Coca-cola's deep rooted history may have a stake in the u.s. as its products get the boot from schools.
Blocking the keystone pipeline, saying it will raise gas prices.
The fda approves the first machine ever to diagnose adhd in children, which could cause a major shakeup in the drug industry.
Good morning, everyone.
It is july, 16th, we are live from bloomberg headquarters.
You are "in the loop." i'm betty liu.
Scarlet fu is breaking down goldman sachs results.
Erik schatzker following the financials for us.
He will have analysis to help with today's earnings.
And we will dig deeper into coca-cola's results.
Duane stamford, reporting on trouble spots for coca-cola.
Peter cook is watching the senate, where majority leader harry reid is trying to push through a rule concerning the nomination process known as the nuclear option.
Scarlett has more on the breakdown of car -- goldman sachs'result . the world's most profitable securities firm before the financial crisis, went to the performance of capital markets.
The theme, as j.p. morgan and citi before, higher trading revenue for the banks compared to last year, but down from the first quarter.
Earnings per share of $3.70. much higher than average estimate of $2.89. over the past month, 15 different analysts had ratcheted down their bottom number for goldman sachs.
On the revenue side, $8.6 billion in revenue, higher than anticipated.
Keeping with that theme, lower purse is the first quarter of the year.
When you pretend it various businesses, investment banking coming in higher than anticipated, $1.55 billion thanks to debt underwriting and advisory fees.
Equity underwriting was shy of the mark.
Trading did hold up.
Fixed incomes, currencies, commodities, $2.64 billion.
It looks like a miss from the average analyst, but coming up of a reasonably strong quarter.
Equity was higher than expected, $1.45 billion.
Lots of concerns that higher long-term rates, what that would do to the balance sheet of banks, capital levels, the trading books.
So far, the affect seems to be pretty the nine -- benign.
And expenses, most of them coming through compensation and benefits.
43 percent said compensation ratio.
That is a percentage of revenue.
Bang in line with what analysts were anticipating.
Thank you for those numbers, scarlet fu.
She just mentioned, we had j.p. morgan, a city city, and wells fargo for more analysis on these bank earnings, i want to bring in erik schatzker.
What stands out for you hear from the beat by goldman?
I want to pick up on one thing that starlet mentioned, trading revenue, especially in fixed income, held up in the second quarter, even as long- term rates were backing up.
It was an open question for wall street, and we still have not seen bank of america or morgan stanley, but the big question, goldman had to exorcise the demons it was living with from 1994. lloyd blankfein and gary cohen were still there when it was still a private, capra was being destroyed by the backup in yields.
For goldman sachs, even more important to demonstrate it could hold its own in a fixed income market, like we saw in the month of june.
They proved they were strong in foreign exchange currencies, commodities, even as industry trading revenue declined, as you would expect in that kind of environment.
The other thing i want to highlight is the return on equity.
This is the benchmark of profitability for wall street banks like goldman sachs and morgan stanley, j.p. morgan.
10.5% in the second quarter.
This is still terrible.
That is pretty much the cost of capital for a firm like goldman sachs.
So long as they cannot earn their cost of capital, it is destroying shareholder value.
Yes, earnings per share come out ahead of estimates, not as much of a decline from the first quarter as expected, but in the bigger picture, broader perspective, this is not a good quarter for goldman sachs.
You need to see a firm like goldman sachs over the medium term generating roe in the mid- teens.
That will drive investors to drive the stock up.
Thank you, erik schatzker.
Moving and shaking this hour, yahoo!'s marissa mayer.
One year after becoming ceo, she has seen shares of her company rise.
But she has still not one over the advertisers.
Many have shifted their online budgets to google and facebook.
Analysts are forecasting another quarter of stagnant sales when yahoo!
Reports after the bell today.
Will the fed or what they question continues to hang over the economy.
We will be getting an important clue.
Michael mckee is with me.
He says the idea of tampering may get pushed by cpi later echoed not only do they have to worry about unemployment, but they also have to worry about inflation.
Everything the fed used to do was on inflation, but that went away.
It is too low right now, running about a percentage point below their target.
Some telling us that they do not want to vote for tapering until inflation starts to rise.
Ben bernanke committing to their 2% inflation target, and the good news is, we may get some progress on that front.
Consumer prices are expected to have written -- risen in june.
Service prices seem to be rising.
That may help us rise a bit more.
Something else to watch, medical care.
Price increases have been slowing.
In the long run, good news, but analysts are not sure that that will continue.
What will not pump up gas prices, gasoline.
Prices went down last month by an average of 11 cents, higher now, but look, right before the spike, that is june.
The fed will be watching the numbers and decide whether or not inflation is rising enough for them to commit.
Two more cpi report before that's september meeting with everyone will be focused on whether or not they taper.
We kind of forgot about inflation for a while.
Thank you, mike mckee.
We have an update on edward snowden.
Moments ago we learned that he has applied for temporary asylum in russia.
A russian lawyer says that he has agreed to stop leaking secret american documents.
He has been stranded in a moscow airport for three weeks as he has looked for a country to take him in.
Vladimir putin indicated the country would not offer him asylum, unless he promised to stop linking u.s. secrets.
It sounds like that is exactly what he has done.
Back in washington, is senate majority leader harry reid about to pull the trigger on the nuclear option that would prevent the filibustering of presidential appointments?
If he does do that, will anyone outside of the senate notice that he is doing this?
Peter cook has the latest on a looming showdown in the senate and why this matters.
