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tv   Bloomberg Best  Bloomberg  August 18, 2019 6:00am-7:00am EDT

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♪ kailey: coming up on "bloomberg best," the stories that shaped the weekend business around the world. global markets find themselves buffeted by a whirlwind of worry. >> i felt that she'll go up my spine. shots inolitical argentina and hong kong. >> today could be carnage. in the argentine markets >> growth concerns across asia and europe. >> output has weekend. the export sector has suffered in the second quarter. >> to disruptive disputes over trade and tariffs. >> they still have some enormous issues they have to sort out. >> china said we are going to
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retaliate. >> results reflect the degree of uncertainty farmers are facing in the midwest. >> cbs and viacom finally reunite. work unveils its plan to go public. > another parade of another parade of earnings and at revenue. ad revenue. >> the focus is on the decline in online ad revenues. >> not a lot of great news lately. >> baseline does not suggest a recession, but these factors, keep an eye on them. kailey: it is ahead on "bloomberg best." ♪ kailey: hello and welcome.
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this is "bloomberg best," your review of the most important news and analysis from bloomberg television around the world. let's look at the top headlines. we begin with investors jolted by political shocks. hong kong protesters forced the city's airport to shut down, canceling flights. and in argentina, a result in primary reactions a set off a chaotic election. >> argentina is at the crossroads. while the president is looking to us second term, his path to the presidency just hit a massive roadblock. his main rival, the opposition candidate to grab the momentum and came in 15 percentage points ahead in the nationwide poll. >> this was a massive surprise in argentina, the 15 point difference between the two candidates. many analysts would say it is all but insurmountable. they like his policies. they are market-oriented. fernandez, it is not clear what
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, and he would probably be more interventionist, it is not clear what he would do with the imf. today could be carnage in the argentine markets. >> the peso has plunged to a record low against the u.s. dollar. >> what happens in the next two months in a half? that is the big question. we have not seen the opposition candidate. it seems like they are both comfortable in the situation where maybe a little bit of chaos can help them toward the election. so that is a dangerous game. we could be in a full on crisis if we don't have reassurances of what a government will look like under fernandez. >> there you have it. you can close the book on another day of losses, the s&p 500 day of declines. , the day of declines. the second day of declines.
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worry, the new bricks in the wall. argentina added. hong kong added to it. not to mention the saga of italy, trade, brexit. >> we think it is slowing growth that is winning the battle now. >> tense standoff at hong kong's airport, where protesters are forcing a major service outage for the second day. this comes as the city's leader, carrie lam, says the city is in danger of sliding into chaos. >> they were climbing up the using umbrellas to cover the walls. they were security cameras so airport staff would not see what was going on. police officers arrived here. they tried to dispel these crowds. they were able to retrieve the man protesters had tied down earlier. this man, the protesters alleged was a mainland public security officer. they tied him down. he was beaten up. until finally, please showed up. there were clashes between
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tourists, trying to climb over these protesters and get through and make it to their flight. so it is getting a bit heated here as well. >> we have heard from president trump tweeting china is mobilizing its troops to the hong kong border. what do we know about beijing's response? > we have seen a sharpeningseen a hardening of the rhetoric out of , a beijing. we have heard from officials in in kong and macau affairs office saying they are seeing signs of terrorism. the question is whether this is an intimidation tactic or whether they are now laying the groundwork for some sort of intervention in hong kong. >> u.s. tariffs on some chinese consumer goods as of september 1 have been postponed until mid-december. appears to be to
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avoid price increases for the holiday pricing season. >> it happened after the u.s. stock market opened. >> it looked like we were set for another down day. u.s. trade representatives did something rare. they announced after the market open in a move designed to try and cheer the market up a little bit. they would be separating september 1 tariff increases into two separate legs, with the biggest hit being moved to december 15. that, as you mentioned, was for toys, laptops, smartphones. we know there are more talks happening in two weeks. at this point, the fact that they are talking is good news. but, they still have some enormous issues they have to sort out. and the fact is they could not sort them out a couple of weeks ago when they met in shanghai. i am not sure they are going to be resolved in a couple weeks. >> china's july industrial output posted the weakest growth
