tv Bloomberg Markets European Close Bloomberg March 4, 2016 11:00am-12:01pm EST
this is the "european close." ♪ mark: we will take you from london to new york in the next hour. here is what we are watching. europe are higher. they have been fluctuating in the u.s. after a mixture jobs report. what bill gross says about the jobs report, coming up. vonnie: the brazilian real, the of a former president, is the president he coming closer to impeachment? mark: europe's refugee crisis is the focus of an emergency summit in brussels. we will hear from the european commissioner for migration. let's go to the market desk. julie hyman has the latest.
on u.s. stocks, we're seeing j -- seeing gains across the board. a bit of a turnaround. ness.ill see wishy-washy nic of around 10:00 a.m.. it started to recover, up one third of 1%. the good and bad of the jobs report, the payroll number is better than estimated. wages fell a little, which was not expected. looking at the bloomberg, we are whichg at wirp, calculates interest rate possibilities based on futures, near 70%. the highest in quite some time. it looks like this report brings up the probability that we might see an interest rate increase or two before the end of the year.
looking at rates, similar sentiment in there. looking at the 10 year, the rates and yields have gone higher. 1.8 nine percent, extending gains. interestingly, at the same time stocks are going higher they are going in the opposite direction, not the case today. looking at the euro, we are seeing the euro fall against the dollar, interestingly. it looks like we have flip-flopped. this is the dollar versus the euro. an interesting situation in the wake of this jobs report as people are still ruminating on it. mark: i will show you euro-dollar and plied volatility . oil is seeing its highs of the day. julie: it is a bit of a mystery as to what is going on. it is unclear if oil is leading stocks, or if the stocks are
leading oil. it is higher by 1.5%. what is notable is the weekly move. it is positive. the third straight weekly gain. we have not seen a stretch like that since may. we have seen an enormous bounds since the lows of the year. in oil, the magnitude has been much more dramatic. mark: in europe, we are 30 minutes away from the end of the session. rising for the six day and seven, third week running, best stretch since october. since february 11, the stoxx 600 has jumped by 6%. -- it is the world's largest provider of high-security mobile phones and bank card chips. it posted higher than estimated four-year revenue.
the security software is used by visa, mastercard, and at&t. biggest advertising company in the world, a 6.1 percent rise tofour-year revenue thanks add spending by north american customers. their projected further growth 3%, net sales going by helped by the european soccer championship in brazil and the u.s. presidential election. a big here says wpp. vonnie: the euro has been trading. it is looking to end the losing streak against the dollar, up 1.2% so far. mark: three weeks of drops. it looks like it will and that losing streak. what i wanted to show you is that looking at volatility, this is the euro-dollar implied volatility telling us the expected gyrations over the next
months. on monday, the level was the highest since 2012. there are lots of uncertainties, the economy, the brexit, political turmoil in ireland and spain, the euro-dollar parity by the end of the year, but they are in the minority. the estimate is for the euro to end at $1.08, not too far from where we are today. leap day, so we have to discount leap day. courtney donohoe has the first word news. some republican party members opposed to donald trump have changed their strategy. many believe the only way to for the candidates to stay in the race and deny him the delegates that he needs, then they would be forced to contest the nomination in july. at 1:30ney will speak
p.m. eastern on bloomberg television and radio. been rocked by an investigation into high-level corruption. that took another turn today. the former president was detained today. authorities are investigating payments to companies controlled by him and his family. brazilian stocks rallied on the news, and the probe could force president from power, even though prosecutors say she is in being investigated . it is one of the closest encounters ever between a commercial jet and a drone. it came within five feet of an air france jet landing in paris. drones are banned from flying near airports. rupert murdoch and jerry hall have married in london. it is the fourth marriage for murdoch. he is 84 years old, hall is 59.
she and makes jager had a private change of marriage ceremony in geneva in 1990. news 24 hours a day powered by our 2400 trellis and 50 news bureaus around the world. .onnie: thank you let's go to asia with the stocks climbed. surged. banks nikkei ending up. congress meeting this weekend. our nbc preview. pageantryf china's taking place in beijing, policy have a balancing act. put forwardok to policies to support near-term growth, slowest in 25 years. we also expect them to push forward the much-needed
structural reforms, particularly when it comes to overcapacity in steel and coal. you can see that the pollution has returned to beijing. there are environmental and economic reasons for this to be at the top of the agenda. cutting overcapacity means jobs. 6 million jobs could be on the line in the next three years alone. we will watch how the policymakers plan to deal with that. we know that in recent months they have taken a more accommodative stance. lending has reached record highs. the latest in a long easing cycle. they spoke about how the reforms will not be easy. how it is like taking a knife to one's own flash. flesh.
