to be ready to look at the possible instruments or decisions you may may to take in case. so, readiness, yes, but i think do not rush too quickly to
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conclusions, but it's fair to say that the conversation has started. >> if the conversation has started, does it mean that interest rates will stay low for even longer? >> i think it is difficult to say today. when you look at prices, market prices, yes, the days of the first liftoff have been pushed further by market participants. the debate has been coming. as i say, the perspectives of rate for longer is something you have to look at the consequences of that. >> does tiering make the tool of negative interest rates less effective? >> the negative rates have been extremely useful to support the economy because the opportunity cost of saving has been lowered. you push people either to spend or to go into more risk in supporting the economy. going into investment and all that. so we have seen big effects of the negative rates on the economy, which is good also for the banks themselves because if the customers do better, it is also good for them. the question that comes today is with a slowing economy, because
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of international and geopolitical factors, you get lower growth and also the negative effect of the rate situations on the intermediation margin. that is how the debate has been triggered. on the economy, you have to see other things will evolve. >> coming up, more perspectives on monetary policy. the ceo of the japanese bank says the fed's dovish u-turn took him by surprise. plus, conversations fed presidents. after bloomberg reports on a culture of sexual misconduct of lloyd's of london, the ceo promises to make changes. >> it is simply not acceptable in this day and age that any woman should not feel safe. >> this is bloomberg.
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>> welcome back to "bloomberg best." this week, bloomberg held the business and equality summit in new york with global leaders discussing critical issues of diversity, inclusion, and gender balance in business and in society at large. and along with these discussions came news of change. lloyd's of london was the focus of a recent story in bloomberg businessweek, which found a deep-seated cultural sexual misconduct in the london insurance market. the company has responded with a plan to address the allegations. ceo john neal spoke exclusively with nejra cehic. >> this is not the lloyd's that i want to be part of, and not the lloyd's that many of my
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colleagues feel they want to be part of either. whether these instances occurred 10 days ago or 10 years ago, i don't care, it is simply not acceptable in this day and age that any woman should not feel safe. you've run through the actions we have announced. one of them is important, which is to understand through an independent cultural survey what we are doing well, but what more we can do. because what i am clear on is whatever we say, we are not doing enough. we have got to ensure that everybody, whether it is a woman or a man, should feel safe at any time of day doing anything associated with the lloyd's market. i'm determined that will be the case. >> how can you actually manage to convince people they will feel safe out of the lloyd's of
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london building? it is one thing to police behavior while people are at work, but a lot of incidents did not happen within the building itself. >> and you are right, because lloyd's operates globally, not just in london. we have been clear that we will impose our own sanctions. whatever anyone of the constituent companies choose to do in our marketplace, if anyone is found to have acted inappropriately, we will be incredibly decisive, and that could include lifetime bans. we are being as clear as we can that we will not accept any form of that behavior. >> a skeptic might say that this is a form of crisis management, or even closing the door after the horse had bolted. will you really be able to bring about an overhaul of culture that your predecessor, inga beal, with all her work on diversity, didn't manage to do in five years? >> i think inga did a fantastic job in bringing the marketplace forward. i think the inclusion pledge, the changes in the market, have made have been incredibly significant. everyone i've spoken to has been shattered by the article, so i have no doubt whatsoever that everyone wants to redouble their efforts to ensure that these
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events cannot occur. >> fears of a global recession cast a shadow this week after the u.s. yield curve inverted for the first time since 2007 and the federal reserve said it wouldn't hike rates in 2019. several prominent figures in finance assessed the danger signals, starting with koji fujiwara, who spoke exclusively with bloomberg at the milken institute symposium in tokyo. >> my impression is global landscape has started changing as 2019 has begun, the reversing of yield curve symbolizing trends. as i recall that happened in 2007. i think we have come to a time when we raise the level, there is a timeline. in 2007, it came about one and a half years later. furthermore, responses by central banks have become more sophisticated. i don't think we need to be overly optimistic. >> the fomc has downgraded the outlook for the economy and
