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tv   Bloomberg Markets European Close  Bloomberg  March 2, 2016 11:00am-12:01pm EST

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mark: and i mark barton. this is the european close. vonnie: we are going to take you from new york to london to capitol hill in the next hour. after their big super tuesday wins, hillary clinton and donald trump focus on each other, but is it too early to count the other candidates out? mark: italy's finance minister huge a brexit could have negative consequences for the eu. vonnie: and a crucial vote underway in spain. the acting prime minister is mocking the efforts calling it a farce. we will look at how it all could end. are half an hour from the close of trading europe.
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tell us about today's market action. fifthstocks up for the consecutive day. appetite for risk year assets continues. this is the stoxx 600 twelve-month chart 50 day moving average. yesterday, the stoxx 600 closed above the 50 day moving average. you know how important that is. the last time it was above the 50 day moving average was above december 8. since then, it has fallen by 9%. moving average is above the 50 day moving average -- not good things for your technical analysis. a big vote of confidence taking place in the spanish parliament very soon. will the socialist leader get the required votes to become prime minister? it very unlikely. actuallyields are
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below the level, unlike in torture goal. we spoke to the finance minister yesterday. spanish yields are below where they were at the time of the spanish election. so not real worried yet about the lack of a formation 10 weeks after the spanish election. you want to say the spanish are coming to a fork in the road. what is the pound now against the euro? mark: who would have guessed last wednesday when sterling was 79 p against the euro. fortunes have changed, but don't forget, the euro is up against the pound and is already on track for its best year since 2000. maybe those declines or overdone.
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the median call for sterling is 74 p by the end of the year. hpsc is the most bullish on the euro. currency out of the 31 we track has fallen against the pound. it is the argentine peso. that is your stat of the day. i guess that's not too surprising. we are 90 minutes into the trading day in the u.s.. what's head to the markets desk. julie: let's start with oil prices. we just had the inventory numbers rising to an 86 year high for inventories and yet crude oil is higher. a drop of about 2% after the numbers came out and now it 1%.ebounding and up by we'll dig into the numbers and see if there's something underlying the bill we saw.
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bit unusual here that we are announcing a climb and if oil is climbing, stocks are falling. the intraday price we are seeing, the white line is oil climbing and the other line is stocks tracking along with the. falling tos&p 500 some extent, paring earlier declines. take a look at the stocks on the move. the s&p is now higher very slightly. let's take a look at the groups on the move. energy has turned higher. that has been the pivot point for the market. materials are lower and that is why i want to look at monsanto. it is not because of the miners.
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it is the drag from monsanto which cut its forecast. it seeing lower prices for one of its herbicides and they pressure from the argentine peso falling. mark: what has been the theme on the dollar and treasuries? julie: that measure of employment coming in better than expected. the pound is rising versus the dollar but little changed versus the yen. more of a change in the treasury market where we see treasury yields go higher for the second straight day. this is aheadthat of friday's report from the government and there doesn't tend to be a lot of coordination between these two reports. spread a five-year
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between the two and as you can cap.there is a frequent it's not necessarily a good predictor on the payroll from the u.s. government and yet we can see some market reaction. vonnie: we still like to see income better than forecast. now on the first word news with courtney donohoe from the news desk. courtney: let's start with asia. the un security council approved the harshest sanctions on north korea in 20 years for its recent missile launch. they include mandatory inspections of cargo leaving north korea by sea or air and it out by banningea the sales of oil. the number of key states are them play on march 15, including illinois and ohio.
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donald trump widened his lead over ted cruz and marco rubio. has 1000 one of the 2383 delegates necessary. 371.e sanders has justices will hear arguments in the first major abortion case in almost a decade. the case involves a texas law that imposes strict requirements on abortion providers. the law has already forced half the states abortion clinics to close. there may be a new clue in the missing malaysia airlines flight. an airplane part found along the coast of mozambique comes on the same type of plane, a boeing 777. that part is being transported to malaysia. global news 24 hours a day powered by 2400 journalists and more than 150 news euros around the world. vote a crucial confidence
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underway in spain as the socialist leader tries to broker a deal to become prime minister following inconclusive election in december. let's ring in our correspondent in madrid to get the latest in parliament. what is going to happen today? it is a crucial confidence vote taking place as we speak. pedro sanchez trying to broker a deal but it looks like he is going to need a miracle to become prime minister. he needs an overall majority and by the looks of things, it is not going to happen. the acting prime minister said he would vote against him and said he would vote against any other government combination that does not include his party. at the same time, you have them saying they won't back sanchez, so it looks difficult at this
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point. what happens next? if he doesn't get today's vote, there is another opportunity in the next 48 hours. should he have higher hopes for that vote? guest: we take it to friday. you would only need a simple majority, which is more votes in favor than against. isthat stage, the game plan to try to make them look like there's no agreement, no inernment and if he stays office, it's going to be their fault because they did not agree to a deal. i think that's where the socialists are heading. the question is are they going to blink under pressure? it looks like he could lose it on friday and they could be headed for new elections. we are looking at an election
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that could potentially take place around june 26. they don't seem to be rattled by this? guest: you have mario draghi and a big backstop their. from a financial point of view, it is done. ready.get wasn't really getspanish government did one. they are likely to get some accommodations, but it is there and has been approved. that means they can cap the markets and you have mario draghi who is maybe potentially unleashing more stimulus. we will have to wait to see what happens after friday if sanchez actually loses the vote. great to chat with you. it will be a busy rest of the day.
