tv Bloomberg Markets Bloomberg May 15, 2015 4:00pm-4:31pm EDT
and we did it. another record on the s&p, by one point. second day in a row that we are looking at another record for socks. the s&p unable to keep its intraday record yet, 2125, but another record for stocks. i have got to say it is a pretty yucky record. it is not really moving that much. joining me now is joe weisenthal. joe, we keep getting the bad data. everyday i am saying record high, and where up, what, a couple of points? it is not a huge takeoff. joe: yeah, it is basically the same story every day that we have been getting for, i do not know, 60 years now. which is the data is not that great, but it is not that bad. you're going to say
goldilocks right now, and i will totally roll my eyes. joe: i am trying not to say it. we have got more mediocre data, but the bottom is falling out. alix: you know what is not moving echo transportation stocks. goes, dow transportation there goes the dow. 6% off closing high, and without the intraday record high, interesting bird that is an outlier. joe: definitely a yellow flag to watch, i would say. as you point out, there is a believe that they often leads the market. he want to watch rails and airlines, leading indicators, definitely something to watch. obviously this is all central-bank driven. how much ammunition do central bankers have? a cool note today saying the world economy -- this is very poetic -- the world economy is like an ocean minor without life boats. to be aer hits coming
truly titanic struggle. the implication is that the banks have done all they can, they deflated as much as they can. they do not have many tolls now that interest rates around the world are basically zero. politics, ife of the economy did turn down again, it is not obvious that we will be able to respond. i feel like we are seeing that in china a little bit. basically they aren't trying to let chinese banks to swap for cash. they are digging deep. cutting interest rates is not enough to growth they are maintaining a bottom to follow. is it easy to believe that china does not have the tools available that we have the u.s. or europe? but it is there, there is not any obvious bullets than anybody has at this point.
bubble thatus anybody has at this point. alix: speaking of bubbles -- joe: hank paulson -- let's go to this. hank: until we got back to a world where interest rates are starting to turn by economic forces, economic reality is going to be -- there are going to be asset bubbles. alix: he was speaking to bloomberg's guy johnson. it is the first time you tossed, so, high five. got it done. it is interesting to talk about what bubbles are being created because jenn janet yellen was talking about that as well. joe: talking about the four key drivers that happened in the world, they talk about one ice, which is -- they talk about one new paradigm, which anything they talk about paradigm -- alix: it is like "new normal," right? joe: yeah, it always freaks me
out. areas.h saving, not many they also talk about a demand for supply and value. this is one of the things that we have been hearing for a while. there is a lot of money chasing investments. not that many investments available. alix: that was really interesting because we were seeing balance sheets shrinking while the bond market is growing in size, meaning that there are a few big guys in the market that have the potential to move because the assets are not being traded that much, like a pimco, a blackrock, and something lisa abramowicz, our debt reporter, talks about. joe: the fourth driver is the of wall streeton as a perpetual bubble making machine. every but he is trying to make the benchmarks, whether it is their fund benchmark, whatever it is, and to me, benchmarks, you have got to buy. tocreates for everybody
invest in the big companies, whether it is apple, european bonds, that inflates new bubbles. alix: talking about where the retail, consumer durables, consumer services, food and beverages, kind of what we have been seeing. anddata has been so lumpy, that is where they are identifying the bubble. they are also saying emerging market sectors are really cheap, like banks, cars, energy, and in the u.s. is a little hotter. what we are looking at here is corroborating what citigroup is saying. looking at energy, consumer discretionary etf has seen more inflows this year, $2 billion aboute energy sector, and 730 $6 million for consumer discretionary. huge inflows, the money just pouring in, to your point. joe: yeah. the interesting thing is even with these bubbles identified, citi still says you have to buy. the quote is -- we think it is
still early to fight the bull market, we remain overweight. health care and we do not expect a huge rate hike until 2017. alix: meantime, they say it, expensive stocks may be getting more expensive. joe: what other choice we have, though, but to keep buying? alix: we have lots of eco-data, housing, earnings from home depot, lowe's, target. we also get walmart. it is kind of like a retail /housing bonanza with the fed kind of sprinkled in. joe: we are coming to the end of earnings, but this last wave will be retail focus, and that is the question we want to know more about purity is the consumer as weak as the data has been saying? university of michigan sentiment smith today, so we will get a nice wave of retail data and see where things are. alix: from where i sit in the
