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tv   Bloomberg Markets Americas  Bloomberg  March 23, 2017 2:00pm-3:31pm EDT

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scarlet: we are live and bloomberg world headquarters, covering stories out of mexico city, washington, and london. here are the top stories we're covering. the countdown is on on a vote to repeal and replace obamacare is coming down to the wire. the white house is trying to win over holdouts with last-minute changes, while some of congress say the vote could be pushed until tomorrow. mexico's central bank governor speaks to bloomberg. he says the pacer remains undervalued by as much as 10%, even with the recent strengthening of that currency. we will focus on retails. sears shares have been under pressure as the company makes the top focus of winning default on its debt. u.s. markets close in two hours time.
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let's check where stocks are trading with abigail doolittle. it looks at we have a direction for a change. small gainsittle: for the three major averages -- the dow, the s&p 500, and the s&p 500, after trading in a muddled fashion earlier this morning, mixed up and down, we now have small gains for all three of the images. the s&p 500 on pace for a second day higher, and the dow on pace to snap a five-day losing streak. a little bit of bullishness ahead of the health care vote. investors are waiting to see if that goes through. if it does, he could be perceived as bullish because it could allow the trump administration to move fall for -- forward with fiscal stimulus. it is a dent on the health care stocks. centene down a bunch. hospitals stand to lose the most.
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we have seen this stock down the most, perhaps suggesting investors think the vote will be passed today. molina health care, with more of a focus on medicaid, also has more to lose, as opposed to humana, which has less exposure according to a bloomberg intelligence analyst who said he would not make any predictions on if it passes or not. turning to another sector where we are seeing a little bit of green, and some ready -- kroger and supervalu -- both stocks trading higher on upgrades to outperform over at rbc capital. william kirk sees multiple catalyst, including food inflation. he thinks valuation is attractive on kroger. whole foods down more than 1%, at this point down nearly 1.5%, sell andas, with a new a price target. they recommend buying sprouts.
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we look into the bloomberg, speaking of competition, this tells the picture. in white, the whole foods stores. not very many of them. yellow, trader joe's. blue, kroger. kroger is dominating the picture. all foods, the turnaround everyone is hoping for not materializing quite yet, and this might tell us why. scarlet: thanks so much. let's get us back to the debate over the republican plan to replace obamacare. president trump making his final offer to win support for the bill. --ning us, kevin sarao, kevin cirilli, bloomberg's chief washington correspondent. give us the names of the people that have to agree to the changes the president is proposing for this vote to go forward. kevin cirilli: mark meadows is in the eye of the storm, so to speak, and happening right now is where the freedom house caucus members are holding court
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about whether or not to support president trump and the deal he made. aide towith a senior representative andy harris, a republican from maryland, who was at the meeting, who told me representative harris is still opposed to the deal. he was a hard know vote all along. i also spoke with a senior aide ofmark meadow, the chairman the freedom caucus, and says there is no deal at this moment, and whether or not they will get the deal for what is supposed to be a vote scheduled to happen, but i caught up with republican blackburn,, marsha from tennessee, who was busy whipping votes all day. let's hear what she had to say about the potential for a vote tonight. rep. blackburn: all paths are trading yes. kevin: how are you going to vote? rep. blackburn: i am one of those that is going to come along and support a conservative yes vote. so, clearly chimeric
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elegance busy on capitol hill, trying to decide whether or not so clearly, republicans busy on capitol hill tried to decide whether to stick with the tea party or president trump. oliver: did you sense the bill was poorly written and does not appeal to the gop and democrats, or does it speak to something that does not tell typical party lines and it is somewhat bipartisan? kevin: it depends on who you ask . moderates say they are not like it cut services to lower income americans and senior citizens. they are hopeful that should get to the senate, they could pull back to the middle. you talk to conservatives who argue this is obamacare light, a term coined by rand paul. i spoke to an eight to senator paul who said the senator is in constant contact with members of the house freedom caucus, including following after that meeting they had with president trump.
