tv Bloomberg Markets Americas Bloomberg December 20, 2016 10:00am-11:01am EST
julie: from new york to london to berlin. here's what we are watching. german police say the person responsible for the berlin large,may still be at putting pressure on angela merkel to do more to guarantee the public safety. mark: joining forces to create the $30 billion gas giant. it will create the world's biggest supplier of industrial gases. julie: the dow jones industrial average inching closer, 13.5 points, yet another record high. about 30 minutes into the trading day in the u.s., abigail doolittle is on 20 k watch with us. we are creeping ever closer. abigail: everyone is watching
with bated breath. what makes this remarkable is the fact that this is a stunningly fast move higher for the dow. the other major averages high as well. at records for the nasdaq and s&p 500, on pace for record closes. since november, 22, when the dow closed above 19,000. in a short time, 28 days, we have the dow up 5%. if it can close above 20,000 today, it would be the fastest 1000 point gain ever. on history right now is 1999 and 35 days. we will be watching this closely and bringing the details to you. we're looking at the banks, the financials, bank of america, jp morgan, trading higher. bank of america is getting of
boost after the company sold its for credit card business $2.4 billion. that will close in the middle of 2017. also helping is the 10 year yield. it is rising a little, helping banks in the idea that rising rates will help lenders lend in a more profitable way. we have the bloomberg dollar index trading higher, being helped by raising rates. a risk on tone for markets in the u.s. , as has beenrs proven over the last year and a half, shrugging off geopolitical uncertainty in light of incidents in the last 24 hours in ankara, turkey, berlin, zero, switzerland. -- sure it, switzerland -- zurich, switzerland. the stoxx 600 is rising come the highest level since december 31,
2015, proving resilience to geopolitical shock. the age of stock volatility, the lowest level since july 2014. that membersupbeat of the stoxx 600 expect earnings to grow by 12.5% hear it when it comes to benchmark highs for the of april, 412 last year. we are 10% below those levels. this is the turkish lira. yesterday record low against the dollar after the russian ambassador to turkey was killed. we rebounded ahead of the turkish central-bank decision, fell to a new record, and rebounded it in. we are close to the record. all threel bank kept interest rates unchanged in a cautious monetary policy needed as it assesses the impact of the weaker lire on inflation.
the decision is an attempt to support the economy that slowed sharply holding the coup attempt in july. bloomberg forecasted 45 basis points increase to the overnight lending rate, and no change in the other two. last month, the central bank raised rates for the first time in three years, citing the possible impact on lira on inflation rates. 7% last month compared to the bank's 5%. the euro has fallen to the lowest level since january 2003, 1.0368. finishing off with the german 10 year yield, highlighting there innot a flight to safety light of the three geopolitical incidents. we have the german 10 year yield toing high two basis points 26. last year, yields fell for the
first week in three on december 12. you can see that peek at the end. 99%,ng at three point highest since january. today proving the market resilience. as we have seen time and time again, to geopolitical incidents like in the last 24 hours in her len, ankara, and zurich. bankers are perhaps becoming more accustomed to these incidents. let's check in on the bloomberg first word news. summoned merkel has top security officials to talk about the government response to the attack in berlin. site earlier the laying flowers to honor the 12 people killed and 50 injured. thererman prosecutor says may be several assailants
involved. the german interior minister says authorities have been questioning a suspect taken into custody after the truck plowed into the christmas market, but they say the man, who is from pakistan, who has applied for asylum is denying involvement. authorities are questioning if he was the driver of the truck. vladimir putin promising an offensive on terrorism after the assassination of the moscow ambassador in turkey. he was killed at an art exhibit, yelling afterward ". do not forget aleppo" is the first moscow envoy to be killed in almost 90 years. he is 22-year-old assailant, a police officer, was killed by police forces. six others have been detained in connection with his death. a shooting at a mosque in does not appear to be
