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tv   In the Loop With Betty Liu  Bloomberg  February 6, 2014 8:00am-10:01am EST

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that company missed its fourth-quarter profit estimates by a long shot. >> don't tell me it is because the weather is cold. >> definitely not. to their credit, they did not use that as the next use. they posted a profit of $.67. analysts surveyed were looking for $.87. that is a huge miss. it is a lot better than the $.48 profit they have last year. outside of china, they are having issues in asia. they lost $300 million outside of china. that is the weak spot for them. in china, they have always had a real strength. it is a huge company in china. >> a huge challenge to get started. they miss. it hits the podium. >> everyone in detroit wants nothing more than to talk with
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mary. she has been at the company a long time. she has definitely got her hands wrapped around what is going on there. she is in control. the problem is, as a pr issue, it is difficult. that has been their problem. >> we have other headlines. let's get caught up. >> let's do that. shall i? areines flying to russia being warned to watch for tubes of toothpaste that could contain materials used to make bombs. i had a tube taken away last week. >> two big? >> yes. according to an official, the alert went out yesterday. just ahead of the game's pulmonary events. the opening ceremonies will kick off tomorrow. i cannot believe we are there. declinedctory orders in december on weaker domestic demand. orders adjusted for seasonal swings in inflation dropped from
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november. the numbers signaled that companies in europe's largest economy remain hesitant to invest. house republicans are narrowing a list of conditions that they would seek in exchange for votes to raise the debt limit. leaders have concluded that they cannot pass a debt limit increase that also requires building the keystone xl pipeline or appealing a provision of the affordable care act. let the left them to clean hike pass. >> we have a guest host. matt miller did not know that you cannot bring a full sized tube of toothpaste on a plane. >> it is not a liquid. it is the paste. rayburn is here. he is an experienced turnaround expert as ceo of hostess brands.
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he made the decision to liquidate the brand. would you bring a full-size tube of toothpaste? >> that is not hard. three ounces. paste, liquid -- >> i understand. i found cinnamon flavored toothpaste and i wanted to bring it back. >> check it in your suitcase. >> do you take flintstones vitamins? >> i do. let me bring in someone else. julie hyman is here on a huge story. >> you can find cinnamon toothpaste in new york city. >> unless you are buying turquoise rings -- >> why did i get out of bed for this? >> huge story, coca-cola is making a big investment in green mountain coffee. $1.25 billion.or
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you may not have known because this did not get much attention. they're coming out with a cold system. you'll will not just have tea and hot coffee. you will have a cold system that you can buy. >> throw away the soda stream? >> here's the difference between what it might look like. soda stream -- you have the thing on your counter. there is a big bottle a screw in. you make a bottle of seltzer. you add the flavorings and it is customizable. you add as much syrup or none. the difference is that you get a pod that includes the flavor and the carbonation. you do not necessarily have a big canister. >> not as good? >> is more precise. if you are coca-cola and you want your product to taste like podry specific way -- the
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makes more sense for you. >> i was talking to greg this morning. we were discussing soda stream. if i want a coke, i do not want any other kind of coke. i know some people drink rc co la, but most people prefer coke. >> what is your take? >> if i wanted to, i would change my oil. i am not going to. i will go to jiffy lube. if i want a coke, i am with matt. >> do you make coffee at home? >> i have a curate. -- kuerig. it is more about efficiency. >> you need the caffeine. >> it only makes sense if you're going to have a couple of cups. >> are you a soda consumer? >> i am not. >> i come on the other hand, drink a lot of cherry coke.
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-- how has their stock performed? >> it is surging. 40% growth. >> anything for coca-cola? >> not as much. inc. about the other investments that they have made. coconut water, honest tea. coca-cola has seen growth in north america with the bread and butter beverages. it had to get into these newer beverages that are seen as healthier or more innovative to try to wring some growth. >> it makes her victims. talked aboutine how large companies should not be afraid to be noble. outdo -- be more fearless than a start up. they typically are. >> this is a move in attraction.
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>> they typically are not. this makes perfect sense. if you have market share, then as long as you acquire things that are tangential to the market -- you have a right to the space. it is knowledge you're buying a company that sells tires. you have scale and that is what you want to see. >> them having a right to the space and the ability to scale -- what does this mean for soda stream? until now, they were the only game in town. >> i have not looked at it. >> i described the differences, theoretically. you saw the soda stream is down. it is not found as much as it was last night. just like in so many markets, you could conceive of a market where you would have different choices and different cost points. tends to beerig
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expensive. if you look at the per pound or per ounce price -- presumably, the cold system would be similar. soda stream could be a lower price point. >> it is amazing -- >> that is not fair. if you look at every dress you bye-bye per inch fabric -- >> there are a lot more choices in the dress market. >> this is what happened to green mountain. they were the only ones with the k-cup model. they are doing what happened to them. >> they are still the leader in that market. when i talk to people about the story, people said that green mountain has partnered with france -- you can get starbucks and onion doughnuts k cups. you might have a pepsi k-cup.
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the partnership initially is with coke. they will expand to other brands. >> i do not like soda stream because it does not taste like oh. we just resolved it. >> i am a health food fan. you mentioned this morning -- david einhorn is not just a good poker player. >> he is a good investor. this is a huge grant for three years. what does this mean? >> nothing good today. he is getting squeezed as the stocks are 40%. if they come out with this thing and that is the next big growth area, that will mean growth for the stock. >> ouch. >> i reached out to him this morning and no comment. he has big investments out there. this is an extraordinary story. people have looked at them as a standalone. i'mrtnership with coke --
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curious to see how many people will buy this now. >> is there an appliance saturation point? most people has -- have one kind of appliance and they have the kuerig. >> would you buy another? >> no. >> i heard yours is in the cabinet. >> it is. it is like a snoopy snow cone. julie, thank you so much. greg, you will be staying with us. we will not be discussing the snoopy snow cone, but we will talk about companies that need restructuring. twitter shares are tumbling. we will find out whether this can be turned around. ♪
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>> welcome back.
