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tv   Bloomberg Markets  Bloomberg  February 22, 2016 10:00am-11:01am EST

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from bloomberg world headquarters, i am vonnie quinn. here is what we're watching. stocks stay on a roll, climbing. can equities continue after the best weekly performance by major averages this year? another --p faces tomorrow. how will jeb bush's departure impact the race? hillary clinton is the big favorite in the next primary. is the clear path insight for her nomination? apple takes the battle over privacy to congress. calling on the lawmakers to study the issues raised rather than open up pandora's box. 30 minutes into the session, let's head to the markets desk where julie hyman have the latest. rallying ins are
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the u.s.. continuing the rally we saw around the globe. stocks are really strong out of the gate, up more than 1% across the board. it has something to do with oil prices which are surging. oil is spiking higher on the day , up by nearly 7%. even approaching $32 a barrel. gaining momentum as the morning progressed. i want to take a look at the oil stock correlation. this is something that we have been looking at all morning. this is the oil and s&p 500. the has seen a downtick in the correlation but it still is historically on a relatively high basis but it has gone down from where it was earlier this year. oil is not the only commodity that is higher today. theys, gold, aluminum -- have been trading higher in the session. if you look at those metals, you
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see strong gains. that means that besides energy stocks, materials stocks are performing well in the session thus far. have freeport back ran gaining on the day. percentagewise, a couple of the best performers in the s&p 500. again, aside from the oil stocks we are watching. itnnie: the big story is brex and the pound getting crushed. julie: it is a big one-day move. more ineeing it down 2009 -- seeing it more down in a single day since 2009. we did see they like down in the pound. i want to look at the volatility uptick that we have been seeing in the pound. if we take a look at the bloomberg, we see we can volatility, it has been surging as we have the unpredictability
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of the situation as we heard them talk about on "bloomberg ," we have increased uncertainty. we will not know for a while. vonnie: thank you so much. let's check in on the first word news. matt miller is manning the news desk. matt: we are going to talk first about david cameron, he will make the case for staying in the european union to parliament. his speech this morning came after boris johnson became the highest profile figure to campaign for written to quit the union. that sent the pound plummeting. the argument that britain is eu, theff in the referendum is on june 23. a police commander in afghanistan -- killing at least 13 people including nine civilians.
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local police were among those killed and another 19 people including civilians were wounded. the taliban has claimed responsibility. a swedish think tank says global arms exporters increased 14% during the past five years. the u.s. is still in the top position after sales grew 27%. biggest exporters, china and russia, also grew. the u.s. and russia supplied a total of 58%. a team of the cdc is starting work on a case-control study on the zika virus. they want to find out if it to be does cause babies born with devastating birth defects. the study kicked off with a training session in brazil in the northeastern region, the epicenter of the outbreak.
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black,y chair, draped in will greet the supreme court justices today. they are back at work for the first time since the death of antonin scalia up. his chair will remain as a tribute. news, 24 hours a day powered by our 2400 journalists. i am matt miller. vonnie: thank you so much. year -- buyers emerged, flexing u.s. and equities. deepest --t of the since 2014. a rally in commodity producers and a weakening british pound. let's bring in steve wood.
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$240 billion worth of assets under management. is there anything about this u.s. market that would tend you to get more excited about the u.s.? steve: we are looking at it from the cycle perspective. we also look at it with sentiment in the market and also a valuation perspective. and 2016, they were stretched at high valuation in u.s. markets. the slowed off a bit in first quarter. that was an opportunity to get into names that we like but from a geographic perspective, we would say whereas the u.s. economic cycle is maturing, the eu and japan are not. regionally we think there is more medium upturn in europe. the united states may be more of a name by name stop picking environment. vonnie: q8 beginning and continuing in europe is going to be better for u.s. stocks but it is because of qe and not
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fundamentals? steve: i think that is part of it. for european companies and , it willexporters juice up the european economy. regionally, we would see more medium term opportunity in europe as long as you get the currency right. vonnie: exactly. how do you go about hedging for currency? steve: it depends on what your strategy is. 105 but there doesn't seem to be tremendous upside in terms of strengthening. you have seen what is happening with the british pound. want currencies to understand where you are in terms of earnings. it is not all or nothing. not 100% or 0%. you look at it moving up and down in the cycle. the british currency, it could
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be a weakness in the u.k. economy is adding to some of the weakness of the sterling. when you say the general index, what do you mean when you recommend to us? active managers, our security sectors, fixed income and they would identify the best names within a country. germany would be a strong one. there are two european economies that can be strong exporters. but where are the names that are going to benefit from oil prices or a weakening euro exportation into the u.s.? a common- tends to be theme that we see but japan should not be overlooked. the yen isjapan, moving as looking to be difficult to managers. what has that done for your japanese portfolio? steve: what we have seen in japan is the first time in a long time that the volatility in
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japan is negative. an active space. the bank of japan is committed under the new chairman to pursue quantitative easing. by andll be episodic and large, there is weakness in the yen, that could be good for the and japaneseomy consumption. we would advise that you don't take a 25 or 50 years view on whether there will be a definition of success but in the near term, these quantitative easing policies by the bank of can be good for equities. vonnie: 13%-14% in the last year? steve: that might be a premature forecast to have. or cash, it stocks is a broad world and multi-asset and global. you have a lot of options. look at valuation cycles.
