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tv   Bloomberg Best  Bloomberg  July 22, 2018 3:00pm-4:00pm EDT

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shery: coming up on "bloomberg best" the stories that shaped the week in business around the world. friends or foes? the lines blur as a trump/putin summit. we don't know exactly was said between the two in that more than two hour sit down. >> you can't sit there with the president of russia and not more strongly defend the united states. shery: wall street dig into a feast of earnings reports and is it the end of an era at goldman sachs. >> the secession played out so inelegantly. shery: the eu slaps a record-setting fine on google and comcast calls off its chase at fox. >> he noted very little about the biggest issues chasing wall street.
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shery: trade tensions could be trouble for investors. >> clients are questioning the whole foundation of international investing and that is the foundation of globalization. shery: and donald trump's campaign manager claims social media is slanted against his candidate. >> their employees have bias. that goes into every line of code they write and everything they do. shery: all straight ahead on "bloomberg best" ♪ shery: hello and welcome, i'm shery ahn. this is "bloomberg best," from bloomberg television around the world. the week began at a summit meeting in finland between donald trump and vladimir putin. after it concluded, the reaction was decidedly mixed.
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>> a good start in helsinki, that is how president trump described his meeting with vladimir putin, but members of his own party have different words for it. shameful, disgraceful, bizarre. flat out wrong. president trump sparked a republican backlash suggesting he equally trust vladimir putin and u.s. intelligence agency. president trump: dan coats came to me and said they think it is russian. i have president putin who says it is not russia. >> we don't know what was said between the two in that more than two hour sit down. that was just between them in a translator. in the public press conference, we had some pretty interesting statements. putin admitted he wanted president trump to win the 2016 election. president trump had harsher criticism for the mueller probe and the fbi than he did for putin and russia.
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>> he did not back off the u.s. opposition to the pipeline that he has been critical of with european allies and their relationship with russia. nor did he suggest there would be any easing of the sanctions for crimea and russia's annexation of that. the u.s. position is that that was wrongly annexed. >> bank of america beating profit surge by the banks consumer unit which boasted its highest revenue in more than eight years. is it all about interest rates? >> it's all about interest rates, absolutely. people were worried about the flattening of the yield curve. and what that would mean for jpmorgan, bank of america. they are showing they are able to make money. they are showing they are investing to gain shares. for bank of america, they also, even with an aggressive cost-cutting plan, said they would invest hundreds of millions of dollars into digital banking efforts.
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people are reacting pretty well to that today, even though net interest income is shy of expectations. results this morning were mixed. shery: if you look at shares of goldman sachs, they are slumping today after the bank reported earnings in expensive and a drop of equity trading. this comes as goldman officially announces david solomon will be taking over as ceo in october, ending lloyd blankfein's 12-year run. >> was lloyd blankfein pushed out of goldman sachs? >> that's the overwhelming sense that people have. why? the secession played out so inelegantly. goldman has been struggling in some areas. commodities and fixed income more broadly. it is overcapitalized and hasn't been able to grow revenue. so, there is a sense that goldman needs to reinvent that business and more broadly reinvent the firm. lloyd blankfein having been
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there for 12 years in the eyes of some people on the board and at his age, may have run out of ideas for how to accelerate growth at goldman sachs and transform the firm as fast as some people feel it needs to be done. >> federal reserve chairman jay powell making it clear to congress he wants to stay in his lane and keep on the message of monetary policy. his message may have come with a caveat. jay powell said gradual rate hikes will continue for now. >> he is mostly concerned with the economy and not making waves for the markets. he noted very little about the biggest issues facing wall street and didn't say much about the yield curve other than they are watching it. a lot of talk about ranking -- banking regulation. the new bill that passed earlier this year that lightened some regulation on smaller banks, powell said they are trying to implement that as quickly and carefully as possible. he took some hits from elizabeth warren and other popular democrats for the stress test
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they conducted this year in which morgan stanley and goldman sachs came up short but were allowed to pay out dividends anyway. at this point, it looks like he satisfied most of the critics on capitol hill without doing anything to really upset financial markets. >> a rare oval office about-face. president trump reversing course after intense outcry on capitol hill, including from some usual loyalists. he walked back some of his comments in helsinki. he now says he accepts the conclusion by u.s. intelligence agencies that russia interviewed in the 2016 presidential election. >> the president was definitely being given a message that you can't stand there with the president of russia and not more strongly defend the united states. so, we will see if this quells some of the outburst and opposition, but it was definitely as close as we get to
