tv Bloomberg Markets Bloomberg April 7, 2016 10:00am-11:01am EDT
markets" on bloomberg television. betty: we are going to take you from new york to london to tel aviv in the next hour. we are 30 minutes into the trading session in new york. stocks are lower now the day after the s&p had its biggest jump in a month. european stocks are falling on renewed skepticism. mark: mario draghi says no surrender as the ecb outlines its regiment to ease monetary policy more. should new risk to the economic outlook arise? betty: jamie dimon warns of geopolitical risks between china and the potential brexit. more on his 50-page annual letter to shareholders and the call he is standing by.
let's head straight to the markets. on a hyman has the latest pretty sharp decline in the markets. julie: i'm just seeing a headline. the u.s. 30 year mortgages knowing 3.59% according to freddie mac. lower.arching ever fascinating. we are seeing stocks fall back after the advance we saw yesterday. that basically reversed the declines from the day before. on the back of the fed minutes, the reader is relatively dovish and we are seeing those gains reversed once again. in terms of what is moving us we haveelecom stocks -- rates -- we are
seeing the financials get hit again. in terms of the individual movers, we have a couple of downgrades. estimates and price cuts on apple have been cut. people are holding on to their iphones longer. they are not replacing them, which is negative for apple. verizon has been downgraded over jeffries. the margin is going to be os video by the fi platform. betty: the japanese yen is the other big story. julie: for sure. a remarkable level in the japanese yen. the dollar is farthing -- falling further for the japanese yen, its lowest point since 2014. the dollar has dipped below 1.08
on concerns of global growth. if you take a look at the world ker, i've taken a -- all otheren inrencies have fallen comparison to the japanese yen. mark: julie, stocks are falling for the second day in three, fourth day in six, on track for their fourth weekly decline in a row. we are down about a third of 1%. we were higher earlier. leading the gainers for a second day, health care stocks. shire shares up by 6%. after zeneca up by 4.5%. both companies could become al againow that the
and pfizer deal unraveled. mark spencer, the clothing retailer, the merchandiser, it has set sail sports clothing and general goods that are less than estimates forale its clothing and general goods that are less than estimated. clothing sales have seen a four-year drop. what i have done, i have done a chart comparing the big to clothing retailers in the u.k. over the last 12 months. fascinatingly, both of them have fallen by 23% in the last 12 months. preferredhi's inflation method matters. the ecb is ready to all the stimulus gun today. five-yearficials, the rate is off its record lows of
last month. it is still well below the target of 2%. i can't believe we are still talking about ecb stimulus. i thought we were done with it, betty. betty: we thought, but we just can't get rid of it. we can get rid of any central bank stimulus. has more on other news at our news desk. vonnie: president obama takes his case for his supreme court nominee merrick garland on the road today to the university of chicago. so far, the white house campaign for garland has had little effect. hastert askednnis that he not go to prison in a hush money case. he has pleaded guilty to violating laws in trying to pay
$3 million in hush money. will search the panama papers for evidence that people against russia. at least $2 billion in transactions involved individuals and businesses that had ties to russian president putin. russia has dismissed the report as an attempt to destabilize the country. bank at thethe center of those papers says that his firm did nothing wrong. sold tofonseca investors. global news 24 hours a day 2400 journalists around the world.
speaking exclusively with , james reminded all of us about the element of surprise. >> the committee reserves the right to make a move at any time. >> a live meeting is just a meeting where you can debate, right? >> well, we debate at all meetings. i think all meetings are live meetings, there is no other way to think about it. [laughter] betty: for the first time ever, for living fed chairs will be speaking at the same event. janet yellen ben bernanke, alan greenspan and paul volcker. joining us now is an expert who studies the fed past and present -- kathy jones is joining us. the chief fixed income strategist at charles schwab. it sounds like it powerhouse tonight, right?
