tv Bloomberg Markets Bloomberg June 29, 2015 1:00pm-2:01pm EDT
germany and france have declared they have done all they can to avert a greek exit from the eurozone. banks and markets in -- and markets are closed in athens. we could be days away from the default. we will have the latest. betty: diplomats in indiana -- may be close to reaching an agreement with iran. we will look at what a deal could mean for oil prices. >> wimbledon is underway on the outskirts of london. we will look at why membership in the all england club is one of the most exclusive in the world. betty: good afternoon. i am betty liu. >> i am mark crumpton. today markets are falling . investors worried about fallout debt situation and
whether the country will exit the euro. a check of the board shows all of the major averages down more than 1.3%. s&p 500 is down about 27 points. dow jones industrials up -- a drop.int greece's financial problems have revived demand for gold as a safe haven. european investors are increasing purchases. right now, gold futures are on the rise up nearly .5%. of the risk of a greek exit from the euro is impacting oil. it dropped to a three-week low today. crude oil now down over 2%. market,n the treasury sharplyear yield 2.35%
down based on buying. the euro have been falling based on what we see in greece but had recently turned higher. you can see the euro trading at $1.12. let's get a look at top stories. the supreme court is wrapping up today with a number of decisions. justices ruled on a case involving the death penalty that states can continue to use a drug implicated in several watched -- botched executions. to debra liberal justices -- two liberal justices said it is highly likely the death penalty is unconstitutional. david cameron says the u.k. cannot hide from terrorists. at least 30 british nationals were among those killed when a gunman opened fire friday at a resort in tunisia. it was one of four tax that they blamed on muslim extremists.
cameron says terrorists have declared war on us. the f.b.i. is warning of possible terror attack's targeting the fourth of july holiday. peter king spoke to abc. peter king: there is more concern now than any time since september 11. multileveleen operations. it is not just the lone wolves. there can be coordination. betty: we know there is no specific threat of attack. diplomats in vienna are on the verge of reaching agreement on iran's nuclear program. the foreign-policy chief says the signs are close to a deal ahead of tomorrow's deadline. the u.s. and other global powers want to make sure iran is not trying to build a nuclear weapon. in exchange, they will ease sanctions. mark: another sign of strength in the real estate market. pending sales existing homes
rose for the fifth month in a row, up .9% just below estimates. sales were strongest in the northeastern u.s. the field of republican presidential candidates keeps getting larger. ohio governor john kasich lands to announce he is running for the white house. bloomberg news is reporting he will make the announcement july 21. there are 13 republican candidates in the field. there will be 14 after tomorrow when new jersey governor chris christie will announce he is entering the race. nedco is dropping its plan takeover of u.s. foods. a u.s. judge blocked the deal last week. antitrust investigators warned it would raise consumer costs. it now says it will add $3 billion to its stock buyback program. general electric is speeding up the sale of its finance operations. g.e. has agreed to sell the bulk of its vehicle fleet management business to element financial.