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in 17 years, amid pressures from trade tensions. announcer: it is clear we have a slowdown in germany, u.k., and for china, that means they are going to have to drill off some of their domestic demand. numbers pointing to an ongoing slow down. retail sales was a big mess. part of that is slowing car sales. all that means china is going to have to come to support its own economy. >> the german economy shrank in to june. months trade tensions between the u.s. and china could have weighed on its export heavy manufacturing sector. that is what we saw. the pressure on politicians to in berlin to loosen the fiscal purse strings. >> they came in as expected. they have shown the export sector, a crucial element part of the german economy, has
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suffered in the second quarter. that is definitely piling on more pressure to the government to do something and terms of a in terms of fiscal stimulus. >> another recession warning is glaring. it is all about the , the yield curve inverting for the first time since 2007. this as the yield plunged to a record low as well. >> when you break through levels that have never been rogan before, that is an indicator there is a reach for you globally, and we might not see yields this high anytime soon. two/10's saw that inversion hit the level it did in 2007, there was a chill going up up my spine. i have this reaction. i am sure a lot of the reaction is emotional. >> the market believes the fed is no longer preemptive. the midcycle adjustment is not
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enough. therefore, the question is the fed will only cut two or more times. what is ahead for the u.s. economy? they are signaling a recession, i kinda believe it. >> china's state council responded today to president trump's plan to impose more tariffs on imports, saying it u.s. action would violate and understand with china and they had no choice but to take necessary measures. then the ministry of foreign affairs said talks were ongoing i and trump, and they hoped for a negotiated resolution. >> we have heard contradictions from the trump administration. china usually has a clear message. today was different. china will move forward with retaliation in these 10% tariffs on the goods that are going to be hit in september and december, even though there has been a delay. china saying, we are going ahead and retaliate. we don't know what the targets are. in the past, they have hit
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things like farming goods and lower-level plane models. we will have to see what they come up with this time. they might be able to meet the administration part of the way in a deal. >> trade concerns driving me 10 treasury below 1.5% since august. 30 year yields, record low, below 2%. >> how much further can we go with the 10-year? >> that is a great question. we are in uncharted territory. there has been some technical tried to be applied, and right now we are looking at 1.9%. trendline suggest that is a line in the sand. we will see if we get there. if markets are anxious, it may not take a lot. vowing tos retaliate to looming tariffs. also pushing back on efforts to link the trade war with the terminal in hong kong. that, as trump says, he is said
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to talk to xi soon. >> i don't think they will retaliate. if they did, we have the ultimate form of retaliation. i think they have very few jobs left in china. >> mixed signals. hearing from trump china is desperate to get a deal, that he's going to have a phone call nonetheless. you are hearing from the chinese side, despite retaliating, they are planning to send negotiators to washington in september to continue those talks comes a very mixed messages from both sides. the messages by trump, linking hong kong and trade, suggesting maybe president xi meet with definitely not welcome messages in beijing. said thisficials have is an internal affair, and china has said repeatedly it thinks the u.s. is helping to ferment the unrest in hong kong. there is a lot going on. he thinks he's going to have president xi. presidenc
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it seems china is digging in for the long haul. kailey: still ahead as we review "he week on "bloomberg best, john chambers talks about the latest twists and turns in global trade. el -- assessing recession risks. plus, exclusive insight from the bank of america ceo ryan moynahan. >> we have nothing to fear except the fear of recession. kailey: the focus shifts to earnings. >> we also read the papers and hear the news. there is lots of uncertainty. kailey: this is bloomberg. ♪
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♪ kailey: this is "bloomberg best." let's continue our global tour of the week's top business with a deep dive into a flood of earnings reports, starting with chinese e-commerce giant alibaba. >> alibaba surged in new york after posting better than expected revenue. and that is despite geopolitical headwinds. quarterly revenue rose 42%. more than >> the secular drivers $16 billion. our actually well understood. very rising incomes in tier one cities, tier two cities, increasing digitization and lower tier cities. that drives the core business. they grow at 26%, 27% off of their commerce businesses grow at 30%.
