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tv   Bloomberg Markets  Bloomberg  April 20, 2016 12:00pm-2:01pm EDT

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scarlet: good afternoon i'm scarlet fu. tracy: i am tracy alloway. stocks fluctuating near three months highs. investors focusing on couple's with results that beat presidential front runner donald trump and hillary clinton take their home state of new york in the primary giving them both a bigger lead in their race for the party nomination. tracy: google's android business in europe is under pressure. the eu is accusing the company of abusing its mobile dominance to crush competition. first we are halfway through the u.s. trading day. let's head to the markets desk. julie hyman has been tracking moves and it looks like we are at the highest level since december for the s&p. julie: 2/10 of a percent gain on the s&p. we have seen this string of advancements for the major averages.
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s&p 500 above 2100. above a level that some traders have been talking about. 18,000 for the dow. all three major averages moving to the highs of the session. the highest that we have seen. jones industrial average , last may is when the dow hit its record. 1.1%.nly off about the s&p, around the same so we are getting closer to re-achieving that record for both of those averages. the nasdaq, little further away. today's session, energy has turned around and is the best performing group in the s&p 500. up about three quarters of 1%. health care is gaining. we have consumer staples being pulled lower in part by earnings from coke. i wanted to look at other earnings movers that are not quite the biggest names but still important ones to mention.
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textron coming out with earnings that beat estimates. the company saying bell little changed in terms of sales but it's growth in industrial aviation -- industrial and aviation that did better than estimated. the chipmaker coming up with earnings that beat estimates in a particular forecast for revenues. mware -- there were questions about profitability. shares are down sharply because of those concerns. this quarter reassuring investors to some extent is earnings came in above estimates. the company's forecast was also above estimates. that is benefiting though shares in a big way. tracy: we know you have been watching oil closely. it looks like crude has turned around after inventory data. julie: moore to the point, production data. we get these weekly production numbers and you can see crude
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oil and there is usually a lag after the numbers come out and then we saw a taking a sharp leg up. better than 1.5% and it has to do with the production part of the report. we did see a week over week build in inventories. it is the sixth week where there has been a decline in production at its lowest level since october of 2014. that is what caused a spike in oil and in energy stocks as well. scarlet: julie will be back later on with our mistry stock. tracy: now we check in on the first word news. mark crumpton has more from our newsroom. hillary clinton and donald trump are leading in connecticut ahead of next week's primary. mrs. clinton leaves senator bernie sanders 51% to 42%. donald trump gets 48% of likely primary voters. governor john kasich draws 28%. ted cruz has 19%.
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connecticut holds its primary on april 26 along with maryland, pennsylvania, and rhode island. ted cruz is downplaying donald trump's victory in yesterday's new york republican primary calling it a politician winning his home state. mr. trump says there is not much of a race anymore and the associated press says senator cruz cannot possibly collect the delegates he needs for the nomination before the convention . reforms are expected to begin quickly in ferguson, missouri have a federal judge has approved a settlement between the u.s. justice department and 18-year-oldre michael brown was shot and killed by a police officer. has 60 days to implement a plan for the use of police body and car cameras. a monitor team is expected to be hired within 90 days. president obama has wrapped up a meeting with saudi king solomon, part of a 24 hour visit that includes a purg persian gulf summit.
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global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. crumpton. president obama's trip to saudi arabia comes a few days after opec leaders failed to agree on a plan to freeze oil output. tracy: our guest says even if they come to an agreement it would not have mattered much to markets. michael hsueh joins us from london. can you tell us where we are in terms of the big question which is the rebalancing of the global oil market? michael: we think things are really still on track. as you saw from u.s. data today, you were talking about supply declining. .hat is part of the picture product demand on the u.s. looked very good. the saudi -- the delhomme meeting washe doha
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not what to be a game changer one way or the other. our model remains unchanged. with a lot of disruptions also happening in the first quarter, that helps out as well. pushing us toward what could look like balanced markets in q3 and q4. q3 and q4 are typically undersupplied so you have a typical h one surplus and h2 deficit. h2 being balanced is still on the margin. a bit heritage but it should a bit bearish but it shows we are moving in the right direction. 2017 as an annual average could be balanced as well. we got very high inventory so we need to draw those down so we need to see deficit markets to reduce inventories. i think we are moving in the right direction. tracy: perhaps by second half of the year. post doha and pre-opec in june, where is the leadership among producers when it comes to the nations? is there anyone who is willing to take the lead in supply management? michael: i think what we have
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seen from last week plus meeting is that it is still the animosity between saudi and iran that is driving the conversation. that is holding back producers from the freeze agreement. . i do not necessarily see that changing june 2. they will be talking in intervening weeks so we will have more information before that meeting. as of the current moment i don't .ee a big change tracy: even if we had gotten an agreement in doha on this oil production freeze it would not have matter that much. why did investors and traders seem to get so excited about it and why did we see the oil price rally? that we my suspicion is are seeing in proving fundamental data. there was also suspicion of that
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kuwait, the strike might have had something to do with it. i think alternatively you can argue that we do see fundamentals improving. we have seen supply cutbacks in the u.s. and elsewhere as well. far-flung places as diverse as nigeria, iraq, colombia, venezuela, all of those impacting the picture. opec production has fallen for two months. of course we still have a fairly strong demand picture. not a strong as last year but still at trend or maybe slightly above trend. those things are slowly coming together. i do not think it is necessarily any impact from negotiations among producers more than it is the fundamentals naturally tightening up. scarlet: speaking of demand picking up, gasoline has been a star performer. gas futures have outperformed wti futures. estimates that demand for
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gasoline is equivalent to half the total increase in oil demand 2015. 44% in do you see gasoline getting a lift to the rest of the oil complex? michael: sure. you have seen that in the u.s. product demand in the first part of the year or first couple of weeks of the year was looking really week particularly because -- probably less restocking post-winter. since then you have seen gasoline demand pick up. that has been a big support from the u.s. i would say also for gasoline from the chinese side it is more of a structural story whereas since 2008 you have had industrial distillate demand taking a backseat to passenger vehicle gasoline demand. growth accounted for about 42% to 66% ofone up chinese oil demand growth.
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you do see gasoline being the main driver. we are looking ahead to earnings from big oil companies. xon, exxonsday, mobil, shell, all reporting earnings. a boosted margins from rising gasoline prices. what are you going to be looking for to sharpen estimates of where oil goes? that youone thing would be looking for is what they are talking about for investments for the next couple of years. it has been cutbacks in over the last was co-years that help us to get where we are in terms of supply rationalizing a bit. i would probably be looking at whether they give guidance as to what their crude oil price expectations are and how that is driving their investment decisions. hsueh. michael
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scarlet: erik schatzker sat down with the ceo of pemex. we'll give you some of that interview later this half hour. still ahead, our mystery stock. the news has them feeling less spoiled. we will unseal today's pick after the break. any ideas? tracy: i have no idea. scarlet: julie hyman will reveal the mystery stock. ♪
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tracy: you're watching bloomberg markets. scarlet: let's head to our markets desk where julie hyman has a check on individual movers and the big reveal a today's mistry stock. -- mystery stock.
