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tv   Bloomberg Markets  Bloomberg  May 6, 2016 12:00pm-2:01pm EDT

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scarlet: from bloomberg world headquarters, i am scarlet fu. alix: happy jobs friday, i am alix steel. in just a few minutes, president obama will be making a statement on the economy off the april jobs report we saw this morning. we will take you live to the white house briefing room. scarlet: speaking of jobs, april posted the weakest gains in job growth. alix: markets showing muted reaction to that data. stocks are trading for a fourth day, headed for an 18 month low with a drop in treasuries and yields higher. scarlet: we are halfway through the u.s. trading day. has a look at the latest. julie: we have had a lot of
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volatility and various assets as investors try to figure out what to make of the data. number was worse in terms of the number of jobs added but we also saw some wage growth and we have heard a little bit of mixed reaction to this number. stocks are down at the moment but there are a number of different factors driving them. the nasdaq is the underperformer, down 6/10 of 1%. look at the s&p 500, we have had a lot of bouncing around even athlete got the number. that even after we got the number. we saw futures recover to some degree and confusion being reflected during the course of the session. we are seeing similar reaction in terms of the bouncing around in other assets. the dollar, for example, a lot of zigzagging in the wake of this report. we saw it go higher and it has
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been bouncing around since. seeing aar note also lot of bouncing around between gains and losses. saw a sharp decline in yield after the number was announced but it has since recovered. it is only up one basis point. this indecisive reaction to the jobs report. i want to check on oil, because there is a little more decisiveness, more of a steady gain in oil prices today about $45 a barrel. that is kind of the eco-data we have seen all week. that is kind of the eco-data we have seen all week. julie: this macro picture is murky but on an individual basis, not as much. serial, energy along with oil prices are higher. utilities and health care are
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the worst performing groups. federal regulators are investigating estimated costs and scheduled a much delayed mississippi clean coal plant. speaking of missing estimates, endo international is down very sharply today, 40% declines. it has been accelerating all day as it cut its forecast. in general, also the generics unit is facing more competition and taking its competitor along with it. scarlet: julie hyman. alix: let's check in with bloomberg first word news. ramy inocencio has more. the republican party chairman says he supports donald trump is the gop presidential nominee. that means rents previous is
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breaking with paul ryan. the chairman says a meeting next week will help the party start to unify behind the likely nominee. on the democratic side, bernie sanders is threatening a floor fight over rules at the summer convention. he is concerned the democratic national committee will stack the various committees with helen clinton supporters -- hillary clinton supporters and a lot of his have not been's -- have not been included. the wildfires and canada may be the most expensive catastrophe in the country's history. more than 80,000 people have fort mcmurrayof and 8000 people had to be airlifted out. insurance losses may go over $7 billion. elon musk has done it again. spacex has landed a rocket on an ocean platform.
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the booster touched down on a barge in the atlantic ocean after launching a japanese munication satellite. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. scarlet: let's get back to the april jobs report. we are awaiting the president who will be making comments. u.s. employers added 100 60,000 month. 160,000 jobs last they were short of the 200,000 that was forecasted. the unemployment rate stayed steady at 5%. alix: wage growth up to one half percent and a bump up in average hourly work week. what does that mean for june rate -- rate hikes? a little bit of good, little bit of bad. one of the things the fed has
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been harping on over and over again is movement toward what they described as full employment, and that they have the defining through unemployment rate. now that the jobless rate is no longer going down, that is one of the problems. i think they have been pulling back from that and they will continue to pull back from that as a result of this data, but we have a lot more data to come before the june fomc meeting. scarlet: the unemployment staying at 5%. does that suggest janet yellen has asserted there is some slack in the labor economy? steven: we saw upward movement in the participation rate, which is now stalled. i think there is a lot more upside potential over the long haul in terms of the participation rate and what that will do to the jobless rate numbers. i discount a little bit of the gains in hourly earnings because a lot of it was concentrated in january.
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we know what happened in january with regard to the minimum wage. january was up nicely, then you had a week february and march and a bump up in april, but less than january. i think we will see a trailing off. alix: something i have been curious as to which wins out, gdp or jobs? i have charted u.s. gdp over the next 10 years versus nonfarm payrolls. what we have seen recently with that white line being gdp, coming in just that one half percent. gdp?this meet up with the .teven: i believe it does i believe the gdp numbers of the most important numbers relative to jobs numbers, and the reason is because they are a concentration of all the other statistical releases we get during the course of a month. if you look at all of them, the
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labor market data stands out as different. i tend to go with where the majority is in terms of the statistical releases. scarlet: we are waiting for the president to begin speaking. that is the brady press room in the white house. he will make comments on the latest jobs report. do you think the door for a june rate increase has been slammed shut or is there room for it to be opened somewhat? the labor market has not lost its underlying momentum and there is up or movement and average hourly earnings. overdoes suggest it is not yet. >> every meeting as live as far as they are concerned. they look at all the data and there is a lot more data. it is not going to be there when i get to june. that is the difference between my view and the other one.
