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tv   Bloomberg Markets Americas  Bloomberg  June 8, 2018 10:00am-11:00am EDT

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welcome to "bloomberg markets." ♪ julie: here are the top stories we are covering from bloomberg and around the world to one of the most anticipated g7 summits in years kicks off in quebec. trump heads to the summit at odds with other leaders on trade and iran. aple shares dropped after complaint of iphone orders. verizon offers a surprise as it offers its new ceo. what it means for the company's 5g ambition. deutsche bank dilemma. it considers a merger with commerzbank, but is it enough to get the bank out of the doldrums? we will get insight from the head of financials are goldman sachs. 30 minutes into the trading day in the u.s. and we have abigail doolittle with what is moving today. overall not a big movement.
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abigail: not a big movement for the major averages. and onng just slightly the week, we have each of these major averages higher. the dow leading the way of more than 2% with s&p up 1%. the nasdaq yesterday haven't met pullback with a little bit of rotation out of technology. it gained the least on the week less than 1%. nonetheless a rally, but a small pause right now as we head into the g7 meeting. will the rotation out of technology, if you can call it, after one day continue? let's look at the chart that dan chargehowed us on smart this past wednesday, suggesting that the breakout in tech israel. this is a one-year chart of the s&p 500 information-technology sector. just recently hitting an all-time high, breaking out above its moving averages. dan russo thinks that is bullish.
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what concerns them? a drop down below the last high concerns and. him. keep an eye as to whether or not the tech sector can hold those gains. julie was mentioning apple. let's look at the chart because apple is on pace for its worst day since april 24. look at the big drop off on that nikkei report that they told suppliers to plan to cut back on components. we have seen this before so we will need to see whether or not there is more confirmation. it's a very big ecosystem of suppliers. if it is true, there will likely be more chatter. let's take a look at some of the chipmakers that do supply to apple. we have seen broadcom comest guy works, all sharply lower. it will be interesting to see how the story develops considering that apple is such a big weighting to each of the averages here in the u.s.. caroline: there are also reports notoriously unreliable, but it has a market effect here in
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europe as well. i'm looking at the stoxx 600 and breaking it down by sector. down by a 10th of percent -- 8/10 of a percent on financials. off only by a quarter of a sent coming off of our lows. it really is concerned about trade. it is also concerned about the ecb starting to ease back on that free money cheap money and bond buying. there is poor data coming out of germany and france today. industrial production really falling for those particular countries. those not adding to the overall risk off sentiments. there we have it off by a quarter of a percent on the stocks hundred. let's look at the particular moves in the market. financials as the leader of the pack in terms of laggards. andsche bank down by 2.5% commerce bank up by a similar amount. we love to discuss whether these two german banks not performing that well could tie up. the is in the press because
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deutsche bank chairman has been discussing it with none other than government officials. we also report speaking with top shareholders. could this be a deal that eventually gets done? not likely in the short term as they have got to tie up their own particular issues in terms of their banks. that's what analysts are saying. they have particular got to be looking at that balance sheet first. alsoer, morgan stanley cutting their price target on deutsche bank earlier today. not really risk news for deutsche bank today. let's look at ams. this is where abigail left off. this is a chipmaker on the downside because of those reports that apple is warning suppliers that you might have to pull back in terms of the iphone component. this is the nikkei reporting. sometimes it's not always particularly reliable. let's look at some of the other industry groups and asset classes out there. i want to look at the fx market. money moving into japanese yen. we have the risk aversion moving
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that into the stability of the end. i leave you with this. up by 7/10 of a percent, why? all because there is a vote or referendum on funding. they have a few of these because he only need 100,000 votes to push through this referendum. this is on the swiss national bank and whether it should have full authority of money. many are saying you are saying you're not pricing in the very small chance that it could get through. the swiss franc down by 7/10 of a percent. julie: not what you would normally expect from the safety trade. thank you for that perspective. president trump is set to arrive in quebec any moment now for the .7 summit the president spoke about the expected war of words with this counterparts over trade policies. >> we are going to deal with the unfair trade practices. if you look at what canada and mexico, the european union, all of them have been doing to us for many, many decades, we have to change it. they understand it's going to
