tv Bloomberg Markets Bloomberg May 15, 2015 1:00pm-2:01pm EDT
mark: coming up on the next half hour of bloomberg market day, ken langone sounds off and tells us what he wants chris christie in the white house. consumer confidence falls this month by the most in two years, is this a temporary blip? --will the fed beef theire forced to raise rate hike this year? mark: and we will check the success of this year's tv's upfront. ♪ betty: good afternoon, i am that
he little here with mark crumpton. bloombergome to the market day, let's see what is happening on wall street this hour, stocks are headed lower this friday, and investors are looking at industrial output. it fell for a fifth straight month. at is down just fractionally 2119. the nasdaq composite is just over-- falling oil isoints, and falling, but it is still close to a 12 week high. gold futures are down, $.70 --ally, at $1223 $1223.70. market, they bond
are at a low, and in the meantime, the dollar also taking a hit as well as we see with its trade against the euro. -- guys,dollar trading 1.14,bring it up, 114 -- and let's get a look at the top stories in this hour, in nepal, the u.s. marine corp. says it is unsure what caused a helicopter crash during a relief mission. nepali. marines and two troopers were on board. we willnt general: observe the sacrifice of the great soldiers and nepali soldiers who lost their lives. militaryout 300 u.s.
personnel are taking part in the aid mission in nepal. it evolves helicopters and transport planes. amtrak expects limited service between new york and philadelphia to resume on monday. all of the derailed trains are off the tracks. there is no official cause cited in the recent crash, and eight people were killed. mark: in a rock, islamic forces captured a key city. iraqi troops have been fighting isis forces in this area for almost a year and a half. theia's gdp shrunk and first quarter, but better than a forecast of bloomberg analysis -- bloomberg analysts.
russia's economy stalled last year after sanctions were applied after fighting in ukraine. president obama says when it comes to iran, we've got your back. the president pledge to defend gulf nations against an attack and would stop escalating behaviors from iran. president obama: we will deal with iran diplomatically and from a position of strength. mark: the president said any deal with iran will cut off any path it has to a nuclear weapon. put $100rl icahn has million into lyft. one of the managing directors at his firm will join the lyft board.
consumer confidence fell this month by the most in almost two years, that is according to the university of michigan index out at 10:00 a.m.. outlook of many americans, the rising gas prices also hurt. mark: the art world has never seen anything like this. this painting went for $50 million last night at christie's. it was an auction record for a modernist painter. it was after a two-day frenzy of selling in new york. more than $2.7 billion has been auctioned off, and that is more than the old record set last november. mitt romney has thrown his hat into the ring this time, and it really is the ring, a boxing ring. boxingaking on taxing -- champion evander holyfield to help impoverished people around
the world. holyfield's advice to romney, just try not to pass out. [laughter] mark: that is a look at the top stories this past hour. that is an understatement. betty: i wonder how many people will pay to see that match? mark: but it is a good cause. hopefully romney will just get out of the ray -- way. home depot cofounder ken langone says why he wants to end income inequality, and he calls it his current passion. betty: and the u.k. economy has affected -- been affected by the recent elections. mark: the tv networks are making their annual pitch to advertising companies. we will look at this in the face of increasing online competition. betty: earlier this week, president obama called out hedge fund managers to prevent income
equality. president obama: the top hedge fund managers made more than all of the kindergarten teachers in the country. you from't ask society's lottery winners to just make that modest investment , then really this conversation is for shill. few: this is roughly in a feathers on wall street, as you will -- would imagine, including ken langone. -- eric andare in stephanie set down with him today. they should make sure they should vote for people who would change the law. eric: i think that is what he is trying to do, trying to change the law. ken langone: he is saying that
rich people are taking advantage of you, guess what? he set the stage. these are the best times of my life. i can go to certain banks and they will pay me money to borrow for them. i go to germany and guess what? i didn't set the stage, they did, he did. eric: wait a minute, he set the stage for negative interest rates? now eric, wait a minute, he has a good point, but i think when he is trying to say is that these rich people will didn't -- rich people do and say they are going to screw these people, how is that their fault? eric: i am not suggesting it is necessarily their fault. come on, please, i think we should look back at the historical record. let's look at the historical record. who was in the office in the credit bubble? it wasn't president obama. ken langone: when did the credit
