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tv   In the Loop With Betty Liu  Bloomberg  January 13, 2015 8:00am-10:01am EST

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are 90 minutes from the opening bell. some are saying it's time to raise the gas tax. that hasn't happened for two decades. we are going to talk with the former transportation secretary if this is a good thing for the economy right now. audi debuts its latest suv. we will talk with the ceo. first, here's a look at the top stories we are watching for you this morning. oil passed another milestone on the way down. it fell 4%. training is below $45 a barrel. -- trading is below $45 a barrel. opec can withstand the plunge and oil prices. the british inflation rate hasn't been this low in him was 15 years. consumer prices rose one half of 1%. they will write an open letter explaining why prices are rising
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too slowly. in greece, the government says they could stumble out of the euro by accident if the opposition party wins. the finance minister is saying the opposition party might have to have the bailout extended. >> if the opposition wins, they do not have the knowledge of the experience in negotiations, they have certain ideas of their own, i think it's prudent for them to ask for an extension. it will give them some time to manage the negotiations. >> the greek election is in a january. the opposition has a slightly. in france the magazine will print 3 million copies of the issue that comes out tomorrow. the normal press run is 60,000. the staff has been working since friday.
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the cover will show a cartoon with the prophet mohammed. an upset in the first college playoff football finer. eczema deal elliott rushed for 246 yards. ohio state won over oregon. it's the eighth national championship for the buckeyes. oregon was favored to win. president obama will meet with congress with plans to lay out new cyber security proposals. central command twitter account was hacked. the pentagon has dismissed as a prank. the twitter and youtube accounts were suspended for about 30 minutes after messages thought to be from the islamic state were posted, including american soldiers, we are coming it, watch your back. the military insists no
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classified information was compromised. there could be more serious implications from this prank. jordan robertson is our cyber security reporter. he joins us from the washington bureau. the white house dismissed this they said this was not a hack attack. it was just a twitter problem. is there something more going on? the idea that anyone can get into a government account how serious is that? >> the real issue is the white house is said this was just a twitter account hacking and the military was not compromised. we have every reason to believe that's true. in our internet age our twitter accounts of become very closely aligned with their identities. when central commands account is hijacked, there is an emotional
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attachment to that for many soldiers or people involved in the military. if you are an organization that places a high value on security which the military does securing a twitter account is the easiest thing you can do. it's embarrassing from that point of view. the damage wasn't great. from a symbolic standpoint, this is simple to secure. >> if they can do this, what else can they do? walk us through the logistics of how 70 would hack into a twitter account to begin with. >> first, we should say that twitter offers what they call two factor authentication. this is something everybody should have. you get a text message alert when you log into an account from a non-familiar computer. that was not used here. you can do it a couple of ways. you can send an e-mail to the account administrator.
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if they don't have the text message alert set up, you can login. you can do what is called brute force attacks, guessing random systems. if you are allowed enough guesses or you use it over enough time, you can get in that way as well. it sounds like this wonky thing. it's essential for everything. it's essential for everybody. >> the president was talking about the importance of cyber security just yesterday around the time it happens. he asked congress pass a law requiring information be shared between governments and private entities. a lot of tech happenings of been very resistant to this idea. they are critical of the administration for suggesting that they play ball with authorities and gather intelligence. why is it important that they do so? >> this is an interesting
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question. on its face would seem like a commonsense solution. the private sector has lots of data about ongoing attacks. the government has a lot of data about ongoing attacks and they should share information. cyber security decisions are not always made by the technology departments of organizations. far more often they are made by the general counsel's office and the legal department's office. when a company decides to share information with the government, there is almost always a lawyer in the room saying this could come back to haunt us. this could be a liability for us. this could be a legal problem for us. private companies want to share information, but they need legal cover and protection or incentives or advantages to get government contracts. the government will not get a lot from these companies. >> jordan robertson, thank you very much. i want to bring in my guest toast for the hour. he is the ceo and finder of our
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crowd. he has invested in a number of security companies. he has views on this. john medved, welcome to the show. it's been an issue. tech companies don't like the idea of having to turn over consumer information because they see this as an infringement on freedom of speech. >> the issue is not whether tech companies are going to make data available. it's whether it's secure. both the government and corporations need to make the requisite investments to make sure that this is happening. it's outrageous when you look at what is going on over the last couple of weeks. whether it's sony or a "prank," it's disturbing that their twitter at cap could be attacked so easily. we are totally vulnerable. we need to invest. both private corporations and the government need to get the
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best technology. you can't not use that double authentication. we have a company in our portfolio that developed a new way of doing biometric authentication. they actually watch how you type. they watch how you use the mouse and through different parameters, they know it's you. how are we not using these advanced authentications? people don't want to spend the money. it's important. the message is getting through. i think the president understands that. every ceo in the boardroom, how do we not become the next sony? >> look at target. that was a preventable attack. it's easy to monday morning quarterback. it's much harder to be the ones to step out in front and say i will make this investment right now. >> there are all kinds of solution. there is a company called bill guard.