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happen. julie: we are joined now by republican representative tom reed from new york. house waysber of the and means committee and joins us now from capitol hill. thank you for your time and thank you for joining us. rep. reed: great to be here. julie: we know the president is looking to go into the g7 and what appears to be a hostile audience at least on the topic of trade. what kind of progress do you think he can make their, if any? rep. reed: i hope positive and he will have an opportunity to tell our colleagues and allies that all we are trying to do this negotiate a fair deal for america. a fair deal for america means a fair deal for canada, mexico, the eu at the end of the day. we are talking about leveling the playing field and getting to a place where we can all compete on an equal footing in order to have the best person and best company win. julie: they don't seem to be getting that message, do they
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come a commerc, congressman? we have heard belligerent language coming from our closest allies. justin trudeau and emmanuel macron same it will not sign onto a communique if everyone has not signed off on trade. with everyone coming up with their dukes up, it does not look like everyone is looking at that level playing field and it will be a discussion of fairness. rep. reed: i appreciate that. 7i was raised by a single mom with 11 older brothers and sisters. in our family, we had disagreements. there were times of frustration, but at the end of the day we were still family and we worked it out by continuing to negotiate and talk to each other. that's how i feel with our closest allies in regards to the situation. there's a lot of blustering and positioning and leveraging. at the end of the day, we can work this out with our close allies. at that end of the day, we will move on to the real issue, the elephant in the room in china and going after these unfair trade practices going on unchecked for far too long. julie: because of this
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infighting among our closest allies, maybe we have taken our eye off the ball the goal is china. what me through how these global trade disputes ex china will get us through the gulf. rep. reed: we will negotiate a gold standard if you would in my opinion with canada, mexico, and maybe the eu. we don't have a trade agreement with china. when we go to negotiations with china for the next level of trading relationship, we then use that platform to say look that everyone else in the world is accepting this as a level playing field. china, you need to do the same. once we get to that point, a united front will be presented to china and it will have no choice but to negotiate with us in good faith. caroline: you are not worried in some ways that you are pushing the eu in particular closer to china rather than the united states? you have seen merkel visiting china and looking to make joint statements against the policies
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of trump. rep. reed: i do think at the end of the day the eu and other trading partners are more interested in a strong relationship with america than china. i think the american market represents something that is unique versus china. when you look at the right of freedom, when you look at the inperty rights respected america versus china, our model is a much more attractive area for investment in china itself. china has a big marketplace. at the end of the day, we need to make sure we are all playing from the same rules and the rules are enforceable against everyone. that is ultimately where fair level trade policy needs to go. caroline: meanwhile, the u.s. trade deficit with china and stop by $2 billion in the month of may. this cannot be music to trumps 's ears. how likely will we see tariffs imposed on china by mid-june? rep. reed: i believe everything is on the table.
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all the tools are in the toolbox. wñmy hope is that we avoid that and we also sent a message that we will use these tools. president trump is very clear. he is not going to the status quo. he is not going to engage in the decade's of trade policy that has gotten us to this point. at the end of the day, he wants to negotiate. look at what he did with brazil. look at what he did with south korea. if you have a good faith partner to go shooting with america, i know this administration is open to sitting down. we are here in the house and the congress to get to that negotiated outcome that's fair for everyone. caroline: how long will it take with nafta? it does not look like anything will be brought over the line until past july. rep. reed: timelines are obviously important to people. this is what i appreciate about this president. this president is not working off political deadlines. he is working off of outcomes that are based on substance, which is in the best interests of america as well as trading partners when it goes to future negotiations. at the end of the day, not a
