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tv   Bloomberg Markets Americas  Bloomberg  January 30, 2018 2:00pm-3:30pm EST

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scarlet: live from bloomberg world headquarters in new york over the next hour, your other top stories where covering. we are covering. caution in the market, investors slashing into the red across most asset markets erie of the since august.e jeff bezos, warren buffett, jamie dimon, teaming up to offer health care to their employees. then you have apple incorporated, the iphone sales cycle may not be so super as the older models draw scrutiny. all right, there is a selloff underway. when i say selloff, let's be real. trumplooking at president , celebrating i guess his election victory.
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julie -- julia: what's interesting is we haven't had very steady action today. at one point all three major averages were down, now they have bounced off the lows, but it is still the largest selloff since august, particularly for the s&p 500. we have seen to down days -- two down days. let's put this in context. take a look at the bloomberg, this is a chart that we looked at on friday, when we saw a 1% gain in the s&p 500, because that was unusual. thee saw a 1% decline in s&p, that would be only the fifth time in the past year that it had happened, it has become increasingly unusual in this extraordinarily low volatility high record-breaking day environment to not have these kinds of big price swings. another way to put it is there have now been 112 trading days
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that have gone by with -- without all three major averages falling simultaneously. the 10th longest streak, i should say, of that type we have had since the nasdaq was record -- created. the next longest streak was back in 1972. in other words, it is a rare occurrence to go for so long without all three major averages on a single day falling by at least 1%. have been talking about the factors contributing to the declines, including the from amazon, jpmorgan, and berkshire hathaway of a new health care venture. then there is the situation with apple, down over growing concerns on production cuts to the apple iphone x. then the news today that the department of justice and the sec are investigating whether securities over disclosures from software
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older iphoneslowed models. that is what they were alluding to and it is what they were continuing to put pressure on in the shares. it's not just with stocks. we have been watching bitcoin, today, for example. i thought we had it, but it went away. it was across asset selloff. where is the money going? it's difficult to find a place. we have a selloff in the bond market as well, highest in almost three years. going anywhere, either. money is not going into the dollar. even gold is not catching a bit. we have bitcoin, but it is falling as well today, below $10,000. subpoenasnt they sent to a couple of the largest cryptocurrency exchanges, which then caused cryptocurrencies to take a leg lower as well. julia: great cross market wrap,
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there. number there for bitcoin, 112 days without all three falling more than 1%, very important. for more on the action, let's bring in our chief equity strategist from credit suisse. great to have you with us. put the price action into perspective. four days we have been talking about the increases in asset prices. surely, a pull makes sense. >> you know, two days in a row of down markets is nothing to really get bothered by. the market is up five .5% year to date. -- 5.5% year to date. the reason that interest rates are higher is because the underlying economics are in good shape. pause in this-
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type of rally, we have to be careful not to analyze -- over analyze it. scarlet: absolutely. the volume has picked up. trading in the s&p 500 stocks is 20% above the moving average. sense from youhe if there is a forced selling of pensions. according to credit suisse, they would need $12 billion in equities in the final days of january to go back to private -- prior asset allocation. is that driving some of this decline? great point,s a and i think it's really important for investors to understand that when you have a pension plan -- or for that matter, a balanced mutual fund that wants to have a certain ,mount in stocks versus bonds they are mechanically forced to reallocate that capital. it's not a statement that the market is losing faith.
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it has nothing to do with interest rates rising or changes to the fed policy. it's people being very responsible about the kind of risks that they take. is it possible that in this one point 5% miniature adjustment that you have that that is contributing? it would make absolute sense that that would be the case. unusual, now,ng it would happen anytime the market moves ahead as quickly as it has. julia: as you have pointed out on a number of occasions now, the price action here is what it is and you have to keep your eyes on the big picture. -- what point do you start to get nervous and look at ways to hedge this? upathan: when the market was 7.5% only a couple of days ago, people were screaming that they wanted to see some type of correction. that it would be healthy for the market, giving us an opportunity
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for people to buy on the dips, but when it happens the first thing that people say is -- do we need to hedge this? is it the beginning of a trend? ins probably somewhere between. the one thing i'm looking at and i think professionals are looking at, the vix has spiked up. market volatility is higher, but as the vix kind of settles back down into that 10 to 12 range, which i'm highly certain that it will, it should naturally push stock prices up. probably the real relationship toe is moving the markets volatility up, stock prices down , and that is a temporary reality. the see of -- scarlet: on the bloomberg, it's a sea of red. does it matter that the selling originated overseas?