bubble start? stephanie: george bush. ken langone: when did the credit bubble start? frank scolded the banks, he said, how dare you, do you know what the red light is? race, it done by is done by economics. if you live in an area with abject poverty, how can you loan anyone money in an area were no engine by food? barney frank said -- eric: hold on a second, you are blaming the bubble on barney frank? stephanie: the banks are culpable, but they are not -- hold on -- it is your birthright, it is just not. said it,ne: you just there is enough blame to go around to everybody. eric: i didn't say that, i just
said -- what you guys -- the point that you were effectively making is that we can pin quantitative easing -- ken langone: no, i am not making that point at all. my point is more basic. a pox on all of their houses. they were all at the trough. where it was barney frank or anybody else, -- whether it was barney frank or anybody else, everyone can agree that it is a broken economic system. vote forne: agreed, i that, we have a broken system, i grant you that. we are not going to fix that broken system until we get term limits. stephanie: how can we blame the wealthy and the financial system for this, eric? in 2003, if a bartender in san diego said i am going to buy a
four bedroom house -- on a second, who in this conversation blamed america's ills on the wealthy? about theking resistance he believes the hedge fund community has put up -- stephanie: he says these are lottery winners. ken langone: you are a honest man. eric: i try to be. ken langone: don't you think the way that he framed the issue -- there are a lot of people who say these pigs, these horrible human beings they get richer and richer and richer every day -- to me a favor -- eric: do me a favor, i'm going to be honest with you. ofon't see the idea demonizing these people, that is my honest opinion, but it depends on who he is trying to communicate with. if he is trying to persuade congress to close the carried interest loophole or the favored
tax treatment, i personally don't think that is a great way to go about it. ken langone: boy, you hit the nail on the head, how did he go about it the other day? to the top 50 hedge fund guys and invite them to the white house with images and beers, you get the champagne and the lobster, syringes and beers, and say what do i need to do to get you guys to understand, you are giving away money and huge amounts. another great hedge fund manager, so you are giving away money and huge amounts, guys, let's really put some skin in the game. that's how you sell people. you don't humiliate them. this is humiliation. he is saying, those that caps on a look at what they are doing, now they have to play the tax system. the tragedy is, the people he is talking to, they don't understand the neck -- the mechanism. he has spun it as if it is everything. betty: that is the always
where we are seeing movement. movements seen big today and trading at a record, it is above $600 a share for the first time ever according to people familiar with the matter. we've been talking about this a lot today, netflix is in talks with the chinese media company backed by jack ma as it tries to enter the very lucrative online video market in china estimated worth $9.9 billion. ofre also watching shares yum! brands today, and it is now more of a probability and start a a -- probability instead of possibility that yum! would spin off its china business. there was this reaffirmed 13feve in yum! and his filing didn't confirm that as
well -- did confirm that as well. is under pressure into 2016 and that there is a potential for liquidity crunch for farmers, which would obviously be bad news for deere since that is their main customer base. betty: thank you so much, from on the movers there, julie hyman. the battle to rule the ridesharing road just got a lot more interesting, because investor carl icahn invested $100 million in lyft. he is also looking to put an associate on the lord. -- on the lyft board. bloomberg editor at large cory johnson joins us now from san francisco. cory, what is all of this about? there is anry:
airline once upon a time called twa, and it made carl icahn famous because he borrowed a ton of money with a little bit of help and then bought the company and broken up to the great offense of many people. something of that was the inspiration of the movie wall street and the character gordon get-go -- gekko. that was the carl icahn, company destroyer, wall street icon, that he became and that kind of thing. here we are, 30 years later, and carl icahn has taken the role of venture investor? yes. taking a stake in lyft -- taking as a privateft company and helping them to grow their private business.
