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tv   Bloomberg Daybreak Americas  Bloomberg  April 24, 2019 7:00am-9:00am EDT

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optimistic. the european bank diverging from ubs on revenue. s&p and nasdaq hit fresh records and poke holes in the rally. is it fundamental or fear of missing out? and tech giant names drive the rally. what the market needs to see from google to amazon to apple as growth trumps value. david: welcome to "bloomberg daybreak." it is earnings week, and we've got them out right now. at&t came out a short time ago. in terms of revenue, they missed a little bit. the real story, i think, will be what happened with directv, with net ads to their service and things like that. they are really going down in subscribers. alix: basically the whole time warner thing. that is why they need the content, right? david: they need to content both further wireless and premium. that hasn't fully clicked in,
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i'm sure they would say. at the same time, they need to keep that going in the meantime. people are focused on ongoing operations in terms of wireless, disappointing. looks like in the market, down about 2% now. also, axiom to make a deal to anadarko -- occidental make a deal for anadarko. there has been a lot in their strategic reserves, their dividends, if they will commit this kind of money to a potential takeover offer. we have to wonder what kind of cash they have. david: are they really trying to get it, or bid up the price even further from chevron? what is the breaking fee? alix: you have to wonder for shareholders for anadarko, would you rather be with chevron or occidental? there's a lot more synergy when it comes to chevron's assets in
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mozambique and latin american assets, whereas occidental only have the prime ian -- the permian synergy. david: if you have chevron stock, you might want to own some of that stock. alix: trading at $76 a share. , about halfe a lot cash and have stock as well. are they going to have to raise debt? i'm not sure about that. chevron is deafly going to have a lot more there. david: every day is oil for you these days, alix. alix: fine, fine. david: we have a out from northrop grumman. they missed -- we have earnings out from northrop grumman. they missed on revenue, made estimates on earnings-per-share, but took up their estimate for earnings-per-share for the full year. they are about flat, maybe a
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little north of flat now. alix: earnings dictating what is happening. fresh records yesterday for the s&p and nasdaq. the question is, what now? you had sort of risk on yesterday, now a bit of a risk off. a nice bid coming into the bond market here in the u.s., as well as europe. the dollar stronger. equities a little softer, now regaining a little bit of steam. german data coming in, and euro took a hit lower by 2/10 of 1%. eco versus the actual equity market is the question. european stocks breaking an eight day winning streak, despite the fact they are up 16% for the year. david: now we are going to go to bloomberg first take. we are joined by gina martin adams and then sing the rela -- -- andcent the rela
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vincent cignarella. we have some industrials and very big tech companies, but thus far, haven't would be -- haven't we been surprised to the upside? gina: we have. it is better than the long-term average of about 70%. it has also taken the estimates from where we are going to head for the total quarter a little bit higher. in the earlier part of the season, analysts were expecting a 4% drop in earnings. now we are on track for about a drop. generally better-than-expected. still a drop on a year-over-year basis, mostly about financials so far, so reserve your total conclusions until later, but you are right. once we get through this week, we are more than halfway through the market cap as it
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comes to where we are. alix: does it feel like the beats are counting? vincent: the lobar was definitely set. people were thinking you could -- the low bar was set. people were thinking you could trip over this one. the fourth quarter was almost a layup to make it for the first quarter financials. down the line, we have somebody like texas instruments saying chip sales for the second half of the year not looking so good. chip sales are a major dynamic. they are in everything. you need six month lead time to order these chips, so if they are seeing a six-month drop, they are basically saying six months from now, orders and growth probably not as robust as we are seeing now. alix: that brings us to our second story, the broader take away of what is leading the rally in the s&p. is it going to be foam out -- going to be fomo or economic
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fundamentals? during the 2015-2016 rally and pmi matched the rally. now we are seeing a divergence. what do you make of it? gina: i think we have to give it a little bit of time. pmi bounced back really quickly and 2016, but took a big it late in that year -- a big dip late in that year. i don't think anything about this screams fomo. i think there are a lot of investors that are scared of getting an. there have only been four positive weeks of flow into the equity market. compared to peak levels of the cycle, they are roughly 30% higher than we are today. if you look at etf flows, they are only about 1/3 of total equity markets. i don't think there is any fear of missing out. i think there is still a fear of getting in and a lot of
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skepticism that has power the rally higher. once we get the depletion of that skepticism and investors start flooding in, that is usually a sign of some form of top. david: we've been talking u.s. stocks and earnings. let's turn to europe. we started with the first european bank out today, credit suisse. francine lacqua got to sit down with the ceo, and he feels a little vindicated about holding onto his trading operation. it was under pressure at the end of last year. our view was of them a chance. three years -- was give them a chance. three years a very deep cutting. -- vince, you know trading. it seems to be coming around. why? vincent: i don't know if they've done something different from
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the rest. trading now is mostly electronic. all of these guys are from the same school of thought. they all sort of reacted the same set of way. you lose the human factor. it seems to be that credit suisse has a little bit of human factor somewhere along the line because to break out from the rest of the pack, this can't be pure electronic trading. alix: thanks so much, guys. good to see you. check all of the charts we just found and more. go to g tv on your terminal and browse the features. breaking news for you when it comes to occidental and anadarko. occidental making another bid for anadarko. the rumor was originally they had a bid for $70 a share. now they are upping it to $76 a share, trying to outbid chevron's takeover. what is interesting is they already outbid with $70 a share.
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will another six dollars warnlly be enough to anadarko changing sides? i think there's a couple of things. one is synergy. there's a lot more synergy between chevron and anadarko in terms of assets. you're going to have an easier switch, potentially, going to shareholders and saying we have chevron stock now, as opposed to occidental. the market clearly did not want occidental to make this kind of bid. david: as i understand, this bid coming in is 50-50 stock and cash. if you are a shareholder, you are having your value used in the shares. if the market doesn't like it, that drives down the value. alix: i don't know what they offered before in terms of cash and stock. that might have been sweetening
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the deal as well. on the occi front, what is the saying about occidental that they would make this kind of bid? everyone is looking for --ortunistic mna, but a, butunistic m& occidental is doing great. it is a bit of a puzzle why this makes sense to them. david: we talked with the ceo of chevron. there aren't that many other properties like anadarko sitting around. it is not clear what the next one up is. alix: the next one is endeavor, a private company rumored to be the next takeover target. does occi look at that? i don't know. in shale it is quite different because he really need good rocks next to each other. it makes what you can buy may be a little bit more tricky. remember, anadarko has things in mozambique. that is really great synergy when it comes to chevron.