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a public apology from president trump. >> morgan stanley beating expectations on the top and bottom line and reporting stronger than expected trading and fixed income revenue as well. you have to say they absolutely smashed it. >> yes, they did. you started with trading but i would like to start with the blowout in investment banking. specifically the underwriting side. you will see from the results that they blew it out of the park there. plus 34% in the new stocks field category. in the bond yields category, plus 7% and that was over expectations for them to be a bit negative in those areas. trading was really great. increased 14%, driven by the strong morgan stanley equities franchise. >> google was fined $5 billion. a global record for antitrust penalties. >> it's a big fine. you want serious behavior changes. but when it is 90% of the market, will it really make much
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of a market? >> the differences now, we have a choice. those who produce mobile phones for us, they can choose. if i would like to put and other operating system for those who search rivals to google? they make it a fair chance to get to us as consumers to show their products. >> she did not actually say how google has to adhere to the ruling. she said that this is what you are doing is wrong. you will face if i'm come and let you fix it. ultimately it is about contracts that they agree with the smartphone makers and it will be the new phones going forward. if you already have an android phone, it doesn't affected at all. the new ones shipped, they have not done an agreement with the
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smartphone maker that they have to install the suite of google apps. it is not something we will really see until the next generation of phones comes out perhaps later this year or next year. >> the pboc set a daily reference rates for the yuan weaker than the dollar. china does seem like it is willing to tolerate greater volatility. >> what we are seeing now is very politically motivated. they are sending clear signals to america that they need to back up on these tarrifs. if there is a trade war going on and -- there is a trade war going on and america is being brutally beaten in this. >> the mood music is different this time around compared to 2015 and 2016. the authorities still have very firm capital controls in place. there is no sense of panic in terms of trying to get money out of the country. another point to remember is
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this is coming at a convenient time for china. the economy is slowing and they are facing a trade were. the yuan's slump could potentially offer a cushion for growth going forward. >> comcast waves the white like, bowing out of the battle for fox entertainment assets. they will focus instead on when he control of sky. >> the question will be, will disney do the same thing and cede sky? is there sort of a quid pro quo? we don't really know. disney has said they want the sky asset and comcast is very much in that business. it does strategically make more sense for comcast, but disney has said they want to be closer to the customer and have direct billing relationships with the customer. that is something sky provides. it is still a little bit of a tossup whether disney will stay in this or not your it. -- or not. >> the fed under fire from the oval office. president trump taking aim at the federal reserve chair that he appointed, criticizing jay powell's rate increases. the white house are now backtracking this remark, saying president trump is not interfering at that he respects the independence of the u.s. central bank. does it matter the president said this?
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>> the reason this president doesn't talk about the fed is not about politeness or tradition. it can backfire for two reasons. one is people start to feel feel the fed is going to count how -- kowtow to the president and allow the economy to grow too fast, overheat, inflation to go up, interest rates will rise. the bond vigilantes will kick in and the rates will rise, which is what the president is not what. or, the fed will show its independence it will preemptively raise rates, either way the president is shooting himself in the foot. >> president trump ratcheting up tensions with foreign countries and the u.s. federal reserve bank. the president tweeted this, "china, the european union and others have been the nebula in currencies and interest rates
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lower will the u.s. is raising rates. the dollar gets stronger and stronger with each passing day, taking away our big competitive edge. as usual, not a level playing field." >> he wants the dollar lower. i don't think anybody believes donald trump is steeped into the mechanisms of currency markets. but that is therefore dangerous because of the nations, if they take actions based on what they think is strategy may cause miscalculations. things can barrel out of hand. it is a very dangerous thing donald trump is doing, but ultimately, he wants to see the dollar lower. shery: still ahead as we review the week on "bloomberg best," an exclusive conversation with blackrock's larry fink. plus, aviation executives talk about trade, and the earnings drumbeat continues and a big miss for netflix is among the biggest headlines. >> they missed by one million subscribers. that is quite a big number.