the eventually in some sort of financial transaction. betty: it is hard to that against carl icahn at all -- cory: well -- obviously, he has been successful, cory, but as a venture investor, i have heard about him every day now, and i just heard from a big-time investor who said that uber is not worth $40 million -- $40 billion. this money is going to go away. cory: if you are going to play a valuation game and figure out what is a better deal, ube or lyft, i- uber don't think that is how this game is being played. there is all this heft that is in the public markets, fidelity, one of the biggest investors
that ever was, t. rowe price, now making it late private investments in his private companies, maybe waiting for ipo. carl icahn, a guy who has a completely different view, he has a very different kind of investment frame and i think it signals the side of the times. mark: bloomberg a large editor cory johnson joining us from san francisco, cory johnson, take you very much. at how the dust has settled in the u k after the elections and what is next for the british economy, when we afterack -- in the u.k. the elections and what is next for the british economy, when we come back. ♪
mark: when all of the votes were counted, david cameron's conservative party won a surprising majority in the house of commons, along with the six week campaign that preceded it, had a big effect on the u.k. economy. the day after the election when all of the votes were counted, the pound surged against the u.s. dollar, just look at that. it was up 1.38%. loud totives were declare that it was part of their performance, but of course, in the end, the conservative party won 331 seats , giving them that government majority. that means prime minister david cameron will remain prime minister david cameron. this is not the economy outcome that economists and business experts expected. that six week. leading up to the election was a
huge drag on the u.k. economy. we had seen signs of a slowdown , confidence among businesses had been falling, and traded a had not been that great, either. two of the biggest problems are wage growth and productivity. u.k. workers are on average 20% less productive's than workers in other g7 countries. when you look at the productivity gap, it is at its widest since 1992. who seems happy about how things turned out? the banking sector, for one, as well as the energy sector and as well as utilities. troubled sectors are manufacturing and construction, these are not back to where they were before the recession. before the recession, deloitte surveyed companies in the u k and asked what the risks were and what they were most worried -- in the u.k. and asked what the risks were and what they were most worried about, and it
seems like they feel crisis is -- the crisis is averted. there are smiles all around. whether or not the u.k. will decide to you -- decide to leave the european union is still up, and david cameron promised there would be a referendum up in 2017. and we discussed some new data that came out, and the governors there decided to cut the forecast coming forward, down from 2.9% down to 2.5%. aey are still maintaining pretty positive attitude, they show the and implement rate, which is at five point 5%, and they say things can get better here in the next couple of years -- 5.5%, and they say things can get better here in the next couple of years. mark: it is obvious when you look at it, but there are some similarities between the u.s. and the u.k..
what are they? david: we have had problems with the, and the u.s., it has been pretty flat, and in the u.k., we trya dip, but everyone is to play a game of guessing when the central bank is going to raise rates, and this report became out earlier in the week make people revisit these forecasts and wonder if this is going to take place next year at the earliest, and is is probably going to come in at 2018. . betty: that sells very familiar, that's david gora -- gura of bloomberg news. mark: your weekend just started. [laughter] betty: yay! mark: coming up, we will break down the numbers on bloomberg market day when we continue in just a moment. ♪
headlines in the hour. -- an eur leader becomes the first to marry his same-sex partner. he is the first in the catholic country to do so. and thousands of migrants are believed to be stranded on trafficking ships and waiting for countries to take the men in asia. an aide to the president of randy says and attempted to has failed in the african country. three military generals -- attempted coup has failed in the african country. three military generals trying to overthrow the president.