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they use crowdsourcing to see if they will be the victim of a credit card fraud attack. people like target or home depot you know if you are being hacked. the tools are out there. they are being developed here and in israel. israel probably leads the world in cyber security. >> john is sticking with me. metlife is going to be suing the u.s. government to fight its designation as an important institution. in the event of a failure it might trigger a financial crisis. the definition means that metlife will be subject to stricter oversight by the fed. joining me to discuss this is erik schatzker. a lot of people don't like this kind of oversight. they feel it will be strict. >> it restricts their business and it adds costs in terms of
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enhanced liquidity leverage and capital requirements. metlife and jpmorgan can't stand that idea. the banks don't have an option. the largest lenders in the country are designated with no recourse systemically important financial institutions. the nonbanks have the option under dodd-frank to appeal the decision within 30 days. it was on december the 18th that it was designated. the 30 day window expires this friday. the three non-bank firms designated are aig, ge capital and prudential chose not to fight the designation. they are obvious clinical reasons. given the trials that they went through during the financial crisis prudential came very
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close and decided not to file suit. suing the u.s. government is not a small matter. metlife acid take the government to court in washington dc and then it's up to a federal judge to decide whether the nine to one vote by the committee was unfair to metlife. >> if you think about what is systemic and important, i think about long-term capital and the ramifications long-term capital has. that is something determined to be a big deal, though nobody would have thought so at the time. >> there is an important distinction to be drawn between insurance companies and amasa -- an asset manager. there are asset managers like pimco or black rock. they took in activities based
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approach. to see if their activities pose a threat to the financial system. in the case of the banks and the insurers, they are looking less and the activities and more at the size of the institutions and the threat that would be posed in the event of a sudden liquidation of their securities. insurance companies hold liquid securities. this is the argument that the ceo of metlife is going to make. they are not subject to the same run on the bank situations. these assets are held against insurance policies. it's not like you can withdraw all your assets like you can a bank account. that is the foundation of the appeal that metlife is going to make to this federal judge. >> we will hear from the ceo at 10:00 this morning. >> he will be on market makers. >> we look forward to it. a sign of things to come alcoa
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kicks off earnings with better-than-expected numbers. we are going to talk with the founder of a crowdfunding site. we will be back in a few. ♪
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>> welcome back. i am trish regan in for betty liu. scarlet fu is revealing the name that you need to be watching. >> let's start with apple. it's the most commonly traded spark with 36 million dollars worth of shares being exchanged. the prospect of cash returns and earnings momentum. the shares are gaining it. the most -- second-most actively traded is amazon.
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gross margins will rise in 2015. let's move on to hewlett-packard. it is a downgraded. rising competitive risks, the market share rose to 18.8% from just over 16%. best buy is getting an upgrade over at goldman sachs. solid sales for holiday numbers. its position as he sold surviving electronics retailer there is a lot of excitement over flatscreen televisions. >> 2014 was an incredible year for investment. funds raised $32 billion last year. it was a 62% jump. it was the highest total since 2007. there was heavy interest. it is fueling fears that some parts of
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the venture capital industry may be overheated. i want to turn to john medved. he is the founder of the israeli crowdfunding site are crowd. you start seeing things like whatsapp or a $40 billion devaluation on uber, is this 1989 all over again it? >> we have companies with real value, making money and creating earnings. this is a totally different situation. some of these valuations you could debate. i wouldn't bet against mark zuckerberg. they seem to know what they are doing. we will see how whatsapp plays a role at facebook going forward. the real question is is a good
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time to be investing in tech? it depends on your perspective. who knows. that is a crystal ball. if you look at it for 10 years, it's a great time. sony pieces are in place that are going to generate huge growth. the internet of things is a real, enormous trend. what's going on in the odor of -- automotive industry in terms of tech, it's huge and important. big data is changing all of our lives. >> it set the stage for all the good things that can happen now. >> back in 1999, we knew what google was. we did not know what facebook was. we lose perspective of time. the new googles and the new facebook's are being born. they are not just being born in silicon valley. they are being born all over the world.
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despite the fact we had a nasty little war this summer that people thought would hurt the economy, it turns out that our tech investing was up 35% for the year. we hit all-time new records. $3 billion invested in israeli startups alone. >> the israeli startup community is incredible. it's tremendous. you are involved in a lot of companies. >> i'm excited about the company that we took public this year called re-walk. it's an exoskeleton maker that allows paraplegics to get up and walk out of their wheelchairs. this was one of the best-performing ipos of the year. it was a company we invested in as a crowdfunding. what's happening out in the world of venture capital is it's being democratize. individual investors can get in. before, it was a close game. there was a dark room where
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people who were connected in silicon valley got the hot deals. they got the next facebook. no longer. these kinds of companies are now coming to sites like our crowd where in individual investor has $1 million of net worth, there are 10 million households in the united states that meet that criteria, they can invest in a company. what's happening in our area in terms of equity finance is following what's happened already with companies like the lending club who have done that for debt. i think three or four years down the road, you will see companies like our crowd having billions of dollars. >> that is the democratization of all of these markets. still ahead, oil still plunges below $45 a barrel.
