What'd You Miss in markets today? Here's what investors should know

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LONGEST SLIDE SINCE JUNE.
JOE: THE QUESTION IS, "WHAT'D
YOU MISS?"
MATT: U.S. STOCKS MAKE UP THEIR
MIND.
JANET YELLEN'S RECENT COMMENTS
ARE GOOD FOR INVESTORS.
CAN THE FUNDAMENTALS IMPROVE
ENOUGH TO KEEP THE RALLY GOING?
JOE: WALL STREET IS WAITING TO
GET MORE ENDOWMENT CLIENTS
HELPING SCHOOLS MANAGE
INVESTMENTS HAS GROWN INTO A
$100 BILLION BUSINESS.
CHANDRA: IN BRAZIL, THE
IMPEACHMENT TRIAL OF THE
PRESIDENT IS ENTERING ITS FINAL
PHASE.
CAN SHE CONVINCE LAWMAKERS TO
KEEP HER IN OFFICE OR IS HER
REMOVAL ALREADY A FOREGONE
CONCLUSION?
MATT: WE BEGIN WITH OUR MARKET
MINUTE WITH THE BIGGEST GAIN ON
THE S&P WE HAVE SEEN SINCE
AUGUST 5.
WE POINTED OUT THE LONGEST
LOSING STREAK SINCE JUNE HAS
BEEN SNAPPED.
GROUPLL SEE EVERY SINGLE
ON THE 500 INDEX HAS GAINED
TODAY.
OSP TO SEE WHAT M
IS GOING ON IN STOCKS.
YOU CAN SEE THE GAINERS.
I WILL CHANGE IT OVER TO NAMES.
WELLS FARGO, J.P. MORGAN,
BERKSHIRE HATHAWAY ALL BIG
GAINERS TODAY.
FINANCIALS LEADING THE WAY.
AS FAR AS THE LOSERS, BIG NAMES.
ALLERGAN, BIOGEN, AMGEN.
I'M PULLING OUT PHARMACEUTICAL
AND HEALTH CARE NAMES ON THE
LOSING SIDE.
JOE: IN THE GOVERNMENT BOND
MARKET, WE SEE A SELLOFF IN
SOUTH AFRICAN BONDS.
THAT IS ONE COUNTRY -- LET'S
LOOK AT THE U.S. FIRST.
LOWER YIELDS ACROSS THE BOARD.
WE SEE A PARTICULARLY SHARP DROP
ON THE 10 YEAR YIELD.
THE FACT THAT THE U.S. TWO-YEAR
DROPPING LESS THAN THE 10 YEAR
INDICATING A FLATTENING.
FRIDAY AFTER THE FED COMMENTS,
WE SAW YIELDS UP.
TODAY A REVERSAL.
LET'S LOOK AT A ONE-MONTH CHART
OF SOUTH AFRICAN BONDS.
THAT IS INTERESTING.
GROWING ANXIETY ABOUT THE
FINANCE MINISTRY AND POWER
SITUATION HAS SEEN A SHARP JUMP
IN THE LAST WEEK.
CHANDRA: I'M LOOKING AT
CURRENCIES STARTING WITH THE
DOLLAR.
WE HAVE SEEN THE INDEX HIT A TWO
WEEK HIGH TODAY.
WE ARE PRETTY MUCH UNCHANGED AT
THE MOMENT.
YOU CAN SEE THE DOLLAR OVER THE
PAST TWO DAYS.
FRIDAY SEE THE SPIKE ON
AFTER STAN FISHER SPOKE
FOLLOWING JANET YELLEN'S SPEECH.
YOU CAN SEE IT UP .9% OVER TWO
DAYS.
I WANT TO LOOK AT THE YEN.
WE ARE SEEING A STRONGER DOLLAR.
THEYEN WEAKENING AGAINST
DOLLAR FOR A FOURTH DAY AFTER
BANK OF JAPAN GOVERNOR KURODA
REITERATED HIS READINESS TO EASE
MONETARY POLICY.
EYE ON THE REAL AS
WELL, IT IS THE BEST-PERFORMING
EMERGING-MARKET CURRENCY AGAINST
THE DOLLAR TODAY.
UP 1%.
ON THE COMMODITIES FRONT,
LET'S CHECK OUT GOLD WHICH HAS
BEEN ON A LOSING STREAK LATELY.
IF WE LOOK AT A CHART OVER THE
LAST MONTH, HERE IS A ONE-YEAR
CHART.
WE'VE HAD A BIG RALLY SINCE
DECEMBER.
BUT WE HAVE TOPPED OUT LATELY.
WE HAVE NOT MADE A NEW HIGH IN A
WHILE.
OVER THE LAST MONTH, A BIT OF A
LOSING STREAK.
GOLD HAVING A SEVEN-DAY LOSING
STREAK.
AFTER A TORRID START, GOLD IS
FADING.
MATT: THOSE ARE THE MARKET
MINUTES WE ARE LOOKING AT.
WE WANT TO GET INTO THE DEEP
DIVES AND TAKE A LOOK INTO THE
BLOOMBERG.
I WANT TO SHOW YOU THE FUNCTIONS
YOU CAN PULL UP BY LOOKING, FOR
ME IT IS THE BOTTOM RIGHT-HAND
CORNER.
FOR YOU, THE BOTTOM LEFT-HAND
CORNER OF YOUR SCREEN.
I HAVE ONE ON OIL WHICH I THINK
IS GREAT.
THE ECONOMIST AT BLOOMBERG
INTELLIGENCE SENT ME THIS.
YOU SEE THE DIFFERENT OPEC
COUNTRIES AND THEIR PRODUCTION
GOING BACK TO THE 1990'S.
ONLY THE WHITE LINE, WHICH IS
SAUDI ARABIA, THE ORANGE LINE
WHICH IS A ROCK -- IN IRAQ, AND
THE BLUE LINE WHICH IS A RUN,
HAVE MADE SIGNIFICANT JUMPS UP.
IRAN COMING BACK TO NORMAL.
IRAQ IS THE BEGINNER AMONG THE
OPEC COUNTRIES.
YOU CAN SEE ALL OF THE DIFFERENT
MARKET SHARES THERE.
YOU SAW IT FOR A BRIEF MOMENT.
IT IS INTERESTING TO LOOK AT THE
BREAKUP OF THE OPEC COUNTRIES.
JOE: DEFINITELY.
I'M LOOKING AT THE CORRELATION
BETWEEN TWO E.T.F. AND I THINK
IT SAYS A LOT ABOUT WHAT IS
GOING ON IN THE MARKET NOW.
THE CORRELATION BETWEEN THE SB
TLT.D
.HIS IS A 90-DAY CORRELATION
THEY ARE THE MOST POSITIVELY
CORRELATED IN FIVE YEARS.
WHEN EVERYTHING IS CORRELATED
TOGETHER LIKE THIS, IT HAS LOTS
OF IMPLICATIONS FOR THE MARKET.
IT MAKES IT HARD TO DIVERSIFY
WHEN BONDS AND STOCKS ARE DOING
THE SAME THING.
YOU GET NO DIVERSIFICATION IN
YOUR PORTFOLIO.
IT SHOWS THE IMPORTANCE OF THE
FED.
TODAY WE SAW BONDS AND STOCKS
RALLY AT THE SAME TIME.
FRIDAY WE SAW BONDS AND STOCKS
SELL OFF SIGNIFICANTLY AT THE
SAME TIME.
