tv On the Move Bloomberg November 25, 2015 3:00am-4:01am EST
selloff was the turkey-roger incident post up escalation is in focus in this program. caroline: it is great to be back, and yesterday was the worst you have seen in two weeks of european selloffs. russianbecause of the aircraft shot down by turkey really causing concern for investors. that, may be mulling over cause for concern. will be see any significant tensions between these two countries? particularnalysts in saying a major escalation seems unlikely. soil rebound is in the cards. the fifth day -- the ftse 100 up. that has been among some big speculation of late. more risk so clearly
appetite up there today. let's have a look at how oil is faring. liking up amid political tension that was a focus on oil and therefore it could see some supply concerns about egypt, russia ongoing. thosejust going off of highs, the dow backup 46. the united kingdom, meanwhile there is still some search for safety. we are seeing gold remain higher. back in vogue it would seem after it had been pushed a downward amid the ongoing issues and preemption of the u.s. mandate would last bring up the overall cost of borrowing and the end of cheap money. but gold is back in logan. it remains so at the moment. let's have a look at some of the stocks on the move. we do have some speculation out
there. metro is slow to open, all three are slow to open. upely to rise, it could rise 4% or 5% this morning on the back of a german retailer proposing dividends ahead of analysts estimates. any had more cash to slash overall growth potential. they are raising the overall dividends. +s also as big speculation for this company. thomas cook will wait to open. --ember the disruption among they could repatriate some of the holiday makers there. but they are now back off a 2016 despite the geopolitical environment. jonathan: thank you very much. we'll bring you those when we get them. reports that george osborne will
reveal the next plan to the boost to the homebuilding this country. bow way up around 2% and we will continue that story later on in the program. i want to get more with the yvonne man right now. really yesterday's again we back to monday's levels. we are seeing geopolitical tensions over the downing of the russian warplane adding to concerns. overall, there was a modest bid. gold is holding some strength. japanese and korean stocks falling. .7%.ing 0 chutes are the energy producers. looking pretty good for shanghai, but we did get the only bump in indicators that was up -- a bit of a disappointment.
is a gauge of interest among small and medium-size businesses all deteriorated in october. it is good to show we see immediate response after waves of fiscal evening -- easing. overall, we take a look at investors looking ahead to next week. we have janet yellen who will be speaking, the u.s. jobs report is out next friday. it is the last report before they decide on their december rate hike. of course, china's pmi. jonathan: he was what is happening in today's program, first up the ntis alliance, it's it in jeopardy? what are the serious consequences to turkey-russia relations? what us can we expect is the homebuilder stocks are in focus
this morning. later on, can hp make it alone? it was a disappointing forecast a profit after the split from hp you. ♪ the ntis alliance in jeopardy? vladimir putin accused turkey of being an accomplice to terrorism after a russian fighter jet was shot down by turkey. the incident marked the first class between foreign powers embroiled in the syrian war. >> an unidentified plane was warned to 10 times before it entered our space. warnings, it insisted on violating our airspace. following that, after the intervention, the plane was shot down. day's tragic event was
significant consequences for relationship between russia and turkey. we will never tolerate such atrocities as happened today. times the fact that a large amount of oil and oil products is being transferred to the territory of turkey from the territory seized that is how gangsters are receiving a financial support. stab in theve a back with strikes against our jets which are fighting terrorism. >> turkey says -- has a right to defend its territory, and its airspace. is very important for us right now to make for that both the russians and the turks are talking to each other to find out exactly what happened. take measures to discourage any kind of escalation. jonathan: let's continue this conversation and bring in elliott, president obama would
like to define exactly what happened. we were always going to get conflicting stories. we're hearing about serious consequences. the business world wants to know what the serious consequences are. what are they? it doesn't look like it will be any kind of escalation. certainly not directly between the russians and the turks. there are many other potential consequences that there could be. i spoke to lawmakers about the energy relationship between russia and turkey. turkey is gas proms second-best customer. of course, turkey very much relies on russian gas as well, that is for about half of its needs. they need each other so much and in terms of that relationship, it is unlikely to change in the short-term. longer-term, turkey might be looking among the other potential suppliers. perhaps iran could step in once
sanctions are lifted. then there is the tourism in the wake of the downing of that jet saying that russian jets should no longer traveled to turkey. they have been traveling there quite a lot. they are the second largest contingent of visitors to turkey, after germans. we saw the impact on turkish airlines, which is the biggest carrier of russians. it was down 7% yesterday. their rebounding today. there are concerns that could impact the both of them. a news agency reporting that russian tour operators could suffer more than turkish ones. there are many ways that there is big follow-up the downing of the russian jet. as i say, the good news is it is highly unlikely that will translate into any escalation militarily. in the middle east, thank you very much for joining us this morning. let's continue the conversation.