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the company guided for 33% growth for the year. but what really drove the growth over the top are the investments in local services. these things are growing at more than 100%. they have been spending a lot of money on these investments. now i think it is coming together and bringing returns for them. >> tencent reported second quarter revenue that missed estimates, while the chinese social media and gaming company beat expectations, online ad revenue grew worse than expected, 16%. what are investors focused on? it seems to be a mixed bag. >> even though those profit theers beat expectations, focus was really on decline around online ad revenue. it is a promising area that
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starting to see it get hit by broader economic issues in china as well as competition. what was interesting on the call was where the company pointed out the slowdown in advertising ad sales buys. this is from the automobile sector, the real estate sector, the financial sector which is really not a surprise, given a string of economic data out of china. >> the world's largest crude oil producer will soon donate part of the world's biggest oil refinery. saudi aramco will buy a stake in what is estimated to be a $15 billion deal. >> i can attest the company is ready for an ipo. the timing of the ipo will be determined by our shareholders or the owner of the company. earnings look at the and you think of investing in the ipo, do you worry about the fact it is not diversified enough or some of the where reserves, or you just wait to see how they price the ipo?
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>> clearly from the perspective of the company's ability to generate cash, obviously it throws off a huge amount of cash from oil production. i suppose the bigger question for the equity investors is how much can it produce in terms of a dividend for equity investors. we saw in the financial statements they just put out for the first time, there is this $20 billion special dividend they just paid paid to the government. willpost-ipo environment, it still be paying out that money to investors, or is this just a one-off that has gone into the budget to help prop up economy at a time when they are trying to boost spending? >> macy's big miss. it is the worst performer on the s&p 500, in fact, the lowest we have seen the shares since 2010.
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they have plunged after a worse than expected second quarter. what is worrying is that 10% tariffs that have been delayed, they are not in the your future forecast of macy's that they already downgraded. >> that's right. this is based on the fact they were struggling to sell clothes in the second quarter. >> wow. >> the tariffs, we have other discouraging signals today. they said on a previous batch of tariffs that affected houseware, furnishings, they tried selectively raising prices and it did not work. what the ceo said is that consumers do not have the appetite for these price increases. that looks worrisome is more tariffs are set to go into effect later this year. >> walmart setting a high bar for other u.s. retailers. it raises full-year outlook. that may sidestep concerns about the trump administration's tariffs. it is up more than 4%. >> are people trading down to
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walmart because they cannot shop at other stores? people worry about this. we saw it in 2008. are we starting to see a repetition of that? is early tonk it say we are seeing a repetition of that. what we saw from walmart today, broad-based strength. in traffic and basket. we saw an increasein traffic and basket. that is part of what was driving the growth. that means essentially people were buying more things per or were buying pricier things per order. that is a good sign this is just folks out there spending and enthusiastically as opposed to trading down. that is something we have to watch for us these tariffs kick in. >> the world's biggest shipping group maersk has been estimates, but set the global outlook remains uncertain. group stuck to its outlook and said they realized a billion dollars in synergies faster than
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expected. could you take us behind the numbers and give us a sense of how concerned you are about global uncertainty for the rest of the year. >> first, i would like to say that the trade tensions have been manageable for us so far. global demand grew 2% in the second quarter. the u.s. imports grew 2.5%. they are way down, around 7% from china. but goods are coming to the u.s. from many other places. and that has allowed us to manage the situation quite well. of course looking forward, we also read the papers and hear the news. and there are lots of uncertainties, especially to have the trade tensions between china and the u.s. will be resolved or not. that is why we believe it is right to reiterate our guidance for the year. out with estimates.
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they missed for the last quarter. they took it down and said they got a look at fundamental restructuring. >> the results today reflect the high degree of uncertainty farmers are facing in the midwest. it has really been a challenging time with the trade uncertainty , which has been report we got compounded by the disastrous report we got this week, where we saw higher than expected acreage planted, yields, production, which are going to weigh in corn prices in the near to midterm. really just makes it a challenging backdrop for the year moving into 2020. ♪
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>> you are what "bloomberg best." -- just what is to come with brian moynihan. >> what happened to the bond market this week? a record low in yields. that wouldy number suggest something is wrong. >> it is largely outside united states and concerns are trade and manufacturing. if you think and look around the world, there has not been a lot of great news lately. whether it is the brexit situation, europe slowing down, the new york central bank saying we need to slow down, china slowing down, the impact of the cherry war across the region, the need for companies to
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restructure supply chains to tariffs, which means they are spending money to move things. not spending money producing new products and capabilities. that debate, and more importantly the debate about the debate. we have nothing to fear but fear itself. we have nothing to fear of our session right now except the fear recession. you are seeing a lot of people look ahead and say trade work continues. if this doesn't get solved, you can see this finally getting to the consumer confidence in the u.s., the critical thing to maintain. the business confidence has come down a little bit is still very strong. they are a little more worried about what's going on around the world. >> what should the fed do? there is no shortage of people giving jay powell advice. >> i guarantee that jay powell does not need one more piece of advice on this. i think he has been clear that they are thinking about this in
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the growth periods of the 1990's. there was a need to go in and make financial conditions a bit more accommodative to help along this long distance history growth period. they don't see anything we don't see that the economy is fine. they should continue to watch the data and make choices. thele are over-reading negative side of what they see. recovery can continue. this is the longest recovery ever. help.p going takes some kailey: coming up, more of the week's compelling conversations. one of the most respected voices and global technology, and the vice president of the philippines. mohammed al arian has one word for the fed has couple markets try to stave off a downward spiral.
