tv Bloomberg Markets Americas Bloomberg July 12, 2019 1:30pm-2:00pm EDT
acosta with the u.s. attorney in miami at the time when he oversaw a nonprosecution agreement that allowed epstein to avoid sex charges by pleading guilty to state charges and serving 13 months in jail. maryland democrat elijah cummings, chairman of the house oversight committee, told reporters i think secretary acosta did the right thing. >> there are questions addressedg the way he the epstein case. and the way that he treated these young ladies, and it is extremely unfortunate. hopeful that the president will appoint someone who will be very sensitive to women in the workplace. deal tostein reached a
secretly end a federal sex abuse investigation involving at least 42 need girls that could have landed him behind bars for life. if you'd between japan and south korea over north korea is getting worse. anl has called for international probe over tokyo's claims it allowed sensitive materials to end up in the hands of north korea. japan is also considering removing south korea from a list of trusted export markets. china is promising to impose changs -- sanctions on american companies involved in arms sales to taiwan. the state department has approved a $2 billion package for taiwan that includes tanks and stinger missiles. production cuts by opec and its allies didn't prevent the return of an oil surplus. global stockpiles surprisingly increased the first half of the year. the iea says consumption was far
weaker than expected. oil supply also exceeded demand by 900,000 barrels a day. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. live from bloomberg world headquarters in new york, i'm vonnie quinn. >> live in toronto, i'm amber kanwar. are the top stories we are following from around the world. earnings report card. what does it mean for u.s. companies? insight next week as the banks kickoff earnings season.
the leading edge of tropical storm barry is reaching louisiana. landfall is expected tomorrow morning. we are live in new orleans with how the gulf coast is bracing for the storm. ev engine. that cooperating on self driving technology. we will talk to the new ceos about the alliance. let's get a quick check on the major averages. it has been an up day for the most part in the u.s. it looks like we may creep to want to close and stay above it, which would be an important psychological level. the dow is up half a percent. .4%.asdaq also rallying, j, down in ion j& the session, now down 4.8%, on word there is a grand jury
investigating what executives knew and when as it relates to talcum powder and this pestis claims, now that we know it is true that some cancers were caused by asbestos in talcum powder. a big drag on the dow. i found a way to chart the enthusiasm that is happy friday. i am sure a lot of people say that to you in the office. when it comes to performance for the s&p 500, friday so far in 2019 has been the best performing day of the week for the s&p 500. for those who like to sail off early mid day, could be missing out on some gains in the market. trade war fx. slumping exports in china, sending warning shot to the world economy as trade tensions
continue to simmer between the u.s. and china. we got data out of europe as well that was disappointing. let's welcome cameron crise. just because the fed chair spoke earlier this week, it doesn't matter what kind of economic data we get now. >> apparently not. it is fair to say the fed is taking perhaps more of a global mantle. ultimately, the u.s. data does not necessarily require the sort market isthat the expecting, that the fed is presumably going to deliver. you think about the twin pillars of dual mandate, employment and inflation. the last figure in each of those has been running a little bit hot. what about in china where we got the latest batch of trade eak, butt only exports w
imports. might we see the central bank step up efforts there? >> probably a fair assessment that the pboc will engage in more easing measures, whether loosening the reserve requirement or injecting more liquidity into the system through some of their special financing operations. the thing with china, we tend to focus exclusively on the trade war, at least from a north american perspective. clearly, domestic demand in china has been on the wane, really predating the trade war. it is sort of the u.s. hammering them on the trade front, has exacerbated what was already an economic deceleration. vonnie: why the urgency to cut rates? we got inflation that was a little bit hotter than expected that still far from the 2% mandate. a little answer is the market
is fully priced. the fed is not in the business of disappointing markets. as far back as we have data, the fed has never not cut rates when markets are priced as they are today. more than fully pricing in a rate cut. i think it is certainly a reasonable proposition they could wait a little bit more, longer to see if employment was a debt remains resilient and if inflation ticks higher. for better or worse, the market has corralled them, back them into a corner if you will, given the messaging that we had, they are pretty much now required to deliver a rate cut. are they required to deliver the full extent priced into the market over the next year? absolutely not. it will be one of the real issues for the second half of this year and into early next year, is how the fed massages