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i believe the broader spectrum of economic data is telling us the right signal. the labor market data is being somewhat overly stated, and i do not believe the underlying trend is only 0.521%. alix: take a look at a function in the bloomberg terminal. the probability of a june rate hike as 2%. you do not see over 50% chance of an increase at all until after february of 2017. barclays, bank of america already today down there hike forecast. steven: markets move very quickly and the same guys that are cutting all their expectations on the fed funds rate probably would have been telling you they were convinced it was going to happen. one piece of data should not be determining what will happen with the fed. that is why i like the gdp
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numbers is that is a confluence of data. then, let's see what happens when the next jobs numbers. alix: you agree with the forecast and you agree the .arket is correct shouldn't you be expecting some kind of qe4 or negative rate because of things are that bad? steven: i am saying the economy is running at a very slow trajectory. the gdp numbers says .5 and that will probably be revised to one. on average we will probably be around 1.75 this year. it is not great, not horrible. the fed should leave things alone. evans on may 9, and they going to say anything that will move markets in one direction or another? steven: they are having the
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debate in public and they have been having the debate in public. the confluence of people that spoke this week versus next week , i think you will have more measure so it has less of an impact. alix: steve, thank you very much for being here. a little bit of cold water on the optimistic part of the job report. scarlet: that is a live shot of the white house brady press room . we are waiting for the president to come out and make comments on the april jobs report which indicated the economy added 160,000 jobs for the month of april, far less than what economists had been looking for. the unemployment rate is at 5%. we will be awaiting the president possibly marks. president's remarks. ♪
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alix: we are waiting for president obama to speak from the white house briefing room. we will bring you those comments live. you are watching bloomberg markets. i am alix steel. scarlet: i am scarlet fu. alix: american industries that stroh strong -- show strong first-quarter growth did pull back in april. retailers cut payrolls by the most in two years and construction companies out of the fewest number of jobs since jan. the unemployment rate was unchanged since five -- unchanged at 5%. square says it extended
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153 million dollars in loans and advances in the first quarter, a 4% previous -- increase from the previous report. they cited delays find a new investors to help back its lending business. alix: that is the bloomberg business flash. any moment, president obama will be delivering a statement on the economy as well as new steps to tackle tax evasion. justin joins us from our washington bureau. what he think is the number one message he wants to hammer home? justin: i think he really wants to highlight the job numbers. even if this is a disappointment on wall street, this is 74 consecutive months of job growth. , we have to say rebounded the economy and it is
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our policies that have made the difference so i'm sure we are going to hear president obama say this is another mark of success and something we want to keep going. speaking of the election, this is president obama's first appearance since donald trump became the presumptive nominee of the republican party. that is likely to come up, isn't it? reporters have a chance to ask some questions they will. alix: president obama is speaking now. pres. obama: 700,000 jobs and the unemployment rate hit 9% on its way to 10%. in april 2016,er our economy added 160,000 new jobs, taking april the 74th consecutive month of private-sector job growth in america. businesses have created 14.6 million new jobs.
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wages have been rising at an of 3% so the unemployment rate has been growing, unemployment has been falling, and wages have been rising. as manyglobal economy people here are aware, is not growing as fast as it should be. we are still seeing lagging growth in places like europe, japan, and china. in the united states, there are folks that are still hurting so we have got to do everything we can to strengthen the good trends and to guard against the dangerous trends in the global economy. if the republican congress joins dust -- joined us to take some steps that are pretty common sense, we could put some additional wind at the backs of working americans. to create new jobs, they should invest in our infrastructure, our roads, bridges, schools,
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water mains. some of you joined me i went to flint this week. it was a great example of the kind of work that is out there to be done, and we could be putting people all across this country back to work. huge multiplier effects across the economy if we started investing in the infrastructure that would make us more productive. some of the hardest working people in america, congress should raise the minimum wage. it would not only help individuals getting a better paycheck and it means they are spending more. playing field for american workers and crackdown on unfair foreign competition, they should pass smart new trade agreements. congress should reform our tax codes to promote growth and job creation, which includes closing loopholes and simplifying the tax code for everybody. i have been talking about this
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for a while. only congress can fully close the loopholes that will be individuals and powerful corporations all too often take advantage of at the expense of middle-class families. if they are getting out of paying their fair share of taxes, the rest of us have to shoulder that burden. to do put forward plans just that, close loopholes, make sure everyone is paying their pair share. that would be good for the economy. it would make sure that families and small businesses who do not have fancy lawyers and , are being treated the same as big corporations who do. i think it is fair to say that congress will not act on a big tax reform plan before the election. that would shut down some of these loopholes. what my administration has been doing is looking for steps we can take on our own to make the
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tax system fair. in recent months, we have seen just how big a problem corruption and tax evasion have become around the globe. we saw what happened with the release of the panama papers and we have seen the degree to which practices of tax avoidance that are still unfair and bad for the economy, as well as illegal practices that in some cases involve nefarious activities, continue to exist and to spread. this kind of tax evasion and strengthening the global financial system have been priorities of mine since i took office, and they are part of our broader ongoing efforts to make sure the rules are not rigged and the economy works for everybody. fairve made our tax code and last month the treasury department took action to
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corporationsore -- from taking advantage of a tax loophole to avoid paying taxes in america. taxes that they rightfully oh. we have taken several steps to make sure that our tax laws are leading, including efforts to crack down on offshore evasion. thousands of individuals have come forward to disclose offshore accounts and pay the interest and penalties they oh. today, we are building on that interest. i believe you heard from treasury but i want to amplify what they have told you. we are requiring banks and other financial institutions to know, verify, and report who the real people are behind shell corporations that set up accounts at those institutions. one of the main ways companies is by setting up a bunch of shell corporations and making it harder to trace where
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moneys are flowing and what taxes are owed. we are saying to those financial institutions, you have to step up and get that information here it are plugging a gap in our tax issuing a proposed rule to make sure that foreigners cannot hide behind anonymous shell companies formed inside the united states. these actions are going to make a difference. they will allow us to continue to do a better job of tracking financial flows and making sure that people are paying the taxes that they oh rather than using rather than owe using offshore companies and shell corporations to avoid paying taxes. are notaid that, we going to be able to complete this job unless congress acts as well.
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i'm calling on congress to pass new legislation that requires all companies formed inside the united states to report information about their real owners to the treasury department's crime enforcement network. that will help law enforcement better investigate and prevent financial crimes. i am calling on congress to provide the justice department additional tools to combat corruption. i am calling in particular on senator rand paul, who has been a little quirky on this issue, to stop blocking the implementation of tax treaties that have been pending for years . these treaties improve law toorcement possibility investigate and crackdown on offshore tax evasion. i am sure that is not something he is in favor of so we are going to have to cooperate internationally. is taking place
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in a global financial system and if we cannot cooperate with other countries, and makes it harder for us to crack down. if we can combine the actions that we are taking administratively with the new tools i'm asking congress to provide the justice department and treasury, these actions will prevent tax evasion, money laundering, terrorist financing, and most importantly they will uphold the fundamental principle of our economy. no matter how wealthy or powerful, you should play by the same set of rules as everybody else. i will take a couple of questions. >> i wanted your reaction to donald trump becoming a presumptive nominee of the republican party. math, dis delegate
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think it is time for bernie sanders to step aside? pres. obama: with respect to the republican process and mr. trump , there is going to be plenty of time to talk about his positions on various issues. a long record that needs to be examined. think it is important for us to take seriously the statements he has made in the past. it most importantly, and speak to all of you in this room as reporters as well as the american public, i just want to emphasize the degree to which we are in serious times and this is a really serious job. this is not entertainment. this is not a reality show. contest for the
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presidency of the united states, and what that means is that every candidate, every nominee needs to be subject to exacting standards and genuine scrutiny. it means that you have got to make sure that their budgets add up. it means that if they say they have got an answer to a problem, that is actually plausible and that they have details for how it would work. it is completely implausible and would not work, that needs to be reported on. the american people need to know that. they take a position on international issues that could threaten war. or has the potential of a ending our up
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relationship with other countries or would potentially break the financial system, that needs to be reported on. that i'm going to really be looking for over the next six months is that the american people are effectively informed about where candidates stand on the issues, what they believe, taking sure their numbers add up, making sure their policies have been vetted, held to candidates are what they had said in the past. if that happens, i am confident our democracy will work. that is true whether we are talking about mr. trump or miss clinton or bernie sanders or anybody else.
