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tv   Bloomberg Markets  Bloomberg  April 8, 2016 2:00pm-3:01pm EDT

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david: here is what we are watching this hour. markets looking to close out the week on a high note, struggling to gain traction, giving up earlier gains. health care is the laggard. lisa: crude looking to close out the week with a 5% gain. oil rallying today big-time. 322 billion dollar valuation -- two hours away from the close of trading for the day. the ted to the markets desk where rami has the latest. ami: off the session lows, but
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we had been higher for most the that's most of the day, especially this morning. session lows, but we had been higher for most of the day, especially this morning. doubt up about 4%. about .4%.up wednesday's pop and the green we unableing today, to balance out the negativity we tuesday. eight of the 10 sectors on the s&p are in the green. energies of the most and has been all day come up by more than 2%.
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materials up by a little more than 1.2% there. health care is the biggest laggard, down about .4%. followed closely behind by consumer discretionary there. i want to talk about the u.s. , a lot of volatility happening back-and-forth across the trading session. by 109 to theen dollar. about 108.37,d the japanese yen. david: quite a week for the, quite a week for commodities as well. rami: we did see it push higher to the 6% mark, still rallying 5.4% for nymex crude.
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a reason production could happen ine opec members meet several days from now. gold futures up about .5% here for the second day in a row. let's take a look at what's week today, nymex crude following that rally. headed for its biggest weekly falseness january. january.ince lisa: a confusing week. let's check on the first word news this afternoon. an associated press poll finds 55% of americans say they have a negative opinion of democratic presidential front-runner hillary clinton. that is better than the 69% who find donald trump unfavorable.
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just highlighting the negative feelings americans have for both presidential front-runners. votershalf of registered say they would at least consider voting for mrs. clinton while 63% say they would never vote for mr. trump. sanders plans to attend a vatican sponsored conference the puts them in the middle of a diplomatic dispute. the senior vatican official accused sanders of showing monumental discourtesy in seeking an invitation to a meeting on social and economic issues. a spokesman for sanders disputes that characterization saying the invitation was extended by the vatican and not at the senator's request. a man authorities believe had a key role in the paris and brussels terror attacks is in custody. mohammed was taken into custody during a police raid today in brussels.
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he is believed to be the mysterious man in the hat who escaped last months double bombing at the airport. key role in both attacks that were carried out by islamic cell linked to state. the cost of mailing a letter is going down. beginning sunday, the price of a first class stamp drops to $.47. the agency estimates it will lose $2 billion in annual revenue with the price drop. in philadelphia, fans are lining the streets to celebrate villanova's ncaa championship. the wildcats upset the north carolina tar heels in dramatic fashion, winning on kris three-pointer at the buzzer. global news 24 hours a day, powered by our 2400 journalists
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in more than 150 news bureaus around the world. i mark crumpton. i have to extend my apologies, we did not do that on purpose. a loyal tar heel fan, i'm sorry. u.s. stocks are pretty much flat on the euro after a rocky start. that's flat on the year after a rocky start. lisa: bling find sees consolidation opportunities -- lloyd blankfein sees consolidation opportunities. the you think stocks will remain stable enough to support robust m&a activity through the rest of the year? >> we have not had a great start of the year in terms of m&a or ipo activity. you have had a very powerful rebound here come up 15% in the last two months. we may be in for a bit of reversal here given the fact and we've got difficult gdp
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first-quarter corporate results coming up over the course of the next month or so. david: you dig into the history here, the january barometer. how worried should we be about ?hat more concerned about what the near term fundamentals are. the atlanta fed does a good job of keeping track -- they've taken their first quarter number .own to .4% second order of last year, we were at 3.9%. -- second quarter of last year, we were at 3.9%. you want to see gdp moving up rather than down. on the corporate side, we will get first quarter earnings results next week. revenues are expected to be bound, the fifth consecutive
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backcourt appeared earnings 8-9%.ed down eigh the market digests disappointing gdp numbers -- lisa: as someone who enjoys looking at the credit market, usually the pessimism comes from the credit market. i was looking at a chart that showed the yield for bonds in -- the yieldss have come down more and more thanly on the junk bonds the comparable measure for the s&p 500. that should be fairly bullish for stocks. phil: we think stocks will be fine longer-term. given the 15% rally in the last and some tough news
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on the immediate horizon, we could be in for a pullback. we are thinking something in the 5-8% neighborhood. 500, we are at the s&p could we lose some points? absolutely. about the healthy consolidation here that allows investors to cash in some of their gains off of what has been a terrific two-month short covering rally. david: what are you looking at? what do you like? now. we are there right we've taken some money off the table in equities, more money in fixed income. within the equity categories, come atthat looked best beta, lower dividend yield -- more of the big
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uglies then the technology guys. the economy will subsequently get stronger, we will have a new congress and new administration to work with next year. likely, stocks will work higher over time. not optimistic about fiscal policy now, i'm optimistic about the potential for more positive change in fiscal policy in the future. lisa: there's been a lot of pessimism around stock this year. this has been one of the most shorted stock rallies in history. how do you square this pessimism with a sense that the market could still fall? doesn't that short base support a potential continuation of the rally? coming ifreality is gdp comes in material is stronger than we think -- the reality is, if gdp comes in materially stronger than we think, stock prices will go higher. evaluation at 18 times earnings is excessive.
