tv Bloomberg Bottom Line Bloomberg April 14, 2015 2:00pm-3:01pm EDT
mark: from bloomberg world had court is new york, i mark richt in. -- world headquarters in new york, i'm mark crumpton. this is "bottom line." to our viewers in the united states and those of you joining us from around the world welcome. we have full coverage of the stocks in stories making headlines on this tuesday. su keenan has details on u.s. oil production growth. laura reports on the $74 million stock award. peter cook brings you the senate
hearing on the potential congressional role in the iran nuclear deal. first, let's get you to the top stories we are following. a good day for jpmorgan shareholders. profit climbed 12% in the first quarter, beating analyst estimates. an increase in trading revenue the first time since 2010. higher volatility helped drive the quarter. investment banking fees also saw a double-digit increase. good news for wells fargo. it beat analyst estimates thanks to lower interest rates. that encouraged more barbers to buy homes or refinance debt. wells fargo was the nation's largest home lender and most valuable u.s. tank. the imf says the stronger dollars helping japan and the euro area but taking some steam out of the u.s. recovery. the imf kept its prediction for
global growth unchanged at 3.5%. the imf is depicting a role economy being shaped by swings and currency and the drop in oil prices. >> the price of oil has helped. this is leading us to have higher forecast for the eurozone. the main risk we saw last year was the risk of recession in the eurozone. that has not disappeared but is much smaller than it used to be. mark: retail sales in the u.s. rose less than forecast last month but still the first gain in four months and the biggest advance in the year. overall, figures show americans are being cautious with their wallets, even with savings from lower gas prices. it may take a bigger boost and wage growth before we start loosening. inflation has risen at the home sea level.
the producer price index up 2% in march after falling half of 1% in february. -- up .2% in march. that's a look at the top stories we are following on this tuesday. republicans and democrats will vote today on legislation that would give them a say over the iran nuclear deal. the white house worries a bill could jeopardize the ongoing talks but the administration is holding inspire for now. -- holding its fire for now. peter, good to see you. will congress derail this deal? peter: the best chance is no. this bill -- bill corker said he was closing in on this agreement over a compromise here. it looks like based on the economists from the white house, this compromise may be watered
down enough that congress can have it say. the caveat is that there is still this meeting, this vote today. there could be offers amendment's offered up that could alter this legislation. the white house is holding its fire. >> if we arrived at a place where the bill that is passed by the senate foreign relations committee with bipartisan support is a vote to vote later on commercial sanctions and not the decision about whether or not to enter into the agreement that would certainly result this result some of the concerns we've expressed about the authority exercised by the president. peter: the reality is they would prefer no legislation from congress that could jeopardize the ongoing negotiations with iran. the white house sees the writing on the wall.
there will be something democrats and republicans will support and they can live with the currently which. does this bill change in any way. mark: the senior democrat senator corker seem -- and senator corker seemed to have reached an agreement. peter: there will be a time period where congress can review this and then vote on a resolution. the time window here has been shrunk 60 days to 52 days. they can live with this. mark: peter cook joining us in new york today. thank you so much. bill: service secretary of defense under president clinton from 1997 to 2001 and is now chairman and ceo of the cowen group.
welcome back to "bottom line." last week, the chair of the senate foreign relations committee said he is within a few both of being able to override that threatened presidential veto. does today's compromise make an overall -- make it overall more or less likely? >> it depends on what the agreement is. frankly it looks as if there is something in the works to make it bipartisan. even so if they were to pass it today and it appears they will with the next two days the question becomes should be brought to the floor for a vote prior to the time that this agreement is worked out in detail? that would be a mistake if they bring it to the floor. it's open to amendment, it could be 50 amendments. any number of changes made that would jeopardize it. hold the fire.
congress has an important role to play but don't jeopardize the agreement before there is an agreement. it's important that they hold back and not seek to enter post congress at a time -- mark: does congress have the authority to require its approval before and iran nuclear deal reaches the white house? >> that's open to question. in terms of they certainly have the power to withhold the lifting of the sanctions imposed by congress. they have power and that power can be used at some later time. should they try to exercise it now and what would that do to the negotiations underway? i don't think congress should do anything to jeopardize negotiations while they are underway. they certainly have a voice certainly have used. the administration is working closely trying to satisfy what ever questions there are and there are legitimate questions.
