tv Bloomberg Markets Bloomberg April 5, 2016 2:00pm-3:01pm EDT
david: here is what we are watching this hour. markets taking a dip today. all 10 s&p sectors in the red. the dow flirting with its first double-digit loss since march 8. aroundil is bouncing between gains and losses as crude looks to stop the two-day losing streak. his oil stuck in the $40 range? david: the treasury department issues new rules on corporate inversions as the obama administration warns that more action is coming. some breaking news here, u.s. antitrust officials are said to have prepared a lawsuit to stop halliburton from taking over baker hughes. jennifer reed joins us now to comment on the latest news.
walk us through just how big a deal this merger would happen, and how close the scrutinizing has been. one of the longest deals we've had running. it's been more than the year. it would have been a very big deal. halliburton and baker hughes were looking to merge to better compete against slumber j which recently acquired cameron. they don't fly. it's been very seldom that a market can be down to a duopoly. lisa: baker hughes shares not moving much. however insurers also not moving that much. why? >> this has been dragging on so
long committee of investors may have already been expecting this. halliburton and baker hughes have been trying to make concessions, trent to offer up settlement for a long time now -- trying to offer up settlement for a long time now. they're facing regulators in europe and brazil as well. they've been trying to make this work, weeks and -- we've seen halliburton trying to offload a bunch of assets. antitrust officials will be talking about the global reach. >> it is a huge deal. i will be at the conference. a lot of antitrust regulators and attorneys and analysts attend that conference. say very much because they will not say anything publicly that they have not already said publicly in a press release or otherwise. deal, but a
decision to block a deal -- lisa: what does this mean going forward? everyone's been waiting for this wave of consolidation within the oil and gas industry. what does this mean for the potential acquisition and consolidations that everyone's been expecting? jennifer: i don't think it means very much. it is very sector specific. it depends on competition in a sector. in the areas where baker hughes and halliburton complete, there is a concentration problem. in other areas come in may be way the market is defined, it may -- there may be other concessions. ohat deal may be able to g forward. there doesn't seem to be a fix that is palatable to those parties and the doj. say aboutt does it
the obama justice department and its attitude toward deals like this one? jennifer: the doj is doing its job. hearing about aggressive antitrust enforcement, but if you dig into the statistics, the enforcement is not more aggressive than it's been for years. we're seeing a lot of deals being drawn between huge computers -- huge competitors in regulated markets. david: jennifer rita joining us today. -- jennifer reed joining us today. julie: we have stocks lower today, at one point today down the most in almost one month. that is partially because we have not seen that big upswing for the u.s. equity markets as of late. up a bit off the lows of the session, but still taking a hit. there's this risk off sentiment that's been affecting the markets globally today.
there's also a lot of big baker hughes and halliburton and the situation with pfizer and allegan. pfizer is looking for various ways to salvage this allergan deal. same tax havenhe they were going to under the plan's original structure? pfizer up today. allergan bouncing off the lows of the session. saying pfizer has advantages and not going through with the plan. some other stocks there are concerns about. baxalta declining, shire in the process of buying backs all the -- baxalta. today, traders are waiting in
the two stocks are down. -- and the two stocks are down. 110, theese yen hit level last approached in october of 2014. the dollar down nearly 1% against the japanese yen as people seek perceived safety. gold futures are up to date. vix, we are seeing a bump up today as a result of this 8.5%,l, the fear gauge up but still at a relatively low level. today, even with today's action, we are seeing the vix below its average for the last three years. still not a worry about a return to volatility. lisa: the yen is up more than 8%
so far this year. let's check on the first word news. mark: president obama said he is very pleased with new steps the treasury department has taken to discourage corporate inversions. when companies move abroad for lower tax rates. the usage has sparked a political outcry. the president referenced the recent really that's recently released -- referenced the recently released panama papers. reminderhad another that tax avoidance is a big global problem. it is not unique to other countries because there are folks here in america who have taken advantage of the same stuff. a lot of it is legal, but that's exactly the problem. mark: the president's remarks come a day after the treasury department announced rules that
would limit the ability of inpanies to participate inversions if they've already participated in the last six months. you know that while donald trump wants to build between the u.s. and mexico? he's found a way to make mexico pay for it. he tells "washington post" he would cut off lien's that's billions ifcut off mexico made a payment of up to $10 million to build the wall. the republican senator says it she is more convinced than ever there should be hearings of president obama's supreme court nominee. susan collins met with merrick garland on capitol hill for more than an hour. mcconnell said there would be no hearings or votes.
