tv Whatd You Miss Bloomberg June 27, 2019 3:30pm-5:00pm EDT
mark: i am mark crumpton with bloomberg's first word news. president trump is in japan for the g20 summit. he is expected to meet a prime minister to discuss the president has his move to terminate india's special trade status that reduced tariffs on the nation's exports to the u.s. the president will meet with german chancellor angela merkel and japanese prime minister shinzo abe. the proposed millionaires tesla not be on the budget for 2020. he says he will not shut down over his spending
plan parent governor murphy says forill go continue to press tax fairness. according to a bloomberg survey, the central bank is likely to cut rates by a quarter of 1% point in september and again in december before a week as meeting of fed policymakers. economists were expecting just one rate cut. u.s. unemployment filings increased to an unexpected high. job claims rose to 207,000. among two people eligible held around 1%. jobless claims remain near historically low levels. global news 24 hours a day on air and at tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg.
♪ >> this is bloomberg markets, the close. awayn: we are 30 minutes from the end of the trading day. >> the outperform a today is the nasdaq. this mood music is one of risk on in spite of the mixed message of whether there will be any progress in g20. a ban on tech sales to quality muddied the waters. the euro basically flat. ofhad woeful data in terms --sumer >> brent crude oil down .2%.
gold still above 13, $100. carolyn: there will be no buying today. let's look at the next element of industrials. been theones has underperformer. flex the dow is turning red here on the day. we see small caps holding their ground actually. really haven't given into any issues in the market. what flex get some breaking news here boeing will need up to three months to fix the latest 733 max problem. --hough all >> we have seen a sharp downturn , about 2.3%. the us turn to politics now. biden and bernie sanders are among those on stage. off the stage, republicans out
-- theo be sure president positive voices heard. a debt from afrom small visit in miami. i'm afraid we will have to bring in that particular piece of information a little later. let's return to the breaking news happening with boeing. one we have been looking at all day in terms of the 737 max 8. you look at the element of updating software to bring it back to the aircrafts back in use. now there is another safety issue that is been found. >> we have had reports that this would be longer. these are very complex systems. one thing goes off in the software and 10 other things go off and of course you have to get it right. >> right. lag in. pilot running a
response because of computer chips. we will see how that unfolds. let's get you back to the discussion on the republican side in miami. we spoke with the rnc chairwoman. let's have a listen. >> i thought it was frightening to see candidates on the stage lurch further toward socialism, demonizing capitalism, demonizing job creators and saying they are for open borders . there were so many things i saw last night, taking away private health care plans, i do not want to lose my pediatrician for my kids that i had for 14 years. it is not right. i saw a democratic -- democrat party totally reshaped in the likeness of bernie sanders. we have a republican party that can go to the american people and say, we have created more jobs and wages are up and this
is why you need to elect donald trump. you hosted just earlier today roundtable ands immigration was a key topic at last night's debate and will likely be for the second portion as well. of the father and his daughter, their bodies, it has gripped the attention of the nation. last night, democratic candidates blamed president trump. >> let me say, as any mother would when you see the photograph, it rips your heart out. it is heartbreaking. a father and his daughter and the mother survived and they have to live through that. it is heartbreaking. i know that the president has been fighting for immigration reform for over two years before he got into office. that is what started his campaign. he said we have broken borders
and we need to fix our laws. democrats covered a manufactured crisis in january. they said it was a manufactured crisis. it gave them a license to sit on their hands and not do anything. that photo brings home, they have got to fix the immigration laws. we need to secure our borders and fix asylum laws and make sure that people are not taking a treacherous journey that puts their lives and their kids lies in danger and the only way we will do that is through comprehensive immigration form, which the president has been fighting for since day one. the democrats have chosen to sit on their hands here >> you talked with cuban-american floridians and you say one of the themes is common to some as well as immigration reform. what are some themes you are taking with conservative voters and, candidly, swing voters.
>> they are in tune with what the democrats are putting out --e they are frightened putting out. they are frightened. in the end, it is a government takeover and it becomes oppression. we know many people today came here cuba and that's because they lost their livelihood and ability to achieve the dream of success. i think it is something that resonates. i want more people to hear the stories of these fine people and what happened with them. we have to educate younger voters with what socialism really means and the democrats are really embracing that. >> joe biden takes the stage tonight. what do you think? with the have a tougher time against senator sanders or president trump? -- he goesever the wherever the wind blows.
every possession he is changing. he has a 45 year career in politics. i do not know what he can take to the american people and say we need to get things done and argue why he has not gotten that done. to see be interesting how he embraces different positions and revamps himself for the american people tonight. >> the president tweeted that it was boring. the timestamp was when they were talking about immigration. was he saying the issue of immigration was or was he critiquing the candidates? i am not going to speak for the president. i did think it was boring. i did nothing moderators really pushed back on some of the answers. i hope we hold these candidates accountable. i would like to see msnbc do that tonight.