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vonnie: steve wood, thank you so much. is a huge week for retail earnings. big names all reporting and we will give you them and take a look at what today's consumer says. apple is now calling on congress to form a committee, we will have the latest on their battle with the fbi. york opened its new flagship in downtown manhattan and we take a look inside. those stories and more coming up. ♪
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vonnie: good morning. i am vonnie quinn in for betty liu. it is time for the bloomberg business flash.
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international monetary fund manager says crude oil prices well probably stay low for longer than expected. she is urging gulf arab oil production companies to cut spending and boost revenues. speaking in abu dhabi today. tax should beue adopted. liquidators has a three times higher risk of causing cancer than previously repeated -- previously reported. the cdc reported there was less danger. six cases to 30 cases for 100,000 people. the earlier report says there were 2-9 cases. a federal judge has ordered bute to unlock the phone the company has refused and today, they are suggesting congress get involved by forming
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a commission to discuss the implications. latestt is your bloomberg business flash. that's go to the bloomberg markets desk. julie: i want to pick up on that last story with apple. has been interesting, during this whole situation and the standoff with the fbi, we have not seen reaction in the stock. it really has more to do with a broad privacy issue. this hasok at how performed, since we learned that the u.s. was requesting the unlock of the phone, it is down about a quarter of 1%. not much reaction. the other story, lumber liquidators, that really has had a big effect on that company. as shares are down 20% today the cdc revised its report on the dangers of formaldehyde, how much it is amazing. it has had a big effect on the stock over the past year.
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since 60 minutes first reported there was an issue with the flooring. you did see a tiny up on the but then theeport stock turned down once again. so we have seen an essential collapse over concerns of the flooring. what is interesting is what has happened to the sales. take a look at the bloomberg here. i'm looking at the company's annual revenue going back several years. that is the camber bars. we are seeing continued increase areavenue through that even though the pace of the revenue was decreasing. here is the forecast revenue by analysts, going out the next few years. although they are currently fiscal for a drop in 2015-2016, they are looking at recovery further out. it will be interesting to see if this latest cdc decision changes
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the calculus on that. vonnie: thank you for that update. still ahead, a break weekend in primary politics. big wins for donald trump and hillary clinton. jeb bush might have been the biggest loser, ending his bid for the white house. ♪
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watchingou are bloomberg markets, i am vonnie quinn. politics. now to hillary clinton beat bernie sanders in the nevada caucuses, winning support from iparty voters and casino workers. in the south carolina republican primary, donald trump topped the field with marco rubio just nearly edging ted cruz for second place. jeb bush ended his campaign
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after coming in fourth place. joining us from charleston, s.c. now is the white house margaret talev. which way are the supporters going? margaret: jeb bush started with so much money and there isn't much left. there is a real furious scramble for the previous donors. to a large extent, they seem to be heading towards marco rubio but it is not over yet. that,sh has yet to -- there is a lot of tension there. we are seeing now some important corporate support hedge fund support for john kasich. whether that is an outlier or whether these are real as a
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competition is yet to be determined. but there is an interest to prevent donald trump running away with the nomination. vonnie: you reference it there, --nd druckenmiller druckenmiller is now backing john kasich. will others follow? will john kasich get the boost that he needs? margaret: these are interesting and important people. not a consolidation, this is an uphill battle for john kasich to break through. particularly when there is so much pressure among the republicans who believe that it is a now or never moment. aboutis even debate whether a three-person race is too much at this point. should it be a race between
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donald trump and ted cruz or marco rubio? these are the kinds of discussions, the serious scramble for strategies that are going on now. side,: on the democratic hillary clinton's of winning now, carolina is above 99% is that a little skewed? can bernie sanders pick up momentum? margaret: if bernie sanders one south carolina, we would be in a different ballgame going forward. every poll shows are in the ballpark of 20 points ahead, some even further than that. bernie sanders goal in south carolina has got to be to cut into the margin. if he can get it down to less break theif he could 15% threshold, it would be huge for him. if he can cut into african-american support amongst younger african-americans, that is the goal for him to keep the narrative going.
