tv Bloomberg Markets European Close Bloomberg November 26, 2018 11:00am-12:00pm EST
♪ guy: here are the top stories we are covering from the bloomberg and around the world. stock stabilizing. as investorsa bit catch their breath ahead of the g20 meeting and a key speech from jerome powell. italian yields drop as room signifies it might be open to compromise on the budget. deputy prime minister tonight in what is described as a decisive meeting. gm stock spikes. -- the ceoders targets five north american closures at the cost of 10,000 jobs good let's take a look at the markets. 600 up bythe stoxx 1.29. i will show you the volume in just a moment.
it is not confirming the price action. volume remains light. massive moments. we have got the fed chair speaking wednesday, g20 into friday. do you want to take directional positions into some of those events. we also have the end of the month. see for aay have to portfolio balancing point of view is people buy in to rebalance their portfolio. italian yields, we are seeing them drop. italian bonds are day. .tp having a decent day how much of that is confidence being renewed in what is going out of rome right now. we did see a surprise early on, the israeli shekel spiking as the central bank decides it is going to hike rates. we have not seen an israeli rate hike for a long time. let's quickly show you where you sit with the volume story. that is where we are the trajectory.
that is the 30 day average. once again, that light volume not providing complication for the price action. abigail doolittle with all the details on what is happening in the united states. abigail: we have the risk rally in the u.s.. dow, s&p, nasdaq all solidly higher for the best day since early november. we also have the bank index of 2.7%. it's best day since march. a bit of a rebound in confidence . the question is whether or not it can last. we take a look at an interesting chart that can suggest whether there may be more selling ahead, but let's take a look at the banks. 10 year yield, rising yield, thought to help the profit margins of these bank. blackrock, morgan stanley, trading higher. a broad rally. as for stocks, let's hop into the bloomberg.
chart.term it deals with stocks above the 200 day moving average. insaw with the bear market 2003, only 20%, that was the case after the financial crisis, that was the case after a bear market in 2011. right now we had been at oversold levels with more than 80% of the members above that 200 day moving average. now we have only 40%. this chart suggests it may drop to 20% or below, pointing to the idea that more selling action could be ahead for stocks despite the reprieve we have. finally, let's take a look at oil. oil up 3%, holding that level,ally important $50 giving the energy complex and nice bid on the day. guy: let's turn our attention to what is happening in italy.
a modest reduction in the deficit might not be enough to satisfy the eu. let's bring in a bloomberg opinion columnist who joins us from milan. a big move in btps. about therprised strength of that given the fact that we have this meeting coming up this evening? >> i'm not completely. accurate, the news coming from the weekend that italy is willing to finally ,egotiate over debt to target that is suggesting that the italian populist coalition made up of the five-star movement and the league's backtracking on some of the more confrontational stands which it has taken during the autumn. markets,mportant for because it said the government is acting in a more rational way. the new still needs to be confirmed and tonight there is a crucial meeting between the prime minister, who has been a
driving force of these more consensual approach with brussels, and the deputy prime minister's, who have been deficitfor keeping the target at 2.4% for next year. vonnie: the market is interpreting that perhaps there will be a fallback and an allowance made so that the 2.1% oronly is 2% or something like that, but what about the option of making it larger? no one has put figures down. >> absolutely. at the moment it is only speculation. the european commission has asked that rome resubmit its budget, an unprecedented move in the history of the eurozone. at the moment there is only vague talk of scaling down measures here and there. italy needs to submit something fresh. the italian budget has to be
passed by the end of the year. we need to see a new budget and this will need to be introduced in parliament. at the moment, we are hearing percentage of .2 .oints the european commission may be asking for more. at the start european commission was asking for a target of below 1% for italy. this will go up. enough, that is anyone's guess. i suspect it will not be the case. guy: we have the btp boned spread-- the btp bund trading below 3%. how would that react if we were to see early elections? what the market take those as positive? question. a good
the hypothesis you suggested is realistic. 1.2 view is if we go to a new election -- one point of view is if that we go to a new election we will go to a more coherent government. this is a coalition of strange bedfellows. the five-star movement and the and ended teamed up up juxtaposing their lavish promises and making inexpensive spending bill. if the leak, which is running high in the polls, work to come on top in the next election with its more traditional center-right alliance, we would see a government still confrontational with brussels, still keen on massive spending plans, but it is only one populist agenda rather than two combined, which is what is freaking out many investors at the moment. guy: we'll leave it there. thank your much. the view from milan.