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i am matt miller with stephanie ruhle. you are looking at president obama and the first lady in washington at the national prayer breakfast. later today, he will hold bilateral meetings with the haitian president. we will keep you updated on everything that happens. happy couple there. getting coffee, not from kuerig. >> we're are here for the entire hour with greg rayburn and we need to talk about a stock that everyone is tweeting about -- twitter. their earnings beat estimates and the company is struggling to widen its audience beyond 200 million users. analysts asked how they plan to gain more users. the ceo kept to the sketch. surprise, surprise. based on the reactions, what
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does this mean for twitter? the super bowl -- so many were tweeting. they increase to the use by three percent. that is nothing. all three of us are active. is the market saturated? >> with twitter, there is a narrow market for people who tweet. you have media, celebrities, athletes, you have -- >> where is matt? >> dumb people like matt and i. he is media. >> it is a niche for news junkies. >> it is very narrow. it is essentially like e-mail, from the standpoint that you cannot monetize that. if you try to monetize that or have a gateway for usage, you end up with a zero. >> you will not pay for e-mail. there is no way you would pay for that service. >> why would you pay for twitter?
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the hurdle for them to monetize is much higher than it would be for facebook or another platform that sells ad space. >> all of these analyst's were asking how they would increase user base. shouldn't we focus on how they will sell ads? it does not matter, we are all on it for free. >> if you go back to the 90's bust, then everything was valued revenue, profits or and that is where we come back to. usage, and increased that i want my platform to grow, but that does not equate to money. >> hold on. for you as a businessman, do you roll your eyes? of whonot a matter smiled, but who ate twinkies. when we valuate these companies,
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do you say give me a break? >> i do. i invest, but i tend to stay away from tech stocks for that reason. if they have a product and they make money, i thought apple was a safe investment a few years ago -- now, it is silly. if you look at what is going on, you have all of these people who were trapped at higher price points. they are trapped in that stock. you have someone like carl icahn who has an investment window of six months -- so much noise around it. i have a hard time with why you want to be in that. >> that is loud noise. twitter is deafening. listen to -- the problem is the bottom line. listen to i what dick costello said. >> the changes we're making will
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make a more satisfying experience. it will lead to higher engagement and user growth over time. >> here's the problem. million on$521 stock-based compensation. total spending was $752 million. 0.5 billion dollars. those numbers look bad on the bottom line. the growth slope is changing. what he means as it is not vertical. it is going horizontal. >> only amazon can do amazon. even their string is running out. i can make money later. with twitter, it is hard to reach. i think they're great. >> to love the mess and investor? >> not at all.
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it is the way people are current with news today. that does not mean it is an investment. >> you mentioned carl icahn. given your experience, what do you think of these activist investors? when you see him and bill to help, are they there with these companies in the right direction? >> clean that up. -- i do not want to lump them together. there are good feelings and bad ones. >> what is activist invest ing? >> they talked about investment horizons. that is really what you have to look at it if you look at yahoo! -- jim lobe is a nice guy. >> he moved himself out of that.
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>> after the stock went to pot. now, is marissa mayer the right person? i do not know. is it all alibaba? probably. dan is gone. for carl icahn to say i have long-term holdings -- that is fine. a long-term buy-and-hold investor like buffett, we're talking 10 years or more. >> you have activist investors like that as well. hackman will stick with his bets. >> not really. he went in there and put in the new ceo and stood by and took his lumps. it is different from dan loeb, who split. >> look, all of these guys are
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sharp rise. they have made fantastic investments. ackman included. jcpenney was a rookie mistake. about 25 years ago, i ran a retail chain that was fabrics. -- they customer base were all hooked on coupons. that business is dying. my mother sewed, but no one does anymore. why would you? >> i am a dress barn all the time. >> like heck you are. the point is -- >> he made a rookie mistake. is, he moved to make them something that they were not. they did the same thing i did 25 years ago. they did not build a bridge. they went cold turkey. you cannot do that in retail. >> all right. >> you cannot abandon your
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customer base unless you are ready to hemorrhage money. by the time they decided to make change, the company was already eight months pregnant with that strategy. as a turnaround person, but what i do with that? >> he hemorrhaged money. >> a lot. >> i want to come back to this conversation. as we look at all different companies going to restructuring, is it the right move for investors to step in and try to run these businesses? whether we talk about phil ackman or eddie lambert -- they do not know how to run different companies. we will talk about that when we come back. >> we will also talk about -- are you out of breath? >> never. >> this woman ran up the stairs of the empire state building. >> she did. it was the race last night. >> and australian won. >> we will talk about jcpenney
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and microsoft. more turnaround stories from the guy who knows that best. ♪
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>> welcome back. i am matt miller with stephanie ruhle. we are on the markets. let's take a look at where futures stand. we are looking at gains across the board. the s&p 500 up nine points. dow futures are up as well. >> amazing. if you think about where we were at the beginning of the week, people were concerned. the worchester to the year since 2009. the crash is making people wonder what will happen in the markets. the central bank is pulling back. here we are three days later and we are in the green. yesterday, we said this is a market correction. a buying opportunity. maybe people are listening. >> maybe they are today.