IN THEE ONLY VARIABLE
MARKET SEEMS TO BE THE TIMING OF
THE FED, YOU GET EVERYTHING ELSE
RALLYING OR DECLINING AT THE
SAME TIME.
WE ARE GOING TO KEEP AN EYE ON
THAT CORRELATION.
CHANDRA: BY CHART SHOWS A
DIVISION BETWEEN WALL STREET AND
MAIN STREET.
IT IS NOT THE FIRST TIME THIS
HAS HAPPENED.
I THOUGHT IT WAS INTERESTING
BECAUSE IT IS LOOKING AT
VOLATILITY.
WE HAVE THE CALMEST STOCK MARKET
IN FIVE DECADES.
THE ON THE SURFACE, WE ARE
SEEING A TO VIRGINS IN SENTIMENT
-- BEYOND THE SURFACE, WE ARE
SEEING A DIVERGENCE IN
SENTIMENT.
INDIVIDUALS ARE LOADING UP ON
PROTECTED OPTIONS AND EQUITY
FUNDS.
WE HAVE THE WHITE LINE RISING.
THIS AMOUNTS TO A STOCK MARKET
SHORT ON THE PART OF RETAIL
INVESTORS.
IF WE LOOK AT THE BLUE LINE,
THESE ARE THE FEATURES POSITIONS
-- FEATURES -- FUTURES
POSITIONS.
SMALLER INVESTORS ARE EMBRACING
THEM.
INTERESTING TO SEE THIS
DIVERGENCE OR SMART MONEY IS
GOING TOWARDS THE VIX STOCK
MARKET.
MATT: WE HAVE TO USE THE BUNNY
EARS WHEN WE SAY SMART MONEY.
CHANDRA: THEY GOT IT RIGHT THE
LAST TIME THIS HAPPENED IN 2015.
JOE: LET'S DIG INTO THE TRENDS
IN THE EQUITY MARKETS AS IN
INVESTORS SNAP OF
DIVIDENDS, STOCKS ARE PUSHING
HIGHER CURRENTLY ABOVE THE
10-MONTH MOVING AVERAGE.
ARE STOCKS GETTING TOO
EXPENSIVE?
JOINING US NOW IS MEB FABER.
THANK YOU FOR JOINING US.
U.S. STOCKS ARE STILL VERY CLOSE
TO ALL-TIME HIGHS.
CAN THEY KEEP PUSHING HIGHER?
HAVE THE VALUATIONS GOTTEN TOO
MUCH?
>> THE WORLD LOOKS A LOT LIKE
THE WAY IT HAS BEEN THE LAST
SEAT OF TIMES I'VE BEEN ON THE
SHOW, SO GREAT TO BE BACK.
STILL EXPENSIVE.
THEY ARE THE SECOND BEST OF FOUR
ENVIRONMENTS TO BE IN WHICH IS
EXPENSIVE AND GOING UP.
THAT IS OK.
THE REST OF THE WORLD, WHEEZING
EQUITIES IN PARTICULAR, LOOKS
MUCH BETTER.
A LOT OF THE INVESTMENTS WE
TALKED ABOUT, EMERGING MARKETS
AND FOREIGN MARKETS IN GENERAL,
USUALLY THE REALLY CHEAP STUFF,
BRAZIL EQUITY MARKETS UP ABOUT
60% THIS YEAR.
THE RUSSIAN MARKET UP ABOUT 25%.
WE THINK THAT IS A MUCH BETTER
PLACE TO BE THAN U.S. STOCKS.
JOE: I HAVE THIS CHART ON MY
BLOOMBERG.
THE EMERGING MARKETS
E.T.F. VERSUS THE SPY.
YOU CAN SEE IT UNDERPERFORMED
FOR YEARS BUT HAS BEEN PICKING
UP LATELY.
STILL IT HAS HARDLY RECOUPED ANY
OF THE RELATIVE LOSSES SINCE THE
PEAK IN 2010.
DO YOU SEE OVERALL EMERGING
MARKETS HAVING MUCH FURTHER TO
RUN RELATIVE TO U.S. EQUITIES?
>> THE END OF THE YEAR WAS THIS
PERFECT ONE SIDE WITH MANY YEARS
OF UNDERPERFORMANCE -- COINCIDE
WITH MANY YEARS OF
UNDERPERFORMANCE.
FINALLY GOT TO CHEAP VALUATIONS.
NOBODY WANTS THEM.
THAT SETS THE STAGE FOR FUTURE
BULL MARKETS.
THEY ONLY OUTPERFORM EACH OTHER
ABOUT HALF THE TIME.
THE U.S. HAS BEEN CRUSHING
EVERYONE ELSE SINCE THE GLOBAL
FINANCIAL CRISIS.
YOU ARE STARTING TO SEE THE
SHIFT RIGHT AROUND JANUARY.
FOREIGN MARKETS STARTED TO TAKE
LEADERSHIP, PARTICULARLY
EMERGING MARKETS.
SOME OF THE EUROPEAN COUNTRIES
ARE STILL LAGGARDS.
ITALY, GREECE, SPAIN.
WE THINK MANY MORE YEARS OF
OUTPERFORMANCE, DOUBLE-DIGIT
RETURNS IN EMERGING MARKETS IN
PARTICULAR AND LOW SIGNAL DIGITS
FOR THE U.S.
MATT: WE DO HAVE BREAKING NEWS
COMING ACROSS THE TERMINAL,
WHICH IS KIND OF A BIG DEAL.
IT SAID IT IS NO LONGER PURSUING
A COMBINATION WITH HERSHEY.
IT SAYS IT IS DISAPPOINTED WITH
THE OUTCOME BUT CITING RECENT
HOLDER DEVELOPMENTS AT HERSHEY.
IT SAYS THERE IS NO ACTIONABLE
PATH FORWARD.
IT IS GOING TO CONTINUE
EXECUTIVE PLANS TO BOOST
SHAREHOLDER VALUE, PROBABLY A
GOOD IDEA SINCE THAT IS THE MAIN
JOB.
THIS SAYS THEY ARE NO LONGER
PURSUING A COMBINATION WITH
HERSHEY.
VERY INTERESTING NEWS OUT OF
MONDELEZ.
HOURS, WE SAWFTER
A BIG SPIKE AND A RECOVERY.
NOT A LOT OF MOVEMENT IN SHARES.
JOE: PLUNGING OVER 8% RIGHT NOW
ON THE NEWS.
OBVIOUSLY, THE LOSS OF A
POTENTIAL ACQUIRER HITTING THEIR
SHARES.
MATT: EXACTLY WHAT YOU WOULD
EXPECT.
OFRE ARE NOT A TON
SHARES TRADED AFTER HOURS IN
HERSHEY.
YOU CAN SEE THE CONTRACTS AND
HOW MANY ARE TRADED RIGHT NOW.
VERY INTERESTING NEWS.
WE WILL CONTINUE TO MONITOR IT.
I WILL ASK YOU ABOUT THE U.S.
CONSUMER.
WE ARE TALKING ABOUT CONSUMER
STOCKS.
UT RIGHT HERE.R
WHAT DO YOU THINK ABOUT THE FACT
THE U.S. CONSUMER SEEMS TO BE
, KIND OFNNING ON EMPTY
OUT OF GAS ALMOST.
IN LOS ANGELES, HOUSING
PRICES LOOK LIKE 2008 NEVER
HAPPENED.
THIS IS THE THING YOU START TO
SEE IN THE BULL MARKET IN YEAR
SEVEN OR EIGHT WHERE RETURNS ARE
GETTING TO THE POINT WHERE THE
SENTIMENT IS STARTING TO GET
HIGH AGAIN.