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white house press secretary sean spicer saying the president himself is working the phones this afternoon, again, all eyes on whether or not there will be a deal. representative blackburn calling president trump "the closer." let's see if he can close the deal. scarlet: kevin cirilli joining us from capitol hill. thank you for the latest. oliver: let's check on bloomberg first word news with mark crumpton. mark: britain is attempting to return to normalcy one day after the worst terror attack there in more than a decade. the streets around parliament are cordoned off. both houses and the vast majority of london are open. westminster bridge open to traffic again. the bridge strategically opened near parliament and the london eye is a popular tourist site. authorities have identified the person they say carried out the attack. a 52-year-old who police say is of britain with a record. the dish prime minister theresa
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may says people from 11 countries were hospitalized after yesterday's attack. nationals, british three french, two romanians, and one each from germany, poland, italy, and the united states all required hospitalization, and that is in addition to the four who died. the 29said seven of hospitalized are in critical condition. israeli police have arrested a 19-year-old israeli jewish man is the primary suspect in a string of suspects targeting jewish community centers and other institutions across the united states. the anti-defamation league says there have been more than 120 mom threats against jewish community centers -- centers and day schools in the u.s. this year. several jewish cemeteries were also vandalized. french presidential candidate marine le pen will visit moscow. the kremlin held the far right politician as a realist who
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opposes globalization along with president trump. opinion polls show she is likely to reach the may 7 runoff for the presidency. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: think you so much, mark. coming up, we talk about socially responsible investing with jerry dotson. and also, white house press secretary sean spicer is still speaking at the "daily news" -- daily news briefing. he says the president is meeting with the freedom caucus today in an attempt to bring the gop members on board and he says it was "a positive step," and he said nothing leads him to believe there will be a delay in the vote planned for tonight. you can watch the briefing in full on your bloomberg tv go. from new york, this is bloomberg. ♪
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scarlet: this is bloomberg markets. i am scarlet fu. oliver: and i am oliver renick. let's turn to the topic of socially responsible investing. we are joined by jerry dodson, the ceo of poor nasa's investments. his fund has produced 13% annual returns over the past decade, beating the s&p 500 index. jerry, thanks for joining. let's talk about environmentally and governance-minded investing. tell us how for you those qualities of a company translate into returns for investors. my opinion, if you
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take those into account, it gives you an advantage. for example, if you treat your employees well, they will be more productive. if you are environmentally responsible, you are less likely you will be fined or have a .awsuit we think these aspects come in and in the final analysis, it really does help the return of the fund. oliver: now, i guess what i am -- what we are trying to figure out here is it seems like there is a real possibility the companies that are the most aware in terms of their corporate governance, in terms of social responsibility, those are also going to be the companies that, by virtue, have done pretty well and are larger companies. is there not any kind of noise there in the data you have to sort through? jerry: oh, there probably is. almost any kind of data you have it probably is going to need to be sorted through. there is no doubt it is in their. in general, if you look at a company that has these
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qualities, it is going to really help you in terms of investment performance. scarlet: talk about the current environment right now. obviously a lot of political divisiveness in the u.s.. california and new york, a lot of people call them the coastal bubbles. esg as a knee-jerk reaction -- has become more popular because of what we have seen politically? jerry: i have not noticed that, but perhaps because people are thinking about it, they would like to do something to express disagreement with the trump administration, and one way to do that is to invest in a fund that is socially responsible. oliver: tell us about the factors that go into this. you talk about social responsibility -- there is a certain degree of subjectivity. it is an emerging field, and there are different points that one can choose to measure. what are the ones that spell out whether or not a company is reaching its goals?
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jerry: well, you are absolutely right that there is a lot of subjective judgment -- judgment going into it, and some people tryt disagree, but what we to do when we look at individual companies, we try to look through and say is his company a good corporate citizen? how does a treat employees. factors thatrtain can be objective -- do they have health care for employees, in terms of educational opportunities -- there are a lot of things we look for. the benefits they have. there is also intangible -- that is very subjective. we try to talk with the management and ask is this a good place to work, and of course no company would say it is not a good place to work. specifics, weout make judgments, is this really a good place to work, and the same thing applies to environmental responsibility orchard will contributions -- any other social factors we look for in making investment decisions. scarlet: as you mentioned, a lot of subjectivity and i wonder if
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your brand of bsg investing include something like what what investment includes other companies --divesting from companies that would build president trump's wall -- does this something you are considering? jerry: it is a great question. it we are relatively new. we have not made a decision on that. oppose building the wall, but i do not know how that would -- i would have to think through it more before making a final decision. oliver: jerry dodson, interesting stuff. i was going to point out for the viewers on the bloomberg terminal, we have a great function that actually tracks environmental, sustainable, governance scores the of the bloomberg. i am looking at the function right now where you can grab fundamentals, go here and select a disclosure score.