and in horse racing, the field is set for the second leg of the triple crown, the preakness stakes in baltimore. american pharaoh is the 4-5 favorite, and he will face just seven other horses, including the second and third place and assures from the derby. triplee has won the crown since 1978. in the next half hour of the bloomberg market day, u.s. factory productions stall last month and consumer confidence falls by the most in two years. we will look at what the latest reports mean for the markets and the u.s. economy. shares of netflix jumped after bloomberg news reports the streaming of video company is planning to enter china. we will have the latest from hong kong. and the tv networks are making their annual pitch to advertisers. we will look at the success of this year's upfronts in the
face of competition. while consumers are feeling increasingly confident in the , factory output dropped for the fifth consecutive month, adding to worries that the u.s. economy will sustain slower growth. here to break down the numbers is carl riccadonna and kathy boyle, the president of chapin hill advisors. thank you both. a causee these numbers for concern or are they an aberration? extending into the fourth month of the year, so we saw a lousy rise in the first order, and economists said that while we saw this last year, there is a fluke and economic data, but now that this is extending into the second quarter, this is becoming more problematic. are looking for a
repeat of that and i think they are getting a surprise now. we had soft retail sales earlier in the weekend what industrial production and this tells us that any q2 rebound is going to be mild at best. mark: are we looking at a new normal right now? we have have --kathy: had six years of the market theg up, and this is one of longest in history, and the numbers are very weak, everyone is looking for the liquidity to keep up the flow. arrows, thered us is nothing else to do, we are kind of pushing a rubber band at this point. mark: what is weighing on the average person right now? kathy: the average person is not seen job increases, they are worried about their jobs. according to resurvey today, the concern about job losses is the most that we have seen since 2009, when we were at the bottom and very pessimistic.
worried, andare baby boomers are not retiring, they are actually working, which is not leaving jobs open for the younger set, 60% of the five-year-olds are living at home. 54% of 30-year-olds are living a home. mark: carl, interestingly enough, ms. boyle points out the audit limit factor, but the headline and numbers show that things are going and the right direction, but help us sift through the numbers. what is going on underneath that we might not be aware of? carl: in terms of unemployment numbers, there is a downshift from what we were experiencing later part of last year, so we are chugging along, but if we add the revisions, we only have a gain of about 185,000 jobs, so that allows for march and a little bit improvement in april. households are not seeing wage
improvements yet. it is probably not going to show up until we cross that 5% threshold of unemployment. we are not there yet. we are seeing this economy that is moving slowly in the first half of the year and they are getting concerned. mark: our wages the linchpin here? kathy: yes, and most of these jobs are in services that are very low pain, health care, retail, and restaurants. gdp is really driven by consumer spending. mark: next week, what are you expecting? kathy: we are looking to see a as to whether the fed is going to give any indication of an increase. 4% bet thathave a rates are going to rise in june, and we don't't -- get a 50% rise until september. a fedwe are talking about that is data dependent, but they need to see some sustained
strength over a. period of time, and not a blip on the screen. the data, and at best, the data is closely right now, and so in june, it might slip off the table. we will hear from a number of important fed speakers next week, we hear from vice chair fisher, and also, janet yellen it speaks next friday on the economy. thecould seal the fate of situation, maybe in july as welcome at they do want to keep hopes alive for rate hikes. mark: we have about 30 seconds, but i have to ask about retail numbers in april, i hear they were pretty dismal. what picture does that paid for the fed? this does not: look good, and they are not saving the money, they are spending some of it and they are spending done their credit
cards, so theoretically, that is saving. boyle, carl riccadonna, thank you both so much, appreciate it. still ahead on the bloomberg market day, we will get an update on why the european stocks closed lower this friday. hear that netflix is in talks to enter the chinese markets, it has brought netflix shares to a record high. ♪
mark: welcome back to the bloomberg market day, let's get straight to a check of the markets. bloomberg's julie hyman is standing by with the details. the three's look at major averages right now, because yesterday the s&p 500 has closed at a record. it has not been able to maintain that record, however, and we had a consumer confidence report has showed a major drop in the last two years, and that is not making investors feel incredibly strong about the economy, the nasdaq is only down about one quarter of a percent. if you look at the push and pull of the stocks today, you have utilities on the rise and financials on the decline. with that consumer confidence report, we are seeing more dying of treasuries and yields are falling. if you're looking at the 10
year, and where that yields today, you can see that pessimism reflected in that and we are probably going to see rates lower for longer. i also wanted to bring you breaking news coming out in the past a few moments, there has takeover approved of another company, and it adds a big nuclear power provider as it takes over pepco holdings. clout in theing its solar programs that pepco has put forward. we are going to figure out exactly what those issues are, but pepco on the screen behind me is spiking after a got that approval. we saw exelon shares also spike after the approval came out.
