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tv   Bloomberg Markets Americas  Bloomberg  November 8, 2019 1:30pm-2:00pm EST

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rollback of all tariffs on china and said he had not agree to anything. the house committee is investigating the president has released testimony from alexander benjamin, the national security council official described a july meeting where ukrainian officials asked about a meeting between president trump and blow to mental escape. he said then -- a security advisor john bolton cut the meeting short after u.s. clement gordon sondland spoke about ukraine needing to undertake certain investigations to get that meeting. he stated he felt the request was "inappropriate." calls for scottish independence from the united kingdom are growing louder. the scottish national party today launched its campaign for bertens december 12 election. party leader nicola sturgeon says her countries look to remain in the european union has been ignored. >> the tories number one pledge that this election is to take scotland out of the eu against
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our will. now i doubt there is anyone in scotland who is not partially sick of the brexit nightmare, but the boris johnson deal does not get brexit done. it just opens the door to the next episode of the brexit horror show. sturgeon added a vote for the s&p is able to escape brexit. the parties is involved hold a new independence referendum next year. protesters hit the streets of hong kong today after the death of a student who took part in demonstrations earlier this week. the student died after a fall in a parking garage near a protest site. pro-democracy supporters claim police were chasing him, while authorities say the accusations are false. some demonstrators have committed suicide during the unrest in hong kong but nobody has been confirmed dead as a result of the clash between
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police and demonstrators. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. >> live from bloomberg world headquarters in new york, i am vonnie quinn. >> i am amber kanwar in for amanda lang. welcome to bloomberg markets. are the top stories we are following from around the world. optimism wanes. president trump says the u.s. has not agreed to roll back tariffs on china. the president's comments diluting hope the u.s. will make enough concessions to secure a
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tree truce. mccarthy, blackstone's global cohead of real estate says nothing, not the trade war with china nor the prospect of a slowing global economy will curb their appetite for property. we will have an exclusive interview. and minding the gap. is steppingpeck down before the company spins off its powerhouse old navy brand. what does it mean for the struggling retailer? vonnie: let's get a quick check on the major averages. we are unchanged right now on the s&p 500. we have been up and down all day long. you would not think that if you look at the headlines, plenty of trade headlines from the president. the dow jones down 39 points. the nasdaq is higher by .2%.
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look to next week to see what direction we go in, although it is a grind higher in general. year,ooking at the 10 monday is a bond market holiday in the u.s., veterans day. i'm sure traders need it after the week that was, particularly here. huge volume on thursday. not in the history of bond market movements, but in recent times, a massive move. looking at 2% right in the face, i guess. crowd,play to the home look at the canadian dollar. canada's job growth hot streak came to a bit of a health in october, shutting 2000 jobs. the u.s. dollar advancing versus the canadian dollar. put in itscanada best year of job creation in about 17 years. notwithstanding the fact that we
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saw a contraction in overall october,the month of wages actually perked up and are at around the highest level we have seen in a decade. a little bit of a push-pull the re. that is the story with the overall markets. investors have been whipsawed by contradictory headlines on the -- thehina trade numbers u.s. china trade file as it progresses. earlier this morning, donald trump says the u.s. has not agreed to a tariff rollback. here with the latest is damien says our -- damian s assower. yesterday the headline says one thing, today it is the opposite. and the market has trade on both of those things. damian: this is nothing new. if you look at the dinner last night, it was pretty impressive.
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to october go back 2018, exports were up 14% in china. that is a pretty big hurdle for them to overcome if they want to perform with last night's print, but they did that. exports were down just 0.9%. the focus shifts to a forward basis. next week, we have inflation data, credit extension, fixed asset investment. all of these things will fit neatly in what we believe to be a slowing china economy. if you look at forecasts through the end of the year, we are looking at 5.7% gdp growth until the end of the year. does this play into president trump's hands? damian: i have no idea what president trump is thinking. he is trying to extract the best possible deal, i guess, for the
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united states. nextts heightened focus on tuesday's speech in new york. the markets are just looking for clarity as to what he is really thinking with regard to the negotiations with china. we have had a lot of interesting news. in terms of where the wan goes from here, your guess is as good as mine. my guess is back about seven and a near-term. vonnie: thank you. of course, referring to the speech on tuesday at the economic club of new york at the president is giving on trade. thank you. for more on the market reaction today, let's welcome lindsey bell. has your advice to customers or those opening accounts changed at all during this trade war? lindsey: no, we think investors should remain invested and
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diversified. the headlines have created a lot ,f volatility up and down created a lot of emotional stress for a lot of our clients. andadvice is to stay calm invested in these markets. amber: i wonder what the risk is to that advice, when you consider markets are close to all-time highs, earnings season, while it beat expectations, profit growth was pretty tepid. we are looking at a current pe for the s&p 500 the highest it's been since january of last year. is this not a perfect recipe for that price for first -- perfection that could be right for a selloff if we get some kind of negative news? lindsey: i completely understand where you're coming from with the question, but you have to remember, this is a seasonally strong time of the year for the markets, especially when we have a year that starts with a strong january and february.