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let's look at aol. revenue be as well. take a look at where the shares are trading. up six percent. here is ceo tim armstrong talking about the quarter. >> when you look at the result today, we have record results for the last decade. a lot of those are driven by advertising. 23% global growth. that is coming from video and mobile. really, the absolute tailwind from consumer usage. >> wow. >> that is funny to me. twitter is not feeling it. what? they're having a good morning. rayburn,ck with greg one of the most experienced turnaround experts.
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he was the ceo of hostess brands and liquid dated -- liquidated the brand. let me take you back for a moment. when you were going through the final throes of it. that was worried he would never have a twinkie again. did you feel like the union thought you were --? >> not really. when you go back, we had an agreement. it was really the bakers union that went on strike. i do not think they thought i was bluffing. maybe some people in the membership at the local level might have believed that. at the leadership level, i think they know that the decision they were making would lead to closure. >> in retrospect, we have not heard from the union saying that this is not have without it would play out? >> no. >> nowhere. --a love chocodiles
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twinkie dipped in chocolate. i was working on the new york stock exchange. a lot of traders were getting on ebay and ordering cases. they were worried. a choco taco i am not sure if that is the hostess product. i want to get back to recovery. sears -- any lampert. -- eddie lampert. easy to say with sears, there is hindsight. it is the hardest industry to turnaround -- retail. >> why? >> it take so much capital. for every 10 ways, eight will be wrong. it is very tricky. it is irrelevant what matters. i get a lot of questions, should
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i buy the stock? think about whether they are relevant. if not, no one would care if they went away. then they will go away. that is where sears is. not relevant and no one will care. >> when we hear that they cannot find the right ceo, is there really a drought of top talent? nowne wants to move to play -- plano, texas. >> it is not bad. leadership does matter, though. ceos are no different from a coach of a team. it makes a huge difference. you have to get the right person and have the right strategy. >> let me just break in. we're getting jobless claims. they fell 20,000 last week to 331,000. michael mckee will come to us with the latest. what is behind this number? >> it would suggest good news. you can see in the turn how we
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have gone down in jobless claims to a low of almost three months. you have a lot of weather related issues involved. could you get to the office to file your jobless claim? that is still to be determined. it may be a few weeks before we have a real clue as to what is going on with the labor market. everybody is watching because of the jobs report. it is a major hint at this point. there are numbers out that matter. the trade balance comes in at $38.7 billion. that is more than expected. this is for december. it may mean that this is a fourth-quarter growth. better than expected. we will see how that plays out. relativity is up 3.2%. up 3.2%.tivity is the bottom line is a little bit stronger. lesse paying our workers and compensating them less.
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that is a formula -- it may not make the workers happy. >> the question i have -- every time we see these reports, i am concerned. we focus on what i think is not the most important thing. that is underemployment. if we have a statistic that captured underemployment and how many people came back from retirement and all of the people going to college who cannot get jobs. >> or do jobs that are not good enough. they settle for jobs that they're overqualified for. >> do you feel like you have kids coming out of schools who do not have jobs? >> there are not. if they are able to go to graduate school, it used to be that you would come out and you would work and then go back. >> so you could pay for. >> kids are staying in college as long as they can. there are no jobs. hear about always
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the reason people are leaving -- baby boomers are retiring. greg thinks that is not true. but you think? ♪ there is a lot of debate about this. researchers say that that is the case. much as demographic. we are seeing a strong demographic effects. there is a question about how many people just get this courage done drop out of the labor force. maybe more than people think. how many people can be employed? it is something the fed is struggling with. nobody knows the answer. >> should we stop looking at this number and focus on underemployment? that is the real number. for the fed to make decisions based on underemployment is no different from the situation market then. these are not the right benchmarks. >> the fed has abandoned the 6.5% benchmark. they have not officially done it.
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they have told us they will keep rates lower for longer. they know that it is not a good metric. people are dropping out of the labor force. how do you measure the underemployment level? jobs are at the same level they have been for the last couple of years. there has been no increase in that. the number that now likes to look at includes part-time workers and that has been going down. that includes people who are dropping him. it is not a good measurement. maybe you should focus on income. that spreads the wealth. that is everyone's increase. >> look back over the last 10 years. it does not look that great for rising incomes. i want to bring you a headline from europe. it looks like the central bank there is facing the same problems that we are. mario draghi is saying that he is looking at a prolonged period
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of low inflation. here in the u.s., that is fine. we do not like to have high inflation. in europe, they are terrified of inflation. maybe super mario is different. >> it is a question of deflation over there. the year-over-year rise in 7/10 of aseven -- percent. we thought they would do something policy wise. draghi may hint that that will happen going forward. he is using forward guidance. they want to stimulate a little bit of inflation. they are switching the mandate. it is a question of whether job owning is the number. whether they have to do something negative. try to stimulate price increase. >> i am reading the headline. he says that they will take further decisive action if
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needed. to be honest, this disappoints me. when we hear central bankers continue to say i will do it it takes, it does not get to what the economy looks like. you spent time in winston-salem and charleston. one could say that is what the economy looks like. what does it look like? >> the economy does not look at all. i do not -- we talk about people retiring. i do not buy that. i do not know anyone retiring. >> i do not. >> i know people who are putting it off. >> i know people were coming back from retirement. >> they do not have any money anymore. >> from my perspective, the fed 3 as a dance.2, that is a foundation built on quicksand. the economy is not recovering
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underneath that. what you are seeing now is that they are out of hammers and nails. they do not have post bernanke --they do not have any more nails. >> hold on. the equity market is about professional investors benefiting. we are talking about the real economy. people who do not have job opportunities. >> you still see the equity market throw a tantrum when janet yellen says no, we will taper. we will also talk about thursday night football. >> i am focused on it. >> you could not be more excited. we should also talk about winston-salem. the cigarette thing at cbs is a huge story. -- cbsy night football is making a partnership and spending big money. an undisclosed amount to get eight games on airs tonight into my house. >> and how about what nbc is spending during the olympics.
