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tv   The Pulse  Bloomberg  October 14, 2015 4:00am-5:01am EDT

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francine: a deflation fear. another slow down and chinese factory gate figures. growing speculation that the pboc will act soon to ease monetary policy. manus: jpmorgan mrs. ann says trading pain is not over yet. bank earning season begins. francine: clinton goes on the offensive as the first democratic debate white house race. ♪ welcome to the polls. live from bloomberg's european
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headquarters. i am francine lacqua. manko we got a couple of big exclusives coming up over the next hour. we'll be speaking to stefan eckhardt -- stephen urquhart. that is in 20 minutes. ceocine: we speak to the francesco caio. manus: more poor data out of china. this time the inflation figures that is seeing further weakness. we have news of more m&a in europe. francine: here with all of the details and how markets are reacting is mark barton. , producerng 1.6% prices sinking 5.9%. the 43rd month of decline. it gives the people's bank of china more scoped to loosen
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policy. looked at it at a different angle. this is the high market value. china stocks falling for the first time in six days. ending the longest winning streak since july. the value of all chinese equities, $5.72 trillion. that is up. on --aluation occurred 4.3 chilean dollars -- $4.3 trillion. the value of the u.k. stock market is $3.5 trillion. central bank loosened monetary policy today. risinggapore dollar today. the central bank of singapore reducing slightly the depreciation in the local dollar, versus those of its trading partners. -- as its main policy.
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avoiding a technical recession in the third quarter. 3% against the u.s. currency. m&a in the german rental property industry today, the know via -- the know via has -- francine: a little bit of technical difficulties. it starts to show. a lot of central banks are worried about tools they have left. in edmund shing. he is the author of the idle investor. thank you for coming in. overall, we have equities will rise. other ones waiting for correction. i am not go to sit on
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the fence. go in a place where you do one way or the other. the positioning of the investors i've seen is cautious. either downright bearish or hedge to the hilt. i would say you've got to go forward. in q4, seasonality is a strong. inrdly, ecb is going to come with big guns in december. i would not rule out the bank of japan adding further liquidity. they have upward pressure from liquidity and investors are not punishing forward. manus: when you see ecb is coming in the -- in december, what you mean? global deflation, that doesn't set a very good 2016 for us, does it?
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-- they'reare in going to extend the program in terms of maturity length. they will extend the rate of assets they buy. a great idea in principle. finally some to buy and i will buy them. they have to go further. francine: it seems like this week they started this islet program with their testing out buying bonds through an auction. this is significant, because they're getting ready for something. let's put out a little trickle first to make sure the mechanism works. i do think -- if you look at the -- they, the euro-dollar trade weighted euros have been drifting up. francine: the problem is draghi tries to announce he has the
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tools to do more. euro and your traders are not believing him. edmund: that is an interest is best that is an interest rate rise. draghi is going to have to walk the walk. the bigger guns have to be unveiled in december. manus: looks like 2016 is going to be the biggest year for deals. we've got a huge amount of corporate debt coming into the market. give us your take on the appetite. would you buy these debt instruments that are coming out? edmund: there will be a big enough yield. credit spreads have widened out. the premium you're getting for buying debt over government that has gotten higher. i think if i was good to focus in, i would rochus in europe rather than the u.s.. you have qe coming in strongly into the eurozone. insurance companies need credit.
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you got those pressures which means it will outperform going forward. will talk about banks shortly. it is earning seasons for bank -- it is earning season for banks. manus: caroline is good to break down details. a warning shot from the cfo as well. caroline: jamie dimon the chief executive says he is pleased, given the volatility did they managed to eke out the profit through tax credits. they managed to get slightly better margins despite federal rates. the underlying business looks sharply. headwinds to come for the next quarter and across the industry group. sales down 4%. we thought trading slump. fixed income, this is where the woes are. rock-bottom federal reserve rates.
