tv Bloomberg Markets Americas Bloomberg July 17, 2019 1:30pm-2:00pm EDT
recess. pelosi and minority leader chuck onumer pushed back suggestions that congress could rely on a short-term debt ceiling fix that would broaden negotiations -- that let broader negotiations fall through. campaignapped up finance violations tides to michael cohen, suggesting there might not be further charges. prosecutors in new york are probing whether others in the trump organization were involved a finance scheme to pay money to women who had affairs with mr. trump. iran's foreign minister is the united nations gathering that the sanctions against his country by the united states are deliberately targeting innocent civilians. the u.s. reimposed tough sanctions on tehran's oil
exports after withdrawing from the landmark 2015 nuclear deal between iran and several world powers. overall deaths in the united states likely fell last year for the first time in three decades. new preliminary statistics from the centers for disease control been overdose deaths have falling each year since 1990, topping 70,000 in 2017. still, the overdose death rate higher than it was a generation ago. 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. shery: live from bloomberg world
headquarters in new york, i'm shery ahn. amber: and live from toronto, i'm amber kammer, in for amanda lang. shery: here are the stories we are following from around the world. low rates claim another bank victim. mrs., following its pr squeeze by a flat yield curve. now netflix set to report earnings after the bell. how about company will grapple with losing some of its most popular shows and movies to traditional media companies dropping into the streaming game. and elon musk wants to merge human brains with computers by next year. we will have the details on his latest venture. startedet's get you with a quick check of the markets. the s&p 500 falling for a second consecutive session, industrials
leading the decline lower. it is now below the 3000 level. of earningsed bag and lingering trade tensions between the u.s. and china that are dampening sentiment. the dow was also down .2%. the dow transportation average is also seeking to five-month lows, and we follow that index to gauge economic performance around the world. we will get another snapshot in about half an hour when we get the fed beige book. in the meantime, we are getting some numbers out of europe with car sales again dropping. in fact, the biggest drop of the year, when you take up a look -- take a look at the month of june. we could be heading for a second consecutive year of declines, amber. amber: and we have certainly seen that from a number of automakers, who have lamented that very fact. you mentioned a moment ago bank of america -- let's take a look at that bank's stocks.
bank of america managing to trade higher, despite saying what everybody else is saying when it comes to net interest margin. now, that is the quarterly story, but here is a look at the story since early the financial crisis. a look at how the banks have performed relative to the s&p 500. as you can see, they have managed to put in very little in the way about performance. at best, they have been tracking the markets. let's get more insight into bank , allisonseason williams, the senior banking analyst at bloomberg intelligence. we mentioned on the net interest margin, they are talking about what everyone else is talking about, a world of lower rates will hurt their interest income. higher,tock is trading what is there to like this quarter? allison: to your point, bank of america missed their net interest margin for the quarter.
also they talked about how the stock was trading down yesterday , in light of jpmorgan and citigroup and wells fargo, sort of foreshadowing that lowered expectations today. the other thing that is going to differentiate around here is cost. lower are going to have revenue, is there a way to offset that? one of the offsets is going to be continued dollar credit, so maybe that is an offset but not a headwind. we will continue to see that underscore profits, and citigroup is expecting some cost-cutting benefits come through in the second half, jpmorgan and goldman saying they will continue to invest. wells fargo guidance, the high end of cost range, that was a negative due to operational risks and compliance, less , and bank of america
saying today that they were going to basically target costs to come in below last year. they have been targeting about flat. they are saying they are not going to cut tax spending, but they are going to look for other ways. shery: and capital markets ending on a high note, despite the volatility we saw in the last quarter. a mixed bag. what do we see for bank of america? bank of america, fixed income did a little bit better and equities came in light. the positive story for them this quarter was the banking fees, their global banking fees coming in better than estimated. equities, capital markets coming in very strongly, well above. that has been a strong story. equity capital market fees due to the u.s. ipo market, everyone is benefiting from that, but bank of america showing some share gains, and a lot of that
has been repositioning that business and focusing more on the middle-market clients, and getting some benefit there. what are the banks saying about return of capital to shareholders? most of that was done post the fed stress tests, but are they telegraphing what that will look like in the next couple of years? allison: the detail we have gotten around that -- to your point, we got the big news a couple weeks ago, i would say. in terms of detail, it was interesting. goldman saying it is a ceiling, not a floor, and i think that is a way to think about it across the banks, given the uncertain environment. we do not know what earnings will look like or what the opportunities are going to be. i think that could affect the actual payout for some. goldman also saying in their a positive for that company. as far as the other banks, another piece of news we are getting is related to the stress capital buffer.
