Skip to main content

tv   Bloomberg Markets European Open  Bloomberg  July 6, 2018 2:30am-4:00am EDT

2:30 am
good morning, welcome to bloomberg markets >>. we are live from our european headquarters. i am guy johnson. >> the city that never sleeps. asian markets have staged a dramatic turnaround. the cash trade less than 30 minutes away. >> shots fired. on $34 imposes tariffs
2:31 am
billion worth of chinese goods. .sian markets rally are they getting a boost from the chinese authorities or have investors run out of reasons to sell? fed minutes indicate growing concern that the conflict could slow the u.s. economy. >> the start of european trading, look at futures. gains across the board. take gains in chinese stocks overnight, asian stocks. upanese stocks, really, as well. up 0.3%. dax futures, 0.4% up. ftse futures, up. traders are selling u.s. 10 year. pushing the yield up. 2.84%.
2:32 am
risk signs across other asset classes. let's want you around. europe had a solid and day. seeing, cominge into the afternoon session, it did not happen in the morning. austria is trading higher, the higher in japan. more gains, i think, as well. trading strongly. chinese markets setting the tone right now. in terms of the currency markets, the dollar is on offer as we approach and on arm payrolls.-- nonfarm the yen isar, trading softer. even the british pound is a little bit bid, but not by much.
2:33 am
let's go to first word news with juliette saly. >> u.s. president donald trump has fired the biggest shot yet in the global trade war by imposing tariffs on $34 billion with of chinese imports. china said it would be forced to retaliate. trump said $16 billion could follow in two weeks. suggesting the total could reach $550 billion, a figure that exceeds the total of all goods imported from china last year. president trump: the war was lost on trade many years. now, we are going to win. we have all the cards. seniora may's team of ministers is due to finalize the post-brexit trade plan at her country residents. privatelysters are
2:34 am
pushing for her to tear up her plan. they met in boris janzen's -- force johnson's offices. german chancellor angela merkel has won the support of her coalition partners for a deal on migration policy. getting the social democrats on three weeks of political tension in europe's biggest economy. she agreed to a demand by her bavarian sister party. saudi arabia has cut prices for most of its oil grades. to assure customers there is sufficient supply. the wall street journal reporting saudi aramco and the country are not ready or an ipo
2:35 am
that could raise $100 billion but bring unprecedented scrutiny. " a senior executive on the subject of an ipo saying everyone is almost certain it is not going to happen. global news, 24 hours a day. powered by more than 2700 analysts and journalists. imposed tariffs on $34 billion where the chinese imports. they target products ranging from farming plows to airplane parts. china responded, saying they will be forced to retaliate your read is how investors think the war will play out -- retaliate. this is how investors think the trade war will play out. >> this is probably going to be more like a trade skirmish. after 1, 1 and a half rounds,
2:36 am
there would be an exit ramp. riske focus is the growing for escalating to a second round of tariffs. we are talking about $200 billion, as president trump threatened. that will probably have a more meaningful impact in terms of china's gdp growth. we are cycling down and growth, but i do not think we are vulnerable to a recessionary shock. you have to keep watching. today, no recession risk. inif this is to metastasize, terms of migration, an escalation from $50 billion to $200 billion, all bets are off. >> some views on what happens next.
2:37 am
kong, the from hong u.s. sanctions have been announced. i am curious to see what happens with the chinese. there are a few interesting ways to think about this. go to your bloomberg. what we have done is pulled out a vessel. it is making its way out of seattle towards china. it is racing hard. it is loaded with soybeans. it is headed for the port and is desperate, judging from how quickly it is going, to make their before the tariffs are announced. will it make it? what will the next few hours bring? we haven't heard yet specifically from china how it intends to react, to retaliate on the $34 billion in tariffs.
2:38 am
it has long said it would not go first, this was an aggressive move, but it would retaliate. we have not heard how that is going to happen. the finance ministry has come out with a statement. u.s. forriticizing the this action, calling it aggressive and unprovoked. look for isng to whether the u.s. imposes a second round of tariffs. president trump at that rally said he was going to go ahead in the next two weeks with another $16 billion in tariffs. he likes surprises, so it is unclear whether it will go through. how does this actually work? view, process point of how does this story come into play? the u.s. has imposed tariffs.