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but what i am concerned about is the degree to which reporting and information start emphasizing the spectacle and the circus, because that is not something we can afford. the american people, they have got good judgment and good instincts as long as they get good information. side,k on the democratic let's let the process play itself out. you mentioned the delegate math. i think everybody knows with that math is. i think senator sanders has done an extraordinary job raising a whole host of issues that are important to democratic voters as well as the american people generally. point, theret some is going to be a conversation between secretary clinton and
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bernie sanders about how to move forward toward the convention. the good news is that despite the fact that they are in the course of primaries and everybody gets a little chippy, i have been through this, it is natural. sometimes it is more with the staff and supporters than the candidates. the good news is there is a pretty strong consensus within the democratic party on the vast majority of issues. there is some disagreement about ,actics and political strategy bothlicy nuance, but secretary clinton and bernie sanders believe every american should have health care. so do i. both candidates believe that we should be raising the minimum wage. both candidates believe we should be investing in our
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infrastructure and putting more people back to work. both candidates believe we should pass a comprehensive immigration reform policy to make sure we are enforcing laws and improving our legal immigration system, and making sure our borders are secure, but also that we continue to enjoy the credible -- the incredible boost both candidates agree that we should be prudent, in terms of how we as our military, and we should care of her our veterans when they come home. 95% of the at issues, there is strong agreement there. you do not see the same kinds of divisions between the two democratic candidates that remain, that you have been seeing in some of the republican debates. >> mr. president, what did theker ryan tell you about state of the republican party? how would you advise your fellow democrats, who appeared to have
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to now run against donald trump? obama: i think you have to ask speaker ride with the implications of this comments are. isre is no doubt that there a debate that has taken place within the republican party about who they are, and who they represent. their standardbearer at this moment is donald trump. not just republican officials, but more importantly, republican voters are going to have to make a decision that this is the or not guy who speaks for them and represents their values. i think republican women voters will have to decide if that is the guy i feel comfortable with
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in representing me and what i care about. who haveolks historically been concerned sure that budgets add up and we are responsible stewards of government finances have to ask if mr. trump's budgets were. .- work those are questions that republican voters, more so than republican officials, will have to answer. as far as democrats, and typically run on what we are for, not just what we are against. years, we have5 been pretty clear about what we believe will help working families who are struggling out there.
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although it has been difficult to get through republican congresses to get those things that theytruth is continue to be prescriptions that would really help people. making sure that families get paid sick leave, and family , and early childhood education. that would help families. raising the minimum wage would help a lot of people. rebuilding the infrastructure would a lot of people back to work -- guys and gals in hard hats that need to work. those are good jobs that can't be exported. now is the time to do it. i want democrats to feel confident about the policy prescriptions we are putting forward. and, the contrast, i think will
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be clear. i will leave it up to the republicans to figure out how they square the circle. i will take two more questions. >> mr. president, what is your message to democratic voters who have yet to cast their vote, who may be hesitant to vote for the democratic front runner because of the ongoing e-mail scandal and investigation? also, did you see donald trump's bowlgo> bowl -- toaco tweet, and your thoughts? obama: i have no thoughts. as a general rule, i pay no to mr. trump's
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tweets. that will be the case for the next six months. you can file that. in terms of the democratic vote, i will let the democrats cast toir ballot, and to mr. trump y meddle in the few primaries remaining. let the process play itself out. we will know soon enough. >> not long before your nuclear summit when you had leaders here, the d.c. metro was closed for over 24 hours. at the white house correspondents dinner, you made i wonder what that says that the nation's capital's metro system was closed for 24 hours. for a potential d.c. bill? somewhatma: this is a self-interested question because a bunch of folks take the metro. [laughter]
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obama: it is just one more example of the under investments that have been made here in the d.c. metro historically has been a great strength of this region. inr time, we under invested maintenance and repair. the steps taken now all refer to the department transportation. i can say the obviously safety comes first. we want to make sure that, if there are safety concerns, that they are addressed. the broader issue is we have airports,oads, forts, water mains, and pipes as we saw that suffer from neglect. in many parts of the country, we
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still rely on systems that were 30-50, in some cases, 100, years ago. the reason we have been neglecting them is not because we have not been fixing them, the people have not known of the yearse have known for that we are $1 trillion or $2 trillion short of infrastructure repair. i talked about this when i came into office and sought to do more in the nation's infrastructure. the problem that we have is the republican congress has been resistant to really taking on this problem in a serious way. the reason is because of an ideology that says government spending is necessarily bad. addr -- i addressed
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this when i was in flint. is against the idea that we have to do something together. it does not matter how much your if you have been taking the metro, and suddenly it is shut down for one month, and now you are stuck in traffic , trying to drive to work instead. you can't build your own metro system. you cannot build your own highway. you can build your own airport -- you cannot build your own airport. specific problem with under investing in infrastructure. now is the time, by the way, to do so. interest rates are so low. there are so many contractors
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and construction workers that are underemployed at the moment that you can actually get jobs done on time, on schedule, it would give a boost to our overall economy because we know what we spend one dollar in infrastructure, you ask a get a buck, inang for the terms of the economy overall. surrounding businesses, suppliers, food trucks, everybody does better. huge boost to the economy, and lasts for a lifetime. hoover dam.ove the not be partisan. if we have in my favorites is whatever the government is doing must a bad, then these are going
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to be the results. it will continue to get worse. tough in poor flint, but weike are seeing these kinds of infrastructure problems spring up in communities all across the country. it does not distinct by race or region. everybody needs roads. everybody needs airports. hopefully this will prompt a conversation. the last thing i will say about this is this is a good example of making sure that the candidates are speaking to this issue. i have put forward very specific proposals on how i would pay for additional infrastructure investment. the numbers add up. the question is how do the
