tv Bloomberg Markets Bloomberg April 7, 2016 3:00pm-4:01pm EDT
and it web properties. verizon said to be considering a bid according to those earlier with the matter. google also considering voting or yahoo!'s core business according to another person familiar with the consideration for an offer. at&t and comcast have decided against bidding, so that is a top story we are following at this hour. yahoo! shares up .2%. at&t and other players a little bit lower. let's get you started with a check of what's going on in the markets because we have seen a downward trend today. we are at session was right now. we have yahoo! up on the board but if we could look at the numbers, down at session lows
and with the nasdaq in particular, we see a flip from positive territory off of two days of calls from monday. down 1.3. accelerating losses by 1.8%. bloomberg so iy can show you the imap function. you can see all 10 sectors in the red, as it has been for most of the day. telecoms ared down. also take a look at what is happening with the majors here today. we have come off the positive territory. less than .5%.
the dow jones still holding on to those gains by about .4%. let's look at what is happening with treasuries, specifically the 10 year. down asear yield is traders pile into it now. carol: the yen has been in focus. ramy: right now, the yen is at the strongest point against the dollar's october 2014 for top there is a safe haven appeal there. dollar will get you ¥108. gold seeing it best day in three weeks. pushing traders into the
safe haven right now. to watch that has been moving to a course of the day, i want to go to tesla. for the first time in six days. we are potentially seeing some profit taking and some news for preorders forhose the model three have surged to 325,000. apple in focus, beat tig cutting apple's rating. customers are not of trading their iphones as fast as they were expecting. to get backe going to the verizon and yahoo! story, but let's get a check on some of the headlines from the bloomberg first word news. former u.s. treasury
secretary larry summers is calling donald trump and american demagogue. speaking at a conference in is ington, he said trump a category with george wallace, joe mccarthy and he we long. the trump presidency would be in his words, profoundly a dress and would break with american political traditions. summers says he does not believe trump will be elected president. mr. trump has cleared his public schedule according to the thehington post", skipping colorado gop state convention on saturday. mr. trump plans to focus instead on new york, his home state, whose presidential primary is on april 19. for the first time, the a ei is providing tools about -- providing clues about the tools used to unlike the iphone -- unlock the iphone from the san
bernardino killers. could not unlock new or iphones. the government is considering whether to share its findings with apple. discussed the case in ohio. surveyedy of americans know little about the zika virus. suggests manyed people still are not sure whether there is a vaccine or treatment or anyway the virus can spread. tore is no official vaccine see go which has been linked to birth affect -- earth the fact. global news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. we do have breaking news -- verizon is considering a bid on the web
does this. so they are interested? i think it is a bit of a surprise that google is potentially interested. google has not been one of the leading candidates for this business. marissa mayer came from google and i'm sure there's a lot of family or the back-and-forth. carol: it would be an easy fit. has search which is very big in other portions of this country and has a sizable user base. google knows that business well but the people close to this deal that verizon is in the driver seat here. we don't know if google is going to make the bed. we know verizon is working with three banks which is a big signal they are interested in this and they would be willing to buy yahoo! japan stakes,
making the deal a much bigger deal. in thewhere are we process. yahoo! has investment bankers lined up and that says they are further along. alex: we are early enough that companies can ramp up quickly. first-round bids are next week. that number will drop down significantly. carol: you have seen the book for yahoo!? 20 or 30? alex: some people have said the number is exaggerated. at this point, the number will be called down and there will be some private equity firm or some strategic timing. we know that tpg and vain are going to make a bed and a
verizon will make a bid. we will see if google makes a bid and there are a few other companies and at that point, they will deal with that group of others and then have a second round bid and pick a winner. if there is a winner. carol: at&t and comcast have dropped out. is that surprising? alex: a little bit. i think a lot of people thought maybe at&t could by yahoo! as a the senseslay, but at&t is going in a different direction and this is verizon's strategy to mary programmatic advertising technology is some content with their mobile network and create a mobile video platform. it would make sense if they were going to place their bets there. do you anticipate a bidding war based on the amount alex: it'snterested?
