tv Bloomberg Markets Americas Bloomberg August 31, 2017 2:00pm-3:30pm EDT
lisa: we are live from bloomberg world headquarters in new york. apple is officially gearing up for the iphone, picking symptom or 12 to reveal massive changes to its best-selling device. -- september 12. cleanup efforts continue, including for oil and gas companies. harvey restraining oil capacity. add new limits to president trump's goal of delivering historic tax cuts. the red lines being drawn as lawmakers get set to return to washington. we begin with the first word news this afternoon. executive says
at asions last night factory in the houston area will not pose future dangers to the community. >> the containers themselves are in a remote area of the plant. officials say harvey knocked out critical power supplies required to keep peroxides cool. 15 police officer's were treated at the hospital. floodwaters are receding in the houston area today. firefighters plan to conduct a search in the areas that have been in accessible. the death toll has risen to 31. harvey has knocked out one fourth of u.s. oil refining capacity off-line. houston, fire personnel and
search and rescue teams have begun conducting door-to-door searches now that the weather is clear. officials are trying to determine how much damage there is and whether any civilians were left behind. that process could take as long as two weeks. the cost of rebuilding from the storm may be a roadblock for president trump's tax cut plans. the president has called on congress to quickly deliver a harvey aid package. the cost may face resistance from lawmakers if any tax changes are not upset by new revenue. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. -- are not offset by revenue. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark renton. this is bloomberg. lisa: u.s. markets close in under two hours. let's check on where stocks are trading with taylor riggs. taylor: you are seeing some green on the screen here. some pretty broad-based gains.
yesterday, we had a positive 3% second order print on gdp and potential tax reform. a fifth straight gain of the s&p, up almost .5%. the russell 2000 small caps are back, coming in one present here. -- 1% here. after thealized election, you've seen small caps and turquoise compared to the s&p 500 in white and seeing the turquoise surpassed the s&p. small caps outperforming here. trying to close that gap with the dow jones industrial average. we are also looking at some of the pharma and biotech companies. the biotech index is up, leading the gains today after 2.5%. russell looking at novartis. they had a special cancer drug
for leukemia come through. if you are covered by the u.s. government and show improvement within one month of that the company will get paid. they will not get paid if the patient doesn't show recovery. -- kite isng high also focused on cancer drugs. we are looking at the big tech companies here. leading the gains with microsoft best day ge having its since july and microsoft coming in with record highs. julia: mark your calendars. apple has finally sent out an invitation for its most significant new product announcement in years. the event will be the first of the new apple -- at the new apple campus in cupertino. have beenapple
gaining momentum before the highly anticipated rollout of new products. apple wouldn't say what is on ,ap but for weeks and weeks we've been bringing you scoops on what to expect from the new iphones. by oliver renick. mark, great to have you on the show. date confirmed. mark: this will be a significant day for apple. this will be a big splash. they will frame it as a new beginning for the iphone given how big of a revamp of this new model will be. lisa: we've been hearing about this for a long time. the iphone is apple's most important product, generates two thirds of all sales. meanwhile, you have growing
competition and a market that could potentially be saturated at this point. at this point, the stock is really anticipating a lot. are there signs that stock traders aren't to spinning too much -- are anticipating too much? oliver: that's exactly my take on it. there aresigns that high expectations. on therun down bloomberg, you will see a lot of green on the beat side. when you look at the price change, it doesn't always work like that. investors need to see a lot from the company to get excited and pay up. six of the last 7 -- seven of the last eight, beat, beat, beat. that doesn't always mean price reaction. this function shows you the relative valuation for a company compared to itself.
if you look at apple right now, you are looking at a high range in terms of valuation. this is the five year historical multiple range. this is for five different types of valuation. the orange dots are the historical averages over the last five years. dots showing just how far we are. compared to history, it is pretty pricey right now. tens to perform a bit poorly after the run-up beforehand. if we look back over the 10 year history, this jump we are expecting for this new iphone will be the biggest jump we have seen in terms of innovation since the iphone itself was launched 10 years ago. to, those you are speaking what do you think is the critical thing here that the consumers and investors are
looking for in this product? i can tell you in terms of our reporting, we've been writing about this since mid-2016. about a year-and-a-half worth of reporting on this phone, which is a lot for an upcoming apple product. that shows you how many new features are coming to this product. the removal of the home button, the 3-d face a scanner with a touch id -- this is a significant upgrade. you are getting a much bigger screen in a smaller form factor. it is a big change. lisa: what is the price point
going to be? can you talk about the whole saturation issue? i hear a lot about how the market for iphones, smartphones is limited to some degree. mark: there will be three new models. upgrades two will be to the existing iphone 7 and seven plus line. the iphone 7 right now starts at $650 for unlocked. you can bet on the starting price of the new models of those upgrades. with the iphone 7 plus successor coming in $120 about that. 8 is likely to cost upwards of $1000. the seven plus has 250 gigabytes of storage. the most inventive iphone you can buy today is $970.
