From russia with no love.
No asylum for the weary as edward snowden runs out of options.
The company behind the clogs mario vitelli loves is ready to put its foot forward with new style.
Burgers versus hotdogs and the world's growing appetite for comments.
From bloomberg world headquarters in new york, you are "in the loop" with betty liu.
It is tuesday, july 2. you are "in the loop." hans nichols is tracking edward snowden with nations refusing to protect him.
Michael mckee has the real deal on why egypt and are in the streets again, bracing for a shutdown in the face of a struggle.
Edward conard joining me.
He is a former bain capital partner and the author of " unintended consequences" giving his take on what immigration means formrepublicans in washington.
Edward snowden , stock at a moscow airport, withdrew his asylum request overnight.
Hans nichols, why the latest change?
Well, he wants to continue disclosing classified information, and that would violate the terms that vladimir putin sat down yesterday.
If he wants to stop leaking, he can stay, but if he continues to disclose, he is on the lookout for another country.
He has 20 applications, but ireland and austria say they only consider applications when the person is on the territory.
His passport has been revoked.
There was a slight chance that he could have hopped a ride on the president of venezuela's plane, but he said he would not be joining him, while holding out that he could get sanctuary there.
The president of venezuela said he did not kill anyone or plant a bomb.
He only said a big truth to prevent wars.
In south america, the president of ecuador said they would be open to an asylum application . there are a few options, but they appear to be narrowing.
What do we know about how edward snowden is taking all of this?
Not very well.
He has taken to wikileaks to argue his case against president obama.
He said "although i am convicted of nothing, the u.s. has unit kerley revoked my password -- passport.
You know the feeling when you head to the airport and you think you lost your passport, that is a very real reality for edward snowden.
Thank you, hans nichols.
It has been more than a week since nelson mandela was listed as being in critical condition.
He is now listed as being in critical, but stable condition, a slight improvement.
Hundreds of south africans have been flocking to the hospital, leaving cards, balloons, flowers and messages of support for the country's first black president.
In north africa, egyptians are bracing for a showdown after president mohamed morsi revoked a military ultimatum for him to restore order.
He said they were not consulted about the deadline.
Michael mckee is looking at the real reasons egyptians are in the streets again.
It is a replay.
It is a replay, but for different reasons.
The bottom line is the same.
Angry surfaced when -- anger surfaced when mohamed morsi pushed through the constitution last fall, but the bottom line is the economy with egypt suffering what some call the worst economic crisis since the great depression.
Businesses have fled.
The company is short of -- the country is short of cash.
Import prices have been raising.
It is tough on those that spend 50% of their income on food.
They spend more than 20% of their gdp subsidizing food and fuel.
Tourism crumbled during the arab spring.
It is only now beginning to rebound.
Revenue from the suez canal is also down.
Unemployment is skyrocketing, over 13%. one quarter of egyptians live below the poverty line, and another quarter just above it.
People hoped to create something better and it has not happened.
What has gone wrong?
Mohamed morsi has not done anything to try to fix the economy.
There are no tax rules or changes that would improve lives.
Businesses are scared to do business.
There is no lower house of harlem in.
The opposition walked out.
The government is basically paralyzed.
Cooperation with the imf to bring in capital has fallen through as the government is unwilling to make economic reforms.
We will be watching those developments closely.
Thank you, michael mckee.
Back here in the u.s., our mover and shaker, federal reserve chairman ben bernanke.
The fed votes on whether to impose new minimums for capital.
The new rules could call for banks to maintain loss absorbing capital equal to seven percent of risk weighted assets, put in line with international agreements.
The proposed change is aimed at preventing another global financial meltdown and a rescue likely saw with lehman brothers and bear stearns.
It is not all fun and games for mark pincus, the outgoing ceo of zynga.
There is a new man at the helm and dominic chu has on what it means for the game maker.
It also looks like it is about time for zynga.
It is a big step.
When a company makes a change with the man at the top, it is a big deal.
Mark pincus is removing himself from being the singular public face, relinquishing the role of ceo, but he will still be the chairman of the board and the development.
Don metrics is behind the xbox platforming program.
He cofounded his own videogame company at the age of 17. he eventually sold that to electronic arts, which allowed him to become president of worldwide studios at electronic arts and led to his career at microsoft.
He knows a lot about the videogame business.
He has the resume for the top job at zynga, but he has a tough job ahead of them.
Zynga is no longer the king of the hill when it comes to games on facebook.
The title now belongs to king.com according to data as they have about 154 million monthly users.
Don mattrick will have to attract customers that like their gaming experience on smart phones and tablets computers to stem a 70% drop in the stock price since it's ipo.
When you look at the chart, don mattrick has a nice resume, but overall he will have to do a lot of work to get act to the $10 -- get back to the $10 ipo price.
This is a three dollar stock right now.
Dominic chu, thank you.
Still ahead, ed conard , the former bain capital partners and nate romney supporter has been outspoken.
He will talk about what the bottom line is for republicans on immigration.
It is complete crocs, with the ceo talking about the softer side of his business, and why the biggest haters might be sporting some crocs.
Instagram versus vine.
We will tell you who is winning.
They "we will get started.
"in the loop" with betty liu will be right back.
You are watching "in the loop" streaming on your tablet, phone, and bloomberg.com.
Immigration reform will largely depend on speaker john boehner.
It will not be easy.
I hesitate to tell speaker john boehner how he should do this, but i think republicans realize the implications of the future of the republican party in america if we do not get this issue behind us.
With me now is ed conard, a former investment partner at bain capital, a colleague and former supporter of governor mitt romney and the author of " unintended consequences." people have said that if immigration reform does not pass the future of the republican party is in jeopardy.
