tv Bloomberg Markets Americas Bloomberg October 30, 2018 1:00pm-2:00pm EDT
synagogue were 11 people were killed. funerals for the victims set to begin today. the mayor of pittsburgh helps the president would delay his trip to focus on families. bullying led to yesterday's shooting at a north carolina has a. two male students were involved in altercation that left one of them dead and dozens fleeing for safety. the shooter has been charged with first-degree murder. a former nurse accused of killing of -- more than a decade ago admitted the charges against him are largely true. he is serving a life sentence for murder that could be considered for parole after 15 years. he told officials during his trial that he deliberately caused patience to go into cardiac arrest because he enjoyed the feeling of resuscitating them.
americans have been given permission to jump the line at an airport previously reserved for europeans. the british government says the law allows citizens of canada, new zealand use the electronic passport gates. it is part of the u.k.'s export to open. global news 24 hours a day, on-air at tictoc on twitter, powered by more than 2700 journalists and analysts, in over 120 countries. i am mark crumpton. this is bloomberg. >> it is 1:00 p.m. in new york, 1:00 a.m. in hong kong. welcome to bloomberg markets. ♪ vonnie: here are the top stories
and from around the world. the strongest detector, white wall street may -- job security for the fed chair. seven days and counting. a week away from the first midterm election of's donald trump presidency. dividend.ashes its we will have a look at the action. let's get a lick it -- a look at all the stocks. abigail: we have the buyers in control but it is a shaky day. the major averages opening lower. the day of volatility. closing down this -- 2601%. that index is higher. it closes that way. sellers in control but the buyers trying to take control affirmed by the fact we
have bonds lower. a slight risk that while on the highs. the high major averages of more than 1%. speaking on the part of incentives, a number of factors. shifting landscape. we have a rush into cash. in 2011, when the u.s. credit rating was downgraded the we had a big correction. time, the one to three months even, u.s. treasury bill surged the inflows looking for safety and over the last several years, lots of red. not so much flows going in but take a look. we have a much -- a lot of money going into this cash equivalent. , since 2011esterday volatility -- volatility. lots of bearish.
today, a reprieve of 2.3%. high of 3.4%. the high similar to the major averages. it pick .3%. they make the equipment that makes chips so that could be an early -- for some sign of life and investors embracing it today. they recently put up a strong nvidia of .7%, jp morgan to overweight the firm to say a car business could drive those results. months, west two have weakness the chip sector. speaking of strange money, let's take a look at the athletic sector. beat. a massive that could be a short squeeze of 21% as bears rush if a
turnaround is in play. it is giving a tyner sector helping to explain for the major averages. vonnie: thank you for that. wells fargo welcome investment institute, tracie mcmillion. she comes to us from, i would guess -- let's have a guess. i would say charlotte north carolina. tracy, talk about the upside for stocks over the next 12 months. it sounds optimistic. tracie: it is optimistic. thank you for having me. the 19% upside we see in markets to the next 12 months is a reversal of this correction and earnings grow continuing its 2019. this year's earnings growth 20% but we see 7-8% growth earnings as well.
