1
00:00:03,920 --> 00:00:08,520
Speaker 1: Broadcasting live to New York, Bloomberg even to Washington, d C,

2
00:00:08,760 --> 00:00:14,280
Speaker 1: Bloomberg to Boston, BLUEMBERG twelve to San Francisco, Bloomberg nine

3
00:00:14,840 --> 00:00:19,040
Speaker 1: to the countries Channel one nine and around the globe

4
00:00:19,200 --> 00:00:23,800
Speaker 1: the Bloomberg radios and Bloomberg got gone. This is taking stock.

5
00:00:24,160 --> 00:00:27,920
Speaker 1: Coming up on taking stock, will take stock of Navistar International.

6
00:00:28,000 --> 00:00:31,000
Speaker 1: The shares of Navistar International are up more than forty

7
00:00:31,040 --> 00:00:34,920
Speaker 1: two percent after Volkswagen says that it's taken and nearly

8
00:00:35,040 --> 00:00:39,760
Speaker 1: seventeen percent steak in the builder of commercial trucks and vehicles.

9
00:00:40,120 --> 00:00:43,400
Speaker 1: Will find out what the w wants from this and

10
00:00:43,520 --> 00:00:46,360
Speaker 1: will also take a look at the truck industry and

11
00:00:46,400 --> 00:00:51,280
Speaker 1: they're going to be facing more reduced emissions regulations in

12
00:00:51,360 --> 00:00:54,040
Speaker 1: the near future. Right now, let's go to Charlie Pellett

13
00:00:54,040 --> 00:00:56,520
Speaker 1: in the Bloomberg news room for Bloomberg Business Flat and

14
00:00:56,600 --> 00:00:59,000
Speaker 1: I thank you pim Fox, the DAL, the SMP NZ

15
00:00:59,080 --> 00:01:02,240
Speaker 1: deak all into the higher equities trading near records as

16
00:01:02,560 --> 00:01:08,160
Speaker 1: traders pair bets on a September fed hike. To service

17
00:01:08,160 --> 00:01:11,000
Speaker 1: industry has expanded in the US in August at the

18
00:01:11,040 --> 00:01:14,280
Speaker 1: weakest pace in six years. That is raising questions about

19
00:01:14,280 --> 00:01:17,240
Speaker 1: the strength of the U S economy, and it adds

20
00:01:17,280 --> 00:01:19,440
Speaker 1: to the case for the Federal Reserve to hold off

21
00:01:19,520 --> 00:01:22,560
Speaker 1: on raising interest rates this month at a time when

22
00:01:22,600 --> 00:01:26,120
Speaker 1: central banks in other developed economies are ready to boost stimulus.

23
00:01:26,560 --> 00:01:30,480
Speaker 1: You and Cameron Watt, his portfolio manager at black Rock International.

24
00:01:30,520 --> 00:01:32,800
Speaker 1: He was interviewed this morning on Bloomberg Television. I mean,

25
00:01:32,800 --> 00:01:34,720
Speaker 1: I think what we learned is the monetary policy, or

26
00:01:34,720 --> 00:01:37,720
Speaker 1: the expectation of monetary policy still matters. I mean, we've

27
00:01:37,760 --> 00:01:40,319
Speaker 1: done with a lunger of crises in the last couple

28
00:01:40,360 --> 00:01:43,640
Speaker 1: of months against a backdrop of expectations of the CV

29
00:01:43,840 --> 00:01:48,920
Speaker 1: extending Bank of Japan extending the Bay coming to the party. Uh,

30
00:01:48,960 --> 00:01:52,520
Speaker 1: and the volatility has been exceptionally over the summer period.

31
00:01:52,640 --> 00:01:56,200
Speaker 1: Federal Mogul Holdings has agreed to be acquired by billionaire

32
00:01:56,240 --> 00:02:00,640
Speaker 1: investor Carl Icon's investment company for nine a share in cash.

33
00:02:00,960 --> 00:02:04,120
Speaker 1: The maker of Champions spark plugs will be closely held

34
00:02:04,120 --> 00:02:08,480
Speaker 1: by Icon Enterprises, which already held almost eighty two percent

35
00:02:08,639 --> 00:02:13,040
Speaker 1: of the company. Volkswagen buying that steak in Navistar International

36
00:02:13,080 --> 00:02:15,800
Speaker 1: to gain of foothold in the US heavy truck market.