Do you buy that?
The future will be difficult if they do not support this.
It is hard to add up the votes and see this as a net positive.
The hispanic population skews to the democratic a former investment partner at bain capital party and this will bring in more democratic votes.
It will be more difficult for the republicans, i agree that this has to happen in one form or another.
You do not see this as a do or die situation for the gop?
I rarely see anything as do or die.
It always sounds better.
That is right.
It is important that republicans show support for the immigration ovulation, and its effect on the economy -- population, and its effect on the economy.
If it does not pass, do you think the republicans have lost the hispanic vote?
I do not think it will have a big impact on the republican party politically because on that is a negative for the republican party.
If they do not support it, -- you think immigration reform would be a bigger boost for the democrats.
That would seem to be common sense.
The last time we talk to you you were heading to mitt romney 's ring in utah where there would be discussions on the future of the republican party.
How do people feel?
A number of people stood up and express their views on the economy.
I have debated liberal economists like joseph stiglitz, and i talked about my side of the argument and how we differ.
There were several prominent democrats there giving their points of view.
The mayor of los angeles, david axelrod.
How were they received?
Extremely well, politely.
Then we all went to dinner in small groups and it gave us the chance to talk about the differences in point of view.
There is a wide grant -- gap in the way we see the economy, and i do not think it will be bridged with negotiation.
It has not been bridged by data.
There continues to be a wide difference.
You continue to write pieces about the economy and drill into your point.
You recently said what can we learn from the fed's failures.
The first question is why do you think that that has failed?
The fed has pulled the plug on quantitative easing with unemployment at seven percent, europe slowing down.
You have to be asking yourself if it was working as effectively as they thought it was, why would they pull the plug at this time and the answer might be chairman bernanke is concerned about his legacy.
It is coming to an end.
He wants to put a marker down.
He tried quantitative easing.
It did not work effectively, and now he is laying the groundwork for unwinding.
Why not continuing it and avoiding the debate?
Would that not preserve his legacy?
I do not think so, because it will be debated whether it drove the economy.
The question is will we had back to the trendline we had in 2007. i think we will grow normally off a lower base.
In that case it is difficult to make an argument that we should have sporadic physical and monetary policy to bridge loan demand.
Where do you fall on the debate?
I hear what you say, q we did not work, and some people it has worked in the stock market.
You could definitely that you could make that argument.
-- you could make that argument.
You could definitely make that argument.
Where do you stand -- we should pull back, or there is no alternative and we should continue with it?
You have to decide whether you are trying to engineer growth in the long run or the short run.
If you are trying to bridge it low, you do it at the expense of the long run, but at some point you have to star policies that improve sustainable growth over the long run and these types of policies are not policies that increase growth in the long run.
At the same time, what are the risks?
It boost the stock market.
I dare not say double territory because when you look at how it is valued, it is not mobile -- bubble territory at.
Risks have been benign.
We do not see runaway inflation.
What is really the risk of keeping it going a little longer?
I would say the reason why you want to engineer an increase in stock values is it drives investment banking companies that chase those valuations.
These have built up cash.
Their return on investment is extremely high, yet they are under investing relative to gdp.
What would change that?
Looking looking at the valuations and recognizing their nothing more than low interest rates and high profit margins.
It is not motivated increased investment in the economy like normal increases in the stock market might do.
It has no effect, but i do not think the risks are high.
I have been talking to people who have great amount of wealth around the world in one trend a notice is that with everyone putting money into the economy there is a sense that everybody's money is losing value.
Do you get that sense, particularly from people that have a lot of cash on hand, that they feel their money is growing less?
I do not get that sense.
I have a fair amount of money and i do not get that sense.
I do not see inflation on the horizon because we do not have demand that will push up the prices.
Asset values have slowed up and down.
People thought they were unusually high.
I do not think i have lost value that i thought i had.
Ed conard, good to see you as always.
The former bain capital arner and author of "unintended consequences.
We will be back individual minutes on "in the loop." ? it is time for this versus that.
It is about the battle for your short films, you're very short films.
This is vine.
He started in january and build up to 2.5 million twitter shares a day.
That is instagram, which was bought out by facebook for its more than one billion members.
Instagram was used for sharing photos only, but on june 20, the day after vine recorded the record number of video shares, instagram announced a new video service.
Vine shares saw an almost instantaneous 40% drop-off and as of last week, the measure has dropped to one million shares.
In the meantime, instagram's video service has been relatively consistent with its photo shares on twitter, and a pace of 1.5 million a day.
Vine has to keep it rolling.
When it comes to the big apple, your love is listing property values higher and higher -- details on a busy second quarter.
You are watching "in the loop" live on bloomberg television, streaming on your phone and on bloomberg television -- bloomberg.com.
New rules could call for banks to maintain loss absorbing capital equal to 7% of risk weighted assets, which is aimed at preventing another global financial meltdown and having taxpayers bail banks out.
Critics have broadly and " the lone ranger" and with a $225 million budget, it is expected to be the biggest flop since " john carter." talk about a media company -- time warner is close to a deal to sell its columbus circus -- columbus circle headquarters.
The move would pave the way for the media giant to move to a new skyscraper that is planned for the far west side of manhattan, the massive hudson yards project.
Staying in property, the bloomberg big number, $865,000 -- that is what an apartment in manhattan will cost you on average, and it is also 4.3% higher than what you would have paid last year.
Why the increase?
It was the busiest spring selling season since 2007 as buyers snapped up apartments faster than new units could be built.
