tv Bloomberg Markets Americas Bloomberg May 10, 2018 1:30pm-2:00pm EDT
the city state's with the u.s. it also has a north korean .mbassy threeafter greeting americans. the law firm would focus solely on its new role on president trump as his legal team. the statement cites giuliani as stating the resignation is in everyone's best interests and onl allow him to focus special counsel robert mueller's investigation. a time police and prosecutors said today they have arrested for two people suspected of having links to a network supporting islamic extremists in syria. authorities say 11 syrians and three moroccans are accused of financing terrorism and other activities that please call highly destructive. russia's ambassador to the united kingdom says he is disappointed with the you k's
response to this country's attempts to gain access to a former russian spy and his daughter. they were victims of a poisoning attack in -- attack in england in march. ambassador alexander called relations between russia and the u.k. very low and said the denial of access gives the impression that these people were of ducted. i am mark crumpton. this is bloomberg. ♪ >> live from bloomberg world headquarters in new york, i am shery ahn. to bloomberg markets.
we are joined by our bloomberg audiences. here are the top stories we are following some of around the world. political earthquake. backlash,candal spurs helping break the six decade grip on power. merger madness. we hear from goldman sachs's global debt from the first annual finance conference in california. the $20 billion rally. the chipmaker that has wall street buzzing ahead of earnings after the bell and we will tell you why. >> let's kick it off with a check of major averages. u.s. stocks are higher today off session highs but still at the highest level in three weeks. enough inflation data this morning. the dow is up for a sixth whileutive session telecom and real estate are leading the gains on the s&p 500. looking with the dollar is doing because it is heading to its
biggest drop in almost two months after the inflation data became below estimates of the weaker dollar also helping giving a lift to commodities. >> i want a closer look inside the terminal at the core cpi. we know the fed is watching these numbers as they close the tracks close to their targets. .he red line is 2% core cpi hugging red at that level. pce watching even more closely is at 1.9%. the hawks and the doves have something to quibble about here. leveraged finance conference just outside l.a., let's get byk to an hammond standing with a key voice in and the day. ted? ed: thank you. i'm here with the global cohead of m&a at goldman sachs. turning into a beautiful day. interesting diversion. let's kick off on m&a.
muscularit a much more than earlier this year. at&t and time warner up in front of the court, and the justice department unusually tried to block the merger. speak tolike they will a more aggressive approach than expected. to do you advised clients play in this market? >> to add to your in quite -- your equation, it was the first time we have seen the mat before the agreement was signed. i think it was a big surprise for everyone. i also would pull in some trade war issues and all of those are elements of complexity. we are all learning at the same time. . lot of it is policy driven a lot of it is idiosyncratic cases. learning as we go,
candidly. you get the best experts you can. i think industry experts particularly with respect to the regulatory process is critical. you do the best you can and you sculpt a transaction in the way it ought to be taken very well. >> you have a huge pressure on companies on one side and investors rewarding companies that than a huge unpredictability on the other. is the right play? if i want to do a big deal in the u.s., you say let's wait or do you say, uncertainty is the cost of doing business? >> i think the latter. the most important thing i see in the markets now is transactions happen when the time is right and you do not always get to choose the time. sometimes the buyer forced the reaction and sometimes the seller says listen, at this
point i will so my organization. it dominates whether the trans-action is attempted or not. the regulatory piece one that you always have to worry about. right now, it is a little more idiosyncratic than we have seen. unless there is a glaring beenrust issue that has proven over time to get in the way, i think companies are prepared because the environment is as good as it will get. regulatory on the spectrum of risk will slide down to the bottom. >> one thing always talked about is the credit condition and good credit market. sustainedd it for a time. m a day is so robust, it is the other way around and perhaps the strength of m&a market is the strength of the quality of the market. >> i have not seen that yet. grade, we haven't
seen transactions that are really questionable from a credit perspective. we are having big organizations that are well-funded. the constraints they face are simply the depth of the fixed income market. cvs, etc., those are transactions that aren't armitage for the industry the credit conditions and credit capacity of these companies is quite enormous. >> let me pick up on that here you have just seen walmart do a split and they have been downgraded on that. they are downgraded already on the deal. we have at&t, maybe they have $160 billion of debt to do the time warner deal. the company is saying, it does not matter about the credit rating so much or if they are worried about what we're doing. the amide activities need to come first. >> it gives you a sense of how their priorities are. do you want to move your company forward first or tend to your balance sheet first?
it gets to be sometimes as simple as that. when the opportunity is there, you have to grab it. the market 10 years prior to this when there were all sorts of obstacles and a lot of those have melted away. so, you just need to risk assess and decide what the consequences are, if there is an upset in the transaction but in general, we have seen that when companies do this, they decide to move it forward, which we hadn't seen in a long time. >> an area i know you focus on is where the risk spreads are. everything over five alien dollars at the moment, analyzed spreads are over 30%, a staggeringly high number. what is it? have hedge funds just lost their nerve? or are we seeing something the bullish side of the market is not seeing? >> i'm using the word
idiosyncratic to many times but it is a specific investor group that gets involves -- involved with merger transactions. they typically do not play the stuff unless they are a specialist. the amount of capital being applied right now is as low as i have seen it in a long time. community is more careful than they had been before. at&t and time warner in particular, that has been going on for a long time. the spreads those investors look for tend to be pretty thin. they are taking the capital and moving it elsewhere. it is a real liquidity issue. that is what we seek to we will put up transactions and we will see talk to -- stock turnover in the announcement date.
