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tv   Bloomberg Markets Americas  Bloomberg  August 7, 2019 1:30pm-2:00pm EDT

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two mass shootings this weekend. they also visited some of the wounded who remain hospitalized. protesters gathered outside of the hospital. the associated press reports many of them hoped their message send a message to the president he was not welcome in the city. the mayor said she would meet with mr. trump but she was also disappointed with his remarks responding to the shootings. the president will travel to el paso later to meet with first responders and survivors. put a ricoh supreme court has overturned the swearing in of the governor less than a week ago, clearing the way for wanda back as -- for wanda vasquez. the decision cannot be appealed. it is expected to unleash new demonstrations because puerto ricans have said they do not want her as governor. as territorynted
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of state. -- as secretary of state. she was sworn in on friday after rose a resigned in response to angry street test -- street protests. mike pompeo has teased a potential run for the white house. he weighed in at the economic club of washington in an interview with david rubenstein. sometimesrience is one people get close to a president, they say, i can get -- i can do that job too. has that occurred to you echo would you have any interest -- occurred to you? you have any interest in running for president? >> i have never been able to predict what my next gig would be. i do have an obligation. if i thought i could do a good turn, there is nothing i would not consider doing for america. mark: you can see the entire interview on the david rubenstein show at 9:00 p.m. new york time here on bloomberg
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television. kim jong-un says north korea's latest subtests are a warming -- a warning to the u.s. he is trying to pressure the u.s. end joint ella terry exercises with south korea. secretary of defense says they are needed to maintain readiness. global news, 24 hours a day, on air and on tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. ♪ shery: live from bloomberg world headquarters in new york i'm vonnie quinn. amanda: live in toronto, i'm amanda lange. we are joined by our bloomberg nrb nm audiences. here the top stories we are following around the world. stocks are coming back from some
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sharp losses adding to already steep losses as concerns mount about a glowing -- a slowing global economy. what is the future of capital markets for boutique firm? we will get insights from one of those firms. david daviau is one of our guests. fedex is severing ties with amazon as it ends it's contract ts contract. members out of germany not helping today. it is not as bad as you might think given all of the trade tensions across the broader s&p. energy is a big one to watch. there is a bright spot in cold. erasing some material stocks moving -- you are seeing some mysterious -- some material stocks moving. the dow and sep -- and s&p feeling the weight of disney.
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we are seeing global recession fears game priced in. concerns that trade tensions will affect the consumption of oil globally. almost a four and three-quarter percent move to the downside as the market interprets that as a negative. vonnie: i am looking at the u.s. three-month 10 year curve. spent that surge has much more into negative territory. we are off into the low. still down 34 and a half basis points below zero. if that is not an inverted curve, i do not know what is. amanda: we have been watching it closely. for more on that, let's check in with luke. we have bloomberg business editor pete with us. we have a various group of market signals saying there are bad things ahead. saying there is danger ahead. how are you interpreting that yield curve? >> still, the yield curve is
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kind of sending the nod -- the not crazy alarming signal. so far, all that has happened throughout this risk throughout, fed funds are the euro-dollar future. this has been about a deeper fed cutting cycle expected. not necessarily a longer one. it will take a while for that to change or the depth to get so two'sat it also pushes below tens. 's. it has been striking how orderly this has been. vonnie: it is a bit mystifying. we have the two year and 10 year spread of 10 basis points. it is not inverted, but it moved a lot. even as you have people like jim bullard saying we are watching the trade war, but we are being patient. what is going on with the
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markets and the u.s. economy? >> i think people are the tradely concerned war could end up resulting in a recession. the manufacturing sector globally by some measures is already in contraction if you look at j.p. morgan's global purchasing index for manufacturing. it is in contraction. germany, industrial production down by the most in a decade. there are a lot of signs things are not going well. cuttingcentral banks three banks again just overnight. is legitimate concern this expansion could be coming to an end. i do not want to predict anything. that is what the market is telling us. amanda: look, the concern is, what happens -- the concern is,
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what happens if that happens. i was looking at a story on the bloomberg about danish mortgages basically add zero. maybe it was only a matter of time when you can borrow that easily, you pass on the low-cost borrowing. thinking smart people this goes on a long time. what do we make of that? >> we're looking at the bond complex. it is the ferocity of the move and yields. it is the biggest five-day drop since the debt ceiling debacle in 2011 for the 10 year. the speed of that move is something that speaks to how entrenched the lower forever dance with regards to policy rates are. also with inflation. if that is the global backdrop, negative yields everywhere the world over, 15 trillion. i have lost count by now. if that is the backdrop, it is just a matter of time before that continues to weigh on the u.s.. the data we are getting tells us
