Transcripts For BLOOMBERG Bloomberg Markets Americas 20240713

Tens of thousands of protesters took to the streets in lebanon today to mark independence day. The unprecedented wave of National Protests erupted five weeks ago, leading to the resignation of the Prime Minister on october 29. Protesters waving lebanese flags packed central beirut where music blasted into the night. Deeply divided politicians have yet to agree on a new government the United Nations envoy for yemen says the momentum to end the countrys war is building. Aircraft its points to a nearly 80 drop in airstrikes nationwide in the last two weeks. And a ceasefire in a key port city as reason for optimism. Griffiths told Un Security Council members today that the slowing pet tempo of fighting could signal a move toward peace of the arab worlds poorest country. Global news 24 hours a day, onair, and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Live from bloomberg world headquarters, im vonnie quinn. Live in toronto, im journal workman. Welcome to bloomberg markets. We are joined by our bloomberg and Bnn Bloomberg audiences. Here are the top stories we are following from around the world. The u. S. Fcc prohibiting the use of federal subsidies to buy Telecommunications Equipment made by a pair of Chinese Companies deemed a security threat. How the decision ups the ante in the ongoing trade war. More bad news for the ailing u. S. Shale industry. Banks have begun trimming back redlines of producers, undercutting an industry thats been struggling to rebuild investor confidence. Tesla blotches the unveiling of its ev truck by smashing two windows as elon musk tries to. Reak into a competitive market are seeing the s p 500 desperately trying to finish off the week with a positive session. A few negative sessions this week. The first time in a couple of months we have had three sessions down in a row, so today the snp is trying to hold on. The dow is up a third of a percent. The nasdaq is up 0. 1 . Looking at one of our earnings up 3 , off ofers, session. For the it pleased the street. We know that they are one of those stocks that have one of the most Short Interests outstanding. There would have been a Short Interest today presumably. Session. Now questions about what it does with its pet food decision. As for the retail sector, weve been watching it today. Helped by s p rally nordstrom. It is enjoy one of its best sessions in three months time. Stock andment stores general getting a sigh of relief after coming out with betterthanexpected profit and sales in its latest quarter. Earlier this week, we talked about the challenges for the likes of kohlsafter coming outh and macys, and interesting to watch, Digital Performance outpacing expectations. We will be watching retelling names next week as well. Keeping andrtainly i on u. S. China trade tensions. President trump and president xi seemingly talking past each other as they both push for a phase one trade deal. And i on u. S. China trade tensions. President trump and president rey as a guiding principle in the deal, while President Trump says he does not like that word as it pertains to the trade deal. In the meantime, the fcc is prohibiting the use of buying telik occasions agreement built zte. Awei and lets get the latest now from peter coy. Just this week, you wrote an extensive story about Market Sentiment. It seems like so much of that Market Sentiment is driven by some of these trade headlines. Peter thats right. News like this could put a scare into the market. You mentioned the zte, huawei news, but the bigger news is whether trump will sign the bill passed unanimouslyntioned the i by the senate with only one vote against in the house regarding the hong kong protesters. As you said in your intro correctly, china and the u. S. Are completely talking past one another on this. U. S. , it seems like a clear case, standing up for democracy against tyranny. To the chinese, exactly the opposite. They perceive it as the bullying u. S. Trying to return to an era where western powers subjugated the chinese. Language peng is using like that, saying we want mutual respect, referring back to the time when there were times in shanghai saying no dogs allowed. These are fighting words coming from the chinese president , and he regards this bill as something that is a redline for him. Same time, we same time, we come to a point where it is good for everybody. Xi jinping doesnt have to deal with congress. The president is saying, im inging the credit for calm the situation in hong kong, but i will not sign the bill. It will go back to congress. In the end, everybody can claim a win. Peter that is one way it could turn out. It is certainly true trump has not said whether he would sign this. We will be watching the closely to see what he does. I have a feeling he will not sign it. Then the question becomes what is congressit is certainly trues not said whether he would sign this. Do . There are clearly enough votes to override a president ial veto. You could argue if congress overrode it, trump could say that was not me, you are doing with me. Can we work Something Else . Be an optimistic way. The markets would be happy without outcome. Jon if the president navigates through that part of the story, do,s circle back on zte gear and how that factors into what ultimate goes on here. Today the fcc decision refers to cases where u. S. Companies receive subsidies in the federal government. That tends to be mostly small, rural phone companies. Companies like verizon dont get those subsidies. So it is an incremental measure. Meanwhile, another measure in congress right now that would subsidize those companies to pull some of that huawei or zte gear out of their networks. This is small compared to previous actions against those companies, such as for having them from getting federal contracts, making