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tv   Bloomberg Markets Americas  Bloomberg  May 15, 2018 1:00pm-3:30pm EDT

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concert -- security council and defended the inauguration of the u.s. embassy in jerusalem. qwest -- >> those who suggest that the bombing of the -- the violence for is from the u.s. embassy, it comes from a violence. motivation, the destruction of united nations member state is so illegitimate as to not be worth our time in the security council. others in the time it takes to denounce it. mark: today's council meeting comes after israeli troops new -- killed nearly 50 people since 2014. ambassador haley says the opening of the embassy is a cause for celebration for the united states. president trump is set to head to head theick intelligence agencies is gina
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haspel. she wrote a letter to senators. she wrote she has learned hard the 9/11ince 2011 -- terrorist attacks. relic and senator john mccain has urged his colleagues to reject her nomination because of her pastoral in cia interrogation -- past role in cia interrogations. the man accused of killing people in a florida shooting in 2017 has been found confident to stand trial. -- competent to stand trial. he agreed to a plea bargain and he will spend life in prison. he would've faced the death penalty. dead.lf is he died in new york. wrote the best-selling
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satires about wealth and power in nn. he was 88 years old. global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. shery: it is 1:00 p.m. in new york, 6:00 p.m. in london, and 1:00 a.m. in hong kong. i'm shery ahn. vonnie: and i'm vonnie quinn. welcome to "bloomberg markets." shery: from bloomberg world headquarters, here are the top stories on the bloomberg and around the world are u.s. stocks slip from two-month highs in the 10 year treasury yield is at the highest level since 2011. we discuss how higher rates affect markets. oil around three years highs.
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will it hurt the economy? we will examine this. big expansion plans ahead. our conversation was ceo tim cook on his plans for apple's massive cash pile. let's get to julie hyman with a check of the eight -- averages. is broad-based selloff today as we are seeing the effect of higher rates that were mentioned. it is a ripple effect. some companies are specific movers that i want to point out. for example, call ford even though it was downgraded, tesla remains in red. adam jonas from morgan stanley has turned more bearish recently. he is continuing to be cautious and he slash the price on the stock by 23% to $291. it is about where the stock is
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trading today. he is talking that the model three margin falls below the 25% target of tesla, and he says it will not be temporary as the company has talked about. spotify trading lower. loop capital is cautious on nasdaq saying people view it like a netflix streaming for music and what netflix was to streaming video. they point out margins will be a slimmer in the music business. elsewhere, we are looking at adjuvant earnings which were below earnings. there is a ripple effect within the testing equipment stocks. a number of analysts have come out and said you should use the opportunity to buy it. it does not look like folks are doing that. let's talk about the 10 year yield. -- ans in portland important part about what is going on. 2011, 0.37% is where we
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are. what is driving it question mark the out look of a sales report this morning. take a look at the bloomberg. pricing ining at the the market of three interest hikes. with four, it has been trending higher. it has now been trending in the surge as well as strength in the u.s. dollar. retail sales data out this morning. the federal reserve is expected to hike the rates. is at the highest it has been an grinding higher grade sessions up for two-month highs. joining us from new jersey is chad morganlander from stifel nicolaus.
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what do you think about the 10 basis point different from yesterday? chad: a bit of a short squeeze over the next trading sessions. it is no prize that you start to see inflation creep in as the u.s. economy has we accelerated and labor costs have tightened. -- labor has tightened. we have -- should perhaps take a deep rest. we feel the fed will raise race in response -- rates in response by roughly over four times. they will be conditional based off market stress as well as bank stress. the market is adopting or readjusting to the situation. this will put a lid on market valuations in the equity sphere. you are implying that we will continue to see volatility going forward. does that mean it affects equity returns enough to turn a
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negative for the year? chad: this will affect equity returns for the next 12 to 24 months as the yield curve readjusts. the dollar will potentially strengthen an additional 2% 4% over the next six to 12 months. that will also apply some pressure to perhaps topline revenue as well as earnings. we are anticipating additional volatility, and a lower return. tonie: where would you look two have opportunities that you might not be -- look to for opportunities that you might not be thinking about? chad: value stocks, high dividend, as well as low volatility companies have actually done quite poorly this year. we would look to pick through those opportunities. look at the consumer staples as well as health care sectors overall here in the united
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states. goodink you can get valuation with companies that are consistently growing and profitable. shery: what about corporate bonds and the high-yield market? what is that telling you about consumer confidence? chad: high-yield we would underweight in one's portfolio. overweight onto the other side. our expectation is that the 10 year bond does not move over 325, and as you see deflationary pressure. we think this will reverse its self eventually and then you will see the 10 year go below to 75 over the next six to nine months. what we are advising investors to do is to perhaps stay a little tighter for the time being on the yield curve and look toward the four five-year duration. vonnie: any quivers about oil
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and what it is doing for the moment and the potential for jitters in that market? has been a perfect convergence. you are going into the seasonal yearg driving time of the as well as you have had annual maintenance of refineries overseas and geopolitical concerns about iran as you have seen in the news. oil has brought up price of , but the supply of oil as well in thess globe is ample u.s.. we do not believe oil prices will go to $100 a barrel. that as china rebalances their economy overall and the united states continues to increase production, that will have a dampening effect on prices in the long run. hence the reason we would underweight oil and oil companies. in this environment, we
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are seeing a high rate of corporate debt in on the other hand, not that many defaults. what is that telling you about the financial health of these companies? chad: it does not tell us much about the health of the companies. the reason is because there is a search for yield, and there has been underlying demand from fixed income managers to buy whatever in order to increase the yield in their portfolio. we would tell investors as well as portfolio managers to move up the quality spectrum at this point in time. andu.s. economy looks good the global economy looks good, but at this point, investors have taken on an excessive amount of credit risk in a time when they want to be more circumspect. vonnie: we were in -- we really appreciate it chad morganlander. chad: thank you. vonnie: you are looking at a
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live shot of resident erdogan of turkey next to theresa may -- president erdogan next to theresa may at a conference. we will have more of the exclusive interview with president erdogan coming up. this is bloomberg. ♪
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sheryvonnie: this is "bloomberg markets." i'm vonnie quinn. shery: and i'm shery ahn. an analysis by bloomberg economics estimates oil touching the triple digit mark and that would shape .4% of u.s. gdp in 2020 compared with a baseline price of $75 a barrel. here to talk about why there is
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less than in the past is bloomberg's managing editor, gina davis. mi assuming that prices are higher than back in 2011. gina: the biggest reason is you are looking at inflation. $100 isn't what it used to be. that takes a few dollars off the price. secondarily, you are looking at in the u.s. more production. oilne who is importing during times of high prices are suffering the biggest hits. now you're talking about in the u.s. importing as much as 10 million barrels a day and that has dropped to 7.5 million barrels a day. the third major region the economists came up with is you are talking about the intensity for a gdp that has fallen. it takes fewer barrels of oil to produce economic output in the u.s. and globally than it used to. what point do prices hit
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the global economy and have repercussions? as you mentioned, economists are talking about 0.4% off of gdp at $100 a barrel. the rule of thumb is a $10 barrel increase takes about .2% off of the gdp. there is an impact. we have heard from producers and refiners talking about $80 to $100 a barrel starts to reduce demand destruction, which means people change behavior. vonnie: and the news earlier today, business is transforming toward clean business. the tendency for fossil fuel's in general is to go down in price over time, over a longer of time, right? what that begin? tina: if you have electric vehicles roll out as you have seen, you'll see a huge decline in demand. that is why you have people bp and others trying to come up
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with a future that looks beyond fossil fuel's and encompasses a wide variety of energy sources. fuels and encompass a wide friday of energy sources. shery: how is the oil market going to be affected by geopolitics? tina: it comes with the balance with the supply and demand. givenl fluctuate on any headline. minnesota has been a slow market disaster for the markets. it has been a series of declines that started when the oil prices drop and then lack of investment. is thatthe latest news courts are being asked to help retrieve to lean dollars with of energy assets in venezuela. tina: this is an interesting escalation. it has the potential to disrupt the amount of oil that comes from venezuela.
