tv Bloomberg Markets Bloomberg November 9, 2015 11:30am-12:01pm EST
bring on mark barton. mark: european starts a been dragged lower by the prospect of higher u.s. interest rates. the european close starts right now. betty: we are going to be taking you from new york to london to berlin in the next half hour. things for us. mark: i want to start with the german airline. they canceled 1000 flights. there is a strike by cabin crew. anddispute is cost-cutting retirement benefits. the shares of's -- have shrunk by 20% during analysts said undermineings could
efforts to push through restructuring plans with workers. the other big move is in germany. you know the carpark maker. they are the number two in europe and they are the biggest decline are in germany. they are falling the most today. the revenue forecast is narrowly low analyst estimates. this company has raised its sales estimates three times this year. commercialorldwide vehicle production will probably increase 1% this year. german companies are very much in focus today. the again.ugal is on what is going on. mark: we will have a look at the psi 20.
this is down 3.9%. there is a socialist led toosition that is trying boost the new administration under the new prime minister. they are trying to vote against the government program. to this could take place tomorrow. the socialists are a left-wing administration. the fear is the market. it's up i 18 basis points. this is the highest since july. the fear is if the left-wing administration comes intothis c. power, there will be less austerity. there is political uncertainty bringing -- pushing portugal yields. betty: courtney donohoe has more from the news desk. president of the
university of missouri has resigned. more than 30 black football players at the school have said they would not play until president tim will quit. they been complaining for months about the way they have been treated on the school's campus. the last official visit to washington, netanyahu was urging congress to defeat the neil -- deal with iran. he is now meeting with president obama. their differences are well-known it, they must work together, obama said. they have not seen each other in a year. onolice officer opened fire a group of americans. americans were wounded and the shooter was killed by police. russia is focused on terrorism at home. speculation is growing that of
tom brought down that russian airliner in egypt. that is underlined the thertance of having insurgency under control in russia. russia federation says it will defend itself against allegations of doping by athletes. the track international organization could suspend them from competition. that's a look at our first word is. you can get word on these 24 hours a day at the new bloomberg.com. i'm courtney donahoe. betty: thank you. thebig story in europe is greenback. the dollar grew significantly in that weakened against the euro this morning trade mark has more in london. mark: this has investors
speculating the pace of last week's dollars surge. of the -- is the head thank you for joining us. goldman sachs is being brave. they are saying it's going to hit parity. are you brave enough to join goldman western mark --? >> we think it's going to stop by 106. it's close to where we are at the moment. the unwarranted appreciation of the dollar will lead to tightening in the u.s.. that could reduce the chances of a more progressive tightening by the fed. : is there a level balance that takes away the prospect of a rate cut by the ecb? it?hat changing
lowestl three is the from april. that is why the euros affect has changed with trading. that is the latest projection. that is what the ecb wants to see. they wanted to be there and stay there for a long. -- amount of time. close to there, we are getting there. that is our forecast. they need not respond in any way. they: i have a question on dollar. i'm not sure if you can see this. let's bring up this chart. there was a rise in the greenback. it was taken down because fed officials worried the stronger
dollar was going to hurt our export growth. do you think that might happen a second time around western mark --? >> it's really about the feds credibility. playing a stronger hold that in march. a rate hike is still our potential case in december. from current levels, any dollar depreciation could lead to tightening in the u.s.. that is something that the fed may want to lean against. they are going to do it through hiking rates. a stable rate could take away some of the tightening that is implied. like: is there a situation mark was alluding to, a parity with the euro where the dollar strengthens so much that there
will need to be a hike in the u.s.? >> that's why i think parity at the moment would be difficult. it will trigger two things. reconsider the strategy to tighten rates. importantly, the ecb may reconsider negative deposits. unwarranted euro dollar depreciation it's this in the hands of draghi and yellen. emerging every single target currency is following today accept for the hong kong dollar. when you look at market currency, the declines are huge. brazil is down by 26%. how much downside in these
currencies could we see as we await the big fed decision in december western mark --? not ase currencies are buying opportunity. should seeterm further weakness and not accentuate losses. that is the case. those currencies should remain close to those lows. valuation consideration may lead to the brave ones to buy into those debts. people should be mindful that the other underpinning drivers are also slowing global growth. that is slowing down china and those factors will take years to play out. investors should remain cautious. mark: thank you for coming on our debut show. there you go, betty.
