tv Bloomberg Markets Bloomberg July 7, 2015 12:00pm-1:01pm EDT
hollande says greece must present reforms and angela merkel says time is running out. there are only days left and we will head to brussels for the latest. pimm: the heads of edna and umana will join us to tell about their merger. betty: elon musk will speak rocket thatacex exploded. pimm: welcome to the bloomberg market day. betty: let's see how the markets are trading and it is an ugly day and equities. all eyes are on the meeting in
brussels. the dow is down 125 points on the nasdaq is taking some heat, and down 1.2%. wow, what we have seen and commodities especially oil prices. ofex crude is down by 3/10 1% but copper is down i percent. even gold is off by 1.5%. pimm: it's the lowest level since april for oil. let's look at the bond market. the 30 year is around 3% and the tenure is at 2.21. perhaps that's a safe. haven trade let's look at the dollar versus major currencies -- the euro is weakening against the dollar. the yen is steady and the pound sterling is losing against the u.s. dollar. some top stories --
itozone leaders have made clear it is up to greece to explain how it will pull itself out of this crisis. the great prime minister earlier held a call with president obama is attending the summit meeting in brussels today. that is seen as a let's -- as a last-ditch attempt for great -- greece to get bailed out by the european union and stay in the eurozone. let's go to hans nichols who was in brussels. could commentou on the prime minister speaking with president obama earlier does this now become an issue that will affect greece's role in nato? there is a possibility but it seems that alexis cypris is casting about for allies. he has called president obama before and jack lew has called
them before. is no specifics, nothing concrete to hang getting up and it -- and he optimistic on. it is muted optimism. ministerse finance say the new finance minister is a breath of fresh air. however, it's unlikely there will be any bridge financing. the ministers broadly agreed that if there is to be another efm program, it would have to be a medium-term program for reasons of credibility and the problems in greece are deep and will meet our attention for quite a time to come. we would be talking about a medium-term program. : there was a fair amount of
disappointment when the greeks arrived without an actual written proposal. they are finishing up that proposal now and hope to send it and there is a possibility will get to the creditors tonight or tomorrow and finance ministers will meet again for another conversation. the prime minister is meeting separately with angela merkel and others and then all the leaders will get together. the prime minister will have a chance to press his case and tomorrow, he goes down to stroudsburg were the european parliament is and the once again present his case against austerity for additional funds and a debt restructuring. says therela merkel is really only days to decide on greece. we are not talking about weeks. is it really only days? 24 hours ago, angela
merkel set hours and now that has been elongated today's come and not weeks. i think we need to heavily discount any deadline that is given on any side. what is clear is that every david passes is more suffering for the greek people. they don't have access to international markets and are restricted to 60 euros per day. it is clear they will not have the banks open again until you have some sort of agreement here. it looks like it will be 48 hours away from formally considering an application. it's difficult how to imagine how the banks can open in athens this weekend or next. pimm: thank you very much. the senateerrell in has given final approval to a bill to remove the confederate flag from the state capitol grounds. the measure now goes to the house where it faces a less certain future as lawmakers have largely ignored call to remove
the rebel flag until the shooting massacre of nine african american people at a church in charleston, south carolina. betty: shake shack is expanding its offering and bringing its first ever chicken sent was to the marketplace. is a natural antibiotic free chicken breast top with lettuce come up butter, lettuce and pickles. it's only available in brooklyn right now but shares of the company have been downgraded by morgan stanley and the stock they say is too expensive and expect shares to fall by 30%. survey monkey announced bill veckney will become the ceo on august 3. goldberg whoavid was ceo for six years before he died while on vacation in may. he will also join the board and joining the board is david
colbert's wife. sheryl sandberg wants to realize her late husband's goal of building a lasting company. pimm: turning to greece, we are standing by as european leaders convene in brussels. they are attending to hash out or discuss a plan for greece to stay within the common currency. this is the first in a string of what we describe as crucial days. betty: it feels like every day we are down to the wire. next hurdle in the strum and the greek exit from the euro. >> the greek drama continues. after a resounding no vote in the sunday referendum, what we know about the future is not clear but something has to happen soon. there is a look at key dates
that could go a long way in determining the future of greece and europe as a whole. the first date to watch is today, july 7. all 19 leaders of the european meet face-to-face for an emergency meeting in brussels. the goal is to restart a lot talks after the referendum vote. angela merkel said the proposals were generous. 8 isas the leverage? july another date to watch. greece has extended capital controls and a bank holiday through the end of wednesday. atm withdrawals are limited to 60 euros per day. no matter what's happening in brussels, the greek government still has to maintain order in the short-term. what can they do to ration its limited financial means? some hedge fund analyst say civil unrest will break out as they ran out of cash. then we go to july 20.