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that not only do we have the trade war, but the global economy is in worse position going into it than we thought. vonnie: i want to port to a article this week. jumps china problem is that a week -- trumps china is that a weak yuan is a weapon. trump desires one thing publicly. then he gets it. it is not what he really wants. >> trump has repeatedly promised american consumers will not feel the impact of the tariffs because the chinese suppliers will swallow the cost. that is exactly what happens when you allow your currency to depreciate. the chinese bear the cost instead of the americans. the consequence of that is you do not get the benefits of supplanting chinese exports with american production. the only way americans are going to start buying domestic instead
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of chinese products is if the cost of chinese products goes up, which he does not want. down --to have gotten have gone down a dnd -- eight dead end road -- a dead end road. >> it is clear the entire asian complex is thing that is having an effect and being reflected in u.s. equity volatility. i wonder if there is a place that breaks the storm. china's yuan is not in best interest either. it is something they are tolerating to offset the cost of tariffs in cna or cny terms. in the longer haul, there is the property secular that is important for -- property sector that is important for china. they are feeling the strange dashed feeling the strain on this a little bit more. -- feeling the strain on this a
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little more. amanda: we have seen some signs -- althougheconomy it has been a little bald out. at what point does this fear go from the bond market to the stock market? has had ack market rough ride the past couple days. it is not signaling recession the way the bond market is. that is a good question. why there does seem to be that disconnect. i think the bond market is -- that the is a fed will bail out the economy and bailout president trump. you see that with bloomberg economics -- bloomberg economics has a forecast of what might happen with the tariffs scheduled to start the timber first. startould make the -- to september 1.
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reaction.the fed the possibility that the fed will cut rates to offset that. we are loved in this weird embrace -- we are locked in this weird embrace or the fed does not want to be president trump's dance partner, but that ends up being what happens. he has it in the back of his mind that if he does something that worsens growth, the fed will be there to bail him out because the fed feels responsible. amanda: the president to -- vonnie: the fed tweeting again this morning -- the president tweeting this morning that the fed should cut rates further. canaccord is a leading advisor in the cannabis sector. there latest marijuana move. this is bloomberg. ♪
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vonnie: this is bloomberg markets. i am vonnie quinn in new york. amanda: i'm amanda lange in toronto. there has been a flurry of financing activity in the nation's cannabis activity. bank. for the investment david -- one way that is an additional boon, we have seen the jr. exploration space. a place where the boutiques -- operated well. are you picking up in cannabis what you are losing on the resource side? >> sooner or later, it will change around again. i heard your previous guest speak about the uncertainty in the market. that drives gold price. that is going to drive activity. we represent a certain element
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of the risk capital. one way or another, people are going to be investing. amanda: you say you are seeing a pickup in the gold. we are deeply interested in candida seeing investment -- interested in canada in seeing investment back into the back -- into the gas base. >> we would love to see a pickup. with the slowing economy, that directly impacts oil. . and gas there are fears -- impacts oil and gas. there are fears. fears that oil and gas do not become finance of will. vonnie: you have said this is a volatile industry. one of the companies will end up stabbing on a rake. how do you avoid -- stepping on a rake. how do you avoid getting caught up in situation like that? >> we have multibillion companies that did not exist several years ago. they are going through a governance process and improving
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significant a. -- significantly. we have done the majority of financing. occasionally, you will have a company that trips up. i'm sure we are going to continue to see that. we have done a lot of diligence he's. you cannot prevent every possible that outcome. vonnie: you are involved in about 18% of the m&a activity in the candida -- in the cannabis industry in canada. can you repeat that question? vonnie: given that you are involved in four out of five transactions in the industry in canada, are you concerned you might have problems down the line? continue are going to -- any industry that is maturing quickly are growing quickly, you're going to see substantial
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m&a activity. there is a premium to be the largest and biggest company out there. you're going to see the consolidation activity. we have seen a lot of activity in candida. we have advised aurora on many of its transactions. going forward, you see a lot of that activity in the u.s. , a multi-liensco dollar -- multibillion dollar company. a number of others. i can go on. we see significantly -- a significant amount of m&a activity as companies try to establish themselves as the dominant leader in what is a maturing industry. amanda: there have been stumbles. bruce linton being pushed out at canopy. where does the maturation happen when you're talking to investors who could face stock price stumbles along the way? how long are we talking?