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time when i'm concerned about. it's about getting it done and getting it done right. julie: we got have much time life, but i want to get to specifics when you talk about outcomes. there are three tire cord makers in arkansas. far from your own constituents, but still part of the u.s.. these three tire cord makers say they will close operations of their products are not exempt ed from tariffs. they employ 1500 people at four plants in arkansas. how do you weigh those jobs against a few hundred jobs at steel companies that are going to be benefited by the tariffs? rep. reed: obviously that's why theçt exclusions in the exempt d process has to work. that is something we are working on as we speak to make sure the process is going in the right direction. you have to look at the long-term picture. you have to look at also the fact that we come out of this stronger at the end of the day. those tire manufacturers are going to blossom and grow and hire more people long-term rather than any short-term pain we could potentially see. youe: very quickly, do
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support senator corker's bill that requires congressional approval for section 232 tariffs? rep. reed: i think to 32 is something that is clear on its face. look at the senators bill. this is best suited with the president and the existing law that is there. julie: thank you so much. our thanks to congressman tom reed of new york. we appreciate your time. let us check the bloomberg first word news with kailey leinz. kailey: president trump doesn't appear concerned about being unprepared for next week's summit with north korea's kim jong-un. he has been preparing for the kim meeting "all my life." the president spoke before leaving for the g7 summit in quebec. china's president and vladimir putin pledged to support each other on key international issues. their talks to they were dominated by the iranian nuclear deal and next week's u.s.-north korea summit. xi and putin vowed to keep the iran nuclear deal alive. the european union chief
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resident negotiator is rejecting a key part of the latest british proposal. barnier says mays proposal for a hard border between ireland and northern ireland cannot apply to the rest of the cap that's part of the offer that makes it acceptable to britain. celebrity chef and travel host anthony bourdais and has died. n killed bourdai himself in a hotel room in france. he was working on his show "parts unknown." his memoir, "kitchen confidential," launched his career in television. he was 61. global news 24 hours a day and on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. caroline? caroline: such that news about anthony bourdain. ceo to bets on a new lead into the five gh.
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g age. will it pay off? president trump due to touchdown in quebec any moment now. this is bloomberg. ♪ yoryow.miño x
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caroline: live from london, i'm caroline hyde. julie: from new york, i'm julie hyman could thi. this is "bloomberg markets." caroline: time for the bloomberg business flash and a look at the biggest business stories in the news right now. andave shares of apple foxconn soaring and their debut at shanghai today. the stock rose by maximum 44%. that is focused on a market
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value of $61 billion. it's the largest take company listed in mainland china. once foxconn to move beyond cranking out iphones. jack ma's fund has raised about $40 billion in its latest funding round and the financial is said to be valued at $160 billion. investors in the latest rally included singapore sovereign wealth fund and silver lake. flash. your business julie: we have been watching this story on verizon. it has new leadership at the company. hans vestberg is heading it up. he is the former ceo of ericsson. he takes the top job in august. let us bring in john butler. you and a surprise for is this the right direction for
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verizon to go? >> yes and yes. it was a big surprise. hans has not been with verizon all that long. many people may remember him as the ceo of ericsson. he was there about six years. he did a great job. he's a great visionary. john: he is big on 5g. his belief in mind is that it's really going to transform the industry. it helped to shape him as a good choice for that role. the timing and the actual news is a big surprise to many. wase: lowell mcadam, there a view that he was not going to stay around forever. does this mean anything internally at verizon about potential successors who might not stick around in the wake of this? john: it is possible, julie. the one thing i would say is that hans is a very enthusiastic guy. that enthusiasm is infectious. he's a very likable guy.
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i can see him sort of smoothing the waters. and communicating the vision well. what i always look for in a ceo is i want to see someone who is going to manage to a well-defined vision. i think he is very good at that. i think people respond to that. everyone wants to be on a winning team, right? i think anyone who might feel stunned by this or inclined to leave verizon because they were not chosen may think twice after talking to hans and getting a feel for the new culture. caroline: i've been lucky enough to have met him a few times. he is a very nice individual as you say. ericsson has not had the easiest time of it. i want to look at it future -- the future of verizon in his tenure. we have seen m&a whether it's consolidation of sprint and t-mobile or looking across the content that we will see with at&t and time warner. where might we see verizon go? will we see any m&a?
