tv Bloomberg Markets Bloomberg November 27, 2015 11:30am-12:01pm EST
chinese equities in three months. the european close starts right now. ♪ erik: from new york to london and then to moscow and the next half hour. mark barton, kick it off. mark: improvements on what happened earlier in the session. china's stock market slumping the most in three months because of industrial profit decline. what helped was data from the eurozone. economic confidence matching its highest level. it will not change with the ecb .does next week the stoxx 600 rising for the second consecutive week since
the paris attacks two weeks ago today. it has risen by 4% since mario draghi signaled on october 22 the ecb would do something in december. the stoxx 600 has risen by 6%. little change today, but rising for the second consecutive week. erik: there was economic data out of the u.k. gdp coming in as expected. private consumption and spending was higher than analysts expected. mark: the biggest negative impact from that trade on record. economy how the u.k. fared in the third quarter. the second quarter, 3.7%. a bit of a slow down. the mystic spending, it is him balanced. we will talk to george buckley from deutsche bank about that. on market says that be january 27, i just asked george with his rate cut forecast was.
i will not spoil it. we will ask him in a few minutes . it is a head to foot the markets say. erik: let's check in on the news with courtney donohoe. courtney: we are focusing on breaking news from belgium. the prosecutor's office says a man has been arrested in brussels trash with terrorist attacks. the police in belgium have been the suspected organizer of the paris attacks. russia is retaliating against turkey for shooting down the warplane. they are suspending visa-free travel with russia. they are already make it tougher for turkish produce do come into the country. further sanctions could be coming in soon. protesters marching through chicago's biggest shopping district to protest the killing of a black teenager i a white
police officer, who has been charged with murder. will you find the nation's worst drivers? theinsurance group says most lawless and dangerous u.s. drivers are in montana, new mexico, and south carolina. her first wordat news. you can get more on these and other stories at the new bloomberg.com. from the bloomberg first word desk i am courtney donohoe. erik: a big week for mario janet yellen. expectations of further stimulus from the ecb are high. the ecb moves on thursday. the same day janet yellen will testify in front of congress ahead of the meeting two weeks later. one of italy's biggest banks placed his bets on the fed's next move.
>> in the usa, the fed could increase in which it is necessary to increase. year wehe end of the could see the rate increase in interest rates. here interest-rate futures show a 74% probability of a rate hike in december. the focus on your side of the pond is when the bank of england will follow suit. mark: it is a big question. earlier, governor carney said a low rate environment remains. the top growth data was released in the u.k.. us the top u.k. economist at deutsche bank. the low the previous quarters. it is an unbalanced economy. the domestic economy is strong, but the net trade drag was
nothing to shout about, was it? >> i'm not sure you can read too much into the future. it was exceptionally negative from trade. i would say that consumer spending is hardly surprising it is growing so well. we have low inflation rates. all of the other components of gdp. i am nervous about. the government spending. can it grow at these rates when we have such austerity plans for the next five years? i suspect not. the trade, influence by global economics and that sterling's up. i am about that on balance. mark: this is where you will lay it out for me. you are still going for a rate hike in the first half of next year. mark carney said that the low rate environment will remain for some time. according to you, some time
means -- george: my view is made. even if they do raise rates in may, you could not describe that as a low rate environment. raising to 75 basis points tightt mean we are monetary policy, we are still exceptionally loose. 400 history of the bank of england we have never gone below 2%. anything below 2% is exceptionally loose. ofk: the fed on the 16 december, does what it does influence the bank of england or not, george? george: don't forget what david miles said in august. tosaid it would be "daft" think the bank of england could not move before the fed. the bank of england will move slightly after the fed because when the head moves it will put upward pressure on the dollar
and downward pressure on sterling. it will look like a rate cut so they can said that off with a rate hike. our policy outlook with the ecb on the one hand, which we will talk about, they will ease policy next week. the fed, a couple of weeks after, we think will raise interest rates. there sandwiched between two. it is not surprising we wait a bit longer before moving ourselves. britishlp me put the economic situation in perspective. what factor is driving the u.k. economy that most closely resembles what we see in the united states, and what resembles what we see on the continent of europe? the dollar is say increasing and sterling is increasing at the same time as consumer spending. it may not be as strong as it has been in the u.s., but it is