thousands of icelanders protested outside of parliament demanding the prime minister step down after allegations of its offshore tax affairs. wiferime minister and his set up a company in the british virgin islands with the help of panamanian law firm. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. david: still ahead on "bloomberg markets," more on the breaking news that pfizer is scrambling to save its merger with allerg an. ♪
david: this is "bloomberg markets." investors increasingly paying for the privilege of lending to governments in europe and japan. lisa: what are the potential long-term ramifications? with us is jim bianco, founder of bianco research in chicago. why are people still buying and negative yielding debt -- buying negative yielding debt? such a new thing and we are trying to get our arms around what it means. only two years ago that we ever saw in the history of man negative interest rates. we are still trying to figure out what it means. while we appear to be acting irrational, it is part of the learning curve of this new environment we are in. david: how long do you think this will go on?
jim: initially, most investors thought this was a gimmick come a one off, it would not last long. , the bank of japan went t negative interest rates -- went to negative interest rates. you add all that up come investors had this might be a round -- around for a long time. that's when we saw an subtleness about negative interest rates as people try to come to grips with what it means. lisa: german 10 year yields on weaker than expected german manufacturing data. why aren't more german and european investors humming to the u.s. and buying treasuries
-- german and generally european investors coming to the u.s. and buying treasuries? jim: when we look at interest rate between europe and the 1.7% looks like a huge high-yield in this apartment, we forget that is a currency trade. -- huge high-yield in this environment, we forget that is a currency trade. , but then youit are back to the same yield you are investing in europe. you are taking a currency risk in an environment where you're making a dollar bet and that is a whole different dynamic than just trying to pick up extra yield. it is not as easy as people make it out to be. just go find the highest yield in the world and by that -- buy
that. abby was asked about the prospect of this happening here in the u.s. >> the fed made the decision to stay away from negative rates here because they thought it would be very disruptive. they were concerned about the impact on money market mutual funds and so on. one of the things we are watching carefully is whether the move to negative interest rates in europe and japan has been effective. david: we've heard janet yellen say they've discussed the legality of this. we got into another economic situation where the fed needed to stimulate again, they have two options, they can do more qe -- the fed has concluded that has run its course. or, they can go to negative interest rates.
they are trying to study negative interest rates in europe and japan. to try to figure out if that would be stimulative. in both cases come in japan and europe, it is hard to point at something when they went negative, see how much it has increased job growth or gdp. they did qe or negative interest rates, they would be in a tough spot to figure out which one to go with. lisa: have we seen enough evidence to point to the fact that negative yields have been ineffective? >> it's possible. wheren a lot of instances they did not expect the currency to strengthen and the financial market movement we've seen. be -- it is so new
and different. zero is a big deal. we are still trying to come to grips to understand what that means. more now on the breaking news we are learning about this hour. pfizer is scrambling to save its planned $160 billion maerger with allergan. joining us is jeff mccracken. what do we know of what pfizer is doing? struggling.re they're bankers and lawyers and experts inside the company -- their bankers and lawyers and experts inside the company are trying to save the steel.
