tv Whatd You Miss Bloomberg November 21, 2018 3:30pm-5:00pm EST
scarlet: let's get the first word. theresa may says some sticking points remain, even though she has made progress in brexit negotiations. she will return to brussels for more talks including with the commission president. sanctions for italy's recommendation for the european commission. italy's budget plans are in serious breach of rules under the single currency. the eu executive arm says they could face fines if they do not bring the plan into compliance. thattalian government resist pressure from brussels
and continue with it spending plan. of000 children under the age five may have died of hunger and disease since the outbreak of the civil war in 2015. that is an estimate from an international aid group. more than 1.3 million children have suffered from malnutrition. officials say more than 8 million people are at risk of starvation. rain is headed for southern .alifornia many more trouble the national weather service says mudslides and rock slides will be possible in the areas burned by the woolsey and hill fires. there is the risk of flash flooding. they are powered by more than 2700 journalists.
>> from bloomberg world headquarters in new york this is the close. >> we are 30 minutes from the end of the all-important trading day. i'm looking at how energy is playing into this context at the moment. it has been energy leading the charge. 1.3%. there was a move higher as we .ee some stabilization going on it managed to hold on to this gain. oil, you put it best.
trying to stabilize here. .0% this is what the intraday looks like. volume is low. this is the average time. if i pull up wei go, looking at volume that is 20% below the 20 day moving average. take that decline with a grain of salt. u.s. stock still in the green at the moment after yesterday's selloff. it is still a rebound across that. that left investors nowhere to hide. energy stocks having their best day this month, at lest -- at least earlier. for more insight on the market in thelet's bring
bloomberg opinion columnist now by phone. for speaking with us. i want to start with how people keep saying we are in the late stage of an economic cycle. give us perspective. is this gyration what we can expect? guest: thank you for having me on. we are in the late stages of cyclical growth burst. the question is whether we get a handoff from cyclical growth to structural growth. the late stage cycle you see clearly, in housing and automobiles. they have slowed down considerably. the u.s. is getting a handoff to structural sources of growth.
that is why i don't see a recession in the next 18-24 months. there is no handoff going on. liquidity has changed radically. is a concern. thank you for joining us. durable goods starting to show some weakness. investment is not being plowed into by businesses when they have had corporate tax cut's and lots of things to stimulate the economy. >> there are fewer monetary levels to pull. tot is when this transition
secular structure growth is important. keep an eye on the interaction of three things. business investment, household consumption, and government spending. all three are relatively robust. the hope for the u.s. is that you get a cycle. gloom and doomhe about the u.s. growth outlook. i am worried about europe and china but not the u.s.. arelet: i hear what you saying but others in the industry are sounding the alarm on credit. especially corporate over leverage. see in ge might be the tip of the iceberg. there is going to be more issues with investment-grade debt in the months to come. where do you stand on that? >> there are pockets of
accessible risk-taking. that is a consequence of a long period of ample liquidity but the since by the markets that the fed would always have their backs covered. we have seen excessive risk-taking concern areas. high-yield bonds, measure markets certainly. i am with them in the sense of saying be careful about the quality and liquidity you have taken on. ande will be shakeout's certain liquidity. caroline: the market seems to be hoping a little bit more that the fed has its back once again. the federal reserve might pause come 2019. is the data bad enough for that? is different. the market has to realize this.
this is a fed that is seeing economic signals point to further hikes. this is a fed that is worried about financial instability down the road so it would not mind taking steam out of the excessive risk-taking, and not convinced about the spill backs from the rest of the world unto the economy. this is a fed that also wants to show that it is politically independent. so i think it is going to take a to pausefor the fed considerably. hike but iuse on one think the market is hoping to much. you need to see weakening in the u.s. economic indicators before the fed pauses. different fed a and a lot of that is because who is at the helm.