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they also have assets in latin america and offshore. for occi, i don't know what kind of options they have. there are also other majors like shell that need to make an acquisition. they need to get bigger in shale. david: the one thing we know for sure is anadarko is feeling some pressure this morning because they've got to really take a hard look at this thing and decide what is in the best interest of the company any shareholders. alix: is that pressure, or like, cool? i think the ceo is up his payout on a takeover. david: i've been around some of those boardrooms when things happen. people want to make sure they are crossing all of their t's and dotting their i's. alix: so it is not like dating. david: maybe your experience with dating, but not mine. [laughter] alix: coming up, forget about forgetto >> narrative -- about the goldilocks narrative. markets are looking more like handel and gretel.
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this is bloomberg. ♪
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♪ viviana: this is "bloomberg daybreak." anthem raising forecasts after adding 1.2 million house insurance customers in the first quarter. growth coming primarily from selling coverage through private versions of medicare and medicaid. those programs have been major growth areas for health plans. a shakeup at morgan stanley's wealth management division affects two executives who have widely been seen as contenders to replace the ceo. one of the wealth management co. heads will run bank units, offering loans and deposit the other will now be the sole head of wealth management. wells fargo's interim ceo was
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interrupted more than a dozen times by hecklers at the bank's annual meetings, calling members " ande company "frauds "criminals" during the opening remarks. in recent years, the bank has faced a string of scandals. that is your bloomberg business flash. david. david: thanks so much. the s&p 500 set a new closing record yesterday, driven by strong earnings across a range of companies. here to give us a snapshot of where we are and whether we can expect this to continue his bloomberg's taylor riggs. taylor: interestingly enough, if you come into the terminal, the massive rally we have gotten here on the right-hand side of this screen, the forward pe ra tio looking very full on a multiples basis and plumbing above the forward earnings estimates. you are seeing -- and climbing above the forward earnings estimates.
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some people are really questioning the strength of the rally given that we have come so far so fast. in particular, volumes are very stuffed. we have the volumes of the three major averages hovering around the 10 year average. py, the etfhe s that tracks the s&p, moving well below the moving average. as we gotndex as well some record highs. you have the s&p 500 tech index really climbing above, and now that p/e ratio is well above the five-year average of a 16.6 times pe ratio. typically that means we are overbought. meansts are saying that very strong momentum, meaning it could go further from here. similar to the s&p 500, rsi is above a 70, typically an overbought signal, saying maybe
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this is momentum to propel us further. analogy the fairytale to define this type of market, you have one blue bag -- one bloomberg reporter saying "hans alem gretel -- saying "hansel gretel" maybe a good analogy. with us we have david bahnsen. is that an accurate description of this loveless rally at a record high? guest: it is an interesting analogy because in a sense, it certainly works. the question is how long does that analogy stick? when did you transition into a high conviction level one way or another? i don't feel like the bulls have a great deal of conviction about sustainability, and i certainly
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don't feel like the bears have a lot of conviction. we are making new highs, and everything seems to be we are waiting for this or this. i am more and more wondering whether the best thing that can happen for markets is that the china trade deal continues to be the thing that will happen next month and the next month. as long as it doesn't blow up, there is still optimism around it. as long as it hasn't happened yet, there is not the worry of selling the news. david: i will put a chart up here. alix: david loves them. this guy is all over that. david: alix has, everything i know about them. [laughter] david: we are actually overbought now. don't it is not that i read it for my own electrostimulation, but as far as our view of markets for -- for my own intellectual stimulation, but as far as our forecast, the
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contrarian side of things besides the fact that markets have had this price movement, there is no data suggesting that we are in some kind of a euphoric buzz around markets. the flows are not suggesting it. think there's offsetting indicators. david: but what is causing the huge rally? it seems to me there is an absence of a negative. we are not going to have interest rate hikes were a trade war with china. marketsore importantly, are always and forever discounting mechanisms. they are pricing in today what they believe about tomorrow. what you said has to be added to where we came from fourth quarter. there is now an absence of rate hikes and quantitative tightening. i think that there was an over discounting that took place around this earnings recession talk. early into this earnings season,
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even apart from how q1 year-over-year is going to look, the market is now saying we are not really going to have a full year earnings recession. it is not going to be 2019 year-over-year earnings contraction from the year prior. that is what the market has priced in. i still think what we are doing is making up, not getting too far ahead of ourselves. we were too far behind. david: just correcting for past mistakes. david bahnsen will be staying with us. coming up, shares of anadarko rise after occidental makes a bid of $76 a share. that's next. this is bloomberg. ♪
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alix: back to breaking news in the oil space, occidental offering to buy anadarko for $76 a share, trying to outbid chevron. joining us is bloomberg
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intelligence's u.s. oil and gas analyst, and david bahnsen still with us. why is occidental doing this when the market doesn't want it? >> i think they see the value in the broader permian base, and it is a that are fit to grow that permian basin. what remains the broader question, what do you do with the other assets? what do you do with the lng? what you do with the gulf of mexico? it seems this deal is exclusively focused around building out the scale and the asset concentration within the broader permian basin, which would make occidental a goliath in the broader permian, which is, as we've mentioned in the past and written about, one of the most economic, prolific, pure liquids plays in the
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broader 48 states. alix: to that point, they are competing with chevron. that is going to be really hard competition. if they don't get anadarko, do they have other options? vincent: if this is about building out scale and asset concentration within the broader permian, there are plays, there are emp's within the broader play that had that scale as well. we talked about this in the past. you have big chunks of acreage controlled by the likes of concho and pioneer, and diamondback as well, well over 600,000 net acres that concho and pioneer have. more broadly, though, this does present an interesting dilemma for a lot of the smaller emp's in the broader permian, those
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that don't have that scale below 100,000 acres. what do they do? below 200,000 acres, what do they do? this isn't a first, by the way. we've seen consolidation in the broader permian over the last couple of years, especially most recently with concho buying rsp and diamondback as well. with the asset concentration that is being sought within the broader permian, it is an ongoing play. david: all right, thanks very much. now how much -- no matter how much since it might make come of the board has to be very careful -- might make, the board has to get toocareful to not far above the deal. guest: you put a number on the share price, first of all, we don't know that that is true because 50% be in stock, the market is going to adjust it.