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they are trying to seize oil or to products that belong state on the oil companies. if that happens, it could hinder their ability to send anything out. isot of what venezuela sending out is being done to pay off old debts. they rely on those shipments. this could have interesting repercussions if they go after the sickle assets in the u.s.. that is the name every -- citgo assets in the u.s. that is a name everyone understands. a commodities business lost their leader. she was one of a small group of people who made the big banks into major players in commodities in the late 1990's and early 2000's. a $3urned the unit into billion a year revenue engine for goldman sachs.
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she has a great deal of success. theill be a big change in guard in terms of what goldman is doing in commodities. vonnie: a long history of being on top with commodities. managing energy are -- managing editor, tina davis. it is time for the latest "bloomberg business flash." intel plans on investing by billion dollars in israel through 2020. this according to statements from israel's finance ministry. intel will upgrade manufacturing plants there and by local companies, adding 250 workers in the process. in return, the government wish you intel a $195 million grant for future purchases of local technologies along with tax breaks until 2027.
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rule.reprieve from local u.s. agencies are preparing to scrap a restriction that most short-term trades violate the presses regulation. instead, banks have the leeway to make their traits comply with the rules. turkey is close to buying commerce banks units. they traded funds. the two banks are in the final stages of negotiations. goldman sachs is no longer competing for the business. that is your latest "bloomberg business flash." and lawyers are making opening markets to a u.s. jury. apple is seeking $1 billion from and itsover its design
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latest installment of this particular saga. this is bloomberg. ♪
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welcome back. i'm shery ahn. vonnie: i'm vonnie quinn. apple will reinvest in the u.s. over the next years. tim: we are going to put a different location in the u.s. then are other campuses. we will hire 20,000 people. we are going to spend $30 billion in cap backs -- cap x over the next years. and investing a
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ton in this country. yes, we are also going to i some of our stock because we view our as a good value per from a shareholder point of view, if we can buy -- value. from a shareholder point of buy, it is can i -- good for the company. if people sell, they pay taxes on the gains. , tim cook.e ceo let's bring in bloomberg's expert from san francisco. comments,et to the let's talk about apple and samsung making opening arguments for a patent battle that was tech in 2011. what is going on there? i saw that -- i thought the fight was over. >> it is still not resolved. they are back in court again. they are giving open marks in
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the san francisco area courtroom. apple is asking the court for $1 billion for various design patents that samsung infringed and they are inc. using samsung of infusing -- infringing on the software and hardware it self on devices like the iphone. you have over the years that some samsung phones has looked like apple products. that is the issue at hand. vonnie: what is the best outcome here that either side is hoping for? mark: they have been saying it is not about the money but about patents being infringed and the u.s. patent system being upheld correctly. an apple's eyes, samsung is arguing that there is only so many ways you can design a phone or an operating system. apple wants the money it was originally awarded in 2011. shery: let's talk about tim
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cook's comments when it comes to building a new site and campus in the u.s. and spending money and where might apple put the new campus, and how is it different from the other campus? mark: it is the fact that they're looking at a few different areas and we did a story that it looks like they are looking in the east coast and in the midwest. they arehey say investing a ton in this country. are we looking at new products or just updated iphones in more of the same? mark: there should be a few new iphones in the fall, larger and also a cheaper version. iny announced earlier january a $350 billion investment over the next five years or so, a significant amount of money. toseems to be in response the new tax reduction businesses
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are getting in the u.s. vonnie: that and also the idea they are not reporting their cash on their balance sheet anymore or they have decided to do away with that. mark: them and along with coca-cola and a few companies that are no longer reporting that, as it is no longer required. apple likes to give the information it is asked to give, bending on the supply chain report. apple down 1.2% right now. mark gurman, thank you. you can watch the full interview with apple ceo tim cook. it is in the new season of the david rubenstein show. only on bloomberg. this is bloomberg. ♪
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and it's "daditude". simple. easy. awesome. xfinity. the future of awesome. mark: i'm mark crumpton. the united nations security council is meeting to discuss deadly violence at the gaza border. ahead of the meeting, israel's ambassador said hamas should be condemned for the violence.
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it is said that israeli troops were defending their borders. he accused hamas militants of trying to attack under the cover of protest. casualty that has resulted from the recent violence is a victim of hamas's war crimes. they are fully the responsibility of hamas. who claimedeveryone that the u.s. embassy move is to blame for palestinian post-e -- palestinian's violence needs to look at the facts. mark: the massacre said it was an orchestrated move by hamas and plan what it called days of rage in advance. turkey's president earned one plans to -- president erdogan itst -- plans to tighten monetary policy. the turkish lira has hit an all-time low. he spoke to guy johnson in an
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exclusive interview. imagehave to give up the of a president who is influential on monetary policies very >> you will play a role in monetary policy going forward, is that the big change? >> this may make some uncomfortable, but we have to do it. a victory month would consolidate president erdogan's one-man rule of a country he has governed since 2003. secretary of state might impale has -- secretary of state mike pompeo told his staff that he is authorizing the department to hire officers and civil servants as funding allows. the decision is the latest in a to undof moves initiatives by former secretary of state rex tillerson. president trump says his wife welcome home from the hospital in a few days after receiving medical treatment yesterday for a benign kidney edition.
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the president tweeted that the first lady is "doing really well." he visited her last night at walter reed national military center and said she was in good spirits. global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. shery: live from bloomberg world headquarters in new york, new shery. amanda: and live in london, i'm amanda lang. we are joined by bloomberg audiences. here are the top stories from around the world. trade talks the topic. xi jinping is in the u.s. as the
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two countries look to find middle ground on trade. exclusive care will have more of the turkish president as he tells bloomberg's plan to take greater control of the economy had of elections -- ahead of elections next month. home both sets cold -- said cold spring weather caused them to miss projections. but as it heats up, will it follow? shery: we are seeing the s&p 500 .alting a four-day rally this is over jitters of a fed hike in the rate. every sector on the s&p 500 in the red right now, including financials. even given the fact that the 10 year yield is rising and we are seeing a steeper yield curve, 10-year topping 3%. this is the highest since july 2011. the yield curve steepening for a
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third session. a blogger tells us that today is another day proving that the yield curve is associated with u.s. equity weakening. this shows the 21 day correlation between the curve and the s&p 500 has not been this negativity since 2008. a steepening curve and the spread around 50 basis points could be a spread that investors are concerned that the fed's approach would not be enough to contain inflation. amanda: all eyes watching for any wage pressure that would lead to inflation. have a look inside the bloomberg at retail sales. -- weakweek start, start, retail sales have firmed up. what this is suggesting is that we are seeing consumers still driving the economy. this could flow through into new .ears about inflation will keep an eye on that. gearing up for round two china
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has dispatched a delegation led by the economic advisor to washington for the next about -- next bout of trade talks. u.s. businesses have lined up to oppose the trump administration's tariffs, including the ceo of the world's most valuable company. davidinterview for the rubenstein show, apple ceo tim cook shares what he told president trump at their white house meeting. tim: i talked about trade and the importance of trade and how i felt that two countries trading together make the pie larger. and that it is true -- i think undoubtedly true, that not everyone has been advantaged from that in either country. we have to work on that. were not theariffs right approach there. let's bring in sarah
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mcgregor, who leads bloomberg's economic policy coverage in washington. it is refreshing to hear words like that because there have been so many who might not have said tariffs are a good thing. how much persuasion that has when you see trump tweeting on china today still? only: tim cook is not the one who today or other days who are opposing the tariffs. as we speak, there is a hearing going on over three days because there is so much outcry about the tariffs. they expended it to three days from one. there are a lot of is is is up there saying, if you put the tariffs in place, we might face retaliation and prices will go up and it will our business. there is a lot of pressure on the trump administration to back down. we do not know if that fed into president trump's decision to look into the sanctions.
