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tv   Bloomberg Markets Americas  Bloomberg  July 31, 2018 1:00pm-3:30pm EDT

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circles and said they are opposed to strong borders and powerful trade. their political network criticized his leadership. it also said it will not support the republican challenger to north dakota's democratic senator. the trump administration reportedly rejected and is bid to join high-level nafta talks with the u.s. and mexico this week. country's attempts to join the negotiations were either ignored or rejected by the u.s. trade representative's office. suggested hemp has might go for a bilateral deal for turning to canada. are trying tohina restart talks aimed at averting a full blown trade war between the world's largest economies. two people familiar with the effort say representatives of steven mnuchin and the chinese vice premier are having private conversations as they look for ways to reengage in talks. the next wave of u.s. tariffs
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may hit as early as wednesday. in afghanistan today and assault on a government compound in the eastern city has killed at least 15 people. a suicide carbone went off outside of repatriation center allowing two gunmen to storm the compound. afghan officials say a coordinated attack also took place in the western part of the country where a roadside bomb killed 11 people. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. shery: its 1:00 in new york. i'm shery ahn. vonnie: i'm vonnie quinn. welcome to bloomberg markets.
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shery: its 1:00 in new york. i'm shery ahn. here the top stories on the bloomberg and from around the world. central-bank tango. the boj announced more volatility in 10 year yields and jay powell is expected to hold interest rates steady tomorrow. in three years its wealth management unit is a standout. we'll hear from the ceo. facebook finds evidence of an ongoing effort to influence the u.s. midterm elections. we will discuss. abigail doolittle is here with us. steady in positive territory. for technology today we have a bit of a rally. the three major averages on pace for the best day in nearly a week.
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the dow, the s&p 500 and the nasdaq up for the first time in four days. tech is making a bit of a rebound. especially the chip. take a look at the stocks of 1.3% -- up 1.3%. this is an interesting chart we have here. in orange we have the checks index. -- chip sector in white we have the s&p 500 tech index. 7%blue the faang trades down on weakness in particular from facebook and netflix. of a rebound. take a look at the strength we have for face, amazon -- facebook, amazon, netflix and alphabet. forre seeing a big rebound
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facebook and netflix. the bigger losers that had been in bear markets. are we going to see an inflection point? david says we have another near-term correction ahead. at the value stocks relative to growth stocks. back in january growth -- value was outperforming growth. today over the last three days of -- up. value had outperformed growth the most since 2008. finally a few of those value stocks doing well on the day. the international trade commission committee patients company of 8.7%. the water solutions company. the outlook was solid. 5.2% on the news they
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are buying a sprayer company in argentina. another piece of that could be the bloomberg scoop about the possibility that china and the u.s. will restart talks around trade. that is a relief. for the markets overall. vonnie: thank you. bank of japan overhaul. the governor announced a bit of a rebound for the massive status programs signaling a stay for the long call -- haul. let's bring in gary shilling. let's start with the fomc. it's the next to last meeting before we have a news conference at every meeting. does that mean we should expect nothing this time? >> probably not. your guess is as good as mine. definitely want to see
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rates higher. they want to get toward what they consider the natural rate where it won't be cumulative. it will be the nice goldilocks middle-of-the-road. we are seeing the growth itself a little bit. we have wages gaining, more jobs in low-paying sectors. this wage trend going to change anytime soon? >> probably not. you look at the really high-paying jobs in this country in manufacturing. a lot of those have disappeared. unionization in the private sector is over 25%. after world war ii it's 7%. even in the public sector unionization is coming down and those are high-paying jobs. jobs being created are in things like retail, leisure and hospitality.
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than you got all the gig workers with a trade-off their freedom to pick their hours and so on for basically lower pay and very few benefits. vonnie: where does this all end up? do we continue on this trend of the little bit of wage growth and unemployment going even lower? where do we end up? you forgot globalization is probably the most important factor in the last three decades. there's been virtually no real income growth for everybody but the very top in this country for over a decade. that's got people mad as hell. this is going back to the network where the guy jumps out of his chair. that's what got trump elected in my view. that was responsible for brexit. continues ihis
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think a lot of that has got to protectionists approach. he's really trying to placate his voters. the people in the middle of the country. saying i'm doing something for you, i'm going after the bad guys. he is branded as imports and immigrants. the president is also putting pressure on the fed not likingng about tightening. as i going to affect the fed at all -- is that going to affect the fed at all? >> he's not the first guy to do that. recently is acting like it's the first time ever. it really isn't. it encourages the fed to dig in their heels and say we're going to do it our way. they're looking at the economy. they want rates higher but they don't want to upset the apple cart.
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we are still in a fragile situation on a global basis. with protectionism growing that's very disruptive at a minimum. trump may end up getting a much china becauseom we are the buyers and they are the sellers. i think we got the upper hand and he knows that. it's very disruptive in the meanwhile. solution?at's the how do you bring benefit to people that are not seeing any benefits economically? the kind of things you can do are very long-term. if trump ends up getting a much you couldl from china get to it down and are a trade war between president for life in china and president trump otherwise it will take a long time to work out. and in the meanwhile people say wait a minute, there's a trend
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of uncertainty. politically it's a very where evenituation if the gains are very long-term and you can't be sure the destruction in the meanwhile can get the voters up in arms and you get the whole thing reversed. shery: less than 100 days before the midterms as well. thank you, gary shilling. for coverage of the federal reserve special report tomorrow at 2:00 p.m. eastern. still ahead, parental profit. jeff bezos's mom and dad may be working billions. numbers next.e this is bloomberg. ♪
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vonnie: this is bloomberg markets. i'm vonnie quinn. shery: i'm shery ahn. jeff bezos is the richest man in the world. in 1995 jackie and mike bezos invested $245,000 in their son's fledgling e-commerce business. later their stake could be worth almost $30 billion. their faith in their son could have literally paid off here. >> in the biggest possible way it is probably the most successful investment of all time. if they decided to hold almost all the stock they received in 1995. it's a return of something like 12,000,000%. timee: he said to them one i want you to know how risky this is. >> he was pretty upfront. he was looking to raise money for amazon.
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it was quite hard for him at the time. was $250,000uch worth to him at the time? >> basically they had 6% or 7% at the time amazon went public. that would give you an idea in terms of how much money. these spent a whole year trying to raise his initial capital. his parents were prepared to take a risk. tory: they have also donated the bezos family foundation. do we know how much that was worth? >> we are pretty confident they still hold some amazon stock. they are pretty much every year giving away in the order of $20 million worth of stock. vonnie: what do they have in terms of voting rights? >> is all very simple. -- it's all very simple.
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what we don't know today is exactly how much they still own. at the high and it is like 3% or 4%. shery: if they had given up all of their shares what would they have made at least? >> the absolute lowest case if they had sold all of their stock they would be sitting on about $100 million. at the top and you are looking at i think $30 billion. vonnie: what stock they would be sitting anecdotes do we know about this time? >> his brother and sister also invested. $10,000 for 30,000 shares. that is now worth about $700 million.
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you have a whole host of early investors who are now legends in seattle venture capital scene. make a bet this successful he will be remembered for the rest of your life. shery: it's also about alphabet, apple. any good stories there. cook's it's possible that jeff bezos himself reportedly put about a quarter of a million into google. that would be a stake worth $8 billion today. you get in early at the right company you can be lucky. vonnie: i'm sure the parents would say today if we had lost it all we would still love him just as much. great story. full of lessons. our thanks to tom metcalfe. facebook has identified an ongoing effort to influence the u.s. midterm elections using inauthentic accounts and pages on the social network area
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joining us from san francisco is -- who has been looking at this announcement. give us the details. >> basically they are doubling down on the efforts to get rid of fake accounts and fight fake news. you are them being a little proactive in terms of lagging things. -- flagging things. facebook investments have been ramping into cleaning up the platform and protecting information and things like that. -- the midterm elections showing how well these investments are working. shery: we know for the 2016 election it was the russians find many accounts. do we know whose account was behind it? >> basically they are flogging the contents instead of some of the regulators and law enforcement flagging content to them.
