tv Bloomberg Markets European Close Bloomberg October 3, 2017 11:00am-12:00pm EDT
close on bloomberg markets. the top stories we're covering from the bloomberg and around the world. frexit is on the mind is the leaders of the conservative party by the next step in the divided tories. ubs will move out of switzerland. will it be dramatically shopping its wares? we will discuss some revealing comments from the executive. we are going to hear from our conversation with larry think, what he said about tax reform, market, the fed, and much much more. have a look at where european equities are trading.
the ninth day.ng a gauge is having a ten-day stretch. all of these currencies, sterling is rising against the dollar. commodities are your final. take a look at the difference between a article and spain's 10 year yield. follow-up from the referendum in catalonia has highlighted the performance between the two neighbors. security upgrades are in a fitting from last week's upgrade from standard & poor's area -- standard & poor's. that is a fascinating chart, keep an eye on that is the week progresses. we have some construction data in the u.k., shrinking for the first time in more than a year in september. frexit is weighing on
manufacturing. sinces the weakest level the aftermath of the referendum last year, weaker than economist estimated, that means it is contracting. business optimism last month fell off according to the survey which highlights how brexit uncertainty is affecting investment decisions. this could have a bearing on boe officials who are signaling course for a rate increase, as soon possibly as next month. tomorrow, sterling had its test month against the dollar in four years in september. data shows on september 29, the oldest that to pounce on the pound out past bearish bonds for the first time since may 2016. the currency is lower for the
seven day in eight. partyonservative conference means compelling reasons to maintain long position. that is the view. how's it looking over their western mark -- there? julie: we do see gains. any gain would mean a record close for all three averages, no matter how small the gain may be. one subgroup that is outperforming is the transportation group. we are seeing airlines rise, that is what is compelling the gains. we have a september traffic update. the companies got into the low range of the unit of an -- revenue range. george ferguson is saying expectations were for the month -- numbers to be worse with the hurricanes. that is one of the reasons why we see the airlines rally did
another way of getting around in your car is up focus. the september auto sales numbers, gm sales were up 12%, better than expected. ford sales were up 9% rate fiat chrysler declined, less the next amended. -- estimated. outside of the world of stocks, take a look at the bloomberg. we are looking at short interest in two areas, the dollar in rate this is a look at the dollar. this is a net dollar edition. of the bloomberg dollar index. if as we see this rebound in the dollar, we have seen that speculators increase, that short i should say increase in the dollar. we have a lot of short increase. this is the most irish since 2013. we are also looking at treasury shorts.
this is jpmorgan survey data looking at treasury. they are showing bearishness on the treasury market as well. even though we have seen the dollar bounce the rate, this means they don't think it's going to last. thanks a lot. mark: let's get to the latest on the conservative party conference. boris johnson just stopped speaking. he said he is behind every syllable of theresa may's frexit plan. -- brexit planet. we are joined from manchester. to that, give us up flavor of his speech. did he stay on script? was he pro may? did he go off script and take more pro brexit line?
that's the line used that he was in new york to describe the unity in the cabinet. some nerveshat along the leadership of the conservative hearty. this is a foreign secretary who is been talked about a leadership contender. the maybe trying to security frexit direction from the backseat of the car. they are keeping control in the front seat. he had the usual jokes. dexterity.he usual he said as you said, he agrees with every civil theresa may set in florence. that will give comfort to those who want to see unity at the top of the conservative party. figure inother key the conversation around u.k. politics and brexit right now. they only hold sway in the
house, does he have the support of the party based in northern ireland. they have a lot of similarities and a few differences. of they have come together to allow the conservative party to upper and. areked eileen foster what your redlines around brexit? >> we entered into a agreement after the general election. that is really where we wanted to be. we don't like talking about redlines. one of the key elements of what we are trying to do after leave the european union is to have no internal orders between the parts of the united kingdom. if there were to be a border between northern ireland and the rest of the united kingdom, that would be a redline or us. to be fair to the prime minister, she has been clear that is not going to happen.