greece needs to repay 3.5 billion euros held by the european central bank. missed seen greece payments to the imf but this could be a bigger deal. even if default is avoided, the ecb could cut off emergency liquidity systems which stands at 89 billion euros right now. the ecboint this month, could pull the plug on the greek life support. the support is pulled, it could get ugly very fast. the debt crisis has been years in the making. if anyone can guess how this ends, the next few weeks will be crucial. pimm: let's go to athens where joe weisenthal is standing by as the head of the european union meet in brussels. give us an update on what the mood is like in greece without tanking in the stock market. they have gotten through
several days of limited banking, limited withdrawals and they feel that can go on longer. eventually, that mood is expected to break. if cannot get the banks open soon or get just give people access to more cash soon, people will start stressing out and become more agitated. pimm: can you give us an idea of what companies are doing to meet their payrolls? even the government's ability to pay pensioners? joe: the issue of companies making payroll is a good question. several people i've met have talked about how they just go for a while without getting paid. the company say they can desert they will pay them when they can and they don't want to quit their jobs. they work for free essentially. not everyone but some people
will work on the assumption they will be paid back at some point. betty: yesterday you were walking around and you wanted to see more about what is going on outside the periphery. is it different within athens them outside may be in the islands of greece? what is the mood like outside the area you are in? joe: in the center of athens, and people arem going to restaurants and cafes but it's not that much different parts of athens and outside. you can walk around and you would not inc. this is a country in extreme turmoil. theories like few people living with families so they have some money. -- this is a highly developed countries so we don't -- we have these expectations of what extreme economic stress looks like. maybe some of our expectations are wrong.
for most of greece, yes, it is slow in business is not booming but you would not immediately recognize this under extreme economic turmoil if you dropped in. pimm: thank you very much. let's get you caught up in the markets. there are some big moves today particularly in commodities. oil and copper are taking the run to that end they are making a bit of a comeback. the commodity index fell to a 13 year low, dropping to nearly 2%. francisco blanche spoke earlier about the headwinds affecting oil. there is a combination of factors, seasonal as well as the iran deal which is ahead of us. that is a huge factor. i think the greek story has not helped. i think weakness and chinese
economic growth can drive all commodities lower but that's not the main story. there are a lot of negative stories from the macro side. pimm: alix steel now joins us. betty: you love oil. allix: he said it was not chinese concerns. the other cap says it could be worries that are bubbling. certain companies are actually stopping shares of their own stock from trading. the idea is if there is a margin call or needs it, you cannot sell a chinese stock but you sell a commodity instead. bloomberg crunched the numbers and found 26% of listed firms in the mainland exchange are no longer able to be traded right now. that could be one of the reasons why we are seeing a lot of downside out of the blue and all commodities. that the united
states which has 4% of the world population is using less oil to make gasoline that's imported? isn't it easier to make gasoline from oil found in the u.s.? it depends on what refinery you are talking about. soe of them need heavy crude they have to import no matter what because we don't have that in the u.s. there was an increase in 10% last week of imported crude. you had an increase last week yet reduction is still around a record highs so there is supply concern but demand seems to be taking more of a center stage in a way we have not seen in a while. that is coming from china. the only thing that has changed the big game is that china buys agan uses their oil to store in petroleum reserves. that will be the game changer for oil and we are not seeing it as much yet. betty: why is gold falling as well? fear,you would think