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remaining candidates for the presidency intend to tackle this? republican agenda for infrastructure? do they have one? how do they pay for? do they pay for it by cutting medicare or medicaid? if they do, that needs to be flushed out -- fleshed out. the consequences for working families need to be explained. thank you, everybody. scarlet: that was the president giving his comments on the economy, and discussing upcoming elections as well. we want to check in with justin, our white house correspondent, who is the with us. you were listening to the president's comments, and one of them he made was calling out rand paul on tax treaties. throughout the president's remarks, throwing
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the attention on congress. is an area where the president has said he is frustrated, where he has not been able to get more through congress. he has wanted to act on his own. this is an area where he needs support if you want to make an impact. alix: he seemed to tiptoe around donald trump's presumptive nominee, turning it back on the media. what did you think of his response? justin: it is always interesting to get a lecture from the president on doing our job. ishink the overarching theme he once a level of seriousness to take over the process. we have heard him complain a lot that donald trump's campaign has been taken too seriously or not investigated hard enough by the media. today, he said, this is not a
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reality show. him askinge seen is if donald trump's message adds up. scarlet: of course, he spent most of the time talking about republicans, and what they have a pose not investing enough in washington and infrastructure. if he hasscussing officially endorsed hillary clinton as the democratic nominee? our measure is that he hasn't. has beenhe president very measured and trying to stay out of the democratic process. bigink he realizes that a part of his base is energized and supporting bernie sanders, but also, recognizes that is essentially the presumptive democratic nominee or she has a huge lead in the delegate count. he joked about his successor,
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whoever she might be. i think he is tried to stay out of the process, keep democrats united, not to the scale one way or another, but at the same time, i think party unity will be a big issue for him. alix: he also laid out a four pronged deal with the slowing growth in u.s. economy. infrastructure investment, raising the minimum wage, closing tax loopholes like tax evasion. anything he lays out, he says, does not make a difference this stage in the game. justin: i think the likelihood is very low. there are wildcards for the next set session. corporate tax reform is something that they think they can work with republicans on. i'm not sure there is a chance, but they will keep pushing on hope.immer of
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the other thing is applied political pressure. if this is picked up by the candidates on the side, it is something that could have life in the next and administration. alix: thank you so much. scarlet: let's go now to the headlines on bloomberg first word news. we have those in the newsroom. ramy: donald trump does have one of the richest republicans in his corner. he tells "the new york times" that he will be backing donald trump. meantime, donald trump says britain is better off without the european union. that is in contrast to president obama who has cautioned british voters against leading. the boat is on june 23 on whether they stay in the 28 nation bloc. trump said today, "i think they're better off without it,
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but i want them to make their own decisions p o." not flyays they did mp.r a syrian cap two months of ireland's political gridlock have come to an end after brokering a deal in parliament. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. back to you. scarlet: thank you so much. coming up on bloomberg markets, we will be speaking to one of the early advisers to alibaba. we will get their thoughts on of rivals. ♪
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alix: this is bloomberg markets. i am alix steel. scarlet: i am scarlet fu. 12%: the fallen angel on of to date, basically blowing high-yield out of the water. scarlet: let's talk about these fallen angel bonds. why are we not seeing why spread -- widespread popularity with this erf? -- etf? >> is basically captures the double b area. it has energy and materials. scarlet: overexposure to those sectors? those two it is sectors. historically, it has doubled. the reason you don't see this, this is my opinion, the bond
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world is less sliced and diced. into buckets.em tend to get is they oversold be on the fundamental value, and as they sit there, this thing scooped them up, and as they come back to the fundamental level, this thing has been harvesting that little bit of alpha. it is almost like they have captured the interest value in bombs. -- bonds. ofx: we tend to see debt companies before their fallen angels get hammered. once they are downgraded, it is like a rally. the worst is over. >> that's right. kin to ary a value investor. i refer to this purgatory area. when you look at energy, angel has 24 percent.
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that is a good example of what you see in the ctf. there may be a month or more where this underperforms, but it seems to do well long term. scarlet: let's talk about jeff -- how do you play it? >> they look juicy. no relationticker -- to the band from georgia. his market predictions did not work out. the thing you need to know if it is not a normal etf. it basically passes on the spread as income. if the fed starts raising short-term rates, that would be really bad for these things. if the curve flattens, or rates go up in general, these things get hammered. i don't know you knows what he is doing, but these things do
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not run properties. alix: good to see you. thank you so much. site turn now to another to her. our next guest knows a thing or two about tech giants. he was an advisor to alibaba. scarlet: now, he is an author of a new book on alibaba. he joins us live from london. but start with alibaba's revenues that came out yesterday. analyst's estimates. what was your take away? >> a very strong core business. people are talking increasingly 's core andba plu periphery. i talk about this as the iron triangle.
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it allows them to take on risk in other areas like finance and entertainment. by the way, i'm no longer an advisor, i was a long time ago. if i was advising them, i would say getting disciplined around the long-term goals will be key for the future. alix: especially as the commerce -- e-commerce world gets more competitive, it you look at jd sales compared to alibaba. jd is growing faster, despite the fact that alibaba's stock is outperforming. you think they can stay ahead of the competition? >> to some extent, they don't want to compete with jd. jd is a more capital intensive model. criticizingaid -- investments being off the balance sheet. the reality is they are much higher than amazon overall
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because of the asset strategy. asple will stay with alibaba jd invests heavily in cities and direct delivery. that comes with a cost. if you are not that engage are going in directly into logistics, there are risks there too. it is a competition of ideas. i think there is room for both now. if you want to compare the company alibaba to amazon a little more, it is relying on the cloud computing business as well. what do you see out there as investors' or the marketplace's willingness to extend the lease to alibaba, as did jeff bezos. >> alibaba has been profitable for much longer. of course, it took a long time to charge anything.
