tv Bloomberg Markets Americas Bloomberg April 24, 2019 1:30pm-2:01pm EDT
he calls regime change, and the disintegration of iran. in new york at a forum hosted by the asia society, he said it is not a crisis yet but a dangerous situation, adding " plotted accidents are possible." [no audio] from selling oil. must be prepared for what he called the consequences. president trump is making a new threat to the u.s. mexico border . the president we did today that mexican soldiers recently pulled guns on american national guard soldiers. he warned that "it better not happen again."
two u.s. soldiers in a remote area of texas were recently confronted by mexican soldiers who thought the americans had crossed into mexico. the mexican troops reportedly removed a weapon from one of the american soldiers. french officials want to speed up the reconstruction work at notre dame cathedral. lawmakers proposed a bill today that would allow the government to issue emergency orders and bypass some strict long renovation procedures. officials say they also one more transparency on how the huge amounts of donation money for the restoration will be spent. dozens of vehicles parked at a dallas airport are underwater after heavy rains moved across much of texas. some vehicles parked in an underground garage at dallas's love field were almost completely covered with just their roots poking out above the flood. parts of the dallas-fort worth area received up to six inches of rain. more is forecast through this evening. global news 24 hours a day,
on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. shery: live from bloomberg world headquarters in new york, i'm shery ahn. amanda: live in toronto, i'm amanda lang. welcome to "bloomberg markets." we are joined by our bloomberg and bnn bloomberg audiences. here are our top stories. high-level trade talks between the u.s. and china will resume next week as the world's top two economies move closer to a deal. and earnings are giving a boost to equities. how markets are digesting all the news. the ante for anadarko. a bidding war is breaking out over anadarko with occidental
making a $38 billion offer in the hopes of breaking the proposed takeover from chevron. we will bring you the latest. tech earnings release so far this week have been largely positive. will facebook buck the trend when it reports after the bell? we have a preview. quick check on the major averages. we are seeing, even as the s&p 500 continues to hover around a record high, we are seeing some negative sentiment out there today, right around breakeven. interesting to see energy weigh on the markets, after being a boost. interest rate sensitive stocks acting as a bit of a positive move for the s&p 500. worth noting on the dow, consumer stocks doing well, and boeing is a bright spot, as it gives more information to investors about how it will manage through the grounding of the jets. at&t is one name lower onset scriber losses. of course, we cannot ignore
anadarko getting a 12% move higher. at the bottom is a look at the loonie. and a drop in the loonie as the canadian central bank decided to leave interest rates unchanged at 1.75%, joining the other western world banks in sort of resetting the expectations about where we go from here. sticking with much more neutral language about where growth is. coming from a hawkish place to a very dovish lace. shery: one sector that i'm watching right now is a sector that continues to gain ground, chipmakers. the philadelphia semiconductor index now at a record high despite at the broader markets are down. last night, texas instruments really getting out an upbeat forecast for the second quarter. they did hint that slumping chip demand would not recover as quickly as possible, but still, the reaction has been pretty positive. those chipmakers are gaining ground. not to mention samsung also
announced they are investing $116 billion in two their semiconductor business in the next decade in order to take on intel and qualcomm. amanda, talking about tech, a chinese tech giant, huawei. sources telling us that the u.k. banningbe actually huawei from the markets. they will toughen rules and regulations against the company operating inside the u.k., but not an outright ban. that could be a major blow to washington's efforts to really restrict this chinese tech company. amanda: although, amid fierce lobbying by huawei on this front, to the so-called nations that are still deciding about the role its equipment will play in their five jeep rolled up. roll up. restrictions mean there are parts of the network they cannot play in. the telecom increment operators have said they need walkway --
huawei's equipment because it is less expensive. canada still deciding where to come down. you could call it a partial victory perhaps for huawei. u.s., were in the continue to be knee-deep in earnings season. joining us for the latest on the markets is cameron crise. seems we are taking a breather from the rally we have seen recently. this chart on the bloomberg showing in the top panel how we have reached a new record high, but at the same time, the 14-day rsi is an overbought territory. are we now just going against these technicals? >> it is hard to say that you are going against technicals when the momentum is so strong. but there is still a lot of fundamental inputs that we need to have enter the equation in the next few weeks. indeed, months.
