tv Bloomberg Markets Bloomberg November 19, 2015 11:30am-12:01pm EST
minutes. european stocks set to close up for the third day. embracing the idea of a gradual rise in u.s. interest rates. the european close starts right now. betty: we will take you from new york to london in the next half hour. tell us more about how the markets have finished. gradualistdea of a -- we were at a three-month high. we did not close quite that hype. we are on track for the best week -- let's show you what's happening in the bond market. have fallenyields for nine consecutive days. the longest winning streak since
august 2011. we are counting down to the next ecb meeting which happens in two weeks. two weeks until you pull me out of my misery. betty: we are looking ahead to that meeting. i know you are anxiously awaiting it. we had news from their last meeting, some of the minutes. mark: you called it the minutes, it is the account. betty: my cultural insensitivity. from in the ecb account the october 22 meeting, some members called for more stimulus. they cited the risk of deflation remaining relevant. uncertainties surrounding china particularly high. peter expressed concern that affectl prices could b ea oilinflation -- w
pricesk could affect court inflation. -- core inflation. betty: let's get a check on our first word news this hour. courtney donohoe has more from our news desk. >> a lot going on this morning. we start in washington where the house is expected to vote today on a bill to make it tougher for syrian refugees to enter the u.s. you are looking at a live picture of paul ryan's weekly news conference where he will make remarks about this bill. it would require top law enforcement officials to certify that each refugee is not a threat to the security of the u.s. president obama says he will veto the bill. you can watch his comments live on the bloomberg terminal. when it comes to the candidate ,ith the better temperament
republicans picked ben carson over donald trump. but they say trump when asked who can get things done. those are the results from the latest bloomberg politics national poll. trump was the first choice of 24% of republican survey. marco rubio finishing third with 12%. in sweden, the government says it may miss its pledge of passing the lowest unemployment rate because of the influx of refugees. it is accepting more refugees per capita than any other eu country. sweden has a 7% jobless rate. it is an unlikely way to show the signs -- ernest hemming way's memoir has become a bestseller in france.
sales have risen 50 fold since monday. that is a look at our first word news right now. these andt more on other breaking stories 24 hours a day at the new bloomberg.com. banks are once again commanding the attention of the markets today. bank of japan left its monetary stimulus policy unchanged days after reports showed the country fell back into a recession in the third quarter. the outlook is becoming more dependent on the fence actions -- fed's actions. december lived off was increasingly likely. as you mentioned earlier, this morning, the ecb published their accounts of their october meeting in malta. mark: not the minutes. we learn that some ecb officials called for more stimulus last month because of deflation
risks. have beenntral banks bucking the global trend by raising rates. let's get some headlines. no accounts yet. is it all priced in next month? what is priced? it is very difficult to ascertain what is priced in because there are measures they can do. they can extend the duration of the program come expand the program, put a greater does count -- discount. look back in january of this year when they started the went large and we could see lots of reaction to the euro. --depends on the mark: 140% of the market is yielding less than two point -- when 40% of the market is yielding less than .2% -- we
-.3.get a cut of >> they have tended to trail policy measures but it has taken them time to get there. more so than other central banks because you are dealing with a lot of different countries. it takes time and it will be a combination of asset purchases. betty: even though you say the it is diverging from the fed in terms of monetary policies, he say it is a risky trade to be for long -- you say it is risky to be full on long the dollar? >> on the u.s. side, in december they are more likely to go than not. the gradualphasize
policy in 2016. the market has priced another two moves. side, it is difficult to the dynamics he can get from that one bond yields are already so low. -- 2000ct from such qe 9-2010, huge impact. 2009-2010, huge impact. bettymark: one central bank thad surprise him with the south african bank. -- surprised some today was the south african bank. record lows this week. it is popular in africa, raising rates to ward off inflation pressures.
will we see more central banks trying to frontload the fed? >> quite possibly yes. those that have dollar-denominated debt, they're are the ones worrying about the situation. turkey, or in brazil as well. for the fence part, they don't want to see an emerging market crisis. -- for the fed has part. fed'si he part. betty: i want to mention also the bank of japan. what we saw there with their no , something the bank of
japan governor talked about last night. i want to play part of his comments on that. japan's economic recovery to be steady and resilient. capital spending will continue to increase with corporate record profits and consumer spending will grow further with rising wages. betty: does anyone believe him, simon? , what did i notes say? they're living a pedal world of eternal hope this pitiful world of eternal hope. have gone pretty much nowhere, slightly negative on the 20 your average and inflation back down to zero. they are living in this position of eternal hope that something will change. it has not in japan. on the scale that is needed. betty: doesn't matter anymore?
maybe it mattered more 20 years ago. if you're in japan and you have not seen wages rise -- japan is one of the most structurally aging populations. italy is on par. that is a huge issue for japan. they cannot get themselves on the right road now, that will not get any easier in the next six years. mark: retail sales and you can't fell more than expected today. the consumer has proven resilient. falling in the u.k. more than expected today. do those factors sustain consumer spending going forward? >> there is always noise in these numbers. take the last two months combined coming was a decent rate.
q4.ing slow at the end of mark: simon has been in the no fed rate hike camp for the year. i think he is rolling over. i think he has rolled over. are they going to go next month? simon: they will. losing their grip from the precipice. betty: begrudgingly going with the crowd now. as we go to break, a once again looking at a live shot of paul ryan at his weekly news conference where he says the on syrianl an refugees is the first step. you can watch this live online go.