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to context that on next. you are watching "in the loop." ♪
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>> welcome back. here with matt miller. the olympics are beginning and russia. they have had their fair share of controversy already. one winner is nbc. they paid $775 million for the tv rights. will you be tuning in morrow? i well. bei definitely will watching. i will really be excited about turning on football on thursday night. more excited than you. cbs will televise eight of its games next season. they will be simulcast on the nfl network. you can watch them on both channels during the first half of the season.
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here to put this into context is added lee. he will make a guess at how much they paid. >> greg is still with us. >> it is happening on both channels at once. somewhere between $250 million. >> they will pay production costs. >> that does not include production costs. they will have to pay to produce that. that is expensive. they must be confident they will make it back. isis the underlying theme -- it a reminder that no one cares about regular tv? no one cares about scripted television or drama? >> it is about live events. look at the super bowl. the most-watched television show in u.s. history. >> every year it is. >> it was not even a good game. >> the commercials were not
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great. >> not as good as they have been. >> it took me until the volks wagen engineer sprouted wings. >> nothing to talk about. >> they were also so random. the associations were random. the tax one, right? it was a cool commercial. it was a tax company. >> but we still watched. one of the reasons that people watched -- >> i was tweeting the whole time. >> i was at the game and struggling. there is not good wi-fi. >> you wanted to tweet while you were there. that drives a lot of people. >> i saw it. everyone knows that you cannot -- fish in the toilet.
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>> is there a risk that we will get too much football? we have it on sunday and monday, now thursday. >> you cannot have too much football. >> of course. >> you have a problem because it eats into your college time. >> my father taught at the university of alabama. i went there. big fan. i would watch it every night of the week. if you are a college football fan, you are aware that yesterday was the close of recruiting. national signing day was yesterday. university of alabama, number one class. >> i have an important question. >> all of us will watch football. >> you are trying to -- >> listen to what bob eiger told jon erlichman. >> the abc lineup is strong.
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particularly with "grey's anatomy" and "scandal." the audience tends to skew to more women than male. it is a great opportunity to move the entertainment shows out. they have success early in the night. move that out so it does not compete with our shows. that will help us in some form. >> bob is telling us that the girls are watching. the three of you are telling us that there is not a limited appetite for football. you mentioned alabama. how about paying those football players if they create must see tv? >> i do not disagree with that. it is something that should be a stipend. i you look at a division
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college football program and what a student athlete has to do, they cannot work. if the ncaa were to relax -- >> so peyton manning could not work at a papa john's? >> they cannot afford to go to papa john's. they are star players for programs that: hundreds of millions of dollars. the guys at northwestern tried to form a union. you can use promo codes. >> there you go. >> nice plug. >> when you look at how valuable football is to television, does it take you back to this argument? should they be paid since they are the stars of the show? >> absolutely. the larger point is that the nfl network wanted to shout this out. the ratings were not great.
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this is the cost of a 32nd ad. you get an idea of how much they're making. they are pulling in $200,000 for a 30 second ad. that could climb a lot if people start watching. millionpulling in $.5 and change. >> why do they not watch the nfl network? >> people do not know about it or they cannot find it. cbs still has the most eyeballs. you get more money that way. you do not watch hd. >> i do not, actually. that is a big issue in my house. thank you so much for joining us. latest on cbs, nbc, and the big league dollars. >> greg will stay with us. >> when we come back, you know
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what i want to talk about? >> cvs. we will talk about where you can go underground to a bar and measure suits. >> adam johnson -- we will have that and more when you come back. ♪
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>> welcome back. i am stephanie ruhle with matt miller. custom suits are must haves for wall street executives. there is one place where you can parlay fitting with a pool game and a party. the johnson checks out spot. >> it is a sports bar and a not so secret hedge fund hang out. i am here to see ryan. the secret is below ground. they have a custom suit shop where the money men by their close.
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have all gone below ground to get suited up. >> this is one we did for ryan lochte. >> it even has his name in there. it is all about exclusivity. a skull and cross bones. >> you can do special lining or buttons. everything to make it yours. >> it is not the most expensive game in town, but the underground thing that makes you feel like an insider. you get exactly what you want. >> a lot of guys are interested in american psychos. this has a nice gray hue. >> fittings can take one hour. the suits, 4-6 weeks. you can head up to the bar and party while you wait. >> throwing down the card. i like it. >> i have to bring you income and greg. you are a southern gentleman.
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do you think new york is the place to address a man? >> you have to go to charleston. >> south carolina? >> that's right. king street. >> adam johnson is also talking about drinking and bourbon. we talked about smoking and cvs. you currently live in winston-salem. what do you think about the drugstores not selling cigarettes? >> it is silly, as an investor. i am ian ex-smoker. i get the sentiment. are they taking out wine and beer? >> no. >> candy? no. this strikes me as odd. as a shareholder, i would be here today. >> this is what i was thinking as well. they are still selling liquor, but they will not sell cigarettes? the reasoning is that they want to be a health care company.
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that does not work with selling cigarettes. you could say that cigarettes are directly linked with millions of deaths every year. you do not see that kind of -- i guess you do. i do not get it either. >> as an investor, i do not get it. >> would you be doing if you were a competitor? >> i would sell all of the things i am currently selling. there was a fad with stocks that wanted to be green. they put together a portfolio of companies that were green or healthy. do you see those anymore? ng iney were not tradi the green. >> i want to bring in a game called this or that. i give you two choices and you pick one. the first one, twinkies or ho-hos. >> ho-hos for sure. >> golf or fishing?