it hard for them to access american components for their products. Thank you for your time. That is peter coy. Check out his stories on bloomberg businessweek. Meantime, one of President Trumps picks for the Federal Reserve and judicial 10 is challenging the orthodoxy of how u. S. Monetary policy is conducted. She questioned whether the Federal Reserve should be independent of political influence. She shared her views with ubs employees saying i dont see any reference to independence and the legislation that the five the role of the Federal Reserve for the united states. Joining me now is a reporter that broke the story. We will get to judicial 10 in a moment. First the overall question about the mandate of the federal is consideredy it an independent body and has always been treated as such by the executive ranch. Is the is interesting legislation itself, the Humphrey Hawkins act, the Federal Reserve act, does not expressly given independence. When judy is picking up on is language that indicates that the , thend the lawmakers president should all have the same goals for a healthy and happy economy, but what we are seeing is judys comments about the fed not having any guaranteed independence is against the context coming from the president where he has repeatedly attacked the chair of the Federal Reserve who he calling Jerome Powell a bonehead, incompetent, not able to do his job, making mistakes. This is rare for a president to make these kinds of comments. Judy shelton, who trump said in july plans to nominate her for Senate Confirmation to join the board, judicial 10 is saying that the president is making these criticisms so critically and thats all day. Calling Jerome Powell a considering is interesting considering the fed is seen by traders and markets as an independent institution that has control over markets. Has control over markets. Jon you also explore, when you have somebody who is on their way to a position like being a fed board member, what is the general understanding of the language coming out of someone in that kind of situation . In traditional times, you would see a candidate for any job, heading to the senate for vetting and confirmation, which is a strenuous process, a lot of congressional investigators look at ethics requirements, past speeches, jobs, publications by that person. Then of course there is public testimony, when senators can ask questions of that candidate. It is a strenuous process. Usually the tradition is to protect your self and a job you are about to take, protect the process. Go behind a veil what you are not speaking to the public, you are almost unreachable by reporters, you are not on tv, and you are waiting for the process to be completed. We see something different. Judy is not the only one of the president s nominees that has not shied away from speaking publicly. This shelton herself says that it is her way to remain transparent. That is the reason that she continues to engage in an economic dialogue. Jon thank you for sharing some of your reporting, so i have most than from washington. Coming up, more pain for the struggling shale industry in the united states. More details next. This is bloomberg. Jon this is bloomberg markets. Im Jon Erlichman in toronto. Vonnie im vonnie quinn in new york. Talk of a shale slow down reached a steeper pitch this year as investors crushed driller stocks and demand and spending discipline. Struggling with low oil prices, banks are naturally back analyzed to american shale producers. Here to discuss is someone who covers this for Bloomberg News. Explain why there is a lack of credit when it seems like there was ample credit for so long, to the point where credit managers were eating up the stuff. Absolutely. There is almost a fear that has taken over in the market about oil prices. We are seeing Commodity Prices fall and its taking producers done with it in a real sense. It is showing up in their stock performance, bond performance. Now the only route that these crude productions companies have left is to go to these banks and check out the borrowing basis, to try to extend the loan they had to keep them afloat until they are able to recover and get to a point that those Commodity Prices are back where they need to be and these companies are making a profit. Jon you looked at history to see what ultimately happens when these Companies Find themselves in this position and have to go to the banks. What does history tell us about what ultimately happens to these companies in a tougher position . Not a good sign for them. These borrowing the determinations are right in the middle of the season where the banks are renegotiating the credit terms and loans these Energy Companies can take out. Right now, they are not seeing very good things. The last time we saw this happen back in 2016, it was a massive warning shot for these companies. They get their borrowing basis cut, start to see their credit card, if you will, hit lower credit limits, that is when you see a problem. It can also spur a fear of bankruptcies. That is where that fear comes back in. Vonnie fallen angels turning into something worse. What companies are most at risk right now . A big one is chesapeake energy. Earlier this month, they issued a going concern that the lower commodity market is really taking a hit for them, impacting cash flow, impacting their debt performance. When theyis month, issued that concern in the earnings call, we saw their stock limit, bonds took a massive hit. Now they will have trouble bringing those investors back and getting that vote of confidence. Jon we will continue to track the story, thank you. There is a look at chesapeake energy. Teslas ciber truck mishap. Will investors look past it . A lot of attention. This is bloomberg. Jon this is bloomberg markets. Im Jon Erlichman in toronto. Vonnie im vonnie quinn in new york. China