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tv   Bloomberg Markets European Open  Bloomberg  November 27, 2019 2:30am-4:00am EST

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♪ anna: good morning. welcome to "bloomberg markets: european open." i am anna edwards live from our european headquarters in london. the cash trade is less than 30 minutes away. ♪ donald trump says phase one of trade talks with china are nearly complete. sweden's state broadcasters says it can trace the flow of cash at scb, the companies involved in
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russian tax fraud. europe's top table. eu parliament votes to confirm new commission has today. we will be live from strassburg all morning and we will be speaking with the incoming commission president, ursula van der leyen. let's look at those futures. we have quite a positive picture coming through in the futures right now. european markets expected to go in little bit higher at the start of trade. fresh all-timed highs on the s&p 500, the dow jones, and the nasdaq in yesterday's session. it is easy to see why stockmarkets are going to head upwards from here. these are the futures as per europe. let's show you what the u.s. story is. we have had these lines from president trump saying a trade deal is in its final throes. we continue to see upside for u.s. stocks but not perhaps by as much as the european
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futures are suggesting. you see quite a broad picture of green coming through on the equity page here. we have money going into equities and sovereign bonds. it seems this rising tide lifting both sides of that ledger. we have a host of markets going to the upside. the chinese data that we reference, industrial profits not a strong picture and suggests more weakness for the chinese economy, even if we are nearing some kind of phase one deal around trade. keep an eye on australian assets as well. it has certainly been featuring on the gmm and certainly on sovereign bonds. the rba yesterday trying to downplay the chance of qe from australia. the market has a different interpretation, it would seem. westpac certainly suggesting we will see qe from the rba, which will be a step in a new direction. let's get into the markets with mark cudmore, who joins us now from singapore.
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good to see you, as ever. we are asking what markets have to be thankful for. it is quite a long list, isn't there? when we sit here on new all-time highs for u.s. equities. >> absolutely right. we have had a year where almost every asset class has had an extraordinary year. assets across financial markets should theoretically and i will come back to why i froze at that, should theoretically be happy. trading these markets is always much more difficult than looking at the returns at the end of the year. i think unfortunately, many investors are not quite as happy as those returns would indicate. many have missed out on the rally across the board on many of these assets because they are suspicious, particularly on bonds and even in equities. i missed out on 4% of the upside in the s&p for having stood out of the rally. overall, it has been slightly more difficult than the returns
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but there has been just such abundant returns that even if you didn't miss out on a small part of the rallies, you certainly made some pretty good returns this year. i think mark cranfield at one of the most interesting suggestions. she said that perhaps jerome powell and his kind of aggressive, dovish turn last december, january, should be one of the things investors most ,hink for four -- thankful for especially for some of the criticism he got early on. he was willing to kind of change ack very quickly and that has certainly helped boost asset prices. anna: let me interrupt with some breaking news, bear with me for a moment. shareholder elliott saying they share the concerns on cap gemini's offer for outran ltranologies -- a
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technologies. the offer price to the shareholders is too low, according to elliott. elliott saying the 14 euros per share offer is too low nor an adequate premium for control, according to a statement coming through. we will certainly be covering capgemini and more importantly, altran. back to our conversation on the macro picture. let me ask you about the latest data from china. industrial profits, the biggest drop on record for china's industrial profits, certainly .2 to a continuation of the slowing of the chinese economy -- certainly pointing to a continuation of the slowing of the chinese economy. >> i think it is emphasizing how drastic the slow down this year in china has been and what a change over the story we have seen in china over the past two years. it is now perfectly acknowledged by everyone that of course we will see below 6% growth for the foreseeable future in china. that was something not seen as
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possible only a few months ago. it does emphasize the slowdown has been quite severe in china. it is not too bad news for asset prices. equity markets are forward-looking, or should theoretically be forward-looking. i think they are looking at that optimism around the trade deal and the fact that the pboc continues to try to support asset prices gently at the margin. chinese equities are already very discounted. we discussed this, that relative to u.s. equities, for example, chinese equities with exceptional we cheap -- cheap.on ably five-yearo their average, chinese equities have a massive discount at the moment. this is not too bad news even though it does confirm the slowdown we have seen over the past year. anna: we have heard interesting things from the rba over the last 48 hours. the rba governor trying to lean against expectations of qe, suggesting the bar was high.