jay powell, different in how he communicates than janet yellen. people say his comments regarding u.s. rates being below neutral was what sparked the selloff. since then other fed officials have come out and walked that back. what is your confidence the central bank will not be behind the curve in this different fed formation. shiftedalance now has behind thed being curve in hiking, which was the case in 2015 to the possibility of the fed over tightening. the balance of risk has moved. the fed i think is aware of this. moderated their signal that the chair had given a few days earlier. i'm interested in your
perspective. where you go for a safe haven right now. you only have certain amounts can full given the rate hikes are still anticipated to a certain extent. where are you, is it all about cash at the moment? how do you ensure your portfolio is best placed in these times of volatility? >> it depends how sophisticated an investor you are. it is about being in cash or at the short end of the curve. are actually being paid something which is a change from quite a few years. sophisticated, you have to think about hedging and the most efficient way to do so. it used to be very cheap because volatility is low. it is now not as cheap as it was but for retail investors, it is
short data treasuries and caps on are that gives you the option to pick up good names at cheap prices. when we get these technical dislocations, it tends to be indiscriminate. you do get good quality names trading at cheap prices. what do you want to take risks? what do you think is now good to move beyond being cautious? would it be overseas in emerging markets? >> i would not go to emerging markets yet. quality and liquidity matter. i would have to principles. you want to take risks actively cannot passively. ins is not the time to file two cash products. no yourself. know whether you are willing to underwrite the volatility.
this is a fundamental change in the liquidity regime. volatility is going to stay with us for a wild. the worst thing you want to do is end up being pushed out of a trade because you could not stomach the volatility. caroline: great lessons and thoughts. bloomberg opinion columnist joining us by the phone. we thank you and wish you a happy thanksgiving. coming out, betting on best buy. upgrading the big-box retailer. and deutsche bank does damage control. minimizing risk after a tough year. getting the deal done. t-mobile tweaks its argument to buying sprint. this is bloomberg. ♪
business headlines. ,he trade war with china factory orders for business equipment has been this way for the third straight month. deutsche bank tried to minimize risk. instead it lost $60 million. the trade in new york pulled millions of positions into one portfolio. there is a signal at t-mobile, t-mobile telling regulators to tie up which would compete more vigorously against at&t and verizon. scarlet: looking to the closed at a bit of a fade in today's games.
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gains. scarlet: still positive on the nasdaq. the dow barely cleaning -- clinging on. fairly low volume as well. a b.a.t. go, the red shows how much below average the trading volume is right now. everyone left already. they are traveling. the with picking up over last couple of days. it was elevated. here is the drop off. that just gives you a sense. a lot of groups making a comeback from the last couple days. a lot of the tech hardware companies are still wobbly. same way that
amazon has been getting more of an upward breeze. apple concerns. the risk appetite seems to be new waning. a deeper dive into the action. >> this is a videogame retailer that has had a lot of issues. fact people are not buying physical disks anymore. popping, one point we are up 18%. the most in 15 years. this company agreed to sell its wireless stores for $700 million. this was considered one of the drivers of growth. they offloaded it. take a look at the year to date. it has an outdated business
model. it needs to regain a sense of why it needs to be. waxed taking a look at shares in the media sector. disney, ideas list, comcast, and a few others. these are now focusing on the tried and tested names in the media sector as we move into the more volatile time. he singles comcast out as a defensive play if we end up in a recession. the media stocks have not been doing that well. s&p 500 media index attracts most of these stocks down year to date. they are down with the exception of disney. year due up 35% on the to dealmaking they have been doing this year. topees them as one of the
local media stocks to own and likes disney as well. scarlet: all right. thank you. a reversal of fortunes for the sectors that have been leading the way down. big laggards of the day rebounding as wells fargo see this as an opportunity to buy. , the markets live editor. in andhave been jumping liquidating their stock holdings. talk a little bit about wells fargo. now is the time to dip back into equities. >> the best entry points since before the election in 2016. i think the broader message from different strategists, we may be seeing the bottom. we are testing that low we saw in october. the market has to retest these
lows. it happens all the time. staying above it is a positive sign. that overriding message, a new volatility regime right now, it may be a good time to buy if you can stomach these consistent swings we have seen. your you can sort of burn password and forget about it for a little while. it is a logical thing to conclude. the big story is this story, theyr officials thinking will posit in the spring on rate hikes. they are data dependent. we have a lot of fed speakers next week. morepefully will get
concrete idea of what the thinking of the fed is next week. theink that still is biggest variable about whether or not this is the bottom. let's bring in another voice who thinks the fed is one of the key things to getting back in the market. matt, you have a new callout saying perhaps it is time to buy in. >> i am not one of these permanent bulls. i have been cautious going into october. even when we saw the first bounce in the market. the bearishness. everybody seems to be bearish now. looking at a good measure of sentiment, the daily sentiment
index of futures traders. it is only 8%. that is low. low single digits, it is usually a sign we are going to get a near-term bounce. going to get too far, too fast in terms of switching sentiment. d make anything of the failure to hold the gains today? >> that is not something you want to see but it doesn't surprise me. we are going into a four-day weekend. people aree of these worried about you are going to get something new, on the trade front or the federal reserve. that doesn't really surprise me. you are going to have to see how things trade. torlet: you doubt want belong this market given how volatile things are. there is a four-day week and for many people.