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a cool function to keep an eye on as it becomes a more popular style for investing. still ahead, we will look at the state of the initial public offering market, and how it could influence other companies considering going public. this is bloomberg. ♪
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oliver: this is bloomberg markets. i am oliver renick. scarlet: i'm scarlet fu. shares of snapper getting a boost after two analysts recommended buying the shares. the company behind snapchat has been closely watched since it went public. will it influence other companies -- for more, let's handed over to cory johnson and carol massar. you, jackie is with us from ernst & young. here to talk about the ipo
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maet. first of allthe snap ipo -- a lot of excitement, the big tech ipo we have been waiting for, came out of the gate strongly, and shortly after it began pulling back. down about 16% after hitting a high after his ipo. what does snack tell us about the ipo market, or is that a specific situation? jackie: i think big brand names, exciting unicorns, they are great for the market. they encourage tech companies and other companies who are interested in listing to get ready. the momentum has been great. the markets have been moving, and there is a lot of global macro economic issues weighing in. don't look at movements in the stock price. we don't like to look at stock price and first-day pops as any sign of the success. cory: to that, snap is unique and not unique in a lot of ways. it is a consumer facing technology business. 80% of technology is enterprise
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technology, but it is a consumer facing business that has a lot of consumer interest. it is a massive money-losing company with massive gross margins. i wonder if that tells us who the ipo buyers are. how many of the buyers are consumer and retail investors? bigie: technology has had a backlog and we need to look at tech as its own unique sector. tech plays into consumer, real estate, different sectors -- so much as interwoven today. overall, companies or investors have been backlog in getting into technology investments, so today -- and we sought, really, last year, a really strong performance in technology at the end of the year. i think there are many technology companies lined up to go public this year. i think we will success stories. i'm confident -- this year. look at the sector, and really, there is a long-term view here. carol: this is why we like to
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talk to you -- you sound optimistic about the ipo market, and already it is stronger than what we saw last year at this time. i am assuming companies are reaching out to you and saying we are planning to do an ipo. talk about what industries specifically, and how much activity you anticipate -- jackie: right -- carol: regardless of what you are displayed in the ipo market. jackie: right. the call started coming in last year, knowing it is a 12 to 18 month runway on every, you are looking at this year lining up to be a strong year, and momentum build. companies are accelerating timelines as a result of the successes we have seen since the september timeline last year. we have had some strong ita -- ipo performances. carol: small, big? all sizes, all industries. mlp's are coming back.
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energy has been backlog. it has been slow in energy. the backlog is building. all types -- it is really open for all industries. retail will be adjusting. carol: when you say retail will be interesting, we spend a lot of time --everyone is bloomberg takes a look at retail. there is so much pressure on the retail sector. look at sears news this week. sales have retail pressure, but there are diamonds -- a lot of them are online businesses -- that is how they started. brick-and-mortar, starting online -- they are getting into brick-and-mortar as well. keep an eye out for those once. cory: how does the calendar look -- we are here in mid-march, already think about when deals have to get out, when a slimmer slowdown might have to occur. last year all your was slow. i wonder what you expect for this calendar year. jackie: typical, ipo's are cyclical. they tend to be heavy periods
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between late march and early june, and also right after labor day. then the rest of them sprinkled in, and brand names can take advantage of any decent, small window there really is. we are just at the forefront of this. i mean, i think we need to look at this year compared to last year. , over $83 ipo's million in capital raised. last year the same time it was eight ipo's, and less than one billion. you do not feel it all, but there's a lot of momentum happening now. thel: what about some of momentum been slowed down by what is going on in washington -- every day we are taking our cues from what is coming out of the trump administration, the nation's capital. what about the ipo market -- is it just related to the stock market? jackie: obvious that, a strong stock market helps the ipo market. these companies are coming off of other companies that are like
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themselves in the market. valuations look great. in the thing to pick about -- change is good. this makes opportunities for some companies. other companies have to think about their strategies. other people know what might be coming, they are sizing it up, and how do i seize that opportunity? cory: when one looks to size the deals --the snap was so massive, one of the biggest we have seen in a long time -- i wonder what you expect for the singles and doubles of the ipo market. jackie: you know, i think we will see other exciting brand names. a number of them are working on readiness. it is about timing, making sure your company is ready. that is one of the best practices out there -- start to act like a public company before you are public. they are all monitoring it cap they are all figuring out when is the right time. there are companies that are going to need to accelerate because they want to raise capital -- accelerate because they need people, and then, you know, altman, there are companies that don't need the capital, but want the --
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ultimately, their companies that don't need the capital, but want the brand. usol: jackie kelley, joining from ernst & young here on bloomberg radio. back to you guys. scarlet: thank you so much. you can catch more of their radio interviews on sirius xm and bloomberg.com. oliver: time for a look at the bloomberg business business flash. credit suisse is continuing a stock sale that is a potential alternative to an ipo of a swiss unit. the fundraising route could happen sometime in the first half of the year. and ppg industries has begun a charm offensive to win over exxon mobil. -- accent noble. the dutch coatings maker has rejected two ppg takeover offers, the latest for $22.2 billion. and disney ceo bob iger will
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stay on with the world's largest entertainment company. he is a great for -- to a contract that will keep him at disney until 2019. he is been ceo for more than 11 years of the company. that is your bloomberg business flash update. scarlet: still ahead, gold traders remain bullish as prices hold that a three-week i. from new york, this is bloomberg. ♪
