tv Bloomberg Markets Americas Bloomberg February 17, 2017 10:00am-11:01am EST
this is "bloomberg markets." ♪ vonnie: we are going to take you from new york to london and stories out of washington d.c., munich, and amsterdam. here are the top stories we are following. president trump is heading to south carolina where he will speak about jobs at a boeing plant. how can he -- can he turn words into actions? how was the trump administration a game changer for defense spending? we will speak to u.k. michael fallon live from the munich security conference. is a megadeal brewing in the consumer products business? kraft heinz targets unilever, but so far, unilever rejects the deal.
it is not a quiet friday. we are 30 minutes into the 30 -- we are 30 minutes into the u.s. trading session. abigail: we have relatively decent declines. the dow is on pace for its worst decline for the month of february, very small, but this does stand out. we do have the three major averages -- dow, s&p 500 and nasdaq moderating. not looking at any record highs. six days, we have had intraday record highs. it is interesting to see that stocks are pulling up. we are looking at weekly gains by the s&p 500. longest winning streak since the middle of august. when we put this into the broader context of the wild action in d.c. and a lot of investors talking about complacency, when will we see a
pullback? we have a great longer-term chart. it goes all the way back to 1992. these are the net percentage changes for 50 week highs. we have the downside and the upside. one thing that stands out is when we have lower highs on the s&p 500, we then see big drops for those numbers trading lower. we are looking at this long-term downtrend that may suggest we could see the number of s&p 500 trading lower and not hitting 52-week highs. something to keep an eye on. very quickly turning to what vonnie has been talking about -- we have both kraft heinz and unilever trading higher. unilever is on pace for its best day. it comes in contrast to kraft heinz saying they were dropping
an m&a strategy mark. it has become clear that they made an approach to unilever. unilever rejected that saying it is overvalued. analyst told our team that it is clear that kraft heinz backed by warren buffett, wants to create a consumer staples powerhouse. here.le megadeal mark: unilever is propping up the personal household goods gauge within the stoxx 600, which is them for a second day after rising for seven straight days. just coming back to unilever, the magic day is 1.4 3 billion. that is what kraft heinz has tabled. unilever has rejected it under evaluating the company. i'm yet the beginning of a bidding war? 12 percentage is the game.
--are we at the beginning of a bidding war. gain.centage is the estimatedhan fourth-quarter profit. vonnie: let's go to germany. we are going to the munich security conference were high-ranking officials are gathering to tackle challenges. it matt miller -- matt miller is there. matt? matt: standing by with the defense minister from the u.k., michael fallon. thank you for your time. what do expect to hear from mike pence, which is his at least becoming vicee president. >> i am sure he will reassure us that the united states is
committed to the alliance. the president made that clear to theresa may when she was the first visitor a couple of weeks ago. i am sure we will get for the reassurance that america will continue to lead our alliance. concerned about the reports that of surfaced concerning donald trump's team in their communications with the russians, who are more foe than friend? >> we expect the united states to engage with russia. it is important to explain to russia what deployments are in nato. it is important to work 2-d escalate tensions with russia. it is important to talk to russia about areas in the world are russia has great influence. engage with russia, but beware. beware of russian internships, aggression and increasing russian bad behavior.
