tv On the Move Bloomberg October 21, 2015 3:00am-4:01am EDT
this is what futures markets are doing. dax futures up by 19 points. let's get your european market open. good newsyesterday, is bad news. we saw stocks fall in the eurozone, ending with better than expected. it is bad news equals good news, because of japanese exports are meeting -- there is hope of stimulus. recalibrating? yesterday, that came off the table. .1%.100 a more apt -- more appetite for equities here it copper -- equities. let's have a look at how the oil market is doing. we are getting data from the ..s. later
stockpiles could've risen once again. at stocks.a look i want to focus in on phenomenal moves. some restructuring to talk about. lonmin's -- credit suisse and shares. selling 28% --suisse profit down 24%. ofting costs to the tune $3.5 billion. the chiefp 4.5% as of executive steps aside. we've got does go profit
warnings. got to profit warnings. jonathan: thank you. in asian markets, weak exports proving we need to discuss. the shanghai comp sit down three percentage points overnight. a lot to discuss. that is what is happening with markets. here is what is happening in the next hour. capital improvements, credit suisse banks raise more than $6 billion in fresh capital. we speak to the ceo. bad is it the new good in japan. disappointing trade data since stocks higher. towardsarrels impeaching its president. ♪ so credit suisse is to dollars as alion
strategic overhaul. reporting earnings that missed estimates following a loss at its investment bank. francine lacqua sat down with the new ceo. she has how he measured success. >> the objectives we gave you. francine: shareprice? >> over short-term. overlong tom -- over long-term [indiscernible] former ceo of prudential said any ceo believes there's any between short-term and any movement in the share price is delusional. i agree. over long-term, shareprice [indiscernible] retrieving 2.1 billion in asia by 2018. [indiscernible] will give you a call to
target. spending 21 billion. i've never like cost-income ratio. liked cost-income ratio. when i tell you where closing down locations, i've said many times i believe in binary thinks. we have announced tonight the sale of banking activity in the u.s. to wells fargo. francine: it is not an outright sale, right? >> the brokers really own the customers. million ofnding $645 savings. we are giving up $50 million in
profits. jonathan: francine lacqua joins us now. great to have you with us. two issues for this company, one is the underlying this is. aboutalways going to be the strategy going forward. what is the strategy? francine: it was a complete overhaul of what we have had so far. what they were talking about is rebooting the company. now he is focusing on three main axes. the international wealth management and the asia-pacific region. white is he so focused on -- why is he so focused on the emerging markets? is a growing segment of wealthy osborne was. -- it is a growing segment of wealthy entrepreneurs. i try to quiz him on whether that will be enough of a safety bumper. >> i think one way is to do what
we did last week is to basically take a number of investments and try and do a non-preemptive crunch. billion, we have a firm commitment signed by a bunch of good names. [indiscernible] 4.7 billion. francine: capital raising exercises go hand-in-hand with cost-cutting exercises. when we seem to understand is he tried as much as possible to keep that capital raising to a -- over the next few years. jonathan: you can find the interview on bloomberg.com. what's more from francine here. francine.re here from
otto, your look through the numbers and news. wonder if the most disappointing thing is the underlying numbers. otto: the results were underwhelming. probably some expectation creeping in. the group cutting back significantly in parts of its investment banking or trading ines activity that resulted the areas that will probably not be great. they are down significantly. they reported a loss for the third quarter. not inspiring. junk of an opportunity to clear the deck. . fresh start has the new ceo taken that opportunity? otto: largely he is doing what the market has been expecting. he was clearly brought in to boost asia-pacific. that is his pedigree coming up -- coming from prudential.
expected a group of cut down's on all kinds of investment activities. start, i mean it is a revamp. largely in line with expectations. their is thein advance on ipo. i looked at it once and twice. what is that about? no one was expecting that. otto: i don't think it was mentioned. i expect it has something to do the an attempt to unlock value of the swiss universal bank. it is a nice stable core element. when all of the global operations, it is a hot button if you like.