do you expect anything to come out of it? we have that many together and they are all going to try not to say something that will move the markets. >> i think janet yellen is at a distinct disadvantage to the rest of them. she has to be very careful about what she says. it should be really interesting. there are a lot of great topics i would love to hear them talk about. betty: indeed. inflation is going to be one of them. i want you to look at my bloomberg -- i want the viewers to look at it on the screen. it shows you inflation performance during these first four fed chairmen. it has kind of trended down over the decades. what do you make of that? on the one hand, there is success. on the other hand, yellen as one of the toughest jobs on the chart. kathy: that's right. i started my career when paul volcker was the head of the fed.
those were the days when no one believed inflation would get that low. but fighting deflation is harder than inflation. not that we have deflation, but the potential is present around the world. a tougher job and you cannot just change level rates. we found that in japan and in europe. you have to go below zero to fight deflation. you have to walk a fine line. it is good timing. we are getting some comments from mario draghi, the ecb president. he said that the ecb helps in then trust currencies. they are all saying that further
stimulus could be needed. it is necessary to get prices back to their target. will behink it necessary to pull the stimulus gun again? kathy: it certainly looks like it. it certainly has not accelerated to the level that the european officials would like to see. we are seeing a rolling over in some of the industrial production levels. some of that is due to the slowdown in exports from europe and the slowdown in china. i think there may be more that is needed. the question is, what are they going to do next? they are buying corporate bonds. they are fretting the line between monetary and fiscal policy. where do they go from here? speaking in is lisbon, by the way. i'm going to bring up a chart of the spanish 10-year bond yield. says is a lovely stat that
this has not happened since july 2012 and you know what happened then. this is one draghi said he would do whatever it takes to save the euro. spanish bonds were not at a record high. they are at a much lower level now. are you worried about how events seem to be handing peripheral countries? fact that ecbe continues to buy government bonds. kathy: it is always a risk. it is certainly a risk as we go into the june vote on brexit. and much of what is happening with the immigration crisis, the refugee crisis -- a lot of things are going on that are worrying. i don't think it means that spanish bond yields or peripheral bond yields are going to go sky high, like they have in the past. is a reason why it may continue for a little while.
betty: do you think the fed communication has been successful? kathy: i have to say no. [laughter] kathy: everyone loves the idea of transparency, but i think when we have gotten a look inside the thought process of the fed, a lot of times the markets are more confused. betty: so should they be more opaque? kathy: no, i think they need to have one story and stick to it. i think it tends to be confusing. betty: kathy jones of charles schwab, think you very much. tonight, don't forget. the conversation between the fed chairs. mark: coming up, catching the next wave of technology. venture capitalist turned lawmaker tells us how he is wielding the power of innovation to create economic growth in israel. that is next.
mark: you are watching "bloomberg markets." time for the bloomberg business flash. i'm mark barton in london with betty liu in new york. made a bid for one of spain's biggest builders in barcelona. he has also made an offer for a madrid-based developer. george soros and bill gates have also bet on spain's emergence from a poverty crash. -- retaileris pacific sunwear has filed for chapter 11 bankruptcy protection.
golden gatety firm has worked out a deal that will them avoid liquidation. walt disney has released the first trailer for star wars rogue one. it arrives as "the force awakens" arrives on dvd and blu-ray. latestthat is the bloomberg business flash. betty: you said you can't wait? mark: i can't wait. i love it. everything "star wars." [laughter] you have a lot of competitors on that front. turning to the world of high technology, ale well cofounder cofounder explained what leaders need to know about the next wave of tech. >> the first wave was led by the government. the government invented the internet. they commercialized the
internet. they broke up the phone companies to unleash innovation. letthe first way if, they the market work. the third wave, the government is going to be involved because it is going to be right for disruption. betty: all right. capitalistture barrel --erel margalit has 30 startupperience leading companies and now he is a member of the israeli prime minister -- parliament. great to see you here. erel: great to be here. off, tech, working
with government, that raises all sorts of issues. where in israel can you point to those examples? erel: i think steve case is making off, tech, working with a really interesting point. the issue of security and technology and the combination between the government and the civilian sector are a big issue around the world. what we are seeing on the organizations,is countries, terrorist organizations are using technology in order to use the cyberspace in order to threaten the physical assets around the world. governments are needing to work together with the businesses and between themselves. i'm here in washington to try to see that israel and the united states can come up with new initiatives to counter the strategies that are using technologies and are threatening our dams, as you had in new york, threatening utility companies, airlines, all kinds of facilities that in the past you felt were safe. now they need protection. betty: that is an easy case to say we need more startups, we need better technology.