do you think the white house has lost credibility. can you work together with this white house in a very trusting way? >> i have spent the last two days working with secretary tim matus, the new -- james mattis. he is a former nato commander. it i am in no doubt to the military alliance and have no doubt to america's commitments to the war against terrorists. the united states is looking to accelerate that battle in a rock and syria. -- in iraq and syria. matt: do you have plans to fight isil together? >> a meeting was held yesterday with the 30 countries most involved and he has reassured us that the united states want to see the momentum of the campaign
accelerated. half of mosul has already been liberated. the operation to free west mosul is beginning and there are operations to liberate syria so we can do with this extremism at the heart of the caliphate in iraq and syria. matt: let me turn to brexit negotiations. are you aware of any negotiations regarding the defense relationship, or the intelligence sharing plans for the u.k. and the e.u. after brexit? >> we have made it clear that we expect intelligence sharing and defense and security cooperation particular against terrorism to continue. remain leading members of nato. we're deploying troops this year in estonia and appoint troops in poland and sitting aircrafts to estonia and sending
troops to poland and aircraft to romania. mark: when you speak to other european ministers, do they ask you to ensure you of your cooperation? >> they want to continue the cooperation between the armed military and the electorates. we have the biggest defense budget. they want us to work with european forces on some of these challenges that face us, whether it is terrorism or uncontrolled migration. they want a cooperation to continue. and it will continue after brexit. -- towe be able to voice have your voice heard on migration because terrorism on the european continent has become a serious issue, and some asylum-seekers have been involved. with the working
various task forces tackling immigration. in the central mediterranean, we are part of the european union and will have the opportunity after we leave to decide whether to continue that work. it is free to other countries to join in some of these european missions. matt: thank you mr. minister for your time. defense minister michael fallon talking to us at the munich security council. vonnie: matt miller in germany. thank you for that. let's check in on our first word news with emma chandra. emma: president trump heads to charleston, south carolina to the boeing factory. according to a tweet, the president says he will talk about jobs. the president flies to florida where he will hold a campaign -- he will hold a rally tomorrow.
he plans on taking a second shot at the travel plan -- travel ban addressing the objections of a federal appeals court. that court halted the executive dan. saidr greek minister europe dealt with a financial crisis with extend and pretend. greece went bankrupt and they wanted to pretend that did not happen. how do pretend a bankruptcy has not happened? by extending liquidity rates. kicking the snowball up the hill. eventually, the snowball comes back. reviewingitors are the bailout. in south korea, the billionaire of samsung has been arrested in
a scandal. it investigators believe he was involved providing $30 million to benefit his close friend. prosecutors say he was part of a scheme to control samsung. the company has denied the allegations. dayal news 24 hours a powered by more than 2600 journalists and analysts in more than 120 countries. i'm emma chandra. this is bloomberg. mark: coming up on bloomberg markets, unilever rejecting a $143 billion merger bid from kraft heinz. we are talking consumer m&a as this drama unfolds. this is bloomberg.
york, i'm mark barton. vonnie: i'm vonnie quinn. this is "bloomberg markets." proposal from kraft heinz to combine with unilever, .u is this round one? seems like it is, but it is interesting that universal -- unilever shareholders are optimistic. investors said there is no rationale for this proposal. mark: is that reflected in the u.s. shares below $50? thatthat tell us doubts this obese successful? >> with the -- does that tell us about doubts that this will not
be successful? >> you have a 60 day put up or shut up period. vonnie: what about the idea that somebody else may come in? europe -- in europe, in terms of size, you have europe -- you have nestle. unilever is such of big giant that if they say they don't want a deal, they probably could make it go away. right now, unilever does not want to sit at the table. vonnie: any investors pushing for this to happen, or for a split? -- theyver has been
have a business that has not been doing very well. the one thing to keep in mind is now investor in unilever has come out and said, you guys should be offering us more. right now, they are keeping quiet. the other big takeover battle we -- they had.k. these two big shareholders in unilever does not have that. does it tell you about the need of these big global consumer goods companies to find new avenues of growth as conditions get tougher around the world? >> absolutely. if you saw unilever's numbers -- they said growth was slowing in the stock took a hit. that it was getting tougher and they don't have the flexibility to raise prices that much.