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feeling less spoiled. unsealed. tracy: i still don't know. do you do any cooking at home? tracy: i live in a new york apartment with one of the tiny internet so the answer is no -- tiny kitchenettes so the answer is no. julie: if you ever cook and have leftovers you place your leftovers -- have leftovers, you place your leftovers in tupperware. tupperware is the company we are talking about. shares up 6% this year. they are dropping today. to explain why we have to unpack it. tupperware raised its forecast for full-year earnings per share. it looks like that raised forecast is because a lower than previously estimated currency impact. the company is now looking for currency impact of $.31 negative versus $.58 previously.
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it is raising its forecast. the increase in earnings-per-share forecast is coming from the positive currency so it looks like there are concerns about the fundamental business. that is why the shares appeared to be down today. we are taking a look at the short interest in the stock which is about 11%. this top chart looks at the short interest ratio versus the stock price. as we look at the stock price -- some of year these shorts have gotten squeezed out of the stock. still 11% is not a small amount of short interest in this particular company. when we talk about currency impact the company only gets about a quarter of its sales in north america. all of the rest is from outside of this country. a largest chunk coming from the whereacific region tupperware gets about a third of
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its sales. scarlet: i know a lot of people use counterfeit tupperware in asia. julie: i use -- time for true confessions in julie's kitchen. i use a lot of old takeout containers because they come in plastic stuff now. i just use those. scarlet: environmentally friendlyscarlet:. that stuff. julie hyman, thank you so much. time for the bloomberg business flash. stay onr hamilton will the front of the $10 bill and leaders of the women's movement will appear on the back according to politico which cites unidentified sources. jack lew will make the announcement later today. politico reporting harriet tubman will replace andrew jackson on the $20 bill and the five delegate will be changed to depict civil rights leaders. secretary lu faces backlash after announcing the proposal to replace hamilton on the $10 bill with a woman. tracy: a new york court has held up the convictions of bernie made off. the u.s. second circuit court of
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appeals -- enough to convict five former workers. made off is serving 150 year sentence after revealing his multibillion-dollar fraud of thousands of investors back in 2008. scarlet: the european union is opening a new front in its fight with google. regulars have sent google a formal antitrust complaint. the company is used of -- is accused of using its power over smartphone makers. we'll has responded saying it will show the android business model is good for competition -- google has responded saying it will show the android business model is good for competition. tracy: we are going to stay on google for a second. bringing in tom giles. explain this case to us. what does the eu have to prove here? tom: they want to show that google is stifling competition. that google is making it harder for you as an app developer to get people to download your stuff on an android machine.
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they do a lot of different things to make that more difficult. these partnerships they have, they pay smart phone makers a lot of money to make google apps . the showcased app on your phone. when you get a new phone we kind of go with the one that's on there. if google searches there we are not going to deliberately go and say i really want being or another search engine -- i really want bing or another search engine. scarlet: what kinds of penalties can they extract? tom: they can levy a big fine to the tune of billions of dollars. scarlet: which google can afford. tom: google has so much cash that would not be a problem. google would love to have just a fine. the bigger concern would be google need to change behavior. you need to change the way you operate to level the playing field so that someone could download apps. some of the download the chrome
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browser just as easily as anything else. at that point that is where google's business model is under threat. scarlet: it sounds like they want the will to change their process or that would be one of the stricter punishments. tracy: how much would that actually hurt google? does it somehow hurt the brand? the way it is embedded into people's lives? tom: it could hurt monetarily. they make about a third of their revenue in the entire european region and a lot of that comes from advertising. a lot of it comes from advertising on mobile phones. if he were people are downloading i google apps, maps, browser etc., fewer people will see the ads marketers are spending money on to get their messages in front of people. if you are not downloading my apps, you're not looking at my ads marketers have less incentive to spend on google versus some of the else. scarlet: i want to move away from google for a moment. big news yesterday on intel cutting 12,000 jobs, 11% of its workforce.
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put this into context. intel is very profitable. tom: intel is realizing that the shrinkage of the pc market is happening too fast. it is persisting. just devastating for business in many areas. they are moving into other areas. we know they are huge in chips per server that are occupying our data centers and all of this data washing around the internet. a lucrative business for them. very promising. they want to push further into iot, the internet of things, these connected devices. phones that communicate with our microwaves and cars etc.. those things are not happening as quickly to fully compensate for the drop-off in pcs. people are not buying these anymore as much as they used to. that is hurting intel's business. tracy: i can't wait for tupperware that is connected to my refrigerator. tom giles, thank you. scarlet: we will be back after
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this. ♪
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tracy: oil prices have caused amex's production levels to plummet. the new ceo warns that output will fall further. card from the budget after $32 billion in losses last year. in an interview, gonzales was asked which asset pen next was prepared -- pemex was prepared to sell. >> we are prepared to put on the table nonstrategic assets. integrated -- there are a lot of things within the new rules that do not necessarily have to be run by pemex. erik: i imagine that might be a fertilizer compan 10 x bought. >> that is open to partnerships. we are going to want to retain
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hearts of the equity but we don't have to retain the majority. partnerpen to having a -- >> a majority operator. in refining and where else? >> in the entire structure from upstream to refining to downstream. everything. >> are you in talks with potential buyers? >> some of them. i would like to call them partners rather than buyers. i like to call them potential partners. >> when we talk about potential partners are we talking financial partners are we talking about oil companies? >> both. >> oil companies are from where? >> they tend to be all over the world. it is interesting because they are very interested in mexico but they are very interested in pemex. oil companies don't like to go into a country without a domestic partner and pemex is a
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good domestic partner. >> you said pemex has a lot of room left to cut on the operating side. where? >> there's a lot of in efficiency that we are running in the company. were going to go through them. we could improve a procurement practices. we can improve negotiating practices with which we find specialized equipment. there is room to maneuver. >> what about jobs? consciousi'm -- i'm about one thing. jobs is not an end in itself. john cutting is not an end in itself. >> it is a sign of efficiency. >> profitability is the end of the game. >> exxon mobil produces twice as much oil as panax with half as many -- penn mac's with half as many employees. will takesay this, we the labor decisions we need to
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take based on profitability and let me counter your examples. x is 50wage bill for peme billion pesos, that would only take care of half of our cuts for this year. we are committed to becoming more efficient. it is not the end game. with erikhe pemex ceo schatzker. tracy: donald trump and hillary clinton win big in new york. how has the political landscape changed and what does it mean for the presidential nomination? ♪
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tracy: live from lubricant quarters in new york, i'm julie: we are seeing by come
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shares spike after dish network ceo charlie ergen said sees a path to an agreement to continue on its satellite tv network. among newsged there was a dispute between the two on the agreements dish has to pay for carrying channels like, a central for example. viacom shares up high about 1.6%. bergen saying that if an agreement is not reached by mid-night wednesday dish will take viacom's channels off the air. judging from the stock reaction yesterday that is seen as worse news for viacom versus dish which did not move much. if you look at dish today, making a little bit of a move on headlines but not much. 1.7%. dishet: i guest subscribers are not clamoring -- julie: or they assume viacom will blink versed.
