tv Bloomberg Markets Bloomberg July 31, 2015 3:00pm-4:01pm EDT
expect prices to stay the slow with oil? alix: they didn't win again. the olympic winter games. betty: and we take a look at business could post in iran. ♪ betty: good afternoon, i am betty lou here with alix steel. alix: let's go right to the markets right now. you're seeing a little bit of a deterioration in the stocks. the nasdaq is up. betty: we are off the highs. alix: yeah, we are off the highs. this is the last day of july, so you could see some rebounding going on, and that totally caught me off guard in that respect. betty: it did, and is could be a
sign of a top august. lowerthe s&p is at 13.5% than this time last year, and most people trade and they go to the beach. betty: go to the beach. plus, it is a friday. energy stocks i know have been hammered, in fact, hammered today quite a bit. the earnings you got from was lower, buton for a midday hit, we spiked up a little bit. alix: definitely the biggest loser of the day in terms of the s&p. but take a look inside my terminal and it tells a very interesting story as we look at the dollar index. there is a big dip down there lowest wagews the growth ever on a record, at least in the last 35 years. the dollar took a take a leg down.
is relatively near the neutral line, but that speaks volumes as what we are seeing in the market today. betty: and i think it was 2/10 of 1% as far as the employment index. and alix, the treasury market to year yield, you can see it is coming down sharply after that -- after that -- after that report. that was after the treasury yield went up. you wonder how could they, right? alix: it seems like janet yellen winds of notges feeding into inflation, which really is something that the fed is going to be paying attention to. so lots of interesting news did come out today. betty: indeed. alix: let's take a look at the top stories crossing the bloomberg terminal at this hour. the labor department says the growth of wages and benefits this spring was the lowest in a nearly three -- slow best in
nearly three decades. this is the weakest showing since the government started keeping track 35 years ago. isty: president obama warning that opponents of the iran a nuclear deal is putting a squeeze on congress. he said the policy for supporting the deal will be tough for lawmakers and "i can tell when they start getting squishy." z spoke about the deal at the white house today. the agreement is very, very powerful in its constraints on the iranian program and on its enhanced verification measures. we keep atas long as it, and keep explaining to others about that, and also keep the secretary kerry, and the president reinforce on a security measures more broadly, i think this deal is certainly close to perfect. betty: many want congress to
reject the deal. the cyclic israel and some measures of kong -- members of congress. alix: the international bank's recording record loss in the first half of this year and this is sparking criticism of the bank and its president. of $52rted a loss billion. the bank isn't required to turn a profit, but it does need income to support switzerland's local government. speaking today in miami, hillary clinton endorsed president obama's push for cuban-american relations. understandnton: i about the engagement toward cuba. as many of you know, i have been skeptical, too. but you have been promised progress for 50 years, and we can't wait any longer for a failed policy to bear fruit.
we have to seize this moment. poll, in a recent pew many backed opening up relations to cuba and ending the embargo. e-mails regarding hillary clinton's time as secretary of state were released today. many portions are redacted, and e-mails from 2009 focus on details of state department business. betty: and here is something that making -- that is making friends of facebook's founder mark zuckerberg to smile, he is expecting. zuckerberg and his wife are expecting a baby girl. they have been trying for years and endured three miscarriages. alix: well, a substantial raise for seahawks quarterback russell wilson. he paid less your poor a base salary of 652 thousand dollars, and now he has signed a
four-year deal that would will reportedly pay him it is million dollars. let's talk about wage inflation -- pay him $88 million. let's talk about wage inflation. --ty: and using dog he dna dna to keep doggies in check. owners of dogs checking into a new york building will have to have their dog partial dna registered and each owner will be fined $250 if they are caught not picking up after the dog's poop. so those are your top stories. alix: poop-diculous! betty: it reminds me of that story a couple of months ago from hong kong where they got the dna from trash on the streets and then they made it into this one portrait. do your member this? alix: i do not. betty: well basically, it was
about publicly shaming people. and it works. reporting second-quarter earnings from big oil companies, the nation's capital energy producer publish their worst quarterly results in several years. from we have an analyst raymond james who joins us now from scarlet -- charlotte, north carolina. what was your broad takeaway? would wasad takeaway that these were messy quarters for both exxon and chevron. there was currency movement, there were various hot items, chevron had an impairment charge. these were not numbers, but let's take a look at the bigger sure here. of these companies have cut of their capital spending by more than 10% -- both of these companies have cut their capital spending by more than 10%.