absolutely, consolidation is something these companies are -- kellogg and are other big companies, what are you thinking today? >> probably not very happy. them felllls, all of yesterday when kraft heinz's ceo said they do not need acquisitions for growth, but maybe he was prepping the market for the unilever direction -- unilever rejection. mark: vonnie? look atit is time to the biggest stories in the news right now. the world's largest maker farm equipment has raised its profit forecast and seeing sales rising 4%. that is 1% higher than the previous forecast. posting first-quarter profits. medicine will help breast
cancer patients live longer. they have a drug to treat ovarian cancer. be manager pimco seems to moving. pimco had almost as much as third-party inflows in january. i think we are getting close to the inflows we saw first quarter. >> it is on a pro rata basis as in the fourth quarter? >> no. another 5 billion in germany. vonnie: that is your latest bloomberg business flash. , looking atahead
and you see that in treasuries as well. it is time for our weekly friday etf report with abigail doolittle. abigail: hedge funds have been increasing their usage of etf's and their competition with them along with their complaints about them. here to look at all of this is eric, the senior etf analyst. thank you for taking the time. we were chatting before. ago, i had several hedge fund clients. at that time, they were starting sees etf's for quick positions as hedges. is that is what is going on -- is that what is going on? eric: you have $104 billion held with etf's. that is basically the majority of all etf shorting.
they are making an isolated bet. you can see the difference between their long and short-term position. this is where they are using etf in place of a derivative. they are also, in terms of long positions, still do tactical data. they will trade them. and then they will hold them long-term. bridgewater is a good example. they will hold the men their portfolio -- they will hold them in their portfolio. in all these cases, they are using the most liquid products. -- thaty speaking, how is how they are using them. they're 500 billion in stock shortages. they will use the etf sitting in these holdings and the etf will lead out stocks. abigail: very interesting and
surprising. do they compete with etf? eric: etf's are trying to compete with them. it is taking a hedge fund strategy packaging it into an etf. investors are not responding to liquid offs. there is $1 billion in them. my comes to those strategies, investors like -- when it comes to know strategies, investors like the real deal. some hedge funds are long only. exposure toet factors in aid to keep wrapper that does it in a way where you can organize it, that is what people will pick. other institutions and advisors and asset managers may not have the ability to do it in-house. smart data has it in-house. always: investors are
looking for ways to cut fees. do they complain about etf's? eric: they have voiced concerns. of all the people voicing concerns, hedge funds do it the most. there are two to categories of worry, one is in a high-yield bonds. this is the concern about how you can have a liquid product holding less liquid products? 50 hedge funds own hyz. clearly they are not listening. another thing is a path to a bubble growing. there was a lot of money funneling into the same stocks and bonds making the market less sufficient. my question is why when they exploit that? there are smart products that do not wait for those same stocks and bonds. both of those are legitimate,
complaintses those happen after a bad year. make an easyive to scapegoat. abigail: sounds like people are making great use out of etf's. thank you for joining us. back to you, vonnie. vonnie: thank you, abigail and eric. still ahead, republican senator is our guest. holdup ofscuss the the nomination of the congress secretary. we will discuss spending and lots more. this is bloomberg.
i've spent my life planting a size-six, non-slip shoe into that door. on this side, i want my customers to relax and enjoy themselves. but these days it's phones before forks. they want wifi out here. but behind that door, i need a private connection for my business. wifi pro from comcast business. public wifi for your customers. private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. ♪ bloombergve from headquarters in new york and in london, i'm vonnie quinn. mark: i'm mark barton. this is "bloomberg markets: asia trump is heading to
south carolina going to boeing's north charleston plant where he will speak at an event debuting be 710 dreamliner passenger airliner. -- omes as the joining us is kevin cirilli. is that relationship overshadowing trump's visit to the plant today. kevin: president trump will help to charleston south carolina -- is in trouble go to charleston, south carolina to see one of the rollouts of one of their aircraft carriers. it will talk about economic growth. -- of the state's senators lindsey graham and tim scott have become political storms -- the ones on the side of president trump. president trump is looking to turn the page after his trip to charleston, south carolina, he
will head to florida where he will hold his first presidential rally tomorrow. relationship between the ceo and president somewhat cozy? kevin: from a policy standpoint, what you will notice is there are folks in both the democratic party and republican party who are optimistic that this new relationship between the president and boeing will help to lead the conversation about the export/import bank. the bank's board is not entirely filled in a cannot finance loans. boeing is a cheap and a factor of this financing, and would like to see that move forward. i would anticipate announcements in the next couple of weeks. vonnie: what is the situation with the national security adviser? trump a tweet from donald
. i have been talking to sources close to admiral harwood, who declined the post. he privately said that it would not be possible for him to enter into this new administration because of what is perceived to be difficulties facing this administration. lieutenant keith kellogg is someone who was an early endorser of president trump on the campaign trail. he was also on the short list to replace general flynn along with admirable -- admiral harwood. a lot of moving parts right now, but i would anticipate an announcement on that quickly simply because this white house wants to turn the page of some of these questions. pruitt oklahoma's scott will be confirmed today, right? kevin: yes.
