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tv   Bloomberg Markets  Bloomberg  May 14, 2015 4:00pm-4:31pm EDT

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we are moments away from the closing bell. . am alix steel another record date for the s&p, settling out at 2120, this is a record close for the index. we did not hit the intraday high, but we are now at a record high for the s&p. we also have a triple digit rally that held on for the dow of 186 points. the nasdaq was really the leader of the day. i am joined i joe wiesenthal. it was a text -- a story all day, you had tech up all day. you had health care of 1.5%. it was mixed. you had a little bit of risk, a little bit of dividends. >> everything. the story for the last six years in markets, and every area,
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everything was up. last week's -- feeling like a distant memory. also saw a lot of movement into international oriented stocks versus domestic saw -- stocks. >> the dollar hitting a four-month low, you would imagine that that would benefit international stocks. people are buying everything. alix: you kind of nailed it talking about the dollar. it was at a four-month low, we are heading toward the longest losing streak since 2013, the biggest thing i was reading, the impact on inflation and corporate profits. it is -- >> it is interesting, we have had a few dollar stories this year, they hit a four-month low, but that comes after the beginning of the year when all people could talk about was the
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dollar. we just wrapped up the earnings season and that was it during a. of significant dollar strain and a report today came out and identified the four big themes that they heard on earnings. a strong dollar winning negatively, that was editable. oil was interesting because companies did not see the oil dividend that many expected. no big boom in consumer spending. negative for a lot of companies. zero optimism, expected higher growth and europe, which we have kind of scene. and the last one was -- alix: ecb demo is leading to european recovery. break andke a quick go to corey. just coming across the tape, the companies reporting revenues of $1.5 billion in the fiscal
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fourth quarter, that is down -- a down from the previous year by 7%. it could be better than what the analysts thought, their estimates. they were wrong either way. down, they were expecting a 6% decline. things worse than the analysts expected. income, profits down 19%. that is not good. even when they pull out the funky adjustments to make things look better, they take out stock, they of compensation and i just for other things as well, you still see that 6% decline with profits down 10% every year. in the face of all sorts of new competition, defending cyber security, defending cyber security, they are facing challenges. a lot of computing is moving to the cloud with different competitors, different approaches to sever security, symantec is fighting not often
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that losing revenue. alix: we also have julie looking at party city. the first is ipos. julie: no analyst estimates that we could find, they haven't started to cover the company yet. but they are showing and i just a loss of 3%, those brand sales of 5.2%. and adjusted earnings per share will be $.97 to $1.06. that is giving us a range. the ceo is pleased with results and sales are positive even after adjusting for the benefit of the easter shift. that is something to note. party city got a search right and has remained at the same level. the shares right now are not reacting to this news yet. alix: appreciate it guys. looking at the symantec earnings, i am trying to find
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out where they got their money in 2014. they got almost $3 billion from , talkacific and japan about the dollar impact on this company. >> for q1, all these earnings, until we see this normalize, the dollar is going to be -- alix: if we wind up seeing the dollar continued to turn lower, will we see companies afford to hedge? the hedge he was incredibly expensive, some companies could not do it. a year ago, if you wanted to buy protection on one million euros, that was going to run you $25,000. now it will cost you $35,000. a huge increase over the past year, to protect yourself by the end of the day, a lot of companies cannot afford to do it. one thing is stepping back and asking, why are we seeing the dollar weakness?
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, thetory conventionally economy has been weaker than expected. pushing backeen the date of the first, throwing that into question. i have to say that i am skeptical of the whole story. early this morning, we got the job list claims. it is the lowest it has been since the economic crisis. i find it hard to square that with the idea that the wheels are coming off the economy. alix: we will debate this in a second. applied materials earnings are out. they make the big machines that produce conductors. their net sale is up 4%. $2.44 billion up from the year before. and net profits are up.