we will see how far policymakers are willing to go in terms of sacrificing near-term growth for a long-term economic rebalancing. we will look for rhetoric on the u.n. they have been talking about the currency. they want more flexibility and expectations for the yuan. there talking about a basket of currencies as a reference. bloomberg, beijing. rmb is a little bit weaker today. coming up, janice capital fund manager bill gross reacts to the jobs report. his take on why wages declined in february. ♪
♪ mark: live from london and new york, i mark barton. vonnie: i am vonnie quinn in new york, where it is snowing. that isn't fair. mark: it is chilly. it looks lovely, but i am telling you that it is crisp. there is sun. it's not snowing. vonnie: we are swapping places next week. a look at the business flash. jobsve a mix in terms of for february. employers added 242,000, more than expected. hourly wages fell. it was the first monthly decline in more than a year, a setback for those hoping a stronger to biggeret with lead paychecks. the trade deficit rose in january as american exports fell. the gap between exports and
imports climbed to 46 billion u.s. dollars. years.est level in 4.5 the u.s. government is investigating complaints that breaks can fail on the ford f1-50 pickup truck. there were called pickups from the 2014 and 2015 model years. the pedals can suddenly go to the floor with a complete loss of breaking. that is your latest bloomberg business flash. mark? mark: let's check out what is happening to the european stock market. it looks like we could finish higher. the stoxx 600 up by 7/10. the longest winning streak on a weekly basis since october. the currencies, interesting stats after. seven weeks of decline for the german bund yield. they're heading higher for the week. a similar story for the u.k.
gilt market. the pound has made big inroads to the biggest losses since 2009 against the dollar. a big performing industry group in europe is basic resources. rebound that we have seen in the european stock market since the 2.5 year low on february 11. basic resources has risen by 16.6%. by the i am stunned 10-year basis point move in the last five days, looking at 24 basis points. the 2-year is still 54 basis points. that is widening. in the u.s., 1.89%. a little bit of treasury selling today. more on the jobs report and what it means for the u.s. economy. we talked to bill gross. tom keene asks him if the jobs
being created are good. : i suspect some of them are not great. some of them aren't minimum wage or higher. of americanincome workers is proceeding higher, but not at a rapid pace. the hours worked in this report did not increase. the participation rate went up. i think a company would be heartened by that, by the extent that it goes up it means more people are coming into the workforce, taking pressure off of their phillips curve and taylor models. a robust modelly from the standpoint of a hike, but it may be from increasing economic growth -- which i expect to be 2%. tom: how far from normal is janet yellen's fed?
200 basis points higher than normal. fought outis being in academic circles. most of the research has come from the san francisco fed. ealy say at the moment, 0% r fed funds rate might be appropriate, which would put it at 1.5%. the blue dots are significantly higher. i think the fed has rethinking to do. let me mention a point, i think that the feds are not thinking in numbers, but they want the market to believe that hikes might come sooner and faster than expected, meaning a positive yield curve.