later this morning, we would anticipate that scott pruitt will be confirmed to the epa to lead the environmental protection agency. as we speak, democrats on the floor trying to make a last effort to oppose his nomination. they have argued that he should release more disclosures that they feel are not full forthcoming from mr. prewitt regarding his previous financial dealings. vonnie: correspondent kevin's are really, thank you. joining me with more on the president's agenda is republican senator john thune of south dakota. senator, thank you for joining us. you go back to oklahoma, tell us your assessment of administration's performance so
far, the first month of administration? sen. thune: well, it has been fits and starts. they have accomplished a lot. the president has a very aggressive agenda. trying to get his team in place has been challenging. the democrats have decided they want to delay and block and obstruct and hold this process up. it has been hard for the president to get his people confirmed. the sooner that happens, the better he will be able to work his agenda and govern the country. like any new administration, they are getting their legs under them in developing a chemistry within his team. hopefully, we will see progress on that front. beene: you say a lot has accomplished, but could you give us bullet points. what exactly has been accomplished? sen. thune: if you look at the
executive orders the president has put into place, and has given a lot of authority to agencies to roll back. what i would tell you is those are things we believe me to be done if we are going to get the economy growing. last year, we saw 1.6% growth. over the next decade, the economy will grow at 2%. one of the reasons for that is the excessive amount of regulation that is really active as an anchor on the economy. if we can address tax reform, repeal and up -- appeal in place obama care to make health care more affordable, get a new supreme court justice, we can get things going again. but he started very quickly with the executive orders, undoing a lot of the damage done. vonnie: when will the agency complex carry out some of these orders and be fully staffed and ready to go in washington d.c.? not to mention the cabinet? sen. thune: hopefully soon, but
what we have run into is a lot of resistance. there are a lot of democrats in the senate that are still critical about the election. in order for the president to work with congress, he really does need to have 15 in place. right now, he is having a hard time getting cabinet members and the sub-cabinet. vonnie: what is to be done about that? will -- when will they be in place? we have a bunch more that we are setting up for votes later, but the democrats are using every minute on the clock to drag this out. there are procedural tactics they can employ in the senate and they have utilized those to the fullest extent to delay this. i do not want this president get his team -- i want the president to get his team out there do. vonnie: john cornyn said that the border tax is on life support and he said we need to
look for other options. does the border tax, to practice? reform and tax whether it incorporates a border tax is still an open question. tax reform is going to get accomplished in this congress. we have to do something about it. in terms of the industrialized world, we had the highest tax on business gunning businesses out of the united states. we are losing jobs in our economy here. we have to reform our tax to become more competitive in the global marketplace. how that is done is being debated. the proposal and the house has an adjustability feature that has a lot of skeptics in the united states senate. i give them credit for being bold. they are looking outside the box alternatives. vonnie: what do you say should happen? sen. thune: i am looking at it -- i have concerns about whether it is wto compliant and how it will impact consumer prices.