37
00:02:16,240 --> 00:02:18,960
Speaker 1: Navastar surging on the news. It is up now by

38
00:02:19,040 --> 00:02:22,920
Speaker 1: forty one point nine percent. SMP five hundred, index up

39
00:02:23,000 --> 00:02:26,080
Speaker 1: three three, a gain of two tenths of one percent.

40
00:02:26,400 --> 00:02:28,840
Speaker 1: Down dust reels up twenty nine, a gain also of

41
00:02:28,880 --> 00:02:31,799
Speaker 1: two tents of one percent. NAA stack up three tenths

42
00:02:31,800 --> 00:02:35,960
Speaker 1: of one percent, Gold up two percent. Rallying he beyounced

43
00:02:36,120 --> 00:02:40,000
Speaker 1: thirteen fifty West Texas intermediac crewed up one percent, forty

44
00:02:40,360 --> 00:02:42,800
Speaker 1: eight seven of Barrow. And now let's look at the

45
00:02:42,840 --> 00:02:47,120
Speaker 1: other stories making news. Thank you, Charlie from the Bloomberg Newsroom.

46
00:02:47,160 --> 00:02:50,240
Speaker 1: I'm Scarlett Foo. Hillary Clinton is once again calling on

47
00:02:50,320 --> 00:02:53,440
Speaker 1: Donald Trump to release his tax returns. Clinton is holding

48
00:02:53,440 --> 00:02:55,640
Speaker 1: a rally in Tampa, Florida at this hour to discuss

49
00:02:55,720 --> 00:02:59,720
Speaker 1: national security. Trump campaigns in Virginia and North Carolina today.

50
00:03:00,400 --> 00:03:02,760
Speaker 1: In the wake of another missile launch, President Obama is

51
00:03:02,840 --> 00:03:05,960
Speaker 1: vowing to push for tighter sanctions for North Korea. However,

52
00:03:06,080 --> 00:03:08,600
Speaker 1: the President said the US is still open to talks

53
00:03:08,919 --> 00:03:14,280
Speaker 1: if it is willing to recognize its international obligations and

54
00:03:14,360 --> 00:03:17,920
Speaker 1: the importance of the nuclearization in the Korean peninsula. Uh

55
00:03:18,000 --> 00:03:22,480
Speaker 1: the opportunities for US to dialogue with them are there.

56
00:03:23,000 --> 00:03:25,640
Speaker 1: Mr Obama made the comments after meeting with South Korea's

57
00:03:25,639 --> 00:03:29,399
Speaker 1: president at the Summit of Southeast Asian Leaders in Laos today.

58
00:03:29,600 --> 00:03:32,320
Speaker 1: It's shaping up to be a busy hurricane season. Hurricane

59
00:03:32,360 --> 00:03:35,280
Speaker 1: Newton made landfall as a Category one storm in Mexico's

60
00:03:35,280 --> 00:03:39,840
Speaker 1: Baja Peninsula. Johnkangelosi with the National Hurricane Center says activity

61
00:03:39,960 --> 00:03:42,560
Speaker 1: is slightly above normal for this time of year. The

62
00:03:42,600 --> 00:03:46,880
Speaker 1: Pacific normally is busier, so we've had fifteen nine storms

63
00:03:46,960 --> 00:03:50,240
Speaker 1: in the Pacific, and we've had eight nine storms in

64
00:03:50,240 --> 00:03:53,960
Speaker 1: the Atlantic. Newton knockdown parallines and stranded tourists in their hotels.

65
00:03:54,840 --> 00:03:57,960
Speaker 1: Former Fox News Channel anchor Gretchen Carlson has settled her

66
00:03:58,000 --> 00:04:01,400
Speaker 1: sexual harassment lawsuit against Roger else. It's a case that

67
00:04:01,520 --> 00:04:04,640
Speaker 1: led to the downfall of Fox's chief executive. According to

68
00:04:04,680 --> 00:04:08,800
Speaker 1: someone familiar with the sealment details, Carlson received twenty million dollars.

69
00:04:09,680 --> 00:04:12,480
Speaker 1: Newark schools are back in session today, but students still

70
00:04:12,520 --> 00:04:15,440
Speaker 1: can't drink from the water fountains. Officials say the lead

71
00:04:15,520 --> 00:04:17,920
Speaker 1: levels are still too high, but should be deemed safe

72
00:04:17,960 --> 00:04:20,920
Speaker 1: by next month. For now, bottled water is being distributed

73
00:04:21,360 --> 00:04:23,400
Speaker 1: Global News twenty four hours a day, powered by more

74
00:04:23,440 --> 00:04:26,920
Speaker 1: than twenty journalists and analysts and more than one countries.