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what are going to discuss that story next. ♪
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>> you are watching bloomberg television. i am sure he for betty liu this morning. this is a look at our top company news. alcoa has reported better fourth quarter industries. they predict the demand for aluminum make increased 7% this year. automakers are using more of the like me -- lightweight material. the a3 80 jumbo jet has proven itself to be commercially viable. airbus said it's an airbus --
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option. there is a battle between airbus and boeing. boeing delivered more planes to customers than airbus. airbus edged out boeing in future orders. elon musk is getting more ambitious about x lori space. he tells -- exploring space. they will play a crucial role in the ultimate goal of establishing a human settlement on mars. it's 26 minutes past the hour we are on the markets here and we are watching the futures market, slightly how are -- higher after a down day today yesterday. we are going to check back it on the futures market in 30
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minutes. as we've been reporting, oil is plunging again with west texas intermediate below the $45 mark. it has taken its toll on investors and oil companies, but also on the banks. they lend to oil companies. they help them hedge. is all of this business about to disappear? isaac, walk us to the concern. >> it's important to member this has been a key growth industry in the u.s. and it's very capital intensive. a lot of funding is required. banks of stepped up to that. in and arranging share sales.
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>> they may be worried about default. if some isn't able to pay the bills. >> the banks have the first cut. they are conservative on that. they take the proof reserves and the best assets at the companies have as collateral. they have semi-to back it up. -- they have something to back it up. the companies will have an emergency group financing with a private company. >> maybe they are ok there. if you move to the secondary stock offerings. >> that's been a real bright spot for a lot of these banks. they might get some of it in m&a. they would be getting fees from that. it's a big? what's going to happen to the
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receipts they were getting from the capital markets? >> the hedging business that goes on with these institutions they need to be on the other side of the trade. >> i don't see the banks failing because of a lack of income from oil deals. there are other deals to replace that. i am surprised how the markets are reacting and how people are talking about the drop in oil rices and people should be celebrating. there should be tickertape parades. this is wonderful news for the average consumer. >> i love that you said that. i think consumers have been left out of the recovery. they been struggling for the last however many years. we are in a situation where they are seeing some benefits. there are more jobs being added and the dollar is stronger. their money goes further. they are not paying as much money to get to work every day at the gas pump. >> it's the perfect time to take
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your family on a road trip other than the weather. it's great news for the economy. more dollars to spend in consumer pockets. lower costs for everybody else in the industrial output arena. long-term, this is a list for the market. >> everybody is freaked out what oil means for the markets. let's not forget that two thirds of gdp is consumer spending. the consumer is the ticket to all of this. how big is energy? how good problems there really spill over to the rest of the economy? i think you've got to weighted against the power of the average american to do more spending. >> the bottom line is if oil prices are volatile, we should enjoy it while it lasts. to say this is going to be the long-term normal, who knows?
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it's great news while it's here. it's got some casualties, which are green energy and alternative energies. that's sad. that's the price you pay for having more money in consumers hands. >> the other downside to all of this i would argue is you are not going to see the investment in shale. this rendered -- energy renaissance has been a wonderful story. it's done a lot in terms of our own a national security to wean us off that dependence out of the middle east. living in israel, you know a lot about that. unless you've got 80 or 90 or $100 a barrel >> it's hurting the transition to natural gas on trucks and buses. the differential between those rices -- those prices.
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in general, i am delighted. >> good news for the u.s. consumer. isaac, thank you so much. john, you're going to stick with me. i would go to scarlet fu. we just got some numbers. scarlet is going to break it down for us. >> you've got an earnings per share number that includes a lot of extra things that were not anticipated. $8.36 was the earnings per share. that is an income tax benefit. on the revenue side, and was up 29%. that is higher than what analysts were looking for. they were looking for $777 million. the number of orders increased 10%. the consensus among analysts was for a 7.5%.
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most of the comments -- we will focus on that and bring you new details. >> coming up audi ceo is going to be join us to talk about the latest line of suvs. they are taking on bmw in the luxury car market. be right back here for more in two minutes. ♪
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next the auto show kicks off this week in detroit. audi came out strong. they introduced a luxury suv.
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it competes head-to-head with the bmw x five. audi is going to spend money to help the taken takeover bmw. will this help narrow the gap in luxury car sales? here to discuss is the audi ceo. still with us is john medved of our crowd. it's wonderful to have you here. what makes the audi suv different in your view? >> i think the audi engineers did great job. we worked heavily on this project. the car is 325 grams lighter. there is all of the electronics on board. we started at the consumer
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electronics show. this car has all of that stuff on board. it will support us in our growth strategy. >> we were just talking about all the technology that is everywhere right now. >> it's unbelievable. the auto industry is becoming an intended -- incredibly tech driven industry. when you think are we going to be driving autonomous vehicles? >> i have a clear answer. the successor that will come out in 2017 will have that on board. >> that is unbelievable. people been thinking about 2020. you're going to be debt by a couple of years. >> 2017. >> you just get in the car and press a button and you let the audi go.