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world" isom bloomberg in midtown manhattan, this is bloomberg markets. i am -- headquarters in midtown
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manhattan, this is bloomberg markets. i am oliver renick. gold holding in advance, but analysts still bullish on the outlook for prices for a second week. look oil -- the chart number is library. btv it closed below with moving average. it is the third dip below since the oil rally ended. we take a closer look at oil and how the recent declines might impact the overall economy. deutsche bank's chief international economist torsten slok some boko earlier. torsten slok: this is a dovish argument to say maybe inflation will not be what we thought, but maybe can hold things back a little. people could argue we should look at core, not a headline, but the chart shows the correlation with breakevens is very strong. actually, the development,
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specifically as it goes down. frustratede somewhat with what they are doing that we are not seeing the intended consequence of their actions. oil, one theory -- lower lower gasoline prices, more consumer spending, but this is different than going from 100 to 26. torsten: absolutely. nevertheless, the key issue becomes that for the fed the oil price is a driver in inflation for fed, and what the oil prices do them if they go down from here, is an important significant development. jonathan: three months ago the only words i heard were animal spirit, and now i only hear goldilocks. animal spirit, and now i only hear goldilocks. is it a good thing that crude is almost over -- is that a good thing? torsten: let's not forget that you had aago --
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significant impact across the board on the s&p 500 in the energy sector. it is not only good news. basically on the market, it is we do not want a big crash. we don't want a increase in prices could we want businesses to plan according to something that is printable. scarlet: mark crumpton. -- openedaffordable the hearing saying the a for the care the american people. kevin cirilli the new bill is very important to president trump. are going to have to negotiate fairly and faithfully with both of the sides, and i think he has the opportunity to win, and i believe he can do that. mark: the rules committee is
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considering the conditions in which the house led gop will vote. in an interview with "time magazine" mr. trump said quotes.ping" was in what i'm talking about is surveillance. in the interview, he defended other statements that have been debunked, including his claims that millions of people voted illegally in november's election. the president concluded the --erview with again "quoting "i guess i cannot be doing so bad because i am president, and you are not." there is a report the banking activities a former campaign manager paul manafort are being invested. the associate press says treasury reports -- treasury agents have obtained information as a part of a federal anticorruption investigation. funeral services were held for martin mcguinness, northern ireland's former deputy
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minister. thousands accompany the coffin as it made its way through the streets of londonderry through the church. among figures in attendance, former u.s. president bill clinton, former british prime minister tony blair, and the former irish prime minister. oversawir and modern negotiations that clinched the 1998 peace accord. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. however? -- oliver? oliver: thanks very much. the mexican central bank governor telling bloomberg he thinks the peso is undervalued. he spoke with erik schatzker from investment banking conference in acapulco. >> it is something we want to constantly for now until it is
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best to where it is supposed to be. -- ifs why we have been you take into account our monetary policy actions since december of 2015, we have been acting in a preemptive way. that inflation needs progressing as it should progress giving -- given the shocks that we say -- face, but we must not be complacent, and will be watching this with a lot of care, so that it does not get out of hand. erik: there is a lot of attention on the value of the pace of him to plan you have put in. --in place so far appears to be successful. agustin: yes. erik: it was not so long ago you said the peso at 22 over the dollar was overdone. how would you characterize the current level? agustin: it is much closer to
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what it is supposed to be. i think it is undervalued. there is still an important unknown there, which is that we don't know how exactly the bilateral relationship between mexico and the u.s. will ship up. -- shape up. erik: of course. agustin: taking that into account, and given the other fundamentals of the mexican economy, i think that the peso is still undervalued. agustin: -- erik: by how much? agustin: it depends on different models. erik: the one you like, let's say. agustin: i look at several different models of the same time. erik: just give me a sense -- are we talking about 5%, 10%? agustin: it is no more than 10%, but it is still undervalued. erik: is there anything more you can do with this uncertainty of u.s.-mexico relations in the backdrop to get the peso to what you think it ought to be?
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we do not have a parody on the exchange rate. our target is inflation. therefore, we asked to precisely guarantee that the inflation -- considering the -- with which the monetary policy act,s we will get back to the objective -- 3% plus or minus 1%. we want to be there as soon as he can, and hopefully we will be there, probably toward the end of this year, under 4%, and 2018, toe end of around 3%. erik: to what degree is the fed policy to normalize policy and the net of states helping or hurting you right now -- united states helping or hurting you right now? agustin: they have done a very good job. the forward guidance has worked. they have prepared the markets. they have allowed us also, to
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prepare the circumstances. so, i think so far it has worked very well. i mean, they have done their work very, very well. erik: would you consider expanding the hedging program you put in place for the pace of? -- peso? agustin: we announced a ceiling. we have a lot of way to go. erik: wilbur ross, the commerce secretary, suggested that some kind of pace of stabilization mechanism might -- ought to be discussed as part of the nafta negotiations are what is your position on that? agustin: we're more than willing to discuss it with him and the u.s. counterparts. at the same time, i think that a very important point that i have to make is that we have been -- we are not a country that tolicitly is helping to try depreciate its currency. on its contrary -- on the
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contrary, what you have seen recently in our actions is precisely efforts to bring back the peso where its value should be. so, we are not in the business of depreciating artificially, the pace of. erik: but, in principle, do you think some kind of -- the currency, and the value of the currency, and the mechanisms around which the value is set off to be part of a free trade negotiations? agustin: well, you know, there are no written rules about that. for example, if you create -- this is not what i am suggesting -- but if you say if you see in the span of 50, 60 years, what has happened in the european union -- the union was first triggered by trade agreements, and then it converted into a currency agreement. that -- the way we