75
00:04:27,279 --> 00:04:31,440
Speaker 1: I'm Scarlet Food. This is Bloomberg, Charlie, and we thank you.

76
00:04:31,480 --> 00:04:34,239
Speaker 1: And again recapping the doal the SMP and NEZ stack

77
00:04:34,279 --> 00:04:38,800
Speaker 1: called Advancing SMP five. How did it index up three three?

78
00:04:38,839 --> 00:04:42,480
Speaker 1: Again there of two tenths of one percent. I'm Charlie Pelton.

79
00:04:42,600 --> 00:04:45,680
Speaker 1: That's a Bloomberg business splash. Shelie pell thank you so

80
00:04:45,920 --> 00:04:49,640
Speaker 1: very much. Shifting gears to gain traction in the US

81
00:04:49,720 --> 00:04:54,039
Speaker 1: heavy truck market, Elon Musk sending a letter to Tesla

82
00:04:54,120 --> 00:04:56,840
Speaker 1: workers to say, hey, let's get more efficient and save

83
00:04:57,040 --> 00:05:01,200
Speaker 1: some money reduced cost in case someone wants to UH

84
00:05:01,400 --> 00:05:03,479
Speaker 1: invest in us, We're gonna put all these questions before

85
00:05:03,520 --> 00:05:07,080
Speaker 1: Alan Baum. Now he's principal at Baum and Associates, joining

86
00:05:07,160 --> 00:05:12,279
Speaker 1: us from otto Land West, Bloomfield, Michigan. Alan, welcome, good afternoon.

87
00:05:12,880 --> 00:05:15,680
Speaker 1: So let's start with Volkswagen. It's gonna buy a sixteen

88
00:05:15,680 --> 00:05:19,719
Speaker 1: point six percent stake in Navistar International two or fifty

89
00:05:19,800 --> 00:05:24,440
Speaker 1: six million dollars, part of a strategic alliance to UH

90
00:05:24,600 --> 00:05:28,320
Speaker 1: get the struggling US truck maker to enter the North

91
00:05:28,360 --> 00:05:32,279
Speaker 1: American market. What do you think it's getting a good deal?

92
00:05:32,360 --> 00:05:35,120
Speaker 1: Because as you say, it's struggling. And the other thing

93
00:05:35,200 --> 00:05:38,839
Speaker 1: is that the Craft eight market, the largest trucks UH

94
00:05:39,000 --> 00:05:42,159
Speaker 1: is starting to turn downward. So for the next couple

95
00:05:42,200 --> 00:05:44,520
Speaker 1: of three years, I think we're gonna see, just like

96
00:05:44,600 --> 00:05:47,320
Speaker 1: in the heavy duty truck excuse me, in the middle

97
00:05:47,320 --> 00:05:50,920
Speaker 1: of the main automotive market, a slight downturn. I expect

98
00:05:50,960 --> 00:05:53,280
Speaker 1: a little bit of a sharper downturn because the ups

99
00:05:53,279 --> 00:05:55,719
Speaker 1: and downs are a little a little stronger in that market.

100
00:05:56,080 --> 00:05:59,160
Speaker 1: So what it does that picks up international UM. It

101
00:06:00,040 --> 00:06:02,440
Speaker 1: complements what it has in Europe, which is mon and

102
00:06:02,600 --> 00:06:06,320
Speaker 1: pan Scania. And the other thing that International is that

103
00:06:06,480 --> 00:06:09,200
Speaker 1: although they have a relatively small part of the market

104
00:06:09,279 --> 00:06:12,320
Speaker 1: in the US and Class eight UH, they have two

105
00:06:12,320 --> 00:06:15,240
Speaker 1: other things going on. One is they sell their engines

106
00:06:15,279 --> 00:06:19,120
Speaker 1: to other truck manufacturers in Class eight and they're they're

107
00:06:19,160 --> 00:06:21,880
Speaker 1: stronger in the medium and the medium market the class

108
00:06:21,920 --> 00:06:25,400
Speaker 1: four through seventh. Is there any possibility that v W

109
00:06:25,680 --> 00:06:31,240
Speaker 1: will eventually make a bid for all of Navistar UM,

110
00:06:32,080 --> 00:06:36,080
Speaker 1: It's certainly possible. UM. I don't know if they need

111
00:06:36,120 --> 00:06:39,520
Speaker 1: to UM. You know, as long as they can cooperate

