tv Bloomberg Markets Bloomberg January 19, 2016 11:00am-12:01pm EST
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london as we wrap up the trading session in the next hour. mark, we are watching this big rally. mark: european stocks at the biggest jump in a month after china data raises prospects for further stimulus. the european close starts right now. ♪ betty: we will take you from new york to london in the next hour and are, he kicks things off for us. mark: biggest increase for the stock in a month after dropping to the lowest in over a year on monday,'s china stimulus talk is track gain today, helping the price of metal as glencore. interesting to see gold down. energy companies are tracking
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the price of oil. it's not every day we talk about the danish stock market. look at the big recliner in -- the, no bo xilai and world's biggest supplier of end -- enzyme, abandoning its target amid weaker sales to the bio ethanol industry. i want to show you what happened and is happening to shares of unilever. 2 billion consumers around the world use its products, daily. that is a lot of product and a lot of consumers. 2.6%, beating estimates. soap, ice cream, hellmann's, linkedin, you know -- lipton- lifting t,
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tea, you know them all. who a lot ofe people paid attention to was the bank of england director and his comments. mark: the pound is down to its lowest level since 2009. mark carney basically said now was not the time to raise interest rates. he cited the world being weak and set u.k. growth is slowed. the oil price collapse, inflation had fallen further and will remain very low for longer. he made those comments on the day that consumer prices on a headline basis rose by .2%, a far cry from the medium-term goal of 2%. by 1.4%, creeping up and as we know from governor carney's interview with our very , hisditor in chief
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preferred inflation gauge right now is the core inflation measure, so that is ticking up at the headline rate because of lower oil prices. one factor is keeping it way off the bank of england's target and that means investors are not pricing in a rate hike according to a morgan stanley measure. for a ratet looking hike until the middle of 2070. -- 2017. u.s.: i'm watching the markets and one chart in particular that has our index, this the s&p charts it back from 1995 and if you take a look at our it looks relatively small compared to the big corrections we had back in 2008 burst --the.com bubble when the .com bubble burst.
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if we get below that moving average, compared to the historical declines we've seen, 40% ifd be down 30% or that technical analysis proves right. the meantime, we are about 90 minutes into the trading session, so we are keeping our eye on the movement right now. we have the latest on how the markets are treating. ramy: let's take a look at where the majors are trading and we are off of our session highs. this is the 500 and the dow up by a little bit more than 6/10 of a percent and the nasdaq up by not too much far -- not to far behind. 10 sectors of the s&p and earlier today, all of these sectors were all in the green. we have turned slightly negative with materials as well as energy. no surprise that this is the biggest liger because if you take a look at wti crude, that
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is where that lack is happening. let's bring that up and see where crude is right now. it is down by about nearly 1%. we did see it hit a low, just in the and a clock hour -- 10:00 hour. this was its lowest level since october of 2013. earlier set of the world is drowning in oil and says that iran could add as much as 600,000 or more barrels by the end of this year. going back to my terminal, i want to show you another grab, this is a graph of what is happening with wti crude as well as the next np. -- x np. the s&p is 1891, we can see generally speaking over the course of today, we can see the down and the ups and here we are
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what happensown, with oil is what happens with s&p, for the most part. betty: as marc was talking about this whole rally around the world, give us some perspective on that. ramy: basically, what happens with china is the negative as we have been talking about, right now we have been hearing that what's happening in china in terms of what order gdp growth came in at its lowest in 2009 as well as for its fiscal year since for its lowest 1990, but with that said, stocks are climbing because of expectations that there might be some stimulus coming out of the china -- the -- coming out of beijing. up three and a quarter percent and the dax up about 1.4%. some of these safe havens are losing a little bit of their luster. gold futures are down by about vicksf a percent and the
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3.2%, breaking a two day winning streak. betty: thank you. we will check it on the bloomberg first word news -- check in on the bloomberg first word news. vonnie: the supreme court has refused to take on too that take on a new constitutional challenge to obamacare. the claim that administration used flawlessly the procedures to pass the measure. did agree to -- a federal appeals court said president overstepped his authority by deferring deportation for up to 5 billion undocumented immigrants. the plan is being challenged by texas and 25 other states. netherlands, protests
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were battles, unhappy about the centers to house refugees. the protesters threw eggs and fireworks at police. china is flexing its diplomatic clout one of the world's most volatile regions. --na's president around arrived in saudi arabia, the first up of a trip that will take into iran and egypt. he is trying to protect chinese influence buildup in iran during the country's long isolation. the trip may also show that china is taking a more hands on role in syria's civil war. guitarist glenn frey of the eagles has died. he founded the group in 1971. the eagles had four consecutive number one albums and five and one singles. the group broke up in 1980 in cap i together in 1994 and became one of the most successful touring acts ever.