In billionaire news, oracle ceo larry ellison using his billions to speed up the sport of sailing, transforming "-- the america's cup race with revolutionary designs that have doubled speed over the last decade and it is a good thing he is worth over $37 billion because this will cost over $100 million to fund team oracle usa for the training.
For more, be sure to check out the august edition of "burke markets" magazine or check out our billionaires index of bloomberg.com/billionaires." in the meantime, we have breaking news on chrysler sales.
June vehicle sales are up 8.2% , pretty much in line with what economists had estimated.
Remember, chrysler had seen double-digit sales, so does this represent a slowdown?
We will keep our eye on these sales numbers.
Remember, florida, gm and other -- ford, gm and other automakers will be releasing numbers throughout the morning.
We have one hour to go before the opening bell.
Dominic chu checks the market.
We are in the red a little bit.
S&p futures are down one point.
The s&p, again, down one point.
The dow jones down 14 points.
The nasdaq, pretty much flat.
On the treasury said, 2.48% the last trade for the yield on the 10-year.
We have seen a spike up in dollar-yen for the session highs.
On the commodity side, crude oil, $98.38, up .5%. gold futures below $1300 per ounce, 1250 the last trade.
Thank you, dominic chu.
Forget the one size fits all suit, and imagine a loan for all borrowers.
Celebrity chefs take their brands seriously.
Just ask titans at the table.
We'll hear more from them in a moment, and talk about the conversations happening in the c suite of paula deen's business partners that have left her.
And, mario bertelli loves his crocs and we will talk to the company ceo about building a brand beyond the world of crocs.
They "in the loop -- stay "in the loop." ? student loan debt is ballooning to all-time highs as students seek private loans, facing the harsh reality of relatively high interest rates, well over 7% and 8% , no matter what they study or what year of school they are in.
One home investment banker is trying to change this.
He left wall street to apply what he learned to the world of college loans, namely that interest rate should reflect the risks of a borrower defaulting on his or her death instead of being one-size-fits-all.
Great to have you with us.
We have been hearing about the student that problem, -- that problem, up to $1 trillion.
The interest rate situation is interesting because it is influenced mostly i what is going on with government.
How do you propose to bring those rates down?
Crocs when you look at this -- when you look at the student loan market broadly, everyone is given a statutory rate, and the issue is the loans are pre- payable, so if they are too high and not commencement with the risks, the private markets should be offering to refinance people into lower rates and that is not happening, mostly because private markets did not have information readily available about default rates.
Why do they not have that information?
To some degree, it is strategic opec this by existing lenders.
There is not a lot of competition in the new student loan market.
Sallie mae, will struggle, discover, they are roughly 80% of the market.
They do not have incentive to provide information to someone coming in on the backend looking to refinance into a lower rate because they have individuals on their books at elevated rates.
You see a lot of players focusing on the refinancing side, targeting, the higher interest rate federal loans.
Derek kaknes , tell me exactly what your company does.
How are you trying to vary the interest rates depending on whether or not each student is going to pay back that loan?
Will we do it at prime student loans is we have technology that aggregates what we view as relative financial data -- employment, education history, and even to the extent that we get cash flow data.
We make that available to underwriters.
We are providing the data to people looking into the market.
These are private companies.
Private capital to my thinking about refinancing the student loans.
You are providing them information that allows them to determine what the interest rate should be.
What are you finding?
What you see is the market is grossly inefficient and what we tell people is if you look at three card.
-- as a person graduated , have they made three full payments, they are 50% likely to -- less likely to default.
There should be an enormous amount of people qualifying within 12 months of graduation, and right now that number is less than 5%. there is a lot of low hanging fruit, and it is a question of getting people interested in the market.
In 2008, people were burned on fraudulent activity, and it has been slow getting people reoriented.
Who got burned?
Investors, broadly in the asset backed securities market.
What do think is going to get more private capital into refinancing some the student loans -- is it simply information?
It is a combination, folks like us, our pseudo-competitors -- those guys are going out and bring in -- reaching out into the capital markets and find individuals that are reaching for yield at places where it is not existing at this point.
Showing this is not attractive asset -- this is an attractive asset class.
But the government is considering bills that would lower student -- the government is considering bills that would lower student interest rates.
We are not talking broadly about an interest rate play.
There is an element to that given where the stitched three rates were set, but even discussions in washington today are largely about moving from a fixed rate environment to some sort of floating rate.
What we are talking about is the contraction in the credit spread.
The risk of lending changes.
The risk of lending to a freshman in college is dramatically different than someone who has graduated, has a job and is paying their loans.
When you move to a 7.9% and restraint, to a treasury plus 4.5%, it does not change the fact that the credit spread is tightening.
Derek kaknes, thank you.
Coming up, it took paula deen years to build her successful cooking brand, but a few days for it to all crumble around her.
We go into what it is to build a brand.
Speaking of food, harris teeter is up for sale and there is an unlikely bidder.
We will tell you who is interested.
Stay "in the loop." ? grab some dinner and some wine and settle in for the latest edition of "titans at the table" where i sit down with four celebrity chefs and titans as they dish on their industry.
They are powerful business players as well with huge brands.
Here is how they did it.
Define your brand in three words.
Can do -- i want to be able to do or envision yourself doing anything that has my name on it or anything we touch as a group.
Three words is never enough, but i would hope it would be authentic, delicious, italian or happy.
I like that.
Big flavors, american, and grilling.
When it gets warmer in the north east people look to me for outdoor cooking.
How about you, tom?
It is what i want to be remembered for -- make people happy.
It is such a great way to make a living -- it is all about sharing.
When you cook, it is a wonderful way to make a living.
