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tv   Bloomberg Best  Bloomberg  March 24, 2019 3:00pm-4:00pm EDT

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> nejra: coming up on "bloomberg best," the stories that shaped the week in business around the world. the fed grows even more dovish, saying it won't tighten in 2019. scott: i'm a little surprised. i think they're overreacting. andrew: the real question now is will we actually we get through the end of the year with no rate cuts. nejra: with brexit d-day looming, the u.k. pleads for an extension. mr. barnier: we have done our best. we have done our best. david: there is not much optimism this side of the channel. nejra: deutsche bank and others in talks. google hit with another spate of
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fines. the outlook remains foggy for a u.s.-china trade deal. sarah: china is pushing back. it is not falling at the feet of the trump administration. nejra: and investors tell where and how they're finding value. marc: i think you have opportunities on the energy side. david: just taking futures trends and applying them to equities does not work at all. nejra: and in a time of political stress, german chancellor angela merkel speaks exclusively about the importance of stability. chancellor merkel: [speaking german] translator: we have to strike a compromise. nejra: that's all straight ahead on "bloomberg best." hello and welcome. i am nejra cehic. this is "bloomberg best," your weekly review of the most important analysts and interviews from around the world. let's start with a day-by-day look at the top headlines. the week began with major news in european banking as deutsche bank and commerzbank officially opened discussions on a possible merger.
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david: deutsche bank over the weekend confirmed it will enter into an agreement with talks with commerzbank. the combined entity would have over $2 trillion in assets and a market cap. give us your best argument for why this merger might make sense. matt: i have been talking to a number of analysts, a number of investors, and not a lot think the merger does make sense, but they all say deutsche bank and commerzbank have to cut costs. one way would be to shut down a lot of the branches they have here in germany and fire a lot of the people that they have working with them, 30,000, maybe 40,000, maybe more. the problem is, a lot of the investors and stake holders outside of berlin don't think
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that this merger would make a lot of sense. in fact, a lot of people i have spoken to today don't think it's going to happen even though christian sewing and martin zielke have been pushed into talks by the german finance ministry. guy: the speaker of the house of commons blocked another vote on prime minister theresa may's brexit deal. speaker bercow: what the government cannot legitimately do is resubmit to the house the same proposition or substantially the same proposition as that of last week, which was rejected by 149 votes. flavia: he wants it to be different, how different is up to them, but he said you lost by 149 votes, you cannot put the same vote again. so this really puts the pressure on her to either get something
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from the u.p., essentially from the e.u. saying listen, i know we've been down this road before, but we need something more. francine: what is theresa may's thinking? we are 10 days away. what are her options, one, two, and three? david: she is meeting with her cabinet to hash out where to go from here. stephen barclay, cabinet secretary, has been doing the rounds. he says we're in a constitutional crisis at this point, and the choices are about a long delay, and a possibly very much soft every brexit or perhaps no brexit at all. >> u.s. officials are telling bloomberg they're concerned china is putting back and walking away on trade pledges. president trump responding
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saying talks are going well. sarah: we have heard a very happy, clappy message from the trump administration that talks are going well. donald trump said things are progressing and moving along. the trump administration has indicated that sooner than later, there is going to be a signing summit between president trump and his chinese counterpart, and i think what our story revealed today, it pulls back the covers a little bit on the talks and show, china is pushing back. it is not falling at the feet of the trump administration. the issue that's the core u.s. free advance, intellectual property theft of, is a hard issue for them to agree upon. guy: prime minister theresa may asked the european union for an extension though brexit deadline.
