tv Bloomberg Markets Bloomberg July 17, 2015 12:00pm-1:01pm EDT
9:00 a.m. in san francisco, noon here in new york. betty: a deal to keep greece a float and avert a threat of immediate default. shares of google jumped to a record high as they top analyst estimates and real and spending. alexander hamilton created the building block of the u.s. economy. now his life is the subject of a hip-hop musical on broadway. wyatt has the attentional to be a block -- why it has the potential to be a blockbuster. pimm: good afternoon. i am pimm fox. betty: and i am betty liu. let's look at how the markets are trading. it is the end of a pretty crazy trading week, pimm. up, the s&p in the
dow kind of off the lows of the session, but the nasdaq is a different story -- bring up the chart. pimm: google, for example. higher today. recordgoogle shares at a high, still at a record high pretty much. coming down and also the earnings and revenue beating estimates. of course, we will talk more about google later in the program. markets, we oil have the longest run into a we losses and oils january. the u.s.he problem -- stockpiles here are 100 million barrels above the five-year average. we have plenty of oil in the u.s.. at whatt's take a look is going on in the treasury market right now. basically unchanged. you see the 10-year.
of buying or selling on treasuries. looking at currencies though, the dollar strengthening or the euro weakening against the dollar. also the yen weakening against the u.s. dollar. the pound sterling, just a little bit of a gain. sterling has been very strong against the euro. all right, let's look at the top stories crossing the bloomberg at this hour. german lawmakers cleared the way for talks on a third greek bailout after chancellor angela greece would them face chaos without a deal. bloomberg's hans nichols filed this report from berlin. all right. we heard that earlier. we know that he is reporting it therehe bundestag and will be more negotiations for debt relief. expectationser
declined in july. the university of michigan preliminary index of sentiment dropped 93 points. abouters remained upbeat employment and wages. the government says gasoline prices are driving a slight increase in inflation. the labor department reports that the consumer rice index rose by 3/10 of 1%. now, prices at the pump rose 3.4% in june on top of a 10% increase in may. pimm: there has been a dramatic surge in the construction of apartment buildings giving a big push to house and start numbers. the u.s. commerce department reported that housing starts increased at a seasonally adjusted rate of nearly 1.2 million homes. at all of this th in multifamily units.
that is the biggest jump in multifamily building in 28 years. they expect that the improving economy will signal a new wave of renters. upsing starts nationwide are 10.9% so far this year. that controls samsung is the winner today over a u.s. hedge fund. the shareholders of samsung narrowly approved an $8 billion merger of two samsung affiliates, giving more power to the controlling family. the fund fought the plan. ellis -- elliott associates could challenge the merger in court. in those merger talks between dish network and t-mobile, the line seems to have gone dead. people close to the negotiations say there is a disagreement about the valuations and a potential structure of the deal.
dish wants to buy t-mobile from deutsche telekom. you can see both shares are lower in today fell trading. paypal splitting up and they will face more challenges than as a bind company. ebay is facing stiff competition with amazon and other online retailers and suffering the effects of a major data breach. ebay said in 2014 it would split off paypal after investor carl icahn among others have been lobbying for that exact move. the company is raising the low end of its forecast this year and adjusted the earnings-per-share, beating wall street estimates. honeywell says it is profiting from the rebound in u.s. commercial construction. pimm: and get this. hacking pays, infrequent flying
miles. rewarded twoes hackers who revealed flaws in it to curate he systems. they scored a million frequent flyer miles each. that is enough to get you several first-class trips to asia or 20 roundtrips in the united states. the rewards are under a new security rewards program started in may. betty: that is real money there. pimm: it is. a million miles. welcomed thearde deal of birding greece's exit from the euro, but today she pointed out the difficulties. -- the deal averting greece's exit from the euro. betty: many difficulties. , david lipton spoke on bloomberg television about greece's debt crisis. agreementt the
between greece and europe calls for is a combination of policies that will fix greece's problems and the financing path, new financing and payment terms that would go along with that, that would leave greece in a sustainable situation. a think that there is perhaps narrow path forward here. we are trying to chart that path. payments will have to be consistent with their ability to pay. that can be achieved in a number of ways. we structured our suggestions in terms of maturity periods and grace periods, because we know that europe is more inclined to accept that than other methods. it is not a haircut or
no haircut situation. there are other ways that could work and if implemented, you believe would work? yes, we have done a debt sustainability analysis. we have done the math. which way do you prefer? how would you do it? how would you go about it? in europe'sderstand legal structure, haircuts are have ansioned, so we approach we think is a practical one. of these 300 billion euros how much -- again, i do not want to phrase it in terms of reductions, because then it sounds like we are talking about a haircut. what is manageable? .et's put it that way everybody who owns a house, for the most part, has a monthly nut.
