Broadcasting live to New York, Bloomberg even to Washington, d C, Bloomberg to Boston, BLUEMBERG twelve to San Francisco, Bloomberg nine to the countries Channel one nine and around the globe the Bloomberg radios and Bloomberg got gone. This is taking stock. Coming up on taking stock, will take stock of Navistar International.
The shares of Navistar International are up more than forty two percent after Volkswagen says that it's taken and nearly seventeen percent steak in the builder of commercial trucks and vehicles. Will find out what the w wants from this and will also take a look at the truck industry and they're going to be facing more reduced emissions regulations in
the near future. Right now, let's go to Charlie Pellett in the Bloomberg news room for Bloomberg Business Flat and I thank you pim Fox, the DAL, the SMP NZ deak all into the higher equities trading near records as traders pair bets on a September fed hike. To service industry has expanded in the US in August at the
weakest pace in six years. That is raising questions about the strength of the U S economy, and it adds to the case for the Federal Reserve to hold off on raising interest rates this month at a time when central banks in other developed economies are ready to boost stimulus. You and Cameron Watt, his portfolio manager at black Rock International. He was interviewed this morning on Bloomberg Television. I mean, I think what we learned is the monetary policy, or
the expectation of monetary policy still matters. I mean, we've done with a lunger of crises in the last couple of months against a backdrop of expectations of the CV extending Bank of Japan extending the Bay coming to the party. Uh, and the volatility has been exceptionally over the summer period. Federal Mogul Holdings has agreed to be acquired by billionaire investor Carl Icon's investment company for nine a share in cash.
The maker of Champions spark plugs will be closely held by Icon Enterprises, which already held almost eighty two percent of the company. Volkswagen buying that steak in Navistar International to gain of foothold in the US heavy truck market. Navastar surging on the news. It is up now by forty one point nine percent. SMP five hundred, index up three three, a gain of two tenths of one percent. Down dust reels up twenty nine, a gain also of two tents of one percent. NAA stack up three tenths
of one percent, Gold up two percent. Rallying he beyounced thirteen fifty West Texas intermediac crewed up one percent, forty eight seven of Barrow. And now let's look at the other stories making news. Thank you, Charlie from the Bloomberg Newsroom. I'm Scarlett Foo. Hillary Clinton is once again calling on Donald Trump to release his tax returns. Clinton is holding a rally in Tampa, Florida at this hour to discuss national security. Trump campaigns in Virginia and North Carolina today.
In the wake of another missile launch, President Obama is vowing to push for tighter sanctions for North Korea. However, the President said the US is still open to talks if it is willing to recognize its international obligations and the importance of the nuclearization in the Korean peninsula. Uh the opportunities for US to dialogue with them are there. Mr Obama made the comments after meeting with South Korea's president at the Summit of Southeast Asian Leaders in Laos today.
It's shaping up to be a busy hurricane season. Hurricane Newton made landfall as a Category one storm in Mexico's Baja Peninsula. Johnkangelosi with the National Hurricane Center says activity is slightly above normal for this time of year. The Pacific normally is busier, so we've had fifteen nine storms in the Pacific, and we've had eight nine storms in the Atlantic. Newton knockdown parallines and stranded tourists in their hotels.
Former Fox News Channel anchor Gretchen Carlson has settled her sexual harassment lawsuit against Roger else. It's a case that led to the downfall of Fox's chief executive. According to someone familiar with the sealment details, Carlson received twenty million dollars. Newark schools are back in session today, but students still can't drink from the water fountains. Officials say the lead levels are still too high, but should be deemed safe
by next month. For now, bottled water is being distributed Global News twenty four hours a day, powered by more than twenty journalists and analysts and more than one countries. I'm Scarlet Food. This is Bloomberg, Charlie, and we thank you. And again recapping the doal the SMP and NEZ stack called Advancing SMP five. How did it index up three three? Again there of two tenths of one percent. I'm Charlie Pelton. That's a Bloomberg business splash. Shelie pell thank you so
very much. Shifting gears to gain traction in the US heavy truck market, Elon Musk sending a letter to Tesla workers to say, hey, let's get more efficient and save some money reduced cost in case someone wants to UH invest in us, We're gonna put all these questions before Alan Baum. Now he's principal at Baum and Associates, joining us from otto Land West, Bloomfield, Michigan. Alan, welcome, good afternoon.