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shery: this is bloomberg. ♪
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shery: this is "bloomberg best" and i'm shery ahn.
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shery: this is "bloomberg best" and i'm shery ahn. earnings season kicks into high gear this week. although deutsche bank won't release results until next week, the lender said monday it expects profits to beat estimates by a wide margin. it sent shares soaring and took pressure off the bank's new ceo. >> this is the news he has been waiting for. they need to move quickly. is the timeline sped up for deutsche bank or can he take a more responsible path up to 2020? >> there is still a lot of
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pressure on him despite the surge today. they are still trading at a very low price. it was about 12 euros when he took over in april. he is still overseeing a decline in share price and investors are still demanding a quick return to profitability. i think there is still a lot of pressure on him to perform and maybe certainly reach the target he unveiled when he took over. >> netflix shares have plunged after the company posted disappointing subscriber growth numbers for the second quarter. should we be worried? if you been invested in netflix, even not having sold your shares yesterday, you're doing great? >> its one quarter they missed. they have had a number of quarters they have beaten. that is the natural flow of things. that is the argument netflix makes. equally, they missed by million subscribers.
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that's a big number. given this is netflix, they sort of say they can move subscriber numbers in the direction they want. that has not quite work. >> unilever expects sales growth to bounce back this year after missing analyst estimates in the first half. that is as truckers in brazil walked off the job. >> the second half of the year we do believe there is a bit more pricing come in because it is relatively on the low side. that will obviously help. we have facing of initiatives coming for in the second half. we think of the guidance we have given to the markets to be between 3% and 5% range. >> j&j shares up after second quarter was solid. the company did give full-year guidance below median analyst. plus, it had to trim the forecast for the drug sale revenue due to a stronger dollar. is that a trade war effect and how does that affect other parts of the business going forward? >> it is not attributable to the trade war at all. i would say it is just the
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impact, the macro impact that we manage on operational sales performance. if you look across our business, our performance was very balanced no matter what region you specifically look at. domestically, we grew 9% outside the u.s. on operational basis it was 8%. so very strong in terms of tariffs or any impact on our business right now. minimal at this point. >> sap raises his outlook this year. the german software giant benefited from increased spending on business products. >> in a period of time where the there is growing uncertainty, companies are turning to software providers like sap to really help them weather the storms. become more efficient and have greater transparency to her see that from the results with our strong growth in the cloud business up 40% as well as the
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stronger resilient core license business we have which was up 3% as well. from that perspective, we believe we will do well for the remainder of the year despite any uncertainties that the macro environment might bring to us. >> keeping an eye on net income for the second quarter, 3.8% above estimate. you say your strategy is bearing fruit. just how good could this year be? >> i am satisfied. there are a lot of bright spots here. we can see underlined income now improving. which we have worked really hard on. we continue to deliver on cost, the credit quality, capital, and also on compliance. the key elements of delivering on our in place. i think we can continue.
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>> microsoft reported strong fourth-quarter sales as the cloud-fueled turnaround kept on going. sales and profit got a boost from customers signing up for more internet-based storage, processing, and office software. talk to us about the cloud. it looks like everything firing on all cylinders. >> absolutely. not just in the infrastructure side, but applications. even on premise products, so we are seeing enterprise tech spending is strong. when you look at someone like microsoft, we saw commercial pc numbers accelerate which we would not expect in this day and age. you could say broad-based id spending and microsoft group 15% in constant currency, that is two times the total software market. these guys -- they know what they're doing. >> ge had strong demand for aviation and health care equipment. that helped boost results. what was your biggest take away?