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first. these things are becoming routine, disputes between carriers and content providers. scarlet: let's go with headlines to first word news this afternoon. mark: next tuesday shaping up to be a crucial day for senator bernie sanders after losing to democratic front runner hillary clinton in yesterday's new york primary. the sanders campaign is pointing to five primaries april 26. aides say he will decide what to do after that. mrs. clinton's victory makes her march to the nomination all but unstoppable. the senate has approved a wide-ranging energy bill. the vote was 85-12. legislation would feed up approval of -- would speed up approval to export liquefied gas to europe and asia. it was delayed over an emergency measure to help fix and replace lead contaminated pipes in flint
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michigan. the measure must be reconciled with a bill that promotes oil and other fossil fuels. criminal charges have been filed against three people in the .lint tainted water case two state regulators and a flint employee are charged with and prevents discharge of evidence tampering and other crimes. flint residents used improperly treated water that contains lead from old pipes. the family of the fan who fell to his death last year from an upper deck at turner field has filed a lawsuit against the atlanta braves in major league baseball. lawsuit accuses the defendant of disregarding fan safety by putting up a guardrail and only 30 inches tall. attorney say that is 12 inches short of industry standards. since 2008, three people have died after falls at turner field. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i'm mark crumpton.
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scarlet: republican presidential candidate donald trump and democratic front runner hillary clinton one big last night. a victory was important for trump as the delegate count puts him in the lead ahead of texas senator ted cruz and ohio governor john kasich. tracy: joining us is chris krueger of guggenheim securities. you used an analogy that scarlet and i both like a lot. you like and trump 28 corporate raider -- to a corporate raider making a hostile takeover. does that mean there is no chance of stopping him? what thesentially corporate management is -- to adopt a poison pill which is ted cruz. the only way to halt trump at this point is to keep him under 1237, the amount of delegates needed to secure the nomination
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with ted cruz being the likely vessel for that. lindsey graham, former presidential candidate orened the two to poison death by other means. trumps essentially -- asked did has been essential. he has essentially taken over the party. the nomination is his to lose. you still have tremendous anxiety among the so-called republican establishment about what a trump candidacy would mean for the party and the country. scarlet: let's go with the analogy further. is there an angel investor in this scenario? be.s: there certainly could despite paul ryan last week saying he would not be that person that really has not tamped down any speculation in d.c. get the way you really
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nomination at this point is to say you don't want to be the nominee provided you are not one of those 17 candidates who ran for it at the onset. 1237,mp does not hit which we will know a lot more after may 3 in indiana, if he does not hit 1237 and it goes to validnd or third or more -- more valid, all bets are off. you will see the steady drumbeat for that investor. scarlet: the democratic party seems to be on sounder footing to defend a raid from bernie sanders. is that an illusion? sanders does not need the democratic party as much of the party seems to need him. chris: they are on sounder footing simply because of the superdelegates. 19% of the voting stock is held by management. hillary clinton was already in a
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strong position given her leads inbound delegates. with those 19% of the total delegates largely going with her . the democratic party has seen multiple raids over the years so they were in better shape to defend this against sanders. ,o keep the analogy rolling sanders is not even a shareholder in the democratic party. he's not a member of the party. hillary's win in new york has really mathematically given her the seal of support from the party. it could continue. sanders, more than anything, is dragging hillary's numbers down. she now has a 56% disapproval rating. that is a very troubling number for the clinton campaign. scarlet: chris krueger, thank
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you so much. love the analogy comparing what is going on to domestic -- tracy: i'm not sure you could call bernie sanders a corporate anything. trump, thenald republican president of credentialsouts his as a successful businessman with a billion-dollar empire. what i've got in my hand is one of the rarest bottles of vodka in the world. one of donald trump's business failures as well. .rump vodka, now defunct it sells for about $100 on ebay. tracy: should we be buying it? scarlet: should we open it? it will lose its value. max abelson wrote about the rise and fall of trump vodka and what it means for his political qualifications. so there is my bottle is real fury and released -- unleashed if you opened it. i'm just kidding.
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i got it in a store in an orthodox jewish neighborhood brief are down in brooklyn. i like to go to liquor stores in of skewer brooklyn neighborhoods. -- of skewer brooklyn neighborhoods. trump vodka did not succeed and if you want to find it you pretty much have to go to israel around the time of passover where it is sold as a kosher for passover drink or get lucky with a strange liquor store. it has disappeared for years now. tracy: tell us about the genesis of the story. why did you decide to look into the history of trump vodka? max: i wrote a cover story for business week and it was a wide lens piece. i looked at his employees, his golf, his business empire. i decided to pick one specific thing. it blows my mind that no one has told the story before only because it is a cool story. it has the kardashian's making appearance, paris hilton. also those trumpian lawsuits in
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financial crises. ultimately failure. it says a little bit about trump but it is a fun and weird story. scarlet: the other thing that surprised me is trumped does not drink at all -- trump does not drink at all. the distiller cannot vouch for the quality of the liquor or the alcohol because they are not drinkers either. max: the first time since my sixth grade class when i could , which iord teetotaler hope means someone who does not drink alcohol. -- he does not approve of drinkers. about hisn open disgust when he sees drunk people stumbling out of offices. .e said he sold his product i guess theoretically there is a limited amount of people who -- in this case he did not own trump vodka. he licensed it to a company called drinks america and the got into financial trouble. tracy: what does this tell us about trump?