to do with that, many people thought they would have to raise fresh capital which they have done that. for ubs, it may mean postponing higher payouts. how do they compare to each other? which one would you choose if you're going to position yourself? with credit suisse, it is basically replicating in many ways what ubs has done earlier. ubs was forced to do something much earlier. out.ndsight, it has worked a much stronger focus on target banking, asset wealth management which is at the core of both groups. in comparing the two, i would say ubs is ahead of credit
suisse and all of its implementation. i would also argue they have slightly stronger private and wealth management business. at the moment, i would still see them ahead actually. credit suisse is catching up to that. jonathan: i am interested in the geographical breakdown. we knew there would be a push with asia, with the barclays, there was a push to u.s. and u.k.. what is the difference between the two banks actually is? otto: between credit suisse and barclays? jonathan: yes. otto:e barclays -- barclays always had a strong u.k. base. regulators want that and a bit from more fruitful activity. they acquired lehman brothers during the crisis. harder tot is much
jonathan: there are bloomberg's top stories. japanese stocks on the speculation that more central-bank stimulus. the move follows week trade data. rising by 0.6%. that is the lowest expansion in a year. for the second time in 30 years, brazil is headed towards impeachment of its president good a group plans to file a request wednesday. the move comes after months of of his impeachment that is rattled financial markets there. for a start trading in new york after raising $900 million in its ipo. investors demand its stock made available. 12will have a value of billion dollars.
-- $12 billion. third-quarter earnings, the season is upon us. equities here in london, the 5100 down .2%. the dax that flat. you left on those indexes, there are some great stories. let's get to them with caroline hyde. erika there are profit warnings desk caroline: one stock shining is -- holdings. this is showing your best performers. on thewards performance stoxx 600. who is winning yak -- winning? syngenta doing very well. on the downside, pearson home retail. the chief exec of quits. mike mac stepping down. the biggest agricultural company, facing it's time for a new leader.
sales have been dragged lower. now mike mac is leaving the company. they feel that is a good thing. syngenta spikes almost 7%. pearson group plunging on the back of a profit warning. pearson group the biggest pool for the stock since 2002. third-quarter sales fall, but there for your profit will be at the bottom end of forecast. this is due to cyclical issues in the educational sector. this is the company that got out of the ft. looks like the area they are focusing in on, education is facing cyclical challenges. they have concerns in south africa as they are seeing certain promises affecting buying over there. this is the worst performer
today, home retail. plunging 12%. four-year earners -- earnings will be below analysts estimates. testtmas sale sissies and sale season -- sale season. on q3, let's more bring in sharon bell. we always love having her on the show. great having you with us. i read your report. it is kind of negative about q3 earnings season. give me the reasons you are so pessimistic? sharon: i do think q1 and q2 were quite good for european earnings. q1 and q2 were very different environments. you had the euro falling. we had european growth improving.
i think q3 is slightly different. globally, growth is slow. we have seen a week export. the third quarter has really slowed globally. u.s. manufacturing data. growthwdown in global and the stronger euro as well. i love the stronger versus the dollar. -- a little bit stronger versus the dollar. the q3re the two reasons season will be a bit weaker. jonathan: how temporary will those two things be? sharon: i think they will be a bit temporary. we think they growth in europe and the u.s. is benefiting. .ousing data has been strong
unemployment has fallen quite a lot in the u.s. next line wages are starting to pick up. in the case of europe, all domestic indicators are strong. confidence, consumer is relatively strong. world,ly in that the amp things -- certainly in the developed market world, things are robust. we think the ecb will act again. certainly extend its. that's certainly extend its period of qe -- certainly extend its period of qe. jonathan: we will discover central-bank story and the next segment. the other point of yours to be positive is the lower hurdle to be. you slashed estimates. i wonder whether the story might be the upside surprise.