2:39 am
if you are a ship heading into los angeles, when you get there, you are going to be facing tariffs. they happen at the border checks. walk us through the process point of view. does it slow everything down? i am wondering what the effect is and how they manifest themselves. has come out with its lift of chinese goods that will be affected. we have not heard from china. some of them are going to be agricultural products like soybeans. prices have begun falling significantly on that expectation. these are the goods that are affected. the impose duties on those goods as they reach those shores. racing for the port
2:40 am
right now. ships onind all the your bloomberg and track them and see what is going on. thank you very much, joining us out of hong kong. up next, we are going to continue the trade conversation. asian stocks rallying. will talk about that next. this is bloomberg. ♪
2:41 am
2:42 am
2:43 am
let's go to bloomberg business flash. your -- he highs and has quit after years at the helm of one of germany's top industrial companies. his departure comes days after an agreement was reached on setting up a european steel giant. that deal was announced with fanfare last year but drew opposition. samsung has reported income rising to $13.2 billion in the three months ending in june. global -- asggish sales -- thetphone company has struggled with
2:44 am
weaker than expected sales of phones. singapore has moved to drive out speculative investments amidst property markets, with tighten the rules, one day after the bank noted euphoria any sector. tighterals will face par owing limits -- borrowing limits. developersproperty led declines on the benchmark index. representatives for elon musk are in talks with thai authorities about eating -- aiding in the rescue of a soccer team located in a cave. they could help by pumping water or providing battery packs. efforts are hampered by narrow passageways and rising water.
2:45 am
it is unclear whether thai officials wil except the offer. >> stocks climbed in asia. the yuan slipped as tariffs began, something china vowed to fight back on. now, what is the story? as soon as the terrorists were triggered, we saw chinese and broader asian markets start to climb. rumor, sell onhe buy on the rumor, sell on the news? implementedfs got during the chinese lunch break. they had rallied 1%. the lunched on after break. market story this
2:46 am
friday. i don't think there is anyone who trades who did not know july 6 would implement tariffs. if someone is shocked, i doubt they are going to have a long-term portfolio. this is clearly one of the of 2018,arket stories but it is not new news for markets today. that is why china was trading off other factors. a weaker dollar, 10 year yields come lower. that means the global macro environment has shifted more positively for risk assets. no major trade developments. even if you think the story is shiftedfor china, it more possibly in the last couple days than negatively. guy: a couple of observations. about what is going
2:47 am
on and the details surrounding it. investors run out of reasons to sell, therefore they have a reason to buy? to those things go hand-in-hand? the chineseumber authorities want to see the close coming in at? it is a good question. there is no particular reason to sell equities today. drop doesll back look negative. they would rally yesterday and they did not. i'm not too worried about the short-term price action. chinese shares look cheap right now. it is fair to say the negative momentum is the there. ignoring one day.
2:48 am
chinese officials do want shares to look ok. backing up their assertion china can cope with a trade war. there may be something with the home team getting involved in the markets. i don't think we needed that today. the marshall developments have been slightly positive. where do they want them to close? 0.5% and 1%.ween depending on which benchmark you use. i think the close of 0.5% is disappointing for chinese shares . i thought they might be looking for 2% to get encouragement. >> i want to ask about angela merkel's situation in germany. back, the deal she made, making me think she may be got a better deal.
2:49 am
regardless of what kind of position she is coming from, there is a deal on migration which looks like it could be a problem. is this all well for now -- quel led fopr now? merkelof the things with is she is seen as so reliable, stable. generally safe. was threatened, it was not being priced in as that much of a negative. there was a little bit of a little bit of the negative but not too massive. if anything did happen, it would be a big surprise. very much a negative. we now look like we have a resolution and might move on, it is probably less of a major boost. the weekend starts here. joining us from our team. they have to the close out of china and see if we get help.