Is senator reid going to pull the trigger?
We will know in about two hours' time.
That is when the fight on the floor of the u.s. senate will take place.
He is so frustrated that the president cannot even get his own executive administration nominees in place, he is willing to change the rules of the senate.
He expressed his frustration over the past few months, in particular, seven nominees that have been blocked for a number of reasons.
He is willing to change the rules only require 51 votes to overcome a filibuster, as opposed to the normal 60. this would only apply to presidential nominees.
This would not affect the judges or legislation in the senate, but would be a change.
Republicans say it would undermine the traditions of the senate, the powers of the minority, the senate as a whole, and could respond in time.
Last night, there was an effort behind closed doors, all of the senators meeting in the old senate chambers.
Harry reid emerged to say that they did not have a deal but perhaps made progress.
The conversation will continue tonight, the votes are scheduled for 10:00 in the morning.
This means the presidential appointees, if he pulls the trigger here come the could get confirmed by the senate in much easier fashion.
The end result could be a senate that has been in gridlock, could be totally blown up by this.
This could poison the well and can a chance to get any legislation passed by the session could be gone.
Who exactly are they fighting over?
The short term fight over seven nominees, all of whom have some impact over the business community.
Two members of the president's cabinet, the labor department, epa.
The bigger fight is over richard cordray, the head of the consumer protection financial bureau.
The larger fight is over three members of the national labor relations board.
They do not like the fact that the president recess-appointed these three people.
There is a legal fight over that.
They do not think they should beaufort until that legal battle is over.
Has this gotten personal?
There has always been a tenuous relationship between a harry reid and mitch mcconnell.
In the last couple of days it has been very unusual on the floor, the tension, animosity between them.
This has become a very personal fight.
Things seem to ease off a bit last night in the closed-door session, but watched today, the body language will tell us how this will work out.
Thank you, peter cook.
Coming up, the hedge fund billionaire leading a campaign against the keystone pipeline.
He sponsored a new report that looks at how keystone will collectively raise gas prices.
Also, shares of coca-cola are down in the pre-market.
The world's biggest soft-drink marker -- maker reporting volume that missed estimates.
? shares of coca-cola are trading significantly lower ahead of the bill this morning after it reported earnings in line with estimates.
One part of their story that poses a threat to the company and industry in general is the u.s. government's effort to put healthier food un-american plates, particularly in school cafeterias.
With me now is michael jacobson . he has lobbied for healthier foods standards in the country, particularly in schools.
Also from atlanta that is wayne stanford, who covers the beverage giant for us.
The corporate story first on coca-cola.
Second quarter volume best estimates.
What was going on there?
Coke has prided itself on being able to weather the storm around the world.
There are so many markets, it can usually make up for any weakness in one area.
This time, the macroeconomic outlook seems to be hurting them across the board.
They have some problems in europe, china.
They have even cited some issues in latin america.
This volume number of 1% growth -- to put this in perspective, analysts were expecting around 3.3%. 4% a year ago.
How do the reverse that?
-- do they reverse that?
Package sizes is a big issue, trying to offer more different types of packages.
If they cannot afford a higher- priced package, there are other options.
They are trying to target occasions, try to convince people to drink their product with meals.
China, pepsico, they rarely stepped up their efforts.
There were some competitive issues cited in that report on china.
Coke facing macro headwinds.
Another challenge they are facing is one that michael is leading, which is this ban on sugary, fatty foods in schools and around the country, trying to get americans to eat healthier.
First of all, have you been satisfied from what you have seen from coca-cola and pepsi, trying to reduce the amount of exposure that they have to younger kids?
It is wonderful that coke and pepsi, the full of sugar drinks have been thrown out of schools.
But they are under pressure from all kinds of fronts.
In the united states, in particular, but also in europe.
It is not the economy, but public health.
Health experts have agreed, sugary drinks have been a major cause of obesity.
Per-capita consumption of pepsi is down 50% since 1998. per-capita consumption of cocoa is down about a third.
The major products of these companies are dying in the united states.
What is happening is, companies are coming out with a variety of lower calorie beverages, which is good -- let me stop you there.
You are ok with selling diet coke in schools?
I am uncomfortable with it, but better than regular coke.
The kids should be drinking water, low-fat milk, skim milk.
By the way, coke and pepsi package water as well.
It is not like they are only so the -- soda.
That is right, but they never sold much in schools.
Their goal in schools is to get brand loyalty, hoping that the kids, as they grow up, will consume their products for the rest of their lives.
The industry is under tremendous pressure, legislators are introducing taxes, a band of advertising, we have advocated for warning labels on the products.
In five to 10 years, the industry will be radically different, with very little full-calorie drinks and more of the low-calorie drinks.
Duane, you have spoken to management of these companies before.
They dispute those findings, that sugary drinks lead to obesity.
Is that right?
They believe it is all about calories in, calories out, choosing a balanced diet, and then exercise.
Clearly, there are " -- components of society, lower socio-economic levels, where they perhaps consume more per capita than other areas.
In those areas there is concern about the kinds of calories being taken in by sugary drinks.
Do we know that the declines of sales in soft drinks is related to this anti-obesity movement?
As people get older, they drink less sugar drinks, so a lot of the decline comes from the colas with the older set.
They are also starting to see this millennial generation, this upcoming generation, perhaps their parents did not let them drink as much soda.
Let's face it, they also drink energy drinks and things like that, so it is not all about health.
It is about that brand awareness and what they grew up with david.
Thank you so much to both of you.