things, do they do two cuts as an insurance policy and that is it? you could argue if the domestic economy remains resilient and the global economy shows signs of stabilization, that could be will what we get. for those things to happen, you'll probably need the president to back up from the trade war rhetoric and some sort of agreement reached between the u.s. and china. that is something that is out of jerome powell or anyone else's hands. amber: thank you for that analysis, cameron crise. the fed is really important for the markets to pay attention to, but earnings season is just around the corner, kicking off next week. we will start with the u.s. banks reporting on monday. meantime, investors remaining cautiously optimistic about the prospects for easier monetary policy. fedmore on what a possible interest rate cut could mean for corporate outcomes, let's bring fargo,t wren of wells
joining us from st. louis. when we look at the overall expectations for earnings season, we expect profits to decline 3%. we have heard a number of things when it comes to profit warnings. to what extent could the fed buffer some future weakness? the important thing is the fed has reassured the market that we are not hiking rates anymore. we may actually ease if necessary. that is really what the market wanted. it's a very important concept that global central banks -- and you could've said this for the last several months. they are not in hiking mode anymore, they are in easing mode. at least holding steady the largely easing. that does somewhat cushioned the earnings season, but it is no mystery, it was not a mystery in the first quarter, not a mystery in the second quarter, that these comparisons from last year were lousy. we are at flat, the consensus is
down two or three. it is prettytwo, much all the same, not good. the market knows that, is looking ahead. we would argue the market is looking well ahead here. really what the hinge is, the risk out there, the fed is not the risk. the risk is global growth, these trade negotiations are heavily tied to that. for us, whether the market finishes here, slightly higher, is goingh lower, it to be trade positives. we have already heard from some global companies like , and the outlook was not that rosie. they were clear about how gloomy things look. how bad is it going to be? look at theu
companies in taiwan, south korea, like samsung, these high-tech exporters were the export a lot of high-tech industrial goods into china. in the fourth quarter and first quarter, their earnings were down 25, 40%. there has been some big hits already. i think these companies are going to issue, continue to issue conservative guidance. that is why guidance is maybe a little bit less important this time. the scapegoats will be trade frictions. you might hear things about a stronger dollar, even if you look at the dollar index, the thing has been stuck in a narrow range for the last 13 months. right now, none of these corporations will issue guidance that is, everything is great, we are going to the moon. everyone will be cautious, the market knows that. with central banks on the market side, so to speak -- and i think
the market is pricing in some sort of trade positives here -- if that pans out, the market should stay relatively bid. valuations are not stretched, at least not in our opinion. amber: what is your view on the breakout point for the s&p 500? recent all-time highs have been hard to get excited about because we are in a range. now that we are ready to crest above 3000, is that a significant break? scott: i would not say it is a significant breakout. if you are a technician, which i tend to be, you are a couple hundred points above the 200-day moving average. tradet some bad headlines, you could retest that. that is down at 2780 or so on the s&p 500. we will look at that as an opportunity as long as the forward outlook is good.
to the upside, the market has been grinding higher. today looks like we will finish at a new record high. is really not any technical areas that you could look to above this. as long as the forward outlook -- our forward outlook is good. we will look at pullbacks as opportunities to buy. we like industrials, consumer discretionary, tech, things that are more sensitive to a continuation of the expansion. if you are long and are in sectors that are economically sensitive, you need to stick with it. if you have cash on the sidelines, there will probably be opportunities to put money to work. this will not be clear sailing. we will get some headlines, probably trade related, that take the market down a little bit, cause downside volatility. that is when you need to be ready to pull the trigger. vonnie: would you keep it all in the u.s.? scott: we like emerging markets.