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>> it looked like a decent clean quarter, which is not always the case with ge so there was some sigh of relief there. they didn't cut numbers which is surprising to me because they only done about $.35 and the first half and are looking at a buck for the year. cost reduction, stability and power, that didn't happen yet. health care and aviation will just keep carrying them. >> the big point to focus on is cash flow. on that front, ge cut its annual guidance for 2018 because they came up short in the second quarter. looking at -$1.4 billion in adjusted cash flow for the first half of the year. ge tends to be backend waited when it comes to producing cash flow. but this sets up a steep hurdle for it to clear in the back half of the year and that is exactly the situation the company found themselves in last year when ceo john flannery had to cut dividends. ♪
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shery: you're watching "bloomberg best," i'm shery ahn. blackrock reported second quarter earnings that the estimates. they saw out those lowering inflows into these exchange traded funds. in an exclusive interview, they are seeing a shift in client behavior. >> we saw clients worldwide pause. we saw clients confused as to what direction the markets will go. >> this is what they're telling you? >> absolutely. i'm traveling everywhere. clients are questioning the whole foundation of international investing and that
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is the foundation of globalization. as we start entering the conversation about trade and tariffs, we are seeing clients pull back a little bit. we are waiting to see how does this play out? the backdrop is we have very strong earnings. first quarter represented we saw strong earnings throughout the s&p. we believe we will see strong earnings in the second order. -- quarter. we are going at a rate of $800 billion worth of stock repurchases. we have record amount of m&a. the backdrop is we are shrinking the amount of equities. we have record earnings in markets are essentially unchanged. >> does that surprise you? >> absolutely. if you asked me if we would have record amount of m&a and earnings and stock repurchases, i would have said the market would be up 10% to 12%. markets are essentially flat. if you strip out -- >> instead of the s&p 500, it would be more like 3100?
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>> yes. more importantly if you strip out the seven major tech stocks, the breadth is really poor. we are seeing evidence of that. let's go deep into the flows, because the flows, the overall macro number doesn't tell you what was going on. we saw a lot of churn in the index equity business. that is where we saw outflows. we had about $13 billion of outflows in that area. we saw investors pull out of what i would say emerging markets and other areas. i need to remind you, cash for the first time since 2008 is earning you a return. you are earning two plus -- >> why is that important? >> you could pause and earn money. >> people can afford to wait? >> you can afford to wait. this is a huge change in the marketplace in the last nine years. people have forgotten about
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that. you are earning 2.5% on a money market fund, similar to the five-year treasury. you could pause. by the way, equities are not up 2.5% so you could be earning money in cash and pausing. let me get back to the flow. >> should people be pausing? does that seem like a wise, smart thing to do right now? >> it depends. if your horizon is the next five years, it is good to pause. if you're focusing on retirement, you should never pause, you should continue to invest. it depends on the time horizon. ♪ shery: coming up on "bloomberg best," more of the weeks top business stories. the sec questions a media merger and japan signs of trade deal with the eu. plus, more of the week's most compelling conversations. donald trump's 2020 campaign manager speaks exclusive with bloomberg and says social media did not put the president in the white house. >> when president trump won, facebook is .1% that deliver his
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message. shery: this is bloomberg. ♪ retail.
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which could save you hundreds of dollars a year. plus, get $150 dollars when you bring in your own phone. its a new kind of network designed to save you money. click, call or visit a store today. shery: welcome back to "bloomberg best." i'm shery ahn. leaders in global aviation came together this week at the in international airshow. airbus and boeing and other manufacturers announced major deals with airlines, and u.k. prime minister theresa may in stopped by to update the an industry on her brexit proposal. bloomberg's guy johnson was you -- was there and he's oak with several top executives, starting with boeing's ceo, who talks about the impact of trade tensions on aerospace. >> growth is growing. review aerospace is growing. it's enabled by positive trade policy.
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some of the things that have been done by the administration in terms of tax reform, regulatory reform have added momentum. we are concerned about the discussions around trade, and our aerospace business thrives on free and open global trade. we are hopeful we will find alternatives to some of the tariff discussions. it's an important topic. >> when you talk to the white house, when you talk to the president, what kind of feedback do you get? are you being listened to? what is he saying? >> we definitely have a seat at the table. i think it's important that businesses' voices are being heard. global trade is a complex topic,
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and we understand there are issues that need to be addressed and challenges around the world. i go back to the idea that aerospace is something that contributes to growth in multiple countries around the world. if you look at things like the u.s.-china trade relationship, for example, china needs the lift capacity of aerospace. it's fueling economic growth in china. in the u.s., aerospace is the biggest trade surplus generator. last year, an $80 billion trade surplus in the u.s. a lot of the generated by boeing in our supply chain. aerospace is uniquely suited to help grow economies around the world.