So let's start with Volkswagen. It's gonna buy a sixteen point six percent stake in Navistar International two or fifty six million dollars, part of a strategic alliance to UH get the struggling US truck maker to enter the North American market. What do you think it's getting a good deal? Because as you say, it's struggling. And the other thing is that the Craft eight market, the largest trucks UH
is starting to turn downward. So for the next couple of three years, I think we're gonna see, just like in the heavy duty truck excuse me, in the middle of the main automotive market, a slight downturn. I expect a little bit of a sharper downturn because the ups and downs are a little a little stronger in that market. So what it does that picks up international UM. It complements what it has in Europe, which is mon and
pan Scania. And the other thing that International is that although they have a relatively small part of the market in the US and Class eight UH, they have two other things going on. One is they sell their engines to other truck manufacturers in Class eight and they're they're stronger in the medium and the medium market the class four through seventh. Is there any possibility that v W will eventually make a bid for all of Navistar UM, It's certainly possible. UM. I don't know if they need
to UM. You know, as long as they can cooperate spread technology UH on in both directions. UH they're going to get what they need. They've had some trouble getting Monanskanya to really uh be part of the b W empire, if you will. Uh, So I think they might be a little hesitant to go all in on on international. Well, it does seem like a big thing to take on. But we know again that they VW truck and bus division hasn't been especially affected by the diesel emission scandal.
And obviously I would think despite any downturns I had, they're investing for the long term. They see a market where they can get a foothold. And let's face, I mean, VW, despite the scandal, is a large, well known, powerful brand. And and the ironic thing is, I say, international Navastar what we're talking about the same thing of course. Uh. Nowa star has been behind the lead ball for their
own problems with diesel emissions. Uh. They took a route independent of SCR, the the newer technology, which paciently failed. Uh they said, okay, we're sorry when they put their tail between their legs. And now they're they're massively moving to the industry standard, which is as CR, which of course is what the W needs to be doing. Yesterday, with respect to its UH, it's mainstream automotive work. Can we turn you attention now to Tesla, I mean Tesla.
The shares are hired by about two and a quarter percent today, down nearly sixteen percent so far this year raising money. Is Tesla going to be able to continue to raise money from the public markets? Well, obviously they need to, and so it's pretty clear that Ellen is saying, let's give ourselves the best opportunity to raise money at the least cost. And obviously the share price is important, and it's also if they go to the debt market,
it's also important with respect to the interest rates. So what they're saying is UH, and this is no huge surprise. As we move forward to the late this year and certainly into next year, between the Giga factory and the development of production capacity and investment for the Model three, they're going to be spending capex in in huge buckets and so obviously they're gonna be losing money UH in
law itch buckets as well. And so they're simply saying you and saying, let's see if we can squeeze a third quarter that looks good in non gap, that'll make it a little better for us as we raise all this money, uh, and then we'll move forward from there. So Allen, but could you could you imagine could you just imagine what again if they're gonna spend all this money in R and d Uh they've again obviously they have had this huge cash burn and the people love
them still love them. Where will they cut? Well, you know, they go to fly around and see clients lest I mean you would imagine where's the where's the where's the fat they can cut? Do you think, well, there's s g n A for them? Uh. Sales in general administrative is a huge issue because of the distribution costs that
they have, uh, their incentives. They need to keep the money the numbers flowing, I should say, in terms of sales and so it's it's kind of difficult to cut off when you're trying to and are obviously huge expensive when you're trying to reach a production and sales numbers that are are very significant because of the fact that the second half needs to be much stronger than the first half. I don't think that the small stuff is
not what you're gonna cut. Uh, it's the Uh. It's some of the issues like for example, supercharger development may be pushed back a little bit. Uh. They obviously need to have more superchargers when the Model three is out, but maybe they have the next year instead of this year. The same with stores. They need to UH dramatically increase their account again, they may not do that uh this quarter or perhaps even next and holding off into next year,
thank you very much. Alan Baum is the principal at Bauman Associates, joining us from West Bloomfield, Michigan. Shares of Tesla higher by four dollars to share a two d and two dollars. This is Bloomberg. Another big deal coming up on taking stock on Bloomberg Radio and Bridge agreeing to purchase a fellow pipeline owner, Spectra Energy Corps for twenty eight billion dollars in stock. While the deal work, we'll find out