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4% every year, 6% increase in profits, that means they're operating margins are getting better. that is a good thing for the company, as they grow the profits and margins get better. the direction for the next quarter indicate to be pretty well expected, things will continue to move forward for applied materials and in line with what the analysts are looking for. a little bit better across the line, that revenue line is 4%, 6% better in profits, margins getting better for applied materials. julie, it looks like revenues look good. asie: it is at $.71, estimated by analysts. were looking for a gain of 3.6%. that is unlike the other departments or real taylor's --
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retailers that we have heard about, macy's and kohl's who missed on the cocktail month -- cocktail -- comp sales numbers. the company is looking at earnings, that will be below the range, up 2%. it looks like they are in line with estimates. nordstrom has been spending more than competitors, so that might have been what took a bite out of earnings per share and made them to miss estimates. different purchases have cost of the money. alix: joe, we are getting earnings, good insight into how the consumer is doing. but you do not think that things are that bad. >> i'm skeptical. it would be great if the economy was better. it is not quite as good as people thought. when i look at a number like that initial claims number it is
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simple, you tally up all the claims. alix: but that is -- not hiring. >> the unemployment rate is down 5.2%. it is hard for me to believe reallye economy is hitting a stall, when the simple measures that we have continued to look good. alix: i will flip it, i will take that initial job claims number and compare it to gdp. claims are going down, but versus gdp, we are barely above 2%. bloomberg intelligence says that any initial jobless claims under 300,000 is traditionally fall has followed by a run-up, especially when real gdp growth is at 2.5%, that is exactly what we are seeing now. that is hard to look at chart. you have to assume that they will meet again, the two line. isouldn't say that the gdp
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-- on seasonal things. .lix: let's talk to peter good to see you. it which side are you on? has slowed it down. it is not horrible, but we are not seeing any real growth. we are stuck in low-wage growth. there are jobs that they are not the sort of jobs that we really want. i do think that the sales industry, lower energy prices will hurt be u.s. economy more than we thought, because we are actually a big net producer. those were the big jobs. they were able to borrow, companies were able to borrow. the slowdown is a link to that. >> what else do you attribute this, the week growth? they get excited, then it slows down. the economy is not as good as it was. it is not horrible, either. a 10 yearook at
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treasury yield, to a quarter percent, maybe it comes back down a little bit, but we are not going back down to the lows. people are too afraid about how the economy will be and how much deflation there is, i think we are going along and i expect an uptick. alix: joe, thank you for coming. peter you will stick with me. coming up next on "bloomberg market day", we ask what is left of the dollar rally, how did somebody -- how did so many people miss the downdraft? ♪
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♪ alix: welcome back to "bloomberg market day". here are a look at the top stories. the death toll in the amtrak train crash is now at eight
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people, they have accounted for all passengers and crew members. they expect to have full-service restored by tuesday. investigators also want to talk to the engineer who was at the throttle. they say that the train was going 106 miles per hour before it derailed, that is more than double the speed limit. the lawyer for the engineer --ls nbc news that he would that he remembers trying to reduce speed before being knocked out by the crash. he said that his client was not using drugs or alcohol or on his cell phone. and obama's trade deal has taken a step forward. they have wrapped up a test vote on fast-track trade authority. it comes to days after the senate democrats rebelled against it. they also voted to pass currency monopoly should that's manipulation and --. and paypal is returning to its roots as an independent company. its payment division is
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separating from ebay and will ypl.e on nasdaq as p they announced the split last after the ceo said that paypal was being held that -- held back. those are your top stories. people are wondering what is left of the rally, the u.s. currency sliding towards it lowest level in four months, this is a day after stagnant sales. greenback's at its lowest level against the euro in three months. is peter. us and sebastian. sebastian, what happened? a essentially what you had is market in a very long one position. physically, there is only so
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much you can spend and actually win, eventually you hit something that goes wrong. you saw oil when rising, better economy is coming out of the eurozone, it puts people out of position. away frommost a day profits. alix: so then you have commodities move higher, it is affecting the bond market, what happens now? >> bonds moving as high as 235, but the same issue is that a lot movingle are comfortable long treasuries. once you start seeing the selling pressure, there is nothing to buy antics -- checkers losses. in the bond market, it we just went through a 10 year option. problem coming, the corporate supplies has been large as well. it will probably end after