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we think it continues -- that we are based in the u.s., in europe, in asia, and in china. we do business across those blocks. it's a very interdependent supply chain. we buy in the u.s., we sell in the u.s. airbus is located in terms of production size in the united states. we want to believe we can keep going in that direction. we continue to link people, nations as a business, but more than a business. we contribute to an international level. >> your supply chain is critical for what you do. i don't have to tell you that. are they starting to feel some of the pressure coming through? is there a worry about aluminum, is there worry about getting the stuff they need? how much attention are you
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paying to the supply chain? >> there is a tension in the supply chain due to growth in the production rate. we feel that this rate, preparing the next step, we suffer from tensions. it is not only linked to trade. it is linked to production capacity. it's out of growth that we like to manage. >> our number one priority from the brexit negotiations was retaining our membership in the european aviation safety agency. there are only two big global and safety agencies. one is based here in europe and and the second is the u.s. we have a significant role and insurance and that european
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agency, and for us, remaining part of it is crucial to our future competitiveness. >> airbus and other voices over and the last -- in the last few weeks have been heard. airbus in particular was all over the front page in terms of in its concern surrounding the direction of travel that britain was taking. and why did it take so long for the industry to step up and make its voice heard, or is it waiting for that critical point? right now, facebook used to be we could put out an ad in a few seconds of a not takes a few days. it is hard to put up 5.9 million and when you can't put it up automatically. >> and you recently met with -- >> i brought that up as one of the items i was frustrated with. i went straight at them and said this is the kind of change that is biased.
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understanding how our technology works, you created a rule which made it more difficult for us to use that. that's a frustrating standpoint. i don't think in the interim we will figure out a way to get things done. i think right now we have a popular president, more popular than he was on election day, and the most popular republican president in modern history. i think we will see a successful trump in 2020. >> it is ironic that your frustrated by face look, given some people believe facebook played a critical role in winning you the election. >> i have been very specific that i think facebook was how we -- was how we won in a lot of ways.
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when president trump won, i think facebook was the .1% that delivered his message. if facebook hadn't existed it will be a would have been a lot tougher. facebook connected the country, connected rural america, people in cities across the country are from different types of backgrounds and it's doing exactly what it was designed to do, connect us all. i think facebook also is a liberal company that -- maybe its management isn't, but it has an inherited bias. just like these other companies. it is based in a place that is extremely biased. i can see it today, talking to
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you. northern california is not eastern kansas. their employees have bias. country. ♪
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shery: you are watching "bloomberg best." i'm shery ahn. let's return to our global tour of the week's top business stories in china, where the latest gdp data sent out mixed messages about the health of the economy. >> ramped-up trade tensions failed to make a significant dent in china's expansion, even as growth edged lower. second quarter gdp rose from the previous year, down slightly from the first quarter. >> we know the economy is slowing down. gdp came in as expected. never really any surprise. we saw industrial output softness for sure, which could be a sign of things to come. interestingly, though, retail sales rebounded.
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they rebounded from a fairly weak month in may, but at the same time there is some good demand on communication devices and the like, which suggests that despite the trade war backdrop and slowing economy backdrop, consumer confidence is doing ok. that is certainly not a negative thing for the chinese economy going forward. >> beijing has moved to bar retail investors from investing in what they call risky foreign stocks. the new rules will affect the stock link with hong kong. tell us the rationale behind these moves from beijing. is there an element of chinese money should support chinese companies? >> what this change will effectively do -- the hang seng index, it is going to include foreign companies, stable
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securities, and stocks with weighted voting rights. china has essentially said, hey, not so fast. you can include them but we are not going to include them through the stock link. that will keep chinese money within the china stock ecosystem. as it pertains to foreign companies. then it will also stop chinese investors from investing in the likes of xiaomi. >> sinclair wants to buy tribune tv stations in a $3.9 billion deal, but the fcc is now questioning the legality, dealing a blow to the merger. the objection expected to cause a significant delay and create a large regulatory hurdle for the tv station. >> this was not expected that all. sinclair is going to have to restructure some of its deals. it agreed to divest about 23 of its stations to comply with the 39% ownership cap. what has happened now is that the fcc is raising issues that some of those divestitures are not cleanly structured. sinclair is going to have to come back probably with a new proposal, kind of make it