president trump could tweet anything. >> that is true. looking at the leadership, back to that strong group the communications and defenses doing less well, that is the setup you are going to need to see a sustained rebound. --is low volume day before it is hard to make too much out of this. there is a lot of information that is going to come at us in the next week from the fed. it will could be an entry point to the market. of a is always that risk trump tweet that makes the trade , or seem more aggressive disappointment for what people are hoping in the fed. caroline: we were just hearing from mike about the different
sectors in the lead. if we do get a bounce from here on out, which sectors lead the charge? do we see tech take the lead? think it is going to be value. the initial bounce will be from these highfliers. they are so oversold. they will outperform for a little bit. especially in the tech area, we have seen this change. texasw how advanced instruments -- they gave poor guidance. that is going to be something that will be with us for a while . the other thing is facebook. the chances of more regulation then the group has grown considerably in the last couple of weeks. that is quite a take a while before we know how much regulation they are going to get. ishink what we have seen
this group is saying -- being re-weighted by the institutions. even though it will bands -- bounce back it won't be the same degree that we saw the lowsscare seconds -- joe: you are five seconds before the close. the dow is basically going nasdaq up near 1%. the nasdaq has really been a big lacquered lately. although today was awe-inspiring, those are the big losers of the recent action.
scarlet: it should be noted even within the nasdaq's, certain tech stocks are doing better than others. microsoft is seen as more of a value play. as a result, you are seeing a lot more people talk about the microsoft of the world holding up better, looking for the defensive names within the tech sector. caroline: i think it is worth pointing out that you have the bounce back curtailing some of its optimism. are morepeople cautious as we head toward the holiday. let's dive deeper into the action. romaine, what did you watch on the close? romaine: it was still a relatively good day considering what happened in the past two days. nasdaq composite is below the 200 a moving averages. few take a look, we had a few stocks that hit 52-week highs on an intraday basis. the only problem is five of the --cks the sixth one of the trash collection company. we did get a few intraday lows
as well. that was tapestry. the coat -- owner of coach brand. in the drugmaker para go. they managed to finish above the 52-week low so i guess we could find encouraging news there. overall, a relatively flat day as we move into the thanksgiving thetomorrow as well as weekend. friday will only be a half day invite -- volume will be light. scarlet: let's bring back matt and mike regan. matt, volume will be incredibly low on friday. it is a half day of trading. what will get it done? what kind of closing out of positions might investors look to accomplish on a friday weather is not going to be a lot of activity and you won't get very much headline news? matt: i think one of the
interesting things to do for investors is what we refer to as line the bucs. there are stocks that have been beaten up and what you can do is put it in ever lowers -- ever lower areas. the market can bounce around because they are so thin. certainooking at prices, putting them in before the market and putting them in at a limit level. that way, you can pick something up if you get a situation with throwing the baby out with the bathwater. those are tough days to get a lot done. everybody knows it is kind of a quiet sideways day. joe: what will everyone be watching this monday? mike: monday, we will get a lot of information about the black friday sailors -- sellers. retailers have not gotten much of a pop. scarlet: except for foot locker. mike: yeah.
you do sort of get the early read on the holiday shopping, even something as simple as images showing lines around the blockage source, it helps psychology for people. there's a lot of expectation that this retail season will be good given the tax cuts. retail stocks are not reflecting that much. it is an interesting set up. forward, past that, when you stick to the consumer help, a lot of people will not reap the benefits of these individual tax cuts until they get the refund in early 2019. i see people speculating about that and maybe yes, some withholdings are with adjusted -- our adjusted drug the year but a lot of people will get a nice refund check area caroline: how important -- check. caroline: how important will black friday before you? matt: i think it will be interesting.