what is manageable for greece? thet: i think you put it way we do. since greece will recover slowly and it will be some years before it can generate payments, we are focused on, as you would put it, the annual debt service will. we think that there has to be many years of grace where there is not principal repayment and then it quite long, perhaps 60 , repayment, and if you look at it that way, there is a paymentatch the annual requirement with greece's ability to meet those payments. erik: are you optimistic, david -- and will merkel and her finance minister ruled out what since have you gotten behind the scenes that they are prepared to consider some of these ideas -- e have you gotten
behind you think they are prepared to consider some of these ideas? guest: they do not consider haircut something in addition under european law. we had a discussion about this in 2012, where europe provided assurance to the imf that greece's that would be made sustainable. but now there will be i need to be more specific. matt: what do you think about the idea that greece it needs a timeout? it needs to leave the euro zone and the european currency for a short while? would that be at all a possibility? and greecepe altogether set down and decided not to go that route -- yet, you float the bloom -- guest: i am not sure float the balloon is correct.
theyargue for that because knew there would be inflation and the greek wages would fall. it would obviously help restore competitiveness. what really matters are great policies. it, you wouldgrex still have a messy situation. what really matters is greece adopts policies to fix its problems are not, not in or out, and they have chosen in. that is the route they have chosen and we will help them work on that push. david lynch, the first deputy director of the imf. much more in the next hour. we will look at how presidential candidate jeb bush is positioning himself as a nerdy tech guy. hmm? all right, and we will
that blue sky looking tempting. s&pe: google and the languishing here. what is pushing them down? individually you can point to best buy, the worst performer in the s&p 500, downgraded to either performed by merrill lynch, which is saying that the second half will be tricky for best buy. the second half of the year, bank of america-merrill lynch say there will be a mixed product cycle. you will not necessarily have a big iphone 6 introduction or something comparable. there is not the hot product to drive traffic. those shares taking a tumble today. also taking a tumble today -- earnings per share missing estimates and they increased provision for energy exposure.
loans to energy companies. the energy loans in the second quarter at $3.3 billion. that was their exposure. you can see shares falling. and then the curious case of betsy -- etsy. marketplace up 33%. the source of this game is a tiny, tiny line in the google conference call in which it said developers like etsy are seeing an increase in traffic due to linking. that is it. but to give you a little more context for this gain, this is 46%, incredibly high short very, very rare he would see something approaching 50%. words, when you see
that game, you see a short squeeze. the stock starts rising. people short it. they are getting nervous. that pain exacerbated. can you imagine, that one line in the google conference call and a 33% gain in the stock? because of the short interest in there, very interesting. also, it is the weekend. i do not know if that has anything to do with it, because you have all of those positions. you got to give it up or pay for it. our seniore hyman, markets correspondent. pimm: now let's look at technology stories crossing the bloomberg at this hour. daily deals to the broader e-commerce market, groupon. it signals it is ready to take on the likes of grubhub in the food delivery space.
up offers services across the country, but most are outside top metropolitan areas. executive ofhief reddit says that they will continue to outlaw abusive information, messages that bully a group, sexually suggestive content concerning minors. the reins from ellen pao who resigned under pressure from the company's board. musk will be holding a conference in a couple hours. the tesla ceo may announce developments in the roadster including an improved battery pack. tesla sold 2600 roadsters and 31 -- in 31 countries before production stopped in 2012.