you can argue the market is looking on the bright side of life at the moment. amanda: that is the question we have had so far here in the majority of reporting companies beating expectations. expectations have gotten pretty gloomy about even the possibility of recession in the u.s., slowdown in europe. are we now kind of snapping back to far the other way, setting the market up for over valuation? cameron: in terms of the earnings season, it looks like a case of underpromise, overdeliver. we had seen expectations are down quite a bit. about 4% on an aggregate level since the start of the year. while a majority of companies have been those expectations thus far this earnings season, the magnitude is actually quite small. the average eps beats 4% of the which is not quite the lowest quarterly beat rate over the last couple of years but close. the beat on topline revenues is the smallest over the last
couple years. so it is not exactly unmitigated good news. couple of the positives that are extraneous to earnings, optimism over the trade situation, where it is amazing how much the administration has been able to milk positive headlines out of this process that keeps going and going and going. that provides a little bit of confidence, as well as the interest rate environment. when the market is still pricing in interest-rate cuts of the fed by the end of the year. about three quarters of a 25 basis point cut. as time passes, we are going to get some resolution on that run, when we or the other. you could maybe argue the circumstances that would need to emerge for the fed to cut rates this year probably are not fantastic for the earnings outlook, growth outlook, and thus, the equity outlook. on the other hand, if the fed does not cut rates, you may have a ratchet higher in yields on
the treasury curve, which again, could impact some sentiment toward stocks. underlying everything, it is very easy to look, identified for reasons to sell, but once you do so, what do you do if it keeps going? that is the question everyone has to consider. shery: also helping sentiment was the fact that despite everything happening around the world, growth slowing down, china continue to pump in stimulus into their economy. now they have finally started to stabilize their economy. at the same time, getting hits from policymakers ability pulling back on those stimulus measures. will that affect sentiment as china pulls back their support? cameron: quite possibly. there's a difference between stabilizing things and throwing gas on the fire and causing a react celebration. stabilizing just means it will not get any worse. it doesn't mean that things will get a lot better. if you look at export numbers from a lot of china's regional
trading partners, they are pretty lousy. it does not exactly suggest that all is clear. shery, you brought up a chart of the sox earlier. quite a striking contrast between considering we are only midway through the downturn in the chips cycle and we have blown through previous highs, in terms of the stock prices. it is reasonable to think that the risk is perhaps tilted to the downside, in terms of negative surprises moving forward. amanda: cameron, great to have you with us. cameron crise, thanks. another story we are following, bloomberg learning and amazon team that audits alexis team commands has access to location data and can find a customer's home address. here is met day with the story. you have been all over the story. in the first store you broke, this was about the idea that our
conversations that alexa users conversations were being monitored around the world. cases, very personal information being monitored. now we discover that that could be tied to locations. >> that's right. in the first story, we expose that there are people listening to a small sample of alexa user interactions. the company was quick to say, there is no way that a person could be listening to a recording and the recording back to a human being. we are learning more about how the process works. one of the things we found is attached to these audio recordings, many cases inside the company, is location data. geographic coordinates that can tie back to the home address of the person who registered. if somebody inside amazon wanted to, perhaps they could pay her a voice recording with at least somebody's physical address. shery: what is amazon saying about all of this? today they said they have
really tight controls about who can access their data. they say they audit it regularly in an effort to make sure employees are not abusing the system. they say they have a zero tolerance policy for anyone that goes into consumer data for anything other than work purposes. we didn't find anything to the contrary, that any employees were abusing the system. we just advanced the story with the knowledge that many employees -- we don't know the exact number -- but can access some data information related to alexa voice recordings. shery: thank you so much. we have breaking news. macy's stock spiking in the last few moments. preliminary discussions with new york city officials about building a skyscraper on top of its flagship store in manhattan. right now we are hearing the company has floated plans for a 1.2 million square foot office tower that would be used by other tenants. macy's probably would push for zoning changes around the
property to allow for the 800-foot holding, according to an official with knowledge of the matter. again, macy's has held preliminary discussions with new york city officials about building a skyscraper on top of it black ship store in manhattan's herald square. a major bidding war in the permian even occidental has thrown its hat into the ring once again for anadarko petroleum. is it enough to knock out chevron? we have all of those details ahead. this is bloomberg. ♪
petroleum has made another bid for anadarko, this time for $38 billion, looking to knock chevron off of its perch. alix steel spoke to the occidental ceo vicki hollub. >> i do want to correct one thing. our offer today is the same offer we made in january 2018. we felt very strongly, as we look at anadarko over the past couple of years, that they have incredible assets. combining their assets with our assets further enhances our strategy of dividend plus production growth. anadarko has confirmed the receipt of the proposal from anadarko, saying the board will carefully review the proposal. for more, let's bring in simon casey. we know that if they have to back away from a deal with chevron, they have to pay a breakup fee of $1 billion or so he how appealing is this? simon: at the moment, they have not really engaged.
