How High Can Oil Climb on Syria Conflict?

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Aug. 28 (Bloomberg) -- Bloomberg's Alix Steel and Bloomberg Tradebook's Gregory Bender put futures in focus with an examination of the oil market as the U.S. moves closer to a military strike in Syria in "On The Markets." They speak on Bloomberg Television's "In The Loop."

And when we do get military strikes?

It is a holiday week, end of summer, three-day weekend.

We are ready had an eroding of the picture, and now we have headlines.

I would expect selling.

Guys will get out of the way and rotate back into the bond market.

You do not know what is going to happen.

You cannot take three days worth of risk.

I think we will see some exit.

We of seen oil in stock emerging -- diverging the most in three years.

What matters is syria probably is not an energy powerhouse, but if it turns to a wider regional conflict, then that will put a spike in it.

It will be a short-term thing.

We of some much domestic supply and gap that this small problem turns into a big one.

You do not know what someone will say next.

Certainly uncertain markets right now.

Brian battle, director performance trust capital partners.

From the trade to the call.

I want to bring in the principal who -- where he manages $3.2 billion.

His call is markets have gone ahead of themselves.

Yesterday's move not unexpected.

To come i think given the uncertainty in the middle at -- middle east and action that will take place, and potentially the markets could respond positively.

No one is giving it the markets -- no one is giving the market benefits of the doubt.

Could come back after labor day and success.

For us, it is.

Investing is like being a turtle.

Pull your head out when you have to take some risk.

By the stocks you like for the next three-five years.

Companies will grow.

People are moving out of equities because of the rest.

We got the fed coming up.

What will happen with the debt ceiling.

Those things for us as investors are a great opportunity to put new money and.

Some good news comes out of syria.

Market could rebound or come back down.

To go -- speaking of stocks, you have stock picks, and ford is one of them.

We talk a lot about the resurgence of the u.s. car market but there are macro concerns.

One of them people are driving less.

This chart is driven on public roads carmichael spirited steep declines last year.

A decline of over 1.5% since january.


People are keeping cars longer, driving less and buying used cars.

We like ford because of the new products.

They have things consumers want to buy.

But the port focus.

Cars that are much more fuel efficient.

Consumers look at them and say wow.


Internationally a call option because as europe turned around, ford has invested through the downturn.

Always owned companies that invest in the downturn.

They are international global company.

3% dividend yield.

You want to own this for a couple more years.

Google is another one.

People are paying to hold the stock.

They have outperformed not only the s&p 500 but technology generally.

It has than double the performance of the s&p 500 technology index.

Remember the old song, one of these things is not like the other?

Take a look at the price to earnings ratio google sticks out like a sore thumb.

Price-to-earnings ratio is double that of apple, microsoft and ibm.

I know you like microsoft as well, but is google too expensive?

To go -- earnings are expected to grow at least 10%. apple has uncertainty.

They have tons of cash flow.

Search coming on.

You have a lot of option value.

Coming out with new products.

Microsoft is a great company but needs to be broken up.

It needed a change.

It needs to be broken up or a shift in strategy.

Great to see you.

Coming up, one more way for you to spend your money on line.

Twitter wants to get into shopping big-time.

Stay "in the loop." ? here's a look at what is on our radar.

Tivo does make big money selling lawsuits.

A profit of over $268 million after winning a legal battle over the -- over the use of the dvr technology.

Groupon ceo wants to ramp up competition with amazon.

They are planning a network of warehouses throughout north america as they seek to rely less on a daily keep on business.

Imagine thinking you want to move your own thing there and moving someone else's instead.

That is what researchers say they have accomplished using brain to bring in our free system.

-- brain to brain system.

And staying in tech, twitter getting into the commerce game as a looks for more ways to generate revenue ahead of a possible i.p.o.. the company has hired a new head of commerce that will let users shop with tweets.

Jon erlichman broke the story and joins us now from l.a. on one level this is a very logical extension for twitter.

Spent the last couple of years catering to marketers and explaining what the platform is and why it would be beneficial to advertise their.

At the next up is the one to sell used up.

They see something on twitter, you can click on it.

That leads you directly to some ability to buy it seamlessly.

It all sounds great in certainly assisting you get excited about, but we know advertising and retailing are different businesses.

We know that other social networking players have tried to move into commerce and so far the results have been mixed.

Twitters as they do not want to be in the payment business.

They want retailers to get onto the platform and try to sell stuff if they're good at doing it.

What would it take to be successful at this?

I feel there is a big moment that it's a lot of attention.

I think everyone is still talking about how oreo capitalize on the lights going out with a dunk in the dark strategy.

If there is a savvy retailers back and take advantage of something happen -- happening in real time, who knows.

That might tell retailers ok so using twitter is a way to do things differently than we have in the past.

The guy running this previously was the ceo of ticketmaster.

Obviously a lot of times there are empty seats.

Where do find a quick way to sell them?

Maybe a place like twitter.

Think you.

Much more on twitter.

All things media today and 1:00 and 3:00 eastern time.

Coming up, the fears of serious sending shockwaves in markets around the world.

Our next guest does business throughout the middle east and says this could bode well for u.s. investment.

That money could be flooding here.