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it is sort of a role reversal. with investments going up through the end of the year you will see more and more of these instances being flagged by facebook. startingacebook said last week and identified eight pages and 17 profiles on its main social network and seven accounts on instagram and violated its rules. how long does it take for facebook to uncover one and will would be seeing more of this? >> you will definitely be seeing a lot more of this. it goes back to the stock reaction that we saw. they are scaling back on content a lot more now and that is affecting the ad inventory. the advertiser demand has not really gone away. the ad inventory is limited because of these efforts. growth is at-term risk due to ad inventory and instagram has to step up a lot more. margin profile of the company is changing. what all of these things mean is
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the cost of doing business has gone up structurally and it is here to stay. shery: we already saw mark zuckerberg in grilled in congress. there were a lot of questions over whether or not they violated the consent decree. point how at this those investigations are going? >> we are waiting on it. eventually at least they are showing proactive steps with the investment. they have shown a lot of metrics in terms of investments but the results of that were still sort of hidden and now with all of these efforts you might end up seeing more of that coming out and we will find out soon about the decree as well. shery: thank you. coming up, credit suisse's second-quarter profit more than doubled on the year. putting it on track for its highest profit. have an interview with
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the ceo. this is bloomberg. ♪
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vonnie: credit suisse beat expectations in his latest earnings report. spoke with this was a very good quarter for credit suisse. positive net assets which is very important for us. 23 .5 billion. if you add the asset management at the size of a medium-size bank. more than 60% of our flows come from -- that's the heart of the strategy. we need to bring institution like advice and services to
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clients. a joint venture between the investment bank is up 17%. that's a really bright spot for us in the results. >> there is a strong market downturn, what happens to new assets? >> you can have outflows. revenue fitsis our between lines. you will see us make much more -- ec markets have an amazing recovery. profit when weon had the loss last year. it's a big swing. it's the nature of what we do.
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recurring fee, recurring income. >> you have trade tensions and a possible government shutdown. >> the beauty of the strategy we markets trading were 59% of our profits. so moving from a to b was absolutely key. we have markets and trading as an upside. core performance is driven by wealth management. markets elsewhere, it's good to be a credit suisse -- has grown 17%. 70.'s good for trading at
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they support the wealth management. another important point in the results. we have our end of 18 target. we had 40 billion of leverage. where now at 10 and 49 of leverage. we have done restructuring. it's going to stop weighing on our results. >> what about global markets? >> it's part of treasury we need to explain better. we don't think that's right. our global market strategy is
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not to maximize the standalone global market revenue. use global markets to power the over divisions. revenue is down 8%. we can trace revenue. we can take in the true path which is to use global markets to serve our clients and that's working very well. tidjaneredit suisse's thiam. coming up, a correction. morgan stanley raising concerns. this is bloomberg. ♪
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mark: i'm mark crumpton with first word news. facebook announced it has identified a coordinated political influence campaign by what it's calling bad actors. the social media giant has
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removed 32 pages and accounts from faith look and instagram, believed to be connected to an authentic clinical activity ahead of november's midterms. the company has been working with the fbi to investigate the activity and says it does not know yet who is behind these particular accounts. the department of homeland security is creating a new energy --ed at guarding energy companies and banks against cyberattacks. they will be a collaborative effort between private businesses on the government on how to identify potential cyber threat and guard against them. the highest-ranking american at the vatican insisted he never knew or even suspected that his former boss reportedly sexually abused boys and adults. farrell, spoke as the u.s. church hierarchy has come under fire following allegations of sexual misconduct
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by the next cardinal who consecrated pharrell as a bishop. persono time did any ever from new jersey or from new york ever speak to me. about this. and as a matter of fact, i didn't hear a word about any of this. then, it might be hard for somebody to believe, but if that's the only thing on your mind, then you focus on that. mark: the associated press indicates an open letter of the conservative catholic magazine first things urged catholics to withhold dicey intonations to the u.s. church until independent probe determines which u.s. bishops knew about his alleged misconduct. time, a hindu has been elected to a general seat in pakistan's parliament he says
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he plans to address poverty and women's rights issues after taking his ways and the national assembly. religious minorities have long phase determination in pakistan, a conservative country with a sunni muslim majority and they have been frequent targets of religious extremists. global news, 24 hours a day, on-air, online at tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪ shery: live from new york, i'm shery ahn. amanda: i'm amanda lang. welcome to bloomberg.
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near the top stories we are following from around the world. pressure on apple. stabilize.tocks canada gets left out in the cold, the country is frozen out of nafta talks and the u.s. engages mexico. and the american pot play. seeingnabis stocks are high levels of interest while the canadian rivals drift back down to earth. let's get started with a quick check of the averages. u.s. stocks holding your session highs with a little more optimism on trade tensions easing up on the canada side, or at least with china we are hearing that talks are happening behind the scenes. , although0 up .6% financials are falling, treasury yields are down, large tech companies seeing a small recovery. the nasdaq gaining .7%. , theal banks a key focus
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whole weeks that meeting and it's also about earnings beating morgan stanley a since the earnings season has begun. you can see that momentum in stocks. amanda: we are watching yield seeing a little bit of softening , but take a look at this. lots of government options this week, billions of dollars of new bonds in today's one-month t-bill sale going at 1.9%, leaving that the only duration below 2% now. i'm now wondering whether we will start to see three again on 2% is the first time it's been there in 10 years. as we watch the federal reserve, we are watching his yields as well. shery: let's continue
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discussions on the markets, the markets are going missing this earnings season. morgan stanley, mike wilson, the bank achieved usa strategies, the selling has just begun in this direction will be the biggest since the we experienced in february. it could very well on a greater negative impact on the average portfolio if it is centered on tech, consumer discretionary, and small caps as we expect great it is guesses benjamin and how careful should we be at this point? themandel: i'm not seeing catalyst for that major correction, at least insofar as equity fundamentals are concerned. ofthink about it in terms the line drivers. first a cyclicality. how is the economy during -- doing in terms of the business cycle and where are we relative to the adverse stage for risky assets which as the economy slides into recession. in our view, recession risk
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remains low in the we moved into the late age of the cycle outlook area are we a high-growth or low growth environment? balance and we look at the u.s. a look, it's arguably exhibiting some leadership in terms of growth but overall, we expect globally for this to be above trend period in 2018 on the outlook is supportive. inflation is not too low, not too high. it gives us a bit more cause being in an environment where the risk and the balance of risks surrounding a central case as deteriorated a little over the past few months. we think about trade war for example as being one of the key sources of volatility here. i think the good news insofar as that equity outlook is concerned is that so far, trade war concerns have been an influence on volatility but not as much on the direction of travel for equities. that's not just me talking,
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that's the empirical analysis of u.s. equities. the a negative hit of 30 basis points and that's more than made up over the subsequent weeks. this is buffeting equities around without affecting the direction. amanda: let's talk about where you think we stand on the trade war front. we have industrials rallying today and size that there may be a reopening of china and it was good news of europe last week. are you beginning to discount the threat of the trade war? aremandel: i don't think we out of the was just yet, though i agree these are constructive signals to started with a medium-term outlook, what is the endgame of all of this? onhave negotiated solutions nafta, bilateral negotiations with china and perhaps with europe as well as we saw last week. that's a possibility. with theis consistent global factor affecting equities and her general risk posture and
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portfolio as being fairly sanguine. outlook i think is the one be subject to a lot of the volatility that we have seen over the last few months. at a good example is the composition of the different fronts of the trade war. nafta is for all intensive purposes i would say deferred until 2019 after u.s. congressional elections. beginningat the very of a negotiated solution. the question is whether those constructive elements underwrite a more aggressive stance vis-à-vis china in the next round of tariffs. where is he a little bit of risk here being too optimistic is the fact that the next shoe to drop will be china. given the uncertainty, how do you hedge as an investor? good question. we think about that in terms of the global public opportunity set of asset classes and we think about that in terms of the opposition of our equity beforee and so i think