deal.e this let's remember that pfizer has been trying to do a big tax deal for years. gan. tried with aller for that, there was astrazeneca. -- before that, there was astrazeneca. the market feels like this deal will fall apart. nobody at pfizer has been able to say this is how we can get this deal done. given the fact that pfizer does stand to pay that much lower taxes and why is the stock not done more? , why ismuch lower taxes the stock not down more? jeff: they have the established drugs portfolio from a drug
they've had for a long time, they can carve that out and either spin it out or pfizer can sell it to someone else. allergan sold their generics business for $40 billion in july. that happens a lot in the pharmaceutical space. companies will carve out ahunk and say that no longer fits with us, it is slow growth and we will sell it. that's why pfizer shares are up. david: when we talk about how they might be scrambling, will they pursue a legal route to challenge what's happened here or restructure the deal they out --out? -- dave laid they've laid out? >> you have not received your tax bill. you would need to get the deal toe, get far long enough
where the irs would say -- that's two years from now. this might take three years, five years. i don't think they feel like what'snt to gamble and going to happen three or five years from now. david: still ahead, we will talk politics and the wisconsin primary today. that is coming up after the break. ♪
lisa: "bloomberg markets you are ."tching "bloomberg markets wisconsin voters will be casting their ballot today in the state's primary. the latest polls show ted cruz and bernie sanders with leads. david: let's start with donald trump. the rough couple of weeks he's had here, he brought his wife on the campaign trail for the first time. we've seen ted cruz bring his wife out more to speak as well. >> she gave some prepared
remarks last night. a couple minutes. i'm not sure she transformed the race. -- he has tove give people more of a sense of who he is. uganda has done some interviews ivanka hasnc done some interviews with "people magazine." lisa: let's talk about the wall. blocking remittances to mexico. why is this coming out now? >> he's hinted at the past that he would get them to pay for the all through some sort
of threat. unclearng of it, it is to me why this was put out at this point. the policy behind the wall is a good metaphor for trump's relationship to issues. there's nothing more popular with his supporters and yet, there is nothing further out of whack with what a candidate of policy. terms remittancesexico's -- 98% of money transfers come from the u.s.. -- come from the u.s. said good luck with that. is wisconsin to
bernie sanders? >> he has to win it, he has to gain momentum. stepeds it as the next towards new york to cut into her lead. once you fall behind, it is very hard to catch up. and stillat her 60-40 delegates.handful of i think bringing the two of them together will not just of cold is bringing president obama and hillary clinton eight years ago. will not be as difficult as
bringing obama and hillary clinton together eight years ago . president obama pivoting to the general election when talking about donald trump policies and ted cruz and his policies. do you think it was an international move? >> president obama and a lot of democrats -- when they talk to foreign leaders, there's a lot of concern about donald trump. they don't want to assume that donald trump will be the nominee. broadert to have a selection of takers. ♪
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has resigned her to thousands of icelanders protested outside of parliament demanding that the prime minister step down after allegations of his offshore tax affairs. leaked financial documents allege the prime and a stir and his wife set up a company in the british virgin islands with the help of a panamanian law firm. he's denied any wrongdoing. he is the second icelandic hisier to resign after predecessor was pushed out during the 2009 financial collapse. planatican says there is a to travel to greece. no official decision on a trip by the pontiff has been made. ,he governor of mississippi phillip wright has signed a law that allows public and private businesses to refuse at services
to gay couples based on religious beliefs. bryant has signed a law that allows public and private businesses to refuse services to gay couples based on religious believes. the connecticut women's basketball team seeks to win a fourth straight national title. the huskies try for their 75th straight victory and 24th straight in the ncaa tournament. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. david: commodity markets closing in new york. let's take a look at today's biggest movers, starting with gold. gold heading for the biggest gain in a week as equities fall today. traders pushback expectation expectations for when the fed will raise u.s. interest rates. oil fluctuating between gains and losses, wti crude settling
-- inventories grew. the opec governor saying the major producing covenants can reach a deal even if iran does not join in on the action. lisa: i want to bring in sarah .unt she says the emphasis on the opec freeze has been part of the world looking for answers as to how prices will recover. we haven't been getting any answers. sarah: i don't think we are getting a lot of answers. every time we've heard rumors, you see oil pop up and then trickle back. this is rumors looking for a home. you have a lot of supply issues right now. that is really an issue, so that is why everyone is focusing on -- sayingkuwait's governor
there has to be a deal because thery are out of options. >> if oil prices can stay lower, that is not in. whether they collectively want to do something for themselves, then you look for an agreement. russia is at a record high level of production. i don't think the rest of opec wants to take cuts to handle that. we will see what happens. supply.u talk about i've heard the narrative shift back-and-forth between whether it is a demand problem or a supply problem. overly produced and demand is ok. has there been something you've seen, whether out of china or perhaps out of the u.s. that is convincing you that demand is picking up? >> we look for a lot of statistics on the u.s. economy.