When you look at your own businesses, do you say i want this to stay around for over 100 years?
my mistake was putting 20 one off -- you made a mistake?
Instead of something that people could use as a group, we built 20 one office, which are not valuable.
I build the grill and i had just turned 26 years old.
I was not worried about anything except max creek.
I could do you restaurant with a contemporary american southwest, and i wanted to be the best at that, so when you crave that food, deciding what you want to eat, you think of that.
That was my focus only.
When i started cooking, i had no idea that i would even work in new york.
I started in new jersey.
Getting a cooking job was the last thing you did after you got out of the military, before you went to jail.
It was the lowest common denominator.
Anybody could wash dishes.
When i told my parents i wanted to cook, they had visions of me sitting with a cigarette in my mouth, stirring the sauce and for more on building a successful rant and reaction to paula deen's crumbling empire, i want to bring in jeff hayzlett, a brand consultant who led to the turnaround as a chief marketing officer at kodak.
Talking about celebrity brand bust ups, we have had quite a few.
Let's talk about paula deen first.
Have you been surprised at the number of companies that basically dropped her?
I am a little bit, though what you have is a balance between what is going on in broadcast and internet, and at the same time it is being melted down, if you want to use the stick of one or as an analogy , it is melted down bad ratings and gave her a good excludes the -- excuse.
What is a brand -- she would say i is what i is, and when you are fighting back, to use a punchline from a racial joke is not the best thing to do for your brand.
Does she have a life afterwards?
You have pointed out celebrities that have come back with martha stewart and tiger woods.
She has the food network, qvc putting her on hold, walgreens, smithfield foods dropping her, but at the same time you have great things going for her.
Her book is selling out before it is even coming out.
They have had to add another cruise to her celebrity cruise.
She has brands that are sticking with it.
Will she be as big as she used to be?
You need that television to have the distribution you will need for that broad base of roddick's, -- products you are trying to sell.
She will still be there.
I was at a funeral in georgia, and everybody was talking about this.
What did they say?
They were supportive of her.
I think she's got it.
I spoke to people in atlanta during this whole thing, and i used to live in atlanta, and most are still supportive of her because she comes from that region and they feel they want to support her.
Jeff hayzlett , i want to give it to some celebrity bus stops.
-- some other celebrity bust ups.
She performed -- jennifer lopez performed for a leader who has been criticized for human rights abuses.
She claims she did not know about this.
And, alec baldwin, coming on his twitter page with gay slurs.
Why do they get more of a pass than someone like paula deen?
The case here is about who they are and what they do.
Paula deen is more family -value oriented.
I do not think i would consider alec baldwin or jennifer lopez in that same breath.
Wholesome goodness -- butter is wholesome goodness, right?
[laughter] i do not know if i could consider alec baldwin or jennifer lopez in that kind of thing.
I do not know what they are thinking.
If things are going bad, i would be ready for this.
Thank you, jeff hayzlett.
You do not want to miss our latest edition of "titans at the table rows" and nine at 5 p.m. eastern time.
Stay "in the loop.
? americans across the country are keeping their fingers crossed for nice weather this week as the fourth of july inches closer.
In the latest edition of " bloomberg businessweek" we take you behind the economics of independence day.
Pick up the latest addition as you will see how everything costs you.
These -- beef prices hit a record high one grocers typically stock up on need for the summer, meaning hamburger this holiday season might be the most expensive ever.
Alix steel, how pricey?
It could be an expensive cookout.
Wholesale the prices reached over 2000 -- two dollars a pound, and that is the highest on record.
Supermarkets by most of their meat six-to-eight weeks ahead of july 4. last year's drought led to record high corn prices, increasing feed prices for farmers, forcing them to take drastic steps like calling their herd to save money.
This could take a long time to normalize.
We can supply is pushing prices up.
It is not just your burger that will cost more.
Hot dogs as well cared for prices are up -- as well.
Pork prices are up 17%. are you trying to sell me burgers or turn me off?
You would think we would have more appealing visuals.
Thank you, alix steel.
More than clogs, how crocs is trying to expand beyond its signature footwear, ready to try sneakers and ballet flats.
Stay "in the loop." ? 30 minutes until the opening bell.
This is "in the loop" with betty liu.
The countdown begins right now.
Equity futures are little changed as we had for the opening bell.
The latest figures on u.s. factory orders come out and just about an hour.
The third largest u.s. automaker extending its streak of u.s. sales gains in june.
Weissler also predicting continued work -- growth as well -- chrysler also predict been continued growth.
And proposal for new minimums on banks for capital.
Let's get straight to the markets desk for the countdown with markets reporter dominic chu kicking it off.
Constellation brands, the ones behind corona in the u.s. reported earnings today that fell short of analyst estimates.
Just shy -- sales just shy as well.
Investors do not like it quite as much.
Shares are down marginally in the premarket.
I've got my eyes on transocean.
Investors selling off shares in the premarket after citi downgraded the offshore drilling to neutral.
Watching shares of groupon, higher and the premarket.
Taking on opentable, adding an online restaurant booking service.
Trying to increase revenue on sluggish demand for those daily deals.
Turning to the economy, we get monthly jobs data out on friday.
The question must he ask -- how low can the jobless rate go this year?
According to a new survey of economists at five of the largest banks, it will stand at seven percent by the fourth quarter.
Positive news for an economy trying to rebuild, but it is also causing confusion among investors as they try to play ben bernanke's bond buying them just right.
Much of this hinges on the jobless rate.
Ben bernanke in his news conference said the fed could begin tapering this fall and end it in the middle of next year when the jobless rate would be about seven percent.