it relates to a proposal around capital roles, and future payouts for the banks. goldman talking a little bit about where they think they are ratio will come out. they are above that now. bank of america today basically, it is not going to change its hurdle. i think that is a positive. shery: allison, thank you so much for that. allison williams of bloomberg intelligence. up next, netflix said to release its quarter earnings -- second-quarter earnings after the bell. what some investors are looking for in the numbers. this is bloomberg. ♪ berg. ♪
new york. elon musk has unveiled his latest project, implanting patients with electric that would allow them to work commuters with just their mind. founded in 2017 but very secretive, neurolink has just had their first demonstration. ours watch more with reporter, ashlee vance, who demonstration. this sounds very sci-fi. you are talking about cybernetic late enhancing -- cybernetically cybernetically and hang seng human beings -- cybernetically enhancing human beings. there has been a lot of work done in university labs, now you see this startup backed million something,
trying to push this state-of-the-art forward, quite dramatically. the company has only been around since 2017, and the fact that they already have these devices and papers seem pretty impressive. amber: it is one thing to holes into the ground, which is what he does as a company, to asking people to bore holes into their skulls. ashlee: they are claiming they want to start human trials next year. the people doing this are not going to be typical consumers, they are people who are going to be paralyzed and have not really had many other options. olink,ing to neur they want to set up these trials by the end of next year. theourse, the big issue is
fda and whether they would approve something like this. at the moment, they are inserting these electrodes. they have to prove there is a therapeutic use for this and they are safe over the long haul. even though they claim they might start these trials next year, i believe we are many years away from seeing this being a regular technology. shery: i am not a doctor or anything, but if you insert for an object into your body, doesn't your body react and form scar tissue and so forth? how is elon musk trying to do this? ashlee: that is a big issue with these types of implants. state-of-the-art thing is the size of my fist and has the very rigid needles that go in the brain. thaturgery itself, original implanting, there is trauma to the brain. your brain moves a lot and there are heartbeats, and it is pushing back on the device.
what neurolink has done, instead of using these big, rigid needles, they call them threads -- they are essentially wires with electrodes on them. they are the quarter of a thickness of a human hair, and they have developed a technique where you can put this very thin object into the brain by using this robot that has needles at the end of it. it is a technique they have developed with a robot, and these materials, advances with these thin threads, it is making things possible. they are claiming they can use the lenses on the robot to see the veins in your skull and dodge them. they: let's move away from imagery of tiny threads moving through my brain and talk about whether this is a contradiction on the part of elon musk, who once called ai more dangerous than nuclear weapons. now he wants to merge brains to ai. ashlee: this is a hard one to
get your head around, besides neurolink he has also funded open ai, and ai company in the past, and tesla is pushing its ai software very dramatically. then you have this thing coming along. the way elon pitched it at the event last week, ai is probably going to get really good. it is either going to be a benign technology or an evil technology. either way, humans will probably want to keep up with the machines. this is a chance to keep up with the machines, where you become a hybrid type creature. future, people are going to have to make this choice -- do you want to keep up with the machines or stay where you are? i guess that is how he rationalizes it in his head, it is giving people a fighting chance. it is a hard one to square for sure. beat them,ou can't
be them. we will continue to track that story, because it is fascinating, but we will focus on the first of the fangs to report. netflix reporting after the bell today, answering a few key questions for the streaming giant. our customers willing to pay more in an increasingly market?tive our reporter joins us from france -- crampton. i think there is a whole host of existential questions that netflix will be held accountable to when it reports. >> absolutely, amber. this quarter, netflix has kind of telegraphed the message that q2 is going to be somewhat muted in terms of subscriber numbers. lighter seasonality, a number of products we are
dealing with, but that could lead to an elevated level of churn. i think people will move away from the second-quarter numbers and look at forecasts for the third quarter, which just looking at the contemplates for the second half of the year, it is gangbusters. they have all of their big-ticket shows returning, with "stranger things," "orange is the new black," so investors will hone in on the q3 subscriber guidance. gety: because it could trickier for netflix, right? especially when you have disney plus and a whole bunch of other vendors in the market by then. should they be worried? there has been a lot of noise, given the slew of streaming engines that will flood the market in the latter half of the year. the most important one being disney plus. i really think it is not all bad news. netflix has actually been able to a mass 100 50 million