this economy, finance industry banks, insurance companies, they need a positive yield curve to make substantial profits. be extended which they are higher than they might really be, that favors bank margins. at they're shooting for is positive yield curve as opposed to being practical where the real interest rate is going. >> if you look at the projections the fed made in december for the economy in 2016 , we had all of those benchmarks. are they data dependent or not? how is the market supposed to divine where the market is going if they say we raise rates taste on the forecast, then they don't? bill: they are global data dependent. they want to pretend like they are the central banker for the united states him a win in fact they have global responsibilities. the dollar is the reserve currency. they will not put that into
print. currencies have moved to the extent that there are sinkholes on a global basis. they have been doing better in the last few weeks, then the fed will take that into consideration. extends beyond the u.s. economy, although the fed does not want to admit it. >> the dollar has not moved for the last 1.5 months. the trade weighted dollar has gone down. even with this jobs report there is barely a move in the dollar index. is that still a real concern? bill: it is because of the lag. there is a six-month to 12 month lag. we will see the effects of a stronger dollar for at least six more months. the dollar has stopped going up against many of the emerging market countries. 15%.azil it is down by
it is getting better from that standpoint. that is a benefit for the s&p 500 global companies that have been affected by the strong dollar. they will now see the tailwind going forward into 2016. janice l's bill this morning. still ahead, a new development in the tetra graph corruption probe. the former president of brazil. the market reaction, coming up. ♪
a percent. mark: i am mark barton. this is the european close your the ex-president will speak from sao paulo at 2:00 p.m. massive bit of news coming out of brazil. hasformer president lula been detained by the police. they are investigating him. they are investigating payments to his organization. itsreal strengthens to highest level since november against the dollar. our executive editor of international governments is with us. what do we know? tightere net is getting around president lula. this is the most are matted tryst in a lot of ways in the two-year investigation into alleged bribery in european
politics. he has not been arrested. he was detained for questioning. from what we could find out, he has been released. it is a dramatic day. mark: he was once called the most popular politician on earth. is he the end -- is this the end? is he a viable as a politician? very optics of this on tv, we don't have images of him being driven away by the police, but the fact that this has happened come in many analysts say this is the end of his political career. the challenge is to cement his legacy to the extent that they can. vonnie: if i can bring in the analysts, one of the groups are just come outve with a report saying that she is likely to fall and the chances of her impeachment are over 50%.
it does not look like she will be able to do what you say. the brazilian economy is in trouble. does an impeachment add to their problem? john: it is certainly not great. on one level, it isn't fantastic for the political mood. politicale a lot of prowess is continuing, making it hard for any governments to dig brazil out of the trough it is an. looking at the markets, it has done one thing. it has bolstered optimism some sections of the market that it will accelerate the process, getting faster to a point where the impeachment crisis will end. then you have the question, who becomes president? there is the risk that all of the political circles will be so tainted that it will be toficult for a successor
have any credibility. looking at this chart, the brazilian stocks reach barriers in the best five days since 2008. they have the the the notching fibonacci line. john: a ghost to show that when the most dominant figure -- a goes to show that when the most dominant figure is detained by ofice questioning, that kind stock reaction, brings home the scale of the drama the events that we are seeing in brazil right now. if you look around the world, it is hard to think that this is the most dramatic development we have seen in any political economy over the past five years or six years. companiesl of the involved in the oil and gas scandal, is their way out. can they disassociate themselves? john: that is what they will try
to do. if you look at petrobras shares, they were up percent this morning. in investment circles, there is optimism. not only for political, but for the companies at the core of these that it will be a cleansing moment for them. so much.hank you, executive editor of international governments at bloomberg news. a mixed jobs report. president obama will deliver 12:15. at we will have the coverage on bloomberg "markets." you don't want to miss this. ♪
let's take you through the market action, rising for the sixth day in seven. the longest winning stretch since october. the sixthing for consecutive day, the best run since october. ,he stoxx 600 intraday chart this is when the jobs report was released in the u.s. up and down come up and down and finishing the session higher. the biggest gain earlier in a decade from the world's biggest provider of high-security mobile phone and bankcard chips. this is a security software company that provides for visa, mastercard and at&t. the euro is rising against the dollar this week. that has not happened for the three prior weeks. run has come to an
end. what about high volatility? these are expectations for volatility in this exchange rate over the next six months. earlier this week, it hit the highest levels since 2012. there will be parity by the end of this year, but they are in the minority. we will speak to neil jones and a second. will there be parity in 2016? vonnie: you never know. greek stocks among the worst performers in the world this year. how much has the greek majors index rebounded since february? mark: blink and you missed it. forget brazil. gold is in a bull market. greece is in a bull market. this is a chart going back to 1998. you have to look at the upper turn here since february 11.