tonight, what is the primary thing you will look for that will give you some sense of nike's growth prospects? >> absolutely. it is a multinational company and we care about every region for better or worse. nike has done a phenomenal job revitalizing their business. we want to continue to see their selling their product in north america to your point about foot locker. on the flip side, there has been so much conversation around tariffs and global uncertainty in general that i think investors will look toward the asian trends. >> do you have a worst-case scenario? >> worst-case scenarios are fun. the reality is there hasn't been a sign about a slowdown. nike is a u.s. brown -- brand obviously. but if you think about where messages have generally trended
to politically, they have actually been somewhat on the other side. i think the beauty of this business is they are the largest in their class of athletic tears. which means they can write the biggest checks to get the biggest endorsers. what they have done is convinced go --rld that if you where a swoosh, you become superhuman. it transcends politics sometimes and situates them pretty well. >> nike has done well being trendsetters. you look at adidas, they have partnerships with kanye west and beyonce and high-profile celebrities who can get people in the door so to speak. how does nike respond to that increase of competition? -- monopolyonopoly these days is the worst thing you can be well -- welcome
healthy competition. there is plenty of room for multiple players. the nike adidas back and forth is a decades old story. a couple of years ago, it was like adidas was gaining meaningful ground and it looks like they would potentially siphon away share. to your point, it was grabbing celebrities that were not necessarily on the basketball court because that is where the trend live. i think what becomes important here is if we bank on that and return to the idea of the largest balance sheet and the largest check book, it means any given year, trends may go away from you but as long as you can outlast the ability to find who people care about, you can win. i think we come back to nike's portfolio. >> 20 seconds. what will you ask? >> i want to make sure north america continues to push in the right direction.
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thousands of mattresses to those in need. live healthier, live happier - by resting deeper. get 15% off, and 2 free pillows. go to leesa.com today. ♪ >> this is count down to the close. >> joining us every day at this time is joe weisenthal. joe: i was watching the debate last night, -- the democratic debate. >> i missed the good part. the way they described the economy, there are obviously issues with the economy, a lot of it, you would think the american economy is a total health skate where the only
ceo's.doing well are there are certainly issues with the economy but their characterization is not exactly match up with how people feel about the economy right now. we have the bloomberg comfort like 2001.high as even among democrats, they break the mostdemocrats of optimistic about the economy since 2001. people who make under $50,000 era feeling the best about the economy. >> picture the data out of europe, it is like -- investor confidence is low since 2016. joe: i get that politicians have to say politician things, can a striking. the other thing about the market, it is kind of a good day. it is very quiet. glot of more waiting for the
25. but a pretty nice rounded rally we are getting today in the market. s&p up, the dow and nasdaq, small caps rallying. you have seen a lot of broad-based stuff. a nice handful of stocks. financials, the biggest gainer. joe: i do not know that is connected to not much wall street bashing last night. >> bernie will come through. >> bitcoins having a horrible time. >> tonight is andrew yang passes time. when we were hearing from romaine, perhaps some of the financial areas doing well. transportation as well is up. it is a broad-based rally. it is one of the more volatile parts of the energy today.
>> you see some laggards. health care also strong. there was a sense of relief that the candidates last night did not say anything new with regards to that. raisedly two candidates their hand. it is not the median of where they are. >> it hasn't been in the eye of .he storm today, we're up here the dow jones industrial average is the laggard. we only have 6.5 minutes with the close. abigail, what are you watching? >> one of the top stocks -- top stocks for russell 2000. up 20.3%. it is a head scratcher. they put up disappointing earnings and abysmal growth
year-over-year. there is an amazon affect, you will be able to pick up amazon orders at rite aid stores. the question is, willis those customers by incremental items when they come in? the stock has been up on pace for its best day since 2015. right now on pace since 2017. could be looking at a short squeeze or short covering. raided a year ago, they have had a rough time with deals falling apart. relatively high but more recently as the stock dipped below $10, you might have some of those and i am wondering again, maybe some sort of m&a activity could be ahead. whatever the reason is.
taylor: i am looking, almost 80%. pray much all day long. more portly, order has increased 50%, more than 2.5% expected from the average analyst estimate. fat plugs well beat estimates. they grew in every region including california, facing and affordability issue. it will softer than some inland markets which leads me to my next chart. what we were really talk about when it comes to home stocks are the affordability issue. i'm looking at the ratio of home aices to income, which is not good thing. buyers are now transitioning to smaller and cheaper homes to offset affordability issues. >> an interesting take. we thank you.