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>> we have quarters and quarters if not years for this industry to continue to mature. . there is continued evolution. we still do not have federal legalization in the u.s. europe is just opening up. their other you jerk -- there are other jurisdictions opening up. five other research analyst. bostonand i the u.s. in -- and in the u.s., we are focused on this sector globally. we are years away from this sector playing out. amanda: on the consumer side, are you starting to laser in on those who have the real innovations they can protect as we start to build up the space? chainre is a whole value being created in the cannabis sector from delivery mechanisms, strains, r&d, where people are spending hundreds of millions of dollars to build that to things
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as simple as inventory systems and floor plan layouts for security companies. it is a massive industry being developed. the combined market capitalization is over $100 billion. it has created a whole network of companies. vonnie: can i ask you a? broadly about these markets -- a question more broadly about these markets? do you imagine we are heading into more of a disorderly time from markets or is this just a shakeup that will calm itself? >> you have had lots of guests on that could speak to this as intelligently are more intelligently than me. we are getting into a market were not every boat is rising with the time. investors are trying to pick their spot and minimize some of the risk associated with the volatility they see. volatility means downside, but it also means upside. a market down again today.
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people are going to have to pick their spots and be a little more intelligent in where they are placing their capital. vonnie: thank you for joining us today. genuityks to canaccord president. the langill is down today. animal health is aiming to reach an agreement seen as weak to combine with buyers in a mahout. this is according to people with knowledge of the matter. he then an animal health down 1.8% and traveling further south. lily listed last year. it is aiming to reach an agreement next week. fedex is snipping and other tie with announcing the end of the ground livery contract. -- ground delivery contract.
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this is bloomberg. ♪
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>> it all started when three friends had a great idea.
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amanda: this is bloomberg markets. i'm amanda lange in toronto. vonnie: i'm vonnie quinn in new york. amazon is trading unchanged. we learned fedex will not renew a ground delivery deal with the tech giant when the deal expires at the end of the month. turning us is tom black from bloomberg news. what does this mean in the --ediate term
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>> it will also broaden its reach into the e-commerce space. as an accurate way to betray this? >> that is right. they decided amazon is a competitive. they are building on a network that copies what fedex has. they're going to turn to more traditional retailers that also are competing with retailers. we are the carrier that will work with you. we are the anti-amazon carrier. vonnie: what is better in this having twoe consumer companies going to head. or having them work together to get everything faster to the consumer? >> clearly the consumer is benefiting. the time for the liberties --
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for deliveries are ratcheting up. we have gone from two delivery to one-day -- from two day delivery to one-day delivery. everyone is gearing up for that. amanda: what is it leave in the short term the cost for both of them? amazon is still building out. presumably, they will be competitive pressure. amazon --ing to raise amazon has one less player to negotiate. that gives a little more bargaining power for ups and the postal service. for amazon, prophetic -- for fedex, it loses volume. analyst think volume is low-margin. it could help profit a bit. the onus is on fedex to get more business to make up for what they are walking away from with amazon. vonnie: who has the better technology echo -- technology
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echo >> say that again. vonnie: who has the better technology? >> amazon comes into this with a clean sheet. they have started with a lot of robotics. in fact, they are copying what legacy carriers do. fedex has a system where contracts with companies that carry its ground packages. amazon is copying that. it is a mix of both. amanda: tom black. great to have your thoughts. appreciate it. the function geek -- the function gtv go gets you everything you might have missed. from toronto and new york, this is bloomberg. ♪
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mark: i am mark crumpton with "first word" news. puerto rico's supreme court revealed that the governor find
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it the constitution when he took office last week. it has belonged to the leadership crisis that a script the government for weeks. piwas the former governor's ck to succeed him. line -- the next in senate this week failed to vote on the issue as the commonwealth's constitution requires. a court order takes effect immediately. the secretary of justice is set to become the third governor in five days, even though she has said she does not want the job. u.s. secretary of state mike pompeo and british secretary of foreign affairs dominic robb are meeting in washington. the secretary of state waited on brexit. sec. pompeo: we support the united kingdom's sovereign choice, however


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