it has risen 20%. year, it is the fourth worst performer. since 1999 when the index hit a record high, it falls 81%. come it has been painful for greek stock investors. vonnie: with the global economy -- the chance of u.s. downturn may have risen. recession over the next 12 months at 20%. he explained why he thinks so. >> it's been eight years and we had the last recession in the u.s. historically, we have been every
4-7 years. debt.t the the debt is a staggering. japan is in recession, china slowing down. half of europe is in recession. mark: in light of the economic turmoil, he is long the u.s. dollar. neil jones, do you follow mr. rogers? the dollar is destined for a bit more weakness. i think there is some upside for euro for the shorter-term did i would suggest we see position reduction. ecb, possible dissension there. theay not get the measures market was expecting. disappoints,e ecb
is it going to be groundhogs day again? neil: that has a huge amount to play in investment decisions. fromd have today officials, dissent. more of a squeeze on the upside for europe in the shorter-term. , butr-term for the dollar for now, high euro at this particular moment in time. vonnie: talk to us about what is leading the u.s. dollar. is it treasuries or the federal reserve or the crude oil trade? neil: oil has a large part to play. so does china. the whole risk on, risk off concept at the moment. i do sense we have possibly more in terms of strength -- more to do in terms of china strength as
well. it is having major repercussions on the dollar. it's interesting, the dollar ens against some and weakens against others. last.t sense it will the dollar tends to rise against against -- can weaken against sterling. mark: sterling oversold last week. the biggest decline since 2009. made back 70% of those losses. brexit fears over or not? neil: brexit is still very much in play. perception of how brexit will manifest itself in the currency market is changing. originally, we were thinking it would be bad for the pound.
itthe moment, the thinking could be worse for the eurozone than the u.k. when you have the removal of a large economy. it may trigger other referendums . the pound cells up against everything. brexit not great for the u.k. in shorter terms. it may not be that great for the euro, either. unprecedented times, we've never seen anything like this before. mark: give me a level for the brexit. neil: the pound will really suffer, we see 1.25. mark: some have seen 1.15. neil: i'm not so bearish the u.k. will fall apart. there will be much more investment into the u.k. after -- it could develop
safe haven spaces. i'm very much contrary into the majority of analysts. ofcontrarian the majority analysts. the economy can make decision s under its own guidance, that could be an attractive haven for a currency rather than the selloff. vonnie: there's money to be made in currency markets. what is your favorite? high sterling against the japanese yen. a structural play that started the year. we are risk on for the moment. we are in that frame of mind, that mentality. prices are moving higher. commodity prices are moving higher. one needs to be flexible in the risk on risk off play. for the moment, we are going
that direction. the world is not position for higher risk. the market is short sterling and is cutting back. the yen is cutting back. we get currencies that respond well to hire asset prices, such as the pound will outperform the funding currencies such as the end. -- the yen. let it run its course and next week and beyond. the ecb does move into deeper territory, what is that mean for germany else? neil: at the moment, the yields have really -- record territory at the moment. we did have some data this morning that point of the other way. moving above into the 50 area for germany. this yield at record
levels, for germany, not necessarily across the board. x forrms of the da germany, that is the focus for the ecb. it will be difficult for the market to beat this expectations. of the reasons the euro has gone up in the last couple of days. there is potential for dissension. mark: the big one next thursday. can't wait. thank you for joining us. 17,000?has just passed vonnie: and the s&p just passed 2000. up .4%. the dow jones up 17,002.
we will be keeping an eye on these all day. the nasdaq up .4%. abigail doolittle has more life from the nasdaq. again, we are looking at a reversal of a small decline earlier. the nasdaq now trading higher. if it closes that way, the first four-day winning streak of 2016. boosting the nasdaq by the most today, apple shares up strongly after bullish comments from piper jaffray's. ise itspany could ra dividend and buyback plan to $50 billion. the march quarter could mark a trough or decline in iphone sales. taking a look at another tech mover, yahoo! shares hit their highest level of 2016 on a report out of reuters in the company could be looking into
feeling some of its non-core assets. decision by the company not so long ago to form a committee to explore strategic alternatives. marissa mayer under tremendous as thee to make changes company has fallen 40% since she took over in 2012. vonnie: what else is new? for a semi-are always under pressure. let's check in on our first word news. -- marissa mayer always under pressure. vonnie: republican rivals say they will support donald trump if he wins the nomination. a group of anti-trump republicans want to make sure that is not necessary. they will fight it out at the convention -- mitt romney will
speak with bloomberg politics's mark halperin coming up at 1:30 p.m. eastern time. in germany come a doctor has determined that a 95-year-old former asthmatic is not fit to stand trial. he faces 3700 counts of accessory to murder. he will be examined by other experts and could still go on trial. saida's new prime minister it would be nice if americans paid more attention to the rest of the world. he made a comment on 60 minutes. he goes to washington next week to meet with president obama. the european union offering some hope to greece that it will not forme a one term haven immigrants. checks have kept migrants out of