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have to follow, but -- each case has to be analyzed by itself. and one last question -- now that wilbur ross is the secretary, do you feel more feltraged by what you about the trump administration when we last spoke before he took office? agustin: i feel more comfortable. scarlet: that was agustin carstens with erik schatzker today. oliver: sears makes its top focus on avoiding default on its debt. we will discuss if the end is near for the 131-year-old retailer. this is bloomberg. ♪
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oliver: this is bloomberg markets. i am oliver renick. scarlet: i am scarlet fu. let's check the markets with the scepter spied a report with julie hyman. abigail: it is actually abigail doolittle -- we're looking at the s&p 500, it's best day in a month. a relief after some bearish action behind the xrt. we are looking at pbh court the stock is up 8.6%. the owner of calvin klein put up a better-than-expected quarter. there was a range above the estimate. lots of bullishness there. the stock is having its best day since september, 2014, and the strength seems to be a bit of a relief for the other retailers, especially apparel retailers. of course, it has been a difficult stretch for retail. we have ralph lauren on the high end of the rally, along with gap and abercrombie & fitch. strength for the retail space,
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plus nike. nike, yesterday, had a rough day. the had its worst day yesterday since june the 2012, down 7%, but today, a nice rally. up 3%. it's best day since december 7. the reason the q was down, new orders were below estimate -- nike was down yesterday, new orders will -- were below estimates. i looked for analysts defending the stock -- did not see any. nonetheless, the stock is seen a rebound here. let's hop into the bloomberg and look at retail versus the s&p 500 since the election. g #btv 6060. investors --nking consumers would be on a spending tear. behold, retaild
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started to trade down, especially on the border tax proposal, and the tough retail environment. quite a divergence at this point with retail down slightly from the election. if b 500 up. detail of debt the s&p 500 up. i tell of two cities. oliver: let's talk about sears -- the copy doing -- on doing a bit of a plunge after doubts about its future today was report said week earnings will hinder its ability to keep operating. we are joined by bloomberg intelligence analyst who covers the company. i love talking about sears -- while the news is not good for them commit is a fascinating story, a hallmark of what used to be brick-and-mortar retail. if sears goes, is that essentially the end of what we knew as big-box stores? >> i do not know if it is the end, but you have a sector in
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transformation. the guys playing the game, whether it is macy's, or even burlington stores, they are looking to shrink were the purpose square footage into something that works. the cup -- the question is can they avoid bankruptcy. a lot of people are surprised they have been able to stay afloat for this long. i would probably be one of them. when i started coming in three years ago, i think my beard was all black. that has changed. it has contingent desk is contingent on the -- it is contingent upon the willingness to rewrite checks because they have been monetizing assets, but the only bidder has been eddie lambert himself. as long as he is willing to write checks, you can play the game longer, but eventually you run out of assets to sell. is one point you
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brought up -- they are getting $1 billion from selling craftsman tools. soy are busy can only sell much. i want to dive into the terminal to look at the fundamentals function yet again. i am looking at sears cash and cash equivalents -- this line right here that rests at about $286 million. then down here in the negative, a huge decline in the available clock -- cash since peaking in 2006. so, the question here is how long can they go on believing that kind of cash? does eddie lambert have enough to sustain that over any reasonable long-term? noel: over the long-term, i don't think so. even this year, there is more they will need to do. theyif you look at what did in terms of refinancing the revolver, and getting the cash from the craftsman sale, and you mentioned close to $1 billion, but half of that goes to the government to offset the pension liabilities. sears themselves gets 525.
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it is a company veterans in excess of a billion dollars a year. -- a company that earns in a sense of $1 billion a year. they will have to do something to navigate the full-year and if they make it through 2017 without going into a more severe restructuring, they will have to start all over next year. scarlet: so it does not end until eddie lambert decides that it ends. soldg said that, they have real estate to make up for the cash. what does it do for the overall landscape that sears is unloading so much of its property? noel: there are two parts of the question. if you talk to some of the reit's, a lot of the landlords are happy to paris -- repurpose the real estate into functional usage. sears is not a good -- does not do a good job of drawing people into the mall. that said, there is a bigger question of how many malls you really need. cutting 130, is
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140 stores, macy's cutting stores, sears cutting stores, there is a question of how many malls you need longer-term. there is a two-part question in how you repurpose that that you don't need in today's retail landscape. oliver: the point you brought up in the meeting -- anytime there is a company that goes into bankruptcy, there could be hawks that buy cheap debt. to you is are there redeeming values to sears debt if this comes to fruition, they have to go bankrupt and figure out a plan? are there other assets that will be appealing? noel: you have to find debt to buy. that is probably the challenge because you have any leopard and fair home -- between them, if you look past -- eddie lampert and fair home, if you look past own -- you can look at the stubs piece, but a lot of those are $.80 on the dollar and
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over-jargony, but what is left when they ultimately file, that will define where your security is, or the peace of the capital structure that gets aqua ties. until you know where the music stops -- adequate ties, and until you know where the music stops, -- oliver: great stuff, noel hebert . scarlet: citigroup is planning to close three of its four london branches as a continued to cut costs and focus on digital. the bankrupt to client about plans to shutter i'll let -- outlets over the next two months. this is a part -- according to a correspondent. they might open other wealth management centers overtime. royal bank of scotland will eliminate 700 jobs and shut down one hundred 80 branches in the u k and ireland. it is part of the ongoing cost-cutting strategy.