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>> the car will do whatever is needed. up to a certain mileage. it gives you a lot of comfort and safety and quality of driving. >> its cruise control on steroids. this is so important area people don't understand how important this is. by the year 2040, $31 billion of google revenue will be driven by autonomous driving. >> i find this fascinating. i hate to drive. i really hate to drive. i love the idea of the driverless car. i am also compulsive. how do they balance these two things. yes it's going to be safer. you don't have all of the human error or it reacts to certain
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situations. at the same time, if i'm in a driverless car and somebody else is driving themselves, i'm going to want to react naturally to something i don't like. how do you balance that? >> the driver will always decide if he is in a piloted driving motor not. there are laser cameras and sensor technologies, scanners on board, there is high commuting -- computing power. you have to have some redundancy systems. the car has to decide what to do. >> how many chips in the average car today? >> it's not about the amount of chips it's the question of the computing power on board. this has grown up dramatically in the last three to five years.
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>> there is a company in israel that have the highest ipo of all time. they have a $10 billion market gap. they make chips for autonomous driving and collision avoidance. >> we are working with a company in california for seven years. they are specialists in high computing power. they are coming from the gaming industry. >> when we watch the dollar get stronger every day there are concerns that the euro continues to slide, what does that mean for your business? >> nothing. we have a clear strategy and that is to work toward growth and the quality of business. audi decided to build a factory in mexico. we believe that there is a big growth in the u.s..
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>> americans by your cars more cheaply if there is a stronger dollar. >> i think it's all about the quality of business. we are the premium brand number one in europe and china. we are trying to get the lead in the united states. this is a tough, competitive business. we know. we have good products. why should this happen? >> thank you so much. this is very exciting. 2017, driverless cars. also, my thanks to john medved. thanks to you both. emily is going to be back in two minutes. we will see right back here. ♪
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>> one consumer has a reason to celebrate the drop in oil
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prices. the dod is the single biggest buyer of refined products in the world. the military could ease the budget squeeze peter cook has talked to the budget person or it >> if prices hold the budget guru says they could save $2 billion this fiscal year. that is real money at the pentagon. the pentagon doesn't buy crude it buys refined products for all those ships and tanks. it's about 1.5% of all consumption. aviation does most of the gas guzzling. the air force consumes more than any other service. they will consume 91.5 million
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barrels. if oil prices hold at the $50 a barrel the bill could fall to $12 billion. real money, even in a place of the base budget of about $500 billion. >> when they going to do with the money? >> not surprisingly, they are being cautious about this. they know prices could turn quickly. they are not banking on these prices being there forever. the comptroller tells me that the money could ultimately be redirected to other pressing needs in the pentagon. >> this is a good problem to have. i am confident that something will come along that will require me to use some of these assets to pay for another
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problem that comes up. this is not a bad way to be having something going well. >> if the savings are substantial, there is a major reprogramming here. they may have to go back to congress for approval. this is a good problem to have. they haven't had a lot of those recently. >> peter cook, thank you. would it be hard to raise the federal asked tax right now? it's been sitting at $.18 per gallon since 1993. with highways in dire need of upgrades there has been chatter that you could raise prices. the national average is $2.13 a gallon. it is $1.50 in oklahoma city. even some republicans have
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proposed a raise. senator thune -- for that last tax raise, he saw the implications. he joins me. mr. secretary, good morning. i have to ask you, we talk about the benefits to the american consumer. the consumer has struggled over the last six years. they are finally seeing some hope. we are adding more jobs to the economy. they are paying less money to get to work every day. is now with the economy is still in recovery the right time to tax? >> we've seen the recovery play out over a number of consecutive months now.
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something this building. you're right to be concerned about raising taxes at a time when individuals who struggle to make it all come together are just seen the benefits of an enhanced economy. i can to you the condition of the transportation system is deteriorating. it's the business that helps all business do business. it's the thing that gets us to those things that bring happiness to our lives, a job or getting our kids to school or visiting grandparents read transportation is something everybody uses. everybody benefits from it and we have to keep the system in as good a state of repair as possible. >> how would you deal with repairing it? >> looking at the gasoline tax and a possible increase, it's
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only part of the solution. you're going to have to look at partnerships bringing the private sector on board even more. you're going to have to look at state and local governments. i'm excited to the congress is now really stepping up along with the administration of looking at all of these options that will get us where we need to be in the future. >> the public, private partnerships people that like to talk about that a lot. it's a policy that has worked in some places. chile comes to mind. i am talking about privatized roads. is there room to have some kind of partnership where we have a privatized highway system that will improve our infrastructure for everyone? >> you see it every day. the identified project near