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>> we no longer have anything anchoring the markets. you know look or have the fed's ability to stretch volatility. kailey: this is bloomberg. ♪ from the couldn't be prouders
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kailey: welcome back to "bloomberg best." i am kailey leinz. the push and pull on trade between the u.s. and china continues this week, with tweets and headlines driving market sentiment up and down on a nearly daily basis. meanwhile, businesses are trying to set long-term plans and maintain equilibrium in an uncertain environment. john chambers, the former chairman and ceo of cisco, shared his perspective on the situation. john: what i tried to do is not look at the individual moves in the chess game from both sides but look at the big picture. the big picture is the relationship between the u.s. and china, and i have been in china over 40 years.
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it used to be a win-win. it has developed into win-lose with the u.s. losing. there is not a level playing field in terms of how chinese companies are treated in the u.s. versus how american companies are treated in china. the industrial espionage is at an unacceptable level, and we have to get back to a better balance in terms of trade. i do agree that the u.s. had to address this. secondly, however, it is in both countries' best interest that we get a resolution. i'm more optimistic than others that the resolution will occur, but the question you ask is the right way to ask it. it is not about delaying tariffs. it's can we get the resolution on the election property -- intellectual property protection, a level playing field between the businesses and the countries, and do it in a way both countries win. it is in both country's best interest. i am probably more optimistic this will be resolved over the next three to four months versus
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many of my counterparts. paul: one of those stories connected to this is supply hpin diversification, how equipment is shipping all of its operations back to taiwan. one of its competitors is doing something different -- something similar. so in that environment that you described, the win-lose, the ongoing battle with no end in sight if you are diversifying your supply chain, doesn't make sense to go back to china? john: well, it will always make sense to be in china as long as it's a reasonably level playing field. they will be the second largest economy in the world and have a good shot at becoming number one, so it will be the u.s., china, and india, in my opinion. on that i think it creates opportunities for other countries throughout asia, such as india, such as vietnam, etc., to benefit from the changes. i look at who it might indirectly benefit. but to the endgame, in the end, it is in china's best interest
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in the u.s.'s best interest to have free trade on a global basis. i think we will move back toward that. unfortunately, i think the current issues were necessary, and hopefully we will arrive at a true win-win solution. kailey: another perspective on the trade war came from the philippines. a southeast asian nation that found itself caught in escalated tensions between the world's two largest economies. in our exclusive interview with vice president leni robredo, the country was told it didn't needed to pick sides even as the current u.s. administration feuds with beijing. vp robredo: i don't believe that the philippines is going to choose between the u.s. and china, in the sense that friendships with both countries would be beneficial to the philippines. i understand why the new administration has chosen to be more friendly with china. what i don't understand is why
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there is no clear line between giving up our sovereignty. because we can maintain economic relations with them, but there should be a very clear line. clean and clear line. as far as protecting our territory is concerned and preserving our sovereignty. haslinda: some critics say this has been a lack of pushback when it comes to china in the south china sea. why do you think that is the case? some others went as far as saying that perhaps the philippines is selling itself to china. do you agree with that comment? vp robredo: yes, because of the way our administration is responding to threats to our territory. and threats to our sovereignty.