Coming up, we will look at the world's biggest seller of healthcare products.
They beat estimates.
We will get the latest from j captioned by the national captioning institute --www.ncicap.org-- you are watching "in the loop." you can also watch us streaming on your tablet, phone, and on bloomberg.com.
I'm betty liu.
It is 26 minutes after the hour, and that means we are on the markets.
All three major indexes are pretty much unchanged right now.
In europe, stocks fell from a six-week high as german investor confidence unexpectedly dropped.
Copper rose in london ahead the production numbers.
Aluminum, tin, both dropped.
Wall street's says that goldman sachs beat is not a surprise.
A jump in fixed-income trading and revenue boosted their profits.
Shares of the health-care giant are on the rise after posting second quarter results that beat estimates.
We are talking johnson and johnson.
Strong sales of said the vice weaknesses in the company's $18 billion of revenue.
And the bond king was wrong in june.
Bill gross bought u.s. security is based on the idea and then the fed would push up prices.
Inflation expectation did not pan out.
And ultimately causing the world's largest mutual-fund to lose $9.9 billion.
He might be wrong so far, but we will see.
In the meantime, in washington, investigators continued their hunt for the answer is behind the -- answers behind the plane crash five asian airlines.
We have more.
We have been digging deeper into what happened moments before the crash in the cockpit.
Could the pilots just have been unfamiliar with visual flying skills, too dependent on the automatic controls?
The first thing that need to be said is that we are still early in the investigation and there are a lot of directions it could go.
In answer to your question, we interviewed several pilots that had flown at asiana or did training and career airlines.
They said they found pilots in that nation were uncomfortable with manual flying skills.
That is what was required in the visual approach that that asiana plane made a week ago.
Does hearken back to overall training at this airline?
To some degree, it is training.
Unlike the united states, where we have a vast network of airports, where young people can learn to fly, and gain a lot of experience, korea has virtually no general aviation airports, small planes.
It may have something to do with the way we train our military pilots and the way date -- they do.
What other issues investigators are looking into?
It is a long list.
The probe centers on what the pilots were doing.
That will be the focus throughout this year-long investigation.
That is just the beginning.
These pilots were landing at what is known as the cicadian lclock.
It was 3:00-4:00 in the morning so they were 58. -- they were fatigued.
Did they operate -- understand the operation?
You also have these trade issues.
Thank you for joining us.
It is early in the investigation.
We are getting some recognition on the economic front.
We will get inflation numbers and they have come out.
The cbi -- the c.p.i., month over month, is 0.5%. this is important because it excludes food and energy which is a big chunk of spending.
It is up by 2/10 of 1%. that was in line with what economists had estimated.
We are seeing a little bit of a reaction in the equity futures.
There were trending a little bit higher but now there's a bit of a sell on the market so for but not a huge impact.
Michael mckee is looking deeper into the inflation picture.
This is a good report if you are a fan of tapering.
It puts a floor under consumer prices.
C.p.i. is not the index the fed uses.
It is the personal consumption index but they track reasonably close.
We are going the right way because c.p.i. is stronger than expected.
It is only 2/10 below the headline number that the fed has targeted.
Transportation prices were the big mover this month.
That means cars and trucks prices will be rising.
Clothing prices were up 9/10 of 1%. that is just had a back to school and maybe inventories have been depleted and companies are raising prices or keeping prices steady.
They don't need to cut prices but services prices are up 2.5%. they are starting to rise again.
That should add to inflation.
There is no inflation danger in these numbers but it seems to put a floor on disinflation and supports that that idea that inflation will come back towards the target which eliminates one barrier to start to taper qe.
We want to hear more on this from ben bernanke when he goes to the bill but there is something different going on tomorrow.
It has always been at 10:00 when the hearing begins at the headlines are released to the public prints in this case, it will be at 8:30 in the morning.
The ratings will go through the roof and everyone will have to watch this show 24 hours from now with the ben bernanke, as.
The committee says it needs more time for its members to read his prepared testimony.
And be able to iraq -- react to it.
We all get an extra 1.5 hours.
It is sad to depend on the fed chairman for my ratings.
That would be my best guess.
Coming up, catering is one of the fastest-growing communities in america and will talk to a head of a company that builds hispanic malls and what will the controversial keystone pipeline mean for the price of gas?
Tom steyer will be + our guest coming up.
That has been a breakthrough on how doctors diagnose -- diagnosed children with adhd and it could be a game-changer for the multibillion-dollar drug market.
In the marketplace and politics, there's a fresh awareness of the hispanic population.
Wendy's and verizon have created products and ad campaigns aimed at hispanic consumers.
March and sorol call sleep hispanic market the new mainstream and the republican party is courting its of those.
We have the founder and president of the ligespi company.
He developed what he calls the entire shopping centers that cater to the hispanic consumer.
Great to have you here.
I must admit that i did not know there was this category.
How did you get into this business?
Back in the late 1970's, there was a strong growth of the hispanic community in southern california and that was my start.
That is a logical place.
That is the no.
1 hispanic market in the u.s. that is about 8 million hispanics.
With 55 million hispanics today, with $1.50 trillion in consumer money, it was only logical to start going after that market what are we talking about when we say hispanic malls?
We take a very cultural community approach.
Would bring the family in and take into account their common threads among hispanics.
Hispanics are very divergent in their views and nationalities.
We take a very strong community approach of understanding who they are with language, religion, they are catholic.
How does that translate when i walk into a mall?
We do events on sundays.