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now it takes us to june 30. mr. tusk: i believe that a short extension would be possible. but it will be conditional on a positive vote on the withdrawal agreement in the house of commons. guy: it does seem as if mr. tusk has given theresa may one last chance to get her deal across the line. maria: he said something that we heard in brussels throughout the morning. the extension that prime minister may have put on the table, june 30, has many, many legal problems when it comes to the e.u., will clash with european elections. they said the u.k. will have to run in the election if it's still a member state. no emergency summit for the time being. obviously, the decision will come down to e.u. leaders. this is no doubt a political decision they'll have to make tomorrow. scarlet: we are awaiting the second fed rate decision of 2019, followed by a news conference with chairman powell. officials expected to hold rates steady, but they're looking at how much they downgrade. michael: it continues, no change in the fed's target rate, and they are done for the year. the dot plot now calls for no
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rate increase in 2019 as nine members move their dot to zero, joining the two that were already there. chair powell: the data that we are seeing are not currently sending a signal, which suggests moving in either direction for me, which is why we're being patient. scott: i'm a little surprised. i think they're overreacting. it's really amazing that in three months, with what i think are fairly de minimus changes in the economic data, that we've gone from this reversal of, you know, we're going to have at least one rate increase and two more, to now at most we're getting one, and we are not going to get that until next year. certainly the market is, you know, with the rally we're getting in treasuries, the market is starting to price
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unease. i don't think the environment justifies that. andrew: fears that some fed officials had a year ago that the economy was bursting out of control and in danger of overheating, those fears have receded into the background. the question now is will we get to the end of the year with no rate cuts. rishaad: president donald trump said chinese tariffs will stay in place until he's sure there's a trade deal. does this reduce the likelihood of a deal, because it sure seems like it would? tom: we have known for some time that the u.s. wants to have or use the possibility, have the optionality of using tariffs to enforce any deal. but by president trump coming out and saying that he isn't going to remove any of the tariffs of $250 billion worth of goods, even if you do get a deal, that does change the status of the negotiations. on the chinese side, they have been clear, they want to come back with a deal that doesn't look one-sided. they were hoping that the u.s. would show some flexibility on tariffs. it doesn't sound at this point like president trump is offering that flexibility. francine: e.u. leaders averted the threat of a no-deal brexit. they have agreed to give theresa may two weeks to work out what to do. if they don't endorse the deal, she'll have until april 12 to decide whether to leave with no
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deal or extend further. pm may: we are now at the moment of decision, and i will make every effort to make sure we're able to leave with a deal and move our country forward. mr. barnier: we have done our best. we have done our best. maria: i think yesterday there was a sense of frustration. today i think the sense is relief. david: we'll get another run at a vote in london, if it's allowed by the speaker tuesday of next week. the numbers are not looking good. there's not much optimism this side of the channel that that vote can be within this week. where does that leave her? they said she's either got to ask for a long extension or decide well, we're going to go for no deal. francine: if she had to choose between a no-deal brexit or very long extension of one or two years, do we have any idea what she would choose? >> i think the europeans
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strongly fear, and so do many british politicians, that actually theresa may, given that choice, would go for no deal. her obsession is tory party unity, and that's a message she's got across very, very strongly to everybody around her. she thinking, i would argue perhaps wrongly, that the only way to keep the tories together is to go ahead with no deal in that circumstance. i think that is what is scaring europeans. that is what is scaring the market. if she's bluffing, she's bluffing incredibly effectively. amber: the market is currently gripped by the fact that we seem to be getting a recession warning signal. this is when you look at the difference between the three-month yield and the 10-year yield, which has inverted. brian: it is the big one. this is the yield curve that accurately predicted the last seven recessions. this is the one investors are looking out for, it's the one that says something about the
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economy. the three-month bill yields more than the 10-year treasury. people are buying the 10-year protection, betting that the fed will have to cut rates soon. some of the data out of europe confirms the rate is slowing. you saw the german bund fall below zero for the first time in years again this year. i think it's a reflection of combination of the fed reacting to slow growth and the slow growth actually showing up in various data points, and the markets are sort of taking that and reacting dramatically. nejra: still ahead as we review the week on "bloomberg best," an exclusive conversation with german chancellor angela merkel. plus, howard marks and bruce flatt share the inside story of brookfield's blockbuster deal for a majority stake in oaktree capital. and up next, more of week's top business headlines. brazil's new president gets a warm reception at the white house. walter: president trump even hinted that brazil could become a full nato member. nejra: this is bloomberg. ♪