related to the attack. after fleeing the crime scene, the suspect shot himself. investigators say he may have had an interest in the occult. investigators searching for nearly two years were missing areysia airline plane making an admission, they have probably been looking in the wrong place. the boeing 777 is likely further north of the current search zone in a remote patch of the indian ocean western australia. board disappeared flying from kuala lumpur to beijing. global news 24 hours a day, powered by 2600 journalists, in 120 colors. this is bloomberg. mark: let's continue global coverage of the top geopolitical stories. matt miller is in berlin where he truck allowed into a
christmas market killing 12 and injuring others. constantine joins us understandable. russia vowed -- joins us from istanbul. russia vowed to step up the offensive against terrorism. we have had challenges from angela merkel addressing the nation. let's listen to that as she addressed the nation. there is so much about this that we don't know yet with required certainty. based on current evidence we need to assume this was a terrorist attack. it would be difficult for all of us to bear if it was confirmed a person committed the crime that came to germany to ask for protection and asylum. incidence ofse the the last 24 hours puts pressure on chancellor merkel to guarantee the safety of the german public? matt: absolutely. the most pressure right now is
on the german federal police. over the last 24 hours, what has become clear is that the police don't know very much about who did this or why. they have one suspects in custody, but aren't sure if that suspect is the perpetrator of the crime. they're not sure if it was one perpetrator, or multiple assailants responsible for the crime. they don't seem to have much video or photographic evidence. they have been asking for it from the public. they still have to match the suspects fingerprints from the you thoughthing they would have done late last night or early this morning. what is becoming apparent parent is how little they know, and that an assailant may still be at large in berlin. despite that, investors, as we have seen again and again
looking at brussels and paris, frequent incidents in turkey, investors areinvestors are shrue latest incident as they are the turkish and zurich incident. what is the feeling on the ground, how is the german public responding to yesterday's incident? matt: not as nonchalant way as investors -- not as nonchalant as investors. and moreecome more used to this from an investment part of you. germans take this very seriously. throughout the day there have been hundreds, maybe thousands, of germans coming here to lay flowers, concerned for the victims and families of the victims. we had press conference after prescott rants from angela merkel, the ire of berlin, the head of the local police and prosecutors office.
come here. it is important to keep in mind where this happened. this is the kaiser wilhelm memorial church that was bob did world war ii and left as is as a reminder to never forget those who fell in the war. it is the place where this .ttack happened as well also at the head of the most popular shopping street in germany. julie: we have heard from angela from anyave we heard opposition political for years as to what this attack could mean for germany? the opposition is not very strong. the cdu party is in coalition with the other party that would be comparable to republicans and democrats. you do have a right wing party, but it is not present in the federal honest talk.
it doesn't have positions in german congress. it has a small part in state elections. they immediately said there is blood on merkel's hands, this is because of her refugee policy. you've heard the same thing from poland and other countries that have not followed the same open door policy as angela merkel. the opposition really isn't very strong. mark: we will speak to you later. matt miller reporting from berlin. julie? julie: turning to turkey, the attack in berlin coming within hours of the assassination of the russian ambassador to turkey in ankara here that fueling the global uncertainty that turkey central-bank warned about following a surprise rate decision. let's bring in constantine from istanbul. we have this rate decision where rates are kept on hold. it was somewhat surprising to