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on the top of that, the market volatility, we saw an inability to put on big trade. that what -- that is what hit sales. hit,ot commercial being asset management being hit. word -- fall down downward. the cfo did sound a warning shot. it is not going to get any easier. october, the beginning of the new quarter, pretty quiet. estimates appear high, therefore start downgrading your analysts estimates for the fourth quarter guesst lets begin to quarter. -- quarter. mortgage fees down 50%. that was a big boom to the consumer unit. there is a silver lining.
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gains in equity trading. m&a flooding the debt market. the investment banking area, underwriting the fixed income. --ht spots, but overall bright spot but overall it seems to be a negative story. these themes, the federal rates and market rout are going to be across the board. whole -- banks as a whole is bound to see profits down. are -- the bets stock will fall overall being raised. double forish bets bank etf funds. clearly, the market is worried. act to you. francine: caroline hyde with the latest on some of these u.s. ex. breaking news about health care providers. seeing a big moves
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in owl nor. mmc health another provider here in the u.k. says it remains committed to a combination with oor.nor -- al n metta clinic international earlier this month agreed to create a giant in south africa and switzerland, dropping a count offer from nmc. nation between metta clinic and owl nor as well. share price shooting up 30%. i will keep an eye on this. manus: let's keep an eye on both of those stocks. it has been a big week for bank
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earnings. latest day we're going to get bank of america, wells fargo. it is a banking theme. edmund shing is with us. announced.being the funding of these deals is incredibly important. edmund: with record low interest rates, investments can be secured very cheaply. they would rather buy something off the shelf where they can cut loss and drive earnings and revenue growth, rather than take that bet for longer-term. that is my worry actually. are takinganks advantage of all of this m&a advisory. they should be taking advantage of interest rates in the u.s. going higher. is there anything you would be buying? edmund: eurozone banks. we come back to the qe story.
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out, ito stick my neck would say deutsche bank. francine: that is brave. edmund: if you want to make money you have to be brave these days. look at academic research. companies cut the dividend, fire the ceo and brought in a new restructured ceo. there's a bank has cut the ceodend, has a new cvo -- who we know can swing and ask. ask -- swing an ax. francine: as long as you think every thing is clean. manko wears barclays going to be in five years time? where is a barclays going to be in five years time? barclays is going to be
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creating a merged european banking segment. manus: income shares fell. a slowdown in demand from corporations. they threatened to curb sales. that is one of the few bright spots in the company. chipmakers largest reported third-quarter results affected by the anemic pc market. francine: nigel farage is going to propel the immigration issue to the forefront. there is a 50-50 chance that --tain will leave the euro leave the eu. the tide has turned.
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-- >> the tide has turned. there is more passion on my side of the debate. i say a chance now is 50-50. manus: peter pan flopped in .inemas last weekend movie units and its production partners according to three people familiar with the situation. a fairytale which stars hugh jackman. it cost $150 million to make. generated $15 million in u.s. -- next we hear from -- ♪
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manus: caddell: should re-examine its investment plans in light of lower prices. that is according to the country's finance minister. francine: it comes after a 12 month. -- a 12 month period. speaking to bloomberg, the company's chairman says he was not too concerned about the situation. >> we are still in good shape. if you look the brought situation, i think we have to be
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sincere. there is a lot of people talking about china. i don't think there is a broad understanding. we know there is an adjustment. everybody has its own theory. believe that this will take a couple of years, some cleaning of balance sheets. end, the fundamentals for demand for copper are still there in the long-term. be inieve we will still business in china for a long time. francine: joining us now is the head of metals, ken hoffman. he'll be making the opening speech in london later. the emperor may have no close. -- have no clothes. money has been used for a
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carry trade. copper has been brought into china to take advantage of very high interest rates. what that does, and nobody knows what chinese to demand is. even 5% of the trade copper, that is a year and a half of mobile demand. thee talking about is -- if trade unwinds. --us: a white friday of ceos a wide variety of ceos, how do you look at copper demand. there is a great unknown. ken: we can track a lot out of china. with test will look at cars, pipes, refrigerators. look at cars, pipes, refrigerators. there was an article that said 70% of all copper imports were used in carry trade.
