tv Bloomberg Markets Americas Bloomberg November 16, 2016 10:00am-11:01am EST
mark: i am mark barton. welcome to bloomberg "markets." vonnie: from washington, d.c., coverdi arabia and stories from mexico and the next hour. global bonds resume me their slides. stories from mexico and the next hour. his election has made action and his election has made action and near certainty in december. >> speaking to bloomberg television. take take on the possibility
picking that may need to de-pegged the currency. vonnie: senator ted cruz is being floated as a pick for attorney general. the challenges of getting the pick approved by the current senate. about 30 minutes into the trading day in the u.s. and we are seeing the trend continue. julie: taking deposits. the category we're falling into after the rally. figuring out several times whether the rally was justified or not. today. down the most the intraday action going back to election they. what we have is a crime and the dow -- with the climb in the dow. back to election they. this perspective, the frompullback is not look large whatsoever.
though shares are trading lower after the company's earnings missed estimates. continuing to lag home depot. the company same-store sales of 2.7%. lagged estimates in the 5.5% rise and the company's earnings missed estimates as well. target coming out with numbers that beat estimates. to school shopping season. pretty wide margin. we are seeing an interesting diversions. continue to see an increase on the shorter end of the curve. 30-year on that took an abrupt reversal earlier this morning.
we had seen selling in the bond higher.ushing yields that reversed. it may have something to do with 30-year on that took an of plano limit the cushion, the types plans they can use percussion debt.ing longer-term we are seeing a pullback in oil debt. that could be something that is affecting the market. prices. oil pulling back a little bit i about 1% this morning. third dow down by about a of 1%. digesting what the donald trump victory means. interesting statistic, seven swings between gains and losses. i do love stats like that. we have had the big gain the day
elected lastas wednesday. it has gone sideways. an increase in third-quarter sales. gained 300-5000 subscribers. users, broadband number 218.7total million. it is maintaining momentum after shaking of the market with at two eurosting per month. the growth and mobile subscriber gains is outpacing this. shares lower. higher today. this is the french building in media conglomerate.
overall third-quarter net income fell 1%. hugo boss. down by 11%. since february. the ailing german fashion house saying it will not return to until 2018. the chief executive embarks on plan.g turnaround slowing down store expansion and selling more. shares have been hammered earlier. 13%.as much as >> retail sales fascinating at the moment. going to first word news. >> u.s. secretary of state says
the u.s. to honor the commitment under the paris climate agreement. he praised the deal as a framework that is built to last. >> no one should does the overwhelming majority of the city's and of the united states who know that climate change is happening and determined to keep paris.mitments made in >> president-elect trump has called it a hoax and has pledged to cancel the deal. trump denying reports his team has been trying to get security adultnces for his children. i am not trying to get top security clearances for my children. this was a typically false news story. house republicans talking about biggest taxes in three decades. they want to/rates on slapiduals and
--/provisions. president hassan bersani --s his country will mean will remain committed to nuclear deals. state tv today saying if the president has changed here in there, it has no impact on the will of a ron. the european union unveiling plans for a new system of security checks. paying a little more than five dollars and fill out an online form to travel in the 26 nation check free area. valid for five years and trip.le global news 24 hours a day than 2600 more journalists and analysts. this is bloomberg.
>> thank you. top investors have been grappling to interpret the results and offer insight to clients. steve schwarzman appears bullish. a major turning point for financial markets. benefithis missable under trump. he says trump does not have a magic wand to spur growth. he has overseen more than $1 trillion in assets under management. as black and white? or is it i take a bullet for you? some good things and some negative and gekko >> it depends on the time span. in the near term markets have reacted rationally. economic surge. a big the school stimulus.