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pricing and those fundamentals need to match up right now. we think that is what will happen in the immediate future. coming up in the next 20 , we find out if the bubble has already burst for unicorn startups like airbnb and uber. lisa: does he think the next president will honor the iran deal? what are the consequences for israel? david: we look at brent and of uti crude this week. " afterloomberg markets the break. -- we look at brent and wti crude this week. more "bloomberg markets" after the break. ♪
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david: this is "bloomberg markets." the number of private companies valued at more than $1 billion has soared in recent years. the list of so-called unicorns has grown to about 200 companies worldwide. lisa: these companies are having more trouble raising money. emily chang joins us from san francisco. are these startups headed for a bubble or bust? a question we will try to answer in a special edition of "bloomberg west" tonight. had beenaluations soaring, but now, we are already seeing some valuations being corrected. biggestspeak to the players and why commentator, the biggest tech incubator in the world. or.ombinat
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nd dropbox are the two biggest companies that came or by marketbinatio cap. it was started in 2008. people are always looking for new ways to make money. same thing with over. does it matter? airbnb is on track to become profitable this year i'm according to sources. -- same thing with uber. airbnb is on track to become profitable this year, according to sources. >> you want to operate your company like a public company. we don't have any initial needs, we don't have any more need for capital. we don't have plans over the next two years to go public. after that, we will see.
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emily: we will be asking that same question of dropbox tonight. dropbox has faced several write-downs by mutual funds. to them about how that is affecting them and what they see in the future. david: some news today out of brooklyn, t the justice accessent pressing for to an iphone that belonged to a drug dealer. the government pressing ahead in its case against apple come asking them to help out with this jugular phone. even though they dropped the san apple doescase -- not know why the government is pursuing this case. there are several open cases dealing with different iphones. something that will ultimately have to be addressed. keith alexander, former head of the nsa is now running his own
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cyber security startup and he believes there is another big attack coming. take a listen to what he told me. keith: in cyber, when you look at what is happened from 2014 to now, you see an increase in attacks from other countries. attacks going from financial institutions to energy institutions. in the asian countries, you are or -- you saw the ukrainian power grid get taken down in december and generate. and january. emily: the former head of the alexander will be my guest on "studio 1.0" this weekend. lisa: that special "bloomberg west" is tonight at 6:00 p.m.
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eastern here on bloomberg tv. with keith alexander at noon on sunday. david: time for the bloomberg business flash. westar energy drawing takeover --erest from ammon court amencor -- lisa: the event driven hedge fund tumbled 15% in the first quarter. almost half of the losses occurred in march. olson manages the advantage and advantage plus hedge fund. bonuses worth a combined $43.8 million last year as the ceoshares fell -- bonus for the year was $8.5 million.