PEOPLE IN GENERAL, CONSUMER
DISCRETIONARY STOCKS FOR
EXAMPLE REALLY
EXPENSIVE.
A LOT OF THE CONSUMER FOCUSED
BECAUSE OF THE SEARCH FOR YIELD,
PEOPLE PUSHING THE YIELDS DOWN.
A LOT OF THESE CONSUMER STOCKS
IS A TERRIBLE PLACE TO BE.
WANT TO GET AWAY FROM THOSE AND
RUN AS QUICK AS POSSIBLE.
CHANDRA: I SHOWED A CHART
GENCEER ON THE DIVERSE
WITH INSTITUTIONAL INVESTORS
BAILING OUT WHILE SMALLER
INVESTORS HAVE BEEN EMBRACING
THEM.
THEY HAVE BEEN SHORTING THE
STOCK MARKET.
WHO IS RIGHT?
INSTITUTIONAL
INVESTORS OFTEN BEHAVE AS POORLY
AS INDIVIDUALS.
THEY USE A LOT MORE RIGOROUS
TERMS FOR IT, BUT THEY MAKE A
LOT OF THE SAME MISTAKES.
BUILDING A GLOBAL PORTFOLIO,
THERE ARE A LOT OF THINGS YOU
WANT TO INCLUDE.
YOU WANT TO GET RID OF HOME
COUNTRY BIAS.
THAT HAPPENS NOT JUST IN THE
U.S. BUT IN EVERY COUNTRY AROUND
THE WORLD.
EVERY COUNTRY INVESTOR PUTS TOO
MUCH IN THEIR OWN STOCKS.
BUILDING A PORTFOLIO, YOU HAVE
TO HAVE A GLOBAL APPROACH.
NOT JUST WITH EQUITIES BUT BONDS
AS WELL.
WITH VOLATILITY, YOU HAVE REAL
ASSETS.
YOU NEED EXPOSURE TO INFLATION
IF AND WHEN IT HAPPENS AGAIN.
WE HAVE NOT SEEN IT FOREVER IN
THE U.S.
WE HAVE SEEN IT IN COUNTRIES
AROUND THE WORLD.
WHEN YOU HAVE THAT GLOBAL
PORTFOLIO, YOU CAN DO OTHER
THINGS.
YOU CAN TILT TOWARD VALUE AND
MOMENTUM.
YOU CAN ADD DIVERSIFIED IS AT A
LONG VOLATILITY PRODUCT WE THINK
IS ONE OF THE BEST THAT VERY FEW
GO TO.
JOE: YOU'RE GOING TO STICK
AROUND.
WE WILL TALK ABOUT COLLEGE
ENDOWMENTS AND WHAT INVESTORS
CAN LEARN BY MIMICKING THE
STRATEGIES OF HARVARD, YALE, AND
OTHER TOP SCHOOLS LIKE STANFORD.
MATT: PROBABLY YELL MORE THAN
HARVARD -- PROBABLY YALE MORE
THAN HARVARD.
TO RECAP THE DEVELOPING STORY.
MONDELEZ SAYS IT IS NO LONGER
PURSUING A TAKEOVER OF HERSHEY.
THE C.E.O. IN A STATEMENT SAYS
FOLLOWING DISCUSSIONS AND TAKING
INTO ACCOUNT RECENT SHAREHOLDER
DEVELOPMENTS AT HERSHEY, WE
DETERMINED THERE IS NO
ACTIONABLE PATH FORWARD.
AFTER HOURS SHARES IN HERSHEY
FALLING 10%.
THIS IS BLOOMBERG.
♪
MARK: IT IS TIME FOR YOUR FIRST
WORD NEWS.
DONALD TRUMP IS SET TO DELIVER
HIS IMMIGRATION POLICY ON
WEDNESDAY.
HE PLANS TO FOCUS ON DEPORTING
CRIMINALS.
THAT IS SIMILAR TO THE STRATEGY
OF THE OBAMA ADMINISTRATION.
THE PRESIDENT HAS OFTEN BEEN
REFERRED TO BY IMMIGRATION
GROUPS AS THE TO PORTER -- DE
PORTER IN CHIEF.
HASOBAMA ADMINISTRATION
REMOVED MORE THAN 2.5 MILLION
PEOPLE THROUGH IMMIGRATION
ORDERS.
HILLARY CLINTON HAS AN EDGE IN
MICHIGAN AND PENNSYLVANIA BUT
THEY ARE DEADLOCKED IN OHIO.
CLINTON LEADS TRUMP 45-40% IN
MICHIGAN AND 46-43% IN
PENNSYLVANIA.
THEY ARE TIED AT 43% IN OHIO.
THE LIBERTARIAN PARTY CANDIDATE
HAS 10% IN OHIO AND 7% IN
PENNSYLVANIA AND MICHIGAN.
ORLANDO'S MAJOR THEME PARKS ARE
OFFERING FREE BUG REPELLENT AS
CONCERNS ABOUT THE ZIKA MELT IN
FLORIDA.
WALT DISNEY WORLD, UNIVERSAL
RESORT, AND SEAWORLD ORLANDO
BEGAN OFFERING THE MOSQUITO
SPRAY AND LOTION FREE OF CHARGE.
MOSQUITO TRANSMITTED
CASE HAS BEEN FOUND IN CENTRAL
FLORIDA.
THE JUSTICE DEPARTMENT WILL
DECIDE BY NEXT MONTH IF IT WILL
SEEK TO PROSECUTE THE FORMER
VIRGINIA GOVERNOR FOR
CORRUPTION.
IN JUNE, THE SUPREME COURT IN A
UNANIMOUS DECISION TOSSED HIS
CONVICTION.
THE RULING LEFT OPEN THE
POSSIBILITY FOR HIM TO BE
RETRIED.
GENE WILDER IS DEAD.
HIS NEPHEW TOLD "VARIETY"
MAGAZINE THE ACTOR AND WRITER
DIED EARLIER THIS MONTH IN
STAMFORD, CONNECTICUT, FROM
COMPLICATIONS FROM ALZHEIMER'S.
" THERRED IN
PRODUCERS" AND "STIR CRAZY."
HE WAS NOMINATED TWICE FOR AN
OSCAR.
GENE WILDER WAS 83 YEARS OLD.
GLOBAL NEWS 24 HOURS A DAY
POWERED BY MORE THAN 2600
JOURNALISTS AND ANALYSTS IN MORE
THAN 120 COUNTRIES.
I AM MARK CRUMPTON.
THIS IS BLOOMBERG.
MATT: WE HAVE BREAKING NEWS FROM
AMERICAN AIRLINES.
IT'S PRESIDENT WILL LEAVE
EFFECTIVE IMMEDIATELY.
AMERICAN AIR CONCLUDED THEY
WOULD NOT BE ABLE TO RETAIN
THEIR EXECUTIVE TEAM SO THEY
KIRBYA NEW PRESIDENT AND
WILL BE LEAVING EFFECTIVE
IMMEDIATELY.
JOE: "WHAT'D YOU MISS?"
MORE COLLEGES AND UNIVERSITIES
ARE OUTSOURCING MANAGEMENT OF
ENDOWMENTS AS THEY TRY TO LOWER
EXPENSES AND INCREASE RETURNS.
BACK WITH US IS MEB FABER.
"THEROTE AN ENTIRE BOOK,
IVY PORTFOLIO."
