tv Bloomberg Markets Americas Bloomberg February 6, 2020 1:30pm-2:01pm EST
speaking at the white house at this hour, the president said today is, in his words, a day of celebration. >> something that just worked out. it worked out. we went through hell, unfairly -- did nothing wrong -- did nothing wrong. i have done things wrong in my life, i will admit. not purposely. but i have done things wrong. this is what the end result is. mark: the president made the remarks to a crowd of his staunchest congressional reporters. he is betting his equitable add momentum to his 2020 reelection campaign. a chinese doctor who was reprimanded by police after warning colleagues about a new disease emerging in wuhan has died. the doctoras learned was admitted to a hospital in early january and was later confirmed to have the coronavirus. when he posted in a social media group about a sars-like illness, police gold at him for spreading rumors.
officials later apologized to him. tensions have soared between israelis and palestinians in the weeks since president trump unveiled his middle east peace plan. on wednesday, a palestinian slammed his car into a group of israeli soldiers, wounding 12 coming before fleeing the scene. officials say two palestinians were then killed in clashes with israeli troops. palestinian officials blame president trump's plan for escalating violence. officials in turkey say three people were killed when a jetline broke apart after landing in rainy weather in istanbul wednesday. all 180 people on board were hurt when the jet operated by discount turkish carrier pegasus airlines beard off the runway and split into. passengers had to escape through cabs in the fuselage. no cause has been determined. global news 24 hours a day, on-air, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries.
i'm mark crumpton. this is bloomberg. ♪ shery: live from bloomberg world headquarters in new york, i'm shery ahn. amanda: live in toronto, i'm amanda laying. welcome to bloomberg markets. here are the top stories we are following from around the world. onna is slashing tariffs about $75 billion of u.s. goods, coinciding with the u.s. phase one reduction in imports from china. trade optimism is helping to push stocks to new records. the s&p 500 is on track or its best four-day winning streak since june. good news for deutsche bank.
they have won the backing of a major u.s. fund manager. that set the shares higher by the most in four years. shery: let's get a quick check on the markets. it is another risk on day with a rally and equity markets. the s&p 500 gaining for a fourth consecutive session, pushing again to record highs. we see communication and consumer staples leading the gains. more optimism after china said it would cut the tariffs on $75 billion worth of u.s. imports by complying with that phase one trade deal. that optimism being felt not only in the u.s. but also in toronto, where stocks are at a record high after four sessions of gains. take a look at how the offshore yuan is very, pretty strong against the u.s. dollar. it got a boost after the news on the tariffs. chinay trade data out of on friday, so watch out for that.
we will see u.s. imports and implications out of those numbers. soybean futures study at the moment, but still, after three sessions of gains. amanda: closer look at canada here. you mention the stock market hitting highs. the canadian dollar going to other way, at two-month lows against the u.s. dollar. we are waiting for domestic jobs data in this country, but the story has been about our central bank, which may be tilted toward easing in the near future. the canadian dollar still trading week. not a terrible day for a trading nation. shery: not surprising. nomura has flipped some of their calls, and one of them is not going long on the dollar. only one month into the 2020 year, so nomar holdings calling long dollar positions against the thai baht, chinese yuan. fear of a global slowdown.
joining us for more on this is marc chandler. great to have you with us. nomura saying sell the singapore dollar. not surprising given the monitory authority said that they have room for weakness in their currency band. we have seen thailand also implement a surprising rate cut. would this be easing move because of the fears of the virus? does this mean that we should start looking at these calls again? this is anot sure prelude to emerging-market rate cuts. we saw brazil cut yesterday and they said it was the last in the sequence. many people expected the philippines to cut earlier today, and they didn't. broadly, you are right, a lot of these countries who have the scope to cut rates would, but there are not many countries left. i think we will see china -- watching february 20 -- when they sent the loan prime rate. it's a market-driven rate. we could see more than 10 basis
points, which is what they cut their repo rate by this week. ,manda: the chinese currency one thing that we've been watching is the u.s. willingness to see manipulation -- what they call manipulation --as something warranting tariffs and other retaliatory action. how much of that would change from the macro events we are seeing? marc: last summer, when the theyr went above 7.0, accuse the chinese currency manipulation. i think there's a lot of bandwidth given to china over this. the u.s. played its interventionalists car to last year. if china was going to manipulate their currency, this would be the time to do it. august theyd in were manipulating their currency, and now they are done. i think the u.s. playing their china latitude. but i don't think china once a weaker currency. wants: in the end, nobody
to stronger currency. the u.s. -- we saw this call from nomura -- it will be the currency that people want to go along in this atmosphere. what does that do to trading and the u.s. focus on currency? -- ifthis is why i think last year was about the u.s. confrontation with china, this year will be more about the u.s. confrontation with europe. we have seen the euros go through some important percent levels -- support levels. i'm afraid in this kind of environment, the dollar is still king. maybe the dollar and the mexican peso. we are also seeing the shanghai composite higher in the last few days because of this optimism over the coronavirus. this chart on the bloomberg showing how the shanghai composite correlation with the rest of asian stocks, japan, is at the highest level since
august. are they exporting their volatility? what does it mean if central banks stop trying to help? if the pboc refrain from any action the last couple of days? marc: it's interesting, why is the chinese stock market higher? when they reopened on the ,xtended new year's celebration -- there was what we call national champions. the chinese have banks, insurance companies, financial institutions which signaled, people anticipated them to buy. whether it is real or imagined, the government played a big role in this. asian markets are moving more in sync with chinese markets. the msci has a greater weight of chinese shares. secondly, you look at who is the biggest trading partner of