People come in on sunday like in the 1950's america where people used to go to downtown.
We create this cahche of hispanic families and that attracts them and that helps that the companies that are at the stores in these malls are who?
They are actually macy's and j.c. penney and sears.
Sears is very well-known with the hispanic community because it has been in mexico for about 100 years for the loyalty factor is what we entertain.
That has tremendous amount of loyalty toward sears.
Sears increases in sales when we do and hispanic mall, where are you expanding?
We had 10 malls all over the united states for it with an atlanta, georgia which is emerging, texas which is fort worth and houston and then an arizona and california.
We have them all over the united states and the idea is to expand into what we call traditional hispanic states like the southwest of the u.s. as well as the northeast, n.y., chicago, and so forth.
There are the emerging states like georgia and oklahoma city or even the northwest.
What about the characteristics of hispanic consumers?
Do they spend more?
Do they pay more in cash?
Do they spend more for certain items?
The hispanic consumer tends to factor purchases in soft goods and food.
You have large families, younger family members.
The hispanic community is 27 years old average as opposed to 42 years old for non-hispanics.
That is a different customer base because of the age demographic.
There is a lot more purchases in soft goods and groceries.
Even going out to eat.
In terms of developing these properties because you look at it from a business standpoint, is it easy to get funding for these developments?
How big are these balls?
I think the market is coming back as everybody got hurt in 2008. however, i think the money is coming back today.
They're smart money coming from wall street, from reits and traditional players like pension funds that are beginning to become players.
How much of these mall's cost for you to develop?
They can go from 20-$200 million.
Great to have you with us and thank you for bringing -- bringing us that perspective.
Staying with retail properties, all the designers have a secret weapon by comes to store sales.
They hire the right designer, the architect.
Meet the daddy of luxury, peter marino, the go to designer fashion boutiques worldwide.
Crystal artwork, golden walls, and a three-story venetian glass sculpture.
That is a few of the design elements used to lure in customers to london's c brand london's chael store.
It is a marketing approach to architecture that i do.
When you walk into chanel, you know you are there.
Peter marino is luxury retailer's architect of choice.
This award winning firm designs more than 80 projects locally each year and half of them are high and stores.
Before designing a space, i checked in on the advertising.
So much message comes from there and look at the product and i am surrounded by product.
He is not just an architect.
He is a sensualist.
Has a remarkable command to create sumptuous glam that sells luxury goods that the vast majority of his projects have budgets of $10 million or more.
Store alone has over 25 site- specific commissioned works of art.
He has some tricks up asleep to keep customers shopping.
You need to have natural light as much as possible.
It has to be easy circulation with the easy flow.
Open floor plans, dramatic lighting, and getting cash registers every room.
The most customers through silk and kashmir state to check out.
We know generally the more rigid the longer we call the customer in the store, the more likely we are to get money out of them.
It doesn't feel too much like a store and that is part of the success of what i'd do that when customers come in, they feel comfortable.
They wished their home looked like this.
What an outfit.
Coming up, the elon musk role model -- the founder of the tesla electric car resembles one of america's legendary industrialists.
Also, a breakthrough involving a child of a disorder that is often misdiagnosed in a shake-up of the multibillion-dollar drug industry.
You are watching "in the loop, coal live, streaming on your phone, your tablet, and bloomberg.com.
The big number today is $4 billion which is behind the drugs that are used behind the adfhd.
Fda has approved a new device that can detect brain waves and children, tracing different electronic impulses.
Joining us for more is olivia sterns how does this test work?
It is a brain scan testing for electric impulses.
You put sensors on a child's head and is hooked up to wires and you are looking for ratios of fortheta and t beta and ways.
The fda considered the efficacy against the traditional methods of testing.
That is like behavioral questionnaires and iq test and physical eye exams and they say the brain scan helped them get more accurate diagnoses.
So that accuracy will have big implications for the drug makers?
Yes, one of the reasons people say there are such wide variations of how many people actually have adhd because of variations of the diagnostic criteria.
If you get a machine involved with a more scientific approach, some say it could bring down the level of adhd diagnoses.
The american psychiatric numbers says between 3-7% of school-age children have adhd but the cdc said 11% of u.s. children have a diagnosis of adhdh and 2/3 of them are taking prescription medicine.
That is a serious issue and a major development, thank you.
Coming up, who does elon musk most resemble?
We've got the verdict next.
A one-year report card on marissa meyer and investors like a performance that advertisers may have a different take.
State,"in the loop." ? it is hot and humid outside but inside it is: we have an exciting ready program and had today at noon.
Tune and at that have.
Will get the bottom line on the coca-cola earnings and what they reveal about the beverage giant on bloomberg radio.
We will look at one store with two sides.
Today we're focusing on the two sides of billionaire entrepreneur elon musk.
He inspired the robert downey portrayal of comic book billionaire tony stark in the iron man films that elon musk more closely resembles a real life industrialist.
That is henry ford made the model t, first affordable car and revolutionized transportation and the way americans live.
Musk named his newest test of the model as and he says his company works closer to the way ford used to than ford motors does now.
If you want to check out the comparison between elon musk in iron man to judge for yourself, go to bloomberg.comtv.
Check out sam robards.
It is about 56 minutes after the hour which meant that bloomberg television is on the markets.
We will look at what futures are doing.
All three major u.s. indexes are not changed.
There is little reaction to the cpi numbers that came out earlier in the hour.
There are a little above expectations.
They increased the bet that the fed might start to taper from its quantitative easing.