mark: welcome back to bloomberg markets. the european close live from london. i mark barton with betty liu. islamic state has been the source of terror around the world -- what is the source of the funds to carry out attacks? cam simpson wrote about the islamic state and how it is getting its money. betty: a fascinating account. write "the islamic state got into the oil business lobby for it captured global attention for barbaric beheading
videos in the summer of 2014." for a wild committed american intelligence officials underestimate just how well-funded islamic state is? americanwild, did intelligence officials underestimate just how well-funded islamic state is? >> administration officials told us those bombing campaigns had -- ited oil revenue turned out to be wrong. we were not only overestimating the damage we've had done, we were underestimating how much will they were getting out of the ground. i wish we knew how they got it so wrong. they did. we are not sure what the consequences are. how much they got it wrong was $400 million.
it is not a rounding error. the estimate went from $100 million a year that we had degraded them down to through airstrikes to $500 million a year -- mark: tallying up the revenues, what resources islamic state has with an oil and outside of oil numbersof the are astonishing. it seems to be in this, the revenue source. >> that is the problem. when you have territory with a million people, you can squeeze them for as much money as you possibly need. they tax everything. there are pharmacy taxes, student taxes. religious taxes. you have to buy an id card for up to $2500 if you work for a religiously inappropriate regime. there are hundreds of millions of dollars they could be getting from taxes. there were 90 bank branches just in iraq they took.
the estimate is up to $1 billion in cash they took from this banks. freshly loaded grain silos full of wheat bud. $200 million worth of wheat. the farm fields those come from are the most lush farm fields in all of the middle east. producing anywhere from half to three quarters of serious wheat -- syria's wheat. even if they were just selling crops on the black market at a 50% discount rate, they could be making as much as $200 million a year just from that. betty: it is incredible. the reach and the diversity. is there any possibility of cutting their funding off? >> it is kind of a misnomer.
how do you cut off something that is internally generated? it's not like it's coming into or out of its borders. even the commanders from other rebel groups who are fighting and killing islamic state fighters are buying their diesel fuel from islamic state inside syria. unless you get in and start retaking territory from which revenue is impossible to stop. think about it like drugs in the u.s. or europe. why haven't we wiped out the drug problem in america? we control the territory. it is virtually impossible. anytime you have a listen --inesses -- businesses and illicit businesses and billions of people -- mark: i recommend our viewers get on that website and have a look at bloomberg businessweek
and by the magazine as well. a really insightful article. you can read the full story in this week's bloomberg businessweek. let's get back to the u.s. stock market. yesterday's exuberance has somewhat dissipated. rally we had the biggest in a month and now we are fluctuating here. lowerf the indexes are with the exception of the nasdaq. i want to bring in abigail doolittle who has more. abigail: stocks are mainly flat here at the nasdaq. one of the big stories is the much-anticipated match group ipo . it sure is now trading well above $13 and much higher than the ipo price of $12 per share. is notable inut the fact that revenue is growing , up 19% in the third quarter of this year. soaringto another stock
, curator green mountain up as the company reported fourth-quarter adjusted earnings that beat the company's own forecast and the street estimate. they made $.85. keurig green mountain. up 20% over the last week. now, with visa strong results, the fact that the company is forecasting growth for fiscal year 16, we may see investors start to shift and look at the stock -- today is the best day for the stock since february of 2014. betty: mark, it is a battle of the charts coming up. mark: i have it ready. coming up, battle of the charts. what is the reality when you compare japan with germany and
betty: you are watching bloomberg markets. the european close. it is time for our global battle of the charts. we take a look at the most telling trace of the day and what they mean for investors. weisenthal joins us now in new york and mark barton is standing by in london. let's kick things off with you. joe: i want to talk about what's going on with russia and the ruble. an oilis in large part driven economy. , there has been a been a big disconnect between the ruble and oil after the ruble has gone up and oil has got nowhere. this is brent oil.
there is disbelief that thanks to the common an enemy of haws, there will be this t between russia and the u.s.. -- investors are betting that would be good for russia. mark: that divergence might not last. we had morgan stanley sing the currency is overvalued relative to the price of oil. does not rise significantly, the ruble will weaken between 65 and 70. the divergence will remain or not. joe: there are other people that argued that russia is less dependent on oil than believed. they are doing a fair job with their core economy. this will be interesting to watch. betty: mark, you've got more.
what's going on? mark: we are at inflation expectations. this is the breakeven rate on ten-year debt, the difference between government debt and inflation linked bonds. a way of gauging inflation expectations over the next 10 years. in the u.s. come inflation expectations have been rising since september. in germany, rising since august. what has happened in japan coming inflation expectations have been coming down. the breakeven rate is 7.8%. why isn't the bank of japan adding to stimulus today? goldman sachs today said u.s. ten-year breakeven rates -- one of the traits of 2016. betty: you just heard from our guest earlier who said you will
pile into the dollar on this inflation expectations, that can also be a dangerous trade. won? who has betty: my decision is still joe. i will call you out, mark. that is the same chart you are prepared for yesterday. chartt together a new mark: for the day. we are done. me and you, we are done. betty: i'm worried you will fly over and kick me. mark: betty, we are finished. i will see you again tomorrow for the european close. have a good day. ♪
scarlet: from bloomberg world headquarters in new york, good afternoon. i am scarlet fu. alix: i am alix steel. that's are heating up the fed will raise interest rates. reaction in the market is needed. as the hike then priced in -- been priced in? scarlet: pitt qb square -- a cool valuation valuing the company at about $1.3 billion. alix: we would talk to the ceo mna andgo on big pharma goile mylan's bid for perri failed. scarlet: we want to get a snapshot of the activity -- checking in with julie hyman, a mixed day. julie: after a three-day rally for