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kailey: what will negative rates and inverted yield curve mean for global banks? are bonds in a bubble? with that piling up, these were among the topics francine lacqua tackled on thursday in an exclusive interview with blackrock's vice chairman, philipp hildebrand. philipp: the yield curve metals -- matters a great deal for banking no matter how you look at it. wealth management can be a way to diversify away from some of the risks of having a flat or inverted curve, but it is difficult. we are not going to see booming banks in an environment where we have the yield curve the way we have it today. francine: i look at it almost weekly, but it just keeps on going up. this is the value of negative yielding bonds, topping $16 trillion. our bonds in a bubble overall?
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philip: again, there are reasons why the market is seeking safe haven, and bonds is where you go. i wouldn't say this is a bubble. this is a consequence of, on ths one hand, a cyclical slowdown which we are now in the late part of the cycle. risks of recession are increasing. most importantly, it is also a consequence of the governmental policies, particularly the populist policies we've seen in so many countries. the notion that this will not harm the global economy is simply a fallacy that is now revealing itself. populist economic policies lead to bad economic outcomes, and markets are reflecting that. kailey: as global stocks plunged and yield curves inverted on wednesday, allianz's chief economic advisor and bloomberg opinion columnist mohamed el-erian spoke to chief -- david weston about the big economic picture behind the turmoil in the market. he said the federal reserve rate hike in was a policy mistake december that will have long-term implications. mohamed: the fed has lost
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credibility in the last nine months. it had to do a massive u-turn and the market is holding the fed hostage, asking for more and more, and at the same time not believing the fed can make much difference. you no longer have the ability -- anything anchoring market, the fed's ability to repress financial volatility, which leads to the third issue of what is next. the answer to all this is not the fed reducing interest rates, that is not going to help economic growth in europe or economic growth in china. the answer is more pro-growth policies to lift structural impediments. unfortunately, that is unlikely to materialize, and that's the big concern looking forward. david: how worried are you about a recession? i will put a graph up from the new york fed. they are showing the likelihood at greater than 30%, the highest since 2007. since 1967, every time that
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number has done over 30%, we have had a recession. how worried should we be? mohamed: first, i have been warning about a recession in europe for months. i think europe is approaching stall speed in which growth of just under 1% isn't enough. they have to be very careful. here, it is hard to trigger a recession based on how strong the household sector is. so if you get a recession, it is because of one of three things. one is a self-fulfilling issue. we worry about the inversion of the curve, we don't realize it has to do with distortions, particularly coming from europe and policy, and then we get ourselves in a self-fulfilling cycle. that's the first risk. the second risk is a policy mistake. the third risk is a market accident. these are risk factors -- it's not the baseline. the baseline doesn't suggest recession. but these risk factors, keep an eye on them because they are becoming more important.
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kailey: this is "bloomberg best." i am kailey leinz. let's resume our roundup of the wii's top stories in business , finance and politics. italy seems to be getting closer to an early election that could reshape the country governing coalition. matt: matteo salvini's bid for control of italy has started on the beach. the league leader and deputy prime minister is on the campaign trail after pulling the plug on the coalition government last week. he is calling for swift elections that would likely hand him a majority in parliament. is he ready for an election? what strategy has he got planned? maria: he is 100% ready for those elections and is in full campaign mode. that was a marathon day for
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salvini in sicily, he was talking to people, shaking hands, taking pictures, he wants to present himself as the man of the people. he wants the selection to take place quickly. i spoke to him at the beach, and he told me hopefully we get an election in october, and then he said investors have nothing to worry from his government. there is no secret plan to leave the euro. we are not going to leave the euro. mr. salvini: [speaking italian] translator: what we are discussing about, find wrong, and want to change are rules on immigration and taxes. there is absolutely no plan to exit europe or the euro. matt: deputy prime minister salvini will likely have to wait weeks in order to get a power grab in italy. senate leaders failed to agree on a date for a confidence vote that could bring down the populist coalition. maria: yesterday, italian lawmakers were supposed to come up with a date for a confidence vote. that is the first step to
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officially bringing an end to the coalition and trigger an election, but they cannot agree on it. it is looking like it will be august 20. after that, it comes down to the president of the italian republic to decide whether he wants to trigger an early election, which salvini would of course love, or actually try to find another majority seat in the italian parliament. everyone here, except salvini, has an incentive to delay the vote. the opposition is very divided. the only person at this point that wants an early election is matteo salvini. paul: in the long-awaited deal news, cbs has agreed to merge with viacom and $11.7 billion transaction. the all stock deal unites the most-watched u.s. broadcast network with the parent of paramount pictures. bridgestone first proposed this combination in 2016. what took it so long? chris: management. who is going to run?