112
00:06:39,680 --> 00:06:44,640
Speaker 1: spread technology UH on in both directions. UH they're going

113
00:06:44,680 --> 00:06:47,720
Speaker 1: to get what they need. They've had some trouble getting

114
00:06:47,760 --> 00:06:52,599
Speaker 1: Monanskanya to really uh be part of the b W empire,

115
00:06:52,720 --> 00:06:55,039
Speaker 1: if you will. Uh, So I think they might be

116
00:06:55,120 --> 00:06:59,640
Speaker 1: a little hesitant to go all in on on international. Well,

117
00:07:00,200 --> 00:07:02,800
Speaker 1: it does seem like a big thing to take on.

118
00:07:03,000 --> 00:07:06,080
Speaker 1: But we know again that they VW truck and bus

119
00:07:06,120 --> 00:07:09,400
Speaker 1: division hasn't been especially affected by the diesel emission scandal.

120
00:07:09,480 --> 00:07:12,360
Speaker 1: And obviously I would think despite any downturns I had,

121
00:07:12,360 --> 00:07:15,280
Speaker 1: they're investing for the long term. They see a market

122
00:07:15,280 --> 00:07:17,480
Speaker 1: where they can get a foothold. And let's face, I mean, VW,

123
00:07:17,680 --> 00:07:21,600
Speaker 1: despite the scandal, is a large, well known, powerful brand.

124
00:07:22,320 --> 00:07:25,840
Speaker 1: And and the ironic thing is, I say, international Navastar

125
00:07:26,040 --> 00:07:28,200
Speaker 1: what we're talking about the same thing of course. Uh.

126
00:07:28,360 --> 00:07:31,400
Speaker 1: Nowa star has been behind the lead ball for their

127
00:07:31,440 --> 00:07:35,040
Speaker 1: own problems with diesel emissions. Uh. They took a route

128
00:07:35,160 --> 00:07:40,800
Speaker 1: independent of SCR, the the newer technology, which paciently failed.

129
00:07:41,200 --> 00:07:44,000
Speaker 1: Uh they said, okay, we're sorry when they put their

130
00:07:44,040 --> 00:07:47,800
Speaker 1: tail between their legs. And now they're they're massively moving

131
00:07:48,240 --> 00:07:50,920
Speaker 1: to the industry standard, which is as CR, which of

132
00:07:51,040 --> 00:07:54,720
Speaker 1: course is what the W needs to be doing. Yesterday,

133
00:07:55,280 --> 00:07:59,640
Speaker 1: with respect to its UH, it's mainstream automotive work. Can

134
00:07:59,720 --> 00:08:02,520
Speaker 1: we turn you attention now to Tesla, I mean Tesla.

135
00:08:03,080 --> 00:08:05,360
Speaker 1: The shares are hired by about two and a quarter

136
00:08:05,440 --> 00:08:09,880
Speaker 1: percent today, down nearly sixteen percent so far this year

137
00:08:10,640 --> 00:08:14,000
Speaker 1: raising money. Is Tesla going to be able to continue

138
00:08:14,000 --> 00:08:17,520
Speaker 1: to raise money from the public markets? Well, obviously they

139
00:08:17,600 --> 00:08:21,640
Speaker 1: need to, and so it's pretty clear that Ellen is saying,

140
00:08:22,040 --> 00:08:25,320
Speaker 1: let's give ourselves the best opportunity to raise money at

141
00:08:25,360 --> 00:08:29,320
Speaker 1: the least cost. And obviously the share price is important,

142
00:08:29,520 --> 00:08:32,240
Speaker 1: and it's also if they go to the debt market,

143
00:08:32,320 --> 00:08:35,560
Speaker 1: it's also important with respect to the interest rates. So

144
00:08:35,600 --> 00:08:38,920
Speaker 1: what they're saying is UH, and this is no huge surprise.

145
00:08:39,640 --> 00:08:42,160
Speaker 1: As we move forward to the late this year and

146
00:08:42,640 --> 00:08:45,920
Speaker 1: certainly into next year, between the Giga factory and the

147
00:08:46,000 --> 00:08:50,640
Speaker 1: development of production capacity and investment for the Model three,

148
00:08:51,040 --> 00:08:55,440
Speaker 1: they're going to be spending capex in in huge buckets

149
00:08:55,559 --> 00:08:59,280
Speaker 1: and so obviously they're gonna be losing money UH in

150
00:08:59,760 --> 00:09:03,440
Speaker 1: law itch buckets as well. And so they're simply saying

151
00:09:03,480 --> 00:09:06,080
Speaker 1: you and saying, let's see if we can squeeze a

152
00:09:06,160 --> 00:09:09,960
Speaker 1: third quarter that looks good in non gap, that'll make

153
00:09:10,000 --> 00:09:12,600
Speaker 1: it a little better for us as we raise all

154
00:09:12,640 --> 00:09:15,200
Speaker 1: this money, uh, and then we'll move forward from there.