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it was one of the key points when the delegation went to beijing that they respect -- or ease restriction on sanctions. there is a lot talk about when the chinese delegation comes to washington. shery: stunning reversal from president trump when it comes to z te. could we see some progress on these negotiations or perhaps president trump is hoping to gain advantage when it comes to agricultural products? sara: that is the big question right now -- will he be willing to get a foot out the door to agree to maybe a smaller scale deal with china that could include easing sanctioning on z address would start to his concerns over the u.s. trade deficit with china. we are hearing from a lot of officials. we heard from larry kudlow, the
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economic advisor. they keep bringing up the larger issue with the economy right now and how the u.s. feels it has had too many barriers to china's economy and a lot of ip theft and the much bigger issues need addressed. how ahard to imagine small deal on z te could really address that. that this isting going on, including the potential for new tariffs at a time when concern about inflation is beginning and more people are talking about it. we have reported deflation from china for so long. you think that is in the mix that advisors are saying that is not the time to artificially raise prices? there has been a lot of concern from the business community who felt they were going to get a windfall from the tax cut but that tariffs could knew that and raise prices for supplies and products they sell here and that would dent the
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prophet. yet, as you know, inflation -- profit. get come as you know, inflation stayed steady. a lot of what we get comes from china. all of apple's production is based there for the supply chains. if companies are going to pay more or cut off from that, how will they keep their business going? sarah mcgregor, thank you so much to chile is bloomberg's economic policy coverage in washington. leads bloomberg's economic policy. president -- the turkish president makes a play for more monetary control. we will have that next. this is bloomberg. ♪
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shery: this is "bloomberg markets.". i'm shery ahn. i am with the mandalay in -- amanda lang in toronto. --sident hurdle on plans to resonant erdogan plans to presidentnus it -- erdogan plans on tightening monetary policy and why he things it should go to him. >> first of all, you are the head of the state. wendy people fall into difficulties because of monetary policies, who will they hold accountable? they will hold the president accountable. up the image of a president who is influential
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on monetary policies. a role inl play monetary policy going forward, is that the big chains? >> this may make some uncomfortable, that we have to do it comes it is those who rule the states who are accountable to the citizens. let's call them unorthodox from an outsider's point of view, view of monetary policy. if you are to play that great of a role, it will be different from the rest of the world. is that something you are comfortable with? doing all of these, we are not doing them to disturb some circles on an international level. steps in take the order to protect my country's interests, and we will do whatever my country's interests require. you am curious as to how
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think it will work -- how your relationship with the government of the central-bank will change her how will that relationship operate? >> at the moment, however the central bank relations are continuing, they will continue in the same way. we aren't new to running the country. we have not taken over the government recently. we have been running this country for 16 years without interruption. >> you said in the interview that turkey had an independent central bank and you talk about that it will carry on and be the same now and afterwards. will turkey with your greater role in monetary policy still have an independent central bank? above all else, and it is not just turkey, we will apply the same governance in turkey in the same way it is applied globally.
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governanceever the approach in the u.s. or europe, we will apply the same in turkey as well. what is legitimate for them cannot be illegitimate for us. everyone should know this. we will take all of the steps accordingly, we will never let our country lose. think -- the comparison with the united states, is your assessment that president trump and jay powell who is the chair of the federal reserve, does the president speak to j how about interest rates? about interest rates? you have complied it you'll take a much greater role. is there another example of somewhere you feel a model working for turkey -- is there another country that stands out? >> know, there is no need to
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argue. the u.s. interest rate policy is known. we don't need to reinvent it because we have all the information. in other words, we know what the interest rate policies are and of the countries of the world. we are not just discovering them now. therefore, we will take our assessment according to this. we assess what it is in the u.s. and what it is like in argentina, mexico, is ill, germany, and britain. -- brazil, germany, and britain. we will make our own decision accordingly. like. president, i would to talk about politics and what will happen in the upcoming election. we have a presidential election and the parliamentary election. yourself into find a situation where he won the presidential election will we end up with a more mixed picture with the parliamentary election as we did in 2015, would you
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call another round of elections to make sure you secure the parliamentary mandates that the system is almost designed to be set up with? of course, now we have a saying, you do not fold your hands before seeing the stream. we have such a saying. now there is no point at all to foil -- holding the hands before seeing the stream. let's see the stream first. of course, we will certainly have preparations for a result in the way you describe. if it happens the way we planned, of course all of these will happen. it looks at the moment we are doing well. 40 days later, a plan as we wished will emerge and 40 days later, turkey will wake up to a much more different era good --
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era. shery: that was an exclusive interview with the president of turkey. time for the bloomberg business flash. we will kick it off with uber allowing sexual assault and victims to sue the company in court. the company's previous terms of service barred victims from "and redirecting them to private arbitration if 14 women are attempting to sue over sexual assault and harassment from drivers. retail sales gains in the u.s. point to a healthier second quarter. it rose .3% in april and the governments reside -- revised march numbers. it is bigger after tax offset the rising price of gasoline. and the zine says it is disappointed by seattle's revised tax.
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they lowered the tax after amazon threatened to limit its growth depending on the vote. the new tax will bring in $48 million to improve homelessness. the original text that have raised $70 million. starting next year, the police with more than $20 million in revenue will pay to $75 per employee -- $275 per employee. for amazon, that is $10 million a year. your businesss flash update. i spoke to one of the city counselors in seattle who voted unanimously for this tax. and i asked are they worried? she said they are not worried. they are going right where the money is to solve the problem. shery: you are seeing higher prices and homelessness and it could see a problem. a tricky question for the city, ofh the second headquarters
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amazon being announced. many contenders are out there in different cities. amanda: toronto is on that final list of what was 20 cities competing for that grade there is some debate year whether it is good to the city to attract a large business like that for the .ery reasons, it raises costs we just learned that arlington may drop out of the bidding for hq to. make -- hq2. shery: we will talk about another company, home depot because cold-weather is to blame for the lackluster results. our -- are they a cause for the u.s. housing market? . we will have more on that next. this is bloomberg. ♪
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amanda:
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amanda: this is "bloomberg markets." i'm amanda lang in toronto. shery: and i'm shery ahn. home depot shares lower. the retailer is looking at its outlook and warmer weather has already driven double-digit sales this month. our senioris analyst. great to have you with us. what is your teams forecast for the company? remainingstill positive on sales growth for home depot. it was related to the weather. they are already seeing significant growth in may and they have tailwinds in their favor, house information, and there is a lot in their favor. i think sales just got delays -- delayed. amanda: one of the reasons this because itwatched is is seen as a proxy on the housing in general. we have seen price movements where we have seen that we should not read it this way and it is not the beginning of a
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slowdown? seema: in the housing market? i don't think so yet. concernbe a little more , but they are seeing a rebound in sales growth. i feel the housing market is probably ok. amanda: what i shery: what is the strategy of home depot that it will perform better going forward? seema: they are focused on the consumer which would be a contractor which is 40% of their sales. they are seeing strength in that as well as retail consumers and people see more value in their home and they are starting to improve their homes, particularly because many our home in the united states. they need to have work done on them. home depot can benefit from that. amanda: one of the interesting equations is that as interest rates go up, we will see the
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effects of lower taxes coming in . it may be hard to know how that will balance out. may it offset the rising rates? toma: i am still hesitant give emphasis on the tax cut because gas prices have gone up and a lot of that consumers are doing is going to health care and housing costs. i am not sure that it necessarily goes to discretionary spending, but in not cases home people might be discretionary. that is another benefit for them. when we look at the macroeconomy of the u.s., it is going well. you'll get the tax windfall. this could be a good support for home depot going forward? seema: yes, absolutely. shery: what are some of those trends? seema: as i mentioned, prices going home so people feel more value and
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want to invest. those are probably the biggest ones. thank you very much for being with us. coming up, an exclusive interview with the fed president at st. louis. g tv is the function on the bloomberg if you missed out on any of the charts we brought out. toronto, new york and this is bloomberg. ♪ mom, dad, can we talk?