mark, thank you so much. we've got very much ahead. volkswagen is pointing fingers at management. travel chaos continues in europe or in germany's largest air flight -- airline grounds almost 1000 flights. can't eight for this battle on the charts. mark is going to dive into the terminal. they will explain what this chart is telling us. ♪
mark: welcome back to bloomberg markets. we are live from london and new york. betty: it looks beautiful there. i am betty liu. this is time for the business flash. these are some the brighstnow. shares of macy's and kohl's are following today. citigroup warned that they are in for a tough quarter. the industry is suffering from a sales slowdown and too much inventory. of dupont will have a job prominently. he has been running the company since last month. expandsaid he wants to the cost cutting program and once ellen kullman to resign. that omission testing scandal has hurt volkswagen's credit rating. to bedebt has gone down
plus. questions about their internal controls and management. that is a look at the business flash stories. mark barton has more in london. mark: let's focus on that. we had the pitch downgrade. hans nichols is in berlin. wt's start with the a to b downgrade. it's still a credit investment. it still positive. what is expected? hans nichols: there have been a variety of downgrades. they areportant is looking at the health of the management of the company. that is what is concerning. does not just looking at the scandal, but how the company has rescanned it -- responded to it. that's troubling. we thought this was localized
and it had to do with nitrogen oxide on diesel engines. it actually had to do with co2 as well. now we get this downgrade and we have an announcement for cars in germany, half a million of them need to be fixed or require substantial reengineering. this is going to be a very expensive problem. estimatesthe cost rising on a daily basis? aside $6.5 billion. hans nichols: when they did their earnings it was $6.7 billion. their earnings call, they raise that to six point of an billion. then they announced the co2 aspect of this. that is about 800,000 vehicles. this could cost an extra $2
billion. estimates, we have to go with what the company is saying. they need to pay a big fine, they are going to need to raise that to do it. they are pretty liquid. i'm: when it comes to cars, fascinated by this. perspective grid what does it cost when you ground 1000 flights on a single day? hans nichols: we have some idea because of the pilot strike. that was into because of a court injunction. that cost 350 million euros. what's important about the last couple of hours is its estimated to have included long-haul flights.
they listed more than 100 long-haul flights. we would never think about leaving from franklin -- frankfurt to go to new york. you should check your flight to see if it's going to make a trip. mark: how could they be cutting costs with a increased earnings in october? how do you marry that? hans nichols: every married person in europe takes easy jess and ryanair. you obviously have a problem rum a challenge with low-cost airlines. that's what they are trying to compete against. they have a new ground. they used to be germanwings. fighting those low-cost carriers and above they are competing with the gulf state carriers.
that is a difficult position to be in. mark: it's good to see you. it's all about competition with easyjet. there you go. betty: undercutting the bigger rival. metals have been taking a huge beating as of late area there is a commodity collapse of his rippled. stocks are way down right now. one company that is getting crushed is prominent. offering $407 million worth of shares at one penny each. from johannesburg. our shareholders, how are they reacting? good day. now, the shares climbed
most of the day. we just saw a complete turnaround. the stock is down to a record low. it lost 20% in total. that's a massive fall for a day. surprises a bit of a andn that they won approval have citizen shareholders. shareholders were underwriting this plan. it does come as a surprise. betty: what exactly is this plan about? first off, i think this is a $770 million plan to reach its balance sheet.
if that gets approved, which they are underwriting shareholders, the bank will extend another $370 million in credit area this plan should be sufficient just to keep it from taking over. they are expecting an improvement in platinum prices. betty: why is it so important to keep this company afloat? yout's interesting that mention it size. it depends on whether you look at what it produces as opposed to its market cap. it's the third-largest platinum user. size, it's at its today barely worth $100 million. profitst 90% market
value. investors could not see the way through for this company given the downturn in the process. betty: thank you so much. i is in from johann's berg. want to quickly check how the markets are doing. we are down here. there is a big selloff going on in the dow right now. it has turned negative for the year on a day-to-day basis. they are down 1%. this is the biggest drop since september 28th. we are retreating from that three-month high in the s&p. i want to bring in abigail doolittle. what's going on? abigail: the indexes off significantly. this reflects the fed news from last week, they may raise rates
in december. we have been watching priceline. these shares are plunging. the company offered a fourth quarter profit forecast that fell short. the competition may be heating up with expedia. discount,ading at a at least one bank has downgraded it to a buy. the stock has its worst day in more than a year. dish network, this company missed its revenue estimates is more subscribers canceled. the company lost 23,000 users in the third quarter. we suggest that the loss could have been worse. wasstreaming online service up 60%. betty: thank you so much.
betty: you're watching bloomberg markets. we take a look at some the most telling charts of the day. joe weisenthal is joining us. mark barton is still with us. isk: goldman sachs consolidating its money-losing brick and next. how did they fair since 2002? next is upck and 113%. it is 50% below its record.
sincedex has risen by 70% 2002. it's just one perform -- 1.4% above the record. question, ishe basedhe end of acronym investing mark --. >> is this a sign that we are getting closer to the bottom. i want to look at the chart of the usd versus the euro. that is the proper line. the gold line is the spread between the two year yield.
alix: from bloomberg world headquarters in new york, good afternoon. i'm alix steel. scarlet: and i'm scarlet fu. alix: mark zuckerberg is sitting down with bloomberg news. he is an investment in new york public schools have been disappointing him, but that is not stopping them from making a bigger bet on a nether school district. and cisco and ericsson make a billion-dollar partnership. how do they expect to do that? alix: let's go to the markets desk. julie more. it seems like a delayed reaction -- it feels like a delayed reaction to friday. julie: it is really a strange