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chevron has put stock on the table as well, 75%, but it is chevron. there is a very defensible position why that is a more stable stock price. post-transaction, occidental would be three times the leverage rate that chevron is at. that is the biggest reason they can justify going with the chevron offer. david: got to look at the balance sheet. alix: totally. --nk you very much david thank you very much. david bahnsen will be sticking with us. coming up, we've got good boeing -- we've got boeing and caterpillar. stay with us. this is bloomberg. ♪
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alix: this is "bloomberg daybreak." we are waiting for earnings from caterpillar and boeing. yesterday, fresh highs for the nasdaq and s&p. will we build on that?
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s&p futures pretty much flat. european technology stocks tearing higher. microsoft also helps that story. in other asset classes, it felt like a risk off trade when you came in this morning, but that is kind of paring a little bit. in australia, inflation really disappointed in the first quarter, raising issues of potentially seeing a rate cut. david: we have boeing earnings out now. earnings-per-share in the first quarter were $3.16. the estimate was $3.25, so that is a miss. first quarter revenue was 22.9, right on mark for the estimate. new guidance will be issued at a future date. they might have to do with the 737 max 8. just a wild guess. the big question is to what extent will that affect material business. at the moment, boeing is up a little over flat, about 3/10 of 1%. alix: caterpillar out as well. revenue looking pretty good,
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$13.5 billion. the estimate was $13.4 billion. apparently they had record first quarter profit per share. they are investing in services and their operations, but at least for this, it looks like it could be paying off as well. that stuck up by over 1%. we will continue to see as more information comes out. high-end, $13.06. david: even as you are talking, a redhead line crossing. boeing is suspending their forecasts. they are not even going to protect going forward. joining us now is bloomberg intelligence's senior machinery analyst, and david bahnsen of the bahnsen group is still with us. . you own boeing. is it all about the 737 max 8 now? guest: the forecast is entirely about that. stock price entirely
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about that? no. the 737 max was a significant contributor to free cash flow. that is not going to go away. the question is what the timing is going to be when they get back online. i think it really defies even the most bearish of bearish sensibilities to say this is going to represent a permanent impairment. david: permanent is a long time. the question is how big and for how long. guest: my guess is six months and 5%. david: it is not just free cash flow. it is also margins, as i understand. guest: a higher margin product, so it affects all margins, but boeing trades off of free cash flow. they are the second-biggest free cash flow generator in the s&p 500. ultimately they commit to returning 100% of cash flow to shareholders via reckitt dividend -- via record dividend growth and a big stock buyback.
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david: when you say 5%, is that off of where the boeing share price was from the start of the crisis? that would suggest you should be buying boeing right now. guest: not very strongly. 16% thishe stock is up year. i wish all disasters could be so bad. it isn't a streaming value in it, either. the market doesn't believe this is going to represent a secular shift in boeing's viability. alix: the other earnings we got just a moment ago, caterpillar. they are citing some tax benefits. karen, what is your underlying read to how good these moves are? karen: if you take out the tax benefit, it looks like an in-line quarter. sales were slightly better than expected. at first i thought it was good,
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but it looks like it is mostly the tax rate. $11.75, nowt was raised by the tax benefit, but it looks like they are emphasizing the tax range. alix: do you have to be better? karen: expectations are pretty high. all markets and regions are going. momentum is slowing in terms of rate of growth come about the numbers will still be good -- gross, but the numbers will still be good. guest: our issue with caterpillar, they are a good dividend payer, but we don't business.yclical of course, last year you had all of the external china concerns. we do not have a position in caterpillar, but to the extent the cyclicals and industrials rally, caterpillar is a great leadership name in that sector.
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alix: so what do we learn so far from caterpillar in terms of the global economy? karen: that. it is holding up. north america -- that it is holding up. north america is still growing. numbers in europe are not really showing up in the industrial names. asia is the risk, and china is down in machinery right now. david: does that tie into stimulus coming out of china? karen: that will certainly help. if economy is slower, but they stimulate, that is going to help. david: david, how much do you take into account whether china stimulus will kick back in and re-stimulate the economy? guest: we to get into acc countera completely
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way. alix: when you are taking a look at china and the green shoots we were talking about just 24 hours ago, how do you play that? guest: as a u.s. equity investor, it is going to help sustain the macroenvironment. so much of the clouds over u.s. equity investors coming on the year were global concerns. the things that are more held together, europe, asia, et cetera, the better environment is for u.s.. what we don't do is take better exposure into those companies. that area is still problematic. to the degree you get a good bid on a risk reward basis, we still think it would be inferior to emerging market opportunities. alix: karen, final word for you on caterpillar on the call. what is your question? karen: i am looking at margins. i want to know if they will still be able to improve margins, which have been very good. how sustainable is the stability
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and china? that is going to be a focus. it is a decent market for caterpillar. david: karen new art -- karen, thank you so much for being here. we have one more earnings to break, general dynamics. they did very well, i think it is fair to say. revenues were $9.3 million, and revenue per share was $2.56 per share as opposed to $2.41 the estimate. that is general dynamics. now let's get an update on what is minting headlines outside the business world. for that, viviana hurtado is here with first word news. viviana: the u.s. and china resumed trade talks next week in beijing, the goal of which is to reach a draft agreement by the end of may. next week's negotiation will cover such issues as intellectual property, forced technology transfer, and
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enforcement. the sides are stepping up diplomacy to try and decide the year-long dispute. the eu will stop short of an outright ban on chinese telecom equipment maker huawei. the trump administration has been pressuring allies to prevent huawei from building new -- new 5g networks. former vice president joe biden is set to announce he is running for the democratic presidential nomination. bloomberg learning he will announce via video tomorrow. he will follow that up with his first campaign rally next week in pittsburgh. he will be the early front runner in a crowded field. he plans to focus on his economic message and his strong ties to labor unions. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. on the the on art out of. -- i'm viviana hurtado.