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sure. what's up, son? i can't be your it guy anymore. what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. seems a bit long, but okay... set a memorable wifi password with xfinity my account. one more way comcast is working to fit into your life, not the other way around. scarlet: in 7:00 p.m. in london. i'm scarlet fu. lisa: i'm in for julia chatterley. welcome to "bloomberg markets." ♪
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scarlet: we are live in bloomberg world headquarters in new york over the next hour. here at the stories we are covering on the bloomberg and around the world. cook on the record. tim cook opens up about his recent meeting with president trump at the white house. miss. the long and brutal winter didn't just ruin your all fresco spring flan -- plans, a chilled home depot sales. the one, the central banker in a bloomberg exclusive. he says he will tighten his grip on the policy including monetary policy if he wins an election next month. we have u.s. markets closing into ours. abigail doolittle is tracking the moves. we got a late lower. abigail: we're looking at a selloff. near session lows. the dow, s&p 500 and nasdaq lower by 1% or more. scarlet's point, a small leg lower to those session lows.
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the worst day in three weeks for the major averages following last week's big rally. lots of volatility. let's take a look at the 10 year yield. this chart is remarkable. up 11 basis points. that's a backup and rates. what makes it interesting, rates trade in verse two price. that tells us bonds are selling off as stock selloff. investors not liking the possibility that the rates could continue to go higher, caza repricing of risk, cause investors to question the valuation on stocks. february for we are seeing it today with the 10 year yield at levels last seen in 2011. it's influencing the specter of for the s&p 500. if we lot -- happen to the bloomberg -- hop into the bloomberg, all 11 sectors are lower. on bottom, real estate, that is a high dividend yielding sector. it does not look as attractive
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relative to the 10 year yield. higher.d's financials have been the best sector, down slightly, flipping with energy. that sector benefits from rates train had -- trading higher. financials not getting a boost. as for the worst drugs for the s&p 500, let's take a look at the big drugs -- drags. down 8%.rement company its worst day in more than a decade. this is after the company did seeing --alysts not liking that. i should mention, there are two those shares.ding nvidia down 2.5%. d.r. horton and lennar, scarlet was mentioning home depot missing revenue sales, that is causing some to wonder whether or not their softness for the u.s. housing market is causing homebuilders to slide in a big
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way. look at d.r. horton down 7%. has brought interesting aspects to the s&p 500 technicals. if we happen to the bloomberg and use the gtb function, this is a one year chart of the s&p 500. a beautiful uptrend. this year on these volatilities i was mentioning as rates trade higher, we see the s&p 500 is back on that 100 day moving average. very much appearing as though it will go to the bottom of the range, that are some are calling between 2600 and 2800. maybe back toward the bottom of that range as rates climb higher. lisa: thank you so much, abigail doolittle from goldilocks to inflation worries in a couple days. let's go to the first word news with mark crumpton. mark: thank you. the huge number of wounded protesters in gaza is putting extra pressure on gaza's already stressed hospitals. medical officials say all operating rooms have been working around the clock and their are many wounded people waiting for treatment. officials say the hospitals are
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facing and equipment and medication shortage. to the u.n.isit european union headquarters, secretary general antonio gutierrez was asked about the bloodshed in gaza. a terrible tragedy. i'm deeply sorry for all the victims. it shows how important it is to have a two state solution allowing israel -- israelis to beefed-up security. renewingsident trump's his push for congress to secure america's border. the president made his comments during an annual tribute to law enforcement officers killed in the line of duty. president said government's first duty is to protect its citizens. he called on congress to support border patrol agents, stop so-called sanctuary cities, and end policies he says release criminals back onto the streets.
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there is a new danger for a residence near the big island of hawaii. officials say some vents formed by the volcano are releasing such high levels of sulfur dioxide, that the gas poses an immediate threat to anyone nearby. about 2000 people have been ordered to evacuate since the volcano began shooting lava on may 3. global news, 24 hours a day, on air and at tic toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. lisa: thank you so much, mark. we are most of the way through this earnings season. it has been impressive by many measures. if you want to take a look at a bloomberg terminal right here, you can see that more s&p 500 companies are beating earning estimates than ever before. 79% so far have had a positive surprise in this s&p 500. that is the biggest surprise ratio since going back to 2009.
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u.s. companies seem to be very -- in very good health or why are investors so nervous with those big declined steadily? joining us to discuss is mona mahajan, u.s. investment strategist for allianz global investors. indexes and they read today. people really skittish. why? said, earnings this quarter are phenomenal to we came into the quarter looking for a 17% number. we are now at 24% year on year growth. driven by energy financials, technology and materials. what we are looking at today is what we have talked about in the past. it is a consolidation of a good week last week, but we have also had rates hit 308. lisa: do you buy that that is what is causing the selloff? stocks,en you look at they are basically cash flows discounted at a risk-free rate. when the risk-free rate moves upward, yes, you can see stock valuations come in.
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as you get rates moving higher and higher, you start eating into the real economy. on the consumer side, you look at auto loans, mortgage loans, and on the corporate side you look at spending. perspective and a real economy perspective, rising rates can actually bite into a market. we are seeing that today. scarlet: we have seen that, sure. the skittishness came before rates got to mere 3%. there has been nervous in general over the lack of revisions from the companies. it is april. that tends to be normal that companies don't have great visibility on what will happen the second half of the appeared why is it different this time? mona: i think there are a couple risks that have emerged. you can't discount the geopolitical backdrop we are facing right now. not only the iran nuclear deal, we are also looking at the chinese trade tensions. we also have d.c. political turmoil, midterm elections are
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looming. that is causing skittishness. when you think about the earnings picture, what we are looking at, 24% this quarter, and 24% probably for 2018, but when you start looking beyond two 2019, 2020, next year numbers fall to 10%. in a rising rate environment, you think, when will this hit the real economy? lisa: ddp starts coming down. if someone tuned in right now and they heard you talk, they would say that she is really bearish. i read your investment report and you are saying, it is funded by stocks. reconcile this? mona: we are toward a late cycle environment. in the late cycle environment, historically stocks have done well. s&p on average, in a fed tightening cycle is up 9%. the year after fed technical sightings can be up another 16%. when you look at an indicator like the inversion of the yield curve, usually you don't hit a recession until 18 months after
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that yield curve is inverted. what we are looking at is yes, and late cycle environment where you will have volatility in rising rates. you will probably have sector rotation. what you can still have equity markets that perform well. in terms of the high-yield side, we think since the recession is 12-18 months out, you can still do well in high-yield markets, given there is not a difficult cycle looming on the horizon. that is how we square it out. scarlet: when you look at the backdrop, and this is a chart you included in your packet, you look at global growth and it does appear to be softening. the u.s. economic surprise index has flattened. europe has started to come down. that is the blue line. that has dragged in global indicator lower as well. how are investors positioned here? if this synchronized global growth story is faltering, how are investors positioned? have they been commenced of the global growth story and not ready to make that transition? mona: we came into the year, we
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looked at two sources of growth. one with tax reform, the second was a synchronized global growth story. that would help global stocks. i think what we are seeing here is the synchronize global growth story may be faltering a bit. when you think about positioning, we have seen yen selloff recently and that is due to the rising dollar strength. but also in terms of europe, was i think, something we are looking at closely. they softened quite a bit. part of it is due to the chinese trade tensions. some of it is due to the currency issue. there is also talk about it being due to weather and flu related issues. we think about the region globally. we still like china. we still like asia. there is some strength still globally in addition to the u.s. lisa: i love that people are blaming the flu for softer growth. that's fair. i got the flu. it was pretty bad. i wanted to talk about something that you said earlier which is
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at a certain point, when 10 year treasury yields hit a certain level, it not only starts to eat into equity valuations but also the real economy. what is that tipping point as we head to the highest since july 2011? mona: there have been several sources of analysis done on this. one thing we look at is the s&p dividend is 4.8% -- i'm sorry, s&p earnings yield which is the inverse, that is 4.8%. and you look at a treasure yield, that is 3.1%. we are nowhere near that tipping point. the other thing we look at his mortgage rates. if aanalysis shows mortgage rate hits 5%, that is when we may see a slowdown in the housing market. if you do spread correlation, that is roughly 3.5% on the 10 year yield. that is kind of what we are thinking about. 3.5 percent to 4% is where we can start to feel a bite in the real economy. we are not there yet. now we have reached this technical level of 3.05. we may start moving in that
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direction. scarlet: our thanks to mona mahajan. thank you so much. let's take you to capitol hill where we have the republican leadership meeting right now. if we could show you what is happening in washington, there we go, let's listen in right now for a little bit here as we listen to the senior republican leadership. >> the vote is 64 bipartisan votes in the senate. he was number four of the cia whereas when she was there, at this particular time, she was the equivalent of gs 15, roughly a major lieutenant colonel. obviously, not a management person when it comes to running the cia. i think the democrats are running out of excuses to block this highly qualified nominee. i hope more of our senate democratic colleagues will come across the aisle and support her as they should. is the leader pointed out, we had a good discussion with the president today. as the leader also mentioned, a