-- sharon: -- they have already taken down -- they were already beaten up in the first and second quarter. they have come down 5% on average. that does mean a lower hurdle rate. you got quite a low hurdle rate to be. the average of the last eight quarters, they have all been going down. it is not that unusual. jonathan: when you think the pessimism is overdone? -- where do you think the pessimism is overdone? think there is pessimism there. there is quite a lot of pessimism and the commodity area , the oil stocks. people are very pessimistic.
jonathan: good morning and welcome back to on the move. i am jonathan ferro appeared to japan now here to out of asia. japan's september export grew at thisin more than a year. 70 stocks -- japanese stocks have grown. jodie snyder is weighing the good news, bad news good news dynamic. jodie, welcome to the program. ands start with the numbers try to lift the lid on this export trend. it a geographic problem? something happening outside of japan? >> the biggest factor is china. china slowdown has had a big effect on japan. this is one of the first signals the chinaing of how
slowdown is going to affect other parts of asia. 3.5%nly were exports down, in september, that we saw exports down to it needs a, -- to indonesia, india, all of that is the pitch of china. china really seven demand. -- china really sapping demand. to europe, more than 5%. that cannot make up for the picture in asia. jonathan: looking at the import data, not pretty. imports plunging. i wonder what it means for the boj, giving a fifth of japanese exports are going to china. i look at the data, october 30, the next boj meeting. the speculation's they may have to move, is that discussion happening in japan? jodi: it is a big story in
japan. all eyes are on october 30. our most recent survey of economists show 42% expect further easing. next week, we will get another piece of data with the industrial production numbers. there is a lot of speculation that this weakness we are seeing , and affect japan may have already entered another recession, will weigh on the bank of japan. -- the more the going toon is there is be easing, he may want to go the other way. jonathan: and big thanks for joining us. i want to keep the come session on japan going with sharon bell. sharon, i have seen dollar yen at $1.20 this morning. scenario is to
extend qe by september 2016. i wonder how much that moves the dial. markets up in japan, even though data has been week. i think there is more appetite for investment -- for investors to see more easing. japan and europe has been recovering. tests moresing easing is something that is seen as quite important. jonathan: i am looking at yields go low. growth projections being cut. central banks talking about doing more. they seem to be intent on doing it. as they keep pushing down those yields, what does it mean for the equity markets? when do want profits come into play again? sharon: bond profits have been strong this year.
you had a good environment for these executives. more buying of bonds on average support more bond proxy sectors. beverage of over 20 times. a lot of these companies have exposure to emerging markets. they are exposed to airasia -- two areas of the world that are exploding. their revenues, their margins, they're pricing, if here very exposed to these emerging markets. they also face it in terms of currency moves. a lot of emerging markets have seen devaluation, depreciation, which means they're going to translate that back to sterling or euro. jonathan: health care, does it fit into our picture? sharon: health care would be the one i prefer. it has a bit more dollar exposure. it is case of the dollar,
the possibility that the fed may go this year in terms of lift off. u.s. domestic economy is going to be strong. sharperd see a slightly dollar versus a euro as the ecb eases further. that will be helpful. also the health care stocks like a lot of the other areas provide a reasonable yield. jonathan: the final question, i look at financials, the volatility of barely no good for the trading business. the uncertainty no good. the yield curve is not in their favor. meanall of these factors for the financial sector going for? sharon: when the ecb wants to encourage growth and lending activity.
therefair, since they did -- they have incurred some lending activity. councils has picked up slightly. it is not been incredibly strong. noters can lend but it is profitable lending. that is another hit to them. recovery and unemployment continues to come down. it has been reasonably good. you see banks come down. -- perhapss is this businesses. there are a lot of restructuring stories at the banks to. ,he longer you get the slack the more painful --
john cook we seem to be hearing about the stories everyday here in europe. minutes into the show. here is what is coming up in the second half. as brazil arrows towards impeachment, investors have to wait global risks. ferrari begins trading today on the new york stock exchange -- between ther u.k. and china. ♪ 30 minutes into the trading day. 31 minutes to be precise. the ftse 100 down a 30 day. the dax doing nothing. .4%.toxx 600 up by switch up the boards. let's check out the fx market. the euro heading into a central bank decision tomorrow. 10% below where we were this time last year. 63 -- 113.623,
here it dollar yen going through 120. aboutne starts talking what the boj will do more at the end of this month. emerging markets the focus this morning. for the second time in 30 years, brazil is heading towards the impeachment of its president. a group of lawyers last two file the request today. let's speak to our justin kerrigan. how is this to pan out in the coming weeks? how long could this process take? justin: it is anyone's guess, but it is going to messy and pretty long drawn out. figurespretty too high in the establishment touching