we see talk coming out of europe , that is not acceptable. because 72% goes to the rest of the united kingdom. it is a very important issue. the leader, a key figure in the brexit conversation right now. she said internal borders are a real redline or her. that is one of the key questions around brexit. how do you end up in no quarters in the u.k. and a frictionless border between ireland and northern ireland? maybe technology will satisfy brussels as well. vonnie: that's the question everybody keeps asking. everyone says they don't want hard order. negotiations the
that britain makes with the european union. tell us a little bit about what he said. we heard from david davis earlier. he said the preparation work is being done for the deal. conservative party will end up with no deal or the cabinet. many people agree they would like to see no deal. they think it's the responsible action from the planning case we end up in that situation. another topic of conversation is around reaction. they were talking earlier on today. not enough progress has been made to enable the conversation to move on and talk about trade. that's what the conservative government wants to do. it they want to talk about trade. many voices here are trying to put blame for that on europe's
door, that they have not been there enough about what progress they need to see. britain needs to come up with more details about what a want or it -- want. mark: great job. thanks a lot. the crisis in spain is deepening. hardline separatist are taking to the streets of barcelona to press their demands for independence. shops are closed and demonstrators are voicing their outrage over the police violence that marked the weekend vote. joining us is maria. it seems like the prime minister is stuck between a rock and a hard place. he suspends catalonia's anonymous status? does he mean the secessionist halfway? which way is leaning? >> right now, it's just quiet. we haven't heard
from him in today's. if you follow him, he is not a man who like to act. he likes to react. was -- they are arguing this is an administration that has gone road. not the saying they are bad guys read this is a difficult situation. going to stay in catalonia and make sure they are taking their of you we confirmed a lot of them were being told to get out hotels. a lot were being told to kick out spanish. the deputy prime minister said don't go there. vonnie: what kind of leadership are they getting from the leadership? what are they saying what mark
-- what -- saying? >> they have gone quiet. declare a republican 48 hours or it they have gone white. they were in credit -- incredibly vague about we think should be watching out for friday just because it's an iconic day for them. declaredependence was right before the civil war started. they have done incredibly quiet on dates now. mark: spanish bonds are down. we have the stock market lower for the second day. what sort of assessment are you reading from analyst? is this still a localized event >>tern mark -- event to mark
we talked about this. on monday, we said this was panic. people did not know how to address the situation. now they are trying to digest the situation. we are not getting new developments. we don't know which direction this is heading. the market is confused. it's a difficult question to answer. when you look at the streets, there is protest. it seems like catalonia and madrid are not having any conversation. they are waiting to see what the other one does. mark: maria, thanks a lot. we are getting some breaking news. they are getting voting shares in balkan. that is the development.
glencore is minus stake in the peru minor for up to $956 million. shares are trading higher today. courtney donohoe has more from new york. courtney: president trump is on his way to order rico. this gives him a chance to show his commitment to rebuilding the u.s. commonwealth that is almost completely without power. the president's wrote -- spoke briefly before leaving. >> they have done an incredible job. whether it's her or anybody else, they are all starting to say it. i appreciate governor and his comments. he has said we have had done an incredible job. courtney: the president has been criticized for the response. the shooting in las vegas will
likely rekindle the debate on gun control. murphy and other democrats failed to win passage of a similar measure after the 2012 shooting at a school in connecticut. it killed 20 children and six adults. u.k. is trying to tackle online propaganda from the islamic state who have content online. they could get up to 15 years in prison. the british government says supporters of promoted almost 67,000 propaganda tweets in english. there than five terrorist attacks in britain. music fans are mourning the death of tom petty. he died last night at a los angeles hospital after suffering cardiac arrest. they just completed be 40 of anniversary tour. hits include refugee and american girl. he was 66 years old or it global
the jobs are going to be much more interesting jobs where human content is crucial to the delivery of the service. this was in the newest magazine. joining us is the co-author of the article. the man who may be wanted to become a professional football player. what was he like? obviously very content and satisfied with what he is done at ubs. it's taken them quite a long way he is at a premium for most european peers. the bank is geared toward wealth management at the moment. they carry larger premiums. it was a big shift in the model that he undertook. a lot of banks are still
grappling with finding that. overall, he feels he has taken his firm along way. the has a little bit of frustration with the regulators, he sees them as coming to the point where they need to be learning the lessons of the last few years. they've through a lot of regulation after the financial crisis and it's time to look at what you've done and decide any that didn't quite work out. mark: you are looking at the arbitrage moving jurisdictions. >> we did ask. that there isint going to be a level of some point where it becomes a competitive this advantage to be in an environment where regulation is much tougher. that could be the point where one might consider if you have the shareholder interest in mind, that may be where it comes
up. vonnie: what could be his next job? >> he did not rule out potentially the chairmanship role one day. there was speculation early on in the summer that he might to politics, which he shot down. he is obviously committed to staying there right now in that role. that is probably where we will see him for the future. mark: biggest challenges in the next few years? >> the external challenges. we discussed those in a lot of detail. policy, heonetary said many central bankers don't know what the effect of that shift is going to be. you've got yield politics, which he singled out as a large negative. there are the internal challenges. those boiled down to monitoring the -- managing the cost base.