these stocks have been some lately. on top of the tax cuts, tax rebates i should say, the wage growth it's finally picking up and we see signs of that of course. crude oil is falling out of bed so gasoline prices will come out o up. if they get positive news out of it, it could be a big surprise to the upside so i agree with what micah saying. scarlet: what about the upcoming meeting with trump and president xi jinping of china? how much can we take our cues on what we might see as the initial reaction in asia for instance, matt? interesting how some of these asian markets -- you look at the chinese stock market which has been underperforming for quite some time, it is bouncing back nicely. if they can any good news, that's will be -- emerging markets will be one area where
it will surprise people to the upside at least on a short-term basis. the thing people are going to be looking for, not so much as a concrete agreement but something that pushes the 25% tariffs from their further away january starting date. there was rumors around that earlier in the week. if we get something like that, that will be bullish for the market. that is what people will be focusing on. does the dollar go higher or lower? are you expecting the fed pausing into 2019 or focus on the data? matt: i have always said not only is the fed dependent, but they are market dependent -- data dependent, but they are market dependent. urthersee a f
pullback in the market, i think they will change their tune. the thing on the dollar, if they get any sign that they are pulling back, that should keep the dollar there. bullish on the dollar is strong. everybody is on one side of the boat and positioning is strong and long on the dollar. back to be a big surprise. look at everybody on one side of the boat, they usually move at least to the middle of the boat. that would be another reason as to why emerging markets could give us a surprising outcome. joe: when you look at tactic, certain pockets of tech it is easy to see a clear story whether it is a weak outlook from the chip stocks, the controversy around facebook, that there is this numerous momentum software names that seem like they have been doing fine but are getting killed. adobe, stuff like that.
that looks more like speculators, liquidation, and what do we know about that? mike: it sort of a position watch out to some degree. goldman sachs has this hedge fund trend reports out every quarter and it is kind of a fascinating read. a lot of people say is there anything you can take away from their? they pointed to the notion that you can. hedge funds pile into a position, it is pretty bullish in the next quarter for those types of trade if they do. if they back away from them aggressively, like we saw in the last quarter with a lot of these tech and momentum names, it really is bad for those positions going forward. that trend tends to continue into the next quarter. they are extrapolating from that that leadership on monday the spent of stocks -- leadership --ng the defensive stocks
caroline: markets closed ahead of the thanksgiving holiday. it was flat on the dow jones. ands&p 500 held onto gains the nasdaq in the tech sector is the upper former. joe: the question is "what'd you miss?" caroline: a mixed bag of economic data. is a sting home sales rising to the first -- for the first time in six months. what the numbers could mean for the fed plans ahead. trump tweets. crude surging the most in five months even after president trump urged keeping oil prices down by thinking saudi arabia. what the reason tremors and big tech could mean for company's plan to the public -- plans to go public. got axisting home sales rising surprise. even with the increase, the housing market remains solid. by more now, we are joined
bloomberg economics. >> if you just look at the data, you are thinking we just had a rebound, but the longer-term trend is still down. the reason for that is rising interest rates. there was a piece the other day that said while we have affordability concern striking down the housing market, late in the cycle like we are now, you start to see income growth outpaced house growth. even though we are expecting the short run to be a little sluggish, we expected to be pick up later down the road as we get the stronger consumer base. romaine: when you look at some of the goods numbers that we got, some of the numbers were concerning. you are starting to see spending on these big-ticket items not keep pace with where some folks think the economy should be going. tim: that is right. when the third-quarter number came out was the sluggish a one-off number
movement or are we going to considered that continue to see it. it was not just the headline number that was week, we had extras british and which is your underlying sense -- ask transportation which is your xderlying sense-- transportation which is your underlying sense. some suppliers have been saying tax reform giving some boost. caroline: do think the fed will be looking at any of this? tim: i think this causes them a little bit of a hiccup. i do not think it will change december but it most certainly has them looking into 2019, maybe for two hikes, i would not be surprised if we had a pop in march to see where we were. markets isity
something the fed looks out but will not react to. these numbers are something that gives them pause. joe: do you see any signs of economic overheating? tim: that's a great question. signsk there are some that we are above where we want to be and trend growth is around 1.9-2 percent. that means we are probably posting 3% this year. that is a place to look and consumers continue to show up at the sopping malls -- shopping malls. romaine: let's stick with consumer spending because that is on everyone's mind.