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this is bloomberg. alix: coming up, credit suisse rising after the bank posted an earnings beat. why the ceo is hopeful. this is bloomberg. >> we are pleased with this performance. we are pleased with our people also, particularly in global markets. there have been real increases of intense pressure. ♪
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viviana: this is "bloomberg daybreak." ,oming up later on bloomberg the oppenheimer fund cio and head of fixed income. ♪ viviana: this is "bloomberg daybreak." i'm viviana hurtado with your
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bloomberg business flash. there may be a new twist in the discussion over who will eventually succeed morgan stanley's ceo james gorman. he has shaken up the leadership of the bank's wealth management unit and two of the executives who have widely been seen as dental successors. as potential successors. business isk's fund said to favor a combination with ubs's asset manager. dws is still looking at other options. reaching a deal is complicated because deutsche bank has agreed to give up control of dws. blackrock set to open a new office in saudi arabia, looking at several new investment opportunities in the middle east. the company is looking for ways to broaden its global reach as the industry is under pressure
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to find growth. that is your bloomberg business flash. david: thanks so much. european bank earnings got underway today, with credit suisse reporting. francine lacqua spoke with the ceo about the economic backdrop to support his bank's surprisingly strong performance. >> the economy was positive. low unemployment, low debt. consumer confidence is fading, but it is still very strong growth. it is a very positive environment, and we will take advantage of that. china is doing better. we see that in our numbers. since q2 of 2018, it is very strong.
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[indiscernible] francine: interest rates? brexit? economy to athe whatdifficult place, but matters to us is switzerland, where everything is very good and we are doing extremely well, but being cautious, we are the first to announce of the european banks. but we are pleased with this performance. we are pleased for our people as globalarticularly in markets. thatwe wanted to show is it is a viable business. it has its place, and it is really now delivering by working more closely with the wealth manager, which is what we wanted. we are of now 23% and becoming material.
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suisse'sat was credit ceo. joining us from zurich is francine lacqua, with whom he was speaking. very good to have you. prior to this, credit suisse under a lot of pressure about the global banking business. he must feel a little vindicated today. how did he turn it around? francine: i think overall, the move where the chief executive was he couldoom finally smile about coming around. in costld do more cutting in that unit. at the time, equities were worried about it. global markets also deemed better-than-expected. he keeps on saying this is about
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having a model which is robust, so they wanted to give a chance to global markets to get up on their feet. he says it is not a trend that can continue forever because. haverever because you will good and bad, but at the moment they don't have too much pressure for cutting costs or finding other way around it. david: that raises the question, what comes next? is it more of the same, keeping strategy? are there other businesses you can get into, or daresay mergers and acquisitions? francine: we did ask about mergers and acquisitions. every day we hear about deutsche bank possibly merging with commerzbank or someone else. we were talking about the asset managers of ubs merging with someone else. i asked if there was anything in credit suisse he would like to merge with someone else to make bigger. he said he was quite skeptical about all of this imminent day
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m&avity because -- this activity, and would focus on organic growth. as to what comes next, this is basically the end of a restructuring program. the question we get often from analysts is how does he grow the bank from here. it could kind of withstand any market pressure, but also go for growth in asia and the wealth management he's focusing on. david: thank you so very much. once again, a terrific interview. alix: still was us is david bahnsen. i keep wanting to say richard branson. that is not your name. [laughter] guest: but the two of us together are worth billions of dollars. alix: there you go. you have european banks looking at their best month in four years. value trap? guest: absolutely. no question about it.
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these are deeply balance sheet impaired companies. you have a really valuable trade. fundamentally, we know the balance sheet problems that touch these. alix: let's pretend we have extended tltro's from the ecb. we have some tiering when it comes to the deposit rate. would that change your opinion? guest: it wouldn't become more investable to me because it will be just as good for jp morgan. to me it is just a safer way to be exposed to global financials. david: many thanks to david bahnsen of the benson group -- nsen.e bah -- go to to
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riyadh, where yousef gamal el-din is standing by. ousef: i am with the chief executive officer for saudi capital markets. he joins us here in riyadh. thank you again for your time. you look at the flows into saudi equities, and the inflows have been relatively stable. what needs to be done from your perspective to persuade more board investors to put capital to work in riyadh when there is still a lot of caution? would say, from the standpoint of regulators, the flows have actually been quite rapid and accelerating, particularly over the last two months, as we've drawn closer to index conclusion and drawn conscious of index conclusion.
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the number of foreign investors by the end of the first quarter of this year is more than six we had in theer last year. although we are starting from a very low base, saudi today has crossed the 5% threshold. i think we are moving quite rapidly, particularly as we moved to the next stages. yousef: what kind of passive and active influence, in terms of quantities, are likely? the math,you do there's roughly about $2 inllion in the world managed emerging markets. saudi arabia today is about 3% of emerging market indices in terms of market cap.
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it is possibly one of the largest additions to market indices in the country. that gives you a number that is $30 billion tod $50 billion. not all of it will flow at the same time, but that gives you a sense in terms of the overall magnitude. yousef: what else is in the pipeline? you've moved very rapidly with a lot of these reforms. are there new ideas or derivatives to deepen some of these markets? guest: yes across the board. we are looking to continue what we've done in terms of deregulation, and i think we are deregulate more. havenk very soon, we will equity linked index futures,
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probably in the second half of the year. we are looking to allow non-saudi firms to list in the saudi markets for the first time. we are looking to deregulate investor actions by allowing alltegic investors inside the time. is in govern -- is in governance. more to comey throughout the day from riyadh. david: we will look forward to it. thank you for that interview. we have breaking news from spark spread, a publication specifically online to inform about energy, saying berkshire hathaway is said to be in talks to acquire pg&e, a rather big potential deal. berkshire hathaway trading about flat at the moment, pg nd up a bit. &e up a bit.
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berkshire hathaway has huge holdings, and they really believe in the operation there. alix: it is so much to take on. not only do you handle the liability from the forest fires come but to fortify the company again for climate change. david: off the top of my head, number one, they know how. to deal with risk they are insurers -- they know how to deal with risk. they are insurers. -- cbstwo is extends the search for a ceo. more on what i'm. watching next. this is bloomberg. ♪
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in drama fors been some time now, but now there is news that the acting ceo has been asked to extend his tenure through the end of the year, what you think would be good news. had the one les moonves hand-picked to succeed him. most people are saying they basically want to merge the company with someone else, maybe viacom. shari redstone controls both companies, so it is an easy negotiation with herself. alix: much more to come. this is bloomberg. ♪ so with xfinity mobile
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occidental raises its bed to try to snatch away from chevron. the stoxx sinks in premarket. hit fresh records as the bears try to poke holes in the rally. annualing suspends forecast, reflecting the magnitude of the 737 max 8 crisis. david: welcome to "bloomberg daybreak" on this wednesday, april 24. we have a lot of earnings, and then it turns out we also have a lot of other bringing news. now,lk southern breaking reporting operating revenue of $2.8 billion, right just a hair over what was estimated. earnings-per-share is $2.51. that is a nice beat. the big issue is actually operational efficiency. they are doing something new called precision scheduled railroading, making the trains
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run faster and have less dwell time. it was expected they would do better. it is unchanged in the premarket. alix: also doing better is caterpillar. they beat estimates for the first quarter. they had a nice boost in their mining business. this obviously important, adding signs industrial earnings are holding up in the face of a trade war any -- trade war or any global growth concerns. benefit from that , but still relatively solid numbers. david: number from boeing are out. earnings-per-share were a little bit light, revenue was straight on, but they said they will spend future guidance -- will suspend future guidance because of that 737 max 8 airliner. in premarket, up a little bit over 1%, possibly because the news wasn't any worse than that. alix: also watching occidental.