greed, demand -- pile into gold as a safe haven but we are not seeing that. one advisor was saying we could see margin calls and they speculate gold could be more liquid and would be the first to go. that's we are -- why we are seeing some negative action. so people are selling their gold holdings to meet their margins? yes, we see that in gold from time to time. betty: is it that had they need to do that? alix: that is what one consultant said. no one can give me a single clear answer. betty: because nobody knows. alix: it's puzzling for the market. we are seeing this ripple through all the commodities. it has then a particularly ugly
day that started yesterday with oil. pimm: i vote for you as our expert, well done. alix: i get so excited to talk about commodities. people are seeing the prices go down so nobody is cheering. pimm: let's just short oil. betty: in the next half hour, while business titans settle on sun valley, one big name once outcome of the former lehman brothers ceo dick fold,. his team isusk says piecing together the events that led to the rocket failure last month. we will speak to a former astronaut coming up. of humana and's aetna will join us to talk about the merger of their insurance companies. will it pass regulators? we will be back. ♪
6 welcome -- pimm: welcome back. betty: let's get a check on the markets with julie hyman. it's the third down day of stocks and they have been bouncing a little bit today. it's still fairly deep in the red with the nasdaq down more than 1.28%. we have been talking about how much chinese concerns are waiting on the market. we definitely see it affect alley babbo -- ali baba. their trajectory has been interesting. it is down more than 30% from its peak last november and at
its lowest since its ipo. it has been affected by all of these worries from china. take a look at shake shack. it is being downgraded to an underweight at morgan stanley with the shares off by 10%. it has to do with valuation. we have seen their shares surge about 150% since their ipo in january. analysts are asking why it's so expensive. one reason is the illiquidity. there are not that many shares out there available to trade. that has been pushing up the share price. pimm: those chicken sandwiches are not helping the stock. betty: it sounds good. thank you so much. pimm: still just ahead, elon musk spoke for the first time since the explosion of the unmanned falcon nine rocket. betty: how much of a set back
betty: this is the bloomberg market day. pimm: elon musk says it'sx is piecing together the events -- says spacex is piecing together the events that led to the explosion of their last rocket. betty: elon musk spoke in boston about the explosion. spacex. a huge blow to we take these missions incredibly seriously. that can engage in the investigation at spacex is very focused on that. case, the data seemed to
be difficult to interpret. whatever happened is not a simple, straightforward thing. betty: for more on what this means for future missions, we are joined i a former nasa astronaut in houston. thank you so much for joining us . blow,e says it's a huge what are the consequences of that for spacex? >> anytime you have a serious mishap it will be a setback. they lost a rocket and a space craft so that means they will be delayed before they can plan the next launch. they've got to figure out the root cause of this trouble to make sure it is not generic and their fleet and make the corrections necessary and do the testing to certify before they can fly. they have been set back for -- with time and dollars but it's not a fatal setback by any means. pimm: if you are currently on
the international space tatian, with this give you concern? >> anytime you lose a resupply ship come it will be a concern. fortunately, there are enough critical supplies like oxygen and water and food to keep the growth -- the crew going for several months. a russian resupply ship successfully docked a couple of days ago so no undue amount of concern for the crew on board, just some head scratching. three supply ships were lost in a row but they were unrelated. he said it will take a long time to figure out what happened. is there any finding that could deal a fatal blow to the program? >> if they had a succession of failures and started losing several launches, and people lost confidence in them, in that case, i think that would be pretty serious.