let's get some more analysis. the sneakyng at rally and how brought it is what about the overall bond market? joe: i mean, you had a post on the blog pointing out that the last time the s&p hit its record, about 71% above the 200 day moving average, similar to other past market peaks, i think people give very nervous when they see this is really hard rally. we're up 18% this year. it makes people nervous that we are the smelt up situation. -- this smelt up situation. corrections can happen on either axis of the chart. price or even time. basically flat compared to where we have been at the beginning of 2018. it doesn't really suggest the melt up thing. >> the yield credit side, things
feel a little more extreme. it seems to be one area human with stocks an all-time high, people look at credit markets and cannot help but feel anxious. >> especially look at how everyone came into the year. almost every strategy predicted a further rise in yields. i've got my eye glued to the 2% level. we have had one close below it. maybe the treasury rally is running out of steam. a big negative shock could cause it to go back up again. >> we want to bring an eddie, the chief equity investment officer in boston. when you look at the market now, is it actually a good environment for people to enter into the market? understand why someone would want to stay in it, but
would it pass those by who have not gotten in it? >> the point you just made is a good one. we're not that far from where we of 2018the beginning will he got the corporate tax cuts that have the effect last of rate isn't -- raising earnings per share by 22%. if you put the two years together, it is not much of a rally at all. shape.nomy is in solid the fed seems dovish. we may not get a china deal sooner rather than later. to invest int equities, not there. risk equities are not at and pessimist him is very high. people are dipping a toe into the stock market and buying yield stocks. that is where the richness is in the markets p are financial stocks are performing well. is where the value is. i do not think it is too late for those stocks. >> they continue to edge lower at a rate environment that much
-- might go lower. talk about what you like. >> i do not want to get to individual names but they are all interesting. regional banks are interesting. interest-rate sensitive. i think the larger universal banks which of trading businesses and asset management businesses are also interesting different reasons to there are plays on volatility and higher market levels. i think the flatness of the yield curve is a recent stocks are cheap today and why there is to buyopportunity today those stocks. we get a rate cut on the short end and good news on the economy in china and trade on the long end of the curve, you could get from here andg that will be a strong catalyst for those who want to go back to those players. we can add to the banks in recent weeks. >> what was the vibe today in regards to pre-g20 positioning? >> it is quiet and cautious. yougeneral sense, how do
define success at the g20? the bar is really low. is allhake, a photo op, people are expecting. take some reald negative outcome to really make the market react strongly. caroline: meanwhile, s&p 500 up 3/10 of 1%. volume down about seven points. joe: look at that gain. 2%. romaine: when you look across the markets, not a lot of great names. uber is on there. tripadvisor. not necessarily those large-cap leaders we would normally look to. deeper with our markets reporter, abigail. >> i was thinking about that
outside move you were just noting. 1.9%, best they in three weeks. some of that goes into the small-cap index for underperforming. that has done something for the index. over the last year, it is below 200 day moving average. a backup of the 200 day moving average doesn't mean that much at this point. a little bit of a line in the sand. perhaps with the rsi or momentum indicator trying to move back into the middle of the range, really duking it out. perhaps the fact that you have those two readings going bullish today. let's see whether or not we have that after the g20. >> the worst performing stock ra, the brandg behind the likes of pam, chef boyardee. reported earnings, investors were not impressed. the company missed on both the
top and bottom lines. headwinds included competition from private label, other brands and an increase in steel prices. deal prices increased 14% and that forced them to raise prices, however, their competitors did not. there was a wide price gap there that customers could not ignore. going forward, the company is saying that they will be lashing onto trends we have seen these days. one being vegetarian meat. they will be expanding manufacturing capacity for the vegetarian brands, but as you just saw, conagra down more than 12% today. joe: thank you. still with us, mike regan and eddie parkin of eaton vance in boston. what do you make of that strong close? >> i think whenever you look at russell, you are looking at higher data when the s&p is doing well, it will do a bit better.
dollar is coming into focus for a lot of people. seeing some dollar risk. you would think that would benefit the s&p 500, but as abigail said, it has been a mid range bound index. you will get that risk on appetite back. romaine: eddie, i want to bring you back in and talk about what we are seeing in the rates department. particular some expectations we have here for the economy. seeing inversion on that 10 year part of the yield curve. steepness on other parts. what do you make of that? particularly in the bond market, people are trying to figure out where the economy is headed. a lot of what is going on is simply positioning and where rates are in the u.s. versus the rest of the world. in germany, you had an all-time points on theasis
yield. $13 rates are negative for trillion of assets around the world, 2% doesn't look half bad. matters is the economy and the fed policy, so i think the fed will cut in july. i think we will continue to get decent news on the economy. i do expect a steepening of the curve. caroline: what is interesting is the performance of certain ipos has been lackluster, but today we had another to biotech ipos come to market that both exceeded more than 80% gains in the first day of trade. we have not had eight ipos since memorial day exceed more than 50% gains on the first day. is headline today, uber again up above its ipo price. where do you stand in terms of
new companies coming to market and whether or not you are willing to get in? majorlook at most of the ipos that come to market. one area where active investors can really make a difference is these new companies not yet in industries. when people make a passive allocation, they are not able to capture some of the benefit of those ipos, so it is something to look out, particularly in small-cap strategy. i want to get back on the comment on the russell 2000. he also have a rebalancing that is coming out tomorrow that could be playing a role. small-cap investing is a place we have got to have an orientation to quality, companies are able to generate returns above capital. that is what we do is focus on good quality companies, nearly -- a little bit more than a third of the constituents that do not make a profit.
