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tv   Bloomberg Markets European Close  Bloomberg  April 15, 2016 11:00am-12:01pm EDT

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you are watching the "european close" on "bloomberg markets." ♪ mark: we are going to take you from london, to new york, to amsterdam all in the next hour. here is what we are watching. crude falling ahead of this weekend's critical meeting in doha. iran said oil minister won't attend. can all producing countries which a meaningful agreement on freezing production? betty: feeling the pain at goldman sachs. planning the deepest price-cutting in years. obama entering the brexit debate when he visits the u.k. next week. how much influence was he really
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have? let's head over to the market desk where ramy inocencio has the latest. ramy: i am calling the session a very noncommittal session. about marketsng were flipping into the red and green and back again. right now, not even solidly in the red because this will likely change. the firebird it down a tent -- we fibered it down a 10th of a percent. u.s. factory output falling the most since last year in february. consumer sentiment falling to its weakest in seven months. rise thefactory output most since 2015. is happening on the imac function. earlier today, in the past hour, i was telling you that three
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sectors were in the green. three sectors are in the red. utilities are up the most. energy continuing to be down 1.2%. financials down a 10th of a percent. let's take a look at what stocks are doing the biggest players in the financial sector. citigroup offered it earnings report up by 1%. that is the only big gainer today. down on, wells fargo, the order of 1% here. i also want to talk about, bax they tried for an ipo last summer. you can see it is up by nearly 20% here. they did price at $19 a share and opened at $22.80. -- they are at20
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$22.25. betty: oil is in the focus of the doha meeting. doha starts off on sunday. right now, nymex crude is down in session lows by nearly 3.5%. into sunday, at least 18 oil-producing countries will be in attendance, the hope for many will come to an agreement on freezing production. mark come over to you. mark: ramy, two this week, china produced data that induced a rally in european stocks. not the story today. industrial output, retail sales, all picking up in march, all the analysts estimates. in european stocks are falling today and ending the five-day winning runs. we have 30 minutes to go for the
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friday session. we are up over the week after four weeks of decline. the longest losing stretch since october 2014. isn't sustainable as output is not fit to increase. that is the news from the ceo. chart.w i love this this shows how the big miners have fared. anglo american, 200%. that is the rally since january. rent -- rio tinto is up a near 40%. what it is trying to do was -- south africa is one of
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the few countries where ab inbev needs approval to combine the world's two biggest beer makers up 1.5%. in on the's check bloomberg first word news with vonnie quinn. after shots have been rattling communities in southern japan following a magnitude 6.5 quake that killed nine people and injured 800. rescue workers have been combing through rubble in hard-hit areas to make sure there are no more trapped people. the prime minister says the government wants to prevent any secondary disasters from aftershocks. an economist from citigroup will join the academic community. saunders predicted that the u.k. economy will slow to 2/10 of a percent this quarter.
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the appointment is for three years and it starts august 9. hope willts groups highlight the plight of refugees . the vatican insists that the -- 's five-hour visit -- spainasualty minister resigned today after getting conflicting explanations about his ties to u.k. lines set up by the panamanian law firm. he denied any involvement before backtracking as new revelations came out. global news 24 hours a day, powered by 2400 journalists, in more than 150 news bureaus across the world. i'm vonnie quinn. mark? mark: goldman sachs chief executive is embarking on the biggest cost-cutting push in
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years. people familiar says the firm began dismissing more support staff and rejecting bankers expenses that directly serves clients. the question is will that be enough to satisfy investors when goldman reports on tuesday? will it be enough to satisfy investors? hi, mark. that is a great question that remains on the table. we will see when the report earnings. analysts are still skeptical that it will be enough to measure and balance. about the cost cuts. where are they falling? >> they are trying to do more with less. they are trying to cut costs
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wherever it is needed. that goes from hotels, -- noainment, flights matter where it is they can reduce costs. they are relying more on junior bankers. it is pretty much across the board. size ofther than the these cuts, what is unique and different about this round than others that goldman is implemented? for theare going deeper going fromin years, hotels to entertainment and neededto keep those as for servicing clients. ,hey are also cutting services trying to rely more on technology to improve
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productivity. they are facing tremendous challenges. they need to find new ways to balance the revenue drop. betty: they do. i can imagine there are going to be a lot of unhappy goldman bankers walking around. to retainey going that talent, the star talent? are they adding any other kind as perks are being cut? >> one of the major challenges facing the banking industry, and we have seen it all across -- jpmorgan, you name it. they are faced with lots of challenges and retaining talent in an area in which, as many it is not that
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pretty anymore. let's see what happens. it remains being a very attractive industry and a lot of people are willing to go in there. mark: and it's not all cuts. >> and a lot of junior people are still willing to go in. the most read story on the bloomberg, you are one of the co-writers. set to push the deepest cuts in years. in london, 4:10. betty, what is coming up next? betty: we are looking at two big stories this weekend. doha tomeeting in discuss the proposed feel production. production.
