Transcript for Italy Tanks US Markets
Ringing the bell this morning executive. Here is the opening bell for this Wednesday November ninth hello everyone I'm Stephanie -- in New York futures plunged this morning on the latest developments out of Europe -- Joining me now to discuss those developments and all the business headlines is Suzanne -- how grant from Bloomberg TV good morning Suzanne good to see you. -- morning what a day already I don't know let let's start in Europe and Italy where bond yields hit a record high today. Is this country now on the brink of those have -- 7%. And they're moving above 7% let that tells us is borrowing costs -- moving higher and the market is really doubting the future of Italy and it's going to be harder for the company that country which has. Over -- trillion dollars in debt one of the largest in the eurozone. To make its payments and let the market is sinuses are very unhappy obviously with what's happening in yesterday we discussed Silvio Berlusconi whether or not he would stay -- go. Late in the day came -- said he would resign after they came out with the austerity package he -- But the action in the bond market today is telling us that is not enough for the market a lot of questions investors are asking today as. Is he definitely going to step down. When will that be who's going to take over and what is actually Italy's plan economic plan -- ran his the pat accents and list of forty or so questions you Italy's finance -- Juliet Montae and he wants answers by the end in the weeks now -- -- so much uncertainty and that's when we are seen as bond yields get hammered -- -- and the question remains bloody changing Italy's leadership any change. Make much of -- difference in the country's balance sheet at this point. Well -- right now -- and -- -- the market is telling us again we don't know who is going to take over for Sylvia Silvio Berlusconi that as a big question mark lot of names being floated out there we did talk salon strategists yesterday who said they kind of needs some and is not Italian somebody outside of the country to come in there and really do some hard economic work put in an austerity measures. And then of course the longer this situation progresses and hire those bond yields yields. I'm will be watching very closely today it becomes even more dangerous for the -- -- but in particular Italy that's an interesting comment they need somebody that's not Italian to lead -- out of this mess -- you just the latest. As is an on Greece air kind of a holding pattern seems now you know not things aren't much better in -- either and in just a week ago we are talking about progress in Greece now we're on. George Papandreou Greece's prime minister I did when a vote late last week but he did say he would step aside and -- would continue to work with the new government. The best is another layer of uncertainty why's it taking so long to form this new government and -- Andrea seems very much involves still. And he was part of the problem still investors -- -- say say hey what's going on their what's taking so long forgotten that led. Basically Greece into this -- is still really running the show over there what will be watching as later today we're supposed to get. All the so that's also creating another layer of uncertainty for US stocks here along with Italy the situation in Greece very much on resolved. That is why we -- seen in very sharp sell off. And you -- Fox's right absolutely just looking at the -- here in the first few minutes c.s and their dance. More than 2% at this point. Trading below 121000. So let's talk about earnings and whether that could bolster the markets -- -- at all GE and is among the companies reporting earnings today and how did they do. He can't it be any do you sell hot we look at profit and revenue is there they're profitable don't forget just a year ago GM lies coming out of bankruptcy. But profit and sales actually declined from a year ago. That's something that investors didn't set -- investors but more than that Europe was -- -- excuse me he must close to make its European Union profitable. This year and what we learned this morning Nancy scrapped that forecasts are not going to be able to do that and we have to see as -- -- -- -- the -- this morning. A dam mine he said listen there's so much macro uncertainty in you're out. And that's what we can really. -- really. Bring out together -- -- -- together for the US folks and say listen Europe's problems very much become our problems. Is now GM will continue to lose money in that unit for the foreseeable future at -- about 300 million dollars and that's what investors are really worried about with General Motors stock. That is down about 30% this year it's down sharply again this morning last chat and -- it's. Part of the reason in the -- reason -- -- -- European Union will continue to lose money this is supposed to be a growth area for General Motors. -- -- contagion creeping up again OK let's act and other headlines big case involving Spicer. And its blockbuster drug Lipitor the company is accused house holding back a generic form of that drug what are you hearing about France yet we're hearing hanging out again this is all allegations but we're hearing. -- -- with another pharmacy recommend oxy had actually. And holding back the generic version -- just to give -- some numbers here Lipitor cost about four dollars today the generic version can cost about ten cents today. And for -- and this drug loses patent expiration