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tv   Bloomberg Markets  Bloomberg  August 6, 2015 12:00pm-1:01pm EDT

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betty: can anyone stand up to the donald? im: ibm is adding to its health care business. will the deal make ibm shareholders feel any better? they: and a unique approach for renters and potential homebuyers are betty: let's begin with how the markets are trading at the moment. we are approaching the lows of the session for the s&p and the dow. 1%.dow is hitting
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part of it had to do with use declines we are seeing in media stocks. viacom taking the worst of it, now down more than 17%. we are seeing that into other media shares. all of them in the red right now. it is yet again another day of losses for oil prices. you've got nymex crude down over 2%. the over supplier, the supply, the inventory, that is beginning to weigh on not only nymex but brent crude. glutan sachs expecting a in global supply. pim: let's take a look at the bond market in the united states. we see some buying going on in the 30 in the 10 and even the two-year.
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the 30-you're still under 30%. let's take a look at currencies and see how the dollar is faring against major currencies. gaining a little bit of strength against the euro. you again take a look at our terminal and take a look at the active trading in the currency markets. you can see the dollar there, one dollar nine -- 1.09 versus the euro. betty: the boe might be behind the curve here. pim: ride. coming -- right. coming out and saying no rate increase. let's look at the top stories. ibm is acquiring merge health care for a billion dollars. the all-cash deal is subject to
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really good tory -- the regulatory review. pim: we will talk with an ibm executive a little later. viacom is the latest media company to sing the blues. a wider than forecast revenue decline in the third order. sales dropped 11%, just over $3 billion, less than wall street expected. it is the fourth straight quarterly decline in u.s. ad sales. on wall streetme to think that it does not pay to in it. james murdoch says the streaming tv side is looking really good. >> hulu is looking vary good right now. it has the velocity that it has not had in years aaron -- in
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years. millionbs took a $55 charge in costs as a radio and television station. adjusted earnings per share came in at $.13 for "the new york times." down 5.5%, dragged by declines in print. pim: filings for unemployment benefits are hovering your the lowest level in or decades, a sign that a strong labor market will bolster u.s. growth. jobless claims rose by 3000. saidb market experts firings are down as employers hold on to more workers. of course, we get the july jobs report tomorrow morning. the blank -- the bank of england
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leaving its benchmark rate unchanged. only one of the nine policy makers voted for increasing rates. connie foresees no immediate threat for inflation. mr. carney: as the economy economyes and if the progresses broadly in line with this forecast, the decision about when to move interest rates will come into sharper relief. pim: the united states tomorrow morning payroll report will be a guide over whether the fed raises rates in september. fannie mae and freddie mac were seized to doing a 2008 financial crisis. $442e will have returned billion to the federal
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government after it takes next month's payment. is tinto is expect -- reporting better-than-expected numbers, raising spending to combat higher iron ore and prices. for 2.5 were looking billion. rio says it will pay a dividend of $1.08 per share. pim: hitching a ride with the russians to the international space station is costing the united states a lot of money. nasa says it needs about half $1 billion to send six astronauts to space. why? the united states doesn't have the rockets necessary to do the job, at least not right now. that's why you've got elon musk's -- elon musk and spacex. it is getting worse for media shares. we just showed you the selloff.
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their earnings failing to impress. is this a temporary glitch? the media companies, one of companies -- one of the company's top talents, john stewart is signing off tonight. and there is good news for all of you political junkies. we are just hours away from the first debate of 2016. 17 -- and all 17 presidential hopefuls will appear on in cleveland, but only the top 10 will get a chance to shine in prime time at 9:00 p.m. eastern. betty: the elections are more than a year away, but i am looking forward to the event tonight. trumpthe top 10 is donald . so let's set the stage and the
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road ahead. in cleveland right now, pretty quiet ahead of the event. liberman here in new york. mike, let me start with you, since you are there. it looks pretty serene behind you. tell me what the atmosphere is like right now. mike: you are right. it is pretty quiet here. the tv stations are set up here on east. fourth in downtown cleveland across from quicken loans arena. people will start trickling in here soon. there are two debates here. the under carded, bottom seven in the polling at 5:00. and the main event tonight is at 9:00 pim: i'm wondering if you can come in on this topic of the debate, mark.