however, i read jamie dimon's annual letter where there is a about silicon valley companies taking too much of your data and using it for purposes that you have no idea that they are using it for. here is one of the biggest bankers in the world warning that this data taken by the likes of whoever, facebook, google, whatever -- taking your data and selling it and trading it. there is -- erel: there is a combination between security and protecting the individual -- and privacy. it needs to have a fine line. one of the things i'm doing is aeating -- every country has combination of cooperating between the private and public sector. i'm looking for international effort to counter the attacks and also to protect the individuals. in israel, in the middle east, the issues of security and privacy and the ability to fight
the extremists by those that are willing to work together is critical. erel, what about the general investment climate in israel? would you say it is deteriorating? you have the financial community, you have benjamin netanyahu and the supreme court falling out over this gas deal -- is it fair to say that the investment client is deteriorating? what is the balance between populism and investment friendly policies? come from the startup nation generation. i think technology-wise, israel has always been on the forefront of the leadership of the technology world and things are still very strong. on the general economy, you have to remember that two thirds of the population are not part of the startup nation revolution. sector, the
ultra-orthodox people in the south and the north, we are trying to bring a new vision and i think that netanyahu, as much as i have respect for him as my prime minister, there needs to be new strategies for what is going on. the strategies need to address some of the monopolies, contain them. you need free economy, not monopolized economy. on the other side, you need an economic drive that will handle the security issues that are there with a new set of strategies that israel, the united states, other friendly countries need to address and secondly, driving new economic drive on things like innovation. in the north part of his real, you bring the arab community and the jewish community to bring food, around agriculture, medicine, bring these things together. there is a whole set of new things, new ideas that israel needs to push. my political side of the spectrum is to try to challenge
the way things are managed now and bring a much more dynamic, offensive move. mark: will your side of the youress equation be led leader, isaac herzog, who has been reviewed by the justice committee, will he remain as leader? some could say you could be a potential leader if he does not survive. could you tell us if you have ambitions to lead the labour party? erel: i'm coming from the private sector. remember, in the united states, you have primaries that are very interesting.
the startup economy that israel inclusion --omy of on the other hand, you really need the labour party to bring back, like in the time of ravine, one hand for security and another hand for economic development. the labour party, in the first instance of the company, was a party that used to build a -- whetherw pioneers it is now technology or whether it is agriculture or whether it is security and the ability to --e someone in the region whether it is the gulf states, jordan, morocco, israel needs to work with these people instead of working alone. jews.not arabs against it is the extremists against those who are willing to battle them on the security front and the economic front. mark: erel, thank you for joining us. erel margalit, the founder of
betty: we've got some breaking news on tesla. julie hyman has the details. julie: 325,000 is how many orders tesla has received for the model 3. the reservations equal about $14 billion in future sales. the stock is trading lower after the company making these comments. there are still some questions about tesla's ability to manufacture that many cars. we will have more when we come back. ♪
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quinn, she has more from the news desk. vonnie: i want to reiterate the tesla news we just got. tesla got a lot more reservations than forecast and said it would be $14 billion in future sales. there are a little concerns about whether it is full or not. -- investigating the terror attacks wants information on the man in the hat. he was seen muscles -- she was seen moments before the bombing. he was then shown walking to a nearby town. authorities are asking the public for any information or photos. a two day conference opens today in geneva. the first of its kind. it is part of banshee moons effort to address the root causes of terrorism. the aim is to get governments on
the same page and focus on youngution and unemployed people. french police arrested a suspected gunman after shots were fired near parisian cafes targeted in november attacks. no injuries were reported but the incident rattled nerves in a city still on edge. officers were deployed after shots right out. the suspect appeared to be done -- appeared to be drunk. -- show solidarity with refugees. the vatican announced today that they have accepted an invitation by the leader of the world orthodox christians. and the greek president. global news, 24 hours a day powered by our 2400 journalists. betty: thank you. now it is time to get you caught up on action around the world.