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francine: this is speculation. do we really think that is 70%? that is a huge number. thing is notrtant whether it is happening or not? is --pening or not, -- manus: i heard you saying that china is doing what it is wanting to do. that says a whole other thing is to where we are in the commodity cycle. ken: copper prices could punch because the carry trade is a huge chunk. hofcine: can hoffman -- ken fman, thank you for joining us. the rise of the apple
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watch have made it difficult. omega's president stephen urquhart has expressed no concern about the company. he joins us now. a good morning to you. get the pulse. ceo two weeks ago, he said 2016 is going to be a record year. is it going to be a record year for all make up? -- four omega? stephen: our ceo was clear about his objective. think that nobody has no concerns. we are following the market very closely. i don't want to comment on what different brands are saying.
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where on track to meet -- we are on track to meet our estimates. manus: where try to get to the bottom to the concerns. the chinese consumer, the traveling consumer, what is it that spends a great deal of your time? stephen: currency is a big issue. we have to sit back and accept what is happening. the politics business. in terms of the consumer, china is buying -- if i take the overall chinese market, it is pretty stable. if i take into consideration what the chinese are buying in our countries, they are changing their destinations.
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it is not easy to follow their pattern very easily. , the euro isope helping. certain markets in south asia and the middle east and other centers. should be worried about this or that. manus: i want to give your to -- i want to get your take. we are seeing high rents in hong kong. how do you see the whole property rental market in hong kong echo i know you have a presence -- hong kong? i know you have a presence. give me your take on that market at the moment? -rents and hong kong is a problem. it doesn't affect the consumer. hong kong is going through a difficult stage. some of it is monetary, or psychological.
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the chinese realize there is a problem. this is something we have to follow very closely and monitor. anywaythis will work out that we have good business there. it is true, hong kong is a problem. i am sure that the rental situation will stabilize in the future. i'm certain of that. manus: we are getting ready for the bond movie. i know omega has two bond watches. what is theis impact of a bond moment as we run up to the gifting season? secondly, could we expect a tech watch from you next if you get
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this contract on the next bond movie? me a sense of what is going on there -- give me a sense of what is going on there. [indiscernible] 300 is called the specter which is the launch now. it is seen in all of the windows very prominent. bond is a great property to have. it is unbelievable. , not justss the world the anglo-saxon markets, but also asia. we are going to be very happy with what is good to happen. the film is going to be a big success. i've seen a bit of of it -- a bit of it already. go,s: just before let's you
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what is the real threat from the apple watch? very briefly. stephen: i think we are seeing this announcement was made a few months ago. what i chairman said is very small wretches have been around for a while. the biggest player has come into the market. it is not going to have a direct affect on the strategy which is very clear. we are launching next month our new watch. this is something we're going to follow. anything.n to the group is well-positioned in this field for any brand within the group. are in a other brands better place to enter that market. we're ready to adapt ourselves. manus: omega president, thank
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you for your insight. nigel farage says there is a 50-50 chance that britain will leave the eu. we'll hear from him coming up next on the pulse. ♪
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>> expecting unemployment data any second now. lowestfallen to its levels since may 2008. jobless rate falling to 5.4% between june and august from 5.5% in the previous three months. pay growth, excluding bonuses, slowing to 2.8% from 2.9%. we have no inflation in the u.k.. inflation fell .1%. britain's enjoying the strongest growth in real income since
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before the financial crisis. wage growth held at 2.7% in the latest three months. that could boost consumer spending. it could lead the bank of -- it could leave the bank of england more room to leave the rates at record lows. francine: the pound tells you what mark carney is thinking. the weak inflation figure yesterday, that makes me hold rates and i have a bow and -- i bou a boy and economy -- yant economy spurred by jobs growth. manus: top consumer prices came in weaker in china.