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john: we may see it here and there. their big bet is on 5g. att has made the big bet on content. for verizon, it's all about moving to the next generation network. networkmuch a wireless as it is a new generation computing platform. get theeally got to network really dense if you want to make 5g work. they may have to make some fiber companies to get that done. it's easier to buy rather than build when it comes to fiber networks. julie: in this case not a big transformational acquisition like at&t and time warner. john: i don't see that. julie: john butler, thank you so much. he is the bloomberg intelligence senior telecom analyst talking about verizon. caroline? caroline: i'm going to stick on the theme of telecom. right here in the u k, bt has pushed out john patterson after
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the board of investors lost face and his plan -- lost faith in his turnaround plan. it recently told investors it will take until 2021 for the company to return to profit growth. let's check out the european market because we are bloomberg markets. seeing a down day on the stoxx 600. it really has been the banks leading us lower. looking at how the dax is performing, we have poor economic data as industrials are down. poor economic data out of france. italy, the was there once again down by almost 2%. this is bloomberg. ♪
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caroline: this is "bloomberg markets." i'm caroline hyde in london. julie: from new york, i am julie hyman. friday.me now for etf
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here to give us more insight is tom from bloomberg intelligence. first of all, what are these? tom: these are a little different than what we're used to could use etf's are powered by picks from analysts so there are three key qubes that looked at. there are tracks that are holdings popular with hedge funds. there's the sell side that is taken care of by bernstein and that using cel-sci ratings to fill in that etf. the third one is machine learning. machine learning and it is picking stocks based on algorithms they put together. julie: instead of based on an underlying index or a sector, they're supposed to be performance-based. they are picking stocks that they suspect will outperform. just make it sure i'm understanding this. how are they doing? >> one common thing is that they
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are all outperforming the market. it's a little bit of a faux pas for the performance a little bit short for some of these products. i don't want to make a big rock statement, but it's not what noteworthy. julie: that sort of tracks with the idea that it is a stock pickers market perhaps or give some credence to it. are there any commonalities in terms of the text that the buy side and the machines have chosen? >> i've looked at for etf's and there is not a stock that appears in all four of them, but some come pretty close so a name like adobe systems is across all three of them. delta airlines was an interesting pick. alphabet areout bu the most common. julie: not surprising because those are widely owned anyway. what about flows wise? have we seen them be pretty popular? >> the biggest one of the four is ai eq.
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$154 million in it. julie: not very big. >> foreign etf just launched and getting the attention is a good thing. these products are not competing on fees. thes 75 basis points so performance and flows is an encouraging thing sign. julie: thank you very much. caroline? caroline: thank you could still . still had, something's got to give. and forree overhauls ceos, deutsche bank's chairman is ready to break the loop of them and commerzbank might be the outcome. we will discuss. ♪
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julie: live from bloomberg's world headquarters in new york, i'm julie hyman. caroline: live from bloomberg's european headquarters in london, i'm caroline hyde and this is
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"bloomberg markets." let's check in with bloomberg first word news with kailey leinz in new york with more. trump sayssident russia should be at the g7 weekend. quebec this before leaving for the meeting, the president said the g7 should want to get become the g8. that is what it was before russia was removed. present trump says, "we should have russia at the negotiating table." president trump says he may part in the lake boxing champ muhammad ali. ollie's lawyer says he appreciates the sentiment, but there is nothing to pardon. the u.s. supreme court overturned his draft evasion. virus has come in with the biggest rescue program for argentina. it is a $50 billion standby arrangement that will run for three years. the argentine government is trying to reduce double-digit inflation and narrow the budget deficit. emerging markets have been rocked by a global selloff that has forced central banks to raise interest rates. paul i kleiner became chairman of deutsche bank. he has been through four ceos
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and three strategic overhauls and is looking at a problems. he spoke with the top shareholders with a possible merger with commerzbank. there are currently no talks going on. global news 24 hours a day on air and on twitter powered by more than 2700 journalists and analysts in more than 120 countries. behind. -- i'm kailey leinz. caroline: talks of a potential merger has raised the questions about what the european financials will look like. a hot topic is the goldman sachs european a financial conference to. matt miller joins us live now. taken away -- take it away. the goldmanre with sachs had a financials. thank you for joining us today. you have been at this conference
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all day with the most powerful forces of the european banking industry as well as the finance minister of germany, a lot schulz. what is your biggest take away from this conference yo? >> thank you for inviting to speak with you,' this wa. this was a three day event and we had just shy of 3000 participants and it included the executive management of all major european banks, insurance companies, as well as other companies. we have participation from the economy minister and in this case the finance minister of germany di. i put the takeaways and essentially three buckets. bucket number 1 -- the operating environment for banks remains very tough. i think the outlook for the second quarter, but also for the rest of the year, is one of subdued revenues, margin