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it is being held at the cook alone center. usually, that is where -- the quicken loans center. usually, that is where lebron james plays. what about the advertising dollars associated with the debate and also with the campaign at elf? our: this is the kickoff of national pastime. we have 15 much for the season to go. that will be great for ratings, which in turn is great for advertisers. pim: what kind of numbers are we talking about? $1.6 million? more than that? mark: it depends. it could take the top update and its cable. you can insert local cable advertisers. have anndors opportunity to advertise on the biggest stage. whether donaldw trump is jonathan bell. betty: what -- johnny football. betty: what are the campaigns
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telling you? how are they going to basically sendoff donald trump? mike: he is definitely the big unknown. that is what reporters here are talking about outside the arena. i talked to a lot of clevelanders. i have been here for a few days. that is what they are talking about, donald trump. he is an unknown. the key here is to see how candidates are going to treat donald trump. it will be to watch jeb bush. jeb bush is one of the top names polling here atop -- among republicans. target of the grassroots base for the republican party. handle trump with
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kid gloves almost. he doesn't want to alienate trump's supporters anymore than yard he has. -- any more hand, than he already has. hand, the scott , these and ted cruzes are the ones who want to capture trump's supporters. how do you go after trump without alienating the people, 20% to 25% to republicans right now who are supporting trump right now. billion dollars, that is estimated how much is going to be spent on -- $44.4 billion, that is estimated how much is when to be spent on the campaign. mark: tv is still the most engaging platform.
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and new new data technologies, the ability for advertisers to ride that and target -- president obama did this, were he to data and new campaign, backis in 2012, many people credit him due to thats strategy. cable is going up about 40%, from 2012 to 2016, about $800 million. broadcast about half of that. broadcast does not have a targeting capability of cable. what you have now is the entertainment value of the debates, being able to propel the course of the next he -- next 15 months. -- thedo you even need one who doesn't even have to spend any money right now on media is donald trump. mark: that is what is
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compelling for the next candidates to spend. advertise, because the media, you guys and others, really love covering the donald. if i am a candidate, i have to go through advertising to get through the clutter. skews democrats and republicans. mark: msnbc will go to the left and fox over to the right. by using data now, you can go through their whole 50 or so cable networks and identify where the best viewership is to reach a particular type of audience. that will be unique about this campaign. each campaign will come up with their own creative. they can ask a come up with the audience they are trying to reach. data is the new creator. pim: data is the new creative. betty: on the stage, where the
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bets being placed? i know you mentioned jack bush, but will really be able to fend off or be able to attack the donald the best? is it christie? is it carson? is a case it? who exactly? mike: kasich and christie are capable of it. they have shown they have no qualms about telling it like it is or how they see it as it is. i will be watching for scott walker, to see how he handles it. this is his -- one of his first national exposures. there is a lot of expectations for him. also, don't sleep on marco rubio. he is a vary quickwitted -- a wittedarp, quick, quick republican here. pim: we will have to watch and find out.
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betty: still ahead, we are looking at some of the big movers in the tech industry. pim: fitbit and tesla having a challenging day. that is next on the bloomberg market day. ♪
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is a shot looking south that the empire state building a lower manhattan. welcome back to the bloomberg market day. betty: let's get a quick check of the markets.
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one of those stocks plunging today. : tesla is down about 10% here and it is all about this heat in tesla's upcoming model s. elon musk says the company is facing some challenges and it could slow down some challenges -- slow down production. sinceat its lowest november 2013. fitbit falling, now down by about 12.5%. off of its lows from earlier today. it posted narrow margins in the second quarter to 47% from 51% a year earlier. market share fell 40%.
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which is sizable. but less than last year's 45%. you to green take mountain coffee. the stock is going cold, down nearly 30%. this is its biggest fall since may of 2012. this is the maker of singleserve coffee machines. people just aren't buying as many of its individual coffee pods anymore. pim: i was thinking that the combined image you are driving your tesla holding your green mountain coffee with your fitbit and today sounds -- and that sums up today. let's take a look at some of the top stories. egypt unveiled a major expansion to the suez canal today. the $8.2 billion extension is a
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first of a series of megaprojects designed to transform the country. it links the red sea to the mediterranean. betty: soft group says it is to buy back stock. the founder is trying to revive sprint rather than sell the u.s. carrier. he bought it for $22 billion in 2013. pim: still ahead on the bloomberg market day, media stocks, we have been talking about them all day. heading down ahead -- heading downhill and the plans continues. betty: why there is more concern about media companies and the future of cable. people cutting the cord. ♪
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betty: media stocks are getting
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slammed for the second day. after earning reports that scared experts. yesterday, the media index l6 percent. felllug -- the media index 6%. the plunge continues today. it is not as though we woke up the last two days and said there are core coders out there. what gives here? paul: espn and disney. espn, comes out and says the mightiest of all cable networks, arguably the mightiest of all meter brands, had fewer subscribers year-over-year. as a result, they will reduce their guidance for profits for espn. that is the first time that many investors had ever heard that. that is a canary in the coal mine, if you will.