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up, the super tuesday result established hillary clinton and donald trump as favorite to win their party's nomination. are clearly taking aim at each other. we will have the latest after the break. ♪
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mark: live from london and new york, i mark barton. it has lightened up a bit. it was raining early -- raining earlier. let's turn to the race for the white house and the results of super tuesday. megan murphy hasn't slept all night. on the democratic side, hillary
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clinton jumped out to a big lead after winning seven state compared to four states for bernie sanders. winning seven state and taking a significant need in the delegate count over ted cruz who 13 states last night. megan murphy is our washington bureau chief. how do the strategies change now? megan: the strategies change radically. we expected donald -- donald trump to do well. alaska and a barnburner of a race and marco rubio had a tough night, so the establishment thinking he was going to have a stronger night, they are left with this option of do we start to think about getting behind donald trump or do we have sitting lawmakers and sitting governors saying hold on a second, this is not what the republican party represents? we need to put our firepower
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behind marco rubio or ted cruz. the problem is marco rubio has not shown he can win a state and ted cruz is as much antiestablishment as donald trump. vonnie: in his speech last night, he seen to be throwing down the gauntlet, saying get behind me, i will unite everybody. see somethink we will dynamics play out in the republican party we never expected to see in this cycle. we are in a situation where the party may be on the cusp of rejecting the present and -- the presumptive nominee picked by voters. swath of a broad voters across a broad range of andgraphics and geographies interests. they are left now with this real choice about what they are going to do. are they going to keep the party intact or are they going to risk a fracture that could damage them for years to come? questionch leads to my
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, is a trump victory going to signal the end of the modern republican party? : i think a lot of this is rhetoric and hype, especially for those who are trying to help a campaign that is sputtering. the republican party has been through candidates and incidents in people perceived as much weaker than donald trump. this is rhetoric. one thing funders are looking at is saying we can survive a donald trump candidacy and may even be able to survive a donald trump presidency. what we cannot survive is the kind of civil war that would potentially risk our loss of the senate and cs losing state houses in 2018. mark: how beneficial is it that hillary clinton probably now can sit back and start to plan ahead to november and start to strategize and look at the
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runoff against whoever the republican nominee is? is that to her advantage? megan: it is beneficial in that she can try out a lot of different strategies. that make no mistake, bernie sanders has a lot of money and will stay in the race. the one several races last night and will continue to focus on income inequality, free college and health care. importantt are really to the progressive wing of the democratic party. he's going to try to push and it will be interesting to see how she can make this case for herself against donald trump. hillaryif you were a strategist, would you advise to ignore bernie sanders and focus on trump or does she play to a generic candidate. cannot ignore bernie
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because of the enthusiasm. she has regained enthusiasm with women and african american voters. she needs it with latinos and young people. she's going to take the same strategy she used with him, building women and looking to stitch together a broad coalition. he has paved the pathway for her she's going to use against donald trump or any other nominee. if you thought it was interesting before, it is sure getting interesting by the hour. movements are eyeing reforms. we will discuss the so-called brexit with a top greek official. ♪ wh
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vonnie: live from new york city
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and from london, i'm vonnie quinn. mark: i mark barton. this is the european close. global investors and leaders are seriously weighing the potential risks of a so-called brexit. italy plus finance minister warned about the shockwaves that could come from a british boat to exit the eu. guest: the result that would lead to an exit from the european union would have huge repercussions throughout the european union. would show the european union can be disentangled in the negative sense and would generate negative impact because we would lose the benefit of economic and financial integration, not just for the u.k., but with the rest of europe. mark: for more on how the brexit could impact the european union, we are joined by the secretary for privatization in greece who is currently an attorney for the
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greek supreme court. hank you for joining us today. the italian finance minister essentially warning that a brexit would be a dangerous precedent. do you concur? would open the door for other countries to do the same? guest: without a doubt. xit was a big risk for the european union. , because ita brexit is a much more important economy, it is a bigger risk. grexxit talk has died down. where are we in the talks for the bailout between greece and its creditors? are we near a deal or not? guest: we are not there yet. we are still in the risk zone.
