Senate Showdown Averted: Bottom Line (07/16)

REPLAY VIDEO
Your next video will start in
Pause
  • Info

  • Comments

  • VIDEO TEXT

July 16 (Bloomberg) -- On today's "Bottom Line," Mark Crumpton provides insight at the trading day's critical hour, with careful analysis of big events for investors. (Source: Bloomberg)

. from bloomberg world headquarters in new york, i am mark crumpton.

This is "bottom line," the intersection of business and economics with a main street perspective.

What coca cola's latest earnings fell flat.

The architect makes luxury liners look as good as the close they are selling.

To our viewers here in the united states and those joining us from around the world, welcome.

We have full coverage of the stocks and stories making headlines tonight.

Su keenan joins the market selloff.

Cory johnson has the latest on marissa mayer's turnaround plan or yahoo.

Let's taken with -- let's stick with washington with the filibuster deal.

The senate has stepped back from the brink and as a result, the regular tory agency finally has been confirmed -- has a confirmed leader.

What both sides of the aisle have referred to as the nuclear option, leaders on both parties struck the deal this morning that led to the confirmation of richard cordrey.

This gil -- deal gave democrats what they were looking for.

He also forced harry reid to cancel votes on two nominees for the national labor relations board.

The deal marked a new start for the body, and mitch mcconnell had similar positive things to say today.

I thought it was good for the institution for us to be talking to each other, rather than at each other.

I think it led to a constructive outcome an opportunity to get back to normal.

Getting back to normal does not necessarily mean an end to some of the acrimony we have seen defining congress these days.

It is a star.

How close were they to the nuclear option?

What would've been a r - start?

They were as close as close to be.

He had the meeting last night.

They did not reach a deal.

There was an 11:00 deadline this morning.

There was only one hour before that they had reached a deal, a copper fights.

This would have been bad.

It may not have changed the rules, but it would have set acrimonious debates ahead.

What does this mean for the senate going forward?

It is a positive sign.

Congress has been wracked by gridlock over the last couple of years.

President obama saying he's looking for them to use this as a jumping off point to finish legislation they had been working on.

They have a debt ceiling vote shortly after the august recess brady hope is that maybe this can spark compromise going forward.

Thank you.

Also, edward snowden is officially asking russia for temporary asylum.

He is vowing to president bush's demand that he start -- stops releasing the man -- information about the united states.

They need to be convinced that snowden has promised to stop leaking.

Wally have snowden's assurances that he is done disclosing american spy secrets, the kremlin may want something firmer and writing and not just verbally.

The white house still insists that snowden needs to face charges in a u.s. court of law.

See is not a human rights activist.

He is not a dissident.

He is accused of leaking classified information.

He has been charged with three felony counts.

For those reasons, he should be returned to the united states.

The last time he applied for asylum in russia, he withdrew his request hours after resident who insists he stopped his un- american activities.

Snowden's arrival in russia was the fault of the united states, that he was an unwanted gift.

He appears to be creating diplomatic space for himself.

Putin was insisted that snowden does not want to stay in russia indefinitely.

It could give the snowden enough time for the noted nations refugee agency to issue him new travel documents, or get him out of the airport's transport zone.

Back to you.

In other news, one year into the job, marissa mayer has one investor confidence.

But she is yet to convince advertisers to spend more money to reach yahoo users.

The country's largest web portal reported earnings that showed a seven percent drop in revenue.

She assured investors that the outlook -- of the outlook of the third quarter.

Our product launch has dramatically picked up.

We basically reached a page of launching a new product every week.

A significant new product at that.

We have made real progress over the last year.

We have positive momentum heading into q3. bloomberg west editor-at- large cory johnson joins us from san francisco with more on yahoo.

Interesting courts are, -- quarter.

The results are somewhat lacking.

They are not bad.

They are not great.

What we saw from yahoo is a modest change in revenue in year-over-year basis.

Profits got a little bit better.

It was a bit of free cash.

They announced there's going to be a big share buyback.

It is not help the fundamental change in their business.

They need a fundamental change in their business, and it is not there yet.

How was advertising doing?

It is hurting.

You would expect that the strength of yahoo is their display advertising.

Their display advertising is hurting.

Six consecutive quarters of decline.

The plight -- the price is acute.

If you are selling less of something, and selling it for a lot less money, that is a bad situation to be in.

They need to stabilize that business.

Marissa mayer spoke about technology changes in the way it advertisers are buying right now, but they are not in the best deals out there.

They have got to fix that as they migrate into mobile.

Spending billions and acquisitions that are yielding little in revenue, there are changes that need to happen there.

It was not a terrible quarter, but it was much superstrong either.

The turnaround is still a ways off.

You spoke about stabilization rig what was good and bad for yahoo at this point?

There was still the favored son's chosen to answer questions.