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redstone had a couple of strong ceo's, they had their own agendas and visions, it took a while to work that out. both of them are now gone. then it was what is the price of this and who was better off. there are people they don't think cbs should be tied in with the slower growing cable tv channels. vonnie: you ended up striking a deal. did you come down to meet cbs? >> negotiation was conducted by two special committees and independent directors. what you need to focus on is the value creation potential. we will be a very significant partner with ads and distributors and huge content suppliers. very exciting growth strategy going forward and people see the material value that is here. shery: wework has applied for an initial public offering with a net loss of $690 million in the first six months of this year.
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testing appetite as it moves to the fall listing. what are they thinking in this market environment? aren't they afraid they will end up like uber back in may? ellen: they might be afraid. that is potentially why they rushed out this ipo. this was something people knew was coming, but it seems like the date has been getting closer and closer. wework is an example of a company that loses a lot of money while having really fast growth. it has been growing quickly and expanding overseas, and yet its expenses are growing almost as quickly. it is one of these companies where it is not turning a profit and won't for the foreseeable future. it is warning investors that's what they should expect. guy: hong kong's government announcing a stimulus package worth $2.4 billion. they say this economy will struggle to grow at all this year. 10 weeks of political protests taking a toll on the economy, putting the squeeze on businesses and tourism. yvonne: hong kong financial
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secretary paul chan announcing a $2.5 billion fiscal stimulus to try to boost the economy. this after they cut their growth forecast for hong kong from 0% to 1%. a city still struggling to grow amid political unrest, and says the measures are not related to the protest. this is what we are learning. the city waiving fees for small and medium-sized companies, also giving kindergarten and secondary school students handouts of $300 usd, and giving one-off electricity subsidies for households. the key question is, are these measures going to be enough to prevent hong kong from entering to a technical recession as these protests continue for an 11th straight week, continuing to squeeze the business and tourism sectors? haslinda: it is not just hong kong's economy in the doldrums. rival singapore isn't faring much better. the city state is cutting its
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growth forecast this year to almost zero as the escalating trade war dampens the outlook. this is the second downgrade in terms of gdp projections for the year. joyce: there has been a slew of bad news out of singapore in the last few months exports have plunged for the first time since for now, they are not pressing 2016. the panic button, and they are not considering a off policy meeting. they will meet in october and their monetary policy remains unchanged. we have the trade and energy minister telling us that he is quietly confident, and they are not inspecting recession for now. last week, the minister said that the government will be prepared to step in to stimulate the economy, if need be. he warned that the economy is facing a different future and called on the citizens to prepare for that. caroline: a key measure of u.s. consumer prices unexpectedly
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accelerated in july, in a broad-based response, signaling that perhaps inflation could be firming. is it firming? does the fed care much for cpi? peter: it is not the measure of inflation the fed focuses on. they focus on personal consumption expenditures. they tend to track together, so it comes in higher. we had 2.2% year-over-year change in the core cpi, and that is above 2%. we want to see what happens with the fed's measure, but it does tell you that inflation is maybe a little stronger. it means that the elusive 2% target that the fed has been going for for like a decade now seems to be finally in sight. vonnie: u.s. retail sales widen by the most in four months. offering some comfort for the economic growth. on the one hand, we are seeing department stores fall out on
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earnings reports, and yet we can see in the data that consumers are spending. where are they spending? sarah: the gain was across a lot of different sectors. the only one that didn't look good was sporting, hobbies and books. that is more about structural trends and buying toys online, more that than the state of the consumer. and we saw particular strength in non-stores, particularly in e-commerce, which makes a lot of sense. the amazon prime day sale took place in july and a lot of retails held rival sales which became a rising tide that lifted all boats. caroline: mexico's central bank is going to be cutting the rate to 8%. it cites slowing inflation and increasing economic slack. inflation is still above target at three point percent but it has been coming down and , clearly they are more worried about the global growth story here. carlos: exactly.