2:50 am
you can follow the entire team on your bloomberg. let's check what is on the roster today. the employment report coming out. we will look for coverage to start later. we are going to wait 10 minutes for the european open. now, nine minutes. some of the stocks we are going to watch. undero, resigning, considerable pressure. that stock could move to the downside. the open is nine minutes away. this is bloomberg. ♪
2:51 am
2:52 am
2:53 am
from the minutes away open of european stocks. let's get the stocks you need to watch. covering u.k. car sales website. , looking at -- let's start off with you. what is the story? the company said last night, after the market closed, he would like to resign. he asked the board to relieve him of his duties. hastenllows pressure to
2:54 am
the overhaul of the company. thyssenkrupp is known force deal. -- for steel. there were two big shareholders. they want the company to speed and overall. they felt this would go to slowly. stocks will probably go up because investors expecting any new manager to hasten that. about bca marketplace? they are not moving with an offer. is ending its pursuit of the u.k. car sales website. it did not provide a reason. the company pushed out its own statement giving its reasons for its refusal of two preliminary officers. they considered it undervalued.
2:55 am
bca is reassuring investors it can go on, proceed on its own. we will see the market reaction a few minutes. >>. thanks for joining us. what islooking at -- the story? guy: i was trying to think of a joke. down, -- write down. these are kind of goodwill write-downs. big cash cost write-downs. the markets likely to take the stock down sharply. is we arehis morning going to see 4% or 5%. real pressure for assad lloyd -- assa abloy.
2:56 am
not a bad performance. asia, we were rallying hard. that seems to have faded. he europe looks like it is going to open reasonably solidly. ♪ phones have made our lives effortless.
2:57 am
2:58 am
streaming "must see tv" has never been easier. paying for things is a breeze. and getting into new places is even simpler. with xfinity mobile saving money is effortless too. it's the only network that combines america's largest most reliable 4g lte with the most wifi hotspots and it can be included with xfinity internet. which could save you hundreds of dollars a year. it's a new kind of network designed to save you money. click, call or visit a store today.
2:59 am
guy: minutes to go until the start of cash trade this friday morning. trade a big theme. the nikkei is coming through 1.12%. the chinese markets have actually not delivered as much as we anticipated earlier on. the dollar is on the back burner today. we are trading 117 for euro-dollar. oil is a little bit big. 1% yesterday up on 9/10 of -- .9%. let me show you with the futures look like here in europe. i think we are 20 startup around poin.5%.
3:00 am
a couple of real stock movers that could be a factor today. broadly, i think we're looking at a positive session. the 76 levelround for the ftse 100. expecting to go above that this morning. i think you are going to see similar numbers for the other european markets as well. individual names could actually be quite interesting today. the ibex is up .27%. in the meantime, let me show you what is happening with the heat up. i see of green out there. sea of green out there. energy looks like it is on offer
3:01 am
this morning. we will see whether that continues to get sorted out. there are a few slices of bread out there. at the moment, it looks like generallyets are strong. matt: we have 397 gainers. 86 losers. on the stoxx 600, you're looking at individual indexes across europe. we do see green arrows across the indexes. if you take a look at the movers here, you will see that we have mostly cleaners. very few -- gainers. very few losers. if you look at the companies adding index points, you don't see very many of them up more than 1%. otherwise, you see smaller moves by some fairly sizable
3:02 am
companies. daimler still up there. i has been watching very closely even on vacation with a possible story surrounding the tariffs. take a look at the losers here. rolls-royce is among the losers there. we know they sold off at least a small slice of their business. we also see some of the bigger companies that are making smaller moves, holding the stoxx 600 down. hsbc only down .6%. bp only down .4%. let's talk about the trade story and how european markets are reacting to it. let's talk about what we are going to get from the payrolls later on. asia rallying. that does it actually happened, what we saw with the chinese markets coming into the close at not the kind of 2% or 3% higher
3:03 am
