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tv   Bloomberg Markets Americas  Bloomberg  January 30, 2020 10:00am-11:00am EST

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alix: it is 30 minutes into the trading day here in the u.s. vincent: from london -- die: from london, i'm guy johnson. welcome to "bloomberg markets." about 0.4%.wn by the is helping support equity market, the likes of microsoft, for example. on the downside, facebook is absolutely terrible, down 6%. it's lost about $50 billion in market cap today. yes, it is growing. it is not growing at the people wanted it to. . that is weighing on the stock. three-monthket, the /10 year spread inverted yesterday. is that a signal, or do you have to ignore it? no surprise, we are watching crude. can the market stabilize the
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risk off feel? guy: $58 80 two cents on brent crude right now. european stocks are lower. we are down by around 0.9% when it comes to the stoxx 600. not at session lows, but quite close to it. the pound bouncing back. the bank of woodland left interest rates on hold today, and -- the bank of england left interest rates on hold today, and the vote was not even close. certainly getting a boost today. $1.3083.e trading at alix: we want to begin with the latest on the coronavirus outbreak. the death toll now rising to 170, and more than 7700 cases are confirmed in china. the outbreak has sped to -- has spread to india and the philippines for the first time. joining us is stephen engle. give us the lay of the land. stephen: you just ran through the human toll, 100 70 cases and
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cases,an 7711 confirmed about 2000 more than what we had in 2003 with sars. of course, this has not been around as long. sars was with us for five to six months, and that shaved about $40 billion off of global economic growth. a number of economists are saying china is a lot more integrated in the global economy this17 years later, so if is a crisis that extends five to six months, i'm getting ahead of myself a little bit here, but economists are saying we could see some serious economic damage . growth could accelerate more than the 2% we saw from the first quarter 2003. one analyst at jp morgan has downgraded the growth forecast for the quarter and for the full year at china below 6%, so 5.6%
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for the first quarter, 5.8% for the full year. guy: is it just a consumption hit, or is capital expenditure going to take a knock here as well? capital expenditure will be an interesting one going forward. they are already talking about whether the needs to be some easing to help the corporations through this. companies especially in the central part of china, in wuhan, that would need this kind of help. one story that crossed the bloomberg terminal the bloomberg terminal that got my attention demand orhis lack of diminished demand in china actually diminish the impact of the phase i one trade deal with the united states? are they going to be buying all of those commodities that they pledged to do? where does that leave phase ii? guy: it will be interesting to
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see. we will talk to international paper later in the program. it will be interesting to get their take on it. thank you very much indeed. stephen engle joining us on the latest surrounding the coronavirus. let's talk about the market reaction to this. we are joined by henrietta treyz, veda partners director of economic policy, joining us from new orleans. what does this tell you on the impact it will have on the global economy? henrietta: my understanding is they are looking at 5, 6 months at a minimum in terms of how this will be continuing to reverberate around the economy. globalized entirely economy now, with goods going to the united states, germany, and everywhere in between. i would expect this would be a pretty significant disruptor, and the fear component is just starting to seek out as well. having just been in l.a. last week, you can see that it is already having a dramatic impact
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on travel. chinese students, how are they going to come back to the united states? 500,000 or so are estimated to be over there right now that want to come to the united states to continue their schooling, and that is a potential serious disruptor at the immediate outset. guy: would you expect there to be a policy response, idle fiscal or monetary, in the united states, europe, and china? henrietta: you were mentioning for the potential for china to potentially not meet its commitments on the agricultural purchase side. i think that is a huge factor that the president of the united states is monitoring very closely, as are the farmers in the heartland of the united states, and expecting this purchase is to come through. the first thing i can think of immediately is there is a back-and-forth on whether there is a third round of trade assistance offsetting the trade war, which would diminish the amount of purchases china can