from my perspective, the objects of the agreement. we don't know yet how many separate views will be held by the -- centrifuges will be held by the iranians. we don't want to be seen as having been the party that rejects the agreement. then we end up with the worst of all worlds. we don't see exactly how this is going to play out and satisfy ourselves i think we look as if we are the ones who pull the plug on this and we end up with no sanctions -- we've seen how russia has moved in with proposing to sell the antimissile sale. there is a lot that can be done to jeopardize this. if congress were seen as the ones to reject it, the sanctions come off and we have iran building a nuclear weapons capability with no sanctions, no inspections. mark: the new york times
reported last week the director of the cia told an audience at harvard that iran's fragile economy is the driving force behind a potential deal. how bad is iran's school situation -- fiscal situation? with the lifting of sanctions be the catalyst for a resurgent economy in iran? >> is by virtue of the sanctions . yes, their economy is in trouble. that coupled with the drop in oil prices has put a tremendous kink into the economy of iran. by lifting the sanctions, not initially as the iranians are saying -- if that were the case i would walk away from this agreement in a nanosecond. have to be gradually lifted depending on what the conduct of the iranians are. i don't think we can trust iran.
they shown that you cannot trust them. they have to earn the trust. they will earn the trust by showing the are committed to an agreement that restricts their ability to break out into nuclear weapons capability. if we were to lift those immediately the money flowing into iran would give it the instant capability that would only jeopardize much of the stability in the region. mark: vladimir putin is reportedly approving the sale of the surface to air missile system to iran. does this kill the nuclear deal with iran because the system might be used to protect iran's nuclear facilities? >> this would not be a breach of the agreement. as far as the framework agreement is being negotiated. what it does show is that president putin is up to causing as much trouble as he can under the circumstances.
if this were seen as a dealbreaker by members on the hill putin could claim congress has broken this thing up and congress would have to bear the burden of walking away from this deal. iran would win in the sanctions come off. they get there as 300 missile and no inspections. -- their s300 missile and no inspections. mark: mr. secretary, always a pleasure. thank you for your time. coming up, america's highest-paid executives. how buying those coleman camping gear and crockpot slow cookers could and $74 million more to when executives paycheck -- add $75 million more to one executive's paycheck. ♪
in an interview with matt miller , tom ridge says he is endorsing jeb bush for president. >> i clearly believe jeb bush is best qualified to lead this country. did an exceptional job in a difficult state. i appreciate the fact that he is looking to solve national problems like immigration. i appreciate that kind of bold leadership and i look forward to supporting him. mark: hillary clinton is on the campaign trail. she is touring a commuter college and will participate in a roundtable with students at and educators. she is scheduled to visit a fruit investable wholesaler tomorrow where she will hold another roundtable with members of the small business community. more on the clinton-bush campaigns at 5:00 p.m. on "with all due respect."
let's get you the other top stories we are following on this tuesday. southwest airlines is not giving you more like will give you more seats. southwest on billing the whitest seat in the coach cabin of any boeing 737 in the net states. more than a half inch of extra with. -- extra width. an airline baggage handler that decided to take a nap will go up in a cargo hold with the plane in the air. the man had dosed off in the cargo hold of an alaska airlines jet print when the plane took off for seattle from los angeles, he started banging on the walls.
the captain declared an emergency returned to seattle and the man was found underneath. the man was taken to a hospital and was released. spacex faces stormy skies as it tries to launch a shipment of space station groceries. the unmanned rocket is set to lift off from cape canaveral. the weather odds are 60%. spacex homes to transform -- hopes to transform the rocket business. this will be the third attempt. coming up at 2:20, lauren marsonn --
mark: the man who cofounded the company that makes yankee candles is on track to become the one of the highest-paid executives in the united states. jarden gave him unrestricted shares of $74 million, putting his total reported pay for 2014 at $96 million. jarden recorded the stock award as having no value. laura joins means to be appeared how did we find this out?