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max: one thing i have been thinking about a lot, when he talks publicly he says i'm going to surround myself with the finest people. the grandest negotiators. in this case, the people he worked with were nice. on the other hand they did not have the experience or the capital to make this product work. it's an example of trump not surrounding himself with the ideal people is a fair way of putting it. scarlet: was the economy to blame? encrusted around 2008. max: the economy was part of it. the demand was not there. if people were clamoring to get that bottle they would have had an easier time making it work. scarlet: this is not a 24 carat gold edition? max: i'm not going to tell you because i don't want you to take it. no, it is not. tracy: have you tried it? --: p i can now, the team
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the team leader of the financial team has a poker game once a month. i'm thinking of bringing it. tracy: thank you for joining us. scarlet: a closer look at earnings after the bell today. tech earnings will continue this week. qualcomm reports this afternoon. tracy: american express reporting first quarter earnings after the bell today. analysts are watching for signs of account growth following consecutive quarterly increases. scarlet: united continental namedscarlet: former air canada ceo as chairman of the board. how will the airline fare in the first quarter? ♪
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scarlet: you're watching
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bloomberg. tracy: this is your global business report. scarlet: mitsubishi caught red-handed admitting to falsifying fuel economy tests. tracy: time to buy iron ore. the world's biggest miner cuts production forecast. scarlet: bank of england president mark carney has a warning for london and its financial hubs. wherein in japan mitsubishi motors has admitted to manipulate fuel economy data test. about 625,000 cars are in all and it acted -- affected models include -- shares fell 15% in tokyo. tracy: saudi arabia has agreed to terms for a $10 billion loaned to fund its budget deficit. the first sovereign loan in at least 15 years. according to people familiar with the matter a large group of u.s. european japanese and chinese banks ar lending
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the moneye. the world's biggest miner come at bhp billiton cut iron ore production for its australian mines by 4% because of bad weather and rail network maintenance. iron ore prices are up 44% this year. scarlet: another warning on the impact of the u.k. leaving the european union. mark carney says the city of london should expect its role in the global financial system to fade if the u.k. pulls out of the eu. carney defended the central bank intervention in the eu debate saying it would be political for him to suppress important judgments. there may be a debt crisis brewing. former bank of england governor mervyn king spoke about the potential risks and repercussions. >> we are seeing it already. major potential problems in europe with banking and sovereign debt. i think you can see in china with some of the state owned
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enterprises defaulting on their loans this is going to become more common. scarlet: it is time for our quick take where we provide background on issues of interest. for decades the zika virus was considered no great threat to anyone but with mosquito borne virus spreading through the , zika's days of obscurity are over. territories reported outbreaks as of mid-april prompting the world health organization to declare he got a global public health emergency. who expects zika to reach parts of every nation in the americas except canada and mainland chile. currently there are no specific drugs to treat zika and no vaccine to prevent it. the u.s. government is working on both. brazil recorded a 20 fold increase in babies that developed abnormally small heads and brain defects. earlier this month the u.s. centers for disease control made a connection between that
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condition and zika. a zika was identified in 1947 in monkeys in uganda and five years later in humans in uganda and tanzania. one theory why it is spreading rapidly now is that people in the americas are encountering it for the first time and have no natural immunity. transmitted by mosquitoes that have bitten a human infected by the virus. the virus can move to new areas when mosquitoes hitch a ride on travelers or cargo or when someone infected travels to new territory and is bitten by certain types of mosquitoes. there are reports of zika transmitted through sexual contact including recent cases in the u.s. since there is no vaccine the best way to control the zika virus is to control mosquitoes. a pilot program to release certain mosquitoes that have been genetically modified so their offspring die early. opponents are worried about the unknown consequences of releasing modified mosquitoes which are food for other animals into the wild.
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for more stories, visit bloomberg.com. ♪
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tracy: those are some of your top stories on bloomberg.com. i'm tracy alloway. scarlet: i'm scarlet fu. stocks at their highs. oil erasing losses. the s&p 500 up 73 points. five points.
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the dow up by 73 points at the moment. energy shares leading gains after crude oil erasing its decline are you let's go to abigail doolittle, looking at some tech movers. abigail: starting out with qualcomm. shares are trading higher ahead of the companies fiscal second-quarter report after the bell. analysts are looking for increase in both earnings and revenue. this equates to a year-over-year decline and sales of 23% and a year-over-year decline in earnings of 8%. a continuation of the bearish story. a downtrend that remains in effect. i spoke to a noshing abbas factors continue to weigh including how the company will grow its top line. what will the payment status of chinese royalties proved to be? qualcomm reports its fiscal second-quarter after the close. tracy: yesterday we saw yahoo!
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reporting the stock is higher today up about 1%. what is going on? abigail: god who is higher after the quarterly report. a beat first-quarter adjustment but the second-quarter outlook, not too surprising. it appears analysts are looking past the deteriorating fundamentals toward the sale process. a number of analysts on the street including peter stabler on wells fargo and ben chandler. it was laura martin and needham. laura martin is calling for 50% upside potential. we have been looking at a bullish chart of yahoo! in the last few weeks, one that thatsts her prediction there could be 50% upside for the shares of yahoo! country with the stock above its 200 day moving average. yahoo! did in fact climb significantly higher the last time that happened. scarlet: we will stay with gallowaycause scott
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shared his opinion on the troubled company on bloomberg surveillance earlier today. , i thinkm armstrong what he did with aol was impressive and i would argue ms. myers is the most overrated. a big disappointment. it is probably in terms of hitting. the favorite is verizon because verizon can afford to over pay $105 million -- 105 million handsets plus the assets of aol and yahoo!. the largest marble network in the world. the epicenter of growth around all media is mobile advertising. verizon can probably come in and spill $2 billion to get this thing. tom: still, that is the key word. scott: they could overpay. i think the odds on favorite is verizon. i can't imagine one of these reverse merger things with time. could you imagine the amount of criticism if yahoo! ends up
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going to yellow pages.com? tom: i was stunned. scott: it's going to be exciting to see. forcing this sale. i think these guys would've killed the deal had it not been for this guy saying he will take all nine seats. >> buying this core business makes sense because of advertising even if they overpay for it and they will most certainly have to? scott: there are some assets. it is a company that has i think the third most traffic in the world. one billion people come to yahoo! portals through the course of a month. incredible assets people do not talk about. $90 million in year in free cash flow royalties from yahoo! japan . even one million square feet of unused real estate in the valley which they think they can monetize. the incredible ip.
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5000 patents to get a couple billion dollars. there are some real assets. 100 million mobile devices with one billion people coming into mobile devices in advertising. that is fantastic data you could sell to a lot of advertisers and verizon, they could come in and make strategic -- the last 10% of any auction is ego. these guys are better armed to take this thing than anybody else. francine: so what you are telling me is that the only way to make money from digital advertising on mobile devices is to have scale and lots of scale. scott: this is a winner take all economy. a company like facebook doing 1 billion and a half users. yahoo! users, only 10% are on it every day. 51% of becoming -- global mobile advertising goes
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to two players. facebook and google. every day it increases. scarlet: scott galloway on bloomberg surveillance this morning. tracy: before we go to the break i want to point out an interesting story that went up on the bloomberg terminal. verizon is selling bonds backed by customer payments for mobile phones for the first time. in talks to do that, seeking a rating could be as high as aaa. scarlet: it had to raise a lot of money when buying out the part of verizon wireless it did not own. maybe it is raising money for yahoo!. bank of america's chief operations and tech officer will be our guest. ♪
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scarlet: 1:00 p.m. in new york, 6:00 p.m. in london. >> welcome to bloomberg markets.