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make. secretary perdue said he would not roll out a search -- a third tranche. wouldine a third tranche be about $15 billion or so that would be going out to u.s. farmers. the secondary component is locking travel, restricting airlines, and those pieces which are being debated right now. alix: what i also want to impact we is if the is if the impact is we getting gdp, can it still be for china? henrietta: you will see some boost to the economy as a result of having seen $100 billion or inof expenditures limited 2019, but this misses the
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reality that all of the tariffs are still on. no tariff rates have even dropped yet. a100 $20 billion basket that drops in half, but not until two weeks from now on february 14. this expedition that there has been a huge relief as a result of the phase one trade deal being reached is very much missing the reality that all of the tariffs continue to be in effect, and this is only going to worsen potential fears out of china. i thick about luxury retailers or any kind of retailers. the airlines who have already been disrupted so heavily by the hong kong protests are now going to have this to contend with across a much larger patch of geography. alix: the idea that we are going to see more monetary action or fiscal action now from emerging markets that are quite exposed, is that now a foregone conclusion? henrietta: i think that makes a lot of sense. that would be what i was expecting. if you are in the emerging markets and you are not china,
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you've had potentially a benefit from the trade war. left 13% of companies have china and gone to other developing nations. you can see, especially with the passage of the usmca now, maybe some expansion in mexico as a result. i think with brazil and argentina, they had really picked up a lot of the slack the united states has had. they will probably be impacted from that perspective as well if there is any shift in the purchase amounts that china wants in those protein items and commodities that they ship over there. alix: great stuff. henrietta treyz, veda partners, will be sticking with us. we want to give you an update on what is happening in first word news. here's viviana hurtado. viviana: senate democrats are making a final run at persuading a few republicans to call witnesses in the impeachment trial of president donald trump. a showdown vote could take place tomorrow. democrats need at least four bublik and votes. they want to subpoena former
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national security advisor john bolton to testify. senate majority leader mitch mcconnell is leaning on republicans to stay united. president trump wants to mix or democrats don't get all of the attention in iowa. tonight he is holding a rally in des moines. in monday's iowa caucuses, democrats are battling for support in the first test for presidential hopefuls. more problems for the most expensive u.s. weapons system in history. turns out the f-35 fighter has a gun that can't shoot straight, according to the pentagon's test office. authorities have a long list of problems that need to be fixed on the plane. 13 of them are described as must fix items. the f-35 is built by lockheed martin. shares of tesla soaring. the electric car maker delivering a second straight quarter of blowout earnings and speedy executions. record revenue beating
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estimates. esther musk is speeding up the introduction -- mr. musk is speeding up the deliveries of the new model y in march, months earlier than expected. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. guy: thank you very much, indeed. viviana mentioning what is happening next week. we will bring you special coverage of the iowa caucuses. it is going to start at 10:00 p.m. eastern time monday, february 3, live from des moines. tuesday, we will carry president trump's state of the union address at 9:00 p.m. eastern. great coverage coming up. this is bloomberg. ♪
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♪ alix: live from new york, i'm alix steel. guy: from london, i'm guy johnson. this is "bloomberg markets." alix: we went to get a check on the markets with abaco too little. -- with abigail doolittle. abigail: it is certainly a risk off tone on this thursday. take a look at the s&p 500 here a the u.s., down 0.3%, but second down day in a row, so we are seeing a couple of back to back declines. the ftse 100 in the u.k. down more, but take a look at the taiwan stock exchange, down nearly 6%, reopening after that lunar new year holiday. investors, traders really concerned about what the economic fallout could be on china around the coronavirus. crude oil down once again. if we go into the bloomberg terminal, take a look at the divergence. copper down 11 days in a row, the record. these are both risk assets.