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in terms of interest in him, he has a challenge going forward into the super tuesday, not only voters but also hispanic voters. these the larger states, are the challenges. that is what south carolina is testing the ground for. vonnie: you are in trial since -- you are in charleston, s.c. and you will be reporting on this for us. margaret talev, thank you so much. group, chrisch krueger. let's start on the republican side. your big take away that marco rubio is the only nominee to be watching at the moment? potential nominee? chris: what you saw in south carolina over the weekend has folded into a three-person race between donald trump, marco rubio and ted cruz.
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it is now a two-person race and ultimately, marco rubio will ultimately win. and you look at donald trump's numbers, he has the highest at the lowest ceiling. highest unfavorable numbers in the field. marco rubio is likely to consolidate a lot of that support. his theory is that he is everyone's second favorite. marco rubio does have a zero margin for error here. the path is much clearer for rubio with jeb bush packing it in. vonnie: you say we will really know on march 15 how this will turn out. aboutoes this stop being retail politics and pete -- and purely about politics and what it will do for americans? i don't think it does. this election has turned everything that we know about
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politics on its head. we are in a zero gravity environment. , if they really mattered, jeb bush would still be in the race. it is an election with people in --icy positions not print not really mattering as much as they used to. vonnie: on the democratic side, should bernie sanders have campaigned more in nevada? he might have campaigned a little bit more but he, the thing that is interesting with bernie sanders is that he is playing the long game. he is already talking about states in march. he has a ton of money. he does very well on college campuses. a problem for bernie sanders in march though, is when you have of delegates,unty it's spring break. so a lot of the college campuses
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will be empty when it is time to caucus and primary in the key states. yes, bernie sanders came close in nevada. 74-year-old a democratic socialist is going toe to toe with the strongest front-runner in modern american political history, it is a huge story. vonnie: you know, i was reading over the weekend that donald trump's ground game is a lot more sophisticated than people realize. there has been a heavy presence in south carolina and there will be and is in nevada at the moment. obviously, that is helping. be goingr ground games on is more money flows into marco rubio's campaign now that jeb bush is gone? chris: the republicans will be caucusing tomorrow night in .evada
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marco rubio has a strong ground game there. it is a three-person race and donald trump continues to over perform. everyone is sort of thinking we are calling the top on trump but donald trump is continuing to do well in the march 1 states. south carolina should have been but donaldrritory trump one south carolina and he is very well positioned in alabama, georgia and he could even -- if donald trump beats ted cruz in texas on march 1 that is it for ted cruz. vonnie: thank you so much. that was chris krueger. thank you for joining us today. coming up, we get insight into the presidential race. ♪
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>> live from bloomberg headquarters from downtown manhattan, you are watching bloomberg news. julie: we are wearing a lot of
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different hats today. accused ofiver killing 16 people in michigan makes his first appearance in court today. he went on a shooting spree in kalamazoo, michigan on saturday. .he shootings were random pare t educatorsrs and six died in the sandy hook shooting spree. the gun maker on trial hopes to be dismissed in the lawsuit. ransom, forin islamic state to release the christians it has as hostages. macedonia restrictive border
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access over the weekend. they restricted access after austria put in place a silent regulations. obamalady michelle guest, aed a special 106-year-old woman. she was so excited, she started dancing. google news 24 hours a day, hour-by-hour more than 2400 journalists around the world. >> thank you. all eyes on the consumer this week. economists will be watching where they put their money. starting tomorrow, a bevy of housing reports will roll out throughout the week. by friday we will get a look at how much growth the economy has seen in the quarter.