let's start in asia. stocks jumped the most in three weeks. the nikkei, the shanghai composite -- the shanghai composite is actually down by 1.4%. there was a big story out of the region that came out of korea. samsung has been struggling to regain its competitive edge in a saturated phone market but they may have found the right formula. its preliminary first-quarter earnings beat estimates. we have the latest numbers from hong kong. >> the early release of samsung's galaxy phone got a head start on apple and chinese rivals, making it a surprise hit. samsung's operating profits beat estimates at 5.7 billion dollars while revenue came in at $42.4 billion. sales are estimated to have talked 9 million units in the first month, triple those from last year. the new model boosts a
semiconductor chip. analysts now expect operating income of that unit to have fallen 15% to $2.2 billion. mark: let's have a look at the european equity markets. they have been up and down like a yo-yo. down on friday and up on monday. the stock six entered was up earlier and it is on track for the fourth straight weekly loss. the longest stretch since october. 2014. these are the industry groups that are leading today's moves. health care is the top for the second day running. speculations have risen that companies like shire could be a theet in the industry after pfizer deal has fallen apart. energy stocks are lower. have a look at the currency in the bond market. the euro yesterday rose to the
highest level since october 2014 and it is down today. it was up against the pound but it is lower now. look at the spanish government bond deal. rising for the six connecticut -- six consecutive days. you know what happened in july of 2012. that is when the president said he would do whatever it took to save the bureau. how far it has changed. and the dutch rejected a deal -- a ukraineeate deal. that is in the netherlands, it is just a tad lower. let's get back to the united states. abigail doolittle has the latest from the nasdaq. abigail, what do you have for me today? abigail: we have the nasdaq trading lower and amazon is
lower after the channel advisor says that the march profit came in lower than the february. investors may have been looking for more growth plus, jpmorgan has lowered the price target ahead of the company's first-quarter report on april 21. recently, the stock did put in a bearish about saying that sellers are moving in and there could be more downside ahead for amazon. mark: apple is also down today. what is behind the move? abigail: apple is the biggest drive and behind that is bti you reducing the earnings estimate, below consensus. theanalyst believes that upgrade cycle could persist. he is also hearing positive chatter on the incremental shares and it could be difficult for the iphone in terms of taking share their.
these types of comments plus the chart could suggest that shares of apple may trade down into this company's fiscal second report. stay tuned. mark: thanks a lot. should we talk? or should we talk about jamie dimon? i can't talk. [laughter] betty: jamie dimon has issued the annual letter to shareholders. he gives critical list and predicts u.s. interest rates among other things. he also took shots at u.s. regulators by saying that our shareholders should keep in mind that the u.s. government requires a capital surcharge that is double that than the international competitors. that surcharge may ultimately vantage. banks at a disad versus competitors. so to sort all of this out, i want to bring in erik schatzker.