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that is your business flash update. a check on the biggest laggards today -- rami: in the retail and restaurant section. consumers are not consuming. let's head to the retail sector. ap down by 13%, seeing its worst day right now since 2011. it is not just about same-store , also inventories piling up. let's head over to another retailer that has to do with boot barn, down by more than 14% right now after j.p. morgan downgraded the stock to neutral versus no overweight because of layoffs happening in the oil and gas markets. julie hyman pointed out the fact that there's a huge correlation
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between where boot barn is and where oil-producing regions are. with restaurants, ruby tuesday's also falling. down 13% come on track for its lowest close since april of 20 09 here. they were expecting an uptick of .8% there. from fives downgraded -- two five cents from eight cents. to five cents from eight cents. out theill ahead come massive selloff in oil has dramatically impacted bond traders, including passive bond funds. ♪
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lisa: you are watching "bloomberg markets." it is easy to see how cheaper in next bond funds have been all the rage in recent years. the rise of these passively managed funds have made the west bond markets more fragile. let's take a step and look at just how popular these bond funds have become. ofningstar data shows 27% mutual funds that bone taxable funds come upxed from 20% at the end of 2013. the significance of this, these funds go and invest in bonds based on how much debt each company has outstanding. the way these indexes work, the companies have the most that are rewarded with the heaviest
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weighting. they get more money that comes into these indexed funds. this becomes a problem when noncredit worthy companies borrow a lot of money. one thing we saw in the energy debt boom in 2012 and 2013 was this is the same time that all of these index funds were growing. the total amount of junk rated debt has tripled since the end of 2008 and has become a much bigger proportion of the overall high-yield debt index. in 2008 go up from 11% -- you have seen it go up from 11% in 2008 to almost 15%. david: let's look at the first chart. the uptick in popularity. what explains that? lisa: the indexed funds are cheaper.
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think about etf's, mutual funds that don't have to have the active credit selection. you also think the federal pushve would basically further down yields on bonds across the board, fueling a lot of these gains. could thought come if i just get into that market, i could get some gains. was come investors knew there would be a buyer for any debt that the not have to scrutinize it. the new if the big bond issuance , theying to be bought knew if they bought a new allocation, it would immediately pop and somebody would bite within the next 30 minutes. that's what you saw the proportion of the index increased to such a degree that was made up of energy companies. david: you see that worrisome uptick -- is there a chance they
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would not known about all these investments in energy? lisa: i've talked to investors who've said frankly they did not realize it and they were not necessarily overweight energy, it was just a matter of them falling -- following the indexes, trent to get exposure to high-yield bonds. -- trying to get exposure to high-yield bonds. shrink, itnues to will end up being that much less popular with investors. david: still ahead, the commodities he was a look at oil, having a big day today. nymex crude up 6.1%. ♪
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david: from bloomberg's world headquarters in new york, this is "bloomberg markets."
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appealinggovernment's in new york judge's ruling last month, rejecting its demand that apple help unlock a drug dealer's iphone. in tech giant has cooperated previous cases and should do so again. the government successfully hacked into the iphone of one of the san bernardino shooters without assistance from apple. bernie sanders appears to be surging in the critical state of california. ,illary clinton leads sanders but the lead has only increased 1% since june while sanders's support has jumped six points. republican candidate ted cruz added $12 million to his campaign war chest last month.
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he has raised about $32 million over the first three months of the year. officials did not say how much cash the texas senator has on hand now. president obama says a functioning american democracy is what is at stake in november's elections. the president said it is important to elect leaders who believe compromise is not a dirty word. and listen to those who disagree with them and respect those who are unlike them. the president mentioned donald trump and ted cruz several times in his remarks. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. david: commodity markets closing here in new york. let's look at today's biggest movers, starting with cotton, jumping the most in four months. export sales doubled from the previous week. copper slightly higher, still
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capping the worst week of losses since january. a glut of refined metal and weakness in china putting pressure on prices. wti crude jumping amid speculation over whether an accord to cap output can be reached. lisa: nobody's been more vocal about the iran nuclear deal than benjamin and yahoo!. -- benjamin netanyahu. he spoke exclusively to bloomberg from tel aviv. >> the prime minister made clear what his concerns were. concerns are issues we also understood. the iran agreement was focused
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exclusively on removing the existential threat of a nuclear weapon. that is what the negotiation was. i think anyone who looks at the that it is a much stronger agreement then had been anticipated -- than half been anticipated. been anticipated. there are concerns of the prime minister and of president obama and of all of us in the united states that iran has other behaviors, like supplying launches, missile activities in yemen in syria, human rights issues. we have a lot of problems. , let's takehy was
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the existential threat off the table and not relax on the others, the other issues, quite the contrary. redouble our efforts, strengthen our partnerships with israel and the gulf countries in our security cooperation. we are doing and i think the prime minister has made it clear that, look, a deal is done, it is implemented, let's make sure it is implemented fully, it is verified and then we can continue to address the other issues we see around. , includingl of us , also hopeinister of time thatiod the other behavior we are so concerned about the change.