you will get economic growth in short-term. we do tell the clients there are longer-term issues. would heea that you --ticularly look that worried about is longer-term. defined long-term. >> i think people are looking at the good things the trump administration has said and valuing the discount. we worry about volatility and emerging-market. term the first worry is how much this will be implemented. how much of this will be what is the tit-for-tat reaction from other governments if we do guide forward, and the longer-term, we the fiscal deficit
buildup will happen if you have that will create endowment. you have to worry about longer-term issues. does the fed raise rates in is a path inwhat 2015 you go >> we see a lot of downside risk is that does not raise rates in december. to rate rises and 17. >> we will not see inflation next year. >> seend of growth yet inflation trends rise. real rates have not gone up that much. we see scenarios where we could be more. it could happen sooner than i think. a more aggressive fed policy
necessary. rising yieldsrising yields yearg yields, looking at where they had been recently. exacerbating the present of longevityact risk. on longevity and reliability, what are the costs of longevity risk? >> an environment where rate rise would mean rates and less of an issue. we think the risk that longerpants will live than expected. for over a century we have underestimated how long woman up living. liability creates a major issue. we need to think about it in a integrated manner
alongside market risk. real.very >> how are you managing it? >> i know you have a plan and a sponsor for longevy risk. >>t do you recommend gekko to recommendations. looking at the real longevity risk. old. of the plans are a 6% increase in the underfunded status of corporate pension plans. nothink they still have corrected enough. realism and pressure testing of actual life land, and second , because it will show liabilities are worse than you think, it focuses on what you do then. high-yielding assets and less
liquid investments to meet the greater funding gap. second, driven around liability investment as you close the gap. >> what is the return that you correct gekko >> lower that public pension plans assume. a lot of volatility. we think people are being particularly in the public section plan. >> the fear is it is more than that. >> absolutely. >> larry summers has saieven infrastructure that donald trump is set to be planning well .ot help anything that does not generate a commercial return will not be included. if it is that kind of fiscal funding, does that change the
growth trajectory for the u.s. gekko >> i think it does. i think there is real risk about how you implement a plan of that size. the u.s. has not had a private partnership in infrastructure. if you wanted it done from the primaryector, infrastructure happens. i think there is real risk. maybe not as easy as one things through thes plan government proven channels. > you have touched on why thy got it so wrong. the expected life and of humans. >> i think there has been a underestimation of medical break is. the hiv virus and the retroactive drugs for that. most recently our focus is on
therapy.g genetic that is not built into the estimates. we think within the lifespan real and willme life ban further. >> interesting tidbits i was reading yesterday that the life and and louisiana is six years connecticut. something to think about. >> thank you for joining us. more on the federal reserve when yellen heads by tomorrow before the congressional committee. committee. we will carry that live. >> president-elect donald trump down reports of power struggles inside his transition team. live in washington for the very latest. this is bloomberg. ♪
mark: live from london and new york and london. i am mark and -- mark barton. speaking out amid of heller struggles inside his trance he shouldn't team. very organized the test taking part. i am the only one who knows who the finalists are. one of the finalists may be ted cruz. considering nominating crews to serve as u.s. attorney general. , we go from -- to our reporter in washington. does take crews have a shot at
being attorney general? >> ted cruz went to trump tower yesterday and met with donald trump. he was a serious the land of her trump lander and donald defeated him by calling him lying 10. love lost but they seem to be getting back together mended fences and now cruises on the short list to be attorney general. >> crews wife was also attacked that one of the campaign events. talk to us about who was us about who was
deciding all of this. is that donald trump and self? priebus? >> that is what trump is saying. he is saying he know that she is the only one who knows the kushner? and will reince make a final decision. disarrayring a lot of with a lot of different power struggles going on between people late jared kushner and people who once allied with the former transition chair, chris christie. we are seeing people he from the transition team in part due to the disagreements and fight on.g trump has some work to on. trump has some work to do to make sure his staff members are on the same page. >> will he rubberstamp everyone he eventually picks or will problems? >> he does not have a lot of room for error. it is not necessarily going to rubberstamp. we have heard from rand paul he
is not in favor of some of the been floated.e obviously there are republicans favor of some of named, and part because of their need for the iraq war or going to war with countries like iran. senator rand paul has pushed back against some of the names listed. named, and part if democrats are two or three republicans vote against the would eat voted against. work againste to to make sure they are on board with the nominations. >> we now have news that chuck been elected the minority leader after fellow democrats picked him to succeed reid. thoughts on the
minority pick in the senate. >> he has said he wants to pick on the areas of agreement with trump administration like tax and infrastructure so he has not been a flamethrower like reid inrom senator terms of attacking trump and calling him negative names. look for common ground. democratic democratic enormity that is in need of leadership. after not getting the senate the way they expect it to. we can expect to china to find common ground and trying to protect a number of democratic up fors that will be reelection in 2018. schumer has been elected the chambers minority leader. this after fellow democrats picked him to succeed harry reid who is retiring. >> a big interview later today according to his new investment, bill gross. adding no new trump will market.