is looking at a big strategic shift over the decade. technology is probably going to drive something along the lines of 30% cut back in the employment levels at the firm. mark: it's a great piece. that's just an upshot in the piece. it's a great interview. do read it. a lot of hours went into that. you can read the full story in bloomberg market magazine. vonnie: it's a fantastic story. still ahead, donald trumps tax lan gets any critic. hear how very think says it needs to be amended. this is bloomberg. ♪
mark: the european close is about ask minutes away. vonnie: i am vonnie quinn. what does the head of the largest money maker think about the market. erik schatzker asked larry think ,f there were gains in stocks have a listen. is an issue percent. faster thanmuch some of the other places in the world in terms of stock in vonnie: he also talked about donald trumps tax plan and the potential for eliminating the deductions. >> i don't take we're going to get tax reform if there is the elimination.
i think it creates a bigger deficit. we're going to have to find somewhere else. vonnie: he said the tax plan will have to be amended in order to get congressional approval. we will get more, the blackrock conference at 1135 eastern. talk etf demand and strategies did larry think is also talking. missing that is coin. that is a fascinating interview. we are or minutes away from the end of the tuesday session. nine days of gains, this is bloomberg. ♪
nine days of gains, the best since july 15. the gauges last ten-day stretch ended december 2006. will re-reach 10? wait and see tomorrow. one of the decline to coca-cola. chief executive died monday during a medical leave. rakearted a four-month september 5 seed to receive treatment or an undisclosed condition. he was 56. he joined the company in 2000 and. he worked as a regional director for -- before being promoted in 2009. based in switzerland. it listed in london. it's one of the biggest coca-cola bottlers. the euro against the dollar.
catalonianafter the referendum over the weekend and you need to thank the u.s. economic growth and prosper x for further rate increases, so says goldman sachs. they are recommending find the current gig in the euro. the euro fell back to 113 by the end of your data ecb says they will pursue a relatively dovish paper timeline. two is where we are in. given the results of the catalonian referendum sunday, we saw a white in my 10 basis points yesterday, the most since august 8. the yield spread is also the highest since early june or it the paint was 1.52%. that was the peak in the last year, in april. 20 15.s the highest june
the records read was at the highest gas prices. we are nowhere near the level were at the height of rice is five years ago. vonnie: there is a lot of waiting going on. the themes that are prominent, tax reform, who is going to leave the fed it, these are percolating. policy might be getting tighter when it comes to monetary policy. fiscal holocene is 11 year. -- policy is still up in the air. the vix is not going anywhere. we are down a tiny bit of a. it is a strong dollar. remember last year, we the 10 year yield up to 10.6 and change. congress continues to write tax legislation is that means we did have a wider yield her.
it went from 79 to 85. there was not much. globalmarkets are in the g20 countries higher. obviously, there was a miss him out there when it comes to geopolitical event settling down. see it in current the. up its point seven right now. this is courtney donohoe. orkney: president trump called the quick response of police during the left leg is shooting a miracle. they track down the trigger -- shooter when the smoke alarm in his room when off. >> he was a sick man, a demented man, a lot of problem's i guess. we are looking at him very very seriously. we are dealing with a very very individual and courtney: we will be talking about gun laws as
time goes by. the first lawsuit have been filed against the trump administration's travel restrictions. a nonpartisan legal is to filed. they say read picking travel violates the constitution. there is a report that the trump administration has two front runners to be the next chair of the federal reserve. given worst. steve mnuchin's data is in labor of owl. googles youtube is making a push to get sports fans to sign up for the new service. they have signed on as a is any concert or the world series. they will run youtube tv ads during the broad asked and the on the website you global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg.
i am courtney donohoe. vonnie: we are continuing on capitol hill. richard smith is answering weston's before a house now on that massive data breach. he has stepped down. can watch the hearing on the bloomberg. it's not the only hearing on apple hill by a long stretch theng the in another room, wells fargo's you testifies on his attempts to clean up the bank after that bogus account scandal grew and grew. we are following these hearings for details area coming up, retailers get ready for the holiday shopping and the national retail federation says it back to jump in ales. we will speak with matsch a and asked where the interest comes from. that's next. this is bloomberg.