WHAT DO YOU MAKE OF THIS WALL
STREET ATTEMPTING TO GET IN ON
THE ENDOWMENT BUSINESS,
COMPANIES TRYING TO OUTSOURCE
THEIR ENDOWMENTS TO WALL STREET?
WHAT DO YOU MAKE OF THIS TREND
AND WHAT ARE THE TOP ENDOWMENTS
YOU HAVE FOLLOWED FOR SO LONG
DOING NOW?
>> TYPICALLY, WE START WITH
HARVARD AND YEAH.
ENDOWMENTS,ARGEST
THERE ARE THINGS THEY DO GREAT
AND THINGS THEY DON'T DO GREAT.
THEY DO A TRUE GLOBAL
PERSPECTIVE ON ALLOCATIONS.
NOT JUST U.S. ASSETS BUT FOREIGN
ASSETS AS WELL.
THEY HAVE A HEAVY ALLOCATION TO
EQUITY LIKE ASSETS.
THEY HAVE A CHUNK IN REAL ASSETS
LIKE COMMODITIES.
THEY ALSO TARGET ACTIVE
MANAGEMENT WHEN APPROPRIATE SO
IT GIVES YOU A DIVERSIFIED
PORTFOLIO.
THE THINGS THEY DON'T DO WELL IS
IT IS TYPICALLY AN AGGRESSIVE
PORTFOLIO FOR INDIVIDUALS AND
INSTITUTIONS.
THOSE ENDOWMENTS PROBABLY LOST
50% IF NOT MORE IN THE 2000 A
PAIR MARKET.
-- 2008 BEAR MARKET.
THAT IS HOW MUCH THEY WOULD HAVE
DECLINED.
IN MY OPINION, THEY DON'T OFFER
TO TRENDS.SURE
MANY INVESTORS CAN GET ENDOWMENT
EXPOSURE NOW.
IN E.T.F. THAT GIVES
YOU ACCESS TO OVER 30,000
SECURITIES AROUND THE WORLD.
ANNOUNCED THAT WE NOW
MANAGEMENT FORT
INDIVIDUAL ACCOUNTS FOR A 0%
MANAGEMENT FEE ACROSS 13 IF YES
THAT LOOKS A LOT
LIKE THIS PORTFOLIO.
YOU CAN TURN THE DIAL UP OR DOWN
FOR PEOPLE THAT CANNOT HANDLE
THE LARGE ENDOWMENTS AND
LIQUIDITY ISSUES OF A
TRADITIONAL ENDOWMENT.
I WANTED TO POINT OUT WE
WHICH GREAT FUNCTION
ALLOWS YOU TO GET DEEP
INFORMATION ABOUT COLLEGE
ENDOWMENTS.
OBVIOUSLY, HARVARD IS THE
BIGGEST.
THE ONE-YOUR RETURN IS POOR AT
5.8%.
OVER 10 YEARS, THEY ARE UP
7.86%.
YALE STOMPS THEM OVER THE LAST
YEAR AND 10 YEARS.
WHEN I THINK ABOUT COLLEGE
ENDOWMENTS, I THINK ABOUT
ALTERNATIVE INVESTMENTS DID THEY
KIND OF PIONEERED DUMPING INTO
ALTERNATIVE INVESTMENTS.
DO YOU THINK THEY DID THAT WELL
AND HAVE NOW GONE OFF THE RAILS?
ALTERNATIVESOOK AT
AND SAY LET'S GO BACK 60 YEARS
AGO WHEN HARVARD WAS DOING
TIMBER OR PEOPLE WERE EARLY TO
ASSET CLASSES, ONE OF THE BEST
THING YALE DID WAS IT STARTED
ALLOCATING TWO SMALL-CAP
MANAGERS 30 YEARS AGO WHEN THAT
WAS LESS EFFICIENT.
THERE ARE 10,000 HEDGE FUNDS
TODAY SO THAT GAME IS HARDER.
YOU ARE SEEING MOVE INTO ASSET
CLASSES THAT ARE NOT TRADITIONAL
THAT INDIVIDUAL INVESTORS NEED
EXPOSURE TO.
HARVARD HAS BEEN STRUGGLING.
I THINK IT IS GOING TO BE
INCREDIBLY DIFFICULT FOR MANY OF
THESE ENDOWMENTS TO OUTPERFORM A
BASIC 0% FEE BENCHMARK LIKE OURS
GOING FORWARD.
THAT IS GOING TO BE TOUGH TO DO.
JOE: MEB FABER, THANK YOU VERY
MUCH AS ALWAYS FOR JOINING US.
CHANDRA: YOU ARE WATCHING
"WHAT'D YOU MISS?"
A CONVERSATION YOU DON'T WANT TO
MISS TOMORROW WITH STANLEY
FISCHER, VICE CHAIRMAN OF THE
FEDERAL RESERVE.
HE SITS DOWN THE TOM KEENE AT
6:30 A.M. EASTERN ON TELEVISION
AND RADIO.
THIS IS BLOOMBERG.
♪
CHANDRA: YOU ARE WATCHING
"WHAT'D YOU MISS?"
TIME FOR ANOTHER DEEP DIVE INTO
THE BLOOMBERG.
LET'S START WITH A CHART ON THE
CARRY TRADE.
THIS IS WHEN INVESTORS BORROW IN
GROUPS OF 10 CURRENCIES WITH
GROUP INTEREST RATES AND USE IT
TO BUY HIGHER YIELDS.
THIS IS ON PACE FOR ITS BIGGEST
ANNUAL GAIN SINCE 2012.
THIS CHART SHOWS THE DEUTSCHE
BANK CARRY TRADE INDEX.
I THOUGHT THIS WAS AN
INTERESTING WANT TO SHOW GIVEN
THE ENVIRONMENT OF LOW YIELDS WE
HAVE AND THE CONSTANT HUNT FOR
YIELD WE KEEP TALKING ABOUT.
THE CARRY TRADE IS ONE OF THE
STRATEGIES.
ANOTHER ONE THAT HAS BEEN
RALLYING IS THE EVALUATION AND
MOMENTUM TRADES.
THIS CARRY TRADE IN PARTICULAR
INTERESTING BECAUSE YOU HAVE
SOME CURRENCIES RALLYING EVEN
WHEN THEIR CENTRAL BANKS EASE.
JOE: ANOTHER STRATEGY THAT HAS
DONE WELL LATELY, RISK PARODY
FUNDS WHICH GO ALONG EQUITIES
AND TREASURIES AT THE SAME TIME.
THAT IS THE REDLINE GOING BACK
TO THE BEGINNING OF THE YEAR,
HAVING A GOOD YEAR.
FRIDAYTO HIGHLIGHT
BECAUSE YOU SEE THE DECLINE.
THAT WAS ONE OF THE WORST DAYS
ALL YEAR FOR THE STRATEGY AFTER
THE COMMENTS AT JACKSON HOLE.
IT SHOWS THE SUSCEPTIBILITY OF
THE STRATEGY TO PERCEPTIONS OF
TIGHTENING.
IF THE STRATEGY DOES REALLY WELL
AND PEOPLE THINK TIGHTENING IS A
LONG WAY OFF, BUT ON DAYS WHEN
PEOPLE HAVE TO RATCHET UP
EXPECTATIONS OF A FED HIKE, YOU
SEE SELLOFF ACROSS ASSET CLASSES
AND THE STRATEGY DOES NOT DO AS
WELL.
MATT: VERY INTERESTING CHART.