Goldman sachs is out with earnings earlier this year, beating estimates after seeing a rise in profit from its trading and investment banking divisions.
Coca-cola and j &j are also out what earnings and coca-cola is reacting with the global volume growth, the stock down 2.5%. we are on the markets again in just about 30 minutes.
Coming up, the hedge fund billionaire leading a campaign against the keystone pipeline and now tom steyer has sponsored a report on what the pipeline would mean for gas prices for american consumers and we will talk to him in just a few moments.
Stay,"in the loop." ? 30 minutes to the opening bell -- this is a "in the loop." the countdown begins right now.
Wall street -- goldman sachs did not disappoint this earnings with earnings to the upside.
Revenues were boosted in second quarter profits and we are watching cents marissa meyer took the helm of the auto she has made acquisitions.
Our advertisers impressed with their?
Tom steyer will be with us in just a moment to talk about the results of a new study on the possible impact of the keystone pipeline, rising gas prices.
He says it will be bad for the american consumer.
Let's go to the markets desk.
I am watching shares of coca- cola falling this morning.
Profit is down 4% in line with estimates that sales fell short.
Coke is seeing sales dried up in europe.
Liquidity services helps customers get rid of their surplus assets of merchandise.
They announced preliminary earnings and sales that fell short of analyst estimates.
Many people are seeing this company has one that may report again a forecasts that is also lower.
There is a deal this morning i am looking at in the gming technology/industry.
Shuffle entertainment will be bought for about $1 billion.
The price is $23.25. thank you.
It may be a cliche but, yes, all eyes will be on ben bernanke when he testifies on the economy and monetary policy tomorrow in washington.
Michael mckee will be among those listening in and you have already been looking at what we can expect?
This is a big change from the house financial services committee.
Ben bernanke's testimony will be released at 8:30 tomorrow morning, not when the hearing begins at 10:00 as a has always been.
Leaders said they want to give their members more time to read comments.
This is a promo for your show -- tune in tomorrow at 8:30 or you will lose money.
People will tune in on this.
They have to.
They will be "in the loop" at 8:00. but what will we hear exactly?
We will expect more of the same for ben bernanke, the same after june.
The key question is -- when will they start cutting back on bond buying?
It all depends.
If job creation continues to pick up and new growth figures suggest the labor market progress we are seeing continues.
What change will they make when they cut back buying treasury bonds?
How do buyers react to rising mortgage rates.
How much will the treasury borrowing.
? you can expect ben bernanke to wag his figures at congress saying they're not doing a good job of the budget.
How long does tapering take until they are done?
The answer is, it depends.
That all figures into the calculation.
Don't expect a whole lot of clarity, a couple more months before they have to make a decision if it is september but they will make -- but we need to wait for more clarity.
It is hard to gauge the market that way.
If we will see tomorrow.
Let's stay with the economy and another measure of economic growth.
Restaurants and bars may be a better indicator of what is at for the industry instead of the government sells figures.
Restaurant jobs rose from one year earlier.
As the biggest gain since 1995 for the industry's sales slowed to a three-month low during that same period.
What is this data telling us?
We want to find some kind of leading indicator for where we think the economy is going.
For restaurants and bars, the majority of our economy is based on consumer spending.
As especially on things like discretionary items like food.
Look at this chart.
We are seeing data on the number of hirings we have had over the course of the last couple of years versus restaurant sales.
They track pretty closely until most recently when they are starting to diverge.
We see employment hiring at restaurants and bars is doing much better than the actual sales themselves.
This is something that neil dutta has highlighted and he believes that the employment data is more telling than what is happening in the overall economy.
This is perhaps a sign that things are getting better with consumer confidence and that means restaurants are hiring more people.
Are we seeing other signs that there is more optimism about consumer spending?
This is a great sign in the consumer stocks, restaurant stocks have done very well versus the s&p 500 overall.
Maybe people are more optimistic about what is happening.
Take a look of the restaurant stocks.
It could be a good sign for the overall industry and the markets.
If you like dishing about the food industry, check out the latest edition of "titan's at the table." four famous ships gathered around a table at me to talk about branding and getting people into the restaurant.
And search titans to view the full program.
New jersey governor chris christie is trying to rebuild the garden state at the last fall's devastating hurricane sandy.
Yesterday, united arab emirates donated $4.5 million to the hurricane sandy new jersey relief fund, a charity founded by the governor's wife.
The money will go to help repair 30 schools damaged by the storm last year.
Meanwhile, when new jersey beach town is doing something to attract visitors after sandy and it is not costing a dime.
The city of wildwood has banned saggy pants in it wants to create a more family friendly atmosphere.
Hike up your pants and you will be allowed to go to the shore.
The social media craze might be over among venture capital firms.
According to new data, social media companies are trying only 2% of the internet yield by venture capital firms.
That compares with 6% overall in the two-year stress that stopped in 2012. paul kadraski is joining us.
Are we seeing double bubble popped on social media?
In a sense we are.
Most of what is interesting about social media is that it is a winner-take-all market.
When someone has established a dial tone, there is not a lot of reasons to get a competing dialtone.
In a sense, the dial tone is established for it is facebook and linkedin and twitter.
Nobody thinks they will make a new investment and create a new twitter.
So there is no game -changer to fund and social media?
Yes, the only stuff happening is new platforms.
If you look at things like snap cha, these things are making some inroads but are likely to get purchase by another social network.
For the most part, the opportunity for building a new social media platform are fairly limited and that's why you see issues with media moving upstream.