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in the case of reaching all-time highs in november, it is a positive for the market, finishing out a strong year, giving investors that santa claus rally that they have come to expect. vonnie: what did you make of earnings season? lindsey: it was a good period, we are still looking for a earnings growth. that compares to a 3.4% decline going into the reporting period. it is where you would expect, it industrial's, energy, materials, the sectors being impacted the most by the trade war. it was not much of a surprise. we sought out your numbers come down quite a bit. we were looking for 10% earnings growth going into the reporting period for 2020. now it is looking like it will be about 8.5%, which is a more reasonable number, given the growth trajectory we are on. as we look into 2020, the
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numbers look much more reasonable than they did starting at the beginning of this earnings season. amber: you mention those two sectors, energy as well as industrials, both have been screening positively on the value side of things. even companies that missed expectations have been starting despite i think of caterpillars results. do you think if there is a santa claus rally, the leadership will shift, and it will be those stocks that take us to the holidays versus what our traditional pillars of strength at the beginning of the year in tech stocks? lindsey: right now you are seeing a rotation into value stocks. financials are doing well. what you can see continued is those value sectors lead us into the end of the year, which will be a positive for the market. that is a healthy rotation out of the cyclical set reset have been leading the way. so sector that has lagged
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far since the beginning of october has been consumer discretionary. that is one sector were earnings are coming in better than expected. estimates have been cut deeper than we had expected. i think that is a sector that can do well into the end of the year, especially as we get into the holiday shopping season. the consumer is still feeling pretty confident with that consumer sentiment number that came out. wages are on the rise, employment situation is strong. i would expect them to show up and support the consumer discretionary in the fourth quarter. vonnie: what about the dollar index? doesn't it hurt earnings, for discretionary spending? lindsey: we have not seen too many companies, the dollar this earnings season. when you have seen is the dollar come down a little bit, which is a positive for the consumer, positive for companies in general. we would like to see the dollar
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remained on the weaker side, from a corporate profitability standpoint. amber: lindsay, thank you for your insights. lindsey bell, ally invest chief investment strategist. coming up, we will hear from kathleen mccarthy on where private equity is finding opportunity in real estate. this is bloomberg. ♪ s is bloomberg. ♪
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vonnie: time now for the bloomberg quick take. it's taken just over a decade for alibaba to turn a quirky chinese holiday into the largest shopping event, singles' day. it will attract hundreds of millions of shoppers from around the globe.
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11/11, the numbers about their branches. in the 90's, it became a celebration of being single in a culture where young people face heavy pressure to get married. jack ma wanted to center the promotion around a holiday. ma first targeted singles. now he goes after every demographic. last year's sales rose 27% year-over-year to 37 ilion dollars. that is about the size of the annual output of some small european countries. more merchandise is sold in the 24 hour period then in the time in the u.s.. amber: blackstone's real estate group is one of the biggest and best performing franchises at the nearly $600
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billion alternative asset manager. of division wants a domain blackstone president coo is now run by ken kaplan and kathleen mccarthy. erik schatzker sat down exclusively with kathleen to examine where the private equity giant is finding opportunities in real estate. try to figure out what's happening in the world with the economy, overall preferences, and we figure out how to put that in a real estate context. on the back of what we are doing in e-commerce, we are investing in office, rental housing. these are the places that are getting more of their fair share in population. west coast, seattle, vancouver, los angeles, san francisco. in europe, places like stockholm, berlin. beyond housing and office, we also look at global travel. we think there is a real push for people to spend more on experiences rather than just
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things. that has given us more conviction to invest in high quality hospitality assets, particularly in supply constrained coastal markets. makes sense that you would be chasing these innovation cities, experience-based opportunities that you describe. what about the stuff that is being thrown out with the bathwater while that takes place? some of the secondary and tertiary cities for example in the u.s., are they getting cheap enough that if it becomes interest to blackstone on evaluation basis? cities arethose interesting places for yield orienting investments. you see good supply demand fundamentals but not the rate of value appreciation that you might find in the biggest cities. those are the kinds of places we look to find a yield oriented thesis. >> blackstone believed that interest rates were going to go up, with the accelerating economy. the economy accelerated but
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interest rates instead went down. if you had known that ahead of time, what would you have done different way? >> i think the performance of our port audio today says that we would not have done much differently. >> lucky? >> we try to invest in things that we thought were going to grow faster. we felt like in a higher rate environment, we needed to outpace the growth and rising interest rates, which would put pressure on yields. goodrns out that thesis is in an environment like today where there is pressure on growth, and we are in the places and asset classes that we think will outperform. logistics, for example, experiences. >> i think 2020 will be high consistency. >> blackstone is big on the importance of scale. it seems self-evident, but particularly in real estate, how is scale a different shooting factor? >> just about with any industry, information is powerful.