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just a day later, the westpac economist, or economics team, suggests we will see a rate cut and qe from the rba. this is a new rubicon, should it be crossed. i think the speech was very interesting. it was interpreted slightly differently by different audiences around the globe. they kind of emphasized that the rba probably has another two great cuts in its arsenal before it would consider qe. some people have said that means qe is not close. other people took that to mean there are two more rate cuts possible, not just the one that everyone was thinking. rbabase case before was the would consider qe's their base rate was close to have percent -- close to 0.5%. i think there was the emphasis
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that qe in australia will probably be in local bond, local assets rather than a broader range of assets. that should be supportive of bonds, along with the story that there are two more potential rate cuts. i think overall this is positive for australian bonds. anna: we are seeing the australian five-year on the move today, trading higher. the yield down by eight or so basis point. thank you very much, mark cudmore. you can join in the debates on today's question of the day. what should investors be most thankful for this year? the generosity of the fed, a pause from the fed, new highs on u.s. stocks, what do you think? let's get your top stories now with the bloomberg first word news update. donald trump says the u.s. is in the final throes of a trade agreement with china, signaling progress on a deal that has been in the works for two years. the u.s. president says it is going very well but in an interview with former fox news host bill o'reilly, trump later
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said he is holding up the trade deal to ensure better terms for the u.s.. profits at chinese industrial enterprises fell for a third straight month, dropping by the most since at least 2011, as producer prices continue falling and domestic demand slows. the world's second largest economy slowed for a seventh straight month. british carmakers are calling on the next government to deliver a world being brexit trade deal. the society of motor manufacturersand traders says s, tariff free, and regulatory alignment. the owner of manchester city has agreed to sell more than 10% stake to private equity firm silver lake. the deal puts a valuation on the business of $4.8 billion, one of the highest ever for a sports team. the transaction shows how surging tv revenue is drawing
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attention from investors, including the likes of silver lake, which have traditionally focused on tech companies. global news 24 hours a day, on-air and on tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. up next on the program, one of sweden's biggest banks gets drawn into the nordic money laundering scandal. we will get the latest. bloomberg radio is covering this story and many others live on your mobile device or on dab digital radio in the london area. this is bloomberg. ♪
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♪ back.welcome 18 minutes to go until the start of the equities trading day. futures point higher coming off new all-time highs for u.s. stocks yesterday. and the eu parliament is scheduled to vote on the new eu commission. if confirmed, urszula vande leyen's commission team will take -- at the beginning of december. later, the fed will release its u.s. beige book. watch for earnings from the chinese electronics company xia omi for the third-quarter numbers coming from that business. another major swedish make has been drawn into scandinavians money laundering scandal.
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scb is now suspected of allowing nearly 500 million krona linked to russian tax fraud flow to the bank. scb has so far maintained it has not found any evidence of systematic laundering. joining us now to discuss is someone fresh of a call with the company and can bring us insight. francis, what is the latest here ? >> yet another revelation in scandinavia about money laundering, this time the ceo tells us that he ritter reads that he reiterates his message that he has not found -- tells us that he reiterates his message that he has not found any evidence. that said, the ceo says they cannot exclude the possibility of being used. it is a difficult area to investigate, not least because moneylenders take extreme efforts to hide their money launderers-- money
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take extreme efforts to hide their tracks and make a shell company upon shell company upon shall company. anna: how big is the allegation ?eing laid at the feet of seb give us the size and scope around this. >> around 50 million u.s. dollars tied to the bank. that was a lawyer helping bill tax fraud intigate russia. according to browder, russian authorities and officials million oftake 230 his dollars and run it through banks, particularly in scandinavia and back through the western financial system. he was investigating tax fraud and died in prison. browder has made it his mission to uncover where all this money went. according to set,
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what through seb. seb itself has said it had about 90 billion of transactions that flowed through the bank, about a third of it work low transparency. it has worked hard to identify any suspicious transactions and maintains that it has not been systemically used. but you cannot exclude smaller efforts. anna: ok, yes, so there is a difference. what about the penalties the seb could face? i guess it depends on what developments happen from here and extent to which these allegations are proven. >> exactly. banksow, two other nordic have also been identified as being used by money launderers. donskoy bank is probably by far the largest amount that has gone through. it said that a large part of
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230, 220 billion u.s. dollars were suspicious. estimates of the penalties it faces have got, have ranged as high as 8 billion u.s. dollars. we estimate it is probably closer to $2 billion. it is hard to know until the u.s. authorities and estonia authorities and elsewhere finally come down and reveal what they have found in their investigations. anna: ok, thanks very much for the update. she's in copenhagen giving us the very latest on this story. let's get a roundup of the top corporate stories with a bloomberg business flash. culinary -- colony ceo, tom barrack, is facing an investor call to step down. blackwell capital says it is not confident in its leadership. it says the company desperately needs change to avoid a shareholder excesses. colony says it has already made
