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tv   Bloomberg Markets Americas  Bloomberg  August 8, 2019 1:30pm-2:00pm EDT

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charleston, south carolina. >> it may be true that the law cannot change the heart. it can restrain the heartless. and we the power to act can act to legislate safety even if we cannot legislate love. we must act to prevent people who should not have guns from getting them. >> senator booker made his where ninea church bible study participants were shot to death in a 2015 racist attack. dozens of immigrant workers have been released after being detained in the largest immigration raid in a decade in the united states. immigrations and customs enforcement officials arrested 680 people yesterday at a foods facility 40 miles from jackson, mississippi. cutting down trees is making the
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world hotter and hungrier rid that is according to a you and report on climate change that raises the issue of food security. the report does not pinpoint any country but when they were asked, scientists mentioned brazil's recent deforestation of the amazon. wasie wechsler says she deceived by jeffrey epstein. she accuses epstein of misappropriating vast sums of money from him and his family. epstein has been jailed on charges of sexual trafficking. he says he was in the dark about epstein's alleged wrongdoing. 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. ♪
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ahn.m shery >> i'm amanda lang. we are now joined by our bloomberg audiences. here are the top stories we are following. signs of stability from the chinese central bank. calming markets with a stronger-than-expected fix for the yuan. of ridesharing giants. shares of uber are up. the u.k. is set to report second-quarter gdp tomorrow with economists expecting a slowdown is brexit headlands grow. let's get started with a quick check of the markets. we continue to see strong momentum with u.s. stocks jumping the most in two months. the s&p 500 about to embrace its
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weekly loss. every sector is in the green. the nasdaq is gaining for the third consecutive session. sentiment around china and what it is doing with you on setting a stronger-than-expected fixing for the currency giving investors confidence that there may be some stabilization in the chinese yuan. we are seeing 30 year yields rising for a second session. this is after it fell near record lows earlier in the week. given where rates are at the moment, we have seen a strong focus on that the 30 year bond option. the u.s. transit -- treasury sold bonds at 2.335%. the ratio coming in at 2.24. this was just have an hour ago. the key for everyone is watching the markets to see investor
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demand gauging their demand at such low yield. thatand analysts saying given where the focus was, the auction was pretty reasonable given that the market has to underwrite this issuance at a much higher valuation. out as anon stands extremely high relative to many a quarter of the credit globally now negative. happy to go higher than 14 trillion, you can. look inside the terminal at the amount of negative yielding debt. wes is barclays global and continue to climb on the negative side. saying the u.s. could wind up being negative as well. that's one to watch. we are also watching currencies. the you wanted steady today as people's bank of china set the daily fix stronger-than-expected.
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with us now is our emerging market strategist. in some ways the currency wars will go on despite what china does. >> i don't think they are over by any stretch of the imagination. if you look at basis, i am talking onshore, offshore china you want basis. unit emotionally -- initially mushroomed on friday. it is come back down to the 200s but it is still one standard deviation of the five-year -- five-year average. you should take that in conjunction with what's going on in the rest of the world. in conjunction with the trade data that was not very good. it was better than expected but you are seeing the pivot on the
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part of china exports away from the u.s. toward the eu. imports continuing to fall out so there is still some risk of their. >> let's talk about the risks for china. even the weakness of the yuan, there is also risk of capital outflows. at the same time, it would help their economy but they don't want the weaker yuan that would provoke the u.s.. how big of a challenge is this? they announced some interesting things. they are going to reevaluate the 2015 suggestions about open in the financial markets. opening their futures market and allowing bearish bets on local rates and equities and allowing people to put those bets on. that is unprecedented in china. the verdict is still out whether or not they pass that legislation. they have already taken a step in that direction. china needs to draw on offshore creditors and the key
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thing here is dollar you want stability. they need to maintain stability that is the focus. if today's focus goes along way toward them doing that, it's a step in the right direction. where does that leave other emerging markets? the strong u.s. dollar is going to heaven influence. what is your input -- what is your outlook on other pms? >> the philippines cut rates last night by 25 basis points. we have peru on the books tomorrow. there is no change expected but i do believe you are going to see more emerging market country banks trying to stimulate growth by cutting rates. the secret here and it speaks to your chart of negative yielding debt, it is very difficult to ease financial conditions with yields are so low. it dozens the move. -- devens the move. that's what emerging markets need.