of course, it will cost north of that. in terms of market saturation, there's a big percentage of iphone loyalists looking to upgrade from past iphones. there's a lot of people who 6ill use the iphone 6 and +. now, it's time to get that upgrade. that will drive a lot of the upgrade cycle. plus, you will lots of android me iners oliver: count that pile. iphone, their huge product with two thirds of the revenue here. from an investor standpoint, they are also looking at whether this willy can get -- be a big thing come a but you up to watch the other parts of the business.
he's been warning lawmakers do not disappoint him on tax reform while also urging them to deliver a harvey aid package. this creates a conflict. billion dollar disaster relief will only steepen resistance to tax changes that aren't offset by new revenue. here's a republican who chairs the house ways and means committee on tax policy. take a listen. >> i come down strongly on the side wh that says it has to be revenue neutral. my home state of illinois is under a lot of fiscal stress -- it is not a good situation. let's avoid that at the national level. julia: joining us from washington is michael needham. thank you so much for joining us. how much of a conflict is this? the idea of harvey aid along with comprehensive tax reform. >> it is not a conflict at all.
thank you for having me. america has a gargantuan debt problem. it is a debt problem driven by the fact that we spend too much. we have to do something about it. that has nothing to do with our tax code, which is an outdated 30-year-old tax code with the third highest corporate tax rate in the world. that's what the president and congress is talking about fixing. we all know that when we have an emergency, we have to deliver true emergency relief. trying to conflate this and make it into an issue about that is totally dishonest. to tax reform and we need to take care of the people of houston and salt are debt -- assault our debt -- solve our debt. julia: we have a debt ceiling to raise. that theyill hopes can get some form of tax reform
done by the end of the year. that makes it to pass and avoid some kind of showdown over the debt ceiling in the coming months? go back ando recognize what the debt ceiling is. it is an alarm bell that america voluntarily imposed on itself and said we will put an alarm bell in our fiscal house so if there is a fire, we force ourselves to do something about it. a lot of people look at the debt ceiling is something we need to be afraid of. we never want to not raise the debt limit, but the worst thing would be to not deal with the real issue in our country, entitlements. the debt ceiling is something that forces congress to get a debte of urgency about
that is spiraling out of control. we've had a hurricane. compare that to $20 trillion of debt, the numbers are not in the same order of magnitude. let's take care of the people of houston and our children and grandchildren who will be drowning in debt if we don't do something about it. julia: the president clearly had more enthusiasm for this tax reform bill than he did for the aca repeal. he warned congress this week not to let him down. given everything we seeing here, the you think is enthusiasm here is more hindrance than help in getting something passed on tax reform? >> i think they've had a great process. early on, the congress and the white house got together amongst themselves and brought in
outside stakeholders. i've been to the white many times talking on this issue. that's the white house many times talking on this issue. the president can make the sales pitch. that is the formula that is going to have us end up with a tax bill. lisa: we've seen a lot of dissonance from different parts of the gop over tax reform. there's a sort of splintering within the conservative movement about what the goals are. , have youperspective ever felt this kind of tug and push from your own views and what you should be lobbying for from the conservative members? >> the republican party for a long time has had internal debate. that is a good thing. it's only liberals on college campuses who are afraid of internal debate c.
everybody on the right agrees that we need tax reform. to do that in a permanent way, it has to be revenue neutral. lisa: when you say debate, that does not reflect the acrimony we are seeing played out in real-time. that's what i'm asking about. grew up in york city. -- new york city. we had debates that got acrimonious at the dinner table. the debate is far less you did then it is on other issues like health care. those are issues that the party is struggling to get together on. on tax reform come everyone wants to get it done. the only way to get a tax bill next tax cut to not be revenue -- to be revenue
neutral. i think we will see something that is not revenue neutral that is a tax cut. that doesn't mean any of us disagree on the core premise that we need to reform and tax code that hasn't been reformed in 30 years. julia: do we get that by the end of this year? >> yes, i think we will get a tax bill by the end of this year. maybe it bleeds a bit into january, but the president and congress will deliver on their promise to the american people. that is critical to unleashing 3% or higher growth. lisa: great to chat with you, michael needham. julia: still had, wells fargo struggling to respond to scandals of an additional 1.4 million fake accounts. this is bloomberg. ♪
lisa: this is "bloomberg markets ." it is now time for the bloomberg business flash. julia: inflation in the euro area rose more than expected this month due to price increases. next week, ecb policymakers will debate the future of this to mills program. 's fake account scandal is growing. aroundings the total to 3.5 million accounts. wells fargo has already agreed to pay $185 million in fines. lisa: for more on wells fargo, ,et's bring in laura keller who's been tracking the fallout and all the implications from this scandal. it sounds like it's a lot of buty in payouts and fines,
given this new disclosure, how much more could the potential penalties rise? >> that's what investors want to know. what is the final number this is going to cost the bank? unfortunately, there isn't a final number. whether you're talking about how much money is going to customers -- the bank is saying $10.7 million more out the door going to these customers. or, you are talking about the legal settlements, a $142 million settlement on the table. is that going to go forward? at this point, we don't know. julia: how could these get missed? they widened the band, the area of time they were talking about. increasing the amount of time they were looking at.