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nejra: this is "bloomberg best." i am nejra cehic. let's continue our global tour of the week's top stories. at a meeting of the opec plus alliance of oil-producing nations, the group kept supply curves are in place, but there's strain between the most powerful members. guy: saudi arabia's minister said opec and its allies have much work ahead to balance the global markets. who is the most important voice to listen to at these meetings? is it saudi oil minister khalid al-falih, or is it mr. novak from russia? annmarie: it is increasingly looking like the russians are the ones that are setting the agenda. they were talking about they have so much more to do in terms of cuts. inventories are building in the u.s. they are surprised about the shale output, and these cuts need to come. he did say we have to make a decision coming up, it was clear
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he said there's more work to be done to clear this. while this russian oil minister, alexander novak, says we need to wait and see. today, they said we're going to scrap this april meeting and there's only going to be one in june. it looks likely that they're listening and taking that cue from alexander novak, so that april meeting is off the table and then deciding on whether or not to extend these cuts the rest of the year. they will make that decision in vienna in june. david: president bolsanoro of brazil arrives in washington today for talks with president trump on a wide range of issues from expanded trade with the united states to brazil's
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membership in the oecd to cooperation on space launches. pres. trump: as i told president bolsanoro, i intend to designate brazil as a major non-nato ally, or maybe, if you start thinking about it, a nato ally. kevin: on the issue of venezuela, they are clearly on the same page, that really is the big takeaway here. they said in terms of trade and business relationship, the u.s. and brazil would be able to forge a new path ahead. walter: president trump even hinted that brazil could become a full nato member in the future. and bolsonaro, when he was asked whether brazil would support u.s. troops in the border of venezuela, kind of said that this is up for discussion. so there's something going on there. joe: another ex-president
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arrested in brazil. michelle temer becoming the second head of state to be caught up in the carwash probe. the news sent shock waves across the country, the benchmark fell as much as 2.6% today. julia: the concern is this will impact for pension reform, which is what investors want to see. it had been looking like progress was being made, and now we don't know how much of an impact this will have. guy: china's president is visiting italy to sign the first m.o.u., memorandum of
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understanding, with a g-7 country for his one belt, one road initiative. there has been some concern, both from washington and elsewhere in europe, about what they're up to. john: it's a vague memorandum, it doesn't have any specific business deals in it, but does commit italy to volunteer for a role in the one belt, one road initiative. separately, european allies are also worried, that italy going out on its own, negotiating this memorandum with china, is a breach of the united front that the european bloc is supposed to present. haidi: against a backdrop of global trade tensions, canada's trudeau government has delivered a budget that leaves the deficit track largely unchanged. josh: how exposed is canada to
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trade tensions? finance minister morneau: trade tensions obviously impact the global economy. so there will be obviously a knock on impact for canada, should the trade agreement with the united states and china be positive, and there'll obviously be challenges to the extent that it's extended. but i think what we have in canada is a situation where our economy is actually performing pretty well. we're getting through the oil price changes in last year, but underneath that is the lowest unemployment rates we have seen in 40 years. so it's generating strong returns for the government, it's generating strong returns for families, and our job now is to get the people that are working optimistic about training for the future and investing, so that we can continue with an economy that's working for most
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canadians. anna: rates are on the rise, at least in norway. the norges bank hiked its key rate for the second time since september and sees rates increasing again over the next six months. oystein: the background for this new policy rate path is that, on the one hand, internationally we see, especially in europe, in our neighborhood, we see lower growth, still uncertainties of different kinds, but for the norwegian economy, the recent information is in the other direction. it underlines that growth in the norwegian economy is stronger, even stronger than we foresaw. then there's no need for the low rates that we still have. david: we have the bank of england decision. alix: so nothing. basically. so nothing changed. that's a shocker. the rates stand at 75 basis
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points. it was unanimous. guy: the brexit fog is now so impenetrable that the bank of england really doesn't have any choice but to wait and see exactly what is going to be happening here. it's interesting that the bank is reiterating that the rate could move in either direction on a hard brexit. the market doesn't believe that. it believes that the bank of england would err on the side of caution and would likely loosen rates in the event of a no-deal brexit. the pound would be expected to move sharply to the downside. would the bank lean into that or against it is i think the question the market is asking. the suspicion is that the bank would not hike rates if you were to see an inflation shock generated by a pound move low. because it would see it as being a temporary factor. jonathan: president donald trump saying a deal with china is close ahead of a fresh round of talks in beijing next week. u.s. officials less optimistic about a quick deal. how close are we to a breakthrough? kevin: president trump says u.s.