155
00:09:15,280 --> 00:09:17,560
Speaker 1: So Allen, but could you could you imagine could you

156
00:09:17,600 --> 00:09:19,840
Speaker 1: just imagine what again if they're gonna spend all this

157
00:09:19,880 --> 00:09:22,679
Speaker 1: money in R and d Uh they've again obviously they

158
00:09:22,720 --> 00:09:24,640
Speaker 1: have had this huge cash burn and the people love

159
00:09:24,640 --> 00:09:27,480
Speaker 1: them still love them. Where will they cut? Well, you know,

160
00:09:27,520 --> 00:09:30,200
Speaker 1: they go to fly around and see clients lest I

161
00:09:30,200 --> 00:09:33,320
Speaker 1: mean you would imagine where's the where's the where's the

162
00:09:33,360 --> 00:09:37,760
Speaker 1: fat they can cut? Do you think, well, there's s

163
00:09:37,800 --> 00:09:41,320
Speaker 1: g n A for them? Uh. Sales in general administrative

164
00:09:41,440 --> 00:09:45,440
Speaker 1: is a huge issue because of the distribution costs that

165
00:09:45,559 --> 00:09:49,200
Speaker 1: they have, uh, their incentives. They need to keep the

166
00:09:49,320 --> 00:09:52,400
Speaker 1: money the numbers flowing, I should say, in terms of

167
00:09:52,520 --> 00:09:56,679
Speaker 1: sales and so it's it's kind of difficult to cut

168
00:09:56,800 --> 00:10:01,520
Speaker 1: off when you're trying to and are obviously huge expensive

169
00:10:01,679 --> 00:10:05,040
Speaker 1: when you're trying to reach a production and sales numbers

170
00:10:05,080 --> 00:10:08,360
Speaker 1: that are are very significant because of the fact that

171
00:10:08,480 --> 00:10:10,680
Speaker 1: the second half needs to be much stronger than the

172
00:10:10,720 --> 00:10:14,320
Speaker 1: first half. I don't think that the small stuff is

173
00:10:14,360 --> 00:10:17,760
Speaker 1: not what you're gonna cut. Uh, it's the Uh. It's

174
00:10:17,800 --> 00:10:22,040
Speaker 1: some of the issues like for example, supercharger development may

175
00:10:22,040 --> 00:10:25,040
Speaker 1: be pushed back a little bit. Uh. They obviously need

176
00:10:25,080 --> 00:10:27,720
Speaker 1: to have more superchargers when the Model three is out,

177
00:10:28,000 --> 00:10:30,840
Speaker 1: but maybe they have the next year instead of this year.

178
00:10:31,360 --> 00:10:36,319
Speaker 1: The same with stores. They need to UH dramatically increase

179
00:10:36,360 --> 00:10:40,200
Speaker 1: their account again, they may not do that uh this

180
00:10:40,320 --> 00:10:44,560
Speaker 1: quarter or perhaps even next and holding off into next year,

181
00:10:45,440 --> 00:10:48,280
Speaker 1: thank you very much. Alan Baum is the principal at

182
00:10:48,440 --> 00:10:53,200
Speaker 1: Bauman Associates, joining us from West Bloomfield, Michigan. Shares of

183
00:10:53,240 --> 00:10:55,760
Speaker 1: Tesla higher by four dollars to share a two d

184
00:10:55,880 --> 00:11:02,280
Speaker 1: and two dollars. This is Bloomberg. Another big deal coming

185
00:11:02,400 --> 00:11:06,520
Speaker 1: up on taking stock on Bloomberg Radio and Bridge agreeing

186
00:11:06,559 --> 00:11:10,320
Speaker 1: to purchase a fellow pipeline owner, Spectra Energy Corps for

187
00:11:10,400 --> 00:11:13,160
Speaker 1: twenty eight billion dollars in stock. While the deal work,

188
00:11:13,240 --> 00:11:13,960
Speaker 1: we'll find out