course, we have been watching this entire earnings season. oil producers announced cuts, cut to headcounts, cut two projects, cuts to rig counts, thethis carries with it theme of the medium-term oil delivery -- recovery. carries theo it seeds of a medium-term recovery, within the oilre companies say that it carries the complete demise of the oil sector. : hardly a complete demise, both of these companies, at least, were profitable, and profitable in one of the worst periods in recent years. they are certainly not going away. their dividends are safe. i've been getting a lot of questions about this in the past
month. yes, we have seen smaller energy dividends.ost -- cut with exxon and chevron, dividends are safe permit it would be inconceivable for these safe, it would- be inconceivable for these two companies to have this otherwise. certainly, they need to cut spending, which they are doing, but the dividends themselves are safe. alix: the bigger question is when are we going to see m&a? that could be an account could account on the raise all of oil price on the year on year, so does exxon need m&a right now? pavel: no, it doesn't mean that they won't need m&a, but it doesn't mean that they won't do it. m&aave seen one very large
deal this year, that was shell that was thed exception that proves the rule. as a general premise, if a large energy company wants to buy assets, they can buy individual individual acreage. they do not have to do megamergers. megamergers are expensive, they are disruptive, and they are very rarely accreted. would definitely not rule that out, but even that is by no means necessary. alix: what was the catalyst b for that to start happening, even if it wasn't a full takeover? pavel: well look, there are asset deals all the time. there are companies selling addition to buying periodically. when i am talking about large-scale, corporate m&a, i do not think that is on the table at the moment. certainly there were some know,ssed companies, you
distressed corporate entities, so many that ran into a liquidity crisis for example, then companies that have a stronger talents sheet, and the two that you mentioned are in a strong balance sheet category, they could look at it. they don't need to do m&a, they could have plenty of opportunities as i said. thing these companies need to be doing is adding more assets when they are already not drilling enough on the assets that they already have. let's all right, pavel, look at the context of the macro environment to then. where are we going to be in the second half of the year? pavel: probably close to where they are today, maybe moderately higher. there is not a lot of catalyst for recovery because saudi is pumping all out and iranian oil will becoming back to the market, you know, maybe in 6-9
months after the embargo gets lifted. the global demand is not looking all that splendid, either, so i think we have to see more of a supplier response from this austerity across the landscape of the industry between a production peaking, we have seen brazilian production taking, so there are signs that the international oil supply is starting to, you know, decline, come on the other end of the curve. but it is still going to take two or three more quarters before those declines really begin to move the needle on surprise. betty: all right, pavel, thank you so much for joining us on the oil sector. alix: coming up on the "bloomberg market day," the latest batch of hillary clinton e-mail is giving her rivals more fodder. we will tell you what those messages have revealed. ♪
betty: welcome back to the "bloomberg market day." i am betty lou. alix: we are going to get straight to -- i am betty l iu. alix: we are going to get straight to the markets with julie hyman. expedia is trading at a record today and priceline is on the rise? after yes, expedia rising second quarter analyst estimates. this is excluding the revenue that is a selling booking for up to 20% and their growth was up 35%.