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compression because of the negative rate and environment. it's an improving credit quality picture. that's kind of a silver lining. the second take away -- and i'm sure the one that will generate the most headlines in the future -- relates to how the european market structure in banking is going to look like in the immediate medium and longer-term view. --heard thanks express thanks express support for market consolidation. thee's a recognition of need for the market to consolidate. there's a preference for that consolidation to continue to happen on a national basis. when it comes to consolidation, i think the response from the executive management was much more subdued. i think the third takeaway falls into the policy area. us, if you are an investor in european banks or financials, what really matters is that you
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complete the new financial architecture. that means completing the bank union. the bank union is complete when all three pillars are done. common a functioning vision. we have a functioning common resolution as he picked up from the ministers speech. there is a good chance that it will get strengthened further in the medium-term. when it comes to a positive guarantee, that is further out. if you want to believe that there will be large cross-border mergers into the eurozone, you ultimately need to create the revenue for central banks to do so. the way you create the revenue is that you allow a bank to source deposits where they are cheap here in front for -- frankfurt and lend them out when they are more attractive. for that to happen, you need a complete bank union. matt: that will take longer than expected. we all understand that. on the subject of national
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consolidation, a bloomberg news reporter broke the story that the deutsche bank chairman has been talking to shareholders over the last few months and government officials about the possibility sometime in the future of a merger with commerzbank, the building behind you. clearly not going to happen now. deutsche bank shares have been battered and it would require some headcount reduction that would not be palpable or advertising for germany. in the future, does that merger make sense to you? does germany need to have a big, strong bank national champion? jernej: you mentioned we are standing next to the commerzbank building and it's a really cool building. [laughter] question but that i will answer it in general terms. the reason why german banking suffers from low profitability is because the market is very fragmented. nobody has pricing power. the way to address that issue is not solely by consolidating the buts as private and listed,
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also prevent the issue of competition from the public sector institutions. we have a number of state owned banks. we have the saving banks. they all pressure returns of german banks. could you achieve a more rational market structure and higher returns if you start putting these banks together? i think most of the participants at our conference would probably say yes. when it comes to specific mergers, i think it's very, very difficult to say. the timing is difficult. the incentives are difficult to judge. what i will tell you is that i have covered commerzbank and deutsche bank in one capacity or another since 2003. for a decade and a half. i can't recall a single year where there has not been a rumor that somebody will take over commerzbank. here we are standing in front of their beautiful building and it
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is still a standalone entity. matt: thank you so much for joining us. it is the head of european financials for goldman sachs. can we pan out and just show the commerzbank building? julie, it is quite striking indeed. the question is who will own that building in the next couple of years. will continue to be commerzbank headquarters? julie: an excellent question and one we will continue to talk about. matt miller, always great to see you. here is what's coming up now in the next hour, watching that g7 meeting in quebec where rolled leaders will be arriving shortly. we will bring it to you as it happens. then, the state of doing business in russia. we will hear with all of your fuse on how vladimir putin is moving to the banking industry. and a quick look at markets here. the s&p 500 muddling along here. technology selling off again, evidenced by apple down 1.7%. we will dig into that stock further.
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the 10 year yield not much moved today at 2.93%. oil rising for the second day in a row. we are going to speak with a manager who owns energy companies next. this is bloomberg. ♪
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caroline: with from london, i'm caroline hyde. julie: in new york, i'm julie hyman. this is "bloomberg markets." the vision in -- division and opec. cartel members split on increasing production as saudi arabia wants and the u.s. has requested or hold firm. russia and iran want a united front against american sections. he is joining us from his firm's headquarters in leawood, kansas. thank you for joining us.
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what do you think? is opec going to increase production? there are a lot of conflicting interests here. >> absolutely. this is going to be one of the more contentious meetings on june 22 that we have really had as it relates to opec. ver the past year, compliance has been well over 100%. what is there to get jazzed up about this time? there is a lot. seen venezuelan production declined starkly and the u.s. is trying to impose sections again on iran. overall iranian production is very much a question as it remains to be seen what european countries are likely to do. at the same time, you have the world cup, where saudi arabia and russia will be on opposite sidelines. we think when opec comes together on june 22, saudi arabia and russia will very much be on one so sideline and the rest of opec will be another.