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advertising was one model. the do ensure investors with that. financial services, that is the real big prize here. entertainment and so on is interesting, but the reality is financial services where they can back and middle classes of china. that, and financial, the domestic entity, there's already talking of a dual entity. scarlet: interesting, especially ma was such ack visionary, but is no longer part of the day to day. you think that is the way he is moving as well? >> the head of the business is .he cofounder of alibaba in fact, she worked with jack ma before alibaba was founded. jack has such visibility, that is why i wrote about him --
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although i would love to write entrepreneursale in china. i think we will see others come to the floor. alix: thank you so much. duncan clark. nextet: coming up in the hour, the offer to take over tribune. that is coming up. ♪
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alix: it is 1:00 p.m. in new york welcome to bloomberg markets.
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scarlet: good afternoon. i am scarlet fu. alix: i am alix steel. job growth does little to alter views on interest rates. s&p 500 index turning negative again for the year. scarlet: goldman sachs ceo is extending jobs operations to 10% of its staff. part of the biggest cost cutting push forhe biggest cost cutting in years. alix: hundreds of homes destroyed in canada and key oil facilities being threatened. the pictures. alix: unbelievable. let's get the outlook for the markets or the current state
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with julie hyman, who has been tracking the moves. scarlet: negative, but not so negative. gone loco little bit in today's session, but there is this negative tone. the nasdaq has been leading the decline with about .3 three of 1%. investors are digesting the job picture, trying to figure out what this morning's report means. in the absence of that direction or decision, we are seeing a lot of mixed reaction within the groups in the s&p 500. p becauseok at the ima we are seeing utilities and health care at the bottom of the pack, but if you look at the wheel, you have an equal amount of red and green on your screen. in the absence of that macro direction, investors are looking to specific stories, particularly on the earnings front as to get sort of the last gasp of the earnings season. end, the pharmaceutical maker, one of the big, big percentage
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declines, down nearly 40% after the company came out and cut their forecast. motorola solutions with the second quarter for cast -- second-quarter forecast missing estimates. energy, chemical and mining clients have been delaying final investment decisions. that is the trend continuing. and then there is apple, which continues to release struggle. if you go back to april 21, there has only been one session in that hole stretch of time that the stock has risen. as you can see, down 13% over this point of time. we have been looking at this chart peak with me on the bloomberg. this is an index that looks at apple's market cap minus googled market cap in the keeps getting smaller and smaller. now at $15.6 billion, so it is the smallest and has been since we saw early february. alix: we also got news on codeine maker. julie: i got confused because of
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tribune publishing. company called pharaoh is a codeine company and they are reporting that they have hired them to explore a sale, so shares are spiking up on that report. we will keep you posted if anything else develops. scarlet: thank you. let's check in on first word news with ramy. ramy: thank you. first, we had to washington and president obama says donald trump has a long record that needs to be examined. he also suggested that the presumptive nominee has not come up with serious proposals for listening and dealing with security. obama: this is a really serious job. this is not entertainment. this is not the reality show. is a contest for the presidency of the united states,
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and what that means is that every candidate, every nominee needs to be subject to exacting standards and genuine scrutiny. as for democrats, mr. obama will not make an endorsement until it plays out. he expects the candidates to unify the democratic party for the general election. has platforms planks at the democratic party summit convention. he is concerned the national committee will stack the committees with hillary clinton supporters. he says many of his supporters have not been included in the process. treasury secretary jack lew will go to puerto rico on monday. he said puerto rico may need the u.s. government bailout and congress is not happy. he has called on lawmakers to pass a bill to help style and prevent a series of cascading defaults.
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his trip comes after puerto rico did miss a deadline for its $422 million bond payment. impeachment commission has quoted 15-5 that there is enough evidence to try the president rousseff that she used illegal financing to budget -- to balance the budget. they are scheduled to vote on wednesday. rousseff says there is legal justification for her impeachment. global news 24 hours a day powered by our journalists and news bureaus around the world. scarlet: thank you. as you know, about one hour ago, president obama wrapped up this statement on the economy. he addressed it is jobs reports that showed a slowdown in hiring in april. in thent obama: here united states, there are folks out there still hurting. we have got to do everything we can to strengthen the good strengths and guard against some dangerous trends in the global economy. if the republican congress joins
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us to take some steps that are pretty common sense, and we can put traditional wind at the back of working americans. alix: if you are looking for a different read in the u.s. labor market, i hiring and small businesses may provide the clarity you seek. a small business executive at bank of america, they just released a study on the concerns, aspirations and perspectives of small business owners around the country. looking at the job picture through the lens of small business, is what you see different from the number today? >> it is not. the study we just came out with shows that the small business owners are taking somewhat of a wait and see attitude. their confidence is down. we believe that a significant reason why the confidence is down is because they worry about the outcome of the election. the survey really show that. the result is that the small
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business owners are saying that they do not plan on hiring in the next 12 months. only 22% of the small business owners say they plan to add employees, and that is down significantly from last year, --n 46% of sm planned small business owners said they planned to hire. scarlet: it concluded in the study that the fact of the face of the small business force is changing. talk about how that involved. susan: there are a few things changing about the face. that they survey said actually prefer to higher the 'ers rather than the millennials or the boomers. i'm not sure who i feel worse for. alix: the millennials. susan: in our survey last year, we talked about the changing workforce and what the small business owners were doing around the workforce.
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almost half of the small business owners said they were changing the dynamics of the work environment with pet , trying toartments attract more of the millennial generation, but in this survey, y are much more interested in generation x. alix: two things stood out to me, the percentage of small addnesses that planned to jobs increased for the first time this year, but with a payout actually fell, which expectation fell by about 1%, so they will pay less but higher more. a little bits different. our survey was different because half of the small business owners who said they were going to hire, they said they wanted to hire part-time versus full-time, which was a significant difference. we are seeing some wage pressure as well. the results of our survey were a little bit different. scarlet: what about the fact
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that you do or do not need the college agree? much discussion around whether college is worth it. for the millennials who are target of small business owners, do they need to spend hundreds of thousands of dollars for that bachelor's degree? susan: small business owners say they value of skills and experience most and that was by far, more than half of the small business owners say that is with a primarily look for an education was only 3% of what they look for. 3%, so significant. and if you think about running a small business, in the morning, the small business owners are doing marketing and sales and in the afternoon, product development and operation, so bring in someone in who can bring critical skills to the table is likely a lot more important to them than worrying about whether or not there is an education. as a mother of three millennials , i would still recommend the college education. alix: you have to get the skills somewhere.