there is a lot of low-quality equities in the russell 2000. you need to pick your spot andy ipo inclusion in those types of portfolios is something that can be very beneficial for investors. joe: you know i learned today, speaking of ipo's? former of a company was -- i totally missed that. did everyone else know that? caroline: i have to say, i didn't. joe: i had no idea. are you going to shop on the real real? joe: i missed this. i think it is important news. romaine: do you have a question, joe? [laughter] joe: i am curious. this is something i'm seeing more and more people talk about. caroline talked about incredible appetite for biotech ipos. a lot of companies not making any money. sending these discordant signals
in which some areas of the market seem to be flashing anxiety, nothing in the ipo market would suggest that. issuancel, this much makes people a little bit nervous, why are these people coming to market now? we had the bottleneck last year and a lot of stuff got deferred. if you look at the amount of ipo issuance compared to the total market cap, it is nothing like boom, with a much greater percentage. supplying a love new stock to the market in defense of those prices. relatively, it is not that big. romaine: can we get your final thoughts? what are you seeing with confidence in this market? >> i think a lot of investors feel like the market is getting away from them and in my opinion, they are far too conservatively positioned. they are owning dividend stocks
when they should be willing to own value stocks, including financials, cyclicals. stick with good quality balance sheets, but the market from your continues to climb the wall of worry, because there are not enough people position for higher levels. romaine: thank you very much. that does it for the closing bell. "what'd you miss?" is up next, where we will take a look at nike in at quarter end results. this is bloomberg. ♪
headquarters in new york. the unitedapshot of states. joe: the question is, "what'd you miss?" caroline: democrats debate health care and immigration last night. 10 more candidates including joe biden will take their turn tonight. up, apic that may come white house plan for a tax break that could benefit the wealthy. reportsts, nike investors looking for details on north america, china invest in's -- joe: investments. we have the first 10 democratic candidates last night in miami and health care was one of the most intense exchanges. in january, i spoke with senator elizabeth warren and here is what she said when i asked her vision of health care in america. >> right now, we have got
intiple bills on the floor the united states senate. have signed on to medicare for all, i have signed on to another that gives an option for buying into medicaid. there are different ways we can go here, but the key has to be always keep the center of the bull's-eye in mind and that is affordable health care for every american. , warren, night alongside her rivals, made it clear where she stands now on the same question. >> could hear would abolish the private health insurance in favor of a government run plan? look at the business model of an insurance company. it is to bring in as many dollars as they can in premiums and pay out as few dollars as possible for your health care. medicare for all solves that problem. >> [applause] >> we should give everyone in
this country health care as a basic human right. there are to me people profiting off of the pain of people in america, from pharmaceutical companies to insurers. washingtong us from is joe biden's deputy chief of staff during the obama biden wendy 12 reelection campaign. 2012 reelection campaign. it is striking that warren has gone from being a little ambiguous to saying no private health insurance. what does that tell you about the direction this race is felt -- shee she was one of two last night to stake out that space. >> it was notable last night, not only that senator warren leaned so heavily into medicare for all, but how many hands were not raised. interestingly, people think of the democratic party lurching leftward, but only two hands went up.
people looking for answers across the array of the spectrum. from obamacare to adding the public option, onto full medicare for all that would change how we provide health care in this country. notably, there were a array of answers for those who wanted to keep the private insurance market or scrap it. when you look at what is happening now with the backratic bait, and you go four years ago, republican candidates duking it out, you , you response from voters wanted something that was out of the norm. that is how trump read the wave to victory. , i'm talkingilar about democratic voters. something a little more to the left, a little more extreme. i think you can want to
shakeup what is happening in washington and also fix problems in a real way. , were someight now went to work within the rules and some want to blow up the rulebook, in thinking through that, you have got people who seem to have their issues specifically. right to raise that concern. tonight will be interesting with ands like andrew yang marianne williamson on the stage. these are not conventional politicians. they are coming from the outside and we will see what they have in this debate and where they push this discussion. caroline: andrew yang comes from technology and that was the other area that we have been talking about is breaking up the big tech companies and monolithic companies in the u.s..
will be we stay back in terms of policymaking, cory booker not wanting to name names. >> interestingly, cory booker did name a couple last night in the discussion. i think what you will see tonight is he and others not only laying out their vision for the future, but laying it out in contrast to president trump and perhaps to each other. i think what you will see from the vice president is just that. that is up to him, it depends on what questions he gets asked. what you have got to do tonight, ,o matter who you are well-known establishment candidates making the case for people who don't make the case for what can make that right and what can make that change. for some people, that is making specific companies, for others, that is whole new things like andrew yang, for universal basic income and other concepts that
are not much in the political discourse but are increasingly something to listen to and watch. joe: your old boss still far ahead of everyone else in the polls. strategically, doesn't make sense at this point for others to go after him directly, or is it too early for that and as you put it, maybe just make their case about why they should be people to vote for? >> it will be interesting to see. some folks need to introduce themselves. there are folks like the senator from colorado who is relatively new to the race but has had an impressive career. for him, a moment like tonight to introduce yourself, that seems to be his playbook. there are others who need a reintroduction or a big moment to break out and that could be where one of them begins to take a swing. the challenge with those swings is they can double back on you if you don't land the punch.