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>> golf. >> not even flyfishing? >> you spend a lot of time away from the family. >> they call it fishing for a reason. not catching fish. >> auburn or oklahoma? >> i was at the sugar bowl. i am still in pain over the win. i would go oklahoma. i cannot go auburn. their arch enemies. >> no team that wears orange. >> tennessee, florida. pen?ntigua or as >> antigua. i am not a winter snow guy. give me the caribbean. >> bill ackman or carl icahn? we are on my television. >> boy, put them in the same
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boat. i cannot pick. they both have great track records. they both have been wrong on some things as well. >> last one, deadliest catch or duck dynasty? >> duck dynasty. >> there you go. >> i like that. i would agree with you on every answer. except i would pick auburn over oklahoma. >> stop. >> thank you very much, it has been a pleasure. >> it is 56 past the hour, that means we are on the markets. take a look at where we are trading. just a half-hour ahead of the opening bell. s&p 500 futures are up. not as much as they were. we are at .2%. >> you know what that means. >> we are on the markets again
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in 30 minutes. we will see you back here tomorrow. >> this is "in the loop." ♪
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this is "in the loop with betty liu." >> welcome back. here is what we are working on. more data out this morning. one day before the friday jobs report. productivity rose more than projected in the fourth quarter. that is helping hold down labor costs. shares of twitter getting pummeled. few were users are logging on and tweeting and at the same time they are reporting a bigger than expected lost. general motors new ceo has her
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work cut out for her. gm out with lower-than-expected earnings in the fourth quarter. profits hoping offset some of the weakness overseas, including europe. another company -- aol. they posted fourth-quarter earnings that beat estimates. deliver the strongest revenue growth in a decade. i caught up with the ceo tim armstrong earlier this morning to ask them what other premium content he is looking to buy. overall is to be the leading media technology company in the world. within that, we have focused on three big areas. rebuilding the aol service, platforms that scale not just to aol, but across the web. in content, we are focusing on long-term human needs.
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-- everybodyst needs news everyday. -- technology is the biggest cultural trend. the third one is women. we think women are underserved on the internet. we have the first conference next week in now way -- that is another -- in la -- that is another huge area. i would love to have more brands to serve more content brands. >> speaking about brands, you essentially sold the majority stake in patch, the local news service. was it hard? it was a pet project of yours. was it hard to let it go? >> yes. but it was the right outcome for aol. it was a $150 billion space. the product had to get restructured. i think it will get restructured more successfully than it would
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have on our own. we are big owners of the property still and we will work closely with that. one of the things we have been able to do, both with hail and the content properties, we just purchased gravity, the personalization property. le going to do that aol could not do? >> they are focused on the community platform aspect of the products, which patch struggled with a little bit. producingeat editors a lot of content, but really the focus on the technology staff is what hail is going to bring to the table. they are going to bring a faster way to restructure the product. >> lots of rumors about a yahoo! atie up with some point. is this anything in the future? >> we are already tied up with yahoo! -- if whole bunch of
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partnerships across ad and content. >> further merger? >> that is above my pay grade. we are focusing on turning aol around. we had an olympic performance in q4. that is what i'm focused on. >> above his pay grade? i don't think so. i want to bring in at least -- ed lee. as we hear more and more about the struggles with yahoo!, there is that speculation -- could they merge? >> the thing about tim armstrong is that there is nothing above his pay grade. he loves brands. he is an advertising guy. he gets brands. yahoo! is still a brand, a big brand, a well-known brand, tons of traffic. they tie up could make sense. could make sense. they're both trying to get
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premium advertising. >> are they starting to overlap? >> you are starting -- absolutely right. programmatic advertising. with that sort of coming to the fore, the coming more of a adtor, all of the display skies are going to get in each other's face, quite literally. why not team up? make it more efficient. that might make growth better in the future. >> then who runs the company? >> they're both superstars in the media-tech world. >> both former googlers. they must talk to each other. they likely are talking about partnerships and everything. >> there in the same circle. what about tim armstrong masterfully exiting his way out of patch? >> oh my gosh this.
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for almost a year before that, he kept from sin by the end of 2013 that patch would become a profitable business. it.ept losing money on he got a turnaround. it will no long to be on aol's books. that was a good sign. that was what you wanted. it was responsible. >> why couldn't they make that work? >> it had over 1000 people running 900 sites. they had to cut staff to 500. they're cutting staff again to even half that. there are 200 or 300 staff. >> the localized content -- why did a non-work with advertisers? >> -- did it not work with advertisers? not enough salespeople on the ground selling advertising. >> the cannot catch up and get to the goal. other aspects of aol which
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have been interesting -- >> adapttv. >> has been working out really well for them. what about gravity? >> this plays into tim armstrong possible content premium publishing strategy. gravity is going to help them draw in more users, think of aol as a content destination. i think they want to be a kind of publisher almost. i think there was an element of that to the gravity. >> i thought it was interesting what tim was saying about the content he wants to beef up, including content geared towards women. did you agree with him that there isn't as much out there for women on the internet? >> there was enough out there for everybody. i think his point, which i do agree with, is defined
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destinations. were you know women are going to want to go. advertisers are always targeting women. >> thank you for joining us. in washington, house republicans are struggling to come up with a strategy to deal with the debt ceiling. time is running out as the deadline moves closer. peter cook has the latest. they cannot agree with what to ask for in return for a debt ceiling increase. they want this trade-off. >> they want to trade-off, but republicans in the house cannot what that asked should be. the talked about the keystone pipeline. the talked about a provision within the health care law. upy are struggling to come with something that can ask for which gives them, at least a symbolic, show of strength. they want something in return. they cannot decide what it is they want. the two latest ideas -- getting
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rid of the cost of living popular,t -- that is but it goes against the idea of dealing with the deficit. one would be to block medicare cuts for doctors, popular as well, but it costs money. backdropll against the of the rising deficit. there is a mixed message there. >> what about the timeframe? >> the clock really is taking at people seem to not be focused on it. lew has said they have to deal with it by the last week of february. there was a recess in the middle of february. house members are on for nearly two weeks. they need to come up with some sort of plan by the end of this week, something they can vote on perhaps next week. time is running out on john boehner.