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indexes dropping over 1%, does it matter? jonathan: i don't think so. one of the things that has been surprised -- surprising to us, stocks around the world, european stocks of the s&p 500, they are more or less trading in line with each other. more and more people are focusing on the tax changes as a cause of the market being up, but the real story is it's all been rising together. i'm not seeing a smoking gun. i'm looking at the bloomberg. there's no economic earnings release, no headline, no big political event causing the market to behave badly. thisn an absence of that,
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is probably a buying opportunity. probably the best way to look at it. youa: great to hear that are looking at the bloomberg all day long. [laughter] jonathan golub, thank you. mark: speaker paul ryan is defending the decision to release a classified moment on the rush -- memo on the russian investigation. it appears to show improper use of surveillance by the at the eye and justice department, which ryan said could be in violation of american civil liberties. >> there may have been malfeasance at the fbi by certain individuals. it is our job in conducting transparent oversight of the executive branch to get to the bottom of that. the sunshine is the best disinfectant. we want all of this information to come out so that transparency can reign supreme.
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mark: the speaker was adamant that the release of the four-page memo is unrelated to the robert mueller investigation, which he said should be allowed to run its course. the deputy secretary of state says that there is "not a change in u.s. policy on afghanistan." he added that the american policy is "conditions based." >> we support afghanistan process-- afghanistan's . the taliban cannot wait us out, our commitment not based on a timeline. we have an enduring partnership. we will work with the government there to make sure that terrorists cannot exploit that territory to threaten the world. mark: monday, president trump ruled out talks with the taliban. u.n. agency for palestinian
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refugees is seeking $800 million for emergency operations in syria, the west bank, and the gaza strip. he agency saw its budget slashed this year. historically been the largest donor to the agency. opponents of the russian military campaign in syria heckled sergey lavrov in sochi. they boycotted an event, calling it an attempt to your server the role of talks in geneva. they wanted to take the lead by reinforcing the regime. 24 hours per day, powered by 2700 journalists and analysts in 120 countries. i'm mark crumpton, this is bloomberg. scarlet? julia: we are -- scarlet: we
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have come off the worst levels of the session. lows,e come up off the that was about 30 minutes ago. members of the dow are down. this is bloomberg. ♪
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julia: this is bloomberg markets," i'm julia chatterley. , withhealth care company hundreds of billions in revenue, these corporate giants are a force to be reckoned with. that is bad news for insurance.
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story, us on this catherine baker. great to have you with us. catherine, i want to go to you, first. the big disruption of amazon into the health care space does not quite look like this. what do you make of this, between the three companies? >> there is a lot of waste in the health care system. we all agree that we are spending more money that -- then we need to. which of that is really wasted? some m.r.i.'s improve health a lot, some do very little. it takes a sophisticated reading to figure out what is wasted and what is beneficial. maybe these guys will have the opportunity to do that. scarlet: the press release right now is light on details. what jumped out at me was the phrase free from profit-making
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incentives and constraints. venture isthink this aimed at? insurer's health care providers themselves? max: the fact that the release was so vague, that means you can any way you want. they have this mixed motivation where their job is to lower health care costs, but they have to maximize profit for insurers. by becoming this group self-insured negative corporation, which for the purposes of providing health soe coverage, they can do the things that those companies do on their own, potentially leveraging their size to do it better. whether we have been talking about obamacare, real feel -- repeal or replace, amazon hashis is why
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always been perceived to be so perfect in this space. do you see what they are doing here as scalable, catherine? operating at a big scale is clearly important for success in a health care sector. already big employers ensure their own employees. what they don't do is deliver innovative insurance products. those reforms work much better with a sophisticated, nuanced insurance plan. julia: you can do what you like, but to be potent, you need to be a disruptor. max: many companies are self-insured. the question here is if this consortium can be more aggressive in terms of designing how to deliver care. on the one hand, it's jpmorgan, but they are operating
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with information and experience. they might have a lot of data, but nothing like united health has on the longitudinal outcomes data. they try to determine what kind of and -- innovations might be helpful. julia: when we say self-insured, we talk about companies that take on the risk of health coverage. the question of disrupting the health care space, why hasn't it to the disrupted extent that it should? this should be ripe for disruption. but offering these narrow networks in a tech savvy, younger client base, they still lose a lot of money. carerine: the health sector is a norm is the complex and it poses a real challenge for disruption.
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you need all the different pieces to work together. an innovative delivery mechanism, an innovative way of getting people to the right providers is an going to work well if the insurance they are covered by doesn't promote that as well. an innovative product that tries to steer people towards high-value care won't work well if the networks aren't included. if you can line up the right reforms with the right insurance product and apply it to a large scale of people, it poses a real opportunity. as you point out, the devil is in the details. we haven't seen this successfully implemented to date. thea: the 3 -- scarlet: three companies involved, they are forming a new company rather than an alliance. why is that art and as a distinction? max: we have seen big companies come together in consortiums before.
