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tv   Bloomberg Markets  Bloomberg  March 10, 2016 2:00pm-3:01pm EST

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david: from bloomberg will had chris new york, good afternoon. tracy: here's what we are watching at this hour. the european central bank could cut rates further but mario draghi says it is not likely. we will delve leeper -- deeper into the plan. david: a joint press conference between president obama and prime minster trudeau. when oil and gas come please ever let it happen -- >> we examine what matters most to top finance professionals. we will bring you up to speed. first, let's head to the markets desk where julie hyman has the latest. julie: things are not going great. i've been reading through some
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of the research in the wake of the ecb announcement and there doesn't seem to be a lot of confidence that what the ecb is improvell be enough to the economic fortunes in the eurozone. draghi sayingario today this will be the last of the interest rate cuts, that is giving investors concerned that the ecb has perhaps deployed all of its tools in one shot today. we are seeing stocks lower in the u.s. the s&p 500 has good lower and lower, bouncing along the bottom. dragging the most on the s&p. a combination of technology, microsoft and apple trading lower. it willme out and said be making its latest product announcement later this month. falling along with financials in a, with -- along with financials and exxon mobil falling as well.
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the month oft march, this is the second biggest swing in s&p we've seen this month. it was even bigger if you look at european stocks, the s&p 600 swung from up to present to down 1.5% by the time all was said and done. how does that contrast with what we've seen in europe? julie: the movements are similar in direction and magnitude. 600 -- here's the euro and the action we's all right right after the announcement of the stimulus and that during the press conference and afterwards. a big turnaround after mario draghi made those comments about these being the last of the interest rate cuts here. also, we've been watching sovereign debt to see how that has been reacting. a bump up in the german 10 year.
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a bigger increase in that yield then we saw in the 10 year in the u.s. a similar to decorate. it is a question of magnitude. -- a similar trajectory. tracy: thank you so much. now, we will check on the first word news this afternoon. mark crumpton has more from our news desk. -president obama is looking to nominate a replacement for antonin scalia a as soon as possible. he was asked about the replacement during a joint press conference with prime minster trudeau. president obama: it's important for me to nominate a supreme court nominee quickly because i think it's important for the supreme court to have its full complement of justices.
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i don't feel that i'm having to take shortcuts in terms of the selection. mark: the associated press reports the president may be narrowing his search despite calls for him to look outside is search for a nominee, he reportedly zeroing in on a group of appellate judges with a history of bipartisan backing. the president's approval rating at a three-year high, the highest rating since may of 2013. the president is doing better than his predecessor, president george w. bush who had a rating of 32% at this point in his second term. utah senator mike lee plans to endorse ted cruz for president. that is according to multiple media reports. lee will be the first senator to back cruz. he is expected to make the announcement in miami before
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tonight plosser publican debate. debatenight's republican . north korea is able to send an -- anonnect and although intercontinental ballistic missile into space -- kim jong-un has the capability to miniaturize a nuclear weapon and put it on an icbm today. the intelligence community senses the threat of such an attack as a low probability. i'm mark crumpton. tracy, david, back to you. david: the ecb pushed beyond expectations with its announcement of further stimulus they. while the central bank continues to ease -- further rate cuts. drghi: does it mean we can go as
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negative as we want without having any consequence on the banking system? the answer is no. a global economics professor from nit joins us from our bureau in boston. -- from m.i.t.. let me first say that this was a good meeting, a good move. i was particularly impressed by the fact that they introduced new tools. treasuries extending to corporate debt. this will help large corporations in the euro area. number two, equally important, they are coming up with a new program providing liquidity to the banking system to encourage the provision of new lending
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with an interesting twist. they will be rewarding banks were able to extend lending beyond some margin. they are doing some innovative, positive things. you say it was a good meeting but we have not necessarily seen the reaction we might have expected from all these new policy measures announced. what is going on here? >> i would identify two elements in that. comeirst element is that in addition to the policy decision, the ecb put together its forecasts and the new forecasts do create some concerns. the forecasts they put out for 2018 are for 2017 and much below the ecb's definition of price stability, suggesting the ecb has been behind the curve on easing. byy are trying to undo this