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the trade war rhetoric corrupted, we were expressing our view that we like the u.s. as the defensive high-quality segment of your equity exposure. call on global growth green about emerging markets, thinking about japan is having element of that. the distribution in the trade as farslightly different as emergent markets do tend to bear the brunt of it. we underwent europe and no more neutral. benjamin mandel, jpmorgan investment global strategist. apple: alvaro -- returning results, investors hoping that people turn that around. we have angelo zino on the phone with us. let's start with your expectations for after the bell. is a lot of hope that apple will
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.evive the enthusiasm mr. zino: weir group bullish going into the -- we are very bullish going into the quarter. the first item is going to be services, all eyes are going to be on services as they have been for the last several quarters are in our view is expect 28%. is going to continue to be driven by the app store, icloud, and the services like apple music. second, guidance will be important and i think that's going to help dictate whether a lot of these new products are expected to come out this fall will come out in time. finally, this company has about $145 billion net cap position and i think the pace of buybacks will go a long way in dictating how they are actually would use this cash over the next couple of years. shery: mobilephone sales growth
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was a sore point for samsung overnight. what are we expecting for apple? mr. zino: as far as phone sales are concerned, not much we are looking for on a year-over-year basis, typically the june quarter as their 12 quarter. we are looking at about $42 million -- 42 million unit shipments of a 2% increase year-over-year. i think more importantly is how the average selling price for the look like. we are looking for another double-digit increase that would mark the third straight quarter of year-over-year increases in terms of average selling prices and that of course reflects the easy comparables with the inclusion of the iphone x. about thewill ask you multiple that apple is trading at because x cash is something like 12 to 14. why such a low value for this company? mr. zino: historically, hard work of these have treated at below market multiples and that's always been the case with
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apple. when you look at him historically they traded at a multiple of around 14 times over the last several years. seeingw is as you start higher revenue potential from that services business, we do think the street gets more excited about that in overtime we do expect the multiple to expand from apple. shery: we saw what happened with facebook and twitter, how much or how well does apple have to do in order to keep investors happy this time around? mr. zino: i think that's a great question and i think the question you just alluded to was with regard to the multiples, as a kind of tells you when we look at apple, it's a much different story than relative to the other faang names. the reason for it is the lower multiple trade that all seriously they don't have the growth rate that these have. i think because of that, the expectation is also lower.
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our view is as long as you can kind of come in line or beach, which we expect them to do, if they can show that growth we are looking for on the services side of things, we do expect them to buck the trend relative to the performance we've seen from other tech names. amanda: what is there weak spot here? mr. zino: what was that? amanda: what is the weak spot? what could go wrong for apple? mr. zino: when it's also and done, if there's any kind of risk, i would say it's on the iphone shipments for the quarter. that being said, we think of this point of the cycle, investors are willing to kind of look away from that. amanda: great to have you with us. angelo zino, analyst at cfr eight. still ahead, deep freeze, the u.s. is giving canada the cold shoulder and recent attempts to engage on nafta. we dig into the details after
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this. this is bloomberg. ♪ ♪
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amanda: this is "bloomberg daybreak," i'm amanda lang. -- "bloomberg markets," i'm amanda lang. shery: the conscious attempt to join the negotiation were either ignored or spurred by the u.s. trade representative's office. and president trump as adjusted he might go for a bilateral trade deal with mexico before returning to canada. we are joined by michael mckee, bloomberg's international correspondent. i thought mr. lighthizer had said we could see a deal on nafta by august, so is a bilateral or trilateral?
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it was by august of would be a bilateral deal with mexico and it's probably not going to be a full deal, it might be an agreement in principle. the mexican government is in a transition right now, the old administration would like to get it their plate and the new administration like to not have to deal with it when they come into office very there is motivation to get something done with the mexicans. there is and with candidate at this point in the u.s. feels canada has not done enough to come to its position and they feel if they could strike a deal with mexico, that's going to put pressure on canada to make some concessions. of the big sticking point in the u.s. has been clear they can canada needs to compromise better has been the so-called sunset clause, the term on any new deal. is it your belief that mexico might be bending on that? heard any haven't
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indication that mexico wants to give in on terminating the deal is part of a sunset clause that there was proposal strength of a mechanism where each side could give their approval of disapproval to nafta and maybe call for renegotiation every five years. they might go for that. the biggest issue with canada is one that isn't talked about a lot and that is supply management. of whether or not the united states is going to let canada continue with the theory price supports. ,he president not understand but he certainly as opposed and that is something that canada has said so far they're not going to give ground on. at least when i come to china, there may be some progress and secretary mnuchin is holding talks with the vice premier china. anything agreed on that front? michael: no. they agreed to talks about talks. a mechanism toat try to bring down the temperature on the possibility of a trade war, but the administration still could impose of the $16 billion worth of sanctions on wednesday when
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ends today period and tomorrow they could impose sanctions which means china will come back with another $16 billion in the president threatened $200 billion. we could see this escalate rapidly and the chinese in the u.s. are saying maybe we should talk about this. the last couple of times they talked, they haven't gotten anywhere in the last time that we saw steve mnuchin ed lee ojo talk, they reached in agreement that the rest of the most recent killed. it's too early to be optimistic about it, but at least they are talking. amanda: we are still worried about seeing auto tariffs inside the north america zone. doing think that they will be held at day after what happened last week in europe and that their talks with mexico now? to say verys hard the images are just ahead with its case and the commerce department is going to present the case brought tariffs and we presume in favor of auto tariffs since that with the -- since that's what the president wants. sometime perhaps in the month of august and then the
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administration will have a and thenmment period and they would enforce tariffs. we have the 70 agreement with the europeans last week, where does that go in what does that mean? if the u.s. reaches agreement with mexico, does that mean a whole lot of tariffs in advance for mexico, and they would have to with canada given the cross-border relationships? it's very hard to know exactly what's going to happen with this. we do know that international automakers are gathering in europe this month -- this week, to talk about strategies to fight back in the u.s. chamber of commerce and all the automakers of the united states have come out against it. there will be a lot of political thesure on congress to get president to change his mind. it's very hard to say where this goes from here. shery: mike, always great to talk to. michael mckee, bloomberg's economics and policy correspondence. amanda: coming up next, why investors are lighting up over 150 marijuana stocks. this is bloomberg. ♪
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amanda: highflying stocks. the u.s. focused marijuana stocks are seeing increased level of investor interest as more states, including massachusetts and new jersey, push ahead with obama era legalization policies. meanwhile, in canada, hot stocks are burning out, hitting highs until this year. christine portland is with us. is with us. oram we are still not exactly sure ownership, including investing is going to be treated legally in the u.s.. that's why they personally traded at a value gap. there is so much on certain -- uncertainty. jeff sessions made it worse when he said he was going to rescind
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the memo that basically meant there was a risk that the states that it already legalized and those pursuing legalization would face legal challenges at the federal level. a lot of uncertainty remains, but there has been some small indications that the states are moving away from that and they are going to allow the states to do with a want. trump has openly endorse that policy. the valuation gap the u.s. stocks have traditionally traded at is beginning to shrink a little bit. traded muchcks higher valuations with that is going to change over time. one analyst did a just an analysis that said canadian stocks currently are trading at about 6.3 times projected 2022 sales. u.s. stocks by comparison are and that's0.2 times a massive gap in has the potential close meeting the total aggregate u.s. market cap could be 10 times higher by 2022 that is today. does that mean investors could be cutting exposure to canadian names and adding the u.s. counterparts? christine: some of the investors
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i've spoken to recently are doing exactly that. back thereimming exposure, saying some of those names like aurora, has run out very high and dusty some risks because of the number of acquisitions they have been stockshere u.s. focus are looking very attractive relatively speaking. the u.s. market even without federal legalization is much bigger than the canadian one, california alone is about the size of canada population wise. if and when the u.s. market pursues full federal legalization, we are looking at a market that could be 10 times the size of canada meeting is an enormous opportunity for growth. effective they are analyzing these things based on 2022, that it will be a long rollout area. christine: this is more of a buy-and-hold kind of strategy. the reason 2022 is used is because of the year when the canadian market is thought to hit maturity.