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treasury secretary mnuchin u.s. trade representative bob lighthizer headed to beijing to continue the trade talks. meanwhile, if you switch gears from the u.s.-china trade talks, the president, in an interview that aired on fox business network, says he fully intends to keep intact the 20% tariff on light trucks in europe and saying the e.u. is treating the u.s. more unfairly than china is in some cases. scarlet: president trump announcing plans earlier today to nominate former campaign advisor stephen moore to the federal reserve's board of governor. mr. moore is also a senior fellow at the heritage foundation and co-author of "trumponomics: inside the america first plan to revive our economy." michael: he suggested that chairman jay powell be fired and the rest of the federal reserve should be let go for monetary policy incompetence. you called the fed "the swamp in washington." are you going to be able to work with these people? mr. moore: you know, that was probably written in a time of anger. and by the way, i think everyone would now acknowledge that what they did in december with the rate increase was a very substantial mistake, and the fed has, thank god, reversed that and changed directions with respect to the rate increases. so, look, no. i think -- i have never actually met chairman powell. i look forward to working with him. i know he wants high growth.
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he can be a hero if we get our monetary policy right. at the same time, we have these very strong, you know, pro-growth measures on the fiscal side of the equation. so you know, i don't want to be disruptor, i want to be somebody who can realy help chairman powell and the others on that board to construct the best pro-growth, stable price system that we can for this country. ♪
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nejra: this is "bloomberg best." i am nejra cehic. this week, german chancellor angela merkel spoke with bloomberg editor-in-chief john micklethwait at the global solutions summit in berlin. among many topics the covered, solidarity in e.u. she said the goals in e.u. are different, but they can be reconciled. chancellor merkel: [speaking german] translator: each one of us has different ideas of where to reform. that has always been the case in franco-german history. looking at whether they can well persuade one or the other of european member states. that's not something new. when you look, for example, at how the euro was created, that's very much a case in point. and the way that germany argued, the way france argued, has always been very different
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there. france has always said, or made a point for the stability pact not being so strictly adhered to or strictly interpreted to -- in -- or rather look more at the labor impact, the impact on jobs. we have always said be strict with a view to the financial sector, we will do so when we look at the capital markets union, when we look at the budget of the european union, that -- and all of the other 25, if i leave britain outside of it, we have to persuade them. that is a very important task. john: germany first toward the european union? chancellor merkel: [speaking german] translator: no, i don't think so. so i'm actually always opening up for compromise and have done
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a lot of compromise. for example, we have been heavily criticized on the copyright laws, and france very much has attached importance to also protect the startups and their intellectual property rights. that has in a way also brought us in conflict with our position agreement, where we said after eight years, after 10 year, we now finally have a common legislation on copyright and intellectual property. we have to make a compromise. i see a lot of young people out there demonstrating against it. but we have to strike a compromise.