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lot of it had to do with what is happening in the economy. i think the president rightfully can take great credit for significant strides we have made. if you look at the economy today, i think it is a reflection that a progrowth, pro-jobs agenda can make a profound difference in the lives of the american people. unemployment is at a 17 year low. in the month of march, there was a record number of jobs created, 6.55 -- i should say number of jobs listed, 6.55 million job listings. a new record. there have been almost 3 million jobs created since the president took office. about 800,000 since tax reform passed last fall. on the jobs front, on the wage front, on the wage friend, on the growth and economy friend, there has been a lot of progress. you compare that to where we were in a few short years ago, and you can see where a progrowth, pro-jobs agenda makes a difference in the lives of the american people. we want to work on that. the president does as well. economy, focus on the
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keep that focus on jobs, keep that focus on wages. howamerican families, and we can improve their standard of living and their quality of life by putting policies in place that allows them to keep more of their hard-earned money in their thatockets in an economy continues to grow and expand and create better paying jobs. we had a productive meeting with the president talking about a number of things happening at home as well as around the world. we talked about iran, the new as well asjerusalem, what is happening in north korea. the focus was on the economy. the fact that we have a strong, healthy, growing economy, an american first economy based on tax cuts, cutting red tape where we have unemployment rate at 3.9%. the lowest in 17 years. consumer confidence at the highest it has been in 18 years with the 3 million new jobs. at the same time, nancy pelosi has said what she wants to do is
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eliminate the tax cuts. she thinks the government has a better idea of how to spend the money than individual people at home. we will continue to fight for growing economy, a stronger economy, a healthy economy, with a larger paycheck and more prosperity here at home in america. this is police week. when senator kunz and i came to theress, we created bipartisan law-enforcement caucused or one of the things the president mentioned today was his chance to meet with all of those people who are here. many of this people here this week, for police week. it's a good time for us to remember the capitol police, all they do to secure the place we all work in everyday, and that people visit every day. still, the most open seat of government anywhere in the world. what they do -- scarlet: we have been religious listening to republican senators following a meeting with president trump.
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discussed international events with the president, including iran, the new u.s. embassy in north korea -- in jerusalem, and the north korea. and how things are getting better. job certainly, and growth. lisa: who knew that it was police week this week? scarlet: thank you for pointing that out. certainly this will be something we continue to keep our eyes on and if you want to check it out, i believe it is on live go on the bloomberg. from new york, this is bloomberg. ♪ mberg. ♪
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lisa: this is "bloomberg markets." scarlet: in an interview for the david rubenstein show on bloomberg television, tim cook says the company will inject
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$350 billion into the u.s. economy over the next five years. ande are investing investing a 10 in this country. going to buylso some of our stock because we view our stock is a good value. from a shareholder point of view, if we can buy stock from people that think it is worth less than we do, then that is good for the company. actually, it's good for the economy as well. if people sell top -- stocks, they pay taxes on their gains. scarlet: he opened up about his meeting with president trump. >> i met with the president the next day. know, i would not want to say what he said because i don't -- that's not the way i look at it. but what i talked about was i talked about trade, in the importance of trade and how i felt that two countries trading
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together make the pie larger. and that it is true, i think undoubtedly true, that not everyone has been advantaged from that, in either country. we have got to work on that. tariffselt that the were not the right approach there. i showed him some more analytical kinds of things to demonstrate why. we also talked about immigration. of fixing theance dreamer issue now. we are only one court ruling away from a catastrophic paste there. scarlet: you can watch the full interview with tim cook in the new season of the david peernstein show, peer to conversations in june. let's follow that conversation and get insight into the business community's response to
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trumps tariffs from michael mckee. tim cook, not the only one who doesn't think that tariffs are the appropriate response here. you have been monitoring this. there have been so many people, so many companies and trade organizations responding negatively to tariffs but they had to expand the hearings. michael: the hearings are part of an ongoing series of events that will culminate in the publication of the list of the 50 billion in tariffs but the trump administration says it would put on china. toy did have to extend it three days because 120 company signed up and you can look at the old sitcom line, hate it, that's the general feeling. there is a reason why. let me show you this graphic. you can see it onto tv. it is the value add. this is what china adds to the manufacturing process. there we go. just under 7% of the value of an item that is imported in the united states is added in china.
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much of it is stuff that is either made here, shipped to china to be assembled or made in other countries shipped to china to be assembled. then it comes over here. this tariff regime would affect a lot of companies around the world including those in the united states. they are not excited by that possibility. lisa: i was surprised some of the companies in the list of haters including u.s. steel corporation, others considered manufacturers that could benefit from some of the measures. michael: some of the steel manufacturers like this -- like it. the aluminum and steel tariffs will not hit china because we aren't you have tariffs on them. most of the other manufacturing companies say this will make it harder for us to source the parts we need to send stuff back over to china to be reassembled and be brought back here. it will raise costs per don't have pricing power. it will compress our margins. they are not in favor of it. they look at tariffs as economists do. a tax on consumers. that may be they can't pass
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along to consumers this time. it is not going to stop the chinese from doing what they have been doing. lisa: are thank you to michael mckee, bloomberg economics and policy correspondent. from new york, this is bloomberg. ♪ bloomberg. ♪
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scarlet: this is "bloomberg markets." i'm scarlet fu. it's time for the bloomberg business flash. a look at the business stores in the news. tampa 2 is go fed president john williams reiterating his view rate hikes are appropriate for 2018. he says he is positive about the economic outlook in the u.s. and abroad. investors expect the fed to raise interest rates on june 12 and 13th. on june 18, he will become the head of the new york fed. coinbase is developing a new tool to attract institutional investors. some of the tools include custodial services that will allow investors to store large amounts of digital currencies and more trading abilities such
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as risk management and margin trading. coinbase became the best-known currency exchange in the u.s. by bringing but going to the masses. cap has apologized to china for a teacher that offended the country's political sensibilities. the t peart -- t-shirt featured leaving-- map of china out parts of it. that is your business flash update. lisa: coming up from blankfein to j lo, stars gather for robin hood's charity gala. we look at that and more an hour wall street beat from new york, this is bloomberg. ♪
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lisa: from bloomberg world headquarters, this is "bloomberg markets." commodity markets are closing in new york. today assilver singing
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the dollar strengthens on the back of manufacturing and retail sale numbers that failed expectations of higher interest rates from the federal reserve. let's shift to soft commodities where dry weather is expected to continue this month in brazil. that is making investors bullish on sugar. sugar up 2.3%. sugar bulls are relishing positive day they get because sugar is down 25% this year, being drowned i surpluses. a quick note. -- by surpluses. a quick note. a weekly show hosted by alex field that captures the stories and trends. catch it every thursday at 1:00 p.m. eastern. let's get to first word news with mark crumpton. mark: thank you. ahead of an emergency un security council meeting on gaza, the french ambassador warned conditions in the middle east and the gaza strip does what he called a perfect storm. what is happening in gaza only reinforces the radical and potentially terrorist
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organization in the region. threat to peace and security we are confronted with, the security council must take responsibility. it can no longer remain silent. if the security council is not allowed to deal with such an issue, then when should it be? the: he added that situation in gaza "only confirms the urgent need for political horizon in the conflict." president trump's pick to head the cia says the agency's enhanced interrogation program " is not one the cia should have undertaken." gina haspel comments came in a letter to senators. she has learned hard lesson since the 9/11 attacks. john mccain has urged his colleagues to reject her nomination, because of her past
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role in cia interrogations. german chancellor angela merkel informed israeli prime minister benjamin netanyahu today that her administration will remain bound by the nuclear deal with iran, as long as tehran upholds its side of the bargain. the u.s. withdrew from the citing allegedk, evidence presented by israel of iran's nuclear program. in a phone call with netanyahu, merkel noted are many shares concerns about iran's holistic missile program and its destabilizing role in the region. she also condemned recent iranian attacks against israeli positions in the goal line heights -- goal line heights. built has be will be sentenced on september 24, five months after he was convicted of sexual assault. his lawyers have asked to delay sentencing since his -- since december. he turns 81 in july and is likely to face a sentence of up to 10 years in prison. he is under house arrest and has to wear a monitoring bracelet.