But they showed video of the products, and that was pretty interesting.

You got to see not just hear about their exciting weather wrap that was successful -- weather app that was successful.

I am not a big believer that companies need to look different.

They need to be different.

Yahoo needs both.

Showing a look is probably a good sign for them.

Cory johnson joining us from san francisco.

Thank you.

For all things tech, tune into "bloomberg west" twice each day.

Only on bloomberg.

The best s&p 500 rallies since the first of the year comes to an end, up next.

Coco: drives equities.

Those stories and more when we continue in just a moment.

? welcome back.

Let's show you how the equity market finished the session for tuesday, july 16. stocks fell as the longest rally in the s&p 500 since january came to an end.

Coca cola profit dropped.

There were calls to cuts to stimulus.

Here are the market numbers.

The dow jones industrial average off 32 points.

The nasdaq composite index was down nine points.

Let's get you the stories behind the numbers with su keenan.

Good evening.

Earnings continue to be the big driver here.

Goldman sachs was in the spotlight on several fronts.

Better than expected earnings.

The stock fell, though.

The ceo downgraded -- here is the good and bad from that.

Earnings doubled on a surge in revenue.

He lowered goldman's rating to two evaluations.

Coca cola, another big driver, falling two percent after the company missed revenue estimates by $220 million.

This is the story of slowing sales in china, europe, and others.

We will have more of coca cola coming up.

Big earnings for johnson & johnson, more than doubling after selling big.

Can you sell -- can you say speed bump?

The tesla target of $84 is much lower than what the electric carmaker's price was yesterday.

Goldman making headlines.

What is the latest?

They are putting the bill for his defense.

Tesla -- many jurors are struggling to comprehend.

The judge said have a heart, be gentle, the jurors be lost if you use wall street lingo.

She had to replay that today.

A complex investment.

John paulson would profit from this loss.

Again, this continues tomorrow.

Su keenan, thank you.

Coca cola rockets lost some of their -- profits lost in their second quarter.

Was the outlook -- what is their outlook?

That is next.

? coca cola quarterly earnings fell flat as second-quarter profits dropped four percent.

Economic weakness in china and europe, and bad weather in india are to blame.

That is not the only challenge.

Doing stanford covers -- duane stanfords joins us now.

You have a story on bloomberg.com.

You right coca cola has long touted its broad reach.

Is that strategy more urgent now than before?

Emerging markets are very important for coca cola, as more development it's begin to move away from full calorie a soft drinks.

As evil age and try to find healthier options, they moved to other drinks.

The youth are drinking lots of different things.

There are so many choices out there.

The emerging markets are really where those products are growing.

That is where coke is looking at.

Is this a health kick?

Is that why the soft drink market is declining?

Yes.

That is a large part of it.

Coca cola is under attack by various governments, a new york city they're looking to ban certain size soda.

That is under appeal now.

Of 30 states that have tried to impose excise taxes on soft drinks and sugary beverages in the u.s. most efforts have failed.

But it creates this pr storm or coca cola as they try to convince you to buy the brands and the lifetime drinkers.

They opened a beverage plant in marion marr -- myanmar.

They will be racing to try to set up distribution in that country.

Also to produce in that country.

Coco cola and pepsico like to produce in the countries where they sell their drinks their efficiencies are much better.

They are cost efficient.

They can get closer to the market.

You will racing to get plants up and try to be first movers with the consumers.

Coca-cola and pepsi, they are going head to head in china.

What are companies doing to pay low there -- tailor their brands to asian tastes?

One of coca cola's biggest products is a drink called pulpi.

It is basically a dairy and juice hybrids.

It has bits of pulp and it.

Those are huge products for them.

They have expanded from there to other asian countries.

The name of the game there is to appeal to local tastes.

At the same time, they are also trying to move their coca cola full calorie products as well.

What is even today's news, coca cola shares increased 13% this year.

How does that compare with the market overall?

Go is -- coke has still had a good run in the last years.

Since we have moved in that position as ceo, prices continue to rise.

He had a split last year.

Investors will be wondering if today's news of sales lagging and this tsunami with macroeconomics and health issues , whether that is going to be something they can work through over the next few quarters or not.

As one analyst said, the stock is valued at such a place now that the smallest negatives could blow that down.

Could we circle back to health?

Coca cola did roll out a tv ad campaign addressing the issue of obesity.

Coca-cola executives are quick to point out that obesity is a problem that is not just something that is linked to sugary soft drinks.

It is about other kinds of high: -- high caloric foods as well.

The message has been very clear breed they say they offer products you can enjoy when it makes sense.

Calories in, calories out is the name of the game.

Making sure you get exercise.

If the obesity problem comes down to all kinds of foods, they should just be singled out.

If you take in too many calories, you're going to be kobe spray that is the message they're going to be focusing on.

We will see how much consumers latch onto that or not.