vonnie: let's get to another developing story. general motors spikes after being halted. it is prepared to scale back operations in north america. cutautomaker says it will 10,000 in staff. let's bring in craig to dell, u.s. autos editor. how sure are we that all of these factories will close? >> it is not unprecedented for a carmaker to say it is going to stop allocating production to a isnt and then later say it going to bring that plant back to life to extend a lifeline to it. it is hard to say that these plants are done for, that they will be closed for good. it is also worth keeping in mind that gm has union labor it negotiations with united auto workers coming up next year. certainly the future looks weak.
two of them are transmission plants. the other our assembly plants. sedan sales in the u.s. have been cratering for gm and the rest of the industry. part toplan on gm's make some drastic changes to its north american production footprint to make more as uv's and trucks and get right before a downturn. nowtalking about doing this while it is still a healthy potentiald avoiding a for a further slumping of sales in the u.s. and china, which we have seen in recent months. i was about to ask you that question about the economic cycle. is there a hint she believes this is as good as it gets in terms of demand stories. will demand get more difficult going forth?
she is hinting at that. craig: the u.s., it is easy to say the facts are be -- the fact is behind us. in 2016 we saw sales peak. sales have been ok in the u.s. market, and historically speaking, very strong. they will finish the year north of 17 million. that is a strong showing for the market. it is not a disaster we are seeing in the u.s.. in the past, we have seen this be a cyclical industry and it is hard to believe the market is going to be able to sustain that momentum when we are seeing interest rates rise. that has been a huge contributing factor to demand staying where it is been. cycle thatment consumers go through, they do not need a new car every two or three years. they may want it, but when the economy starts to slow down,
which broadly speaking, there is expectations the economy cannot keep up forever, you see car sales start that decline first. a leading indicator. vonnie: we have not had any reaction from president trump. no doubt at some point there will be a reaction from the administration. how much has this to do with potential tariffs? craig: it is unlikely the tariffs have much to do with this or the new nafta. this is a matter of car sales being in terrible shape. they are not being in outlook for that to change anytime soon. gamut, whether talking about smaller cars like the chevrolet cruz or bigger sedans like the buick lacrosse. this is something you have seen coming, in part because you've seen ford and fiat/chrysler make
similar announcements where fiat chrysler stopped making the dodge start. ford saying it will get rid of all cars they produce in north america, with the exception of the mustang. this is something detroit carmakers have been up against able torms of being make sedans able to make sedans profitably that can compete with the japanese and the koreans and there waving the white flag at this point rather than continuing to try that fight. vonnie: we do have a response from the canadian prime minister, who says gm workers were the heart and soul of the city where the gm plant had been for years. the expect -- expressed deep disappointment in the gm ceo. let's check in on the first word news. courtney: president trump says the u.s. will close its border with mexico permanently. teargas wasfter
shot at migrants trying to cross the border fence. he says many migrants are stone cold criminals. there was dramatic renewal tensions between russia and ukraine. russian forces fired on three ukrainian navy ships. the attack took place near crimea, which russian president vladimir putin annexed four years ago. ukrainian ship violated its waters. un security council will meet on the matter today. hasunited arab emirates pardoned a british academic sentenced for spying. ae announcement ends diplomatic headache for the uae. the government showed videos of the spy reporting he spied for british intelligence. global news -- global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over than 120 countries. i am courtney donohoe. this is bloomberg. vonnie: thank you.