remember, expedia is in the process of acquiring orbits. that jaffray was saying you should buy the stock going into this morning report regarding priceline and that european travel trends are looking pretty strong right now. linkedin, this is the one we were talking about all day. it is down 10% right now. the company raised its forecast, but a lot of analyst and investors -- analysts and investors are concerned about the core business, and growth is coming from the acquisition of an educational service website called lynda.com. responsible for the clinard the shares that we are seeing today. and thes up today, flying cameras, or what i would creating $5 are
billion-$10 billion in sales and the shares are up 1.46% right now. take a look, we have a look at entiments on this ring a. this is when they began to rate the stocks. this is the most bullish as measured by the number of of by ratings that we have seen from the cell by communities -- ssel y-buy communities -- sell-bu communities. sentiment,g of the shake shack is up 12% today for no reason. a couple of days ago, the lockup on the shares expired, and we saw them rise. that happened on wednesday, but then they kept going up and that any fundamental news. as you guys know, shake shack has the potential for being volatile. that is a for this lazy friday. , we: thanks, jules
appreciate it. betty: why those stocks go up or down, we don't know. and now a look at the top stories. and a federal judge has ruled 30 charged against dylann roof, the white man who killed nine black churchgoers in a church. 21-year-old suspect pled guilty to all counts. in zimbabwe, the country wishes to extradite the american dentist who killed of a lion. aey say he lured him out of national park in order to kill him. betty: and a wing flap was discovered on a remote indian
ocean island and tests will be done in france to decide if it was the doomed ocean liner -- doomed flight mh 370. the flight disappeared last year with 239 people on board. those are your top stories this hour. and it is friday, and it is a perfect time for a document dump. we are getting one from hillary clinton to be at the state department released the latest batch from the former secretary. are hearingter we that we are working in her tax returns later in today. and we are joined by mark halpern -- mark halperin. the clinton folks are
saying that this shows is that they are transparent by putting all of this stuff out, but one can't notice that it is a friday, it is summer, and the records are out, included the health records, including a note from her doctor commenting about her health, but this is not big breaking news, and this is another amount of e-mail groupings. there are still many more to come. there will be another group later. and i suspect that's because this comes at 8:00 on a friday, that will be more interesting. it have her source of income and it will be interesting to see what we will learn about how president clinton made his money. there are many years of tax returns. there is this missing period and period whereo they did quite well. given that it is a friday and given that it is a summer, the
weekend may show that there is a lot to read. betty: but they have done this before, right? they have done this before. the timing, right? mark: not just the clintons. alix: i can tell you about the earnings of that i have covered on a 4:30 on a friday, it is like, come on. mark: as we say in arkansas, it is a little bit of chutzpah to put out the tax records and the financial records and the health records on the day that the state department is putting out the e-mails. have a lot of confidence in reporters' ability to read the information that is coming out. alix: what is the biggest monkey on hillary clinton's back right now? concern thats the some voters do not have trust in her. alix: the e-mail, what? e-mail, the whole thing, but we will talk about but on "all due respect,"
clearly a lot of americans don't find her trustworthy, don't find her believable. she's got to address that in context of this huge storm. we will see what comes out of the tax records as well. she has got to convince people to think new about her, but she does have this opportunity given how well know she is. alix:: tune in alix: -- tune in tonight to view "with all do respect" at 5:00 p.m. on once again for beijing. the chinese capital has been selected to host the 2022 winter olympics. we are going to break down how much it costs. ♪
the -- has been chosen to host the 2022 olympic games. it will be the first city to have hosted both the summer olympics and the wind her all of it. betty: we're joined by david gora. this came down to these two cities, which is sort of strange, in the past, you had a many cities vying for this, ukraine dropped out obviously because of the political tensions of there, but it just highlights the fact that it is hard to get support for the olympics in this day and age. alix: we just saw in that graphic that $1.56 billion is the budget for china. what kind of stuff to the have to build? there is quite be high-speed rail going there,
beijing is already building a second international airport. they say that it is not for the lib ex, they said it was just going to be built in there now. if you look at every olympics games in the modern era, all of them have been over budget. budget was 1000% over budget. are many, many billions of numbers. alix: good stuff. betty: david, thank you, david ura, thank you. david: have a good weekend. alix: it was so nice working with you, have a great weekend. we will be right back. ♪
connecting rural areas to the internet and wants drones to move up to 90 -- 90,000 feet to connect with lasers. mark zuckerberg talked about it with emily chang. many people do: not live within a range of a network. satellites is one way to do it. microwaves are another way. there needs to be solutions to bring connectivity to people. getting more people online can help facebook. says that the project will lose money for several years. and a new round of funding for the company, that is according to the wall street journal. that valuation would give
facebook a record. they reportedly raised $1 billion in their latest round. areshares of linkedin falling today. they are forecasting revenue better than estimates, but there -- but the acquisition of lynda.com is causing concern. the company says that full-year $2.9 million. technology -- could technology soon be calling balls and strikes in baseball? a computerized system recently pasted these calls this week. this is not new, but this was the first time it was employed to make the calls. those are your top stories. now as officials hammered out
