tv Bloomberg Bottom Line Bloomberg March 26, 2015 2:00pm-3:01pm EDT
mark: from bloomberg headquarters in new york i'm mark crumpton. this is "bottom line." to our viewers here in the united states and doesn't be joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines today. -- and those of you joining us from around the world, welcome. peter cook follows late developments in the iran
nuclear talks. we begin in paris where this stunning developments -- >> good evening. mark: what are the latest details so far? >> totally stunning stuff. it was quite dramatic. every line out of his mouth was breaking news. it is the pilot that did it. when the main pilot when out of the cockpit, he locked him out. the minute he was gone, he put the plane into descent. mark: were there any indications that the copilot would do something like this? >> no and that is what everyone is trying to figure out. he's a 28-year-old german citizen from a town an hour
north of frankfurt. he had little experience. there's nothing that would indicate why he would do such a thing. the entire world's press corps is descending on the town he is from. prosecutors have searched his house. hopefully we will get some clues. at the moment, no one has any information. mark: in the united states pilots are never left alone in the cockpit. does europe have the same rules? >> they don't. in the u.s., if the main pilot -- if one of the pilots leaves another member of the flight crew comes and sits down with the remaining pilot. this is not because they expect
the pilot to fly the plane into the mountain. it's in case they got their head or have a heart attack. just so there is someone there in case something happens. it is not the rule in europe. it is a guideline that airlines follow but not a requirement. today, one airline after another has been announcing that they will start enforcing the rule. mark: what is the next step in this investigation? >> the investigations go on. there are several investigations. in france, the air traffic authorities have begun their own investigation. they moved slowly and don't tend to diebold information. be-- diebold information. -- diebolddivulge information. they have to try to figure out what is the story behind this
pilot. mark: thanks. let's check some of the other top stories for this thursday. saudi arabia and its allies have begun airstrikes on yemen. bombing positions held by shiite rebels who forced him as president to flee. the rebels are linked to iran, a shiite country. the saudi's want to stop the spread of iranian influence on its southern border. nine other countries have joined the coalition. the united states is providing logistical and intelligence support. the saudi ambassador to the u.s. outlined the goal of the attacks. >> we will do whatever it takes in order to protect the legitimate government of yemen from falling. mark: oil surged after the saudi attacks, up as much as 6%. west texas intermediate trading above $50 a barrel. another sign the u.s. jobs market is holding a.
first-time claims for unemployment benefits fell last week to a five-week low. the sustain the level of applications shows employers are holding onto workers and that coincides with more hiring. leon cooperman is telling clients his firm has received a subpoena from the u.s. attorney's office in new jersey. seeking information on trading and certain securities. in a letter to investors, he wrote "these inquiries are very early stage and no one at omega has been accused of any wrongdoing." he says omega is cooperating with oath agencies. -- both agencies. juries are beginning a second day of deliberation in the gender bias lawsuit. an attorney urged the jury to let the defendant know that everybody deserves a fair and equitable workplace. the lawyer called her a failed
investor seeking a big payout as she headed out the door. turning now to markets, barclays is out with its global outlook. the head of research joins me from the firm's office in new york. welcome to "bottom line." you write that the euro region and japan will benefit the most from lower oil prices and the stronger dollar. how so? lyric: unlike the u.s. where they have a stronger currency, the currencies there have weakened quite a bit. neither are really oil producers. you have benefits there. there's other things going on, especially in the euro area. we finally have credit flowing. the ecb has just started a massive qe program which should be very market supportive.