at the end of the month. It's their best rallying drug it accounts for a big big portion of revenues -- they want to hold out as long as they can that this actually is something -- Thousands of illegal space and whether or not they were permitted to do this with about eleven pharmacies -- -- at all shake out I guess in the courts but. Clearly outside under a lot of pressure Q. Release that drug -- the generic. Populations so people can buy cheaper -- for consumers out there who are on the cholesterol drug but it's bad for five their fighters under a lot of pressure to come up with. New drugs -- partner with Biotech companies that this is an example of them perhaps trying to push the envelope a little bit -- keep. Keep -- -- get as many prescriptions as they can until they do you have that and I believe -- November 30 limit expert has turned an -- he interesting okay. One man -- we're talking about Roger rotten here. Has now that fits you -- -- For insider trading to us. He records that's -- -- first thought he has a longest prison term right. Insider trading in US history -- lending years. We learn not a couple weeks ago the late last night the FCC came out and said hey we're -- -- About over ninety million dollars 99 dollars or so -- this case and and that's actually a record as Welling. This is this case has really been a poster child for the United States in cracking down on insider training. The rajaratnam trial I had a lot of twists and turns involving some big names including Goldman Sachs Lloyd Blankfein and CEO. So certainly an interesting twist of events at -- time rajaratnam is worth over a billion dollars. His defense surely very costly. Likely he'll be appealing. This FCC fine if -- well. And we'll see how that goes by yes he has now broken two records in the US for insider trading bonds for prison sent accent sentenced. And 14 sign. As it's called. And -- some will see what happens now nearly a pace to stay on the straight -- -- we have both potentially important precedents we should say -- -- last week was that big IPO from Groupon and now we have another Internet giant talking about going public give us the details yeah I yell I'm. I don't really is -- but sometimes if you search on the Internet you can't and I if you search -- -- press conference Atlantic City Yelp will come up with -- -- a couple of reviews I -- did -- that it does plan to the public sometime and when he twelve Goldman Sachs will be the -- that's important. For Goldman Sachs -- ahead with a lot of these Internet -- he has. And -- what we're hearing is more -- more Internet IPOs are going publicly at Lincoln is here of course Groupon. Just last week group unrivaled well mention however. The IPO is it opened around twenty dollars it's down to 23 senate hasn't done -- high degree in the first day. But -- distance -- out follow through. And we will be watching yell they are planning potentially to go public next year isn't a company that can be valued at about -- billion dollars so pretty. Pretty significant for one of those Internet companies but when we hear that companies like Yelp are considering an I PL. IA it's important it's a very good sign that they're going to the market to raise money. But if it was went public this week it made it maybe shelving its plans for example because of all the uncertainties -- this uncertainty continue it makes it harder for companies to go public in if you had an IPO for example set for the -- next week a lot of executives typically what they do you since there -- -- uncertainty. As it will postpone it and obviously to for a time when things are a little bit more calmer. Did you that DL but -- with that -- time according to the company again this is expected and money well. Makes a lot of sense to sit and wait at this point is taking one more look at the -- Suzanne before we let -- ago when it's down 200. And 36 points we do expect this dropped to continue throughout the day. What will perhaps in my I would mention is -- S&P 500 the best gauge the broader market rate 500 stocks is just up 1%. For the year based on today's action it looks like -- may erase. That -- and be flat or perhaps negatives are certainly going forward going to be watching how the market street today. Any positive developments coming from Greece as I mentioned are waiting on details of its new government could that encourage the market possibly but again. Will be waiting for those headlines any further. Clearly important and another eminent keeping -- -- -- it is very important as we talked about earnings before Cisco the world's largest networking company will report earnings after the bell. This is very important company -- have business all over the world uniqueness routers tiny Chinese Internet except -- there the company that's providing -- -- best. This company's in turnaround so we want an update on that. And the -- be listening for is when CEO John Chambers -- his forecast it it usually is it did. Consider to get economic barometer -- and that's something that that the markets are going to be paying attention to -- and hopefully he can either give us some clarity about. How serious its European situation is in terms of whether or not his customers are holding back orders. Or if they're just finding deals going forward that's something that's very important to the market -- -- a lot of headlines today Susanna without a grant from Bloomberg TV. Faces and have a great day -- -- thanks.
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