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memorial day. we should have a clear sailing, it will probably go away for the bond market. alix: sebastian, do you agree with terms of the currency market, have we seen the dollar level out? euro,, thinking about the versus the yen, we have been very close to that one. especially when people start screaming and feeling that pain, we are very close to it. a settling down trade. we will reverse a lot of what we have seen right now. the dollar should appreciate. alix: what will be the catalyst for this to change doesn't come down to the fed? little bit. for me, it is the carry trade. we are looking at long yield on's. the longer you sit there and start earning, that adds up. some are saying it will be slow,
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the fed is on hold. maybe we should get fixed income into the portfolio and rebalance that. that is what i am looking to drive that. -- drive at. that fear will go away quickly. alix: sebastian, is the catalyst for the stronger dollar going to have to come from the fed? driving a car fast on the road and you hit a pothole. you get nervous and jerky, but over time you forget about the pothole. the u.s. is still doing relatively well, the economy is not at a great rate for growth, but it is doing pretty well overall. you, at 4/10 of 1%. it is like getting hit by a car and falling down, and then getting up slowly and people getting excited about it. it is going right direction, but
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it is a very slow process. it is not a great reason to buy the dollar, over the long-term, eventually it will get stronger. alix: and --? >> i see the probability of that being diminished. we can see this happening in the eurozone and the u.s.. you, this has been baffling my mind over the last few days. up, task from muddy waters speaks out on the practices of noble group. ♪
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♪ alix: welcome back to "bloomberg market day". the commodity trader noble group is under pressure from research groups to make it financial --
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more transparent. the stock market -- the stocks lunged after they were criticized by carson block. spoke withuhle carson block today. >> you use the word brain damage, i use the phrase internally to describe how difficult it is to actually double cleat -- stocks. the point that was made, you do the work, you do it right, i am not passing judgment on herbalife, but you do all this work and you know that you are right and you come out and speak to the market and you get attacked, left, right and center. you have to have it scanned to do this. >> does that mean you are changing your tune? re: starting to say that may be shorting is not going to be the money waters way of the future? >> i think the way that we do our research is most conducive
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to shortselling. we do not like to prognosticate on the future and what will happen over the next year, the few quarters, we're generally looking backwards. we are looking at information that the company has released. it is a question of canned this information be reinterpreted, or interpreted differently dan the market is -- than the market is doing? there is a situation where the economics underlining each share really are, but with this type of research, it is more conducive to shortselling ban buying?than long if you look at the short and -- do look at the short and say this isn't worth it? >> with thomas it, that was a commercialy are not
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investors. we learned that firsthand. with noble, noble is not really our fight, it has been on the radar for years, we researched it. we had a conviction over a year earlier and what happened with this case is that a former noble employee began writing critical research and distributing it publicly. some of the research that we had done it was additive to that, so we shorted it and publish our view, we thought this was a bad company. worsening,amentals we saw that 30% drop in profits? this,h the company like you really don't know what the underlying economic health is. it they were able to engineer better profits, that says to me that the business is deteriorating. i think that it has been bad for
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a few years. they have been able to paper it over with financial engineering. >> with activism, clearly it is debated. it has been said that it is not good for companies, companies basically hiding under the desk hoping that activists do not come knocking. >> i think that you could say that there are two types of activists. i'm not a believer in the financial engineering activist who comes in and says -- >> by that, by that. >> make it to do it, i think to do it, thatbt is not helpful at all. i think when you have activists come in and hammer away at --, i think that is healthy for the economy. it is about what the individual activist court investor, with their a sow's is. , always aon block strong word. we have stocks moving after
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hours. julie has more. -- thosewant to show stocks are pulling back a bit. per sharey's earnings is at $.18, revenue up by 11%, to $90.4 million. and restaurant sales are up. maybe that was not enough. and we have king digital, and the maker of candy crash, the company is also following after earnings. julie, thank you so much. that wraps it up for "bloomberg .arket day", i am alix steel have a great night. ♪
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