the president agrees. we have a tweet he tweeted out earlier talking about the fed backing off and starting to talk more dovish. i think if we are going back to our 2800 range, start. his that what you see for the federal reserve? do think the fed will get more dovish? tracie: i cannot comment directly on that tweet but we do think that could be a catalyst for higher prices in the equity markets. at this point, late in the cycle we are going through a transition period of higher innings -- earnings to lower earnings, probably your gdp to somewhat lower gdp in 2019 and as we go to this transition and markets acclimate, we are going to see this volatility but we do
not think it is going to persist. one of the reasons that might not persist is if we do see a slightly dovish tone emerging from the fed, if we see midterm elections finished next week. that tends to bring about a correction in the market ahead of the midterms. but after the midterms, on average markets are up 31%. not that high in that context. you say you do not want clients getting defensive. wherever concentrators? tracie: we're looking at the cyclical sectors. we like consumer discretionary and consumer confidence coming in at an 18 year high. that is helpful to consumer stocks. we like health care stocks, industrials and at this point, we also like financials for a
valuations. talk to us about how you have the book out now. what other thoughts have you been having? guy: -- tracie: what we welcome is some equities, some picks to income and some on turned lives. the mix depends on the individual time drive and the are with colin. our recommendation is to overweight relative to fixed income relative to emerging markets and relative to u.s. large-cap. we are taking risk out of it fixed income now by being underweight and underweight high-yield. vonnie: in terms of emerging markets, you see upside there. or?here a particular area,
would you buy the complex tracie: we like 80 more than south america. we think there is going to be catalyst for higher returns in 2019. tracie mcmillion, thank you. president trump may be doubling down on he got rhetoric aimed at chairman powell. he has a formidable ally of his own. did miss my like. explained the thinking behind this. base -- what it is based down to is one does not like it's uncertainty. if you removed said chair during your powell, it would be a massive source of uncertainty. it is not clear who the receptor
would be. it is not obvious they would have their -- the committee -- committee. vonnie: didn't hurt the fair -- fed chair is -- himself. tracie: i think he is a known quantity. we had jay powell as governor, becoming chair. they understand his reaction function. i think wall street basically knows that they cannot expect of him. they might accelerate the past for words. they might. are you going to news conference of every morning -- meeting as opposed to any other meeting. you have to like jay
powell. he is more transparent than in the other presidents. into ben bernanke and janet yellen, slowly handholding markets and said watches a bit is the latest step in that. david: what have you -- vonnie: what have you seen that makes sense? i might understand why you might grumble about interest rates driving, but to attack one person. i think there are two things. anytime the fed that is raising rights, they are a target for the president because it takes some of the economy off the economy. prior to bill clinton, he would tech --y see trump they are the most harmful member of the auto qamar -- federal market committee.
we know from people who have been in the room that -- but we know that the chair marshall is away. there is a reasonable place for a president that is going to criticize the fed. the fact that it should happen, what would be the process the holddent would try to chairman powell. it is not clear what for cause means. if we aregligent -- not sure raising rates will qualify, beyond that we are not sure the fed chair can be removed from office. this is uncharted water. no one has ever attended it. this has never been done in the sense of somebody actively being fired. vonnie: we shall wait to see. thank you and that is a great
eight states? why only eight states? >> what you can see from the president is admitting the house of representatives is going to be a tough job for republicans to hold onto. it is hanging onto the senate. we are going to service their energy on the states. but a democratic incumbent is trying to defend her senate seat. that is going to be where the president attention is his last few days. that is going to be a challenge for moderate republican members who are trying to convince compromise in on an environment that is polarized. what is the night for 2020 or sooner than that? >> that is a good point. there was the consideration the
states are going to be important in president trump reelection bid in 2020. if you look at status like -- states like florida. you have bill nelson trying to defend his senate seat against the republican governor rick scott. it is a race between two incumbents who held statewide office. if you look at a state like tennessee, where you have a republican member of the house. running against the former governor, resident captures -- you have the race to determine whether polarization will work for more moderation works. vonnie: what about the rhetoric? today we had something new. tightwas ending birth citizenship. one reason the news
cycle is important is you have a handful of senate races and a dozen house races where neither candidate has a clear altered. anything that happens between me national mood against republicans or democrats. --could have an unexpected whatever happens, that is going to be the mood that people take with them. do we have any idea whether turnout will be healthier than in previous midterms. >> what we have seen from absentee ballots is turnout is stronger than it has been in previous midterm elections. if that turns out to be true, that is going to be an advantage for the democrats. they are working to turnout among -- young people and my inhorities who have not been
she writes white stocks should be on the table. analysts are saying mte says it is not going to have capital rates. >> i think that was interesting, the tone larry colts hurt on the conference call. he says that was not necessary. i tend to disagree. the company has over a thousand and month months, years. it is significant. talk about the sec investigation, the doj is jumping on board with that investigation in terms of penalties. more sense to put in ge capital, including the reserve short in january. there are different accounting standards rolled out of the summer. for that legacy insurance business is it headaches. you continue down the list of
areas different horror shows. there is the investigation into g's subprime morgan business. there was the process of shareholder lawsuits like when you have this goodwill charge, thatn after -- reviewed balance never thing was fine, that does add more fuel to those claims. vonnie: why did -- push? what has been so bad to throw that on top of everything else? the stock is low by 10%. >> i think you should leave the door open. part of investors' frustration is there is this slow trickle of bad news. given all of these lingering risks, not only do i capitalize them. you also wish you could be a significant challenge for the company. i just don't think you have the
luxury of ruining anything out. i was surprised he was so decisive. i think it should leave the door open. does it take away credibility a little bit? gainedarry colts has respect. dan was a different part -- type of building. inheriting this labyrinth and conglomerate he has to -- unravel. i think he is up for the task but it is going to be difficult and investors were hoping to hear more from what they actually got. he did not say much and part of case, he would hit
the ground running. vonnie: thank you. be sure to check out her piece. watch our interview with an interview more morning. now come of the stock trading up 2.5% in the u.s. it is said to weigh in a quest can get further into asset management and take all the shares. 2.5% in the up u.s.. onehe european trading, at 1.4%. let's have a look at markets. club little&p 500 bits. it is a quarter of a percent. the dow jones is industrial average and 4/10 of 1%.
