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tv   Bloomberg Markets Americas  Bloomberg  May 30, 2019 10:00am-11:00am EDT

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york, 3:00 p.m. in london, and 30 minutes into the trading day in the united states. i'm vonnie quinn. guy johnson is out today. welcome to "bloomberg markets." we have some breaking high-frequency data. pending home sales coming in, month over month down 1.5%. these are contracts that haven't yet been signed. economists were looking for a positive 0.5% figure. year-over-year pending home , better than economists were hoping for, and much better than last month. got a raft of economic data as well. we will get back to that in a few moments, but let's look at how markets are trading. we had those down days, and a little bounce today in response. it looks like we are headed towards the 2800 mark on the s&p 500 once again.
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despite lots of negative news in the markets, one of the head scratchers today is the retailers index. we still have the discounters coming in and confounding the markets. theevery single stock in s&p 500 retailing index is higher. still, there are a few retailers out there not doing so well. pdh down after coming in with a very grim outlook. it does seem like some of this is a fundamental story, and some is just better tone in the market today. 4.5% -- viacom up 4.5%. cbs is up as well. the 10 year yield has been quite a story in the past 24 hours. the yield back up to 27%. 2.27%.pe, -- up
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in europe, autos are one drag across the board on the renault and on and onot story. the dax in germany up 6/10 of 1%. the publisher in germany is up 21%. talks with kkr potentially happening about a going private. later this hour, we are speaking exclusively with martin franklin . his thoughts on the landscape for m&a deals, turnarounds, and of course, activist investing. always a great conversation with martin franklin. trade talks between the united states and europe have stumbled in the 10 months since president trump and european mission president junko juncker struck a
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truce aimed at clearing the way -- european commission president jean-claude juncker struck a truce aimed at clearing the way for negotiations. allocate. you farm out the trust that people are giving you. what kind of phone calls are you getting from your managers and clients these days? guest: certainly all focused on these geopolitical risks everyone is watching in the headlines. we've been encouraging the advisors and clients we work with to really focus on the fundamentals. while economic growth and the earnings backdrop certainly are decelerating, it is still moving along in a positive direction, so we are suggesting a balanced approach to risk for 2019, and we think investors should not chop on quality, both on the equities side and the fixed income side. vonnie: it seems like it is changing every day. just look at the last 24 hours
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in u.s. fixed income. what are you supposed to make of that? quality is the word everyone is using today. companies with low earnings variability, good balance sheets. we look for areas that have the ability to maintain profit margins as we are firmly in the late cycle here. growth is becoming harder to come by, and input costs are going up. companies are able to maintain margins, certainly areas in technology, areas into health care that we are leaning into right now. vonnie: are you swapping out managers? who are the managers that are catching your attention the most these days? emily: really it is the ones in our network that are following this sort of quality and growth outlook and process right now. we are seeing that ability to this marketer
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volatility by employing this balanced approach. on the fixed income side, we are leaning into areas like investment grade corporate, and we are talking to investors about the fact that we understand you shortened duration last year, and that worked really well, but it makes sense to own some duration in this market. vonnie: where are the areas of the market that are concerning to you that clients are calling you up and saying, hey, are you sure we are safe here? should i be getting into gold? [laughter] emily: haven't heard too much conversation about gold. feels like that has gone away a bit. certainly areas that have high leverage to china, a high percentage of their sales coming from china, are areas we are concerned about. sectors like materials, which are essentially a leverage play on chinese growth. on the fixed income side, there's just certain areas where it doesn't really make sense to go over in terms of taking risk.
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areas like high-yield, areas like bank loans, where we have the experience of seeing a really meaningful drawdown compared to other parts of the fixed income market. we don't want to repeat that experience as these bumps in the road continue. vonnie: at john hancock, what kind of return are you targeting in the some buyer meant -- in this environment? emily: i would expect more muted returns out of the equity market, and some decent returns out of fixed income as we had forward. tends tote cycle, what happen is the fed pauses, the yield curve inverts, and equities get a nice run up. in our mind, we still think there can be another leg up in terms of risk assets, but now is the time to think about pruning risk within the portfolio in anticipation of the eventual recession. vonnie: when does john hancock think this recession comes?