Some say they are not realistic of how many exercises you can do to burn off calories of a soda.

Thank you for your time.

We appreciate it.

The recipe for coca cola's classic formula is one of the most treasured formulas in the world.

Here is a look at the eight strangest coke products in the company's history.

? ? ? the gains in the past year were driven by their stake in chinese companies.

Now the chairman of -- is the subject of an online protest.

The top stories in asia are next.

? welcome back to the second half-hour of "bottom line." thank you for staying with us.

Let's see the markets finished.

A string of lackluster earnings reports from companies, including coca cola.

An eight-day winning streak ended for the s&p 500. the dow jones industrial average falling a quarter of a percent.

The nasdaq was down as well, 3598. let's check the top stories we're following for you.

Tensions continue following the george zimmerman vertebrate up in los angeles, 150 people ran through the streets smashed windows.

Police made 13 arrest.

The trouble was caused by a relatively small number of protesters erie police will be out in greater force tonight.

Cory monteith died of an overdose of heroin and alcohol.

That is the finding of the corners office of british columbia.

The actor was found dead in his vancouver hotel room on saturday.

He had been struggling with addiction for years.

The corner called his death is tragic accident.

The water got into his eyes and ears, and could have caused them to joe.

He got back inside the space tatian safely.

Nasa says the leaking drinking back may have caused the problem.

That is the look at the top stories in the news at this hour.

It is time for the commodities report.

Su keenan is back with the insight on today's session and a look ahead to wednesday.

Breaking news after the bell.

Barkley says inform former traders will be all ordered to pay fines and penalties.

It is the u.s. federal rigo trade commission.

They are best getting if they were manipulating the energy markets.

Clay says it plans to vigorously defend this matter.

We will follow that.

Despite analyst forecast, motorists are getting sticker shock once again.

Oil is above $100. that as to outages from philadelphia to texas.

That will impact supply at the peak of the summer driving season, and is pushing gas preachers -- futures to the highest in four months.

Oil fell for the first time in three sessions.

Oil moving lower as stocks fell.

All of us having a direct impact on what you will pay at the pump.

The latest data shows gas rose $.15 a gallon last week.

We are seeing the highest prices of summer.

This is a very hot topic.

Senators pushed refiners for next donation on why prices are higher when we have been talking but the boom in u.s. oil.

Are higher prices here to stay?

It looks that way.

For several reasons, include controversy over the keystone highpoint.

The nonprofit organization consumer watchdog came out with a report today saying that this project will raise gasoline prices.

Tom stier wade into bloomberg -- waiting in to bloomberg.

As a result, if the pipeline is built, the price in the midwest of gas would go up why 25 cents.

Higher prices all around.

Analyst expect a third drop in oil supply over the last week.

It is possibly we could see that again.

Buckle your seatbelt.

Thank you.

Let's look at the top stories in asia.

Most of yahoo's gains in the past year were driven by the appreciation of stakes in the chinese rocket plays ollie baba -- alibaba.

Hello.

There is a slowdown in china.

Not in e-commerce.

They have crushed as summits in the first quarter with a tripling in earnings.

Income surging 189%. the main number investors care about, that rose 203%. increase to 1.3 billion dollars.

Yahoo holds a 23% in the company.

He made about $25 million in earnings.

Also, their other company, yahoo japan.

Have a huge market place here in china.

He started charging people.

That is giving a boost to the bottom line.

These commerce -- these numbers come as a high a potential ipo later this year.

There is a petition going on asking the chairman to apologize . he may, to about the tiananmen square crackdown.

How might this affect their prospects to go public?

It is an interesting question.

The billionaire has been asked to apologize for the comments that he actually made over the weekend.

He is suggested that the former chinese leader acted appropriately during the 1980 crackdown, were hundreds were killed.

An executive, he says he is that he make similar decisions.

They are part of china's life.

It is ingrained in it.

It is hard to read yourself him something that is engaging.

While he has been getting ahead in the short-term as relates to his presence on social media, this will not damage the company's ipo prospects.

That is what people are telling me.

All right.

Thank you.

Coming up, the federal reserve economic analysis.

Member nikki's -- ben bernanke's testimony, and where the fed is headed when we continue in just a moment.

? welcome back.

This is "bottom line" on your tablet and a bloomberg.com.

Wednesday was a big day for the federal reserve.

It will release it is analysts on economic conditions in the united states.

Bernanke will deliver his semiannual monetary policy.

For the what to expect, but spring into larry mcdonald -- let's bring in larry mcdonald.

He is the author of a " colossal failure of common sense." good to see you.

In recent weeks, chairman bernanke's comments have sent the markets on a roller coaster ride.

What are you expecting this time/ the one thing for people watching us right now, over the last couple of years, he has tempered market expectations.

He has.