that would have sent a strong signal. the u.s. has imposed tariffs and we're waiting for the chinese to respond. the trade story is a reality now. the chinese are going to respond. from a market point of view, we getting into a position where we , thatly get to understand way we can take the fear element out of the story and markets can actually get their arms around what is going on? peter: i think in the short term, you might be right. most of what has been incremented has been well flagged. here,dium-term question what we haven't worked out is, where is this all going to end? we don't know. secondly, we what is ultimately going to be ending in the global and local economies, including the u.s.? we haven't really works it out. there are quite a few analysis
3:04 am
out there. i think we might have an idea, but ultimately we don't know. matt: what is your base case here, do we just have some bilateral tariffs changes or do we have an all-out tit-for-tat trade war? peter: that we don't know. what we have done is we have looked at various scenarios. if i pick out one by my when yous in the u.s., try to model with the worst-case scenario for a bilateral china-u.s. tariffs scenario is, .55rrive at roughly about growth reduction for the u.s. that is not great, but it is not the end of the world. that is probably the way the u.s. administration is looking at the treasury as well. further.wen that
3:05 am
don't know what the end point of all this is. what if the situation with canada and mexico escalates further? what is the situation with the eu escalates further? what if 25% tariffs are upgraded further? all of these things, we don't know. guy: we don't know a lot is what you are saying. what is priced now? peter: i think what we are odrrently pricing is would be vino. escalation, i don't think we have priced that. down 10%. matt: we have been watching that and that is a big mover. losing about $2.5 billion in market cap in just the first few minutes of trading. let's get back to what you think could happen here, peter. you mentioned what you think the
3:06 am
hit will be to growth in the u.s. what do you think the hit is going to be sure earnings and stock market? isolation?singly peter: one of the things we have far,ar in mind is that so the economy as a whole has held up extremely well. we are to see it most likely later on today when we get a data. overall, consumption and the u.s. remains pretty healthy as long as that is the case, you should expect the stock markets to stay pretty healthy as well. particularly relative to the stock market in asia and europe. guy: i guess it is a little surprising given the potential, is the volatility remains incredibly low. continues to
3:07 am
a bunch of things are still working. one of them is the not getting too freaked out by volatility. merrill lynch going forward with fixed income. over the last year pretty much in line with the average which is 52. if i take the average over the last five years, it is 67. we are well below what you would expect normally in terms of volatility. we have this huge trade war rewing, and yet the markets are incredibly calm. we are pricing in a very calm way. peter: what we are currently particularly as far as the u.s. is concerned, the real impact on the economy so far, limited. so far it is fairly limited. most analysis i have seen suggest that it is manageable, responsect that policy
3:08 am
of other actions are going to be pretty steady. as long as that is the case, volatility doesn't necessarily have to go up. if that changes, the fundamental underlying narrative changes significantly and i think volatility will go up. guy: who should we be listening to at the moment? you read the headlines of trade stories out there, you talked to ceos and cfos. things are ticking along pretty nicely. are we listening to the wrong people? surer: i'm not necessarily because you can look at numbers, or if you want to look at more qualitative reports, they all suggest as you just said that things are going nicely, unless you are talking are looking at precisely the sectors that are directly affected. that is a different story. i think what we are currently
3:09 am
seeing is the economy as a whole is still relatively domestic for some current sectors. as long as that remains relatively isolated, i think the market is going to be fine. matt: we have a lot more to talk about with you on this friday. up next, we are going to bring you the stocks on the move so far this morning. announcing.0% after this is bloomberg. ♪
3:10 am
3:11 am
3:12 am
guy: 11 minutes into the trading day. let's talk about some of the stock movers. getting a boost of morning after we heard yesterday's ceo is resigning after growing backlash from shareholders. they have been criticizing the former ceo for falling revenue. the ceo leaving after seven years. on top of that, we have heard that thyssenkrupp has been graded to buy. a abloydownside, asse down 9% right now.