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what does the fed do this year in preparation for that? emily: one thing we watch is the leading economic indicators index. what we are seeing is that it has accurately predicted the last seven recessions in the u.s., and it still remains in positives to hurt -- in positive territory, but that has come down from about 7% back in september. if we continue along the space, they could go negative by the end of this year. typically you've got around six to 12 months after the lei goes negative until you get that recession, so we are looking at sometime in 2020. vonnie: all right. stay there, emily. head of john hancock investments research, is staying with us. let's check in on the first word news with kailey leinz. kailey: consumption was stronger in the u.s. then was originally reported, as were exports.
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it is down 1/10 of 1% from the original report. president trump has renewed his assertion that robert mueller's report exonerated him of wrongdoing. the president's remarks directly conflict with mueller's yesterday, who said that it was up to congress to act. in italy, deputy prime minister matteo salvini is ready to play hardball. he has told his party he is willing to let the coalition government collapse if you can't push through his flat tax plan. salvini has the upper hand in the coalition after his party's victory in european elections. hsbc may cut hundreds of investment banking jobs. at least 500 dobbs could go within global -- 500 jobs could go within global banking markets. the bank missed full-year
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revenues.r 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. i'm kailey leinz. this is bloomberg. vonnie: thank you. alarm,ounding the expecting lower returns and increased volatility from corporate credit markets. our exclusive conversation with the ceo and cio, next. this is bloomberg. ♪
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♪ vonnie: from new york, on vonnie quinn. this is -- i'm vonnie quinn. this is "bloomberg markets." questions over the health of the
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corporate credit market are coming into focus. bloomberg's jonathan ferro spoke exclusively with pimco's ceo and cio on where they see opportunity in credit. >> a lot of what we are trying to do isn't dissipate the next investment opportunity for our clients. we talk about credit issuance. a lot of that occurs outside the united states, within emerging markets, across asia, even pockets of europe. a lot of our growth areas are focused on where we anticipate the best returns. in this business, you have to start sometimes multiple years before that opportunity actually is out there and ready to be realized, so that is one of the key areas of our focus. resources with a slight tilt towards credit. jonathan: let's talk about private credit markets. is that an opportunity? manny: it is an opportunity, and it is something we have been doing for 11 years. it is an opportunity, and it is
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going to become even more attractive. jonathan: how scalable is it? it is never going to be as scalable as what pimco does on the liquid side, and it doesn't matter. are we you think is there opportunities because of what banks used to do that they don't do anymore, for us to do various things. it goes from lending against real estate to buying securities in housing to being able to opportunistically do direct lending to various private credit transactions which, if managed properly and constructed ,he white way -- the right way that is an opportunity for us and other people. jonathan: the key question is other people. it is an incredibly competitive environment right now. we talked about areas where there might be frost. is that an area where there might -- might be froth.
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is that an area where there might be froth? sidethe corporate credit is where we see frothed. we look at but read of state, private realist -- we look at corporate real estate, private real estate. we still see considerable opportunity. despite the global financial crisis being 11 years past, we still see friction in markets. we still see opportunities for investors on the private side, as well as the public side, and that has been our focus for now, looking to harvest opportunities within that space. cio mannymco ceo and roman and dan ivascyn speaking there in an exclusive interview with bloomberg's jonathan ferro. we are joined still by emily roland, john hancock head of investments research. what are the fears out there in fixed income and the corporate space? emily: i think the fears are
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somewhat overdone when it comes to the investment grade corporate space. there's a lot of talk about the prevalence of bbb securities. that tends to be higher quality companies that should be able to weather an economic downturn better than other parts of the market. they actually have a nice, nation of being able to provide some yield in this environment, but nice diversification away from risk, which is one of the key reasons investors own bonds. vonnie: i also have been looking at some of your notes, and you are talking about the chinese yuan as being a catalyst. what levels would we have to see, and a catalyst for what? emily: certainly the chinese yuan is a key risk factor we watch. global marketof disruption have been driven hard by a significant depreciation of