describe what that means? a 50 page letter, the longest that jamie dimon has ever ridden. his first was 12 pages long. he has been through a lot since then. enough that he feels it is worth spending 50 pages of shareholders attention. let's address this capital surcharge. what id of encapsulates would describe as a defensive and ever so slightly paranoid undertone to this letter. there are many places where he sounds strong but there are also other places in the letter where he feels he is under attack. certainly by people like elizabeth war and but others as well. here's a quote. i do not want any american to look back in 20 years and try to figure out how and why america's
banks lost a leadership position in financial services. if not us, it will be someone else and likely, a chinese bank. it is hard to see right now how chinese banks would get into that position. we know that they have a debt problem and they likely will have a bad debt problem on the chinese bank problems. do have a reason to go global and they are ambitious. so that is a take away from the letter. there are a number of other things swirling around. of course, including the idea that perhaps jamie dimon should no longer bp ceo of jpmorgan. shareholders might before that idea, do they need an independent chairman? erik: this is on jpmorgan's proxy which came out in conjunction of the annual report. this is a document that shareholders have to read and digest before the annual meeting and that is coming up in the
next several months. shareholders -- not all shareholders -- individual shareholders have tried in the past to break apart the ceo role and the chairman's role and jamie dimon has had those roles since he became ceo in 2005. thus far, it has been unsuccessful. the chairman of the bank of america thought it was appropriate to give him that role and it is hard to see on that basis what or whether jamie dimon deserves to lose the shareholders will. these proposals or a proposal like this has been on the proxy before that it has been defeated every time including the year after the london scandal in which he was under considerable pressure to defend his right to have the chairman job. mark: on london, talking about is thedon whale, there
upcoming referendum and it is a big political risk. jamie dimon talked about that. he talked about best case scenarios and worst case. erik: his best case scenario is that region remains part of the eu. eventscenario -- in the of a brexit, the best case scenario is that region and the eu are quickly able to renegotiate a number of trade agreements and business will continue as usual. the bad scenario is where bring breaks apart from the eu and the eu becomes defensive or takes retaliation against britain for the action. if the worst scenario, by far, is a dissolution of the eu, not just by britain leaving but by other states leaving the eu and this great european experiment
that has been underway for a quarter of, it would fall apart. betty: you also pointed out his criticism of silicon valley. erik: this really merits attention. i am going to term it as something that people might see as odd but he draws attention to something that i would call data rape. the reason i call it that is because when we, users, press the button on our smartphone to gain access to third-party mobile apps, that tapped into our bank accounts, we don't realize how much information we are giving away. jpmorgan, which has many of these accounts, has studied the problem and says that people are surrendering way too much data about their finances without knowing about it and secondly, many of the third parties sell or trade this data in a way that is not beneficial to the end-user, you were me.
and third, the data collection continues long after we cease to use the mobile apps because there is no off. once you sign up, you have signed up for good. to name any of these companies individually because there are a number of them and i think it would be inappropriate to point fingers, but we know who they are because we may be participating and saying that you companies should no longer do this because you are preying upon the goodwill of our customers. betty: i am curious to know what state he is talking about? erik: data about bank accounts. jpmorgan maintains information for baking accounts checking accounts, savings accounts, mortgages counts -- these mobile apps don't have visibility into your individual stock holdings but they will know the value of portfolio and they can see it rising and falling over time
along with the balance in your bank account and they are taking this information and selling it or trading it with other parties and we are not even aware of that. betty: that is fascinating and scary. erik: it is noteworthy that the ceo of america's largest bank is saying this. betty: erik schatzker, thank you so much. much more ahead, the public arts creator -- she may help you convince people to say yes to your ideas. ♪
creators who will solve all of our problems. we are joined now with more. tell us a little bit more about the overall idea of the design issue. >> this is the fourth annual design issue, it is connected to a conference on monday in san francisco. design is important to bloomberg businessweek. believe it is important to all companies and it is forward-looking. we like to sell stories in the of ways that involve designers. betty: it is hugely important to companies. >> incredibly important. betty: helen barrett is one artist that you profile. why her? >> she has a spectacle artist in london and runs a company called artichoke. her goal is to create installations that more active that interrupt your routine with something unexpected and something you will remember. mark: i love her philosophy --