3:13 am
commentednley has that is significant. finally, rolls-royce not reacting significantly. it was down more earlier. as we know, rolls-royce had been looking to sell that business. guy: i'm going -- matt: i'm going to take it from here. forecastingre american employers probably added 200,000 jobs in june. the jobless rate held at 3.8%. the fed expresses concerns that an escalating trade war could hurt growth. that is according to minutes of last month's fed meeting that came out yesterday. back with peter. we see a whisper number that is
3:14 am
a little bit below that. 188,000 think is the whisper number. is this going to be the last report that isn't hit by these trade concerns? peter: we are not sure about that. we are also at had lower than that, about 180,000. i think what the market is going to look at the wage numbers anyway. mosty case, we think indicators we have looked at suggest that the job market is going to remain strong. job openings are great. the weekly jobless data tells us that. we don't think the job market is in jeopardy. guy: you talked earlier on about the fact that the trade story is going into a few key sectors. numbersart to see the in the states being affected by this at any point? : you could always have a
3:15 am
relative comparison to how would it be otherwise? relative to a scenario like that, likely. in absolute terms, the u.s. was to be strongly reckoned. you might see some layoffs in certain companies are sectors, but that always happens. if you look at the greater scheme of things,. openings are still very elevated. the job market is generally turning out more jobs. the minute to do it knowledge that some is misses are already turning tail when it comes to trade concerns and capital expenditures. do you think you're going to start seeing that more seriously now? peter: i don't want to be dismissive about all this. so we are sitting here in europe ringing comparison with the european situation. if you look at the brexit situation as an example where we already are sort of two years
3:16 am
into an uncertainty. -- period, what you do see is , theively speaking scenarios that probably would have panned out otherwise, we are doing significantly worse. we have wrote a big research piece about it. in absolute terms, we're still doing ok. i think that is kind of the same situation here. relatively speaking, to a situation where we had a different policy by different administration, in absolute terms, we don't think that is what is going to happen currently. we don't think it is strong enough to bring the u.s. toward a serious slow down or even a recession. we haven't seen enough here. guy: let's talk a little bit about where the dollar goes next. we see this rally that is coming through over the last couple of months, starting in march and rallying through into june. dollarh more does this
3:17 am
move have to go and at what point does it start to become a factor in the fed's thinking? economy is a relatively closed one, so it is marnie into the dollar. -- immune to the dollar. nevertheless, it is kind of a wrecking ball. peter: we do think there is more dollar strength coming. which also reflects the fact that we are pretty optimistic wet what the fed can do, think that the fed has easily to more hikes this year and probably for more hikes next year on the cards. we are more optimistic the fed look at two levels they themselves indicate they want to get to. in that realm, it is quite likely the dollar will see of strengthening. right. you're absolutely the impact of a relatively strong currency on the u.s. itself should not be that strong. the impact on some of the other markets around is very different.
3:18 am
here, we will have to see what the old world dampening impacts, particularly the emerging does to global and u.s. growth themselves. overall, you just hit the nail on the head. it is a relatively closed economy. therefore, tariffs and a strong dollar do not have the same kind of potential it would have in an open environment. know if yout checked the world cup rankings lately, but i am leaving still among my television colleagues. there are other places you can compete with each other on the bloomberg terminal. whisgo gives you the opportunity to put your guess in an so she the whisper number as well as the economists survey for the jobs number. i think there are four hours left to put your entry in. i can say that matthew
3:19 am
miller has gone from the bottom to the top of the world cup rankings as well. it's not over yet, obviously. that is when to be something that is a factor this weekend. we will see what happens monday morning after all the games come there. we will leave it there for the moment and come back. peter is going to stay with us. coming up, the german chancellor whence a vote from her social democratic partners. this is bloomberg. ♪
3:20 am
3:21 am
3:22 am
guy: welcome back, sorry, just doing a bit of reading. let's figure out exactly what is happening. this is the picture we find ourselves in at the moment. we now have a european market that is a little bit flat. i think we were expecting a little bit more early on. there was some expectation that maybe the chinese markets would be providing us with little bit of a lead, but they did not deliver the rally that we were maybe anticipating. we didn't come through with that
3:23 am
kind of rally that maybe some people would have anticipated. let's talk about what is going on in germany. matt: angela merkel has won the . partners.her sbd if for the a divisive debate on migration. peter, i'm eager to hear your take on this. i have been out of the country for the last week, but from what i read in different media sources view what happened differently. really get the draw on merkel? deald merkel give him a that really doesn't do anything, he brings nothing home to the bavarians and that is why the spd backs it?
3:24 am
sad, wef it wasn't so could chuckle about the entire situation. you essentially nailed it. it's not entirely clear what really happened. if you take a step back, this entire problem that is arising is a very large one. they are expecting the entire continent of europe. in myamework in place, humble opinion is not up to scratch. that is by the situation has arisen in the first place. i think what we have now currently is a situation where in germany themselves, they are tying to create something that everyone can live with. but at the end of the day is not really going to solve the bigger picture, but isn't there are more people coming to europe and want to come to europe than the continent is willing to deal with. that is not going to change. the german now, government should be stable now.