great to have you with us, serious consequences. that quote, i still want to discuss it. i want to know what that means. what did it mean to you? inthe worst-case scenario terms of turkey and russia relations, we could see russia going after -- i don't think it will be energy. i think it will be toward his him. there are more than 3 million russians going there every day. it can be making it more difficult or turkey to put exports inside the russian markets. this has been done before. you use medical standards. you stop the flow of goods, especially foodstuffs. turkish market left to slow down. you can make life more difficult for turkish trucks. there are different ways -- buttons that putin can press.
if we are talking about serious consequences, i don't think that will be the case. marketn: we saw the reaction, money going into german bonds at an all-time low. the market reaction was one thing. as an investor, what is the advice you give to them? what do a single out as an escalation, or something as you just consider as noise? gango: if we see another episode like yesterday, with a russian fighter jet involved in some sort of skirmish -- shooting down with any other weapons. i believe that is unlikely. the corporation will intensify, they want to be part of the equation. to cook some kind of
anti-isis alliance. it is going to germany, russia, and excluding turkey. the shooting was maybe not about protecting the border. i'm ae saying i'm turkey, big regional player, you need to get me to the table. jonathan: is this a sign of progress from yesterday? wolfango: we are still quite away from having this be an alliance against isis. complicated. i also believe that americans are upset by what the turks it did. there been working very hard to try to reach some middle ground with the russians. it certainly will complicate things. we could still find a way from what we want to achieve in syria. it is about isis, what will we do with assad, so there are a lot of moving parts. jonathan: plenty of moving
country's capital on tuesday. another 17 people were injured. the attack is thought to a suicide bomber. it to the declared a 30 day nationwide state of emergency. early indicators suggest the chinese economy is still showing response to waves of monetary easing. that is based on a search engine interest. an indicator dropped sharply from october. a goldman sachs employee detect illegal behavior has been sued helping himself to information and trading on it. individual exploited access to the firm system to make almost half $1 million. 50 minutes into the session in london, the ftse 100 up by 0.5%.
the red yesterday, we can get more that from caroline hyde. caroline: we are a rebound across the board and travel. led lower by the concerns of increasing political tension after the downing of the russian aircraft. that added to the concerns that people would not want to travel. i want to focus on one of the key spots driving that rebound -- thomas cook having its best day since march, 2015. more than six months, the reason is all about quarterly earnings coming up. yesterday we saw a significant selloff in thomas cook shares. there were concerns about tunisia rising once again. this is a company that sends people to the likes of egypt, tunisia, and they did say that there are fragile geopolitical environment continuing. they said there was significant disruption in certain destinations, mainly egypt and tunisia where they still have back theird -- put
market. their remaining suspended, but nonetheless they say 2016 got off to a good start overall. cook a driveomas higher on the back of the fact that there was optimism despite the geopolitical tensions. not so much for the other stocks. keep an eye on some hotel companies, they sold off significantly. easyjet one of the worst performance yesterday after concerned by the downing of the russian aircraft by turkey. would people want to be traveling at the moment? we are seeing continuing selloff on easyjet this morning. so do is act or, the hotel company. yes, we are seeing a rebound in
thomas cook and the overall industry, but there are still some key concerns about traveling to key destinations such as turkey at the moment. jonathan: let's continue this conversation and bring in bloomberg's european aviation correspondent. you and i were talking last time about this extra layer of security that could be introduced after what happened with the russian airliner. have we seen any sign of that story develop? banhe u.k. continues to travel to egypt. the thomas cook ceo this morning was saying they will be speaking with the department of transportation today. it is still quite early, i know the u.k. wants to boost security at airports. theseally in some of problem areas, but we will have to see how that pans out over
the next few months. quickly, thet conversation george having, the airline and you have been speaking to them at the moment? ango: the view that we don't see immediate escalation taking place. watch whatey need to the airports due to try to coax some alliance. certainly, there is some sort of economic retaliation by russia towards turkey. that is basically, and a nutshell, what we told the clients yesterday. jonathan: a sent to the business response, is tourism and eat your -- an easier target for russia? wolfango: it is. it has been done before. the prime minister was already invited me russian the prime minister not to go to turkey. it can simply try to do that.