>> they will be going out for smaller declines. sluice through the m and a business? >> first of all, the answer is yes, first of all, what we have put together is a dedicated -- dedicated group to the market. relationship people and m&a execution people. the m&a part of this is a sponsor side. we found that to be attractive. have somebody senior and experienced to has done this the whole career. instead of having the sponsor -- those before it -- portfolio
companies, make sure someone is dedicated to the manager team that will work in conjunction so you get the best of both worlds. you have morphed a lot. activists have been with us for decades. it is different flavors. $150 worth of dedicated capital. every year, there is a new trend in a new trust. activism will always be there. it is part of the market.
and -- amanda: this is bloomberg markets. malaysia's longest the end of the coalition decade grip on the power. it comes after malaysia's and regulatory investigations around the world. let's bring in bloomberg opinions dan moss. i remind -- i remember when i was in malaysia. skirts --15, yellow yellow shirts, not sure i survive that. what changed. remove ormport and to one is more of a subsidiary .ssue in 2013, the coalition nearly lost.
they lost the popular vote for the first time since britain. this is a train wreck that was decades, years in the making. one was really one factor. >> i asked what changed. broughtchanged is they -- back. daysmade the world comfortable with voting for the opposition. which, you know, historically is a company with chinese parties. >> but will they actually change anything given that they actually centralized power when he was prime minister? >> this is one of the questions. the primeew up under minister.
>> what that might mean in the country, almost meaning anything he does might be worse than the scandal. >> the party is the government. the group is bringing into the office. meaningfulny kind of government experience. priorities let alone medium to long-term priorities , hehe group of parties probably never expected themselves to win. >> he is now the world's oldest leader.
the on this rather shocking event. >> this is another key tension a has to be resulting. he has said he would stand aside . his former protege, he is languishing in jail. the first one was in jail, he put in there after the peak of the financial crisis. somehow, these two are supposed to reconcile. pardoned and to emerge from jail. what happened along the way, fascinating. in pretty uncharted.
never had any ruling the experience and look at that, they have no chance whatsoever. >> people are riding to victory when they finally came to office. todid not take them long completely implode. it is a great question. many similarities are there. japan is much more of a vibrant democracy. now than malaysia has been. >> still ahead, raising stakes. a record $20 billion rally. bullish productions are making earnings. one of the most anticipated of the evening. we have a preview of what to expect after the bell next. this is bloomberg. ♪
>> this is bloomberg markets. i am amanda lang in toronto. shares are at a record high. increasingly bullish predictions, making the company's earnings the most anticipated of the evening. analyst for bloomberg intelligence is here with what to a after the bell. what is your call? >> this has been an unbelievably great organic growth story powered by multiple tailwinds that the company has. at the end of the day, the company has been excellent. the interesting thing as new gaming andutos and
cryptocurrency, all of these have fed into the graphics processor use across a diversity of applications. widening and the pc user experience, also cryptocurrency feeding into that, mining me for those applications is driving gpu's. on the other hand, data center is another area where widespread training,ularly in ai has driven the need and when they have a common platform and do one thing really well, the markets take advantage of their chips, it demonstrates stronger revenue growth. relations are very high, as is
the case with most growth stories any other part is expectations remain incredibly high. you have a backup between very strong growth franchise and strong expectations. >> we see a stock hitting an all-time high two days in a row. for a all-time highs reason. that is the growth story. as you say, it is set up for perfection. does it have to subscribe for revenue forecast or return even more capital or does it have to blowout to hang on to the capital? >> all of the above. see greato performance from the gaming side of the business, roughly 60% of sales. you want to see phenomenal performance on the date -- on the dating center. he wanted to see cryptocurrencies, more volatile.
you wanted to see the register here. >> we had first quarter sales potentially taking a hit. watching in terms of sectors. >> if you look at cryptocurrency, we have an estimated currency for $200 million. a little less than 10%. the question is how visible is it? more visibility is better in the long run. more consistency is better in the long run. you want to see those two particular facets for nvidia or for that matter -- hold on.
>> all right. great to have you with us. senior analyst from bloomberg intelligence. thanks. >> thank you. be waiting for the earnings report coming out after the bell. remember, if you missed any , g tv sed today is the function. you can save them and alter them. for future reference as well. gt the on the bloomberg. a new function. you can find all of our charts. live from new york and toronto, this is bloomberg. ♪
scarlet: we are live in new york over the next hour. here are the top stories. peak earnings are rivaling some investors. why you should be afraid. the dollar drops and 10 year yields retreat. founding a movement, we speak to the woman behind black lives matter about the business of equality. we have u.s. markets closing in two hours time. is check in with julie hyman -- let's check in with julie hyman. see thee continue to pattern of stocks rising all lower than average volume. that is a pattern in place over the last month, a couple of months now. the rally is continuing today