3:25 am
has though the entire topic been on the desk for quite a while. if i am thinking about how your progresses from here, one of the things that is kept him throughout the past few years has been the leadership of angela merkel. we can go into a debate on whether or not that leadership has led to the right results, but there has been a sense of direction. will that disappear? story thatigration is what to be massive for europe over the next few years. reasons thaty maybe europe will not be ready for it. does europe have a center of gravity at the moment that could get it through intact? peter: the term of angela merkel, at one point is going to end. we don't know yet, but typically
3:26 am
what happens in democracies, you don't know who is going to win the next election. guy: that is different. when you have a leader in place. peter: it is very clear to me that whether merkel goes in a years time or in three years time, this is her last term. she is not going to stand again, i am pretty sure about that. she isre, if you believe single-handedly responsible for the european situation holding together, which i don't, obviously, you have to see the situation as a very dark one.i tend to believe you have did it multiple angles here. when another chancellor of germany takes the reins, the outcome will not be similar. matt: thanks so much for joining us. peter is going to be joining us on bloomberg radio's daybreak
3:27 am
europe live on london dab as well. definitely turn in to radio for that. they're looking at gains across europe. ♪
3:28 am
3:29 am
3:30 am
matt: welcome back to bloomberg markets. the european y america imposes $34 billion on chinese tariffs. now we wait for beijing to respond. asian equities are up after asian stocks rallied hard after the close. have investors run out of reasons to sell? will junes payroll number be the last before trade tensions? good morning and welcome to bloomberg markets, the european open. i am matt miller in new york guy johnsongside
3:31 am
and bloomberg's european headquarters in london. now,.arkets are up right i did not think we would have that rally in the asian markets. i think there is disappointment from that. that and the fact we need to start thinking about trading next week. let's talk about what is happening here in europe. i want to highlight what is thyssenkrup as we are now 31 minutes into the trading session. i'm told the market is going back. let's focus on the downside and say what is going on there. let's not risk anymore ogical issues.
3:32 am
go to sebastian. sebastian: u.s. president donald imposed $34 billion on chinese imports. china immediately said they would be forced to retaliate. the president also suggested there could be another $60 billion in two weeks. >> the war was lost on trade many years ago. the war was lost, but now we are going to win it because we have all the cards. a crunch all day meeting for brexit. aren pre-brexit ministers silently hoping for her to tear up the plan.
3:33 am
federal reserve officials return their commitment to gradually raising the u.s. benchmark lending rates. the june meeting also highlighted a debate among policymakers over how many more rate hikes would be needed to keep the economy on a stable footing in the long run. the head of the u.s. environmental protection agency, scott pruitt has resigned after damaging revelations about his spending, travel and property rental deal. president trump announced in its tweeted that he had accepted the resignation and he has done an outstanding job in the post. overw wheeler is to take the epa. saudi arabia has cut oil prices
3:34 am
as the world's best critic raises productions to a sure customers plenty of supply. the journal quotes an unnamed senior executive at aramco for the oversight. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. thanks very much. we have breaking news on china. theirre now saying retaliatory tariffs are currently in place. three and a half hours ago, u.s. tariffs went into effect and now china says it's retaliatory tariffs are in place. they are also saying these tariffs from the u.s. violates wto rules. one would wonder if their
3:35 am
retaliatory rules violate the -- retaliatory tariffs violate the rules as well. nonetheless, they are saying any unilateral pressure from the u.s. will be in vain and that countermeasures have been taken. there you go, we have some statements out of china on the tariffs situation and trade war that may be kicked off in earnest just about three hours ago. switching gears to german corporate stories. those of shares are up this morning following the resignation of the ceo. froms under pressure shareholders who were angry over the company's slumping revenue and share price. give us the way out here. --ch sheryl holders
3:36 am
shareholders are the most vocal? thyssenkrupp has two main shareholders pushing for changes in the company. i think that is likely a big part of the reason why you are seeing the ceo step down. when note says it is an astonishing surprise. is it? no.: yes and there has been a lot of rumors he is not going to be able to hold on given the pressure from the shareholders. i think it's really ramped up in the past year with elliott taking that stake, that he wouldn't be able to bring the kind of change they are pushing for. matt: if i look on the anr i see they have 14 bison only two cells. -- sells. nonetheless, an overwhelming majority say it is a buy.