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and that is your business flash update. up, an fbiing informant flips and then flips again -- the store you cannot miss about a wall street trader who turned on his peers, and then the authorities themselves. i love this story. cannot wait to talk about it. that is up next. this is bloomberg. ♪
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bloombergis is markets. i am oliver renick. scarlet: i am scarlet fu. when a wall street broker was nabbed by the fbi, he was asked to be an informant or go to jail, but when they gave him an unsavory deal, he tried to get even. join us with the dirt, bloomberg finance reporter zeke fox wrote about this story in "business week" on the terminal. let's start with who guy genteel
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is. zeke: guy runs in a trading group. people to do all kinds of crazy stuff you cannot do in the u.s., and the business was going great until he got arrested. scarlet: he is a bucket shop broker? zeke: that might not be the nicest word for it, but the people that trade with him i do not think are doing that great. oliver: not pulling any punches. scarlet: just curious. caught 4 -- was he what the fbi panama up against the wall for? he allegedly purchase. in pump and dump schemes -- where they send out a mail saying how great it is, and believe it or not, people will buy stocks like this and you can
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make good money with these scams. scarlet: there is the shout out to bucket shops. he began working as an informant with the fbi because they caught on with him and wanted to plead guilty, and he tried to could a deal, or they wanted to cut a deal? zeke: they said if you help us out, maybe we can make this go away. he said he was made these promises. they say it was not explicit. either way, he ends up spending three years running sting operations for them. he got really into it. he felt like he was the star of his own movie. he always wanted to be a secret agent, so it was his dream come true. oliver: what did you learn about pursuing this -- what was surprising to you about how the fbi operates? zeke: i was surprised that you need someone like this. as someone who investigates these scams, i thought they would have access to all sorts of trading records and they would be able to prove things
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without needing somebody on tape. guy ise fbi agents told these things are hard to prove, you need to go in there, and get this target to say hey, we committed a crime -- we want to rip people off. this is like robbing a bank. they really wanted dirty things on tape. oliver: to have it be exquisitely -- explicitly illegal as possible. we have to leave it there. zeke faux, check it out. disney: breaking news -- ceo bob iger says he will not extend his contract again after 2019. we told you earlier today he was extended his contract until 2019, but now he says after that he will not extend his contract once again. we will keep you posted on further developments. this is bloomberg. ♪
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>> i'm oliver rennic. >> welcome to bloomberg markets. >> we're live from bloomberg york.headquarters in new we'll be covering stories in los angeles, washington and london. here's a look at the top stories. u.s. stocks in a bit of a holding pattern as investors wait to see if lawmakers in d.c. can gather enough support on capitol hill among the republicans to pass the healthcare bill. down to of healthcare, last minute changes and last minute bargains. to washington paul ryan is expected to hold court. disney business, confirmed ceo bob iger will leave the company. we'll go behind scenes for the contract extension and what
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for 2020. streetington has wall undivided attention. it's white house press secretary does remain confident. what sean spicer said. >> you expect there to be a vote tonight >> yes. >> any chance that will be pushed back? be up to speaker ryan. >> for the latest we're joined and on capitol hill is our chief washington correspondent. the white house made what it called a final offer to the group that house freedom caucus. ifyou tell us what we know that offer? >> the focus of this final offer is on getting that freedom closer to where they can be in terms of dialing
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benefits in the individual market without touching what president trump has indicated sort of third rail for him, which is the issue.ting conditions we did hear sean spicer address that. that's still something president trump said needs to be in that package. it has not been enough so far. final offer i guess is in the eye of the beholder. group thee tuesday moderate republicans coming to the white house. they're the other side of that equation. the white house still trying it seanogether a deal and as spicer was speaking we had outside.s gathering >> kevin is that the end of the it?t or the beginning of still got the senate. look like? bill will >> i spoken to senior aids and members of the house freedom caucus earlier after the meting that they had with president trump.