egypt is a difficult destination. we have an emergency situation there as well. you wonder where the russian tourists can go. it will not that easy for the russian authorities, turkey is not the place to go any longer. jonathan: great to have you with us. up next, we look ahead to the chancellor's budget. ♪
jonathan: good morning, and welcome back to "on the move." that is the turkish prime minister speaking, talking about the refugee situation. he says closing the doors would amplify the problem. islamophobia graces reactions -- i think you get the gist of what he is speaking about. he does mention what happened yesterday. i will bring you those headlines as they come through. in there, homebuilders u.k. said to be offered new incentives to build affordable homes. that is when the chancellor delivers his statement at lunchtime. up by overor wimpey
2%. of course, the u.k. chancellor will give us much more detail a little bit later on when he delivers the first statements of the conservative majority this lunchtime. one of the big questions is whether mr. osborne will be forced to cut a target of 10 billion pounds by 2020. last week, figures showed the deficit the biggest cents october 2009. they missed the borrowing target set by the office of budget responsibility in july. one of the men charged with digging to the data is dan hansen, let's bring him in. the numbers for october, how do they change the world? dan: you are quite right. the numbers were weaker. be 5pect more over 2016 to million or 7 billion pounds
higher. what we expect them to do with that is not the weakness to the forecast. back into the forecast and it will be slightly smaller. but they will get is a slight windfall from the interest payments. yields will be down, we expect inflation forecasts to be slightly weaker. interest payments could be slightly lower. overall, you're quite right. a surplus of the back end of the forecast will be smaller than the 10 billion they had penciled in in july. jonathan: i'm back and forth between two stories. what is happening in turkey and mr. osborne. we're getting some headlines on the turkish situation. i want to go to caroline hyde for more. caroline: this is coming live from the president of turkey. he is saying that too on it in a fight jets violated turkish airspace. he is speaking once again, standing by his criticism that russia did invade his own
airspace initiative the right to protect their own borders. he said the jets were in violation and were warned. one return to syria, the second military jet insisted on the airspace violation. therefore, turkey took down the russian military jet. just inside the turkish border. it was about one kilometer into turkish airspace. overall, they're still standing by their reasoning as to why they took down the russian jet. of course, heightened political tension as the moment -- at the moment. much being said by vladimir putin, saying it has serious consequences. he said he was being stabbed in the back. now the president of turkey is retaliating, standing by his criticism saying the second military jet would not stand down and insisted on staying in the airspace -- in violation of
jonathan: good morning, and welcome back to "on the move." let's get you up to speed him or stocks are trading this morning. the ftse 100 up this morning. by 31 things this morning. the dax up by 11 points. cac up by about 10 points. the day ahead, it is dominated the chancellor in this country. let's bring in dan hanson. we're talking about the
borrowing figures. at you go into this, what are you looking for from osborne? we know it may or may not happen, what will happen elsewhere? n: the spending review will come alongside the statement. it will flesh out details on how different departments will contribute on the deficit reduction plan. jonathan: where is the pain? dan: we know it want the in the nhs. that means other departments hits to the budget. local authorities, especially. expect them to take a big hit again. between 2010-2016 the budget were slashed by 15%. we expect them to be slashed by 30% over the coming four years. the other thing to look out for his tax credits. --ple may use recently
they've come up against opposition on tax credits. he is likely to look to smoothie of limitation of those cuts. he will borrow it had more in the near term, but will want to bankroll savings in the back end of that surplus. have you witht to us. we will it over to westminster now where on edward to standing by with a guest. thanks, many perspectives were gathering this morning. he will deliver his autumn statement, the third time this year begin to hear from the government about what they want to do with spending. let's bring in our guest, lord digby jones. a former minister of trade. he is on various boards in advisory roles. let's take a bit about training,
they want to focus on the skills gap. the government said they want to millions more apprenticeships. there was a tension between business and the government with how it is paid for. the productivity gap in this country is enormous. we have people who want more for less -- no problem, as long as you can get more. the only way to do that is to have better skills. i'm not talking phd's, or rocket science. to do it, we need education systems that produce people that can operate a computer. the big thing is to get 16 have a 19-year-old in apprenticeships. the chancellor has said that his predecessors have said to get more apprenticeships. now, the challenge is how do you get a small businessman to actually take on another kid? the answer is having taxes pay for part of it. he said it in july, and march,
the problem is how does it work? anna: it will be a levy on business. lord bigby: i don't think the mind a levy if they can then get it done. i don't think they mind that, as long as the result is -- we have seen some of the house bills in the u.k. trading higher. this is going to be a statement that includes housing very much as a focus. will it be material? lord digby: chancellor's of all parties for 30 years of talk about this. they're hypocritical nation in one way, we don't do nimby anymore, we now do banana -- build apps really nothing, absolutely nowhere at all. housing, we need more
but that the bottom end of housing. i think there we have to get more houses built. i reckon local authorities will do so. that is, if the man actually puts his foot to it in there this afternoon. business --vise a what do businesses make of what we have the government already? they want a level playing field. they want insurance on goal posts of change. it is more important than the money spent. whatever you do, please don't change your mind halfway through. don't same a predecessor said that but i will do this. that is what they hate. morehat we need to do is money into the security services. , tell the police and you might have less money but you can still keep the people on the street, it is how i handle the money back of the desks.