miles driven have been increasing. this been a lot of talk about whether there would be a demand response and oil prices. i think now you are starting to see that miles pick up and worldwide demand is decent. now, demand is ok but supply is still on the high side and inventories are very high. that makes it tricky. david: let's look at that release tomorrow. bloomberg forecasting an increase of 2.5 million barrels. problematic here. >> we are at very high inventory levels. rangesat the top of the in terms of inventory. if you want oil prices to go up, that means it is hard for them
to act well when inventory numbers are at such high levels. how do you invest in this environment? >> look for companies with decent balance sheets in the energy sector. you look at the majors, bp is one we've been talking about for a while. they did a lot to shore up their balance sheet before they had to. you look for companies that have good balance sheets, good eog saying we will we will not -- overproduce an environment where commodity prices are low. david: however facing a lawsuit
that halliburton facing a lawsuit over baker hughes. talk about whether that deal makes sense to you. concentration did not matter so much. it wasurprised when announced because you are talking about the second and third largest global players. this is something that did not come up immediately as how is it possibly going to get through? i was surprised when it was announced and there was a lot of discussion about what they could do to make this work. lisa: there have been 50 bankruptcies of north american oil and gas companies so far in the past year or so. where do you think we are in this bankruptcy cycle? >> if i knew where the price of oil was, i could tell you.
yeare beginning of last when they look at everybody's debt levels, there was a lot of hope that oil prices would rise -- the banks were waiting and hoping that oil prices would get higher. a lot of companies have big cash flow problems. of companies were outspending their cash flow even at higher oil prices. you will end up seeing consolidation or some movement around who owns what properties at this point because there is a lot of distressed drilling out there. us -- sarah point jenning sarah hunt from alpine joining us in your. york lisa:.s in new lisa:would you watch an nfl game on twitter? paying $10 is million for a 10 game package. look at theke a
david: this is "bloomberg markets." time now for the bloomberg business flash. pfizer scrambling to save its gann to merge with aller because of the latest u.s. crackdown on corporate inversions. halliburton facing a lawsuit from the justice department which is gearing up to block a proposed takeover of baker hughes. the legal action could be filed as soon as this week.
unit of bursa capital preparing to file for bankruptcy. the filing could come as soon as next week. that is the bloomberg business flash. john kerry has to geneva this week and for talks in brokering peace in syria. expect syria to cooperate in good faith to end the civil war. islamic state continues to be the chief target in the world terror. that's war on terror. a group of centers staffed by arab speaking
communicators, people who get on social media and actively counter the false narrative of isil. opening aarabians are center that will draw in religious groups from around the world to speak about true islam. isil masteredhat an early presentation in social media that was not countered initially. now, it is being countered. people are learning more and more about the lives which their false caliphate is based. some people are concerned there hasn't been adequate cooperation among european security authorities. of work is being done. even before the brussels attacks , we had a foreign fighters search team that had gone to
brussels to work with their authorities to try to examine where there may be some gaps in where we needed to better we've had a number of meetings this month in which our experts will work with them. one of the things europe needs begin to do ast passenger name record system on air flights and travel and they need to have an early access screening system for some of those folks so they can do a better job. europe has not been where the u.s. is with respect to that tracking. have privacy concerns. come as weearning did in america with 9/11, you have to take certain precautions
and give up a little something to be safe. is that a lacking on europe's part? people can come from europe to the u.s. to what extent does that pose a threat to the u.s.? kerry: it is much harder to get across the pond and get into the u.s. than it is york.e from syria to new david: president obama criticized our allies were not nato.iently funding it appear nato is deeply engaged with us in afghanistan, deeply involved in iraq. now, becoming more involved in the counter isil flight, helping
.ith the migration out of syria the united states is about 22% of nato. what the president was talking , there was a pledge take by every country to spend 2% of on defense. a number of countries have not done that. that is what the president is urging. a broader sharing of the overall expenditure requirements. david: what is a realistic achievement for syria? kerry: there needs
to be a transition. body thatar governing represents all the interests of syria, that assumes responsibility for the day-to-day management of the country while they move towards a new constitution and elections. russia, iran, saudi arabia, turkey, qatar, many countries have all signed up to this. the key now will be whether or not a sod -- whether or not assad is capable of negotiating and we have to put that to the test. i don't see any way possible for assad to remain because there is no way to end the war while he is there. iran and russia and others need to recognize, if you want peace, asaad has to transition.