in the couple of segments you have been talking about emerging markets, for us, the chinese economy will hold in there. we think there will be some improvements. emerging markets should benefit. for us, emerging markets look relatively inexpensive versus the u.s. they had not participated in this year's runner-up. we think there is some opportunity there. vonnie: scott wren, thank you. coming up, tropical storm barry is strengthening as a barrel for the louisiana coast. putting 70% of the lng market at risk. we are in new orleans next. this is bloomberg. ♪
markets." i'm vonnie quinn in new york. amber: i'm amber kanwar in toronto. we arethe top stories tracking, tropical storm barry, strengthening as a barrel store the louisiana coast. the storm is expected to make landfall early saturday morning. 125 miles west of new orleans in bringing as much as 25 inches of rain to some areas. bloomberg reporter rachel adams heard is in new orleans and joins us by phone. give us a sense of on the ground what kind of preparations are underway. rachel: i am about 50 miles southwest of new orleans. some of the lower lying communities had a mandatory evacuation order this morning. recentlyto the sheriff and he is getting ready to bring some supplies down there. in general, most people don't
seem too worried about the storm as it is forecast now. and one thing you keep hearing is the concern around the levees, high river levels. that is bringing back memories of katrina. one woman in st. bernard parish, she just kept walking up to the levees to check on the water levels. we will see where the rest of the day takes us. vonnie: louisiana i would have a lot of workers working at lng to us abouttalk those facilities and the destruction that we might expect. we have two in the path of this storm. broader backdrop of this huge lng supply from the u.s., highlights the risk that some of these facilities have being in these high risk .urricane hotbeds right now, two facilities that we are looking at, checking to
see how operations are affected. the biggest issue is when the store tanks fill up, if that happens, how that will impact production going forward. amber: what about on the crude side where there is not only production but refining? rachel: production was the first shoe to drop. we saw that with offshore producers. i think about a million barrels right now. moving forward, we will be watching the refiners. there couldon really move markets pretty significantly. vonnie: when do we anticipate that we will know more about barry and its path? rachel: later this afternoon we should be getting more of eight. right now, we are waiting to see if it stays on track, whether it does strengthen to become a category one hurricane. of my that is kind
follow-up question, the strength of it. even if it becomes a category one hurricane, does the classification matter, or is it about the water and the rain and the swelling? that has the potential to do serious damage come even if it is not classified. exactly. no one is paying attention much to the wind force of this particular storm because the main issue will be flooding. that is why you have so many people closely watching the river levels right now, seeing how close it gets to the levees. obviously, you are always concerned about a levee breach, but now that there is a little more confidence in the structures itself, that the waters would rise to high for the levees to make any impact. vonnie: let's hope we get through the weekend without any significant problems. rachel adams-heard reporting from new orleans. coming up, tag teaming to take
amber: this is bloomberg markets. i'm amber kanwar in toronto. vonnie: i'm vonnie quinn in new york. it is a move hoping to be a major step forward in the industry disruptive transformation. volkswagen and ford are teaming up to make electronic and self driving technology. the ceos of both companies spoke to david westin. >> we are in close relationship some of our chinese partners, but we are big enough to have economies of scale. one is to come in the automotive industry is big investment in
autonomous, electric vehicles. it just makes sense even for two big companies to share the efforts, which will make both companies faster and more efficient. >> how does this fit with your restructuring in europe? >> it helps the renaissance. came in parallel as we were working on the autonomous problem. the past year in november, i was watching one of my favorite football games, the ohio state-michigan game. at halftime, i called herbert. as we are working through this technology, it occurs to both of us, there is opportunity to expand the nature of this. he said, look, you have to take a look at this architecture. it is quite humble but really extraordinary engineering. so it just started to fit together. because these teams were having these early discussions, it was
easy to throw that in the mix and say, try to rationalize that. when we made the first announcements in january, we were in the middle of that -- we had a lot of work to do. here we are ind, july, announcing these two facets of the alliance. it will be just in time for when we need it. david: we are watching in europe and china as well the government's pushing forward in missions free technology. will this be in time to help volkswagen? >> we think we are in time, when in missions really start to get tough in 2021. there will be all of this new technology driven by our ventures in china. we have a high market share in china, 18%. evneed 1.5 million vehicles by 2025, so we will be investing heavily in china.
we will use this model in europe. will makele from ford is even more competitive. amber: that was david westin with the ceos of ford and volkswagen. take a looks at where we stand right now at the close. by dow is up 148 points led dow chemicals. a great session in europe, continuing that in the u.s. the s&p 500 is very happy, above 3000. 3006. we will see if that holds. have a look at g tv . this is bloomberg. ♪
the storm could plow through the heart of the gulf of mexico's oil production operations. 45% of alland natural gas production in the gulf are off-line. nearly 200 production platforms also have been evacuated. barry takesstorm aim at louisiana, volunteers are filling sandbags. the ap reports that in the baton rouge area, volunteer organizers had a goal of building 5000 sandbags in three days and in a day and a half nearly 15,000 sandbags have been filled. the banks are being delivered to the handicapped, veterans, and those who cannot get the sandbags themselves. because of berry, the rolling stones have postponed their new orleans concert which was scheduled for sunday. the their website there the showing