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tysons corner, projects in texas this technique is something we're going to see more of. the last time the gasoline tax was raised, it was raised for deficit reduction in 1983. in 1997, it was taken and placed in the general fund. we haven't seen an increase since that time. thank you very much. >> thank you. >> paul ryan is bowing out of the presidential race as mitt romney ramps up campaign efforts. is a reunion in the works? we will talk more next. ♪
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>> i have an update on oil prices. wti has stabilized this morning. for the week, they are down 7.7%. oil prices tumbled yesterday. analysts say it is the biggest winner of whitening price differences. they raise the price target to $56 a share. trish? >> we're going to head to san francisco where we will talk to the vice president of global r&d. instant caryt is seeing a $2
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billion valuation. ♪
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>> welcome back to "in the loop." i'm trish regan in this morning for betty liu. these the top stories we are following. the futures market indicates stocks will be higher at the open. the price of oil is falling again. west texas intermediate is down 4% below $45 per barrel. the u.k. relation -- inflation rate hit a record low. it ties the record set 15 years ago. victory for anti-wall street
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democrats led by elizabeth warned. they forced him to withdraw his nomination for an undersecretary post. it does not require congressional approval. a day after a fatal accident sent smoke into a train, one person is killed in dozens were sent to the hospital. one of the subway lines is still closed. here in new york, a fire near penn station has caused delays are some committees. subway travel was disrupted and some tracks were shut down temporarily. the first winner of the college football playoff for the national title is ohio state. ezekiel elliott rushed for four
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touchdowns leading the buckeyes to a win over the oregon ducks. it is ohio state's eight national championship. we are under 30 minutes to the start of trading. these are our top 10 headlines. julie hyman is joining me. we ar have number 10. we are focusing on the mobile consumer data sales. people are shopping on their mobile phones. i spoke to kevin ryan just yesterday. this is what he had to say about it. >> everybody is around 50% of revenue coming from mobile. it's in or miss. >> mobility is what it is. he was making the point that
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this is the reality. this is where everybody is trending. it's not just kevin ryan saying this. you are hearing ceo after ceo after ceo. this is not just retail. >> just yesterday, i was in a conference. it was the national retail federation. various vendors try to pitch their wares to retailers. one of the themes they were talking about is unification of the experience from the store to your mobile phone to the website. >> number nine today boosting the pay for lowest earning employees. they are going to be getting a minimum of $16 per hour starting in april. >> i think i will give that a pass at the moment. $16 an hour.
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>> if you work 40 hours a week that is $33280 annually. depending on where you live, that's kind of ok. >> where are you living on $35,000 a year? >> it's interesting. >> in new york trade >> cars cost the same wherever you buy them. >> this is a major insurance corporation. that is not a corporation that is just doing a cookie-cutter kind of thing. i thought they were supposed to be a major health insurance. >> i would say with the best people doing those kinds of jobs. >> number eight general motors says it is open to working with google on developing self driving car tech knowledge you.
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-- technology. we just had the ceo of our young. he said they'll have a driverless car on the road in 2017. >> how much would it cost? >> he didn't say. the technology is improving at such an incredible rate, you will be able to drive this when you need to. you will have all the technology. >> when they say driverless cars, do they mean there won't be a steering wheel? >> you will have all the things that you have but you will have those line side cameras or the monitoring of the distance between you and another car, the lane changes. it's going to be assisted with all this technology. >> it's not going to be like sitting in the backseat going to sleep. >> i just wonder if you are like
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myself and i don't want to drive if somebody comes near you, you are going to want to take over. you didn't know that about me. number seven, boeing delivered more planes than airbus in 2014 to hold onto the title as world's biggest airplane maker. >> have you been on one of those 787's? >> i asked andrea rothman about these companies. she has covered airbus. why does it matter so much which one of them is bigger? we are talking about very slim margins. at one time, when airbus cut up with boeing, it was a big deal. it's less than a big deal now. it's a bragging rights thing. we look at these numbers very closely. it's interesting. in terms of their business, the
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actual number. >> the penetration of the new 787 and the new airbus, with low oil prices these airplanes are designed to cost 30% less to run. that means big profits for airlines. >> they are seeing the evidence of these oil prices. number six is alcoa. they had the largest numbers, up 7%. auto makers use more of the late -- lightweight metal. it sets the stage. i will take it. >> it's not going down. >> as opposed to copper and oil. >> oil has dominated most of the commodity headlines. >> the ford f1 50 is all aluminum. >> are you getting one?
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>> i'm a truck girl. >> i've heard they're very good. >> i do know about on the streets of new art city. i don't know if i want to drive a pickup's are. >> when they announced this, it was a big presentation with fireworks and men with sledgehammers on a huge stage. mark fields was not the ceo afford it. there's the bell. this was an incredible display for this all aluminum f1 50 he and built in kansas city. they showed how many jobs would be provided. i think matt has been to the factory. it's great. >> coming up, the head of global r&d will be here to talk about the latest research.