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>> the company is still forecasting and net loss this year. it says higher fares may help a trend the shortfall. another rideshare giant, uber is set to release their earnings after the l. joining us to look about this is an industry analyst. let's get started with lyft. how much did this help clear the path to profitability for the company? i don't know that helped clear the path toward profitability but i do think the results last night was a good starting step toward showing investors that there is a path
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out there toward profitability. we continue to believe we are going to see breakeven numbers closer to three years out. what is more important investors out there is to start seeing some progress on the margin side of things. -- i think the q2 results think a great number that came out on the second-quarter results was the improvement that the had shown in terms of marketing and promotional side of things. lift bank -- lyft is managing expenses. one of the concerns is that lyft and uber will engage in a race to the bottom. is that the end of the race to the bottom and them undercutting each other?
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near the very least in the to intermediate term, that is the case. we have seen some stabilization on the pricing side. lyft pointed towards increasing prices at the end of the second quarter in certain markets and regions of the country. we will see that followthrough in the second half of this year. i think you are going to hear similar commentary coming out of uber in terms of the u.s. market. i think it could be a little bit different as they start speaking about other markets outside of the u.s. from a u.s. perspective which is their core market, it think you will hear a lot of the same commentary that you got out of lyft. >> a slight deceleration for uber in the second quarter, is it inevitable? there are tough comparisons. think also you have a law of numbers here as far as that
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is concerned. over time, you would expect to see a deceleration from both businesses. that being said, all eyes probably for over bank -- uber -- can they start making headway and show some signs of improvement? one important indicator to look out for is the contribution and that isber essentially the profit margin excluding a lot of the nondirect cost. we do think they are going to point towards improvement in the second half of the year with the potential for positive contribution margin in 2020. >> you are positive about uber and lyft in general. >> we have by recommendations on both names. that being said, there are enormous risks out there. the biggest risk has to be the competitive side of things. the competitive pressures.
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viewed as a friend of may. the company like lyft is utilizing technology to get into autonomous cars but they are still a competitor. the other big risk out there is the regulatory environment. that stems from a number of regions but at the end of the day, we don't have a regulatory framework in the u.s. in terms of autonomous cars which we think is the final destination for these companies. thank you. will business from under boris johnson or will his tough brexit stance way our
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markets? meanwhile, oaktree capital cofounders is the fed was run to cut rates. >> the process of lowering rates causes assets to inflate so there will be more wealth piled up by the people who have assets and it will be harder for people who just have a little bit of savings to get a return. ♪
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>> this is bloomberg markets. i'm amanda lang. many have compared orest johnson to donald trump.
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says futurest relationships between the u.s. and the u.k. is going to top the agenda for boris johnson's administration. welcome duncan edwards to discuss this. let's talk about a no deal brexit. we just heard from boris johnson himself talking to media a few moments ago saying that he is urging the eu to show common sense and is confident the eu will show flexibility. how serious do you think he is to push ahead with a no deal brexit? how worried are the businesses you represent? >> none of our members would have voted in favor of the u.k. leaving the eu. this is not a positive for businesses. that said, i think the chances of the u.k. leaving without a
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deal are clearly much higher than they were. we hope that an agreement can be thehed and some version of withdrawal agreement that was negotiated still gets past. less --it is less than less and less likely. >> what preparations are you making? >> the financial services industry was forced to make no deal preparations and term for the -- in time for the march 29 the deadline. for a lot of large companies, the effect of brexit has already happened. the key part is manufacturing businesses. people who have complex supply chains across europe. smes are really struggling. they don't have the resources for planning or changing their supply chains. most large companies have all done their preparation and it will be ready on october 31. u.s., both canada and the
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there is an opportunity in brexit to reinforce trade with the u.k.. we haven't anti-trade environment going on right now. are you optimistic that is a path you will go down question mark >> there is a huge propensity or the u.k. government towards relationships with canada and with the usa question. you've seen to senior cabinet members are in the united states is weak. we will bring a delegation of our members to talk with tomorrow morning. there is a huge focus on the u.k. government to embrace what is coming out of the white house toward a potential deal post-brexit. it is difficult to get it done of course. hearing the air