are making it out to be? some of the reports seem to be that while spending total is up, consumers are spending more on discounted items and things that may not transfer over to the economy. tim: one thing to take away from the durable goods report is that you might see some of a sugar high from tax cuts this year putting more money in people's pockets. when you look at the bigger ticket items, houses, cars, all those items -- the pace of gains is slowing. little on pick up a discount purchases. next year we might see a slowdown in consumer spending as people are talking about. i want to look at drivers as what is consuming markets. it has been geopolitics. in u.k., everyone is worrying about exit. driven byf that is the china it -- by china and u.s.? tim: i think it could be. the u.s. economy is predominately domestic. while some of those external some investments
slow demand, you are seeing now, as you can see consumers going slow and demand tapers off as businesses are saying where are the opportunities to invest. i will not build a new factory, not invest in technology if i do not see demand. i think the story is more about what is going down domestically more than the international peace, that that is not to say the international peace does not tip one way or the other on the margin. mahedy, thank you for breaking the economic data down. --mp says thank you by the thank you. why the president is tweeting out words of praise for saudi arabia today. this is bloomberg. ♪ bia today. this is bloomberg. ♪
caroline: the european commissions says italy's budget violates eu rules. the european economy commissioner told bloomberg today that the italians are forcing the commission to act. the para meters capable of producing that is way too high. we received no answer which is why we are persistent and we see that there is a very serious deviation to our roles which is bad for the ozone and italy as well. it has to be corrected one way or another. let's bring in a bloomberg opinion columnist from rome on the phone. what next? >> what next is that the european commission is taking another two weeks before formalizing the procedure. the standard rules.
they are not inventing anything new, but i think it will be a last-ditch attempt to obtain something from italy. the question is whether rome will budge. all the indication we've seen so far is that the two parties in rome have no intention to change their mind on the budget at the moment. i think there will be two weeks of discussion and if that does not happen, we will go into uncharted territories. joe: what could those uncharted territories mean for investors, particularly buyers of italian bonds? ferdinando: investors are paying a slightly different game here which is trading on the fundamentals on what is going on in the italian economy and there are lots of reasons to worry. the discussion with the commission will take a long time.
this will happen possibly after the european election next year. if by neil tech on up, there was a very important option of -- optionestors important to retail investors. the italian economy is slowing. these are the things that matter to investors. caroline: do they really matter to the italian government? italy, they, eu, are kicking the can down the road. finds will come potentially, what forces the hand of the italian government to change? the market? ferdinando: the trouble at the moment is that the italian government is made up of to bring parties which makes it hard -- two parties which makes it hard. no one can be fully in charge of this process. islong as the government made up of two parties it will
be hard to make a u-turn. will have two parties an incentive to collapse the government and go through another election to try to win a majority on its own. that is what is on people's mind. as long as we see no sign of --,, as money becomes growth slows down, this will be the scenario. romaine: thank you very much for that, ferdinando. let's move to oil. in the u.s., wti crude have fallen for the sixth straight week and could be headed for a seventh. the president of the u.s. thinking saudi arabia forgetting oil prices lower saying it is like a big tax cut for america and says it has gone down to 54 from $82. let's get insights from david marino. david, we did not get to 82 and the president
point -- president's point stays. on the saudi arabians responsible for this? david: not really. president trump, by giving waivers to some of iran's oil and surprised the market a bit with that and that certainly helped the drought. joe: how much of this was supply-side versus demand-side? david: there were demand-side factors as well. some sense that global demand is slowing or growth is not as robust as it was two months ago -- starting to that would have an impact on demand from one of the biggest -- some of the biggest customers of oil. some questions
about demand and saudis in russia and the u.s. production is zooming. caroline: to that point, how much does the fact that the shale could be going great help or hinder the opec and its allies to decide to pull back on production or not. david: they are caught between a rock and a hard place. if they decide to take a lot of supply off of the market, they can improve prices, but then that really makes u.s. production, which is already profitable, even more profitable. all of these wells that made them questionable to drill and complete, they will be finishing them. u.s. production will increase that much faster. romaine: when you look at the map and you see all of these pipelines and you look at oil net, 54, assuming he does not
rocket back up into the 70's, a one point does it become -- what point does it become unprofitable? david: building these pipelines will keep it from being unprofitable. earlier in the year you saw prices and west texas dropping far below where they needed to be and where the market was in houston and globally. a question, can they keep drilling if they cannot get to market? pipelines in the next two years that will encourage. joe: they have been able to increase the throughput of the existing pipeline, how does that work? david: they can increase the horsepower on the pumps that drive the oil through the useline and they can chemicals that produce the friction in the pipeline and allow it to flow that much quicker. you get a little bit more. every little bit helps. david marino, thank
you very much indeed. a quick check on the latest business flash headlines. another sign of falling demand, assembler plans to cut two point $9 billion of expenses -- $2.9 billion of expenses. 10% of non-technical staff will be eliminated. gamestop is getting out of a business that the company once viewed as a key to future growth. unit has amobile most 1300 stores. at&t changed its conversation to resellers last year. that is the business flash update for you. coming up, talking tech. it's companies went public this year stand back. we break that down with the ceo
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that's $150 off the mattress, plus a free pillow - and free shipping too. go to buyleesa.com today. you need this bed. >> let's get your first word. president trump responding to john robert's criticism with him with a tweet which reads "you do indeed have obama judges." earlier today, the chief justice affirming the u.s. does not have obama judges or trump judges, bush judges, or other judges. jim mattis has the white house has given him the
this could mean directing troops that attain migrants in defense of border patrol agents. that means troops could use lethal force to protect the border patrol. british counterterrorism police are investigating after finding what they think are two improvised explosive devices. this is in the northwest neighborhood. neighbors are home after evacuating for eight hours. greece's bailout predators have approved to scrap pension plans after the country delivered a strong budget performance. the european commission said the cuts were no longer necessary. according to the draft budget, the debt will decline from 180.4% output to 167.8% next year. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.