the price tag, $6.9 billion. g plans to sell off about 200 and dollars of lending assets to refocus on industrial operations. betty: lebron james reportedly will become a free agent again. he is not expected to go somewhere else. espn says james will decline the option on his contract with the cavaliers but won't meet with other teams. that was set james up to get a bigger contract next summer when the new t.v. contract kicks in. that is a look at top stories. hour, thehe next half puerto rico governor says the island is unable to make payments on its debt. we will have the latest on what it means for the bond market. betty: we will have the latest on what caused the spacex rocket to explode after launch this weekend. mark: diplomats in vienna are trying to reach an agreement on iran's nuclear program. we will have the latest on
negotiations and what that could mean for oil prices. they: our top story today, greek crisis has hit a tipping point. we have been talking about it all morning long. >> if you were to put a gun to my head to give a probability greece is in the eurozone in the next few weeks, i would tell you it is about 15%. there is an 85% probability greece will be forced to leave the eurozone. so,because it wants to do but because it is no longer able to stay in the eurozone. >> greece should default. it should stay in the euro. this is one of those circumstances that never should have happened. it shows very poor economic management from the european side. >> they will come to some kind of agreement in the last minute. but i don't think that is positive because greece is basically bankrupt. >> this is a severe issue for greece. we need to do all we can to
restore confidence in the country and banking system. >> greece is going through what economists call a sudden stop. when you close the banking system, you trigger cascading failure throughout the economy. when that happens, it is difficult for politicians to remain in control of the economy. >> there should be relief on this mountain of bad debt. if europe won't give relief, greece should take the relief by saying we cannot pay. he believes firmly the europeans need to greeks as much as the greeks need the europeans, which is sadly not the case. i think he is trying to push the blame. >> on substance, they are not that far apart. the problem is there is no trust. when there is no trust, people require you to do things upfront. when you can't agree on the past, when there is no trust, it
is very difficult to into up with an agreement even if you are not that far away on substance. mark: what is next? schatzker onn erik the ground in athens, and thomas miller of the executive service corps any former ambassador to greece. he joins us from washington. what is the latest? we saw this was a day when the stock market was closed and capital controls were imposed on the banks. mark: capital controls --erik: capital controls came in at 3:00 a.m. that shows how long it takes for things to get interesting in this country. you usually have to week until the sun is going down. that is what is happening now. behind me, you may be able to hear the groundswell. protests are beginning to break out in front of parliament. so far, they are peaceful.
but several thousand people have massed in front of the parliament building blocking traffic. are what we can tell, these pro-separatist testers calling for the greek -- calling from the greek people to vote no on the referendum, the referendum that would put on the table for the greeks the prospect of accepting new terms from the european lenders. they want the country to reject them. that raises all kinds of questions about the future. these people appear to be backing them. betty: it does indeed. gettingor, now we are into nightfall. you are going to start to see protest and will likely see them for days to come. does greece have the time to wait until july 6 to figure out what the country wants to do? ambassador: it does not. the clock has run out.
we are starting to see 11:59uences of this diplomacy or lack thereof. the banks are closed. markets are closed in greece. a.t.m.'s are running out of money. that hurts a lot of greeks. it also hurts a lot of tourists. the capital controls could buy time. , inistory is any indicator most countries when these are imposed, they don't do much. is this buying time for greece? will they help to stop the bleeding? thomas miller: i don't think so. the element that has always been most worrying is not economic. it is the political and psychological. people are starting to see the reality set in. i think the capital controls don't stanch the bleeding. sidesk statements on both
give me little hope there is going to be reconciliation, that there will be a solution. have spoken with a couple on their way to greece for vacation wondering whether they needed to cancel given what is going on. what is open now on the street? what is life like at this moment? miller: i have talked to friends in greece. i will be going there shortly with my wife. things are open. hotels are open. restaurants are open. is a great time for tourists. make sure you bring a lot of money because there might be problems getting money out of the tms -- a.t.m.'s. prices are great right now. way, is a great time for tourists to be there. betty: erik? erik: it is business as usual. the ambassador is right.
because of the depreciation of the euro, things in u.s. dollar terms are cheap. the question is whether these businesses grow nervous enough to stop accepting credit cards. yes, you can bring euros into the country. if you're going to spend time here, you need to travel with a lot. more than hundreds. we are talking possibly thousands of euros in cash. travelers are going to begin to feel apprehensive about that, especially if they find out a.t.m.'s are running out of hard currency and cannot restock. the greeks are limited to 60 euros a day. foreigners face no such limits. if i can get to an a.t.m., i can withdraw the limit the a.t.m. imposes on a foreign transaction. that could be 250 euros. but there is no limit on the number of withdrawals i can
make. being, it is business as usual. i have described it as an in eerie of calm -- an sense of calm. there needs to be a flashpoint moment before things change. mr. ambassador, we have about 30 seconds. if there is rapid outflow of capital from the european union, are countries like spain and italy in danger of being destabilized economically? ambassador miller: i think much less than in 2012. in 2012, the europeans had not put the firewalls up they have now. i think there's a sense you have ring fenced greece more or less. italian bonds are under u.s. bonds or were this morning. i don't see that panic yet.