What the banks are saying is, if you believe the fed forecast that the economy is going to pick up, and their own forecast that the economy will pick up the second half of the year, then job creation should happen at a faster pace.
If you plug in the numbers right now, about 165,000 a month is what we have been giving -- getting.
If you extrapolate that, that is seven percent by the middle of next year.
If we get anything faster than seven percent number will come up sooner.
Then the question for traders is, when does the fed start tapering and when do they stop?
Not like right afterwards they will do this.
If they start in september, how quickly do they have to come back of the jobless rate is going to come down to seven percent before that.
One of the confusions may be, ben bernanke did not say we were going to have a seven percent target.
He said by the time we stop it should be about seven percent.
He was looking at a coal incident indicator that some of the market taking as a trigger might not be the case.
Now he's got investors paying much more attention to economic data than before.
Yes, it is going to be a data-driven decision, so it is going to be a day by day thing.
Anytime we get anything to do with jobs or employment you will see a reaction in the markets.
Tomorrow will be a very big day -- adp and jobless claims on the same day.
Economics editor mike mckee.
Rising interest rates putting consumer spending at risk.
At means retailers and homebuilders may lose their place as stock market leader so far.
In the meantime, tech investors are showing bullish sentiment as more are buying products and the economy improves.
What is going on?
Markets reporter alix steel is watching the trend.
Dominic chu is looking at some of the laggards.
What is the outlook?
Let's talk about some of the big winners.
The laggards possibly in the future may be the winners of the past.
If you look at some other sectors.
. the s&p 500 financials over the last year, i far the runaway winners, up 32%. consumer discretionary up 30% as well.
Beating the s&p 500 18%. brian belski ,bmo's chief investment strategist is looking at consumer discretionary.
Looking at how much they have gone up relative to the s&p 500. this chart of the day shows you the s&p 500 consumer discretionary stocks versus the s&p 500. basically the higher this line goes, the more overvalued, so to speak, those stocks are versus the overall s&p 500. that is why he is keen on this particular one.
Maybe the consumer discretionary stocks are due for a bit of a pullback.
What about valuations?
, to be concerned well that pose to investors and consumers discretionary stocks?
If you look at valuations, price to earnings at least for the s&p 500 consumer discretionary stocks is at 20, 20 times earnings versus the s&p 500 16 times earnings.
Rice to book is something brian belski is looking at as well.
-- price to book.
Book value of the discretionary stocks, trading four times book value, assets minus liabilities versus s&p 500. valuation certainly a concern.
Markets reporter dominic chu.
One sector that might be ready for the fed to take the training wheels off his technology.
Alix steel joins us now.
How is it different than what dom is talking about?
A different trend has emerged, as investors worried about tapering.
Technology really found a footing.
Tech stocks had their best 10 weeks of relative performance since 2009. the guggenheim s&p equal weight tech etf that you see, actually outpacing the equal weighted etf since mid april.
Brian jacobson of wells fargo says this shows a rotation into industries that could outperform later in an economic expansion.
Recovery continues, capital spending on tech product will improve.
The trickle-down down effect is really seen everywhere.
The federal reserve bank of san francisco's tech index tracks the health of the tech sector.
It shows an improvement in investment, consumption, employment, industrial production and shipments at the highest levels since 2008. which companies are set to benefit the most?
We heard from accenture which forecasted sales that missed estimates.
Disappointing guidance from them but still tech rallied.
It runs the gamut.
An analyst that matrix say it -- point out names like cisco, microsoft, hewlett-packard, they -- names that can benefit.
At the end of the day higher interest rates bode well for tech stocks.
They tend to be less financially leveraged and can really leave the broader market as short-term -- lead the broader market as short-term interest rate rise.
Now, for a little bit of perspective, there are some risks to be aware of.
The monies are still hesitant to spend to replace software or their computer systems -- companies are still hesitant to spend.
And they are global companies with exposure to softer markets like europe and asia.
Alix steel, our markets reporter on the tech sector.
We will talk more about that in a moment.
In the meantime, high-end supermarket chain harris teeter on the auction block.
An unlikely bidder has emerged, cerberus, the private equity firm that usually service -- focuses on distressed companies.
It has been on a little bit of a buying spree when it comes to, of all things, supermarket.
I want to bring in cristina alesci on this.
Why are they interested in this?
It is interesting, betty.
Kind of a dynamic time in the supermarket industry.
As you know, a lot of them are under pressure to cut prices, and they have been getting lots of competition from the likes of walmart.
On the other hand, high-end supermarkets that service customers want fresher and organic foods, they are doing pretty well.
What cerberus might be thinking here is, look, we've got some underperforming supermarket chains could benefit from a better run company, from the experience of a better run company.
Not only that, combining what they have as their underperforming portfolio with someone like harris teeter could actually give them more leverage in negotiating with suppliers.
So, there's another benefit there.
And keep in mind, harris teeter, the areas in which it operates has really seen a population growth.
A central growth story in turn -- in addition to the organic and fresh food phenomenon we have seen.
Those are some of the things cerberus may be thinking here.
But it begs the question, if it is so well ron, why are they selling it?
You are right.
The margins that harris theater has are actually better than what you would expect, better than some of its rivals.
In that sense, it is a well-run company.
. but the problem is that harris teeter will be facing new competition.
There is a company called publix making some headway in its home market.
They are seeing that and getting a bit nervous.
If you look at the first quarter, harris teeter actually missed analyst estimates for the first quarter.
They have been under pressure as well.
Just on another note -- because i know this is always very important as what kind of price tag are we talking about?
There is no doubt the stock is expensive.
It has valid 36% over the last year, and cerberus will likely have to pay a premium.