defend the stock. julie hyman is here and she has details about the killer numbercrunching. julie: google search terms is what they are looking at her and they are extrapolating from the data. they say there is an hike or relation between it and the direct retail revenue. piper is saying revenue growth will be 56% or the third order. their own forecast is for 37% during the consensus is for 42%. this would be better than the company has than talking about and better than the analyst community has been it is waiting. -- anticipating. if you take a look at the bloomberg from intelligence, their tool for looking at ruminant -- revenue, we are comparing wayfarer with pier 1. the yellow line there is
wayfarer. their revenue is considerably larger than some of the competitors in we are not counting home goods for example for ikea. grown rays, it has quickly in a short amount of time. flow,: you talk about the they have a good record. julie: he has been quite vocal. for a couple of years, it has not worked out well. the stock cap pricing for the most art, even as he has consistently been short or it part of that has to do with the revenue growth in the market share. it has taken his the schism, has the country -- kathy been to gain that market share. they have not been positive. the revenue rose as their, the
drop ability is not as much there. one of the things piper jaffray says is they are positive on positive in the fourth order of this year. if we will see if they come through on that amidst some skip the schism. that is down sharply from the start of the year. vonnie: that's another thing we should take note of. julie, thank you. staying in retail, let's get a further look at one of the main barometers of the u.s. economy. continually 2.5 trillion dollars to gdp. no one knows that better than our next guest. speak withg to be matthew shay, see it no of the national retail federation. you have just released your
sales forecast. the most important time of the year paris will, you are forecasting sales up 4% this year. the top vendor that would match last year's growth. what do you see driving holiday sales? matthew: we released what we think is a very realistic forecast for retail sales growth. it's underpinned by a couple of elements. first is the dynamic in the economy and we think it's in a very good place. we think the retail industry is in a good place to there has been a lot written about the health of the retail industry. it's true. while there is disruption in the industry, there is a lot of transformation taking place to engage with consumers are in the third factor is the strength of the consumers, there level of confidence. the fact that they are taking on additional that, trying to act this credit or it wages may be
growing at the secular, but growing still. the dynamic in the retail industry and the investments consumers, that is contributed what we think will be a robust season. the onlineentioned sales, you ask them to be a 15% this year. we have seen this big shift in consumers pending to online. how are your members dealing with this? there are some ice profile names really struggling. matthew: if you look at the reports like walmart and target, their online business is growing 60%. massive growth and transformative investment, that is taking place all it ross the industry. i think we need to widen the lens and consider the fact that while there is disruption in retail and volatility, the two
bookend deals that we talk about the street, last year's deal between walmart and jet and this year's deal between amazon and hold. those are opposite ends of the same spectrum. they are trying to get better playing in this case where consumers are every day you to do that, you need the right skills and talent and structures. no one's get it to get out completely. the nose and likely what is happening and how to reach consumers every day. playersere are some big that have more wiggle room to experiment and what are others trying to do to make sure customers go into stores western stores." matthew: helping them along on the journey is a big part of this you've got to establish an identity for yourself and your brand. you have to distinguish yourself
in a crowded marketplace and find ways to reach people with products and services, with price and selection. you've got to tell a story. you've got to know who you are and who your consumers are. there are lots of small retailers competing successfully today. winners. that means there could be some users. that demonstrates the ability of retailers to win across all categories if they understand who they are and who their tumors are and have the ability to go with their leadership and make the investments they need to make you you've got to believe in the future together. you have to be in it together to get there. the there's a way for this to work it takes big investment. emma: i want to talk to you about tax reform. you said economic mentum is part of one of driving sales. the trump administration thinks tax reform will help.
there was a big win when they held the tax. you came out in port of the tax plan. what you like about it? what you think of its chances western mark -- chances? not killingin is the border adjustment tax or it it is getting tax reform to this country. we support a tax reform in the beginning. we supported for many years bring what we like about this land is it hours the corporate rate. we pay 35% in retail. that is the highest of any industry. 25%ort lowering the rate to there are many millions of them in retail. lowering the rate will make them more competitive than they can test it create jobs. those are two big features of why we like plan.