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the yuan. seven is the all-important level everyone is looking at, and we are trading at about 6.91 per dollar. we have seen that kind of deterioration happen. we saw it in 2018 a little bit. we also saw a similar scenario play out in 2015 and 2016. i think that key level could cause some destabilization concerns about liquidity and capital flying away from china. we have to remember that china remains the growth engine of the global economy. that is going to be a critical piece for us to watch. vonnie: emily, thank you for joining us in studio today. emily roland is john hancock's head of capital investments research. let's check on those markets now. here's abigail doolittle. abigail: we are looking at a bit of a rebound for global equities. take a look at the s&p 500 and the nasdaq in the u.s., the first update in a holiday shortened week -- first up day
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in a holiday shortened week. also true for the stoxx 600 in europe. the msci index on pace for its best day in about two months. the big source of relief, the 10 year yield. bond yields around the world falling. in the month of may, that has been pressuring investors worried about economic growth. right now we do have bonds trading slightly lower, with the 10 year yield up one basis point , providing enough relief for emerging markets, which are more sensitive to rates and currencies. when we going to the bloomberg, there's reason to think we may see more ready for stocks even though the s&p 500 is technically confirmed for a continued drop. what we are looking at for the the 200 dayd is moving average here. this confirms the 10 year yield to drop below about 2%, but in the near term it is very likely
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we could see the yield back up to about the 50 day moving average, right below 2.5%. the rsi coming out of overbought territory supporting that. should this happen, it could get some relief to stocks. on the day, what is giving relief both here and in europe, as we take a look at some of the bigger movers here, dollar general popping higher 7.3% on a blowout quarter. margins very strong. 4.5% as cbs prepares for talks with viacom mid june. asml in europe trading higher. to put it in perspective, in the month of may, down 5%, the first -- and worstth down month of the year so far. vonnie: abigail, thank you. that's abigail doolittle. we do have a raft of economic
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data this morning. gdp the big one, but we also got pre-lim data on wholesale on home sale- inventories, and we also got trade deficit data. the trade deficit with china widened for a second month since that record back in december. this comes as exports dip. the trade gap grew to $72.1 billion from $71.9 billion in march. bloomberg users can interact with all of these charts using gtv . charts browse recent featured on bloomberg tv, and save them for future reference. this is bloomberg. ♪
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♪ vonnie: live from new york, i'm vonnie quinn. this is "bloomberg markets."
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it is time for our weekly factor funds segment. it is a big rebalance in the indexing world this week with saudi arabia, but also some big changes in the factor world, particularly in momentum. with us to tell us more is at the nazi of sarah vegas -- is psarofagis out of our london office. reporter: the fun we are talking about is probably one of the most followed momentum bunds out there. earlier in the year, the fund got very defensive. what you actually ended up seeing, especially in may, .omentum is doing really well it also almost became like a low vol fund. those changes just happened yesterday.
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vonnie: let's talk changes. what were the biggest ones we saw? up to this,ading the fund was very exposed tech. now it essentially flipped. it went very heavy back into tech. the health care exposure got , and iown quite a bit think it is pretty interesting because this is a time when tech is starting to underperform on the trade war news, and health care is doing really well on a relative basis. these trades keep missing each other. it went defensive earlier in the year, and now it is going back into tech when tech is starting to lag a little bit. vonnie: going forward for momentum, what exactly does this mean for investors? athanasios: i think this is why it is so important that we pay attention to rebounds. someone looking at this fund, thinking it was positioned like earlier in the year, would see it is doing really well because of its defensive positioning. now that is completely gone.
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it is much more risk on. if the market continues to go down, that relationship is actually going to go away. i expect this relationship between low vol in momentum is going to drop pretty significantly. that is why it is important to know when these funds change because it completely changes the compass of the fund. psarofagis,nasios thank you for joining us from our london office. you can check these out on your terminal. -- just gogtv gtv . .t go to ft w
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james gorman at morgan stanley sees downside. fedex bowing to the surge of e-commerce volume. the company will move to seven days of deliveries in the u.s. year-round by next january. boost its also ability to handle larger packages. as thereen pressured have been changes. barclays says tesla may be lowered to the status of 80 niche luxury carmaker -- of a niche luxury carmaker. of theirst about 1/5
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value in the last month, trading diddy $7.97 -- at $187.97. .oming up, the outlook for m&a that's next here on bloomberg tv. majors are higher in the u.s.. the dow up one third of 1%, the fullaq up one percent. italy and the european union squaring off just a little but at the moment. this is bloomberg. ♪
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♪ vonnie: live from new york, i'm vonnie quinn. ."is is "bloomberg markets a report from cnbc earlier today that cbs and viacom are getting ready to talk merger.