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republicans would not appreciate much at all a clean debt ceiling vote. >> an issue on the democrats side -- they want to extend unemployment benefits. has the type passed? -- tide past? >> harry reid astride one more time -- is trying one more time. they're going to do it by reducing the amount of money to pay into pensions. that is harry reid's proposal. it does not like -- look like he will get read -- support from republicans. >> thank you so much. coming up, twitter shares plunging after the company reported its first result is a public company. growing pains. as jay leno gets ready to say be saying, will nbc
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goodbye to one of its most profitable programs? ♪
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loopu are watching "in the " live on bloomberg television. you might have not heard of this company, but they are behind global software and cloud providers. synchronoss reported fourth-quarter earnings. the ceo joins us now. at&t iphone users use your software. >> that is right. u.s.came famous around the when everyone purchased their first iphone. store, in the you cloud, all of the users data for
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a variety of customers. >> we started activating devices years ago. device nowt as the is the content of the device. we backup and store all of that information and make it available to you across multiple devices and multiple opportunities. >> the nsa should be calling you then? >> [laughter] >> what is the next step for your company? we are talking about connecting people to our devices. what is your role? bridgele is an important between customers buying the device and personalized content between family share plans -- if you look at some of our newer offers, where we are integrating cars --, the connected what consumers want is the ability to store information, make it contextual --\ >> you
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are in your car, but you can talk to your home, devices in your office, or what not. >> a five screen world. that is why a lot of people are coming down with add probably. [laughter] and store an backup all of that information. decides to make a purchasing decision for a new device or move to a new operating plan or system, we have the data and we make it portable across devices. if you have an android and i have an ios, we can share information across the cloud. >> it is a very interesting business and you are such a key part of that, especially for other companies that are trying to go more and more global. starbucks, mcdonald's, facebook. disney made some comments about going mobile. >> we have seen, mostly because
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of the development of the smart mobile devices, phones and tablets, a huge increase in mobile, in that space -- a tremendous increase. it is for the games market is today, as far as we're concerned. we have shifted our strategy dramatically. >> how would you help iger in this endeavor? >> the amount of content that consumers are storing, we see a lot of industries and trends. we have 9 million customers in the u.s. a day sink some sort of some sort of data. the laptop is now your cell phone. that gigabyte or small portion of data has almost doubled in a year and a half. photos, user generated video -- it is becoming a portable laptop and the portable laptop should be a will to stream content, video, and all types of messaging. >> this works for all companies?
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>> correct. walks across all major operating platforms. it allows the consumer to pick the best device come the best up of content they want to store, s boltedhronos altogether for them. #selloff -- what are shares plunging after the first -- twitter shares plunging after first reports. ♪
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moving and shaking this hour -- the new ceo of general motors.
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gm's fourth quarter earnings make it clear that she and her team have plenty to do. profits fell short of estimates. asia was the big culprit. europe actually decreased. on januaryover gm 15. she is counting on better sales in north america to offset restructuring costs overseas. the chevy silverado and and policy then have been big sellers in the united states. we're a few minutes away from the opening bell. keep it here on "in the loop." ♪
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>> welcome back. i am betty liu. minutes past the hour. bloomberg television is on the markets. scarlet fu has the latest on futures right before the bell. ooh, that music. >> futures are pointing to a higher open. jobless claims show their first drop in three weeks. the emerging markets indexes higher, ending a three-day losing streak. the european central bank left interest rates unchanged. you are seeing the euro strengthened. increased.s
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areds on the 10-year bonds increasing. we are on the markets again in 30 minutes. >> thank you scarlet. these are the only trade you need to know about. julie hyman joins in. number 10, carnival. analysts said earnings may more than double in three years. number nine, boyd gaming. it was upgraded to outperform from market perform. flow. improving cash raising price target to 11.35. >> shutterfly. higher expenses.
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this oh personalized products related to photos. loss for the current year. >> disney -- beat analysts' estimates. help by video game sales and the movie "frozen." eiger -- igerob said he is not ruling anything out about the future of "frozen." can probably count on some princesses in the works. at number six is pandora. shares falling in the free market even after it eat fourth-quarter earnings. -- beat fourth-quarter earnings. pandora continues to add customers, but its costs are rising, particularly royalty payments. >> another internet-based company -- yelp.
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importantly, the company reported that her than it -- better than estimated revenue. -- the reported a better than estimated rise in revenue. i spoke to the ceo earlier this morning. company'se ceo -- record results are due to advertising and video ads. number three is akamai. it beat analysts estimates last quarter and this quarter. >> green mountain to the. buying a 10% they're looking to produce singleserve cold drinks. >> number one, twitter.
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despitere selling off beating analyst sales and earnings estimates. -- it's monthly active users grew by 30%, slower than the 39% a year ago. we will be taking you deeper dive into twitter in just a few minutes. we are doing that right now. cory johnson is standing by with more. morning hasthis been that this is reality sinking in to twitter investors -- that the stock got way ahead of the reality of the company. >> i think that is fair. i am always thing dante pension don't pay attention to the stock, pay attention to the business. i think a lot of the things with twitter going into the ipo were about the stock.
