tv Bloomberg Markets Americas Bloomberg May 10, 2019 10:00am-11:00am EDT
york. 3:00 p.m. -- 10:00 a.m. in new york and 3:00 p.m. in london. i am vonnie quinn. guy johnson is out today. let's check those markets. it is uber, that will be the big news of the day. elsewhere, we are seeing a grind for the s&p 500. down by 4/10 of 1% today. we are far below the 2900 mark that we had been holding above for such a long period of time. can tripping to that, -- contribute into that, casinos and gaming. contributing to that, casinos and gaming. the 10 year yield has changed despite the inflation data. the turkishint to lira as well. it is soaring today. it is up one and three quarters. we will take a look at what is
happening in europe. it is a bit of a different picture. you have the dax up 90 tenths of 1%. it is the only major index that will be up for the month. for the week, it has not been a great picture. it is up 21%. that is pleasing investors. cac is up by a third of a percent. the usual suspects bringing that higher. we will continue to follow that throughout the rest of the session. at 12:50, back to her. we will hear from the -- uber, we will hear from the ceo. let's get to the ipo. joining us is mike. gabe. forward is
is of the concerns for uber regulatory, right? at the city level and the state and federal level. what are the regulatory concerns that uber investors should be most concerned about? thing, they are at odds with the three largest cities in the united states right now. .ver micro mobility there are lawsuits. those bad relationships are playing out in a number of ways. companies like lyft are getting exclusive contracts for scooters and bikes. that is one concern. i think, in general, there is pressure to raise prices, which is separate. there will be pressure to share a higher percentage as they raise prices. i think the minimum wage in new york, that they have to comply
with is a potential problem that could spread to other cities. if it is on problem their profitability only, versus what is best for workers. those are considerable issues for them at this point. there is a study that came out that showed there is a lot of congestion, up to 60% more congestion in san francisco. as you see the pricing going into effect in new york, that may affect the number of vehicles that can be deployed in a downtown area. vonnie: i want to point out to viewers that you helped build the bike sharing business and you were the government's , perhaps you could give uber some advice right here and right now as to how to get around these regulations and how to make them work for the company as opposed to work against the company. >> what it comes down to his
trust. you have to build trust. i feel like when the new ceo came in, they had an opportunity to rebuild trust and cities wanted to give them that chance. with the lawsuits and some of the tactics that they have deployed, it seems like chicago, they have started to squander that trust. cities are always forgetting to recognize the positive impact that services like uber can have. i think teaching more of a co-creation approach to cities and saying how can we design these services to work for the city and perhaps look at revolutionary with cities as well. -- is: it is going to be it going to be a question of whether drivers can state contractors or become employees. they have control over the employment loss, what would be -- laws.
what would be better? that they become employees or that they stay contractors, from your experience at lyft. >> this is a great question. --panies like spin have from what i am seeing, they are getting better returns on that. people thatn to worked for them and more consistency. on a business of the scale where you have a lot of part-time people doing this for a few hours a week, i think you want to continue to be able to do that. but, as john zimmer from lyft has said, maybe we need a classification between contractor and w-2. and recognize people that are working over 30 hours a week and give them some benefits. the economy is changing. however, inequality is also
getting to record heights in our state. i think uber should be pushing the envelope and looking at working with cities and figuring out -- and states -- and figuring out what is maybe a third classification. vonnie: you are also part of a d.c. company out of detroit. how far away are driverless cars in competition toward services like uber? >> i thought they were -- i think we all thought they were coming faster. a couple of years ago, we thought by the end of 2018 we would start to see some rolling out. the estimate that i am seeing are for 2021 through 2023. that scale where you're having robo taxi services, it could be
.25. i don't think uber can rely on that in terms of cutting their costs. raise it 30%e to and have to pass that on. then you have to start to wonder, will there be a drop off in the use of the services? i think on the business side, they have a solid market. side, you could see a significant drop off. in transportation, it is hard to make money. one of ourransit is biggest bettors, which has not been received well by cities. transit does not make money. you have a lot of experience in that area, thank you for joining us. >> thanks for having me. vonnie: we are joined by ivan
who is run of -- one of the underwriters of the lyft ipo. what do you make of the pricing being at the lower end, $45 a share? >> we are in a difficult market. the pricing of lyft was at the premium. the fact that the stock has sold off put pressure on the pricing of uber. the weakness in the market did not create the best time for them to go public, unfortunately. flipped belowas its latest private valuation of $15.1 billion. what does that say about the general valuation of the companies that are not making a thatt, there is hope for in the future, but the price of these massive valuations? >> it is the fact that uber goes public. you have a category of at least two companies that is creating