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this alliance is a group of something like 40 plus different companies that have similar aims. but it is just a loose grouping. at the end of the day, instead of banding together to really use their market power most effectively, they ended up contracting with opt him, kind of a legacy player. while they might have gotten better terms, it's that exactly the most innovative technology will -- technology. anybody'm not finding out there who has decided that this is a real game changer, amazon in the health care's race , let's see what else we can come up with. thanks to max nisen and katherine baicker. a quick look at where the dow is trading now, we are off of the session lows. some 300 30 points. we are off the lows of the u.s.
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10 year. higher by four basis points. ae dollar just can't catch break. even with today's sentiment, 1/10 of 1% higher. we will continue to keep you posted. from new york, this is bloomberg. ♪
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julia: this is "bloomberg markets," i'm julia chatterley. and i'm scarlet fu. apple's results have been released. we are learning that the sec is looking into whether the company andviolated a law with a softwe update that slow down -- slowed down older models. formalizingthe doj, the investigation. tell us more. >> the u.s. government, the department of justice, looking into the early investigation into apple's public comments
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about the issue where they came out with a software update around february of 2017. it throttled iphones over than seven in order to make the batteries last longer-term, or prominently to avoid iphone shutdowns as you use the device. there were complaints about reboots. in december there was an uptick in complaints with people saying that my older iphone is slower for no reason. it's not that old. these models came out maybe 2016, 2015. december, apple stepped back and apologize for its communication, saying it didn't mean to slow down the iphones in order to get people to buy new iphones. in the spring with the software update coming out, it will allow people to turn off that function. you have all sorts of
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analysts coming out saying that they are cutting production. totsche bank is the latest say that the iphone 10 is to highly priced. were one of the big optimists who said that people want to buy this, they love it. what's going on? abigail: you see the -- mark: you can see the apple loyalists here, but you are right, the $1000 price point has attracted some people. these are basically the boards that you see every year around this time. i have been covering the company for seven or eight years. as long as i can remember, every december you get a report saying hey, apple is cutting back orders. my belief is that they over order after the holidays. still, there is a lot of smoke to indicate that there is a fire here in terms of the iphone x interest not being as high as
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expected. scarlet: very quickly, what constitutes a super cycle? number of unit sales? selling price? mark: it's not tied to any particular number, it's a few seeking a -- of people to upgrade to new models. example. great people rushed from all over the world to upgrade to the bigger screen. scarlet: market, thank you so much. still ahead, market volatility on the rise. not just in equities, but bonds and currencies as well. this is bloomberg. ♪
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>> i am joe's -- joe weisenthal and i will anchor president trump'state of the state billion
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-- his policies especially around the economy have made america, well, great again. he will do that by highlighting the seth -- the success of the stock market, tax overhaul bill, and state of the u.s. jobs market. country ahead for the when it comes to infrastructure, trade, immigration, and national security. various global hotspots when it comes to foreign policy p and most notable, the ongoing battle against the islamic state in the middle east. what you likely will not hear is anything that has to do with robert mueller and the investigation into the conclusion -- the collusion --ween trump it will not be really connecticut's attention tuesday night on capitol hill. many eyes will be on democratic female members of congress who will show support for the me too and times up campaigns. then there are members of
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congress including representatives john lewis, boycotting the speech altogether. every member of president trump''s family will be there, including first lady melania. representative joe kennedy of massachusetts will deliver the democrats response. kennedy is the grandson of robert kennedy and a great nephew of former gentner -- former president john f. kennedy. how will it all turn out? join me and washington's bureau chief starting at eight: 40 5 p.m. eastern tuesday night and we will stream live on tick with analysis on everything and will be answering questions from our follows -- our followers. i am joe weisenthal in new york and you can follow me on twitter and get all of the other dates at -- -- all of the updates at -- >> that is our what did you miss cohost. i'm scarlet fu. here with julia chatterley. let's go to another familiar face and get the headlines with mark crumpton.
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mark: environmental protection agency chief scott pruitt is distancing himself from his to 116 statements that then presidential candidate donald ifmp is a bully who, elected, would abuse the constitution. -- try to use his words against him today during an oversight hearing. pruitt made the comments on february of 2016 appearing on a conservative talk radio program in oklahoma. he was the state's attorney general at the time. pruitt says he appeared on the show several times but did not recall making those specific comments. the state department today hosts officials from cutter in the first annual strategic dialogue between the u.s. and the persian gulf nation. secretary of state rex tillerson and defense secretary james mattis were joined by their with the tworparts
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nations agreeing to bilateral cooperation on a range of security and economic issues. >> we have made significant progress to improve efforts to combat terrorism and as a result of the understanding, our countries signed in july, the united states and qatar have increased information sharing on terrorists and terrorist financiers. we have participated in counterterrorism technical training and taken steps to improve aviation security. mark: for taking a position on the blockade of the country. in egypt, a coalition of eight opposition parties and some 150 pro-democracy public sectors -- figures are calling on a boycott for march presidential elections. they said the elections are a farce and amount to "absurdity bordering on madness."