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he died of complications from pneumonia and ulcerative colitis. day.l news 24 hours a let's get back to the global economy and mark, we have heard from top investors about the state of play in china following that data. mark: the stakes are high for china, it is not just the country's credibility. -- if you lookt 2015, we are continuously on a global basis lowered growth estimates and i think 2016, the minimum we can say -- -- led by hundreds of all the ground researchers that provide real-time economic data and customized -- thank you very
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much for joining us today. it has become fashionable to dismiss the official data. what is your data on the ground telling us and how does it differ from the official data? is we first thing we do don't offer a gdp number, we think it is a bad lens to -- it is not effective growth, even if the number was real. we saw significant weakening in the fourth quarter and 2015 was the weakest data we have seen in the history of the survey from a growth perspective, the inflation data was week, we are not seeing this tepid showing. betty: does the fact that the economy lost the mountain at the end of 2015 tell us anything? trend, itner is not a may be the beginning of a story, it may not be, but the story for the last two years has been that you have a slowdown with --bility and the slowdown
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the stability part of that, a labor market that was relatively picturet, and inflation that is relatively beneficial despite the exhilaration and growth, we do not see those factors in the fourth quarter. betty: does that mean it is inevitable that we will see more stimulus out of china and if we do, let's help? -- will it help? >> we will continue to get stimulus from china, the question is, what kind? people used to talk about monetary policy stimulus, but it does not do what it's supposed. to. china rates go down every quarter. monetary policy stimulus is not working. on the fiscal side, there is never been an example where fiscal policy has been used in china to change the dynamic of the country. 2010 was essentially fiscal policy stimulus so this is a great experiment at this point. betty: some believe that china
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continues to experiment with their currency and one of them is gary who was on this morning and said that china is devaluing their currency. china is trying to devalue, they don't want to do it explicitly, so they are doing what greece did, eternal -- internal the violation. they are knocking down prices and wages to make their exports cheaper. betty: do you agree? >> i think we are seeing aspects of that. the chinese will have a lot of pressure to try to blow off steam, not keep up with the stronger appreciation of the dollar. for the other hand, that evaluation -- the one off, 10%, 50% devaluation is wrong. things are happening, just not astronomically. the agenda working out?
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i know the economy remains on any imbalanced international comparison, a historical interest --. comparison. what progress are they making towards this shift? categorize it as two steps forward, two steps back. you see things that are helpful to rebalancing, keeping the currency stronger is one way. this theme of two-tier economies becomes so popular, manufacturing is weak but services is strong, that did not happen in the fourth quarter. going on, balancing but both aspects are weak, rather than what is picking up the slack. betty: thank you for joining us. stay with us. ♪
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>> something relatively big has helpppen soon and perhaps worldwide markets to take the issue behind us. >> we are in for a little bit of stability, but the general trend is still for a slowdown in the economy as they rebalance and a weaker exchange rate and a concern about an export of deflation into the asia from the rest of the world. >> as far as china is concerned, i think there is a problem, there it real risk of overheating -- they are at real risk of overheating. leyland, and a lot of disparate views on where china is heading. is if the number one story in 2016 as it has been for the weeks?ouple of
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>> it will dictate what effect does, even though they won't admit that. it will dictate how asia does and how emerging markets do. everybody has to have a better read on china and it's difficult to do when government publishes data that nobody believes is accurate. betty: where you think growth really is? >> i would start with a disclaimer that we don't believe i wouldut that said, say about 4.5%, maybe 4%, nowhere near the official numbers. this isn't exactly your area, but we were showing pictures earlier of the president and his interaction with middle east leaders. he is in saudi arabia meeting gulfhis golf partners -- partners. think he hopes to
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accomplish and how might that affect china's economy and china in the oil market? >> this does tie very tightly into the economic picture. for a long time, the chinese leaders promised to the leader -- to the people was to create enormous growth rates and make their lives better. they're dealing with a situation where they can't do that anymore, so one of the promises in terms of what they are saying, one of them is keeping a morey of making the world -- a more chinese central place. look at what they are doing in terms of becoming a global power, the promise is changing because they can't deliver on the economic side. mark: it already has since they were doing -- included in the sdr. the you want has fallen quite
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substantially. -- would -- that you want the yuan has fallen quite substantially. >> one of the things that we end other people of said is that it will not affect a lot of things -- and other people have said is that it will not affect a lot of things. this is about as good as it's going to get for a wild. of pressure on capital outflows and the idea of them opening up the capital account, which is the true step to internationalizing the currency which is -- is more unlikely because they cannot face the repercussions. they did the reform, they got the currency in a basket, and now we are backtracking. you,: great to see president of the china-based book international. -- china beijing book international. -- beige book international.