the initially started s eeing concerns back to 2002. what is the risk that this thing increases further even beyond the current window? >> at this point, what you've identified is where we are at. the bank went back to 2009. they have not gone back to 2002 when its own board investigator bank was firing individuals over these practices of creating these bogus accounts. there really is no answer. i talked with kim sloan this morning and asked that very question. his answer was, look, we picked 2009 because that's when we merged with wachovia. the further you go back in time, the quality of the data tends to decline of it. -- a bit.
new york. let's kick off with energy. gas prices continue to rise in the aftermath of hurricane harvey, rising for the eighth straight day and extending the longest rally since 2013. parts of the vital colonial pipeline that carries gas from texas to the east coast has been shut down due to the storm. oil is paring back some of its losses from earlier this week, up 2.5% today even after the u.s. cap the strategic petroleum reserve for the first time since 2012. outside energy, copper is hitting its highest price in nearly three years. jeffries boosted its forecast for the base metal. gold futures have risen for 4 of the past 5 sessions. 352s take a look at g #btv on the bloomberg, and you can see behind me that the precious metal is posting its second
monthly game and best performance since january. it is month's end as well. you can see that on the right-hand side. lisa: turning back to oil and gas, earlier today "bloomberg markets" spoke to the president of the power associates and 30-year veteran of oil and gas based in houston. vonnie quinn asked him what the followed of harvey will be for jet fuel. >> due to refineries having cut their throughputs by 5 million barrels a day, that accounts for 5000 barrels a day get fuel. airports in charlotte or atlanta that are dependent on jet fuel from houston, as well as new orleans-area locations, are going to see tighter supplies. there is a knock on effect come and become is in there, with mexico buying lots of gasoline from the usa. are they looking for alternative supplies? >> exactly.
there is a scramble going on in the market. mexico buys 350,000 barrels a day of gasoline from the u.s. they are turning to european suppliers. at the same time european consumers are buying several hundred thousand barrels a day of diesel from gulf coast suppliers. at the same time, jet fuel that has been coming out of the middle east and other locations going to europe is being diverted to the u.s. and there are disrupted exports of liquefied petroleum gas as well, which is causing prices to rise in asia. is that going to continue? >> it is going to continue. the u.s. has been exporting a thousand barrels a day of propane to markets around the world. we are seeing a trickle-down effect between north america, asia, as well as the european goes on,s the scramble
because we have lost so much refining capacity. come in your 30 years, you have seen many of these types of catastrophes. differentrticularly and unique -- they all are, but houston is one of the epicenters of energy in the u.s. do you imagine this will get resolved and markets will go back to pretty much normal within weeks, or is this going to take a lot, a lot longer? >> i think this is going to be a months-long phenomenon. there has been some good news, let's be clear. the corpus christi refiners should be back within a few weeks. houston-area refiners can with the exception of one that has some flooding, expected them to restart within the next two to three weeks. but i am particularly concerned montt the ball mark -- beau area, where there is been a press release saying that it will take them two weeks just to assess the damage. the arkemast, chemical plant explosion --
should we expect more of those types of events in the next few days? >> it is very difficult to say whether that was a one-off situation, but one would have to really be concerned about a similar type of event in beaumont, where there is just so much water around, and the loss of the external utilities could cause a similar type of event. mark: andy, can we talk crisis? gasoline searching about two dollars a barrel in new york today. spread athe wti almost five dollars. can you give prices in the next week or so for gasoline, that spread, the oil price? >> saure, starting on gasoline prices can we see the wholesale gasoline price in the pipeline market of $.50 a gallon, compared to come say, 10 days ago. as far as the retail consumer goes, they have seen an increase of about a dime. that we will see day by day the retail price up about five cents
a gallon over the next week. the big issues that headlines getting the vti to the refined -- wti to the refineries. that spread will stay wide until the refineries get back online. lines out of cushing down to houston are delivering crude oil. , theyf the permian basin have restarted delivering oil and to houston. the refiners in the houston area in valero who are waiting for crude oil supplies are going to start getting them. vonnie: some of the more independent producers, are they going to feel it a lot more, put out of business by this? >> destinations are being cut off because there are not enough supplies to go around, and i would imagine that the brand and suppliers -- branded supplies are on allocation come meaning they cannot get the full contractual volume, because it is not there.