the market. it seems on the one hand that the central bank is faced with the following lire, and on the other hand with political pressure. why was that decision aid today? >> it was a surprise decision from the central bank. the central bank is dealing with depreciation in the currency. the layer is the worst performing emerging market currency in this quarter. growth is slowing down. the economy contracted in the third quarter and there's political pressure to keep rates low to stimulate the economy. that they noted the depreciation has impacted, may impact, depreciation. theslowdown is restraining impact. some analysts said it looked like the central bank is willing to wait and see this pass through on inflation before it acts. seen, weat have we
have seen a drop in the layer yesterday in the wake of the assassination. constantine: the lire sold off after news of the assassination. it recruit some losses throughout the day -- recouped some losses throughout the day. after the rate decision we saw a selloff again. some people were positioned for 25 basis point increase to the overnight rate. at the same time, the lira has in a can since his bearish call. people were already quite bearish. that is why we may have seen a muted reaction after the surprising move. constantine, what investors are looking at is the relationship, how it has been affect hit by the merger of the russian ambassador to turkey. developedhis has not
into a flashpoint between the two nations. this matters economically to the turkish nation? constantine: that's right. investors brushed off the so-called geopolitical risks when it came to turkey and the latest developments, for good reason. the authorities were very fast to reassure investors that we would not see the same fallout that we saw in november. last november when turkey downed a russian jet and pressure retaliated with economic trade sanctions, which crippled turkey's tourism industry. we have not seen anything like that this time. most of the economic and political costs of this incident were limited compared to what we have seen in the past. julie: thank you so much. coming to us from our euro it stumble. mark: coming up, markets showing
resilience. stock. geopolitical we speak to the director of u.s. electives and derivatives strategy. julie: the tao is falling back a little from the 20,000 target. after getting within 13.5 points earlier in the session. now it is a little further away from the mark. we will be tracking, of course. this is bloomberg. ♪
for more on how investors are investigating the troubling headlines, we are joined by the executive director of u.s. equities of derivatives strategy in our new york studio. julian, we have these various headlines about the assassination in ankara, about the truck driving into the crowd in berlin. stocks remain unfazed. we havewhat increasingly seen over the past couple of years. julian: it is not the past couple of years, it is for the most part of the 21st-century. we have had a series of horrific incidences dating back to september 11. markets have proved resilience time and time again. attended the is for markets not to top on bad news, which we have seen over the past 24 hours. what this does is it puts on display the push and hold. on the one side, there is a deep
optimism built in no the past couple of months since donald trump's election about the potential for the u.s. economy to grow, and all of the good things that can come from that. on the other side, what we are seeing particularly from europe, is a sense of uncertainty that is exacerbated by these horrific events, in front of critical elections next year. it is no surprise that the euro itself is trading on the lows of the year as well. --ie: do you think that obviously, these are 2 big incidences. if we sell more like that, with that change further the political calculus in europe and put further pressure on the euro? julian: these things accumulate over time. certainly, the surprises that we saw it the u.k. in june, and obviously in the u.s. in november, indicate that there is a trend in politics towards
greater populism. we are certainly saying that play out across europe. mark: let's look at the late stages of the bull market in the u.s. in 1999-2000, europe in early 2015. you talk about this love affair in the late bull cycle. are we seeing that again? are we seeing the love affair reigniting for stocks? julian: we saw it in the weeks directly following the election in november. the inflows into stocks and out of bonds were record large. for us, you are starting to get to where valuations are becoming quite stretched at 19 or 19.5 times the 2016 earnings. there is concern. see howld be key is to january, typically a time for retail investments to participate, how that response.