vonnie: this is bloomberg markets. i am vonnie quinn in new york. latest bloomberg business flash. neil cache kari has unveiled his plan to end it too big to fail banks. it would significantly increase the amounts of capital banks againstd to protect losses in a crisis. it would reduce regulations on banks.ty
we will be quick neil cache kari tomorrow. nearing an agreement to buy back a 50% stake in an asset nearing an agreement to buy back a 50% stake in an asset management agreement. that is according to people familiar with the matter. that is our latest bloomberg is missed flash. >> still ahead, the latest on industry. crude oil backing off today. barrel.ound $45 for the industry figures in just a minute. this is bloomberg. ♪
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a two-week high after rallying. julie is here counting us down. >> oil inventories. yesterday on renewed optimism that maybe opec would come to a deal. seems to be coming back down to day. inventories rising more than estimated. much more than the estimate. alsooks like gasoline acted -- unexpectedly rose. interestingly,interestingly, rer
than estimated. interestingly, refineries higher than estimated. that is the one little more bullish thing coming out from the report. covering the oil markets in london on the bloomberg. that pretty much sums it up. taking a look at thehis comment. bloomberg. leg downward oil is taking. definitely first blush reaction quite negative. i will call up the actual numbers. chart. let me update the timeline for big this is. if you look at the perspective this year, not so increase it is a huge but a third straight weekly inventories.he it shows a build gradually long stream of a the kleins. if you look at how energy stocks react thing, here is the two
day chart. big run up yesterday. now coming down in a little bit leg downward. as for the commodities, we have been watching that as well. old futures coming up. selling off in the wake of the election and then bouncing around. copper futures coming back after streakand strong winning spurred by the election. ore coming down. andhing miners as a result we are seeing a pullback. >> thank you very much. since donald trump's victory am yields have jumped significantly, rising to the highest level.
what can we expect next? thank you for joining us. looking at the barclays industry since trump was elected. the global yield index down by 2%. the european index down by roughly .2%. have we seen the worst of the or is there further to go for the high-yield? >> i think we have seen the worst for now. still do not know the details of the trump plan. sure there will be a shift as theu.s. market details hit different industries in different ways. it has been an asset class that has done remarkably well year. the european gauge has not done so well.
disappointing this morning. >> you have data i have not seen this morning. think the expectation rise five get a rate year. the it is clear many of the policies that trump ishe is looking to y. it is clear many of the policies that trump is pronouncing are inflationary in nature. get more of a headwind. excuse me, tailwind. which -- mark: which sectors get a boost from trump and which one suffered gekko >> certainly that infrastructure related sectors. i think we'll get a boost. recognize there are not a lot of shovel ready projects ready to instantly. hospitals and the other portions facingth care are
headwinds because of changes in regulation. the one that is a tossup is energy. thus far the energy industry seems to be looking at this as good times you hear. from our perspective it is not that clear. change regulation and perverse laws. the one flaw is the old law of supply and demand. we are still in an oversupply position. we have been producing more energy with the incentive they may be given. that does not reserve -- reverse. >> the big question, the meeting at the end of the month. do we get a deal to freeze output. >> great incentive to do so.
whether opec has the same impact going forward will be the big western. the u.s. production has risen to such athe u.s. production has ro such a degree over the past 10 years. think the expectation is that it will continue to grow, which is emphasizing energy independence in the united states. >> do we get more or less until see where yields are going and what kind of policies? at has been pointed out, high-yield is off the little bit and most is pointed to the treasury yields. from whereost flat they were when we were all out voting. up the coastoved treasury yields have moved up.
there were a lot of companies waiting to see the results of the election. we will come into the market. will wait and see whether it there is balance. there has been a lot of refinance taking place. have the ability to on the sidelines for an opportunity where they can get a better deal in terms of rates. one thing we talked about when i was on the sidelines for an opportunity where they can get a here was the opportunity in the loan market. ourselves to outperform high-yield bonds. us addedgiven performance, and i think that will continue for the immediate term. >> thank you for joining us, high-yield.al tomorrow, janet yellen will the congressional joint economic committee.
he tells bloomberg he is taking a long-term approach to investing. the ship'ss-royce closing engine site because of falling demand -- demand. >> we take a closer look at how u.s. corporations are lowering the tax bill by shifting profits overseas. >> the billionaire prince alawite says the u.s. economy after eight years of president stewardship is in good shape. he spoke earlier today with erik schatzker. >> when mr. obama took the reins eight years ago, the u.s. economy was not in good shape at all. almost a bankruptcy situation. i think he has taken it and made it in good shape somehow.
>> he is a long-term investor in level. and the breakeven level. >> cutbacks are on the way out rolls-royce. best known for the jets think he it in engine. the company will close the bulk safe. the lower price of oil has her .emand for x duration target posted third-quarter estimates.at beat the strong back-to-back school season boosted revenue. same-store sales fell. bouncing back from a surprise drop off in traffic last quarter. newedes unveils a convertible. it has four seats. the roski crystals embedded in the headline. it will cost $323,000. production will start next year.