lisa: i was the president of li -- that was the president of lipow associates on bloomberg today. he is tried to get back houston and cannot get a flight could let's get "first word" news with mark crumpton. mark: the house of representatives will most likely vote on the first phase of relief money for hurricane harvey in september. that is according to a republican aide, he that the initial down payment will replenish federal emergency management agency funds used in the immediate aftermath of the storm. congress returns on september 5. the third round of brexit negotiations ended in a stalemate today, with talks taking a bitter turn over the size of the bill britain has to take it the eu's chief negotiator claims that the u.k.'s position papers hinted at what he called a nostalgic desire to hold onto single-market membership. the u.k. chief negotiator said he would not confuse belief in the free market with nostalgia. >> there is a structural
arrangement in the european union. he referred to it, it gives him a mandate. creates the frame with which he can negotiate. but the phrase i used, a direct quote from the council, the european council. both sides are also struggling to find common ground over the rights of citizens in each other other's areas and the irish border. the coordinator for the u.n. human rights syria team says some 20,000 civilians are a asped in the city of raqq coalition forces battled the islamic state. >> getting out those who want to flee, they need to be able to do so. secondly, what you're saying is that everything has to be done in accordance with international law to protect civilians who remain, even if the fighting is
going on. civilians have a protected status. the u.n. high commissioner for refugees released a statement calling on coalition forces and others fighting islamic state to do more to protect civilians from airstrikes and other firepower. has not violated its nuclear deal with the united states and five other world powers. that is according to the latest quarterly report by the u.s. agency monitoring iran -- u.n. agency monitoring iran's compliance with the deal could the international atomic energy agency report come out today, does not exclusively say iran is honoring the dale. -- deal. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. up, consumer stocks are up for the fourth time in five sessions today, but disney not feeling the magic. we will take a closer look. from new york, this is bloomberg. ♪
julia: this is "bloomberg markets." lisa: i am lisa abramowicz. it is time for the sector spider report, stock mover of the hour. today we focus on consumer discretionary. consumer stocks are up for the fourth time in five sessions after economic data was in line with expectations and bloomberg's consumer comfort measure finds the highest in more than 15 years. oliver renick has the details. r: today is a good day for consumer stocks. a little bit of her brief year. the market is up as a whole, but part of this is probably investors looking at the
economic data today and liking what they see. the consumer index by bloomberg at the highest level. investors feeling good and consumers feeling good. pretty much green. volumes have been low the entire week. you look at the individual movers, interesting things are happening. first let's check out autonation. 4.5% gain on the day for a few reasons. says theout by rbc company -- right now they are opening stores in houston, reopening, and the idea that they might have to reorient some of the vehicles that are actually on the ground at the location, helping them redistribute the inventory, something that rbc sees as a blessing in disguise. that stock is up. then we have weakness could dollar general, this is a big day for committees because dollar general is down. issues with that company. this has been popular among investors, especially hedge funds.
and this situation is not too hot. disney is down about 150 basis points today. some weakness there. a few things going on. first, reports that they are going to india continue to figure out how to create higher margins at the company, something that has been very important to them. today our story on bloomberg is that they are looking at cutting some of the staff at the abc unit. this is never a great time if you are having to cut employees. overall it has been a positive story for the stock. julia: you know the network business has been under pressure, and that is part of the profit of the overall company. and are going over the top are going to be streaming the product as well. one has the stock done since then? oliver: we are 13% off the high. this stock has corrected somewhat dramatically.