tech ipos down 45% from their highs this year on average, but remain up about 4% for the year. here with us on a wrap on how companies -- how companies that went public there in the market. let's welcome read wallace. rett wallace. some crash on the months but they are still up on the year. rett: it is a fascinating trip. we have said earlier in the year, the second quarter for example, when everything was up almost double, we spend our time scoring these companies so people can invest in the good ones enough the bad ones. that did not matter for a long time. we find it matters again. even though tech ipos are up 4%, the high school is her up 10% and the low scores are underwater, which was far from true for a long time. romaine: some of the names that
we saw that people piled into typically were a lot of the software names. now we are seeing a little bit of weakness, what is going on? rett: there is weakness everywhere in the sense that everything is 45% off. i down threehings quarters from where they were in the peak. some are up 100% for the year even though they have given up a third of their high. the dispersion of quality versus not quality is interesting. one company in particular, a chinese media company, defied all logic in our estimation and was up a triple at one point and is now a third below its ipo price. it was a great trade and now it is over. caroline: is there any irrationality in this head of the selloff? are there any opportunities where things have gotten oversold and we should be getting in? rett: that's interesting in the sense that the buying
discriminate was up whether it should have been or not. nothings revert to something that makes sense to us. if you are looking for things that don't make sense, there is a company way off of its high but looks a little high to us relative to its score and dropbox seems like a good bargain. joe: when you see the market turn across the world for tech ipos, will we start to see that show up in filings as an fewer of them? rett: we saw things recently that indicate this, companies have filed -- for example, tencent music is on file and we are seeing if they will go. there are rumors that they will end reporting that they won't. there's a fashion retailer that could have launched by now it hasn't. it could mean this year is done for tech ipos. romaine: what about next year? we have big ones hanging out there like airbnb. rett: the once people are
waiting for next year are uber, --t, pelletier, pinterest romaine: what is going on with volunteer? -- palantir? rett: all of a sudden there valuation and shareholders are in the newspaper. they are trying to figure out what their future might hold and their bite me a bunch of different ways they go. we hear they are thinking about doing a direct listing like spotify did. the answers will see. caroline: what about the flow of ipos coming from china into the u.s.? you mentioned how tencent music has been put on hold. do we think that flow will stop particularly now that the u.s. market is racing down again? rett: our sense of why we saw those in the first place was that the u.s. market was relatively more favorable than the chinese market where there has been a lot of listings as well. companies, weese
like to pick on one because it was such a low scoring company that it over performed. some did really well. reason in theny numbers so far this year as to why the chinese would not continue if that was their inclination. romaine: backup. your company scores ipos on the various factors. how much of the scores when you talk about high or low scoring companies is strictly in financials versus other aspects of corporate governance, structure, things like that? rett: we have a 15 point scoring system. we score the transparency. if they don't tell us what they do, that is not good. we score the management team come aboard, products. we look at momentum, who their investors are, who the syndicate is taking them public which is important. we look at their fame and buys.