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significant transformational progress in the last 12 months. citigroup has been fined 44 million pounds by the bank of england for years of inaccurate reporting about its capital and the quiddity levels. it is the biggest ever find by the u.k. prudential regulation authority. unitsay three u.k. citi have significant flaws in the system they used to give financial information to regulars. citi says it has now fully remediated past regulatory reporting issues. xerox is ramping up the pressure on hp, planning to go directly to shareholders to present its up.e for a tie- it is the latest push for a deal backbite carl icahn. xerox said it will not apologize for its aggressive tactics in pursuing a merger despite being spurned twice. xerox will urge shareholders to call on the hp board to pursue what he calls a compelling opportunity. say aviation regulators
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they are determined to retain control over the grounded 737 max 8 as boeing prepares to finalize software fixes. even routine approval objects coming off the assembly line will now be done by agency officials. boeing helps the macs will be allowed -- hopes the max will be allowed to return to service by the end of the year. minutes away from the start of equity trading, 10 minutes, in fact. we will take a look at the stocks we are watching at the open, including bat. the tobacco giant cutting its outlook for new product amid a u.s. vaping slowdown. this is bloomberg. ♪
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♪ anna: welcome back to "bloomberg markets: european open." eight minutes to go until the start of the equity trading date. let's get your stocks to watch. annmarie hordern is focusing on cap gemini and its m&a and editions -- ambitions. we are covering bat and dani burger focused on a slew of downgrades across various upgrades. inii will be watching capgem -- altran.elian
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elliott has slowly been gaining more investment in altran. they own it now over 10% and they have been teaming up with minority shareholders which after altranni is for much too low a value. >> british american tobacco lowered their forecast for new products growth. they had seen sales growth this year. they had seen 30%-50%. now they say it is at the lower end of that range. we are talking about in particular vaping. this is on the back of a slowdown in the u.s. vaping market. there has been high-profile instances of lung illnesses this year. the slowdown is not much of a surprise. it is important that they still see growth this year and that they have actually reiterated that profit forecast for the year, largely on the strength of
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the combustion's area. there may be a little bit of a relief but we are expecting to see a bit of a downturn in the stock. anna: a host of downgrades from a number of the very different sectors. seems toay apparently be the day to be downgrading stocks. we saw morgan stanley downgrade rolls-royce. that has to do with issues of free cash flow. mitchells and butlers was downgraded to a hold at barron's berg. this has to do with their positive performance as of late. shaftesbury downgraded at jefferies. the retailing sector, especially when it comes to some of the bigger retailers, are experiencing weakness so a downgrade on this. of these shares might be in the first some movement today. anna: thanks for joining us. you can get all of the latest
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stock stories. first go is a function to use on your bloomberg. let me tell you a few other companies that have caught our eye in the early hours. real estate business, some germany -- some numbers coming out of that german business. look for some movement perhaps to the downside on -- disposaly, and asset could be something that boosts that as a business -- asset business. seb, of course, we spoke to our colleague about that earlier on. look for any response on that one. the brakes manufacturer confirming their full-year targets. there were some other details that went along with that so we could see some movement. we will keep an eye across
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that technology sector. futures pointing higher, u.s. equities hitting all-time highs on the s&p 500, dow, and nasdaq yesterday, factoring in some of the optimism this morning here in europe. this is bloomberg. ♪
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♪ anna: a minute to go until the start of equity trading this wednesday morning. welcome back to "bloomberg markets: european open." let's recap what we have seen in the asian session. a slightly positive session, and little bit lackluster perhaps. we have made moves to the upside off new all-time highs on a host of u.s. indices in yesterday's session in the united states. that is adding to the positive sentiment. comments from president trump that we are in the final throes of these trade talks between the u.s. and china also adding to positive sentiment. we have the chinese industrial profit sector not looking promising. futures expecting to add just a little bit at the start of trade. the pound a little bit under pressure, down 0.25% this
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morning. the current polling will be very topical. look for a new pool at 10:00 u.k. time. this is the picture for european futures. we are expecting to go higher at the start of tried. eye on what we just saw in the pound. just getting things underway. the pound down 0.25%, the euro a touch weaker. there is a some broad dollar strength perhaps this morning with a move to the upside. the ftse 100 out of the gates , euro stoxx 0.3% flat to positive at this very early stage. spanish market up by 0.3%. not a great deal of outlook statements news to go on in terms of gauging how the micro rubs up against that macro picture. we have had a host of downgrades
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coming through to a number of stocks this morning. we wonder if some of those might have an impact on where we trade. let's talk about the sector picture. we are seeing some broad moves to the upside for the euro stoxx up a touch this morning. we do see some breadt to the to the rally,th even though the rally is only a quarter of 1% at this stage. ,enerally speaking, some green possibly lifted by what we signed the u.s. yesterday and also by these comments from president trump around trade tax. let's come -- talks. let's come to individual stock movers and have a look at what is moving around. virgin money is the biggest gainer. hargraves are moving to the upside. those stocks on the move this morning.