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we are going to have more "in the loop." ♪
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>> we are continuing the countdown to the open. it's time for the deep dive. it is to leaders meet in san francisco for the health care conference. new drugs but making a lot of news. my next guest just announced 18 new drug launches in the next seven years. they have six new drugs coming out this year. dr., welcome. of all of these drugs, which do you think you will see the most from? >> i think 18 launches in three years as a lot. six in one year is unprecedented. i think what's happening as we
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are providing drugs for treating chronic diseases. i think it will become the gold standard. a new drug was just announced. it reduces the that cholesterol level is never been seen before. it has the potential to wipe out the last year of mortality and morbidity that occurs in cardiovascular disease. we have a vaccine that is unique in the world. it affects 2.5 billion people in the world. i think our research engines are really producing. we estimate that these drugs will generate $37 billion of sales. >> how much money is allocated
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to research and development? how has that changed over the years? the challenge is given by the ceo. can we develop a pipeline? we had no pipeline five years ago. we've done all of this while maintaining the budget for r&d at about 14% of the total sales. that's low tier in the industry. we have done this through restructuring and work. we have done this with a lot of intelligent science. this year is going to be a reflection year. one things people don't appreciate is the base business is strong. we have emerging markets. i think that business is performing. today, we are less dependent on
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the typical pharma business. 72% of our pipeline is in a biologics. the transformation has been hard to do. >> we've seen so much consolidation in your space. a lot of that is fueled by tax inversion deals. a lot is a need for additional research. when you look at the landscape over the next year, is there anything you would like to have in your r&d department that might be for sale? the part -- >> the prices are high. we have 10 drugs in the mid-stage. right now, we are looking at adding assets that are critical
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to the solution approach rather than the pill approach. we have to go beyond the injection or the pill. we have to have a copperheads of solution for the patient. we are looking for things that will complement a portfolio approach for the needs of the patient. >> let me ask you about management. any sense that a new ceo who that might be or who the company is looking at? >> the board is working actively. i don't know. i know we are looking for someone who can execute what we have in front of us. we have a roadmap that is clearly defined. we have six launches this year. we have to continue the
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momentum. we have to produce a pipeline that is a right through type line for the next two years. the mission is clear. we need to understand that we can't lose momentum. i don't think we've missed the beat in terms of execution of the priorities. we need to get those products launched and commercialized. >> before we go, let me ask, have you been approached? >> i love my job. i love research and development. we've done such a great job and i am so pleased. the turnaround we have affected the situation is better today than when i joined. i am enjoying what i am doing.
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>> ok. thank you so much. we will see later, thank you for joining us. we are going to have more later on in the program. we're going to take it break. we will see you back here in two minutes. ♪
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>> welcome back. i want to bring you the most important stories you need to know before the bell. we've got julie hyman and tim fox joining me here. we are going to start with number four. in france, the satirical magazine will print 3 million copies.
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the cover will show the prophet mohammed. >> this is a huge rent for them. 60,000 is the typical circulation of this magazine. it's garnered a lot of attention and this is a symbolic gesture to show that the magazine was not crushed by the actions. >> they will sell those magazines very quickly. >> there are waiting lists to get it in paris. i was listing to a report on the radio were a journalist went to her local newsstand and had to sign up to get a copy. she is on a waiting list. >> it's an interesting concept. >> it's indeed a tragedy. >> there was a hacking attack on centcom.
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the problem here is i don't care who did it or how it happened well i do care who did it, the point is they got hacked into. that is not a good thing. the white house was trying to say it was not a big deal. it was not a real hack into our system. my thought was, this is not good at a time like this. it happened ironically as the president was talking about hype -- cyber security. >> twitter has tuesday's authentication. if you have a corporate account many people are contributing to it, you can't do a two-stage authentication for all of those people who are using the account. the question is, how you make that secure? if i sign in and then a code gets it to my phone, it can't be sent to all the people using the cap. >> didn't al gore say it's the
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information superhighway? people can do a lot of different stuff. they do it online. >> paul ryan runs at a presidential bid. mitt romney makes a mood -- move. this will be the third time for mitt romney. one way or the other -- >> is he the modern day william jennings bryan. >> i'm not sure richard nixon should be a romo. >> he was outspoken about the threat of russia. it looks as though everything he predicted is starting to come true. he's got some credibility when it comes to the foreign issue.
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>> to that. >> we're going to take a quick break. we're getting closer to the open. we will be on the markets as we head into break. we will see you back here. ♪
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>> welcome back. imed trish regan. we want to get you caught up on the most important stories. julie hyman and pimm fox joining me on set here we are going to talk about the number one story, oil. dropping below $45 a barrel amid speculation that u.s. crude stockpiles will increase and exacerbate the global supply glut. i will say it again. people are worried about this. what it means for shale companies, banks lending to shale companies. i say it is good news for
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americans, for consumers. and therefore should be a net positive for the economy >> the retail conference, an economist at morgan stanley was talking about the consumer. she said in the fourth quarter this returned $50 billion to u.s. consumers. if we continue at the same pace it could be another $80 billion on top of that $50 billion in savings additional cash to spend, potentially. >> i also think it is psychological. people got so beaten down. they feel as though the market is going here and only a certain class are benefiting. maybe a glimmer of hope. he would be surprised how many people feel tied to gas prices. when it goes down, that is based. >> $70 a tank down to $40 a
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tank. >> that makes a difference. a couple more bucks in your pocket every week. stephen with us as stocks get ready to start trading. the chief market strategist at russell investments. he considers lower oil prices a win-win netting out the negative impact to the energy sector. trading just getting underway. a quick look at the market. as we are watching futures it looks as though we would open higher and that is the case. the s&p up seven. energy has continued to struggle. looks like it may continue that struggle today. is there some good news that people should be recognizing in the face of these lower energy prices? >> in the u.s., one of the biggest tax cuts in history. in europe and japan, oil importers. the big three and they three central banks are using. they are having a net benefit from oil prices.
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in the short-term term, credit markets, there's going to be knots in the dental floss as markets digest. the medium and long-term effect is positive. >> you are trying to figure out where we are seeing the best you. your is one of the places you are looking at. ecb action seemingly imminent. it has seemed evident for a while. richard clarida was saying what mario draghi has done is bought the euro time to get productivity backup get back. the structural reforms still need to happen. how comfortable are you putting your money in europe when structural reforms are yet to be enacted? >> mario draghi has been clear.