-- buzz. and we look at momentum. is it happening or not happening with this company? that gives us a wide range of scores across the range for the companies we have seen this year. ranging from the lowest score down in the fours all the way up to dropbox in the sevens. caroline: i'm interested in not only the market selloff, but also some of the pain we see among staff chat -- snapchat coming to mine as does facebook. snape allowed basically all of the voting rights to be held by the founders. will that go out of fashion now that we see the ramifications it repercussions the come to hit the likes of facebook? rett: we saw in snapchat, something unusual. we score the founder power of companies. ae founders controlled management team, board, and shareholder vote.
we continue to see very multiclass systems that ensure founder power over companies. in general, it is very good. it is correlated with good performance companies. ind founder we f power to be good. misunderstanding that business is what we think led to the diversion since the ipo value and the ultimate value. selling ad campaigns up against facebook and google is something hard to do. caroline: rett wallace, thank you. a bloomberg scoop. uber will withhold taxes from its drivers in mexico. this is an opportunity to make good relations after years of mutual hostility.
mexico has been increasing its tax collection. let's go to our reporter broke this. she is in mexico city. how much of an about-face is this for uber for example to be really working with the government from the very offset to help this tax collection? >> good afternoon. it is an about-face and as you said, the company has been battling lawsuits in new york, london, all throughout this year. and mexico, it seems they took a different approach and they are cooperating with the government. they were in negotiations for a year and now they are ready to jump into this program as soon as next year. i is a different approach and but the mexican government is welcoming of this new attitude. romaine: could you give me a sense of how much reach uber has in the market there to the extent that this new agreement will have any real dramatic policy of fact? about: uber in mexico has
an 84% market share so it is pretty big. into --rs are divided there are small ones that have about 5% each suit uber is the main player. mexico for uber is the third-largest market. the first is the u.s. and the second is brazil. the third-place is a battle between mexico and india. it's a big opportunity for them to be in good terms with such an important market. joe: andrea, how does this move with uber fit into a broader effort by the mexican government to crack down and reduce these informal, undocumented untaxed economies? andrea: we will have to see how the uber drivers respond to this agreement. is annot that mexico informal economy, most people do not report or pay taxes.
if they are able to skip it. it is a big drive from the government to automatically reach into this income that basically goes unreported. the thing here, as my sources say, it is not about the money, the quantity they would get from the taxes, but about the president of being able to tax companies just starting to come here. is ride-hailing in for delivery, but the next plan will be rentals and other sorts of online companies setting up shop. . -- shop here. caroline: a great scoop for us from andrea navarro. thank you. is the bull market finally breaking? we have the chart you cannot miss. that is next. this is bloomberg. ♪ ♪
joe: it is time for the smart charts segment where we dig into timely topics with the streets top technicians. zimmerman now is walt . his previous appearance sounded the alarm on brent crude which is now looking precious. you brought us a new chart showing the breakout of a rising wage and brent, and now it is sitting -- it is hitting. walt: first, let's go back. everybody was bullish and long. in the market was overbought. into the seasonal picking window, the wedge broke. risinget was taking the wrench with distant line and drawing a support line to it.
bearish rising wedge, does it turn into a bullish up wedge channel? it has to from here sitting on the support line. 64-55 is where the line cuts. joe: just to be clear is what we are seeing with the current support line is not necessarily a line that bisects with the bottoms of the range, it is just parallel to the top of the wedge. walt: yes. it creates a bull's uptrend shot which may not hold because it is on the right -- on that's right now. things get ugly if that's why brakes because we are talking bear markets and correcting the to 8674.ve from 2710 of support, ifng we want to talk about equities, you look at the nasdaq, you also have a chart showing the nasdaq has been bouncing along its long-term support line. before bounced off of it
a couple of years ago. i guess the million dollar will be different. 8133 worked perfectly as a multitier peak. bearish momentum divergence, off the charts valuations, everything points to the line being vulnerable. that line cuts this month at 607a.d. that is not that far away given recent volatility. -- 6780. that is not that far away given recent volatility. then you are in a bear market. att started at 1108 and it 8133 in august -- ended at 8133 in august. if you take up the trend line,