growing 3% or something like that. rateve .8% today, a decent . over 3% year on year. it is not surprising when you have interest rates so low, and the sides of the labor market that is getting close to equilibrium. it is pushing upwards on wages, and pushing down on unemployment. erik: how would you describe access to credit in the u.k.? george: improved aware was a few years ago. i'm sure it's not that to where manys, if you look at how mortgages are taken out, it is nowhere near the scale in 2006 before the crisis. we would not want it to get back to those levels, but credit has improved markedly. not just on this side of the channel, but in europe as well. mark: should we talk about the ecb? a 36-day wait cents malta --
since malta. if mario draghi has to surprise the market, what, now, counts as a surprise. we have been debating and ruminating for five weeks. george: expectations surrounding .f the ecb extends qe whether they increase the run rate of qe, possibly. do more qe over each month over a longer period. they could cut interest rates. points. basis they could abolish the floor. there are a combination of policies. each one could be powerful, but each one together could be more than the individual part. mark: could it drive the euro to parity? havee: our own forecasters the euro going below parity and a year and a half. mark: in the near term?
it getsi'm not sure down that far. of course, the ecb will be careful. the last thing they want is to surprise by doing less. if they do less and put upward pressure on the currency, it will be less likely they hit long-term inflation goals of 2% over the next few years. they are worried enough about not meeting inflation expectation. they are better to overdeliver than under deliver. mark: thank you for your guidance on what the ecb could do next week. it is only a matter of days. it has been a painful process. erik: please thank george for me, as well. russialation risks as cuts economic ties with turkey. more on the rising tensions between these two countries. ♪
mark: welcome back to bloomberg markets. live from london and new york, this is the european clothes. i am mark barton. i am erik schatzker. the biggest stories making headlines. shares of disney are declining because of its most profitable channel. espn lost 3 million subscribers in the fiscal year ended in october. that has revised concerns consumers are cutting the cord, moving away from traditional television packages. making cost cuts because of the admission testing scandal at
volkswagen. lawsuits over the software that tricked pollution tests in diesel powered cars. will bees at volkswagen getting smaller bonuses. china will surpass the united states as the biggest airline market in 15 years. it will hurt airline growth somewhat, but the passenger total will double by 2034 to 7 billion. you can always find more business news at bloomberg.com let's take you to mark barton in london, looking at the escalation risks the between russia and turkey. upping the pressure on the country for shooting down its warplane on tuesday. has ruled out military retaliation against turkey, but they have begun economic retaliation that could impact tourism, trade, and investment. let's go to ryan chilcote in
moscow. what is the latest development regarding this between moscow and ankara? ryan: the spot continues to grow. we heard from president erdogan attacking the russian president saying that turkey is not a supporter of the islamic state. that turkey is not buying oil from the islamic state. that turkey did not deliberately target russia's jet. and saying that if the russians continue with these allegations they must prove them. and of russia is unable to prove them, then russia would be a liar. it is difficult to imagine the animosity between president putin and president erdogan. it is off the charts. there is some talk that come monday, when the talks began in paris, they might meet there. that could bring some relief to
what is becoming an increasingly acrimonious spat. it is not looking like that at this point. an hour ago, the russian foreign minister announced that turks that want to come to russia will need a visa. that is one more thing the russians have introduced since their airplane was shot down. they are absolutely livid. vladimir putin is retaliating on the turkish tourism industry. what about other things he might do? how much of a dent could putin put in turkey's economy if he wanted to? ryan: the russian prime minister said he would give his ministers to day's to come up with the economic measures russia wants to take. that deadline is up tomorrow. that is when we will learn more. the russians have already done a lot. ony have a effective than
travel. russians cannot go to turkey. the tour operators have canceled trips. the russians are gambling that could hurt the turkish economy. russians with the second against source of tourists to turkey, bringing into billion dollars in income. they have an account deficit, and the hard currency from the russians offsets that. if the progress they have made in narrowing that deficit, in the current account, if that is reversed, that would put more pressure on the lira. it is one of the worst performing currencies this year, and has been performing poorly this week in particular on the back of the incident with the airplane. things could get worse. the russians, though they are concerned that this could hit them as well, are pretty convinced they can put turkey in a bad space.