the investment category of transportation as a service. which is in its infancy and will take a long time to play out. there is some opportunity for long-term investors to buy these participation in this trend of transportation of the service as both these companies expand the platform to include different types of services. for example, lyft is focusing on health care transportation, providing rides for people to go to doctors and health care providers who cannot get there on their own and may not have a family number two take them. that is a huge opportunity. pay foror's office will the transportation. they are expanding in two other types of area of deliveries and services as well as investing in autonomous technology, which will be a big part of the transportation as a service fee. vonnie: who will be the
ipo, which is massive at $45 a share, will it be the same kind of client base as it was for lyft or a whole different segment of the population? >> there is huge demand for ipo's because of the initial profit opportunity. of a focusbeen more on uber to try to get the stock into hands of more retail investors who may be more longer-term to avoid some quick selling. but, stocks seek their own level. and eventually shares get sold to people who are willing to understand the long-term value creation potential or not. commit toe willing to see there is a willingness to commit money to this category of transportation. over time, it will be a major
theme in the economy. vonnie: once they are both focus, how do investors on -- what do they focus on in order to tell which company is better? >> it is about the investments they are making to grow a long-term business. oath company's have continued to grow their driver base and ridership base. have continuedes to grow their driver base and ridership a's. i believe the health care transportation business may provide the need for greater service, which may have a premium price to it. and create a better opportunity. and there is a lot of interest technology, which has been the focus for uber and lyft for the future. there have been other companies that have contributed to that.
there is a lot of technology that will go into this as well as increasing the functionality and features of the platform that connects writers with drivers. -- riders with drivers. vonnie: uber boasts a revenue of do thelion last year, drivers hold the key to the long-term success? >> i believe it is customers that hold the users key to long-term success. of the service is the driver. it is also an opportunity, the majority of uber and lyft drivers are part-time drivers who are looking to make a few extra dollars driving at night or on the weekends. or, if you have a job that allows you some downtime during the week, they can fill that time with the opportunity to drive. it creates a unique
entrepreneurial opportunity for people to make extra money. that is another attraction point. they are building this economy and this ecosystem. vonnie: thanks for joining us today. chang speaks emme with uber's ceo after the ridesharing company starts trading at the new york stock exchange. that should be around 12:30 eastern time. looking forward to that one. now, it is time for the first word news. raisedident trump has tariffs on 200 billion dollars of chinese goods. beijing says they will retaliate. so far, there is no white house. president trump tweeted there is no need to rush a deal although he later deleted that tweet. negotiators will be back at it again.
messageral reserve's that inflation will not last is getting tested. consumer prices rose by less been excited in april. iran says there will not be any talks with the u.s. a day after president trump said he would like iran's leaders to call him. the top military leader said there will be no negotiation with america. the u.s. has been ratcheting up economic pressure on iran. in venezuela, nicolas maduro is exacting his revenge for last week's uprising. he is cracking down on those he holds responsible by issuing arrest warrants and sending opposition leaders into hiding. the head of venezuela's opposition has brought supporters back into the streets. they run the risk of being rounded up. global news 24 hours a day, on air and at tictoc on twitter,
president trump has increased tariffs to 25% on $200 billion of goods from 10%. in europe, the dax is higher. china, a big rally of 3.1%. on the week, i was mentioning down five days in a row. let's go into the bloomberg and put it into context. we are looking at the worst week of the year. for notassive losses just the majors in the u.s., we have the shanghai composite in the orange and the dax is lower. this year, mainly gains. take a look at the shanghai composite in april, putting in its worst week then of the year, a lead for the worst week we have for the s&p 500 and the nasdaq this year. bidre going to see a haven and it is the biggest haven bid since march. we have the worst stock selloff since december of last year. investors not fleeing to safety as much as they are going out to
risk. bonds are rallying along with the yen rallying. a couple of movers on the day. we have meant tech plunging. marriott is down on a disappointing first quarter. lyft down 1.8% ahead of the big uber ipo. vonnie: thank you. u.s. and china trade teams are meeting for a second day of talks. this after president trump unleashed a new round of higher tariffs. we are joined by sean in rdc bureau. -- our d.c. bureau. the president has escalated a trade war and behind closed doors, the two sides are trying to talk. to add to the curious tones, the president calling all of these talks congenial, even