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the analyst company called will start in a few minutes. analysts didn't get it when they made a bid for $70. they certainly don't get it when the bid is $76. david: some news from ford motor company. , a company -- rivian that makes electric vehicles, dill now invest in for electric vehicle operations. as we look at all of the auto companies, you know this so well , they really need capital to invest in electric vehicles. ford has a new investor. they are unchanged in premarket. backed byan, which is amazon, didn't want to start a partnership with general motors. it is interesting they wound up going with ford. david: i had read about rivian doing some dealings with ford
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before. i will have to check on that. it is just up the road, from dearborn to pontiac. alix: apparently they came close to a deal. g.m. would have given engineering and manufacturing expertise. that is really interesting. in the markets, yesterday the nasdaq and s&p hit fresh records. a little bit of softness. s&p not really going anywhere. if you'd like we are just taking a break. you had a pretty strong selloff yesterday, and now we are taking a break. today,note's out later so what will that bring? data and europe a little weaker. fomo or fundamental? david: at the same time, all these earnings coming out. the s&p set a new closing record
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yesterday, drove my some of those earnings. here to give us a snapshot of some of those is taylor riggs. taylor: it is all about fundamentals over here. a low bar for the earnings means the price to looks really full. if you come into the terminal, you have prices really outperforming earnings. you have the pe ratio surpassing the forward earnings you. you saw a similar thing -- forward earnings view. you saw a similar thing with stocks rising past forward earnings-per-share estimates. volume is so low, so can we trust the rally? here we have the volume of all the major indices right above the 10 year moving average. y falling off ap cliff, and not just the s&p, but the tech sector as a
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whole. if you come into my terminal, you have the average price climbing on the s&p 500 tech index. what that means for evaluations is that p/e ratio is about 19.5 times that. the tech rsi is above 80. typically that means overbought. analysts say that just means momentum. maybe momentum is so strong, the rally may continue. alix: thanks so much. joining us on set, sylvia direxion from investments. article ongreat bloomberg that compared the gretel.""hansel and
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is that what it is like to buy into this loveless rally? sylvia: you mentioned it, it is fear of missing out. i think there has been a little bit of fear of missing out. if you look at the rally in specific sectors and how some of the top performers are coming in, any short-term we have seen investors really benefiting on these sectors. industrials have benefited investors. tech, same thing. apple is up, google is up, microsoft is up. i think than the short-term, we have some momentum and a reason to continue looking at some of these names. david: at the same time, one of the things we look at his growth versus value. if you look at the ratio of the two, we are really at a high watermark. i have a chart that shows this. let me make it full-screen. here we go. does that give us cause for pause? foria: it gives us pause
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what will happen again throughout the rest of the year. this is super interesting etfuse we launched relative value overgrowth. look at what happened in december. tech is at all-time highs. health care and financials won't pick it up. what do we do? now, over the last two months, we've seen apple rally, google, microsoft. all of these same names. facebook, amazon. if anything, i think the growth has not played out. i think it is muted for the rest of the year, but we have a little room to run. alix: investors wanted to talk value because of what we saw in december. in terms of earnings, who is delivering, value or growth? sylvia: growth. we can look at industrials, for example. caterpillar surprised from the
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upside last year at the last earnings announcement, down 9%. it just wasn't on our radar. now you have some meeting about the chinese trade negotiations going away. that should boost caterpillar, lockheed, and some other names in the industrial sector. on the growth side, facebook was incredibly beaten up, and came out with stellar earnings and user numbers. that is a growth name looking pretty good going into the next earnings season. amazon is expected to have 40% growth in their cloud business. i think that growth is holding up. david: but how much pressure does that put on the big tech names were going to get earnings through the rest of this week? sylvia: i think a whole lot. again, health care has been so beaten up. we see some of the flows going back in there, investors may be thinking medicare for all was overdone. but i do think that if tech
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holds up, the rally will continue for the next order or two. alix: sylvia will be sticking with us. itsng up, boeing suspends annual forecast due to the 737 ma crisis. berkshireeporting hathaway not buying pg&e, citing warren buffett. and the occidental conference call just started. more on the second bid for anadarko. they see asset sales of about $10 billion to $15 billion following that deal. this is bloomberg. ♪
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viviana: this is "bloomberg daybreak." occidental petroleum is starting a bidding war for anadarko, making a $38 billion counter offer in an attempt to break up the proposed takeover by chevron. the new bid represents about a 20% premium to the chevron offer. occidental says since march, it has made three offers to anadarko. nissan slashing preliminary profit for the fiscal year that ended last month. the japanese carmaker cutting earnings from $4 billion to $2.8 billion. in 2019, nissan car sales in the u.s. and china sputtered. and four seasons hotels and resorts converting another private jet to its fleet, used for bespoke vacations around the world. by the way, it doesn't come cheap. one of those trips could set you
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back as much as $147,000 per person. that is your bloomberg business flash. david: thanks so much. boeing shares up in the premarket. the company met revenue expectations in the first quarter, but suspended the annual forecast amid the 737 max crisis. joining us is baird's senior research analyst for aviation. exiona jablonski of di investments is still with us. is still a little bit of uncertainty regardin exact software737 max solution will be approved. until they know this final details, they don't want to have to come back to investors a second time and change those
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initial guidance outlook details. david: in the premarket, boeing is up on the news. does that surprise you at all? normally when a company says we have some problems, that is not taken is good news. why did the market apparently preliminarily say this is good news? in line think what is with expectations is the fact that the software solution is trucking to what is ultimately going to be the solution. we've been saying since march that the software solution would be the fix here. so far everything is tracking, -- tracking, and they expect to have a solution. there is nothing more negative coming out of that, and they can make an assessment once the details are final. alix: sylvia, do you like boeing? theia: a little more before 737 issues. i think it is probably not all priced in.