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we are going to have the latest coming up. ♪
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♪ live from london and new york, i mark barton. betty: and i'm betty liu. this is the european close. the other big story, the world will be watching to key events, starting in brazil will be developing in brazil. chief onto the bureau whether to impeach dilma rousseff. does it look lychee is on her way out, julia? julia: the latest we have from the local media show that
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opposition has enough votes. they need 342 votes to impeach. it would be enough. betty: ok. if she does, then what happens? give us the mechanics of what exactly happened the government. julia: if they approve bpm process on sunday, then it moves onto the senate and it should take a couple of weeks for the senate to decide whether to accept the request or not. if they except the request, then rousseff is removed temporarily for 180 days while congress does its own investigation and don't ruling. then the vice president will take over or they could kill the process and rousseff is back. betty: ok. there is going to be quite a periods of uncertainty. how exactly of the markets going to react to this? how will investors reacted this? julia: from what we have heard. because it had been priced in so
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happen, it does not will be a good day on monday. we are expecting the currency to selloff. see room for gains. well it seems. us a sense ofive a spectacle it is. it is taking place on a sunday. it seems let the whole nation is gripped by this. when will people be watching it? julia: the biggest tvs will broadcasted live. they canceled some soccer matches, which always happen on sunday afternoons. there are big screens being put up in the capital. we are expecting people to be out on the street or family lunches watching the spirit --
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watching this. mark: do we know where rousseff herself will be watching? julia: we know she will be watching it from her home. betty: ok. obviously, the whole nation is gripped watching this. is there any sense that once we get through this, julia, it is clear that there is a transitioning government, is that going to be enough to lift brazil out of recession? julia: that has been a big debate among investors and analysts. what we need to know is what will the government look-alike? like?ok self psych it is going to be a very big we can in brazil. thank you so much, julia. mark?
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mark: let's get on to doha. as we said, let's do doha. if opec another producers don't do something about the surplus, it could destabilize prices. again, 40 traders and analysts surveyed by bloomberg were evenly split on whether they will be a deal. let's bring in will kennedy, bloomberg's managing editor. the drum rolling continues, will . are we going to get some sort of deal, and if so, how it will budget will it be? will: we will get some kind of deal on sunday. the things that people need to watch our saudi arabia and iran. is iran going to show up and are ?hey going to make a commitment will that be enough that they
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will take part? a may not be the strongest accord. mark: having saudi, russia, pumping at record levels. will: it is logical for the market. you got producers who account for well over half of what production, potentially acting in concert. that will give a real lift to prices. there are other things going on in oil driving the market. share prices are falling dramatically. climbing onas been its own accord. betty: you mentioned earlier about whether a ron will show up at all -- iran will show up at all. if they do, it will be a more junior representative. gnal?'t that send a si the opec governor will
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appear. it is possible that changes if mood becomesf the more positive over the weekend, but i think all through this has beeniran questioned about how will they engage. they have their own agenda which is to bring back to ramp up exports. betty: speaking about not opec the table will be some of the biggest producers. we are talking about china, the u.s., and others. how significant, if there is a production freeze agreed upon, they are not there at the table to agree to that. will: you are right. if we talk about the u.s. which is the biggest producer, not at the table, i wonder if the producers will be wary of too much success?