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-- is virtually certain to win. in the u.k., a man who stole from victims of the manchester arena bombing while pretending to help them is headed to prison. a judge sentenced him to four years behind bars, telling him it is hard to imagine a more reprehensible and -- reprehensible set of circumstances to he received worldwide attention after claiming to help comfort the injured and dying after the exposure -- explosion at an ariana grande concert. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i mark crumpton. this is bloomberg. julia: stocks under pressure for a second straight day. down 411 point europe let's get to julie hyman here for some perspective. we are off the lows here. julie: they have remained lower
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for most of the session. the nasdaq at one point is only down about half of 1%. we havesee the swings been experiencing is -- even as i have been watching in a couple of minutes. of bouncingte a lot around. we have seen stocks get to unusually stretched levels when it comes to momentum and evaluation. ofther tell is the measures so-called euphoria and the market. as part of consumer confidence survey at the number of people expecting stocks to continue to rally for the next 12 months. that number is at 51.6%, a record high from the beginning of the survey. when you see extreme levels of foolishness, that, for some, is an indicator that it is time for a cell. today has toggest
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the amazon jp berkshire merger in which they are teaming up to offer health care insurance to their employees. this is happening -- having a big ripple of flecked in the insurance market in particular as unitedhealth group and cigna all fall. it really spreads for almost anything touching health care in today's session. as promised, bitcoin. which we mentioned earlier. we have a chart now hear what we have seen happen in the past year, still holding above $10,000 for bitcoin at the moment. we have seen a breakdown in bitcoin prices, as you can see clearly from the chart. today's catalyst beside the general risk off tenor in the marketplace today is scrutinizing one of the world's largest cryptocurrency exchanges. tether, a coind exchange it operates, are being scrutinized. those coins have been popular
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for dollars on cryptocurrency exchanges. tether says all of its coins are backed by u.s. dollars held in reserves but critics on tether have asked for proof of these reserves and thus far have not gotten any. we will see what happens with the investigation. julia: when you're talking about bitcoin, just incredible. thank you and we will talk about that story in more depth later in the show. more on the markets with stocks on pace for the biggest two-day climb since august of last year. fallen --bonds have have 2014 highs. chief investment officer at fixed income, great to have you with a spear talk to me about what is going on in the rate markets now. been.s. 10 year, we have talking yesterday, german five-year yields, now in positive territory. hold.y did not
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they closed negative again today. i think all of these markets are related for sure and at the heart of the matter is a global economy that is doing better. we have seen coordinated growth across the world. i think it is positive. the question -- the tricky question is how did central banks maneuver themselves from what has been almost 10 years of emergency policy measures into what is now -- what now needs to be a different regime? i think today is one indication in the last few days that will not happen in a straight line. scarlet: how narrow path will that be? >> we have to look at errors on both sides are we were talking about policy errors that really centered around, oh my goodness, there will not be enough stimulus in the economy.
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now one of the things we look closely at is where our financial conditions are, particularly in the united states or financial conditions are smoking hot. the fed is trying to slow things down a little bit but the dollar is weak and the stock market prior to today has been very strong. credit spreads are tight and rates have not gone up. put all of the ingredients together and you have a situation where work should not be surprised that the economy is doing well because the financial conditions are stimulative. the fed wants to change that so how do they? here, how doestor you play this? we were saying earlier with jonathan at credit suisse, he said look, we were rallying through the year and we need a bit of a pullback because that will be healthy. we get over excited. >> before i left my office, i looked on your screen and a market was down 400 points. month to date, it was still up
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5.5%. let's get -- let's not get crazy about it but i go back to the notion of how is policy going to change? at how influential monetary policy has been over the past 10 years, i would rank it as the highest and most important factor in the markets. that is because it was stimulative. we now have a situation where that is about to go into a reversal. the fed is already trying, as we mentioned, not so far successful. the european central bank also has to get into the game as well. their economy is running very strongly and at least they have a stronger euro, which is tempering things a little bit. but overall, a negative 5-year note for the biggest economy in europe when it is growing somewhere north of 2.5%, that is probably not the right policy. the euro here,t the dollar today simply cannot catch a break because it is
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down, continuing that trend. as we look at and consider the someess in u.s. stocks, have said that there is going to be a big shift from pensions into big fit -- fixed income assets because of the rally we have seen in u.s. stocks. playing out the way the banks expected or are returns to bonds still low? >> a 5-year note today in u.s. trades is 2.5%. i would say ok, let's leave the pensions to the side at the moment. for mom-and-pop investors, two point 5%, if they could get 2.5% on a very stable investment, they would have jumped on it. i think it started to get attractive, that is the important thing.