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honestly, i thought it would be a lot worse. maybe it is too soon. maybe it is next quarter where this comes out. what is interesting is there isn't really another alternative besides airbus. the amount of pending orders for boeing is still high. that hasn't been reduced. if they can find a solution to this problem and get back on itck, and the long-term might be a good idea to buy it on a dip. it didn't really impact aerospace and defense. i think so far, the impact on the market has been fairly muted. david: sylvia makes an important point about the real competitor, airbus. if they get the software fix and it works, i assume what you are saying is there won't be any lingering effects for the long-term effect of seeing it is a competitive environment, i would just as soon go with airbus going forward. peter: that is an excellent
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point. you are essentially dealing with a duopoly, and there isn't any excess capacity to ramp up if boeing customers start to shift over to airbus. i think boeing customers will obviously get comfortable with the software solution and any training associated with the 737 max fix. i think the duopoly stays intact. the long-term thesis on the global outlook for air travel remains favorable, so there hasn't been any change in the long-term thesis. this has obviously been a major bump in the road in terms of boeing investment pieces. if the long-term continues to that inn track, we see the stock. alix: will the world trust the faa falling down on the job when it comes to making sure these planes stay safe? there was an article over the
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weekend about the dreamliner and production there. the cloud that could hang over boeing in the industry, how do you think about that? peter: the cloud i think will dissipate over time. confidence will recover. this has been boeing's tylenol moment, if you will, in terms of having a big mark, but boeing's heritage over the last many decades has been around safety, and i think they will get back to showing the public they are producing safe aircraft. the track record historically has been very good. david: peter raises a really interesting point with the tylenol moment. those of us who remember, jim murphy, when he handled that, took all the tylenol off the shelves. decidedly not what boeing did. does this raise questions about boeing's management and how they handled this? by the way, the faa management as well.
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are they really up to the job of dealing with a major crisis like this? sylvia: i think shareholders are waiting for more information on whether this is the right decision, whether the software is enough, and not removing all of the aircraft off of the market is the best thing for the overall market. i would imagine just because of the headline risk, the airplane crashes and whatnot, if the faa and boeing thought they should remove these aircraft, that is some that would have happened quite some time ago versus a software fix. i would like to believe boeing has had a legacy for customer safety, and they believe the right fixes the software fix. david: talk about this generally in the out years. where is growth going to come from? peter: we still look at the global air traffic market as being the primary driver here. aerospace is a growth industry.
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of --ve a terminus amount a tremendous amount of new entrants coming in terms of middle-class and asia. you are seeing 100 million people coming into the air travel market a year in that region, so the capacity requirements are enormous. both boeing and airbus are benefiting from this long-term trend. we expect that to remain intact. boeing benefits from tailwinds in terms of budget and the recapitalization cycle happening not only domestically, but around the world. boeing has made a big push into services, so they will continue to be a tailwind in terms of their ability to capture more of the lifecycle of products they are involved in. they have a lot of irons in the fire to continue to show long-term growth. they have big and market trends that are not changing because of this. that keeps us positive on the long-term for boeing. alix: thank you very much.
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sylvia will be sticking with us. coming up, caterpillar profits and sales beat estimates. more on that in today's bottom line. this is bloomberg. ♪
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david: time now to look at three companies worth watching this morning. investingll, ford is $500 million in rivian, a relatively small electric truck maker out of pontiac, michigan. initially, gm flirted with them. they don't need the money so much because amazon has raised a lot of money as an investor in them, but now ford has a partner .here up withtrying to catch
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gm, because it is generally a thought they are ahead in electric vehicles. if they can use a platform like rivian, that might be a jumping off point. alix: occidental's analyst call underway. here's what we know. they've upped their bid for anadarko to $76 a share to produce 1.4 million barrels of oil a day. they see cost savings on the supply chain of $600 million, and in terms of supply and all of that, will it be enough? i don't know. david: delivered situation is really different for chevron than for occidental. alix: so is your share currency, but stay tuned. at noon we will speak with the occidental petroleum ceo. that is at noon and 5:00 p.m. london time. david: next is caterpillar. for more, brooke sutherland.
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good news for caterpillar, i guess. brooke: it is. the numbers are ok. we did see a weakness in the margins, so that is kind of troubling for me. they did get the price realization they were hoping for, but also saw increased material costs and logistics. that is not a total surprise given the bad weather we had in the first quarter. you would expect logistics costs to be up. a concern for investors, would they be able to make these price increases stick and overcome cost pressures? we are not really seeing that. we saw a huge bust in sales for their mining business, which has been an eyesore the past couple years, but that is really starting to bounce back. they think that is going to continue. they are looking for strong sales momentum there. david: at the same time, they are facing a lot of competition when it comes to china, according to the cfo.
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brooke: if that is going to be a growth engine, can that compensate for weakness in the energy sector? i don't know how much mining will be able to compensate if you see a weakening of the macro factor. alix: sylvia, do you like caterpillar? sylvia: i do. there are a couple of good momentum pushes coming up. one is there is a productivity issue right now, with labor markets as tight as they are. i think there's an opportunity to add machines into the picture and help bump up weaker productivity. caterpillar has an opportunity there. i also think with manufacturing inventories at all-time lows, and potential demand rising, particularly in places like china as they continue to push stimulus, caterpillar has an opportunity to grow there.
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i think they have something like 45% exposure internationally, and most of that is in china. i think that would be some positive momentum for caterpillar. alix: brooke sutherland of bloomberg opinion, thank you. sylvia jablonski will be sticking with us. on the occidental call, $76 a share for anadarko, trying to outbid chevron. they say they bring project experience to mozambique lng. they are trying to sell it as if it would be good synergy. also talking about good cost savings on the supply side. much more coming up. this is bloomberg. ♪ s is bloomberg. ♪
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alix: this is "bloomberg daybreak." i am alix steel. a very busy wednesday carried equity futures closing into positive territory. the nasdaq closed at record high.
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well,an stocks doing s.a.p. helping optimism in certain sectors. in other asset classes, a mushy start. weaker german data that weighs on europe. some buying in the bond market after the big selloff. the mover to me that is fun is the aussie dollar. their first quarter inflation missed. now some fx guys are saying we might see a cut from that which everyone was not expecting. that the big mover in the fx market. david: that happened with the euro after the numbers came down your -- after the numbers came down. alix: the bidding more getting with occidental increasing its offer to anadarko, up to $76 a share. joining us on the phone is adams fund ceo.