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squeaky clean, and present it to the agency. >> china and the eu are pledging to work together to defend the global trading system, amid rising concern about protectionism. talk to us about what china and the eu have agreed to do. >> well, we got some substance out of this one-day summit, even if it wasn't groundbreaking. we did get the first joint statement since 2015 between the eu and china. they pledged to uphold the multinational trading system and open markets. we also got some movements around the bilateral investment treaty they have been working on. both sides agreeing to exchange market access, which moves that forward. >> japan and the eu have signed a trade deal that scraps a wide range of duties and regulatory obstacles between the two economies. the joint statement sends a powerful message against
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protectionism. they obviously didn't name the u.s. or trump specifically, but it sounds like a pretty pointed emphasis on uniting against u.s. trade policy. >> well, it's true they didn't name trump or specific nations, but given what is happening globally it is pretty clear to whom they are sending a message. their staff was very clear, they promote free trade and continue to fight protectionism. >> japan's leadership and free trade deals is a very important at a time when protectionism is extremely strong. japan managed to reach an agreement with the eu, and we also led in tpp 11 deals. i understand it is not easy for the u.s. to rejoin the tpp deal,
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but it is important that the u.s. understands the value of multilateral trade agreements. but we got some data from a company fee advisor that provides pricing software to a lot of clients that sell on amazon. it was able to estimate the sales boost. they are saying sales in the first 12 hours for up nearly 90% compared to the first 12 hours a year ago. so despite the glitch, it is looking like amazon's prime day is off to a much better ending than beginning. >> texas instruments ceo brian crutcher is resigning after violating the company's code of conduct. this is the third chip ceo after intel and rambus who lost his job for these violations. >> yeah, and particularly for texas instruments, which is a steady, low-key, disciplined operator. this is an unnecessary distraction. and remember, this is a new ceo, and rich templeton was looking forward to his retirement after serving for more than a decade as ceo and for a long time with the company. unnecessary distraction, but it doesn't take away from the
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investment thesis. >> u.s. aluminum tariffs were meant to protect the industry from foreign competitors, but instead they are taking a bite out of the earnings of alcoa, which lowered its 2018 projections as tariffs are presenting with the company says is a "significant headwind." this wasn't supposed to happen. >> no. but there is a fine tradition of coming out with very aggressive tariffs and sanctions, and then backtracking quickly when you see it causes the economy to collapse. we saw that before were the tension went after one particular individual, and then they realized it would have this enormous effect on the rest of the world, and then everyone
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would suffer as a consequence. they backtracked on that. i think we are heading down the same path here. >> political uncertainty in italy is rattling investors. there are reports that the finance minister might be forced to step down as he disagreed with who would lead a particular bank with the two populist leaders in power. walk us through the events of the last 12 hours. >> well, this morning we came across reports that there were serious differences regarding the finance minister, and then there came a whole bunch of denials. and then a key matter happened. apparently the government has reached agreement on the head of the state lender, the heart of the matter that we were hearing this morning. it has been up and down all day and now they seems to be some sort of calm returning. >> president trump continues to criticize the eu over trade. auto groups, industry workers, and foreign governments are condemning his idea of raising duties on cars. at a public hearing attended by wilbur ross, -- warns the administration that tariffs on car imports would hurt the u.s. i understand that the eu was preparing for retaliation.
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>> they are currently working on a list of american goods that they will retaliate against if the u.s. were to hit the eu with this auto import tariff. the word we are hearing here in brussels is that the size of the retaliation would probably be about 20% of the buying goods -- volume of goods that the u.s. has. >> now let's focus on the start up that is taking the footwear industry to new territory. allbirds makes casual shoes and sneakers from renewable materials like wool and tree fiber, and in less than three years has sold over one million shares. -- shoes. the company's cofounders told us about their journey from small to big. ♪
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>> the idea was first born in france. in a place that has got nearly 30 million sheep, the idea that wool could be used, we had to make shoes that were not just comfortable, but better for the environment was an idea that seemed obvious and hadn't been explored. we launched the business with one shoe, which a lot of people told us was not how you launch a shoe brand. we started with wool, we added tree and eucalyptus fiber, which has never really been executed before which we are excited about. we are incredibly focused to sell a handful of styles. we are not holding to wholesale release dates, which allowed us to put the customer at the center of the business. >> every transaction we have in our business model, we get data from our consumer, we know what they want. >> the customer interaction, that relationship has allowed us to move really fast and i think it is a key part of the early stages. >> this thing has grown much faster than we could ever imagine. it started a few years ago, joe, myself, and his dog walt working
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out of his mother-in-law's house. all of a sudden we are north of 100 people. >> from the beginning we realized culture could be a differentiator for us. we invested in it from the beginning and spent a lot of time defining our mission and our vision and values. it has been incredibly helpful in attracting talent. a bunch of outsiders with a couple of notable exceptions. it has allowed us to attack this industry with completely fresh perspective. i think continuing to invest in that team and making sure our culture is absolutely a priority for us. >> we started as a direct to consumer business on an e-commerce platform. we quickly added stores.
