Transcripts For BLOOMBERG Bloomberg Markets 20160511 : compa

The sun is in talks to take control of Mitsubishi Motors nissan is in talks to take control of Mitsubishi Motors. Looking at the share price, it is down 1 but there is no indication it is really moving given that volume is not really heavy. 14000 and 104 shares. Is the share price of nissan pus american depository receipts. Americansans depository receipts. We will continue to monitor this as the news continues but we want to get more from Ramy Inocencio. Ramy taking a look at the major markets and how things are react in, not much here in terms of those headlights headlines. Across the board, we are in the red, the dow is down the most by about two thirds of 1 . This is off the back of what happen yesterday when we saw the best game in the markets in the past two months. Today, corporate earnings is one of the big ways. 90 of the s p equities have reported and in terms of earnings growth, it is actually negative on that sense, down 8. 7 year on year. Ratel concerns are another. I want to show you this about volume. This is the svs function. Volume is almost lower across the board except for a little bit of an uptick in utilities. Look all the way over here to your righthand side. 69 and this is what is happening in consumer retail. Basicallyetail getting a huge bump in volume, a lot of this in terms of cells because some of the worst macys,rs include michael kors. 10 of the worst performers are in retail. Lets look at the s p intraday. We are at the mercy of earnings, and earlier earnings we can see this drop off when the markets opened. We are also at the mercy of oil. We saw oil headlights cross when we saw that unexpected decline in oil and we saw oil rise, bringing up the energy prices. Here we are back down. Basically retail is the main theme of the day. Alix following those pretty disastrous macys results and outlook. Mark crumpton is in the newsroom. House Speaker paul ryan is scheduled to meet in washington with the presumptive president ial nominee, donald trump. Stunned the gop when he said he was not ready to endorse mr. Trump. Here is what he had to say. This election is too important to go into the election at half strength. That means we need a real unification of our party. Mark he was then asked about his interactions with donald trump. I let him once in person and 2012. We had a good conversation in and i would rather have a conversation in person than through the media, no offense. Mark p also described the butary season as bruising called the gop the big ten party. A deadly day in baghdad where a series of bombings has left 93 people dead. A car bombing hit an outdoor market insiders city followed by and anothermbing. Argeting a Police Station Islamic State has claimed responsibility for all three attacks which has left at least 165 people wounded. The Justice Department will not the the Death Penalty for benghazi. Federal prosecutors offered no explanation for their decision. In brazil, the senate may decide whether it marks the end of the line or president Dilma Rousseff. Prosecutors are debating an impeachment resolution. They give their approval she would be required to step down. She is accused of illegally tapping banks to hide budget deficits. Global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. I am mark crumpton. Scarlet we are keeping our close eyes on brazil given that the senate will be holding its Impeachment Vote later today. This could be a Dilma Rousseffs last day in office as president. Alix the big question in the emerging market community, does this rally continue if Dilma Rousseff is voted sidelined for the next 180 days. It has been trading in a range from 2013 to 2014, and then you saw the bottom dropped out. When the political crisis intensified. It closed at its lowest level in january since 2009. Then you have this incredible sharp recovery. As the impeachment speculation coincided with the dollar weakening and oil prices stabilizing. You have a calm her macro environment to support this rally. Alix a similar story with the radel. This is the dollar versus the riel. The dollar is strengthening and the realities weakening. Riel. Y rally within the if you see a transition of government, perhaps the new government will be able to cut rates that will help stimulate the economy and help growth. That has been behind this rally. Scarlet lets get more on the ground perspective from anna edgerton. What is going to happen today exactly . We know there is a vote scheduled for 7 00 p. M. Local time but a lot of things have happened in the past couple of days to throw it into disarray. Anna the senate is already holding the session that is going to end with the vote on office. Rousseff from the Supreme Court did not accept the challenge that the attorney general had filed yesterday. Alix the attorney was trying to get the Impeachment Vote on old. An old. Annulled. There is a simple majority and it will go through. That means she would be sidelined 480 days. What happens tomorrow . Anna the expectation is that formallywill be notified of the decision and the Vice President will step in. He wants to name his cabinet as soon as possible so as soon as he is able to do so, he is going to name his ministers. Scarlet has he indicated what he is likely to do first once he points his cabinet . Bea his focus is going to trying to get the budget under control, and he is probably going to name a central formal a former central bank had as his advisor. He will also be able to choose the central bank president. Alix your group had a note out saying if the impeachment does go through, theres a 25 chance er himself will not finish the