That is mostly where the money is going, not to creating the platforms.
In a bloomberg article, the reporters said that they found a lot of money is going into cloud companies.
They might not sound as sexy as facebook or twitter but it is the new wave and technology.
Clouds services and those sorts of things are popular but is also robots and drones.
Consumers don't see it every day but it is usually an exciting and make a huge impact of the next few years.
Most of what is happening on the social side of things is they are moving out markets.
Thank you for joining us again.
We will return in two minutes.
? you are watching "in the loop,"live, streaming on your phone, your tablet, and bloomberg.com.
The controversial keystone xcel pipeline still awaits the president's approval.
The final decision will be based on the u.s. state department evaluation of the project which is in its final stages.
One billionaire climate activist and donor and friend of the president has been a vocal opponent to this project.
Tom steyer is the founder of the $20 billion hedge fund recently launched a social media campaign to persuade the president to block the pipeline.
Now he is upping his efforts by supporting an independent report by consumer watchdog that examines the keystone pipeline impact on gas prices.
Tom joins us exclusively on business from san francisco.
It is perfect time to talk about gas prices because they are on the way up and consumers are looking at the price at the pump and asking was going on.
What are the findings here in this report?
How is the keystone pipeline going to raise gas prices.
What the report says is that the pipeline would take this tar sands oil which is currently being shipped to the midwest of the united states and ship it to the gulf coast where it would then enter the world market.
Right now, the midwest to the united states has an oversupply big as there is no place else for the tar sands oil to go.
As a result of them shipping it to the gulf coast, if the pipeline is built, the price in the midwest of gasoline per gallon would go up by 20-40 cents.
Since the price right now is about $3.40 so it's, it would go to $3.65 -- $3.85 which is a consumer cost to the people of the united states of 3-$4 billion.
Do we know for sure that the oil is going to be for export?
Do we know a large part of that will be for export?
We do know that the reason they want to build this pipeline is to fall.
They want to get to the world export and want to develop it faster.
We know that they get about $30 a barrel less in the midwest to the lead status.
-- in the united states.
That is the world price where they compete with mexican and venezuelan oil.
They're not getting that in the united states.
We know this is primarily an export pipeline.
It goes through the united states but it does not go to the united states.
How did you get involved with this report?
This is an independent report.
We have known the people at consumer watchdog who are consumer advocates, it is a nonprofit organization, for years because their base in california.
I have talked to them about my frustration about the pipeline and they said let us examine what the impact is on the citizens of the united states, the consumers and see if it is good or bad for them.
This is the result either in the band informix.
-- this is the results of their individual farming.
There are reports out that show perhaps that remain not be an actual impact on the climate and the environment and maybe this is just another way at to offset what seems in dispute.
You're trying to offset that to focus on gas prices.
Let me say what is in dispute.
The state department said that developing the tar sands faster would not hurt the environment because building the pipeline would not hurt the environment because the tar sands would be developed faster because- alternative ways of getting a tarzans to market.
That has turned out subsequent to their finding that they can always get to market summer else turned out not to be trouper the primary alternative pipeline would go to the west coast of canada cerberus columbia.
Risk columbia turned down the pipeline.
On july 6, there was a terrible railcar explosion carrying oil in canada.
The way they felt they could automatically move the tar sands oil to market if they did on approve this pipeline were either the pipeline to the west coast, rail or truck and has turned out that those are alternatives that they were gimmes.
There's a question as to whether they get this tarzan's oil to market without the keystone pipeline.
There's still a lot of questions around the environmental last.
Have you found that there has been a debate on the climate said that perhaps is more beneficial for you to say this will get consumers' wallets?
." there is no doubt that an economic finding, it has cost american consumers, 3-$4 billion per year to have this pipeline built.
That is something that bolsters our case.
We would like to have a stronger case because we strongly believe this pipeline is a huge mistake.
From the point of view -- is not an alternative argument.
Is one more argument.
Thank you and i know you will join us later on radio.
We will return in two minutes.
? we are just a few minutes from the opening bell and we have the top 10 trade you don't want to miss after this break.
? welcome back.
The opening bell as moments away.
It is 26 minutes after the hour which means bloomberg television is on the market.
Julie hyman has the latest on futures.
Yesterday, we once again closed at a record for the s&p 500 within eight-session winning streak.
It is not clear where futures are pointing this morning.
It looks like the bias is toward a higher open but not much of a gain.
You have a earnings reports from some of the big companies thej &j and coca-cola that are mixed.
They are not giving investors much direction.
Economic data has been mixed as well.
We're not sure which way we are going to go today.
And no clues at all right now.
Let's count down to the opening bell with the top 10. these of the only trades you need to know about today.
10 is walmart, they may have the secret sauce to be the top player in the online grocery market which may increase by over 50%, $9 billion, walmart is testing an internet-based grocery service in san francisco and san jose.
I was just listening to pandora.
Spotify is pushing to expand in asia, spotify is aiming to tap into chinese users.
#8 is a rio tinto with new bids for their gold and copper mine in asia and that is sending shares soaring.
80% of the mine could be somebody filed this -- decision is expected this month.
Glaxo's smithkline vice president of operation public confessed to bribery allegations.
Investigators are shrugging off this news as the stock is outperforming -- outperforming european competitors.
The story is unfolding.
#6 is a ford and gm.
Goldman sachs is a different view on the two carmakers removing ford much conviction buy list and replacing it with gm.