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it was is carefully managed as any big ipo ever has been. it probably included baking in this quarter. a lot of people are thinking, this quarter was going to be so much better. we can safely on the stock and evaluation. but a lot of people are struggling -- not believing. there is strong belief on both sides. you have to believe that the stock might become more. -- be down more. twitter should be thanking everyone for the existing shortselling. when you look at the underlying fundamentals of the business, not everything is rosy at twitter. >> there was one analyst quote in our bloomberg story who said, look, it is hard to see twitter beyond a service for news junkies.
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where is the mainstream appeal? >> i am all for news junkies. we need news junkies. i like that. price of sales or whatever ratio you want to use. the number that really jumps out to me were the user metrics. earnings, beating revenue estimates, adjusted eps estimates. that stuff is baloney. when you look at the underlying user statistics, what you saw was growth, but anemic growth. the total number of users grew at a very slow pace. the growth rates are more important. you see those numbers that weaker and weaker levels, particularly in the u.s.. less than 2% sequential growth
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in users. you would have thought that they would have more than 2% in the u.s., but they did not get that. >> a great point, cory. an associateng in who helps manage $3.5 billion -- you on some of these big tech shares. you own a bit of facebook as well. you do not own twitter. were you ever tempted to get in? >> twitter is great for people who like to use it. in our view, how are you going to expand outside of the hundred 40 letters they are using -- 140 letters they are using? how do you grow this would you already have an installed base? what else can you do? given the valuation, it is not something we want to pick up at this point. >> why don't you think it appeals to the mainstream audience? >> is it too hard to use? >> i think it is, how do you get
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other segments on it? can you get video? can you do other things? facebook article has that. google art he has that. -- already has that. i do not see where twitter is going to go with a new product that is going to get the more usage and more growth. >> where is the new product? >> i think we have seen a lot of that in the quarter they just reported. we saw a lot of new ways to view twitter. photos embedded into the newsfeed. the incorporation of vine and videos there. metrics, not a lot, that were extraordinarily positive. the value per timeline view. you saw significant increase in ad rates. 1.49.alue per user was $
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fromis remarkable growth $.79. at this stage of the game with this company, you want to see the user base. facebook is well over one billion people is growing at three times the rate that twitter is growing. >> even with all these concerns that the younger users on a logging onto facebook is much. >> it is more time spent also on facebook. you will spend more time. went to look at a tweet, you move on. >> i want to switch gears to another one of your holdings -- gm. arra, the new- b ceo, starting off with a big white. -- plate. are you worried? >> no. they are restructuring.
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to kind of say, look, she is coming in and cleaning house. let me start with a clean slate, we have a good product, we have done well, we have come out of bankruptcy. you would not have started a dividend if you did not think you would have a base of growth to start from. if you're worried about your cash flow. i think that is where they're starting from. i think the expectations were headed for the should have been. i think going forward, if you're going to get 16 million cars sold here and you have a little slow done with inventory and -- we thinkeather you want to hold for the next 3-5 years. >> think you so much. and thank you to cory johnson, editor-at-large for bloomberg west. good night, jay leno. what will the last night appearance on late night tv mean for nbc? ♪
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>> as part of our ongoing series about my new book "work smart" i want to look at fashion designer michael kors. kors joined the ranks of billionaires. he owns just over 2% of the company where he serves as the chief creative officer. what is he doing right? how was he working smart and getting into the billionaire range? with me this morning to discuss this and fashion week is linda wells, the founder and editor-in-chief -- great to have you with us. you know michael kors? >> yes. he is my billion our cousin. and i'm a journalist. [laughter] >> what has he done right? i keep hearing. the michael kors brand has done it right. >> he has worked for so long to get there.
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he has managed to figure out and accessible luxury. particularly in accessories. coach had a down turn. michael kors has stepped in and taken over. he has a broad range of products. he creates a very distinct brand. it is very desirable, but it is friendly, it is not too edgy and he is everywhere. >> use a tory burch who became a billionaire last year has done the same thing. even at a lower price point. it is something that people can latch onto, it is friendly, it is something we all want to wear. she is everywhere too. they are very carefully branded. >> is that related to the person itself as being accessible luxury? what is it? how do you create that? >> it is the person.
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michael coors was on project runway. his name became well-known. he a products at a lower price point and a higher price point. the booklet to participate in his brand in a bigger way. it is the person, business, marketing. it is all of the things coming together. failures of people who are very talented but do not have all those coming together. >> some of the luxury brands are trying to get into cosmetics and fragrance. already thought they had a cosmetics line, is doing a major push. >> it is in the fall of 2014 we have yet to see that. that is going to be a big line. it is fantastic branding. it is a great way to make more money. margins are high. it is a great opportunity for these companies to spread their market. for women to buy into the brand, where they could not. guccihard to walk into a
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store and imagine paying $30 and participate in the gucci brand. in the fall, you will be able to buy lipstick. the say mr. for chanel, tom ford -- they have these brand extensions that is great for business and for the consumer. >> it is nice to have a gucci lipstick in your purse. workingyour reporters during new york fashion week? >> we are all over the place. backstage is our incubator. we go backstage. we tweet, we instagram, we pinterest. we do all the things to communicate with our consumer. we're backstage. we have access in ways that other people do not. we have been doing it from the beginning. we are a beauty magazine parade -- magazine. thank you so much. thank you for joining us. linda wells, the editor-in-chief
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of "a lower" -- "allure" magazine. riskc taking a ratings after the con and o'brien disaster -- conan o'brien disaster? jon erlichman joining us from l.a. there's always a risk with these transitions. >> this is definitely a risk. leno is going out on top with a really big lead. nbc does not have a lot of examples and that. their number one with nightly news. the tonight show was generating close to $150 million a couple years ago. people come on and talk on a talk show. i think they're making this change because they're concerned about the age and long-term losing some viewers, or getting more viewers and the more important aged him graphic for advertisers.