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-- will change. the agreement was built on rolling back the nuclear program and putting in place extremely strong verification majo measurs forever. that is the basis of the deal. it does not solve the other problems, but we have to work on those now. >> donald trump says he would rip out the iran nuclear deal on day one. is it reversible? is we havethe issue to implement verify. the next president will take office just after the one-year anniversary of implementation. it is hard for me to believe it would be a wise move on the part of the nine states of america --
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united states of america to see tingyear of implemen this successfully and walking away from that. has come tolief iran. knowing that it is extremely plus onethat our p5 and other partners who were critical in a comprehensive sanctions regime, it is very unlikely that they would follow our lead if the next president arbitrarily says everything is going fine, but i don't like this deal, let's start over again. it is highly unlikely it could be reversed. >> technically possible, but i don't see that any calculation leads you to that being a sensible approach.
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upiran has been ramping reduction, 3 million barrels a day. it being overly optimistic about the amount of oil it can produce over the course of this year? >> they started out with a fair amount of reserves they are marketing. understood the capital requirements to be the order of wehner to $50 billion to invest in those fields to bring them back up -- 150 billion dollars to invest in those fields to bring them back up. i don't see how those resources will be attracted on a short timescale. time.ill build up over how fast it goes come i cannot say. we know the capital requirements are quite significant. moniz in tel
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aviv. the republican presidential candidates are hoping to win delegates in colorado this weekend while bernie sanders is about to take time off the campaign trail to head to the vatican. lisa: so far, the dow jones industrial average has been no friend of facebook. index is leaving out the iconic social network. david: look at the nasdaq today come up about .1%. more "bloomberg markets" coming up after the break. ♪
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david: this is "bloomberg markets ." time for the bloomberg
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business/. ." this is "bloomberg markets time for the bloomberg business flash. more orn has received less based on whether he could achieve return on equity and book value targets. lisa: the first inflow in four months for the $1.3 billion fund belonging to bill gross. hasd: unitedhealth group decided to call it quits into states. that's in those go states. hasnitedhealth group decided to call it quits in two states.
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in politics, hillary clinton and bernie sanders are taking a step back from the negative tone earlier in the week. nbc that oning clinton's worst day, she would be an infinitely better president than a republican candidate. with us is mark halperin. it seems like the democrats are trying to show up the republicans and say, look, we are more civilized than you. is that what is going on? mark: they both like to say look at the republicans having this messy nomination fight. twoy, neither of these relish and negative campaigns. is in the negative mode, he seems to be not at all troubled by it. is not intors negative campaigning.
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their natural state is to avoid this. what broke out this week is a product of fatigue, the stakes e hotheads inth new york. what about las vegas? david: senator sanders trying to escape that hothouse. he's going to the vatican. mark: there's been some controversy about this. nother he was invited or come i don't get why he is going to spend two days off the campaign trail there to not meet with the pope. he can eat pizza here. it seems like a strange decision. i might say maybe in the end, he will not go. it is not really clear. onwill have jeff weaver
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"with all due respect" tonight. they thinkking why spending two days in rome ahead of the primary is a good idea. if he is not going to meet with if pope come i don't know there'll be a conference at the vatican. lisa: the vatican has completely distance themselves from him. it's been a bit of a slow day on the campaign trail. what happens in new york, the vacuum gets filled. here, this thing is getting a lot of coverage. david: hillary clinton is campaigning in buffalo. you can watch that on the bloomberg.
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ted cruz will make an appearance at the colorado republican assembly. what is it? why has he decided to go? david: we are getting great education in this country about how delegates are selected. mark: in the florida recount, we hasned that every state different voting rules and in florida, it is 67 counties, has different ways of voting as well. now, we are learning that every state has to from ways of picking the delegates. , there is a multi tiered process. it is one of many states where there are indications that ted cruz's delegate operation has been more sophisticated the donald trump's. ted cruz has personally gone to north dakota and colorado where he can appeal to delegates in a way that has so far paid dividends for him. lisa: it's interesting how much
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the supreme court nomination is playing into the race. fox news and spoke with president obama come asking him whether he would rescind his of judge merrick garland. canident obama: what we have is a situation in which the republican senate simply says because of a democratic president, we are not going to do our job. >> are you saying you will stick with merrick garland through the end of your term? president obama: yes. lisa: that is airing on sunday, the full interview. with the democratic nominees make an issue of this in any way? mark: it is an open question. you hear a lot of republicans now saying that made a huge mistake. garland is a centrist.