the answer is probably not very appealing right now. the ball is back in chevron's court. do they come back with a sweetened offer? anadarko share prices up today. in fact, it's been up all of this week, last week following chevron's bid. there wasn't a rotation in the market that something would come through. if you go back to the day chevron's bid was announced, the reporting at the time confirmed occidental was in the running. there was expectation that is bidding war could run for some time. amanda: we are seeing this report that the anadarko board has not made a preliminary determination so far about this bid. it was clear from that interview with the ceo of occidental, that they are positioning this not just as bigger for bigger sake, not a reaction to the chevron deal, but because the assets fit
together in a way that makes sense. is there one that makes more sense on the face of it? one analyst came out this morning in the aftermath of the news, pointing out that the industrial logic is similar between the chevron and occidental offer. itsdental is keen to stress technical expertise, but chevron has that as well. what is at stake here is the permian basin. as we all know, this is a very fast-growing region in terms of oil production. now tos a real rush consolidate the ownership in this area. it is very fragmented. chevron came out earlier this year and announced very ambitious growth plans for the permian basin, so did exxon. anadarko has a strong position there, so does occidental. an opportunity to put two second-tier producers
to create what would be the number three oil and gas producer. chevron is a far bigger company then occidental. so there are risks here. chevron has the huge firepower. occidental is frankly stretching itself here to do the deal. shery: i was going to ask how much size matters. anadarko saying they are reaffirming that original recommendation right now. how much will size get into consideration when they have to choose? simon: it matters enormously. fundamentally, occidental, to do the deal, has to sell assets to pay for the financing to do the deal. chevron has also pledged asset sales. it is under much less pressure, it's balance sheet is in or miss. it will take on debt to do the deal, sell stop, but it has much more but stability. combining occidental with
anadarko, occidental will have to take on this massive lng project in mozambique, for example. it doesn't have anything like that at the moment. they say they don't have any problem with that, they have project experience, but this would be a new industry for the company. if they sell it, who would buy it? there is a lot of uncertainty in the market even though it is fast-growing. lots of questions raised, absolutely. the size plays a big part of it. amanda: great to have your thoughts, simon casey. moving past some negative headlines. the market expecting facebook earnings will improve the social media company has moved past controversies. this is bloomberg. ♪
speaking now in atlanta, expected to speak on opioid addiction. we will monitor for any news headlines that he makes. a reminder, if you want to watch that live, you can do that on the bloomberg at live go. we are waiting for facebook's first-quarter numbers. one of the questions is whether they will reinforce a rebound even analyst looking to see the company moving past negative headlines that have held at the stock the second half of last year. what to expect? bloomberg intelligence is with us. what does facebook have to show to show that it is actually a rebound story? >> if you look at the expectation, 25% revenue growth, they have some strong stores in terms of the adoption being phenomenal. if you look at the underlying demand and advertising, that's been strong very you see that in earnings for snap and twitter. expectations are strong here,
but what is happening with the shift to stories, growth coming areas,wer monetizing all you are basically playing a game between ad volume and pricing. the expectation is pricing will decelerate, but they will compensate that with a strong volume. that is what is setting the expectation. shery: expenses continue to grow. will that be a problem? jitendra: for this year, investors have sort of accepted the expenses will go up, but it will bottom by the end of the year. so this is sort of the end of the expense cycle. they are guiding 40% to 50% growth. historically, they have come in at the low end of guidance. we don't think the expense would be a big issue, but if something goes wrong, you have to look at pricing. could go wrong, what are you watching in terms of a misstep for facebook? jitendra: we will closely watch
the guidance. thecally, we are seeing pivot the company is making toward privacy focused communications, ephemeral messages, things like that. integration of messaging services coming down the pipe. during the transition, if it shows up in guidance, showing it is either pricing or a move toward privacy or other features, might have near-term impact. that could impact revenue growth in the near term. that could go wrong. but expectations, like i said, is for a strong quarter for facebook. shery: the number of monthly active users seems to beginning to plateau. where should we expect every acceleration of growth to come from? jitendra: it is all on instagram, really. yes, the numbers are plateauing, but we looked at some third-party data, and it is pretty stable. there is growth in instagram, messenger.
if you look at the holistic number they get, the family number, 2.7 billion monthly active users, that number will continue to grow. facebook will continue to focus investor attention at that number, as they are moving toward monetizing that population. not just through advertising but e-commerce as well. shery: jitendra waral, thank you for that. coming up later today, we hear from the ceo of at&t. he joins the david rubenstein show, peer-to-peer conversations. from new york and toronto, this is bloomberg. ♪
before a house committee. john gore, justice department deputy attorney general, will before the house oversight committee as he was scheduled to tomorrow. the panel wants gore to answer questions related to commerce secretary wilbur ross' dec decision to ask about sessionhip on the 2020 -- senses. aboutke with bloomberg one of his priorities. >> we have to define our key industries that we see is our future markets, and we have to defend them and create also champions in key industries. meanwhile, british prime minister theresa may is considering a new tactic in her