term and there is a 20 chance that he will be implicated. Have you heard something along these lines . Anna we have spoken with people involved in the car wash investigation and they say that the evidence against temer himself is not very strong, and it is unlikely that he himself will be personally investigated. His party however, is deeply involved in the scandal. The days leading up to the vote had been pretty tense. What are you seeing on the street . Is there a prospect of violence if the vote goes one way or another . Anna it is much more calm than it was last month. Last month, there were people in the streets and today it is empty. There is no one on the street and the rest of the country, some labor groups have said they will block streets, start strikes, but i do not think it will be widespread. We have seen anything the last couple of days, anything could happen. Anna edgerton in brazil. Alix more coming up on Bloomberg Markets. Alix you are watching Bloomberg Markets. I am alix steel. Scarlet i am scarlet fu. Lets stay with brazil. Alex joining us now is moromcew. At 7 01 tonight does the rally continue . So, and that is because the Vice President will have a narrow window to enact legislation and ken address some of the structural problems and can address some of the structural problems. Scarlet at the end of the day, isnt there a lot of doubt about his ability to continue his term because he can get implicated in the car wash scandal as well . To look atirst thing is who he appoints to his economic team. That will send a very strong signal to the markets. I will also caution that he has to be reelected in 2018. He has to keep the populace support. Alix could you make the priced tohat it is perfection . There is a lot of room for that not to happen. Alex i think there is room for more. Alix how much more . Alex i cannot give you an exact number but if you show action and show that he is addressing these problems, that will give people confidence. There are a lot of Fund Managers who are still underweight resell. They have been sitting underweight brazil. They have been sitting on the sidelines, so i think we have a rally but sooner or later there will be a reality check. Scarlet what about your position, and what will you be doing tomorrow . Alex i have been country neutral as a way to balance out the volatility because we were have some of these 4 swings to the plus or minus and i thought, if i could eliminate that from the portfolio that is a big positive. When i have been doing in the Stock Selection is going more , because i high beta think there is an upside. Tomorrow morning at 8 00 a. M. , are you going to be buying . Do you shy away from the volatility . Alex i have already bought so im hoping to ride the rally. One of the bugaboos and brazil is inflation and inflation is coming down. Of course the strong rail helps so is there so there is scope for the Central Banks to cut Interest Rates. Scarlet that could be a catalyst, but when it comes to companies fundamentals matter. How much can they gain traction in improving their fundamentals when you have a government that is completely distracted by a problem of their own making . This is why we try to look for companies that would do well despite what is going on in brazil, who are not dependent on regulatory change. , a credity is clo card merchant firm. You think if the economy is weakening, retail sales weakening, that they would be doing poorly. They continue to execute well. Another is a private education program. Schools remain of mixed quality so there is a call for private education in brazil. Scarlet and that does not change if Dilma Rousseff is president or not . If we do want Stronger Economic data in the u. S. , what does that do to offset the brazil rally . Alex brazil benefits more from a weaker dollar and a stronger dollar but i would think people would be more focused on what is going on internally them looking at a global macro. Scarlet the gains have enough foundation they can stand on their own even if the dollar starts rallying . Alex i think so. Scarlet global manager at tiaa global asset management. Alix making the Business Case for lgbt inclusion. We will speak with kathleen anelius who is working with organization to make that case. Scarlet this is Bloomberg Markets. I am scarlet fu. Alix we are going to turn to the Business Case for lgbt inclusion. There has been huge fallout from a North Carolina law. School, oro ucla law than 60 million in business has been pulled on the state and this week, lgbt advocates are discussing this issue in new york. Scarlet joining us is Kathleen Sebelius, former head of the health and human services. We want to start with you, todd, because you guys are in town for the sixth annual out conference. Mentioned is pretty large in terms of potential income lost. Todd the Williams Institute partnered on this research and there are a couple of key components. It is about 4. 8 billion, and it is federal. It is the dollars the government gives to North Carolina that they are risking. 