vonnie: breaking news on apple. justices appeared to allow an antitrust suit to go ahead. the justices would be hearing arguments and they have heard the arguments across the ideological spectrum of the court. apple says the case focuses on commissions it charges app developers and only the developers can claim those fees. the supreme court decisions is only direct -- it is interesting to see supreme court justices are looking like they are poised to allow this antitrust lawsuit to go ahead. let's check the appleshare prices, up .6%. president trump resuming his tweets on border security, urging mexico to deport what he calls flag-waving migrants.
we are joined by kevin cirilli, bloomberg's chief washington correspondent. why is the president reopening this rhetoric right now? kevin: more than 40 migrants arrested along the u.s./mexico border over the weekend. part of the 8000 migrants part of that caravan as the president has alluded to them. over the 1009 hundred 54 mile u.s. mexico border, -- over the 1954 mile u.s. border, u.s. patrol agents using teargas associated -- according to the associated press. said today theen customs and border patrol were struck by projectiles thrown by caravan members. she goes on to say the perpetrators will be prosecuted. i will continue to aggressively support dhs personnel as they work to secure our borders.
the president has two rallies for the special election recount in mississippi where immigration could pose a significant political motivator to some voters. he tweeted mexico should move the flag-waving migrants, many of whom are stone cold criminals , back to their countries. .o it by plane, do it by bus they are not coming to the usa. we will close the border permanently if need be. congress, fun the wall. the president alluding to that government shutdown. he wants to see funds tacked on for the funding of the u.s. -- mexico border wall. guy: how does it play in washington that some of the pictures showed women and children choking on teargas? how does that play in washington? kevin: it has drawn criticism from democrats and skepticism from some centrist republicans
who would like to see more compassionate conservative argument in terms of how the deal with mexico is negotiated. there are two points i would make. is very unclear what the terms of the agreement are with mexico and whether or not this will lead to a long-standing change in u.s./mexico immigration policy. take a look at the peso, which has picked up word today. it dipped over the weekend a bit and it has been steadily increasing over the past several days. ,hat is at stake economically mexico is the third largest u.s. trading partner. $557.6 billion in trading goods in 2017. also $58 billion worth of services in 2017. thismically speaking, comes as world leaders are getting ready to -- at the g20. atnie: the peso trading
guy: live from london, i am guy johnson. this is the european close on bloomberg markets. guy: theresa may has a deal with the european union but has long odds getting it through the house of parliament. most labor mps have signal their opposition to the deal. tonight the prime minister's chief of staff will meet with labor mps to meet with them -- let's bring in bloomberg charlotte. theresa may went to the house today. we listened into what she had to say. how effective is this kind of
policy of talk to the nation and talk to mps. what is her strategy going forward. she seems to be striving to address mp's. i do not understand what her strategy is. >> i think what she is doing, she seems to be following a two pronged strategy of telling mps this is the deal, this is the best you can get and if you do not vote for it we will have more uncertainty, and at the same time we saw on friday the government had been all of her twitter with the benefits of the deal. she is also planning to go around the country appealing to the population directly. backdea there is people go to their mps and put pressure on
them to vote in favor of her deal. vonnie: it seems to me there are three possibilities. parliament accepts the deal, parliament does not accept the deal and there is a hard and fast exit next march, or there is another referendum somehow. is that what it seems like to you or am i missing options? charlotte: that is probably where we are at. there are another couple of offshoots options from that. one of which being that parliament rejects her deal. this is a theory we have discussed on bloomberg where you get quite a strong market reaction. you may be also get pressure from other mps and they make a few tweaks around the edges to the deal, take it back to parliament just before christmas and it gets through a second time. the everlso have