the ducks are lining up for the euro area. mark: what impact has that surge in the u.s. dollar had on the global economy? how much upside potential does the dollar have right now? larry: a lot of people are talking about currency wars. we see this as constructive. it ends up shifting growth and inflation from the u.s. to places like the euro area and japan which are facing deflation threats and need to grow more than the u.s. does. as far as how much more, it has a little more to run. we see more opportunity for the dollar to appreciate against the euro and the end. -- the yen. mark: how much support is the current environment giving to them? >> when you put all this together, the plunge in oil, the
strong dollar, you come up with a still very benign environment. one of the things to keep in mind is it is a monetary policy environment a lot easier than we thought it was going to be a few months ago. a lot of people did not think the ecb would do qe. no one thought they would do over a trillion euro. that is huge. when you combine the low bond yields with the anticipation of the qe and the low inflation that is a pretty supportive environment for the financial markets. that is the kind of environment that has been in since the beginning of this recovery. mark: barclays out with this global outlook today. some countries and some regions have not benefited from the recent market changes. who was underperforming right now? larry: there are winners and losers. countries that depend a lot on oil revenue and half political
issues like russia and venezuela. there are a lot of countries in latin america they tend to be big commodity exporters and there is a lot of political issues in several countries. you are starting to see capital outflow from latin america. that area is not doing well. the u.s. benefits in general from low inflation. the low inflation strong dollar also keep the fed at a. -- at bay. the u.s. is a little more mixed because of the strong dollar. while lower oil prices helped the u.s., the u.s. is also becoming a huge oil producer. mark: because of lower inflation and that strong dollar, can the fed now be cautious as opposed to patient? larry: i think so.
what the fed is facing here is a labor market that is the strongest it has been in over 20 years. we are getting payrolls 250-3 h -- 250,000-350,000 month. we have inflation moving down. they want to get off the zero bound because this economy doesn't need zero rates anymore. they would like to get it off zero so when the next problem hits, they can cut rates. there is certainly going to be no hurry. when they hike rates, it will be more benign like the end of qe because everybody -- there is no inflation threat at the moment. mark: what should investors portfolios look like right now? larry: buying u.s. treasuries under 2% is not going to make
you any money but serves as a good hedge in a portfolio that has lots of stocks and corporate bonds. the u.s. stock market has not had a correction in a few years. it's nice to have the bonds in there. i would be venturing more internationally than before. for years, the u.s. stock market was outperforming -- the euro area and japan stock markets have been performing much better than the u.s. and that will continue for a while. mark: larry always a pleasure to have you on. thank you for your time. up next john kerry returns to switzerland as negotiators in the iran nuclear talks hope to strike a deal. peter cook is following developments. he will join us with the latest when "bottom line" returns in a
mark: welcome back. a stunning revelation from france today. prosecutors say the copilot of the german plane that crashed tuesday killing everyone on board locked the pilot out of the cockpit and appears to have deliberately clashed -- crashed the jet. this in the pilot tried to break down the door as the plane was in the rapid descent from 30,000 feet. -- 38,000 feet. >> in the selection of all pilots, the training of all pilots, the qualification of all pilots and the work of all
pilots has not been touched by a single tragedy -- this single tragedy -- have all been hashed by this single tragedy. mark: he was a 28-year-old citizen -- german citizen who wanted to be a pilots into was young. he joined the airline in september of 2013 and had more than 600 hours at the controls. iraqi troops have lunch the final phase of an offensive to recapture tikrit. the move comes hours after the u.s. launched airstrikes on the city. fighting intensified as iraqi troops in special forces moved toward the city center. coming up the lamarck's best will a marks -- the latin america report live from mexico. at 2:45, beauty and personal care products and the story of
the survival of the fittest. it is crunch time for the iran nuclear talks. john kerry and his iranian counterpart or in switzerland trying to hammer out a final deal. it would limit iran's nuclear program in exchange for an easing of international sanctions. peter cook is keeping tabs on the talks and he has the latest from washington. do we have a deal yet? peter: we do not have a deal just yet but diplomats and to conclude a framework agreement by this sunday ahead of the formal march 31 deadline. that is the best case scenario. secretary kerry resuming talks today with his iranian counterpart at the palace on the shores of lake geneva after meeting with kerry, he says talks are moving in a good direction. he says the entire puzzle has not yet been fully assembled. one sticking point -- the
technical terms are ironed out ahead of a final july 1 deadline. you was officials are insisting the details must be made public so members of congress israel come other nations can see for themselves the terms of the agreement. the duration of any agreement, the pace of sanctions relief for iran, access for inspectors and limits on iran's ability to conduct research in the element going forward. while they are moving to a deal, negotiating -- that's where things stand right now. they are not on their way to switzerland. there could be a deal in the works. we have heard in the last little bit that the iranian president has been conversing with some of the leaders from those other countries about this agreement. he is personally engaged here in these final days. mark: what is the possibility we
could see another extension? peter: there is always a possibility. both sides have said they don't have any plans at this point to go beyond this march 31 deadline. it seems unlikely it looks like this is indeed the crunch time for these talks. there's always the possibility of no deal at that point and then the question going for it the admin's rations as that would be a bad situation -- administration says that would be a bad situation. mark: peter cook, thank you. up next, we will take a closer look at the crisis in yemen. the historical context of the current conflict and what the latest developments mean for counterterrorism efforts in that region. ♪
mark: welcome back. saudi arabia and its allies have resumed airstrikes on yemen for a second night. jets have already bombed locations in the capital including the airport and the country's northwest. willem marx has followed the story for years and joins us now with more on this story. what has prompted this intervention from saudi arabia? willem: the primary thing is security concerns. they are worried about their own border. it's under the control of the rebels. you have to think about their support for the now exiled president. they have long supported him and his predecessors. they want to maintain control over the situation in yemen. mark: who are the rebels? why are they doing this?