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you would be better off confirming him then if you think hillary clinton will be elected, letting her nominate the next justice. she will pick someone younger and more liberal. the younger thing is a big deal. part of the criticism from the in their conservatives 40's and 50's will be there for a long time. merrick garland is older. this will be a raging debate all year. democratic efforts to force a confirmation hearing have somewhat stalled. the prospect that he will be concerned -- confirmed before the election is small. david: you mentioned the ted cruz going after delegates. in thesome movement trump campaign, looking at what might happen if they get to cleveland and things don't go as
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that campaign would like. how closely is the trump campaign working on that? >> they've hired barry bennett and others working on this. they are all experienced republican operatives. this is a combination of art and science. there is a human element to it come also a lot of data that is to be gathered about who they are, might that's what might influence them. there is a widespread acceptance that it is much better for trump to win this with a majority without having to go to a second ballot. that means in the short term trying to get people to vote for him on the first ballot who are free agents. if they can turn enough of those people into trump delegates, he may be able to eek it out on
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the first ballot. lisa: mark halperin, thank you. isight, their special guest jeff weaver. david: coming up, facebook shares have surged and the company has more than one billion users around the world. why is this social network getting the cold shoulder from the dow? coming up come a look at facebook shares since the ipo in 2012. up 192%. ♪
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lisa: this is "bloomberg markets ." the nasdaq is the laggards today, but off its lows. abigail doolittle joins us live from the floor of the nasdaq in manhattan. certainly has been a
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volatile day at the nasdaq. 1% this morning, then turned into the red, weaving between red and green. in the context of an up-and-down volatile week. the nasdaq on pace to finish this week down by more than 1.5%. rally off ofe february lows is getting tired. facebook shares down 4% on the week, down monday after deutsche comments,autious suggesting the company could miss first quarter estimates just slightly. the stock would likely trade down. it is trading down into that report. the stock had been higher 5.7%. -- higher by .7%. traffhers saw facebook
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ic fall 20% in the first quarter. all of this has taken facebook back below its 10 day moving average, suggesting perhaps the new york -- the near-term momentum is turning bearish. facebook is higher on the year by more than 5%, the biggest boost to the nasdaq, right behind apple. q logic set to higher a catalyst group to explore a -- hire catalyst group to explore a potential sale. lisa: facebook is the fastest ever to reach $230 billion in market cap. david: so, why isn't facebook in the average? it is getting harder to ignore the social elephant in the room. how is membership in the dow
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determined? how often are new entrants considered? >> it is determined by a committee. they meet a couple times a year. abouttimes, changes come because of some sort of corporate change. one of those will potentially happen soon with the merger between dupont and dow. why doesn't matter if a company is in the dow jones industrial average -- why does it matter? do they get money based on how well they select companies? >> there are new owners now. there is some concern of having an index that does well -- it's supposed to be a representative of the u.s. economy and the stocks. it is a 30 member gauge. the biggest companies in each industry. david: how well this technology represented right now? >> it is very well represented,
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reason they might not put facebook and. there are six technology stocks. food, there is no food stock. 2012t -- taken out in in 2012.en out facebook is a really young company come only founded in 2004, only public since 2012. the revenue is pretty small. the second smallest company in the dow. expressumors american might be on the way out. >> it is down 38% in the past two years or so. the company has struggled quite a bit with business and losing some of its key partnerships. there is speculation that maybe american express would be taken
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out, that might pave the way for facebook or another financial company. is there any other company on the short list to get in? >> someone mentioned wells fargo. that might be a better one for 141 if american express is taken out. david: qlogic hiring catalyst to explore options, including a sale. that is boosting shares. more "bloomberg markets" coming up after the break. ♪
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>> welcome to "bloomberg markets." ♪
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carol: good afternoon, everybody. i'm carol massar. here's what we are watching at this hour. a flat year for u.s. equities as we discuss where markets are headed and how the fed rate hikes might play out. then a bidding war for yahoo!, verizon and google are said to be in the race for the company's web business. corporate america kicks off earnings season next week with alcoa. how much squeezed margins and overleveraged profit. from thee hour away close of trading on this friday. let's kick it off with ramy inocencio. we started off with a rally but move down a bit. ramy: we are headed towards session lows right now. it's been a general decline throughout this whole entire trading session of the week,


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