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they are going to do quantitative easing. the five most lucrative words and history, "we will do whatever it takes." the mechanics of qualitative easing are not as straightforward. if you are going to print euros, what are you going to buy? markets in europe are not as developed or deep. mario draghi has bought time and that has been taken advantage of. spain has made progress, italy has made almost none greece has made almost none. it is more miss than hit. quantitative easing can extend the runway but there are difficult political decisions that need to be made in europe. the countries that make the decisions earlier will be better -- >> what are they going to buy? >> can they buy something that? -- seven-- can they buy soverign debt?
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the germans would say no. a combination of sovereign debt. it is not as straightforward as the u.s.. jamie benn here at home you see a lack of inflation. doesn't it cause you to think that the fed will not move in april or june? >> i think third quarter april makes sense. the fed is on their policy path. probably third quarter makes sense. they want the market to believe inflation is positive, about 2%. it is a belief. they want to get into a normal regime. it is a central banker's world.
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the europeans are going to ease some of the chinese are in the process of easing. it is going to be a more liquid environment for a while. the u.s. can get closer to normal the earliest. >> thank you for all your perspective. a huge rally underway, better than 200 points. 224 and again, a gain of 21 on the s&p. nasdaq up 55. more on the market when we are back in two minutes. ♪
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>> welcome back. we are watching a rally in the market with the dow up better than 200 points. every sector in the s&p trending higher. i want to go out to scarlet fu fitness looking at another the movement. >> channel advisor shares
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falling by more than half to its lowest price since going public. a small unprofitable e- commerce company. based in north carolina. 7 analysts downgraded the stock. and a lot of institutional investor interest. channel advisers said fourth-quarter revenue will be less than expected because its business mix is shifting to larger retailers. a product down drains and the stock is off-line more than 50%. >> a new round of funding and the latest to join the billion-dollar violation club. instacart. cory johnson spent the day as a shopper to understand why the company thinks it can go it alone. corey joins me from san francisco.
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a new round of financing. valuing the company at more than $1 billion. help put that into context. . >> there are a handful of contexts. we have a lot of companies that are privately valued. torilla's would be -- most notorious, xiaomi or uber. we do not know the terms of those deals. they might let late round investors be the first to get their money out. companies are waiting longer to go public. we have company is looking at the ipl as not the purpose of the company but something else. instagram is a fascinating and not so little company. they have over 150 employees
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and over 1000 contractors. they have adopted this thing. everyone who walks into their office these pitches and powerpoint presentations. they refer to this as the uber of this, be uber of that. these guys are the uber of grocery delivery. using a cell phone to request stuff. they use the same device to fulfill those orders without the person so filling the service ever calling on staff. they have shoppers who go into stores, performed the service as a contractor of the company. in this case, instacart and in the other case uber member has to hire all the people. >> the. two. business. i have used this -- the peer to
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peer. i have used this myself. occasionally you get too many questions from the instacart shopper. it is the reality of somebody else doing the shopping. you became an instacart shopper for a day. what was your experience? >> good to have something to fall back on. >> you never know. >> you can do my shopping anytime. >> because they really did take care. this is not as simple as pygmy up here and take me there -- pick me up here and take me there. to figure out if the pears are ripe or a 12 ounce because the 16 ounce is not on the shelf. they are in 15 cities across the u.s. they are succeeding in ways a
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lot of dotcom businesses fail. a lot of businesses where over $1 billion of capital expenditures went to nothing. it was a publicly traded company, heavily backed by goldman sachs. anthony noto, now the ceo of twitter, the opportunity was so great. >> kazaa, you could order a $.75 snicker bar and they would deliver for no charge. that is the difference. they do charge you to do that. >> what i understand is instacart is already profitable and growing at a fast pace. we will have a deeper dive and talk to the general manager of instacart. you will see me donning the
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green t-shirt and making the delivery. >> looking forward to it. making the right decisions. >> i try. >> see you later. we are getting some tips from the rap dress queen herself. stephanie ruhle sat down with fashion designer diane von furstenberg. i'm surprised you are not wearing one of her dresses. >> diane has thrust herself into the next generation. she just wrapped up her first reality show where she chose a brand ambassador. she's tapping into a new generation. she says you have to. at her age when you are in iconic rant you need new strategies to attract a new demographic. she says she has new young women shoppers from her show. she has been doing the social media thing the branding, since the beginning. >> i was doing social media
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before there was social media. in a weird way, when i was 25 i was doing personal appearances. i had become a celebrity because i was this young european princess with an expensive dresses. nobody could say it out. it is not like that has changed. >> she thinks she's the original social media star. she's the one who wore her d resses. she made these dresses, everyone wanted to be like her. >> she's a fabulous designer. we look forward to seeing you and the interview with the ceo of metlife, coming up on "market makers." still ahead, biogen beefs up its pain portfolio. we hear from the biotech giant's ceo. stay "in the loop." ♪
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>> fax to the jp morgan health care conference in san francisco. 2014 was a terrific year for biotech. a great number of mergers and acquisitions. my next guest has announced the first deal of the year. joining me is george scangos ceo of biogen. you are buying the u.k.'s convergence, a company focused on developing pain relief drugs. tell me about the reason you made this acquisition. >> we are focused as a company on diseases that need therapy. alzheimer's disease and other neurodegenerative diseases. pain is an area where there is need for other drugs that will control pain to a better extent. convergence is a small company in the u.k.. they have a number of assets.