VERY COOL.
IAN SUSPENDED BRAZIL
PRESIDENT TELLS THE SENATE
REMOVING HER FROM OFFICE WOULD
BE A DEATH SENTENCE.
WELL HER EMOTIONAL APPEAL TO
LAWMAKERS SWAY ANY VOTES?
THIS IS BLOOMBERG.
♪
MARK: I AM MARK CRUMPTON.
DONALD TRUMP IS PRAISING THE
DECISION OF HILLARY CLINTON'S
TOP AIDE TO SEPARATE FROM HER
HUSBAND, FORMER NEW YORK
CONGRESSMAN ANTHONY WEINER.
TRUMP IS BLASTING CLINTON IN THE
COULDS CLAIMING WEINER
HAVE ENDANGERED NATIONAL
SECURITY IN ALLOWING HIM CLOSE
PROXIMITY TO HIGHLY CLASSIFIED
INFORMATION.
WIENERRED NO EVIDENCE
HAD ACCESS TO SUCH MATERIAL.
SANDY HOOK REOPENED AFTER THE
SHOOTING RAMPAGE THAT KILLED 20
CHILDREN AND SIX EDUCATORS.
STUDENTS RETURNED TO A $50
MILLION REPLACEMENT OF THE
SCHOOL ON THE SAME PROPERTY IN
NEWTOWN, CONNECTICUT.
NORTH KOREA CALLS THE U.N.
SECURITY COUNCIL STATEMENT
STRONGLY CONDEMNING THE LATEST
BALLISTIC MISSILES A HOSTILE ACT
PERPETRATED BY THE U.S.
THE FOREIGN MINISTRY ACCUSED THE
U.S. OF INSTIGATING THE
STATEMENT TO DETER THE COUNTRY'S
LEGITIMATE RIGHT TO
SELF-DEFENSE.
MORE THAN 35,000 PEOPLE DIED IN
U.S. TRAFFIC CRASHES LAST YEAR.
THE MORE THAN 7% SPIKE WAS THE
LARGEST SINGLE YEAR INCREASE IN
20 YEARS ACCORDING TO THE
NATIONAL HIGHWAY TRAFFIC SAFETY
ADMINISTRATION.
INCREASE ENDS A FIVE DECADE
TREND OF DECLINES IN TRAFFIC
FATALITIES.
OFFICIALS ATTRIBUTE THE RISE TO
MORE DRIVERS ON THE ROAD.
GLOBAL NEWS 24 HOURS A DAY
POWERED BY MORE THAN 2600
JOURNALISTS AND ANALYSTS IN OVER
120 COUNTRIES.
I AM MARK CRUMPTON.
THIS IS BLOOMBERG.
>> ONE STOCK MOVING IN LATE
TRADING IS HERSHEY AFTER
MONDELEZ SAYS IT IS NO LONGER
PURSUING ITS COMBINATION WITH
HERSHEY.
YOU CAN SEE THE STOCK DOWN 11.5%
AFTER HOURS.
MONDELEZ SAYS IT IS DISAPPOINTED
WITH THE OUTCOME AND THERE IS NO
ACTIONABLE PATH FORWARD.
HAMMOND -- ED AT
HAMMOND WHO HAS BEEN TRACKING
THE DEAL.
WHY DID IT FALL APART?
>> IT NEVER REALLY GOT GOING.
WHEN IT BECAME PUBLIC, HERSHEY
WAS IMMEDIATELY REJECTING OF THE
OFFER.
THERE HAS NOT BEEN MUCH
ENGAGEMENT OVER THE SUMMER.
BEFORE THIS WENT PUBLIC COUPLE
OF MONTHS AGO, THEY HAD BEEN
TALKING BEHIND THE SCENES.
BELIEVED THEYELEZ
WERE POTENTIALLY OPEN TO A DEAL.
MATT: NOW THEY DON'T BELIEVE
THAT.
I WAS LOOKING BACK TO SEE WHAT
KIND OF SHAREHOLDER ACTIVITY
COULD HAVE LED TO THIS CHANGE.
I SAW THAT HERSHEY IS CONTROLLED
BY THIS TRUST THAT WAS UNDER
FIRE FOR LAVISH SPENDING.
THERE WAS AN INVESTIGATION.
THEY PROMISED TO DO BETTER.
STORY WITH
THE OWNERS OF HERSHEY?
RIP GENE WILDER INDEED.
FITTING THIS NEWS WOULD COME ON
THE SAME DAY.
HERSHEY HAS A NORMAL CORPORATE
BOARD AS EVERY COMPANY DOES.
BUT IT ALSO HAS A TRUST CHARGED
WITH LOOKING AFTER THE INTERESTS
OF HERSHEY THE TOWN.
THEY GET THE ULTIMATE CALL ON
WHETHER OR NOT THIS COMPANY
GETS.
SOLD EVEN IF THE BOARD APPROVED
THE DEAL, IT IS UP TO THE
TO DECIDE IF THE BOARD
MADE THE RIGHT DECISION.
IT NEVER MADE IT THAT FAR.
MATT: MONDELEZ WOULD HAVE TO
MAKE IT VERY APPEALING TO THE
PEOPLE TO WHOM THE TRUST REPORTS
FOR THE TRUST TO THINK ABOUT IT
BECAUSE THEY REPRESENT THE TOWN
IN PENNSYLVANIA.
AN AMORPHOUS CONCEPT ON
WHICH INTEREST THEY ARE SERVING.
THERE HAS BEEN A LOT OF
CRITICISM BECAUSE THE TRUST IS
OFTEN UNDER FIRE FOR APPARENTLY
SERVING THEIR OWN SELF INTEREST,
SPENDING LOTS OF MONEY ON THEIR
OWN ACTIVITIES, NOT NECESSARILY
BEST FOR THE BIGGER CONCEPT OF
WHAT IS IN THE BEST INTEREST OF
THE TOWN OF HERSHEY.
>> WHAT HAPPENS NEXT FOUR
MONDELEZ?
WILL THEY LOOK AT OTHER
ACQUISITIONS?
>> I THINK THEY WILL LOOK AT
OTHER ACQUISITIONS.
THEY ARE ALSO SEEN AS A TARGET
SO IT IS POSSIBLE SOMEONE BIGGER
AND BETTER WILL GO AFTER THEM.
THIS DEAL I'M SURE WAS MOTIVATED
FOR STRATEGIC REASONS.
THERE HAS BEEN WHISPERING SINCE
IT BECAME PUBLIC THAT THEY
POTENTIALLY WERE DOING A
DEFENSIVE MOVE.
>> ED HAMMOND, THANK YOU VERY
MUCH INDEED.
MATT: LET'S GET A QUICK RECAP OF
TODAY'S MARKET ACTION.
STOCKS SHOWED GAINS TODAY.
THE BIGGEST GAIN FOR THE S&P 500
SINCE AUGUST FOR.
JOE, THE BIGGEST GAIN IN A
MONTH.
.5%.
JOE: THAT IS A REMARKABLE FACT.
I THINK WE ARE ON 35 STRAIGHT
DAYS.
IS 36. THINK IT
I HAVE A CHART ABIGAIL DOOLITTLE
HAS BEEN SHOWN TODAY.
IT SHOWS YOU THIS RANGE.
A 1% ORHAS NOT MOVED TO
GREATER RANGE IN 36 DAYS.
THE RANGE IS BROADENING SO WE
ARE GETTING THERE.
BUT IT HAS NOT MOVED OUT.