different countries. china dominates asia. i know that we dominate the inional hegemonic power, but the trade flows and business cycle, it's clear how important china is. south korea has had to shut down auto manufacturing because of problems in china. his is not just about trade, it's about global supply chains, about high diverse production has been across the globe. i think there increased role in indexes,th in the investment portfolios, and the global economy, looks like my why china is driving so much in the region. amanda: thank you so much. banks up next, canadian were once the belle of the ball. now investors are beginning to worry they may not be so safe. by traders are turning their attention to a different part of the countries financial services sector. this is bloomberg. ♪
amanda: this is bloomberg markets. i'm amanda lang in toronto. shery: i'm shery ahn in new york. now to an exclusive. bloomberg was forced to reveal the details of hsbc's impending overhaul. they are planning their third turnaround in a decade, eyeing job cuts, mergers, and write-downs. the bank'sn comes as biggest market, asia, suffers through crises. for more, let's bring in michael moore, who leads the coverage of finance for bloomberg. what will this mean? this is the third overhaul in the past decade. will it just be trying to squeeze more out of asia, when asia itself is suffering michael: that seems to be the
already 90%asia is of hsbc's profit, and they will try to double down in the region. growing as not quickly, they see more opportunity. they may scale back on some of the businesses that they are not as dominant in, perhaps in equity trading. you have seen them over the course of the last few years, especially since the crisis. some countries have been selling businesses. you may see more of that. we have seen this from citigroup. these banks want to be global but not in every single country in a big way. another bank we have talked about in the turnaround pans is deutsche bank. looks like a vote of optimism from a capital group, a new position, and the stock is rallying on that. what does that signify? michael: the ceo of deutsche bank is having some success in
articulating to investors, here is what we are good at, here is what we will focus on. that seems to be corporate lending in germany, europe, and the fixed income side. they have had a little success in the last couple quarters with that initiative. that seems to be a vote of confidence. the capital group has been in the stock before, many years ago when they were under a different strategy. cap pultegroup then got out as that strategy was beginning to flounder. maybe a sense that the new strategy may work. shery: top investors have been burnt before with deutsche bank. michael: right. it is all about when you gotten in. the longer you have been in, the worse it's been for most investors. we have seen that but several of the top names. amanda: our thanks to michael moore. financials,h the flipping to the other side of the board, canadian banks have
enjoyed a long run as investor darlings. that may be coming to an end. the largest lenders started to lag the toronto benchmark, the first time since 2010. now investors are turning their attention to a different part of the country's financial site to her. it looks like there's a bit of rotation going on from the banks to insurers. let's start with the banks. why are people souring on canadian banks? >> a lot of it is banks were doing quite well in the years leading up to 2019, they had a pretty strong run before that. you start getting all of these concerns surrounding the trade war. is the economy going to do well in canada? there was also concerns about loan losses for banks, net interest margins declining and hitting the balance sheet as well for the end of last year. that has sort of sour the sentiment toward banks. not likeg said, it is people are not putting the money
in banks, they are thinking about the other options out there. shery: we have seen can accord annuity under weight. why are these investors preferring life insurance companies, is it the threat of recession, why are they under waiting banks? >> a lot of it comes down to the concern around the sluggish growth we are seeing in the economy right now. also a concern that bank of canada may cut interest rates. we are seeing that with bloomberg data. traders are expecting one this year. that will have an impact on banks. that is very domestic focused when it comes to canadian banks. if investors are looking to stay in financials, financial stocks, maybe they are looking outside canada from an economic growth perspective. when you switch and look at insurers, companies like man u life, sunlight, have quite a bit of their revenues coming from outside canada, places like
asia, the u.s., menu live in particular gets more than 50% of its revenue outside canada. when that concern is growing about where canada's economy is heading, people may start thinking about how can i invest in canadian companies that are just getting more money outside of canada? amanda: what would be a catalyst for the banks? if we are worried about that interest margins, you wonder when they will turn around. but these remain high-yielding stocks along with the capital gain. will the yield be enough to keep these people with the names? divya: it sounds like the matter what, investors will keep their money with canadian banks. the biggest catalyst will be to figure out what will happen with fourth-quarter earnings for both banks and life insurance -- insurers as well. some are reporting next week, so we will see how their overseas business has been going. also what kind of impact the coronavirus has had on life
insurers. canadian banks, you'll also be looking at fourth-quarter results, which come out later this month, to figure out what they are thinking about 2020, and their growth plans there. shery: thank you very much for that on canadian banks and insurers. coming up, china's $1 billion donation. why china continues to donate to colleges in the u.s. despite trade tensions. we will discuss. this is bloomberg. ♪
amanda: this is bloomberg markets. i'm amanda lang in toronto. shery: i'm shery ahn in new york. trade tensions between the u.s. and china may be at a high, but that hasn't stopped china from donating nearly a billion dollars to universities and colleges across the united states. there with more is janet laurent, who covers college endowments. great to have you with us.