as he has rolled out the biggest bazooka yet in terms of tears. what we are seeing is both sides trying to not be the person to walk away from the table and not see these talks break down altogether. we really have seen a deadlock of -- devolve over the past week -- evolve over the past week. there is a low chance we get any sort of a deal over the next few hours or even the coming days. both sides are eager to emphasize -- part of this is about managing the markets. they are going to emphasize they are still talking. vonnie: when will china's retaliation actually come? it has been promised. china is seeing more tariffs on to exports, will it wait retaliate further down the line? when is the retaliation coming? >> we don't know. the chinese said they would do it quickly but they offered few details as to how they were going to retaliate. i think they have the option to
raise tariffs as the president has on the u.s. exports to china. they have a lot of other tools they can use and that they have used with past trade disputes, including harassment of foreign companies that are operating in china. sending in safety inspectors. we have also seen in formal consumer boycotts get underway of creating -- korean goods and japanese goods. that is another option. there are a lot of options beyond the official response. there are a lot of tools that beijing has. we don't know which ones they will use yet. vonnie: we will be keeping our eyes peeled for any response as the parties continue to talk. still ahead, we will be taking a look at the rising stars of etf. tose rising stars reporting bloomberg intelligence. this is bloomberg. ♪
♪ vonnie: live from new york, i'm vonnie quinn. this is bloomberg markets. there are over 2000 etf's. to help with all the clutter, bloomberg intelligence has rising stars put together to help investors know which funds to watch out for. here to discuss the latest is morgan. how do you begin to identify these rising stars? >> they are funds that have more than doubled assets in the past 12 months. and those that have crossed the billion dollar threshold so far this year. funds have proven they can break out from the pack, putting them in the top 20% of funds by asset. vonnie: looking at the list our viewers can see, there are a slew of factors, what about these? two multifactor funds.
they have multifactor funds that made the list. we see so much appeal in multifactor because when there is unpredictable news flow, these are packaged rules-based strategies that put the ideas into something that is more predictable. we have seen a lot of influence and interest in multifactor taking awayeek -- the need to time factors. vonnie: come back to us soon. thank you. it is time for our latest bloomberg business flash. there is a big transaction in the pipeline business. bought buckeye for $6.5 million. ofis the largest acquisition a u.s. pipeline company in the last year.
an ipo for an asia unit that could greece -- raise up to $5 billion. it let up to acquisitions in a thriving world. that's your latest bloomberg business flash. big investors betting on a spectacular market crash. you won't want to miss this. russell clark is joining us. that is up next. this is bloomberg. ♪
no need to rush a trade deal in china. that came out in a flurry of tweets. onrs after he raised tariffs $200 billion of tiny -- chinese projects. -- products. talks resulted in little progress. china is eroding u.s. dominance in technology with an avalanche of patents. says american investors command the largest portion of the nation's patents but the percentage is dropping. web in north korea suggests kim jong-un has a missile in north korea that could brighten u.s. troops. they have launched short range missiles that appear to be a local variation on russian weapons.
two new government reports say billions of dollars of cash -- has soaredvancouver 70% in the last five years. 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. this is bloomberg. vonnie: thank you. for the past seven years, it has been doing this. the markets are hovering around record highs. he is convinced the crash is near. good to see you, russell. the market seems to be the site -- defying expectations. where is the illusion, what are people missing if there is a pocket that is overvalued here?
>> when people talk about a 10 year market, they forget that during these 10 years, you have had crises in russia, crises in brazil. crises in the oil locket. you don't have to always invest in the s&p to make money. that is what we look for. we look for industries where there are problems bring and when we see those problems breaking out, we go after them. so, when we look at the markets now, and we look at things in general, one of the things that you find when central banks keep rates low as they have 14 years is that people do silly things. they are looking at the yield. mlps a fewve been years ago. what is big in asia and europe is people are buying retail
products. market for them is korea. so, what we do is keep a close eye on the korean market and we look for issues that could disturb that market. the way that market is it was to is that if fall dramatically, it would trigger problems in volatility. we have a bearish position at the moment is we have had two blocks in the market. we have had february of last year in q4 of last year. the markets have come back to near highs both times. the underlying issue of our retail investors still exists. the third, we ask ourselves what could take it down?
money is influenced by the market. we haveone reason started to take an aggressive view on where the markets are going. as we progress through the year and with tariffs going on on chinese imports and when we look at the nature of how the chinese market is trading and other currencies in asia, it seems to me that you have two different things that could blow up the markets. one would be big problems in the semi conductor industry which i think exists. the second would be that china decides to retaliate through think wouldhich i make sense. given that the dollar looks overvalued, you have come to an environment where risk is large.