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messages of warmth and optimism, will they say that a trade war is not good for anybody? asked i think they will. there is no question that the johnson administration comes from a treat -- free trade tradition. there will be a continuing dialogue with the u.s. toernment about the desire remove the tariffs and not escalate a trade war. it doesn't help anyone. outside of a formal trade agreement? what are they opportunities for businesses? you can see the time it has taken even for usmca or the disasters around the bp. -- tpp. we really encourage regulators to regulate discussions things at thealifications
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outset, we have a good relationship. trade between the u.s. and u.k. is already extremely positive. there are few restrictions on companies doing business in the other countries. if this is going to make it better. there are not massive problems to solve. to do it quickly will be very hard. businesses our u.k. and americans hoping for a long tenure for boris johnson? is he seen as a business? >> he is definitely seen as pro-business. support aey would conservative administration over the alternative. i expect to see what's we get past october 31 if it gets past october 31 a set of expansionist policies, tax cuts, and greater spending and i think they
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certainly look to the u.s. over the last couple years that maybe there are some things that can be done in the u.k. to replicate what has been a successful performance here. thank you so much. up, and rough welcome for kraft heinz new ceo. the report earnings for the first time since he took the reins. the result list shares to a record low. that's coming up next. this is bloomberg. ♪
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>> this is bloomberg markets. kraft heinz is feeling the heat from wall street. the company plunging at one point today nearly 16% to a record low after reporting earnings are the first time since february. the results were disappointing. it's a rough welcome for the new ceo of said the level of
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declined we experienced in the first half of this year is nothing we should find acceptable been forward. our customer reporter is here with the story. how justified is this plunge in the stock? wasn't that bad? ask the numbers were not good. the expectation was that they would not be good. we have had problems in the business, accounting problems. this was delayed for a long time to get these results are it some of the comments on the call, the ceo people that their guidance out there and said we are not confident enough to give guidance right now. it looks like the stock was going to be down 2% or 3% then the call started and it really started tanking. question -- ise this a sign that the cutting was too much? >> that has been a conversation
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since february. there are definitely problems here. the biggest challenge for them is that they are in a tough place as far as an acquisition. february 2017, they tried to bite unilever. that would have allowed them to cut costs which is what they do best rather than building brands. with the debt they have in the stock where it is, it will be hard to do another deal and that leaves the ceo to get these brands growing. when you look at their brands, there is a lot out of step with where the consumer is. >> where does that leave berkshire hathaway? >> warren buffett has come short of saying he made a mistake and he has basically said they overpaid which is a stunning admission from warren buffett and the guys that 3g. there is no sign he is going to sell out but he is obviously not happy with the performance. >> how much shaking that has to
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go on when you think of the makeup of the foods and the supply chain? what are they have to do to reassure investors? >> the big food companies, they are not nimble. they are supertankers and they make it difficult to adjust to consumer trends and change faster than they ever have with social media and bad diets and everything that goes on these days rid this is a company not set up to innovate on food. it was set up, they took heinz profit and they got the expenses down. at the same thing with craft. they want to do this again and that is the thing that stopped them. as far as growing the brand, that will be the challenge. >> thank you for joining us. from toronto and new york, this is bloomberg. ♪
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at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity.
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♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond. mark: i'm mark crumpton with first word news. italian bonds declined after a report that deputy prime minister matteo salvini has threatened to bring down the
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government unless his demands for changes in the cabinet are met. the deputy prime minister has called for the finance minister to be replaced. president trump has said he is "very strongly considering" commuting the sentence of former illinois governor rod blagojevich, who is serving a 14 year prison term on multiple corruption charges. corruption convictions. president trump said he was considering a commutation for blagojevich, who then filed paperwork requesting it. the president told reporters aboard air force one last night that he thought blagojevich, a democrat, had been treated "unbelievably unfairly." in hong kong, pro-democracy protesters plan to hold a demonstration in the international airport. there was a warning for protesters at a press conference earlier. stageany protester will protests at the airport, i hope they will be peaceful and law-abiding.

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