that boomerang effect israel and seeing how many entrants there are, that is perilous not only for your evening but potentially for your candidacy. caroline: thank you. current founding partner of asset strategies. we will have coverage and highlights, the second debate tonight and tomorrow. some quick breaking news, nike earnings are out. shares falling after hours. eps coming in the fourth quarter at $.62 per share. the estimate was for $.56. revenue did come in line, at it looks liked gross margin came in at 45.5%. coming up, controversy and the court. the supreme court releasing its opinions on some key issues, including gerrymandering and a ruling on the senses. we will give you a breakdown of what you need to know next.
romaine: we just want to recap nike earnings. the company is out with its fourth-quarter results. -- $.62n at about 60% per share. $.69 per share in the previous year. the estimate was for to drop to $.66 per share, so it missed on that bottom line number. revenue came in slightly ahead billion,tes at $10.2 but you are seeing shares move lower. maybe a little bit of profit-taking, but you want to watch. meanwhile, the white house is developing a plan to cut taxes
by indexing capital gains inflation. according to people familiar with the matter, the move would benefit the wealthy and may be done in a way that bypasses congress. this is something that has been bounced around in previous administrations. potentially a vote winner or in some ways, then official? is it many the wealthy who will benefit? >> yes. the very wealthy. if you look at the top .1%, they get two thirds of the benefit here. who is a tax cut for those have a lot of capital gains assets, stocks and real estate. the reason the white house is looking at this is they can do this without congress. congress is slow, with democrats in the house. getting a partisan tax bill passed would be unlikely. they are hoping it would
generate political goodwill with donors, though it is not clear how much economic growth this would generate. joe: what is the deal with bypassing congress? is there any legal question about why -- how they can do this? >> they are looking at doing something like an executive order from the white house. the reason they can do this without congress is they are looking at changing the definition of what is defined as capital gains. there is a lot of debate in the administration and outside about whether they have the legal authority. this administration one year ago decided they could do this and are now picking it up again. the first bush administration looked at it as well. there is a lot of lawyering going on. romaine: that is bloombergs laura davidson from washington. thank you. also in washington, a big day for the u.s. supreme court as it passed decisions on the plan to include a citizenship question
on the senses and about partisan voting maps. here with more is bloombergs greg stohr, who covers supreme court for us and is live there. let's start with gerrymandering. the court basically said it is ok to keep politics in play when you are redrawing these maps. explain how the justices came to this decision? theyat they said that the said there are not judicially manageable standards for them to politics goesing too far. the court said it is ok to think about politics and the question is, is there a point where that is too much? where partisanship takes over so much that it violates the constitution? the conservative justices expressed skepticism about that during arguments and today, the five of them said, we are done here. greg roberts, the chief
justice sided with the conservatives, then sided with the liberals on the census, but even there, it was more of a technical argument about the argument that the government used, rather than the question. my thought is, the whole thing seemed very robertsy to me. >> it is. the opinion is muddier in terms of what it would mean. it certainly threatens the ability of the administration to put a citizenship question on the census. we don't know for sure that they will not be able to. that will play out over the next few months. it is very john roberts like. he does not want the court being perceived as a political, partisan institution. had the court come out with two , on gerrymandering and the census question, which goes to arguably just creating
against hispanics, that would have seemed like the court was doing the bidding of the trump administration and the republican party. john roberts is not going to have that today. he is picking and choosing and keeping the court at least a little bit above the partisan fray. caroline: do you think it worked? overall, this decision, when it comes to the maps is divided on ideological lines. there is going to be a take away from that, as it does indeed benefit the republicans. >> it should help the republicans in 2020. the reason is that republicans did so well in 2010 that they control a lot of statehouses, control more redistricting than democrats control. what happens after that remains to be seen. we don't know how the 2020 elections will turn out. it may be the democrats take control and want to start doing gerrymandering. for now, this is a decision that should help the republican party
the next election. beyond that, it is anybody's guess. we just want to recap nike earnings again, bringing a little more color. this is the first the company has had in quite a few years. seeing shares move lower over hours. they did come in light on the quarter. as far as north american and china sales, they also came in slightly lighter than what some analysts were thinking. reporter: kind of amazing considering that someone -- caroline: kind of amazing answering that someone has run the math -- i will have to double check it, this is a company that tends to deliver. come, easy up, easy go. bitcoin getting clobbered about as fast as it rose this week. we will discuss that with the ceo. this is bloomberg. ♪
ma i am mark crumpton with bloomberg's first word news. rthe supreme court ruled has giving partiesy that control state legislatures license to redraw district to cement their political advantages. 5-4 decision along ideological lines upheld maps drawn by maryland democrats and north carolina republicans while dooming similar challenges. they pressed against republican maps in ohio and michigan boosting prospects in the 2020
