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tv   Bloomberg Markets Americas  Bloomberg  February 18, 2020 1:30pm-2:01pm EST

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scandal. olo was involved in one of the biggest owners scandals in the sports history. guilty for pleaded going to report a felony when he paid $400,000 to the former louisiana governor in exchange for a riverboat gambler license. asry rice, why they regarded the most prolific wide receiver in pro football history, spoke to reporters at the white house after today's announcement. took alls how debartolo chance on him when he was drafted by the team. >> today is a great day for him. i'm glad to be sure to be a part of that. it is something i will never forget. this man has done so much in the community, has done so much in nfl football. today is a great day for him. won five super
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bowl's under debartolo's leadership. the president is also set to commute the sentence of wrongful cleavage, who was sent to prison for corruption. blue boy of it, a democrat, was convicted for his alleged efforts to auction off the u.s. senate seat left vacant when barack obama won the presidency. is slappings sanctions on a unit of russian oil giant rosneft for helping venezuela skirt embargoes on its oil. senior administration officials warned anyone in the world doing business with rosneft could also be sanctioned. it is part of the campaign to push venezuelan president nicolas maduro to step down the worst locust outbreak in parts of east africa in 70 years has reached south sudan. the outbreak is threatening to decimate crops and a country where about half of the population is already facing hunger. the locusts have traveled in
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swarms the size of major cities. officials say the number of insects could grow up to 500 times by june when dry weather begins. global news 24 hours a day, on-air, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. shery: live from bloomberg world headquarters in new york, i'm shery ahn even amanda: live in toronto, i'm amanda lang. shery: here are the top stories we are following from around the world. america's largest company cutting its outlook. it shares of apple tumbling as the company says the coronavirus will weigh on supply and demand.
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those concerned bleeding into markets. u.s. equities pulling back from andrd highs, hardware chipmaker stocks follow apple into the red. walmart bucking the trend. the retail giant reporting a resilient full-year outlook despite a weak holiday season. quick check on the major averages. some of those stories that shery alluded to playing out in the markets. weakest in thee s&p today. of course, tech is weighing on the market. apple leading the way. at last check down 2%. in these, a major weight s&p 500. we are also seeing financials drag. checking in on some old world stocks, walmart and macy's, both in the news, very different readings, in terms of what the market is doing.
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walmart not trading off of its news about the fourth quarter. that as it looks down the road to better things ahead. less so for macy's. its failure to turn around. downgraded to junk status. big namessome other being downgraded to junk. a result. shery: we could be seeing some good news on the virus front. we are looking at the rate of infection snow falling. china reporting the lowest number of new cases since announcing a change in the accounting methodology. you can see the pop in the green this month, when the method was changed. now the rate of infections falling, and the death toll also starting to fall every day in china. still, concerns remain about the impact of the virus. i spoke with a chairman of the how hard itmerce --
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is to navigate new policies in the country. >> incredibly difficult. because the regulations came into place very suddenly. they are all in reaction to the crisis that we face. as such, they were put together quickly, maybe not completely thought through as to what the ramifications of every decision would be. latestapple now the company to mourn about the impact of the virus, putting out a statement saying that work is starting to resume around china but they are experiencing a slower to normal return to conditions, which is why they don't expect to meet their revenue guidance. for more, let's bring in tom giles from san francisco. thatntirely surprising they are going to miss on their guidance, but it seems the timing was a little more shocking to some analysts, especially midway through february. tom: they can already tell,
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based on a couple of factors -- one, as you point out, people are not coming back en masse to work in the factories at foxconn and other suppliers for apple throughout china. they are staggering their return to work, work is resuming, production has begun once again, it is just not happening as quickly as the most optimistic forecasts were calling for. , the other side, is that stores remain closed. we got an inkling several days ago that stores remaining closed. they have about 42 stores in china remaining closed. they are not seeing footrest it, you are not seeing people come into the stores. home, are stating reluctant to be in public, even outside in wuhan, the area where the contagion began. those two things combined made
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it very clear to apple early in the quarter that their guidance, as you will recall, was a wider revenue target and usually issued, they were just not going to make it. we don't know exactly how far they will be from that $63 billion to $67 billion, but clearly not coming in as high as they hoped, even on the low end. remember, china accounts for about 18% of their total revenue. herea: one of the problems is that we are not through this crisis. , and apple is tounting up the cost of it, bu are they giving any guidance on how this gets exponential for them if this continues? tom:
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moving production outside china. how quickly that can happen is very much a matter of debate.