it is not in very market territory, but given that it has done very well around the bull market here, and turnover as well in the executive branch, but down 13%, off the high from a couple months ago. and the revenue breakdown, a big portion of that comes from the media networks. the margins have been solid, up and up, but investors want to see more effort on that court, and it looks like they are going to do that, and there could be some folks that get the boot as a result. julia: 21st century. lisa: we saw that at fheo. julia: oliver, good to have you n.expedia shares are up after the ceo and as he was leaving the company to head uber. mark oberstar has been promoted to the top job. asked him about his reaction to the exit. >> these things, you talk about them for years. like a sports analogy, you
prepare the team for the big game, and you get a call on sunday night and the game is into two weeks from now, it is tomorrow. it unfolded a little bit like that. we were ready for this eventuality and when it did unfold, he did not unfold exactly how everyone had planned. but we are excited about expedia, we are happy for dara. he is going to do a fantastic job there. emily: when it comes to you and your job, very keller says no one was even considered. -- barry diller says no one was even considered. you and dara worked together many years. what are things you might do differently? >> i have been very involved in the strategic action of the company for a very long time. dara and i have been in lockstep on all the major strategic decisions, along with barry diller. i don't have a long list of things i am dying to change. we have a number of priorities across the company, certainly
becoming more international is one of our key priorities. i will be very focused on making sure we continue to expand globally. i think you are going to see a lot more of the same for us, and if i do my job well, we can go faster. emily: you have some deep ties to uber's new ceo. what are ways you could work together, like free uber writes for expedia customers? >> we have talked for a long time about possible ways we could work with uber, integrating the service into the app.ia app or hotels.com now that we have a direct connection, those talks might be easier. into adara is walking difficult situation -- by all accounts, and ousted founder who still wants a role in the company. we hear a lot about how he can deal with big personalities. tell us more about why you think
he has what it takes to take on some of the personnel challenges. darall, i think above all has one of the highest levels of emotional intelligence i've ever seen. he knows people, he is humble, he listens. i think above all, dara makes people around him better. people want to be around him, people want to think like he does. he is a great role model, identify, high integrity. he values diversity, he values gender balance. he stands for a lot of the great things that, from what we read .nyways, may be lacking at uber i have 100% confidence that uber will be a much better company under dara. emily: there was a retracted report that you were going with dara to uber. but they have a number of executive positions to fill. are you concerned that
executives from expedia will follow him there? >> we feel very good about our executive team. we have one of the most talented executive teams out there. we have been together for a very long time. they are very excited about the prospects around expedia. they are highly engaged, they are highly committed. we have been working together on a strategy that we are not yet done. lots of work yet to do a head of us them and we feel pretty good about our team. speaking about expedia specifically, google in particular is becoming a acre potential threat. they are making bigger moves in the travel business. do you see more opportunity to take them on from the u.s. antitrust perspective, as they make these moves, and given the political climate, this cap this tech -- thed big
skepticism around big tech in general? tech -- the focused on making sure we execute strategies to ensure that we are always the first place for people to come and shop and book their travel. i think they are a combination of all of that and we will be fine and i hope you will a constructive and positive relationship with google for many, many years to come. julia: that was "bloomberg technology" anchor emily chang speaking to the expedia ceo mark okerstrom. a huge vote of confidence from him in the new uber ceo. now time for bloomberg "business flash," the biggest business stories now. amazon sold unsafe it clips glasses and did not publicize our recall. that is according to a north
carolina couple. they claim their eyes were damaged after wearing full the glasses. -- faulty glasses. campbell foods posted disappointing earnings and forecast numbers, according to people from the with the matter, warren buffett's comments about an unlikely industry merger are waiting on shares. the fast food industry has suffered a slump as consumers shifted natural and organic foods. that is your "business flash" update. prices are hovering at record levels. we take a deep dive into the crib the currency craze. from new york, this is bloomberg. ♪
is stronger than ever. bitcoin hovering at record levels. "bloomberg technology" is covering everything you need to know about the cryptocurrency market. emily chang joins us from san francisco to give us highlights of what we can expect later. why all the feverish excitement about bitcoin this year? we have been talking about it for years. my so special? -- why so special? emily: first of all, look at the price. bitcoin is hitting another record high today. there is a question, are we in a bitcoin bubble? we don't know the answer to that, but one clue is if you look at the run up to bitcoin, it is going far faster, far higher than the run-up we saw ahead of the tech bubble, the run-up we saw and of the housing bubble. that is one clue. however, there is widespread disagreement and deep divisions among the community about just
how powerful bitcoin is going to be and how valuable it will be in the long-term. there are investors who say that bethree-years, bitcoin will thousands of dollars, and others selling out because the long-term value will be zero. i recently sat down with the cofounder of points based from the biggest bitcoin exchange, and he talked about the potential to disrupt many industries including the biggest tech companies, like facebook and google. >> you don't need a middleman to own your data. emily: so do you see bitcoin as a way to disrupt the big tech companies? >> exactly. i think the big tech companies will be disrupted as much, if not even more than the big banks. considering those are the most valuable companies in the world, that is worth paying attention. emily: that said, there are a