they said the packages were staggering, more could be somewhere in the u.s. mail system. the associated press reports that the suspect, cesar sadock, kept a list of intended targets, he will stay jailed until his trial, citing him as a flight risk and a danger to the community. the associated press is reporting that james whitey bulger was at one time one of america's most wanted fugitives, was found dead in a federal prison in west virginia. the 89-year-old was a slain at the federal penitentiary at hazelton, he had recently been transferred to the facility, he was serving a life sentence after being convicted in 20 of participating in 11 murders and related crimes. a federal judge in new york city is keeping the trial of joaquin "el chapo" guzman on scheduled
to begin next month, a defense request was denied to delay the trial so that more time could be different to review a mountain of evidence, he is pleaded not guilty to charges that his cartel laundered billions, committed murders and kidnappings. thatsecretary-general says he is confident that the western military alliance and russia will act in a respectable way as the two sides hold drills in the same area in waters off of norway's coasts. these comments were made at the trident juncture were games in a norway. this is not a cold war situation he said. >> [indiscernible] this is about preventing a , an attack on one ally
will trigger a response from all allies, and so the best way to preserve the peace is to -- >> moscow has warned it could be forced to response to increase in inability or activities, and its navy plans to test missiles in international waters, close to where the alliance is conducting those military drills. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists in more than 120 countries. shery: life in -- live from bloomberg world headquarters in new york i'm shery anh. amanda: and in toronto i'm amanda lang. here are the top stories that we
are following from around the world. than half of the s&p 500 companies have reported quarterly earnings, we have the earnings scorecard so far. and a bloomberg scoop, the u.s. is set to expand china tariffs, if the meeting with china's president falls a short. and no more bad news, facebook is hoping for good numbers when they report their numbers after the closing bell today. and of course, facebook shares are being closely watched, because of all of the turmoil, not least the lust of key executives and -- not least with the loss of key executives and the faang weighing on the markets. shery: they have had a tough year, look at the downtrend in the stock, they lost more than $200 million -- $200 billion in market value, the stock losing 30% in this coming in the time
when markets are holding out -- trying to hold onto gains. the dow is up to 10th of 1%, the s&p 500 is flat and the nasdaq is trying to hold onto gains and losing 2/10 of 1% at the moment. we had a mixed bag of earnings, ge sinking to a nine-year low, disappointing, but the other way around when it came to under armour who had surprisingly good results. there are also concerns over global demand while u.s. stockpiles are rising. reported its quarter, it was the best quarter it has seen in five years, one of the things happening for bp is that they are betting on oil prices staying flat. that is reallyng being capitalized on, a refinery near chicago was retrofitted so it could refine less high-quality crude, coming from canada.