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improvising to make knowledge and they should have eased more early on. that ias some confusion hear in market views regarding the effectiveness of monetary policy and whether they have run out. mario draghi was absolutely correct in pointing out that they can keep using interest rates, but this has costs associated with it. the can adversely affect insurance industry. this is not something they should be doing without considering those costs. at the same time, he stressed in the q&a that they still have many, many tools they can deploy. i would have been happier if they had announced an even larger increase in the purchases. indeed expand the asset
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purchases much, much more if they want to. david: mario draghi nodding to the complexity of this. how does this play out across the block of states here? smaller states might have more difficulty playing out this program as intended. >> this is one of the unfortunate elements of the euro area not having uniform financial markets throughout. let me give you an example with corporate debt. it is only the largest of the that will benefit most from that. they did not extend the corporate purchases to banks. mistake thatwas a discriminates across -- against the smaller states. bankse member states have come as a bank that is something that will be available everywhere in the euro area. not all the member states have
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non-bank incorporated debt. they worried about conflict of interest that might arise. this is not something that should have shaded the decisions in this manner, but we've seen in the past how complex the situation in europe is when different member states have different economies and different instruments. tracy: where does this leave the ecb in terms of further policy options? is this it for the foreseeable future? >> absolutely not. very good meeting in my view, -- following the disappointment in december. judging by the inflation forecast they put out today, i think they will do more -- they will simply focus more on asset purchases and the provision of liquidity. we know that is effective. not concerned about the effectiveness. i just wish they would get it
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over with and do as much as needed to get close to 2% inflation, which right now is questionable. tracy: thank you so much. who better to talk about the ecb than a former ecb governing councilmember? coming in the next 20 minutes, canadian pacific ceo says there is not a favored son when it comes to profitable companies to acquire. who would also considered purchasing -- david: common ground on climate change. their pledge to reduce oil and gas emissions. tracy: natural gas is down 35% in the past year. we will look at how companies are dealing with record low prices. ♪
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david: welcome back to bloomberg markets. it is time for the bloomberg business flash. transcanada says it is in talks .o buy an unidentified company this comes after the wall street journal reported the company is negotiating with columbia group -- pipeline group. a change at the top of the world's largest hedge fun. jon rubinstein has been hired as the co-water of bridgewater. bridgewater manages $154 billion. the current ceo is greg jensen. jensen will focus more on investing at bridgewater. that is your business flash update. to headow, we are going over to a bloomberg exclusive. earlier today, we sat down with the canadian pacific railway
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ceo, hunter harrison. erik schatzker asked about his efforts to buy norfolk southern. hunter: there is not a favorite there. both the organizations in the east would work with our franchise. there is not a favorite. one has this advantage, one has that advantage. we think we could fit well with either one. either one of them -- one of them would fit well with us. aik: is the approach to csx sign, an indication that you are running out of patience with norfolk southern? o'er the prospects for getting a deal done there are deteriorating? hader: if you go back, we the initial conversation with csx. offer --ke we made an
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you don't do that in a 1.5 hour meeting. erik: you have not made an offer? hunter: no. i have a reputation of being a past gun, but i'm not that fast. we spend an hour and a half with them. this goes back five or six months ago. the initial talks, things did not work out. wasid not look like it going to fit for either one of us. we stepped back at that point in time as a result, look at other alternatives, norfolk southern. we ran the numbers there and looked at it and it looked good, also. there is not a favorite son. erik: you considered csx first. hunter: yes. it could have been norfolk southern first if there had been a phone call.
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then, we had the meeting with norfolk southern, there was no unfortunately. that's unfortunate leak. i called to apologize for the leak. i was the last to know. here we are today. erik: where do things stand with csx right now? , neither one fair of them have been excited -- erik: have you talked to the ceo and chairman? hunter: yes. erik: most recently? hunter: not the most recent meeting. erik: how come? hunter: another individual met with him and a member of the csx chain. if it is necessary or i can be helpful in that process, but it's a little complex.