lot of regulatory issues and so much uncertainty, and as we talked about earlier, volatility. lisa: to that point about regulatory uncertainty, coinbase itself has come under scrutiny because it got a flood of complaints from consumers who said we tried to get money out and they wouldn't give it to us. emily: if you look at their complaints, 6 last year, 293 so far this year. people are saying they cannot get their money out, people are getting robbed, people getting hacked. one of the major exchanges, a big flash crash this year. they are not just handling big one, but other crypto currencies list of all of these currencies are seeing a huge rise. there is a question about whether the system can handle it. at the same time, you have big banks jumping in and betty that i need to be investing in the technology, investing in the pool to allow people to trade and invest in the crypto currencies. honestly,ve to say, today we saw news out of the
"ft" that the big banks are joining a consortium to create the own digital currencies. people should watch this, because this is at the heart of the new revolution of the industry. emily chang, thank you so much. catch emily on the cryptocurrency special today at 5:00 p.m. thets include cofounder of coinbase. after a resident of flooding in texas, the massive project of cleaning up begins. from new york, this is bloomberg. ♪
welcome to "bloomberg markets." ♪ julia: we are live in bloomberg world headquarters in new york over the next hour. here other top stories we are covering on the bloomberg and around the world. u.s. markets are reaching higher thanks to positive economic data, as the trading day wraps up, with tech stocks leading the gains. the flood are receiving in texas after record rainfall. now the massive cleanup effort is set to get underway. .he ceo of waste management family business is scrabbling to raise money on hundreds of millions of dollars it owes on one of its investments. did the dealings reach the white house? let's get a check of the headlines on bloomberg "first word" news with mark crumpton. isk: vice president pence
in texas surveying the damage from hurricane harvey. he was accompanied by his wife, karen, and members of the cabinet, including energy secretary rick perry. erry: the p president went to the right place. he literally and figuratively wave to the five. american citizens know he cares and is paying attention. mark: president trump visited the area monday. secretary perry added that the president was advised to visit areas where no search and rescue resources will be pulled away. vote on theuld first phase of emergency relief money in september, when to a republican aide. texas house congresswoman sheila jackson lee told bloomberg that congress needs to get started because there's no time to waste. costsn lee also expects
from damages to run higher than sandy's, which ballooned $70 billion. nearly 2 million texans have been evacuated due to harvey, according to acting homeland security secretary. she says 32 dozen are in shelters, and the goal is to move people from those shelters as quickly as possible. ravagedd that flood areas have not tested yet and may receive by saturday. beaumont, texas, has lost its water supply because of the storm. the city has lost service from the main pump station due to rising waters caused by harvey. beaumont officials say they must wait until the water levels from this storm received before determining the extent of the damage. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. lisa. lisa: thank you so much, mark.
let's stick with harvey and the grueling recovery ahead. how will the untold amount of debris and garbage be removed, and how will houston recover as a business center? joining us on the phone from houston is the ceo of houston-based waste management. let's talk about the present time. are you able to collect garbage? is there messaging relation of garbage on the streets that aren't flooded, and -- is there accumulation of garbage on the streets that aren't flooded, and could this be a hazard? >> all of our disposal facilities in the houston area -- landfills, transfer stations, are operational today. there are still some challenges with accessibility to some of these neighborhoods, but i think the big challenge -- i spent the last five hours with several of our leadership team working in a house that was flooded, and every single house on these streets must have 40 yards of
trash debris in the front yard. femahallenge for us is, will be responsible for picking up the debris. we are responsible for ordinary trash. but you cannot tell the difference. it is a gigantic mountain in front of every house. lisa: i want to follow up on that, because there is debris in the front yards, but there is going to be that much more waste from every single house that needs to be gutted and rebuild. how are you planning to handle that? >> that is really what i'm talking about, the storm debris. --t we are doing is carpet taking carpet and furniture and appliances out of these houses, and you put it in the front yard. everything a house is basically started the process of unloading all of this -- every single house has basically started the process of unloading all of this flooded debris into the yard. you could go up in a truck with one house, how much debris is out there. julia: how are you coordinating that?
you have a job and that is not necessarily part of your role. how is the separation of the waste and the debris you are talking about here -- how well coordinated has the whole process been? >> well, i would say it has been very well coordinated. veryayor turner has done a good job so far working with the governor, the federal government -- this is one that stands out as how it should work, as opposed to some others that have not worked very well together. it is going to be important that the mayor tell residents that, look, here is how the fema process worked, because most folks have not been to that -- been through that. the fema process is one that people have to pay attention to. for us, it is a matter of once we get our trucks operational, everybody able to differentiate between the debris that is part of the flood and just ordinary
recyclables or trash. we have seenasons three floods in the last two years -- i appreciate not on this magnitude, but what would you like to see from authorities in terms of flood mitigation or preparation for these kinds of events? >> boy, that's a great question. it is hard to prepare for anything of this magnitude. almost five feet of rain in four days -- i don't know if anybody can prepare for that. i know the army corps of engineers is working on these 2 reservoirs with earthen dams to make sure -- so far they have held up pretty well. but they have a big project ongoing to make sure that in the they hold up well if we are to have another one like this. i think, honestly, the mayor did a good job of communicating this whereidents, to evacuate
you need to be evacuated. most people paid attention to the first responders, who said don't go out if you don't have to. there is very little traffic on the roads. most people stayed in their neighborhoods. what i think the city and the state and the federal government have done well together. julia: interesting, we are katy,g live shots of texas, here, just to show the magnitude of the level of flooding. i'm glad you brought up the mayor, because he has come in for some criticism for deciding not to evacuate because he did not want to create a great emergency with people panicking to leave. , again, ahead of time there needs to be some kind of roadmap and plan for evacuation laid out so that he doesn't face this kind of last-minute decision and the criticism that followed? >> yeah, i mean, look, it is