if you don't see the currency appreciation being predicted, what will happen? frankly, there are a lot of merits to what the house has put forward, and it has an expense provision that businesses will find very attractive and gets the way down to 220%. to 20%.own there are things that businesses will like. border adjustability is a new concept in our country. and i all looking at it am keeping an open mind trying to determine what the impacts on our economy would be good -- would be. vonnie: talk to me about spending, senator. there might be a request for pentagon spending as much as $40 billion. how much will the debt ceiling be extended? sen. thune: anytime we have a
vote on extending the debt ceiling, we want to do our best to put in place measures that would actually reduce the debt reduce the deficit. it is challenging right now because we have a lot of people that believe we need to build up and invest more in our national security interests. we have this deadline out there to raise the debt ceiling. i don't know what that number would be good will get more information from the treasury department as a day approaches. we know that we have to pay our bills. we have to keep our country and our economy going. i assume when the time comes, we will have the votes to pass it, but it is never something that we find any enjoyment in doing. unless because couple it with deficit reduction measures. positionsme of the seem a little bit at odds with white house positions. how do see the relationships going for between the gop and the white house?
sen. thune: on the broader agenda, we are in sync with where the white houses. they are focused on the economy and we certainly do here. we think that deals with repeal and replacing obamacare, lessening the repertory burden, all those issues -- there are differences of opinions between the white house and congress and among members of congress and the senate and house about the best way to do that, but in the end, we have to figure out how to get 218 votes in the house and bills that can get signed into law by the president. in the end, that is what matters. that is what we will be focused on, trying to find that consensus to move an agenda forward. senator john thune south dakota, thank you. mark: excellent conversation. is our guestlnick and will tell us about the
♪ live from london and from new york, i'm vonnie quinn. mark: and i mark barton. this is "bloomberg markets." nba's kicking off its all-star technology forum in new orleans. they bring the most influential names to talk about the future of the industry. cory johnson is there joined by special guest. with strauss zelnick, ceo of take-two interactive. how is again doing?
strauss: we have achieved the highest ratings for any sports title in this generation. this year, we are about eight units sold. sales are up 60% year-over-year. isy: the quality of the game mind blowing for people who play games. immersive. this game is so immersive. strauss: it started as a simulation game. we're going to create something electronically that mirrors what you see on the court. more and more, the simulation is real. if you step back a little bit, you cannot tell the difference between nba 2k and professional basketball television. nowink the added excitement of the ability to tell stories and involve yourself in the story surrounding basketball is what is catapulted us to another level. you don't just have to love
basketball. if you love sports, if you love players, if you admire someone, these are reasons to engage with nba 2k. cory: what is the correlation between sales and the consuls themselves? strauss: it is tempting to talk about shows from an industry term if there are millions of devices. it is irrelevant if you put out something bad, and equally irrelevant if you put out something good. sold theft auto five has in 75 million units. no one would ever think about it high ratio of that number. if we put out a disappointing number, we will not get the benefit of an installed base because no one would wanted. cory: you have a new partnership in the nba. for people who do not know this business, it is a massive business. the competitive gaming spaces unbelievable. strauss: it is hard for people
to understand the notion. believe that people will watch a play a game electronically. 250 million people around the world do just that. half of that audience is actively engaged in watching competitive gaming. twitch and many other platforms -- youtube, facebook, own -- are on nba 2k. and to bee way getting a spectator sports, someone would say, why would you watch someone play basketball? the answer is i want to see the excitement of the game and identify with the problems -- i do with the players and get involve at a level that i cannot play it. cory: what will happen next? we are trying to create a competitive gaming environment
that tracks as closely as possible the actual nba environment. there will be teams, professional players who will get paid, salary caps, general managers, and one could imagine the knicks are lakers. that will develop. i don't want to speak for the team owners, but my sense is that there is excitement. themselves the teams , the same group who owns the -- cory: the notion that we would have the current team owners involved in competitive gaming is a very sensible one. -- willsee the lead receive the league sell those rights? would you be the seller? i would like to be a venture partner creating the new system. the economics will take care of themselves. i know this sounds like apple pie, but the added benefit is if consumers, the
economics will follow. cory: take-two will be a platform for the league, not just for this year? strauss: and the videogame space, that is been true. oneur detriment -- four -- of our competitors controls the soccer business worldwide. i think the truth is when you make a great game and when you have high ratings and people play it, when they get accustomed to your title, you do have a good deal of competitive barriers. cory: straw celtic, thank you -- stra. mark: in new orleans, it is time, vonnie. vonnie: yes it is. you are looking at pictures of president trump arriving at joint base andrews.