and google is revealing that one of its cars was at fault in an accident for the first time. in google'sended home city of mountain view, california or more than 10 prototypes were in traffic. onboard at the time complained of minor whiplash. they were checked out at a hospital and returned to work. who? but who rear-ended betty: unclear, right? exactly. the questions were already -- who is liable? pimm: the man car. someone driving it hit the back -- it does not get rid of driving. betty: are we calling it that now, man car? pimm: man car. well. betty: i am adding that to the list of terrible names in tech. pimm: manned vehicle?
betty: there you go. incredibly donald trump continues to lead the pack of gop presidential contenders. donald trump with 18 percent. jeb bush who has big name recognition, but struggling at the polls, out in silicon valley wooing the tech startups, the illuminati. something like $114 million so far? betty: not from tech. some are talking harder than others. jeb bush is trying to woo silicon valley by embracing his nerdy tech side. he's even making visits to other startups.
he met with voters. the former florida evernote was floridard raving -- governor was also raving about smart watches. he says that he uses it to check e-mail and track twitter. pimm: it's very interesting. he is going to silicon valley, going to california, trying to close the gap with donald trump as we just saw there. but these comments in support of , and i think the company was thumbtack that he visited in theyrancisco yesterday -- provide services if you are looking for a dog walker or other services. it puts him at odds with hillary clinton, who was talking about some of the downsides to the sharing economy, that may affect people's ability to find paid work. and of course uber is at the center of that. betty: there is clearly the
debate about whether technology closes the income gap or widens it because they take away jobs. er caren he took the ub to thumbtack, the driver -- i believe we have a picture of the driver -- did not know who jeb bush was. and later on said if he was going to vote, that he would actually vote for hillary clinton. that was a little bizarre. pimm: the other thing also about this trip, and also the comments being made have to do with uber's position legally in the state of california. whether the drivers are considered contractors or employees. maintains their contractors. the judge handed down a ruling, and said, no, they are employees if they meet certain guidelines.
you know what is interesting, all of these republican candidates -- particularlyelse, these billionaires, the koch brothers, sheldon 80's and, nobody has come out to endorse anybody. pimm: they have 15 to choose, and i think others are expected to join the race. , he is setting the bar pretty hype. he has raised $114 million. betty: i know you are setting off to enjoy your weekend. pimm: yes, and i believe it in your capable hands. betty: a lot more on the bloomberg market day. ♪
let's take a look at the top stories making headlines of his hour. federal authorities are not yet pinpointing motive in the attack that held 4 marines in tennessee. investigators are checking social media and lessening friends of the suspected shooting dead shooter, matt:, killed -- muhammad youssef abdulazeez killed after yesterday's attack. he was a naturalized u.s. citizen agents entered his home in a chattanooga suburb and two women were let away handcuffed. the suspect name was not listed on any federal watchlist. president obama asked americans to pray for the victims families. the attack left a police officer and another u.s. military member wanted. the shooter attacked a pair of military recruiting office in a training center. the suspect had no criminal history. needed just 12 hours to decide the case of the colorado movie killer. theorm count one, murder in first degree after deliberation
we the juryblanc, find the defendant james holmes guilty of murder in the first degree after deliberation. betty: james holmes killed 12 people and wounded 70 in the attack three years ago this month. the jury rejected the defense claims he was insanely opened fire in a movie theater. the same pal must decide whether he will die for his crimes. the jurors will return to court next wednesday. a somber anniversary today in eastern ukraine. it's been one year since a malaysian airline passenger plane was shot down killing all 298 people on board. ukrainian president is pointing the finger at russian president vladimir putin calling it a ruthless terrorist attack i pro-russian separatists. is of the incident could not have occurred without a direct topr from the russia's political and military leadership and russia has denied any involvement. and eu test for his recommending