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that decline for copper suggests there could be some bearish action ahead for the s&p 500. finally, taking a look at some of the tech stocks on earnings, tesla another blowout quarter. true, too, for microsoft. not so for facebook. slowing growth worrying traders. alix: thanks so much. the economic data came out today for the fourth quarter seemed to be ok, but if you dig into the details, consumer spending was weak, and it was exports that help support the number. we are back with henrietta treyz, veda partners director of economic policy. what was your key takeaway for the fourth quarter? henrietta: my view is very much in line what was -- in line with what we have been hearing the past couple of days. we were lucky to get the gdp number for the fourth quarter, and looking ahead to the remainder of this year, 2% gdp growth expectation seems most
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appropriate. as i said earlier, all these tariffs are still in place, and the u.s. consumer is going to have to deal with that. the biggest concern i have is that there was clearly a pull forward in inventory from anybody with a supply chain in china and the first half of 2019, and then it stopped. all those tariffs are still in place, so i am skeptical that all of a sudden, that re-shipping is going to start happening again and people are going to be ordering inventories they had in the first half of 2019 that pulled forward a lot of good growth in the first half of the year. alix: do you feel like this kind of data is worth a three-month 10 year yield curve basically had zero? isrietta: i think this data pretty lucky. the ripple and staff i talked to has been very anxious about dropping below that 2% gdp number, just emotionally and mentally for voters who are so focused on the economy as the number one driver of president
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trump's administration. the reason they would go to the polls to vote for him. 1.9% to something they have very much been anticipating, as a lot of others were, for 2019, and i think they were lucky to get above 2% in the last quarter. i think all the indicators are essentially telling you that. we are also fortunate that inflation hasn't been through the roof, given the tariffs. the u.s. consumer has been really strong throughout the last year. more and more talk that bernie sanders could be the democrat candidate. how do you think the market would react to that, and how do you handicap his chances? henrietta: it is a two-phase equation. there is a general fear about what would happen if he got elected, which is pretty negative for market investors. if you think about medicare for all happening or severe restrictions on drug pricing or corporate taxes rising, any of those big macro events.
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but then i would imagine that if i what werewins new hampshire, almost immediately thereafter, once he wins those caucuses, think about his chances of defeating donald ofmp, when the vast majority older voters, and it some cases even voters over 35, don't support his views, he is, of all the democratic candidates, the one with the highest unfavorable of the ratings. when you think about 70% of the democratic population voting for someone else at a men mom, a lot of those people are actively not going to be voting for bernie sanders, so when markets digest those data points, it is a short-term negative in terms of fear that all of those microeconomic changes could happen, but as you digest that news and thing about the chances of bernie sanders versus donald trump, the expectation becomes that donald trump will remain the president, in which case there would not be tax increases. there would likely still be
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deficit spending. there would not be dramatic health care changes. it is a short-term negative, long-term positive. guy: we will leave it there. thank you for joining us today. we really appreciate it. henrietta treyz, veda partners director of economic policy. we still got some highlights from our conversation with goldman sachs ceo david solomon. that's coming up. this is bloomberg. ♪
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♪ happy thursday, everybody. live from new york, i'm alix steel. -- fromm new york london, i'm guy johnson. this is "bloomberg markets." the investment bank has a plan that could leave it looking more like an everyday bank. goldman sachs ceo david solomon spoke yesterday to bloomberg's sonali basak at the investor day 2020 in new york. david: feedback is quite
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positive. i think people appreciate that we did it. people appreciate the transparency, and the fact that we have laid out a clear path forward for our business, strengthening our existing businesses, making some adjustments in new businesses. the feedback has been very constructive. sonali: you are entering transaction banking, wealth management, and a lot of banks are already in that space. what is the investor thesis for goldman sachs? david: we've been in the wealth management business for a long time. we just dealt with the ultra high net worth slice, and we now see an opportunity for a united capital opposition to expand that to high net worth individuals, so that is a really good opportunity for us. one of the things we laid out today as we look for opportunities that are adjacent or synergistic with strings that we have in our core business. that is an example of that. when you look at goldman sachs and you ask what the broad thesis is, what we try to lay out is opportunities that strengthen our businesses, add
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some new businesses, diversify our revenue mix so it is more durable, and run the firm more efficiently. if we do that, we will driver turns higher, and hopefully shareholders will be rewarded. sonali: you didn't rule out a merger or acquisition. do using the federal reserve will give you the leeway you need to buy a bank? david: i never said that we would buy a bank, so it is interesting you are asking that question. we look for opportunities to grow our business organically, and occasionally there are opportunities to do something in organically that allows you to accelerate part of your plan. united capital was a great example of that. we wanted to move more quickly into the high net worth wealth management business, and united capital give us a platform to accelerate that expansion. that is a great exhibit a finding something in organically that can accelerate part of your strategicrt of your plan. that is mostly what we are focused on, but we are not out there looking to buy a big bank.