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yes, we know about the bundle fraying at the margins. that -- but if espn fights to dial back the profit guidance, that is a big issue for the space. and then we have company after company after company the last couple of days report sluggish earnings were disappointing earnings, that is enough for what is a classic rotation out of a group. is it worth noting that espn and other sports programming -- this is all live programming? this is not filmed entertainment content. this is live. is it worth noting that? paul: that has been the real calling card for espn and disney. you have to have espn because it is live programming. advertisers love it because it is so hard to reach consumers with live programming these days. that is why it has been such a juggernaut, from an advertising perspective and an affiliate pay perspective.
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if the bundle is coming freight at the margins, that is a sign for the entire ecosystem. we also have google, facebook, all the advertising dollars merging. pim: don't they have live video streaming service? betty: right, yahoo!? paul: youtube is a huge player, but that is where the dollars are going. advertising dollars coming from the tv business. you have the advertising issue and the affiliate issue. betty: it is interesting to see how netflix shares have gone over the last year. in fact, most media stocks are going up. but in the last few weeks they have tanks. -- tanked. but netflix is off the chart. a little bit off today, but
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where can we track all those eyeballs gone from a disney were discovered? paul: they concern for investors, while netflix is making all-time highs, day after day after day, we see stocks taking pressure. more and more consumers are spending more time consuming more content outside of the traditional pay-tv package onto new platforms like netflix. that calls into question the overall economics of the pay-tv bundle. we have seen valuations go to netflix, and away from traditional media. betty: thank you so much. we are cutting the cord with him here. pim here.- with ♪
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betty: let's get a look at some of the top stories making
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headlines. john thane is warning of a potential lending crisis in shadow banking. mr. thane: some of the most leveraged lending is being pushed out of the bank space into the hedge funds. if you wanted to worry about the next crisis, you would worry about that space. that is where the more leverage, the more risky pieces are going. betty: cit group just finished a of one it creates a new systemically important solution since it has over $50 billion in assets. he told us the threshold for the two big to fail institutions should be raised to $100 billion. -- cities ben's mercedes-benz posted a surge in sales in china. sales rose to more than 29,000 vehicles and global deliveries are up 15% from a year ago to 150,000.
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elon musk says tesla is facing challenges with seats and other interior pieces in the forthcoming model x suv. new -- but the snags in the new suv could slow it down. news but aren the up 20% so far this year. a stradivarius violin stolen has been recovered. it was stolen after a performance in 1980. the chief suspect in the theft has died. thene will be charged and violin will be returned to the family. that is a look at the top stories. coming up, making money in real estate while helping people buy
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homes. we are going to talk with a former goldman sachs banker who is heading up a company putting a twist on the rent to own model. mylan has been in pursuit of para go. ibm hoping the health care business can spark some revenue growth. ibm has agreed to buy merge health care on a 32% premium. joining us now with more on how this is all going to work is dr. john kelly. he is ibm's senior vice president of solutions portfolio and research. big acquisition for how exactly are you going to use
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that data? when can you start really using that data to apply to your watson technology? dr. kelly: we are excited about this acquisition. this is our third acquisition of cloud-based data in health care in the past few months. this data set is rare unique in that it is medical images. are previous acquisitions and a lot of our development was around electronic medical records and natural in which. this is medical images -- and natural language. this is medical images. betty: why is that important? dr. kelly 90% of medical data is hugeined in imagery, amounts of data, more than most doctors can possibly deal with. we have some berry unique technology in watson, an artificial intelligence system, which is capable of not only reading medical records, but we have fundamentally given watson eyes to be able to see and understand images up to and including complex medical
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images. betty: what is watson going to do with that? be abley: watson will to look at complex cat scans and mris and help a doctor understand what is going on. is it a tumor? is it not a tumor? is a growing? is it not growing? look for subtle details an heart scans. betty: is merged the biggest player in this? are there other bigger players in this space? were they not attractive? why merge? : merge is the biggest in an independent machine producing an image. it is the largest in the vendor neutral area. it can handle images -- to scansve access coming off all types of equipment in the industry. we can pull them up to our watson cloud with the patient's permission.