lauren: i have to credit the team for finding this. they went beyond the compensation table where people tend to look at executive pay mark: they stop there. lauren: exactly. they found this grant that was not accounted for, which is pretty uncommon. mark: no doubt. why did the county a company for the award this way? laura: if the performance conditions tied to that award are in probable, they don't have to value it. jarden said these revenue goals that they set were indeed improbable allowing them to value it at zero. mark: i don't mean to make light of it, but it doesn't seem
improbable. tell us about jarden. lore: at first glance, you don't recognize it. -- laura: at first glance, you don't recognize it. coleman camping gear, bicycle playing cards -- mark: you've seen all those logos at some point. laura: exactly. all familiar brands and they have tons of them. they are the type of company that has acquired these brands overtime and they turn them around and make the more profitable. mark: what do their financials look like right now? laura: they have about $8.3 billion in revenue last year. earnings per share of 270 -- $2.70. they are targeting $10 billion in revenue and four dollars earnings-per-share.
that is the lay of the land. they need to make these goals by 2018. mark: are the performance conditions achievable? laura: we have a bunch of analysts who say they are p for possible by 2018. that's why this is a little. -- a little odd. the bloomberg estimate for earnings is already at $4.14 for 2018. mark: as the company done this before? laura: in 2010, they did the same type of thing. they said the performance conditions were improbable and were vested in 2013. mark: you talk about members of your team who did the digging. you guys and spoke to the vice
president at perry and advisers. he said this approach appears to allow a company to skirt the compensation table disclosure and does not strike me as the best practice. did we hear from jarden? laura: they declined to comment on the treatment, the accounting treatment of the award. they did comment on the long-term aspirational goals they like to set for their ceo -- for their executives to incentivize them. that is not an uncommon practice. the idea of saying something is improbable and therefore evaluating that award at zero that is the more uncommon practice. mark: we begin this by talking about is not one of those things you look for at first glance.
you are not looking for this. was there anything that came to the team and said a let's dig deeper or did they find a needle in a haystack? laura: there are other tables that disclosed the spirit we have smart people who know where to look for this type of thing. mark: the story is on bloomberg.com and the bloomberg terminal. the 74 million dollar award that jarden values at zero. retail sales in the u.s. rebounded in march but not as much as expected. david strassburg will offer his reaction and outlook. stay with us. ♪
mark: welcome back to the second half-hour of "bottom line." thank you for staying with us to list check the top stories we are following on this tuesday, april 14. a check on the price of crude oil and close of floor trading. crude trading at 53.33. drug sales up 3% at johnson & johnson. j&j looking to revitalize its pharmaceutical lineup.
it's popular hepatitis c and blood thinner medicine spacing competition and the strong dollar is hurting j&j sales overseas. it's a record the irs must hate 54 companies in the s&p 500 partially exempt from corporate taxes more than twice the number four years ago. the big reason, inversions. the u.s. corporate tax rate of 35% is the highest in the developed world but few pay that rate. ge developing a science documentary series that will be shown on the national geographic channel. the series will feature ge employees and will explore science and technology subjects. among the directors who have signed on, ryan howard -- ron howard and angela bassett. retail sales in the u.s. rose in march, but not as much as
expected. purchases at retailers rose 9/10 of a percent last month, the first gain in four months but less than economists had forecast. david, welcome back to "bottom line." was this a surprise for you as well? david: march and april are always tough because you have an easter shift. this year, it came much earlier in the month. that helps. last year, we had the cold january and february. march was a nice month. it's a lot of moving parts here. it was a tough one to get. mark: unemployment rate at 5.5%. gas prices averaged $2.41 a gallon. why is the american consumer soak up cautious? david: the area that was pretty
strong is restaurants. when people have a few extra dollars, it's the first place they want to go and have fun. it's an immediate decision. the lower oil prices is mostly in restaurants. mark: americans in spending on dining out just over grocery store sales for the first time ever. are you surprised that the millennials are shifting americans eating habits? david: i guess there is a lot of that going on. restaurants are better today. the opportunities out there are amazing. the offerings are so much better than they ever have been in the past. it makes it more enticing. mark: demand rose in nine of the
13 major retail categories last month. where did we see strength and weakness? david: building products, homes remain strong. electronics was weaker, perilous ok. -- a peril was ok. -- apparel was ok. the best thing you can do with retail sales is look at it over a two-month period. the shift can be perplexing. i'm confident -- it's hard to get the adjustment on that. mark: are you in the camp that the weather had something to do with this? david: i think it is. it was just as bad last year. mark: we are talking about the northeast. wasn't that bad around the rest of the country. david: it went all the way to
the midwest. in that perspective, it was worse last year. march on the margin was a little worse last year. when you start parsing whether you are missing the broader sense of what's going on out there. you have a much better employment number but wage growth is lagging. what everybody is watching is these wal-mart raising wages target raising wages how is that going to play -- are those low-end wages that everyone is talking about pushing higher going to drive wage growth acceptable wage growth? mark: if the jobs market continues to improve but the wage growth continues to lag, won't demand continue to be sluggish? david: it will be. did walmart really change the course of wage growth with that announcement?