documentitching this to the lower house today for consideration on the impeachment proceedings. there will be a decision on that. if it gets through, it will go through to the senate. rousseff will have to step down temporarily. country -- that is to be a long process which could be months. we are likely to see a lot of financial turmoil in the months ahead. jonathan: justin, i imagine this would be manageable if the economy was doing ok. it is not doing ok. i wonder how damaging this could be for brazil. justin: is not doing ok at all. we have the reality down more than 30%. $300 billion of value wiped off
the stock markets. bond yields are at extraordinary high since raising borrowing costs of brazil at the worst time. we've had four downgrades for resilient debt. debt. brazilian be fair to brazil, a lot of this has been called by the global backdrop. economy slowing down. all of this economy price decline. becoming cheaper and therefore bringing lower revenue into the country. it is been a bedtime time for this affair to erupt. that only the corruption scandal theounding natural gas, but
controversy surrounding rousseff herself. it might get worse. there are a lot of people saying it cannot get that much worse. look for some bargains. -- we haveme lewis heard jerome lewis couple of days ago. it is not going to be apparent for some time. jonathan: justin kerrigan, great to have you with us. thank you for joining us. more political risks. this time it is russia and syria. the kremlin confirming the syrian president traveled to moscow for talks. the sitdown happened yesterday as the pair discuss their fight against terrorism. for more let's speak to ryan chilcote. ,efore we get to what we know how significant is that meeting?
ryan: it is pretty significant. surprising everyone, inviting the syrian president to come and announcing it the next day. with his foreign minister, his secretary defense, that is going to be seen as bold. vivacious by-- many outside of russia. the video is out there. russians are consuming this on state television. aside saying the russian president has prevented a tragedy in syria. we heard vladimir putin they're going to hear a group of -- they are going to send a group of parliamentarians tomorrow. said we lookn forward to working with the international community, not just on military action that on finding a peaceful solution to
the conflict. jonathan: the people who are not surprised would all be surprised if other countries met with him as well. what is the chance of that? ryan: they're all going to be upset. since the crisis begin. since the civil war began there. four years. many people blame him for the people that have been killed in syria. i do not know about cooperation at this point. exactly what is he offering? is he going to say to a side, ok you have had your time? i think that will depend on. we are in the deconstructing stage. spokesman for the
the defense department says the united states should pen a memorandum of understanding with russia whereby they have rules of engagement. the pilots are up there, that is a starting point. i noted the wording choice, he said coalition and russian forces to make sure they don't get into trouble in the skies. clearly in washington, they view russia as not a part of the coalition. jonathan: more from ryan throughout the morning. how can without has helped to push up sales of the pay-tv provider. ♪
jonathan: there are bloomberg's top stories. the bank of england says global risk to not change his view that rates should rise. i spoke to ian mccafferty. that outlook remains unshaken. >> lily there are greater risks out there is the question is the judgment as to whether these affect the central outlook for the u.k. whether they compound some of the downside risks. my view is if anything, a compound the downside risk. those risks to crystallize into a material change in the u.k.
outlook. those have to be transmitted into the u.k. economy. that is through competent channels. as yet, there is little evidence. jonathan: credit suisse is to raise $3.6 billion as a part of a strategic overhaul that will see the initial public over -- public offering. decreased $815 million from just over $1 billion a year earlier did -- earlier. syngenta ceo mike mac is quitting. his refusal to engage with monsanto over its takeover approach. john ramsey will step in as interim ceo. welcome back to bloomberg tv. there are your top stories. here are your market moves. monday, tuesday, wednesday,
three straight days of losses. ftse 100 down by 20%. -- down by .3%. a lot of stock movers and earnings we need to dig through. let's get through some of them with caroline hyde. movers arehe biggest from the u.k. 8.93%.dings is up revenues looking strong. ,espite the fascinating trends outstanding growth in smartphone sales. there are some cooling in that respect. slipping 1.2%. despite that slowing growth and smartphones, arm holdings is managing to sell more chip designs.
a calls for relief. -- a calls for relief. they're still growth is quite a slowing smartphone market. on the downside, we have got profit warnings aplenty you'd 13.8%. somey cyclical problems they say. same two for home retail. up -- off by 13%. back to you. jonathan: caroline, back to you. more movers to discuss. ferrari going public good the carmaker starts trading in new york today after raising $900 million in its ipo. let's get to chris writer in berlin. do we call this a success?