how he transitions is what the geneva co negotiations will be about. sessiontocks well off lows, but the s&p 500 still on pace for its steepest loss in four weeks. all 10 s&p sectors in the red with financials the laggard once again. julie: we are going into earnings season, financials among the first to report and there is not a lot of optimism surrounding this group. the xlf down more than 1% today. one of the large cap laggards has been gold. this is the second quarter in a row where analysts wait until the end of the quarter, they hang on to their optimism and slash their estimates as the quarter gets to the end.
you can see the shares down a little more than 1% today. eeg for goldman sachs. here's what we've seen the earnings estimates do. even as the stock has continued to go up. it will be interesting to see what happens on my guess companies tend to beat the average earnings estimate. this is quite an unusual amount of pessimism going into the quarter. the boutique investment banks are trading lower today in the wake of these treasury regulations on inversions. will these guys have less business as a result of these new rules? xlfall of these are in that . financials remain the
worst-performing group of the year. one -- the xp xl financials still down 6% despite the bounce we've seen in the s&p 500 overall. it has been led by telecom, utilities, industrials -- financials have not participated to the same degree in that rebound we've seen. david: coming up, thursday night football is coming to twitter. they get games at a bargain price. next.d to san francisco, ♪
dow down 66d the points. lisa: the risk off trade was evident in the bond market as well. yield,ne in the 10 year 1.73 despite good u.s. economic data that came out earlier today showing the services sector was actually picking up more than analysts had been expecting. even though we are seeing positive news coming out of the u.s. economy, we cannot get people to stop investing in this stuff. the two-year also coming down to 0.7% from 1% not long ago. people push back their expectations of a rate hike and how much rates could increase. its firstks
broadcasting deal. david: they were able to beat out a slate of heavyweights, paying $10 million to stream nfl games. by emily chang in san francisco. why did twitter want this deal? jack dorsey said he will be to find live events we can gather around. emily: the cfo of twitter was also cfo of the nfl. you can imagine what kind of discussions were happening behind the scenes between him and nfl. twitter has is life. as a victoryat it for twitter, but $10 million is a drop in the bucket.
it may be more about experimenting for them. has isbest thing twitter live. twitter will show the ad the thursdayare airing night football games, then will sell some ads that would normally have been sold to local affiliates. this is more about users. our colleague had an interesting take on this. a great placeen to talk about sports, trash talk sports, but they have not shown a lot of potential in terms of looking long-term sports fans that are not already on twitter. she cited the olympic steel -- the olympics deal. lisa: i'm trying to understand
how this will look on the twitter feed. people are usually just looking at news that scrolls down. to look at one particular streaming event goes against what twitter is all about. emily: that is interesting. i don't know exactly the mechanics of this particular -- how you will be able to login and see this. they will be paris coping before and after the game. before and after the game. better and getting a more all-around experience here. these tech companies competing for the rights to this, it is interesting that the nfl chose twitter. this deal was friendly to the networks. twitter will be showing their ads. it is a very experimental endeavor for them.
we will be interesting to see how this works on both sides. uy streaming rights to an nfl game last year. they paid $20 million for the rights to this particular game. yahoo! claims they had 15.2 whilen unique visitors only 1.5 million people streamed the super bowl. you can watch emily chang on "bloomberg west." an interview with the former chief operating officer of the san francisco 49ers. more "bloomberg markets" after the break. ♪
carroll: good afternoon. here's is what we're watching at this hour. is the global economy on firm footing? click -- christine lagarde is not certain. where are the biggest downside risks? >> camera public presidential candidates steal momentum away from donald trump. and later on, more fallout from the panama papers. allegations of using off-shore's shell companies. who will be next? away from this close of trading this tuesday. let's head to where julie hyman has the latest on the trade. kind of all over the place.