details of a nuclear plan with iran, investors started to make assessments of their own. a large country with low debt, lots of oil, and plenty of room to grow, but is it the world ready to do business with iran. we recently traveled to iran to get answers and earlier today hans who shared his impressions. part of the country that many -- but most of the country is incredibly educated and eager. gauge. the part of the country that is the hardliners, they're the ones pushing the hardest not -- on their side. i see population that the
eager to do and are business with the rest of the world and the u.s. betweenry disconnect what the government says and what the people of iran wants? alix: sound like it from what you have told me. it definitely seems like what you hear in the u.s. and what is filtered through versus the people there. they all speak english and would probably have a love for franchises and things of that nature. >> it sure sounds like it. >> what is impressive, i just tires.ere to kick the i went there with a travel agent to see what it would be like to go there as a tourist. it was amazing, people were
self-taught in a list. they had never been to the u.s., they learned in school and watched movies. students, all college no international people there, frisbee,ed up ultimate people studying to be tour guides, they were playing a popular sport in a country that does not allow it. but they were reaching out and welcoming foreigners. bank loanseft over from before the sanction. >> and they also have bilateral countries iner asia and commercial debt from banks, and they have never defaulted. >> do we have a fence on what the bond market appetite will be there? >> this is a country that has
been off of everybody's radar for a long time. i do not think that people appreciate how accessible it is culturally. if you go you will feel comfortable. really, many sophisticated industries. they will borrow at attractive rates. these will be cheap when they first come out. attractl issue cheap to buyers. they will not default. it is going to be a very good investment when it comes to market. that we have an idea investors have experience with iranian debt? bonds, they have had two that were issued for about one paid them on, they time. they used to trade pretty for delay. i spoke with a traitor and he ader andt they -- tr
they treated them every day. they had experienced. >> what are the problems that iran faces as it tries to enter the global economy? >> the tensions they have running the country, you have the hardliners, the reformist and within the reformists there are industrialists who were there before the revolution. there is a jostling for power. they might start losing power. once they reintegrate, they will have a problem with those who manage the institutions, they are very well educated, but they are naïve in terms of finance. they will have to consolidate commercial banking, they'll probably have to work off of loans, and frankly reintegrate
with a payment system. it will take work. >> any timetable on when these changes will happen? >> as far as the u.s., there will be sanctions lifted probably after the international community. one would hope in six months, but it could take 2-3 years to transition. hans use -- s hughes. coming up, the next generation apple tv could be revealed this fall. we will tell you how old the first -- how it will differ from the first. ♪
alix: time now for a look at the markets. we will go to julie. we are feeling the summer friday. we are looking at the nasdaq, pretty much unchanged. but we have now moved around much. the various sectors are on the move. oil and gas has consistently been the worst performing. health care has consistently been a good performer. technology has been down. they really has not been a big
directional change as the day has gone on. it is just a question of the size of the moves. gas theret oil and are a couple of things working against that group. oil prices continue to move downward. his 46.79 a barrel -- it is $46.79 a barrel. that you have individual companies in the energy sector. exxon mobil, we have been talking about all day long, they missed estimates. in resultso turning that are the lowest profit and about a decade. are what we those
are looking at in the energy sector. this morning we got the index, the man -- the measure of wages. yields goingg at the lowest and the perception that if we are not seeing wage growth, the fed is not going to be raising rates sooner instead of later. but then we get the big jobs report next friday. and for the s&p 500, it feels like it has in a quiet july, but we are up percent for the month. we are up 2% and this is the best we have seen since february. even though it feels like the season, a learning little good and a little bad, it is over all interesting.
seen -- ngs we have the new that we would have macro issues as well? julie: it is amazing that we are up 2%. alix: a look at top stories across the terminal, spending much more time watching video online. we will spend an average of one hour a day doing it by next year. this is according to a study that says that the number of average people watching tv will rise this year, but fall in the next couple of years. and according to the new , weersity of michigan index are looking at the rate for consumer confidence that has risen. making whiskey that will be
out of this world from japan. it will be sent to the space station next month to see how gravity effects its flavor. -- the lack of gravity. suntory also owns jim beam. and it cut back and water usage in california. water use of their fell 27% in june, leaving a reduction order by jerry brown. it is one of the worst droughts in its history. and a rare pre-civil war $179,000card fetched at auction last night. it dated at 1860 and was purchased by an anonymous buyer. it was in a family for more than
150 years. those are your top stories. there is a report that the next generation apple tv will be unveiled in- september. it will be slimmer, faster, and will be compatible with siri. this is the first major change since 2012. emily chang joins us now with more. ?hy did it take so long emily: exactly. i had the first and there has not been that many updates to it over the years. this will be the most significant update since the beginning, slimmer, faster and there is supposed to be a developer kit that will help a person develop apps for this. we don't know why this is indeed coming out in september. it has been reported by buzz see that they were planning to introduce this in june, but they pushed it to september.