greece -- the eu wants greece to do a better job of registering migrants. day.l news 24 hours a i'm courtney donohoe. mark: let's stay with the refugee crisis in europe. said progress is being made towards driving down the influx of refugees. her comments, head of a crucial summit on monday in brussels where eu leaders will tackle the crisis. europeano the immigration commissioner and the euow much a threat is facing. put in doubtct is by some member states. i believe one of the main threats of the european project right now, challenges with which
we are confronted, mainly the rising of populism and xenophobia in europe. some political forces are exploding the refugee crisis -- exploiting the refugee crisis to force havens. mark: one million made the journey back in 2015. vonnie: unbelievable, really. the commissioner told you about a crucial point. troublethought i was in good i got a call saying the commissioner wanted to speak to me. he said i have a winston churchill quote for you. at the end of the interview, i asked him about the upcoming u.k. referenda. i want to hear his a stance on
the referendum. as you know, migration is top of the fears at the u.k. electorate. he said i will not get involved in u.k. politics, but i can tell you, i'm a massive fan of churchill who was a big fan of europe. when he called me up after the interview, he said i have a good quote tatian from churchill -- quotation from churchill. we cannot aim at anything less than the union of europe as a whole and we look forward with confidence to the day when that union will be achieved. those are the words of winston churchill. it was great to hear the commissioner following up our interview with a quote from the great winston churchill. we will see how european leaders can hammer out a resolution on monday when leaders will meet with turkey, trying to hash out a deal on this refugee crisis.
stock market are wonderful. yesterday, the stoxx 600 in europe failed to rise for a six-day. the winning streak was the longest since october. let's use our function to look back at the longest winning streaks we've seen since the inception of the stoxx 600 in 1987. it is wonderful what you uncover when you are a nerd. ,n the last 20 or so years there's only been a six-day winning run, october of 2015. look at the nine-day winning run. there have been 59-day winning runs from 2009 to 2015. wo ten-day winning runs. -- five nine-day winning runs. run is as rareg
as matt miller buying me a drink or mark barton winning battle of the charts. you should see my chart. we will have a look at that. hello, matt miller. mark barton bought so many pictures -- check out this chart. i will show you something useful here. we've taken a look over the last 30 or 40 years here. we look at unemployment, this redline. we covered a lot from the recession. that's weaver covered a lot from the recession. this blue line, the unemployment to population ratio.
this is fascinating. e recovered a lot from the recession. 40% of the people who live in this country do not have a job. they have tracked each other so well for the last 40 years, only now because of the baby boomers do they diverge. the baby boomers was so huge that passing through will create this huge bump. vonnie: i love that presentation. i would give you the win, but i have not given mark a win yet. stay with us. more next on "bloomberg markets." ♪
vonnie: changing habits of tv viewers. streaming is a company that started in sweden and just launched in one of the fastest-growing markets in europe, germany. thank you for being with us. u.s.,e based here in the but trying to take streaming into europe. why will you be doing better than other streaming services already there? >> we do live television, not recorded. the focus is live television. a globalying to build .latform for distribution we can take signal anywhere and distribute it anywhere. this show itself is now on our platform and being watched in germany right now, live. vonnie: how are you on that
form? >> signal can be taken anywhere based on the content price that we have. the localhe rights distributor wants. in this particular case, we have the right to distribute in germany, but with the click of a button, if bloomberg allows, we can be in anywhere in the world. is the tv becoming extinct? >> that is a great question. it is a new type of it beware coming in -- viewer coming in. many people who are not watching live television are beginning to watch television -- the remaining 62% who have televisions watch it in another room. later in the evening, they watch
the programs that may be recorded. oonnie: did you follow the aere case? gine tv works with the distribute is very well. distributors very well. when we say we want to drop the barrier of content, you must pay wantome content you don't to watch before you can watch something else because we work with those broadcasters. vonnie: we will follow the story. it is fascinating. that is it for the european close. have a great weekend. ♪
scarlet: good friday afternoon. alix: here's what we are watching at this hour. he and scenery came in becoming the world's largest movie theater chain. is becoming the world's largest movie theater chain. scarlet: not all workers are benefiting. what is disappointing economists . alix: the massive investigation into corruption getting close to the center of power. >> julie hyman is checking things out for us. a big beat when it comes to nonfarm payrolls. a modest gain in stocks. julie: the modest gain in stocks came oay