i don't think that will happen. have a lotnd spacex of help massive who has a lot of experience. i am confident they will find the root cause and fix the issue. betty: he said he builds rockets cheaper than those in russia. does any of this has to do with cost? >> i don't think so. this is a development program and the alcan nine is a new rocket. they had 18 successful flights before this so they have a very good track record for a new rocket. they have had anomalies before. valves have stuck in things have happened and they have learned rum those. none have resulted in loss of a vehicle. betty: thank you so much. ♪
there is a surprise and labor market -- job openings unexpectedly rose in may to the highest level on record, more than 5.3 million which is the second month the opening exceeded hiring. the u.s. trade deficit got eger in may as the gap rose on his percent, $42 billion. exports fell by the most in three month in the biggest decline came in commercial aircraft and industrial equipment. it's a sign businesses are having problems selling to overseas customers. where's the demand? pope francis is setting a fast pace during his south american trip. he has a full schedule and quit or before going to bolivia tomorrow. he has one long and i shown no ill effects from the high-altitude. coming up in the next half hour, samsung suffers through its seventh straight quarter of declining profits. 6 arm of the galaxy s
losing more ground to apple. carnival cruise line says it will launch a cruise to cuba next spring as relations between the u.s. and cuba. normalized a meeting of the european leaders are getting underway in brussels as i speak. what will they do about greece and time is running out. we will stay on top of those developments. speaking about multibillion-dollar negotiations, two ceo's pulled off that before the holiday. aetna announced it would buy humana for $35 billion including cash and stock and a breakup fee. with me now are the heads of those companies -- mark, the share prices of both
of your companies have declined on this news. investors did not seem to be buying this merger. how do you convince them that a merger between the two makes sense? >> i don't think it's all investors. i think it's the arbs that got in the deal looking for opportunity and i'm not sure they know how to do this trade. this is a long-term strategy. this is a big combination is going to have a longer-term impact on the quality of health care and the cost of health care involving consumer marketplace. i'm not sure they know how to play it and it will settle down and we will do -- do just fine. betty: bruce, will it lower health care costs? >> very much so, as you see the transition from a more employer-based to a consumer base model and a value-based reimbursement model to fee-for-service, these combined organizations what the capability to meet those of those trends in the way of our
the deepcapability and employer relationships that aetna has on their side. betty: mark, will there have to be some the best future of your business in order to pass regulators? >> yes, we did a detailed review of the businesses at a local market level. this is not statewide or citywide, this is by zip code. we will have to do some divestitures. we included them in the value of the deal and the cost of the deal. we still believe they give healthy returns chunk ofwhat kind of revenue are we talking about that you would have to give up? >> we are really not broadcasting that number. that is subject to it conversation with the department justice. betty: there are estimates already out there.
it was said you might have to give up about 13% of your revenue in order to get this passed regulators. is that off the mark? >> i would just say that we are not going to talk about that at this time. everybody is doing analysis at a far less detailed level than we have. betty: in terms of the value for investors, i understand that we cannot say that all shareholders are not all happier satisfied with the deal by looking at the share price but you have to look at where the offer is, $223 for the company in the share price is well below that price, about $30 below. what is that telling you? says the arbs who are confused. they have been hurt over the
last few deals with a long justice cycle. to investors we have talked are very excited about the future of the combined companies. they will be holders post deal so i don't because the longer-term investors. there is some confusion out there on the arb side as to how to play this particular transaction considering the ftc review. is that partly on you in terms of the messaging to the investors? -- it'snk the messaging not all the same -- we will have to let the kind of shareholders who value this deal find their way through it and it could be a huge buying opportunity. i think we need to let it clear through. we have a long time between now and when the transaction closes. that's where all of this will be of true value. we will let the market sort itself out. why are these deals
happening now? it seems like you have had lots of drug deals but we are seeing some health insurance deals. you have and thumb and cigna that are in place so why now? of thisig story and all is that the business model has to change. we now have doctors in a cash basis with hospitals on a revenue basis and insurance on a margin basis. to get everyone on the same page, we have to have a different partnership. it has to be a partnership between payers and providers, making sure that we are getting the right outcome which is healthy and economically productive and happy members. we look at that is the outcome and we reward the health system for doing that and then we will see trend vendors make the market more affordable for consumers. does the timing
have anything to do with what we heard from the supreme court and >> the affirmation of the affordable care act? >> no, i believe this is a long-term trend. the exchanges have brought some motivation to it. the aca and all the items related to that stimulated these kind of discussions. it was not the reason. this transition from a very deep withmer centric model value based reimbursement is driving the industry from a sick care model to help model. there is technology that needs to be invested and partnerships that have to be created. size and scale to ensure its affordable offers all of that. go, talkinge we about the timing, did the fact that there are other mergers out there or companies in play like cigna or anthem, did that have
anything to do with making sure you guys get together and iron this deal out? we have an looking at this combination for five years as a company. bruce and his team have been thinking about this over the last five years and what we knew was that we had to lock and load them what we thought was best for westerners and best for shareholders and best for the people we serve in the employer community and provider community. this is the deal. we said let all the noise rage and keep the news cycle going but we will get the deal. done betty: thank you both so much. still i had, samsung struggles , samsung isead still struggling. ♪
betty: welcome back. european markets have closed. mark: four days of the kleins market european stock and stocks are at their lowest since february. investors are turning their attention to brussels again. stoxx 600 is not in correction territory. no trading in greece on monday or on tuesday or on wednesday. these are the biggest movers across europe.