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scarlet: from bloomberg world headquarters in new york, good afternoon. i'm scarlet fu. i'm tracy alloway could stocks are higher with the s&p 500 at the highest levels in five months despite earning result. oil prices are heating up once again. scarlet: ford apparently does not drive a hard bargain. it is thing $50,000 -- anchorage thousand dollars more than the sticker price for the tesla city. tracy: an american airlines is adding two new members to its portrait is it flying into more turbulence? head first to the markets desk more julie hyman has been tracking the moves tracy mentioned we are at session highs and oil prices climbing. julie: certainly not hurting matters. earnings of a topic of
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conversation once again today. the dow is leading things with .4% gain. that means the dow and the s&p are building on the year to date gains and the nasdaq is shrinking. it was down less than 1% at some point today. as we have talked about the dow and s&p, also both getting closer to the record closing levels. financial services are getting a boost to earnings from the increased card spending. those short -- those shares of 7.5%. 12,000 folks. those shows higher today. coca-cola striking down the consumer staples group after the company's earnings actually beat estimates. among, there's concern analysts about the secular decline in the soda business
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overall. flat volumes in terms of carbonated sales. also, let's just take a look at ea. probably looking at this everyday doings earnings season. for thesales on the top s&p 500 and the earnings share on the bottom. we may see a rebound in those numbers. right now only 69 of the 500 s&p members reporting. 30% bump up in sales. earnings per share write about in line with estimates for the decline of around 10%. seems like the irony, is predicted to drag on, is leading earnings today. julie: maybe things will turn a little bit more ugly once they begin to perhaps. exxon, schlumberger, all of them on the rise today. gender morgan is the first company due to report earnings.
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the shares are not doing much today although they have come up off the load. driven by the oil price, which and the weekly production data showing the sixth consecutive the client on a weekly basis on the production numbers. oil is moving, perhaps not coincidentally, to the highs of the session. scarlet: thanks much, julie hyman. tracy: let's check on first word news. mark crumpton has more from our newsroom. mark: donald trump won the new york primary yet the one county lost in the state was his home borough in manhattan. john kasich picked up 45% of the vote in the big apple. mr. trump received 42%. the loss highlighted weakness trump has shown among more moderate republicans who often populate big cities. he lost to marco rubio in washington, d.c., while governor
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kasich won in areas around chicago. hillary clinton hold in nearly $12 million last month -- a pac for hillary clinton hauled in nearly $12 million last month. donors have pledged another $49 million. the group is holding its cash until the general election when it plans a spending spree of historic levels. it was victims of terrorism u.s.ored by iran -- victims of terrorism sponsored by iran are on their way to collecting $2 billion. the group includes victims as well as family members of the 1983 beirut marine barracks bombing and the 1996 bombing of kovar towers in saudi arabia. michigan this hour, officials are expected to outline criminal charges filed against the people in the city's tainted water case. 2 statement leaders and a flint employee are charged with evidence tampering and other crimes.
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for almost a year and half flint residents used improperly treated water that contained lead from old parts. abolitionist harriet tubman will appear on front of the $20 bill proposing former president andrew jackson. -- replacing former president andrew jackson. she will be the first woman featured on paper currency in modern times. alexander hamilton will remain on the $10 note. the decision is the latest chapter in a 10-month-old controversy that erupted after treasury secretary jack lew tried to address gender imbalance on u.s. currency notes. secretary lew will make a formal announcement later today. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i am a mark crumpton could tracy, scarlet, back to you. scarlet: in the developing billionrgentina's $16.5 on sale open up the floodgates for junk related issuers but in the developed world from something is looking below the surface.
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tracy: we will talk corporate credit now good in a note last week ebs warned that the junk a bit away is just from popping. matthew, maybe just to start you could lay out when you see as the ebola case and the bear case in u.s. high yields. matthew: yeah, sure. the bull case is essentially the corporate fundamentals are deteriorating from a relatively healthy position. if you look at the aggregate financial accounts, if you look at debt to profits, if you look at debt to assets or net worth, those levels with regard to the u.s. corporate sector are not overly alarming. people are concerned about weakness earlier in the year and commodities but you started to see a rebound in -- and that certainly encouraged more inflows into the asset class, encouraged people to reach again for yields, and started to open up the capital markets in terms of funding.
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the bear case, i would say, is if you look at gep and jet -- debt to gdp and you look below the hood, you see a fairly significant degeneration particularly at the lower end of the credits dr. in terms of leveraging credit fundamentals. put into context, if you look at moody's data, relative to the total spectrum greg publishing, --has gone from 452 100 feet 103,050. that is a combination we believe of basically firms that should have defaulted in the last cycle basically getting bailed out by quantitative easing and very low interest rates, which helped them refinance in the last few years. and another wave of issuance driven by companies looking to take advantage of low rates. those investors --
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tracy: matthew, in your note you have written that you feel bonds are in a speculative bubble in the sense that investors are not being adequately compensated for the risks they are taking by buying those products. does that mean you follow also into the air camp -- that there -- the bear camp? full scan keep going for quite some time. matthew: we don't use the term "bubble" lightly. a period or fundamentals are basically overshot. what we would suggest happen is when the fed lowered rates to zero and initiating quantitative easing and globally the central banks have been aggressive in easing policy, you essentially drove a substantial increase in inflows and those force clients to reach for yields and in many cases they reach much further down the spectrum than we would've otherwise seen. if you look at traditionally the pensions that are looking for returns around 7%, 8%, and the
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, the income space mid-to-late 1990's, you bought short dated treasuries. in the last cycle indeed that she needed to buy triple b corporate -- you needed to buy triple b corporates. he needed to look to single be and bond paper markets effectively doubled and we do believe that a lot of the credit ratings are inflated or fairlye barbelled where low interest costs and high levels of liquidity are offset by very elevated leverage for the rating. scarlet: right, and the surge in issuance has peaked and turned the corner as well. in started to roll over a little bit. matt, what is keeping the ratings companies from downgrading a whole swath of companies? matthew: well, it is interesting, the proportion of triple c's jump last year and that is due to the downgrades in
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the commodity sector. if you look at the latest quarter for the last few months of data, the downgrade-upgrade ratio has deteriorated significantly. i think you are starting to see the downgrades. obviously, it takes time and and earnings from the ratings agency perspective, they need to have more clarity on the trend. you are seeing deterioration in corporate profits. it is obviously driven by commodities. but if you look at the federal reserve data, profits you're on your are down 13%, even if used about energy and commodities and used about the rest of the world earnings. earnings are still suffering. that is domestic earnings. there's something more going on and part of it is the lack of topline growth coupled with some tightening in corporate profit margins depending on the sector. tracy: something else going on indeed. scarlet: coming up next on "bloomberg markets," it is
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normal for, just want to get there hands on the competitors latest comic book whited for pay a huge premium on the model suv from tesla? ♪
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tracy: you are watching "bloomberg markets." i'm tracy alloway. scarlet: i'm scarlet fu. let's get to the markets desk with julie hyman. are looking at iron ore once again because it is trading at a 10 month high. ton ore used most notably make steel and it is up 49% rate unexpectedly rally to many
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analysts and traders. it has been driven by a number of different factors but bhp and rio tinto, the largest business, cut the output forecast for this is one of the things that has been spurring the gain in the iron ore prices. something else spurring the game has been chinese demand for iron ore because of steel production. we have got quite a number of charts now. this is a version, i don't know if you saw earlier, of the charts that were created this morning. china has been producing more steel. here you have this rebound we have seen in the prices. note, on theelated thisse steel output, demand for iron ore to make
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steel in china. indeed, they are also getting a boost. scarlet: the earnings results should be interesting. julie hyman. tracy: turning to the world of under for shoulder just d shelled out- for just under $200,000 to buy one of the first suvs made by tesla. keith naughton joins us from detroit. any idea why they would pay over sticker for the model x? all about getting competitors intelligence. they try to get the competitors cars as soon as they come out. in this case, ford had to pay did a premium because they wanted it the very first.