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interest rates, while the boj is sticking to the 2% price target. also the ultra easy monetary policy. what do you say about the policies of the major central banks? >> u.s. policy turns in the economy aside, i think the turning point came earlier than i expected. i also think u.s. monetary policy came too early, as rates would have had more room if they have been raised more. the boj policy has brought the japanese economy to the exit of inflation. this is a big accomplishment. on the other hand, we have to raise monitoring levels. 2% inflation target is a means, not a goal. the goal is stable economic growth. we have to come to a time when we consider the policy is appropriate against this goal and consider the impact of reversal rates. i think the boj people know these things very well and are doing a difficult job of navigating monetary policy. >> was the fed's decision to strike a more dovish tone and to hold off on rate hikes in 2019 an appropriate response given
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some of the challenges we are facing? >> as we came out of last year with the turmoil of december and the beginning of this year, there was great uncertainty that emanates from the trade talks between china and the u.s., between north korea and the u.s., within europe, with brexit, all those elements of uncertainty saying, what's the rush? we have to let the dust settle, and as chairman powell announced, one has to be patient. that does not mean a u-turn, but there is a clear statement for normalization remaining the the goal, witnessed by the fact that is an indication expected by him where 2020 will be another rate hike. i would say this is a car that is moving in a predetermined direction at a slower pace. >> there is, of course, a discussion by some that we may be looking at a rate cut at some
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point in 2020. what do you think would be the catalyst? >> well, i would say i would hope it would not bring it today, because there area distortions in exceedingly low interest rates. central banks remain the only game in town. >> the federal reserve's latest expression of dovishness had an impact on markets this week. and two fed officials appeared on bloomberg to offer insight into the bank's policy part. let's start with the federal reserve bank of chicago president charles evans, who told rishaad salamat why he softened his stance on rate hikes between december and
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march. >> we had more restrictive financial conditions at the end of last year and strong growth. then you get into the first part of this year and markets rebounded after we communicated a little more carefully that we think the policy is in a good place we can monitor and pause for a time. but the economy ended up slowing down a little bit with the first quarter. now we are trying to figure out how this plays out. financial conditions still seem to be quite reasonable, and is the first quarter going to be a temporary slowdown, or will it
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be something more than that? i am optimistic. i think we will finish the year 1.75% to 2%, that is pretty good. but i'm a little nervous about inflation. i think inflation is close to 2%. that's good, but i'm worried that it still takes accommodation to keep inflation at that level. i actually marked down my path for policy rate increases, i basically have policy on hold until the fall of 2020, so we can see how the economy is playing out. add just a little bit of additional accommodation or not impart any restrictiveness, rising above 2%. i have inflation rising to 2.2% by the end of 2021, consistent with the symmetric inflation objective and helped solidify the belief that we will get inflation on target, and we will have as much capacity to cut rates in the time we really need it if things slow down. but at the moment things look good. >> so you are pausing.
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>> that's right. >> it is now happening. we are not sure how much, i'm not sure how much growth will slow. my best judgment is we will slow down to 1.25% to 2%. -- 1.75% to 2%. but the bond market is suggesting it could be worse, but that is what you are seeing in the bond market. you are seeing skepticism and sluggish expectations for future growth. >> it is interesting, rob, that this bond rally got started after the fomc met and took all the 2019 rate hikes off the table. it could be moving in either direction. the bond market has increasingly now started pricing in the chance of at least one rate hike this year. is that a possibility, or is the bond market getting ahead of the fed? >> i would emphasize -- i will give you my own view. i didn't, in my dot plot, and i have been saying this for some
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time, i didn't have any rate increases for 2019. it doesn't mean that i couldn't change my mind. it means as i sat there in the march meeting, that was my base case for 2019. but it is always subject to change. what my main goal is for monetary policy right now is that we are flexible, that we are patient. i want to see how growth is going to unfold for the next several months in 2019, and based on what i see -- and for me, i look not only at the economy hard data, i look at corporate earnings reports, a whole range of factors, particularly the fixed income markets in the treasury curve, and based on all that, as we get through later in the second quarter, i want to be flexible to have a policy where we can move appropriately.
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i don't know where that will be yet. could be no action at all, but i think we are well positioned right now to take the appropriate move based on where the facts unfold.