is down 8%any tecnic today. they announced plans to cut 6000 jobs and reduce its fleet of oil service ships to cope with slumping oil prices. the german newspaper publisher is in talks to combined with a broadcaster to strengthen their push into digital media. rolls-royce, the engine maker sank 6% yesterday and another 5% today. j.p. morgan cut the stock to underweight rum neutral. there could be more downside there. are declining on the stoxx 600 which tells you everything you need to know about sentiment here. struggled to get
customers from apple on a got worse. they posted their seventh straight drop with a second quarter that missed estimates. s6 failed hype of the to meet market expectations. it was not the demand but a supply issue and the one-of-a-kind curved screen. and sales shortages dropped nearly 9% from one year ago. operating profit was already -- also down 4%. it is struggling to win back customers who switched to the iphone6 and are losing to chinese customers in the low-end segment.the chip is mrs. told booming with 2.8 billion dollars profit. boominghip business is with $2.8 billion in profit. get to julie hyman.
julie: the same stories we have been talking about -- greece and china are the two big drivers. there is uncertainty about what is happening in greece. the chinese stimulus does not seem to be juicing the markets like it once was and yet major averages are up off the lows. the s&p was earlier at its lowest in four months is now only lowest from this past week. 200dow was down more than points and now just 86 the nasdaq has come up office lows as well. i want to mention that the s&p average whichving is a momentum indicator, i have charted it and we have the yellow line which is the 200 day moving average. ofhas been support technicals. we bounced off it earlier today when stocks are at the lowest and it went below the yellow line. by some that was seen as a negative however, we have down
stauffer at once again so we will monitor that throughout the day to see where we stand. i want to check on the greek etf and adr we have been tracking. down 3.1% and a smaller decline than we have seen recently which is down about 18% since the greek situation started heating up from june 26. you are looking at the fxi which is the chinese etf which is down. it's continuing the selling. u.s., let's take a look at the imap. mark barton say the sectors in europe are lower but not so in the u.s.. utilities and consumer staples and energy has turned higher. we are still seeing information tech knowledge he as one of the biggest weights in the major averages. tesla is being cut to hold from
buy at deutsche bank.the analysts say shares reflect the opportunity in the global energy storage market. it's the battery side of the equation. . amd has a sharp decline after the company cut its sales forecast and other chipmakers are falling in with it. that's why we see that underperformance in an as and tech today. betty: thank you so much. now look at some top stories -- carnival is planning to offer cruises from miami to cuba beginning in may. that should make of the first american cruise company to visit the island nation in more than five decades. jets are being offered through the new carnival brand called fathom which focuses on trips where passengers sale to a destination in order to volunteer. >> it's the first time in 50 years where a ship will be able to go from the u.s. carrying
passengers to cuba and return and repeat the process. haveel are the list to received the u.s. licenses and are excited on working with the humans to ensure we do everything possible so we can sale in the middle of 2016. betty: the weeklong cruise will not be cheap, starting at $3000 per person. former lehman brother chairman is putting a property up for auction in sun valley. the compound includes three residential structures, main service orders and a separate guesthouse in a gatehouse with a combined total of 11 bedrooms and 10 bathrooms. living in this secluded style is not going to come cheap. the auction expects the estate to bring $50 million for deckfuld and company. . crumptone now is mark
who will be with me in the next hour. valley, we know this week is the week meeting of billionaires. they say this is the playground of billionaires. some important deals have been consummated their. it's an exchange of ideas but it is not open to the press. betty: there are some press who attend off the record. mark: i have always found that interesting because you hear these juicy tidd it's betty: and you cannot act on it. mark: you are told not to say a word but i think you get a sense. i think you engender some loyalty from these folks because they realize what we are trying to do is talk about the economy and how we can help the economy.