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at the moment, the greek is hoping they will come back to greece to continue discussions and every day of delay increases the risk of something catastrophic happening to greece. you anticipate more assets being privatized? guest: yes. i'm sorry could you speak a ittle bit -- in greece at the moment, we have a radical left-wing government but they managed to do three things in a short time. we have privatized [indiscernible] to chinesesold investors. privatization not only about collecting revenues but introducing competition to an economy. mark: how is it going to work? guest: it will have to. mark: that is the red line that
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has to be crossed? not the only one. many redlined have already been crossed. worst,as the sixth graphic problem in the world. as a result, we have 3 million pensioners and only 2.5 million people working in the private sector. it is impossible with those numbers for it to be sustainable. that mean the imf will contribute to the bailout? easy not onlyot from a clinical perspective but an economic perspective. pensioners have already seen as much as a 50% hit and there's less of a demand in the economy. we are and a downward spiral which has led to greece losing 30% of its gpa. what about the deposit
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in greece? do you anticipate that situation is under control? do you anticipate the deposit situation we saw last summer where deposits flee the country? is that under control? guest: at the moment, there are controls in greece. anticipate controls will be in place for a considerable amount of time. the banking system lost about 40% of its deposits. about 107 billion the country. mark: at the same time, greece is dealing with what many are calling a humanitarian crisis. 25,000 refugees stranded. what is the economic and social costs of what many are calling a crisis?
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there is no doubt that there is a crisis. we have approximately 4000 people a day. there are some businesses that benefit from that. island ands on the so forth, in general, bookings are down for the summer. certain islands are going to be severely hit. the cost to infrastructure is very high. in addition, there's a greater risk people do not anticipate. you: i have to interrupt rudely. we will have you back. the former secretary for privatization in greece. ♪
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mark: live from london and new york, this is the european close.
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i'm mark barton with vonnie quinn. stocks finishing up the day on this wednesday session. let's take you through all the market action of the testing lows of the day. looks like the stoxx 600 will close up for the six straight day. the appetite for riskier assets continue after china stocks rally the most since november. this shows the individual stock indices -- the ftse looks like it is going to close low but most look like they are going to finish in the green. a lovely chart made by our bloomberg news colleague. is stoxx 600 going back to 1998. we have had a rebound of 12% since the 11th of february. over similar times, there have gains ofn instances of roughly 10% in a two or three
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week timeframe. what is interesting is what followed after the those. in five of the seven instances, we saw gains that came with three-month increases of 9.9%. investors that held on for a full year ended up suffering losses in half the time. this is the euro against the pound falling for a fifth consecutive day. it was one week ago when sterling was what many were saying in the middle of a mini concerns.brexit falling currency against the pound, the argentine peso. in the last five days, the euro has fallen by 2.5%. lenscrafters here --
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what is behind this move today? stock catching your eye -- was that deliver it? you are a natural pun maker. the maker of ray bans, shares down 5% today. basically, it is going to curb its earnings growth outlook as it invests more than 1.5 billion euros to revitalize and expand the business. that will increase 1.5 times the pace of sales each year through 2018. its goal in the last six years have been twice as much. the company going through massive of people in the last 18 months. have had three ceos walking out the door. are you a ray-ban wearer? vonnie: i like my sunglasses but i'm not sure if i have a pair of real ray-ban's. i can put that on my list. mark: i will give you that for a
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birthday present. vonnie: i would have to tell you my birthday. maybe not. maybe recovery is too strong a word but the pound gaining against the dollar and the euro, there are concerns over a brexit . us here in the studio in new york is the chief goal -- chief global strategist from westshore fund. the author of the best of money and currency wars. recovery, is it going to be long-lived? guest: i don't think so. the polls are closed my view is they probably will vote to leave the european union. a couple of reasons for that. boris johnson is very popular.