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it goes back to your story of the girls of finance, you have to do it carefully -- gears of finance, you have to do it carefully. erik: you've done your best to make progress. they are not budging. what drives the more? the management or shareholders? you don't hear anything from the norfolk southern shareholders. hunter: i guess that is some of our frustration. , werly, realistically strongly believe we could get a trust done, but we cannot do it by ourselves. if we do not have cooperation from them, it is not going to happen. tracy: that was hunter harrison. we will head over to our markets desk were julie hyman has a check on company movers. julie: let's start with jack dorsey's company.
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he is the ceo of square and twitter. square coming out with earnings come initially the stock rose and now down by 8%. the company's fourth-quarter earnings did beat estimates. company are saying the plus guidance that company's guidance is somewhat conservative. there is twitter as well, those shares climbing. they were falling at first and then square appeared to follow. the company is offering more stock and cash bonuses to retain some employees. .hose shares declined we are watching american express today, which is having its investor day. the company did reiterate its forecast for full-year earnings and earnings of at least $5.60 a share next year. shares have been bouncing around a bit. they were falling going into can
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be getting his comments at the meeting. the slideshow that amex presented at the meeting said that 4% revenue growth could fuel a 5% growth in earnings per share. he later cautioned, i'm not offering 10-12% as a new earnings-per-share growth target. it was more a hypothetical scenario. he talked about lending to maddie growth to the company. -- lending, adding growth to the company. david: thank you so much. julie hyman at the markets desk. jamie dimon graces the governor of bloomberg markets magazine. he's not the only financial pro featured in the new issue. find out what matters most to people fearing the global economy. ♪
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david: welcome back to bloomberg markets.
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time to take a look at the new bloomberg markets magazine. on the cover, baking superstar jamie dimon. he sat down with bloomberg for a rare all axis interview. -- all excess interview. peggy joins us now. you've been doing this since january when we had all this turbulence and uncertainty. with a quotert -- my favorite idea is be long on the u.s. dollar as europe, china and japan continue fueling dollar strength. several people talked to you about trading strategies. peggy: exactly. there is volatility in the markets. one thing that is striking about these markets is there is almost nowhere to hide. everything is something investors are worried about. lots of people we talked to say
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it's important for investors to up their cash allocation. be in at want to position where you have to sell into a down market, but there are going to be opportunities to buy as we go through these volatile cycles. you want to have your shopping list ready. tracy: we have another quote on technological disruption. this is the buzzword visual or dujour.word dword energy models that are cleaner and give consumers more choices about how they consume and technologies that tell people when it's cheaper to do their laundry. peggy: we are so focused right now on energy as it pertains to oil in the market place, right? i was talking to the head of environmental markets at goldman
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sachs about how she is looking at the technology innovation that is slowly moving into the energy market. there is technology like nest where you can change remotely your heat up and down in your home. we are at the early cusp of other technologies like for example, you can determine when it is cheapest to do your laundry at night. this is the very beginning of what she says is going to be a disruptor in the market place. -- you willer quote see more deals but business owners should be the -- careful of the process they used to achieve liquidity. peggy: he was saying in terms of ae m&a market, we are seeing greater dispersion in terms of high-quality companies coming to the markets looking for capital because companies
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are trying to get financing now. while we will see more deals coming to markets, fewer will get closed. that is not the most positive outlook for m&a going forward. tracy: thank you so much to peggy collins. the new magazine is on newsstands now with the cover star, jamie dimon. you can also find it on the bloomberg and at still ahead, president obama and prime minster trudeau find a common cause on climate change. was today's conference all talk or will we see changes? stay with us. ♪
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. .
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♪ (ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...) man snoring (don't fear my darling...)
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(the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store. david: from bloomberg world headquarters in new york, i'm david gura.