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once legalization has been around long enough that that would be considered steady sales. the u.s. market at that point will also be much stronger than it is now. amanda: thanks. oramshery: christine . if you miss out on the charts, amanda has charts on g tv as well, they'll you stocks a momentum stocks right there and the the u.s. securities of only bills being sold right now. check them out, g tv . live from new york and toronto, this is bloomberg. ♪
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scarlet: i'm scarlet fu. lisa: i'm lisa abramowicz. welcome to "bloomberg markets."
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scarlet: we are live in new york over the next hour. the top stories we are covered on the bloomberg and from around the world. apple closes out iraqi earnings season for the mega cap staying block. apple races towards a $1 trillion market cap. while u.s. focused cannabis stocks once considered a risky bet are seen heightened levels of investor interest. use their landns to create wealth. bloomberg crunched the numbers and the data may surprise you. u.s. markets closing in two hours, 2.5 hours before apple reports results and you were looking at whatever is in stock. abigail: a relief rally on the day after yesterday's tech induced pullback that we do have solid gains from the dow, the s&p 500, and the nasdaq. earlier, the nasdaq had been
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slightly lower at the highs of .9%. they are buying the tip on the fact that there was not a negative tech report to influence market action, plus bloomberg daybreak the story early today that the u.s. and china may be heading to talks around trade held at the wall could come down investors are seeming to like it. despite the weakness we have had recently, it's very interesting, july shaping up to be the best month for the major averages, despite this tech wreck since january. we take a look at the gains for the dow, the biggest of 4.9% at this point with the s&p 500 up 320%. off the heavy nasdaq least on that tech weakest waiting. it's the best quarter since the big gains in january and very the monthly gains made in 2017 when the s&p 500 rose nearly 20%. the recent volatility, we do have the strength. we do of august ahead and this
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is pretty interesting, taking a look at the vix. is the fear index, when he goes higher intel tells there's lots of volatility on the s&p 500 goes lower come over the last several years, it has tended to put an annual peak in january, which we don't know if that has happened. the peak was in february, or august or october. august and october are ahead, clearly, with the recent volatility which tends to breed more volatility and images suggest that the vix could spike higher in august, perhaps as the s&p 500 dropped. david, what main street capital things that is likely. as for apple, the big story up .75%, close, higher really being boosted by some of the suppliers. beat%, they put up a big in the second half looks better. up not justdding apple, but other suppliers as well. scarlet, you mentioned the race
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to $1 trillion in terms of market caps. let's take a look at this terminal. it is pretty just in. what we are at here is the race between apple in white and amazon and blue. these are the last several years. and this is the projected market cap by analysts over the next 12 months. in blue, with amazon taking that place, even though amazon's market cap right now is closer to $880 billion that apple is that $941 billion. images suggest that the report after the bell could be rocky. but time will tell. lisa: abigail doolittle, thank you. mark: the senate judiciary committee is demanding answers from federal immigration officials about the trump administration separation of migrant children from their families. as it struggled to reunite them. lawmakers from both parties criticized the practice. illinois democrat richard durbin called for homeland security secretary kirsten nielsen to
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resign. >> the family separation policy is more than a bureaucratic lapse in judgment. ,t is and was a cruel policy inconsistent with the bedrock values of this nation. administration has to accept responsibility. and executive associate director for immigrations and customs enforcement told senator durbin the ice has records documenting decisions by hundreds of migrant parents to leave the u.s. without their children. senators have expressed doubt that many parents willingly left the kids behind. president trump has given chief of staff john kelly a vote of confidence. bloomberg west the president has asked kelly to stay through the 2020 election. the retired marine corps general just celebrated his first full year as chief of staff. for months, there has been speculation he might leave. california authorities say 10 states have sent personnel to help battle the 17 wildfires burning across the state and
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that another six states will send resources this week. the out-of-state fire crews will relieve california firefighters who have been working nonstop for two weeks. officials say the largest of the 30%es, near redding, is contained after scorching more than 170 square miles. largest healths insurer said today that plan cuts for individual premiums would have been larger had the of affordable care act been left alone. blue cross and blue shield of theh carolina says that average range would have been lowered by 22% instead of by 4.1% had congress on the trump administration not eliminated the obamacare penalty for people who don't buy health coverage and the subsidy to insurers. global news, 24 hours a day, on-air, online at tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.
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i am mark crumpton. as is bloomberg. -- this is bloomberg. lisa: technical difficulties after a technical glitch wiped out $350 billion in market caps faangs fangs -- find -- phone a friend. they will be focused on revenue, iphone sales, and services growth. joining us from san francisco is mark gurman. what will the narrative be out of today's earnings? will it be diversification to a media company for apple? all those things. we are expecting two things that are on either side of the coin. have come iphone revenues because of a higher price of the iphone x are likely 15% top year-over-year 20%, which is perhaps excellent growth in the eyes of investors
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and analysts. growth the sales ship during the quarter, we are not expecting that growth to be more than 2%. it could be anywhere from the zeros as a starting number 2%. not a lot of growth there. services on the other hand, 30%e talking about 25 to year-over-year revenue growth. services don't count you units because there's nothing tangible , toalculate read services your point about apple the coming of the media company, have notvice offerings changed. more people buying apps and subscribe and apple music, which is a good thing for the company because they are making so much headwind and getting lots of growth for dissing services offerings. when they come out with new services over the next couple of years, the growth will escalate more. that's what they want to focus the right now what they are is a phone company and the iphone makes up most of its look atread when you
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the fiscal fourth quarter, everyone is going to be dissecting the growth margin exactlyand to determine what apple is go to do the next generation of iphones. you've been on top of the iphone releases, give us a sense of what to expect when apple released its plan for the next iphone cycle in september? mark g: analysts are estimated $50 billion to $60 billion for fourth-quarter revenues, which would be a little growth. what we are expecting our three new bottles -- models all around the iphone x. and then a much larger high-end premium phone that comes in well over $1000 with a bigger screen that looks like a giant iphone x. the real hit is going to be for the next year or so, this low-cost iphone x which is going to be a bit bigger than the iphone x and it's not going to have as good a screen, but it will have key features like the
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iphone x edged as designed with the display and face id. that's going to be a hot seller if it's priced correctly around the same price as an entry-level of the iphone x -- the iphone 8 today which is six and $50 to $700. gurman, i know you would give us all the details. joining us over the phone right cross, andnon shannon has a buy rating on apple with a price target of $213. the fiscal third quarter for apple is typically described as the most worrying -- the most boring of the year because it comes because of death before the next big iphone upgrade. when you look at the numbers apple will be releasing today come on which metric is apple most likely to surprise, either to the upside downside? there's currency
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playing into it, some of the component prices have been they did get the money, although it's not clear how much, from samsung from the settlements. i think people are looking to growth margin. the clearly have everyone is focused on what kind of phones are going to come out and what we can gather from the guidance they provide. we think apple is well-positioned this year, especially given the phone the mark was talking about, which is the lcd version at a very attractive rice point. -- price point. lisa: how important are the plans for buybacks? the share purchase is it announced in the last earnings period helps to bolster the share price. to cross: we expect them death we have $23 billion of repurchased during the quarter. we expect them to continue to be active and then obviously with
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the catch generation they have, they can be very aggressive both in terms of dividends and share repurchasing for quite a long time. it has helped support the stock and it makes investors feel comfortable that management thinks this is not just an iphone company with being exposed to the vagaries of whether or not consumers want to buy an iphone or not. it's almost like you have recurring revenue from what's really a transactional purchase that people just a with iphone. exposed apple is very to the trade tensions between the u.s. and china. obviously this one a lot of scrutiny over what tim cook says with regard to the rushing tensions there. they can ship manufacturing to a lower cost basis, bangladesh or sri lanka.