psychological evaluations and random drug and alcohol testing for pilots. the goal is to prevent a repeat of the march 24 german wing disaster. they say the copilot who reportedly had a history of mental illness deliberately flew the german airliner into a mountain after locking the pilot out of the cockpit. all 150 people aboard the plane were killed. a strong tropical storm swept across western trip dan and two people are reported killed. the tropical storm caused serious flooding and disrupted air and train travel as it crossed the main japanese island. a major reversal for japan and its main stadium for the 2020 summer olympics. plans are being redone because of out-of-control costs. the prime minister says the venue will not be finished in time for the 2019 rugby world cup. the government has come under growing criticism as the estimated cost for the new stadium skyrocketed to $2
billion which is twice as much as the original plan. construction had been scheduled to begin in october. that is a look at the top stories at this hour. coming up in the next half hour, a musical based on the life of alexander hamilton could be the next loss -- blockbuster it on broadway and we will look at the story behind is unlikely combination of hip-hop and history. ebayl is set to split from after the bellamy will tell you other digital wallet company has created functions you are probably using without even knowing it. earnings reports are streaming in from u.s. big cap stocks including google for focused on cutting costs. general electric is focusing on heavy industrial sales as global economies are trying to find a better footing. as the u.s. economy strengthens and europe maintain stimulus, how worried should we be about china? remember the guy from morgan stanley? he joined us earlier this week. >> every single major global
recession the last 50 years has been caused by the u.s. economy stumbling or going into recession. the next couple of years, the next global recession will be made in china like any other things in the world today. holland, chairman of holland and company in many companies who have reported earnings this week visited china regularly. you have an office and you have made several investments in china. you and i talk so much about china and i know you are quite positive on their prospects. what do you think when you hear the prediction that we will see a recession made in china? people in the 20 years i have been going over there have other people invest for us. i have learned there is always a good headline to get you scared about china and then you can say even if the members are good,
you cannot believe the numbers. betty: you cannot win? >> fortunately, we have a public fund. people have made money because there is such negative sentiment people do not invest. is onea of a recession where he may be right but that's the wrong bet. the people in power have no interest in having anything close to a recession. they allow for some slowing down 7% or it's probably 6% in reality. when you get through the real numbers, the people in china who run the country want to keep people employed. it is a life or death situation literally in the country. you spend many years reporting their and you know how the government will get worse. betty: how do you have an
economy that never has a recession? you've got to have cycles in the economy whether you like it or not. how does the government avoid a recession completely question mark those cycles will be there no matter what. >> what you say is true. you have had a country like china for the past 20 years going from an emerging market country to this, the second largest country in the world. they did not have those things. they had slowdowns. people who are talking about this for the last 10 years about the hard landing, it was 7% growth. that is a good growth number for anyone else. this is the second largest economy in the world. i presume they will have recessions in the future but will the government have an easier time doing what they do because of the nature of the communist country? 2008-2009, stimulus programs -- the u.s. and china
stimulus programs -- incredibly effective. betty: and here we are with a bubble. >> they overdid it. these are not timid people. have political parties to report to. they have one party and they run it. when you have them running the country, they can do whatever they want. they want to run the economy to keep jobs going. it almost sounds like there is a lot of things we should be worried about but have faith in the party. >> we have had a bubble there in the stock arc. were 150hese companies times earnings. they are netflix kind of valuations. those companies have had their stocks decimated in the past three months. you are a shareholder in
google. >> moving on -- betty: we only have a few more minutes -- google is now at a record high with 600 alien dollars. it's based on cutting costs. >> they have some pretty good fundamental numbers. google hits a record high based on trimming costs is the headline. >> google, 35 times earnings. i rest my case. betty: i know you are a value investor. >> there is no question the cfo -- >> do you on netflix? >> i am delighted. it has made us a lot of money. betty: jpmorgan, you are a shareholder.