60 million level, has been lost and 35 million are in jeopardy. In the 46 days since this law has passed is about and 84,000 dollars loss every day. Alix are there other cases where you have states who have done something similar in passing a discriminatory law . What is the lasting Economic Impact . Todd it goes not just from the businesses but from the talent, and what we are seeing from the state it is very scary. Almost 10 of youth in North Carolina identify as lgbt and 40 are contemplating suicide or have contemplated suicide in the last 12 months. It is not just the dollars and cents that make an impact but it is the talent and citizens of North Carolina that he is putting at risk. Former governor, the reputation of your state is very important so Business Leaders who look to locate a new call center, who are looking across the country for an environmentally sound place to do business, do people want to live here, what is the overall atmosphere . This could have a huge negative impact. We heard about how Deutsche Bank has pulled back from the state and other companies are likely to do the same. There is a different the difference in the leverage that Multinational Companies have as opposed to local businesses. Todd many local businesses have stepped up to say this law is bad for them. The Williams Institute looked at 34 out of 100 counties in North Carolina get more than 1000 jobs from tourism. Residents say this impacted negatively the reputation of their state. Kathleen coming out of kansas, North Carolina is the best in line. Sports organizations are very leery of any overt discrimination. They will be very leery about this kind of reputation, so it can have an impact up and down the line. Hence choosing to go to college in a different place, workers choosing to live in a different atmosphere. I think the impact could be on business, on students, on reputation, and on tourism, and that is huge. Alix we have to ask about the Affordable Health care act. We have learned some things, a foreigners insurers are pulling out of some states and premiums will go up. With those things in mind, can you say the aca is still a success . Kathleen i think it is absolutely a success. About 20 Million People have coverage that did not have it when the law went into effect. The lowest uninsured number ever in this country. They arests, while rising, are rising at the lowest level in 50 years. The new markets are fairly fragile, no question about it. Insurers are moving in and out. One said they were pulling out of a couple of different markets. Other insurers led by anthem say they are actually expanding their marketplaces so i think you will see some push and pull over the next couple of years, but i think the law is working to provide access, provide coverage, and keeping costs at an alltime low. Scarlet donald trump has already said he would repeal the Affordable Care act. If you were to advise the democratic candidate, how would you suggest they improve or change the Affordable Care act . Kathleen stabilizing these marketplaces is a big thing. About wheredebate the subsidy level should be, how far it should go, are really legitimate issues that could be tackled that frankly, in the six years since the president signed this law there has never been a congress willing to work on improvements. I look forward to that day with the democratic president. Alix Kathleen Sebelius and todd sears. Withet we will be back more Bloomberg Markets, including our mystery stock. Scarlet here is the church and here are the clues. A fashion faux pas. Alix macys . The gap was yesterdays news. Passage of time hasnt been very kind. There you go, fossil. Scarlet again . We talked about it in yesterdays afterhours trading. Ramy stocks are falling hard. We are down 20 . We can see this really fast drop in the past day or so because of withhas been happening what is basically a slowdown for fossil. The stock is down 27 . It had been down as low as 34 , clawing back a little bit of the stock aired but this is its biggest fall in five months. First quarter eps missed estimates. And the secondquarter guidance to 1. 80. Other watch retailers are also falling. Movado group group down 10 . Time versus may be technology kind of thing, especially with the rise of the apple watch. Scarlet my kid doesnt wear a watch at all. Lets get to bloombergs first word news. Has donald trump says he narrowed his list for a potential running mate to five or six people. Publiclso against taking money to fund his campaign. The Senate Measure aiming to undermine the obama deal with iran. Heavy water isnt radioactive, but it has research and medical applications and can be used to produce weapons grade plutonium. Sayseat from a top aide there will be a surge from turkey to europe. Dealy was offered a visa in return for agreeing to take back refugees. Alix lets go to las vegas where the sky bridge alternative conference is underway. David weston has an exclusive austan goolsbee. David thank you. Thank you for being with us. This is my first question. We hear these fed presence coming out almost every day saying dont rule out june. We might hike. But markets will have none of it. View, the fed kind of ,stablished this fantasyland but a credible fantasyland in which, for 30 quarters in a row, theyve been saying next year conditions will be really strong and we are going to raise. And then the data comes in and it is not that strong. And they say, well, we wont raise yet. We will wait until next quarter with the forecast says we will be great and we will raise. Now we are back on that cycle. David you advise the new york fed. In a way, the new york fed has been better than the board offeds are the governors. I think it is because the fed is not alone in this. I think it is mostly the forecasting models are fundamentally about reversion to we predict the future will look like the past saying ind they are the model implicitly, when house prices go up, the data from the 2000s tells us that people spend Housing Starts will skyrocket and the economy will come booming back. 2006 is thepened in thing that is abnormal, not now being the thing that is abnormal. David if you are running a company and you had a model that was running the norm the wrong numbers, would you change the model . Austan the job of forec