elections. >> [indiscernible] generale states in who's maps are controversial. districts are much more homogenous and money and power is being consolidated. has --gest fear anybody if you change the gerrymandering concept to make it a little more inclusive for the country as a whole -- mark: chief justice john roberts said the court is in the wrong place to settle gerrymandering disputes and a dissent from the four liberals, elena kagan wrote for the first time ever, this court refuses to remedy a constitutional violation because it thinks the task gone judicial capabilities. president trump is responding to
the high court rulings to block his citizens of question in the 2020 census. in a tweet, he said the ruling is ridiculous. the president said he has asked his lawyers if the administration could delay the sentence. the high court says the explanation for adding the question was inadequate. the second night of democratic presidential debates is only hours away. 10 candidates including front runners joe biden, bernie sanders, kamala harris and pete buttigieg will be on stage in miami. nbc will host the event. last night, the other democratic hopefuls discussed issues including immigration, health care and climate change. most of western is facing a whether freaking heat wave. parts of the southern area of rants could see temperatures as high as 45 degrees celsius, which is 113 fahrenheit. weather watchers blame climate change for bringing air from the sahara desert into western
europe. authorities have warned of a risk for forest fires. global news 24 hours a day on the air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. romaine: the federal reserve just released results of its comprehensive capital analysis and review. like --, it looks deutsche bank, i was not prepared to say that. deutsche bank did pass the test and there was a lot of concern, they have had issues with this, going back to the drawing board. caroline: the only flies in the ointment seem to be credit suisse being act to go back and reassess how much money they will be paying out. how credit suisse is measuring
losses. perhaps, j.p. morgan had to come back and reassess and resubmit adjustments to his capital payouts. j.p. morgan is saying that it will boost dividends to $.90 per share. also saying they will be lifting overall dividends. for more analysis, let's go to allison. j.p. morgan,he fargo, bank of america, j.p. morgan is able to buy back $24.9 billion. flying colors in terms of the banking system. >> also the over capitalization of the banks. is, wek's stress test are asking the same economy questions that we have been asking the last 10 years. we have had this flight to quality in the month of may and $3 trillion in money market funds. you get into these stress like scenarios and here is fed allowing massive backs.
joe: speaking of massive buybacks, news out from j.p. morgan on my screen, they are going to be buying back up to $29.4 billion worth of stock. they are also boosting dividends. investors, how important is this aspect of the equation? a lot of things in the yield curve. capital usage specifically, how much does that drive decisions? >> when they originally started ,o release capital, very tight but primarily in the buyback world, what a blessing. think of how much stock has gotten bought back at lower prices. let's not forget bank of america's example. we were talking about raking five dollars in 2012. stocks nowhere near that, but buybacks in 12 and 13 were created for shareholders. a real blessing in the fed said don't use income, use your stock
in the open market. romaine: do you think these are still relevant as constructed right now? >> to your point, we will slowly get to the point where people are doing stupid stuff at some point and it will not be as meaningful. like i said, the economy is the real question. joe: i was just going to ask, in your view, what drives the sector going forward? they spent a lot of time talking about the yield curve. is it more about what happens in the real economy more than what happens to some numbers on the screen? >> no question. the fed is talking about with the marquette is forecasting and at the same time, they are saying, the economy and labor market are strong. we are afraid of what the market is showing us. usually, fed dictates market policy. market policy is dictating fed in the interim. caroline: u.s. banks programming a dividend, j.p. morgan doing the buyback and the bank of
america. joe: capital management, thank you very much. now, bitcoin's rise was meteoric this week, then it declined. a frenzy over cooked a currency push the price to nearly 14,000. right when we were on air, that was the highest price since january. it has been plunging ever since and bitcoin is at the same price it was five days ago. to help us make sense, joining us from san francisco is andy bromberg, cofounder and president of a financial services platform. thank you for joining us. what happened? is the only answer here for what happened with bitcoin that that is crypto for you? >> i think part of it is. less that's crypto and more that is an early-stage asset. we will see massive cycles. tension is building around it right now.
bloomberg did great reporting on this yesterday. this time, there were some large buyers driving the price up over time. we reached a point that felt unsustainable and we saw it crash back down. that will happen over and over. what is interesting here is that it was not retail interest driving this yet. we are yet to see the retail wave this cycle. caroline: the consumer part of coinbase, retail part of coinbase got overwhelmed and had to go off-line for a while. themuch do we think infrastructure to support these mega rallies and sudden cells? >> a lot of exchanges had trouble. it was not the same old people buying this time. there were new actors entering the space and most often, they are buying directly in big blocks. those were happening. afterwards, those desks had to go back to the open market to settle those trades and recycle what they bought and sold.