DO YOU WANT TO SHOW THE CHART I
HAVE?
JOE: THERE IT IS.
THAT IS A GORGEOUS CHART.
"WHAT'D YOU MISS?"
THE IMPEACHMENT TRIAL OF
BRAZIL'S BENDED PRESIDENT IS
ENTERING -- SUSPENDED PRESIDENT
IS ENTERING ITS FINAL PHASES.
COMMIT ANYE DID NOT
CRIME CALLING HER IMPEACHMENT "A
POLITICAL DEATH PENALTY."
TWICE, I CAME CLOSE TO DEATH.
ONCE WHEN FOR DAYS I WAS
THAT MADE ME DOUBT
HUMANITY AND LIFE ITSELF.
WHEN A SERIOUS ILLNESS ALMOST
MADE MY LIFE SHORTER.
TODAY I AM CONCERNED ABOUT THE
DEATH OF DEMOCRACY.
IN JULIA LEITEG
FOR THE LATEST.
DRAMATIC STUFF.
DOES SHE HAVE ANY POLITICAL LIFE
AT ALL OR IS THIS A DONE DEAL?
>> THIS IS SEEN AS A DONE DEAL.
MOST OF THE NEWSPAPER POLLS HAVE
AROUND 52 SENATORS VOTING FOR
IMPEACHMENT AND 10 UNDECIDED.
THEY ONLY NEED 54 TO IMPEACH.
THIS IS SEEN BY HER ALLIES AS A
DONE DEAL.
SHE'S GOING TO BE IMPEACHED THIS
WEEK.
JOE: IT DOES NOT HAVE TO BE A
DEATH SENTENCE.
ONE OF THE SENATORS WHO WILL BE
VOTING HIMSELF WAS A BRAZILIAN
PRESIDENT WHO WAS IMPEACHED.
HER CAREER COULD GO ON.
>> THAT IS RIGHT.
1992 AND WASHED IN
OUT OF THE POLITICAL SPHERE FOR
.IGHT YEARS
HE HAS BEEN BACK.
HE IS A SENATOR.
HE SPOKE ON THE FIRST
IMPEACHMENT VOTE AND IS VOTING
THIS WEEK AS WELL.
GAINSHAVE SEEN STUNNING
IN THE RUN-UP TO THIS.
IS THIS OPTIMISM IN THE STOCK
MARKET BECAUSE OF THE
POSSIBILITY OF HER GOING OR IS
ACTUAL FUTURE BETS
ON BRAZIL'S ECONOMY?
>> WE HEAR BOTH THINGS.
WE ALSO HEAR COMMODITIES RALLY
AND LOW INTEREST RATES ABROAD.
THERE IS A LARGE PORTION OF
INVESTORS THAT STILL SAY
WHATEVER COMES AFTER WILL BE
BETTER.
THEY WILL HAVE TROUBLE PASSING
REFORMS EVEN THOUGH THERE IS A
LOT OF OPTIMISM HE WILL MANAGE
TO GET SOME DONE.
INVESTORS KNOW IT IS DIFFICULT.
BRAZIL HAS A DIFFICULT POLITICAL
SYSTEM.
WE HAVE OVER 30 PARTIES SO THERE
IS A LOT OF NEGOTIATING THAT
NEEDS TO GO ON.
JOE: I WANT TO EXPAND ON THAT
QUESTION FURTHER.
AND ISG SHE IS IMPEACHED
OFFICIALLY REMOVED FROM OFFICE,
DOES THAT AID IN THE PROCESS OF
POLITICAL REFORM AT ALL?
IS THAT ON A TOTALLY SEPARATE
TRACK WITH ITS OWN DYNAMICS?
--THE HOPE IS IT WILL MAKE
GIVE HIM A MORE LEGITIMATE
GOVERNMENT AND MORE SWAY IN
NEGOTIATIONS.
POLITICAL REFORM PROPOSALS HAVE
BEEN PUT ASIDE FOR THE TIME
BEING.
WE ARE TALKING MOSTLY ABOUT
PENSION REFORM, SOCIAL SECURITY
REFORM, TAX REFORM.
SOME TALK ABOUT LABOR LAW
REFORM.
POLITICAL REFORM IS LIKELY TO BE
EVEN MORE COMPLICATED AND IS NOT
ON THE TABLE RIGHT NOW.
MATT: WHEN IS THE LAST TIME WE
ARE GOING TO HEAR ABOUT THIS?
THE LAST TIME YOU'RE GOING TO
HAVE TO REPORT ON HER FOR AT
LEAST EIGHT YEARS?
>> THAT IS HARD TO KNOW.
THIS WEEK, WE WILL BE
REPORTING ON HER A LOT.
SHE COULD APPEAL.
THIS COULD GO ON FOR A WHILE.
WE WILL SEE WHAT SHE DECIDES TO
DO.
MATT: MAYBE A BIT OF A
NEVER-ENDING STORY.
>> BUT ONE THAT WE LOVE
FOLLOWING.
THANK YOU SO MUCH.
MATT: STILL AHEAD IN OUR OWN
POLITICAL SAGA, HILLARY CLINTON
IS WORRYING SOME DEMOCRATS BY
TRYING TO SEPARATE DONALD TRUMP
FROM HIS PARTY.
ARE THEY TRULY TWO DIFFERENT
ENTITIES?
WE GOT TO WASHINGTON NEXT.
THIS IS BLOOMBERG.
♪
JOE: "WHAT'D YOU MISS?"
HILLARY CLINTON IS TRYING TO GET
REPUBLICAN VOTERS TO DITCH
DONALD TRUMP ARE LINKING HIM TO
-- BY LINKING HIM TO OTHERS
OUTSIDE THE MAINSTREAM OF THE
REPUBLICAN PARTY.
OURMORE, LET'S BRING IN
GUEST.
IS SHE SAYING THIS IS NOT A
TYPICAL REPUBLICAN AND SOMETHING
MUCH WORSE?
>> SHE IS TRYING TO WIN OVER A
LOT OF INDEPENDENTS AND
REPUBLICANS WHO NOT SURE ABOUT
DONALD TRUMP BY BASICALLY
PAINTING HIM AS SOMEONE WAY
OUTSIDE THE MAINSTREAM.
NOT A CONSERVATIVE.
NOT A REPUBLICAN.
GIVING HIM WIGGLE ROOM TO SAY
THEY'RE NOT GOING TO VOTE FOR
THE NOMINEE BECAUSE IN HER VIEW,
HE IS NOT A MAINSTREAM
REPUBLICAN.
IT IS A WAY TO REACH OUT TO
CONSTITUENCIES THAT NORMALLY
WOULD NOT CONSIDER VOTING FOR
HER.
BUT BECAUSE HE IS SUCH AN
INCENDIARY CANDIDATE, SOME ARE
CONSIDERING NOT VOTING FOR HIM.
JOE: ONE OF THE CRITICISMS OF
THIS STRATEGY IS YOU GUYS HAVE
BEEN ACCUSING US OF BEING RACIST
AND SEXIST AND BIGOTS FOR YEARS.
SO WHY SHOULD WE LISTEN TO YOU
WHEN YOU SAY THIS ABOUT DONALD
TRUMP?
HAVE THE DEMOCRATS CREATED A
PROBLEM?
THERE WAS A SPECIFIC ATTACK ON
POP KRUGMAN -- PAUL KRUGMAN.
IS THE BAR HIGH FOR HILLARY
CLINTON TO SAY REALLY, THIS IS
ON A LEVEL WE HAVE NOT SEEN
BEFORE FROM PREVIOUS CANDIDATES?