i'm sure they don't mince words. betty: this used to be a playground for the billionaires and it used to be old media. you've got rupert murdoch of those every year,les moonves and bob eiger. elin must is going this year so what does that tell us about the changing face of technology. it is mighty and it's a wave that will not stop. i guess these folks came to realize that maybe we need their insight. betty: what's also interesting is who does not go or who is not invited. the new york post had a snarky thiel is not going
this year. we don't know if they were invited and not attending but other people who have gone -- maybe they did not get their invites. mark: how do you get disinvited to that? was something said in the conversation? betty: maybe you held your fork wrong. maybe you did not ride yours right. who knows? mark: i think you and i should split the cost of rick fuld's house. it still all about greece. this is one of these things that's going down to the wire again. some of the european finance ministers are meeting today to hash out a deal. i will speak to the former u.s. ambassador to greece, thomas miller two, to get his thoughts on this. the has gotten to where
international creditors may be throwing their hands up in the air and saying enough. betty: the whole world is saying enough already. mark: look at global markets again today. betty: i will see you in the next half hour and there's much more ahead on the bloomberg market. they the donald trump catchphrase will not become your retired anytime soon. ♪
betty: welcome back to the bloomberg market day. it looks like donald trump has lost another business contact over his comments. the pga has pulled the grand slam of golf event from the trump national in l.a. this follows his break with nbc and univision and macy's. . the list is growing longer it looks like donald could be
working on employee relations at his own organization. it turns out the trunk company as one of the stingiest 401(k) plans allowed under federal law. there was a juicy story written about donald trump. he is running for the republican presidential nomination. tell us what makes this so stingy? for trumpd news employs is that his matches pretty good. if you contribute 6%, he will put in 4.5% to your retirement. the issue is the hoop you have to jump through. you have to wait one year until you can participate and wait until the end of the calendar year before the matching contribution shows up and his money does not become your money until six years after you started working there. betty: so not fully vested until six years -- that is a huge amount of time. companies that
are like this? does he stand out among companies? >> 401(k)'s are all over the map. some have these features and others including the nbc plan which are generous that allow investing in the first year. these plans are all over the place. it often can be hard to compare. hissomeone who talks about success in being the best of everything, this one is middle-of-the-road to lower middle-of-the-road. what about the trump organization? what have they said question mark >> this information comes from federal filing so they have not said anything. they have to do close -- disclose with the features are. for a few years, they disclosed they got matching contributions together. junemarch of 2009 through of 2012, there is no matching contribution.
that is usually companies do when they are in financial trouble. there are private companies so we don't know what their full books look like but like a lot of companies in the suspension -- in the recession suspended that match. it took a long time to resume it. betty: that's a peek inside, thank you so much. , much more ahead -- we will speak to the former u.s. and acid or to greece, thomas miller, about the crisis brewing there. stay with us. ♪
days left to reach a deal. we are live at the euro leaders summit in brussels. arabia has launched an aggressive airstrike campaign to take out rebels in yemen. we will take you to the front lines. mark: disrupting the real estate's nest. we will speak with the ceo of a company launching a tool for on-demand home chores. home tours. good afternoon. thank you for staying with us. let's look at the markets. stocks lower today. european leaders meeting to discuss greece. the decline is also due to a selloff in chinese equities. the snp