chris: it's success is at the top end desktop and of the range. they set the range between 48 to 52. it is a success. could they have gotten more? maybe they could have. pieces a part of a bigger of the puzzle to take chrysler to the next level. he want to make sure this ipo was a success. the demand on the appeal market has that been great. the fact that they got the top end workshop well for ferrari. jonathan: how do we value this company now that it is in the public sphere. at about 12 to 13 times earnings. that is the premium. do we price this as an automaker or a luxury brand?
chris: it is what they were pitching. that remains to be seen on how ferrari positions itself. right now, the thing that ferrari sells as luxury is cars. , renowned,rs there desirable. it is a luxury value attached to 7000 cars a year. .t might go to 9000 cars that is a limited range. beyond that, their merchandising, it is not like a gucci -- it is not like a that can attach itself to many different products. if they can go beyond that, it is difficult to see. they have to support their fan base for their formula one team. it -- at aiced at luxury price range.
jonathan: i am impressed. u.s. next low desk -- race, space, u.s. by -- thejoined growth seems to help the champions league. doesn't that continued? >> we see a significant impact coming from the champions league's games in the u.k. next low -- u.k. the premium now. if we look at the customer growth figures, it seems the impact is limited. we see more people subscribing to virgin and traditional
pay-tv. jonathan: you wonder how sustainable the business model is for sky. what is your outlook? erhan: there are cheaper alternatives like netflix coming to the market. these highly priced traditional pay-tv would be the business model. a relatively good job. keeping costs under control. increasing customer intake. ita result, increasing gives signal that the business model is sustainable. tucker great to have you with us to break down the numbers. -- jonathan: great to have you with us to break out the numbers. we break down the deals on the horizon between the u.k.
jonathan: welcome back to on the move. live from the city of london. first up, chinese president is due to meet with u.k. prime minister david cameron today. a business summit and the city of london. caroline hyde joins us. china andeen made of britain's financial link. does some of that get cemented?
caroline: visiting education areas. the imperial college as well. the duke of york and george osborne. last night, must've been music to david cameron. when we heard gigi ping pang so much lip service. basically all of the big ask -- -- the fact that we were members tofirst apply for mentorship in the asian emphasize your investment bank, all of this was paid lip to using ping -- xi jinping. we are seeing the yuan been
propped up. it seems as though he goes around trying to internationalize the currency at the moment. we're seeing speculation that the yuan is being propped up by banks, chinese banks. it's rated up the most in a week we're seeing it being supported. banks are selling dollars, buying you want. picture there is no further depreciation. -- you uan. sure there is no further depreciation. of harrodsthe md last week. he was worried about visas for chinese tourists. add 1.2 billion pounds per year to sales and the u.k. david cameron is going to do that today.
these will be extended to this visas will be extended to two years. -- visas will be extended to two years. david cameron try to make it easier to lauren the two worst -- to lore in the tourist. chairman ringsri at the opening bell of the new york stock exchange. manus cranny is excited about that. symbol.er i am easily impressed. markof england governor carney speaks at oxford university. he will way into the grexit debate. -- if manus is easily carney isovernor mark
calling the reporter -- i love the ferrari story. it is phenomenal. it is one of those iconic moments in the market. the other story is credit suisse. jonathan: yes. manus: there is a great saying if you live a horse, you'll get grass. he is promising to extract value for shareholders by having an initial public offering. perhaps consolidate to white labels. meaning bring your business and we will follow the true -- and we will funnel it through. fixed income sales plunged by 53% in extreme dislocations.
this is everything that ubs is not. this is everything that credit i jonathan: the strategy takes the headlines. manus: the news is in the numbers. goldman sachs says this is good. it is a good opportunity. another -- a number of other people are saying exactly the same thing. credit suisse going for the split investment. you have markets business on the right-hand side. that is clearly identifying where the returns on equity will be. jonathan: manus cranny coming up with the pulse. that is it for me. it want to talk markets, i am on twitter. down for a third straight day. weakness for the miners once again. pearson stock getting smacked, down by 14.31%. best of luck for the rest of your day. ♪