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can apple do that, do they have that capability? is there any place outside of china were factories can turn out person components that quickly at that scale? they get components from various places around the world and the salek everything is manufactured in china. and there'sosystem also a huge ecosystem of little , the connectors and things like that that aren't a technologically advanced but still very important. maintaining a healthy trade relationship is important for this company and frankly, selling in china is very important in terms of growth. i think tim cook will be very politic on the call and they are talking about what they are seeing in china. your biggest concern about today's release that could make you rethink your buy rating? ms. cross: again, this is the
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quiet quarter. there is limited, part of that to me they just pushed a lot since october which will put it into the next quarter. it has not been a lot of news out that would be negative. think it's been fairly business as usual. facebook said identified ongoing effort to influence the u.s. elections using an authentic accounts and pages on the social network. we have the latest on that next. from new york, this is bloomberg. ♪ bloomberg. ♪
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scarlet: this is "bloomberg markets," i'm scarlet fu. lisa: i'm lisa abramowicz. facebook says it has uncovered an ongoing effort to influence the u.s. elections and the company has shut down number of an authentic accounts. sheryl sandberg said the operation included creating a protest in washington. take a listen. laterdisable the event in today will begin informing people who are interested in the event or said they would attend. it's clear that whoever set up these accounts once a much greater lengths to obscure their true identities in the russian based in that research agency ira did in the runoffs to the 2016 u.s. residential elections. lisa: the latest, let's go to sarah frier in our san francisco bureau. i know it's a busy day for you. was the latest on this and how extensive is this effort that facebook is identified? sarah: we are being let in on
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this effort in the very early stages, as sandberg said on the call, this is earlier than it would bring in people from the public, but they have been informing congress and the fbi and trying to work with the government to figure out who is doing this. the biggest question is what was the actor behind this, as she said, they have been a lot more careful about disguising their identities. we don't know enough yet were facebook tells us they don't know enough yet to say whether this was russia. congress people and senators are saying they believe this was russia. we do not know enough yet to say whether that is the case. in the meantime though, they identify this ongoing campaign directly the midterm elections in particular. 32 fake accounts and pages are removed. follow, of pushback or i want to bring in a tweet.
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he says if performed wittingly or unwittingly becomes weaponize by russian intelligence, is of the is possible to do to shut the firm down -- the responsible thing to do is to shut the firm down? should facebook have taken more aggressive action for shutting things down for a while while they sorted out? shutting: -- sarah: down facebook would make it difficult to find what's happening. the company doesn't want to be in the position of being are only barrier between these threats. they want to be able to rely more on the governments and more our intelligence agencies the parser what they should be following in terms of tips. it got thousands of tips to follow up on. company has been investing a lot in this and as sandberg said on the call, they are never going to get to the step where they are one
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ahead. the actors are always catching they are always going to they willer thing try. so is a constant battle. sheryl sandberg noting this is earlier than facebook normally would tell people. as a partly because they are trying to get ahead of the issue and show they are being proactive to the public? is it working? separatest week at a call with journalists where they were trying to demystify how they are working the combat these threats and a lot of people asked them have you found any threats, have you seen anything?? and facebook said we are not in a position to tell you in that cause a lot of disappointments. the company is making these grand promises about how they elections andhe how they make sure there is no foreign meddling and interference in the democratic process.
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then we kind of want to know what are you seeing in finding and how is it working? this week, it's almost a little bit in response to that as well. in addition to the fact that , theyt is coming up soon were slammed by the public for not disclosing early enough the fact that russia tried to intervene in the 2016 election. now they are trying to make up for that mistake. scarlet: bloomberg technology sarah frier joining us for his efforts as go. facebook shares up by .9% after a three day, 23% decline. news,g to earnings investors who stayed with the ceo credit suisse through his three-year turnaround, higher returns may finally be on the horizon. the firm's quarterly results added to signs its restructuring is nearing completion. some challenges still remain. we spoke with the ceo earlier today. >> we look at markets trading is
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an upside. call for performance is much more stable and much more printable, and growing nicely. i tell her markets seem want to go to new york and elsewhere is that it's good to be in this because we can grow. good for17%, that's trading activity to be able to .row 17% lisa for wealth management. another important part of the results is it was our restructuring unit. we have the end of 18 targets. we said close it down when we had 11 and $40 billion with the leverage. we are now at 10 and 49 of leverage. we are done with restructuring. there's a lot of skepticism
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whether we could get to the right point at the end of the year early and have had the point where it is so smooth and it's going to start weighing on results. >> what about global markets? reallyal markets, it's a part of the thing we need to explain better. people compare us to others we don't think that's right. is notl market strategy to maximize the standalone global market revenue. its use global markets to power the other division. what you see is revenue is down 8% and that's because we keep in termsr a strict cap of leverage. pooruld change revenue and much more capital in that activity annuity results are similar to those of our peers. can use goal markets to serve our clients actually it's
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working very well. scarlet: the credit suisse ceo speaking earlier on bloomberg. back, turningand out more profit than expected in the second quarter. this is bloomberg. ♪
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scarlet: this is "bloomberg markets," i'm scarlet fu. lisa: i'm lisa abramowicz. time for the bloomberg business flash. profit roseer fourfold at bp, the energy company cashed in on surging oil reinsured that investors of financial strength after bp announced the biggest deal in almost two decades. the company agreed to buy bhp's shale assets for $10.5 billion. a big transaction in the real estate business, or feel as a management agreed to buy ford city realty trust for about $6.8 billion. in springfield second large
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realty transaction this year and it marks the firm's real estate g -- the deal is valued at $16 billion. procter & gamble is feeling the heat from new competition. pursued-products giant quarterly sales of missed estimates and rival products include divers from amazon and kroger's of razors. p&g is dealing with higher commodity costs. that's your business flash update. pot profits. why investors once larry of investing in u.s. focused marijuana stocks are not changing their mind and heading into marijuana. from new york, this is bloomberg. ♪
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>> summer camp for the ultra-wealthy teaches kids how to stay rich. i am suzanne and i cover wealth for bloomberg news in new york. for many people, the thought of summer camp brings images of
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roughing it and summer cabins. and the reality for some millennials is radically different. ically different.
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>> needless to say, that is not where your children or my children went to camp. for bloomberg.
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from bloomberg world headquarters in new york, this is bloomberg markets p are i am scarlet fu p release of am lisa abramowicz. it's get to mark crumpton. mark: wow, new jersey. six minutes its women seated in the trial of paul manafort, president trump's former campaign chairman is facing tax evasion and charges. rest of his life in prison if convicted. to resultfirst trial from robert mueller's investigation into potential ties for the trump campaign and russia p prosecutors not expected to address the question of possible collusion between mr. trump and russia. statements are expected this afternoon. canada has been denied recent attempts to get in on nafta talks. a decayed -- a canadian negotiating team has been told is u.s. trade representative
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focusing on negotiations with mexico and is not interested in engaging at the moment here president trump suggested he might go for a bilateral deal with mexico before turning to canada. the united states and china are trying to again avoid an all-out trade war. lubricant's learned that representatives of treasury secretary steven mnuchin and china's premier having private talks to restart negotiations. the next set of u.s. tariffs is early asck in as tomorrow. in afghanistan, an assault on a government compound on the at leastity has killed 15 people. a suicide car bomb went outside a repatriation center allowing compound. to the the assailants were killed after a six-hour battle here at afghan officials say chordata attack also took lace in the western part of the country, where a roadside bomb killed 11 people.
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global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. lisa? lisa: thank you. many statistical measures show how productive the u.s. is. it is even harder to decipher how americans use their land to create wealth. here with a breakdown is alan. we were interested in this graphic we published today which was super fascinating to all of us showing how land is used in america. why don't we just start with what might surprise people especially living in a city, about america? >> yes. this is a great project done today published by two of our great data visual reporters. you see a lot of surprising things in the report if you are like the 4/5 of american debt americans that live in urban areas.