hard for the mayor, because the original forecasts were somewhere between 50 and 25 inches of rain. those were the original .orecasts and of the we would've had your the flooding and devastation. we ended up getting twice that. in the mayor's defense, what are you going to do at the time that the forecasts are say 15 to 25 inches? you are probably not going to implement contraflow and run everybody backwards on freeways out of town. -- that had the forecast maybe -- it is hard to forecast six feet or five feet of rain. there is always going to 20 quarterbacks -- monday morning quarterbacks, but i think mayor turner, governor abbott, the process is working as well as it could work in the worst flood in
u.s. history. lisa: real quick, do you have enough employees to remove all of this waste? we have a large number of employees that are coming into town. it has just been fantastic that employees, who have been displaced, or wanting to come to work. but there is so much more work over and above what we normally do that we are engaging employees from outside of the houston and the texas areas to come in. we have set aside hotel rooms. this will be a long-term project for us. but i think we do have enough folks to come in -- not just people, but equipment, to make sure we are able to adequately handle the work. doing an incredibly important job, jim. thank you for joining us. waste management ceo jim fish. the close hour from
of trading. let's check in with abigail doolittle. abigail: another day of solid gains for the major averages. nasdaq are sharply higher, looking past the geopolitical tensions this week. the s&p 500 up for five days and , the- five days in a row longest winning streak since the end of may. nasdaq with the best week since july 14. nasdaq finishing at a record close, just below that, but we are down to the wire. nasdaq,that tech-heavy biotech. really being helped by all the big names, gilead sciences earlier this week and their decision to buy quite five firms difficult -- to buy kite pharmaceuticals. interesting to see that. also helping monthly games. let's pop into the bloomberg and 287.at g #btv
in the past we have been looking at monthly declines for the s&p 500. now we have to nasdaq, dow, and s&p 500 on pace for monthly games. the s&p 500 averting its first monthly loss since october of last year. super quick, let's look at what is helping these monthly gains, aside from biotech. apple, microsoft, berkshire hathaway, and gilead sciences, and apple with another intraday record high today, julia and lisa. third in a row, the eight this month. we have the product launch event on september 12. investors are very excited. deeperou are going to beating and over and over again. coming up, we will go back to texas and look at what the government will prioritize in recovering for harvey and planning for the future. from new york, this is bloomberg. ♪
lisa: this is "bloomberg markets ." i'm lisa abramowicz. julia: i'm julie chatterley. lisa: harvey may have left texas behind, but our next guest says it will take years of rebuilding. joining us from austin is texas land commissioner george p. bush. his office plays a key role in the state, managing oil and gas, and is responsible for coastal protection. thank you for joining us right now. taking a look forward, what needs to be done to prevent this kind of catastrophic destruction from happening to a major texas
city going forward? it is a i think combination of many factors. ,ur agency presented an idea proposal, before the last legislative session to create a coastal spine that would withstand a category four or 5 storm that would detect the houston ship channel, the second-most important port in the united states. this would be a long development, a long process. what we asked for was the same type of treatment that new orleans received after katrina. all beasley, we were unsuccessful in obtaining the wereng -- obviously, we unsuccessful in obtaining the funding, but we outlined a vision where we could protect and of what an industry like petrochemical facilities, retail, and the hub that the houston ship channel is in terms of economic activity. secondly, as texans, we are going to have to come together with the regional plan when it comes to flood control. again, this is a very expensive
idea, to modernize this very 4 major rivers that come through a population of 60 million people, but it is something that we will have to evaluate. those two ideas will be the foundation, but we are going to have to look at new resiliency measures to get folks to higher ground, but in a fashion that doesn't result in the disaster that we saw after rita, where hundreds of people died on highways as they were escaping beaumont, port arthur, and houston, in connection with the storm that hit three weeks after katrina. julia: you make some great points, commissioner. i want to ask you about the coastal barrier system you were talking about, because you have been advocating this for some years. have you sent a letter to president -- and you sent a letter to president trump in april asking it to be put in to the infrastructure plans they were building. i'm wondering if you got feedback from president trump and if that was discussed when
he visited texas this week. >> well, i have not been personally involved in any of the discussions. we heardsent a letter, back from the white house three days after the fact, and we were told this would be one of 80 projects being scored along with other infrastructure projects throughout the country. pending congress movement on an infrastructure plan, we'll to this will rise to the top when looking at different projects throughout the -- we hope this will rise to the top when looking at different projects throughout the country. ayala with other state leadership will be consistent about this is not just texas, this is a national hub for food, fuel, enforced throughout the country. you base ansioner, interesting point -- you say "national." when i think a national, i think fema, national weather service, all programs that are slated to have budget cuts under the proposed budget from president trump. how much are you aggressively lobbying to remove these budget
cuts and possibly increase funding, and what have the conversations been among people that you talk with, both inside texas as well as outside? >> well, to me, it is an economic argument. when we pitched the coastal spine idea, we said that after ike, which cost $32 billion of public property damage, our state received only $3 billion reimbursement to help rebuild communities along the coast. it is a block grant that we still managed to this at my agency. storm,u look at this estimates put it north of $160 billion. ,hether it is texas, louisiana new york after sandy, i think it is better public policy to have an upfront infrastructure plan that deals with these storms, that with more creative ways in which we zone neighborhoods and residential areas and industry, instead of coming back to d.c. after every single disaster.