julie: i do. we have individual movers we want to point out. macy's is one of them. it was cut to sell at deutsche bank. they say the sales rep will continue because of tourism headwinds. also because of declines we are seeing from macy's vendors. those shares down 2.7%. when we talk about the sales declines, i want to show what we are talking about. it has not been straight downward. upward is when it has seen sales gains. recently, a 7% decline from macy's. today, at j.p. morgan participating in a broad pullback in financials. jpmorgan last week was trading at a record but is now down 1.7%. is downgrading based
on the fact it has done so well. we are looking at chesapeake energy. it has seen a lot of negative commentary. today it is pulling back along with the rest of the market. stern agee is upgrading the stock to buy saying the issues the company are facing are not fatal. also pointing out there is high short interest in the stock. if any good news comes out, you could see a short squeeze. this is short interest at the percentage of float. it is very high. 28% is sold short. you can see what the risk of a squeeze would be. one of the highest shorted stocks on the s&p 500. mark: julie hyman, thank you so much. puerto rico may be headed toward a debt spiral according to the governor. the island is unable to make immense on the $72 billion debt. the puerto rican legislature is
meeting now to vote on a budget. betty: puerto rico's economy has been in trouble for years. now the u.s. territory is dangerously close to default. here to outline what is ahead is lark keller, following that story. onjust got a headline out the bloomberg terminal saying they will keep paying their debt. different froms what it sounded like the governor have been talking about. i think investors are looking to see what he can clarify when he speaks at 5:00 today. mark: is the governor giving investors advice? >> they have been carrying on conversations for a long time. i am assuming there are creditors saying we need clarity. otherwise, how can they make an investment based on these changes without knowing more information. betty: whose money is at stake?
>> euros, mine, everybody we know. these are investors in mutual funds, your retirement savings might be involved. there are also institutional investors with hedge funds. it is a lot of different types of investors. i focus more on the distressed asset guys. mark: we want to point out some creditors have been willing to give puerto rico money. laura: yes. you have two groups willing to do that. you have creditors to the electric authority that have been saying we would like to fund your $2 billion worth of new investment. you have this other group of 35 different hedge funds who said for almost a year we would like to fund $3 billion worth of debt. but it is going to come with our conditions. step? weat is the next will hear from the governor.
when we get through his comments, how do we move forward? : it sounds like a lot of the deals may be off, including one getting money back to the bank of the lender for the common-law. off, that, if that deal is do you go into more of a negotiation scenario? do you ask bondholders to take care cuts -- haircuts? mark: we started the broadcast talking about greece. can you compare and contrast what is happening in puerto rico to greece? governmenthave the trying to put austerity measures in. you also have differences. creditors are very different. you have the i.m.f. and other nations. here we have investors, creditors. mark: laura keller with the latest on puerto rico.
mark: welcome back to "bloomberg market day." i am mark crumpton with betty liu. betty: elon musk's vision with dealt -- was dealt a serious blow over the weekend when one of his rockets exploded moments after liftoff. the falcon nine rocket was about two minutes into flight. it is the third demise of the vehicle carrying supplies to the international space station since october. sk is promising to
find out what caused the explosion. unknown,d cause still now parsing data to recover final milliseconds. betty: the failure is the first in 19 launches in what has been spacex's seventh holland trip to the space station under a nearly $2 billion contract with nasa -- ling trip to the space station under a nearly $2 billion contract with nasa. it was his birthday over the weekend, a terrible gift. also, there was news out the battery swapping program for tesla is not doing well either. nobody likes this technology. mark: we have done tons of stories about mr. musk. we have interviewed him. you get the sense from having spoken to him, having seen him up close and personal at work,
he is not going to stop until he gets this right. betty: exactly. accidents are part of any space program. it is not as if his company is the only one that has seen explosions like this. it is unfortunate. but they do come back. they have other missions. many luckily are successful. i just worry about the astronauts on i.s.s. i hope they have enough food. [laughter] betty: apparently, they do. i am signing off and getting food now. mark: coming up, diplomats in vienna may be on the verge of reaching an agreement on iran's nuclear program. we will have the latest on negotiations and what it could mean for oil prices. ♪ .