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that's very much multilateralism. nejra: that was german chancellor angela merkel speaking exclusively with bloomberg editor-in-chief john micklethwait. coming up on "bloomberg best," more of the week's top business news and more compelling conversations. the u.s. agriculture secretary said deals could multiply when a trade pact is finally signed with china. and a pair of wall street's richest executives discuss the deal that brought them together. the brookfield deal with oaktree. howard: this transaction was not primarily price-oriented. bruce: it was just about us delivering for our clients, that's it. nejra: this is bloomberg. ♪
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nejra: this is "bloomberg best." i am nejra cehic. while the u.s. and china still face obstacles to a comprehensive trade agreement, progress has been made on some fronts, notably inclusive u.s. purchases of chinese farm products. this week, ag secretary sonny perdue spoke exclusively about the negotiation with bloomberg's shery ahn. sec. perdue: there are numbers that have been discussed. it is not appropriate talk about
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that publicly at this time, because negotiations are still ongoing. but it would be the easiest way for china to help reduce quickly the trade deficit of the united states. shery: do you see china importing more agricultural items such as grains, or more items that you mentioned, before pork? sec. perdue: well, we hope both. they need the raw commodities, they have an aggressive and vibrant soybean processing facilities there, so we think they would probably import raw soybeans. but on corn, ethanol, those will be processed here. beef and pork and poultry, more than likely will be processed here as well. it would be a combination of both. shery: will these come before a trade deal or as part of the package? sec. perdue: i think it is part of the package. chinese vice premier liu he made a good-faith offer of 10 million more metric tons on top of the previous 20 million. that gives us about two-thirds
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of the way back from where we were in the 2017 purchases from china. shery: when it comes to dollar value terms, we have seen china purchase about $24 billion per year in 2017. the only issue is that, for china, a really small part of their purchases, right? what, they import more than $120 billion per year. could we see the purchases being topped, topping those 2017 numbers? sec. perdue: i think we could. we could easily see, if we are able to come to a trade resolution, of doubling or tripling that kind of number over a period of two to five years. nejra: with global growth slow and central banks turning more dovish, investors around the world are adjusting their strategies. some of wall street's most respected figures shared market insight with bloomberg this week, starting with avenue
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capital's marc lasry, who told jason kelly an economic slowdown will be quite positive for his distressed debt business. marc: there is a lot of stress in the market, and what i mean by that is last year, the economy grew at greater than 3%. today, where is it going to grow? is it 2%? 1.5%? either way, that will be a 20% to 30% reduction in growth. you don't have a recession, which is what everyone is focused on, but what you have is a slowdown. for us, what we do on the credit side, a slowdown is great. there's a lot of different opportunities that are out there that we can take advantage of today.
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jason: all right, so let's dig down a level deeper. what sectors are you specifically interested in? retail is something that people keep saying may experience more stress or distress. what do you see there? marc: you have opportunities on the retail side. i think you have opportunities on the energy side. you are seeing that continue. then you have a lot of idiosyncratic opportunities, where specific situations that we have been able to come in on, where we have been able to buy the debt -- you have one situation today -- i won't
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mention names, but bonds are due in 2023, that's the senior debt. the unsecured debt is due in 2021. and there is, like, a $2 billion market cap, and those bonds are trading at $75. i think you will get paid off. i think it will go $75 to par in the span of the next two years. you have a lot of that here in the u.s. and a ton in europe, and much more in asia. for us, there's lots of opportunity. erik: what kinds of strategies are you employing in equities? david: in equities, we are applying a lot of strategies to do with how companies are organized and governed, what we call organizational matrix strategy. then we are employing our traditional technical strategies, a lot of global universe, customized and
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tailored to trading in the stocks universe. just taking futures trends and applying them to equities doesn't work at all, and that is the sort of graveyard companies have tried to do that. i am not under that illusion, but there is some of our knowledge of how to play futures have been applicable to our global equities. erik: this is still all systematic. david: everything is systematic. everything is systematic. though it is all governed by people, you know. i say this because some people say, you know, do you ever intervene? there is no sense in intervening. me and my team, we write a program, and we run the program. we don't put hoods over our heads and sit in the dark while the program runs. if the program, you know, miscalculated something, we would, you know, we would do something. nejra: staying with wall street, last week, brookfield asset management agreed to buy a 62% stake in oaktree capital. the combination creates an investing behemoth with almost