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let's have a look at what is going on in the downside. rolls-royce had been downgraded by morgan stanley. that stock is down by 2.6% so that particular downgrade having an effect. i see in the downside here we britvic share price down. brakes, a company confirming broadly it's full-year outlook. we will leave these markets to just settle into their stride. those are the upgrades and downgrades having an impact on the markets today. european markets opening broadly higher as donald trump says talks over a phase i trade deal with china are in their final throes. joining us now onset in london is kevin thozet, portfolio advisor at carmignac gestion. good to speak to you once again.
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let me ask you your thoughts as 2020.d towards the end of do you see more upside -- towards the end of 2019 and into 2020. kevin: both have been working pretty well this year. a bull market of everything in 2019. we see more value on the equity side of things. technical factors are supportive, flows have not poured in equity markets yet. we are still in negative outflows in those equity markets , contrary to bond markets, which have seen significant influence. we have strong liquidity -- inflows. we have strong liquidity injections as well by central banks since september. , even the bankj of china is starting to provide easing, so so -- supportive for equity markets.
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markets are a bit more challenging on valuation side. anna: let me pick up on that point around value. you have referenced the constant conundrum between value and growth. prepared, we have this is showing s&p 500 value index divided by the growth index. this is showing essentially the underperformance of value. value has been doing very badly over many years. just in the last few months may be, we started to hear a lot of people talking about whether it's time for values to come back. you see a bit of an uptick on the right-hand side of the chart. is it time for values to come back or not yet? kevin: we would tend to think it is a bit too early for value to have a sustained outperforming growth globally. but clearly, those hopes on the that thee, hopes economic cycle is bottoming are trades.those value
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some boxes have not been checked yet for value to begin to behave properly over the long-term. one is yields curve steepening, for instance. the dollar it wrong this morning -- the dollar is still pretty strong this morning. we need to see all those boxes checked to have value outperforming and long-term -- in the long-term. anna: what do you make of the prospects for the global economy in 2020? one of my colleagues was writing that 2020 looks like a year of synchronized stability. kevin: clearly what we have seen in 2019 is the u.s. economy catching up with that of the rest of the world, which is slowing or stabilizing at a low level. going into 2020, we are still quite cautious on the u.s. cycle
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come on the u.s. economy. weeks -- cycle, on the u.s. economy. the main reasons for that is that low unemployment implies wage inflation. unit labor costs are picking, which is harming profit margins -- picking up, which is harming profit margins for companies. we could see even unemployment ticking a little bit higher moving into 2020. we are having gdp, total quarter gdp today. 1.9% is expected. q4, the picture is not that great. anna: we will talk more about the u.s. growth picture in a moment, but sticking with the
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global story and what china is going to the global story i guess. do you see continued weakness until we get a real turning point in trade negotiations? the industrial profits number today seemed to confirm for the weakness. kevin: china is trying to stabilize its economy, expecting it to provide some form of reflation or global reflation. it is not 2016. china is operating under constraint. there is inflation. real estate inflation has been very high in china and chinese eenhorities are not too kken on pushing this higher. pork prices have soared by 150 percent this year so chinese authorities are reluctant to push this too far. zet stays with us on the program. we will bring you stocks on the move, including rolls-royce. morgan stanley removes its buy
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rating on the engine maker and the stock is down by 2.6%. this is bloomberg. ♪
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♪ welcome back to "bloomberg markets: european open." we are 10 minutes into a trading day that looks broadly positive. european equity markets up 0.1%. andeuropean parliament
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leyen has arrived for her confirmation about. with that in mind, the european parliament votes again on approving the new eu commission today. the process has already been delayed after three nominees were rejected. if approved, the new cohort will start on december 1, working to leyen'st ursula von der ambitious plans to transition to zero emissions. what can we expect from this new commission and if everything goes to plan today? >> good morning. we are actually expecting the european parliament to give us the green light. you mentioned that a number of members of the team were rejected. this whole thing has been delayed. we understand that this is actually the right time for this commission to take shape and
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they will take office in december so it is good news for is a loteyen and there on the agenda for the new commission president. she says she wants to tackle climate, put in place a so-called european great deal -- green deal. it would see a climate emission reduction by 2050. she has talked about this digital tax, saying there is no international agreement on digital taxation. that brings many questions in terms of perhaps digital jobs here in europe. you have to look at this in the bigger picture. she is also taking office at a time where the european economy has slowed, where germany has technically flirted with a recession. .ou have brexit this is a team that will renegotiate the future trade deal if the u.k. leaves by the end of january 2020. anna: at the parliament where
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you are, they don't want to talk about brexit, do they? they want to be talking about a new green deal for europe. can she get her european green new deodorant -- new deal done? >> she says this is her number one priority. this is something that really resonated with voters. they want to care about the environment. that is why the green did so well in that election. leyen has taken that on board. they want to make europe a climate neutral by 2050. funddo you find it -- it? european nations are worried because they are still very heavily industrialized countries. many countries will say we want to be an industrial power but also environmentally conscious.
