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Speaker 1: Broadcasting live to New York Bloomberg eleventh Yo to Washington,

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Speaker 1: d C, Bloomberg one to Boston, Bloomberg Well one to

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Speaker 1: San Francisco, Bloomberg nine sixteen to the country Suities Exam

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Speaker 1: Channel one nineteen and around the globe the Bloomberg Radio

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Speaker 1: plus Aven Bloomberg dot com. This is Bloomberg Surveillance. Good morning,

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Speaker 1: I'm Karin Moscow along with Tom Keene and Michael McKee,

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Speaker 1: and the opening val is brought to you by sei

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Speaker 1: In the future of the sset management business will be

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Speaker 1: profoundly different. Find out how seis Global Operating Platform can

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Speaker 1: help you navigate the new operational frontier at se i

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Speaker 1: c dot com. Slash imagine socks are higher at the open,

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Speaker 1: the s and P five hundred up half per cent

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Speaker 1: or ten points to nineteen o five down Johnes Industrial

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Speaker 1: average of four ten percent or seventy points to sixteen thousand,

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Speaker 1: two hundred sixty eight, and the nastacts up eight tens

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Speaker 1: per cent or thirty five points to forty four seventy

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Speaker 1: Tenure Treasury down eleven thirty seconds. The yeld one point

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Speaker 1: eight one per cent yield on the two year point

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Speaker 1: seven five percent now I'm ex screwed oil up one

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Speaker 1: point six percent, or forty seven cents to fifty one

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Speaker 1: a barrel. Comex gold is it'll change at twelve oh

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Speaker 1: seven ninety announced the euro is at a dollar eleven

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Speaker 1: eighteen the end one fourteen point to six. Tom and

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Speaker 1: Mike Karen, thanks so much aloup ninety points is Karen

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Speaker 1: mentions green on the screen of vix. No, there's the

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Speaker 1: first print in the vix twenty three point four zero.

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Speaker 1: It'd also point out Sterling with the Brexit UH weight

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Speaker 1: forty two is a weaker cable. Uh this morning, never weaker?

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Speaker 1: Is David Wilson with a look at the equity markets?

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Speaker 1: Is morning, David, what do you see in the land

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Speaker 1: of equities? Well, we might as well start with Kinder Morgan.

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Speaker 1: I mean the shares are up eleven and a half

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Speaker 1: percent in early trading. The pipeline owner was added to

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Speaker 1: the whole days of Warren Buffett's Berkshire Hathaway during the

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Speaker 1: fourth quarter. Berkshire ended the quarter with twenty six point

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Speaker 1: six million shares, where one point two percent steak. You've

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Speaker 1: also got free point mcmurran up about five and a

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Speaker 1: half percent. Billionaire investor Carl Icon disclosed that he raised

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Speaker 1: his stake in the mining and energy company last quarter.

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Speaker 1: Icon now has a nine percent holding, making him freeports

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Speaker 1: largest shareholder. Down the earnings front, you've got Price Line

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Speaker 1: Group up ten and a half percent, the largest US

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Speaker 1: online travel agency, report and fourth quarter earnings that beat

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Speaker 1: its forecast as well as annalyst average essement in Bloomberg survey.

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Speaker 1: Revenue also exceeded projections. T Mobile US up about four percent.

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Speaker 1: The wireless company's fourth quarter earnings and sales surpass estimates.

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Speaker 1: T Mobile said expects to add as many as three

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Speaker 1: point four million new subscribers this year. On the other hand, Cerner,

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Speaker 1: a healthcare software provider, down eight and a half percent.

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Speaker 1: UH Their fourth quarter order bookings came up short of estimates.

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Speaker 1: On the deal front, Staples up three point two percent,

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Speaker 1: the largest US office supply chain, agreed to sell wholesale

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Speaker 1: contracts to Ascendant for about twenty two and a half

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Speaker 1: million dollars if it's proposed takeover of rival office depot succeeds.

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Speaker 1: Staples move is designed to overcome regulatory objections to the deal.

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Speaker 1: Then you've got ter Ax up about five and a

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Speaker 1: half percent. China's Zoom line. Have a industry set received

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Speaker 1: a letter of support from banks for a three point

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Speaker 1: three billion dollar takeover offer for the cranemaker zoom line,

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Speaker 1: seeking to scuttle ter X's proposed merger with Finland's equity idea.