was this inevitable given the number of chinese students at u.s. colleges? they have tripled in the past decade. >> yes, about 370,000 students. chinese students make up the largest amount of international students on u.s. college campuses. the growth has slowed but it is still quite a large number. amanda: a lot of this goes to fund research, universities rely on it. harvard, one of the biggest beneficiaries, shy of $100 million, it was there that a professor was arrested for concealing payments to a chinese university, accused of intellectual property theft. how much is about that? how much is focused on the tensions around a -- intellectual property? janet: that is certainly part of it. the head of the fbi, christopher wray, made a comment at a public hearing, saying that maybe universities were a lot of bit naive with what was happening with china.
-- a billion dollars for ubs u.s. universities is a lot of money, but compared to what they are taking in intuition and other government money, it's not as much. it is still a big number and increasing. money from china ranked third among countries. what is the u.s. government trying to do in order to balance economic freedom and national security? about 30 years, the government has required colleges to report this data, gifts that are $250,000 or more annually. the government has said colleges have not been complying. they wanted to do a better job, want a little more robust data. of course, the colleges are reluctant to do that. they say they don't want to give individual names of donors, things like that,of course, thee reluctant to do that. and do not want to reveal trade secrets, if
it is other entities giving the money, rather than individual donors. amanda: we have seen universities in the u.s. and elsewhere working closely with chinese academics. that kind of information sharing is considered and do not want to important for academics, not to work in silos. could that be endangered here? janet: possibly. schools are concerned about a lot of things. they want to have an open relationship, especially with scientists, researchers and other parts of the world doing similar research. they want to be able to collaborate with them. in fact, that was arizona state's reason for taking the money in contracts, they wanted to have more of a global presence. that is certainly something universities want to do more of. amanda: janet lorin in washington, thank you so much for that. we turn now to senator bernie sanders declaring victory in the iowa caucuses despite being essentially tied with pete buttigieg as the count was ongoing. for the latest, we have kevin cirilli in new hampshire, where
sanders just wrapped up his speech. kevin: i'm here at the manchester field office for senator sanders. moments ago, he essentially declared victory in the iowa caucus. he is pointing to the popular count where he says he is leading by about 6000 votes. according to the iowa democratic party, with a little bit more than 97% of precincts reporting, former south bend mayor pete buttigieg has a razor thin majority at toys 6.23%, ahead of sanders' 26.06%. either way, sanders saying the process in iowa was far too complex. says, where he comes from, more votes means you win. he was also asked about criticism that former vice president joe biden has lobbed in his direction, particularly about how senator sanders has labeled himself a democratic-socialist.
senator sanders responded and said he believes he has the economic message of inclusivity that will be able to form a coalition that will be able to defeat a pathological liar, his words, in the president, donald trump. some fiery words coming from senator sanders as he looks to seize upon momentum. a new monmouth university poll has him leading here in new petehire, ahead of buttigieg, joe biden, and elizabeth warren. nowy: the political world focusing on new hampshire. the some harsh words for iowa democratic party. how much has the chaos in iowa helped president trump? betweenhere is history the iowa caucus and senator sanders, especially amongst his supporters. in 2016, senator sanders' campaign was disappointed at how the iowa democratic party
handled that caucus, leading to the eventual nominee hillary clinton. he is seizing on what he perceives to be political chaos amongst democrats when it comes to telling the vote. just hours ago, the dnc chairman, tom perez calling for there to be a recount of sorts. the political drama has followed a syrian new hampshire. -- followed us here in new hampshire. amanda: we appreciate it. bloomberg users can interact with all the charts that you see on your network. the function is gtv . you can browse recent charts, as well as the analysis that backs them up. from toronto and new york, this is bloomberg. ♪
speaking from the white house, he president called the impeachment efforts evil and corrupt and maintained he did nothing wrong. after entering the east room to ovation as hail to the chief played, mr. trump lifted a copy of the "washington the large headline that read trump acquitted rawing another round of applause. hundreds of students took to the streets in baghdad today, they on the square, the epicenter of the four-month anti-government protest movement to condemn this week's militia demonstrators. eight killed and 50 wounded in the attack. 6.4 ly a month after a magnitude earthquake hit puerto 2/3 of the island's schools remain closed. there is growing criticism at education, the of complaints over the government's echoed those se after the hurricane in puerto storm. a category four it caused $100