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we will see some of that production coming back into the u.s. a lot of this production that is so under stressed, that may become viable again. mark: well, good to see you. look for to seeing you in doha. will kennedy. that is ahead of the company positive shareholders meeting. that is next. ♪
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♪ you are watching "bloomberg markets." i mark barton in london. betty: and i'm betty liu and new york. m&a ahead ofalk the shareholder's meeting in amsterdam. the chairman said a merger with
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the industry big guys could create savings of $10 billion a year. farah read shareholders meet on the same day outside of italy. you got a chance to speak to the chief executive. we had a long interview in amsterdam. hopes in the next two years some of his competitors will understand that the industry needs to consolidate. >> i have a huge amount of respect for what he has done. i haven't been able to make the
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economic model work for cars of that caliber and that price. but i am quite willing to learn. i adapt quickly. i debt quickly to changes. adapt quickly to changes. we may be late, but rather the late than sorry. that is sergio, tesla orders having in the u.s.. he really expect that in the next two years, something will change. a big deal makes a lot of sense because it could save $10 billion a year. discussed along with that about the brand extension.
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hein knowledge -- acknowledged that next year he really wants to come with something new. ferrari you think that is going through an identity crisis? >> that is what investors told us. in october. public his plan was to transfer for ferrari into something other than just a carmaker. something may come next year, not before. you andeat to see
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bringing that from the big guy. we will speak to you soon, no doubt. equity -- european equity markets are faring. we are five minutes away from the end of the session. we are coming away from a five-day rally. overe up over the week four consecutive weeks since october 2015. most of the industry groups are declining today. basic resources are falling despite china's gdp data that matched estimates. quickly compound.
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mark: we are live from london and new york. this is the european close on bloomberg television.
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have a look at the stoxx 600 for the day. it looks like we are going to finish lower after a five-day winning run, the longest winning run since early march. over the week, it looks like we have gained after four weeks of losses, the longest linzie run since october 2014 -- losing run since october 2014. we have some data out of china that made no difference whatsoever. unlike inflation data, new credit outlook all beat estimates. gdp matched estimates. the markets shrugged it off. shares up by 3.8%. france's biggest retailer reported stronger first quarter pregnan revenue growth in europe and latin america compensated for a decline in china.
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i want to show you shares of volkswagen. quarteren's first courier european market share has reached a five-year low, 23.4%. auto buyers are snubbing its efforts to resolve its emissions cheating scandal. they are turning to models from bmw,ikes of fiat chrysler, and daimler. 5.7% to 1.7 million cars. it is that the 31st consecutive month of growth. this is the chart of auto and auto related stocks since september 18th. that was the day the emissions scandal blew up last year. vw at thees to see bottom of the pile, but it is the other carmakers that are only just lagging it. ll sporting declines since
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last september. betty: all slowing down. we have had flow data from man group. talk about this reaction from the. at. mark: up by 7% earlier. the big story was the world's biggest publicly traded hedge fund firm, man group, reported net inflows of half $1 billion in the first quarter. it is computer-driven funds that attract investors. the industry had a tough first quarter as a whole. in the first quarter, the industry was down by .8%. the big damage was done in the first two months of the year. equities and commodity markets rebounded in the third month of the year. that is according to data from hedge fund research. the big inflow data from man group pushing its shares up by 7% today. just: mark, as you were