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Speaker 1: How about bonds? How about garment? Up eight and a

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Speaker 1: half percent? The navigation device makers fourth quarter revenue beat estimates,

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Speaker 1: uh so did garment sales forecast for this year, and

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Speaker 1: Fossil Group up almost nineteen percent. The watchmaker's fourth quarter

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Speaker 1: earnings top to estimates with the help of new brands

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Speaker 1: and a new website. David Wilson taking so much, Lisa Branmo,

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Speaker 1: it's for us now as you look at bonds and

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Speaker 1: uh it was a twenty three billion dollar Tuesday. I mean,

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Speaker 1: we're gonna talk about Apple and I get all that,

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Speaker 1: but I there, it's terrible high yield. We're all gonna die.

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Speaker 1: And then Toyota, IBM, Apple, they all show up and

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Speaker 1: it's like, what do they do to make five phone calls? Well, first,

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Speaker 1: let's put this into context, right, I mean, this is

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Speaker 1: the busiest day in three weeks for investment grade bond

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Speaker 1: issue and so for all intents and purposes. The market

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Speaker 1: was pretty much closed for three weeks. Now suddenly companies

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Speaker 1: are seeing an opening. Suddenly the world doesn't seem like

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Speaker 1: it's about to fall apart, and people are actually starting

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Speaker 1: to sell bonds. I do find it compelling, Tom to

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Speaker 1: your point, wasn't the world falling apart? But these guys

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Speaker 1: can just sell whatever they want? Can't but stuff? I

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Speaker 1: want you to explain how they quote unquote sell They

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Speaker 1: literally make five phone calls, right, It's not an exaggeration.

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Speaker 1: The banks do not have to work too hard to

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Speaker 1: get this stuff off the books because realistically, think about

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Speaker 1: how many investors out there internationally, let alone in the

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Speaker 1: US wants some yield, wants want a sense of safety.

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Speaker 1: And if you look at Apple, I mean, think about

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Speaker 1: how much cash they have, think about you know what

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Speaker 1: a fortress balance sheet. They seem to have seventy billion

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Speaker 1: dollars of annual revenue. I mean, this is not exactly

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Speaker 1: uh fragile, come ay. And yet it is interesting that

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Speaker 1: the junk universe has gotten so toxic to investments, and

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Speaker 1: yet investment great companies are doing just fine. Do you

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Speaker 1: assume dollar for dollar that every bond dollar coming in

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Speaker 1: goes back out within the financial engineering to buy back shares,

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Speaker 1: raised dividends that would be awfully cynical? Would that mystic

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Speaker 1: aspects of the bond market? Tom is revealing? Um, I

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Speaker 1: actually agree with you because if you look at the

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Speaker 1: companies that are raising cash through the debt markets right now,

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Speaker 1: it's for general corporate purposes, which is another word for

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Speaker 1: we can do whatever we want, and you guys are

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Speaker 1: just going to deal with it. Johnny, should we do

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Speaker 1: a weighted average cost of capital on Wednesday? Well, let's see,

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Speaker 1: we have three listeners left, Mike, just as a quick

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Speaker 1: quick view, weighted average cost ten poe equity debt costs one?

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Speaker 1: It what do you need to know? Well, as one

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Speaker 1: trader put it this morning, it's it's really sad to

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Speaker 1: see Apple issue debt like this when they have all

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Speaker 1: that cash overseas. The fact that our tax code forces

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Speaker 1: them to do that is insane. Well, and it's not

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Speaker 1: just the tax code, right, I mean, yes, this is

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Speaker 1: partly because they don't want to repatriate cash that stashed overseas,

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Speaker 1: but this is also to Tom's point, to buy back

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Speaker 1: their shares to basically pad the pockets of their stockholders.

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Speaker 1: Take your head off for that. It's not a pad pockets,

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Speaker 1: it's a return on capital of profit. But is that

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Speaker 1: an appropriate use. That's a debate. You know. I'm not

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Speaker 1: going to answer to the debate, but Mr go Belly

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Speaker 1: would push against those who think it's bordering on criminal.

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Speaker 1: I don't think it's bordering on criminal. I do think

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Speaker 1: that the idea of borrowing from bondholders in order to

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Speaker 1: pay stockholders feels a little off because it doesn't necessarily

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Speaker 1: lead to and improve made the fundamental business prospect of

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Speaker 1: she does that. She's more subt old Michael. She brings

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Speaker 1: in her beautiful Bloomberg gad Fly article, which you can

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Speaker 1: perceive I'll put it on on social in a moment.

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Speaker 1: Buried in the bottom of it is the tragedy known

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Speaker 1: as Hewlett Packard where the certitude of tech bonds Michael

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Speaker 1: McKee evaporated into a higher yield and a lower bond price.