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there is a lot of demand. one thing is volatility will be much higher and for asset managers, that is a good thing. hold onto your seat and look at opportunities as they come. >> a pickup in that five-year. i know where i would rather be. scarlet: thanks very much. up, triple-threat man how amazon, jpmorgan, and berkshire are hitting the health care sector. we have got more on this developing story. this is bloomberg. ♪ up, triple-threat man
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julia: it is time for the stock of the hour with abigail doolittle. guessk we could probably which sector we are looking at today. >> that is health care. more than 2% on the day down for a second day in a row. this represents the worst day of the year since october parity probably guessed the big news around amazon, berkshire hathaway, and jpmorgan coming together to form a health care company to provide health care for the ruffled -- roughly one million u.s. employees. this is clearly pressuring the sector. take a look at the insurers down sharply. no start -- no stone unturned here. the health care sector treating lower as investors fear, what could this mean in the future?
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could the companies and what they form in the health care space really disruptors the industry, especially considering how dynamic and forward-looking their leaders are, and, take a look at this, the nasdaq index down 1.8%. the fear here could be there is another negotiating power around drug prices that could potentially not be such a great thing for the biotech stocks. president trump vowed to bring down prices. they fell on that and rebounded. it does appear these losses will stay. let's turn to a bright spot. one of the winners in the health care space, the stock of the hour, this is hc health care up sharply at the highest here the stock had been on it pace for its best day since 2014. this is after the company did beat estimates. they put up a better than expected number. there are a few main factors including the fact that the flu, there is a big outbreak of the flu. it drove the best rate from 2014 and 2015.
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the tax rate fell to 25% so they -- reinvest those and that brings us to the third point, investing in the future. they are planning on capital spending of $10.5 billion next year. that equates 2000 and 200 outpatient facilities. we have the stock doing pretty well on that. scarlet: it is at a record high fuel look at shares. on a day when stocks across the board -- across the board are lower, is it too late to get in on this? >> evaluation is a little bit stretched. a lot of momentum. something pretty unusual on a bearish day. it is a longer-term chart and we and a stall ind the repeal and replace efforts. look at that. a very strong breakout. this suggests, you could see the
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share go in size $24 per share. >> this is back to 2011. >> ok. cool. some offor a look at the biggest business stories in the news now. theresa may heads to china with business leaders. the british prime minister continues to push to rally key economic partners post-brexit p are it is the biggest delegation the government has every take -- ever taken overseas. beijing and shanghai on the three-day trip. withill also hold meetings --nging paying -the- that unit is valued at about $20 billion. competes in providing information to the financial industry. earnings season, tech officially kicks off this week.
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amazon and don't forget facebook, big players in the technology sector. proposeected to double-digit revenue growth but their reports now, off the market selloff and u.s. stocks on pace for the biggest two-day decline since august. that is your business flash update. scarlet: coming up. you canthe bloomberg, see red across the board for bitcoin, ripple, and u.s. regulators are scrutinizing one of the largest cryptocurrency exchanges and we have got the details next. this is bloomberg. ♪
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scarlet: another developing -- it's scrutinizing the
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currency. tether, a company that uses a widely created coin. i know that when it comes to --her, been willing to let their books be audited and there is concern that they are backing --thout the
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from what we understand -- we have got a problem. >> yes. valuation they just sever ties with the auditor. the audit was getting to weeds. that seems like a red flag on that front.
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they also have a connection with one of the biggest cryptocurrency markets in the world. it lost its tied to the u.s. customers last year when wells fargo ended its corresponding banking relationship and ever since then, they refused to divulge which banks they have. it is another red flag. >> the biggest red flag, i like what matt said about the audit going too deep into the weeds. >> ok. bitain to me who is behind connects and who is behind tether? if we get behind that, we can understand what they are saying. who is the person behind this? that is an interesting part of the story. it is hard to track down from what is available in the public who is in control.