thirdly, we have to get the navy up -- mainly because where these wars are you need big not a goal presence. all -- nautical presence. anna: you, like many lords, voted -- lord digby: we of no democratic mandate. an honest orlike rectory. we advise, we revise, we kick up a stink, and that is what we did. i do think the democratic will is the most important thing. i wanted to have big cuts to welfare by 2020. the big change in tax credits, these taxpayers stop subsidizing low pay. i'm with him on it, what i want them to do is just take the hard edges out of the transition.
of political, a lot of fears voted for the government because they thought the constitutional issue of not overruling democracy was more important. i just thought we ought to get the hard edges removed from this. of stopping the taxpayers subsidizing low pay is exactly right. let's talk briefly about the brexit. you suggested recently that you could be tapped and -- tempted to voice in favor of leaving the eu. digby: i can see the value added. brussels is marching down towards 1970. they're looking inward, everything it's about inward. they should be taking how do we give a job to a kid in greece. how do we give a quality life with single mom in madrid.
go global and our competitiveness. instead, they're all looking inward and fighting each other and everything else. i want to stay -- that begs the question, what does reform look like? i think most businesses here wants to stay something that is globally competitive. it don't want to stay in something which is, frankly, not fit for purpose in the 21st century. i'm airing on the side of staring in their staying in at the moment. i was a lawyer for years, that is probably why. anna: thank you very much for joining us. plenty more to come from here throughout the day as we work our way up towards the: 30, when the chancellor takes the dispatch to deliver his autumn statement and spending review. jonathan: thank you. much more from anna edwards throughout the morning on bloomberg.
is still with us. the housing situation, i thought this was remarkable. post crisis, the way that i could make you feel good was protector asset. now we see the politicization of assets from a lot of people. you have to bring that back in, but now you want to get them up and want to know how people buy them at the same time. how do you reconcile those two things? is her difficult. the problem in the u.k. is the fundamental short supply of housing. governments attempted to deal with this head-on. they failed. you really need the government to look into, and take steps to increase supply power. would stop this process of bubble hype that we hear about in the u.k. when you get prices, house prices, welling -- running well ahead of earnings. that it moves back again, -- jonathan: can this economy
handle e-house bubble popping? can it really? 31 government to oversee that? what on earth does that mean for the policy? they can say they will do it, but the consequences could be much worse. dan: absolutely. a commitment to doing more house building is a step in the right direction. my personal view is that you should get a cross party agreement that could be taken to different parliaments. a new government comes in and they press reset and things change. what you should get is a commitment to a longer-term policy of house building and investment. that will benefit the economy. jonathan: the greatest morning. we will bring you the chancellor at half past 12 this afternoon
live on bloomberg television. do not miss that. someone breaking headlines on the tension between turkey and russia, let's get to a few of them with caroline hyde. caroline: this time of his angela merkel speaking out, saying she has urged the president of turkey to do everything possible to calm tensions between russia and turkey. saying that germany backs is syrian peace talks ended utterly rejects islamic state terror. president has been speaking on states that he continues on the humanitarian operations at syria's borders. intention, he says, to escalate the situation. nonetheless, standing by his view that hit every right to down that jet because it continue to be within its airspace. that was in violation of the airspace. the turkish lira is continuing to weaken today.