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those talks start next month. let's chat with ed hammond for a little bit about this. sharesshares up 6%, cbs up over just 4%. this is the thing that everybody says makes the most since. ed: correct. it was always a question of win, not if. and some ofonves the other potential impediments were removed, it does lead to a deal happening. these reports are unconfirmed, but it looks like this is potentially going to come over the summer. it will be very interesting and it will definitely make things interesting at the sudden valley conference. vonnie: people seem to be happy viacom, sosponse at this might make sense. ed, thank you.
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let's get onto the main topic of conversation this half-hour, and that is our guest martin , whose company is growing in popularity as investors look for opportunity. no one better to talk about it is the jarden capital founder. martin, welcome. right now it seems like there are people waiting for the capitulation, waiting for the market to inevitably turn properly into recession, and those saying fundamentals are fine, companies are getting to spend their money in all sorts of ways, and we are pretty healthy. where are you? martin: i can't talk about bull rus -- about bull runs. guy,ot a stockmarket but i think we are in pretty good shape. it's been a very long run, but
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the reality is gdp growth has really been more gradual then in years past. i think it's got room to continue. there are things to worry about. i worry about china and the trade war. i worry about europe and brexit. but america's economy is a juggernaut. it is not going to move off course that quickly. vonnie: as the stock market has gotten more and more healthy and the dow has gone higher and higher, it's become a market that sees innovative things being done by companies. it is not your usual grow the dividend, buyback some shares. we are looking at breakups, different kinds of mergers. what is the most interesting about that for you? martin: capital has remained inexpensive. i think a lot of people has expected that with the bull run and the gdp growth we've been having, at some point rates
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would start to rise. they haven't. i think that's created bit of aties in a window where capital is readily available. there is still value to be found. as you know, i do these special-purpose companies very different from american-style specs. we do them in scale. finding opportunities where there is a good spread between the public markets and private markets. it is still out there. you just have to find it. ed: one of the places where you are looking for those opportunities is with your spec. if you get to october and you haven't found an acquisition for liquidation -- martin: we can extended for a year. -- extend it for a year. ed: where you looking for opportunity? we look at cash flow
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generation run by good management. towardsto go manufacturing industrial space and consumer. we've found a couple of interesting things. we've got close to one or two things last year. didn't act on it. vonnie: why not? what was the sticking point? martin: for us it is always valuation. we don't spend time on things we do not think would be a good fit. we are pretty disciplined. very disciplined. if i don't see real upside, not just short-term, but long-term, for our investors, there's no point in me doing it. i'm investing a lot of money myself. i don't get free shares like specs in america do. i have to create value for shareholders, so we are disciplined. but i am pretty confident we are going to do something. ed: talk to us about element.
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you obviously reconfigured the company quite significantly. it is really under leveled, at least by the standard you traditionally operate a lot of your businesses. it also has a lot of cash. it seems obvious that it is going to go out and do some m&a. martin: element we are not going to do any, day of any size -- m&a of any size for the time being. we are going to let the standalone corporation show its cash flow generating capabilities as an entity. we haven't even had one full quarter as a standalone company the sale of $4.5 billion. it is a great business, a real high cash flow generation business. it has been a little unlucky. the trade war in china has affected the electronics business in asia.
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that obviously will flow through at some point. ed: how do you deal with that? what is the play running a company that does get a lot of base materials from china in this environment? we got a lot of customers -- martin: we've got a lot of customers moving manufacturing to places like vietnam. we will be supplying those customers, but there will be a lag. you had softer and markets -- softer end markets because chinese manufacturing has tightened up on and been tories, but that lag will ash tightened up on inventories, but that lag will catch up -- tightened up on inventories, but that lag will catch up. i think some of it depends on the environment between the chinese and the united states when it comes to trade. vonnie: longer dated capital is out there, and you are attracting it, i'm sure.
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are your metrics when it comes to longer dated capital in this environment, given that so much of it is going to pe, this infrastructure play that may or may not happen in the united states? how will you attract it? martin: i think infrastructure is coming because the country needs it. at some point the politicians will push it all aside, probably after this next election, to do something in congress. from our perspective, we are staying relatively conservative. we have another company i cochair called nomad foods, a frozen food business, city on i think $800 million or so of cash and running with a very unlevered balance sheet. it does give us capacity that if we find something really interesting or transformative on an opportunistic basis, there is long, relatively inexpensive capital available.