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now all of their people are driving their own in town here in detroit and assessing. tracy: do we know how many people have paid over the sticker price? is that it indication of the popularity of this new model? keith: tesla has been very hot, whether it is the model s or mo del x. they have been very hot and people pay over sticker. this is quite a bit over sticker. fordet: in terms of what wants to learn from driving around town and testing it out, what is it hope to achieve? keith: they buy these cars and drive them initially. this sort of dissect them like a frog. they will sometimes put them back together again and try them some more. ford is looking at how to do more fuel-efficient vehicles. this is an electric car and 40
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spending $5 billion over the next five years on electrified vehicles. they want to learn about how tesla does electrics, they can learn from that. tracy: speaking of the model x, he does have these winglike doors -- scarlet: from like "back to the future." tracy: have we seen any of those? keith: the falcon wing doors, they call them at tesla. they have doors like the delorean in "back to the future." line ford says that will not be in the production car but they are driving one with similar doors. that would be a problem in manhattan with the streets are so narrow and cars are driving by. not enough room to spare. keith, give us a sense of whether tesla has said anything about ford paying out for the
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model x. tesla really has nothing to say about it and i'm sure elon musk is very happy. says they do often have to pay over sticker to get cars very early when they come out. scarlet: he's not in, thank you so much. he cannot and of bloomberg news joining us from detroit. tracy: still ahead, dealmaking in health care. find out why bain and company says i-16 is the european position for investors. ♪
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is "bloomberg markets." tracy: i'm tracy alloway.
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this year deal makers are facing market volatility, recession, concerns, and of course, crackdowns on tax version. scarlet: what does all this do to the pace of health care m&a for the rest of this year? our radio colleagues may have found one. it's turned to carol massar and cory johnson. scarlet want to thank in television. welcome everybody in bloomberg television. this is bloomberg advantage. jain, aus is nirad partner in bain and company. thanks for joining us on bloomberg. in terms of the health-care system it has been a busy space, what kind of activity are you seeing right now. nirad: carol and corey, thanks for having me. this is the fifth annual corporate m&a report and 2015 was just a record year for health care dealmaking. $546 billion of deals done in 2015. both corporate m&a and on the private equity side.
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withent a lot of time private equity investors and it was a pretty strong year for dealte equity in 2015 with exits up, deal count up. a very robust year in 2015. as we look at 2016, we think it is going to be an interesting year. carol: interesting good? interesting bad? nirad: if you look at overall m&a activity in the first quarter of 2016 it is down versus 2015. in health care specifically we think twice 16 will be down versus 2015. there is 4 things that will impact that. on global products companies there is more migratory scrutiny on tax versions. providers, there is more migratory scrutiny that you are seeing around local market competition ensuring that patients are going to get adequate access providers are consolidating and you will see that.
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on the payer side, hard to imagine what a large additional pair deal is that could happen in the markets. you are not going to see probably another one of those happening. and valuation set pin-high in health care and you will continue to see that play out in the market. cory: i want to the value is of being out of the market as a buyer of drugs. valiant was the highest bidder for a lot of companies. look think that will not be the case anymore. but that does for evaluations across the industry and also driving activity across health care m&a. cori, it is an interesting question. if you look at health care pretty broadly, as a go into times of economic uncertainty and look at what is happening -- cory: well, they are all times of economic uncertainty. nirad: health care is a sector most able flock to. you see more interest that will drive valuations from that perspective. in terms of pharma specifically it has been a very active and livelier over the last year.
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think we will continue to see things happen in pharma that it will be interesting to see what happens over the next couple of quarters. carol: what about geographic differences around the globe? nirad: if you look at private equity activity specifically, developer markets is where most of the activity is. you tend to see a lot of activity. last year asia was a very active region, specifically in asia it was china and india get a lot of activity. moreh care continues to be global as you think about the customers or the consumers that are going to come online for health care access. a lot of that is going to be in the asian developed markets and we will continue to see activity there in the markets. making sureted in they are well positioned to provide health care industry situations. cory: is the nature of the funding, is the structure of the deals changing in any meaningful way? nirad: there's is a variety of
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things that are happening. as you see some capital market uncertainty, there is a return to some creative dealmaking. you saw some corporate partnerships start to become more popular. as you look at a private equity investors, straight buyout may have the aware they are spending the majori of the time -- you will see some private investments happening in public equity. you also see distressed debt opportunities emerge in the sector like you see it emerge in many other sectors. carol: just about 30 seconds left. one about the political landscape? we were talking about the new york primary and this seems to be more serge ibaka is at the polls come november. how does that impact -- more certainty as to who is on the polls come november. how does that impact left it? nirad: the fundamentals and health care are still there. the country is aging and you will continue to see more and more demand in the u.s. for healthcare services and that will be a good thing for investors.
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carol: we will leave it on that note. tracy and scarlet, going to send it back to you guys in bloomberg tv. carol massar and cory johnson, thanks so much. scarlet: still ahead on "bloomberg markets," he is on the front line of financial security. she tells us how she is steering one of the biggest bank into the digital revolution. ♪
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tracy: from bloomberg world headquarters in new york, you are watching "bloomberg markets ."
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i'm tracy alloway. scarlet: and scarlet fu. mark crumpton has more from our newsroom. mark: they fail to michigan families -- that is how the state attorney general described three people who face charges in connection with the water contamination crisis in the city of flint. you are looking at live pictures from the press conference. he told reporters these employees have a duty to protect the health and safety of the families of the people of flint. those charges include 2 statement leaders and a flint employee. they are accused of evidence tampering and other crimes. next tuesday is shaping up to be a crucial day for bernie sanders after losing to democratic front-runner hillary clinton in the new york presidential primary. the sender's campaign is going to five primaries april 26. his eighth save he will decide what to do after that. mrs. clinton's retreat yesterday makes her -- victory makes remarks to the nomination all but unstoppable.