Citigroup is cutting the automobile industry for a whole and for the first time in four years what at&t today.
It is taking a page from t mobile, offering thousand tablets on an installment plan with the option to upgrade the devices annually.
This makes the strategy that the mobile robot earlier all eyes are on merges the mire -- marissa meyer.
The earnings report is due out over the -- after the close today.
A management overhaul has not convinced advertisers to spend more money at yahoo!
Johnson and johnson is no.
3. the numbers doubled after selling its stake in elon.
And sticking with earnings, let's talk coca-cola.
Shares are down in the pre- market after the company reported its earnings and they missed revenue estimates by $220 million.
A 4% drop in sodas specifically was cited.
And you can imagine, number one is goldmansachs.
[opening bell] bank earnings doubled in the second quarter, beating estimates.
Net income at about $1.9 billion.
Joining me from chicago its scott bauer.
It looks like we are waiting for what ben bernanke is going to say tomorrow.
We have had disappointing data, retail sales coming in a little bit worse than expected.
I do you expect that the market will flat line -- do you expect that the market will flat line for now?
The data this morning did not suggest any imminent tapering.
We will see the same speech that he has said over the past couple of weeks.
And what is forcing the market back is the financials, who have led along the way here.
They are reporting blow out earnings.
There is no stop to it right now.
This market suggests a grind higher.
" it is not going to happen anytime soon.
Grinding higher than.
It is ben bernanke comes out and pretty much says the same thing that europe said all along, what is the market reaction when to be -- that he has said all along, what is the market reaction going to be?
So far, we have seen really good earnings.
Coca-cola was a little bit disappointing today, but the market leaders have been great.
Iwhen we saw the market-couple of months ago, we thought volatility in the marketplace.
The vix had already bottomed out.
The market is still grinding higher, but we're still seeing the vix on the downswing.
That is a key indicator that we will still grind higher in this marketplace.
Scott, thank you.
Julie and mike are staying with me because we're looking at the market today and tomorrow.
It is time for the call.
Here with me here is the managing director of a boutique trading and research firm.
It is interesting, steve, because after inflation data this morning, why do you say next year?
Retail, excluding auto, was the first-we have had in almost two years.
-- the first negative number we have had in almost two years.
The second quarter has been lowered several times.
We are now talking 81%. and it looks like we're starting to see a summer swoon.
Bernanke is dated dependent.
I think he will talk about doing everything, but nothing will be done until 2014, in my opinion.
I know mike has been watching the fed and bernanke's comments.
You have been looking at how much the fed bond buying has been affecting the financial market.
People all over this city say the fed is distorting the market.
$1.90 trillion of three trillion dollars is treasurys.
If you cannot get a real price on bonds, if you cannot get a price on what corporates would be worth under normal circumstances, how do you trade forward?
How do you discount?
I don't think the fed really helped the market in june or july because it was a negative number.
I.p. the market takes care of itself.
The fed will slow down the tapering program, but the most important thing is the interest rates will stay low for a very long time.
And now we have to watch corporates.
Financials have started out well, but the multinational companies led by coca-cola, which got hit by currencies and lower revenue, that will be the earnings season going forward.
Citibank is good, but they had a 780 four million dollar reversal of reserves.
-- $784 million dollars reversal of reserves.
Europe and china are obviously slowing down.
One of the industries that you are pretty bullish on is the airlines.
Julie is looking at the bear case for the airlines.
If you look at what has been going on, it is been hard to make a bear case.
The stock is doing really well.
It is up over 40% in the past year.
And this formula for the stock to do well is that there has to be relatively strong demand, and you ought to have some capacity discipline on the part of the year a lot -- airlines.
That is, they have to keep their supply in check and not block capacity.
We are, however, seen delta at capacity even as competitors to cut back.
It could be a risky proposition to enter here because the question is whether they can keep that capacity in place.
How do you make sure you are in a disciplined airline?
Three years ago, there were 12 competitors.
There are now four.
They are now running like a business.
Crude prices, which i think should have gone lower, have gone out.
But most airlines buy their fuel off of brand, which has come down.
Delta in the latest quarter, had a positive number on fuel.
Stocks are up, so they could have a correction at any time.
It but like the railroad industry of five years ago, where they will get multiples, none of my clients have really made it back into airlines.
Coming up, it has been officially one year since marissa meyer took the helm at yahoo!
And the stock has gone up.
Has she proven the critics wrong?
Plus, glaxosmithkline, is it able to deal with allegations as serious as sexual favors stocks ? one stock are bloomberg -- "bloomberg west" radar that we're watching today is yahoo and it is reporting earnings today after the bell.
75% of the past year has been because of growing optimism around marissa meyer.
Dominic chu has more on investor sentiment and today's turnaround trade.
Jon erlichman is looking at what you should be watching for this afternoon to know if her efforts are really working.
Let's start with investor sentiment.
You got to say happy 1-year anniversary to marissa meyer, because at -- on this day a year ago she took over the helm of yahoo!
And it has been quite a time.
She has made a lot of acquisitions, about 17. six major product launches and a lot of products dropped.
They are trying to streamline operations at yasu.
It they have bought a lot of companies like tumble -- tumbler.
All of these are meant to improve their footprint into mobile, digital, smartphones, everything like that.
Mobile is where marissa meyer is focusing her attention -- yahoo!'s attention right now.
What do investors need to look out for?
All of these are meant to rosales, grow profits.
It is about trying to get yahoo!
To be cool again.
The stock is up 75% over the course of the past year, yes, during her tenure.