and it's trading at a major discount, is called western canadian select and its pricing discount. so bp is capitalizing on the fact that we cannot get our oil to market because of a pipeline blockage so they get to make even more profit on this cheap canadian oil. shery: let's get a check on the scorecard, we are being joined now by sarah, investors are not gaining a lot of momentum from the earnings season, despite the fact that we have had some solid results, more than 80% of companies have reported beating estimates. halfwaye more than through the earnings season and 82% have actually beaten earnings estimates, we are on track for 23 and 24% profit growth this quarter, the third straight quarter of profit go --
growth above 20%, the numbers are coming in strong, but if you ,ook at the average reaction it's down 82 basis points, it's pretty amazing, investors are clearly not focusing on these numbers, they are listening to the rising costs and trying to extrapolate going forward. expect the would rate of growth would flow, because we are getting into an economic cycle or frictions like tariffs, how bad is the outlook? or is the market pricing a gloomier outlook than they should? >> for the fourth time since trump tax passage was passed, the overhaul, excuse me, these estimates have come down for the first time, so i one month ago they are at $177 a share, now it'sare down to 176.66,
not a large step down but it's not moving in the right direction. these estimates are coming down and we are hearing a bit of worry related to these companies and what they are talking about going forward, and the stock market is all about what happens in the future. have breaking news, general electric is dipping below $10 for the first time since april 2009. we have seen them did to a nine-year low after some disappointing results were announced, we are now seeing for at $10 -- below $10, the first time since 2009. down more than 10%. to a bloombergn scoop, american officials are prepared to announce more tariffs on chinese imports in december if talks between president trump and president proved fruitless.
if the tariffs are levied, these just in time for chinese lunar new year in february. tone recap to shawn, the has been fairly positive, does this run counter to that or is this the inevitable? >> there are two points you need to make, one is that trump has always made a lot of his personal relationship with she ident xi,ing -- pres and it is speaking increasingly in cold war terms of economic aggression, which is its term for china, and its way to respond. so there are low expectations for the g20 meeting at this point. the best anyone is hoping for is a cease-fire. no one is talking about the end ofthe trade war, and a lot
people are preparing for another escalation. that's what we were reporting yesterday. a potentialwill breakthrough come? will it be after the midterms? after the g20? postponed until next year yeah go -- year? and there are so many tariffs that could be put in place until then. the midtermet elections next week, and chinese officials, like officials around the world will be focused on the result and use that as a gauge of the strength of president trump and what he can carry into the meeting at the end of november in when a sarris -- in g20.s aires at the i think the chinese are hoping a weaker trump may be in a , ortion to make a deal potentially there has been some political blowback through tariffs, and they need to get
closer to a deal. but president trump has said it again this week in the white house officials we spoken to say this over and over again, which is that they do not think that china is ready for the big deal they want. shery: it's great to have you with us. let's -- let's wrap earnings with michael purves, who is with me in the new york studio. it's great to have you as always, and living up to the reputation of being volatile, we are seeing what big companies are doing against quarterly averages, you can see this after a very dull summer and there is a spike this month, does this tell us anything about the direction of the markets? >> that the vix has spiked? shery: that earnings are uninspiring for investors? >> your colleague sarah was just
theussing how strong forecast has been, i think it is important to frame this discussion about what is really going on here. what i have been arguing is that it is not necessarily -- the volatility that you are seeing in the vix and the mid-20's, and the very choppy price actions is not so much an indictment of the economy or earnings next year, it's really an indictment of earnings disability there. it comes to this core factor that your other colleague was just talking about, trade and tensions. it's really impossible to price or quantify what kind of bite the trade tensions are going to have in 2019. ,f trump or to reverse things -- if trump were to reverse things, do what he did with
canada, for example, let's call it a rebranding exercise and nafta. if you pulled that off with the chinese we are in a very different condition. if the trade tensions persist there is a risk to the earnings of streaming are sitting next year. right now if you look at ansensus forecasts, it has 5.5% rate of revenue topline growth, that's in the middle of the 25 year average going back to the are really 90's. when you think about that squaring with consensus, nominal gdp forecast in the high fours, high 21 yield, low to on high ion, that revenue -- onon yields, low 2 inflation, i think that there drinking of kool-aid, the real risk is what will happen to the margins.