hard to say. we know verizon values the yahoo! internet core business at less than $8 billion. that number has fluctuated between four and 10. i think is verizon wants to buy yahoo!, i think they will. other company we have reported that could compete is google. hitting war,as a it would probably be between those two companies and those companies are diligent about what they have bid on. you point out that verizon is interested in the yahoo! japan stakes. does that make it a sweeter deal for verizon? alex: i think it makes a sweeter deal for yahoo!. for about aeporting month that yahoo! would prefer to sell its yahoo! japan stake and this is the time to do it
and monetize their assets. then the question is what would verizon do with it? softbank owns the majority of yahoo! japan and we had one source tell us that they have the right of first refusal and if they want yahoo! japan, they can get it. it's a question of how much they wanted. we have been told softbank only has tepid interest in yahoo!. carol: what does it mean former is a meyer? verizon buys yahoo!, marissa mayer will be on. they will run the business through tim armstrong who runs aol. there's a chance that with a right combination of equity , but it's going to be difficult to compete with giants like google and horizon. carol: is there a chance a deal does not get done?
alex: there's a chance. there's a proxy fight looming in the background where star board plans on replacing the board of directors. if nothing gets done, there's a chance the board and marissa mayer get pushed out anyway. they may be copied between a rock and a hard place here if they don't want to sell. if the barbarians at the gate go away, they sell or they get pushed out. yahoo! is fully aware that the clock is ticking. to have enough interested parties in terms of the asset. alex: we have to see where the first-round bids commend. how much money of these companies willing to pay? carol: great story. i know you wrote get here at bloomberg. alex sherman right here on bloomberg news. up, the fed is uncertain
what do you mean by that? guest: it has been hot and cold lately. it seems frustrating to a lot of market participants. one day we are tracking oil and the next day it is dollar yen. nothing changing fundamentally. yesterday for a great and we are back to feeling awful today. i think it's really confusing market disciplines. carol: what are you watching to figure out what is going on in the market? guest: i think this is a bit of consolidation. people haven't like this since mid-to late november or february. i think people have been frustrated and this back and forth is a little bit of a battle. onol: there is a lot of risk , but you've had the yen and treasuries and gold to the upside. guest: one thing people are
concerned about -- there's a big carry trade. people have been buying cheap assets overseas. that is why you see the yen strength. i'm not sure i believe in that theory. i think this will resolve it sells at the higher levels. carol: we have had a lot of and parsinging in it out. what does it mean with respect to interest rates? guest: i think interest rates are relatively stable. janet yellen set a clear signal the interestlet run. we could see 2% in the tenure and higher in the long on. pace of rate cuts, i don't know if you see one this year.
economy ato give the chance to accelerate and want inflation to run for a long time. i think they failed for four years. the last for your average -- for fourd run at 2.5% years. they are going to let that occur. one thing people have to start -- yellen really seems to be driving the boat with a global mandate and very dovish. in spite of a lack of real demand, i think you have to buy into this rally. i think we've got one more leg higher as people get squeezed into this. carol: i'm looking at the vix and it's up and down -- pick your indicator. i tend to watch more up
one point. i don't worry too much. the thing that concerns me as it seems to be everyone's favorite hedge right now. t vix is another based on double time the vix. they've seen mass amounts of inflows which tells me people are really hedged. huge't think we will see volatility because they're such a big hedge their. that could be the impetus. carol: you are also watching coco bonds. we were watching it so closely. guest: the deutsche bank stock broke through their lows. bonds are well off the lows. i think they rebounded from the
low 70's to the mid-to high 80's. you see a little differentiation were bank stocks are getting hit. ok.senior credit is doing is withthe sad reality banks, you come into earnings, they are going to suck. carol: did you just say that? they will probably agree with you. on the credit side, they are much safer because they've reduced the tail risk. and almost volumes everything are down, including homebuying. -- there's a lack of velocity driving much of the world. carol: is it because investors are being is earning and picking through the good and the bad? guest: yes. i think we had a huge selloff
and everyone bought into the year-end rally in the wrist wholesale selling. now come easy discrepancy where people say this looks cheap or this looks rich. that leads to a much healthier market. think that's a good base to build from. carol: thank you so much. let's get a quick check on the markets. we are 40 minutes away from the closing bell on this thursday and you can see stocks just off their lows of the session. the dow jones industrial average down 1.1%. the nasdaq down 1.6%. that's good for a 1.4% decline. let's get an update on commodities. some of those safe haven trades attract investors. crude oil down about .8%.
carol: this is bloomberg markets. stocks are selling off in a pretty big way. the s&p 500 erasing all of its gains for the year, joining the nasdaq in the red for 2016. ramy inocencio is standing by with the options market and how it is handling all of this action. ramy: joining me today is strategist from zacks.com and joins in chicago. obviously a very risk off day today. stocks heading to their worst weekly fall in the past two weeks. definitively turning negative. what is your take on this?