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talking about, european markets are done for the day. u.s. markets are still open. we were trying to come off of some of our lows here. abigail doolittle has more live from the nasdaq, . abigail: we do have the nasdaq trying to turn green. next week is a big week as we see big tech names report like netflix monday after the bell. the stock is up a stunning 40% from february lows. expectations are pretty high, but it seems the focus could be on guidance. research recently told me he thinks the first quarter will be fine, but he is concerned around the second-quarter guidance with a plan price increase could cause trying to spike and that could impact numbers. he lowered his numbers below consensus. we take a look at a near-term chart and others may have this concerns. the buying momentum has started to weaken and the uptrend has
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started to crack, suggesting some sort of surprise could happen and big volatility with it. it is something that is happened before with the shares of netflix. betty: you mentioned the big earnings coming out. tell us more about the tech earnings. abigail: we will have intel reporting after the bell and analysts are starting to weigh in here yesterday. michael mcconnell was saying he expects the company to miss the midpoint of expectations. he reduced his full-year sales outlook. today, wedbush's same the sentiment could be at bit of an opportunity. and analyst expects an in-line quarter. we take a look at the stock's performance after the last earnings reports and it has been a mixed bag. it will be interesting to see how this one plays out. betty: abigail doolittle, thank you so much. the stoxx 600 is known 6% to date despite rebounding from a february low. what is the main risk to
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investors going forward? mark: there are concerns that remain about political uncertainty as well as narrow m&a deals get emm done. joining us now is garry mccarthy. of the big stories is the global markets that got it shares trading. it has been a pretty quiet year for ipos and 2016. basically before today, only 10 companies have listed and that is all biotech firms. this is reflective of the global ipo market, isn't it? >> there are two factors behind it. one was how strong europe was in 2015. we had a record year for issuance. the second one is volatility, which makes price discovery challenging. mark: is there a window for activity, and if so, where?
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gareth: we always highlight the post easter. eriod and the brexit vote would be an ideal opportunity. there's an ipo this week that would price and trade very well. we have seen big blocks in the last two weeks as well. we are in a sweet spot now for the next 2-4 weeks. betty: let's talk a little bit more about specific countries. in particular, brazil. they are facing an impeachment vote. i want to show you a little bit about how investors have been brazil as an emerging market risk. i want to bring up that chart. do we have that chart? they basically shows that local currencies and brazilian bonds have been outperforming other latin american bonds. i want to talk about the risks that you might see or whether or not this is an opportunity for emerging markets here given that
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this may be resolved soon. needh: in any market, you a stable secondary market and a stable pricing market. q1 globally has been characterized, if you look of the vic's index in the u.s., that's a good way of looking at volatility. pricing bills is challenging. when you have that in the developed markets, you will see an even more challenging environment in the emerging markets. particularly with uncertainty around what the fed will do has a big impact on the emerging markets. from my perspective, you need to see a stable developed market with transactions printing before you see the next leg, which would be a recovery. that's when you have more certainty on the fed with the emerging markets. betty: that's like a hope and a dream now -- more certainty from the fed. i mean, they don't even know. gareth: that's a fair point. these things take time. we came this year with a pretty clear view as to what the fed's
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activity was going to be and i think there's a bit of a shock to that in q1. you have both the ecb and the updates the last few weeks that have given investors a bit more clarity idiocy in the market response about with a healthy environment. mark: on the matter of the ecb and the fed, we have a chart here. it shows the price differential between the s&p 500 and the stoxx 600. as aweek, european stocks ratio traded at a record low versus their u.s. peers, which begs the question -- why hasn't ecb stimulus boosted the european stock market as much as maybe some think it should and could? gareth: this is a relative argument. you have seen a pretty sustained relative -- rally in europe and the has been driven primarily by ecb stimulus good on a global basis, a lot of historical u.s.