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he reportedly allowed only dutch is only love to meet with his lawyers or doctors. only alloweddly is to meet with his lawyers or doctors. global news, 24 hours a day, on air and at tic toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. thank you so much, mark. we turn to wall street where we cover three things wall street is buzzing about your first step, the commodities queen abdicates her thrown. goldman's cohead of securities the parts the firm marking the end of an era for bankers battled for profit supremacy. touchdown tupper. he closes down on a deal with carolina panthers. he keeps the total amount raised at the robin hood foundation charity gala a secret. here to break it down is peggy collins, she leaves are u.s. investing team to we love having peggy on. let's turn -- start with is about. she was one of the co-heads of
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the security division. she said she will be stepping down next month. how big of a deal is this? peggy: i think it's a big deal in the sense that it is an end of an era for some of the traders that made their name on wall street at a time when commodities were really rising, but also compared to now where we have heightened regulations and tougher trading conditions for commodities. it's really interesting in the sense that she started her career in commodities because she loved to travel. according to our report yesterday that came out, and also that she started the company and started to rise through the ranks at goldman, becoming a partner at age 37. one of the top revenues producing women for the bank who is stepping down. which i think is another key point. we haven't had that many women on wall street who are really revenue producers could we have seen a lot of people rise through the ranks but not those that are touching the money in a way that she was. she: she ran scarlet: --
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ran goldman sachs which may more than $3 billion annually. this was the same division that stumbled in 2017 and has only recently found its footing. peggy: a dire 2017 for that unit. cohead ofwas securities overall, a remains close touch with the commodities unit. she is not exiting at a time where it is completely dour in the sense that in the first quarter, the commodities unit did better. fixed income had one of its best quarters in three years. lisa: there is a big question here about whether this is the end of an era in a bad way, meaning it is negative for the bank, or whether these underperforming units in the two coheads that were least performing were exiting as a result of that. do we have any color on that? peggy: i think it remains to be seen. i think across all units and banks and in trading divisions, they are adapting to a i and lots of new features. they are bringing in new blood
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in a lot of cases to adapt to the new structures and world we see. scarlet: i think it should also be mentioned that after goldman sachs tapped david solomon to become the sole ceo and president, you might have a lot of shift within the personnel. have been might aligned with lloyd blankfein or harvey schwartz who left, could be moving on as well. lisa: it's also interesting because goldman has cohead subunit. now, they are going to cingular had models going forward for the security divisions. it is interesting. we will see if that lasts. let's shift to more wealth news right now. -- speaking of wealth, david tepper in the spotlight saying that he agreed to by the carolina panthers for $2.2 billion. i have to wonder, is as a vanity project or is this a savvy investment? peggy: we have seen more sophisticated investors come
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into the sports arena space per one of the reasons for that is media rights. we have seen people buy out sports teams for the trophy rights. we are seeing people make investments in these teams as of their entertainment industry. it's one of the few things people watch live on tv. there are a lot of meteorites. there are a lot of retail opportunities around stadiums to build up. i think it really is something that people actually see as an investment as well as fun. there is no doubt that being the owner and at the super bowl is definitely a highlight. scarlet: he is no stranger to the owner's box. he is a minority owner in the pittsburgh dealers. -- steelers. it is not as if he doesn't have experience. peggy: it has to be hard to give up your hometown team. he has migrated south or use one of the first hedge fund managers to move to florida in advance of some of the tax changes we saw. he is based in florida. --be he is grappling
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grabbing the carolina panthers to be close to the sunshine state. must be approved by three quarters of the nfl's owners. it's not a done deal. our people expecting there to be resistance? margaret: i haven't heard much about that. it seems like he is one of the front runners right now. still running his appaloosa hedge fund -- hedge fund. scarlet: the other bidders include the navarro and ellen kessinger who is a billionaire from his mining company. let's talk about the big event last night which was robin hood event. anniversary of the new york city-based antipoverty charity, founded by someone. do we know how much money was raised? in previous years they disclose that. secrett: keeping it a this year. speaking of david tepper, i think he was there last night. it is a hedge fund gathering of sorts. a number of the hedge fund managers are backers of the nonprofit. we certainly have seen it grow and grow over the years.
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i think and if her love has performed last night. lisa: thank you for translating that. i was struck by paul tudor jones. he was one of the speakers. he explained why they are not revealing the total that they are raising. he said, the amount isn't important, to hell with that, it's the work that matters. that's the reason why they are -- they abandoned the tally. margaret: they are one of the forefront nonprofits in terms of solving anti-poverty issues. investing is hard. solving poverty has been one of the hardest things to figure out. lisa: peggy collins, thank you so much. we love having you on. coming up, home depot's deep-freeze. how the long winter is hitting the retailer. more next. this is bloomberg. ♪ this is bloomberg. ♪
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is "bloomberg markets." scarlet: we are watching the 10 year treasury. the yield has been zooming higher as the selloff deepens. you're looking at it -- it's above 3%. lisa: look at how at 8:30 p.m. people digest at the data and traders reposition their books. it only climbed higher. the highest since july 2011. lisa: it makes you wonder where the next level is. scarlet: let's bring in our sector spider report abigail doolittle. you are going to key off the higher yield when you look at the sectors. abigail: you are right. yields are a big peas of what we are looking at. that is the real estate etf.
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spider to wector see the xlr e is down 1.7%. its worst day and more than two months. the double way me. firstly yields you were talking about, let's take a look at the today chart. this is a stringer. we have had a huge backup in rates. not so long ago at the session highs. but held as even bonds sold off. inflation fears, repricing of risk fears, lots going on here. but also, really putting coolness on the real estate sector for a couple reasons. of course, selling homes with rising rates, not the easiest thing to do. also, if we take a look at the movers in the space, we are going to see a few of the reefs. these are the worstthese are ths for the real estate sector in the s&p 500. the worst sector for the s&p 500, take a look at that. down 3.5%. -- yield.nd reeled
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when the 10 year yield climbs, others claim. investors believe is dividends look less attractive even though it outpaces the 10 year yield. rateti family apartment also has a high dividend yield. that helps to explain the decline. look at the home builders. this is extraordinary. the homebuilders getting hit by rates rising. that can put a damper on homebuilding activity from a homebuying perspective. plus, turning to our stock of the hour, home depot. this is a drag on the dow and s&p 500. down more than 1%. modest when we take a look at some of the other stocks. is homeshould note depot, they missed revenues by almost 1%. they did put up almost $25 billion in revenue. that is impressive. sales missed 4.3% versus the estimate of 5.6%. there is talk that cold weather hurt. there was also the idea that as the weather warms, as it is today, pretty warm out there,
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that it could help the company. investors not liking that. it is dragging on the home sector because it is often seen as a proxy for the u.s. housing market. that is where i wanted to go with this. considering the fact that they cited their gardening sector as a drag. is it really a proxy for the housing sector? abigail: such a great question. when you hear it, it makes sense. we have a terrific chart that may suggest the homebuilding sector could be leading home depot. let's hop into the bloomberg and use the gtb function. we are looking at is in white, we have home depot. in blue, we have the homebuilding sector. we see over the last year or so, they have tracked each other nicely. this year, as rates have been rising, we have that homebuilding etf dropping down. home depot had done that a little bit. now there is as a divergence. the question is, are home depot investors correct to be having this move up even though we have a drop today? or are the homebuilding investors correct?