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this is a vast country from sea to shining sea. while urban use has been increasing, it is still door by cropland, livestock land, for stray land, land for special uses, there is a lot of land in the united states and people use it in a lot of different ways. >> speaking of land in the united states, more than one third of land is used for pasture, the biggest plan type in the u.s. by arter of that is in -- federal government, most in the western part of the country. let's talk about at cultural part of the land. not as big as i thought it would .e it is equivalent to the amount of land used to grow the food that you and i eat. illinois and half of iowa. we are talking about land that is kind of sitting out there for cows to rome on rather than for us to grow food with. dexia's. the united states
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is used for cows than four people. maybe they should beginning electoral votes. it is something to look at in terms of how we are using our land. crop reducers in america are incredibly efficient. you look at the land which includes everything from california, but more concentrated in the midwest only a two places where i went to camp as a kid, you will see how the productivity of coin -- corn, soybean, and we do in the u.s. is hitting the entire nation and a lot of the world on what intuitively seem like more land than an actual takes part in if you ever have driven through the state of kansas, it is endless. >> you have such a way with words. it is wonderful speaking with you. i will -- i would love your sense of what this does with respect to the debate we are having with trade tensions and trade wars especially with china importing a lot of agricultural goods from the u.s. shape ourhis graphic discussion in the manner? >> it almost reminds me a little
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of electoral maps we see, with red america. it seems like such a conservative place in them the vote is actually concentrated urban areas carrying the day. same with land. even though we have a trade were, like a magnet -- american agriculture, it is so well encompassing that all of these small companies and infrastructure networks and the over, they are deeply affected by this and they do sometimes correspond with the put kobach. you have to keep that in mind with have a land uses affect themselves in the political arena and the impact for all of us whether you live in that part of the map or not. >> well said. bloomberg agricultural policy reporter and a big shout out to our data visualization reporters for their fantastic work on this chart. check it out. it is available on
2:38 pm switching gears but staying with what gross, hot profit. riskyis stocks were once or but now, canadian businesses are expanding into the u.s. states like massachusetts and new jersey are legalizing recreational marijuana despite attorney general jeff sessions saying he -- saying he would make it more difficult. this shift was written about in mark and he joins us from d.c. you call marijuana stocks the ultimate growth pet -- growth play. you think about technology companies as well. compare marijuana stocks with tech names. both of them clearly meet the definition of growth. >> right. the first thing i think we have to at knowledge is pot is pretty much the best business imaginable. i likened it to technology stocks become -- because both have hopes of a lot of growth. unlike technology, with pot, we
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know that it works or there is no disagreement about the fact that it works. it.e is ready demand for you wantre something to tell us? >> i should say that i hear that it works pierce so i am told. there is demand. you do not have to wait to see whether people will use it. more and more people are saying they will use it regularly, more people are saying they have used it, so the demand is there. also, unlike technology, the regulation is 18 oh wind, not a headwind we're going from an where there has been more regulation, where it is out like a leak -- outright illegal, too medicinal use, to criminalization, and canada has allowed even recreational use. here is the catch. everyone knows this. investors have piled into
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this. the evaluations are very high and investors have to seriously returnsselves, have the been made? are these prices already reflecting future growth? >> we have a chart that highlights this perfectly. highlights this perfectly. a lot of this growth has been anticipated by investors. the white line shows canada cannabis competitors peers index, basically tracking marijuana stocks and the blue line is the top performer in the index which owns and operates intivators, and dispensaries six american states. but i want to pick up on the idea that these are all in canada. come on in because this is u.s. marijuana use, and the potential. a lot of people are kind of betting that this will translate into networks within the u.s. what happens at the u.s. does not legalize marijuana and there is an increased oversight of the drug? is it sort of priced to perfection?
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>> think you have hit on the key risk. investors will look at the u.s. versus canada and say that u.s. companies are a lot cheaper and that is true. he does not mean they are cheap. reflect a different set of risks. we know with the land's -- the it you getooks like into the u.s. and it turns that things do not unfold the way pot even thoughpe, then pot stocks are cheaper in the u.s., it may be a worse investment. you have to think about those regulatory risks a lot harder in the u.s. than in canada. >> if you look at ways to measure how cheap or expensive the companies are, there are no earnings. you made the point we really looking at the sales potential of the companies because they are not profitable yet. >> that is right. that's what makes them like technology stocks and a little more risky in the sense that it is very difficult to find a pot
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company that makes any money. it is not obvious that even if sales come in the way of one turncts, but that will into profits. tois one thing to sell, actually run a business and rememberhe profits, there is a barrier to entry. nothing involved with pot as far as i can tell. you put it in the ground and grow it. anyone can get in. it is hard to understand what the competitive edge is. just because these companies are listed on the exchange is now, and there is a lot of enthusiasm about it, that does not mean they will be the winners. >> fancy lightbulbs. >> and you need a distribution network. bloomberg opinion columnist and pot expert, thank you for joining us.
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you can find out more information about how well pot stocks haven't been doing in canada. i recommend you can see what the monthly returns have been like. check it out. this is bloomberg. ♪
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lisa: this is bloomberg markets. scarlet: it is time now for the stock of the hour. >> thanks be it we're looking at the industrial sector spider etf . up over 2% today. in fact, industrials are the
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best performing sector on the s&p 500. every industrial stocks on the s&p 500 is in the green today. value stocks having a bit of a cell in three days. looking at this chart we have, it shows in the last three days, that spike, we have seen the biggest value open growth performance in almost 10 years, suggesting investors are getting a little defensive. let's look at industrial movers today. the biggest move are the ones that can be powered by the earnings report. making products for recycling, a percent, strong revenue and earnings beat. indications company harris this morning is also up over 9%. so too is the ethan corporation, both of them had very good earnings results. the power management segments benefiting from the early stages of demand growth here in the u.s. the corporation also up almost
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5% today, it is acquiring an argentinian manufacturer of specialty products for agriculture. we also heard jpmorgan passes u.s. equity fund for investment caterpillar is our stock opening hour. analysts downgrade today but the stock is still rising up over one percentage point. barclays, the analysts saying price increases may pressure profit margins. the actually reported earnings yesterday that us with the analyst is referring to. here, a solid raise benefiting from a broader recovery but investors still seem to be working out how to play caterpillar's earnings are the stocks up and down over the past 48 hours and some concerns .egarding trade they said the tariffs could cost between $109 and $200 million.
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that is how they would have to raise prices. >> really nothing in caterpillar's earnings per se, just the fear that something could change in the not so distant future. >> absolutely. we see from other analysts including goldman, the longevity of the cycle, he said the earnings selloff yesterday, it is now a story for caterpillar. is making,terpillar a quarter selloff, when he got on the earnings and said the prophet could then be a high water mark your the second quarter probably showing that they sell that that there is still fear that the peak has not been reached. >> though there is a question about perhaps whether that was misinterpreted. it was said people misread that as them saying there was a really good routes if not growth. >> it shows you have sensitive people are to the idea. all right. thank you so much.
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coming up next, suitcase shakeup . they bigger slice of the luggage market. can the company offer first at economy prices? this is bloomberg. ♪
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lisa: this is bloomberg markets. its firsty of 2016, suitcase. since then, they have sold 300,000 pieces of luggage. it is poised for even more growth. the journey is described from small to big. >> a global travel brand. we make travel more enjoyable and we started by selling luggage. product, we wanted something to make it a lot easier for you to focus on travel.
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we interviewed hundreds of on how they get to the airport, what they do with the airport and what they arrive. >> product design and manufacturing, and within a year, we checked the suitcase. carry-on. with a four different colors are we went really narrow with the product and overtime, expanded and added more colors and collaboration. >> we made 4000 carry-ons. it was not enough and within weeks of launching, we were totally sold out in the first year of the business was basically a recurring theme of us underestimating what the demand wasn't selling out and rushing to get more and we have gotten a little better at that today. >> we are definitely on one first but we found out early on people really wanted to interact with the brands online and off-line.