I am hearing the company probably will not settle for less than $50 a share, which is a hefty price.
But keep in mind, cerberus will find some way not to pay top dollar.
Thank you on that.
A new deal on the horizon.
Cristina alesci, our deals reported.
Coming up, staying on a consumption thing.
It willhummus overtakesalsa as the dip of choice?
One company trying to make it happen again day.
And these clouds are made for walking -- the clunky uncomfortable look has its fans and its allegiance of haters.
Now crocs looking for a whole new set of buyers with sleeker styles.
The ceo later.
? we've got some breaking news on the proposed changes to the bank regulation and capital ratios the federal reserve is going to vote on later today.
It will will affect financials.
Economics editor mike mckee look at what exactly they will vote on.
The fed is the first u.s. bank regulator to vote on this, but it will be adopted by all of the others sometime this month.
All grows out of basel iii and the effort to rewrite the banking capital pandered rules following the financial crisis.
What the fed and other u.s. bank regulators have decided is to go a long slightly strengthen the rules.
They will require banks hold 4.5%, and equity as a base minimum capital standard and a 2.5% capital conservation buffer.
Total, seven percent.
Also considering a three percent surcharge on the largest banks.
It may not be voted on today but will being -- bring the biggest banks in the u.s. up to a 10% ratio and also imposing a three percent leverage ratio.
And you look at the seven percent standard, what they do is they rate the risk capital to banks hold depending on how risky they are so it is not a one-to-one, but with leverage, is just one for one.
Three percent minimum is what you would call it, seven percent in practice and 10% probably coming for the largest banks.
The fed will vote on this today . control of currency, fdic likely to vote on it later this month and adopted fairly soon.
Just they with me, because we will talk more about this.
I want to bring in the chief market strategist for america rise financial.
His call is he is still sticking with the year and 1650 target for the snp, however, economic data is going to become increasingly important as people look to fed tapering.
As i mentioned, micah staying with myanmar its reporter alix steel is also joining me as well.
--, mike mckee is staying with me as well as reporter alex deal.
Does this change your outlook at all for financials?
I am not sure it is terribly unexpected.
The banks do not like them, of course, but it is not something that is terribly surprising.
And at the same time, i do think that the big banks indeed get funding premium for in essence being too big to fail.
So, they should have standards that are a little bit in front.
I don't think this changes my view.
I think the banking sector looks good, actually.
How do you expect them to react to this?
Particularly it is the smaller ones exempt from it.
They are not exempt actually.
They would have to a plot -- complied.
90% of the banks already have the capital levels.
What really matters is how you rate the risks of what is on your ballot sheets.
Small banks did get some relief from the fed.
They generally do not take as much risk is the bigger boys, like j.p. morgan chase and citigroup.
They've got some relief on that.
But all banks hate those standards because they have to spend additional money to raise the capital.
Let's talk about something -- looking at utilities related to the whole qe program.
We talked about technology stocks doing better as the economy recovers.
But if the fed winds up tapering, the concern is what will happen to utilities are currently paying about four percent dividend yield?
You can see that utilities have drastically outperformed the u.s. 10 year yield.
Right on the right-hand side of the screen, you see utilities coming off a little bit and you have seen yields rise.
The question is, will the head till those higher-yielding assets?
You say they are worth to hang onto, right?
I think so after the downdraft.
They were off some 8-10% the last month or so.
You have actually seen some bottom fishing interest in them.
And the last week, they were one of the best-performing sectors as some of the high yield have attracted buying interest.
I would say if you still own them, absolutely hang onto them.
You know, it is a nice way to add some income in a diversified portfolio.
David, thank you for joining us.
David joy, from ameriprise financial.
Zynga founder stepping aside making room for a former microsoft executive to take the helm.
The new leadership turn around the struggling social gaming company?
? you are watching "in the loop " live on bloomberg television and streaming on your phone and bloomberg.com.
Futures are mixed right now.
From world headquarters, it is time for the countdown blitz.
Dominic chu, let's are with this healthcare company.
A company that may not be in the spotlight just because it is warren buffett berkshire hathaway company -- it is a provider of kidney dialysis services and it may see payments cut under a new medicare proposal.
Companies could see their payment reduced by 9.4%, art of a federal budget balancing agreement and subject to public comment and could change before taken effect.
How about though we go off -- winkelvoss twins?
They are getting into the bitcoin business.
They are out looking for investors in a fund to track the movement of the online currency.
The fund is looking to sell one million shares.
We will see if the bitcoin fund gets traction.
Time warner is close to a deal to sell headquarters to related companies for more than $1.3 billion and move into a new -- manhattan's west side, according to persons knowledgeable of the situation.
It calls for the media company to anchor a two point 4 million square-foot tower on the northeast corner of the new hudson yards.
Again, no real details yet but these are sources close to the situation.
The company made big news when they signed on, so this will be big.
Hudson yards is a big game changing project.
One of the largest privately funded real estate development ever and it makes the time warner center, huge in and of its own, seem like a small piece of the pie if you look at the massive development.
The two guys helming that project.
We are just a few minutes from the opening bell.
Futures have closed mix.
We've got the top 10 trades you will not want to miss.
Keep it here on "in the loop." ? welcome back.
You are "in the loop." i'm betty liu.
Our markets team is ready to take us through the bout.
Mike mckee and alix steel is here, time for the top 10. the only trade you need to know about today.
Number 10, transocean.
Bad news again for the offshore drilling company after it was downgraded to neutral by citigroup analyst robin shoemaker.
The price target, $52 a share, $11 lower than the analyst prior forecast.
All right, and number nine.