david: the market looks like it's rolling over a little bit, but when you thought -- when you talk about the spike in volatility, it's only because we haven't seen much volatility over the last couple of weeks. we had a long streak where the s&p wasn't up or down i 1% for several days in a row, so to break out of that range a little bit, i'm not too concerned and i don't think the market is that worried about it. ramy: the vix is spiking up above 17%. you say you don't share in the fear. why is that? david: 16.5 on the vix when you are talking about it at 14 earlier today, which is the lowest you end up seeing the vix. you have a historically low 16.5 -- ipop up to feel you she -- you should be more concerned but here, i'm not going to freak out about it.
looking at safe havens, the yen is strengthening today, since highest strength october 2014. is this through the lens of negative interest rates there? david: we had those three meetings and the ecb with super mario saying he's cutting it -- cutting rates. the one that you thought was going to be the most dovish helped steady and now the market is saying we better do something a lot stronger because it's just not working. that is why you see yen strength in the face of this. ramy: tell me about twitter. david: i'm a big fan of letting the jockey, not the horse. you get one of the best jockeys in the game with jack dorsey.
i know a lot of people say he's got a part-time ceo but i think he's doing a good job right now. he just announced a deal with and they're going to have 10 of them. i think that's just the beginning of jack starting to flex a little muscle and i've got a trade for you. i'm going to look at a call meead and it's going to cost $1.50. i can triple up on this and get you far enough of where you have an earnings were coming and i think it's going to be a great trade. thank you for joining me. more bloomberg markets next. please don't go away. ♪
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a check of the headlines. our crumpton has more from news desk. mark: would you democrat is more qualified to be president? sanders looked at wall street donations to hillary clinton super pacs and her support for the iraq war for reasons why she should be disqualified. give a directo answer. islamic militants have kidnapped a 300 contractors in an area in northeastern syria. the workers were abducted from a town outside the capital, an area where militants launched a surprise attack against government forces earlier this week. prosecutors investigating the terror attacks from last month want information on the so-called man in the hat. he was seen with two suicide bombers moments before the explosions.
of 40's are asking the public for any information or photos. are asking the public for any information or photos. some overnight rain will help slow down the fast greens. jordan spieth is back in part of an 89 man field. arnold palmer was on the first tee for the ceremonial opening shot. he said his health wasn't good enough to join jack nichols and gary player. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. carol: markets closing in about 30 minutes. abigail doolittle is live at the nasdaq. selling today. abigail: it has been accelerating all day.
leaving, the dow and the s&p 500, some of the large top technology shares. the nasdaq is on pay for its worst decline since february 8. before turning to some of those, let's take a look at one of the buddhists -- boosts. see $2.2 billion in 2019. he has confidence in management on delivering the outlook. recently, the stock it did put in a bullish. returning to some of those stocks dragging on the nasdaq, the big e-commerce names are included, including amazon and ebay. this after a channel advisor for all the march comps three.
google continues to impress. amazon expected to grow even greater than e-commerce rates and ebay did have a tough march but its average for the quarter, which is marginally positive. carol: i have to ask you about yahoo!'s news today. verizon said to be proceeding with a yahoo! bid. shares initially spiked. abigail: this stock was down 2% earlier. the japan softbank was probably out of the process and i are on ons report -- and higher this report. google is likely to weigh in. fact that thee price rise in my offer could be less than what ceo marissa mayer is working for. thank you so much.