i don't think the infrastructure is there yet. we can withstand massive surges of interest, getting better every cycle. we have seen that since the early days of crypto. romaine: talk a little bit about libra, not just what facebook itself is going to do, but how it moves the needle a little bit more forward. >> i think it is one of the first genuine projects that a massive company in the world is actually going into the crypto space. a lot of companies have announced exploratory initiatives or pure innovation. facebook has committed significant resources and effort to libra and to the wallet for the libra currency. they have done a great job, build a great team. that is giving investors real confidence in the space. we haven't seen a lot to big institutions, and make meaningful place. when that starts to happen, they should be paying attention, because others are as well. joe: one of the striking things
about the first half of the week and the year is that bitcoin has significantly outperformed other coins. from your perspective, people use this as a platform for initial coin offerings. bitcoin,le are full on less enthusiasm for the other coins and stuff that came out, how does that affect your business? non-bitcoinall, the coins did rally, just not as strong as they have in the past, may be because institutional buyers are more focused on bit time. at the same time, they helped facilitate a sale of $60 million, which is one of the biggest in recent memory. there is still interest for great projects to solve meaningful problems in the space and that's going to continue. it may not rally as big as bitcoin, but it is still seeing increased interest. romaine: thank you. that is the cofounder and president of coinbase. we just want to jump back to the
news with regards to the federal is sayingells fargo it's going to buyback up to $23.1 billion worth of shares. a couple of other companies here. caroline: morgan stanley doing the same, boosting to $6 billion. also boosting its dividend overall. citigroup announcing that it will do a buyback and dividend will be raised to $.51 per share. across the board, banks weighing in. romaine: we should point out that the shares of most of these companies are up. caroline: also a bank rally today. romaine: back in america, after the bank rally -- bank of a relic -- bank of america, after the bank rally. joe: general mills earnings missing expectations. we will hear more from the ceo in an exclusive interview next. this is bloomberg. ♪
caroline: consumer crunch, general mills fourth-quarter sales falling short of expectations. more on that and the trade pressures facing the company. we go to colorado, where our colleague has an exclusive interview with the key executive of the company. >> thanks very much. i am here with the ceo of general mills. aboute a global company, 25% of your business is outside north america. how are you dealing with disruptions to the global supply chain? >> for us, there has not been a big disruption for trade. the toughest part has been brexit, or at least the threat of it.
otherwise, whether it is what we sell in canada or europe or china, we have not seen a big impact. >> what is going to happen if worse johnson wins leadership of the conservative already -- conservative party and britain exits the european union? >> our plan will be to continue our business in the u.k. and continental europe. we will find a way through, as we always have. >> it will just be more costly? >> it will be more difficult. we have been around 150 years and this will be one more change. it may take us a month or a year, but we will adapt. >> can you feel that the economy is slowing? >> our business has been really good. we had thesiness, best quarter on sales that we have had in a while through grocery stores, our business in china and brazil is growing.
the toughest place for us right now is france. that is where we feel slower growth, but otherwise, we haven't. >> i couldn't help but notice after you reported earnings yesterday that the analyst on your conference call wanted to talk about pretty much one thing only. youpremier pet food company all last year. you had a head start, you made the most of it. creaming pet food exploding as a category. how do you manage the competition? for us, one of the things we're most excited about is the premier category growing. we are leading that growth. we are excited the whole segment is growing and we are dated -- we feel that we have the best brand. the key to growing brands in petfood is the same as human food. make sure you innovate. we have innovation coming out. we love what happened in the first year of lou buffalo under our ownership and we think we will have a good second year. some of the startups in the
premium petfood category are starting to make petfood with human grade ingredients. is that where the industry is headed? >> i think pets have certain nutritional needs and so, while you want to make sure that there is not a trend toward humanization of that food, it still has to be petfood. whether you have dogs or cats, they get the nutrients they require. there is a trend toward humanization, it is clear that petfood is petfood and the nutritional needs of the animals come first. >> the other thing exploding is plant-based food. general mills was an investor in beyond meet? >> yes, one of the first. >> what kind of return did you generate? >> so far, so good. more broadly, general mills created an investment arm where we invest in small companies. was one of our first investments. >> beyond your little venture
fund, how do you ride the wave of interest in and demand for plant-based food products? >> when we think about innovation, we need to play all the keys on the piano. some is investing on small start up companies. a lot is investing in our own capabilities and sometimes we buy companies, like lou buffalo, annie's. as we think about innovation and maintaining food trends, we will look at all of the trends. that will be the case with plant faced, where we have plan based investment in a yogurt company. or whether we develop plan based alternatives ourselves. >> i want to go back to earnings, because much is made about whether you do or don't beat estimates. investors,os and warren buffett and jamie dimon is ass, say short-termisn
plague on the stock market and they want ceos like you to stop giving out earnings guidance. what you be prepared to do that? >> we are fine with giving earnings guidance. we don't actually give earnings guidance for a quarter. we give it for a year. for me, that is how you play the long game. sometimes there are pluses and minuses in any quarter, but one thing we are most proud of his last year we be earnings beat our earnings guidance. things fluctuate quarter to quarter, but over the year, we said -- we did what we said we were going to do. >> would you agree that is a problem in the stock market? >> it can be if you let it. my job as a ceo is to make sure the people in our organization of the context in which we are operating. our stock went down a little yesterday, but it went up before that. we tell them look over the past year, don't look over 24 hours. >> i can't help but think back