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how will we bring those two concepts together she has considered? x for thosemmon ta companies that do not comply with the target. anna: maria tadeo at the european parliament. leyen is giving her speech in strassburg. we will be speaking to the incoming european commission president later today. that interview, you can see it on bloomberg tv at 3:00 p.m. london time. plus, we will also be joined by the incoming european commission vice president for economy at 1:30 p.m. london time. some of these briefs shifting around a little bit. kevin thozet, portfolio advisor gnac still with us here.
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let me talk to you about where european equity markets head from here. a real focus on the green agenda, as you might expect. what do you expect in terms of the european equity story from here, kevin? should,uropean equities well some of them, anyway, should be behaving pretty well going forward. i mean, those european companies cannot really rely on economic growth in the euro zone and in growth because european low.etty germany's gdp growth is expected around zero for q4 and q1 of -- zero low. ofmany for q4 and q1 20. companies -- of 2020.
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anna: i have a chart here which talks about european firms stronger finances, doing better recently. this is a morgan stanley creation. they have eu strong balance sheets versus weak balance sheets. that isto some extent obvious may be but also helps to tell us what it is that investors are looking for as they buy into what has been a strong rally in europe. kevin: this loops back to what we were talking about earlier on the value side. investors and global investors can find some attractive companies in europe, but they want those visible, quality growth stocks in europe and not necessarily those cheap, value, highly leveraged stocks. anna: what about the side -- the cyclical side? ursula von der leyen
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saying it's time for a new start in europe. different slant. kevin: green new deal is a great opportunity. as your colleague said earlier, it is very much in support for a european -- european voters. it is probably one of the easiest measures to get through. the main question is, how is it financed? via taxes and taxes on co2 emissions? this is not fiscal easing. fiscal easing would need to be quick further down this and we are not seeing this for the time being. euro zone fiscal easing expect at 40 basis points per 2020. the green agenda
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something you and your clients talk about in an investment seen that you get incited by -- and an investment scene you get excited by? is this something that clients are increasingly talking to you about? kevin: clearly, we are seeing stronger and stronger appetite for esg and socially responsible investments by clients. there is client interest clearly. again, on those green companies, europe is probably at the forefront of what is being done across the world. we are thinking of companies s for instance in wind turbine. anna: kevin thozet stays with us on the program. annmarie hordern has a list of your top stock movers this morning.
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>> i want to stop with -- start with a rolls-royce, one of the biggest decliners out of the gate on the stoxx 600, down more than 2%. this comes as morgan stanley says they are no longer buy. morgan stanley says weaker free cash flow extending into 2020. british american tobacco flat now. it started off negative at the start of trading after they lowered their sales growth outlook for a cigarette alternatives like e-cigarettes. this comes really as a u.s. starts cracking down -- as the u.s. regulators start cracking down on they been. paschi up more than 1%. anna: thanks very much. up next, something to be thankful for this week. we will look through the data do after the u.s. ahead of the
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holiday season. will it be good? the data, that is, or will it be a turkey? this is bloomberg. ♪
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♪ anna: welcome back to "bloomberg markets: european open." a mixed picture for european equities right now. the stoxx 600 fairly flat, ftse
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100 up 0.2%. weakness coming through from the major economies at least. powerful markets is a bit better . coming off all-time highs on u.s. stocks, let's talk about what we see in the u.s. growth story. a pack today for u.s. economic data ahead of the thanksgiving holiday tomorrow. the highlights are the second reading of third-quarter gdp, durable goods and capital goods audit and the pce deflator, the key gauge of inflation. beige book also released. kevin thozet still with us. give us your thoughts on gdp. looking at the atlanta fed gdp tracker, which suggests weakness in the fourth quarter. what do you expect? kevin: we expect the u.s. economy to continue slowing for clearly, -- 2020
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2020. clearly, the figures should be holding well but moving into q4 should be a bit more challenging. at 0.4 orfed pointing 0.5% of gdp growth for q4 so that is pretty weak. profit margins are under pressure in the u.s.. unit labor costs are rising around 5% year on year. anna: wage inflation is a concern for companies and is it an inability to pass on other costs to customers? there is the tariffs story. lots of companies we speak to say they are not passing on some of those or others say they are passing them on but different in different industries. kevin: there is another one, which is productivity, which is going nowhere. starting around 0%, so that is