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mark, wonderful person to talk to on this day. what you want to see happen? anadarko because we think they have good assets. that is being made clear by two large companies. we are clear -- we are surprised by occidental. when chevron made the bid, we are happy. we own a lot of anadarko. that was a good thing. we were convinced it was not an occidental's best interest to go after anadarko. we are surprised by the bid. not as much surprised by the level of the bid. was getting chevron a good deal at $65, but the fact that occidental -- let's look what this looks like. occidental is not going to double the size of their company. a lot easier for somebody the size of chevron to do and
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integrated and selloff pieces you do not need and get the synergies. a lot more difficult when you are doubling the size of your company. that is one of the things that concerns us most about occidental making this bid. there are a lot of moving parts. what i waschoed thinking. occidental is a good company that does well with the wealth it has. it has some of the best wealth in the permian. the rhetoric was they do not have to be the biggest, they have to be the best. does that lead you to think something other than that in terms of their production efficiencies and their reserves? mark: it does not. occidental is a good little company. we believe it is taking on a company in anadarko that has operations they are not familiar toh and it is not easy double the size of your company. they will have to get synergy
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out of this to make $76 work. one of the issues now as we have seen in the free market is the market does not like occidental doing this. the value of that offer is pretty significantly below what the face is because the equity of occidental is down so much. they are good operators. there is no question about that. we think there is a lot of risk in what they are trying to pull off and not nearly as much risk for a company like chevron. will --ou have said he it would double the size of the companies. this is before any proposed merger. we can see that occidental is much more leveraged than chevron. they already have a fair amount of debt. as an owner of occidental are you concerned about their leverage flat out? mark: we will be after the deal, certainly. not before the deal.
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occidental does throw up a lot of free cash. we believe the debt level they currently have is fine. honest, we have not really looked at what that does to the balance sheet of occidental. prior to this, there's enough free cash flow to us to not be worried about that. we certainly need to look at that going forward. it is also important, i want to make sure you understand we do not own very much occidental. when you look at what we own, we own on a relative basis more anadarko and then chevron then occidental in that order. to that point, if occidental came through with this and it worked out, would you want to sell it? mark: what we need to look at is what it does to the balance sheet and understand more about what the plans are. what are they going to do with
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mozambique and the gulf of mexico? are those the kind of things they're going to sell? what are the synergy targets? what is the timing? all of those things are important and until we do that i cannot answer that question. alix: mark, good to catch up with you. joining us on set is the jpmorgan head of local oil market research. what does it say to you that you have chevron and thought investing so much money. chevron is trying to grow even more. occidental is going to try to beat it. what does that tell you about the production profile? >> it is one of the best assets the u.s. has when it comes to shale and it is viewed as the quaint of the united states -- as the kuwait of the united , but also its accessibility to the gulf coast where they're able to bring that crude to the gulf coast and exported. the amount of pipelines coming
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online by the end of this year, taking that oil out of permian and giving it access to the world market makes permian one of the finest assets the u.s. has and it is what the u.s. deems necessary when it comes to its energy exceptionalism and using that with all kinds of politics, whether it leads to oil related dynamics. we go now to the financial sector conference where the coanchor of bloomberg daybreak middle east is standing by with a special guest. >> it has been a busy day. let's pick up where you left off in terms of what is happening in these energy markets. we are joined by the nigerian oil minister, thanks for coming back on bloomberg tv. here, financial
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sector conference. you had a chance to sit with the saudi energy minister what are the prospects of finding deals? >> very good prospects. we're asking for some investment , we are looking at potential for lng investments. .ooking at trade deals [indiscernible] at -- among those industrial cities. youseff: let's focus on the energy market because we have a situation where the waivers for iranian oil exports were not renewed, shaking up the market. what is your reaction after having heard what the saudi
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energy minister had to say. is this the right way to go about this? >> i agree. it has happened. we need to find some solution. in juneving a meeting and a meeting sometime next month. about three weeks to calibrate after this initial excitement flair. event --, in the continues the trajectory, which is lower levels of volumes, i think the question is how to manage it in a way that is both fair [indiscernible] what the specifics of that will be, i do not know yet.
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we will have to wait until vienna to calibrate on that. youseff: from what you are seeing in the numbers, is a six-month extension still the base case or does that get curled tail -- does that get curtailed? what does that look like? we are at the same levels as we are now. there is a volume issue. maybe we will push back a little on [indiscernible] production costs. in terms of the relationship itself in the direction the corporation last, we prefer longer-term. longer-term is able to manage and to reach. [indiscernible] how is -- how intense
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is he getting at these opec meetings. you have saudi arabia and iran are doing through the united states. these must be difficult. >> it is. nobody wants to have wrangles. where -- we've been able to do relationships on both sides. when situations like this arise from you know there will be a lot of heavy lifting and trying to manage both sides. how much are you pumping at the moment and where does that go over the next few months? about 2.6 million barrels right now. , beginning ofh march and into april pulling
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down drastically to meet the opec numbers. .bout 5% now noncompliance we still of a bit of work to do. there was a lot of pressure to try to get that done. part of that is the issue of secondary numbers. we are tried to reconcile that. if you put the number we signed on, that is where we are 5% noncompliance. youseff: with brent at $75 a barrel, how sustainable is this kind of oil price? is obviously in your interest. >> once those numbers tick up too fast, reactions go down. shale, also.
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you want to have a balance. we are at the point where we are comfortable. we know that something needs to give. what is a good level? $70 is the upper level. once it begins to get past that -- i want $100, don't get me wrong. youseff: on the demand side of the equation, you're beginning to get worried about some of the deceleration? >> it is worrisome. that is why you have to be careful how you calibrate the numbers. there are so many factors. it is always a joy catching up.
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thank you for stopping by. i know you have a busy itinerary. that is the nigerian oil minister. alix: thank you so much. bloomberg daybreak middle east coanchor. we are also getting headlines from iran's foreign affairs minister in new york city saying the u.s. is not acting like a normal country and they are calling on others to violate the yuan resolution. that is interest -- the u.n. resolution. iran can talk a lot but how much leverage do they have? david: he called the u.s. actions on iran oil coercion. that is kind of the point of sanctions. the united states is not going to listen to iran. , turkey,countries india, china, that need this oil. alix: helped topple they get on secondary sanctions. it down isp us break
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the jpmorgan head of global research and strategy. how tough will the usb? -- how tough will the u.s. be? >> we were surprised in november but the reason why markets were caught by surprise november, you have to see the other side of the equation. the u.s. government and u.s. system which is trying to deliver the action is very markets savvy. the way they are deliberately sanctions is trying to see the timing of it in november. the capacity for opec was down to one of its lowest points at 1.9. now the spare capacity is around 3.3. not in countries like russia. at 3.3.pec we're it cannot be better timing in terms of delivering what they have committed to last year. alix: the saudi's are not going to pop willy-nilly. they were burned.