willem: they are a broad coalition of parties at this point but this started out as a movement in the northwest of the country. they are an offshoot of shia islam led by a charismatic tribal leader. they complained about their treatment as a minority group back in 2005, responding with violence. that escalated over the years. the president is out his successor now out. mark: what about the regional conflicts in this area? is that stoking and regionalism or tribalism? willem: these rebels are supported by aaron. -- by iran. the have all said we will intervene, especially saudi arabia, the home of islam.
something people really care about in that region. mark: talk to me about the saudi influence in this region and in this fight. what do they want to see happen? willem: the saudi's are the major elephant in the room. they control the arabian peninsula and are the most powerful military in the gulf. they want to make sure that the border is secure and they can maintain -- mark: able to move for the new king of saudi arabia. willem: it's not really for him to stand up and say this is what i can do. he has a 35-year-old defense minister. this is a big step. mark: what has happened to the yemeni president? willem: u.s. state department saying they are not quite sure where he is. he has fled. mark: talk to me about the u.s.
and the reputation or what the u.s.'s vested interest is. willem: to have had a long-term relationship with yemen authorities. they conducted airstrikes against the al qaeda group in the arabian peninsula. mark: is this a failure of u.s. foreign policy? willem: they have had to withdraw from yemen. now, the question is -- they say they are providing logistical support. what kind of support can they offer? certainly nothing on the ground. mark: willem marx with an update on yemen. u.s.-iran nuclear talks. we will discuss how close the sides may be to an agreement. "bottom line" continues in just a moment. ♪
mark: welcome back to the second half-hour of "bottom line." i'm mark crumpton in new york. thank you for staying with us. let's get you the top stories we are following on this tuesday. let's begin with a check of the price of crude oil and the close of floor trading. new york crude is up about 4.4% trading at $51.39. french prosecutors hate was not a next and that brought down the germanwings airbus. the copilot locked the pilot out of the cockpit and then deliberately flew the plane into a mountain.
that was the conclusion after investigators listen to conversations and other sounds from the cockpit voice recorder. they heard the pilot tried to break down the cockpit door as the plane was in its rapid ascent -- descent. diplomats in switzerland say negotiators want to conclude a framework agreement over iran's nuclear program by march 29. robert einhorn joins me. welcome to "bottom line." thank you for your time today. all this information we are hearing today about a possible not a deal, but some sort of agreement by marched when he what should a framework look like? robert: in has to deal with all the critical elements of the deal. it is not going to flesh out all the technical details but all the critical nature issues need to be resolved. the actual deadline is march 31,
tuesday, although some of the diplomats may wish to finish earlier. it should not be a foregone conclusion that they will reach a deal. as peter cook reported there is some important issues left unresolved and in any negotiation the last issues can be the hardest to resolve. mark: what is iran's endgame? sanctions relief or an attempt to rejoin the community of nations? robert: the principle is sanctions relief. the sanctions have had a devastating impact on the iranian economy. reasonable iranians understand that the economy cannot get back on the right track unless sanctions are lifted. that is their number one priority. mark: francois hollande spoke with the iranian president today.
