tv Bloomberg Markets Americas Bloomberg September 13, 2019 1:30pm-2:01pm EDT
to try to break the brexit impasse. earlier today, the prime minister was interrupted during a speech by a heckler who was angry at his decision to suspend parliament. he urged johnson to get back to parliament to sort out "the mess that you have created." must face aump lawsuit accusing him of profiting from his presidency. today's court ruling is a potential blow to his efforts to keep his finances secret. the ruling reinstates a case brought by a restaurant group that accuses the president of violating the constitution's emoluments clause is. unless an expanded panel of judges or the supreme court reverses the decision, the president will be post to open his business and personal finances to scrutiny. china plans on making some trade concessions to the united states. beijing will encourage companies to buy american farm products such as soybeans and pork, according to the editor of the most prominent state-run newspaper. he also says china will exempt
those u.s. foods from additional tariffs. trade talks are expected to resume in the coming weeks. a flash flood in the capital of algeria inundated subway stations and the airport. the damage described as enormous. in 40 minutes, the area got as much rain as it normally does in three months. residents say city authorities failed to maintain gutters and other infrastructure. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ live from bloomberg world
headquarters in new york, i am vonnie quinn. amanda: i'm amanda lang in toronto. welcome to bloomberg markets. we are joined by our bloomberg and bnn bloomberg audiences. a collective sigh from the u.s. corn belt. china today says it will exempt purchases of u.s. soybeans, corn, and other products from punitive tariffs. worked.e work re a series of governance changes to calm investor concerns about its impending ipo. wooing jj abrams. is areator of "lost," sought-after talent for tech firms. what it took for warner studios thenk a five-year deal with producer. >> we are setting up to be another positive week, several sessions are grinding higher,
although the s&p 500 is trying its best to go into negative territory. still above the 3000 mark. the dow jones up .2%. the nasdaq on chip stacks -- almost 0.2%. we will see where it ends the session. amanda. amanda: a talk this week has been the movie in yields and a coordinated move. take a look at this inside your terminal. you can see the five and the 10 year in the u.s., and also as it relates to their 50 day moving averages. a massive jump to the upside. interesting to put that in what theincluding with fed is about to do, but to see them moving back toward 2% has een a wild ride. u.s. agriculture markets finally
seeming to catch a break. there are signs china will once again seek american exports. that sparked weekly gains in the price of corn, soybeans, cotton, and hogs. those goods will be excluded from additional tariffs. with us for the latest is our ag reporter from chicago. it is interesting because we have seen signs from both sides of a pullback. put into context how important it is that we do not get new tariffs on these products. >> this is a huge first step. we may not be dancing in the streets or seeing big surges in commodity prices based on this, just because there has been some false starts in the past over this more long -- more than year-long trade war. it is a positive step in the right direction for farmers who have been besieged by everything this year. vonnie: how much of a relief
would it be between now and year's end, how quickly could we see prices change, for example? if we get something tangible, as one farmer said, it could be a lifesaver. they are looking for some sign of hope, some lifeline in terms of tangible prices. that being said, we have a long way to go to get back to where we used to be. this trade war has gone on for a year. china has been largely absent or in and out of the markets sporadically throughout the year, so it will take a while to get things back to a normal run rate. as i said, it's a positive step, something that farmers are looking very closely at. amanda: we had already seen a reaction for corn, based on crop and output. we assume this will be a help as we get supply worked out. do you think farmers had already found alternative outlets, or is this literally inventory stuff
that will now have a home? mario: it is the latter. during the good times over the last few years, before the downturn, farmers reinvested a lot of their capital into on-farm storage. that has helped them in this trade war because they don't need to get rid of supplies at very good right -- low prices, as they horde as much can, given they have more space on their farms to store supply, giving them more autonomy as to when to sell their products. vonnie: i'm curious as to whether you think this will impact the support for donald trump positively or negatively? mario: farmers have overwhelmingly supported as president. they helped catapult him to the white house in 2016. they have largely stood by him during this trade war. not to mention, the
administration also announced $28 billion in trade mitigation payments to farmers during the course of this trade war. so that has helped, but it has not made them whole. that being said, there were tensions in the last two months or so, where farmers were starting to grow weary in terms of the trade war, second-guessing whether or not tariffs, given they are a blunt instrument -- is what i hear from some of them -- may not have been the best weapon. they were getting a little bit wary, but we have not seen them turn against donald trump. in fact, we have seen some stagnation as well. as always,nk you margaret parker. tgif. it is a busy day of economic data before the weekend, showing the american shopper is still swiping credit cards.