i want to check on a trio that came out after the earnings after the bell or this morning, we have a mixed trade on materials, and dillards is taking a hit following its earnings report. mark: julie, thank you, and now a look at today's market action in europe and asia. was go to bloomberg's jonathan ferro. jonathan: let's wrap up the trading day in london, showing? the whole map of europe is in this dark color of red. low,re finishing on this the dax 40 was down as well and the stoxx 600, just a week of losses produced this week. the session for the dax was rolling over and accelerating against the close and exacerbated by that u.s. consumer confidence number, and on the back of that, the biggest
drop in u.s. consumer confidence in two years. there is the complete u-turn in the euro, it was a against the dollar at 1.143. relationshipou the that was not a play today, stocks dropped, bonds did not, a rally in european asked income. throughout much of the day, throughout the periphery and in the core. and french bond in yields were down by five basis points, but keep a lid on those in yields, keep them under 1%, that bond route has no because about that. but here is a big call for you, it could be close to the end of that bond rout right here in europe. back to you. mark: jonathan ferro in london.
shares of netflix are at a rise to an all-time high dig a -- all-time high today after bloomberg news reports that netflix is and talk to enter the chinese market. netflix is talking with possible partners in china -- $9.9 its five point billion video market. it is speaking with the company backed by jack ma. expected to almost triple to $14.5 billion by 2018, but, to take advantage of that growth, it is almost essential to have a local partnership to control licensing for online content. mark: bloomberg's rosalind chin in hong kong. now let's go to the top stories crossing the terminal in this hour, president obama's asian trade talk is back on the fast track.
that would give the president authority to speed up trade deals. democrats backed off what republicans agreed to vote on other bills designed to protect american workers. factory outlook installed last month. the fifth -- before the fifth straight month, total industrial production declined and many manufacturers have been hurt by the strong dollar. to the wants to appeal social media crowd, so the local restaurant chain has redesigned their dishes to look better on social media. this is because diners like to take pictures of their meals and post these pictures on facebook. chili's says it pays attention to what is happening on social media. cotengland patriots fan
defense tom brady. cote: how did you know it was not just cold that day? mark: i almost don't know what to say, mr. cote is a great guy, but scarlet fu, something is wrong with that. detect a bit of a new england accent and that when he set a bar of soap? mark: i detected a new england bias. scarlet: that was really obvious. mark: there are text messages that seem to be as definitive as -- thatbe that one went something went on that wasn't supposed to go on and it wasn't about the cold weather. scarlet: it wasn't about the cold weather and of course, tom brady is appealing his suspension, and he would be able
to return for the game against the colts. and of course, it was the colts than inform the nfl about the deflated balls. the same have heard logic that i have heard, everybody does this. scarlet: i don't know if that makes it better or ok, that hey, listen, the patriots have tom brady to bring in the fans, what about the performing arts? in the next hour of the bloomberg market day, we are going to use bequeath the ceo of -- american rally theat american ballet company. when was the last time you went to a ballet? mark: about two years ago, and it was fascinating, too. scarlet: you remember any of the printable dancers? -- principal dancers? mark: no, they were beautiful and fascinating, but big names?