It is up 34% just in 2013 alone.
Will investors keep demanding the same valuation premium that they do for yahoo!? dan loeb it's still a big investor in yahoo!
I want to head west to jon ehrlichman in l.a. marissa meyer has been making changes and has basically been an acquisition machine in the first year.
You cannot discount the activity she has had.
17 acquisitions over the course of 12 months is a lot here, even if those deals were small.
One was the purchase of tumbler.
It was almost a blueprint on where she wants to take this company, and perhaps, finding a new way to generate advertising revenue.
And to do some key product launches from the homepage is really important, and just as important with a company like yasu is to drop upwards of 25 products.
-- like yahoo!
Is to drop upwards of 25 products.
They are spread across so many different products.
When you look at the earnings today, what you will likely see is a revenue story that is really hard to break, in part because there is continuing pressure on the display advertising business for this company and finding new ways to generate that advertising growth is tough.
It certainly is a lot of questions for marissa meyer.
We will see of oliver acquisitions turned into sales and growth in the coming years.
Jon ehrlichman, thank you.
It for more yahoo!
And all things technology today, when p.m. eastern today only on -- 1:00 p.m. eastern today and only on "bloomberg west." baidu is getting into the wireless market with a $1.9 billion acquisition.
This is the biggest acquisition for baidu?
Yes, it is.
It will buy from a company called that dragon with soft and is requiring the remaining shares.
It is trying to beef up a mobile business.
Its bread-and-butter has traditionally been more of the desktop business, but obviously in china, like here, we are seeing mobile command grow and baidu wants to tap into that.
Itmuch like google here, baidu is the most popular in china.
But what are they trying to do in the marketplace?
It got about 80% of the desktop market, but only about 9% of the mobile customers.
We have already seen a lot of competition in this market.
" you have alibaba buying a stake in the twitter-like service there.
And another internet company here, basically a lot of players targeting this market.
They felt they had to make a dramatic move into that market.
Gregg's -- thank you, julie hyman.
Still ahead, police in china and are seeing a rise in sexual favors.
Details on this shocking story.
And it is a bank bonanza . why banks just keep delivering those results.
? time now for the global outlook.
The wild allegations against one drug making giant in china.
Glaxosmithkline is facing accusations of sexual bribery . this is shocking news.
Yes, it really is.
And basically, glaxo's sales boomed in china last year.
It was about four times the average rate of the emerging markets.
And chinese police say brides and sexual favors are what helped them to rake it in.
-- bribes and sexual favors are what help them to break in.
They say some executives even received sexual favors and that other drug makers transferred money to the agencies to bribe government officials, medical associations, doctors, hospitals all trying to curry favor.
The allegations total nearly half a billion dollars.
Glaxo says they are very deeply concerned and are reviewing all third party relationships and are cooperating with the authorities.
And glaxo is not the only drug company running against regulators recently.
Know, there are at least for a -- four facing charges in china.
This is all in an effort to tighten regulations targeting foreign companies.
Jeff hjordis of gabelli funds says in an effort to establish the authority of the new leadership.
If found guilty, glaxo could pay up to $10 million in fines.
But they say that as a drop in the bucket and essentially would have no impact on shares.
That is sort of strange and confusing that there is no impact on the shares.
Thank you, olivia.
Adam johnson is joining before today's triple play, as he always does.
Banks are at the top of your list.
Yes, and here's why.
The analysts were so far off, you cannot even put numbers to this thing.
Goldmansachs blowing them out of the water.
Goldman, jpmorgan, the most hated sector, but trading at book value.
We will be taking a lot of bernanke's testimony live tomorrow, as you might expect.
And then there are flip- flops', talking about tinkering, and then -- tapering, and then changing directions last week.
And then we will have ben stein, and with all of the flip- floping of the wind then, we want to find out what the other band has to say.
-- with the one ben, we want to find out what the other ben has to say.
But thank you.
We'll be back in two.
? the goal in school is to get brand loyalty.
The industry is under tremendous pressure.
Legislators are proposing taxes and talking about ban on advertising.
We have advocated for warning labels on products.
The industry, at least in western countries, will be radically different.
Michael jacobson, from the center from -- for the center for science was talking about the worsening obesity problem in the united states.
And shares of coca-cola are down not just facing obesity, but growing economic problems overseas.
Tomorrow, mohammad el-erian of pimco will sound off.
That is at 8:00 a.m. eastern time.
Julie hyman joins us.
It corrects it was -- it was a tossup at the open as to which way stocks would go.
Now we have our answer, at least for now.
Declines across the board, not big ones, but enough to win -- to break the eight day winning streak we have seen.
We have industrial projections in june rising the most in four months as well.
But all of that equalling the declines in stock.
We just heard betty mentioning coca-cola is down 4%, but the shares have turned around and are higher, it books.
I think we have some stock prices a little bit off there.
Those are the one-year prices.
Coca-cola is a little bit down today.
Gold futures, we have seen a little bit of a down run.
They have been a rebound in recently.
Let's dig a little bit more into what it's been going on with gold.
The rebound is leading some folks to get back into this market.
The dominic chu has been looking at that phenomenon than either and sentiment surrounding gold.
-- that phenomenon and sentiment surrounding gold.
Let's start with the price of gold this year.
We have seen a steady drop, if you will, in the metal.
According to data compiled by bloomberg, this is the longest run below the 200 days moving average for the precious metal since february, 2011. that is the most since march, 2009. according to data compiled by