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tracy a holloway. and now we have the one and only mark crumpton. president obama welcomes prime minister justin trudeau to the white house for the first state visit by a canadian prime minister in 20 years. they agreed that they must take the lead in the fight against climate change. prime minister trudeau: we share a common goal. we want the clean growth economy . and i'm confident by working together we will get there sooner than we think. the u.s. and canada issued a joint statement agreeing to reduce in missions by 2025. the u.s. is beginning to diminishfforts
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the existing oil and gas inventory. coming up, josh when grove will join tracy and david in a few moments. chairmane judiciary chuck grassley is not budging on the republican decision to block a supreme court nominee by president obama this year. the chairman says that the -- that democrats are only criticizing the strategy to score political points. there is growing concern about at hundreds water of u.s. military sites. the possible cause? chemicals from firefighting. they began sampling water at pieces in december. checks are being conducted at training sites. confirmed the first openly gay member of the military services.
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eric fanning was approved to be the army secretary. he is the 22nd person to hold the position. global news 24 hours a day, 24 hundred journalists in more than 150 news bureaus around the world. at some ofs look today's biggest movers. gold rallied. gold is up 19% this year as the demand for haven surges. choppy trading for crude today. meanwhile, iran is seeking to rebuild its exports. get more on the latest agreement between the u.s. and canada. josh when grove joins us from washington. how big a deal is this? are these significant changes? reporter: i think the jury is still out on how quickly we will
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see them implement them, both on the u.s. side of the border. -- u.s. side of the border and the canadian side. often comes from leaking pipelines, canada says, downplaying the impact. they are very much on the same page. hosting a lunch with just judo as we speak and began by taking canada's previous prime minister to task for not doing enough on climate. i think the jury is still out. can barack obama get the things he has pledged to done where at least moving while he is in office? trudeau has a friend now. whether he will for some time is up in the air. to push thenot want limits of your expertise and make you talk about something you do not know extremely well,
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but i wonder about regulatory pressures here? define how this will be different than what the epa has been working on. reporter: the epa does not have the goal line on it. our colleague has been working on this story. there are nearly one million wells and projects in sites across the u.s., big numbers. to get this done while obama is still president will be eight tall cask. justin trudeau does not have the challenges barack obama has. he has a majority in parliament. it's really a question on the u.s. side, can the epa keep moving and tackle what has been a pretty big number of projects they are looking to shore up? tracy: i going to throw josh a softball after that one. josh -- reporter: taking pity on me. i appreciate that. trudeau looking
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for from obama well he is still in office? reporter: rebuilding ties with the u.s. has been number one for trudeau. it did not get off to a great start. obama killed the keystone pipeline on his third day in office. i think though they see a lot of small ball type issues around ties were -- frigid to the point of being completely frozen. now they are clearly on the same page. i think, live. justin judo has something to gain politically domestically. justin trudeau has something to gain politically domestically. the knock on him was he was not experienced enough. he has been popular at home and
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abroad since winning that election. but going toe to toe with obama and allow him to demonstrate foreign policy credit which might help bolster his reputation alone. david: josh, thank you, joining us from washington today. natural gas is trading at the lowest level in years. i think our intrepid viewers are watching on the bloomberg app perhaps on such a nice day in new york. good to have you back. we talked about the weather. is that is what is driving these prices so low? the main driver? reporter: you are talking about natural gas compared to crude oil. what we have seen is the natural gas market, when you think about it a third of the consumption comes from heating homes. what these guys are telling us -- this is the warmest winter since the 1950's.
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notproblem is we are heating our homes and businesses. that means the surge created by is slowingevolution -- we are having trouble getting that down to a manageable level. tracy: what is needed to get the price back up? is it all supply cuts? that is a really good question. this is the first year we are opening our borders and expert in natural gas and that will help. we are looking at an excess of winter when we exit the season. they will start voting inventories. that is a dire situation. strong burns on the electric power sector. it's not enough. we have to do supply-side balancing this year. it means probably curving in some of that marcellus shale. is this happening more in
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marcello'us in terms of curbing that supply? reporter: we see the slowdown in oil, we see a collapse in the and that is having an impact on those wells. we think of efficiency. but trust me, we are seeing a slowdown in associated gaps in lockstep with the oil fallout and we see oil close out of the appellations. tracy: i want to pivot slightly to a story close to my heart. earlier this week we saw a theyg, a company saying could break contracts. what does that mean for the wider stream him lp type sector? reporter: great question. you saw immediately oil services got hit.