3:37 am
are you hearing more investors are going to be interested now that the ceo is gone? lynn: i think so. one of the things your hearing is that there could be bigger changes coming from the company. the otherliott and see value in the company and are pushing for better restructuring. think one of the things that has been talked about as a possible spinoff of the elevator division. it is extremely possible and there is a thinking that if you could separate that out from all of the mark on put it in steel and packaging and submarine businesses, that could unlock a lot of value. guy: thank you very much. we will wait and watch and get you news on the. matt broke the news to you a of minutes ago that the chinese retaliatory tariffs are now in
3:38 am
place. as that has happened, we have seen u.s. futures stocks dig a little bit lower. maybe there is going to be a market affect coming in as a result of this. as mark put it, you must have seen this one coming. it has been pretty well telegraphed by both sides that we would be seeing this affect coming through. that is what they look like at the moment. futures down a little bit. stoxx 600 is still positive. we have not had this big rally out in asia that maybe some people anticipated. let's move on talking about some of the corporate is we're talking about this morning. boeing is hitting a new adventure. boeinge is set to post with the newest battle with airbus. it's going to be interesting to talk to boeing in a few days times. our managing editor for global
3:39 am
business in europe joins us from berlin. boeing is really good at making big wide-body jets. where's the skill set significantly further down the scale? area they have never really dabbled in. it is a growing category. we saw airbus take a controlling stake in the process. that has ramped up pressure on going to do something similar. because the patterns of travel and behavior is changing somewhat, people are moving more towards these regional travel patterns. they want to the point to point. people want these nimble are roots, and that is why these kinds of planes fit in. boeing appears to have gotten a fairly good deal here.
3:40 am
braer shareholders feeling like maybe it was a bit wanting, but it is a good deal for boeing and gives him some sort of a retaliatory measure against airbus. matt: why are airlines changing models. is it just that they cannot get the prices they want so they will save on fuel and plane cost with these short hop model? kt: is a very difficult model to make work. yet he threw and dubai. we know in the middle east there hubs trying to establish their. you really need to have a huge machine to make this work. there are not that many of these kinds of focal points around the world are you can really make it work. there are one or two in asia, one or two in the u.s..
3:41 am
it is really too small to support this kind of model. what we are seeing is that smaller category of aircraft gaining popularity. we had airbus come out this morning with a market fo look ate they take a the market still see a predominantly small and medium-sized scale of the market as the backbone for the industry, the very large aircraft is really a subcategory, only just over 1000 aircraft. nothing major. the market is in that small category. that is where the money is being made. matt: i appreciate your shirt as well. make that that is a great blast you have their. i think his favorite subject which is aircraft. let's take a look at u.s. futures here as this trade war gets kicked off in earnest.
3:42 am
in workingked at with these new tariffs for about four hours out of the u.s. china says it's retaliatory tariffs are in effect. after the positive sign chinese in asia stocks, did it really carries her into the close. riseso saw u.s. futures initially and now they are down. s&p futures are off just slightly. nasdaq futures are down almost .2% now. interesting. if we are pricing the trade story next to me, we don't you like we have enough, the maybe the german market may be under a bit of pressure later on. i want to highlight one of the stocks we are watching. there are a few out there this morning. individual names are interesting. let's focus on what is happening with our stock of the hour. the lock maker out of the nordic region trading down .7%.
3:43 am
non-cash that it is making in its asia and china division. to.s coming through the key stocks trading on base and volume. the stock is down by 1% on a daily basis. only down by 6%, so it's not quite bad. abloy is really struggling this morning. being, there are 11 buys on this stock. up next, we will bring you more of the stocks we are watching this morning. we will come back to that business next. this is bloomberg. ♪
3:44 am
3:45 am
3:46 am
guy: 46 minutes into the market session this friday morning. some interesting stock sessions want to talk about this morning. nejra: that valued at 552 pence per share. rbc said earlier this week that
3:47 am
echostar me to bid at least 750 pence for share to gain any shareholder approval. could hold outt for more. eurazeo, upgraded to buy at hsbc. finally, smcp, which sells apparel and, accessories a majority holder has sold stock at 25 euros. dropping the most since november 2017. matt: china has announced it's retaliatory tariffs on u.s. goods are now in effect. beijing is targeting a variety of agriculture products as well as cars in its first round of countermeasures. joining us now is the research fellow at the london school of economics.