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right now, we have four in new york in san francisco, and l.a.. it is great brand awareness and great marketing tool. we also sell a lot of suitcases. >> in new regulation was issued earlier this year. our carry-ons come with a with -- lithium-ion barry -- battery in them. we made a changing year ago that the batters pop-out from outside but the earliest version of the products are actually move from the inside. with a way came up to convert all of the early suitcases into having ejected both batteries. we have been able to offer the program at no cost to the customers at all. the response has been overwhelming and we appreciate it from our customers that they can continue to travel monthly. >> this business has exceeded
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our expectations in every way possible. when we started the company, there were four of us and we are close to 150 people now. ande are really focused listening to our customers to expand the product line into the perfect version of everything they need to travel. we are focused on expanding geographies. >> what excites us even more but the future is the potential to change a lot of things in the travel industry. there are so many things wrong, from experiences to where you stay in how you get there. there is a lot of opportunity for us to travel. >> we will do that. >> that was the cofounders on their journey. it is time for a snapshot of some of the biggest business stories in the news today.
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u.s. spending has risen for a fort -- fourth straight month. purchases helped by gains in income with the same amount. preferred measure of inflation was a higher than expected 2.2% on an annual basis. a sign of optimism from pfizer after it decided to delay drug price hikes under pressure from the trump administration. the company increased profit outlook for the full year here at pfizer reported second-quarter numbers that beat analyst estimates. more trouble for cvs. executives are being accused of .estroying evidence redstone's -- says in a court in the cbs executive used -- to communicate. the allegations come one day after they agree to keep the ceo in his current role for now. sexual harassment allegations up against him. that is your business flash
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update. coming up, big tech investors are hanging hopes on apple. the company puts quarter earnings after the bell today and so far, bank stocks have recovered a bit here and we will see if that can continue after the apple report. the next -- do not miss special coverage tomorrow. rosenberg, allf of that coming up tomorrow at 2:00 p.m. eastern time. from new york, this is bloomberg. ♪ two, down and back up.
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our phones are more than just phones. they are pocket sized personal trainers... last minute gift finders... siri: destination ahead. and discoverers of new places. it's the internet in your hand. that's why xfinity mobile can be included with xfinity internet.
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which could save you hunreds of dollars a year. plus get $150 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. scarlet: welcome to bloomberg markets. ♪
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we are live in bloomberg world headquarters in new york in the next hour. here other top stories on bloomberg and around the world. betting on apple, investors hope the tech giant delivers to stabilize the same routes. whyng a deal with dell, activist investors carl icahn and pulsing a might get in the way of what dell things his company's worth. and, breaking the ice. trade tensions between the u.s. and china may be thawing as both nations trying to restart talks. we are one hour away from the close of trading. abigail doolittle is taking a look at how they are shaping up for the month of july. ethical: you are right about that. for the month, look at the the -- look at the gains, the dow leading the way up 4.8% in the month of july. each of the major averages on sinceor their best month
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january. despite recent volatility that we have seen, it has been a strong month for stocks, similar to what we saw in 2017, with month after month of gains that led to a nearly 20% gain for the s&p 500. this is the nasdaq 100 over the last four days. down, down, and up a little on .he day with major averages up the best day in nearly a week, but over the last four days, still down about 2%. the three down days were the worst since march. digging into the s&p 500, one reason we have some strength, let's happen to the bloomberg and take a look at the imap here. the 11l notice nine of sectors are higher, helping to explain the gains in tech. -- and tech is not surprisingly higher at .6%. two sectors lower, telecom and financials. clear out performer is the industrial sector, up 2%.
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this may have to do with the scoop earlier that discussed the idea that the u.s. and china may start trade talks again. let's take a look at some movers taking the industrial sector higher including caterpillar, 3m, ge, along with boeing. nice strength for the industrial stocks. thattors feeling hopeful if the trade war between the u.s. and china can dissipate, perhaps it will create a bullish spark for some industrial companies. if we take a look at the index here are the industrial movers. it can see the rally i was mentioning, hopes that a trade work would be alleviated. the trade on the day has been bumpy but to the upside after three big down days, the worst in three days, in february of 2016, we started higher, then
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lower, higher, and i should mention this is not the true trade. this is also apple among other movers. we see at this point up .7%. the big one coming up after the bell, at 4:30 as scarlet was mentioning, apple. this was over the last month. july has been kind to apple as well, gaining and gaining, higher. three things investors will clearly be focused onto a revenue growth, looking for more than 15% year-over-year, and the second is iphones. very interesting. the second quarter with tech companies beating, and then something iffy about the future. what will apple's guidance look like? it will certainly be a key not just for apple but the tech sector. >> we're just living in it. thank you so much. to mark crumpton. >> thank you. in out's andrea, virginia, a majority six minutes six women were seated in the trial of paul
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manafort. facing tax evasion and bank fraud charges. manafort is already in custody and could spend the rest of his life in prison if convicted. for specialial counsel robert mueller's investigation into potential ties between the trump presidential campaign and russia. prosecutors were not expected to address the question of paschi will collusion between mr. trump and russia. opening statements are expected this afternoon. top federal immigration officials went before congress today to defend their handling policy ofnt trump's separating migrant children from their families saying they keep records of children in their custody. the senate judiciary committee that we will not leave our humanity behind. but chuck grassley wants an -- held at of it
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agency facilities. a to be clear, this is not new issue. some abuse dates back to at least 2012. several of the most horrific incidents occurred in 2015 and 2016. don't say that to imply that this is all the obama administration's fault. it is not. but clearly, there is a larger, systemic issue that needs to be addressed. mark: saying that someone in the trump administration has to accept responsibility for the zero-tolerance policy, illinois democrat dick durbin called on homeland security secretary christian -- nielsen to resign. the trump administration is considering a tax break for wealthy americans by reducing taxes levied on capital gains. administration officials said today that the secretary steven mnuchin prefers referring to congress, but he does have his
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department studying the economic impact of such a change and that illegality of proceeding without congressional approval. bureau says the company will continue leveraging at a measured pace. says it will to the housing prices and structural reform in the second half of the year. global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: u.s. stocks are snapping a three-day losing streak, suggesting a few bad apples. [laughter] affecting 25 -- for revenue for the quarter. where is the momentum moving to? joining us now for more,
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certainly in the last three or four days, it fell like you are seeing a rotation out of tech him into the more beaten-down sectors matter what apple reports today. the data to look at and see if it bore out. if you look at what happened in july, you could run the function and it shows you the breakdown in the month of july, primary a rotation into industrials and health care, into financials, and this was the fourth straight monthly gain that we saw for health care. in june, the leaders were consumer staples, did -- consumer discretionary even consumer staples in their second straight monthly gain. you go through all the sectors and one thing you do not single out is tech. in as not been a leader weekly monthly basis since may. >> about 2.3% for the month. >> and it strikes me, is this
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undoing some of what we have seen before, a tech stock havens from trade tension, and shunning the industrials and saying they would get hit hardest, is this a reversal? profit-takingbout here, but think again, looking at a monthly basis, what were the most profitable traits? you are talking walgreens, jpmorgan. you can go down the list and you will not find a tech name. the leaderboard, twitter, netflix, and there were a few names that managed some names. , amazon, butpple it -- it still only puts them in the middle of the pack. >> i am struck by some of the unwinding of trade tensions. you have seen assets now. >> a really good point. when you put all together, what does it mean for the nasdaq for
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a record high, with technology coming out of favor, it is obvious the other come these are driving it. >> we forget the nasdaq is a lot broader than tech. the number one performing sector in the month of july insurers. number two's health care. mainly biotech stocks. most names in the month of july in the nasdaq composite are not household names or sexy names. fire, a lot of names mainly because those were the growth stocks. when you go through the list of winners and losers for that time, the big name, heavily weighted names, are still in the middle of the pack or toward the bottom. this was a significant change in behavior by investors in the past six or seven weeks. >> overweight in some of these big cap names, has it been unwound or is there a lot more to go if it continues? >> we saw a lot of acceleration
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after last week. factors tolook at watch function that we have on thererminal, it shows you was a huge shift into value stocks and dividend stocks. we have a chart that we could maybe put up and it will give you a good sense. >> we're switching out to the chart you are highlighting. go on. the one going up, that is value p or the top of the chart, the one going down is growth stocks in the one going up is dividend. you can see the acceleration in the last trading session. it was a clear and definitive change in sentiment to value stocks and dividend stocks. you look at etf's nec the same thing with a lot of rotation and the value etf's. >> what are you hearing when you talk to people about what will be the driver for the rest of the month? this will be momentous when it comes to earnings. things start to get a little
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quieter on the macro front. >> you are sort of seeing a stealth rally here. we always look at the facebook's to drive the market. industrialsg outpacing gains in the nasdaq and some of the other indexes today. it has been a driver for the last couple of weeks and really for most of july. i do not see how that will change unless apple comes in tonight with stellar earnings that really change the sentiment about hardware and software and chips, and maybe we can see tech regained some of the leadership. >> that has to be a super bullish forecast for apple. >> let's find out on the stealth rally in stocks. coming up on the deal's, an investor battle could be brewing to bring the company public. we will have the latest next. this is bloomberg. ♪
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scarlet: bp avoided earnings disappointments for shell and at some. more profits than expected in the second quarter, offering reassurance about financial strength. they spoke earlier on bloomberg. >> we delivered results or exceeded it. the confidence to raise dividend for the first time in .uarters -- 15 quarters p are people are pleased. feed on the ground but pleased and advancing. i think initially people were concerned we were off to the races and would break our financial framework. the way we restructured this would -- was to stay in $17 billion of capital framework, continue to divest assets to offset part of the deal.