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us. let's go straight to your top headlines. german finance minister has been the greekawmakers on situation. in the meantime, greeks are lighting up to take money out of atm's, but they are not walking away with much. greece has closed the banks to keep the economy from collapsing. germany's chancellor says there is no basis for the euro zone to give money to greece without a formal agreement, but chancellor angela merkel says she's always willing to negotiate. it is not only a situation for us that is unprecedented. it is also a special situation for greece at the moment. i would not want to speculate. if someone wants to talk to us, we are prepared to have those talks at any time. mark: next sunday greece will vote on whether to accept
creditor proposals that will lead to more financial aid. isme minister alexis tsipras urging greeks to vote no. the prime minister will be going on state tv at 3:00 p.m. new york time. up supreme court is wrapping with key rulings. upheld in arizona state law that gives an independent commission the power to draw congressional districts. the high court also says states can choose whether to keep using a controversial lethal injection drug that has been implicated in several botched executions and ruled thees environmental protection agency did not adequately consider the cost when it ordered coal-fired power plants to cut in missions. shares in coal-fired power plants jumped today on that news. bloomberg news has reported iphone suppliers have started
incorporating devices to make forced touch. force touch allows users to adjust the strength of their screen taps to bring of different functions. in paris, the city prosecutors say unspecified elicited -- illicit activity is being investigated at uber. uber has avoided rules and taxes imposed on traditional taxis. jurassic world was the box office winner for the third week in a row. it is now the fastest movie ever to make $500 million in north america. ted 2 hillforte, expectationsort of . discovery communications is paying 1.4 billion dollars for
exclusive european broadcast rights to the next four olympic games. discovery will mostly air the limbic sonnets euro sports channel. an historic debut. his bat led the team to victory over cincinnati. matts grew up not far from the park and more than 100 relatives and friends cheered him on. those are your top stories at this hour. the clock is ticking on the final round of iranian nuclear talks. tomorrow had been the deadline for reaching the limit of the forear program in exchange easing of sanctions. negotiators say that is of a little festival, -- that is a little flexible, but not to flexible. reagan used to say, let's trust, but verify. i think in this particular case
we have to say, let's verify and then trust because of the way in which the irani and salve havected 8 -- iranians conducted a covert program for years. i think it is incumbent on iran to earn the trust before they can say our verification regime is ok. let's get the latest. joining us from vienna, we have barbara and we have andy, the president of an oil company, giving us his insight. let's go to indira. what is the latest on the talks? reporter: i think the top line is we will not a get a deal tomorrow, but i think it is likely that the two sites will come together within the next two days. said aboutary cohen
verify first, but trust, the of administrationa goes further. this is about distrust and verified. the key here is inspection and what access iran is going to give. y is one we stor aoke, that the two sides have plan to implement the deal if they agree on the hundreds of points that make up this text. first, there will be the agreement where they say, yes, we agree, and then there will be a period where iran take so-called voluntary steps to curb its nuclear program, while the u.s. and the eu work into the complicated things that will relief, financial and oil sanction really is, and step three would be the moment -- verifies the changes and at that moment the
sanctions would kick in. there are global implications for the oil markets as well. lead to does sanctions relief, would that mean more oil sooner rather than later? i think that they would agree to have some sanctions relief immediately which would allow them to sell a lot of oil they have stored on tankers, which would weigh on the markets immediately. mark: andy, what would that mean for the oil energy market? the expectation will be that over time significant quantities of iranian oil will reach the market with increased exports and production. mark: indira, can you give us a sense of what the sticking
points are? indira: yes, negotiators from all of these six powers speaking with iran are hard and fast that there will be no sanctions relief upfront. if the deal is agreed to on july 3, july 9, there will be no new oil sold on that day. there will be no upfront sanctions relief. they agree that sanctions relief will come, but u.s. officials have told me many times it will take a between six and nine months to enact all the curves that it needs to take. sticking point, really it is how are they going to answer the questions the international community has about the past military dimensions of iran's program? how are they going to resolve that?