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very much.k you managing director in small business executive at bank of america. scarlet: coming up, lloyd blankfein receives the biggest cost cutting push in years. that story, next. ♪
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you are watching bloomberg markets. i am alix steel. scarlet: i am scarlet fu. time for the bloomberg business flash. from at anheuser-busch to triple b plus as it remains a negative watch. this comes as south africa's competition commission says they may not meet the raiders deadline to complete the investigation into their
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takeover of miller. officials say there are issues that need to be addressed. lack above $60 billion by june, giving chairman warren buffett a bigger war chest to make acquisitions and buy stocks. and last month's meeting, he said the figure fell to about 50 billion after the completion of a january deal, but will likely jump in june as it redeems preferred shares. scarlet: a trial made for hollywood and underway in los angeles. the issue on whether 92-year-old media mogul was mentally competent when he threw his ex girlfriend out of his home and removed her from overseeing his medical care. the verdict could decide to ends up controlling [indiscernible] he still holds majority rights. that is your business flash update. alix: let's head over to julie hyman with a check at the big stocks. julie: i went to mention before
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i get to news that the dow jones has turned green, up about 26 points at the moment. s&p 500 appears to be heading positive. i'm looking at the dow jones. this is at least the fourth or fifth time that the dow jones has taken to the green today but up the most that it has been at any point over the session. let's get to yelp, a stock in the green over the course of the day, earnings beat both estimates for sales and for profit. the company is benefiting from improvement in its mobile engagement, this mobile app that uses are 10 times more engaged and they increased by 1.2 million. bloomberg intelligence training us some of the context on that. on the upside, herbalife did come out with earnings that beast estimates, but getting more attention is something talked about in a filing. tois in late stage talks
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resolve the federal trade commission probe into the company on whether it is a pyramid scheme. bill ackman, who famously sold the shares short, has alleged the agency expects to pay about $200 million. shares are up 11.5%. on the downside, update movers also. gopro is down more than 4.5%. they posted a wider lost and have been estimated and delay the introduction of the new car madrone to the holidays. finally, square shares down sharply. there are concerns about the financing for small business consumer loan programs. that is the service and have been do you potentially as a growth area. the company said it extended 160 day way in dollars in loans and advances, 4% higher than the previous quarter, but they face with credit market conditions. shares plunging 20%. scarlet: thank you.
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more bad news for workers over at goldman sachs. alix: sources say the bank is cutting more jobs and security units say it is roughly 10% of employees. the investment bank tries to whether trading and deal making. --'s ring in our reporter let's bring in our reporter. goldman sachs does tend to reduce some of the workers in the security division, 5% for new hires? this is different. >> or this is on top of that. usually, it is people at the bottom of the performance ratings or scales. this is more than that. it reflects our difficult it has been the trading environment. reminder in the first quarter that the revenue overall from the first quarter was the worst of any first quarter during the lloyd blankfein time as ceo. this is a company that depends on trading. they are not getting the trading revenue that is coming to their total results, so they are
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cutting people. alix: is there is this specific to the volatility in the trading environment or is it part of the dodd-frank? dakin: it is both, but i think dodd-frank, those changes to the business models, have mainly put into place. this is more about volatility, clients just not using the bank to trade security as much as they have in the past. scarlet: goldman sachs has held firm to this idea that trading is going to continue to drive the revenue and their profitability. unlike morgan stanley, which has shifted gears on the asset management side. even with these job cuts, it is not like they are making large changes but just trimming around the edges. dakin: that is right and a very good way of looking at it. point blank find specifically just talked about keeping option blankfein -lloyd
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specifically just talked about keeping option now the and how to say that when the business comes back, we are there, we have been calling on clients every day, and then when the business comes back, we ramped back up again. that is part of this. he is trying to get them smaller without sort of throwing in the towel. kin campbell a bloomberg news, thank you. ahead, alibaba trying to win the rest of the cloud. he will take the lead? more after the break. ♪
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this is "bloomberg markets." i am scarlet fu. alix: i am alix steel. alibaba had a tripling of
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revenue from the cloud business, but it is not just alibaba that has their head in the clouds. scarlet: also bet also trying to win the race. they appointed diane going to oversee the cloud computing. let's go to our radio colleagues for more. : thank you. yes, interesting things going on. the decisions they make it google affect so many companies. we are joined from trinity ventures. what is google doing in the enterprise that is so new? consumer facing products and moving it to the enterprise is a big deal. >> for years, they have been trying to the consumer products over to google apps, but the thing that is really changing the last couple of years is this new effort around craft computing infrastructure and they had taken the internal
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structure and made it available to the outside world just like amazon has, and they have no higher diane greene to run that really which has revolutionized the way that google is working with the rest of the eco. >> how is a change in the ecosystem? historically, because it has been a consumer company and it has not worked with other businesses the way that they are used to working vendors, right, google did not have salespeople, support people, consultants to help them get google products up and running, and part of what diane greene, who came from [indiscernible] andgs the best practices how you actually work with enterprise customers as opposed to everyday consumers. that, as it relates to
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the focus is not just in storage. there is another component to this. dan: absolutely. google wants to run all of the world's infrastructure. corey: go ahead. run thegle wants to world's infrastructure, just like amazon. they want to be a credible player, so it is not just about storage, e-mail, document sharing, but it is about compute, a.i., networking, all of the infrastructure needed to run applications. corey: is there a certain kind of customs more likely to go to google rather than microsoft or amazon, which is like a market leader doing $10 billion a year in revenue? dan: that is a great question. i think google is trying to position itself. the most natural place to position itself as a companies that are likable, so you see -- corey: that is a lot. dan: that is the challenge for
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them. andomers like snapchat, leading tech companies that are similar to google, apple just made a big announcement that apple was moving infrastructure from amazon to google. the challenge for google over the coming years will be how do they get more instream enterprises -- more mainstream enterprises to move this section over to google? corey: microsoft seems like the first in line to get that business. dan: absolutely. microsoft has existing relationship with enterprises, andthey have the know-how how to deal with them and they have the sales force and consultants. legal agreements in place to make it really easy for enterprises to buy from them , so i think as cloud computing moves truly into the mainstream enterprise, in some ways, this is microsoft's way. brings different
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blood into google. does she have to bring in some other partners and other outside companies to kind of help google in this process? dan: absolutely. i expect that is part of what we will see her do over the coming years. vmware, she knows the playbook and how to be successful selling to enterprises. she has the influence at google being a board member at google to actually get this done. corey: also interesting to me, here you are backing you ,ompanies as a venture investor but what is the impact on the ecosystem around this? -- i would say the impact of google, the main impact of google to move on the smart of ecosystem so far is that amazon -- sorry, google is pushing that price war with
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amazon. google is one of the few companies that actually has the scale and the market power to make that happen, so google is pushing prices down and that is benefiting startups. corey: thank you very much. i will toss it back to you. scarlet: that was cory johnson and carol massar. a takeover ahead, bid. we would speak to one of the architects of the offer and ask them what is next. plus, a broader outlook for what is up for media and m&a. ♪
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âi alix: from bloomberg world headquarters in new york, you are watching "bloomberg markets."