what is unclear is why they would be doing it in september, that is the time normally reserved to unrevealed -- unveiled new phones. and it will come out with a new streaming service, something that apple is working on and they have rented to challenges with that. that according to but speed is not happening until next year. we don't know if it is happening all. there were reports that apple was working on a tv set and that has been shelved. does not seem like the streaming service has been shelved, but what we have heard is that it has been difficult to secure partnership with providers.
moving bed indicated that he had , saying heg to apple was excited to work with them, but we don't know which -- what real progress has been made. it is a difficult process and content providers are on lockdown. alix: and we know that apple does not want to do it unless they are going to crush everybody else. and you are also looking at samsung today, they have seen a lot of their market value disappear in july. what happened? $10 billion in market cap has been marked off. the main problem is that same song misread demand further -- misread -- samsung misread demand further new phone -- for the new phone. many people wanted that ed, and
they expected it to sell. but are they innovated enough to keep up with apple? samsung has moved lower on the list. you wonder if they are at risk worldwidesing domination. we will look into their problems. some people think that it is a branding problem, especially in the u.s. not looking good for samsung. song -- samsung makes the chips that our most of the world's cell phones. -- it seems itt to happen really fast. six months ago we were talking about apple losing market shares to samsung and it was so appealing in china, was there it -- was there a switch? with new phone models,
there was a huge discrepancy in supply meeting demand. they made too many and that have a huge impact on the bottom line. samsung is going to be up against apple coming out with new iphones this fall, potentially, so that will be a huge act to follow. we are coming into the holiday season and people are looking to upgrade devices and get new things. this is going to be something that samsung has to think hard about and it certainly seems like if you have one bad quarter, it can have a major impact on your overall market share. alix: thank you, emily. catch more of emily on bloomberg west. alittle bit of apple and little bit of samsung. still ahead, in the wake of commodity prices, we will look if this will spill over into other sectors. and we will look at the credit market.
♪ alix: as energy companies continued their roller coaster rides, how large is the risk of contagion's? first off, what is the correlation between underlying commodities and the high yield commodities? >> for a lot of them, they rely on oil. that is for the valuations of what they are going to drill. they might not even -- they are trying to grow into their capital structures. they want to improve and increase revenues enough to legitimize their debt load. these are companies that have ,ore debt compared to income
then the more credit worthy ones. if they get lower income, that is a big problem. that means they cannot pay bills. you have a problem if you have billions of dollars of debt. alix: it seems like investors were happy to pump money into these companies and then all of a sudden, they decided these fundamentals suck and we are out of here. >> fundamentals change. alix: the people believed last year, but how many people on your show, they said we think oil will rebound and we will bet a lot on oil. a lot of people had faith. now the rhetoric has changed. china is slowing, we have emerging markets faltering. this is a different story. people are saying we will actually see this lower commodity price for a while. alix: is that spreading? >> so far it is not. you do see dampening in credit,
if you look upon prices it is spreading. you are seeing it pick up in the second quarter. that was the most since 2011. that is an increase in default. relegated to the energy and metals and mining, maybe, they are not sure. it depends on why. why are oil prices this low? ?hy coal that is a separate story. it is cyclical. if it is because there is a slowing of growth globally, that is a problem for all companies. alix: what will it take for investors to want to buy these again? >> stability in oil prices. alix: stability. >> all that would have to happen
is stability for them to value with these bonds are worth. to begin to evaluate tons of companies that are incredibly speculative as far as what they could drill and when you have a moving target as far as what the price of oil is, so that is a big factor. alix: how much money can you quantify for me the yield for energy? >> this is a $2 billion market that lost 4.5% this month alone. already you are talking a billion dollars -- $8 billion of market loss. alix: is it that a lot? >> for big names, and for others. alix: there is a question about how much more pain -- >> there is question about how
and i'm joe weisenthal. alix: it is a summer friday, u.s. market indian lower on earnings. is, but the question "what'd you miss?" they are canceling oil rigs, is the industry taking a hit? alix: and the bone elbow markets that could be dragging down the world economy. and we talked to the economist who tried to save greece. alix: we want to begin with stocks. stocks pretty much flat on the day, but you are looking at the dow lower for two days in a row. it is the last day of the month. volume is off by double digits in the s&p