a little margin erosion can go a long way, and with the equity markets and bond market vigilantes, i think we have equity market the joined is telling us that we need a lower price for six cash flows for trade development -- four cx -- for cx cash flows for trade development. ceos and cfos don't know what bold trade tensions would cost, but we are hearing more about christ -- prices, some which could be packed -- passed on to consumers, margin erosion's are inevitable at some point, where does this leave you position gekko where you want to play it -- position? where do you want to play at? put the trade stuff to the side and assume there is a happy outcome that is resolved here, a very aggressive assumption given which are prior
guest was talking about. i would continue to think that with aucture was -- disinflation, that the economy has been dealing with and the central banks of been dealing with is probably going to persist. you are going to see some classic wage pressers -- pressures here. but how much could they really derail an earnings a stream in 2019 is probably pretty minimal across many sectors. and i think it's important to point out that the sectors that postbeen defining the financial crisis rally has a lot of those business models that are more vulnerable to the classic late cycle cost pressures you are referring to. with the unemployment rate and you are pushing up wages, amazon raised its minimum wage across
its workforce, but microsoft and facebook has cost structures that are very different than most companies. shery: despite the selloff we have seen value stocks becoming resilient, will discontinue? >> there so much noise in the market with all of this volatility, i'm sure you will see some value outperform because people have been taking names to do risk that, a classic de-risking of what has been working. think that's a lot of what has been happening here. assuming things a stabilize and we can build a solid foundation and the newsletter continues to flowod -- the news continues to be good, i think we will see some connecting roads to see our way out. so much.hank you coming up next, you will hear my
shery: this is bloomberg markets, i'm shery anh in new york. amanda: and i'm amanda lang, in toronto. lynn has seen massive change in the industry through rogers communication, i asked if the need huge investment in five g networks will pay off for that industry. >> i think so, it's a fabulous new technology but it requires a lot of money. so the capital expenditures are going to be huge. m&a is probably one of
the two smaller characters in carriers in the united states, so it will be three carriers in the united states. >> and we are seeing consolidation elsewhere. isin canada the government -- has kept four to six people around, but eventually it will consolidate. amanda: when you say kept them around, -- gave them low costs, things like that. the interesting thing is that 50% goes into is serving 2 million, and 50% goes to tallis and rogers serving 30 million. that's crazy, but that's what
they did here. amanda: we talked about what a it was with verizon, will we and should we let american telecom players into this space? >> i don't think we should, and i'll tell you why. verizon takeover rogers, it won't but let's say a , all of the jobs moved to the states, instead of employing 25,000 people here, rogers would be a shell company, and it would only employ 5000 or 10,000. it would be a massive shift in jobs. one of the things that came up in the trade deals was cultural maigret -- protections, should we relax about protecting cultural industries from americans act now -- americans?
preservek we have to the balance, we have to continue to support canadian programming and canadian efforts, otherwise everything goes to the u.s.. i don't think that's right. numbersyour wireless thatn strong will continue? >> that's what we are hoping. are trying to cut the turn rates to the lowest we possibly can, and we are getting there. the president is really fixated on that. and so was the company. requirednd the capex for 5g is expensive. >> terribly. you have the towers all over the and the ip now uses these
>> analysts have been pulled by polled by facebook, seeing that the revenue is going to slow and users will slow -- user growth will slow, the company will have to ago above what it said it is going to do and it could be less bad than analysts expect. amanda: it shocked the street last quarter by saying that revenue will slow and spending will rise, what is that number? i'm seeing expectations of 34% revenue growth, does it have to do better than that? >> i think it does to stem the fears about how bad this might be. the company has grown to a saturation point in the u.s. and europe. and the users they are adding not other countries are going to be as lucrative, it has to increase the prices and growth. >> what is the biggest risk?
thehe financial risk and societal risk, one of the big topics on the call will be midterm's role in the elections, where it's dealing with misinformation, fake accounts, infiltration from russia and iran. this company is dealing with impacts on society as well as financial realities. amanda: we will leave it there. thank you. shery: if you missed out on that interview are others throughout the show, tv is your function. this is bloomberg. ♪
my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. >> i am mark crumpton with bloomberg's first word news, when president trump visits pittsburgh this afternoon he will not be joined by the four top leaders in congress, the president invitation was
declined as he meets with victims and survivors of saturday's a synagogue massacre. a spokesman for mitch mcconnell said he had a previously scheduled commitment, and speaker paul ryan's spokesperson said he was unable to come on short notice. bloomberg has learned that nancy pelosi and chuck schumer declined the invitation because a state and local officials had asked the president not to come. special counsel robert mueller is asking the fbi to investigate allegations that women were offered money to make false claims about him. that's according to a statement about his spokesperson, he has been investigating russian meddling and the 2016 rationalize -- russian meddling and the 2016 election. the president has called mueller's probe a witchhunt. the pentagon is deploying 5200 troops to the southwest