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>> this is "bloomberg best." let's resume our roundup of the week's top business stories with a focus on company news, starting with another chapter in the ongoing legal battle between apple and qualcomm. >> apple says it is pleased by an international trade commission ruling that qualcomm's case against an apple patent is invalid. apple escaped a potential import ban, but faces that penalty in a separate patent ruling. walk us through these two cases and what they could mean for the ongoing battle over patents between the giants. >> what we have seen today is we have two similar cases but at different stages. the case that was closer to the
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point where it might actually affect the import of the iphone into the u.s. was shut down, and that was definitely a defeat for qualcomm. but the second case has basically gone through another stage on its protest, from qualcomm's perspective to hopefully have the same result, stopping the iphone from being imported into this country. >> uber has confirmed it is buying dubai-based rival kareem, a deal worth $3.1 billion, and uber's priciest purchase ever. >> they will be paying for it in a mixture of around $1.4 billion in cash, the remaining $1.7 billion in options for uber stock. this is coming ahead of the ipo later this year, which will value the company at $120 billion. i think this deal -- the context is that this is an attempt by uber to stop some of the cash burn going on in the middle east where the rivalry between uber and kareem has been intense. across the middle east.
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this is a big market. uber wants to be on top of this market and be the dominant player here before it goes ahead for this ipo that is expected in a few months time. >> samsung fell after issuing a surprise profit warning, saying first-quarter results will fall short of marketing expectations because of the slump in memory chip prices. him what exactly are the global implications of this warning from samsung? >> samsung came out today and warned the financial results for the first quarter would be weaker than expected. that was a surprise in part because investors were already anticipating revenue was going to decline about 12% this quarter, and operating profit would fall by about half. now they are warning it will be worse than that, and that is because of declines in the
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prices of memory chips and displays, the screens that going to smart phones for customers like apple. samsung has said they anticipate the second half of the year to be better. their competitors have echoed those positive tones. that may be why investors are reacting relatively calmly to this profit warning from the world's biggest chipmaker. >> africa's most valuable company is spinning off its main internet asset. naspers is planning a secondary listing in amsterdam as part of a plan to reduce the company's exposure to the johannesburg stock exchange and focus on its fast-growing online investment. tell us a little more about why you are making this move. have european investors told you they want to see this?
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>> it is actually not a spinoff, but it's a primary listing of all our global consumer internet assets, and that is what we think an extremely exciting portfolio of assets that we believe global tech investors will be very keen to access, and we think euro next is an excellent exchange to do it. >> india's jet airways is extending gains after the the board approved the resignation of two executives. banks will get 114 million new shares in the company and provide the carrier with immediate funding. does his exit remove a potential obstacle for creditors? >> he has been running company for the past 26 years, and some of the potential investors wanted a free hand in running the company. with the founder being around, they are not sure about that. banks have been urging him to step down from the board and his exit gives an opportunity to go approach new investors and talk to existing ones to see if new funding can come to the travel company. >> bed bath & beyond is said to be launching a campaign to replace the retailer's entire board. they got involved at some point. how successful might these
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combined be at doing something with bed bath & beyond? >> i think it's a good first step. they've had the same management they've had for a long time, with many initiatives, none of which have proved successful, to the point where operating margins have fallen over 600 basis points in the last five to six years. i think it would be great if they are able to get a few board seats. i'm not sure if they will be able to get the whole board. but i think with the initiatives they have planned it will be hard for them to completely turn bed bath & beyond around given it is far behind its competitors. >> let's talk about mcdonald's. this week, a big bet on tech. in its largest acquisition in 20 years, the fast food chain is spending more than $300 million on a company called dynamic yield for its ai platform. that is according to sources. the tech will help provide more personalized customer experiences by varying outdoor
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drive-thru menu displays the show food options based on the time of day, the weather. what does this dynamic menu offer? >> i think it is a way to get you to buy more food, which is what mcdonald's wants to do. i think you are right. the average person who drives up to a drive-thru has a general sense of what their go to order is there it go to order. it is cold today, so how about adding coffee? how about fries if you didn't get fries? a dollar here, a dollar there. that's really the difference for them. they are using tech to customize this to get you to buy more. >> more than $15 billion in cash and stock. why does this deal makes sense? >> it combines two companies that are intensely focused on government-run health care programs at a time when those businesses are kind of in flux.