he departed the white house and is on his way to south carolina going to be visiting north charleston. then he will be with the chairman of the board of boeing and the ceo. he will be visiting a factory and the boeing's facility, then finally, making remarks of the new boeing 787 dreamliner. the president heading to south carolina. this is bloomberg. ♪
♪ vonnie: you are watching bloomberg. i'm vonnie quinn. mark: i mark barton. -- i'm mark barton. you keep prime minister tony blair says brexit opponents should not give up the fight. thereut why he thinks should be a chance you can remains inside the e.u.? vonnie: the future of samsung's leadership is --
the ceo was arrested on corruption charges. west/-- howll you relationsand israel be after the meeting with prime minister ned yost who? mnuchin is getting warnings from his counterparts overseas. the message -- don't call the yen weak and be careful on how you cut financial regulations because europe is listening. the finance chief is looking for clues whether mnuchin will clarify u.s. currency policy. tony blair is urging opponents to brexit to fight to keep the you paid -- to fight to keep the u.k. and the european union. >> the people voted without knowledge of the terms of brexit. clear, itterms become
is their right to change their mind -- as these terms become clear, it is their right to change the mind. our mission is to persuade them to do so. mark: in south korea, the billionaire to samsung group has been arrested in a corruption scandal. lee is accused of embezzlement. they are looking at if he provided $30 billion to benefit south korean -- a friend of south korean's president. mark zuckerberg is calling for a more globally-minded society. he said his company will take responsibility for helping people understand one another. zuckerberg said he will get facebook users involved in recovering from global crises and understanding news from different angles. vonnie: time for our bloomberg could take were we provide at crown on issues.
u.k. are -- the the u.s. and israel are close. he will no longer assist on a palestinian state as part of the piece still. here is a situation does benjamin and yahoo! wants to establish a better relationship with president trump then president obama. under obama, u.s. officials were harsh and their criticism of israeli settlements in the west bank, which the palestinians hoped to make the heart of an independent state. the trump administration does my view israeli settlements as an obstacle, but trump has asked netanyahu to hold off on new settlements for now.
an earlier flashpoint came at 2015 when netanyahu encouraged u.s. congress to kill the iran nuclear deal. trump shares netanyahu's criticism of that deal. the first two decades after its first-in 1948, they welcomed an ally of the u.s. to declined to sell arms to israel. the original patron helping them to develop nuclear weapons. the soviet union supported arab enemies in the 1970's. critics say the pros skews foreign policy away from the national interest by reducing israel's needs to make opera prices with others in the region, u.s. support breeds anti-americanism and militancy in the middle east. supporters say in a region that is volatile, and israel is transparent, accountable count -- accountable, and a reliable ally. you can read all of this on our
quick takes. had to bloomberg.com for more stories. mark: you're looking at live base.es at the he will meet with the chief get aive and boeing and viewing of the 787 boeing dreamliner. he will also talk about jobs. the european close, we are looking at stocks, which are lower. -- sterling's weakness is boosting the ftse 100. this is bloomberg. ♪ .
vonnie: you are watching air force one departing joint base andrews on the way to south carolina, he will arrive in north charleston before meeting with the president of mowing and touring via boeing company, we will keep a close eye on that live and also we will bring you the president's weekly address which he is releasing early to the public, releasing that today here and let's go to the white house and our correspondent kevin's are really -- the president en route to north carolina, having already taped his -- with charlton, softer line of -- north charleston, south carolina. >>