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the wave of refugees from the middle east is going to increase and it's difficult to move in the winter and they will be coming more in the spring. all of these issues will be increased by then and i see they are hiring heavy guns in the u.s.. that tells me they have some concerns there. what makes you so convinced? even david cameron says they can stay in because they have one some concessions. guest: the concessions have to do with their relationship with the rest of the european union. it's not unlike the united states. trump was underestimated all along and probably still underestimated. i think the out move and the theit -- the elites are last to know. they are out of touch with the popular sentiment. mark: look at what is happening
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in the u.s. with the super tuesday results and what is happening right now in spain after the election in portugal and ireland. us?e is this taking this anti-incumbency taking place across the globe right now? is really driving it , wageome inequality stagnation. i think people are familiar with it. i saw this from larry summers the other day -- she's using mussolini and trump in the same sentence. unreasonablean person. throwing mussolini and trump in there is a good example of how elites -- and i put larry summers in that category -- they are just out of touch. elites go to dinner and who do they talk to? other elites. says davos is billionaires selling
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millionaires what the middle class thanks. it's fine to be an elite when everything is good, but right now, every thing is not good. wages are stagnant, jobs are being lost. i understand localization, but i also understand politics. on top of that, there's the refugee issue any terrorism issue. heaven for bid, but a few more terrorist attacks between now and spring won't surprise anyone and that's just going to add to the want of a brexit. mark: look at the growth rates in the euro area. the growth of the united states, some of these european countries would bite the hand off if they could achieve some of that growth. guest: you are absolutely right. lasterage of 2% for the not being partisan
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about it. we all know it's not only the worst recovery, but it is way below trend. over 34 years and one society will be twice as rich as the other. it's not just that growth is weak but all the income gains and capital gains are going to a very tiny percentage. be weak but for the average citizen, they are actually going down. this is a global phenomenon. it is happening in china. vonnie: i want to ask you about gold. ago -- it was a fear trade. do you see another leg higher for gold? hadt: i'm not sure if i three with the fear trade. i called the money trade. gold was sometimes it's a commodity, sometimes it's an investment, sometimes it is
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money. gold is in the index. trade likerting to money, which is a vote of no-confidence on central bankers. gold is money, so these are different forms of money competing with each other. it tells me gold is not trading like a commodity anymore. it is trading like money. the fed will raise rates. but the fed is raising into weakness. why would they do that? are raising into weakness because they don't see the weakness. -- there will probably be a serious recession by the summer and that will just erode confidence even more. mark: how do we make money? jim: i like treasury notes.
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even at 1.6% yield, a 10 year treasury note, there's a couple of basis points in germany and japan. interest rates have a long way to fall and people say they are at all time lows. they may be low in nominal not in real space. i like cash, i like treasury notes. vonnie: we will keep an eye on that for sure. we are looking forward to your book in april on gold. the european markets are done for the day but u.s. markets are still open. abigail doolittle has more from nasdaq. rightw is free much flat now. the s&p 500 -- really unchanged as well. .25%.sdaq is down
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what is happening down there? abigail: we have movement here dollar tree.s and the company beat fourth-quarter estimates. we have roxanne meyer trading the stock to a by citing second half tailwinds. stores is said to be licking their chops. one different retailer that could the struggling is big five sporting goods. one of the worst percentage performances after offering a week view -- apparently weather is a factor. dollar tree is down today, one of the worst performers in the nasdaq 100 after it was downgraded. some are calling it a double downgrade.
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one analyst says come sales growth is slowing. he makes note of the fact he had a strong by for eight years. a big shift in view. let's check in on our bloomberg first word news with tornado. courtney: the un security council has approved new sanctions against north korea. the sanctions are retaliations for the recent missile launch a nuclear test. all cargo going to and from north korea will be inspected for banned items and countries cannot sell conventional weapons to the north koreans. jean-claude juncker is asking for $760 million in emergency aid for refugees. the money would go to greece and other european countries tackling the crisis. reese is trying to fend off proposed european border checks that could leave thousands of migrants up there. gulfdi block of six
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nations have formally branded has blocked a terrorist organization. the move comes less than two weeks after saudi arabia announced its cutting $4 billion in a two lebanese security forces. first seasidets hotel. they plan to open the five-star property on the caspian sea as early as next year. the announcement comes after train sanctions -- trade sanctions in iran were lifted. dayal news and four hours a powered by our 2400 journalists in more than 150 news euros around the world. got acoming up, we've very special guest. if we pay people more, we have a
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chart that explores the relationship between unemployment and wages in three developing countries. stay with us. ♪
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vonnie: you are watching bloomberg markets. time for our global battle of the charts where we look at some of the most telling chart of the day and what they mean for investors. you can access these charts on the bloomberg running the function featured at the bottom of your screen. -- i'm soings off used to saying bloomberg surveillance. way to new york to do it. francine: look at this chart. it is all about china.