vienna is extremely culturally beautiful. we have some things going on in the background. sorry about that. that is what we will be seeing. they have to come together on the issue of verification inspections. andy, if there is some sort of deal, for u.s. oil producers in the interim, would they feel it as much? would they be hurt as much as other countries? andy: i do not think they would be hurt as much as other countries, but they will still be a some pain, because it will be sometime before the prices return to higher levels. if oil were to come back on the oversupply.ould see that would probably be through the balance of 2016. indira, we have about 60
seconds left. where is israel and this? is israel still pushing for the international community to reject any type of deal with iran? they have been pushing, largely through their supporters on capitol hill. if a deal is agreed upon, it will get lots of pushback from the republican party in particular, but also skeptics on the democratic side as well. itself,israel resigned but they will press the obama administration and all the other allies negotiating to make sure they get the best possible deal they can get. although i do not think israel will be happy a deal will come that will allow iran to enrich uranium at all. indira laxman joining us ,rom vienna and andy lipow
welcome back to the bloomberg market day. i am mark crumpton. let's go straight to a check of the markets. -- senior markets correspondent julie hyman is here. everybody is looking at greece today? julie: they are. the decline we see in the s&p 500 is the steepest in about three months. the dow is negative for the year as well. it really has been an projection for today. we see declines, but they have
stephen p review you heard erik schatzker earlier saying we are protesters outside the parliament in athens. perhaps there is concern about what may happen next. thatu look at the groups are doing best and worst in the s&p 500, there's really only one. there is utilities. utilities are rising after we see yields fall. we will get to that in a moment. financials, discretionary, a broad-based selloff we are seeing today. if you look at the worst performing stocks in terms of appledex weight, you have selling off. bank of america is lower. jpmorgan was downgraded to perform from outperform on valuation by oppenheimer. bank of america also trading at relatively high levels. what i amto look at calling the trio today. gr k -- that is a greek etf.
even though the market are closed, it is down 15%. enters a bear market, down 2%, and mbia plunging over the concern of twitter rico -- puerto rico's situation. julie hyman, thank you so much. let's look at the european market close. our colleague mark barton reports from london. is a countdown to the greek referendum. that is what it is all about. a couple major hurdles along the way. greek onyman's and the the greek deal on bailout. what a day. no trading on the athens stock market. not only are the banks closed. the stocks are closed.
since november 2011. 4.6he open, fell by percent. biggest drop since 2011. dax.look inside the no gainers. the banks are the leading decliners. daimler, of course, an automaker, deutsche bank, down 5%. this was a market that was read across the board. , eight give you an idea out of the worst 10 performers banks.year stocks 600, in italian bank, the lowest fall since may as well.