The world was dovish on may 22. then he went into this hawkish week, where he hinted around and ends of qe.

Now, over the last three weeks, the fed governors, many fed governors of the united states have been dovish.

I think over lots of questions, he may temper expectations.

Now we have gone to dovish.

The chairman made a speech in massachusetts and cambridge.

He reinforced that go slow approach on when the fed might start to pull back on the stimulus.

Is the talk of tapering causing unintended volatility?

I think that the hidden secret here is that after -- look back at lehman brothers.

There were a lot of asset bubbles.

Some of those took down lehman.

He do not want to repeat that mistake great as why they took this hawkish stance.

A lot of air has been let out of the balloon.

If you look at high yield bonds, even utility stocks, these crowded trades, a lot of air is let out of the balloon.

As why he is now turning more dovish.

That is good for stocks.

Where is the fed and turns of the dual mandate?

There is not much inflation, but unemployment is still hovering at 7.6%. that is the thing.

The key to remember, you have the quantitative easing that is $85 billion a month.

Then he have the fed funds rate.

They are deathly going to take qe down in september, october.

That is going to come down.

He is -- that is the first day that they raise that rate up.

The interesting thing is that overall, the market equities have rallied to all-time highs.

The fed fund futures, that used to be out -- the market was telling us the fed was going to raise rates in march.

Now that has come down to august of 2014. even though he has turned dovish, the market thinks he is going to raise rates market or -- earlier.

Safari does not seem to be affecting the housing market.

In the fed moves on market rates, what effect will it have?

I have been saying i like the homebuilders market.

People watching us now, they have been thinking about buying a home, they have seen the rates go down.

Now they see that they are moving up.

There is a short-term burst in the housing the custom many people will step off the sidelines.

The second four-year term ends in january.

As the fact that he might leave lesson his influence now?

A little bit.

He is a little bit of a lame duck.

He is definitely leaving.

There is a legacy issue.

Think that is a big thing to remember.

This is his last testimony.

Much of what you're going to see is around cementing his legacy.

That is why he has laid out this potentially hawkish month.

He does not want to leave his successor with a mess.

Speaking of successors, is vice chairman yellen, is it her job to lose?

There are reports in washington that the former charger he secretary has been keeping in touch with folks on capitol hill are nashville, -- capitol hill, and has expressed interest in the job.

Yellen is -- everyone thought she was a shoe in.

It would really be politicized.

This is where you get into historical importance.

If larry summers were to come in, it would politicize the fed.

We not want them to be a political machine.

I am more it about larry summers.

-- i am really worried about larry summers.

Where do fashion designers turn to when they want their stores to look as amazing as their close?

The architect to the stars when we continue in just a moment.

? welcome back.

This is "bottom line" on your tablet, phone, and at bloomberg.com.

What tricks do fashion designers use to sell the their products?

They hire the right architect.

Meet peter marino.

Crystal artwork, golden walls, and a three-story venetian glass sculpture.

A few of the design elements used to lowering customers to the london chanel store.

It is a marketing approach to architecture.

You do not even need a sign.

He is the architect of choice.

His firm designs 80 projects globally each year.

Half our high-end stores for stores like chanel and louis vuitton.

A check on the advertising.

I really look at the project.

I design surrounded by project.

He is not just an architect.

He is a sensualist . he has a remarkable command to create sumptuous environments that sell luxury goods.

Those environments do not come cheap.

Majority of products -- projects have budgets of millions of more.

He has tricks up his sleeve to keep customer shopping.

Have natural light as much as possible.

Easy flow.

No dead ends.

The hidden cash registers in every room, he directs people straight to the checkout.

The longer we hold them in the store, the more likely we are to get money out of their pockets.

One a comeback, they are comfortable.

-- when they come back, they are comfortable.

That was bloomberg reporting.

You can watch bloomberg tv live on any windows phone.

You can download the newest version of the free bloomberg app at the windows store.

Coming up, new meaning to the term heavyweight champion.

This guy was so heavy, a new skill had to be used.

-- new scale had to be used.

? that as a look at the futures market for tuesday evening.

Welcome back.

This is "bottom line." but either bottom line on what is happening on wednesday.

The commerce department has released housings details.

The house small business committee has a hearing . that deals with irs targeting at 1:00. if federal reserve releases the latest beige book at 2:00. now let's go to su keenan with the business news.

The earnings parade continues.

Big names would be out with earnings results tomorrow.

They include american express, bank of america, and a couple of tech companies, including intel, and ebay.

Those are the key names.

70% of the s&p 500 companies have been analyst forecast.

And what went wrong on wall street during the global financial crisis.

The former goldman sachs a bond trader trial continues.

More discussion of complex derivatives, and more dozing jurors.

Thank you.

It is time for "hot shots" the most compelling images of the day.

In australia, a heavyweight weighs in with the help of a local factory.

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

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change