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china is probably the one thing that worries investors across the globe. this is what my chart shows. dropped.tput that does or investors too much. there is linkage but what i found out is the output decline in china -- china reduction lost the equivalent of half of the u.s. during the entire 20th century. this is why we care about china because even if they sold a little bit, the impact is absolutely huge. i like how the blocks are the cover of cement walks. and the number is?
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francine: 421. vonnie: you have a lot to beat their, mark. mark: is the traditional relationship between tighter labor markets and inflation and wages. it is otherwise known as the phillips curve. employment has been falling to an eight year low. if you look at average wages reach -- average wages weekly, they are trending sideways. andployment has fallen we've had a bit of a bounce but it is a nascent recovery. provens the theory correct? unemployment has come down and wages are rising, so why is germany bunking the global says it has gotten rid
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of its labor market flak and says it is at full employment. says germany has stronger labor unions that can push for wage increases. faster inflation -- we have a tighter labor market, yes, we but increasing wages there's barely any inflation and germany. >> it is a good answer, but it is not the right one. three you have put in charts there and i want to point people to where they can find the compendium of charts.
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vonnie: i'm sorry. i think francine has run away with this one. mark: the women are uniting against me. vonnie: you are talking about unemployment and wages and you haven't told me if a brexit would happen -- mark: i love her chart. i was a little nervous about putting you against each other but you came up with great chart and the experience was very educational. still ahead on the european macau plastered ling casinos may be near a turning point. and what is causing improving casino revenues? ♪
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mark: you are watching the european close. mark barton with vonnie
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quinn. headlines coming from san francisco fed president, john williams. is the san francisco fed president and comes from the line of janet yellen thinking, if you like. the labor market is showing good abroadm and any weakness would be overshadowed by strength at home. a couple of very strong" -- he said we are not doing negative interest rates. he also said the fed would rather use forward guidance than negative rates. onuess they have pulled back allowing their treasury market participants to continue. switching gears, sheldon ailsa is off to a good start. the casino magnate is -- has upped his fortune more than anyone else on the bloomberg index.
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biggest index has turned. are they turning after a slump? senior gaming analyst is here. macau did go through a slump, but it was still performing way better than las vegas. what can be different now? guest: i suppose it is all in the eyes of the beholder. massivelyinues to be larger, four times the size of las vegas, but that is down from seven times. if you look at the collapse we saw in the vip business as well as his challenges in the mass market, we just got the february monthly release and we saw essentially a flat number. this is the best we have seen in 21 months. it certainly feels like something is afoot. at lastbeen looking
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year into this year as being a time of transition and we expect to see growth resume. vonnie: does this tell us about the china economy or are you looking at high rollers? way more so than las vegas. guest: there is a discretionary sense to macau, but there are a lot of other factors at play. the vip business truly collapse and it's a side effect of the anticorruption campaign going on from beijing. it set the stage is anti-extravagant over wealthy chinese. you just do not want to be seen doing crazy stuff. the mass market, a much more crucial business with much higher margin, it is where the growth will come from had a smoking ban and the chinese smoke. we also went through a long ball of nothing new in terms of results, and that is changing.
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winners ande the who are the losers? what is driving the virgins tween those two types? timely to be asking that question because we gotten all the fourth quarter results from the macau casinos and what crown andding is galaxy have done best in terms of fourth-quarter revenue. it is the least decline. welaxy, it is china -- think those three are likely to continue as we go forward. how is the chinese currency making a difference? guest: it is not going to be a massive factor.
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we don't think there's going to be a huge weakening that would occur from the standpoint of the currency and you have hong kong dollar and we are ok on that front. mark: great to see you and catch up on what is going on in macau. finished 26 session minutes ago. looks like it finished high and that hasn't happened since october 9 last year. the ftse finished the session lower. ♪
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>> it is noon in new york, 1:00 a.m. of hong kong. >> welcome to "bloomberg markets." ♪
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>> from bloomberg world headquarters in new york, good afternoon, i'm scarlet fu. at -- >> and i'm alix steel. new reportsstall, showing private payroll more than expected, with wagers on the next fed move. scarlet: voters flocking to donald trump, calls for more establishment republicans grow more apocalyptic area alix: is it the beginning of -- apocalyptic. alix: is it the beginning of the end with prices shrinking in january? get at: first we want to snapshot of today's market activity. we are heading over to the markets desk julie hyman has been tracking the moves. upon his from yesterday's buying is what we are seeing in today's session.

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