i begin with the euro stocks. i want to finish with the euro stocks. 14 minutes after the market closed. it came back, but the last hour, it fell again. worst performer in the blue-chip benchmark since 2011. a fall despite a surprise interest rate cut. we have details from hong kong. the shanghai -- is officially in bear market territory following a trade on monday where the main index plunged. swing sincelargest 1992. stocks were down 22% from the ending china for longest ever bowl market. traders were expected to be bullish, but investors once again sold out, particularly on technology layers. so, it seems the week off
remains in play. let's take a look at the top stories crossing the bloomberg terminal. the second of the new york escape is hospitalized in critical conditions. david shot and wounded sweat in april rural area near the canadian border. mattw escape the richard was killed in a confrontation with police on friday. investigators in taiwan say a's in taiwan say a cigarette probably caused a blaze. more than 400 people are still hospitalized. half of them are in serious condition. meantime another debt crisis as julie hyman just told you. crisis on puerto rico's newest bonds sank to record lows today. the governor of the u.s. commonwealth told the times that it's public debt is not payable. he says investors should work with puerto rico to reduce its
obligations. morgan stanley is planning a comeback in bond trading. they cut back operations. now the wall street journal says morgan stanley wants to add market share. that could boost profits. it could also turn off investors who like that morgan stanley has focused on less risky activities. that's a look at the top stories this hour. the introduction of the apple watch was expected to be a disaster for companies like fitbit, but so far, it has not been. fitbit had a sales bounce the spring and after the first week of the apple watch sales, fitbit started outselling apple watches according to data from price intelligence. joining me now, bloomberg anchor pimm fox. does this surprise you? if iti do not know surprises me or not, but it certainly shows that people are loyal to fitbit. the first thing, 33 percent of
people who buy the fitbit product actually buy it from the website. they have already made up their mind. they are not going to paris and shopping on amazon, the second-largest place that they bought the fitbit. run rateking about a that was like 10.9 million, so let's say 11 million fitbit europe. the price point -- you talk about the apple watch, that start at three to $50. i know maybe you want the $17,000 one, that has gold ,round the edges, but the $350 that is the bottom. but that is the top price point for the fitbit. you can get the lowest fitbit at about 60 bucks. and fitbit does not have to split the revenue with a retail partner. pimm: there you go. obviously apple is in the same boat there. they are not discounting other. you can buy it online from apple or go to the stores. it shows that people are remaining loyal to fit it and it
has a big future after its initial public offering, so people who were wondering whether fitbit was just going to get killed by apple and its watch, at least so far that has not happened. any subliminal persuasion, because it appears folks who were going to get the fitbit product know that before they make the purchase. pimm: right, if you go to the fitbit website, it is pretty obvious you have decided this is what you want. also, it is perhaps a little more disposable in the sense that if it costs $60, it's not the kind of thing you will worry about, you may upgrade to a more expensive version, warez with the apple watch -- and the apple watch admittedly does do a lot more than tell the time. more general purpose with fitbit more toward fitness. pimm: and people focusing on that segment of the market place. mark: what do you have coming up?
pimm: we have a bit from mark farber, talking about greece, and a new entrance into the republican presidential field. they just keep growing. mark: all right, pimm fox. i will see you. we have known each other for 10 years. and we've worked together. pimm: i like it. way, wimbledon is on the but if you want to become a member of the all england club, good luck with that. we will explain, next. ♪
bloomberg market day. wimbledon as underway at the all england club on the outskirts of london. winning the grand slam will not only get you $3 million in prize money, it will also get you honorable membership into the all england club, one of the world's most expensive clubs. danielle, how hard is it to get membership there? guest: it is very difficult. there are only 375 full members. if someone dies, that means a membership space will open up have to berson well supported -- will have to be supported by four other full members before they get a temporary membership. it still takes years and years before people are able to join this club. we are talking about a tennis tournament, a sport.
why is it been so difficult? these oldy have british rules. early 1900s. the not that far from me, the old stand had 375 spaces in it stand, it and they decided to give the membership the same amount to give everyone a lot of space to play tennis and things like that. mark: what do you get for your membership? guest: if you have a full membership, you get a guaranteed seat on center court. just to give you an idea -- people pay about 50,000 pounds for a whirlwind adventure which will give you one seat for five years.
.o, that's pretty good it's great to get those seats at that price. if you manage to get in, that is. danielle is covering the wimbledon tennis tournament, joining us on the phone from london. thank you so much. coming up in the next half-hour, jeremy's legal will be on "what'd tv's program starting at 4:00 p.m. new york time. we will continue to follow our top stories. the debt talks in greece continue, going to the 11th hour. we will be right back. ♪
market day. banks and markets in athens are closed as the country could be days away from a default. ago, theil a few weeks rise in chinese stocks seemed unstoppable, but not anymore. find out how bad the crime could be. discovery pays for the broadcast rights to the olympics. mark: good afternoon from bloomberg world headquarters in new york. i am mark crumpton, here with pimm fox. pimm: let's get right to the markets and see how stocks are selling right now. the s&p 500