>> THAT IS RIGHT.
NOT ONLY IS THE BAR HIGH, THE
DEMOCRATS ARE RUNNING FOR SEATS
IN CONGRESS AND ARE NOT
COMPLETELY ON BOARD WITH HILLARY
CLINTON'S STRATEGY BECAUSE THEY
WANT TO TIE THEIR OPPONENTS TO
DONALD TRUMP AND SAY HE IS VERY
MUCH A FIREBRAND THAT REPRESENTS
THE REPUBLICAN PARTY.
THEY WANT TO LINK THESE PEOPLE
IN CONGRESS WHO ARE STRUGGLING
IN TIGHT RACES, THEY WANT TO
MAKE IT VERY CLEAR THAT ALL
TRUMP REPRESENTS THE REPUBLICAN
PARTY.
A THORNY STRATEGY FOR
HILLARY CLINTON BUT SOMETHING
SHE THINKS SHE NEEDS TO DO TO
WIN THE PRESIDENCY.
>> SPEAKING OF TRUMP, WE HEARD
MORE FROM HIM ABOUT HIS
IMMIGRATION VIEWS TODAY.
TELL US MORE ABOUT THAT.
IT WAS JUST KIND OF ONE
MEANINGFUL CHANGE AND IT RELATED
TO THE MASS DEPORTATION ASPECT.
EXPECTING TO HEAR MUCH
MORE FROM DONALD TRUMP ON
WEDNESDAY WHERE HE SAYS HE WILL
LAY OUT A MAJOR SPEECH ABOUT
ILLEGAL IMMIGRATION.
FOR THE LAST FEW DAYS, WE HAVE
BEEN SEEING A LOT OF
BACK-AND-FORTH ABOUT DONALD
TRUMP'S FINAL PLAN.
THERE IS A LOT OF CONFUSION
ABOUT WHAT HE WANTS TO DO WITH
THE 11 MILLION OR SO
UNDOCUMENTED IMMIGRANTS IN THIS
COUNTRY.
HE HAS NOT BEEN VERY SPECIFIC
ABOUT THAT.
THAT IS SOMETHING THAT IS
BUILDING UP AS HE GETS CLOSER TO
THIS WEDNESDAY SPEECH.
HE DOES SAY HE WANTS TO DEPORT
MORE AND MORE PEOPLE WHO ARE
HERE ILLEGALLY, SPECIFICALLY
FOCUSING ON PEOPLE WHO HAVE
COMMITTED CRIMES SINCE THEY HAVE
GOTTEN HERE.
WE ARE STILL NOT SURE WHAT HE
WAS TO DO WITH THE VAST MAJORITY
OF PEOPLE HERE, MANY OF WHOM WHO
HAVE BEEN HERE FOR YEARS AND
YEARS.
MATT: GETTING BACK TO THE
CONGRESSIONAL RACES, I WONDER IF
THERE ARE SPECIAL NUMBERS OF
REPUBLICAN CANDIDATES WHO ARE
TRYING TO DISTANCE THEIR
CANDIDACIES FROM THAT OF DONALD
TRUMP.
DO YOU SEE MORE OF THAT THAN YOU
NORMALLY WOULD?
REPUBLICAN SAYING I AM A
REPUBLICAN THAT I DON'T SUPPORT
THIS GUY EITHER?
>> WE HAVE SEEN SOME WHO HAVE
COME OUT SPECIFICALLY AND SAID
THEY HAD NOT ENDORSED DONALD
TRUMP.
SOME LIKE SENATOR KIRK HAVE
ENDORSED DONALD TRUMP AND
RETRACTED THAT ENDORSEMENT.
WE ARE MORE SEEING PEOPLE
KEEPING THEIR MOUTH SHUT AND NOT
ENDORSE DONALD TRUMP OR SPEAK
OUT AGAINST HIM.
THEY WILL NEED HIS CONSTITUENCY
AND THAT REPUBLICAN BASE TO COME
OUT IF THEY WILL BE ABLE TO WIN
IN COMPETITIVE RACES.
BUT A LOT OF THEM ARE NOT
COMFORTABLE WITH DONALD TRUMP
AND DON'T BELIEVE HE HAS WHAT IT
TAKES TO GET OVER 50%.
MANY OF THEM ARE NOT SPEAKING
OUT AGAINST HIM BUT ALSO NOT
APPEARING WITH HIM WHEN HE COMES
TO THEIR STATES AND NOT
ENDORSING HIM.
JOE: BLOOMBERG REPORTED EARLIER
TRUMP IS SET TO MAKE HIS FIRST
SPEECH IN FRONT OF AN ALL-BLACK
AUDIENCE LATER THIS WEEK OR THIS
WEEKEND.
IS HE SERIOUS ABOUT TRYING TO
WIN SOME OF THE BLACK VOTE OR IS
THIS AN ATTEMPT TO POSITION
HIMSELF AS NOT BEING A SCARY
RACIST, OR SOME OF THOSE
MODERATE SUBURBAN WHITE VOTERS
WHO MIGHT OTHERWISE BE
SYMPATHETIC TO HIM BUT FIND HIS
CURRENT FOR TRAIL -- PORTRAYAL
TOO INTOLERABLE?
>> I THINK IT IS A LITTLE OF
BOTH.
HIS POLLING AT LOW SINGLE DIGITS
WITH BLACK VOTERS.
HE DOES NEED TO DO BETTER IF HE
WILL BE ABLE TO BE COMPETITIVE
AND SWING STATES.
HE ALSO WANTS TO REASSURE VOTERS
WHO ARE CONCERNED ABOUT WHETHER
HE IS A BIGOT, AS HILLARY
CLINTON HAS CALLED HIM.
HE WANTS TO REASSURE THEM HE CAN
BE THE PRESIDENT OF ALL
AMERICANS SO HE WILL GO INTO A
BLACK CHURCH IN SPEAK TO AN
AUDIENCE VERY DIFFERENT FROM THE
AUDIENCES HE HAS BEEN SPEAKING
TO.
HE WANTS TO REASSURE VOTERS WHO
ARE IFFY ON HIM THAT HE CAN
REACH OUT TO OTHER
CONSTITUENCIES AND THAT HE IS
NOT A RACIST.
THAT IS PART OF THE GOAL AS
WELL, THAT HE CAN GO INTO A
HOSTILE ENVIRONMENT, A COMMUNITY
HE IS NOT USED TO BEING IN AND
COME OUT STRONG AND GIVE HIS
MESSAGE.
AS PART OF HIS GOAL HERE.
ON SATURDAY, WE WILL SEE HOW HE
DOES.
MATT: THANKS SO MUCH FOR JOINING
US.
COMING UP, THIS YEAR MAY NOT
BE AS HOT AS LAST YEAR IN TERMS
OF MEGADEALS.
BUT THERE ARE IMPORTANT ONES TO
WATCH.
SUZY QUAN HAS PROTECTIONS OF
WHERE HEALTH CARE IS HEADING
NEXT.
THIS IS BLOOMBERG.
♪
>> "WHAT'D YOU MISS?"
IT HAS BEEN A QUIET MONDAY FOR
DEALS AS WE WRAP UP THE LAST
WEEK OF SUMMER.
JEFF ASKED SUZIE WONG HOW M&A
IS LOOKING THIS YEAR.
>> WE HAD BEEN RUNNING EVEN WITH
2014.
YEAR TO DATE, 2016 IS A LITTLE
BEHIND.