what do you think of the bank earnings? >> in this difficult cycle, i think they do the best they can. jamie dimon has retained a team that is very good. i think he has done a good job as he can. stacks -- goldman sachs numbers. these are mind-boggling numbers. the worst may be behind those companies including j.p. morgan. betty: we were just speaking about the republican contenders. we have been talking about the pollock -- politics in the presidential race. is there anything there that you think could change the prospects for the banks? >> the quick answer is no. countryiment now in the is still anti-wall street. it is fueled by opportunistic politicians from both sides of the aisle. for a while, that will be the case but we have seen the worst of this. china,getting back to
how do you stay invested in china? are you up in your bets in china? despite now over there, the headlines, the people we have on the ground investing over there have -- they avoided shares aere in the a few years ago and things got expensive and they sold along the way. what theto identify group is. they have been buying recently the h shares. the hong kong exchange is 11 times earnings. you used to report from their. if you cut out the stuff that has come down a lot, those are still expensive. stocks are what they are like in the late 90's. they are still overpriced but the let -- but the rest of the market is 11-15x earnings. the there is blood in streets, these people have been finding stuff.
betty: has greece affected you? >> fortunately, i don't have to report it the way you do. it's an old story. it gets boring. they are borrowing money from someone to pay the same someone that will go on until it stops. that's where we are but it is no longer a story for the markets. betty: it's not a story for you? >> it will end badly but we don't know when. betty: how badly? >> if you told me you said greece is no longer part of the eurozone three years from now, it would not surprise me. that would be ugly. betty: it would be ugly but not unrealistic. judging from what we have seen. great to see you. >> happy friday. betty: i know you got your bright and cheery to on so that makes me happy. michael holland of holland and company. still ahead, samsung has turned back a major challenge from activist investor paul elliott
betty: welcome back to the bloomberg market day. let's get to julie hyman for the big stories of the market. technology, given the big google earnings report -- julie: we have been talking about the disconnect today a major averages. you have technology so clearly reflected in the nasdaq as it rises half of 1% and then s&p in the dow trading lower. when we talk about google, the a shares and the c shares are
listed -- listed in the major industries. together, they have a combined market cap of google which is about $464 billion. it looks like the value google is adding to the market today is a record, around $60 billion but we will up date you. it is not just about google today. take a look at the bloomberg terminal at the imap of the sectors. the greenest tech knowledge he and the red is everything else. energy and materials are falling pretty sharply today and dragging on the major averages. stuff, takehnology a look at google -- they have an incredible game today as it trades at a record and its now seeing its best one-day gain since 2008. these are thea shares which is what we track. the c shares are also in the major averages.
facebook and amazon are also trading at record so when you look at the gains today, those two are contributing to the overall game. -- the nasdaq is also at a record. counterbalanced in the s&p 500 either the client we see in energy stocks, in particular drillers are taking a hit. lowest sincets 2001 and conoco phillips plant -- canceled a planned contract. so the offshore drillers are doing poorly today. transocean and diamond offshore are falling once again, continuing views that there is a glut out there in addition to the recent agreement with iran that will bring more supply online, doing nothing to alleviate the recent downturn we have seen an oil. when you look at wti for the past three weeks straight, it has fallen to $57 per barrel. betty: thank you so much.