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we want to beat goldman sachs. we want to do what we can do. but it's been one of the big evolutions for us. sonali: one interesting thing i picked up was that paper performance would be changing slightly. what is one tangible way bankers will be evaluated differently as you are think about how they are compensated moving forward? david: pay-for-performance is not changing at all. this has always been a pay-for-performance culture. but we are trying to make sure that the incentives align to relate driving the overall performance of the firm forward for the benefit of shareholders. how do we driver turns higher as an organization so that we believe we will create more long-term shareholder value? we are starting to put a broader set of metrics in place to award people based on behaviors in addition to driving revenue. those examples can include really embracing and enhancing our goldman sachs culture, making sure we are delivering
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for clients across the organization and breaking down barriers, and trying to make sure the client experience is the best it can possibly be. and for our metrics to reward people who are really enhancing that as opposed to hindering it. we also have a whole variety of cultural metrics we think are very important to make this place as attractive a talent center as it has been. so people have to participate in that and make sure that we hire, we retain, we keep the best talent inside goldman sachs. there are a lot of things we can track, and we think they are important. alix: at the same time this is happening, we learned that the fed approves the volcker proposal uncovered funds on -- proposal uncovered funds -- proposal on covered funds in a 4-1. if that is rolled back, it could more risk on the balance sheet and create an avenue for wealthy individuals to invest in those areas. there's got to be some kind of
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lesson to be learned from goldman wanting to become a super boring consumer bank and the volcker rule being rolled back on this. ways, it has been fascinating that the banks have been able to make as much money as they have went theoretically, from a financial regulation point of view, they were being quite heavily repressed. look at jp morgan and think, given the regulatory environment, how on earth are you making this kind of money? and is that a problem? we wanted them to become boring. they are still looking at him of money. is that an issue? we will see whether history judges that is a good or bad thing. alix: i guess there's two ways to look at that. they are going to be boring and of theo borify the rest business, or you are going to have a more risky culture, and it seeps into the boring business. that is going to be a really interesting cultural distinction
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that i don't think we know if we are there yet, and the volcker rule is going to for some extra spice into the pie. guy: i expect there will be some in the banking community that would like to get back to being involved in mortgage-backed securities and the things that were so germane in 2007, 2008. i think the world has changed since then. i think the regulators would like to see these institutions being less risky. i'm 10 agree, although years younger than that, so that's weird. coming up, the galaxy investment partners ceo gives his assessment on crypto and why he is shorting tesla. this is bloomberg. ♪
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♪ alix: live from new york, i'm alix steel. guy: from london, i'm guy johnson. this is "bloomberg markets." alix: at the context summit in
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miami, erik schatzker is standing by with an important voice. erik: that would be none other legendarynovogratz, a accra manager. he now runs galaxy digital. good to see you. here's where i want to start. tesla. you were short tesla going into yesterday's earnings report. what were you thinking? mike: i had a great start to the year. the chart looks terrible. against my own rules when i said don't short elon musk, and tesla feels like bitcoin. any sort of good news is going to shoot it up. i'll give it a couple of days and i will probably be able to get out without a lot of pain. it should back off some at one point. luckily, it was a spiritual position and not going to
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bankrupt me, but it hurt. erik: what do you mean it's like bitcoin? mike: there's a tesla bubble going on. bubbles happen around things that normally change the world. tesla cars are amazing. he's got all kinds of technology. he's delivering. the story is so powerful, it sucks everybody in. it doesn't mean the company is actually worth that much. the gdp per car they sell is like $3000 and $6,000. that doesn't make any sense in the long run. but it doesn't mean the price can't keep going higher because it is such a great story. it's how bubbles work. i got cocky and tried to pick the top of the bubble, and got a black eye. erik: so you were short on valuation. mike: i was short on the chart and the psychology. i probably should have waited until after earnings, and could have shorted it today. i wasn't going to short it for a long time. i thicket the great company.