Market players are expecting the bank earnings to rise.
Better earnings lead to lower price protection of jpmorgan stock and that is what is happening.
Options hedging against -- claims at jpmorgan had been the cheapest in years.
General motors shares are up in the premarket as u.s. auto sales roll.
The company has announced it is in clean energy mode.
It will work with competitor honda to create cheaper fuel cells and hopefully by 2020, new hydrogen tanks.
Number seven, staying with autos.
Watching for this morning after chrysler reported an 8.2% jump in june sales.
Toward sales will be out in just a few moments.
Stay with us.
We have you covered on all the auto sales numbers coming out this morning.
Also at number six is disney.
Reviews are in.
Critics are panning johnny depp's "the lone ranger " opening tomorrow.
Given the budget, it will take a hero to turn a profit on this film.
Otherwise it could become disney's biggest flop since last year's, remembered this one "john carter?" i actually loved that movie.
Constellation brands, maybe time for a drink.
Earnings coming in and first- quarter results missing estimates by two cents, sending shares lower in in the premarket.
While sales also came up short by $400,000. has shares have surged over nine percent to yet another high after a jefferies analyst doubled up price target.
After yesterday's record close, shares are still climbing in the premarket.
Number three, looking at nielsen.
The tv ratings provider is bumping sprint out of its prime spot in the s&p 500 at the close of trading delight eight.
It is vacating after handing over control to japanese company -- spring is handing over control -- sprint is vacating after handing over control to a japanese company.
Keep an eye of the daily deals website which just started a web booking service selling discounted meals.
Groupon reserve, a direct challenge to opentable.
Such a hot, competitive market.
Zynga at number one.
Mark pincus out, and former microsoft gaming executive is in as the ceo.
The announcement comes after upstart of candy crush -- investor's seem to like this move.
Joining us now from chicago at the cme is larry levine, president -- larry levin , president of trading advantage.
The rally yesterday, you say you are not buying into this.
You think some of this may have been just short covering.
I really do.
That is a technical situation.
We look at the market profile that kind of builds letters to visually see what is happening and that is what it showed yesterday.
A little bounds at the bottom and a little buying at the top and then ran out of buying, so that it's a short covering situation.
I do think the market has a little bit more room to run.
We opened pretty much a steady.
We are sitting near the low of the overnight session, about 1604, and i think we will test that.
Everyone is wondering what the fed is going to do and when tapering is going to start.
Obviously economic data becomes very important.
Maybe more important than in the last few months.
Factory orders are coming out.
Is that now going to be in the spotlight for investors or traders?
It is always about inflection points, always about important spots on the chart.
Where is the market when a piece of economic data comes out?
Factory orders are going to come out.
Sitting at the low of overnight session.
If the number comes out bad, do we get a little push below the overnight session and extend more people selling as they see the technical area get penetrated?
That is what traders down here are watching on a daily basis.
Where is the market when the economic pieces of data come out?
We have earnings coming up pretty soon.
Where is the market when some of the important earnings come out?
That is the way to trade the market here it is not really moving very far so you have to watch those spots carefully.
We are watching auto sales.
Let's turn to adam johnson who has four numbers.
Better than forecast, betty.
Ford auto sales up 13%. the forecast was 12%. we should also point out utility sales were up eight percent and trucks were up 20%. that big truck number is something we also saw at shrek -- at chrysler.
Hybrids are also up although they seem to be trailing a little bit less than expected.
We should point out the escape is up for a fifth straight record.
The sales trend is there, if not necessarily new records on the hybrids.
You can see the stock is trading flat right now.
The real point you want to focus on is the fact that u.s. auto sales in general are on target for their 39th consecutive rise.
That would mean the best sales potentially since back in 2007. this was a real big wheel.
It really speaks to the resurgence of this economy.
Maybe german ben bernanke was right, we have turned the corner.
Adam johnson with "street -- "street smart" and also, thank you to larry levin.
Crocs, we will talk to the company ceo and how it is trying to update its image.
Does it risked losing its core consumer?
And move over, chips and salsa, hummus is trying to take your spot on game day.
The rapid u.s. growth of the middle east and it aired we are just a few minutes into session.
Stay "in the loop." ? we are about seven minutes into the trading session and stocks are mixed right now this tuesday.
We are awaiting a lot of economic data this week, including factory orders in just about a half an hour.
The dow down 11 points right now and as andy is pretty much unchanged.
One stock we are watching this morning is crocs.
Shares are slightly higher.
The maker of the famously ugly foot the -- but where looking to reboot its image, shifting attention away from the trademark law looks to newer trendier styles like wages, sneakers, and ballet flats, like you see on the screen.
They plan to double sales in five years by attracting newer and younger customers.
One way is by sticking its colorful clogs on the back of stores, like what grocers do with milt.
A strategy crock ceo john mccarvel does not deny.
John joins us with more on the future of his company.
You compare your clogs to milk . basically a necessary part of your business but not necessarily what you want to highlight anymore.
I have to go back to what you said -- famously ugly.
I do not think i have heard them referred to like that before.
You are aware of the blogs and haters.
Not telling you anything new.
I think with most products, most good retailers, they do put core products in the back.
I do not and we are doing anything revolutionary.
But it is working for us.
Is it working for you?
Because now you are moving onto other kinds of styles.
Wedges, ballet flats.
Sales have been erratic, are they not, for your company, and is it not that you are moving into different styles?
Well, i don't know.
The word erratic -- if you look at growth in 2011 and 2012, significant double-digit growth in each of the two years.
Roughly 15% growth for a footwear company that is already up old in dollars.
-- already a billion dollars.