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bankruptcyacts are proof. they follow the land. if a nonbinding situation with regard to the actual covenant and the contract. the contract they made is not the sort of contract a businessperson would make in today's market environment. it allows it to be set aside with very good guidance. when the midstream assets were pulled out of the sector, there was risk inherent. we see that sector starkly lower at the start of the year. david: what does that mean for the industry overall? we have two other cases in front of bankruptcy court. we have quicksilver and magnum hunter. are really quick in dismissing -- keep them or do not keep them. with regards to this issue, it can be important.
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there is no part of the supply chain that has not been hammered by these low prices. tracy: thank you very much. reporter: thanks so much, guys. ramy inocencio coming up --tracy: coming up in the next 20 minutes, a fresh set of primaries. we look ahead to those races and he debates for both parties. getting back to the u.s. government. a new, smaller screen iphone. ♪
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david: welcome back. turning to politics, president obama is speaking out on the presidential2016 race. obama said he is not to blame
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for the rancor among republicans. i am not obama: what going to do is validate some republicans'he crackup that has been taking ofce is a consequence actions i have taken. , let'sfor more on that bring in john heilemann and mark halperin, both joining us today. thank you both. mark, you grade debate performances the night off. let's start with how the them a crested last night. you gave bernie sanders the edge. mark: yes, i thought he had more lines that struck with the audience. of course, he got pictures -- you got questions that will were not as hard as the one secretary
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clinton got. and she continues to attack him on things that are being voters ory the perceived as a bit of a stretch. i do not think it changed the dynamics in any great thing. i do not think she did anything to slow his momentum coming out of that big win in michigan. tracy: we did see sanders go after hillary clinton a little bit more than in the past. will that be his strategy going forward? john: i think that senator sanders really went after secretary clinton in michigan and it works. he's not raising new things -- new things. you will not see him back off at all. you about me ask tonight's debate. republicans debating in miami. a lot has been written about,'s -- tonight could be
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important for marco rubio. what does he have to do on the debate stage tonight? mark: he has allied groups helping them with television ads, but he himself is campaigning on tv ads largely because they do not have much money left. he needs to drive his message and this is the last big event before the primary tuesday. he needs to go back to the basis of his brand. he has to have confidence that acting like a standup comic in the catskills was a mistake. it's not the way he is going to come back. he needs to be himself, i think, and talk about donald trump and talk about the importance of his victory from the point of view of the party. i do not think he can joke his way or make inappropriate remarks in this way to becoming the nominee and i think he thinks that now, too. should we expect from trump? we could get vintage trump or a slightly softened trump was
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starting a general election campaign? john: i think trump would like to get back to where he was trying to go before the debate in detroit last week, which was trying to elevate, trying to see more presidential, not be in a food fight with the candidates. -- chuckhard to resist finds it hard to resist, when he is attacked, fighting back. if it is true that rubio goes and to an elevated message john kasich has always try to stay on an elevated train and if ted cruz tries to stay on an elevated thing, that will let trump do what he wants to do, be a unifying figure above the fray. notd: gentlemen, we have talked about the trump news conference where he unveiled the trump steaks and wine and water. many news outlets have been reporting on those items. what is the take away for the both of you? donald trump is great on
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unpredictability in his own campaign. john: david, you need some of those steaks. david, i would like you to get the trump steaks, let us know how they are. david: it's a deal. tracy: do not miss mark and john on "with all due respect" tonight. they will be talking to kim miller. i am sure they will have more on the trump steaks as well. julie hyman joins us with the spdr sector. julie: we are not going to let you forget about the steaks, you realize that? we have the technology etf here. it is down a third of 1%. let's talk about some of the