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i have -- i think it is a great company. i have two teslas i love. sometimes you take a gamble and burn your hand. erik:erik: let's pull the lens back a little bit and look at the world at a macro level. what do you like? what don't you like? mike: first, we got to get through this virus out of china. it is getting worse. i remember paul jones went on tv and said we shouldn't have any risk for two weeks. he was right. there's a lot of activity around how bad this can get. barring that, i think stocks are going to raise higher this year. ofhave a very explosive mix 5% of budget deficit, a fiscal, low rates set on hold. it is kind of crazy, 30 year bonds are trading this close to
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their all-time lows. the environment doesn't feel distressed. that is telling you there is so much liquidity people are going for anywhere. these things in usually within inflation spike. we don't see that coming. when valuations get to the extreme levels, and we are not there yet. charts look like stocks could go higher. to be out is going 30,000 before you know it. the leaders in the u.s. continue to suck in capital, and it almost becomes the same thing. you divorce yourself from valuation. up last year.ere does parabolic mean another year like that? you are long stocks -- mike: and i've done it mostly through calls. volatility is so cheap. .ou can buy calls on the nasdaq
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the risk is either gross really inflation.e get the former may be more likely. you can hedge that. credit spreads at 44, 40 five basis points over. i still love gold. i still of bitcoin. we've got too much liquidity around and we are debasing our currency over time. but 5% gdp in a good economy, put that in perspective. last time we were at 3% growth, we had a budget surplus. that is a 6.5% difference. this is crazy. so you've got to let gold and bitcoin. erik: what brings the party to an end? mike: parties usually end with fed action, so either inflation finally shows up postelection
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and the fed has got to do something, or just valuation runs out. you never know how high it goes. risk?what about political that there is a risk bernie surges. i think you can trade that risk. is going tok bernie become the president of the united states. bernie and elizabeth, bad for markets. anyone else, good for markets. in some perverse way, the only person who might be bad for markets could be bloomberg, who is the only adult in the room. and i'm not part of his campaign, but when i think of what a smart business and look at we've got unsustainable fiscal and monetary, so let's tighten the belt a little bit, the market would probably love him getting in, and then say, wait a minute, the parties over. erik: the charts told you to short tesla. what are the charts telling you to do on bitcoin?
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mike: bitcoin had its bubble, and now it has become an asset. it is a weapon in people's portfolio. it is a version of gold. we are putting in plumbing all around the system to allow more and more people to buy it. it trades much, much better. it is grinding higher. it jumps a little and recovers. way it'sled the traded. if it hadn't rallied during iran, if it hadn't rallied during the virus, i have been nervous, but it did. so i'm gaining confidence in the bitcoin position. erik: is bitcoin the winner take all cricket currency? mike: bitcoin is in its own lane as digital gold. gold has a $9 trillion market cap. the best companies in the market are $1 trillion. there's nothing else like gold.
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table,t of the periodic from silver to copper and everything else, needs a use case. the other cryptocurrencies need a use case. that's going to be a few years away. 3, 4, 5 years before you start seeing the blockchain ecosystem changing the world. erik: so you are steering clear of those other coins? mike: we don't have them in our core portfolio. we will have them long and short. we are making big investment in the infrastructure around blockchain. i do think the adventure in this space much a lot of sense. so you are seeing private permission blockchain's in almost every area of the economy . some of these are test cases. some of these are starting to get used. you are seeing on the public blockchain decentralized finance showing up. this is all early-stage. the internet bubble was 1999.
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we didn't get facebook and the iphone and movies until 2005, 2006, 2007. we are in that gap, but a ton of stuff is being built, and it is an exciting space. erik: i want to remind everybody that mike bloomberg is the majority shareholder of bloomberg lp, and what we discuss here is unaffiliated with his campaign. mike novogratz, great to see you, and thanks very much. that is mike novogratz, the ceo of galaxy digital. back to you. guy: interesting to hear about that short position in tesla. schatzker, erik thanks very much, indeed. let's check in on the first word news with v on a hurtado. viviana: the u.s. a -- with viviana hurtado. viviana: the u.s. economy and the fourth quarter grew at a rate of 2.1%.