present possibility of a challenge against the prime minister if the deal does not get through. guy: we have the arch brexiteer on his feet. joining us with the latest on brexit and the ongoing debate continues. the strategy being produced by the prime minister. we will see whether it works or not. it will be an interesting few weeks. this is how the markets look in europe. we are coming you down to the end of regular trading. three minutes to go. this is bloomberg. ♪
not backed up by volume. i will show you that in just a moment. there is the world map your it the iberian peninsula having a strong session. the italian market looking strong as well. it is having a good day as well. elsewhere smoke the markets not looking so rosy. stabilization is what should we should be talking about today. we will wait and find out tomorrow morning. this big rally sometimes referred to as dead cat bounce. 1.3% dax trading 1.6%. up by nearly 3%. europe.lar session in italian banks have been roaring today. a strong bid. there is a strong connection between the bond market and what
happens with italian banks. stocks like unicredit are having a good day today. --ther that is sustainable between the italian government. greek banks having a good day. euro bank finishing a little higher than it was last time. early on this morning was up.ing up effectively getting a recap coming through. the greek banks look to offload some of their nonperforming loans. we have not dealt with that issue. euro bank trying to deal with that in athens. around why plantronics did not go ahead as an m&a transaction. markets fairly comfortable with the idea that that steel did not go through. 4% intrading up by over switzerland. i think it is important to really doesn't big events coming
up with the back of the week. we have seen strong price 4% in switzerland. action but it is not been confirmed by the volume story. volume is a little like today with trading down by 20% on the volume story and that's an indication that may the market is waiting for some of the address ont like the wednesday about minutes from the fed on thursday. the g20 coming up at the back end the week. maybe the market is taking a more cautious approach for what is happening today. that is look at the european close. vonnie: the dollar index is stronger. oil bouncing back as well. helping asset classes across the board. almost a $52 a barrel. the mexican peso weakening after president trump's comments that he could close the border 20.53.ntly, trading at we have a weaker wrubel --
weaker ruble. some of these movers including european indices performing well today. we had toward the g20 and potential breakthroughs between the chinese president and president trump and what that might mean for asian trade. trading at 6.943. a lot to go before it hits the seven mark. we also have commodities that are interesting today. steel,rebounding and higher on the potential -- potential optimism for trade. god: let's get a sense of where these markets are potentially going. nownd manager joining us
from schroders. mess to see you. thanks for coming in to see us. today we are getting a reasonably positive market reaction. it comes after some fairly big losses at least from we point of view. stabilization or just a cause before big events coming up later this week? >> a cease-fire. i think there are more important events as we move towards december. as you mentioned, we have the fed, the g20, the opec ministers meeting. a lot of results in these events will have meaningful impact for markets going forward so it will be a busy end for the year. guy: what do i do if i'm an investor now? it seems we are on a knife's edge of wondering whether or not this is the start of a downturn a pause assets or just in which i want to buy because we will see the markets reaching fresh highs.
it seems on the cost of a difficult decision. time it depends on what horizon you have and what type of investor. we have seen a correction in valuation. the damage has been done to some extent. valuations have improved. you still need to be cautious because the data, we are at that turning point and we need a little more clarity with regards to what's the direction of the data. even the fed is alluding to that because they are becoming more data dependent. we need to what's leading indicators. do we get a clear sense on whether we will see a best whether there will be some kind of pause next year? isi: we still believe there -- the strike price is difficult to analyze right now. i think as we approach the meeting we do expect powell to re-emphasized the need to focus on the data. that is what the fed does.