vonnie: if something happens to disrupt one of these markets, one of these traits that you have mentioned, will there be an orderly grind down? will we see contagion to other markets? >> the problem with the structure products that they act to suppress false. if you look at volatility quiets, they have been for many years. that is because as markets fell off, the structure of these products tend to sell more volatility and act as a stabilizer. if you get an event of some shock -- for people who have not seen a markets you are two
can look at in recent history where you have seen one. one was the oil market in 2014-15. the markets fall and they fall in a straight line. they will say trade is falling too far. rsi is nine, you have to buy it. early 2016, it barely rally. they act as a stabilizer. when they break, they become a massive destabilizing force in the market. prominent have some .hort sellers you may be short in different products and different types of areas. you need to try to sleep at night. it is not clear when the timing will be right. last on theseou shorts? that theyu imagine
will go awry? we use a lot of different techniques. andon't like to short industry that is at an all-time high. we wait for the market to tell us when. we look for markets that are going sideways to stable. if you look at markets in korea or the nikkei, they have gone to new highs. contrary to what most people believe, the asian markets tend to lead the u.s. markets. i know that is not what most people think but it is actually true. those markets are telling you that. --n we try to look at we try and find an industry or protect.hat will sometimes we get it right and sometimes we get a wrong. we try to find assets that will help us protect the invariable
squeezes that come. vonnie: let's talk about your short thesis. you laid it out there, what of the trade discussions might change that thesis, if at all? thate issue with semi's is the u.s. is the largest supplier of semis and the china -- china is the largest buyer. they produce in the u.s. and sell to china. escalates,t dispute they would be hostage to chinese trade negotiators. the bigger issue is that china aggressive in our semiconductor industry for a long time. if you follow the industry closely and i have been following asian semiconductor
companies for a long time, you have seen inventory built and rising pressure. the asian stocks trade is much weaker than the u.s. stock. closernvestors who are to china can see what is happening while the u.s. investors are looking at something else, i'm not sure what. the signs are already there, in experience, the way have trained semiconductors defies -- they are looking at something. i think i know what. sometimes markets do crazy things for a while. howhave big diversions in asian semiconductor stocks are trading and u.s. semiconductor stocks are trading. oneie: i want to ask you
last question. do you look at the ipo's at all? >> most ipo's happened when their owner thanks they have a good price for the underlying asset. and they would like to cash in. seen a lot of ipo's typically peak in a certain industry. ipo's can very often signal a topping in a certain sector. vonnie: very interesting. thank you for chatting with us today. i hope you come back again soon. check out history in markets magazine, it is part of the contrarian issue. ipoe are on the earliest
♪ vonnie: live from new york, i'm vonnie quinn. this is bloomberg markets. let's bring in emily chang who is light at the new york stock exchange with some big interviews. the biggest ipo in a long time, one of the 10 biggest ever, what is the atmosphere like down there in terms of the books getting put together? >> we are waiting for the shares to open. it looks like they will open somewhere between 4550 and 4650, which is slightly above the
ultimate way they price this ipo. bitcoin is on the low end of the range. that was a disappointment to some early investors and early employees. uber is being conservative given the volatility in the markets and what has happened with lyft. they made a big pop on the first day but they struggled. they came out with an earnings report that showed revenue grew but losses also grew. we have investors who are feeling cautious about uber and uber's growth. what they want to see is that growth and that pop over a long time. i will be interviewing movers ceo any moment -- uber's ceo any moment. as far as this morning goes, we have seen uber employees at the balcony. we had uber drivers and the uber co-founder, travis is here.