the consumer held up well last month despite mounting challenges of reports of sales and confidence. michael for all he is with us now. preliminary data did disappoint once again. what are you reading about the consumer out of this, data from mostecent week or two >> of the data we see on the consumer still looks impressive. you have to give in context, those august numbers we saw this morning, this was coming after a string of several strong months in the spring and summer. you normally expect payback after a string of really blowout numbers like that. instead what we got was continued spending into august. right now, everything we season just -- it will be hard to give up that pace, but we are not seeing any immediate reason to think there will be a letter. jobless claims still look healthy as we get into
september. most of the sentiment numbers are holding up ok. the consumer remains the backbone of the economy. a little want to drill bit into the sentiment numbers. we did see an uptick. we can spend that as glass half old. given we are worried about business sentiment, is that enough? we have a chart to put into context where sentiment is. is this enough to make you confident that the consumer can keep carry the can? to the rightpoint issue, consumers are fine, businesses are cautious about the state of the economy. where the rubber meets the road is hiring. if businesses, if that caution starts to translate into reduced hiring, and maybe we saw that in august numbers, that is where you start to get more concerned about the consumer outlook. so far, it is just hints. for that reason, we still have faith in the consumer.
the thing you want to be concern into lessranslates hiring, which means less consumer spending. of this data, coled wi the backup in yields we have seen, take the pressure off of the fomc next week to cut more than 25 basis points? or even to cut with a dovish tilt? i never had an effect to that they would be using 50 basis points next week. pretty rare that they do that outside of financial crises or really bad economic environment. the path to 25 right now looks pretty straightforward. i suspect the communication and signaling coming out of the ,eeting, for example, the dots probably does not show much more expectations for further easing this year. right now, the fed has a little bit of support in terms of the latest data, not only related to
consumers but also inflation, like we saw yesterday. that could give them some comfort to say, we have made a midcycle adjustment of two cuts. now let's sit back and be data dependent. amanda: would you say that is potentially what the bond market is signaling? interesting to see the massive move up in the 10 and five year in the u.s. does that suggest not seeing three cuts by the end of the year? michael: the bond market has taken out some of the cuts beyond september, but the market is still expecting easing, just not as much as it was a few weeks ago. a few weeks ago, it seemed like the bond market had a pretty dire view of the outlook, at least as it was reflected in fed pricing. where we are now gives the fed .ore optionality after september, if the data comes in well, further easing will be priced out. then we will have a true decision to make in october,
unlike next week. if they were not to cut, that would be a pretty bad day in the markets. whereas, after next week, they may have some actual leeway to watch the data over the following six weeks, going into the october meeting. asnie: is the dot plot relevant as when janet yellen was chair, or even in the early part of powell's chairmanship? what do you expect out of this? michael: leadership has had a love-hate relationship with the dot plot ever since 2012. now, it isright probably less significant than it had been in the past years. it is still not going anywhere. for better or worse. thing toe an important
watch, these quarterly meetings. next week, i would expect that the dot plot shows no further easing anticipated by the participants for the rest of the year. then i would expect this unchanged policy into next year. rates at 1.75% to 2% this year and next year. some 2021 and following, normalization back to were neutral after that. amanda: thanks so much for your insights, michael feroli, chief economist at jpmorgan. breaking news from the uaw. we had been discussing the fact that contracts were set to expire on saturday with the potential first strike at general motors in a dozen years. contracts have been extended indefinitely. this affects general motors, ford, and feel chrysler. the extension can be removed ith three days notice, but is now being extended ahead of the satellite deadline, so
vonnie: this is "bloomberg markets." i'm vonnie quinn in new york. amanda: i'm amanda lang in toronto. is moving ahead with its ipo but making a number of moves anxiety herestor in the office leasing company is revamping its stock structure, announcing a lead director by the end of the year, and will bar ceo family members from sitting on the yours. with us with some of the details are our reporter.
the obvious question is is it enough? some of the changes almost three like an onion article, that his wife will not begin a discretion over a new ceo, but we know governance was an issue. that is a big question, we are hearing to wait from investors, and then hopefully you'll see a story on the bloomberg terminal. early feedback, investors don't seem convinced based on the new valuation range we have reported, which is as low as $12 billion, which is lower than what we previously reported. that companiess and its advisors could be looking to price the stock a little bit lower so that it pops on ipo day. vonnie: $12 billion, that is a quarter of the evaluation that it was set when it first filed come around then, a long time ago. are they not talking to anybody?