that is really going to be the decision -- if you're looking at the economy, that's the real decision to make your. mark: may be our frame of reference is to narrow? david: absolutely. to be successful, you have to look out and see what's going forward. it will get better -- it has to get better based on everything we are seeing on the lower end. mark: is it better enough for the federal reserve officials to hold off and say we will not raise rates in june but maybe raise them in the fall? david: that is their conundrum. things are still not good right now. it depends on your level of optimism. david: david strasselive to mexico cit report and get details on the imf's growth or cast of the
mark: welcome back. it's time for today's latin america report. let's go to our elf nancy financiero partner in mexico city. hosea: thejose: the imf is out with his growth forecast report and is not great for let america. it will grow by the slowest rate since 2009. the region will grow -- the report also projects that brazil will contract 1% this year. the worst since 1990. weak commodity and oil prices low consumer confidence in brazil and a deepening economic
crisis in venezuela. mexico will open its first passenger car factory -- the world's largest automaker will spend $1 million building the plant -- $1 billion building the plant. it will be located in central mexico and will start operations in 2019. mark: jose jordan spieth is basking in the glow of his masters tournament victory today. he told us he is ready for the next challenge. >> the ultimate goal is to become number one in the world. really about the world right now. this is a giant step towards
mark: welcome back. let's get you the top stories we are following. the obama administration signaling it would exempt legislation giving congress authority to review any nuclear deal with iran. this after the republican chairman and top democrat on the senate foreign relations committee changed the measure. bob corker told bloomberg tv his committee may vote today on a bill that would give congress 52 days to review and process late
-- possibly reject an agreement. congressional oversight actually helped the negotiations. >> most of the negotiators felt congress ultimately was going to play a role. we know that strengthened how the administration -- strengthened the administration's hand. this puts in place a process the administration is still fully free to go ahead and complete its negotiations. mark: president obama will become the fourth president to visit all 50 states while in office. the final state, south dakota. the president will deliver the commencement address this year at a technical institute in watertown, south dakota. another agreement between amazon and a big book publisher which has agreed to a multiyear deal covering the sale of print and e-books. in past deals, the sticking point has been the cost of
digital books. coming up scarlet fu is on the markets. later on street smart, tom ridge. time for the commodities report. su: it looks like we have an early rally with legs for now. the fourth day higher for new york traded oil and the government out with its latest stats on the growth in europe's oil output. it could be slowing could be leveling off by 2020 but the bullish note is that by 2029, u.s. exports will exceed imports. we are paring earlier gains. the market is starting to -- it doesn't mean the supply glut is going away but the shale boom
that has beefed-up u.s. oil production to a record could be slowing down. a rising oil output likely keeps brent crude below 80 for the next five years. put it all together pnc's capital analyst is saying the supply demand balance is becoming a lot more tighter than people expected back in december and january. imf's comments predicting oil to its low for a while. >> we would like to reverse trend quickly. our best guess and the guess of the markets is it will be quite a while. the reason the price of oil collapsed with suggest it would stay low for a while. su: prices may bump up but not going way back up.