a little bit of controversy because uber's ceo said he could not ring the bell and wanted to keep his distance from uber's past. so far, no drama that we have seen on the floor today yet. vonnie: interesting that he has at the -- is at the new york stock exchange. were there any protests outside? protesters yesterday were very visible in san francisco. drivers for the main part. >> i walked in an hour ago, i did not see any protesters. they have breached trucks outside -- uber eats trucks outside to get food. we saw thousands of drivers turn out around the world. many of these drivers say they cannot make a living wage. the working conditions and wages have gotten worse over the years. it is an indication that uber is in a very competitive market no
matter what the issue is, ride shareis the business -- rideshare business or food delivery business. sber has been emphasizing rider to try to take them away from other competitors in other markets. happy.re drivers who are we did not see a huge zip in available rides. it is unclear the impact it had. the drivers made a statement. it got the attention of the media. uber has taken a some pathetic tone. they have been trying to come to turn -- terms with the drivers. the question is over the long-term, can they pay these drivers to create a more sustainable working environment and quell some of the unrest as they try to stem their own losses and turn a profit. vonnie: as you mentioned, over
is opening between $45.50 and $46.50. we will see you in a little bit. bloomberg subscribers can follow uber's ipo on our live blog on your terminal. european banks are watching u.s. and china trade talks. >> the confirmation of an environment of low interest rates for much longer than expected. on the others, there is a different type of volatility in the markets compared to the past. low interest rates, low volatility, it is forcing our banks to provide a business
model to adapt to ensure profitability. >> to ensure profitability, what is the immediate urgency for the european commercial banking system to finally clear itself of the challenges of the last 10 years? how urgent is it going into the summer of 2019? the job has to be done. think about banks inside of your cleaning up the balance sheets, this has been done quite extensively. the restructuring in the retail sector, cutting costs, investing in technology. it is an ongoing process. we have launched new initiatives in this respect -- a new initiative in this respect. we are focusing on the areas where we are more profitable. selecting the businesses where we are best at and first in
class, it is difficult to do everything as a capital market bank. was lorenzo at the future conference in paris. we will take a look at futures and have a check on the u.s. markets. we are grinding ever lower. the s&p 500 down one and a quarter percent. it has been a down week. the down is down 1%. -- dow is down 1%. nasdaq is down. a few stocks in the dow is higher. this is bloomberg. ♪
♪ vonnie: live from new york, i'm vonnie quinn. this is bloomberg markets. let's get to our stock of the hour. the company missed expectations for first quarter revenue. the share is under pressure as the trade fight with china heats up. mikal is the place to watch. >> losses are accelerating. it was 3% earlier this morning. people are digesting the selloff, the brand is taking a hit. quarterly revenue is coming in below expectations. it is falling below $1.67 billion. that is what they had wanted. the ceo came on and said he expects demands to pick up later this year. analysts are not buying that. they also said that the boston property be delayed. there is a lot of different factors at work. long-term trend is top line
revenue does not look good on a quarterly basis. it is important to look at revenue by property. they opened up mikal, that is in china. and then you have vegas. you have the palace that opened in 2016. the only one that is driving both. seeinge mikal in vegas sales fall. sometimes single or double digits. banking on that new property. you get concerned when you have some signature properties performing. vonnie: the opposite of that, we are seeing stocks fall. isi think part of the issue the stocks that have big exposure to vegas. revenue comes from china, given the macau. you have mgm that has big exposure to vegas that is taking a hit on this as well.
overall mentioned, the broader china conversation. you had vip gamblers fall. is banks onth profitability from the vip gamblers. when those fall, there are concerns. we have not gotten into this third quarter which is when the chinese economy might be slowing because of tears. who knows what that could do? vonnie: the companies have been expanding and china -- in china as well. taylor riggs with our stock of the hour. let's talk about uber's trade debut in the broader market which is selling off. story of the day is uber. what else is going on? >> that is tied to what we are hearing about the trait
discussion. those tariffs went into effect. uber industries -- there are industries that will be affected by this, the technology sector and the capital goods sectors. that is why you're seeing so much bread today. vonnie: part of the market seems to be taking it seriously now that there will be an escalation and this may not end here. >> a lot a people don't want to be exposed to this over the weekend. it appears these talks will drag on past the close tonight. a lot of folks don't want to be exposed to that until monday. you had a market that had gotten complacent when it came to trade and the effect on the economy and the effect on corporate profit. a lot of markets have woken up to the possibility that has not been taken out of the market as much as they had priced it out before. vonnie: the major story will be uber for the rest of the day.
could it signal something about the tech trade? of action is $45.50. the ipo was 45. this is one of the smallest gaps between the offering price and the opening price we have seen in years. we don't see this. we had complete like pinterest the insured -- opened 30% higher than what their offer was. checking markets more broadly, the major indices are down 1%. the dow is down 1.1. the s&p down 1.25 and nasdaq down 1.5. this is bloomberg. ♪
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the trade day. from new york, i am vonnie quinn. this is the european close on bloomberg markets. let's check european markets as we progress through this session, just about 30 minutes left. the dax is the best performer of the indexes across the water. it is up about .5%. the best performer in the dax is spinning off its elevator business. trading is 25% higher. there are some losses in paris and it is down for the week i several percentage points as our most of the major indices. for the month, the dax is the only one in the green. 100