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gpi rose last month. it is down from 2% in august. francine: singapore's central bank has eased monetary policy for the second time this year. they narrowly avoided a technical recession. singapore will reduce slightly the pace of appreciation and its currency. economists had expected a contraction. manus: profits miss estimates. jamie dimon says he is pleased with results. investors do not --
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vladimir putin made comments after the bank's governor said she can/inflation from almost six percent. we also set down with ryan chilcote. dramatically cutting rates before inflation falls would be unwise. >> you have to think about the risk of someone pumping cheap money into the economy, with artificially low rates. that will lead to financial allles, more inflation, and the other negative consequences. >> is 4% around what you think russia should have four rate? >> it is difficult to talk about the difference between rates and
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inflation. francine: russia has a huge inflation problem. i guess mr. putin is worried about social unrest. >> a lot of people think it would take a miracle. he was pleased this year, the governor of the central bank. only one of the nine thought russia could hit the target. as she says she thinks she can pull it off. she is fairly certain of it. a lot of the reasons for the double-digit inflation is the
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value of the ruble. demand, russia is weak right now. when consumers buy things, they arenot prepared -- they prepared to pay more than they are paying. price setters cannot put up prices. she thinks she can hit it. $50 oil for 15 years is not what scares the bank of russia governor. she must be concerned about the price of oil. it is linked to what she does. >> it is. when i met her earlier this year, she says she checks the oil price several times a day. syncuble moves almost in
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with the price of oil on a daily basis. what is interesting is what she thinks about this idea of goldman sachs advancing and we could be in a 15-year slump. >> we are considering that scenario. the main thing is to learn how to live with oil prices that are relatively low. there is a model that is possible in our country and necessary. your worst nightmare? no, it is a reality we are prepared for. the balance of payments has adjusted to it. our financial sector is ready for it. what could be scarier than $50 oil for russia?
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reforms we need to stimulate investment from the private sector. we need reforms to make russia more attractive for private investment. >> what she is concerned about, why she is concerned about investment is revealed in this graph. look at the last 20 months. investment in the private sector -- private sector investment has been falling for the last 20 months. have the money to invest or they are not confident in doing that. that is before the sanctions began.
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consumers, the driver of the russian economy tapped out. purchasingne televisions. what could is private investment. that is her biggest nightmare. francine: thank you. mostmir putin one of the popular leaders in the world. with thehey dealt falling price of oil is letting the ruble weekend. that makes the job easier. nigel farage, who helped propel immigration to the front of the debate reckons there is a 50-50 chance britain will lead the european union. backed -- a hencine says -- francine:
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backed a conference. they are campaigning for the status quo. ly do so with out great passion. that may make personality clashes somewhat passionate, when things get said that should not. i believe it can be done. differences, compared to the constitutional vote, i have had a my lifetime. his comments,k of he is edging in the right direction. i have seen david cameron as being the status quo man.
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views, attitudes, outlook on life, he goes with the status quo. me, it is difficult to see him joining the campaign. the tide has turned. more momentum and passion on this side of the debate. 20 years of myer life to get this referendum. francine: -- prepares for italy 's -- since 1999. ♪
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>> we have a few shops in hong kong and japan. -- idea we are perceiving is they prefer to invest in what they can show and what they use for themselves. francine: that was the founder of an italian clothing company. the government plans to raise euros by selling stock.
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this will be the biggest ipo since italy sold a date in the utility company. for anjoined by a ceo interview. great to have you on the program. it is nerve-racking. the markets are in jitters. some investors disappointed it is only 40% on the markets. why does it make sense to ipo now? of a plan for the government. they have launched structural oforms and privatization italiana, we are already ipo in europe. francine: do you think moore will be floated?
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francesco: this is it for the time being. this is the deal investors are being exposed to. it is a difficult business. ow is not bad. how do you modernize? francesco: traditional services represent 15%ane of our revenues. to add retail banking with no lending. no credit risk. insurance as an instrument for savings. we are a peculiar post office. we love the brands. it means trust and proximity to consumers. the portfolio carries more than a postal service. we have continued to deliver mail. we deliver parcels.