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we know the ceo of tether and bit connects are the same person. there is a chief strategy officer that has relationships with bit connects and tether. they apparently operate in hong kong but i believe they are incorporated in the british virgin islands. get to theasy to people behind these markets to have such a large influence in the cryptocurrency area. ,gain, that is another red flag in my reporting, people have been concerned about that. >> the time in hong kong is 3:55 a.m. we would love to chat to you if you are available and would like to come on. in the meantime, matt is joining us from our los angeles bureau. very interesting, isn't it? >> red flags galore. coming up, counting down to president trump's first dated the state -- state of the union address. what we can expect from his
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remarks and the possible fiscal headwinds that await his second year agenda and we will give you live coverage of that starting at 9:00 p.m. we are also keeping and i on equities and across assets. you are looking at a dow that has come back off its lows only by 360 one points, earlier as much as 400 points. this is the biggest decline since at one point september of 2015. we will continue to track those moves. from new york, this is bloomberg. ♪
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retail. under pressure like never before. and its connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store
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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. >> welcome to bloomberg markets.
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>> here are the top stories from the bloomberg and around the world. the dow pulls back to session lows of u.s. stocks are still on pace for the biggest two-day decline since august of 2017. president donald trump expected to lay out his vision for immigration and infrastructure during tonight's state of the union. we head to washington for more. getting a deal done and they certainly are. we will speak with jpmorgan's global chairman of m&a. we are one hour from the close of trading. let's get the market check as usual with julie hyman. julie: the s&p 500 and all major averages since august of last year. it seems as though the trigger is bond yields
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getting to elevated levels, elevated for four years time. that is perhaps the trigger. bonds continue their selloff as we see stocks selling off as well. triggering that they deal in the pharmaceutical, in the health-care industry. amazon, jpmorgan, and berkshire hathaway teaming up to offer health care for the 1.1 million employees. health care caused a cascade if you will this morning. if you compare what is happening with health care and biotech you lookh yesterday, here at the biotech index and the s&p bought that pharmaceutical index in blue, yesterday we have president trump commenting about drug pricing. today, there is no recovery. we saw the strap this morning when the headlines came out about this new health insurance venture. a little recovery and then right
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back to the lows. there is a lot of concern in the health care industry about what effect this country could eventually have, how disruptive could it be if you look at amazon itself today, it is trading at a record. shares up about half of 1%. this will bear if material to them at some point p or the upper trend continues there even as we see the drugmaker selloff. amazon, see and jpmorgan, berkshire hathaway lowering drug prices? there are a lot of questions still about what the new organization is going to mean. elsewhere, we are looking at a stock that dropped midway. that is chipotle. on social media, there are yet more reports surfacing about potentially food poisoning at one of its locations. it moore shows the vulnerability of chipotle to this kind of chatter. you saw the stock falling to the low today, a selloff of 2.5%. elsewhere today, is not just
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about the health care industry. we have stories we had been watching. metlife saying it is increasing -- those shares the worst performers in the s&p 500 today. rising more than estimated. a lot of expectations were baked into the numbers. and finally, falling after a report late last -- yesterday likely to limit any kind of competitive sitting. those shares down. quite a great overview. first word news with mark crumpton.
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mark: before releasing publicly, president trump will review a memo on alleged fbi abuses. bias andent alleges surveillance of people .urrounding the president the federal communications commission says an employee who mistakingly sent an alert -- alert warning of a realistic missile, thought an attack was imminent. testing alert capabilities and not the employee, it drove for a real warning and the missile threat. assigned to a job without access to the warning system. leading people to fear the state was under nuclear attack. the european union top environment official warning countries that they face legal action as they ignore
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standards. speaking in brussels today, commissioner said some countries have still not met deadlines set for 2005 and 2010. consequences for citizens. member states have responsibilities to act. mark: poor air quality causes more than 21,000 deaths in europe annually. huge crowds gathered in a park today to witness canyon opposition leader being sworn in at an operation. it was carried out in a protest
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over the new term after months of deadly election turmoil. elsewhere, police fired tear gas at supporters who had gathered to demonstrate. global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. scarlet? scarlet: president trump scheduled for his first state of the union today, expected to highlight his competence so far and come -- infrastructure. chris, yourow, notes are must reads and are amusing and pinpoint exactly what people are looking for. you talk about what the president is likely to deliver tonight. we saw a president who stuck to the script.