What are your projections for the sales of the new products, new styles?
New products are key to any brand growing.
We change all the time.
Whether our footwear, our apparel.
The ties we wear.
The style always has to stay on trend.
And the new products -- women's flats, wages, this is second in third-year generation products for wedges . we have builtp plats for six or seven years.
He continues to extend to new consumers, which is key.
You say you have had these new styles for six or seven years, but i can't say, john, that many people realize that about crocs.
I think some do, betty.
I think core consumers, market researcher says they do.
Our loyalists come back and look at new products and like the direction we are going.
We have less people, as we touched on earlier, who are haters.
Less haters in the brand them before, as people have moved on and they see we stand far more.
Our asian businesses, clogs on account for 30% or 35% of total revenue.
It is a faster brand, more lifestyle oriented.
B ut the reason why is perhaps in asia there is not a stigma attached to the clogs as in the u.s.? i think that is very true, betty.
We stuck with the clog and the consumers stuck with their ideas we are a clog company for a look at period of time.
Where in asia do you see the most potential?
Clearly japan grew for us and the last five years insignificant -- in significant ways.
We will continue to see china growth.
And we see the middle east as a new burgeoning market.
It is warm every day.
Great for casual lifestyle products like ours.
We have done quite well there.
With your clogs here in the u.s. -- and i know there is some sensitivity around us calling them ugly, -- do you hate it, by the way, when people say that?
No, of course not.
I mean, look, we are buyers of crocs and our home.
It is not as if people do not buy that product.
It suffers from an image problem, john.
You don't deny that.
No, i don't think so.
When i first wore it back when i was living in singapore, and when i wore it back home, my wife said the same thing.
But we have, long way, betty.
Our company has changed a lot.
We sell still a lot of clause products and we stay focused on the cl ogs as the portfolio, but a lot of interest is really in the new styles.
Beyond what we are talking about, which are ballet flats, wedges, even boots, are you looking for other products beyond shoes or is this it?
We have some accessories in the stores, and we do license out and various parts of the world the crocs brand for apparel, eyewear.
But i think right now we see a huge opportunity to continue to grow with footwear.
And we are going to stay focused.
John, thank you for joining me.
John mccarvel, president and ceo of the shoemaker crocs.
Coming up, hummus sales growing at a fast pace but can it ever be placed chips -- replace chips and salsa at your next party?
The ceo of a brand is trying to do just the that.
You are watching "in the loop " streaming on your tablet and bloomberg.com.
? you don't want to miss our latest edition of "tie into a table -- "titans at the table" as they dish about their industries.
9:00 p.m. on bloomberg television.
Deng with food, time for the global outlook.
Plenty of americans will throw back a cold one this thursday to wash down their wings and hotdogs.
On item that might not make the list -- hummus.
One is really is trying to change all of that.
Ronen zohar, the ceo of texaco's sabra brand is trying to make it a staple.
That is not him, by the way.
That is our bloomberg reportedly covers food and beverage world.
He wrote the story.
They are really making this push.
Why now is sabra doing this?
The category is exploding.
Sabra has had about 400% growth the last five years.
Especially in the eastern part of the united states, it is really catching up with a certain set of folks who want to eat healthier and they are looking for healthy snacks, though they are starting to include hummus and it is catching on in other parts of the country as well.
These commercials we are looking at, talking about dipping chicken wings, kebabs, chips, of course.
They want to make this as popular as a chips salsa on game day.
Explain to us what exactly they are doing with the nfl.
I was a little surprised myself when i saw them did a chicken wing in hummus.
I've not quite seeing that yet.
That is where they want it to go.
Part of it is signing up with organizations like the nfl to broaden the reach from just your cocktail parties to everyday outings.
Fourth of july, in terms of hummus, is a pretty good day for them already.
But you have to know that it only has about 18% household penetration in the u.s. there is still a lot of upside and they hope latching onto things like the nfl will broaden the audience.
Explain what is going on exactly with the nfl.
So far they have not released specific details.
That will be coming in the fall.
But i do know there will be some contest and so ways to tie the nfl to hummus through online social media based contests.
That will be the strategy as we know it so far.
Sabra is a joint venture between this company and pepsico . coming out texaco -- pepsico has been able to catapult us into the mainstream.
Kraft and another joint venture nestle was part of was dominating the market back in 2005-2006. pepsico in 2007 joined with an israeli company and together they basically funded and helped sabra, this independent pump -- independent hummus company.
They help them really get into grocery stores all over the u.s. pepsi has a ton of leverage because they have frito-lay, the soft drink.
Sabra has also just push the marketing heavily mostly through sampling all over the u.s. with trucks that hand out samples with vegetables or crackers and things like that.
They really flip the market share now and sabra has about 50% share.
We will see if everyone -- if it makes it to everybody's picnic table.
Still ahead, chrysler posting another market sales game.
Ford beating estimates.
We will look at the hottest dooling models.
What does it tell us about the state of the economy and the consumer?
? as we have been reporting, auto sales have been trickling in all morning long.
"streetsmarts" anchor adam johnson has been on auto watch.
So far, pretty good numbers from chrysler or ford.
Is in fact all the numbers come in line with the forecast, this would be the best month for auto sales since december of 2007. that is a big deal.
Yes, we have come all the way back.
On the hand winning -- handwringing and debate about the bailouts and whether or not the economy is improving and whether we taper, is this economy is showing signs of strengthening.
Autos are the second biggest are choices people make, all -- houses being the first.
We knew this would happen because people held off on buying cars going to crisis and now they are stuck with older cars and have been replaced with cars.
The fleet in the u.s. is over 11 year