she says, we shouldn't focus on missing our train, we should focus on the bigger picture. the bigger moments. that leads her to these wonderful moments that remind us of -- remind us what the sultans elephant was? >> it was a spectacle in 2000 six. it involved a huge mechanical elephant and a huge fake there'll and it paraded down london. a million people watched it and what it did was pull people out of their routine. mark: i wish i had seen it. i wasn't pulled out of my routine, i must have been asleep. she has had many of her projects rejected the four she could mount them. her view on yes and no when it comes to the people who make decisions is worth hearing. >> it tells us something about collaboration. she said it today while for her
to learn but basically, when she was trying to put on a spectacle, it was better not to ask for permission, it is that people thought, am i making the right decision? instead, she asked for their help and inevitably, people said yes. betty: that is a great business lesson right there. >> it is, it tells me something about how to collaborate and bringing people into a circle get a project together. betty: thank you so much. check out bloomberg businessweek's design issue on tomorrow's stands. it features many cutting-edge designers. mark: still ahead, new competition for airbnb, a london startup will help you stay inside someone else's luxury home while they are out of town. we will talk to the chief executive next. ♪
mark: let's get to today's bloomberg story on the biggest hotels. at core -- one finds day, it is a london luxury home rental company. the deal is the hotel's latest effort to confront the rise of private rentals and expand into the high-end market. the chief executive, greg marsh, joins us now. what will you do with the money? >> we have been operating for five years. we are launching in rome in june but this is only scratching the surface of what is possible. with this additional capital, we will be planning to roll out to more than 40 new markets over the next five years. mark: was this deal done from the position of motor ability as the likes of you and airbnb make massive roads into the
hospitality industry? >> i think what customers want when they travel, families going to places like london or paris, they want somebody -- they want something that luxury hotels don't always provide. this is an expensive product but it is one that everyone can afford for special occasions. and at one finds day -- one stay, we offer customers with a particular type of experience. are valuednb, they at something like $25 billion. would you consider selling your company is a success? >> the first thing i would say is that this is the first part of a deal which ultimately will take a number of years to unfold.
the total value will be significantly higher. and we don't directly compete with any of bp or marketplace companies. in have more than 600 people the business operating in five global cities and we are planning on launching many more. we welcome guests, providing them with the luxury, upscale control hospitality experience that you would uniquely expect from brands. those can you provide premium services at a lower price than a five-star hotel without burning through too much cash? >> it's not really about price. it is about a different type of experience. if you are traveling with kids for a week or this thing a particular city, you don't necessarily want for adjoining hotel rooms. you want the creature comforts of a finer home but you still
have the assurance of a controlled comfort and an excellent experience. that is where one fine stay comes in. this represents an exciting way for us to accelerate expansion. mark: how do you choose your property? what is the criteria when you choose your property? what is the cheapest property out there? >> typically in london will be a $2 million-$3 million property. it might be an apartment in notting hill or a townhouse in a nice part of town and that property would ideally be suited for a family for a long a business traveler or a couple coming in for a week or two. the times those people are most likely wanting to stay in that property by the times when the owners will be traveling so we expect to make that exchange easy, controlled and comfortable. mark: and it is important for you to scale up quickly because
you want to retain those customers. i'm sure those customers are visiting many countries across the world so you want to get into as many countries as soon as possible. >> absolutely. we do but we don't want to correct the integrity of our brand. what one fine stay has come to represent is something that no one else is able to offer -- the guarantee of equality of a host and service. weall the properties that have evaluated in our portfolio, we except one in 10. i'm sure your property would be accepted. mark: the shared economy, where is it taking us? it is increasingly becoming a bigger part of our lives. are we, the world, ready to adapt to the ever-increasing sharing in cost? >> in many ways, people have always wanted tuesday and other people's homes and experience other people's lives to their own eyes. that has never changed. but what is new is that we have
smartphones in our pockets and internet at our desks. and the way we want to engage with the places we visit is influenced by those tools. we lend to guess an iphone when they stay with us that has information and tools from the owner of that property. it is really authentic in an experiential way to get under the skin of a city. mark: great to see you. he is the executive officer of one fine stay. you can read more about this. had to bloomberg on the bloomberg. coming up, many investors jumping out of brazil. our next guest is getting into it. ♪
european close on bloomberg markets. mark: we will take you from new york to london and to answer them in the next hour. here is what we are watching. u.s. equities are falling, along with stocks in europe over news concerned that central bank policies have failed to revitalize growth. are the concerns as dire as policymakers make it seem? the political future for brazil's president hangs in the balance. today, a report suggested proceedings move ahead but jpmorgan tells investors that