maybe there was a little of inimism from the fed october. right now we need them to emphasize they are more data dependent. we expect the fed to maintain their course and continue to raise interest rates. vonnie: will the fed take notice of other markets? if there is some kind of slow down that's a bit more pronounced say in emerging markets or in less developed nations, will the fed make that one of the factors they are looking at when it comes to that data dependency? more we would need to feel pronounced slowdown. the indicators are deteriorating . we need the magnitude become more -- it is the u.s. data that really matters. the u.s. data is fairly strong. inflation continues to rise. so the fed are doing what they should continue to do. rightly, they also need to look
at what's happening in the rest of the world. i think the main indicator is financial conditions. the u.s. dollar has tightened. if that continues to do so, what impact will it have for the u.s. economy? guy: earlier on we got the survey coming out of germany. the expectations component of that. it does not look particularly rosy. the data are softening in europe. thethe ecb exit from monetary policy it's been delivering smoothly at this point? if it can't, investors will take fright and we will see real moves in the euro. remi: i think that is a big risk for us. i think a smooth exit may be a challenge given where the european data is and i think this is something the ecb is considering. the main thing is to be very clear around the communication, what the frequency is with
regard to raising interest rates. i think that's the big challenge. that forward guidance. this is something the fed were able to do successfully in the u.s. as they exited and this is something the ecb will have to do. guy: critical meeting coming up. nice to see you. remi joining us from schroders. vonnie: an antitrust lawsuit against apple to proceed. let's get more from naomi n icks. explain why this is a little -- not exactly the developers of the apps that are bringing this court case. crux of the case is whether consumers were buying apps can sue apple under antitrust law over the prices it set for developers to provide
those apps to consumers. argued you're not a direct purchaser of an ap of this case isp whether in fact consumers were buying apps are purchasing them from apple themselves or directly from the developers making the apps. a tricky issue. as apple this signal has hinted at we are going to be seeing increasing regulation particularly around the consumer? around privacy? and whether or not the consumer is getting decent deal? naomi: it is certainly another question about whether tech are getting too big or are a monopoly in their respective markets. why the issues at stake is whether apple is really a monopoly in either market.
whether developers are forced to essentially -- in order to get their products the market to sell through the apple app store and whether consumers are victims of a monopoly. this is another question in that regard. vonnie: what is next? what will the next step be for scotus? naomi: we just heard oral arguments were justices across ideological spectrums seemed poised to a lack best to let the lawsuit play out -- poised to let the lawsuit play out. let's check in on first word news. courtney: president trump resumed his tweets on america's border problems today. he urged mexico to deport what flag-waving migrants many of whom are criminals."
president trump's tweet came after agents on the border used tear gas to disperse migrants trying to get them fencing and wire. get ready for six minutes of terror, i stakes plunged across the surface of mars designed to lead a successful landing of the mars insight today. the wrote is concluding a seven-month journey with a series of intricate maneuvers. mission canhe answer critical questions about the early days of the solar system. in trial gets unde -- underway in charlottesville, virginia. james alex fields junior is charged with first-degree murder in the death of 32-year-old heather heyer. accused of driving his car into a crowd of people. heyer was killed and dozens of others were injured.
global news 24 hours a day on air and on tic toc at twitter powered by more than 2700 journalists and analysts in more than 120 countries. thank you very much. coming up, our global battle of the charts. emerging market currencies and how markets are moving today on cyber monday. if you are finishing up trading in europe and you are about to hop in the car, tune into the cable show jonathan ferro and me top of the hour we will be writing smart analysis on what's happening with these markets today. this is bloomberg. ♪
that puts an end to the proxy battle between daniel loeb and the company. third point also going to get input on who the next ceo is. the search is ongoing for a new ceo. that battle comes to a halt. news pending so that is a year to date chart. today's trading it has been down 2% before. the stock was halted. this as we get news third point will get two campbell soup seat and input on the ceo so a win for dan loeb. guy: time for the global battle the charts. you can find these on bloomberg punch in gtd go. monday andy is cyber adobe is predicting it will be the strongest u.s. online sales day in history bringing in $7.8 billion in sales.