we are seeing some green on the screen here. crop futures but not so much for gold. speculation that a small but expected gain in u.s. retail. gold is down for the past six sessions. bloomberg futures are the show stealer here, falling to a three-year low in chicago. that is a proxy for the house again construction market. mark: american consumers sending automakers a clear message, build trucks. trucks have outsold cars in 24 consecutive months. matt miller is in for alix steel. he joins me now.
matt: the ford f series is the best-selling vehicle in america for 37 years. i was surprised to hear how much of these carmakers in sales is trucks in the u.s. 67% of all the vehicles they sell our trucks. even toyota, more than half of the vehicles they sell our light trucks. it's interesting that they even bother making anything else. they are not quite like enough. the big three carmakers don't make enough super compact or super light trucks to satisfy u.s. demand. kevin put out a report on that this morning saying the european automakers will get a jump on the american automakers here at home because they make smaller trucks and smaller, more compact crossovers. mark: luxury market, mercedes
versus bmw. matt: i know you've always been a fan of mercedes-benz. i've been interviewing a lot of mercedes-benz executives. they've been having banner months here in the u.s. i thought when we got the global numbers, they would be heads above the rest. bmw held its lead. bmw sold 451,000 cars worldwide in the first quarter. audi sold 438,000. it's a very tight race. i will have kyle stock on the program to talk about is this good for the luxury market. selling the most cars should not matter to them. i don't want to buy a car if it's the one i see all over the place. i want a bit of exclusivity. mark: that interview with tom
ridge he came out today through his support to jeb bush. governor bush is not even officially declared yet. matt: we will show you that exclusive interview today. as far as republicans i will throw my support behind a governor. he was a governor obviously. scott walker was a governor too. he says "i choose jeb." mark: thank you so much. stay with us. scarlet fu will have a check on the market movers on the other side of the break. "bottom line" on bloomberg television continues in just a moment. ♪
mark: get the latest headlines at the top of the hour on bloomberg radio and on bloomberg.com. that is it for this edition of "bottom line." thank you for joining us. on the markets with scarlet fu is next followed by "street smart" with matt miller. scarlet: it is 56 past the hour. bloomberg television is on the markets. we have an hour to go in the west trading day. the dow has found some support
come up by 50 points. thanks to gains and oil companies and jpmorgan. the dollar weakened and treasuries rose. a smaller and expected rebound -- than expected rebound. shortselling is not the easiest strategy to the blood. lately, it has not been profitable -- very profitable him either. david is not deterred. he has just published his guide to shortselling. he joins me now to discuss. let's start with the idea of why hasn't been so hard to sell short stocks? david: when you have able market like this, it's not an ideal time to pick shorts. stocks tend to rise in a group. to put some numbers on it credit suisse has an index that tracks short focused hedge funds
down 69% since the end of 2008. another one, 71%. it's been a rough stretch. mark: the fact that goldman sachs -- scarlet: the fact that goldman sachs is publishing these short-sellers, what does that say about what the smart money is doing echo david: they said that they were reacting to interest from their clients. equity valuations right now are arguably the highest they've ever been in the last four decades outside of the tech bubble. a lot of people are thinking now is the time to start noticing in on highly valued stocks or stocks right for some kind of internal risk. responding to their clients -- mark: isthey have a pretty
complicated methodology. the higher the valuation on multiple different metrics, that will help add them to the list. one interesting method they use -- goldman has a list of the most shorted stocks they keep in an index. that index has outperformed the market over the last fears, where is another index they have -- over the last few years. by under weighting them or avoiding them, they are signaling -- that index has trailed the s&p by 12% since the beginning. they said focus on that and they have models that indicate what stocks have internal risks. mark: scarlet: give me some names. >> there are 19 stocks that need
matt: 60 seconds -- 60 minutes left in the session. energy companies rallying with the price of crude oil. and we are counting down to earnings from csx and intel among others. we will get sam druckenmiller's advice for investors. and former homeland security secretary tom ridge tells us who he thinks should be the next president of the united states. "street smart" starts right now.