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you have president trump proposing to get rid of the aca, the affordable care act via a legal lawsuit. and then you have democrats pushing medicare for all. it's a defensive move that combines these companies, make them more diversified, and gives them a lot of growth potential if these programs, these new initiatives either don't happen or take a while to come into effect, which based on the history of health care, that does seem like a decent bet. >> shares rallied the most in more than a decade after an external investigation into fraud allegations found that irregularities weren't material. the payment processor acknowledged some employees may face criminal liability. this is quite a limited report in the sense that only covers specific transactions. some investors might want to see something more. any plans for anything fuller? >> yes, there have been some findings, and we are addressing them, and i think we already have implemented very strong additional oversight measurements starting last year.
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on the other side, i think we can strongly recheck rebuts. some of the severe allegations put forward in the public. i think everybody sees it was immaterial. yes, there are findings, but on the other side, what should be a gain now and focus is the strength of this company. >> despite being at the center of global scrutiny, huawei's earnings surged 25% last year as it rose up the ranks of the global smartphone market. >> it is so uncertain, looking ahead, whether the u.k. came out the scathing report. >> i think the market for huawei equipment is very dicey at the moment but bloomberg news looked at all the countries that have either banned or embraced it, and it's about 30% of global gdp
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countries representing that have banned it, but about 40% of global gdp countries have embraced it, or saying they are unlikely to ban. there will still be a market for their gear. ♪
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>> after the second round, this new leaderboard. dwight anderson is number one right now after he picked a perfect sweet 16. notably, he is the only one of the top five right now that has the carolina tarheels winning it all. you can follow along with those titans of business and finance online, and check out our
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bracket and yours at brkt on the terminal. >> there are about 30,000 functions on the bloomberg, and we always enjoy showing you are favorites on bloomberg television. maybe they will become your favorites. here's another function you will find useful, ipo . it will give you detailed information on initial public offerings, past and present, from around the world, including this week's highly anticipated offering by lyft. the ride-hailing company made its public trading debut on the nasdaq on friday, and the founder spoke about it with bloomberg. >> you are here, beating your biggest rival to going public. how does that feel? >> it feels pretty amazing, and there's nothing better than we have all of our earliest investors and the team that has been with us, a lot of them have been with us since we started in 2007. it feels incredible. >> you are here at the new lyft drivers center in a way why was it important to do it this way? >> we wanted to make a point that you can invest in communities and build a great
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business. our driver community has enabled us to be here at this point. many of them are participating in the ipo because we gave them a bonus to do so. and it is the start of how we partner. >> and you are giving drivers stock bonuses? >> we are giving a cash bonus, and ability to participate through the friends and family program. >> let's talk about cost. there's a lot of questions of bringing cost down. you brought in $2.2 billion in revenue last year, but you lost $900 million. how quickly can you bring those costs down? >> what we are going after is a $1 trillion market opportunity. every year in the u.s., americans spend $9,000 owning and operating their car, using it only 5% of the time. this massive market shift, like entertainment has gone streaming.
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it is happening with car ownership, and we are investing to take advantage of that. our economics are improving. we are very confident in the path i had. -- in the path ahead. >> in your risk factors you say you may never be profitable. how do you convince investors that they should be betting on the optimistic here? >> if you dig in on the numbers, every year the economics of the business improve, and we are confident that the business will be very profitable. there are of course risk factors, but we are making tremendous progress, going after this once-in-a-generation shift where this entire industry, potentially, a $1.2 trillion market, could flip their ownership model to a service model. we are leading the way there. >> you can find a lot more ipo information on the bloomberg. you can also get analysis and updates at, along with all the latest business news and commentary 24 hours a day. that will be all for "bloomberg best" for this week. thanks for watching. i'm juliette saly. this is bloomberg.
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>> welcome to bloomberg businessweek. i'm carol massar. >> and jason kelly. quite the ceo of lloyd's of london response to the women areion into how treated inside that firm. jason: heavy aims to step out sexual harassment. carol:


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