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betty: live from bloomberg world in midtowns manhattan and london, you are watching the european close. let's head to the markets desk. we are looking at some of the read -- big retail movers. ramy: we are looking at the retail space right now and i want to go to the high-end retail space. looking at tiffany as well as michael corbat, tiffany is down by more than 5% after it cut its birth -- full yields -- full year profit estimate and is blaming tourists as well as the stronger u.s. dollar keeping people away. it is affecting stores around
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the world including singapore and hong kong. chorus and going up the other way, about a quarter of percent. i should note that while this is up by about a third of a percent, michael kors was up by priceigher, the 12 month target was about $38 per share. the mainstream market, let's take a look at best buy as well as jcpenney, they both are falling right now, best buy down by about 4%, morgan stanley downgraded best buy to equal weight from overweight, a as forble-store sales -- jcpenney, it turns out that it's heading back into the appliance market and it turns out that this is after the past three decades, it will do some 22 starting february
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1, including san antonio as well as temple in san diego. betty: appliances from jcp, thank you. things are coming to a head for french carmaker renault. they will recall 15,000 vehicles due to an emissions issue. we are covering the story in paris. should investors be worried about this recall? a cloud is hanging over the stocks. they admitted that three of their five had been rated by ford investigators as part of french problems with the missions, but the recall is only a small number, 15,000 cars of a very specific model. suv that was launched more than two years
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ago, but the diesel version went into production in july and read -- some of the filter system and they started recalling the 15,000 cars last month. everyone is trying to be reassuring from their side, that there is no fraud and of the situation is in no way comparable to the one of volkswagen that we saw last year. chieft, we had the branch notng that they are cheating, they are meeting the norm and they are not trying to trick the customer. what is behind the move? they have to fortify their structures because of tougher
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capital requirements from the ecb. it is a very specific french bank because they rely on the next mark up 39 regional banks, each of them all a stake in the parent company and vice versa, so in order to simply -- simplify their structure, they will cut back in the regional lenders, that is the way of freeing up as many as 17 billion euros to reinforce the capital. mark: thank you so much. we are four minutes away from the end of the european equity session, it looks like stocks will have their biggest gain in almost a month. ♪
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london, we're wrapping up. yes, the biggest gain since the end of december. yesterday we fill to the lowest since december 2014. miners have been tracking metals higher. energy companies have been tracking oil higher. a big decline are in your -- it is down by a .5% today. the world's biggest supply of enzymes. -- annually. this is one of the big corporate stories today. , it is such a great stat, the revenue in the last final months of last year. higher prices looked good in latin america.
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-- considering the future of the troubled division which makes margarine. they can't turn it around. the earnings season is well and truly underway. as it is here. you had german investor confidence data. what were the big takeaways? mark: -- rose from the previous 9.1%. i suppose the interesting element of today was the core 1.2 up to rose from 1.4%. mark carney, the governments disclaimsmeasure, it the disinflation very impact of imported oil prices. and of course, those are inflation very. and mark carney spoke today.
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and message was simple. now is not the time to raise interest rates. we saw sterling come down to a low level. we will speak to neil mackinnon on what he thinks mark carney meant. i can tell you what investors think. tells us how many months it will be before the bank of england raises rates, they have now got to 20 months. so we are looking at the middle of 27. with thebig question forecast is the plunging price of oil which continues to fall. butid see it rise earlier as we got closer to the opening bell here, oil prices fell. they are trying to recover. they are still down 1%. goldman sachs has been commenting a lot on oil lately
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says we may see $20 in barrel of oil if iran comes online and puts out into the market as much as 600,000 barrels of oil a day. that could continue to put pressure on it. let's get a check on stock moves. you can see that we are still holding onto the gains. but we have cut the gains in half on the dow. abigail doolittle has more live at the nasdaq. abigail: true here, one could say, here we go again. briefly up about 4/10 of 1%. apple has gone from green to red. say the recent pullback represents a buying opportunity. it is concerned around by phone growth in 2016. a really interesting, it is the -- and thisple is
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was true in 2011. but not in 2008. it will be interesting to see how it does play out this year if the selloff continues. taking a look at facebook. shares are higher as the company says it is dropping the subscriber fee for whatsapp. there are other ways to monetize including businesses being allowed to reach out to customers directly. recently bumped back. betty: thank you. let's check on the first word news with vonnie quinn. vonnie: thank you. a new report says the budget deficit will rise to $544 billion this year. that is an increase. much of that can be lamed on tight costs.