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there is no deal. they are not close to a deal. they still have severe concerns that this legislation being trump andy president house speaker ryan is not conservative enough. senior aide and senator rand paul who said the contact with members of the house freedom own andho met on their privately behind closed doors to begin talking about whether or they're going to do this. you know, this is clear choice right now between president trump who is meeting later this afternoon with the tuesday group. the more mod raid factions. will he choose more moderate or the conservative wing of the republican party? right now people like senator feel they haveuz the leverage to move this legislation more to the right because they feel the concern that they have that should get to the senate. either way, nothing on president
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trump's legislative to do list tax reform to infrastructure. all that goes out the window until they can pass healthcare reform first. >> margaret, we know that house speaker paul ryan will be speaking later in about 30 minutes time. he was originally scheduled to speak at about 11:30 a.m. tot does the delay signal you? >> what speaker ryan was hoping hourhat some time decent this evening, they'll able to open up the board and begin a roll call. needed to happen between this morning and now and it may happening past this start time, it is for the side to get closer to together. doesn't want to come forward and speak in a way a can jeopardize the negotiations and have to field tough questions. have ongoingto conversations between speaker ryan and the president. learn today, the president
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himself making individual one on lawmakerscalls to deep into the night. lot of working behind the scenes try to cobble together enough moderates without losing those conservatives. bring enough conservatives without losing moderates. so that the speaker can come canard with a plan that he execute and president trump can salvage enough political victory issue. >> lot of stake clearly. you so much and just reminder house speaker paul ryan at 3:30 p.m.eaking when that news conference begins we'll take you there live. thewe're about an hour from closing trading here in new york. let's get a check on what's with abigail. >> we are looking at small gains of trading. hour we have the dow and s&p 500 and mod -- modestly. nonetheless, we have the dow five day losing streak or on pace to break a
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streak. losing it the s& s&p s&p 500 and nasdar second day. we are in wait and see mode ahead of the healthcare bill. after that big selloff on tuesday. sticking with the theme of is theare on top here bloomberg intelligence hospital index. it's up more than 2%. suggest thatting this thattings design something that the healthcare bill won't be pass. the house stand to lose the most forward 10 toves 12 percent of their earnings have been coming from the affordable care act. seeing a rally here. have centene iwe identified as a hospital, it is actually managed care. focus on medicaid. medicaid really is at risk with republican version the healthcare bill. this stock is down 3.7%. downgraded over -- there
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really is this medicaid scare. humana down the least. he's made the point that this managed care company has tried to shore protect the outcome around this bill. taking a look at healthcare. a look at -- we see that out of the election it rallied. more recently starting to dip down. the on the bottom, this is call to put ratio just weeks ago. been trading higher. investors have been bullish here. right around even. us thatlly telling investors are split on what way this bill is going to go. chart that mayt suggest that investors arely bit bullish. this is the dow healthcare is thers index, below mac d starting to turn down.
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we'll know soon. investors may suggest on hold or little bit more bearish going too the vote -- vote.he for more how investors and at large reacting. showed -- abguilt showed us the charts. does if go beyond healthcare companies? to a number of investors about this. there's this one common thread is bigger than healthcare. it was to the point the detail the legislation wasn't what's important here. what's important they want to get through those pro growth, pro business agenda campaigning on for more than a year. this might sort of serve as a test. how difficult is. we -- theover all picture was it is crucial. however they're looking beyond
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legislation here. >> this is basically not so much a concern about what's going to in healthcare, or nature of the bill. this is a concern perhaps the unwind?ade will >> exactly. a number of people i spoke to this trump trade is getting long in the tooth. might see some shift away. leadershipnse take a in march. you had days like tuesday where the vix spike up. here in that idea light, hedges are cheap now. start tood tame to hedge and be prepared for whatever the outcome maybe. >> you said you mentioned you a talked to howard ward. the investors reacting or preparing for this vote? waiting?
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if they're looking at test for stuffent trump to get done. how are they positioning themselves? sound of people defensive. i think there's this sense of holding your nose and buying the rally. there's been $2.2 trillion in value added to u.s. stocks. it's difficult -- you might don't wantsmart, you to miss out. i think the move right now is into those defensive plays. is something howard ward suggested they will be looking at. participating but still loading up on stocks that seem little point.fe at this another thing investors are doing which was a common thread, pass to if this doesn't look towards oath markets. to look towards european stocks. that seems to like a smarter play if it does seem like have ation is going to tough time getting passed. >> the people that don't get it, watching the healthcare bill, what's their case?
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parts of that's compelling. one chart that's pretty good. this is a comparison of the highest tax companies versus the lowest. the idea being, if trump going passedthat tax reform through, high tax companies are going to be surging. what happened in march, the low tax company outperforming. rally we'vehat the seen and the strength in the u.s. stock market isn't on the agenda.trump's proposed they're saying, look at the well.y, we're doing regardless what happens in washington, these gain will continue. >> thank you so much. let's get your check of the headlines. >> thank you. former president barack obama is the seventh anniversary of his landmark healthcare law. saying in a statement that is strongerca because of the affordable care act. directly did not address republican efforts to repeal his law.