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rami: in his first remarks about donald trump's presumptive nominee status, president obama as a message for the media. this is not entertainment, this is not a reality show. obama urged reporters to take from seriously. --t's a trump seriously take trumpters to seriously. the body of a u.s. navy seal who died in iraq is on its way back to the united states. the remains of charles keating will arrive at dover air force base in delaware today. his body will then be taken to the san diego area where his seal team is based. candidate khan could become london's first muslim mayor. conservatives question whether his link to the muslim community would make him the right person
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to keep london say. north korea has begun its first full meeting of the ruling workers party in over 30 years. power five years ago after the death of his father, kim jong-il. he may focus on economic growth and military strength. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. alix: tribune publishing wants -- wese a chapter with talked to michael pharaoh about why he said no to that deal. >> it was not a true share price. gannetttand why did it. --expect to be trading
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scarlet: high costs and trekking at dollars, some investors are wondering if the future is all that rosy for the owner of the l.a. times and chicago tribune. first, we want to talk more broadly about the opportunities in the media ecosystem. it seems when we talk about media m&a, time warner-charter is likely to get approved. what precedent does that set for the industry? >> this has been years of a time warner looking for a partner in home. you have an industry that is likely consolidated. there are a couple of moves left. those will probably happen in time. the sec has been quite deliberate and aggressive about
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scrutinizing these transitions. when youing to me, look at the digital field, we have transactions happening in the digital world where people who have massive amounts of market share and power seem to there are only a handful left, but i think time warner and charter will happen, for sure. -- dot: regulators have they look at the media industry in the same way? regulation surrounding television and newspapers began, we had a couple of tv stations and a couple of radio stations and a daily newspaper. now, you have to hundred 50 cable chanters -- 250 cable --nnels, infinite websites
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we are still laden with regulations that burden the tv business in particular, even the cable distribution business as well. some of that regulation is hard to get out of the system. alix: you mentioned there were a few more big moves you can see in the tv industry. what are they? groupsou have two large pushing upward against the regulatory cap. there are enough owners of other attractive tv stations you will see one or two more combinations among those remaining owners, see you get a third big player. which ones.w some of these owners are perfectly happy owning 15 or 20% of the country. there are these auctions that will happen towards the end of the year.
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tribune has large television stations. the presumption is they will be part of that auction process. a world of television will look quite different after the options are done. scarlet: it feels like maybe the window for m&a might be closing. interest rates could get higher. granted, today's jobs report does not indicate that will happen anytime soon. these media companies rely on the debt market. is that an issue in terms of timing? john: the media world has had remarkable access to debt capital. rates go up and down, these are high cash generating businesses, they have access to the debt markets readily. i think financing for media will be just fine. how many large transactions are left that can really be done. we have a whole host of
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interesting new names in the digital world which will be the m&a.r of that smaller companies in the scheme of things compared to the giant bloomberg's of the world, but they are fascinating and fast-growing. what will be the core of m&a going into 2017 will be digital companies looking for new homes, aligning themselves with traditional legacy media companies. scarlet: we just had the digital world answer -- what did you the tie up how between digital companies and old media companies my progress in the years to come? >> the fact that you have something called the new front tells you something. it is as though this huge collection of companies need to come to madison avenue and show what they've got and see if they can drag advertising dollars alg with the eyeballs. we know the eyeballs have moved
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massively. there is a tremendous amount of consumer attention to these assets. traditional legacy video and ,elevision still has multiples huge amounts of advertising dollars compared to the total of everything an in the digital world. they are increasingly moving towards legacy media because they need those dollars and they are finding the advertising community is still very much wedded to the media they knew about vice now has its own cable network. alix: as we saw with cbs. we do have some breaking news for you. oaktree is urging a deal with ga nnett. we spoke to the ceo -- the chairman yesterday.
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he was adamant, no deal, no deal, not good for shareholders. what would you advise them to do right now? advisor, so ithe will stick with what we've said publicly. , $12.25 aal as given share is a very compelling proposal. an all caps off are -- cash offer. i raised this question yesterday. we have a 63% premium. the media deal premium right now is 50%. why do you think a premium needs to be higher than 63%? his response was when they came and got the deal, our earnings had not been released, we were starting from a low base. john: you've got some explaining to do. alix: meaning perhaps that does not make sense?