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getting them oil from jon stewart, stephen koerber, jimmy kimmel. bob iger ando asked him about the switch. the marketing opportunity for abc as nbc is going through its transition. he said, definitely there is an opportunity. >> it creates more of a need for us to aggressively remind audiences that, not only jimmy is there already, but the jimmy and the show was really good. you will see more support for the jimmy kimmel show. across the company. because the competition is changing and it is clear that nbc is going to go after the incumbents in a big way, not just abc, but cbs as well. >> it will be interesting to watch the kimmel versus fallon part of the story. using social media. both of those guys are pretty
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good at it. >> they are. up latebe able to stay to see the transition tonight, but i will be looking for it on youtube. thank you. catch jon erlichman with the latest every weekend at 1:00 and 6:00 on "bloomberg west." trouble in paradise. puerto rico is $70 billion in debt. what it means for investors. ♪
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>> time for the global outlook. the european central bank keeps rates unchanged. the bank of england did the same thing. policy makers in london kept the benchmark lending rates at 0.5%. debt, andn in unemployment rate of 15% -- were
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to ricoh's economy -- puerto rico's economy. what is at risk here? are we looking at a greek-style debacle? >> it might not be as bad as that were not quite the same. unlike greece, buying puerto rico's the debt has been a no breaker -- no-brainer for mutual funds for years because they are tax-free. they are a good investment. there are just too many of them out there. they have been borrowing to plug their debt -- budget gaps. investors are worried about whether they can pay it back. bond yields have risen to emerging-market levels. it has not helped that we have got this emerging-market crisis
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that make people worried. this is a vicious circle. it is exacerbated by the ratings they receive. rico. downgraded puerto walk us through the actual spillover effect onto american investors. >> puerto rico cannot pay, they have no choice but to default on the bonds. there are so many mutual funds these,uld -- that hold they would take serious losses. there isnment addressing the problem aggressively. they have raise taxes, cut spending, done a lot -- they still have a budget gap they have to close. not only do you have to close that, said the rating agency, you still have to prove you can access the market. if they can get that across, they might be able to get through. >> will they be able to get it
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across? >> they might have to pay 10% on the bonds. there is another interesting trade out there. there are people who are buying the bonds up at $.60 or $.70 on the dollar. there are people who think we will see puerto rico not only survive, but be a very good investment. >> that always happens in moments like this. some say there is a buying opportunity here eventually. thank you so much. michael mckee, our economics editor. it doesn't for today on "in the loop turco tomorrow the lakers secretary joins us -- labor secretary joins us to talk about the jobs report. on the markets is next. ♪
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>> bloomberg television is on the markets. we are 30 minutes into the start of u.s. trading. is showing modest gains. at the best levels of the sessions after creating in a very tight range yesterday. the best performers are up 1.5%. utilities are little changed. within the dow industrial, 25 stocks are gaining, for our down, and one is unchanged. a lot of health related names are leading.
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broad communications, little change. -- the best performer of the three major u.s. benchmarks this morning. we're keeping an i on twitter. it is getting a lot of attention -- dropping 20% because of slowing user growth. as for treasuries, they're falling for third day. yields are moving higher. jobless claims fell last week. that was the first decline in three weeks. it does set us up for the government january jobs report tomorrow. the consensus among economists that we surveyed is for an increase of 180,000 jobs in the month of january. looking over to europe as well, markets are staying higher after the ecb and bank of england decided to keep rates unchanged today. index did take a leg
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down after mario draghi said he would take action if necessary. inflation is expected to remain subdued. a gain of better than 1% over the last two days. the euro erasing its losses against the dollar on mario draghi's comments. it is strengthening the most in two weeks. emerging markets, however, have stopped falling for now. there was a lot of concern over those emerging markets. they have contributed to the $3 million wiped out in equities over the start of the year. paribas chief strategy officer told bloomberg, the market may not be counting on immediate action, but it does expect the ecb to say they're worried about emerging markets and that they are ready to act. get to individual stocks, company stocks. a lot to watch this morning. we're focused on web giant aol
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-- it announced fourth quarter numbers that beat top and bottom-line estimates, comparable earnings rising 15% from a year earlier. on ceo spoke to betty liu bloomberg surveillance this morning about how his company's focus on advertising is paying off. >> when you look at our results today, we have record results for the last decade. a lot of that is driven by advertising. 23% global growth in advertising -- that is coming from video, programmatic, mobile -- the absolute tailwind of consumer usage on digital services. >> general motors, america's biggest carmaker, is coming out with earnings this morning missing profit estimates. gm is struggling and the rest of the world with higher taxes and restructuring that are taking a toll on european business. the carmaker lost money in asia. dunkin' brands. the operator dunkin' donuts beat
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fourth-quarter earnings estimates, but forecasting bottom line for the year on the higher side of analysts's to mince. they're expecting revenue to grow due to customer loyalty expanding their footprint on the east coast. that is it for in the markets. i will be back with more. in the meantime, market makers starts now. >> live from bloomberg's headquarters. this is market makers. fail. twitter shares are cratering this morning. it is slowing and actual use is slowing. the ceo says he has a plan to turn it around. >> island of debt.


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