it is possible you do see the public becoming an incremental buyer pushing valuations further. the health care, the technology, do the laggards get picked up in a january buying spree? julian: we think so. this set up if you think about ofing into 2016, in a lot ways is different than coming into 2017. a year ago the fed had raised for the first time and it wasn't clear if that was the right move. oil was not going to make a $30 for a couple of months, the economy didn't seem solid. starting in january, the tendency was just to sell the winners and people did not fire the laggards. year, we think people will want to stay invested to comment because of the economy is
willing to perform in the way that it is believed it can perform, you will want to be in stocks. at the same time, the more deeply cyclical issues in industrial energy have run along way. health care and technology are likely to be any fishy areas of tax reform, if we see that. julie: julian, we have to leave it there. mark? mark: still ahead, walgreens is selling more than 800 of its drugstores for $950 billion. and walgreens aid rising in early trading. this is bloomberg. ♪
stories in the news right now. -- ofding the largest supplier industrial gases. a company bearing the lens or name will be having a public german company. they will share 50% of the combined company and face scrutiny from antitrust regulators. hang $950 million to buy 865 drugstores from walgreens boots alliance. it is part of the plan to divest assets and complete the deal with friday. this is bloomberg. ♪
mark: chilly but beautiful. i am mark barton. this is "bloomberg markets" on bloomberg television. more from our newsroom in new york. agencyu.n. humanitarian says the syrian government send 20ed plans to staffers to monitor evacuations from aleppo. they will depart as soon as possible. 25,000 people have been removed from the city. for evacuation. the human human rights chief tots philippine authorities investigate the president for murder after he claimed to have killed people in the past. the chief wants to probe into the 6000 killings committed during his anti-drug crackdown. mayident elect donald trump face i financial loss if he sells his hotel. he would help both sides of the
lease for the trump international hotel washington, d.c. that opened in september. for the organization to get back the investment, a buyer would have to pay $800,000 per room. it is unclear if the property could attract a bid that high. one third of americans say russia influenced the u.s. elections according to a morning consult poll. influenced.y 24% are unsure or had no opinion. to puncture core -- tupac theur and pearl jam are in rock & roll hall of fame. others are the electric light orchestra. an award will be presented to the nile rodgers. his disco band else of make the cut after its 11th nomination.
global news 24 hours a day powered by 2600 journalists and analysts in 120 countries. this is bloomberg. mark: a deal to create the worlds biggest supplier of industrial gases is in the works. buy thee a great to company. this is three months after previous attempt failed. joining us from munich is oliver. when i arrived at bloomberg many years ago that a merger of it. doesn't exist. do i need to unlearn everything that i have learned? i don't think so. it is something i have heard. both companies are trying to tell us it is a merger of equals. what i've heard from others is there is always someone that is always a little more equal. mark: it seems as though praxair
has the upper hand. seemed like this wasn't going to happen after the failure a few months ago. : there are important concessions made. last time there were concerns over where the headquarters would be based. couldb losses that munich face. those concerns were addressed. the company world headquarters in denver, connecticut and munich. they are guaranteeing there would be no forced layoffs at linde until 2022. julie: the chairman of linde has been pushing for this for a while. are there details that he is satisfied? oliver: you have to imagine he is. he did not want the deal to happen. you can only imagine he must have been disappointed when it
fell through the first time. he is going to be the chairman of the new organization. he is the chairman of an american company and will have a bigger say in the operational activities of the country than the chairman of the german company would. he would have to imagine that he is pretty happy with this. julie: there has already been some consolidation in the industry. where does this place this combined entity, and what is its competitive position? oliver: this is going to be the world's biggest provider of industrial gases. to be honest, there aren't that many players left. 4 before the deal. if the deal goes through, there are only three big players in the market. -praxair, then you have air products and chemicals. when you're talking about companies that size, that is it.