abigail doolittle at the nasdaq. let's get back to that breaking story. proceedingd to be with a bid for yahoo!'s web business. allen joins us now. i know we will talk a lot about apple but you do cover verizon stocks. what you think about them making an offer for yahoo!? guest: it has been talked about for a while. waysare looking for other to go into the growth area. they bought aol, tim armstrong as a ceo. they launched a product called go 90. there is a dedication in this company to try and expand into
media properties and i think this is just an extension tim armstrong is tried to get into. carol: it would be good for verizon or not? acquisition. small anything looking for growth, we would legacy them focus more on finding ways to add more capacity to their network. dish is a massive transformational acquisition. this is a small thing tim armstrong is doing to enter into the media business. carol: you have a call on apple today. you cutting the earnings estimates. what is your thinking behind that call? guest: the issue's upgrades. the product apple sales is very high-priced and in the developed markets, customers were upgrading every year in some cases. seeing a muchare slower upgrade rate. people are holding onto their phones longer and this will have
an impact on apple. it's early days in this. it could be when the iphone seven comes out, they'll be so innovative and interesting that the rates will go back up again. we haven't seen a drop like we are seeing now in the first quarter. these majorrate of wireless carriers are reporting in a couple weeks will cause investors to think whether there is a structural change in the industry. if there is a structural range -- change in the industry that it has been seven or eight years since the iphone launched. there has been the discussion of the diminishing market. with was a big sales cycle the six because it was larger. the iphones have they're like and they're holding on longer, that could be a structural change in how the smartphone industry works. carol: i'm one of those customers. it interesting. are the dynamics and thinking
about apple changing? maybe it's not that growth company we have all loved. guest: they've had several innovative products in there have been a couple years where the management team has talked about new innovative products but we haven't seen anything generate a terrific amount of revenue. seen -- we hadly the apple watch. carol: it has not been a mover. guest: there are a lot of opportunities. it's just not delivering those into the market. --ol: we have laura market martin on yesterday. she said out of her thinking was a low platform and she says when somebody is part of the apple ecosystem, they stay with it. you don't dispute that. guest: it's troop -- true. it's true there are other services that apple can get into but they have talked about these
for several years. where are they? carol: are we having a problem with technology overall? and whistles that make us take our existing device and get a new one. a cap i never want to put on what our friends on the west coast can come up with. as far as new innovations, there is a lot of opportunities that can exist. will it happen over the next couple quarters? probably not. now you have a decline in revenue and earnings. carol: how problematic is this for apple going forward? they have a ton of cash. they still kind of blow everybody else out of the water. andt: it is a loved product they have a tremendous opportunity to expand upon that but it actually has to be done in these products have to capture that revenue. i don't think it's a major
problem but it's certainly a red flag if your core product is something customers were upgrading every two or three years and now they are waiting three or four. carol: what about customers in emerging markets? china and these developing markets, does that provide opportunities that even -- may not be changing in our phones as frequently -- guest: they have to increase the price. import taxes make that difficult. a $50 or $100 price cut on a legacy phone is delayed very expensive product. china is a diverse country but if you are talking about lower peoplehones and all the in india, you will have to have a lower-priced phone that addresses that market forced carol: up -- market. there are great opportunities with autos, in the living room, additional innovations on the iphone.
there's so much opportunity for a company whose customers love the product. we would just like to see them actually delivered. carol: in may just take a little bit of time. fiscal year 17 is our time to return some growth about investors have to be comfortable with a declining revenue and declining earnings business. carol: different metrics then we have seen. walter, thank you so much. a quick check on the markets. about 20 minutes away from the closing bell. we are down across the board. near our lows of the session. down 1.1% on the dow jones full's. nasdaq -- jones. a 1% decline on the s&p 500. falls.ving higher as oil investors looking for those essays haven trade. gold up 1.7%.
carol: this is bloomberg markets. it is time for the bloomberg business flash. we start with the senate banking committee delaying action on two nominees for the securities and exchange commission. richard shelby suspending a vote after democratic senators said they were against hester pierce and lisa fairfax joining. they voiced concern the nominees would not push for new disclosure requirements on corporate political spending. the cuts coming as internet media company tries to
reorganize shifting its focus from video entertainment to politics and world news. 320 five people globally. verizon communication points to make its first round bed for yahoo!. google also considering bidding for yahoo!'s core business. among those who are set to not place bids include at&t, comcast, microsoft. flashs your business update. this evening on bloomberg television, we will be presenting a rear conversation between federal reserve chairs past and present. sitting chair janet yellen and her predecessors will all be speaking at the same event of this evening. bloomberg tv and radio will have full coverage. joining us now for a preview, joe weisenthal. thesewild visit to have