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investor engagement in europe led a structural underway through the crisis. they made good steps to address that last year. the uncertainty around greece and the currency as a whole with the political uncertainty whether it be in spain or the u.k. is actually putting off some of the international investors, which is perhaps leaving the opportunity gap. mark: thank you for joining us today. he is the head of equity syndicate at ubs. betty: let us check in on bloomberg first word news. vonnie quinn has more from the newsroom. magnitude 6.2 earthquake has struck an area of the pacific coast of guatemala. there are no reports of injuries could the quake was centered 135 miles southwest of guatemala city. aftershock seven rattling communities in southern japan following a magnitude 6.5 quake that killed nine people and
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injured about 800. rescue workers have been coming through rubble in hard-hit areas to make sure there are no more trapped people. the prime minister says the government wants to prevent any secondary disasters from aftershocks. bernie sanders is now in rome to attend a vatican conference. the vermont senator is making the trip even as he is facing a crucial primary against tillie clinton this week. he is with speakers to commemorate the 25th anniversary of a speaking document by pope john paul ii on social justice in the economy at the end of the second world war. >> i'm very excited to be here in the vatican and to have the opportunity to say a few words to the academy about the need for a moral economy. vonnie: vatican says
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pope francis has no plans to speak at the conference or with sanders. continuing divisions between tea party lawmakers and gop lawmakers have put off addressing the crisis in puerto rico. the white house has put pressure on publicans to fund money to combat the zika virus. global news 24 hours a day powered by our journalists in more than 150 news bureaus around the world, i'm vonnie quinn. mark: coming up, it is the battle of the chargts. i face off with big old joe and are friday edition. warning signs and the stoxx 600. joe, you better be quivering. ♪
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betty: it is time now for our global battle of the charts. we take a look at some the most telling charts of the day and what they mean for investors. you can access all these charts on bloomberg by running the function on the badham of your screen -- the bottom of your screen. kicking things off this joe weisenthal. joe: my chart is called no government, no problem. you see the political turmoil in countries that might cause our ring costs to rise these countries, but not so much. let us look at countries tried to form a government after elections because those elections were so inconclusive. this white line is ireland's 10 year bond auction average yield. they had an auction of tenure debt this week. a brand-new record low. this is a country without an existing government trying to
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work out the coalition. the yellow line is the spanish tenure. they have been months without a government, very close to its all-time lows. in this world where anyone is trying to get any yield or kind of sovereign safety, even not having a government does not mean your borrowing costs go up. that chart onout bloomberg at g #btv 960. betty: you can go reckless and you don't have to pay for it. mark, are you going to punish joe with your chart? [laughter] mark: you better believe it, betty. i love this chart. happy birthday, stock 600. it is a year to the day since the stock 600 and its all-time high. it has been a miserable birthday since the stoxx 600 has fallen by 17%. we need to look back in history to see what the trend is telling us. look at the previous highs. bubble and the housing bubble -- this is the first time in 2000 in march.
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it was followed by 60% three-year drought. this is the second five. this was the housing bubble in 2007. it was followed by a two-year 61% drop. you know where i'm heading . all these declines started after the stoxx 600 rose above 400, which it did as a record last year. the trend if history repeats itself -- a stoxx 600 has another 50% decline heading its way. bank of america says the stoxx 600 is trading in a similar way to 2001 through 2008. they calls it a frightening trend, but the cio of ambrose what management unit says only a global recession could justify such a slump. what a wonderful chart. happy birthday, stoxx 600.
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if you want to see the birthday boy, g #btv 959. there you go. betty: there you go. i'm try to reconcile both of these charts though here, right? you can still borrow at record however, it looks like we may be headed for a recession. not a recession, but certainly a slowdown in europe, which is reflected for equity investors s. mark: you said it, when he was talking yesterday about highlighting the slowing risk of economic growth. he was highlighting the risks of recession and his call on the boe is for a rate cut rather than a rate hike, which is more than the other community is saying will happen the first quarter of next year. impossible we will see a recession if some of the economists are to be
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believed. betty: i have to make a judgment call. joe, he had some pretty cool colors. mark, we are going to give you the wind today. [laughter] joe and mark, be sure to tweet us your battle of the chart ideas and feedback on twitter. liu or markbetty w barton on the bloomberg. aboutis all the chatter brexit hurting the switzerland economy? we are going to answer that question next. richard jones is here. ♪
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mark: got some breaking news on ombardier. it is set
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to reject a proposal from the canadian government. a deal is unlikely before to annual meeting. that is according to officials. that news just crossing the bloomberg and those are the shares today trading up by 11.9%. time now for the bloomberg business flash and a look at some of the biggest business stories in the news right now. global markets is trading and priced its initial public offering at the top end of the market range, valuing the company at $1.8 billion. it raised millions of dollars after shares were sold at $19 each. valeant pharmaceuticals is working with investment banks to were reviewed options after receiving interest in some of its businesses. that's according to reuters and a source familiar with the matter could th. the drug matter may sell some of its non-core assets to sell some of its debt.