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but i think at the same time, as i said at the beginning, if you are in the seventh inning of a cycle, you want to stay conservative. you don't want to find yourself stretching a balance sheet and find that you are actually in the ninth inning. foods area,he nomad kraft heinz would be one to look at. i am curious if you think they should spin off any of it. martin: when businesses are not performing come of the last thing you should do is sell them -- are not performing, the last thing you should do is sell them. i am friends with some of the folks at 3g, and of told them that as well. they've got a great portfolio brand. they are going to be fine. it is going to be a long game. but it is the same thing i said board andi was on the came off. the answer is to fix the business, not to divest assets.
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it is a pass to value destruction, i think. ed: if you can handicap for us new at the moment -- for us , is thehe moment company going to get worse from here? do you think it is fixable? martin: as you know, i haven't been inside it for quite a long time, and i'm not a shareholder, but there are still people there that used to work in our jarden organization and family. it is not easy. when you selloff one assets that have a lot of growth -- when you have af plum assets that lot of growth, and you still pay a big dividend, not a lot of capital to do the fixing, so something has got to give. i think that is reflected in the stock price. unless you get organic growth in the business, start generating cash flow and do the basics, you
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are not going to create value. you can't m&a your way out of that. ed: one story catching a lot of is the growthly coming into the public market. with a company like no bad, which is more traditional, do you think it is completely unreasonable that this company has gone up 200% or whatever in just a few weeks? martin: it would be nice if we had their multiples. [laughter] [applause] -- multiples [laughter] -- if we had their multiples. [laughter] importantat isaac is that investors understand -- what i think is important that investors understand is no bad is perfectly positioned in what you call healthy foods.
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burgers ande plant various other products. but at the end of the day, it is on trend with consumers. it is very much on trend with consumers in europe. we are launching a lot of products on the back of very respected brand portfolio with those new products. we feel like we are in the right place at the right time. it is why we've got i think 10 straight quarters of organic topline growth in the business, and i think that will continue. i don't know about whether i would look at the upside from here with a beyond meet kind of multiple -- beyond meat kind of multiple, but where we are sitting, it is worth continuing to drive towards. vonnie: just give us, if you
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can, a little more detail on what you might be looking at for nomad, with your $800 million in cash, and also they too -- and also j2. martin: with nomad, we are looking for mower the same of what we've been doing. strong market leaders with europe inniches in the frozen food space. there are a lot of additional bold sans that could be great -- additional bolt-ons that could be great for our business. it goes back to our criteria of looking for leaders in their niche markets. opportunityn some that exists for us. there's not much i can say is a public company. but when we get to the point of putting ourselves in a place where we can publicly announce it, i'm sure you guys will know. ed: just really quick, last question, you have borrowed a
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lot over a long time. how would you handicap the credit environment we are in right now? martin: it is pretty good. i think rates are going to stay low. as always happens when the market gets frothy, you will find some sort of second-rate creditors doing credit deals they probably shouldn't do. they will be the first ones to get hit when things turn. but i think this market is going to stay. -- ora buyers market rather an issuers market for credit today. i see that continuing. vonnie: martin, always a pleasure to have you in studio. jardenfranklin, founder and mariposa capital ceo. housing, the u.s. department of housing and urban development is hosting the first-ever innovative housing showcase. it will feature solutions that
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promised to make housing more affordable and more resilient from national disaster type scenarios -- from natural disaster type scenarios. bloomberg's kevin cirilli spoke with hud secretary ben carson from the national mall in washington. sec. carson: you look at what been the last 13 days in tornado alley. we need to come up with more resilient housing. practicesfacturing withstand those storms better, but in also be put up very quickly. we have people who can put infrastructure in with tunnels. they can bullet right underneath right overmall to that house and you wouldn't even know it, and connect you to water, gas. these kind of technologies are really emerging now, and we want to integrate them into our policies. we are not only interested in
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the people going about this, but the legislators also. you see the capitol right up there? we've been talking to a lot of legislators and inviting them down. they understand what we are talking about, and they can all get behind us. kevin: you were on the hill before the house financial services committee. that was a contentious hearing. i want to draw on two points regarding it. a lot of it has to do with housing. that is from carolyn maloney, the congers woman from new york. she pressed you -- the congress person from new york. housingsed you on immigrants, where there's families would go if they are not able to get affordable housing. where would those families go? obviously didhe not want to listen to what we have to say because i said we have the ability to apply for a