will of commodities, it was opposed to be the quarter for the consumer. oil prices fell off the cliff. where was that windfall? bank of america had a no doubt about that. they want to save more or add a lot more to their savings, actually, we are going to hold right now. we have access to governor charlie baker who is beginning a press conference on the boston bombing death sentence on dzhokhar tsarnaev. their ability in to find perspective in all of this, i think is extraordinary. reporter: [indiscernible] gov. baker: i have not thought about that yet. i'm still processing what happened. reporter: [indiscernible] gov. baker: i think every time we run the marathon -- i do not run the marathon -- i think anytime anybody runs the
marathon and participates in the marathon, i think this'll be impossible to be too far from the top of people's minds. for me, this certainly ends the sort of ongoing trial piece of this, but i think it will be a really long time before this episode and all that came with ever lands in my rearview mirror. i think that will be true for most people. reporter: would you say -- even with this verdict? gov. baker: i would say two things about it. first, i think boston showed tremendous resilience and an enormous sense of community around us from the first time it moment it happened. the way respondent, between the first responders, the public officials, the health care system, which delivered under horrible circumstances. and commitments everybody made
to the people who were damaged and lost as a result of this was unbelievable. that has continued to play out all the way through for the following several years here. as i said, many of the events have taken place around the marathon. i think the marathon has certainly changed forever. and i certainly think for many of us who grew up in and for whom the marathon has been part of our lives since we were young , it has changed the marathon, and that by definition, i suppose, changes boston as well. but i think some of this has if boston hadaid, any trouble understanding its identity before this happened, it certainly has not after. reporter: [indiscernible] gov. baker: that is not a very high priority for me. i am far more focused on a whole bunch of other issues, in economic developing, education, even in criminal justice. this is not something that is on our radar. >> thank you very much.
gov. baker: thank you. alix: you had been listening to the massachusetts governor baker talking about what it means for the city now that dzhokhar andnaev has been convicted given the death penalty. we do have a statement also from u.s. attorney general loretta lynch on the boston marathon bomber sent a thinker it "we know all too well that no verdict can heal the souls of ones, nore lost loved the minds and bodies of those who suffered life-changing injuries from the hourly attacks, but the ultimate penalty is a fitting punishment for this horrific crime." of boston, marty walsh, has released a statement -- "i hope this verdict provides a small amount of closer to the survivors, families, and all impacted by the violence and tragic events surrounding the 2013 boston marathon bombing." massachusetts governor charlie
baker, you just heard him speaking at the press conference just a few moments ago, diplomatic and that dzhokhar tsarnaev has been sentenced to death, jurors finding that he would not have committed the crime is not for his brother, yet still convicted and still given the death penalty. "bloomberg market day" will be back in just a few moments. ♪
convicted it boston marathon bomber dzhokhar tsarnaev will face the death penalty. they deliberated a total of 14 hours before making the decision. the defense attorney try to get an sentenced to life in prison, arguing he was under the sway of his older brother. the 2013 attacks left three people dead and more than 260 wounded. schwarz toy store in manhattan is closing its doors in july. the reason -- rising rent. the store's current location is the high rent district in fifth avenue across the plaza hotel fe. toys "r" us owns the store and says it is looking for another manhattan location. forced penners have state to unplug their computers in their engineering school. hackers have been sifting through computers for about two years there. the university developed sensitive technology for the navy and the research is being developed for commercial application.
they could be using the university as a backdoor to commercial and defense technology. the wealthiest university on the planet is spreading the wealth. harvard pays the top six managers of its endowment more than $49 million back in 2013. that is a 50% increase from the year before. harvard has a $36 billion endowments, and last year if returned 15%, the second worst performance in the ivy league investor carl icahn has raised the stakes in the battle between er and lyft, putting money into lyft accounting for the round of funding. one of the managing directors at lyft's firm will join the board. and silver lake's bet on alibaba pays off daytime time. they sold 25 million alibaba sales for $2 billion. alibaba debuted in new york last year with the largest ever ipo. netflix shares traded about 600 for the first time today.