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which are coming to a head today. former president noted 20 million americans gained under his law. car rental company enterprise in confirmed the car used wednesday's terror attack was rented inirs and birmingham. employee identify the vehicle after seeing the license plate. police identified the man behind wheel as khalid masood. born in the u.k. he was shot and killed by police. claimedstate responsibility for the incident on westminster bridge and the u.k. parliament. militant group called masood one of its soldiers. believe he was inspired by islamic state. raisedties in belgium security after a frenchman drove through agh speed busy shopping area forcing
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pedestrians to jump out the way. was arrested. authorities say they found gas cana shotgun and unknown liquid. a bomb squad was brought in to center of town today. the nationday after held remembrance services for attack. the american dream increasingly involves a lease, not a mortgage. the 100 largest u.s. cities where majority rent in according to the u.s. census bureau data compiled by real estate brokerage. shiftedose cities have to rent dominations. this include housing market like denver and san diego and places like detroit where just 49% of householders were homeowners. the lowest level in more than 50 years. global news 24 hours a day,
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by 26 journalist and analyst. is mark crumpton this bloomberg. >> thank you very much. coming up, disney extends bob contract as ceo to jul july 2019. after't extend it again 19. something else we are keeping our eye on, paul ryan be begin giving a news conference. that has been postponed until notice. he was scheduled to speak at 11:30. that was delayed until 3:30. gotten word it has been postponed. we'll keep you posted on all the developments related to that healthcare bill. from new york, this is bloomberg.
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>> look at some of the biggest business stories in the news. quarterects its 1st profit to fall from last year's record. they scaled back production rising costs due to slowing u.s. demand. ford finance unit has been impacted. banks around the globe are trimming staff. banking is preparing to as 2000e as many watchdog jobs. cuts.so making bobn media news, disney ceo extension.ct moments ago, he will not extend beyond then. sweeney join us now from
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princeton, new jersey. it was not a huge surprise he on past his original contract expiration date. can we presume that the company is making progress? so. think when i first saw the news that he was going to extend surprise that was only for one year. i thought it might have been for two or three years. that suggested to me and some spoke to that i perhaps the company is making some progress on identifying a here.sor the most recent comment that you highlighted, the one year extension will be it. that maybe the company has identified some potential successors. maybe perhaps far down the road them on board.g >> you thought they would have to take more time to do this? >> yes. it's interesting. the plan would last seven or eight years.
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minute.down at the last i don't think that disney had plan b. scrambling here. part of that was bob saying as need toon as long be identify a successor. they were codifying it today extension of his contract. this is kind of new territory for them. they've about a year to start process. i suspected they'll need a couple of more years to identify a person, bring that person on board. if that person does come from the outside or person from the continue to groom thatter. it will take a while. saying, 2019 will be it. >> give us sense who the company might be eyeing. from inside or outside. what that person's biggest be.lenge would >> it's interesting. there's not a front runner. they hadart because created this process that had identified tom sags.
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tom.chose there's been nobody else developed or groomed. that leaves investors to believe that the company will go outside the company. greatest jobs the in corporate america. certainly they can attract some talent. it be ation is, will media executive or will it be a executive. thebiggest challenge facing walt disney company here is espn. their brandng direct to consumers? that really is the big issue for the team as they continue to impact all media companies. chart up here of the percent return. past 12 years. bob iger done a good job with the company. what are the characteristics successful that they want to snee a replacement?
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what has really been a success story is the diversification of their business. they have a very strong cable network business led by espn happens to be the most valuable cable network in the business. secondarily, they have the film entertainment business. this is really where bob iger get the most credit. was very aggressively investing in the film business acquisition. and they bought pixar marvel and lucasfilms. that have beenn paying dividends. thirdly is park and resorts they continue to invest. that has been a steady profit grower. opened their shanghai disney theme park last year to of $5.5 billion. he has been willing to make big bet on businesses. i think again, the you have the
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shown over the last decade. >> absolutely. you so much. of course we will keep updated on the dramatic events out of washington today. house speaker paul ryan has postponed his news conference further notice. it was scheduled for 11:30. it was delayed to 3:30. been postponed indefinitely. this comes as congress prepares to vote on healthcare bill. this is bloomberg.
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>> it is interesting. when you look at the cbo and measures demand for downside versus upside. record high last friday. indicates there's some institutional players that feel roll itthings starts to could become significant. hedge outoking to that exposure.
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if we don't see the initiative off, the market priced in the inspection in happen -- that happening. >> thanks for making that point. your trade, the spy. >> with this hesitation, lot of the cross currents underneath i'm looking at the spy holding up here. >> dan thank you so much. there.ave to leave it that was the dan deming. you breaking bring news. according to politico, unnamed republican have informed them the house is said not to vote today on that healthcare bill. originally planned to be voted on today but we have now learned from politico that will not be taking place. details asyou more it cross. this is bloomberg.
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>> it's time now for news. british authorities identified 53-year-old khalid masood as a man who carried out yesterday's deadly attack on westminster bridge and the grounds to parliament. citizens to urge .emain strong and on alert >> we're going to carry on. cooperation with allies across europe and across the wall that we share intelligence. to make sure that all of us are kept as safe as we possibly can. we're reminding ourselves not just london, new york, paris, brussels, other major cities being the targets of evil twisted individuals trying to destroy our way of life and to shared value. minority leader

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