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provide the analysis back to the doctor, back to the health care provider. not onlyatson can now read but see, if campoli patient's history from their medical record along with the image -- it can pull the from theiristory medical record along with the image and provide that to the doctor. we will be paid for those insights that will be provided back to the doctor through watson. betty: how long before you see these acquisitions payoff? dr. kelly: it will take a couple of months to go through the approval process. we have already developed the watson capability to see and read these images. it will take us a vary short time into early next year to pull together the core merge health care capability with the watson capability and get services to market. betty: you see this being a profitable venture for you in
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the next 12 months? 2016, we will have products in the market. and health care itself has a varied good -- and merge itself has a vary good -- a very good business. betty: this is your third acquisition in the last few months. why now? why didn't you do this before? what is special about the timing of? dr. kelly: we are excited about the health care business as an opportunity. globally, it is a chilly dollar industry. half of that -- a trillion dollar industry. half of that is in the united states. frankly speaking, the amount of information on patients and all of us now is surpassing what the doctors can deal with. so new technology is required. we have a vary unique technology with watson that we think it can
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attribute -- can contribute. betty: am i going to expect to see another headline relatively soon, another acquisition? are you full on on that trail? -- at ibm, weabm believe that this industry holds the potential to be one of our biggest witnesses. we've -- biggest as mrs.. we believe that we -- biggest businesses. we believe that we can help transform it. betty: thank you. stewart will be saying goodbye to "the daily show" tonight. >> we have been so proud of our work with john stewart. the on his enormous jon has been an
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important voice in the national conversation. on "the dailysed show."
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betty: welcome back to the bloomberg market day. .et's get back to ramy: it is another ugly session here. ramy: yes. our major markets are all down today. and are all at session lows also at two-day lows. the s&p is down the most. actually, not the most. it is down 1%. . but the nasdaq is down the most.
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the s&p 500 10 sector. nine of the 10 sectors are in negative territory. consumer discretionary is the biggest loser. media is the biggest drag. warner, viacomme all sliding and all on disappointing earnings and because of lower ad sales. looking further into this, viacom for example, is down 15%. 21st century fox also reporting lower. and disney down by about 5%. i want to talk to you about commodities. let's head over to oil. oil is hitting its lowest level in four months. aboutdown about 1.8% at $44.03. the world is says
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seeing too much supply. over the longer term, supplies 90 million more than barrels above the five-year seasonal average. in gold, it is near a five-year low. this is the safe haven commodity , down nearly 5% year to date. tomorrow's u.s. unemployment report will be a factor. if the jobs growth is stronger, that is the case for higher rates and a stronger dollar, which would mean a fall in gold. 215,000.n forecast is betty: which is on par with what we have seen. now a look at today's market close in europe. reporter: we are seeing stocks rebounding today. i'm going to show you the detail
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and then look at the bigger picture. since the financial crisis, the earnings for the second quarter beat and raised its capital target. national bank of greece, along with other greek banks really taking a punishing. that is the detail. i will show you the bigger picture across the national equity benchmark. you can see gains for the most part. the ftse has been leading the rally in western europe. the outlier is the athens stock exchange and greece, losing for a third day. not asfallen about 4%, much as the losses on monday, but look at the banks. down almost 30%.
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finally, i just want to show you how the stoxx 600 is shaping up. up more than 1%. sixth day out of seven. betty: goldman sachs analysts in -- t juliet: china's government has spent as much as 900 billion yuan in the past two months to prop up the country's ailing stock market. halfnjection amounts to the funds for market rescue. about 2.2% for the country's capitalization.