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at the end of the day, there will be a lot of disagreement about what to do. we do think that saudi arabia and russia have really put together a great collection -- coalition and brought opec back together again to have a lot of agreement. we don't think they will want to do anything to disrupt that. at the same time, there is a lot of concern about overall supply. we think that generally saudi arabia and russia are going to give the market confidence to the extent that supply continues to decline that they will be able to use their spare capacity to make up for. no change to the current agreement. julie: interesting. when you are looking at which energy companies to invest income are you looking at those that might be sort of agnostic or built more secure business models that can deal with oil in a pretty wide range given that there is a little bit of uncertainty here? brian: yeah, absolutely. we think the energy infrastructure is a great place
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to invest. these companies are not taking commodity price risk as it relates to oil or natural gas at all. their moving the product from point a to point b. one company that we like in particular is plans all-american. i know on your program that you talk about u.s. show growth. they move one out of every three barrels in the u.s. hear per da. we think is u.s. production grows, planes will benefit from that. caroline: give us a call where you see oil going. if you do see that russia and saudi arabia are likely to backstop it with words and we will still see the u.s. pumping at a regular pace, does it looks like we will not stay at those levels back in may? brian: as it relates to wti in at u.s., we think it trades $55 or $65 a barrel over the next year or so. we think that there are some downside to that as there is a
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lot of uncertainty or geopolitical risk in the press. $65 is a very nice range where the producers will continue to drill. it is at a price low enough as it relates to what consumers see at the gas pump to continue to drive their cars. caroline: i'm sat here in london and i'm all about brent. talk about the brent spread here because it's pretty wide at the moment at what $10? brian: that's right. it is $10 or $11 as we sit here today. but we have seen over the last month that it has been has three dollars or less. as it relates to the u.s. production growth, it has been so great so far this year that the crude oil is constrained as it relates to getting to the gulf coast where you get more of a print price. there's not enough pipeline takeaway capacity from oklahoma to get that barrel to the gulf coast. barrels are moving from pipelines to more extensive options like rail and truck.
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we expect that will remain wide until additional pipeline capacity comes online. quick i have asked a question about high point capacity because we have seen a pipeline crunch in the u.s. when you look at stocks like planes all-american, how much of a concern is that? those stocks got hammered. brian: they did, but they started to come back over the past couple of months. for the pipeline companies in and of themselves, really it's an opportunity. there pipelines are full today so they are completely utilized. given the anticipated continued u.s. production growth that we are forecasting, that just speaks to opportunity for them to build additional pipelines at returns above and beyond their cost of capital, so they will be able to build this pipelines and continue to grow their underlying cash flow. for the underlying pipeline companies, that strength is an opportunity. julie: brian, good to get some
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time with you. thank you so much. brian: it is my pleasure. shot ofe just saw a president trump's plane arriving in quebec ahead of the g7 meeting or what some officials are calling a t6 plus one -- g six plus one. we will talk more about that at the top of the 11:00 hour. this is bloomberg. ♪
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caroline: live from london, i'm caroline hyde. julie: from new york, i'm julie hyman. this is "bloomberg markets." time for a bloomberg exclusive -- george robertson watch the enterprise development fund over a decade ago. is a venture philanthropy organization that great jobs and provides training to people striving to overcome employment barriers. bloomberg television executive
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editor jason kelly spoke with robert and carla javits. he started by asking what exactly is venture philanthropy? venture philanthropy is a term that we've developed when we start doing this over 20 years ago. it is really taking some risk and investing in social enterprises. social enterprises are businesses that generate revenues and products and services and the people they employ our people who have had barriers to entry in their lives, whether it be addiction, incarceration, but they want to work. and so they work in these social enterprises, whether it be producing products or whether it be taking care of roads or taking care of apartments or pest-control, all the things that over 300 of these social enterprises in the united states do.