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there are opportunities in south east asia, india, but you cannot turn around a supply chain that feeds the world's iphone on a dime. amanda: our thanks to tom giles. hsbc made a shocking announcement that it would be letting 35,000 employees go over the next three years. we are shrinking in areas where we think we have clear underperformance and a lack of long-term sustained competitive advantage. equally in today's plan, you see significant investment in those parts of the business where we think we have competitive advantage and can grow. we are absolutely doing both of those things. it definitely was an interesting comment from one of the shareholders, lays the options for hsbc as fairly binary. you are saying you are balancing those two sides of the coin. are you happy that you are getting the balance right from those binary options? think this is the right thing for the bank to do, the right plan for now. $100e looking to invest billion of risk-weighted assets, $14 billion, $15 billion over
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the next three years in parts of the business that are performing well, particularly asia. we think this is the right balance but it is coupled with a substantial cost reduction program, to allow us to speed up the pace of execution. we think it's a great plan. >> picking up on the risk-weighted assets, you are at that moment of leaning into not bad asset price markets, hunger for yield. risk-weighted assets, olympic more complexion on them -- a little bit more complexion on them before we go? >> unsurprisingly, it is parts of the markets business, global banking, markets. we are continuing to exit a lot of domestically focused companies -- customers on the global banking side. amanda: that was the hs ec cfo. -- hsbc cfo. shery: interesting that they are keeping asia as a central role
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in their business in the future, given we are seeing these challenges with china. they do want to focus more on wholesale banking, wealth management as well. up, walmart reported lackluster holiday sales in a rare misstep but easing wall street feels with a full outlook. we will break down the numbers next. this is bloomberg. ♪
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amanda: this is bloomberg markets. i'm amanda lang in toronto. shery: i'm shery ahn in new york. president trump is speaking at --nt base andrews
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he is also talking about roger stone sentencing as well. we will get you more headlines as we get them as president trump speaks live at joint is andrews. let's turn to walmart. shares are gaining ground after the big outs retailer posted lackluster holiday sales, suffering the same fate as a rival's target and five below. investors remain confident in walmart forecast. how long will optimism last? let's bring in that boil. it seems they had a resilient outlook but weakness during the holidays. what happened? >> as whip target we saw a week holiday from walmart, some issues were their own fault. they admitted they carried the wrong mix of merchandise and apparel, too much holiday stuff. too much red and green in the aisles. others they were planning on the markets, like toys and electronics, said there was not a must-have product that really
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got people out there shopping. so a mix of issues. because they echoed some of what target had to say, i'm curious whether any of that is lasting. we are seeing some willingness to look past the numbers and into the future, analysts say they are in pretty good shape, but that softness we are seeing in these retailers, does it speak to consumer softness that we are picking up your? >> it's a question worth asking, do we have to worry about the u.s. consumer? the two bellwethers of the u.s. economy who have been knocking it out of the park, both having poor holidays. outlook was pretty solid, shares are rising on that, but it is worth asking. what is really driving this? is amazon taking way more sales than we thought? both target and walmart have a lot of new senior leaders in their team. could there be changes there?