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another reason why unit labor costs are so high and inflation is very challenging at the moment. it is very difficult for companies to pass those costs on. anna: talking about wages, i suppose, separately, up elsewhere. data in china suggesting we are not seeing a big inflationary impulse around the world. we see the way china exports that inflation story globally. how is that playing out in the u.s.? pce in the u.s. is 1.3% back in september? kevin: clearly, but that is a global phenomenon. here in europe as well. this explains the very dovish stance from different central banks trying to sustain those inflation -- anna: where do you look to get
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exposure in the u.s. at this point? small caps had a very strong rally yesterday as we saw all of these indexes doing well. it is the small caps that often outperform. where are you looking for exposure? kevin: what we do in europe, and the u.s. you are looking for mainly.growth stocks we like tech sector, health care sector as well in the u.s.. we are a bit more cautious on the small caps side, because of these unit labor costs and wage inflation background. besides, we are also seeing some tightening credit conditions in the u.s., which is affecting u.s. consumers and small and mid-cap companies. anna: kevin, thanks very much. good to have you on the program this morn. kevin thozet, portfolio advisor at carmignac gestion. he will be continuing the conversation with me on bloomberg radio at 9:00 a.m.
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london time. we have basic resources as the biggest getting sector. the london market up 0.3%. we see some weakness, travel and leisure, financial services to the downside. ♪
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anna: 30 minutes into your trading day about here are your headlines. was --trump says fade phase one of trade talks nears completion. british carmakers call for a world-beating brexit deal as jeremy corbyn defenses party amidst allegations of anti-semitism. votes couldt concern a new commission heads today. the new commission president calls for a new europe as she delivers her keynote speech. welcome to the european open. i'm anna edwards in london.
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30 minutes into your trading day , let's look at how things are moving around. we have got a divide between the u.k. and the rest. as ever, we look to currency markets. .2%,ound is weaker by hence the ftse 100 is up .3%. basic resources stocks doing quite well. we have a fairly flat picture for the stoxx 600 overall. very divided between the up and down side. gainers, virgin money up by 3%. around town of 3%. -- up 3%. acb, a bank that had faced allegations of suspicious funds is trading up by 2.5%. those are some movers to the upside.
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to the downside, numbers coming in below estimates. this break maker coming in at 2.6% as they put out numbers confirming the full-year expectations. downgradetthews was a , down by 1.9%. 1.7%-royce also weaker after the company was cut. pennon group- weaker. let's get your top stories with a first word news update. donald trump says the u.s. is in the final throes of a trade agreement, signaling progress on a deal. the president said it is quote going very well. in an interview with bill o'reilly, trump later said he is holding up the deal to ensure better terms with -- for the united states. another major swedish bank was
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used for money laundering according to the state broadcaster. they allege they can trace the flow of cash back to a case surrounding the death of a prominent russian lawyer. seb say it flowed through and can be linked in russian tax fraud. they said they have not found any evidence of systematic stop price -- systematic laundering and the stock price is higher. jeremy corbyn is defending his party against accusations of anti-semitism after a lead rabbi suggested he is unfit for office. they trail boris's conservatives but appear to have made gains on the back of plans to reshape the british economy. a white house budget official has said he warned superiors that a hold on aid for ukraine could be illegal but says he waited months without any response. he told the impeachment inquiry
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that officials learned in mid july that president trump had directed aid to be held up. meanwhile, congress has divided the u.s. president to an impeachment hearing. president has denied wrongdoing and has called the inquiry a witch hunt. global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. emmanuel macron's plan to take control of europe is entering its next phase. after phasing to coax angela merkel into action, he's going forward alone. up --his attempt to stake shakeup the eu may have angered his partners, he has also created new alliances. joining us is our european government reporter. good morning. talk us through macron's grand plan to leave europe.