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for the full year, the economy grew 2.3%, the slowest of donald trump's presidency. it is also below his promised target of 3%. over to capitol hill, where time is running out for senate democrats in the impeachment trial of president trump. they are trying to persuade at least four republicans to agree to call witnesses. tomorrow, a showdown vote is likely. democrats want to question former national security advisor john bolton. his new book has revelations about president trump and ukraine. today, a crucial decision for the world health organization. it is likely to decide whether to call the coronavirus outbreak a public health emergency of international concern. there is growing evidence the disease can be transmitted before a person shows any signs of illness. china has raised the death toll to 170. more than 7700 people on the mainland have been affected. the virus may lead opec to hold
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an emergency meeting. oil prices have been falling over concerns that the disease will hit demand. the cartel may move march's scheduled meeting to next month. brent dropping more than 10%. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. alix: thanks so much. coming up, we are going to dig deeper into commodities as part of our conversation with shell ceo. it is a rough day for that stock in the market. it is -- this is bloomberg. ♪
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♪ alix: live from new york, i'm alix steel. guy: from london, i'm guy
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johnson. this is "bloomberg markets." it's time now for our stock of the hour. here with the details, abigail doolittle. abigail: we are taking a look at rp and what may have been an inevitable event. shares are down sharply is one of the company's ships is being held off the coast of rome on fears that one passenger may have the coronavirus. today's drop is just a piece of a big move lower for carnival and other cruise ship operators on concerns around the coronavirus and the possibility it could slow demand for travel and tourism, and cruising in particular. carnival is down about 12% in january, heading to its worst month in almost a year. . the alleged sick patient is from macau. as for the bigger concern for the cruise ship operators, china is the third biggest source of cruisers, or about 3 million passengers a year, behind north america and western europe.
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if parts of china remain on lockdown and fewer people are traveling, it could really eat into the top and bottom lines of these cruise ship companies. relative to what history may say about all of this, the coronavirus is being compared to the sars breakout in 2002, even though it is imperfect in many ways. on this chart in the bloomberg terminal, we see here in blue, yellow, and white the airlines and two of the cruise ship companies, including a carnival. back in 2002, all of those travel related companies were going down, and then in early 2003, there was a bit of a recovery. the initial response was to be down, but now higher. it will be interesting to see whether or not that dynamic is happening is more is learned about the corunna virus and the impact on the global economy. that is your stock of the hour. alix: literally cannot think of anything worse than being stuck on a cruise line.
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shell sell today for the most in more than two years. shell posted fourth quarter leap profits that missed estimates. bloomberg spoke with the ceo, and he says it is prudent to slow the pace of by acts -- slow the pace of buybacks amid the conditions of the coronavirus. >> pressure on oil prices, definitely pressures on refining margins. we just have to take a prudent look going forward. for this quarter, we said let us bring back our share buybacks to one. let's focus a bit more on debt reduction in the beginning of the year. what see how the macro plays out, but also be very clear there is no change in our commitment to buy back the $25 billion. it is just that the pace is a bit uncertain, given where we are with the macro. >> what is your take on the macro picture, especially with the coronavirus and the
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limitation of basically quarantines of million people cities? how does the acro picture look to you -- the macro picture look to you? >> the coronavirus is a very concerning situation, and i'm sure there's a lot of people very anxious about what is happening to them, directly or indirectly. of course, are some patheon thoughts are with it. we are monitoring very closely what that means for us. also, what it means for us economically. at the same time, it is still on in this episode. we don't know how long this will continue. sars, which ith understand are being made, are still a little bit premature. what we can be certain of is it will not help sentiment on demand. alix: that was shell's ceo. for more on oil earnings, will
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kennedy joins us. shell did the one thing you cannot do as an energy company, and that is tinker with your dividend, shareholder payouts, and buybacks. how big is it -- how bad is it? will: you are absolutely right. investors will hate the fact that they are not meeting their promises. it will feel like they have backtracked on that. if you look at the dividend yields across big oil, they are really high. the question is, is that actually a pricing an expectation that we are going to see in shareholder returns? guy: exxon is out was numbers tomorrow. chevron is out with numbers tomorrow. is there a read across from shell? will: i think so. i think all of the company's .ill be nervous this could be a disastrous event for the oil market, and there will be a lot of concern.
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guarantee the shareholder returns we have been talking about, they are going to keep it very tightly it on capital spending, and i think you will see those comments. alix: what that says to me is how do they then spend all of the money they said they were going to spend combating climate change and the energy transition when they have an oil price fix in order to make money, and then they have to make buybacks? will: this is the real dilemma, and i don't think at the moment that management teams have a clear answer about where to take this. shell has set up huge ambitions in terms of building up and investing in were noble energies and transforming the whole scope of the business. what's becoming clear is they can't juggle their current commitments, their commitments to shareholders and the need to invest in new business. something has got to give, and maybe this was the straw in the wind that the companies are actually going to have to reconsider the best of what they can do.