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tribuneockholders and deserve a realistic offer. alix: what happened with yahoo!? >> i've never seen a private transaction spend more time in .hat boards and leaks quite remarkable, actually. the research we've looked at suggests most people analyzing the company find it to be complex. the value of its non-core assets substantially exceed the value of everything else. it's not clear the value of the core is anything. you have this big enterprise where real estate and alibaba and pieces of yahoo! japan comprise what these people are focusing on, but you have the main body that is not doing well. there is someone who looks for a
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real bargain, i suspect the board is very impatient to see some thing happen with this company. it has languished for a long time. not want to hypothesize about what the outcome of the auction will be. just watch the chat boards. someone will leak it soon. scarlet: think you very much. canada's most expensive catastrophe. the latest on the wildfire that is ravaging the region. ♪
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scarlet: you are watching bloomberg. alix: this is your global
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business report. scarlet: geneva prosecutors widening their probe into credit suisse. alix: the proposed deal between anheuser-busch and sab miller is falling flat in south africa. gold.t: is it priceless or pointless? alix: we begin with citigroup's chief economist. world thats for the he is still concerned about the global economy. growth has bottomed out for the time being. goes, gets out of this artificial stimulus phase, it will slow down further. he added that the u.s. will see a genuine slow down and there is a possible trade of war and had. war ahead.d -- trade
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scarlet: china has been exporting record amounts of steel, undercutting prices in europe and the u.s.. prosecutors in geneva expanding their investigation into credit managers. its wealth they've identified three more former credit suisse employees as suspects in an unauthorized trading case. africa's commission says they may not meet their deadline into the takeover of sab miller. several outstanding issues need to be addressed before may 12. adivation has again rejected takeover offer. the french drugmaker bid's is to o low. they called it optimistic.
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opportunistic. alix: today's topic is a time-honored haven for investors -- gold. prices peaked in 2011 but have since tumbled. .> gold is it priceless or pointless? it is one of the original forms of money. gold may have lost its luster for today's investors. markety just a cycle or change in human appetite? gold is a time-honored haven for l that the crisis sent investors leaping for the precious metal. making gold one of the best investments in the world over a 12 year run.
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as economic growth returned and stock markets rallied, the metal began to tumble. investors dumped cold starting in 2013. in 2013.tarting here is the argument. gold bears say there are fewer reasons to own gold now because they see the global economy recovering. a strong dollar and the prospect of higher u.s. interest rates makes it does make it less attractive. gold only rises when investors believe the ranks -- bulls say long-term growth is uncertain. gold's future hinges on the hopes and fears of investors. alix: for more stories, visit , somet: for the third day
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general news in canada. it wildfire is tearing through neighborhoods in alberta. the fire may affect more than one million barrels of oil day. capacity per these pictures we keep seeing are truly unbelievable. ,hat kind of structural infrastructure damage has been hit? >> it is hard to assess. they are protecting some of that key infrastructure, so the airports and water, the bridges around the city doesn't the trade-off is a lot of the homes are going up in flames. the big development today is that there were 10,000 people who were stranded in oil work camps north of the city. weekwent their early this
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thinking it was a safe place to be. that is no longer the case. they're going out in convoys of 50 cars a time. you have several fires still burning out of control. a very dramatic situation, for sure. scarlet: can you give us a sense of how many people are still there? some 80,000 people have already fled the region. >> there are about 80,000 people in the city itself. they have all left. are goingt north and to have to come south now. alix: why is it so hard to get something like this under control? it is the perfect storm, the temperatures have been higher than normal. we had temperatures in the 80's and 90's this week. it has been a very dry spring because of el niño. all the gears were in place for
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a terrible fire. the expectation now, this is not a fire that will be doused by water planes. the only thing that will stop this is rain. we are expecting some rain sunday and monday, about a 50-50 chance. and colder temperatures. more canadian come if you will. alix: something interesting in the last week, take a look at the bloomberg. have seen since may 1, an increase of a probability of a rate cut. of may.% on the first scarlet: it is climbing. does that have much to do with what we are seeing in alberta or economic data? >> it is a bit of both. fromw new forecasts today
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canadian banks ratcheting down their forecasts. have gone to zero growth from 1.5% because of these buyers. production iss this production going to be long is thisow production going to be off-line? scarlet: we will have more "bloomberg markets" after this. ♪
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scarlet: this is "bloomberg markets." yields have spiked, credit default swaps have jumped and stocks have declined. all of this is followed from the prime minister's resignation. alix: in turkey, of course. we spoke to the professor of trade policy at cornell university. he expunged why turkey's
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underlying economy is not as bad as the country plus political challenges. >> among the emerging market economies, turkey is not doing that badly. they did about 4% gdp growth last year. year ashappen this well. the political instability is taking center stage right now. the concern in the financial markets are related to what is happening with the central bank. there is a new central bank governor in place. that creates concerns about whether the central bank is fightto maintain the against inflation or reduce interest rates as the president has been asking for, which could make things go haywire. alix: turkey is not doing that badly because you have the prime ministers seen as closely tied to the west and the eu. >> that's record he was seen as a reformer. .- that's right he was seen as a reformer.
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the low oil price has been a boom for turkey as well because they import oil, so they have a good physical condition and turkey was benefiting from the increasingly favorable conditions -- >> you have commerzbank reducing the gdp expectations for turkey. are these reactions out of place? >> i think it will be a difficult theme in the coming months. the market is losing confidence that turkey will go in the right direction. if turkey now experiences capital outflows because people are concerned about where the economy is going, that creates a load of uncertainty and instability. it will be a rocky few months for turkey.
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who does president erdogan listen to? holden largely be to himself. he will appoint a prime minister very much cut from his own mold. him right stand up to now. alix: what happens with the refugee crisis and the deal that turkey made with the eu? >> we had that discussion on the show this week with megan green. this will be an interesting summer for europe overall due to greece, grexit, spain and the ongoing tension with turkey flaring backu up. brexit, spain. today, we will broaden
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our look of it and look at markets, especially in light of the jobs report and a lot of questions over the credit cycle. alix: we have seen a lot of redemptions come out of the biggest high-yield uts. -- high-yield etf's. the question is percolating right now. >> it fits with the em conversation because we are seeing signs -- seeing things selling off. scarlet: we will be back with more "bloomberg markets." ♪
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>> welcome to "bloomberg markets ."
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matt: from bloomberg world headquarters in new york, i'm matt miller. stocks are bouncing around after the april jobs report is the weakest in seven months. oil is rising, gaining for a third straight day. will the lackluster jobs report take a june interest rate hike off the table completely? john taylor joins us to discuss fed strategy. -- posted for fed presidents at a conference. making a deal with donald trump. republican leaders demanding the presumptive gop nominee demonstrate some conservative principles before giving him their endorsement. markets close in just two hours from now and stocks are now gaining across the board.


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