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we now have 100 employees across two continents. we sell in four geographies, in now canada and australia. we also have two retail locations, one in san francisco, and one in new york. in the first two years we were able to sell one million pairs of shoes. >> i think we believe it is a revolution going on in the way things are made. customers are starting to demand to know the provenance of the things that they buy. >> we focus on making materials that are new, differentiating in expandables. you will see a whole lot more from us, and hopefully we will be popping up around the world. >> it's just the beginning for allbirds. ♪
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>> i've got ea go, a function that can take you through different indexes, earnings results, a report card, if you will. right now we are looking at growth that is 9% over in earnings over the same quarter last year. shery: there are about 30,000 functions on the bloomberg, and we always enjoy showing you our favorites on bloomberg television. maybe they will become your favorites. now let's wrap up this week's program with a look at one of china's most fascinating technological initiatives, a drive to create new ways to tackle its pollution problem. bloomberg's executive editor for greater china explores china's ambitions for a u.s. style shale
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boom. >> china needs natural gas. propelled by president xi jingping's pledge, china's natural gas use has skyrocketed. the country is now the world's largest gas importer. the good news, china has more shale gas than anywhere in the world. the problem, how to get it out of the ground. >> the topography is the biggest challenge of all. it is completely dense in texas. you have these low-lying plains, and one province is all mountains. you aren't in kansas anymore. effectively you have to knock off the tops of mountains and put wells on top and bring all these equipments with you at the top of this mountain. >> china's shale reserves dwarfs the u.s. last year, china produced 9 billion cubic meters. that's nowhere close to the 639 billion cubic meters produced in the u.s. >> in the u.s. model, it's like a factory. a flat plain, as many wells as you possibly can. you can't do that in china. >> it helps to meet its increasing gas yield. the chinese government has cut the resource tax on shale by 30%, and currently provides a subsidy that encourages major producers.
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but there is uncertainty that the policy will continue. >> in terms of the government role, it's pretty backseat. the subsidy is kind of important but they don't really seem to be doing a great deal, saying it is time for you guys to walk in your own two feet. >> if shale is going to take off in china, it will be because of the lessons learned here, in the country's southwest. it is the largest shale gas plant outside of north america. >> it's the flagship shale project. it is very important in terms of trade. in terms of albany techniques they are trying to learn, china needs to learn how to improve shale gas production, it is crucial. >> china's energy giants are
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pouring money into shale. the local governments as shale gas investments will reach 165.4 billion yuan by 2020. leading the charge on this is sinopec. >> we will try to expand output in steady ways. our goal is to achieve a capacity of more than 10 billion cubic meters by 2020, and produce more clean energy for the country. >> sinopec is showing signs of progress. by investing in drilling technology, drilling costs have dropped 40% since 2010 levels. but it has far to go before he can claim success. >> it will not carry the aspirations on the shoulders alone. we need to find more fuelings, that is the crucial next step for sinopec. shery: that will be all for "bloomberg best" this week. you can visit for all the latest business news and analysis 24 hours a day. thank you for watching. i'm shery ahn. this is bloomberg. ♪
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♪ carol: welcome to "bloomberg businessweek." i'm carol massar. jason: and i am jason kelly. carol: coming up in this week's issue, a future with robot taxies. we will introduce you to a pioneering driverless startup. jason: we also look at best buy is surviving and may be driving --


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