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it is a question worth asking, certainly. shery: what about the question of the coronavirus impact. the outlook was positive. >> it is so unclear, they didn't included in their forecast. they have closed a handful of stores, most of their chinese stores are operating in restricted hours. they did say a couple of cents in the first-quarter eps for rising expenses, labor, he will more items delivered, so we have to wait and see on the china impact. they are saying no appreciable impact yet. a lot of what they sell is made in the u.s., particularly food, most of that is sourced in the u.s. we will see. amanda: one place we want to see results in walmart, growth in the online. are they making that transition the way that people want to see? >> it is not so much growth that they have shown but profits. they had been hemorrhaging money in the u.s. online because they
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were spending so much to keep pace with amazon. they did say today that their losses in the u.s. e-commerce will be either flat or down, so that has investors happy. they said that two years ago, and had to go back on that promise. let's see if that actually holds this time. amanda: great to have your thoughts on this, matthew. we will leave you with pictures of president trump still speaking at joint base andrews today, making some announcements, including the sentence of former ohio governor rod blagojevich. we will be back after this. this is bloomberg. ♪
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shery: this is bloomberg markets. i'm shery ahn in new york. amanda: i'm amanda lang in toronto. time for the bloomberg business flash, a look at the biggest stories in the news right now. franklin resorts has agreed to at legg mason, a deal valued $4.5 billion. it is a 22% premium to legg mason's closing price last friday and creates an active management giant. haveher, the companies $1.5 trillion in assets under management. a shakeup at dupont. the company -- chemical company has removed ceo mark doyle and the cfo. his rolether cementing as the architect of dupont past and future. he oversaw the merger with dow chemical and the subsequent split. dupont is in the middle of an efficiency drive. shares of intel side are soaring. appaloosa hedge fund has taken a
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stake in the company. they want more money for the proposal which involves giving up some of its airwaves. the company considered filing for chapter 11 bankruptcy over the matter. that is your business flash update. french train maker alstom has agreed to by the rail unit of the barnier 46 $.7 billion. this makes them the clear second and rail equipment behind chin'' s company. for more, we have miriam on the line. previouslyn alstom make an attempt to bulk up. they didn't because of antitrust concerns. how do we know this will go through? >> there is still a bit of a cloud in the deal, and it is down to antitrust. in this particular case, the
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parties are a lot more confident that this deal will get over the line, cleared by the commission, just because the overlapping areas that we are seeing with alstom and bombardier, are a lot easier to overcome than the one they had with siemens. they are very complementary in terms of geography. as the discussions and deal talks were taking place, antitrust issues were at the center of these discussions. actually, the french finance minister was meeting with the european competition commissioner, to address any of those concerns. are time around, the french taking action, trying to be in the driving seat, being very proactive, trying to collaborate
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with the commission, to make sure the deal gets cleared. amanda: of course, a lot of toorts of bombardier looking sell assets because it has so much debt on its balance sheet. it has trended down to its business jet division, still with a fair amount of debt, but much less. is this the healthy position that people were hoping to see? >> absolutely. there was speculation actually thate we broke the deal they were looking at filling their business. it's a fair question to say what will be left of bombardier. this is such a key part of the business. just last week, they exited from program, and now it's real division. you wonder what will be left of
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bombardier. it is left with a healthy business that has a lot of potential to grow, which is the aviation business. bombardier will remain a key player in the space. shery: thank you. the latest on that cost him and bombardier potential merger. leavingt trump just andrews air force base. he said president xi jinping of china is working very hard on the coronavirus out rate. of course, we have seen a number start to decelerate when it comes to new infections across china. plenty more to come. this is bloomberg. ♪
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mark: i am mark crumpton with "first word" news. president trump is commuting the 14-year prison sentence of former illinois governor rod
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blagojevich, calling it "ridiculous." he was impeached and removed from office for corruption. he was convicted of trying to auction off the u.s. senate seat left vacant when barack obama won the presidency. contracting laws are being weighed to speed construction of a wall on the u.s.-mexico border. the move is expected to spark criticism that the trump administration is overstepping its authorities, but similar legal challenges in the past have failed. a viral outbreak that began in china has infected more than 73,000 people globally. the death toll is approaching 1900. one of those fatalities is a senior doctor at a hospital in wuhan, where the outbreak began. united nations secretary-general antonio guterres says the outbreak is " not out of control" but


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