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-- lead europe. what is he talking about? have done a deep dive into the way he is trying to reshape the european union, you can read the full story on the website. what it's about is it is emerging he now thinks this is the time to reshape the eu. he thinks everything is moving too slowly, there's no great plan. he looks to berlin, and sees angela merkel who has been the one leading the eu. caesar on the way out and thinks it's now time to get things together -- he sees her on the way out and thinks it's now time to get things together. that is upsetting people, but he is trying to make new alliances in the east and south, even reaching out to vladimir putin, making a few people angry. but it's all about trying to
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make the eu fit for purpose. what are the risks with this strategy? if he's trying to forge a new role for france, what are the risks? ian: yeah, the risks are everywhere. we've seen before the eu does not like doing things quickly. litteredhistory is with the eu only making changes when there's a crisis. in a way, macron is trying to force a crisis, be a disruptor. saying, let's talk to russia, donald trump. that really upsets a lot of people. we saw his words two or three weeks ago about nato being brain dead that has upset a lot of diplomats. they don't like one man saying
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that, one man going ahead without the cooperation the eu is known for. the eu cannot move forward unless the majority of countries agree. isot of people worry macron striking out alone and not bringing other governments with him. a time hethis at senses a power vacuum in germany and the eu. you mentioned his views on nato. just this morning, angela merkel said europe cannot defend itself, it needs europe -- nato. maybe they are on different pages here. ian: yeah, and that's where you see the real strong dividing line. real division across europe. on the one hand, you have got macron saying the eu should be more independent when it comes to defense. we should not be relying on the u.s. or nato. do, angelamay well
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merkel saying we rely on nato easternit protects european countries and baltic countries from russian aggression. don't forget, leaders of nato are meeting in london next week, so this quite a lot of tension -- there is quite a lot of tension. for macron to come in and rip it and say we disagree with what angela merkel is saying is quite a big thing. it shows there will be some bumpy rides ahead. anna: it sets up nicely our with regards to nato. us for the latest on politics in the eu. up next, we bring you the latest. this drink maker reported earnings, stocks slumping. this is bloomberg. ♪
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anna: welcome back, 40 one minutes into a mixed trading day -- 41 minutes into a mixed trading day. let's get some stock movers this morning. annmarie: a host of corporate news today. upant to start with seb,
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more than 2.1%. it may be surprising given that the state broadcaster said they were involved in money laundering. one of their biggest shareholders said they still have confidence in management. seb has maintained it has not found any evidence of systemic laundering. britvic is down 2.5%. rbc says the organic growth was disappointing and missed their estimates. they say this may mean weakness in the second half. retro rank -- metro bank is higher after one of colombia's richest men has taken a stake in metro bank. it is good news for metro bank who says they have had a lot of trouble this year and the stock went down to 90%. anna: thank you. british carmakers have warned the next government would provide a deal to safeguard jobs. smmt has called for a
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frictionless border, turface trade, but even a perfect arrangement may not be enough to prevent a job losses. the total cuts have now topped 70,000. atomberg learned audi offload nearly 10,000 workers by 2025. not the u.k., but the wider industry. joining us for more is our auto reporter. good to speak to you. let's start with the u.k. and what the sm empty -- smmt is calling for. is it realistic to expect these things? hoping thes are government prioritizes manufacturing, given and employs a large number of people -- given it employs a large number of people and because of the cross-border geography. they are hoping it takes concern seriously because they do
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contribute a large chunk of gdp and employment. they are hoping the government says, ok, we will look at the seriously and give you trade deal that gives you the benefit of supply trends -- chains that exist. anna: this goes right to the heart of what we haven't talked about. -- have been talking about if brexit is delivered. frictionless borders, tariff-free trade. we will see to what extent those things are on the government list. let's talk about the broader picture for jobs. even without brexit there are plenty of other headwinds. what's the focus? >> biggest focus is companies are struggling with omissions and electrification. globally, china is in a tailspin. europe is not selling as many cars as these two in the u.s. has peaked.