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with rates rising, if that really does slow homebuilding activity. pending home sales, little bit of a disappointment. that is forward-looking of the housing market. it makes it just home depot is falling. the housing sector as opposed to being intel. chartard to tell you this with suggest the home-building sector, the housing market in control ahead of the home depot. scarlet: it also depends on what etf you look at for homebuilders. different ones will show -- are made up of different companies. for instance, what you were showing us. it includes home depot, -- lisa: bed bath & beyond. scarlet: and other etf's only have the builders themselves. it is a real interesting mix on what you use. abigail: that's a great point. lisa: that's a fascinating chart. scarlet: it really is. abigail: a divergence is interesting to me. you want to understand.
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it will be needed to understand this better. but worth keeping an eye on. scarlet: abigail doolittle, posing difficult questions that can't be answered at the moment. a reminder, about one of our great functions. willo, that is where you find our exciting turns we see and we make on the bloomberg. we have mike mckee's chart on how it is not just chinese made, it is only 7.4%. kind of a surprise. we also have other charts available on gtv go. a surprising season about the earnings season that lisa highlighted at 79% of companies are eating and -- beating investments. this is bloomberg. ♪ loomberg. ♪
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scarlet: this is "bloomberg markets." i'm scarlet fu. fighting gender bias is no laughing matter, especially in comedy writing.
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she has written a memoir of her own, called "just the funny parts." it tells the story of how she broke into the hollywoodshe hass club and the lessons she learned. in today's business of equality, bloomberg's in-depth look at the impact of diversity, i sat down with her and asked about the message she set out to send. nel: i thought it was a lean in case study. is some unusual aspects to my story. my husband stayed home with our kids. but also the backdrop is pop culture. i can give all these tidbits the storiesaled behind the scenes at the simpsons and ncis, and the night withd late david letterman. i thought people will come for the simpsons and stay for the feminism. scarlet: that is exactly what you did. let's talk about david letterman. you begin the second woman hired to write for the david letterman
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show in 1990. it was a dream job that soured quickly. what happened? nell: the first day of walking to 30 rock where they shot the show was one of the happiest days of my life. i was liz lemon. was a workplace that was hostile to women. my first day on the job -- i'm just trying to blend in, be one of the guys, a colleague stops in to chat with me. at the end he says to me, before this is over, i will see a tampon fall out of your purse. mystified as to why anyone would say this to me. it took decades to figure it out. why am when it -- working with sarah -- sheryl sandberg and she teaches me about if you remind people that you belong to a group that is stereotypical not good at
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something, it creates and zaidi and they perform worse. the best example is we say girls are not good at math. theou give boys and girls math exam and on the first page, ask them to check off the gender, the girls will do worse. scarlet: you wrote about this in 2009. eight years before the "me too" movement. did letterman himself or the production company ever respond to you directly in any way on this? nell: directly, no. an anonymous late show staffer went to the press and said i quit because i was going to be fired. which was ridiculous. my option had been picked up. what was kind of funny as i write to this piece saying, back in 1990, i felt demeaned. then in 2009, they turn around and demeaned me again. scarlet: it's like, no one
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learns from the cycle are you did see evidence that david letterman, j l, all these guys at the top of the game, started to understand how being on the outside felt. they too were being aged out of their jobs. nell: they too were replaced by a less experienced man. i think it was a lot of lip service. letterman has a new netflix show, and i noticed there are four executive producers, and none are women. scarlet: so that tells you everything you need to know. it's a golden age of television. your book is as much a how-to guide for how a female writer should navigate the process, including responding to feedback, dealing with network executives. for women, talk about what has changed and what needs to be improved? nell: there is a lot of discussion that there is a pipeline problem. i don't buy that. i call it a broken doorbell problem. is the talent is there for
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women and people of color, on the doorstep, ringing the doorbell, and no one is opening the door. we just have to knowledge that. there is no doubt in my mind that diversity makes shows funnier, more dramatic, stronger, and better. relatable. scarlet: if you have more people of different backgrounds, you reach out to a wider audience. nell: right. you have more experiences to delve into. belief that there aren't more women in late night because all the hosts are white men. i said, but you are not writing for the hosts. you are writing for the audience. the audience is not all white men. scarlet: that's a good point. there has been a lot of focus on inclusion writers. do you think that is something that would be helpful for comedy writers? nell: yes, i love inclusion writers. i'm on the board of the which is institute,
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run by stacy smith created the inclusion writer. it sets goals. it puts those words into action. it says, if we do not hit these inclusion diversity goals, we will be -- accept your punishment. scarlet: that was common a writer and author now scovel. lisa: excellent interview. i love your interviews. it is time for the bloomberg business flash. a look at the biggest business stories in the news. amazon has adopted a new policy that will consider women and minorities for all open seats on its board of directors. the company has been criticized for opposing a shareholder proposal to adopt a requirement similar to the nfl's rule. it will require teams to interview a minority candidate for their staff. amazon says its new policy formalizes a practice that is already in place. bill ackman says breaking into technology into three parts make sense. the sentiment echoes fellow activist investor third point,
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he says be aerospace elevators and climate control businesses would trade at attractive valuations and operate more effectively. ackman also said he was building a new position in an undisclosed firm. that is your business flash update. scarlet: while lisa was talking, i was looking at the 10 year yield. it has come off its best levels of the day. 2:18 p.m., itout hit a high of 3.09% to 3.07%. people are amazed at the selloff. lisa: maybe we found are resistant point. scarlet: perhaps for now. this is bloomberg. ♪
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-welcome to bloomberg markets.
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we are alive and bloomberg world headquarters over the next hour. taking the plunge, u.s. stocks fall to the most in three weeks. we speak to former nba commissioner david stern and his business partner. and tightening kids grip on turkey, the president of turkey says more control of the economy in that move to lyra. let's get a check of the markets with abigail doolittle. really pressuring stocks, the major averages are deeply in the red. more than 9/10 of 1%. not too long ago, all three
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major averages were down more than 1%. the big story, 10-year yield. 10 basis points. you do not often see growth stocks selloff. but as the back up, investors are eyeing the possibility of inflation and every price of risk, causing a tailspin for stocks of this point. it is also causing a tailspin for homebuilders. their worst days in 2015, rising rates does not help homebuilding or home on buying the activities of so we are seeing big declines. home depot down more than 1%. that is not helping the amebuilders or the fdr as
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some feel that may be proxy for the u.s. housing market. weakness for this sector. writing rates are helping. we are going to see financial stocks trading higher. some of the regional banks tend to be more sensitive to the rising rates or decline in rates , but it does affect the nets margin interest to so we are seeing it move up for the regional banks so there is one pocket of strength. hopping into the bloomberg, something interesting is happening because back in the big when we had selloff in stocks, there was a 2-10 spread that rose sharply higher. that caused the s&p 500 to drop, in white. tightened, but now
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we are seeing get to widen again. we are not even at levels for the 2-10 spread. if that continues, we could see continued volatility. let's take a look at the influence of the 10-year yield, gold, bitcoin, and the vix. multiple day in a row, rising rates really boosting the dollar as it should be the case in a traditional sense, but that correlation really established, not helping gold. as ans often seen inflation buster, it is trading lower, the dollar trading higher. bitcoin down by 3.6%. vik spiking higher. >> thank you.
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let's get a check of first word news with mark crumpton. mark: u.s. ambassador to the united nations nikki haley is accusing iran of backing hamas on israel the forces that forces.-- on israeli those who suggest that the gaza violence has anything to do with the location of the american and -- the american embassy are solely mistaken. it is the state of israel in any location -- is such a motivation the destruction of a united illegitimateis so to not be worth our time in the security council other than the time it takes to denounce it. this is a day after
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israeli troops killed nearly 60 people in gaza and the bloodiest the day since 2014. turkey has asked the ambassador to leave temporarily. is prepared it to take in israelis and wounded -- israelis wounded at the border. strongly condemning the u.s. relocation of the embassy to jerusalem and israel's use of deadly force. accused ofr veteran killing five people and injuring six in 2017 has been found mentally competent. he will plead guilty and in exchange for the plea, he will receive a life sentence. he could've had the death penalty for the shooting.