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instead of earning a profit, they take the money that they earn and they generate revenues as well. they reinvest in the people that they want to go help. is we havehave done taken pretty much the same approach that we have done it kkr -- at kkr. we take capital and invest in these social enterprises and help companies growth. with capital and a good growth and and consulting the help metrics, these companies can go higher and work with more employees to create jobs and more opportunities. jason: put some numbers around this for us. what does the impact look like and how does it play through and how do you measure it? carla: what's very exciting is just in the last two years alone since we have expanded nationally for the first time, 18,000 people have been employed. the companies have earned $180
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million in revenue that they invest in training and preparing these individuals for work. we know from third-party evaluation of these companies that when people go to work, first there is the intangible, the dignity, and the feeling of self-respect for themselves and that their families feel. and then there are the tangible outcomes. -- 260%.up to 68% there's a flip and the percentage of their own incomes from government benefits versus wages. it was three quarters when they came in and it moves down to a quarter. wages become most of what they rely on themselves. jobs above the minimum wage when they leave a social enterprise.
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and it ranges anywhere from eight dollars an hour to $45 an hour. people really kind of get their skills together and then have the ability to contribute to the economy. george: one of the things we wanted to make sure when we got going here is that you can measure whether you are being successful or not. we actually came out with a paper. it's more like a book. it's taught now in most business schools. it's basically social return on investment, just like we do in a for-profit company. you measure what the return on your investment has been. there is a difference in that the denominator is obviously the capital you invest, but the numerator is a little bit different. it is the cost the government doesn't have to take in terms of welfare and food stamps and others. it is the cost to avoid by sending someone back to prison. it is the additional tax
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revenues generated with somebody who has a job. not to mention what's even more important and that's the dignity of a job. when you look at that return of nottal in and strict cost avoided, it's huge. that 30%-50%ssume of the people you invest in don't make it, the ones that do, the return on that and the return on somebody's life is off the chart. jason: you are doing this at a time where we are at record low unemployment. the labor market is obviously very tight. how much does that help? how much does that challenge what you're trying to do? carla: i think it helps because employers right now are looking at wealth impaired frontline talent. they are more open to an hiring people that they would've typically screened out. the missing link is that even in
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a hot environment where talent is needed, employers want people who are well prepared for the job and show up on time and are committed and know-how to work with the team and have the skill set they are looking for. for many of the people we are working with, they just have not had a chance to do that. job in a supportive work environment that's really trying to build those skills and those muscles that they have not had to exert makes a huge difference. what we find is employers, small businesses, and large companies are interested in hiring them once they're really well prepared for. julie: that was kkr cofounder george roberts and college efforts -- carla javits in an exclusive interview. apple fell in the premarket and it is falling still. we have seen a lot of weakness in technology. thatpecific is for apple
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the iphone maker has one suppliers to expect shipments of its signature product to fall. emma chandra is here with more. what has apple said? emma: nothing specifically from apple. that report from nikkei is from industry insiders and the report says apple told suppliers that iphone orders will fall by 20%. it's a number that demand will fall. apple falling today and we are seeing suppliers also falling. we see the likes of sky works and broadcom also heading lower. apple apparently specifically referenced low shipments of the iphone debuting later this year. they have three phones coming out this fall. if you take a look at a bloomberg, i have the function pulled up. what you can see here is that in the green bars, that is how iphone is essentially the majority of apple's revenue. we know that. the iphone is essentially apple.
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what is quite interesting is that if you look at the yellow bars, you see the services. we spoke to dan ives and he dismissed this report. he said look at services. that is the second leg of the growth school for apple. that was interesting this morning. caroline: fascinating stuff. all this slightly taking away from that $1 trillion valuation. emma, we thank you. meanwhile, president trump is arriving in quebec. all eyes on the g7. how disruptive will trump be as he speaks to his so-called allies as he gathers with the likes of canada and the u.k. and france? this is bloomberg. ♪
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plus one.6 either way, president trump arriving there. you can see him walking from air
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force one has -- as he goes to meet the gathered world leaders. the president will be leaving a bit early from the summit in order to head to singapore and prepare for the north korean summit scheduled to happen june 12. talks of hims leaving early as there is a lot of strife and discord among members of the g7 particularly over president trump's push on trade and tariffs against some of the u.s.'s closest allies. canada has been outspoken on this point. it will be interesting to see if there is, indeed, a communique agreed upon coming out of the g7. i am here in new york, i am julie hyman. this is bloomberg markets. i am in for vonnie quinn. joining me in london is mark barton. mark: we are 30 minutes away from the end of the friday session. you can see it for yourself. gmm is

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