into theout 44 minutes session, here are your top stories. today,ning of brussels the capital has been on lock down since saturday over the threat of a major terrorist attack. meanwhile, the visit 30 day state of emergency after 12 people were killed when a bus carrying presidential guards were killed. 70 more were injured in what was not to be a suicide attack in tunisia. a goldman sachs employee sued for detecting -- allegedly helping himself to trading on that information. they say the individual exploited his access to the firm's victim to make almost half $1 million. what a story. another story, the spanish renewable a bunny has started
credit protection proceedings after a financing company pulled out of a plan to invest in it. shares in the troubled firm have been suspended until 11:00 madrid time. the company has seen its value 70% over the last few months. charles, great to have you on the program. step? abengoa taking this good morning, they're taken the step because it has informed the market this morning that an investment of a 350 million euros by a group has fallen through. it said that they had pulled out of this investment because the terms of not been met. this is the latest chapter in the agony of abengoa. it has been facing a real fight for survival all-year-old -- all
year. isathan: i wonder if this just an isolated corporate story, or something much bigger. what does this tell you? charles: the issue with abengoa was concerned from investors about cash flow. accounting,s about it was a struggle all year for abengoa to convince investors it was generating enough cash. we had reported a nine-month loss earlier this month. in those earning statements, it did include a statement from deloitte which highlighted the concerns around the company. also its ability to continue operating. it has been a kind of long story, and agony for abengoa up to this point. jonathan: the to have you with us. what are we, but 47 minutes into
the session? lots of stock stories this morning. >> i'm looking at some of the biggest movers, specifically some of the biggest gainers. awful terror attacks in paris we saw trouble companies hit. are someuble companies of the best performers of the stoxx 600. thomas cook is among them. positive for the first time in five years. that is because it got boosted business in its home market of the u.k.. despite turbulent and some destinations, said the ceo, the .nderlined business performed underlined profit did beat estimates. that is thomas cook. looking at metro, these shares have risen the most since 2013, and their highest in more than three months. after they propose a
dividend increase to shareholders. finally, i've highlighted persimmon but u.k. builders in general are gaining i head of george osborne spending a report in which he will put the british housing crisis at the heart of what he says. he is offering incentives to private developers to build more affordable homes. as we know, there is a lack of those in the u.k.. jonathan: we do know that. thank you very much. a big tech story overnight, hp is given a disappointing forecast. it is hurt by dependent on the lackluster pc and their market after splitting with its corporate technology quarter -- counterpart. caroline hyde has the details. newly separated in october, but it is the same story. companies posting profit outlook set disappointed the market. both of them falling shy of where analysts had been
estimated. trying to slow their separate the slow from the grow. the sales of service, all of that really not managing to make many waves. largely because the pc business continues to slow. let's start with the woes that hp, the area of the business selling printers. the prophet remains flat. that is with the chief executive has been saying -- they need to get to the gym and get fit. those markets are continuing to be tough for them. pc printer sales slumping. which of the first quarter forecast missing analysts's estimates. amid all of this is actually faring worse than the rest of
the market. sales are generally slowing at about 7% over the course of the third quarter. thanmanaged to fall more that, doubled, down 14%. where the market had been. meanwhile, let's look at hp. whitman is the ceo and chairman of this particular position. she remains the chairman -- chairwoman, should we say. sales down 4%, but if you strip out the currency issue, the fact they are getting less bang for their buck abroad, on a constant fx basis we did see a second quarter improving. bitenterprise services counted for about 40% of sales. sales were down 9%, although the margin was improving. we will have to wait for the real turnaround. the forecast missed estimates
come back to bloomberg tv. and 1:30 p.m.t u.k. time bloomberg tvs manus cranny alongside me. the equity market is bouncing back. morse to is for the homebuilders. -- is that the foundation for solid recovery, or a desperate attempt? ofdoubt about it, it is one the big social cries within the united kingdom. extend that to incomes the odd london, and in london comes 90,000 -- certainly, that is a boost. back, these are the top of the list today, just look at the problems here today. were taylorners
wimpey. that is one of the key stories. it is amazing how yesterday, the equity markets refer -- refuted the immediacy of the politics -- jonathan: immediate reaction. manus: yes, immediate reaction. there was a certain irony when everyone this morning says he does not want to escalate the situation. francine did a slight double take, but what exactly did he do yesterday? jonathan: that probably did not help. stay with us, full coverage of the autumn statements live. a bounce back from yesterday for the equity markets. 2%. dax up by 0. if you want to discuss the markets, you know where i am. best of luck for the rest of your day. ♪
engine runs high after turkey downs a russian jet. manus: markets stabilize. turkey's main index continues to slide. francine: the statements of george osborne, plans to deliver more homes. u.k. homebuilders getting a boost this morning. welcome to "the pulse." we are live from london. i'm francine lacqua. manu