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mexico is finally leaving a -- going a global trend, and the reality is, even with these -- finally joining a global trend. the reality is even with these cuts, the rates remain very high, and now the question is -- will the economy feel benefit? and the central bank plans to do further cuts for the rest of the year. i think a lot of that depends on how the peso performs in the coming days, and the central bank could get more worried if the peso start falling too much. caroline: ge plunged the most in 11 years. an accounting expert who blew the whistle on brady made off is taking aim at the company. he says the cap situation is far worse than described, and now chair and ceo larry culp has responding in a statement. "ge will always take any allegation of financial misconduct seriously. but this is market manipulation, pure and simple."
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: they are working with a hedge fund betting on ge shares to slide so he clearly has the motivation but he has a financial interest at stake. the issues he raised are not particularly new if you've been paying close attention to the company. there are three key points. the first is that they are under reserving for long-term care, and they are not properly accounting for their stake in baker hughes and are just generally ok with the way they report their finances and are not giving enough detail, that there is some gap between how they get from one number to the next. matt: the numbers are mind-boggling. $74,000 per minute, $4.5 million an hour, $107 million a day. that is how quickly the fortune of the walton family, the family that owns walmart, has been growing in the past year. what is fueling the rich getting richer this year? tom: well, the most important
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thing is basically right now, it is a great environment to be rich. you have low interest rates, the stock markets are booming. what we are seeing is a quarter of trillion dollars again -- of gains. so if you are already rich, it's a very good time to be rich, and you are likely to get richer. ♪
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kailey: this is the g.r.r. function in the bloomberg. if we come in close, you can see it is evenly split. six sectors higher, utility and real estate, defensive sectors doing the best. i would like to point out that energy on bottom at 28%, one sector in a bear market which is typically a worrisome signal. kailey: there are about 30,000 functions on the bloomberg, and we always enjoy showing you are favorites on bloomberg television.
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maybe they will become your favorites. here's another function you will find useful, quic . it will lead you to important context and fast insight into timely topics. here's a quick take from this week. >> income and wealth inequality. >> income inequality. ms. yellen: there is a very disturbing rise toward income inequality. >> income inequality. >> over the last decade every , region in the world has seen the income gap grow, which has helped fuel populace clinical movements in places like italy, mexico, and the u.s. and while wider inequality is generally seen as a bad thing, there are debates about whether equalizing incomes actually helps the poor. this is your bloomberg quick take on bloomberg inequality. income inequality is often incorrectly used as a catchall description for related bills -- related ills like poverty in class division, and while the issues are undoubtedly
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intertwined, the term simply measures the gap between the rich and poor. after the great depression the share of national wealth held by the richest citizens in many developed nations fell, but since the 1970's, it has been growing. take the u.s. for example. the average income for the poorest household grew 12% from 2007 to 2016. meanwhile the wealthiest 5% saw their average income increase 31%, to $375,088 per year. the u.s. ranks 39th most unequal among 157 nations. china has an even wider gap, ranking at number 29. president xi jinping has dedicated billions of dollars to tackling the disparity, although it continues to be caused by country's rapid urbanization. rural chinese earn just a third of their counterparts in cities. >> researchers have been able to the link rising inequalities to some of those negative outcomes, which are are greater political instability, sluggish wage growth, low productivity gains. >> it has even been thought to
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create longer commutes and a higher divorce rate, but lowering the gap does not necessarily help the poor. >> one thing we point out is inequality is not necessarily a zero-sum game. for example after the 2009 , recession, that really shrunk the stock portfolios of wealthy americans which reduced , inequality, but in that time period the poorer did not get richer. statech is why some inequality is not the best measure. >> people say the worries about rising inequality are overblown, they will argue and equality can act as an incentive to innovate and take risks and produce and create wealth. >> there is cause for optimism. since despite widening 1990, inequality, more than one billion people have been lifted out of extreme poverty. kailey: that was just one of the many quick takes you can find on the bloomberg. you can also find them at bloomberg.com, along with all the latest business news and analysis 24 hours a day. that will be all for "bloomberg best" this week. thanks for watching.
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i am kailey leinz. this is bloomberg. ♪
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emily: i'm emily chang and this is the "best of bloomberg technology." we bring you all our top interviews from this week in tech. coming up, a flurry of tech unicorns charging to the public markets. we will take a look at the inner workings of ceo adam newman's company and is complex and controversial business relationships. plus, content kings. cbs and viacom finally inked a merger deal.

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