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$500 billion in assets under management. this week, the brookfield ceo bruce flatt and oaktree cochairman howard marks talked about the deal in their plans and exclusive conversation with erik schatzker. howard: this is a fundamentally sound transaction. we are not -- our entering into it at this time has nothing to do with the timing. as bruce described -- erik: nobody should impugn or infer some sense of where you think we are in the credit cycle, etc. howard: not at all, not at all. this is the forever transaction. whether it was or wasn't ideally time, which i don't have a view on, it wouldn't matter. erik: bruce, you told me in december of 2017 it was unlikely that brookfield would ever buy another asset manager. what changed? bruce: i guess you always have
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to eat your words sometimes. but look, i would say it is not something we have ever thought of too often, but as our clients get bigger and our offerings need to be larger, the one area that we were lacking to be able to deliver to them is credit. this business is large enough that it can be delivered to our clients. and many of the other things we could have looked at out there or even building it ourselves, we could have built it ourselves, but it just takes a long, long time, and given the scale of our business and the relationships we have, we just needed something larger. erik: to what degree was this a matter of being able to compete better with blackstone? bruce: you know, look, there is plenty of room for many of us out there. this is a $30 trillion, $40 trillion, $50 trillion, going to $60 trillion market. there is an enormous number of managers that are out there, and we compete with lots of people every day. this is just about us delivering for our clients, that's it. erik: you are both self-described value investors. you've made a career, you pride yourselves on buying low and selling high. how do two people like that agree on the terms of the deal
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like this? howard: well, again, erik, i think you have to understand that this transaction was not primarily price-oriented. we did not sell because we thought we were getting away with something. we were not actively involved in it. i think that is as it should be. ♪
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nejra: this is "bloomberg best." i am nejra cehic. let's resume our roundup of the week's top business stories. eu regulators cracked down on google with yet another significant fine. david: european commissioner margrethe vestager announced a $1.49 billion euro fine for uncompetitive practices on google involving its advertising service in europe, ringing the grand total fines against the company to over 8 billion euros. aoife: it has been quite a shot for google, and google says it is listening and will make some changes and hopefully resolve these issues going forward. the idea is that when you start up your android phone, you will get a prompt to get a different kind of browser or search engine, and this might give
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other companies a chance to get into the market. there are also as issues like shopping. but they are trying to get more competition for customers in europe at least. shery: ridesharing service lyft will need to raise as much $.1 billion in its ipo, valuing it at almost $20 billion. that range will be the biggest from the tech startups since snapchat went public. how is selling itself? eric: right. this roadshow is just getting underway, and it is very topline focused. we are growing the number of monthly active riders that we have, we are making more money off of those riders, revenue is very much focused on that $2.2 billion in revenue that they like to talk about, contribution margins in improving that
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measure of how much rides contribute to lyft's bottom line. but we are not at the " and here's how we start making money" rather than losing $991 million, as they did last year. anna: uber has reportedly picked the new york stock exchange for its imminent ipo. bloomberg has learned that it could take place in april, and it could value the company at as much as $120 billion. at that valuation, they would only have float about 16% of its shares to make the top five listings of all time. crystal: what we have learned is that they have a pickmeal stock exchange, a little bit of an unconventional pick for a new economy stock, because we have google, microsoft trading in the nasdaq, whereas the new york stock exchange has more retail-based. what we can see here is that there's probably a sentimental value as in why they picked the new york stock exchange over nasdaq, because the uber cfo, nelson chai, used to be an employee at the new york stock exchange. also what they are trying to do,