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movers within technology. has added two new independent directors to his board. these folks have experience selling companies. one of these people, eric brandt, the former cfo of broadcom which sold itself to a and catherine, friedman from morgan stanley. none of this is helping shares. they are down by 2% today. are watching microsoft, participating in a pullback in large cap technology. bloomberg has an interesting story. the company is offering free licenses for database software. that's likely not what is wearing on the stock. it is falling with the rest of the market. nextise apple putting its announcement for march 21. analysts are looking for tweaks
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to its products. the shares have come back to little changed before declining a little bit more earlier in the day and one bright spot within hewlett-packard enterprise. shares are up after bernstein analyst said the outlook is favorable in the company is back to where combined hewlett-packard was several years ago. the combined cash flow could more than triple for the company as it sees services margins increased. it is not all bad insect, and overall as a check -- not all bad high-end tech, and overalls a check on the markets, a declined by 1.2%. david: julie hyman there with thespdr sector report. tracy: when we come back, we talk more about apple. ♪
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tracy: welcome back to bloomberg markets. apple has an event scheduled for march the first where it is set to unveil a new, smaller iphone. and we are waiting on the government response to their february 25 filing. emily chang -- let's start with that event. i thought that iphones and ipads were pretty small already? i guess they can get smaller. going back to the original sizes the thing. there have been rumors circulating for months that apple is working on a smaller iphone, much like the iphone 5. supposedly it will be called the better specs, so a better camera, better touchscreen id.
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other things that could be announced at this particular event, an update to the ipad. a ipad pro andat potentially an update to the ipad watch dutch to the apple watch -- to the apple watch. some suggested there could be loops on the phone, much like on the ipod touch where you could put a lanyard through it and hang it on something. more likely it is a play on apple's location, which is 1 infinite loop in cupertino. this is much smaller than the event in september where they unveiled the iphone 6, and if they do release a phone near, it would be out of the typical schedule for phones. normally phones are released in the fall. it would be unusual.
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it's a cheaper phone that would cater to a broader audience, especially globally. emily, here are some key dates coming up for apple in the months coming up. and the response to the second government filing is due -- perhaps that smaller screen iphone in riverside, california. what you looking for today? what are we expecting from the filing? emily: we are expecting the filing any minute now, literally. 3:00ard it would come by eastern time, which we only have a few minutes left. this is the government response to apple's response to be filing. the doj, the attorney general, it does not sound like they are budging at all. we had companies rally to apple's side.
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the senior legal director used to work at the doj. this is what he told me about the argument coming from the government. guest: if the government were to prevail in this case and we were able to compel engineers to build a fundamentally insecure product just because they are able to -- the argument knows no bounds. be interesting to see the argument the government takes today. i sense they are distancing themselves from the original market that does argument that this was about one phone because we know there are 14 phones that getgovernment is trying to access to and not just in terrorist cases, but general criminal activity. drug dealers' iphones. it will be interesting to see how they respond specifically to
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the arguments apple has laid out. tracy: i'm just wondering, what is the next response from apple. what is the next step here? apple responds on march 15. we expect them to say again the government is overstepping its bounds and then there's a big hearing in riverside where a judge will decide if apple has to comply. a lot of people expected to go all the way to the supreme court and could take years. i want to note one more sub apple history credit squeeze talking about the supply chain, saying that things may be better than feared. we follow the news on that minutes. the next few more bloomberg markets after the break. ♪
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is 3 p.m. in new york
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and 3:00 a.m. in hong kong. welcome to bloomberg markets. from bloomberg world headquarters in new york, good afternoon. i'm vonnie quinn in for betty liu. .ere is what we are watching a fresh round of stimulus may not be enough. outside, i would say the majority in favor has been overwhelming. china, thenwhile in south is lumping for a second .traight session we will speak with kevin rudd, former us trillion prime minister, about china's options. and apple getting ready for its latest product event.


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