they appeared to be ready to do that. quickly, president ollanta toward the world trying to form a global coalition against the islamic state. toured thet hollande world trying to form a global coalition against the islamic state. did he bring russia any closer to that? ryan: they said that they would try to avoid hitting moderate forces fighting the syrian president. the devil is in the detail, and russians arethe prepared after what happened with the airplane in syria, to coordinate with nato. i don't think we are any further than where we were in terms of cooperation. russia did make the pledges, but it would be surprising if we see close cooperation. mark: ryan chilcote reporting
from moscow. 1.7% on week, down by the closing basis, the worst week and a couple of months. u.s. equities, it is a hard day. erik: flatlining. we will check in on those with u.s. stocks with abigail doolittle. abigail: it is certainly flatlining. we will look at two of the worst performers. qualcomm is down 19% in november. shares were hit earlier on a weak fiscal first-quarter guidance and shares around royalty collections in china. there is news that south korea tradeualcomm is violating laws. they are on for their worst month since 2008. priceline is down 13%. they did client weak
fourth-quarter outlook on the tourism selling on the terror threats. 16% of the revenue comes from abroad and could make it more vulnerable than other travel shares. there are on track for their worst month since may of 2012. erik: abigail doolittle at the nasdaq this morning. charts isle of the next. i will be posing this question. we'll the euro hit parity this year with the dollar? the battle is next, julie. you better be ready. ♪
london, we have mark barton. julie, since you are the special guest, you get to go first. julie: i am under a lot of pressure. i'm thinking retail. one of the measures of retail traffic that i find fascinating is the shopper attract year over year and monthly visits to brick-and-mortar locations. this goes back to 2012. have only been two months going back to august 20 12 that there has been positive year-over-year change in retail. many fewer people are going to the mall or other retail locations. mainillustrates one of the conundrums for retailers in the united states. they have to bulk up online visits and compete with retailers like amazon. this shows that it is tough to get people in stores. erik: very persuasive. mark, over to you. mark: will the euro hit parity
with the dollar? this chart is beautiful in its simplicity. it shows strategists' forecast by the end of 2015. i have circled it beautifully cents october 22 when mario draghi signaled the ecb would move in december. strategists have cut forecast since the quickest rate since 1.10 to one point 07. this is the euro dollar at 1.03 by the end of the year. a lot might depend on how much mario draghi surprises the market. a know what is penciled in is rate.t in the deposit does mario draghi need to do more to send the euro to parity against the dollar in 2015. that is the big question.
julie: obviously, on enthusiasm can't comesiasm i close to mark barton on my best day. that, i can see. that is pretty topical on a black friday. erik: that is why, mark, i'm going to award the prize to julie hyman for being so topical. julie: i appreciated. i would like to thank -- what and to make it clear this means. that retailers have to spend more trying to capture shoppers online and making every square footage of retail space less profitable. that is why amazon is winning. mark, i am impressed. mark: i will be back next week. i will be back. tourist.ie is just a you will get another bite at the
apple. here is a peek at how the markets finished. a little bit lower than how they finished. the european stocks rose for the second consecutive week. what i'm watching on monday, the the 21 primary change in paris. climate.n. talks on change begin in paris. in the battle of power in the middle east. the imf executive committee scheduled to meet to discuss if an and reserve currencies. i've enjoyed being with you for the market close. julie, well done. i will see you all on monday. have a great weekend. ♪
from bloomberg world headquarters in midtown manhattan, good afternoon, i am erik schatzker. >> and i am alix steel. here is what we are watching. by 5 p.m. in new york on wassday, $1.1 billion already spent online. we are going to check out if the rick and mortar situation -- check out to the brick-and-mortar situation. and another dark day for our glaze -- barclays. they are facing an accusation of financial misconduct. we will discuss. erik: let's find out how the financial markets are shaping up. julie: about an hour left in the trading session on this