no. scarlet: misty copeland is certainly a big name out there, but everyone needs one of her. name ine is the biggest the united states right now, scarlet, we will see you coming up in a few minutes. we will see you at the top of the hour at 12:00 -- 2:00 p.m., eastern standard time. muchg up, we look at how at revenue these networks hope to bring in this year, that is coming up, next. ♪
and cable channels show off their channel lineups to get big money. spend moneyers closer to the fall air dates. sweeney,e is paul director of media research for entertainment, paul, what did we learn that came out of the upfronts. did the numbers decline or are they going to rise? paul: a lot of investment by all of the broadcasting cable networks and some very high quality, high crossed -- high-cost programming with a list talent, so the networks are investing a lot of money up front for their fall season. l theuestion is, wil advertisers spend money on that? if you talk to all of the broadcast and cable networks, they are cautiously optimistic
for this year, and i want to underscore cautious, we are hoping to see some kind of growth. mark: are upfronts becoming educated -- coming antiquated? the networks themselves are performing around the calendar, not just in the fall. it used to be you would have new shows in the fall and reruns in the spring, but now networks are showing new programming throughout the year, and advertisers now have digital places to place their advertising dollars, michael -- dollars, like yahoo!, facebook, so they are committing a less money in the upfronts. money -- youe us gave us information about the money year after year, but due to the shift in all mine viewing, has this a seismic shift that we are seeing? paul: ratings have generally been softer crossed broadcast and even across cable networks,
and a lot of forecasters have recognized that about 40% of havedecline it may resulted in consumers going over the top or timeshifting their viewing. so that is a changing dynamic television landscape, and it is a changing dynamic that advertisers have to get used to, and the way they are thinking about it, how much money do i want to commit as a never ties or to a cable network in may for tv shows that will air in fall? maybe i will have a lot more choices in the fall whether it is traditional media or different types of media. and i are, both you commuters, we see people on the train, people have their laptops and their ipads in their laps and they are watching netflix. one of the challenges for these networks is to make sure ac nielsen, their partner in the ratings business, accurately captures that timeshifting
viewings. days,an track up to three and the state -- and this year is going to be up to seven days. what they haven't really embraced as an industry is nielsen's mobile tracking, and that is something that the advertisers and the networks and wilson all have to embrace together. mark: you say they have to embrace it, so that bigs the question, why haven't they? egs the question, why haven't they? why are they later the party? paul: they are slow in recognizing a nielsens new -- recognizing nielsen's new scheme, but it is a longer process than you would think because there are a lot of parties at the table, everybody has got to work together. mark: what is the forecast seen
it for advertising for the remainder of 2015? a sloweris going to be year than people expected, and it will be fairly flat in the tv business. that is below what investors expect when they are seeing positive gdp. it looks like it goes to the big issue of, where are those dollars going? are they leaving television and going to media elsewhere? mark: i have to ask you a quick question about late night, because david letterman will be retiring next week on wednesday. when you are at these television network meetings and these up runs, and they are saying to you, guys, 11:30, there will be a whole for a while until the hole for a a while until the new guy shows up, is that away for advertisers to advertise their products at a much cheaper rate?
that stephen colbert will be able to hit the ground running. mark: but what about that hole there? paul: networks may recognize that this transition. could help them grab audiences and keep them during the transition, so it is a very competitive marketplace and all of the networks are throwing resources behind it. sweeney, thank you so much for joining us, we appreciate it. after decades of economic isolation, myanmar is throwing out the welcome mat for companies like hilton. our erik schatzker is there and will have updates, coming up. ♪
the hitch the euro for the first time in years. isk: american ballet theater selling its 75th anniversary. how the ceo or revenues by nearly 20%. scarlet: the preakness is running tomorrow could what are aoh words that american phar could win the second leg of the triple crown? mark: good afternoon from bloomberg world headquarters in new york. i am mark crumpton here with scarlet fu. scarlet: tgif. mark: yes, it is. scarlet: we have been trying to make our way back to the unchanged line. haven't gotten there yet. if you look aea