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here with a take on how the u.s. economy is faring is our chief economist carl riccadonna's. people are saying the reason see ahe u.s. will not recession is because of the consumer. number coming up on friday, we're going to see a further downward revision. but you economy was close to stalling in the fourth quarter, and what kept us going was consumers. we also have generated data on consumer spending. what we are seeing is that consumers are the lead line for the economy this year. demand for things like automobiles, houses, and big
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ticket purchases is mostly intact. investors are muddling through good, not great. >> we have seen how sales pretty healthy over the last few quarters. will we see a pickup in wages? that is a powerful driver of stronger consumer spending this year. with the unemployment rate below 5% for wage pressures are starting to lift. goes ae wage pressure long way. that is an important critical engine. a soundnt to show you morning. this >> looking out the next couple of quarters, we do not see any sign of an upturn. there will be another recession,
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there is no way around that. we will have 48. >> to put that into context, he says it is not imminent minute in the next 12 to 18 months. thesesaying that all recession promoters -- completely wrong? >> we always have to be cautious of recession risks. when the economy is slowing down as much is it did in the fourth quarter, then the vulnerability economy accelerated. people need to a valiant what are the real drivers of the economy going forward. it was an export driven recovered from the recession. that driver is no longer present. now it is a domestic spending story. the unpleasant rate as low as it is, it is a pretty resilient story. recession will come eventually, but it will be several years
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off. >> we need existing sales to do better this week? in midwinterg data we can keep at arms length. it is sensitive to the low season for the sector, whether financial market movements can distort that. we need to focus on his consumer related metrics, less on housing. housing data dim to the monitor, in march,n again april. >> thank you so much. now and look at the consumer from a main street point of view. rolling out the earnings this week and, starting with home depot. our retailers holding up? they should be holding up pretty well, but that is not potentially the conclusion we will come to. we heard the consumer
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potentially hasn't spending power. is the consumer spending in u.s. cap,lers like macy's, like department stores and so forth? spending, andr is with various chains across the country. but they are actually looking to put their dollars into experiences. what that means is that in hospitality, and restaurants, in the home business, they are improving and trying to entertain more at home. it is about the kinds of retailers. experiences comes down to the way you are treated. for the last 14 months, sick consecutively,hs they have grown and exceeded the other chains. the small chains across the united states, ellen pao driven -- mom and pop, not publicly
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driven, those kinds of retailers are able to go to the customer, engage with them, bring them unique services and products and look after them in a way that may be harder for large-format companies to do. >> some of them have been making mirrorort on this, to what those small retailers have been doing. , a $50 billion overhaul. they are trying to be the curator of your purse. >> you are absolutely right. it is an already channelization to get to all of these places. trying to get down to the granularity of how to interact one-on-one with customers. by the way, those companies have done incredibly well at getting themselves into that position. remarkably so. >> it is now almost a prerequisite, putting better
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.echnology into your firm it does not mean you will win the extra consumers. who is winning on the choice front, giving consumers exactly what they are looking for? they like to be dressed up for these experiences, most of the time. >> if you look at a company like likeorilla secret, -- victoria's secrets, they have had a quarter that is fantastic for them. what they are trying to do is online and in-store, focus on how to return the visitor. see who is coming through the door and try to not only convert them, but increase their market size. to watchwill be one this week. they are a fantastic company doing everything they can as a vertical retailer to deliver that promise. >> vertical retailer meaning? >> manufacture of products selling directly to customer.
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>> what about inventories? are we seeing healthier inventories? >> no. the weather has been a big factor in that. you have even seen that with some of the larger players and entiren the north face inventory. people are going to be seeing that across the board. >> there was a story over the weekend about namebrand credit cards. they are doing pretty well at how balances have gone up. is that a concern at all? obviously, something we need to keep an eye on, with what happened years ago. our consumers starting to spend on these again? >> i think they are, especially as that loyalty program is tied to that credit card.
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more dollars a lot going into that form of marketing to retain that customer. you are seeing the customer getting comfortable with that meeting -- medium. >> who will be the winner this week? >> al brands. >> thank you. as we head to the break, live pictures of the house of commons in london. prime minister david cameron is speaking this hour about the reform deal he struck with fellow european leaders on friday, saying that it brings concrete reform in all areas. he also says trade deals would take years to complete outside the eu. he is making the case for staying in the u after the london mayor sent a valid plummeting -- sense the balance plummeting saying he would campaign to split from the eu.
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you can watch the event on bloomberg. stay with us. ♪
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>> this is bloomberg markets. it is time to get you caught up in all the action around the world. in asia, oil rebounded. when the story out of the region, there is new talk about .he top job at the securities we report from hong kong. veteran china banking executive is the newly named chairman of china securities regulatory commission.
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chairmanly served as of the agricultural bank of china. chairman 's policies led to an incredible surge. chief has many tasks before him, including an overhaul of ipo, the expansion and hong kong trading link, indices. >> thank you. heading higher on a commodity rally. mark: this is the charge that highlights how european primary equity benchmarks are faring. it is green all the way up the middle version of the chart. the euro stoxx 50 up by 2.1%.