if history is a guide it could mean bad news for markets and retail. my chart shows how cyber monday has been typically a malaise going back 2005 when cyber monday first began. there's only been one day when inse retail and s&p rose 2011. particularly bad year in 2008. it's a financial crisis. that only been three days were retail has outperformed the s&p. if history is any guide that could be not so good news for retail as well as the s&p. equities are rallying today. interesting to watch this chart as the day goes on. you can see my chart on the bloomberg at gtv go. guy: nice chart. vonnie: my chart is based on a morgan stanley note. a note on the dollar and some emerging market currencies and it looks like emerging market currencies are being less influenced by the s&p 500 in recent days. this could be because both
interpreted as a little more dovish and that would potentially be negative for the u.s. dollar but it would be positive for risk in emerging markets. .e're seeing a divergence you can see that chart on the go.mberg at gtb go -- gtv guy: vonnie quinn wins today. incinating to read that note terms of where these markets are going and the correlations -- anybody who used to drive a german tank gets my vote. vonnie wins. both nice charts. you can find them on gtv go. ♪
vonnie: this is the european close on bloomberg markets. guy: it's time for a bloomberg exclusive. we been speaking with the saudi aramco ceo and he's concerned about global oil demand. >> demand is healthy. 1.3 andooking between 1.4 this year of additional demand. next year will be the same in terms of additional demand. crossing 100 million barrels. healthy demand in our industry. lng,e looking also at gas, chemicals. there's a lot of growth potential for saudi aramco as we are prime to balance of stream and downstream. a lot of growth potential. >> a bit of skepticism about your ipo ambitions because it's
been delayed a couple of times now. 2020, 2021, is that the firm? could it happen sooner? highness, the crown prince highlighted we are committed. we are committed to the ipo. so the government is committed for the ipo. it is about timing. the talk before the discussion that there's talk for that second half of 2018. we talked about acquisition through public investment fund in these two cannot go
concurrently. the acquisition makes a lot of sense for us and we need to do it right now. >> a lot of stuff to bring in foreign investors. the recent murder of jamal khashoggi has dampened investor sentiment. what is your message to foreign investors? i think there is a lot of toestment that has come in the kingdom. -- we areotal value finding more than 30 deals worth $27 billion. with the two together, more than
$60 billion of investment we find between us and our partners. >> you're not worried about longer-term ja -- longer-term damage from the murder of the journalists? >> you will see tomorrow total value adds more than 3000 150 fromnts, more than in kingdom and out of kingdom. guy: speaking to the saudi aramco president and ceo. vonnie: campbell soup is halted in today's trading session. we have that breaking news that third point will get two campbell soup board seats. this will put an end to the proxy battle between dan loeb and third point with its 7% and -- they'reup getting two seats but it's a
bigger board and the family is still not likely to be dan loeb toss greatest supporters. >> the fact that they were able to get any seats on the board given the control block, 41% of the shares committed to the company's late, i would say two seats is pretty good, having input on the new ceo is also important. on awill also have input third independent director. vonnie: what do they disagree on? it seems like companies listen to activists and try to implement some of the strategies for making margins healthier and so on. >> i think originally when third point came out they were aggressive and what their demands were. they wanted to replace the board and one of the company to put itself up for sale. ask the proxy battle went on they started to walk back those demands. at the end they were looking for five seats and now they are talking more about fixing the company before exploring any kinds of sale.
the two sides move closer to the middle. vonnie: will we see a ceo appointed quickly now? scott: i think what has delayed the ceo search is probably the fact that they had been engulfed in this proxy battle and it has captivated a lot of their attention. now that this is behind them they can move together to find somebody. vonnie: a partial win for download and third point. campbell soup is still halted in today's trade. president donald trump claiming credit for low oil prices. we will also talk with a former advisor to presidential candidate mitt romney. ♪
david: welcome to balance of power with the world of politics meets the world of business. we go to london and just schenkel -- greg white from moscow on the fallout from russian season -- rushers seizing ukrainian vessels and kevin cirilli with the drama on the u.s. mexico border. can theresa may get the deal through her parliament? jess: theresa may will be on a campaign to sell her exit deal to parliamentarians. the numbers are not looking good at the moment it looks like she will not have a majority to get this deal through. the northern irish party, the du ithas said they cannot back and other mps in her own party and the opposition have also said they cannot back this