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they will want higher oil prices. just how conscious or aggressive do you expect the response to be , which then leads tout tight can the market get? to be far are going more reactive rather than proactive. by being proactive last year they ended up creating a market and work on off guard. this time around they are unlikely to do that during they will be far more reactive and see what these sanctions -- not being extended anymore means to the market. are we going to see not exporting to half a million? in order to deliver what the markets need, that would create a month of may where allocations have already been made by saudi's. alix: what is the upside risk? possibility you could
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see something like $100 oil, especially toward the end of the year. what do you see? likelyubt $100 looks given the fact that u.s. exceptionalism -- it is leverage the u.s. has. now, -- cannot hit the market because of pipe constraints, it is likely the u.s. will lead more on its allies in saudi arabia and the uae. by the second half of this year, the u.s. will leverage its own oil in order to deliver these sanctions, iran and venezuela. we do have a lot of oil, even if it is not the right kind of oil, we have a lot of oil and that is why there is a natural cap, even if you might see a knee-jerk reaction or a spike. it is unlikely to last. alix: jpmorgan global head of market research, thank you for a much. david? david: we turn from oil to technology.
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lead, a deepow the dive into stories making headlines and moving markets with the insights from industry insiders. today we look at the tech sector. it has been the driver of the stock market for a while. the question is to stay on the train or get off? onwe've been very positive some of the cloud-based computing companies. the clout secular trend is the most pronounced trend i have seen. >> to the extent there is any noise in the tech earnings, you could see a selloff. >> there will be a lot of scrutiny around the tech earnings. >> earnings growth will be flat this year, trading at 90 times earnings. we think tech was left for dead in the fourth quarter and has rebounded. we think technology in the u.s. will struggle going forward. >> a momentum trade and growth will be the place to be. it will be the sectors that lead us into the bull market. i do not think it will be good
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in the next bull market. david: a range of views. we welcome bloomberg intelligence senior analyst. still with us is sylvia jablonski. sylvia, let's start with you. our people staying on the strain or thinking about getting off? etf andwe have attacked it is up 83% year to date. does that say to stay in or take your money off the table? sylvia: sort of both, and that is a great point. in the short-term, investors have been bullish on some of the topics we have talked about. you have twitter, facebook, the user growth experience in the advertising dollars and then the business level tech which is growth in ai and clout. which part of the train are we talking about? the consumer facing part or the enterprise part? >> we've been very surprised in
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the last few weeks that better-than-expected results from companies like sap, microsoft reports tonight. everybody has reported very strong results. david: we have a chart that we stole from you, basically. you talk about infrastructure as a service. your projections for enormous growth in this area. we expect very high growth rate in that area and that is a small part of cloud. not even $70 billion at this point and this could go up to $400 billion or $500 billion when we reach maturity. alix: who wins in cloud? >> you of infrastructure service, amazon and microsoft being the leaders. service software as a with all of the cloud
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applications. that is real sales for oracle, sap, everyone is in the game at that point. views see investors discriminating among the categories? sylvia: they are all seeing growth. all of the tech names -- earnings have been decent. regardless of the fundamentals and the issues of facebook might face in the future, it seems like the growth in the at dollar is there. on the business side, we do see the cloud adoption, ai adoption, we see the bank saying we are spending $10 billion come $8 billion in cloud and that will buoy those companies up. amazon is expecting a 30% to 40% growth rate in cloud. david: how sensitive is that the investment? anurag: it is fairly sensitive. we thought 2019 might be week, but so far we have not seen any
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indications in terms of outlooks for 2019. it seems to be ok. david: as we going to the tech earnings this week, are you anxious, are you hopeful? what you expect? sylvia: i am hopeful. i have loved the bull run in tech. thatee with the sentiment is very high valuations. tech might look good until the rest of the year. we will see after that what replaces tech. i'd like to see tech do well. david: sylvia is still on the train. alix: thank you. sylvia jablonski, thank you very much. for more on the bidding war to win anadarko, we take a look at occidental's latest offer, raising their bid for the company. more on what i'm watching, next. this is bloomberg. ♪
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alix: here is what i'm watching. occidental $38 billion counter
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offer for anadarko. roy, do you like this bid? roy: it is able move from occidental. it is the start of a dramatic bid war and i think it is a good move for occidental. it underscores the need to scale up in the permian and the quality of the anadarko package anderms of global diversity supplies with the permian basin at the heart of it. alix: who gets it? who wins? on the20% premium chevron offer a significant. i wouldn't put my money on occidental at this point as the front runner. it will be tough for the anadarko shareholders to reject that offer. chevron could counter, but at this point it is not what i would put my money on. alix: is occidental's check clear?
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this would be taking on a huge amount of additional debt. roy: this is true. occidental's ratio at the end of q4 was about 30%, which was close to the peer group average. this potential transaction would increase the balance sheet and going to the territory where you do not want to be. it underscores how diversity is being valued by the market and u.s. independence. the broader market has value diverse international dependence and for occidental that offers a lot of different resources and geographies to create value for shareholders. alix: quickly, if occidental does not get it or chevron, where else to they go in the permian? roy: occidental has had its eye on anadarko are some time. occidental needs to scan up in the permian. you can look all across the
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board, but the usual suspects in the permian, everyone is aware. tx, the keys, the w point for us is occidental has a great track record for eu are in that can be applied to unlock more valuable and it has a track record of operating in high-risk geopolitical regions. algeria and ghana could be attractive. alix: roy martin. that does it for bloomberg up on the openg with jonathan ferro, oppenheimer head of fixed incomes. this is bloomberg. ♪
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jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪
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jonathan: coming up, the s&p 500 clinging to refresh record highs on a big day for quarterly results. the mood worsening in europe. german business confidence disappearing, pulled down by trade uncertainty. u.s.-china trade talks resuming in beijing on april 30. 30 minutes away from the start of trading. here is your wednesday price action. futures going nowhere. we cling to record highs. in the fx market, euro-dollar buy that line in the sand at yieldsd bonds, treasury coming in for basis points to 2.53. we begin with our top story. getting harder, not easier to sell. >> it does not feel like something you want to fight. >> great economy, great gdp. >>


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