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and shares trading at a two a half year low. how much of that is due to the fundamentals of the oil market and the derivatives of it, and how much of it is due to what the esgt brought up, story and the fact that oil companies are harder to invest in? will: i think it is a combination, but there's no denying these are deeply unfashionable. are really returns the dilemma we are discussing today. people don't like the sector for a number of reasons. energy transition is one. esg is another. they are starting to underperform the oil price. that really tells you that this is not a well loved sector. . at the moment alix: and they make up 4% -- loved sector at the moment. . 4%x: and they make up, like, of the s&p, so you don't even need to on them.
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down behind on the commodities on "bloomberg commodities edge." this is bloomberg. ♪
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alix: live from new york, i'm alix steel. guy: from london, i'm guy johnson. this is "bloomberg markets." time for futures in focus. joining me from the cme's bill futures. blue line , is thison to you virus story an excuse to sell or a reason to sell this market? how worried should we be? bill: i think there's a little bit of both. this definitely reason to take some chips off of the table. talkingeally aren't
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about the uncertainty of how many cases are mounting, the incubation of two weeks that gets you some reason to take some chips off the table. the other thing is technicals. it is a technical failure, and we are seeing this thing lower today. guy: his impeachment having an impact? i am being told time and time again that it is not really a market event. bill: the markets like donald trump. that is the thing. the markets like it. if there's any witness is called, there's some questions that this thing drags out, and the markets probably would like that. you look at bernie sanders surging in the polls. the markets might not like that either. volatility breeds uncertainty and impatience with that uncertainty brings opportunity. we are looking at a lot of opportunity out there.
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we have a program capitalizing on this volatility. guy: do you think it settles back down to the levels we had pre-the start of the virus? theou think we go down to 10, 11, 12 area for the vix? bill: what really matters is the right around this level, but if that gets taken out, we can start opening the door for additional selling. that's what matters most right there. i'm not playing into a short in the s&p. i like being short the small caps. there's a lot of ways to look at this market, but you've got to pick your spot to be patient. guy: good to see you as ever. expert bending time with us here on bloomberg. for bloomberg business flash, a look at some of the biggest business stories in the news right now. general electric is looking at another asset sale.
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ge's ceo larry culp is looking to raise cash and revive the ailing energy business. ge power also makes gas turbines and energy generators. it has been a cash drain because of slumping demand. coca-cola citing rising demand overseas in high sales of its low sugar drinks in the u.s. coca-cola zero sugar had another year of double-digit volumes growth. grou invested $12 billion in juul and has now written that down by 2/3. accusedf lawsuits have the vaping devices of addicting young people. is named inaltria some of those cases. that is your bloomberg business flash. next week, we will bring you
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special coverage of the iowa caucus at 10:00 p.m. eastern from des moines. we will carry president trump's state of the union at 9:00 p.m. eastern tuesday. here in the markets, we are picking up some steam to the downside. s&p is down by about 0.9%. guy: here in new york, we are at session lows as we head towards the close. bt group the biggest loser, but the biggestbp group loser, but carnival, that stuck down by over 5%. we were just talking about it. royal dutch shell down by over 4.5%. the market closes next. this is "bloomberg markets." ♪ good morning!
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oh no, here comes the neighbor probably to brag about how amazing his xfinity customer service is. i'm mike, i'm so busy. good thing xfinity has two-hour appointment windows. they have night and weekend appointments too. he's here. bill? karolyn? nope! no, just a couple of rocks.
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download the my account app to manage your appointments making today's xfinity customer service simple, easy, awesome. i'll pass. guy: a day before brexit, the bank of england keeps rates on hold. who is holding another meeting in geneva on the
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coronavirus as it debates declaring a global public health emergency. a ship in italy is still locked down, even as the first test rules out signs of the virus. deutsche delivers, the bank showing signs of stability as fixed-income trading jumps. live from london, i'm guy johnson, with alix steel in new york. we are counting you down to the european close on "bloomberg markets." ♪ alix: ugly day developing here within u.s. equities. i said earlier it could be worse. it now actually is worse. s&p down by 0.8%. facebook not helping, but


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