his office said by e-mail that he urged "and durable, robust and verifiable record." is that what the iranians want as well? robert: i think they want an agreement that helps them and their isolation. and gets rid of sanctions as quickly as possible. the question is whether they will overreach. the supreme leader had suggested that all sanctions have to be lifted at the outset of any deal. that is simply unrealistic. the position of the u.s. and its foreign partners is that the easing of sanctions has to be phased as iran meet its obligations under the deal. mark: today, we heard that francois hollande spoke with the iranian president and we are receiving word that the russian foreign minister will join the
iran talks on march 29. what is the significance of that? robert: other foreign ministers other than secretary kerry were planning to come to geneva if an agreement seemed reachable in the near future. perhaps that is a positive sign they are making progress and they can anticipate an agreement on this framework. mark: last month, you wrote an op-ed piece in the new york times which read "banding in richmond and dismantling iran's existing enrichment facilities would be the best negotiated outcome but such an agreement is not obtainable." as we approach the deadline have your views changed? robert: no. it has been clear fromor quite some time that banding infringement
-- banning enrichment was a bridge too far. they have become totally committed to it. no one a class -- no one across the political spectrum would except such a deal. a good agreement can be achieved without dismantling the nuclear infrastructure. permitting a limited but heavily monitored enrichment program. mark: one of the things i noted i believe iran was one of the original signatories of the nuclear nonproliferation treaty and therefore they believe they have a right to peaceful nuclear energy. is that correct? robert: if they are a compliant andnpt party. the problem is the international
atomic energy board of governors and the un security council have found them in violation of the npt obligations. they need to demonstrate convincingly to the international community that they are in compliance and have earned the right to pursue a civil nuclear program. mark: does know their in the middle east and johnny deal with iran -- hinge on a deal with iran? >> it's a very important that iran demonstrate its peaceful intent and make it clear to its neighbors that it is not going to pursue nuclear weapons. if there is any doubt about that on the part of some of the neighbors, they may have an interest in acquiring indigenous nuclear capabilities. mark: thank you for your time
mark: welcome back. it is time for today's latin america report. let's go to our partner in new mexico city. good afternoon. >> good afternoon, mark. lots going on here in latin america. the central bank's rate decision in about 20 minutes -- we expect them to hold rates at 3%. interest rates are at an all-time low because the government is trying to boost private consumption and inflation is well under 2% come the objective of the central bank. the central bank of mexico usually -- we expect the banks to hold much like the fed did a
few weeks ago. in colombia, a war heating up between traditional companies -- traditional taxi companies and uber. in some cases, this confrontation has turned violent. uber gained clients after entering the market in 2013 because their cars are seen as safe in the crime-ridden capital. these are the top business stories in latin america. back to you in new york. mark: what are you all working on today? >> the top story in our paper today is the federal government slashing the budget for 2016. the drop in oil prices has had a dramatic impact on government revenues and mexico.
mark: a stunning turn of events in the investigation of the german plane crash. french investigators say it appears the 28-year-old copilot deliberately crashed into the alps after locking the pilot out of the cockpit. the ceo says he is stunned and does not know why he did it. he says there is no sign of a terrorist link and the pilot was deemed 100% fit to fly. he says he interrupted his training for months but cannot say why.
lulu lemon getting a boost from the yoga craze and the harsh winter. the retailer posted fourth-quarter results that topped forecasts. holiday season shopping help its results. lulu limits as oversized sweaters and puppy codes were hot sellers during the cold winter. rosa second-biggest sporting-goods maker is feeling the need for speed. i do does to catch up with nike. the copy says it will rush hot products to stores faster -- a deeddidas trying to catch up with nike. reg norman starting his own asset-based that lending fund. it will be called the great white shark opportunity fund. he was known as the shark while winning 91 tournaments. the fund will start with --
march madness resumes tonight. we are down to the final 16 teams. number one kentucky takes on west virginia. the wildcats practicing in cleveland. notre dame place wichita state, wisconsin plays north carolina and xavier plays arizona. john donahoe is in first place with 87 points. tied for second with 85 points, jimmy dunn and bruce richards. you can follow along on the bloomberg terminal or online at bloomberg.com/charitybracket. coming up scarlet fu is on the markets with a look at dividends versus growth stocks. on taking stock with pimm fox ralph sampson weighs in on march madness and the sweet 16.