IT IS ABOUT EVEN WITH THE
10-YEAR AVERAGE.
TOO EARLY TO DRAW A CONCLUSION
ABOUT THE YEAR BECAUSE A COUPLE
OF BIG DEALS CAN CHANGE THOSE
NUMBERS.
WHAT I WOULD SAY IS INTERESTING
IS THE LAST THREE OR FOUR WEEKS,
WE HAVE HAD AN INFLOW OF NEW
MANDATES THAT COULD BE
INTERESTING.
>> I KNOW YOU SPENT A LOT OF
TIME IN HEALTH CARE.
HOW DOES HEALTH CARE LOOK?
YOU HAVE BEEN ON A BUNCH OF
DEALS.
HOW IS HEALTH CARE LOOKING?
>> HEALTH CARE IS ALWAYS BUSY.
THAT IS WHY IT IS SUCH AN
INTERESTING MARKET.
THERE ARE ALWAYS DEALS GOING ON.
WHAT IS INTERESTING IS IF YOU
LOOK AT THE PATTERN, WE HAD
SEVERAL CYCLES OF CONSOLIDATION
WITH LARGE COMPANIES MERGING.
WHAT I FIND REALLY INTERESTING
IS WHAT YOU ARE SEEING NOW IS
DEALS THAT FOCUS ON SCIENCE.
I THINK THE REASON THAT IS
HAPPENING IS COMPANIES ARE
LOOKING FOR GROWTH SO THEY NEED
NEW SCIENCE.
YOU KNOWST IN R&D BUT
WHAT IT TAKES TO BRING A PRODUCT
TO FRUITION.
A LOT OF MONEY AND TIME.
THE SECOND REASON IS BIOTECH IS
BECOMING A MORE MATURE INDUSTRY.
YOU HAVE MANY MORE COMPANIES NOW
THAN 10 OR 15 YEARS AGO THAT
HAVE DERISKED.
SOME COMPANIES HAVE BECOME VERY
BIG.
ACQUIRERS CAN LOOK AT THESE
COMPANIES AND SAY I CAN SEE THAT
BECOMING BIG AND HAVING A BIG
IMPACT ON ME.
YEARS AGO, EVERYBODY WAS
TRYING TO BUY DRUGS IN THE
HEPATITIS SPACE.
NOW IT SEEMS WE ARE IN THE ERA
OF CANCER DRUGS.
WHAT IS THE NEXT AREA THEY ARE
GOING TO GO AFTER?
>> YOU HAVE TO LOOK AT IT IN
TERMS OF, THEY LOOK FOR BIG
MARKET PROFITS.
THEY FIRST WENT AFTER
CARDIOVASCULAR AND CHOLESTEROL.
THEN IT WAS HEP C.
AND NOW I'M COLLEGE HE.
BEFORE I GET TO WHAT IS NEXT, IT
IS KEY TO REMEMBER ONCOLOGY IS A
BIG MARKET.
I THINK WE ARE AT THE TIP OF THE
ICEBERG ON ONCOLOGY.
I THINK THAT WILL GO ON FOR A
WHILE.
I TALKED EARLIER ABOUT THERE
BEING A LOT MORE MATURE BIOTECH
COMPANIES.
ONE IMPORTANT POINT IS IN THE
SEARCH FOR GROWTH, IF YOU LOOK
AT THE BIOTECH MARKET FIVE YEARS
AGO AND ACQUISITIONS, PHARMA
COMPANIES USUALLY LOOKS FOR
COMPANIES CLOSE TO LAUNCHING A
DRUG.
IN THE LAST FIVE YEARS, A LOT OF
DEALS GOT DONE BEFORE
COMMERCIALIZATION MEANING THEY
WERE WILLING TO TAKE SOME RISK.
I THINK ONCOLOGY IS GOING TO GO
ON FOR A WHILE.
THE OTHER AREA IS ORPHAN OR RARE
DISEASES.
YOU HAVE SMALL POPULATIONS.
WHEN YOU BUY A DRUG OR COMPANY
IN THAT SPACE, YOU HAVE LESS
PETITION IN TERMS OF R&D BUT YOU
ALSO HAVE MORE PRICING
FLEXIBILITY AND CAN SHOW REAL
CLERICAL IMPACT.
OUT, ILOOK SEVERAL YEARS
THINK DEMOGRAPHICS WOULD POINT
ME TOWARDS THINGS LIKE
ALZHEIMER'S, PARKINSON'S,
DEGENERATIVE DISEASES.
>> YOU SPEND A LOT OF TIME ON
CROSS-BORDER DEALS.
COMPANIES IN THE U.S. BUYING IN
ASIA OR EUROPE.
BREXIT, HAS THAT BEEN THE IMPACT
WE WOULD HAVE THOUGHT?
HASN'T SLOWED DOWN -- HAS IT
SLOWED DOWN M&A?
>> BREXIT HAS HAD SOME IMPACT ON
THINKING.
I DON'T THINK IT WILL IMPACT A
COMPANY THAT HAS A STRATEGIC
IMPERATIVE TO INVEST IN A
CERTAIN MARKET OR PRODUCT OR WHO
REALLY NEEDS GROWTH.
I THINK TEMPORARILY PEOPLE ARE
TRYING TO ORIENT THEMSELVES
TOWARD WHAT WE THINK HAPPENS
NEXT.
I THINK IT IS VERY COMPANY
SPECIFIC.
YOU HAVE TO LOOK AT THE
INDIVIDUAL COMPANY.
MULTINATIONALS OFTEN HAVE
OPERATIONS IN DIFFERENT PLACES.
WHERE IS HEADQUARTERED DOES NOT
DETERMINE THE EXIT OF BREXIT --
WHERE IT IS HEADQUARTERED DOES
NOT DETERMINE THE IMPACT OF
BREXIT.
>> THAT WAS EARLIER TODAY.
TIME FOR A LOOK AT SOME OF
THE BIGGEST BUSINESS STORIES IN
THE NEWS RIGHT NOW.
'S HAS OUSTEDINES
THE PRESIDENT.
AMERICAN SAYS KIRBY IS LEAVING
IMMEDIATELY.
HE WILL REPORT TO UNITED C.E.O.
OSCAR MUNOZ.
SOUTHWEST AND THE PILOTS UNION
HAVE AGREED ON THE BASICS OF A
CONTRACT.
RAISELD PROVIDE A 15% PAY
FOLLOWED BY FOUR ANNUAL
INCREASES OF 3% EACH.
FINAL WORDING IS EXPECTED TO
BE NEGOTIATED BY THE END OF THE
WEEK.
THEY HAVE BEEN IN TALKS FOR MORE
THAN FOUR YEARS.
THAT IS YOUR AIRLINE FOCUSED
BLOOMBERG BUSINESS FLASH.
>> COMING UP, WHAT YOU NEED TO
KNOW TO GEAR UP FOR TOMORROW'S
TRADING DAY.
THAT IS COMING UP NEXT.
THIS IS BLOOMBERG.
♪
>> DON'T MISS THIS.
WE HAVE HAD GDP.
TOMORROW WE GET GERMAN CPI.
MATT: DON'T MISS HOME PRICES
COMING OUT AT 9:00 A.M. IN NEW
YORK.
JOE: AND I WILL BE LOOKING AT
CONSUMER CONFIDENCE AT 10:00
A.M.
MATT: THE ULTIMATE DON'T MISS.
AN INTERVIEW WITH STANLEY
FISCHER LIVE.
♪