mark: what about antitrust issues, oliver? will this face scrutiny? will it get the approval of antitrust officials? oliver: you know, i can't say that for sure. i'm not sure anyone can. look at they did make politically sensitive decisions. they are basing this company in denver and germany. they're pushing the idea that this is not just a u.s. company, andxists in the u.s. germany. when it comes to antitrust regulations, they are going to look at those moves. mark: things for joining us praxair merger of equals, or is it? julie: glad to know we got the same lesson at bloomberg, mark. and out judge professor of the
dependent country, facing tough times. many are asking if it is time for the leader to go. julie: the international monetary fund executive board confirming backing christine lagarde despite her negligence conviction in paris court. speaking in washington, she thanked the board and is happy to not appeal the decision. >> i am not satisfied with it, but there is a point in time when one just has to stop, turn the page, and move on. to continue to work with those that have put their trust in me. was convicted for failing to overturn a 290 $6 million payout to a businessman in an arbitration case. a decade ago. she will not face a prison term or fine. mark: a great to buy the bank of
mba credit card business in britain. the all-cash deal comes as the british lender looks to expand and consumer finance. add 805ncial and will million dollars in revenue, a equivalent to a 4% increase of yearly sales. 2 automaker shedding workers in the booming u.s. market shifting to pick up trucks and suvs. general motors will permanently plants0 workers at three as it slashes production of several models, including the chevrolet cruz compact. they will also temporarily lay off employees across five factories. fiat chrysler is trimming production in canada. lost $2.2 billion in the first nine months of the year, even after exiting china,
according to a person familiar. they say the company lost $800 million in the third quarter, not including the chinese operation. revenue is still flowing and is on track to receive $5.5 billion this year. julie: it is time for the will weg quick take, provide context and background. venezuela has more oil than saudi arabia and more poverty that brazil. since the reduced oil prices cover their played with resources of everything from antibiotics to food. the leader is holding onto power at a high cost to the venezuelan democratic constitution. for 2016 he has been locked in a power struggle with opposition lawmakers who in december gained control of the national it then be -- national assembly. in october the opposition effort was suspended.ll
polls suggested he would lose such a test. it was condemned at home and abroad as a breach of democratic protocol. citizens wait in lines to find household items. shortages prompted the first food right in decades in june. hugo chavez was elected president and revolutionized politics with u.s. rhetoric. he nationalized thousands of come, reducing the economy to produce anything but oil. o has trouble for popularity. he raced high inflation, pushing poverty, and a homicide rate second only to honduras. 's critics argue that he has bungled the country and it is time for him to leave office. those that support him say that made up of several
parties with no plan or later. analysts question of venezuela should can can you to service its foreign debt, on which it owes $90 billion over 10 years. you can read about venezuela and our quick takes on the bloomberg. that is your bloomberg business report. go to bloomberg.com for more stories. story on thet read bloomberg today, the bloomberg report, how hedge funds are faring. many lost money, some closing operations, others scaling back. square cut 10% of its staff. headcount reductions also the tudor investment corporation in august. a month later, perry capital announced it was closing its flagship fund. bloomberg daybreak: america's, columbia school of business
weighing inessor, on the health of the hedge fund industry. the to do about how miserable the hedge fund industry is, and how everyone had something to say about how bad it is and what a waste of money, 2% of assets were withdrawing. that is not a time. ton.t a i'm not sure you could say it was a horrific year. >> for some of the headlines come you would take that the industry was dying aggressively. >> you might think that people don't like us. is that subtle? there is a subtle undertone. year down about 2% for the . the guys in the mutual fund business would cut their left arm off 42% decline in u.s..
-- in em. active management is sitting active decline in multiples of what we are seeing in hedge fund space. in reality, the investors are getting the joke that are -- joke better than any of the critics. >> next year -- every day we talk about the transfer from fiscal policy away from monetary policy. will that be good news? >> you have a whole series of things in play that will differentiate good stocks from bad stocks in the equity while short space. out,ave, as you pointed will monetary policy offset fiscal? get these questions right, the immigration question right, any number of questions facing trump . no one really knows what he will do. get those right and you will have an extraordinary year, get them wrong and you are hurt.
>> the sense is that it could be a turnaround year. you will have dispersion in mining,are, steel, financial consolidation, small and midsized banks. the macro fund, it could you the year of a come back, currencies, rates, global growth differing in different rates. all of that. you have to be nimble. you can not be a monster. it will be benefiting the smaller guys that are more focused and nuanced. they can pick. if you are a giant normals fund you can only get into the big box, you will have the same problem with crowding as you did this year. >> people may not like hedge funds in general, but some do. comescretary treasury from that space.