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and they are probably trying to differentiate themselves from lyft, which is also racing towards an ipo. haidi: xiaomi's quarterly profits beating estimates, seeing higher prices for its top two products really pay off. there is a concern about a cyclical downturn when it comes to smartphone demand globally. what were the major drivers we ended up getting this profit surprise for? anthea: xiaomi's numbers are quite impressive. the market in general knows that smartphone shipments slowed down significantly in the fourth quarter, from double digits to low single-digit for xiaomi. but the company continues to increase average selling price for three straight quarters since the ipo. the ipo rose 17%, and not only that, but the new branding strategy in january is they will split from the redmi brand, is another way for them to test the market for the redmi brand to have higher selling prices. that bodes well for the company,
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weathering through this downtrend in smartphone shipments. guy: shares in tencent under a bit of pressure today. the chinese internet giant missing the mark on profitability probably by the most in a decade. it has to spend more to generate topline growth, trying to pivot away from the gaming side of the business, which has generated so much of the profit in the past. it has got to come at a cost. why are investors shocked by this? alex: i think it is the scale of the spending was the big shock. clearly we know that in the middle of last year, china stopped approving new games, and that is the biggest revenue driver for tencent. one has to clearly imagine there was a decision of the top level to say, we are too dependent on games and need to find new sources of revenue. they looked at fintech,
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alternatives, and that is coming at a cost. revenue beat expectations. that money is going somewhere. they reduced money on marketing but invested in new products. one hopes it will pay dividends further down the line. vonnie: boeing's crisis is expanding once again. china now considering excluding the company's 737 max 8 jet. it pledged to buy outside of trade deal outside of the united states. is this something u.s. negotiators might have expected? after all, regulators around the world have put a stop to these planes flying, as have airlines, u.s. airlines and others. sarah: yes. even still, it would throw a wrench in the talks. one of the issues that the u.s. and china have been able to
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agree upon broadly in these talks so far have been china increasing its purchases of u.s. goods. and of course planes are such an expensive product that it's an easy way to ease that trade deficit with the u.s. our reporting shows that china is considering perhaps canceling plans for those purchases, but it also may just agree to buy different types of boeing aircrafts. alix: bayer falling in premarket trading. the company losing in the first days of the trial involving its roundup weed killer, allegedly causing cancer. how bad is it? what happens next? eric: it's a big blow for bayer. you see that today with their
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10% share price drop. it is the second case that has gone against them in the u.s. there are 11,000 some more to go. this obviously increases the pressure on them to reach a settlement with the plaintiffs pursuing these cases, which could get costly. david: biogen shares are down more than 20% in premarket after the company halted its late stage trials of an experimental alzheimer's drug. explain it to us. max: this is one of the last really big, late-stage studies in alzheimer's. it is something that biogen put as the centerpiece of its pipeline. this was their big bet. it of course has fallen apart. it is something that they and a lot of investors probably should have seen coming. without this kind of big upside, people are going to start paying attention to some of their other problems. multiple sclerosis, it is
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getting older, sales are flattening, has ip issues. their biggest newer drug is about to face competition. guy: shares of bmw taking something of a knock today. the company warning that earnings will drop to "well below last year's." harald: we need to be better on the performance side. we would like to save money on the one side on the vehicles, to reduce complexity, to reduce variance, to increase the contribution margin. and we would like to save money on the efficiency side on processes, linear processes. benedikt: and really bmw is caught up in a major storm right now. we have the tariffs, the major move of production from combustion to electric engines, we have the concept of sharing cars while owning them. this is something that is really creating a big cloud over the entire industry. emily: ford has announced it will spend $900 million and hire roughly 900 workers to build electric and self-driving cars in michigan. ford is cutting a shift of workers at its plan because of slow sales of the mustang and the lincoln continental, but it is adding workers to build next-generation vehicles. what do we know about what ford is claiming to build with these new workers? keith: they are going to
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continue to build mustangs in this plant, but they will add new electric vehicles there. they will no longer produce the autonomous vehicles that they said they would build in this plant. it will be electric cars in mustangs from 2023 onward. they are separately building autonomous assembly centers somewhere in the detroit area over the next couple years. that's another $50 million investment. what they will do there is they will take cars that are already built up and update them with the software for self-driving technology. david: a big announcement out of general motors this morning. a big announcement for the 300 people who will be employed at this plant, a big announcement for the economy. $400 million. why is it big for general motors? how does this fit into your overall strategy of electric vehicles? mary: well, you know, we believe in an all-electric future, so i