your first thought will be around-- stop will be 4200 with a retest around the last major low. below that, 2900 for a retest of the last major high. these are giant steps, but the nasdaq has done a kind of thing before. i'm calling this the tax-cut policy. lastine: interestingly, time you came on, you are looking at the technicals, it also sounding the fundamental alarm when you highlighted china here. walt: the exposure of a lot of things here. of the thought that you can build a global economy based on cell phone sales, internet average rising -- internet advertising, and the faang stocks. during the bullish hysteria, nobody questions that kind of
idea. thathere is recognition while a bubble is inflating, the outrageous is expected. as the bubble deflates, people start lowering their expectations on everything. caroline: we will see how those calls go. 40% lower if we fall below that support line. walt zimmerman, great to get your perspective there. a quick check on the business flash headlines. shares of johnson & johnson fell the most since february. a u.s. appeals court refused to stop generic versions of a cancer drug from entering the market causing j&j millions in sales for one of its products. american consumers have ramped up their online spending before black friday. , theying to a report spent $32 billion which is
up from last year. they began offering holiday promotions and delivery deals weeks ago. deutsche bank try to my demise lost $60 million. traders in new york pulled billions of dollars of decisions into one portfolio in an attempt to dive her losses and make more money but the strategy did not work. that is your business flash update. it's time for a look at what stories are trending across the bloomberg universe. terminal readers are learning that deutsche bank put $2 billion in small portfolios to , instead, they took a million-dollar -- millions of dollar losses. tomorrow is thanksgiving. do you even know how to make a
pie? if you need a quick dessert, bloomberg.com reach of the biggest -- best pies in the country. today, zimbabwe president of 30 years resigned his post. tictoc on twitter looks at what changed. you can follow allah be stories on your terminal on bloomberg.com and on tictoc on twitter. joe: coming up, a board divided. remainsrman of the sun unclear as board members declared there is not enough detail on his crimes. that is next on asia ahead. this is bloomberg. this is bloomberg. ♪ s is bloomberg. ♪
hours to go before they vote on whether to discuss the chairman. boardman -- board members are divided. here with more is shery ahn. it feels to me that the ceo of nissan is driving the guilty before being proven instant the point here -- innocent viewpoint here. shery: he was a protege and he has been driving this investigation within nissan and also explaining it toward the public. we are in a situation where we are headed toward the board meeting happening thursday afternoon. that's overnight in the u.s.. it is a nine-member board and will be decided over a simple majority. sources telling bloomberg it will be difficult to secure that unanimous decision given some of the directors used to work under him and they may not back the dismissal until they learn more about the situation. we have seen his statements come saying this stage
the board is unable to comment on the evidence seemingly gathered against mr. ghosn and the japanese authorities. romaine: there seems to be speculation this might be a little bit of a corporate to -- coup. shery: exactly. it given we had heard of the grievances from the japanese side when it came to the alliance, that power dynamic has been pretty one-sided. a lot of observers say this gives a lot of power to the french side of the state -- side. the french side owns 50% of the state. joe: what do we know right now about ghosn's situation in the japanese legal system with prosecutors? shery: the thing in japan is not as clear-cut here as in the u.s. where you charge somebody, mcculloch v of these allegations, and you go through
a trial. right now, ghosn has already been arrested. from officials saying he will be in detention for another 10 days. how prosecutors proceed is not clear given it looks like the probe may be expanding a little bit but not only against ghosn but also against nissan for providing all of these residences to carlos ghosn without any business reasons. caroline: thank you, shery ahn. for more on the stories, do not miss her. "bloomberg daybreak: asia" is 6 p.m. eastern. according to aaa, more than 54 million americans will travel 50 miles at least this holiday week. here's what you need to know about the biggest transportation focus funds. >> one etf that could benefit from a surgeon americans traveling over the holidays is the ishares transportation etf. known by i y t. the fund has roughly $700
billion in assets and tracks 20 airline, railroad, and trucking companies found in the dow jones average. weighted meaning the highest price per share has the biggest waiting. ups, andion pacific, jb hunt. since launching 15 years ago, they have taken off returning more than 300%. outperforming the s&p 500. it comes with a relatively high expense ratio of 43 basis points. iyt gets a green light in the traffic light system with a notice for its price with portfolio. don't forget to watch etf iq scarlet fu every wednesday at 1:00 p.m. new york time. that is all from "what'd you miss?" romaine: "bloomberg technology" is up next. joe: have a great evening. romaine: you have to weigel.
emily: i'm emily chang in san francisco. this is "bloomberg technology." sandberg, why the facebook ceo says he wants to work with sheryl sandberg for decades to come and says he has no plans to step down himself as chair. cut, foxconn is planning to $3 billion from expenses next year. could this be a sign of trouble for the global electronics industry going much deeper than apple?