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we will continue to decrease for shareholders. andipline is the main word we are still planning a company in the 55 range, rather than higher prices. or of thee paid more money you need to pay. you are also guiding investors to expect it would be at the bottom of the range. it seems you are -- for a lot of the past generations. oilell, it depends on the price. it feels firmer right now instead of softer. a lot of uncertainty in the market. the deal will be effective as the first of july when it closes in october. we will have the economic benefit of that are the first part of the deal is likely better prices. the company is operationally working well. 3-d projects this year and three more to do before the end of the year. i think these are on track. >> that was the bp chief executive bob dudley speaking on
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bloomberg. it is time for a snapshot of some of the biggest news stories of the day. quarter profits posted that were better than expected. one of the world's's agricultural trading companies capitalized from south america which led to strong global for u.s. commodities. modestly increased its profit forecast for the year. the french pharmaceutical maker is a return to growth. helping to offset declines for its biggest medicine, diabetes, -- never underestimate the ability of a supermodel to tell a product -- -- the shares soared today after it announced a deal to sell the intimates line in over 4000 cvs stores. the line features wardrobe and -- torpet products from back sticks on bras. and that is your business flash update. scarlet: let's turn to michael
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who thinks he knows what his namesake company is worth. he is not budging. big names like carl icahn and paul singer standing potentially in the wavelet the company's plan for public markets. for more, alix in san francisco. it feels like this is a repeat of a story we have heard before. >> that is right. i feel a little bit of deja vu. if you remember one michael took dell private, there was a battle about the underlying valuation of dell here at thought it was worth more than what icon set forth in that proxy battle. now, the company has been private and they are looking again to buy out the unique traffic stop a couple of years and now they bought it, it is the investors saying we do not understand why dell is how you'd so highly. dell has laid out $109 share
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for the traffic stock. part of that in cash and part of exchange for dell shares. at $80a stock for shares a pop. after the first round of meetings with investors, a lot of what we're hearing is the investor community does not understand how they got to the valuation. it becomes very important. dell needs this shareholder base, a majority of that base, to sign off on the get the company public again through a very unusual process. where does it go at this point? >> investors right now will look to the next results, which we might get a little of in a proxy statement that people say might come in august and then the next earnings report. they will look at how the storage business is doing. how does the core business continue to do?
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inphi that company back 2016. these fundamentals will be so important because again, it will be about justifying the valuation of dell as a company compared to its peers. finally got to the market, if you are -- some of the other legacy software and technology notanies, the premiums are that high. >> michael dell has been an advocate, you talk about the last time he was trying to make -- take the company private, how does that change this time around in the current effort? two expect him to be as vocal as present? right now, a lot of complaints i'm hearing from shareholders because the cfo, chairman, treasurer, bankers have been at the forefront of the investor meetings. has not. it is early in the process. we need to see the next. there is a roadshow and then a vote expected later this year.
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man himself will get more to the front of the stage but right now, investors have a lot of questions, and they feel like they are not getting the right answers or the answers from the person that they want to hear them coming from here at >> thank you so much. with a see what happens new coronation of dell publicly. thanks to alix. if you have a bloomberg terminal, check out g tv . you can find all sorts of fabulous charts if you are a person who thinks the chilean dollar market capitalization is a key mark in real-time. it is really big. who will it be? apple versus amazon? you can check this out and look at how high it is. this is bloomberg. ♪
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scarlet: i am scarlet fu. lisa: it is time for options insight with julie hyman. julie: joining me today's, chief energy strategist at macro risk advisors p are we're focused on energy and what we have been seeing recently from the energy complex. as we have around seen the trade headlines are also slows in china. those concerns justified and to you think that will be a sustained weight on oil prices? aboutay positive idea is climbing the wall of worry. we think a lot of policy risks and the trade war risks around global growth and oil demand picture are noise. we are willing to look through that. >> why is that? why do you think it is just noise and not more significant? >> we just point to the fundamentals of the market. you can argue that brent times of the in the front and
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curve have weakened a little bit with the anticipation of opec supplies and russia supplies in the market, of uti remains firmly in -- the picture continues to tighten. over 2 million barrels a day, and he gives an indication global buyers are still there. >> and that they will continue to be there. ok. at whatrade is looking we are seeing in oil right now. you are looking at the u.s. which is what we look at here for the options trades which track oil. walk me through the two lakes. >> what we have is a way to leg an upside scenario in line with the structure from earlier this year with $80 on the table. we are taking advantage to sell fund a ratio leverage bet
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on call. you are buying six times the calls by september 17 selling one september 14 put. it is important to note here that it is a little bit bid on the call side. you are paying a pre-so you need funds theed that bill. you can buy six times the upside , on higher oil prices. >> why 6-1? the cost worked out when you're selling that you can then find the fixed call? >> yes. you can buy four and collect but for a true -- for a trade when you are being efficient with the u are employing, 61 is the ratio the market gives you. >> thanks. good to see you. back to you guys. >> thank you. still ahead, tech turnaround.
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out apple's results shake of the market slump? we have analysis after the bell p apple shows up by about 11 present so far in 2018. a reminder that you can catch all of our interviews on the bloomberg with the function tv . here is the conversation with our apple guru in san francisco from earlier in the hour. the livee part of event and part of the conversation by interacting with us directly. you can message alisa or me, or our producers if you want to complain about something. from new york, this is bloomberg. ♪
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mark: facebook has announced it has identified a court needed political influence campaign by what it is calling bad actors. media giant has removed
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32 pages and accounts from facebook and instagram, believed to be connected to an authentic political activity ahead of november's midterms. the company has been working -- working with the fbi to investigate the activity and who is does not yet know behind these particular accounts. in the meantime, homeland says todaycretary that u.s. spy agencies were right that russian interference in the 2016 u.s. presidential election. there were remarks at the cybersecurity summit in new york. secretary nielsen said, it was the russians and added that any attempt to interfere in our elections is a direct attack our democracy. america will not tolerate this meddling. has given chief of staff john kelly a vote of confidence or bloomberg has learned the president has asked kelly to stay through the 2020 elections. he just celebratedis


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