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six-month deferral, which can be renewed twice, so that is 18 months, which should be plenty of time to find something. more importantly, plenty of time for congress to act. to do something. you can't sit there and say to the secretary of hud i want you to break the law. section 214 of the housing and community development act of 1980, it just violates that. that doesn't make any sense. if you don't like it, change it. that is what congress is for. kevin: i was also struck by this, freshman congresswoman alexandria oh because io cortez -cortez andia ocasio yourself, you have found an area you might be able to work together on. sec. carson: i can work with anyone, including aoc. i don't look at people who
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disagree with me as being evil. you could take the most liberal and most conservative person in america, and they probably agree on most stuff. but we take the stuff they disagree on and blow it way out of proportion. she is interested in people with criminal records being able to get housing. so are we. the firstry hard on step act, getting people out. our most important resource is our people. they are still an important resource if they've been in prison. vonnie: that is ben carson, u.s. secondary of housing and urban development, speaking with kevin cirilli. let's check in now on the bloomberg first word news. here's kailey leinz. kailey: the trade war between the u.s. and china is escalating. beijing is putting purchases of american soybeans on hold. buyers have not received any
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further orders to continue with so-called goodwill buying. china is the world's largest soybeans.merican german chancellor angela merkel visits the u.s. today to give the commencement address at harvard. it is a sign of germany's growing unease with the u.s. that she will not go to the white house. the turning point came last june, when president trump scuttled the agreement she had with other g7 leaders in canada. turkey is considering deploying a russian missile defense system along the southern coast. the long-range battery could be delivered within a week. that would dramatically enhance turkey's military capabilities in the eastern mediterranean. the u.s. has threatened to sanction ankara if they go ahead with the missile deal. 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. i'm kailey leinz. this is bloomberg. vonnie: thank you.
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you are looking now at live pictures of downtown manhattan. this is where the national september 11 memorial and museum is holding the 9/11 memorial blade dedication -- memorial glade dedication, honoring those who suffered or have died from the aftermath of 9/11. this is bloomberg. ♪
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♪ vonnie: time now for the bloomberg quick take, where we provide context and background on areas of interest. today we look at the so-called private prosecution of boris johnson, the conservative party front runner to become the next u.k. prime minister. johnson is facing a criminal lawsuit over his statements during the brexit campaign that the u.k. sends 315 million pounds per week to the european
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union. but it is not the states bringing the charges, but instead a british entrepreneur is behind the action. the so-called private prosecution is possible under english law, which allows individuals the right to act like a prosecuting authority. in this case, the software engineer says boris johnson must be held accountable for his conduct in public office. he is crowdfunding his legal attempt, so far raising half of his 500,000 pound target. johnson does have to answer and must now attend court. no date has been set, but it comes at a politically sensitive time as johnson remains front-runner to succeed theresa may as u.k. prime minister when she steps down june 7. you can read more about private prosecution and all of our quick takes on the bloomberg. the stock of the hour is next. this is bloomberg. ♪
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♪ our stock of the hour, shares down 13.5% now as earnings guidance came in weaker than expected. emma chandra is here with more. emma: the retail sector as a whole having a bit of a tough time of it. was pvh, the first quarter fairly mixed, but they missed on the key metric of same-store sales. they own the brand's hilfiger brands,in klein -- the hilfiger and calvin klein -- tommy hilfiger and calvin klein. pvh has really been struggling year late, down 36% on the . the weakness in north american sales is something that isn't
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only seen at pvh come about across retailers. vonnie: interesting that the other retailers, some were lower premarket, but they actually bounced back. now the retailing index is higher in the s&p 500. emma: we are seeing a bounce back from some of the ones that did poorly yesterday. also some of the discounters doing a little bit better. some such as jgl falling 50% today. vonnie: thank you. that is, tundra with a very interesting stock of the hour. the european -- that is emma chandra with a very interesting stock of the hour. the european closes next. this is bloomberg. ♪
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trading day in europe. from new york, i'm vonnie quinn. this is the european close on ."loomberg markets we begin with our oil inventories, push today because of the monday holiday. crude oil inventories for the week ending may 24 were down 202,000. the market was looking for a drop in inventories by about five times that amount, so not as much of a drawdown as anticipated. gasoline inventories saw a build of 2.2 million barrels. economists were looking for a drawdown of almost 600,000, so it was an opposite story for gasoline. distillate inventories down by 1.6 million barrels. refinery utilization also coming in stronger than forecast, up 1.3%, having dropped by 0.6% the previous week. crude oil is adding losses, down 2/10

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