In today's global outlook, will the conflict and syria make investors nervous enough to pull funds out of the region and bring them back to here in the united states.

On the phone right now is ceo of a company made headlines when they made a bid for the entire -- empire state building.

So far -- first of all, what are you hearing from some of your sources on the ground?

How nervous they are about the potential military conflict in syria appeared to go first of all, i extend my condolences to all the people of syria.

Wonderful culture.

Culturally wonderfully warm people and it is terrible.

This was one of the first city's ever built in the history of the world.

As such, some of the republics.

So many churches, synagogues, except rep.

It is terrible for syria itself, but the ripple effect is much greater.

They are as a potential.

How worried about that are you?

Because you have interest not only there, but also in bahrain.

You have worked in turkey, israel and other parts of the region.

I am very concerned.

Worried about the ripple effects of lead and on, oil prices in people's fear.

What is happening from a big picture is it is getting wider and wider.

It certainly makes me pause as an investor.

Already we had issues with brazil in turkey, a first-world economy is and an agricultural and industrial area that have social unrest.

That created trepidation around the world.

Quantitative easing creating trepidation about the world and the impact of the emerging market currency.

Now you throw on this what is potentially a world war with china and russia picking one side and the united states in europe and saudi arabia picking the other.

Let's hope that does not happen.

You believe conflict like this summer rising tensions, will only force investors to have been seeking yield in emerging markets, that they might start to come back here to the united states.

Very much so.

I think treasuries will start to benefit.

Gilts will start to come back.


Your rope, etc.. we are starting to see that already.

And people have investment locations like the emerging markets and middle east.

Argue doing that?

No question about it.

I have more of a focus on investing in the established markets.

A place like turkey or brazil that is so exciting right now, folks like myself taking a bit of a pause and waiting to see how the politics of the world, as well as the local markets turn out before making a decision to step in and benefit from potential value.

To go think you -- - on the global crisis.

Turning to italy.

Expanding temporary layoffs for 5300 workers.

Mannes cranny joins us with the details.

We think of a production facility for fiat, the ultimate 300,000 cars.

They have produced 11 -- set to make 3000 cars.

They're so than 4000 of those numbers.

. and low was car sales since 1996. an uptick in germany.

This is a chart that is worth looking at.

It isfiat fiat sales.

Chrysler, the -- jeep and dodge you know.

That is the country where we saw the died down in terms of sales.

Those are the brands under pressure.

The man who loves taking capacity out of the system.

What he is doing is beginning to take other brands to make up for the possibility of having to tell 5000 people to stay home.

Thank you.

A lot happening in today's session.

Syria among them.

Adam johnson here to tell us what to watch for in today's triple play.

You are watching the indian market.

What is happening in india is absolutely staggering.

The currency has fallen to the lowest level ever.

The problem is india runs a trade deficit, but it is not the reserve currency of the world.

It is having a real impact as oil prices rise.

There is real concern about how they will deal with a falling currency.

We are watching washington because there commemorating the 50th anniversary of martin luther king speech.


11:00 there will be a number of speeches.

President obama speaking today.

You think of how far this country has come and how far we have to go.

One person can change the world.


What is coming up here did we will have much modell -- mitch modell.

We will talk about the business of the nfl.

Thank you.

Adam johnson.

We return in just two minutes.

? that does it for today.

Tomorrow we are all over ford.

It the chief executive officer will be speaking with us.

Do not miss that.

Tomorrow starting at 8:00 eastern time.

56 minutes past the hour work, which means bloomberg television is on the markets.

And stocks are actually in the green this morning, despite the fact the s&p closed the low budget below the 100 day moving average yesterday.

The question is, how you measure the level of a bounce?

A lot of uncertainty out there.

Getting pending home sales in just a few moments.

Tw stopo to highlight for you, joy global getting hammered come down over 5%. a decline in sales amid a slowdown in demand growth for metals, as well as coal.

On the upside, you have expressed up 10%. raising the full-year earnings forecast after compared will tell if the sales grew 50%. now it is time for futures in focus.

Oil futures on the rise on concerns the conflict in syria may spread and red oil supply and the middle east.

For more, i am joined by a great defender.

Take a look at oil breaking out.

-- craig bender.

We have been rallying.

We went up and consolidated it.

Technicians look at something called the measure moved target , $120. what is the correlation between brent and wti?

Right now the spread is up $5. looking at 125, which is previous highs.

Looking for 150 if it disrupts supplies elsewhere.

What does the market look like for the next couple of months?

The closer contact other contractors that expired in october trading at a premium.

It actually means prices are higher now going forward.

The market is pricing in a de escalation or lower prices.

Short-term spike in supply concerns.

What about options volatility?

Volatility is back in.

A lot of precedents if you look at desert storm.

September 11, and the vision of a raftiraq in 2003. once the conflict starts, prices tend to not only reversed, but collapse.

To go buy the rumor sell the trade?

To do you could definitely say that.

Prices not only retreat, but step back below.

Like in 1991, we sell 45% decline in prices after the buildup of prices.

To the that is a lot of speculation.

Talking about the s&p and oil.

Moving in opposite directions.

Are we seeing money flows out of stocks and into oil?

Bac ratio, this is taken at important resistance levels.

This text has been automatically generated. It may not be 100% accurate.


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