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it likely focused on the chips and domestic stocks in the government has another one trillion yuan to provide a cushion. today -- tonight, the curtain comes down on jon stewart's run on "the daily show" on comedy central. he has taken plenty of jobs on wall street over the years. jon stewart: let's begin on wall street. blurk.ex at an all-time [laughter] yesterday, the dow industrial fell 500 point, following the , lehmanbankruptcy
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brothers collapse. basically what happened, wall street investment firms were accused of advising people to buy billions of dollars in shares in companies they knew were failing. i believe the word for it is fraud. everywhere you look today, financial catastrophe. -- wallet this straight street doesn't like the particulars of the trillion dollar bailout of wall street. explain thely rescuer-rescuing relationship. we just bought an insurance company. we are broke now. we just paid a lot of money for someone to [beep] us. i'm sorry i committed systemic
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fraud for 10 years. how about i give you a cut of it. i know you are a busy man in your time is valuable. so here a little something for your troubles. [laughter] corporate america, there is a simple credo that exists to cover up any wrongdoing. that is what the money is for! is that all say -- that old saying, don't do the crime if you can't pay the nominal fine. the only people who have fully recovered from the financial meltdown are the ones who caused to the financial well down. -- financial meltdown. you know what, i actually give up. you win. the banks win. we are waving the white flag. take the money. take the flag. the rest of us are going to start a nut-based economy. we are just going to have to pay
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nobody on wall street is a squirrel. [laughter] betty: truth teller. i want to bring in mark crumpton on this. mark: if you look back from 1999 to now, how he has change the narrative of how politics and big finance in this country, how they are both covered. heshone a light on it but made it palatable to everyday people because it wasn't in the weeds. this is what is going on. by the way, i think you may have made an appearance one time on jon stewart. he likes to take clips sometimes on the financial -- mark: some of us have been on john oliver who is picking up the mantle. stewart, andjon set thehem, bill maher
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bar on politics in this country but they did it in a way that made people sit up and take attention, whether you agree with them or not. a sad state of our industry, i hate to say, some people go to "the daily show" to get their news because that was the only place they could get some truth. mark: can you blame them? betty: no. jon not only attacked wall street, but a lot of big companies. one of them was arby's. they bore the brunt of his attacks on the fast food industry. here is a part of their commercial thanking jon stored. jon: if a stomach could get in the balls. all right, fine, arby's. thank you for being a friend
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isn't that the old " golden girls" theme song? mark: yes. you know what they say, even bad press is good press because, well, they are talking about them. betty: tell them to dot -- tell that to donald trump. he knows that like the back of his hand. we will see you in a moment. some of us prefer the flexibility of renting. there is a third option, renting to own. ♪
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betty: we have been reporting for some time now the slipping
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in homeownership. but there is another option that is gaining some traction. this is rent to own homes. home partners of america will actually buy a house and rent it to a customer for five years as they repair their credit and qualify to finance and then buy it. bill, tell us how this works. where do you buy homes and how do you find them? us.: they apply to we do a full credit, criminal,
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eviction, background check. we use metrics similar to an fha or a qualified mortgage. and then we let them pick the house they want to live in and the community that we want to invest. they shop with a real estate agent that they choose. they put the house. we buy a for them. we lease it and they have the option to buy it in the future. betty: up to five years. bill: three years in texas. california,u are in florida, and texas. bill: we are in a variety of states. jumpedestment activities about five times. we are getting great reception from real estate agents and consumers. betty: but you hold these homes on your balance sheet. they could eventually be all over the country in many different parts. isn't there some risk that you are spreading yourself all over the place?
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bill: we are careful by picking communities that we think are stable to improving. so we look at the city first and then we actually pick communities. we do it by school districts. we rank every city, like denver, and look at the quality of the school districts. we buy the top half. we think that is a stable, improving segment of the stock market. and if it's our consumers. our consumers -- and it fits our consumers. our consumers want their families and a great area. they have to sign a one-year lease. they can walk away with no penalty or any hidden fees if they decide it doesn't make any sense. but they can extend their lease for two to four years and by the house on the backend. betty: what if you get a lot of people who say, ok, we are going to walk away, and they don't want to buy the house? bill: that is why we are careful about the communities we invest in. if we end up getting a house back, we can release it or find somebody else who wants a lease
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with a right to purchase or we can sell the home. make do a lot of work to sure our rents, which are vary transparent on her website, are very close toare the school district. and we make sure that the house is that we buy our very liquid. in the event that there is an issue in the customer doesn't want to buy the house, that is fine with us. we can absolutely tell the house. betty: figure so much for joining me. -- thank you so much for joining me. coming up, we will be listening to the lending club ceo.
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betty: this is the bloomberg market day. presidential hopefuls face-off
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tonight in their first official debate in cleveland. we will talk with the ceo of mylan. >> it will ask the ceo of lending club what he plans to do to boost the stock price. shares are down more than 40% this year. ♪ betty: good afternoon. i'm betty liu. mark: i'm mark crumpton. welcome back to "bloomberg market day." the nasdaq 100 to its biggest decline in a month, emerging-market equities and currencies falling. the markets and investors are weighing the possibility of an interest rate


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