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Speaker 1: I was just looking at that portion of this marvelous

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Speaker 1: sort of like the King James body, I haven't got

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Speaker 1: the edge gives that ever, as they came up with

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Speaker 1: Tommy heres bible you can find in every hotel, he

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Speaker 1: can find Bloomber gad Flight everything. We're gonna stop right

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Speaker 1: there is this uh is Apple the camel's nose under

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Speaker 1: the tenter. Is this just a function of timing that

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Speaker 1: they happen to lead the parade into this larger output

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Speaker 1: of bonds? Well, you know, the question is ken smaller companies,

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Speaker 1: Ken companies that actually need to borrow, that aren't just

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Speaker 1: taking advantage of the fact that fields are still pretty low.

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Speaker 1: Are they going to be able to come to market?

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Speaker 1: And And really the answer is it remains to be seen.

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Speaker 1: Thank you, Lisa brand Went said. Seriously, folks, Bloomberg gad

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Speaker 1: fly is a really valuable idea. You get ten twelve,

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Speaker 1: fifteen ideas a day, You're not gonna read them all.

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Speaker 1: You're gonna pick a few and one of them to

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Speaker 1: consider as UH two or three summaries on a huge,

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Speaker 1: ginormous bond day yesterday led by twelve gazillion dollars by Apple,

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Speaker 1: uh computer, They've got other challenges this morning. They're dealing

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Speaker 1: with unlocking their phones as well. Michael Barr has talked

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Speaker 1: about that as well. We're up on in the thirty

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Speaker 1: one point sixteen thousand, three twenty eight, the vix halfway

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Speaker 1: back to average twenty three point four nine, certainly a complacency.

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Speaker 1: Over the last three or four days. Yen one fourteen

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Speaker 1: twenty seven, weaker Japanese yen really beginning to move away

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Speaker 1: from the angst. And we saw the last couple of

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Speaker 1: days uh pounds sterling showing angst. Cable dollar forty two

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Speaker 1: fifty seven week or that's a Brexit angle there as well.

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Speaker 1: West Texas Intermedia sixty four cents and Brent Crewed thirty

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Speaker 1: three fifteen up a good ninety eight cents, widening the

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Speaker 1: West Texas Brent spread. This morning, This our surveillance spotty

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Speaker 1: by MASDA White Planes. Visit MASDA White Plains dot com.

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Speaker 1: Here's Michael R. With the latest news headlines. Mike Tom,

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Speaker 1: thank you very much. Donald Trump says he agrees with

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Speaker 1: Cords that Apple should help the FBI and unlock an

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Speaker 1: iPhone that belonged to one of the San Bernardino, California shooters.

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Speaker 1: Trump on Fox and Friends says, to think that Apple

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Speaker 1: won't allow us to get into the cell phone. Who

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Speaker 1: do they think they are? Apple says if it developed

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Speaker 1: such software, it will put millions of other iPhones at risk.

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Speaker 1: Technology analyst Rob Enderley he creates a catch twenty two

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Speaker 1: for them that they one they specifically made it so

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Speaker 1: this couldn't happen, and if they are able to force

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Speaker 1: force it to happen, then they open all the phones

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Speaker 1: to the same kind of attack, at least by a

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Speaker 1: government level entity. For us F twenty two South Finders

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Speaker 1: have flown over South Korea today and the clear show

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Speaker 1: of power against North Korea. Passengers on two planes at

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Speaker 1: the Traite Metropolitan Airport had a moment. An American Airlines

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Speaker 1: plane clipped a Southwest Airlines plane on the Tarmact this morning.

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Speaker 1: A passenger aboard American Airlines flight twelve forty one says

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Speaker 1: they were getting in line to be de ice when

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Speaker 1: the incident occurred. The debris on the ground, and I

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Speaker 1: turned and looked at everybody because of course there's weird

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Speaker 1: noises and it's not a smooth ride at this point,

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Speaker 1: and I just said, oh my god, you guys, we're

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Speaker 1: hitting this plane. I'm walking and we're hitting it. Global

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Speaker 1: News twenty four hours a day, powered by our two

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Speaker 1: journalists more than a hundred fifty news bureaus from around

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Speaker 1: the world. At Michael barr Man thinks so much curve

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Speaker 1: steepening this morning, the two stents spread, an indicator of

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Speaker 1: uh well, some would say potential recession going the other

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Speaker 1: way with optimism. Stay with us only optimism Bluebirg Surveillance

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Speaker 1: Bloomberg Travalence is brought to by Fairleigh Dickinson University. Boost

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