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how do you see this playing out tonight and the days to follow? the days tond follow are probably two separate trumps. the indications are tonight will certainly follow the well-worn path from davos sort of rising , talking about bipartisanship, flagging, and immigration deal, infrastructure, and in the days that follow after the speeches, we go from teleprompter trump to twitter trump, and we will regress back to partisanship. >> the immigration angle, if we look at the infrastructure, a gain could be a reeling street -- really strong selling point heading into the midterms. how do they pull this together in a bipartisan way? what is the difficulty? on a federal level, democrats want to spend five times more than they are willing to spend, or is it the fact that they
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simply cannot agree on what infrastructure is? >> right. i think what you just said is one of probably three issues. issue number one is infrastructure means a lot of different things to a lot of different people, including republicans, whether some republicans are talking about partnerships, house republicans in the first tax bill would have ended private activity bonds, sort of a central component of public-private partnerships. just defining infrastructure number one, how to pay for it number two, particularly with eight offsets in the tax bill. and number three, as you alluded to earlier, this has to be bipartisan. you can't do reconciliation this year or at least republicans decided they won't, and so, as much as democrats would let -- my suspicion is they would like to win the house or the senate more than giving president trump a bipartisan win before those midterms.
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>> year one for president trump was very much about setting himself apart from president obama, his predecessor, undoing a lot of what president obama had done. we know the obama administration went forth with shovel ready projects that did not quite take off her knowing that, how does the trump administration avoid falling into the same pit holes the obama administration did with its infrastructure proposal? >> it is a great question. plan comes when the together. what we are of seeing is, call a a trillion and a half, plan, with some kind of infrastructure bank, there is sort of a $200 down payment that no one is really quite sure of what they are talking about with that. what you will see trump talk a lot about is cutting the economic red tape, a project needing 10 different studies to
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get approved, which sounds good and polls well, but you have a lot of pushback from the herbalmental left in the tea party. when we hear things like that, they think about economic degradation -- degradation and things like that. some of these commonsense ideas sound good on a bumper sticker but when you start drilling down in the policy, it gets a lot more politicized. >> i think the president will talk endlessly tonight about successes. many of those are real, whether he talks about the stock market, jobs, the tax overhaul. these are successes. why is he so unpopular reporting to the polls in your mind? >> i think some of it is not the substance but the style. just last night, you look at the twitter feed. imagine a trump presidency without 2000 tweets? it is a very different presidency. part of that is he feeds off of
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it and i think he enjoys being in the knife fights. it is someone who grew up in 1980's new york tabloids kind of culture. look at the election. we are also in an unbelievably invite -- divided political environment and you get your news from glenn beck or rachel maddow, with all due respect to people who watched bloomberg rate in the middle. it is a volatile environment. trump is trump. julia: we do our best. you don't mention some skepticism throughout the polls here which is interesting. we will talk to you about this again. chris krueger. and be sure to tune in tonight for our special coverage of president trump's first state of the union address beginning at 9:00 p.m. eastern time. >> i love how our guests today have said -- the start to the year for m&a since 2000. jpmorgan's global chairman of
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.&a from new york, this is bloomberg. ♪
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scarlet: i am scarlet folk -- scarlet fu. julia: with insight and analysis on the sector, joining us now is bloomberg reporter, ed. m&a.port jpmorgan's over 25 years of experience on wall street during the time he has worked on a number of industry defining deals like fox, at&t, time warner. a work in progress there. great to have you. while we have got you, we have to talk about the news of the week thus far.
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jamie dimon will stay on for another five years. we have a sense of succession plan as well. is a really years long time in jpmorgan's history. >> things again for having me. obviously, big news. the most important thing is jamie will be here for another five years. it is also recognition for two great leaders of our firm, gordon and daniel have done an amazing job running two of our most important businesses. from that perspective, it is a recognition of a job well done. >> yes, they have been promoted to copresident, both of them. it puts them in a direct line to eventually succeed jamie dimon. he has talked about staying on five years in the past. upperer, looking in the management of jpmorgan, there were a lot of prominent women there. asset and wealth management, the chief financial officer who at 40 years old would seem to be a contender as well. why isn't there more emphasis placed on them? do you think there should be as
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potential successors? >> they are great leaders as well p over half are women. the whole ceo succession is really up to the board here and we defer to our board on that. they are certainly great leaders and we have many great female leaders at jpmorgan. >> you guys had a real flyer and's -- in terms of the start of the year. has been i think this year, a record or at least 2000 and terms of strongest starts. what is left for you guys in terms of the m&a market? it will continue. i see two things we worry about it we think it will continue. one is geopolitically, we think it is hard to predict and we would worry about any kind of trade war with china. probably the biggest deterrent now is just valuations. we think about clients looking for an actionable creed of well priced target. they are hard to find here that is probably the biggest deterrent here.