downe $15 billion right that craft had to take. how do you and general mills perceive and feel the pain of changing consumer tastes most acutely? >> one of the -- i made a comment earlier about being around 150 years. if you look at our portfolio, we acquired annie's and epic and blue buffalo and we remain competitive in the serial category. us, food values have changed over time. they will continue to change. we need to make sure as a company, whether through acquisitions or internally, we are keeping up with consumer food values and we are not only focused on driving up costs, but on growth. >> what you think of the struggles? >> you need to grow. the only path to long-term sustainability for a food company is growth. we need to make money while we are doing it, reward
shareholders. general mills has paid a dividend for over 100 years without reduction. we owe it to our shareholders, but the way we do that is through sustainable sales growth. >> thank you very much. great seeing you. remain, that is jeff harmening, ceo of general mills. back to you. onoline: breaking news boeing, on apple, on banks. boeing pilots have flagged software problems in the jets aside from the 737 max. the problems that have been flagged by certain pilots are more of a concern then we thought. they say the issues are a concern. the complaint has grown 14%. we are seeing apple news. johnny ives is going to depart the company. he is the man behind the iphone, behind the design of the thought leadership. he will be spinning up his own independent design company. they have named the senior vice
president of operations over at apple. this is a big move for johnny i've. -- ive. romaine: a lot the big banks now announcing dividends and buy back programs. bank of america going to buy back $31 billion in shares, capital one, about $2 billion, city, $17 billion and wells fargo, about $21.3 billion. joe: coming up, the latest on nike's fourth-quarter results. this is bloomberg. ♪
caroline: apple has lost its chief design officer. johnny ive will be departing to set up his own independent design company. they are naming a new vp of operations but that will be a key move. the man behind it designing many of their key products. joe: apple will be a client of his new company. there will still be some
connection to the company. romaine: let's turn to another big consumer products company, nike reporting fourth-quarter results. a retail and discretionary senior analyst at briggs intelligence. the bottom line number was the first miss we have seen from them since 2012. if you dig deeper, it was not as bad. line,you look at the top they are still top line 10% in constant currency and that is encouraging. that is where they tracked even a little higher. their five-year plan calls for high single digit revenue growth and they beat that. at the theory, nike is center of trade war tensions, because it is a global brand. any evidence yet that it is having -- >> if you think about it, the exposure to china is 26%. china used to be the largest country where they produced their goods and that is no longer the case. it is now vietnam.
caroline: great to get your expertise. that's get back to the breaking news on apple. johnny ive departing the company, but still a chance of consulting. let's get to the next guest. bloomberg executive editor for asia. what do you make of it? >> it is a significant development for apple. johnny ive has been so deeply steeped in the company over the years. helping steve jobs to sign all sorts of iconic products, going , theto the original imac colored imac and after that, the ipod and the iphone. it is a significant development for the company and they may need to figure out who has to step into his large shoes. romaine: talk a little more about that. do you have any idea of the kind of people who were working under johnny ive? are they able to step up or where they have to look outside the company? peter: certainly, it is a big
organization with a lot of design depth. ive has been instrumental in cultivating the next round of leaders. apple is not the sort of company that would go outside for this sort of thing. they have gone outside in other cases like retail stores where they didn't have expertise. on the design front, there is a deep bench and we will see what they do at this point. i would anticipate that would come from inside. joe: do we have any idea what else he would like to do? now that he has his own shop, he could work on things other than phones. what else might we see his studio work on? peter: it is a wide world. certainly, he has brought interests that go well beyond the technology that apple had been putting out. he has the opportunity to move into some arenas that apple has been hesitant to move into. it could be working with a broader range of companies, it could also be other products.
you can think about cars or all sorts of other things that he could now turn his attention to. caroline: we have some other reporting saying that he will not be replaced as the chief design officer but there will be other people expanding their own rules in helping support the situation. johnny ive, can you remind us exactly the iconic products that he is behind and really the design that he brought not only to the phones, but in many ways, had a great influence on the headquarters of apple? peter: that is right. when you think of iconic apple products from the iphone and the imac, heng back to the brought simplicity to the that really helped the company recover from its deep financial troubles. it sort of brought this aesthetic to the company that has helped it stand out against a whole range of competitors, from samsung and blackberry to
now the chinese companies that are coming out strong. romaine: we are seeing shares move a little lower. i think this does raise the question as to whether apple can still be viewed as an innovative company. one of the criticisms of tim cook is that he did not necessarily have the same vision as steve jobs. he was more of a manager. which was good on one hand, but does this company still have the cachet that it used you have and can it continue? peter: it is struggling. it's not just apple. the smartphone market has not been growing the way it once did. it has been shrinking now for a time and that speaks to the innovation that all of these companies are bringing to the market. you have not seen the kind of breakthrough innovations with products that you did with the original iphone. other companies, when you look at company is trying to develop
phones, they have been struggling to stand out. people have devices they are comfortable with. caroline: great to get your expertise. bloomberg technology is up next in the u.s. they will dive much deeper into this news. this is blumberg. ♪ ♪ emily chang in san francisco, and this is "bloomberg technology." coming up, twitter sets a rule that might hide tweets from president trump himself. plus, a revelation from bloomberg news that huawei employees worked with the chinese military on various projects.