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positive comments from j.p. morgan chase today about the u.k. stock market. we will come to those at the top of the hour. this is the industry group on the stoxx 600. all 19 rising today. don't forget, last week it had its best week in over a year. since the lows of february 11, this index has rebounded by 9%. this is the story of the day, he boris johnson, a day never believed where he could move the currency so much. this shows how currencies are moving against sterling today. some of these gains you would think would be one month gains. but they are one day gains, and it is all 31 currencies, which of course is coming against the
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pound. his supportn puts behind the leave campaign. and there is prime minister david cameron trying to sell the callingstruck with his -- with his colleagues. >> thank you so much. we will be keeping an eye on the prime minister's statement before the close. markets, wet u.s. have the latest from the mastec or we're looking at two tech stocks in particular. >> the company could reach out to potential bidders as early as today. is exploring board
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strategic alternatives. some participants could be verizon, at&t, or tpg. after is a meyer is under month of pressure as it ebitda sincen she took over. ite controversy for apple as iphonesing to unlock the of a terrorist in the san bernardino attack. will the revenue growth go into the quarter, and how will this effect last year's lows? thank you so much for that update. staying on apple, the company's
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on lawyer is speaking out abc's this week. he warned about the global danger that would, if the government on its way. >> avenue o'halloran's possibility to maintain the trust and faith of millions of people who depended on apple to produce a product that protects their intimate personal life. this is a pandora's box. we are not talking about one magistrate. there are hundreds of magistrates, there are hundreds of other courts. there is no limit to what the government could require apple to do if it succeeds this way. tofor more let's go washington dc. we have been covering apple's trials and relations four years. apple is pushing this on to congress. what do you do when you
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don't want to make a move, get congress involved. it is the perfect solution. >> we are seeing apple take this from the court of law to the court of public opinion. there are some reasons for that. the nation's mood on that is roughly split, maybe leading to de of the fbi. they are worried that the government policies will go to far. apple was trained to take it beyond the courthouse. is trying to take it beyond the courthouse. astell us who will take though -- will congress take this up? >> they were invited to come to think their case and see what was going on. tim cook has had a history of
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performing well at capitol hill. he made a debut there regarding tax issues. it was widely seen as doing a good job of that. i has a lot of print equity. in anything that will come out of a hearing will not sway the other. >> a totally different battlefield for apple, trying to make is a policy debate rather than a debate in the courts. the administration has set their backing the fbi. the fbi has been looking for a case to litigate on this issue. we are seeing this out of california now. >> thank you. we will be keeping in my on that -- keeping an eye on that. luxury retailer barney's is opening up a new flagship in lower manhattan. we will take a look inside the 15 square thousand lo for location, next. ♪
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>> you are watching bloomberg markets. a manhasset homecoming of sorts -- manhattan homecoming of sorts. stores on the3 bankruptcy in 2012. but now they have built a new flagship below 34th street. ♪ >> barney's new flagship store in downtown new york. 58,000 square feet, just open. homecoming, barney's was founded on this blog back in 1923. >> there is much nostalgia, but it isn't an opportunity to engage with the modern downtown
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manhattan customer that we believe is underserved. >> barney's is not the only eyeingretailer opportunity in downtown manhattan. all told, the city will gain 650,000 square feet of additional space. >> do you think the market has the capacity for all these stores? >> i think the customers and the market will eventually decide that. haveour forward plan, we worked out a unique lane of business. we differentiate ourselves from those top competitors. >> that includes partnership with the blind barber for more mail client, an exclusive restaurant, and others that make
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up the downtown destination. about exclusive brands, and carving of exclusive products in the larger brands we carry. >> sales associates carry i've has given and customers can check out with apple pay. having a more mobile checkout experience, and not a traditional cash register behind the scenes as part of that credit >. >> this is part of the commitment to improve the customer experience. fund savedlion hedge barney's from bankruptcy in 2012. since then the retailer has seen record growth, double profit performance, and close to 23 stores. barney's does not need to be
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everywhere. barney's needs to be profitable. >> nac profit here, on 7th avenue. survivor.a surpris there will always be headwinds and market conditions, but there is strength in what the brand is stands for. >> thank you for the story. up, the rally in commodities producers is pushing european stocks toward a three-week high. in the u k, a debate whether to stay or leave is putting pressure on the pound. you can prime minister david cameron speaking earlier at the house of commons. we will bring you all of the latest. ♪
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:00 a.m. new york, and midnight in hong kong. i am in for betty liu. mark: this is the european close.
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♪ >> we are going to take you from london to new york to barcelona in the next hour. a quarterly loss of 858 million u.s. dollars. working toget by oil andh a hit gas companies. a split over leaving the euro. half an hour from the close of trade in europe, tell us about today's market action. mark: rally on.


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