shareholders gave the green might friday to a merger between two samsung affiliates that will help the chairman take control of the conglomerate and give it to his son. it was opposed by u.s. activist elliott and associates. shelly: this was the culmination of six weeks of a very public battle between billionaire activist investor paul elliott singer and samsung. the overwhelming approval of the merger underscored the resilience of the south korea corporate dynasty and boosted the country plus track record of repelling foreign influence. nearly 70% of shareholders voted in favor of the all stock offer for samsung tnt which some argued was undervalued and not fair. the results pave the way for the founding family to tighten its grip on their business empire. let's turnhe u.s.,
to banks as goldman sachs made hundreds of partners rich when i went public in 1999. lloyd blankfein is now a billionaire. $1.1et worth has surged to billion as the shares jumped nearly 300% since its ipo. is the largest individual owner of goldman sachs stock and his stake is worth $500 million. he also owns real estate and investments worth another $600 million. he is one of the few current leaders of the global bank to reach a senior executive rank before the firm went public allowing him to profit handsomely from the shares. mark crumpton joins us with more. dimon is also a billionaire so that's an exclusive club. mark: there is a great story on bloomberg.com and you look back over mr. blankfein plus career and you have to remind yourself that it one time, he was the
head of fixed income trading when goldman sachs had its ipo and that was the event that propelled all of this wealth. it started from that one incident. he gave aack and speech at a business school in south africa back in the spring. i looked at some of his quotes. he grew up in public housing in brooklyn so he came from humble beginnings. he told the folks at the school that i know i am a big fat cat plutocrat kind of guy but i will tiger you that i have been the beneficiary of some of these redistribution policies. even he had discussed the inequities between the haves and the have-nots back then. he was the beneficiary of scholarships when he went to harvard. at this point, when you look at where he began and you look at where he ended up, you cannot vote anything but a classic american success story. betty: that is a terrific point. when you compare him to some of his other peers who have just as big names that are in a
different part of the finance world, the hedge fund managers. and how much more wealthy those guys are. you want to push their buttons a little. how much money have they left on the table? our taking in and mr. blankfein owns 2.2 million at $472 billion based on yesterday's closing. betty: we have more coming up the next hour customer mark: luis fortuno is the former governor of perjury go. -- puerto rico. puerto rico is inching toward its own debt crisis and we will talk to the former governor about how puerto rico got there and what they can do to get out of that and the debate they are having on capitol hill that's being pushed by senator schumer of new york and blumenthal of
connecticut about whether or not puerto rico should be eligible for bankruptcy protection like some u.s. cities so we will talk about that coming up. betty: like detroit, thank you. i will see you in next hour and much more ahead on the blumberg market day. the hot broadway ticket this weekend is a hip-hop take on the life of president alexander -- of alexander hamilton. it is creating buzz and it's a high-profile audience. ♪
night. the president will see it tomorrow. michelle obama is already seen it. how can you explain the success of an original musical with no big stars in a largely minority cast based on the life of a former treasury secretary? musicala broadway producer with us. great to see you. waslast time we talked about the sting musical. "the last ship." it closed down unfortunately. this is getting a lot of buzz, why? >> because it's really good. the buzz is warranted. it is an amazing show that really it tells the story that none of us knew was there to be told. the guy who wrote it and stars in it says he picked up a biography of alexander hamilton and he wondered why nobody has told the story. betty: and in a hip-hop way.
>> he was an immigrant and he felt as a second-generation american, lynn has tapped into a whole world of music from hip-hop to sell such a broadway -- to salsa and broadway. he understands stephen sondheim and rodgers and hammerstein. betty: we talked about the issue of the older audience. how do you sell this to younger audience question mar? >> that's the most important question to any producer. how do you sell it to the people who want to buy it? the notion of it in hip-hop has to be carefully dealt with. hip-hop is probably a limited market. what i think wins the day here is there is something very new about the style of the way this story is told.
it's a story we did not know is there told in a theatrical way that grabs you. someone who saw it said he has as theeen hip-hop used dialogue in between the music. betty: it's done in a clever way -- >> it's telling part of this story in spoken dialogue but it's hip-hop. he did it really only that the lyrics are smart and you are captivated by everything about it. betty: it sounds like i have to go. thank you so much. more includingch the split between ebay and paypal, 13 years in the making. ♪
approves a $7.8 billion loan for greece to keep the debt ravaged nation afloat and prevent the threat of an immediate default. betty: we will get inside on solving the debt crisis in puerto rico and will talk with a former governor puerto rico,luis fortuno. mark: paypal is set to split from ebay and we will tell you youthey created functions are probably using without even knowing it. betty: good afternoon. mark: thank you so much for joining us on this friday. let's look at the markets at this moment. ascks are mixed in new york investors are refocusing their attention on the outlook for interest rate and corporate earnings after data showed slow growth and inflation. googs