3:48 am
thank you very much for your time. first off, let me ask you what you think about this the first move from the u.s. we heard about tariffs on $50 billion worth of goods, then it was $100 billion than $200 billion, now donald trump is talking about $500 billion. is his bite a little less bad than his part? depends.think women think about donald trump , it all depends on his calculation and whether he will escalate or not depends on his political cause. hethe one hand, we all know has defended the trade dispute on the ground of national security. he also claims it is a strategy used to enforce china to make concessions, including protecting intellectual property rights of america and
3:49 am
restricting chinese investment incentive industries. stunt he of political wants to achieve, this is his main incentive for engaging in this kind of trade dispute. but now, the thing is he might have some political cost to incur for the administration. with the upcoming midterm elections, china is actually attacking on the donald trump supporting states. that is where they have important $34 billion in tariffs. also, there planning on attacking whiskey which is produced in kentucky which is natestate of the se majority leader, mitch mcconnell . guy: the chinese look reacted at the moment. they are simply responding to
3:50 am
all that is coming from washington. does that change? >> that is a good question. again, we need to think about the politics. for china, there are certain political costs that might incur from this type of dispute, because as we all know, the reduced ability depends on economic growth in china which is a concern of the chinese government. on the other hand, they might benefit politically from a because there is a sense of feeling in china. it may be opportunity for the government to be more innovative, to have its own industries. this time of nationalism is actually housing the region --
3:51 am
helping the region and supporting the region. this is sort of the political benefit side of it. matt: we talk about china often as a command economy. power over lot more what they do and are less voters. to boulder -- can they hold out longer? do think they can hold out longer in a trade than the trump administration could afford to? >> that is a very good point. you talk about the trump administration and republicans as politically vulnerable because of the incoming elections. in china, they have eliminated limits for their presidents. president xi can stay in power as long as he wants. again, he has a longer problem because resistance ability would depend on economic growth. compared to trump, he has less concerns. guy: we will leave it there.
3:52 am
thank you very much for coming to see is here at bloomberg this morning. let's take a look at futures falling on china's retaliatory tariffs announced. we are starting to see a market reaction coming through. as we were talking about earlier, the market definitely saw this one coming. up next, battle of the charts. this is bloomberg. ♪
3:53 am
3:54 am
3:55 am
matt: welcome back to bloomberg markets. this is the european open. we are just about 55 minutes into the session. looking at gains.their in europe i'm actually in new york for the night .we are coming down that were initially opening up this morning. futures are down, but just fractionally. we do have drops in futures and it looks like asian stocks, which initially saw a huge pop after the lunchtime break and after the u.s. tariffs went into effect, we sell 1.5% gains in china and in japan. we saw them kind of subsided into the end of the close. final be time for the toc of the week.
3:56 am
let's find out what today brings. markets already knew this was coming. let's look forward to the future and don't forget that today is -- i've been looking at u.s. data surprises. that might give dollar bears a chance to strike. take a look at the gap between the u.s. and europe. might continue today because the u.s. stock number is forecasted to be a bit of a callback. that might help the euro rally a little bit. kristine out for blood because i guess she knew i was going to look at something tariff related. that is ok because this has been one of the most notable consequences of u.s. tariffs on china. the dollar has suddenly flipped
3:57 am
negative this year. this drop-off in february came right after trump announced the tariffs, increasingly getting negative. guy: we're going to give it to kristine. have a great weekend. this is bloomberg. ♪
3:58 am
3:59 am
4:00 am
francine: the trade war becomes a reality. u.s. tariffs come into effect. beijing has countermeasures. the fed remains calm after officials say they plan to keep hiking gradually. we get u.s. jobs data this afternoon. and brexit showdown. theresa may faces a decisive battle over her e.u. divorce plan. can she fight off a revolt by her cabinet? welcome to "bloomberg surveillance."


info Stream Only

Uploaded by TV Archive on