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donald trump is speaking about about federal reserve chairman janet yellen. the republican presidential front-runner said she has done "a serviceable job." he went on to say "i don't want to comment about reappointment but i would be more inclined to put other people in." he says he would absolutely support proposals to reduce the fed and allow for a congressional audit. he says low interest rates are come in his words, "the best thing we have going for us," and that an increase in rates would be "scary for the u.s. economy." supreme court nominee eric garland is back on capitol hill form -- for more meet and greets. he will meet with republican lindsey graham. tomorrow judge garland me to the democratic senators robert menendez of new jersey and tim kaine of virginia. president obama has wrapped up a meeting with the saudi king in riyadh part of 24-hour visit
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that includes a persian gulf summit. the white house has said that the summit will focus on regional stability, iran, and the fight against the islamic state and al qaeda. global news 24 hours a day part by our 2400 journalists in more than 150 news bureaus around the world. i'm mark crumpton. tracy, scarlet, back to you. scarlet: it has been a bear of an earning season for banks. bank of america is no exception. the number two u.s. lender announced first-quarter revenue fell 6.5% to 19 point -- $19.5 billion. tracy: for there is a bright spot. bank of america added 2.5 million new mobile banking customers, bringing the total number of active users to just under $20 million. who is behind the trend? cathy bessant is chief of bank america's operations and technology officer.
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you have a big budget in the sense that when it comes to cyber security, it is potentially unlimited. you are dealing with cyber security issues. how do you prioritize your time and your funding? a little bit about being a firefighter and a little bit about being a future looking architect, never thing in between. ciber or platform performance, those are things that have to happen real-time. incredible pace of change. they do by designing the data use and production for the future. the platforms that last is the next 20 years. those things take more of an architectural perspective. scarlet: where would most of your spending on technology and defense five years ago -- where is it now and where should it be in five years? cathy: we have doubled that budget from about $1.5 billion a year to $3 billion a year today
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and we have been very open about that. it is a lot about positioning the company to perform well today and really just growing into the future. we do run an unconstrained budget in terms of information security. ofy tough to keep ahead those who would do us harm and very much i need to make sure we have the best talent in that space. tracy: give us an idea of the kind of thoughts you are seeing now. it's a denial of service attacks? something more serious? cathy: all of the above -- software attacks, network and infrastructure attacks, denial of service attacks and other issues around protection of data. it is really across the board. the issues that face and the frequency and intensity of what i call incoming growing exponentially. it is my talent is as important as dollars in this space because you have to have the brains of the creativity to stay ahead of that. scarlet: we talk about the earning season and the job cuts.
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to build out this part of your business, you have to invest in talent. how do you attract them with the idea of working for big banks rather than, say, snazzy startup in silicon valley? cathy: the easy answer is bank are boring and are highly regulated and there must be a platform that must not be a platform for a talented engineer. the answer cannot be further from the -- is that that cannot be further from the truth. innovate and bank of america and you are reaching 30 million households and the opportunity for intellectual property action and other platforms to leverage the work, and great technologists like nothing more than problem-solving for impact. brand value that makes sense for technologists. tracy: the feels like it has become a buzzword in the banking community. have people like goldman sachs saying they are
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essentially a technology company. to much uses new technology what is a centuries-old business model of banking? cathy: i think of it as a mandate. centurieold banking gets you so far. there's a huge core of our business and we have to invest in but invest in this business as usual ways. thatther piece of it is customers demand change at the pace of what they are used to in their consumer applications. can i update it? does it do what i needed to do tomorrow? that takes cutting-edge intellectual property and innovations are we can be where our customers want it to be at everything will second. -- every single second. tracy: how do you figure out what is being talked up in the industry backup cathy: that is the essential question. to me there's what people talk about in the buzz language, these are great and interesting and exciting technologies. commercial and customer applications remain to be seen.
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we are doing a lot of exploratory work so that as the commercial problems or opportunities become evident, we are well-positioned to use new technologies. at the same time, it is very important to not get distracted. it is a little bit like being a grown-up in a world of glitzy things but not being any of us all. with that coffee are complexity most of the world -- with that caveat, what excites you must? cathy: the idea is that they can come into a physical bank or we deliver the entirety of the physical bank on the mobile device. with the spending, is it to prevent -- is it more defensive in nature, does it prevent you from losing money, or is it more offensive in nature where you can generate more revenue because of it? it has to be, like any innovation, little bit of both.
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the exciting parts of it are where we can make more money and be more meaningful to customers, but the pieces we have to get right every are the pieces where we have important revenue streams and we protect and defend. of bank ofy bessant america, thank you so much for joining us. scarlet: coming up next on "bloomberg markets" will united airlines straighten up and fly right? we will speak to one of the company's biggest shareholders. ♪
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scarlet: this is "bloomberg markets." i'm scarlet fu. tracy: i'm tracy alloway.
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julie hyman is looking at the losers. it were doing a donald trump impression -- the losers. "losers" tot saying you during the break. tracy: i have a filter. anyone who says "loser" to me -- julie: i like that. that is a good attitude to have. let's look at what is not winning in the market, to put it another way. one of the worst performers in the s&p 500, the old hydroelectric, networking company, that company narrowing its forecast for a full year earnings. the important part is it is bringing down the top end of the forecast. canadian pacific is bouncing around today. the activities earnings beating estimates and will buy back 5% of shares and raising dividends. say that the expectations were for the buyback to be bigger.