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drove a putin construction truck today to road bridge -- transportation between russia and crimea the. crimea the cheery are -- deteriorated. global news, 24 hours a day powered by more than 2,600 journalists in more than 120 countries. i am mark crumpton, this is bloomberg. scarlet: up next, full-court press. we speak the nba commissioner the former head, david stern. this is bloomberg. ♪
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this is bloomberg markets. the supreme court struck down a federal law that banned sports betting, so we want to bring in former nba commissioner david stern. sales reporter ed hammond is with us as well. great to have both of you with us today. david, let me start with you. out front ineen terms of the sports leagues anticipating that sports gambling would be made legal. your successor has certainly been looking ahead in shifting to stance on this. talk a little bit about the what needs to be set up in place for this to be a success from the league's point of view.
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david: there are two potential frameworks. one is having some number of jurisdictions, 20 or 30 each of setting up their own system and having a commission or some other form appointed by a governor. scarlet: that sounds, dated. david: -- that sounds complicated. david: it is, located. -- it is complicated. the other hand, it would be great if there is one single federal regulated gambling system and states could opt in. >> before we get into the opportunities this could open up, i want to talk about the liability. what is the risk that the ref minute relates the game or somehow gets kickbacks?
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reality is the focus of attention on the sport, because of all of the people who are engaged in statistics and video analysis and the like, will more manpower and that is why the states -- of the leagues have been saying that they would like an integrity fee because they need to do additional work. i do not think it increases the risk. have --rea we already and was at gambling is already around college sports, if more legal money comes in the college sports, is that something where we could finally see college athletes being paid or is that too much? >> that is a separate issue of whether they should be paid or not. that is of the commission on college basketball recently dr. from determining. ducked, yes -- recently
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think, yes,ning. i that is going to be upon us. >> don i would love to give your thoughts -- get your thoughts. helpould this potentially entice acquisitions or mergers? >> it is a cliche but it is a win-win. >> of course, it is. activitye seeing that for the last nine months and we've been talking to folks about the sports betting and the opportunity that may come. lots of people are interested, whether it is online gaming companies in europe, the u.s. companies here, the leagues, people investing in the teams, so from our perspective, it is activity. does this go this ruling mean for the value of sports franchises in the nba,
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nfl, mlb? >> there is indirect and direct ct.ied a direct -- and dire a sponsorere are dollars, but indirect, there is engagement. consumers make legal bets, they will be most likely to watch the contents, that leads to ratings, and better sponsorships. the leagues will win no matter what. >> idle question on the leagues, a lot of these franchises are very successful -- i have a question on the leagues, a lot of these franchises are very successful. another way that a league potentially monetizes going public, is that something we will likely see? they can get a lot of investment. scarlet: like facebook are most tech companies. >> david should be answering
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this question but i will give it a shot. >> i cannot wait. [laughter] at some was discussion point that the ufc might think about the going public. i think the structure of the leagues makes it difficult. david: the leagues are a partnership for the most part, but the reality is that we have individual franchises that are public. >> green bay packers. >> madison square garden. the boston celtics were a limited partnership, so i am sure it will be looked at. the structure is working the way it is. scarlet: when we look at how other countries have incorporated legalized betting, i think of the u.k. and how that might provide a template. is that the framework we might to, or is technology changing? >> technology is changing
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is tooing and don modest, he has been responsible for certain acquisitions and mergers that involve online allowg and companies that you to do certain things with the touch of a phone. at ank we are coming in different place and there is going to be a fair amount of -- cellularell device to place a bet. i know in the u.k., you can place a bet in the stadium. is going tow what happen here, and the new jersey law talks about casinos and racetracks so will have to see how that develops. >> i am struck by david tepper's purchase of the carolina and i wonder how much of this ways into a decision like this to make in a position.
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there is a lot up in the air as far as how much the team and can draw from its own intellectual property. can you speak about that. buying an nfl or nba franchise come you are buying a piece of the league. the league itself has the llectual property. franchiseeen the values go up and there is no question when david is doing his work, he thinks about, there is this content, how are we going to monetize it? >> david tepper. >> david tepper, excuse me. there is international growth and what the league tries to do is figure out as many ways as possible for cash flow. david, you are an investor in sports cars. game andatch a sports
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instead of listening to commentator a, i could do my own commentary. how do franchises monetize this opportunity? there on sportscaster, are so many involved in this space whether it is the -- ai.s vr or it is going to be an explosion. i'm advising companies in all areas but in your case, it may be that the networks themselves will do it. we are going to halftime, do you want to listen do ed -- to ed, don, or drake? i know how that is going to come out. [laughter] >> because of his accent. but iot going to repeat, will listen to anything i do not
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to listen to x. it is kind of interesting but sportscasters is going to lead a revolution of what fans are ultimately going to be satisfied with. imagine if we decided to do a halftime without commercials. that is interesting and going to be viewed harshly by the networks. they are going to include the ability to have different announcers. that we see mean the end of people getting gameser in bars in because people are doing their own think. -- their own thing? >> no, i do not think so. that is a march that will take several decades. were talking about how there has been a lot of interest, i was wondering if you can quantify how many more
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team-based deals you see getting done this year versus prior years. say, many times teams trade for different reasons and that is always hard to predict. you will see generally one or two teams per league go to market. >> that average? >> that is average. it is usually more like one. one of the issues we do face is the value is getting so high, there and not that many human beings who can afford to buy these teams. who can write a $2 billion check. check? titans.te equity sacrifice ahia, you short time victory for a long-term value. does this private equity model work for sport franchises?
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the easternted to conference finals but they lost to the celtics, does this work in markets like in new york or l.a.? afford to haveot that many more losing seasons. >> i've been a season ticket holders and 1982 and i've never thought about giving up my tickets for the next. icks?r the kn scarlet: really? >> i go because i want to be entertained. of the buying a piece league, so if you own the 76ers, you still get 3% of the nba even if your team is not performing. so long as you give your fans some hope. >> some hope. [laughter] david: too much fun. the knicks have had an unfortunate run of luck, but
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hold onto your tickets. >> the record is 29 wins, 53 losses. thank you so much. don cornwell and david stern. also, to ed hammond. from new york, this is bloomberg. ♪
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today has been interesting, especially what is been happening in the bond market and the stock market. what you make of the actions leading up to today and today's selloff. >> from a stock point of view, this is something that was in the cards. we rallied for seven or eight and it isays
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inevitable that you're going to get a little profit taking. this is not concerning, but the fact that we are seeing a little profit taking is nothing to be upset about. -- that isdoing it the thing to be concerned about. interest rates help the dollar, so it all is very circular. , the trade you are looking at today's utilities which is a group that is not necessarily do well in a rising interest rate environment. whiche looking at the xlu is a utility etf -- what drew you to that? >> i was looking at stuff that was interest-rate sensitive and the utilities had performed reasonably well, but i do not see them going too far. despitell yield well the fact that dividend yields are creeping up, they are
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getting competition from fixed income. i figured, there are people who have to be invested are want to be invested. there is no alternative. the trade i looked at today was something you do not see very often. somebody that wants to be fully invested but is a little nervous. you buy the stock. eventually -- essentially, the payoff is for the call. call paritye call which we do not have time to go into, but you basically have a -- itthat mu married them looks like a call, but you own the stock, you get the dividends, you are paying a premium, but at the end of the trade in june, you decide what you want to do with it. do you want to sell the stock, but your downside is having a
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floor under it to because of the put in the trade. >> you are perhaps protecting herself from the downside. trade and defense of gives you a way to play interest rates, but you keep the dividend and you can stay invested in stocks. >> teaching us something today, thanks so much. steve sosnick of interactive brokers group. north korea's threatening to cancel its much-anticipated summit with the u.s. over military drills. that is according to south korean news of service. we will continue to monitor. this is bloomberg. ♪
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mark: i am mark crumpton with first word news. the israeli and palestinian ambassadors at the united nations are accusing each other's countries of violent international law a day after troops killed more than 60,000
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palestinians and wounded others -- killed more than 60 and wounded others. they refer to the killing of the .alestinians as a massacre the israeli ambassador said hamas should be condemned for the violence along the border. they added israeli troops were the country. the un security council holding an emergency session to discuss said violence today. monday's bloodshed claims 60 lives with an estimated 2700 palestinians injured. claimed 60 lives with an estimated 2700 palestinians injured. the violenceley: should occupy

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