that is after more of the online video service could get their door in -- their foot in the door in china. the "wall street journal" reports china could beef up the netflix subscriber base for it is folks for us and says they plan to be nearly global by the end of next year. those are some of your top stories. the s&p 500 closing at yet another record today. i want to bring in john manley, chief equity strategist at wells fargo fund management. john, so good to see you. what do you make of this rally that seems dispassionate, that we have to keep making these record highs? john: you mentioned it before, when the fed pushes money for the economy, that money encroaches the capital markets. unless the earnings are awful or the valuations are extreme lehigh, it tends to levitate docs will that is what is at work right now. alix: how do we find a value? the datapoint is not great, the economy is not great. i'm not sure you can find
a lot of value. you can go to europe. if you're looking in the united states, you not buying for value, you are buying for growth. it may be the first and second quarter, the worst quarters with seen for the s&p 500, and they get a sense of the earnings are about as bad as they're going to be pure and they tend to look down the road a little bit. i saw that happen a few times in my career. and maybe happening now. on track to now deliver income growth of .1% in the first quarter. we were looking for 5.8%. how would companies over the economy do a lot better? questiont is a great during what have they been doing for the last three years, four years? earnings excitations were growing for the s&p 500, and i think it is, number one, lower interest rates, number two, lower tax rates overseas. also i think it is technology. i think technology not only makes -- technology made all the
workers in america more efficient, and corporations sort of kept all of the difference to themselves, but corporate managers know they are right or wrong, and that has got to result in higher costs. mistakes,aketh many not nearly as dear to you as they were in the past. alix: you mentioned more value in emerging markets in europe, but what about international exposure, shunned the stronger dollar? john: currencies go up and down. commodity, and commodities go up and down. the dollar has been strong for a number of reasons, one of the reasons that we are stronger than europe. the weak euro tends to help european exports, tends to help the european economy, european banks are starting to lend. at some point in time, we get the currency back and get it back to the states because now we have stronger trading partners down the road. it is not only the dollar going up forever. the dollar is a medium of exchange, and i think the market
clearing, i think we can transfuse some of our strength into europe, and that may come back. alix: john, always great to have you, john manley. julie hyman at our breaking news desk. jules? julie: thank you, alix. we had a listeria outbreak in blue bell ice cream's. they will fire almost 3000 workers, or furlough, after it shut down production. employees will be furloughed, and additional 1450 will be laid off. that is according to the texas-based company. the company is also cutting salaries in the meantime. "bloomberg market day" will be right back. ♪
is next to me in person. i can touch her arm. you are real!! julie: as opposed to a torso sitting at the debt secured one of the things that emerged after david einhorn called the mother "motherthe fracker." druckenmiller, each of them taking on a case, empire natural resources specifically, taking stakes and the one that einhorn specifically targeted, druckenmiller also took a stake in eog resources, also some of the other fracking companies. pioneer valued at 500 and $18 valued at $518 million. dan loeb reduced some of his
phillips 66 holdings, he bought into a company called clayton, soreness sort of a mixed bag as it tends to be. in terms of philip 66, that is a refiner, so as oil prices rise, that gets squeezed. to make a distinction between that and the shale, that will be a different beneficiary. julie: right, talking about the whole energy complex not just the fracking. jock and miller had made some of hadother -- druckenmiller already made some of the other comments. just to be clear on what the filings do for us because i feel like we always need this disclaimer, right? us acome out, they give snapshot of where the holdings were at the end of last quarter. and they don't just disclose short positions, either. options positions.
there is a bit of wiggle room for these guys. nonetheless, when you are talking about someone like druckenmiller or someone like a berkshire hathaway, whose filings are starting to come out, they tend to be more buy and hold stocks. and dan loeb has a reputation of being a traitor. if you are one of these people who try to follow and mimic what these investors are doing, there are a lot of caveats that you have to take into account. you have to know the stock worth investing. you have to, you know, sort of track them quarter after quarter. alix: to your point, i looking at pioneer resources. the stock is down almost 10% in all of me. tradere to wonder for a like dan logue, really comes down hard on this company, calls acker."other fr you might like the company, but hey, you will trade out of it.
julie: or the opposite, maybe you see an opportunity because it has been pushed down by all of the talk. he also look to the outlook of oil prices, which would factor into how some of these trades, a lot of them do trade in tandem with oil prices. speaking of oil prices, it was an interesting day as we were watching what unfolded and how the stocks work trading because you look at the energy group, it but reallye day up, we saw some volatility there, just as we did during the week. , it was a pretty volatile week overall across asset classes, whether looking at stocks, bonds, oil prices. as investors are waiting a lot of different elements to the economy, what is going on europe, trying to extrapolate what it means for the federal reserve -- the federal reserve has
applications overseas as well, which is perhaps why we have volatility over there because it will depend on a stronger euro, weaker overall demand globally. what will you do for the ecb in their policy? a lot of implications ringing it out. julie: exactly. we are still getting out some of the 13f's. we will try to update you on what is important and what is not because a lot of it involves a little tweaking of long-held positions. berkshire hathaway -- aol. they have a stake in interesting. julie hyman, thank you so much. we appreciate all of the details. that wraps it up for the "bloomberg market day." have a great weekend, everybody. i will see you on monday. ♪
emily: carl icahn gives lyft a $100 million lift, but is it enough to help the company catch up to uber? i am emily chang, and this is "bloomberg west." coming up, netflix may be teaming up with jack ma. we look at the company will the plan to expand in china. self google's driving cars are about to hit the streets. and one of the highest profile vc firms run by women is getting ready to raise its funds. first, to our top y
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