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we also have economic growth that will be previously forecast. the battle over president obama's immigration plan is heading to the supreme court. there are nearly 5 million undocumented immigrants. plan is being challenged by texas and by 25 other states. justices refused to revive an arkansas law that defends women from getting an abortion after 12 weeks. the will for that law couldn't be squared. we have referred abortion-rights. major league baseball has settled debates with fans. had to do with baseball's decision to bar teams from broadcasting or streaming games outside of their home territory. details of the settlement are not available yet. and in london, the parliament
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debated for three hours whether donald trump should be banned. they realized that there actually had no power to do so. the band was brought up because of donald trump's comments that muslims should be stopped from entering the united states. news 24 hours a day powered by our 2400 journalists. i am vonnie quinn. betty: it was a rough start to the year. we are only getting more pessimistic. >> the downside risks to our central scenario have intensified. focus on these risks are the main factor driving recent developments in financial markets. we may be in for a bumpy ride this year. especially in the emerging and developing economies. oil is a pressure point.
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can any other asset counter that question me -- question that? so within your notes, you postulate, could the u.s. economy fall into a recession? interesting to us those questions only day the imf cuts the global growth forecast for china and emerging markets. tell us how things have changed? things have changed just within the start of the month. investors are now thinking about the possibility of a made in china global deflationary recession. as long as the u.s. is concerned, they are looking for growth around 2.7%. signs in last weeks numbers looking negative year on year.
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last friday had the fastest decline since 2009. so some warning indicators that say thisy economists is not a global recession or a we should look at some of these numbers because actually, there are worrying signs. mark: you talk about the correlation of doom. will that correlation play out? what we have seen is that as high-yield prices decline, we have an increase in debt that many u.s. shale oil companies have built up in recent years. and of course, u.s. banks have exposed this increase in debt. so we have at this correlation of doom.
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with that, oil and high-yield credit and equities, they all moved together. and the oil price is key. if we can seek an indication we cane oil price is -- convince the iea that we have an oversupply, as long as the markets believe that supply is greater than demand, we will continue to see downward pressure on the oil price. so the forecast is $20 oil and it wave -- and it may well be right. the doom can continue. it should be treated with caution. , he is ahamed el-erian little bit more doubtful about that correlation between world markets and the stock market but nonetheless, both are the subject and the cause of this
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volatility. theid write earlier that longer the volatility continues, the higher the risk of the instability spilling back into markets, fueling a destabilizing vicious cycle of economic and financial dislocations. we are already experiencing that. how do we get out of this? neil: he is right. the correlation of doom that i have been talking about chimes well with all of that. the markets are clearly worried about what is going on. ins time last year, a fall the oil crisis was considered to be a net boost for the global economy, it was a good ring. it was consumers with disposable income. economic models show the impact on global growth but would be of seen is that producers have been hurt by the drop in oil prices.
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u.s. shale producers have cut back. projects have been exposed by the increase in debt. we have seen emerging-market commodity prices getting trashed. the imf is still looking today at brazil and russia. they will remain in recession this year. the oil prices have gone too far, too fast. it is consumers that have lost out. that is why, together with the downside risks of the chinese economy and the uncertainties associated with the currency policy and the collapse to the stock market, this is why investors are nervous about why we have had such a bad start to the year. betty: oil prices have gone down an incredible amount. lower for longer, it seems. , likeher asset prices stocks, they are down but not nearly down as far as we have seen in past corrections.
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neil: that is right. i think what is interesting is that from a technical 500,ective, at the s&p very important technical levels right now. these are the spy clothes that we saw last august. all of lastt for year. the s&p 500 went nowhere. returns were flat. what we have to see our current ifels in the s&p, because they crack, then investors will say that we are increasing the probability of a global deflationary recession. it is that for stocks and fixed income. to last year's low. and we are at a port -- we are at an important junction. a lot depends on where oil prices go from here.