donald trump has been in some of the hedge funds. what difference will that make the to you will have not only sympathizers, but people that have participated in the market, running the government? >> i feel great comfort that people have the experience. the question will be what do you do with freddie mac and fannie mae? this guy has run one of the banks and has a good feeling for what is the right wing to do. he has expressed his views on that. people are saying he is not running a hedge fund. you are right. ruben ran the arbitrage desk at goldman sachs. that is a respectable firm, somewhat the same thing done in a different way. we have had people there for a considerable time that are experts in the space. columbia graduate school of business adjunct professor fabio savoldelli. julie? julie: facebook could be facing
mark: live from london and new york, a gloomy twilight as the director called it. i am mark barton. looks it is twilight, it like a painting. i am julie hyman. this is "bloomberg markets." in thek finds itself european union's sites. it is being accused of misleading the eu and the takeover of what's app in 2014. facebook could be forced to pay a multimillion euro fine for supplying incorrect or misleading information in inking data with the app. joining us is the european antitrust reporter.
think you for joining us. what was the misleading information, what is the eu saying that facebook did? european went to the commission to ask permission, they said that they could not link the facebook user information with the what's app information. announced they would be able to do that and show advertisers the information. by linking that information the commission said this is not what you told us and can you be more precise? regulators are having an open mind about whether it was deliberate. they say it doesn't matter, the fact that you did not give us the full facts at the time is a problem. thee it will not overturn merger, it could lead to a fine for facebook. julie: what is the size of the
fine and what are the implications? is it a slap on the wrist or more serious? >> it is not great if you want to do future dealmaking that they are in trouble for possibly lie or misleading regulators. of the yearly revenue. for facebook that is a big number. they have 17 billion in revenue. the fine was only 90 million euros. financially, it may not have consequences, but reputation-wise it will. mark: it has been a bit of an issue? the issue that various tech giants have faced in front of google, aple and reminder of the travail they are going through. >> it has been a horrible year for technology companies in brussels.
three cases opened against moste, one of the important against the android operating system. an order from apple to pay $13 billion of taxes to the irish government, which they will fight. tax andas issues with e-books. it is a jurisdiction where you need to tread carefully. these are very powerful regulators. more importantly, they can worse you to change what you do, as we saw with microsoft, change the way you do business in europe and globally. has had other issues? it had its own terrible year in europe in 2016? >> it seems endless. we started with germany having antitrust and privacy terms. a lot of privacy probes into the issue.app larger and also hate speech, german officials are concerned facebook
may not be doing enough to stem hate speech. it is a tough year for them. julie: what about any other antitrust action that we will see for the tech industry broadly? , is theirlators special scrutiny on that issue in particular? >> there seems to be. new industries bring new problems. we hear regulators say they see monopolies form fast in these industries. serving whiter than antitrust, privacy as well, is a hot button topic for europe. these issues have not always cropped up in the u.s. and are becoming more prominent in these, how people use services. we are seeing the beginning of cases, next year we could see conclusions against google,
facebook, and others. the companies now have a chance to defend themselves. next year is when you see answers, if they convince regulators they are right or find out if they are wrong. ink: there was backlash court to the apple case, they need to pay back 13 billion euros in back taxes. the trump administration, do we have any idea how president trump, when he is inaugurated, will take these sorts of measures against his domestic tech titans, who we noted not exactly support him -- who we know did not exactly support him during his campaign? cases against google are a question whether the u.s. may look at google again. new issues have cropped up since they dropped their case. we're seeing friction between the e.u. and u.s.
the application is a special one, but the treasury disagrees with what the eu has done. the irish are not happy that their tax deals were ruled illegal. is important to them that they are able to attract a big companies to them. these are controversial issues. europe does look like a tough jurisdiction for american companies, big companies, companies with tax deals and these kinds of issues. julie: thank you. isk: the european close next. a check on where things stand now. stocks are rising, the highest level since the end of december last year.
mark: we are going to take you from new york to london and milan in the next hour. this is what we are watching today. the u.k. prime minister is speaking before the liaison committee saying exit missionary is working well and the u.k. will meet the article 50 timetable. julie: shares are falling for a second day. they are said to be not luring investors. hour, we will be speaking to the blackberry ceo about his temper his latest earnings. they are boosting the profit forecast as the shift to software looks to be paying off. let's have a l