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carmakers are struggling to sell more, and because of the challenges of electrification as well as investing in further technologies, especially autonomy, carmakers are struggling to invest more money, which is why they have tried to cut jobs and costs and increase investment spending. anna: seems to be themes we are talking about a lot. thank you very much, our autos reporter joining us for the latest. frankfurt is a european financial hub with the most to gain, perhaps, from brexit. a giant in the swaps market moved a large bulk of transactions to the city and the main lobby group think the total amount of assets could topped topmillion euros -- could 800 million euros. we speak to the head of frankfurt's finance. , i wonderu in london
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if it has to do with brexit. what brings you here? >> definitely brings me here, but besides brexit, i also want to attend the game between arsenal in frankfurt -- and frankfurt. anna: i hope you get equal amounts of pleasure. let me ask you about the brexit story. abouts your biggest fear the impact of brexit on the links between frankfurt and london. >> i don't have much fear. the banks are ready and prepared. in the beginning, when we saw the time pressure, there were worries about repatriating and if that would work. but today, the system is up and running. 80%apering has been done but i don't have much worry, except that the uncertainty drags on. the industry is ready and wants
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brexit done. anna: what is your latest assessment of the benefits brexit might bring? the jobs or business gained, assuming that is your vision. >> the easiest numbers to talk about is almost 60 applications by financial institutions that decided to newly set up or expand frankfurt operations. there are more than 50 institutions and we expect close to 800 billion assets moving. chunk ofnificant clearinginterest rates to frankfurt. in terms of jobs, it has not been a big splash yet. it is just about 1500 jobs we have seen moving. it's not people, it's jobs. and we know of roughly 2000 people that do have a clause
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that says once brexit is there, you get to move. as soon as we have clarity and the deal is done, then we will see a major shift. that will only be the beginning. it adds up to 3.5 thousand. and depending on what the final agreement will be, because the agreement we have on the table says nothing about financial services. it still very much in the open. anna: i'm sure if there were representatives of london or financial organizations here, they would say these debts have been built up. they go back centuries and that does not get undone overnight. >> i completely agree. london will remain, and that is good for the entire european union. london will remain a world-leading financial center.
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will we have always maintained is that it is better to have a constructive brexit. sometimes, all of the business based on passporting will have to move for legal reasons. at the end of the day, london will remain europe's leading financial center. anna: back to the business of banking in the framework frankfurt operates in. there has been a lot of talk about the banking union across the eurozone or how likely it is we get a pan-euros on bank deposit guarantee -- pan-eurozone bank deposit guarantee. do people wants to see the banking union come to life? >> there is not one voice. to put that in perspective, there are three main pillars for the financial sector in europe to become a common market.
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one is banking unions, other is capital markets. the latter one has been the most controversial. it has been on the table since 2015. what i see the german minister of finance readies himself for germany taking on the lead in the second half of 2020. and if you remember brexit, that is the time when things will be decided. he wants to ready himself to come to a conclusion that europe is able to take on that business and to have a stable common as of today doe not have. anna: so it needs a comment deposit scheme. >> absolutely key. usa: thanks for visiting hope you enjoy the football and brexit. frankfurt's main finance ceo
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visiting us in london. up next, what should investors be most thankful for this year? we put that question to mliv richard jones. it's -- that's up next. this is bloomberg. ♪
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anna: welcome back to the european open. broadly positive across some equity markets. taking a move to the upside and
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just the last half-hour or so, now up by .2%. we seem to have overcome a weakness in germany and france and made modest gains on the ftse 100. ,oining us now, richard jones with us from berlin. good morning to you. this is the last full trading day where we will have our stateside friends. we look ahead to thanksgiving and it raises questions of what it is investors have to be thankful for. if you are in stocks or bonds, you might've had a decent year. morning, we have had a rally and everything. -- in everything. what underpins this rally is accommodative central bank policy. the bond markets have obviously benefited from rate cuts, , have benefited
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from accommodative central bank policy. if you rewind to this time last year, the fed still had one more hike. equities reacted quite badly at that time in the short end of the curves were saying the fed is probably done and progressively started to price --e cuts is removed 2019 rate cuts to 2019. so that is the thing investors should be most thankful for, accommodative central bank policy. anna: bethink over that and hope around trade -- be thankful for that and hope around trade. what about the state of the u.s. economy? we get numbers later on today. richard: we get a second look at gdp today. these numbers have started to come in on the softer side on the survey side and harder data.
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this trend we will have to follow into next year because of it does continue, it will see the fed add more accommodation next year which should be supportive of equity and bond markets. anna: thank you very much, richard jones. we will be speaking, of course, to the european commission resident later on today. she has been speaking in strassburg. some of the themes she has been hitting in her address, she's talking about how eu leadership is important and needs it more than ever. time for a new start for europe. she then went on to talk about the green agenda, essentially. saying the eu can waste no time in fighting climate change. deal is a must for the planet. uk's decisionhe
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to leave the eu and will work with u.k. on security issues. the run-up to that, here's the picture to equity markets. fairly flat on other markets. -- picture on equity markets, the ftse 100 up. fairly flat on other markets. this is bloomberg. ♪
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francine: president trump says phase one of a trade deal with beijing is near completion but china's slowdown continues. eu parliament votes to confirm a new commission heads today. we are live from strassburg with the latest. political instability, a trade war, and negative rates are weighing on investors months. we get a look ahead to 2020. ♪ francine: welcome to "bloomberg surveillance." it'


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