we asked several leaders in technology for their take on the advertising industry and whether traditional advertising still matters. >> advertising is more relevant than ever but it needs to be driven by brands first. we need to rethink how we buy advertising. it can't be on a quarterly campaign basis. in that way, advertising is more relevant and important than ever. >> there is room for traditional advertising in today's world. it's a great -- you have to figure out what the customer sees, where they will see it and what they will respect. >> we don't have an advertising
agency at the moment. we are more focused on distribution. how do you optimize your presence on app stores and do good search engine optimization and get your brand recognized on those platforms? it's not about being on banner ads. it's more about getting viral engagement. >> traditional advertising is one of many tools we we use. we advertise in cinemas and radio and tv. we have a story about music we want to tell the whole world. secondly, we fund a lot of our product through the sale of advertising. it's important that we talked to traditional advertising buyers and help them reach an audience of young millennial's. >> we have two sets of customers. the consumers and the drivers.
with most effective with both those groups is word-of-mouth. we get a large proportion of our customers signed up because they refer friends, they use the refer can get 10 promotion. mark: procter & gamble maintains its lead in the beauty and personal care industry. that industry which is worth $405 billion getting a boost from rising incomes and growth in emerging markets. deborah aiken joins me now from london with more. thank you for your time today. you note that in the current beauty and personal care sector it is survival of the fittest. we mentioned procter & gamble maintaining its lead but it is narrowing. who is closing the gap? >> if we look at the top four players, procter & gamble's
number one. it had a 12% share last year. it has gone down to 11%. l'oreal has gained -- unilever gained 1%. the main loser would be a vonn at -- avon at number eight. mark: what is fueling the demand? >> three things. rise in disposable income in emerging markets. aging population and new populations, not bored and if we look at the mature markets, it's more about innovation driving growth. mark: which companies stand to benefit and which will be harmed by the currency fluctuations we are seeing? >> you can go back and we can have a look at what happened to cage.
he says of the european companies have been battling an overvalued euro for 10 years. it has made them strategically aware. they have reduced their portfolios and fine-tuned their cost base. it will be about these companies pushing the pressure in terms of regaining market share. mark: deborah aiken joining us from our london bureau. thank you so much. stay with us. "bottom line" continues in just a moment. ♪
at the top of the hour on bloomberg radio and streaming on your tablet and on bloomberg.com. that does it for this edition of "bottom line." thank you for joining us. on the markets with scarlet fu is next. scarlet: it is 56 past the hour. boomer television is on the markets. -- bloomberg television is on the markets. u.s. stock indexes attempting to stage a rebound from this morning's losses after three straight days of decline. we are not quite there yet. the momentum stocks are snapping back from yesterday's plunge. hanging in the balance is the year-to-date performance. the s&p 500 briefly erased its 2015 gain, but is now higher. the dow is still off by .6%. only the nasdaq solidly higher.
today's economic data on jobless claims and consumer confidence did top analyst estimates but the broader trend of late has been manufacturing and housing that fail to live up to market expectations. what does that mean for interest rates and how should investors position themselves? joining us for today's sector report is the head of microstrategy at green capital. investors stopped up on the safe haven stocks, utilities or health care. is that what you are is adjusting people go back to? >> we saw a rotation out of those and the nasdaq outperform the dividend stocks. the dividend stocks of underperformed by 3% year-to-date relative to the growth stock. after last week's fomc -- they will be slow and patient. it was shipped a bit more into dividend and out of whatever is
heavily reliant on a u.s. domestic growth story. scarlet: it is not playing out quite as people expected. we have seen this play out before. >> we get very psyched up and this will be the breakup quarter where we start putting up 5% gdp numbers and then you see the slow growth, little bits of mixed data. it has been a disappointing quarter across the board and the one problem we still have not made our way through is low job growth in terms of good, high-quality paying jobs. scarlet: i want to get your read on what we are seeing in the fixed income side. why are treasuries moving the way they are? the lack of demand for the five-year and the tenure. >> this year, people have accepted low rates. the german rate is almost negative. people are suddenly bullish.
at 190, everyone wants to be long. that is the dynamic we are dealing with. we have seen oil rise on the back of the events in yemen. one of the excuses the fed has not to raise rates is low inflation, maybe that starts triggering inflation. scarlet: lots of second-guessing going on. thank you so much. "street smart" is up next. ♪