>> we understand they have been speaking to investors since they piled that prospectus in august. they have had about four weeks. beenderstand the ceo has reflected of investor concerns and agree to all of these terms today, including the ones that we outlined. amanda: there have been a suggestion that some of the lead bankers were hesitant, because of the lower valuations, about moving ahead. it seems it is full steam ahead. is that a sign of where the market is, that you want to get it done while you can? gillian: i think it is a sign of where the company is. on a facilityed that is contingent on raising money in the ipo. as everyone knows, this company is burning through cash. in order to fund this, it needs cash, access to this debt facility. in order for access to this debt
facility, it needs the ipo. vonnie: the seam tangled by their realizing that maybe there is not a price at which people should not buy the stock -- i should not say that. there will be a price. but at what price can you give this stock away? gillian: that will be the most interesting question. if they launch monday, we have tried to do the math, based on a protected date. probably will have nine days to convince investors to buy the stock, and that one valuation. amanda: governance was one piece of the puzzle here. maybe it is too big of an elephant to say, but given the valuation levels, presumably, the reception around its other numbers have not been great. gillian: folks have been extremely concerned about the long-term lease obligations. everyone knows that wework's
model is short-term rentals. in a crisis, what happens? they have looked at what happens in other countries like south america. it is unclear what will happen in a downturn to the company's models. thank you very much, we will continue to follow your stories on wework as we limped toward the ipo. i want to point to another company who had a different experience today, cloudflare 24%,ng at $18, now up over trading at $18.53, a much bigger -- better story for the internet firm that helps websites protect and distribute content. it is valued at $4.4 billion. of course, there are risks associated with cloudflare as well. a successful ipo for cloudflare. coming up, what does star wars massive dealbrams
amanda: this is "bloomberg markets." i'm amanda lang in toronto. vonnie: i'm vonnie quinn in new york. jj abrams has signed a deal with warner media after a courtship from multiple media giants for his production company. the deal is estimated at $250 million, just one example of at&t's wedding frenzy for content. for more, we have our content chief. jj abrams is known as perhaps being one of the most successful, potentially successful person to come out of
hollywood since steven spielberg, who is his hero. s this a jj abrams story or about these media companies need to show content? >> a couple of things at work. there is this huge fight to lock up the top talent in hollywood. all these companies are starting their own direct to consumer streaming businesses, and they want exclusive content for their platforms. the other interesting thing andt this story is who won why, and what it says about their strategies. you had apple didn't really hard, but jj was fundamentally a movie guy, wants to see his pictures in theaters. netflix, also for that reason. warner bros., now a part of at&t, pitched this broad deal --t included stop doing doing stuff for hbo, tnt, video games they make. it is a broad deal that they pitched, and they won for that
reason. amanda: a lot of bidders over the course of time at the table here. one more partner, given the history with star wars, might have been disney. it feels like a srts franchise shelling out for one guy over a 10-year contract, even though you know you are only getting three out of him. are they overpaying because there is such a fight or the content creators? a terrifics has track record, but he has also had a lot of misses. this is really a deal about what is coming in the future. disney took a hard look, like everyone did, and they have gotten out of the business of having these exclusive relationships with content people, like jerry bruckheimer in the past. jj abrams was interested in building his own company. they had to part ways. we appreciate your time today, chris.
fascinating story. chris palmeri in los angeles. just a correction on some breaking news, we were talking about the uaw and a strike deadline. gm could still face a strike. we continue to watch general motors in its negotiations. they could face their first strike in 12 years. you can catch all of the interviews on your bloomberg terminal if you miss them with the function tv . from toronto and new york, this is bloomberg. ♪ devices are like doorways
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the brexit crisis at a coention. u.k.s promised to take the out of the e.u. by october 31. myself have been to talk to various other e.u. leaders, particularly in germany, france, and in ireland where we made a good deal of progress. president of the commission and the chief negotiator on monday. and we will talk about the ideas we have been working on. we will see where we get. i would say i am cautiously optimistic. mark: prime minister johnson was interrupted during his remarks by heckler angry at his legally questionable decision to suspend parliament for five weeks during the crucial time leading up to october 31. a taliban official t
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