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it has seen as a disastrous eight-month run that has seen the stock lose almost 90% of its value. citigroup says first corporate profits beat estimates. this is as the trading and you making slump continues. they have illuminating jobs and narrowing the funds fo focus and generate acceptable returns. revenues from trading fell by 13%. that is the latest bloomberg business flash. as we close out the hour, let's take a look ahead to next week could we have a week. we have an ecb meeting on thursday. monetary policy unlikely to be changed. joining us now for a weekly slot is richard jones. we need a name for the slump. to be nothing is going
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done, richard, but our investors beginning to price and more action in the not too distant future? richard: yes, they are coul we . we have nine additional points priced in before the next meeting. what will be interesting about the meeting next week is that given what we have heard from the imf and the world bank's is there taking a cautious tone on global growth coul i. it will be interesting to see if this sentiment starts of feet into what the ecb says next week. mark: let's talk about a country that has been very much affected by what the ecb has done or not done. i'm talking about switzerland . what is the backdrop right now of what is going on in switzerland, especially with regards to currency? let's start with the currency that mattered in january 2015. letell us what's been going
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on. richard: yet seen the swiss franc grinding a little higher in value versus the euro. when of the key things driving this is the brexit referendum and the whole uncertainties surrounding that. we had bank of america telling us there were hedge funds and asset managers last month buying the swiss franc as a safe haven, concern primarily because of any of the risks associated with brexit. if this trend continues and we still have about 10 weeks left in the brexit campaign, we could see a further appreciation of the swiss franc. that may put pressure on the s&p to actually cut rates again. betty: i'm wondering when you talk about the brexit, i know the president is heading over next week to the u.k. to -- and brexit is going to be one topic that he will be speaking with david cameron and other officials on. i've been asking this of
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european guests. how much of that is a risk for us in the u.s. and what do you think could happen possibly to the dollar? we have betty, i think seen what has been priced into a love different currencies here. the pound has weakened. mark and i were talking about the swiss franc and the haven flows there. i think that if the u.k. were to vote to leave the european union, i think there would be a lot of broad sort of waves that will go beyond this country here. there's definitely going to be existential risks for europe, but also i think fed officials have been talking about the implications on the global economy from the uncertainty that would come from a brexit decision. i think there could be some very serious applications. if you look at the pound versus the dollar, the dollar will probably do better. in terms of global economic policy, and that is what the fed does, the brexit could have
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serious implications. mark: this was one of the charts on the week on bloomberg. it shows the cost of hedging declines andound the premium is increasing, isn't it? that highlights the risks and the uncertainty ahead of the referendum. richard: it certainly does and it also points to investors favoring shortening the pound. that is an intuitive reaction given all the uncertainty the brexit engenders. that is something the chart is showing greatly. mark: richard jones, thank you for joining us. a quick reminder of how we finish the european session. do we have the chart? we finished lower for the day, but up for the week ., ♪
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alix: it is noon in new york and 5:00 p.m. in hong kong. scarlet: welcome to "bloomberg markets." ♪
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scarlet: from bloomberg world headquarters in new york, i'm scarlet fu. alix: i'm alix steel. here's what we are watching at this hour. dilma rousseff hit with another blow as the supreme court overturned a government motion that will allow the impeachment vote to proceed on sunday. what it all means for the bills economy. scarlet: critical talks on oil on monday in doha. there is news that iran will send a representative to this gathering. alix: the contrarian views on valeant as the struggling pharma company deals with $32 billion in debt. we will speak with david neuhauser, who is shorting a stock, while bill miller calls it a buy. a big by is what it meant to say. [laughter] scarlet:


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