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the scale that we have has allowed us to access much more information, i think, than most people that operate in a single sector or marketplace. we feel like we can see more information to tell us what the next investment should be or how to drive value most effectively in what we own. is what we are doing working or not and should be changed? our scale have been powerful in terms of access to information. it is also powerful from a competitive standpoint. in our real estate market, where valued, whereirly we can compete for the largest and most complicated situations means there is less competition. as a result, we can differentiate ourselves not only on price but on things like speed and certainty of execution, and that sets up that are outcomes. >> is there such a thing of the real estate deal that is too big for blackstone? i like to think no. we approach every day that anything is possible. we have great relationships with
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investors. we look at transactions more as what we can drive in terms of performance. the quality of the transaction is not limited by size. >> so the sky is the limit. >> potentially yes. vonnie: kathleen mccarthy of blackstone. coming up, the end of the art tech era at gap. how years of missteps and trading brands run down the ceo, and what it means for the future of the retailer. this is bloomberg. ♪
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amber: this is bloomberg markets. i'm amber kanwar in toronto. vonnie: i'm vonnie quinn in new york. an update on the vaping story. u.s. health officials think vitamin e acetate could be behind what has sickened thousands of americans who have used vaping devices.
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fluid taken from the lungs of 29 patients battling the condition all had signs of vitamin e acetate. some makers use the syrup substance as a filler for their product. of course, we heard president trump earlier talking about releasing rules next week to up the age at which vaping is legal. amber: amazing how quickly people have come around on this issue compared to things like smoking and alcohol use. certainly has hit a number of stocks. speaking of, let's take a look at the get. it needs a turnaround, but art peck will not be leading it. struggling retailer fired it ceo later -- late yesterday, sending its shares down by as much as 7% today. determination comes after years of missteps on merchandise that failed to connect with consumers. our retail reporter joins us now with the story. so many different angles to the
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story because one of the fixes was let's take old navy and spin it out. at least that is doing well. the most recent quarters have shown it is struggling also. jordan: when the gap announced that they were going to spin off old navy in february, people really liked that because it was the right spot of the company. past few quarters, they have missed on merchandise, and now the question becomes is this feasible,ill especially because the face of it has now left the company. vonnie: why did it take so long for them to make the decision? to separate a company that's been around for 50 years has been a difficult challenge. in september, they had the investor day meeting. gavethe guidance that they with his firing, it showed that sales would be declining in old
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navy and across other brands. it was just a morning that this would not get better under his 10-year, so maybe it was time for a change. retailing is not rocket science. either you have close that resonate with retailers or you don't. that has been the struggle with gap. who has been taking their market share? of the value discounters, target, t.j. maxx, marshalls. they do really good on finding new and unique things but also with a good price. that is where old navy has played in the category well. but the competition is only increasing. now they have to find a reason for people to walk in. that is the question also that the new ceo will have to take on. vonnie: what are the chances that the spinoff will not happen now? jordyn: a lot of analysts are wondering if the spinoff will happen. in the company's announcement of
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art peck stepping away, they were not explicit that the spinoff would happen. board is meeting, and that will be a line item to decide, if this pinup will happen by the end of 2020 or not. vonnie: you will be on it for us. we are looking for that story. thank you, jordyn holman. you can catch our interviews on the bloomberg function tv . look back and earlier interviews in the day as well. this is bloomberg. ♪
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mark: i am mark crumpton with bloomberg's first word news. u.s. health officials think vitamin e acetate could be linked to the severe lung injuries that have sickened thousands of americans who
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have used vaping devices. a report says fluid taken from the lungs of 29 patients battling the condition all had signs of vitamin e acetate. some illegal makers use the thick substance as a filler for their products. is not promising to support jeff sessions' bid to reclaim his alabama senate seat but did say he will not campaign against sessions. sessions spent more than a decade representing alabama in the senate before stepping down to serve as mr. trump's attorney general. the president soured on sessions after he recused himself in the investigation into russia's interference in the 2016 presidential election. iran's air defense forces shot down what it is calling an unknown drone over the persian gulf, according to its state-run news agency. the report did not say whether the drone was a military


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