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could not be more excited to talk about the new chevrolet electric vehicle that we will be building. we are investing $300 million and creating 400 new jobs at this facility. it's a very exciting day, and it's another step as we continue to work to grow the electric vehicles and the customer response to them. guy: ubs ceo sergio ermotti is giving the most decisive verdict yet on the difficult markets being faced by european investment banks. ermotti telling investors, quote, "while clearly not in line with our long-term aspirations, i find it to be an unacceptable outcome if it is a one-off in one of the worst first quarter environments in recent history." this was a surprise, i take it. elisa: yes. what was interesting was that not only is the investment bank under a lot of stress, but the wealth management business saw something similar. he was staying on the sidelines and not doing very much, and that led to as much as a 25%
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decline in transaction income, which will see revenue come down the first quarter. that combined with the investment bank -- yes, it is pretty bleak. joe: noted economist alan krueger passed away over the weekend. his family releasing a statement saying he took his own life. krueger was an expert in labor economics and served as chair of the council of economic advisers for president obama before joining princeton as a professor of economics and public affairs. talk to us about the legacy of the impact he had on colleagues, in media, the government, and so on. peter: there was something magnetic about him, charismatic. he had a lot of friends here at bloomberg. he appeared regularly on bloomberg tv. he cared about policy. a lot of economists are very taken with their own theories, but he made it real world. one of his key legacies is the work on the minimum wage. i think there has been an
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understanding and macroeconomics that pure theorizing has run its course, and that we have to go back and gather data, understand the way the real world works. he was one of the leaders in bringing that style of thinking to economics. ♪
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scarlet: social climbers, these are the stocks making waves in social media today, and you can find all of it on the bloomberg. first up, dsw falling the most since 2004 after a surprise lost last quarter. the company investing in ways to accelerate shoe sales. it plans to add nail salons to sites across the u.s. in addition to the two in its ohio stores. nejra: there are about 30,000 functions on the bloomberg, and we always enjoy showing you our favorites on bloomberg television. maybe they will become your favorites as well. as we wrap up this edition of "bloomberg best," investors around the world will be paying
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close attention to the results of this weekend's election in thailand. here's a look at what's at stake in the vote. michael: thailand's current stretch of army rule is the longest since the early 1970's. junta leader prayuth chan-ocha seized power in 2014 after months of political crisis. he has repeatedly postponed elections, cracked down on critics, and put in place a constitution that opponents say will stifle elected politicians. thailand has a hereditary monarch as head of state, while a prime minister heads the government. under the pm, sits a 250-junta senate and the upper house. the 500 lower house members are elected through this weekend's vote. parties winning a 5% little house representation can nominate a prime ministerial candidate, but both chambers elected a leader, leaving the upper house of big say. opposing political camps mirror the regional and class divide. on one side, the representing of
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the poor, rural regions of the north and northeast. the party opposes military involvement and supports the exiled former prime minister thaksin shinawatra. on the opposing side sits the anti-taxing democrat party, drawing support from royalist elites in bankok and the south. another royalist party nominated -- for prime minister. the party, which nominated the king's sister as a candidate for the top job, has further fueled doubts over whether the election will be free and fair. with growth already trailing other southeast asian nations, thailand's economic future hangs in the balance. nejra: bloomberg television will have special coverage of thailand's election as the results are announced. you can find much more on this topic at bloomberg.com, along with all the latest business news and analysis 24 hours a day. that will be all for "bloomberg best" this week. thanks for watching.
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i'm nejra cehic. this is bloomberg. ♪
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♪ denise: >> welcome to bloomberg businessweek. i'm carol massar. >>i am jason kelly. we are here at bloomberg headquarters in new york. >> this six issue is focused on an equality and how inequality damages of businesses and culture. >> will examine widespread dissemination against transgender workers. we start with a cover story. one of instead of taking the sat, y

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