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timeu spend a ton of your talking on a very personal level. what are we saying about the business environments, particularly how trump policies are affected with their ability to conduct these transactions environmentk >> the is as good as we see it. every major economy globally is growing. since 2006, we have had synchronous growth globally. tax isre now, the u.s. much more competitive globally. interest rates still remain and they are rising a little bit but remain incredibly low. we check about every box and a little bit unknown here. .rom an environment andy amazon and jpmorgan,
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new company to do with health care costs. to get are going together and build out health care recovery system, perhaps one day that might be scalable and comply with other companies, why do they need to buy parts from others if they can build it out on their own? it might be a knee-jerk reaction and -- but what are the neat -- what are the implications down the -- down the road? >> we see how it evolves. it is an interesting opportunity to bring down health care costs. m&a remains to be seen. driver big part of the as you know. it will continue the rest of the year. >> to think it will accelerate m&a? >> i don't think this announcement will but you think about all coming onshore, bringing cash on shore, certainly health care will be a force this year. >> do you think amazon is a bigger threat?
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we were surprised. it is not what we were expecting from amazon pushing to the health care space. do you perceive them as a big threat today? >> we have seen what they have done on the media side where they have been very disruptive to media companies along with netflix obviously an apple going forward. information is good and technology is good and the destruction we have seen in the media side, we will see it in other sectors going forward. >> in media, two of the biggest deals we have seen, time warner and one thing you are familiar with, disney and fought. there is an element of convergence, not quite getting together because of this disruption be it from amazon or someone else. is that something that isolates the media industry or is it something that will become more thematic across different sectors of m&a? >> i do not think it is isolate it. seeing it on the industrial side. software companies, so, you look
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at whole foods and retail, and i think it will go sector by sector. i don't think it is isolated at all to media. confusion over the apparent green tech that was given to the fox disney at&ttial tie up versus time warner. on the presidential u.s. administration level, the concern is that it would have a chilling effect one being confusion as far as regulators are concerned. was that worrying? >> i cannot commenting -- on anything -- >> do not come in on the deal itself but the environment. >> on the regulatory side? julia: yes. what are they thinking question mark >> again, i really can't hear it sorry about that. stuff, you know, probably an important element in any coming into the u.s. that seems to be one bit of this that has slowed coming to the u.s. terms ofyou hearing in
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that appetite and the ability for the money to come in? chinese is no question companies are looking to buy american companies, it is much more challenging today than it was 18 years ago. years agowas blocked and i think that is very challenging and i do not think that is changing anytime soon. specific to chinese companies or is it more broadly? >> i think it is broader than chinese companies. >> i can let you go without asking the question. you said there would be a $100 billion cash deal. people left and kind of could not believe it and then you have qualcomm. how big could we go? when is the next number? >> i could not have known about qualcomm. luck.of we think it is still right number. i think 100 billion for the right country, -- company in the right sector, we will finance it
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for you. >> who said valuations are too high? and ed of of jpmorgan bloomberg who covers m&a. thank you so much. this is bloomberg. ♪
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julie: it is time for options insight with me is kevin kelly managing partner benchmark investment. great to see you. i will hop straight to your trade today because we are short on time. we have talked all day long about the amazon jpmorgan berkshire hathaway thing. you are looking at another potential target in different industry for these content companies, lions gate. caught your attention? >> what is interesting is during the paradigm of content is king, they have got an ott asset in the acquisition that actually worked out exceptionally well for them. jpmorgan said in their december
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note there is optionality on it. stuff, that iss because the stars acquisition has done well, they are teamed up with hulu. that is really good for them. especially when we see what is happening with disney and fox. this is a digestible asset that will probably come down to both are getting acquired but just who is going to acquire them. a $7 billion market cap, they have great content on television as well as studios and a great management. for company with all the tax the cashappening and coming back overseas and everything going on in the media space, this is probably the target that could happen. you want to sell this out in june and collect the proceeds and use them to buy a spread. you want to buy it for 220 so it will cost under a dollar to have
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stuff up but that does not include the upside on the options if there is m&a by then. this is a great way to play the trade if you have missed out on the recent run-up. >> you have made it easy for me. kevin kelly, thank you so much. julia: president trump us his first state of the union address. tune in tonight for our special coverage at 9:00 p.m. eastern time. from new york, this is bloomberg. ♪
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mark: i am mark crumpton. president trump is expected to post about a stronger economy when he delivers his first state of the union address. the president is also likely to
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call for bipartisan immigration reform. it is a ceremonial start to the second year of office. coverage right here on bloomberg television beginning at 9:00 washington time. steve mnuchin told the senate banking committee that russia will face new sanctions following the publication of russian billionaires and top officials with ties to president vladimir putin. mnuchin denied delaying the release after a mandated deadline to impose new sanctions on the kremlin. the white house said yesterday new know that no new sanctions are needed. was to do ant extremely thorough analysis of hundreds of pages, and that there will be sanctions to come out of this. mark:


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