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mark: we have mark carney, i want to listen to what he said earlier. responsible for sending the pound to its lowest level since 2009. mark: i said last month the decision will come into sharper relief around this year. well, the year has turned and that decision proved state forward -- proved straightforward. now is not the time to raise interest rates. k: is that a good enough sex the nation? says, now is not a time to raise interest rates. suppose mark carney would say that, all i was saying is that we will review the possibility of interest rates picking up. we had the fed move in december. there was the possibility of the
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bank of england following. you said february, now that looks wrong. neil: [laughter] i did. but mark carney is probably is a to say that, it dangerous cocktail of events in the global economy. today atd the speech queen mary's college and he lays out why he is not raising rates across certain international banks that as far as he can is concerned, domestic wage pressures are not strong enough for them to think about pulling the trigger on interest rates. happening inhat is the housing market cycle or the credit cycle, it is clearly going up. mark: give it to me. neil: i guess it will be february next year. [laughter] this is why -- we have seen the volatility.
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betty: you are putting him on the spot. neil: that is the name of the game. spot by theon a traders. they keep me informed. mark: think you for joining us. february 2017 will be the next rate hike. right, back to you. and coming up on the battle of we found a somewhat dovish tone. what are the three key inflation gauges telling us? ♪
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you can access them by running the function at the bottom of the screen. brendan greeley is taking on mark barton. here we go. i want a shot at the title. today, the oldest central bank in the world in sweden said it the possibility , theirg more flexible word, not mine. that is up here, let's look at the reality of sweden and the eu [screech]s. -- boom. mark: i have to do that found. can do. he
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i will do mine in 30 seconds. what is happening to u.k. inflation? we know the headline rate is at -- it disappeared. it is all over. it disappeared. i concede. but inflation expectations are heading down. brendan, it is all yours. [laughter] mark: where has my chart gone? where has my chart gone? [laughter] betty: technical difficulties. brendan wins on a technicality. [laughter] let's go ahead on the european close. park -- he and his late wife made them household names. we will have a preview of the next big project up next. ♪
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betty: today, we are looking at the business of art. we are looking at chris does next big project. gora sat down to look at the project and the way he finances his projects. david: -- is about 60 miles east of milan. and in that lake, there is a about 2000d home to people. a population totally dependent on population -- dependent on boats and ferries. and christo got an idea. >> the project now has another seven months ago. we will walk across the water. of yellowa path fabric on top of plastic tubes. this is the first project that
quote
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he will do without about 2000 people. a population totally dependent on population -- dependent on boats and ferries. his wife. she passed away in 2009. they are floating peers will be in place for a limited time. >> this project will be here for short time. david: about two weeks. >> very precious time. people know that they are at the sight of something that is unique. every human is unique and they like to witness unique. david: what is also unique is how they are financed. decided theyy needed to do things differently. collectors and dealers are notoriously slow payers. we cannot pay our workers on friday. because the dealer did not pay yet. 1980 two, they formed see bj corporations, headquartered in delaware.
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it featured original works of art up to the present. there was a subsidiary for each project. right now, they're working on three of them, including the floating peers. david: he also buys back his artwork if he sees it is undervalued. ♪ david: these projects take years. it took 24 years for them to get permission to do the gates from the mayor, michael bloomberg. has it gotten easier as you have gotten better known to get past regulatory hurdles? >> no. i don't believe it is how difficult. i would love to have an easy way. david: he keeps busy.
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when we spoke, he was days away from a trip to dobby to work on another one of the projects. 80 years old and we asked if he had more projects planned. are easily excited. when we have a new idea, we will tell you right away. david: i am david gora. bloomberg, new york. betty: you can read more about bloomberg,hing at your destination for the finer things in life, travel, dining, watches and life. head over to the bloomberg terminal. wereber when the gates installed in central park, i wasn't here but there was a lot of coverage on it. are you interested in seeing this exhibit in italy? northerni was in italy, yes.
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i have never seen any of his art. is it art? that is an obvious question. do you think it is art? betty: i do. art comes in all forms. what we do here is art. [laughter] what is art? we could debate this all night. me today is that both him and his wife were born on the same day. that is lovely. betty: a good fact to leave us with. a quick programming note, the former pimco ceo will be on in a little bit. ♪
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scarlet: welcome, i am scarlet fu. >> here is what we're watching. dropping below $29 a barrel at one point. but this is not a blessing to all. we will tell you what companies are vulnerable. sales may not be improving at why some people are bullish. stock markets and investors can count on a strong earning system to turn the tides. we will talk about which companies to watch this week. scarlet: first, we are going on to get a check on the markets. radiant as an seo the gains across the globe.
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