that seems to be the current paradigm, and i think we just need to shift that if we are going to be serious about taking on storms of this magnitude. comments have all made about the happiest humanitarian impacts -- obvious humanitarian impacts and the crisis texas is facing after the storm, but also the relative rack of -- relative lack of reaction in energy prices. pointo get back to your about this needing to get countrywide issue, do you worry impactiven the lack of we have seen on energy prices, and the growth of shale, the importance of doing something here on a country level is lessened, because we haven't seen the kind of knock-on impact we might have had in the past? >> there has been somewhat of an elevation in prices of gasoline futures when you have one third refiningtion's
capacity impacted by a storm of this magnitude. to your point, upstream production particularly in texas and shale has changed the geopolitical picture for consumers to our benefit. i think a storm of this magnitude will show that when you mess with refining capacity from particularly on the texas and louisiana gulf coast, you will have a national abrupt global impact. some have made this gasoline futures will increase, but it will be mitigated because of the abundance of life we have a gasoline in storage tanks. we have three days more than we did before ike and katrina on average. you're right, that will be a cautionary tale, but moving forward, that will be on leadership such as myself, other leaders in texas, and hopefully in congress to make the case that the texas gulf coast is a national portion of the infrastructure. julia: thank you so much for joining us on the show.
julia: this is "bloomberg markets." i'm julia chatterley. lisa: i am lisa abramowicz. time for "options insight" with abigail doolittle. abigail: joining me is the chief options strategist at interactive brokers. thanks for taking the time. we love having you here. it is pretty amazing -- the last report i was doing, the s&p 500 is higher. a week ago, on pace for its worst the kind of the year. what do you think is behind that? >> another day, another half a
percent. what's the difference? the market is in his groove right now, and it seems bulletproof. seasonality should be working against the market now. historically be awful for the market -- august and september tends to be a tricky period for the market. but after a couple of pickups, they lobbed a couple of missiles over japan, and here we go. abigail: speaking of bulletproof, you remind me of a conversation i had after this earlier this week where he talked about this divergence or the separation between old-timers on wall street -- those who have been on wall street before 2008, 2009 -- and after. aboutare a lot who talk how it is a natural and those who have been on the wall street board less than 10 years and also used to the central bank report. what do you think about that? >> well, you didn't category is
new with the old-timers, but i will categories -- you did and categorize me with the old-timers, but i will categorize myself there. i have always done a lot of quantitative-type of trading, and it is very easy with the rise of quantitative trading -- the history tends to be more recent. you tend to get more recent feedback. there is not this long-term perspective that is getting increasingly programmed into the way the markets are being traded. that is an interesting feature, -- very dangerous word to say, different this time, but it does feel different this time. but history, if it doesn't repeat, it often echoes. abigail: i would love to talk about that for another time. let's quickly get to your trade, bank of america. >> bank of america has been in the news lately. but the stock, although it has been a great performer over the years, has been in a tight trading range here today, year-over-year up 50%, year to
date and in the 22-25 trading range. if you think it stays in this trading range, selling at 23 put, 23 call, pay off with the stock stays in the range, but a call just in case it does break out. abigail: great trade, great conversation. thanks so much, steve. steve sosnick of interactive brokers group julia: thanks so much, abigail. ahead on "what'd you miss," we earningsr lululemon's after the bell, and equality and perception of the grand issue. from new york, this is bloomberg. ♪
delivers consistent network performance and speed across all your locations. hello, mr. deets. every branch running like headquarters. that's how you outmaneuver. >> time for first word news. there could be more explosions at a chemical plant that was damaged by hurricane harvey. the french operator of the plant
says the fire knocked out power supplies needed to refrigerate volatile chemicals and up to eight more containers could burn and explode. the blast sent a 40 foot flames and black smoke into the air. >> we were able to evacuate about 1.5 miles around the plant to make sure that people were safe in anticipation of any problems. we continue to push the life-saving operations, we are continuing to evacuate people out of areas where the rivers have not receded yet. mark: local officials say the explosions produced no toxins, although federal authorities describe the plumes as "incredibily dangerous." now troops and sent to afghanistan. members of congress will be briefed before details are made public. ne