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the leading asset as a phase two compound that has demonstrated the ability to control pain and phase two trials per at had our internal programs on pain. we had a compound that also will get phase two data. it is a strategically important area for us, for patients and convergence is a high-quality company and so we acquired it. >> does the tax situation factor in? a lower tax rate in the u.k. than here in the u.s. >> we are not inverting or becoming a u.k. company. they now become part of a u.s. company. taxes have nothing to do with it, this is about the quality of the research and the compound. >> when you look atit feels like there is a matter rush to buy the next thing. there's so many deals. the expectation is that we will see more in 2015.
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is there anything you are looking at? >> we are always looking at potential acquisitions or licensing transactions. this is a very exciting time for the industry. part of the reason you are seeing so many deals is there is so much interesting work going on. so many interesting compounds coming for the happy potential to be great drugs. the industries performed well. that is based on substance. there are interesting drugs coming forward. many of those are made in smaller biotech companies. some of them are made in academia. neither the small companies nor academia had the development into the market. you are going to continue to see an model deals and a lot of good drugs. >> one of the criticisms has been that a lot of companies are looking to acquire new drugs and essentially outsource research by doing these acquisitions. what happens to the big r&d
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departments that would come up with these drugs on their own. we are seeing people acquire smaller companies. what is your reaction to that kind of criticism, if you consider a criticism? >> i think you need to do both. we have strengthened our r&d. we have brought in high-powered and accomplished academic researchers. we fully intend to be generating a lot of drugs on our own. even with that most of the drugs that are discovered in the world will be discovered outside of biogen idec so we will be very active in licensing and and acquisitions. i think the combination of those should assure us a healthy and interesting pipeline. >> george scangos ceo of biogen idec, thank you for joining me. stay with bloomberg, more from the health care conference in san francisco. including the ceo of eli lilly.
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he is going to be on "market makers" in the next hour. that does it for today's "in the loop." that he is going to be back tomorrow, talking with serial entrepreneur and angel investor scott kurnit. catch me at 3:00 p.m. eastern on street smart. we will see you then. ♪
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>> is 56 past the hour. bloomberg is "on the markets." 30 minutes into the start of u.s. trading. u.s. equities recovering from yesterday's decline. lots of volatility. the tao is on track for a move of 100 points for the sixth time
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in seven days. up 271. w.t.i. crude has pared its drop. 10 year yield matched the low before reversing. the government will be selling 10-year note later. back to equities. calls helping to support prices. bloomberg news' editor mike reagan joins me. we will start with apple. is it still be biggest company in the s&p 500? upgrade at credit suisse. this has to do with use of cash. >> apple is the biggest contributor to the rally. credit squeeze raising their price target to $130 a share, a 21% gain from yesterday's close.
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a big target increase. they have $155 billion in cash. they are about to announce a new capital return program. >> whether it is a buyback or a dividend -- >> they are using a huge number. credit suisse also looking at the trends in iphone sales. they raised estimates for-sales for this year and next year. saying the iphone 6 is a better profit margin product for them and the higher storage devices are helping profit margins. it is a mixed call between fundamentals and potential for a buyback. >> key price point is higher for the six. today's game is a reversal from yesterday's move down. just under 112. what about amazon? and upgrade at citigroup. we saw the stock moving in the premarket. >> whenever you see a stock with an attractive evaluation they're talking about amazon. upgraded to buy at citigroup.
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valuation is the reason amazon had a rough year last year, down 22%. down 6% as of the open today. the story with amazon has then they have sacrifice profitability to invest in the future. citigroup saying after sunday investment last year margins should improve. optimism about their holiday sales being the lead in the retail sector. >> razor thin margins might be getting less razor thin. hewlett-packard downgraded. not a huge surprise given that hewlett-packard has been on a downward slope. but pc sales have been ok. >> the company might be on a downward slope but stocks have done well. hp up 43% in 2014, almost doubled in 2013. a little overdone in the analysts opinion. they are saying hyper convergence, basically
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products that try to bundle networking, storage into one box. it is a business hp is in. they expect competition to heat up in that space. that is part of the rationale. >> three tech stocks you need to know about. tech shares up 2% right now. the biggest gain among 10 industry groups in the s&p 500. we will be back "on the markets" later on in the morning. ""market makers" is next with erik schatzker and stephanie ruhle. ♪
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>> live from bloomberg headquarters in new york, this is "market makers." with erik schatzker and stephanie ruhle. >> too big to fail -- metlife says not us. going to court. metlife's ceo is here. >> eli lilly, obamacare pain but no gain. we ask the drugmaker's ceo. >> the old dog showing new tricks. brooks brothers breaking out of its image. another ceo you will be hearing from. good morning, tuesday in new york


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