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net interest margin -- they are falling as the company's earnings come in below estimates. we saw some stocks that are declining on the back of analyst calls today. little chance of recovering all the money that was put into the 787 dreamliner. spirit airlines declining. it was downgraded by jpmorgan to neutral. jpmorgan says that evaluation is getting a little pricey because of the year-to-date gains in the shares. her she shares are falling today, downgraded by 2 notches and bank of america to underperform because of the lack of near-term catalysts. chocolate volumes have gone down. negative commentary from wells fargo because it has seen limited growth in recent months. there is a little bit more risk , beating estimates
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for earnings-per-share. matching estimates where there are concerns and one analyst is likening the soda industry to the cigarette industry. that reflects some the concerns people have. scarlet: maybe getting profits abroad in the future as well. julie: and noncarbonated beverages. tracy: fight over who will run intercontinental airlines seems to be averted. it has added two new board members in a settlement with activist investors, aimed at placating complaints by activist that the company does not have enough directors with expertise in your lines. scarlet: nothing comes as the airline is that to report earnings after the closing bell. kelly, anw to chris analyst at one of the largest investors at united. he joins us from his company's offices in denver. you are positive on these board changes announced today. talk to us about specifically how these changes will be
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helpful to shareholders. kris: well i think the primary benefit is something to remove and overhang on a stock that trades at a mid single-digit got back closed 8% of the market cap of the first quarter. has a double-digit free cash flow yield, and so united in particular and the space in general has been weighed down in the valuations are very low and coming back to united it is helpful just to remove the overhang. the second order effects the primary effect for united shareholders, is that the board essentially just went from a very low grade, probably an f, to an a. nominated three of their own directors prior to the proxy contest and we like all three and we like what was just agreed-upon overnight. we now think half of the board is really solid and has very solid airline experience, which
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is what we have been lacking for a very long time. the four drink from a somewhat behind united, hopefully. what is next on the agenda -- the boardroom drama is somewhat behind united, hopefully. what is next on the agenda? general needse in to address the misperception, but people focus on the unit revenue numbers, and unit revenue has been weak for a year, essentially. at the same time, like i said before, they are generating record free cash flow, but investors are so tied up in the unit revenue number that the airlines need to address this and get unit revenue back on a positive track. that would be the first thing for the industry itself. again, united specifically -- there's a couple things. operationally they need to continue to improve the operations. they also need to reach labor agreements with the flight machinists.nd the
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once we get those things taken care of i think the culture of the airline will improve, the operations of the airline will improve, and the customer experience is going to improve, which ultimately feeds to everything, including the financials and the shareholder returns, which is what we are most focused on. scarlet: so there is a big to do list. what kind of timeline are you giving the board to effect these changes? at what point are you going to say, y nor can we have gone long enough and perhaps we need fresh blood once again? kris: i think they have pretty .plenty of runway we have a new ceo who we think is doing a great job. he was not at work for several months due to a heart attack and heart transplant. but he is back now, he is engaged. we think he is doing a great job. adding these board members -- you will be able to rely on -- we think it is going to improve
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the story and the performance of united quite a bit, probably over the next year. where weno timeline start getting frustrated at this point because we think things are in motion for things that come in alignment going forward. scarlet: thanks for joining us. tracy: from plans to trains -- that is pretty bad -- canadian pacific railway shares falling but off their lows today after plants repurchase stock disappointed investors who were expecting a bigger pay back. scarlet: canadian pacific amended the agenda takeover last week after mounting opposition. what exactly were investors looking for when it came to buy backs? let's ask pamela ritchie, who joins us from toronto. what were investors expecting? things a few different
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playing into the stock reaction right now. on the buyback on a looks like investors were expecting more of a 10% float buyback range. what was announced as a 5% right back. there was a lot from analysts and others that the leverage used to buy norfolk southern, some of that at least would be put towards buybacks. there is an annual general meeting, hearing from hunter harrison that no new debt is going to be used for buybacks. interesting comments coming out of hunter harrison as well, who is retiring in 2017. he is talking about what he would do after. not going to be the chair, he says to bloomberg news, but not sure what his role is next. how do you replace hunter harrison?tough call. tracy: canadian pacific also
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raised its dividend. how does it compare to its peers now? pamela: well, it is just tiny. it will put up a chart of the dividend raises. been on growing the eps more 20 harrison says wps will be pushed -- hunter harrison says doubling eps will be pushed into 2019. smallest dividends and the biggest dividend of their peers, the target, norfolk southern. scarlet: pretty notable there. pamela ritchie, thank you so much for joining us. liberty candidate for joining us from toronto. tracy: coming up on "bloomberg markets," new data suggest that loan growth is hitting a plateau despite unprecedented stimulus measures. what will it take to get the euro area lending again? ♪
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tracy: this is "bloomberg markets." i'm tracy alloway. scarlet: i'm scarlet fu. miss" on "what'd you yesterday, we spoke to steve and england are of citigroup and he explained the ecb's big lending problem ahead of tomorrow's meeting. stephen: they need to get stellar growth. they have long-standing economic issues. and it is the kind of mediocre growth we're seeing is not going to be enough. we expect that sometime in q3 they will come up with a further package. how effective the package will be -- they all have some degree of effectiveness. none of the countries that have gone into negative rates or where we have seen quantitative easing, in no case has there been a killer package that
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succeeded and substitute played for everybody else. joe: what is the prospect for the euro right now? steven: they can't be happy that it is pushing 114. in some ways the market is not paying that much attention to it. the em story is by far the biggest story, the yen story is the bigger story. but i think they feel that this drift is hampering them. certainly it is very good correlation between the underperformance of european equities versus u.s. equities and the way the euro has performed. scarlet: last time around at the ecb meeting in march mario draghi made it clear he was not going to cut rates any further. did he backed himself into a corner here? central bankers never do that. since then he has said that they don't anticipate cutting rates further. if.let: big
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steven: it's a big if, and having said that, from our earlier discussion, it seems like things are not going according to plan. i anticipate that you would hear some kind of more forthcoming comments within the next couple of months. if things continue to be disappointing. joe: you mentioned that he that people are not paying much attention to the euro and it is all about dollar-yet. what is next to their? what level would kick that in order to weaken the yen again? they are going to is not necessarily because of the yen, although they are not happy with where the yen is. all the air has gone out of the economics balloon and the economy is going sideways and the outcomes are disappointing him economic and financial market outcomes, and they need more stimulus.
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there will put forth the package .robably in q2 they prefer to avoid april if they can. above 110 they feel they don't have to. scarlet: that was stephen englander of citigroup. joining us is the cohost of "what'd you miss," joe weisenthal. all the talk is from german politicians about the limitations of the central bank. i would characterize this as one of the least anticipated central-bank announcements of any bank in a long time. there are interesting topics that will be talked about. one of them is just going to be one for the tools theoretically does the ecb have at its disposal. as you say, this tension that to be brewing between german politicians critical of the stand and the measures that the ecb itself feels is unnecessary. scarlet: on "what'd you miss" today, what the next big trading currencies might be.
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the strong dollar -- joe: everything is played out. exactly what englander was saying and that the -- saying in that clip. hopefully we will uncover a new trade. scarlet: what about the swedish krona? inflation, andf maybe that will be the hot new currency. scarlet: corona climbing to the strongest versus t euro since january. tracy: all right, we are very excited to talk about the krona. scarlet: joe weisenthal coming up at 4:00 p.m. on "what you miss." the former u.s. ambassador to saudi arabia on will become of the president's trip to the kingdom. ♪
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>> it's 2:00 p.m. in new york. >> welcome to "bloomberg markets."
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>> bloomberg world headquarters in new york. welcome. >> here's what we're watching. stocks shooting up. recovering around five month highs. coming up. >> meanwhile, stocks fell in mostly two months. you -- it's the economy on a verge of a roar again. obama is in saudi arabia. former u.s. ambassador is here the delegate states of u.s.-saudi relations. markets closed in two hours. let's head to markets. rallyre not seeing a huge today. definitely improving over the course of the session. rising about a half

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