four together? joe: it's really cool. it's never happened before, an event like this. i can't remember a time when two of them were on stage talking. given the changes we have seen in central banking over the last few years and decades, it should be cool together perspectives. carol: they are there for a good cause. it's the international house event. it's for a good cause. are we expecting them to speak about monetary policy? doesn't sound likely should expect very much concrete about what the situation is right now or specific stuff about where the fed sees inflation going but that doesn't necessarily mean the conversation wouldn't be relevant to investors hearing all quarter of them talk about the broad framework through which a central bankers in the past and currently evaluate the
economy, the tools of their disposal. given the monetary policy still in involving art, people discuss what are some new tools. ben bernanke had a blog post recently where he talked about negative rates and possible future tools the fed might have. any discussion that talks about the evolution of the fed toolboxes bound to be revelatory -- relevant. who are you most excited about? guest: obviously, we hear from janet yellen quite a bit. but she is always interesting. i think it's interesting and ben bernanke in a recent blog post, he specifically said something interesting which is that he wanted to talk about negative interest rates because theoretically, that would be good for the economy, just talking about it. to sink bill -- to signal to
people that there are more tools would be good. it will be interesting to see if he talks more about future avenues. carol: i'm curious to see -- if there will be an interaction between them. whether or not anyone thinks central bankers have overstepped their bounds. joe: that's an interesting question. perhaps as they're been too much of a burden placed on them because of the fact fiscal policy makers in the u.s. and europe are perceived to not be doing particularly well. carol: do we know anything about the format? joe: we will have to find out. carol: it will be interesting. what would you want to know from each of them? i remember in january and february, everyone was like the fed is out of tools. then bernanke and
janet yellen have shown is that the real limit is what they can think of. mario draghi has shown the same thing. this idea of the fed being out of tools, doesn't really make sense or is there always room for policy? carol: especially what we have heard from the european central bank this week. joe: all the different ways they can go into the market and buy something, is there really ever a limit to what they can do? carol: the dual mandate, i will wonder if they have gotten that off course at all. interesting to watch. thank you, joe weisenthal. do not forget the nightmare conversation with janet yellen and her predecessors starting at 5:30 p.m. eastern time on bloomberg television and bloomberg radio. as we head to a break, a look at shares of yahoo! up.
prize incentive plan to bid for yahoo! web services. google also planning a bid. they have been bouncing around a bit on this news. as we had to break, this is a live shot of president obama. he is visiting the university of chicago to make the case for why judge merrick garland is most qualified for the supreme court. ve. can see that li this is bloomberg markets. [applause] ♪
lows of the session. ramy: despite the decline in the course of the day, we are off the session lows and the last hour or so. the nasdaq continues to be down 1.6%. in terms of a couple superlatives, the s&p 500's own sinceor its worst fall february 23. the nasdaq on its worst day since february 24. in this risk off environment, let's take a look at what is happening with the safe havens because traders are piling into what is happening there. 1.5 percent,up it's best today in three weeks. the 10 year down seven basis points. 1.6 9% is the yield right now. the japanese yen is gaining strength against the less a
dollar by 1.25% of their. -- 1.25%. -- verizon ist set to proceed in a bid for yahoo!. verizon is down by 3%. carol: thank you so much. let's get more on the markets as we head to the close. joining us now is oliver renick. what do you think in terms of today's retreat? all over: it picked up steam pretty quickly. financials and technology both a down. financials more than 2%. indexes weighing -- those two indexes weighing. bottom one fundamental picture doesn't look that great.
another thing i think is interesting -- you also had concerns of banks. also what does the dovish fed to mean. carol: let me ask you about what is going on with the yen. : i think it is that surprise year that affected a trade and that is the carry trade. a sickly when you borrow and sell a lower yielding asset and you use those funds to buy something, a riskier asset like a currency or bond that yields --e or a stock of equity i've an interesting chart you're looking at perhaps the impact of the yen carry trade. the yen dollar gains a percent. is actually seen in the past 10 instances the stocks are losing dayt .8% on average on the
when you see that kind of strength in the yen. i'm not saying that's totally what's happening, that's not the whole story. it's also not the story that when the yen goes up, stocks go down. it is also kind of seen as a safe haven move. if there is a nervousness about the global economic environment, we see that rate. aiver cold and we also have appreciation of gold. carol: what are you looking up particularly with the x? vicks? listed -- we have a chart looking at what is called the roll cost. this is a way to assess to what is lookingvicks
normal. it is shaped upwards so the current spot is lower than the next month but right now, the next want is a so much more expensive than the current spot that is you want to hold on to your futures, it will cost you a little more because there's a lot of people doing that trade right now and the expense you will incur by rolling over your contract into the next month is getting expensive. so much.ank you our bloomberg stocks reporter, oliver renick. " and theou miss? market close coming your way. a quick check on your major averages down across the board. ♪
alix: u.s. stocks closed lower this afternoon. the worst day in six weeks. scarlett: a glimpse into the central bank. to three things you need watch for ahead of this historic conversation. joe: what does the yen strength mean for the bank of japan? alix: an exclusive interview with u.s. energy secretary ernest moneys -- if an oil freezes possible. scarlett: we begin with our market minutes. a resumption of the decline we have seen. butback to downward arrows this is kind of a wash when it comes down to a given the losses today. the we some big gains for yen.