now for the bloomberg take where we provide issues and background on of interest. the highest corporate tax rate in the u.s. at 35%. pay lessy, they often than half of that. have a to a box of tricks for skirting taxes. the most prominent, offshore havens. they cost more than $90 million per year. a to a box of tricks for skirting taxes. talks, corporateeasing ears.a is all cutting the business tax brings foreign profits home. taxld trump proposing a 15% on all businesses. a 20% tax on corporations. these proposals emerge after big-name companies came under for making profits in places like bermuda, grand ireland.nd
paying 30 billion euros. they came to ireland that gave an unfair advantage over competitors. here is some background. the u.s. requires corporations to pay taxes on the foreign profits they bring home. as a result, companies lose their income elsewhere. changing the addresses of the double parks business to switzerland. companies and shareholders benefit. most citizens do not. argued it made 4.5 billion each month. they want to level the tax playing field to avoid a race to the bottom contest. billion each month. economists and businesses expect
trump will strike a deal next year. read more about profit shifting our it takes on the bloomberg. >> more on an interview with erik schatzker. also asked about his views on the saudi government thesition plan to reduce country's dependence on oil. >> we have seen the brexit. we are famous under the demand his father. this will really establish the new rules for saudi arabia to dependence on oil, which has been more than five years ago. oil,ependence on
increasing revenue from various areas. these are supported by me personally. >> saudi arabia has a huge balance of payment. the money supply is shrinking. to government forced liquidate foreign-exchange reserves and sell bonds to ofntain the currency peg 3.75 to the dollar. why not devalue the currency >> my friend, the governor no devaluation, and i believe this is a business the social front. i think the issue of the pegging think it isr, i stable right now. however, as a last resort, it is
a possibility. i do not ask for it right now. now. too early right we have enough capacity to .orrow that is good for the next three or four or five years. the issue of the pegging is too early right now. it's another strategy is taking .ts that is good for the next three or four or five public. the timing could be better. question many ask is why sell the crown jewels at a sell the crown jewels at a discount? >> first of all, i am in support of that initiative. this was the nuclear weapon. i believe it will create more transparency, more liquidity for saudi arabia. even 5% or 10% is something very
welcomed by me. and willl understood appreciate it. >> will you buy the stock when public? >> listen to the public first. i will do anything to support saudi arabia and the correct policy. >> the saudi prince with erik schatzker. >> still ahead, president-elect trumps victory has been roiling mexico.in the peso down around 10%. what this will mean to the economic future. this is bloomberg. ♪
york. mark barton. vonnie: i am vonnie quinn. president-elect donald trump victory is roiling u.s. -- roiling the mexican market. getting more now from eric martin, the economic reporter joining us from the mexico city bureau. how containable is this? how economists? >> people are really concerned. bank has increased the interest rate by 1.5 points this year. there is a lot of question as to whether these moves can kiss -- given that the drop some economists are seeing it as low as 25 per dollar by year end. and otheren blackrock
out with other groups heading just -- cutting the forecast for gdp 1-2% for 2017. a lot of speculation that the proposals that have been put forward will have a big effect on the trade environment for mexico. select-- vonnie: the other thing, i am looking at the bloomberg, both mexico stock index, the yield curve. this is last month. you can see the movie are when last snapshot was taken in blue. the mexican central bank will tomorrow. how much will it raise end is it of theause president-elect? >> it really is outlook for the trump administration.
economist -- before the truck victory they were thinking rates.uld raise inhave seen a big adjustment expectations since then. inflation has been contained. around 3% now. there is a concern that eventually with the peso at record levels, that you could significant pass through and at some point this will start to affect the formation of prices. >> has the market been functioning well was sufficient liquidity? does the central bank need to announce other measures? >> that is something people have been looking for. bank has signaled they are comfortable with with dirty. are are signaling
they may do nothing tomorrow because it liquidity has been there. they do not target a specific rate for his the peso. there is some feeling they may absorbed the political shock. so far the currency commission has held off in selling dollars or other absorbed the political shock. measures that could more directly help. is it a buying opportunity? the move up in the bond yields. a money manager is licking their opportunity here in down assets. question. a very good we saw ashmore coming out and about buying on the dip. managersmber of fund and came that what president-elect trump said was rhetoric more than an actual plan to address trade and
immigration as a governing policy. buying seeing some folks on the drop. we saw the peso up more than 2% yesterday. while it has been a pretty steady decline, there has been opportunities there.s are seeing out economic reporter joining us from the mexico city bureau. >> check out oil. getting a boost. released roughly 26 minutes ago. out from alexander novak. he said russia is ready to toport the decision market.e the this is bloomberg. ♪
trading day today. i am mark barton. >> in new york, i am vonnie quinn. this is the european close 30 me trading day today. i am mark barton. >> in new york, i am vonnie quinn. this is the european close on "bloomberg markets." ♪ mark: we will take you from stockholm to rio and we will cover stories out of amsterdam, germany, and washington hit. here's what we're watching today. trade has seen the odds of a fed rate hike in december moving to nearly 100%. prince speaksudi to bloomberg television. the billionaire says it's too early to judge what the effect of a trump presidency could be, but he thinks it could improve relations with saudi arabia. worste of the industry's a missof