subscribers across the world, and all along it has been dealing with competition. there has been amazon prime, hulu, all of the overseas players in the markets, and it has been able to achieve this dominant status. second, i think a lot of the original content has been resonating well with viewers across the world. they are hit series and they are able to generate a lot of momentum around these series, and that becomes another key to retention. conversely, with all the competition, i think what is going to happen, it will accelerate the whole thesis, which might end up being a net positive, not a net negative for netflix. the shift inlerate streaming away from a linear television platform to streaming, and the key beneficiary there is netflix. at the end of the day, netflix is viewed as the centerpiece of a streaming bundle. amber: right. reporter so much, our
from bloomberg intelligence with the latest. we are now hearing from the world health organization. they are declaring the ebola outbreak a global emergency. we are now hearing from the who, commenting on the conga ebola outbreak, after declaring that outbreak a global emergency. the declaration is meant to help mobilize international aid efforts. and we have another set of breaking news -- we are hearing that colony capital is exploring the sale of colony industrial and its unit that owns warehouses, according to people familiar with the matter. we are hearing that colony capital is exploring the sale of warehouse of their business. colony capital, owned by tom barrack, and this according to sources telling bloomberg that
colony capital in february said it would conduct a strategic review as it attempts to salvage its sinking market value and is now exploring the sale of colony industrial, it's unit that owns warehouses. alphasense thinks it might have a solution for discovering and collecting business data from around the world. they are and ceo joins us. this is bloomberg. ♪
with us.have you your business is something like a google experience. that is how you put it. this is for businesses. explain to us you are pricing model -- your pricing model and who your clients are? clients are from all kinds of businesses, half of the s&p 100 companies are using our product. the largest companies in the world are typically making big decisions in their businesses, so they need the best intelligence and insight driving that. amber: give us an example of a query that a company might have that alphasense would be able to get the answer to better than other products out there? let's say if you are a pharmaceutical company launching a new product and you want to understand what are the existing products in the market and what will be the lay of the land? in a couple of years, you would be searching for other products, other companies that
talk about the same illness and not just companies, but understanding globally who is talking about this and understanding who is coming into the market, what is coming out of the trials, other international regulators. really trying to get a global picture of all the information that really drives, ultimately, your decision on betting on that product. shery: the research market has been changing. it is becoming obsolete, changing investing, you have more reliance on ai. how is this changing the macro changes? say there are certainly big trends in the market happening, but we are actually enabling on the mental research. we are augmenting analysts, providing them ai that helps them really gather information at a much higher pace and higher accuracy so they can actually
compete with passive investing etf's and the fierce competition in the market. so we are really meeting them with technology. millionhat does a $50 investment get you? jack: at this stage, on investment like that goes heavily into scaling a company and a dressing market demand. what i am really excited about is investing in the technology and doubling down on ai. there are a lot of exciting things we have done, but our vision still leaves us a lot to do over the coming years. we are investing in expanding our technology team and betting heavily on using ai to remap all the billions of data points out there that companies care about and need to drive their decision-making, adding more and more intelligence to help them get more accurate results and more precise alerts, when they need the information. shery: the technological innovation is not only affecting your business, but the whole market research environment.
tell us a little bit about the current situation. jack: currently, the situation is not that different from when i was an analyst at morgan researchnd doing this a very manual way. print out a big pile of paper, documents, control+f search documents a line at a time. walk that into a client board meeting and help a director feel like i have things they need to know. amber: all right, jack, thank you for your insight. jack kokko from alphasense. from new york and toronto, this is bloomberg. ♪ ♪
we have had a rally across the bond market, that kick started in germany,. balloons are rallying. 1%,dollar is off by 2/10 of new home construction falling for the second month in june, meaning the fed could cut and could cut further. the s&p 500 down by a quarter of 1%. facebook headlines are breaking. scarlet: a number of headlines, but the fed basically says the u.s. economy is moving along and the outlook is fairly positive. the u.s. economy extended at a modest pace with a job gains slowing somewhat into inflation is stable or slightly weaker. the outlook generally was positive for the coming months with expectations of continued modest growth, despite concerns about the possible negative impact of trade related uncertainties. again, going back to the ideas of moderate, modest, steady commute do not get a sea change in this report. caroline: we did not get much a ns