there are other reasons to like it read we will support it area aggressively. our goal is to be is as aggressive as we can. getting tax reform done in past and on the resident death we believe is the most important policy issue and the most important thing that congress can do for the country. emma: thank you very much for joining us this morning. ink: fantastic interview thanks for joining us let's get back to the black hawk event in place in new york city. man schatzker joined by the largely determined the strategy. >> you would be correct. that is mark weidman. just to put things in perfect, everyone knows by now that largest thatthe
manager. for $3.5esponsible trillion. their inexperience. i am certain your mindful of the schism. can neutralize it. talk to me about the work blackrock does in understanding maybeould they exist and the distortions that do or do not a this. mark: thank you so much for having me. we think etf's are a positive or some helping financial markets in a post financial crisis world trade we used to live in a world where we went straight through leverage balance sheets as the only way to trade risk and derivatives. now we live in a world we can trade all to all read that is
one of the positive contributions, how to reduce stress on balance sheets. team thatdedicated goes out and talk about where are the real risk? where growth has put more and more stress on the infrastructure of the trading of a new market in the united date. where we focused is where do we make equity markets work as well as possible? i still think there is work to do. etf's,ifically around how does market structure need to evolve to limit the problems of risk? mark: they require price transparency. if the underlying securities are there on the prices, people can arbitrage what the value is versus the underlying area when
the markets are closed underlying, they become where prices are discovered. what happens if the market can't trade at the same time western mark we saw that act in august 25. we found it was the synchronized. different parts opened at different times in different ways. what we are working with is making it simple and clear so that the markets open transparently together. >> some people like to etf's and say there. -- their mere existence creates distortions in the market late. certain securities end up in etf's and they rise in al you. those that are not become orphans area the is that a legitimate complaint?
prices note make just between individual stocks, but across market area high-yield versus european equities, whatever it may be, they are a vehicle for discovering what those prices are trading at risk. i look over to winding the orphaned stock. we offer 400 etf's in the united states. it's all in there. what people tend to think about the index, they mean one index. they are thinking about the s&p 500 and that is an out that is -- how did way of aching. half of our clients are act of managers themselves. they invest in a given market. that's how we would consider it. we look at how people use etf today instead of worrying about the orphaned stock. i suggest you buy it. etf's available
from blackrock alone. our clients looking for something you don't yet offer? where is product of element western mark -- development? ,> i came into this business every day i hear finance saying we need more fixed income. we don't offer non-u.s. bond product in the united states. maybe we should. shouldn't be thinking about ways to cut out factor risk? that could be more precise in the product we offer today. currency hedging is an interesting topic. all of those are tools the client can use. i would say for most investors, we offer hundreds of products that will likely meet their needs. tore are more creative ways use these every day.
we have to keep up with them. >> did you see that going as an etf? mark: no. we set our product line that we would encourage our current the hold in perpetuity. i would not encourage a client the hold that point in perpetuity. i don't get the point of a bitcoin etf in the first place. we are talking about trading products that are difficult to access red if bitcoin is ever successful, it's not my thing, why would you need etf to act as it? the s&p 500.or fair point. let's talk about. we have had conversations in the past about the ability and willingness of lack brought to drive down fees. how low can they go western mark mark: it's a matter of scale. as our business grows faster, we
become able to offer product lower races. that has been the secret of growing our range. to reason we have been able row quickly is because we offer a low-cost solution that appeals to individuals and big institutions. as they pour more money into those vehicles, we offer the products and efficient prices. the answer is we are already low. is over the long haul, we will be able to offer things more efficiently. that was thatt you would lose some margin of run and make it up in volume on the backend. are you there yet western mark -- yet? to our initialck
investment in one year. our in biggering and bigger volumes and we had anticipated. they are getting more and more price sensitive. they are using a lot more of our audit. that means they win and we're doing of a. we are consistently thinking about how we offer our products and -- but it's. we dropped down to nine basis points. that is the way. i'd week after the next opportunity? we will call you. >> thank you. head of ishares and responsible for $3.5 trillion at blackrock. vonnie: thanks to eric schatz your -- erik schatzker. we are recapping some headlines.
the president has arrived in puerto rico. he will receive a briefing on relief effort in just a little bit worried he will be meeting with the governor. melania trump is obviously with them as well. mark: coming up tomorrow, we gather in moscow for russian energy weak. vladimir putin speaks tomorrow during a panel discussion. don't miss that conversation. that is 11:00 in london. bloomberg markets continues. this is bloomberg. ♪
trump order rico. , puerto rico is not the only crisis the president is facing. tomorrow he travels to las vegas to face the aftermath of the deadliest mass shooting in u.s. history. what it will mean or his legislative agenda. plus, amazon takes over hold lose, it is shaking the grocery business to its core. which competitors may be hurting