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francine: we understand. i am italian. you are right. if we focus on the delivering of packages or letters, how much to you have? allow to: we will be select areas where the postman can go every other day. it gives us flexibility. a response to customer needs. we are growing in parcels. re-shiftinge we are the focus, from mail, correspondence. -- francine: we are used to buying things online. retail is bigger in italy. you think italy will play catch-up? we are serving amazon
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and our country. we see an explosion of that, of the request on e-commerce. see similar trends in other sectors we serve. we have an opportunity to intercept growing demand in certain areas for consumers. francine: we had a story that pitted you against ferrari. very different businesses, but valuations are not dissimilar. they are expected to be oversubscribed. what is your thought on the market right now? we have a high level of interest from institutional and retail. in italy, we are a strong brand. size, scale,on of cash flow we generate,
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profitability, and the opportunity to grow is making us have a lot of meetings in the city. aboutne: we always talked the italian discount. if you are an italian company on the market, there is an image that italy is not going through the reforms needed. there was always an italian discount. do you think that is gone now? francesco: i think it is going. ipo's, investors want to take a view on the italian recovery. the two go hand-in-hand. if i look at how we have recruited new board members, i do not think there is much room for a discount in italian economy based on the profile and the background. we are getting in the right direction. francine: what makes you more nervous about this?
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the fact thatt your business plan has to focus on e-commerce and financial services. now, you are almost vulnerable to market jitters. business: we have a model that is fee-based. we are more protected than other institutions. most of our income comes from fees. we are not in the lending business. rather than nervousness, i would rather think of focus. we are focusing and making sure the portfolio of our services evolves in the right direction and that the most challenging part of our business plan gets in the right direction. francine: i was promised 2015 would be different than other years, where investors are more sophisticated. now it all has to do with china. do you consider yourself more vulnerable to investors wishes? at the same time, we
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are in the zero interest world. the prospect of having a dividend policy regarded as generous or rewarding, that can flowll rooted in cash generation that we have. it makes the prospect investors to take stock from poste italiane. francine: are you comfortable with the fact that it is used as dividend rather than growing the business? francesco: it comes after plans for investments. it is an efficient use of our cash. , thank you for coming on. manus: coming up, democratic presidential candidates lit up sin city. the biggest target was wall street.
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more with hans nichols next. ♪'
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manus: welcome back. radio streaming on your desk , streaming onio your tablet, your phone. francine: front runner clinton and bernie sanders stole the
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show in this field with both taking aim at wall street. >> it is illegal behavior of wall street, where fraud is a business model helped to destroy this economy and the lives of millions of people. smallhink about the businesses started because we have the opportunity and freedom for people to do that and to make a good living for them and their families. we should not confuse what we have to do every so often in america, save capitalism from its self. manus: when you see saunders -- when you see bernie sanders and hillary, where is she in terms of wall street debate? s: she is left of where she
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was. what she has done in the way of byth hoped she got bloodied are challengers, her changes in position in trade would be highlighted. that did not happen. bernie sanders came to the defense of hillary clinton. let's listen to that. sanders: the american people are sick and tired of hearing about your e-mails. enough of your e-mails. let's talk about the real issues. you want to know why hillary could be the next -- vermont is not crucially important. the reason she could be president is because she is tough and instead of responding sheind to bernie sanders, burned him.
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>> is bernie sanders tough enough on guns. not at all. we lose 90 people a day from gun violence. this has gone on too long and it is time the country stood up against the nra. be someone used to who ran to the right on george w. bush on guns. we saw hillary clinton on to the bernie -- to the left of sanders on guns. you get a sense to how concerned she is about the sanders challenge. francine: who won? if i had to say anyone lost, republican expectations lost because they wanted a bloodied hillary coming out of this and hillary was not
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bloodied. manus: and they have trump coming back to do saturday night live. francine: hans nichols there. on the radio, it is bloomberg first word. for our viewers, it is "bloomberg surveillance." ♪ ...
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francine: deflation fears another slow down. the poc may act soon to ease monetary further. the trading train is not over yet. street.on takes on wall clinton goes on the offensive in the first of a connecticut debates of the 2016 white house race. this is bloomberg "surveillance." i am francine lacqua.

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