used to be a technology laggard but now its a pioneer. Carlyle Group Founder David Rubenstein spoke with a number of tech executives about chinas entrepreneurial strength at the forum. Y for him if i want to invest in Young Technology companies, would i go to china, united states, israel . Yes, all of them. We released a study about where a i was in the global scene. A number of countries leading. No question the u. S. Is the farthest advanced. However, china has a National Minority made code leading in ai a huge priority for their stem related fields. They are producing many more articles, patents, computer scientists. Everyone thinks china will be a leader as well. David david do women have as ga chance to rise up in Technology Companies in china as well as men . Absolutely. You go out of your way to hire women or you dont because they are equally as talented and youll get the crosssection anyway . Women need to get rid of the Glass Ceiling concept. As a corporation, we should create a more friendly environment for women. A lot of them, when they give a lot of them, when they give birth of the we create a work from home environment for them. One technology that i would look forward to is to invest in ar or vr. Thisat you can replicate atmosphere at home, you can have the experience at home. This is emotional. This Bloomberg Forum is emotional. If we could replicate this at home, it empowers the women, and i think solves the problems that we talked about in this for run. When technology can empower a lot of rings, including women, womens careers. David the china dispute with the u. S. On trade, you are probably similar with it. Has it affected you in any way, do you care if it is resolved in the near term, will it affect you one way or another . It has not affected us, per se, but it is kind of dangerous the way it is going. Bethere is really going to , if the countries go farther apart. If you look at technology advancements, all we are talking about is innovation. Innovation really happens when people collaborate. Youif you look at technology do when you look at china, the tech industry, it is really a lot of grassroots entrepreneurs soon all about the market, but at the same time, a lot of engineers and entrepreneurs who have had experience in the states and come back. And the capital which is funding this growth like your very company. A lot of them are associated with the states, bringing experience. This kind of biodiversity is actually very important. Rubensteins david panel at the Bloomberg New Economy Forum. A reminder, the new Economy Forum is run by bloomberg lp. Vonnie elon musk unveiled the new Tesla Cybertruck with stainless steel and armored glass that apparently would not shatter, but have a look at the demo. Well, maybe that was a little too hard. The glass did not fully shatter. How are shareholders reacting . We welcome our automotive reporter from detroit. Chester, is it fair to say that the windows are one thing, but most people are having problems with other parts of this truck, chester yes,lass it surprised him in more than one way, as you noted. The windows being just the start of the dismay on the part of many investors. It pushed the stock down about 6 on the day. There are a lot of questions about exactly what part of the market musk is aiming for with this vehicle. Nichey, it is a more product than many were anticipating, even for an electric powered vehicle. Right now, there are no electric pickups, although there are several automakers working on them. The whole premise of an electric pickup truck and is very radical design has given a lot of investors pause about how successful this canthe whole prc be. Up jon in your story, i love that you get perspective from all over the internet. Ultimately ask the question, who might this product before . What is the early consensus on the enduser, the buyer of a product like this . Chester be. Jon as you noted, the internet, as in the case of many things, has commented all over the place. One interesting element we point out is many in the Gamer Community are actually quite excited about it. Some wall street analysts have said maybe this whole angular design, very nonconformist launch of the vehicle is to appealfinely tuned to a certain segment of the market that wants something that is a breath of fresh air, very different from anything that the detroit three or japanese automakers have out there. And something that could maybe product, something that people can aspire to own. Maybe this will be on the poster of 12yearold boys. Certainly making good headway towards that. Jon weof 12yearold boys. Will see how detroit we ask. Thank you, Chester Dawson with the tesla news overnight. A reminder, bloomberg users can interact with the charts shown using gtv. Chartsresearch recent shown on tv, as well as future charts for analysis. This is bloomberg. Mark im Mark Crumpton with bloombergs first word news. Settled 63 cases related to the october 2018 crash of a 737 max jet phone by indonesias lion air. That represents about half of the lawsuits filed in federal court over the incident. Many of them blame boeing for not giving the pilots advance notice about a new Flight Control system that would repeatedly push the nose of the plane down. No settlement terms of been disclosed. Amazon will likely argue that President Trumps meddling cost the company and government a contract, but in order to win its lawsuit against the pentagon, amazon has to prove white house by us fueled the decision to award a deal up to 10 billion to microsoft. This also means the pentagon will likely have to delay starting a Technology Program for the defense department, calling it critical to its modernization. His president ial bid official in south carolina. He filed paperwork as a candidate for next years democratic primary during a stop in the state today