tv Bloomberg Markets European Close Bloomberg March 7, 2016 11:00am-12:01pm EST
this is "the european close." we are going to take you from new york to london to brussels in the next hour. here is what we are for you today. european union also in emergency -- holds an emergency summit on the crisis, but turkey is making last-minute demands. the warning german chancellor angela merkel has for negotiations ahead. why one group of business owners wants to break away from the european union. could business deals be in jeopardy? mark: donald trump in the lead for the republican nomination. why many in europe are horrified by the idea of a trump presidency, even though in some ways he fits right in.
let's head to the markets desk, bloomberg's julie hyman has the latest. hi, julie. there, mark. the s&p and the nasdaq remain negative, a little mixed breed on the chinese meeting over the weekend. information coming out from it, also reacting to commodities today. with the dow as the best performer, i wanted to look at the three biggest contributors to the gains. chevron rising, caterpillar rising as well, and dupont gaining on the news that people familiar with its plans are considering a counter bid for dupont. we see those shares rising. caterpillar has reached a key technical level. take a look of the bloomberg. i have caterpillar versus its 200-day moving average and
purple. here we go. it is above that 200-day moving average, and that is the level technical strategists were watching. have definitely seen momentum in recent days, mark. treasuriese see extending their selloff, julie, to a second day? julie: yes, indeed. a lot of traders have pulled forward their expectation for an interest rate increase. the two-year seems to be most reactive to the expectation of a change in interest rates. you see the bows of the bottom, the highest since january for the two-year yield. we are seeing gold off a little in itsay, pausing winning streak we have seen recently, down a quarter of a percent, which interestingly, there is a dichotomy between -- gold old miners miners. intracks up 3% and one miner
particular -- the etf rises to the highest since may 2016, we are looking at barrick gold. here is the year today check for barrick. stock,doubling for that the highest since 2014, mark. mark: stocks falling after a of gains, theiod longest streak since october. digesting the information after the national people's conference in shanghai. a third week of gains. the ecb meeting this week, and since the ecb announced stimulus in december on the third of that month, the stoxx 600 interestingly has fallen by 11%. by as much as 2%. it is the world a guest --
biggest chemical company. the merits of a counter bid for dow chemical -- for dupont, which agreed to a merger with dow chemical. we had an announcement that the cfo resigned last week, according to people familiar -- he quit after expressing concern the issue and hinkley point could be announced and would jeopardize their financial position. vonnie: and what is going on with this company, mark? mark: check this out. 67% in one day. biggest gain ever. it felt to a record low several where 11. since then, look at that -- up back to 168%.
a billionaire named john fredrickson raised $510 million in cash, and that is raising speculation of a bailout. look at that. 158%, easy peas the -- easy peasy. hasie: ok, courtney donohoe more. courtney: the u.s. and south korea have begun their annual military exercises. north korea claims that the military drills are really rehearsals for an invasion. vice president joe biden is vowing to "wipe out this evil that is the islamic state." he spoke with american troops after visiting the rand mosque. vice president biden: we have to
ineeze the heart of daesh iraq and syria so they cannot pump their poison into the heart of the world. that is what we are doing with our coalition partners. we are making it harder for them off theirr, cutting lifeline, their oil revenues, their finances. they have carried out 800 strikes against the islamic state since october. the turkish prime minister is laying out new conditions today in brussels -- among them, turkey wants an extra $3.3 billion per year. the eu is trying to persuade the turks to help more asylum seekers of waving them on through to western europe. and western mexico's president has avoided making comments about donald trump until now. he says that mexico would try to work with whoever is elected
president of the u.s., but says that trump's comments about mexico have hurt relations between the deed of countries. global news 24 hours a day powered by 2400 journalists in 150 bureaus around the world. i'm courtney donohoe. vonnie? vonnie: courtney, thank you so much. european leaders have turned their attention away from the and to a moreit immediate problem, the ongoing refugee crisis. greek prime minister alexis tsipras spoke outside the summit and said the eu must share the burden. as: one ofster tsipr our principles were sharing responsibility, sharing burdens, sharing solidarity. vonnie: ryan chilcote joins us from outside of the summit. what have you learned about what european leaders might do to come together on some kind of policy? so, this summit is mostly
about making nice with turkey. turkey has been invited. the turkish prime minister is here. some of the countries, some of the eu officials all in a room, huddled together, and the reason for that is most of the refugees pouring into the european union are moving on to greece. so, what they really want to do is convince greece to keep more of those refugees, even take back some of the refugees who made that perilous journey across the sea from turkey to greece. i think they are hoping -- i think they have a bit of an agreement on this. maybe they've organized transportation flights to bring those refugees that the european union is prepared to accept so they do not have to go to greece and they do not have to make that journey to the city. that is the deal. that is despite all of the
, thatism, the crack down is the idea. there are still to do big problems. one is that turkey is asking for money, and all of the countries have to vote on whether they think this eu plan is a good one. isthe funny thing in the eu when you think you have your back against the wall, a solution is usually found, and we do not know that we need to get this third program going. we need to get this first evaluation through and the imf is obviously a deep layer. , the imf on my part has always been a key and important player in this and we want them to be involved. nish: that was the fin finance minister talking about a different aspect of the problem. you have turkey and its needs, turkey asking for monmouth --
for more money accommodating the refugees. need help from the european union -- and also, this is just as important for they neede -- financial assistance to deal with their own problems that began before the refugees. namely, they need more bailout money. the imf has been holding out. we hear their the finance minister saying he thinks the eu will put pressure on the imf and there will be some kind of deal. you look at the two-year greek bonds, you see investors sharing optimism. you hear their from the finnish finance minister, they think all of these efforts to solve the refugee crisis in an indirect way will help greece get more assistance to deal with its own problems and we might see an imf troika, quartet mission in athens as early as tomorrow,
some of the delegates are telling us. for joiningthanks us. good to see you. bloomberg's ryan chilcote. coming up on "the european close the u.k. referendum draw near. a group of business leaders are showing support for britain leaving the eu. among them, howard shore, chairman and founder of shore capital. he is with us next. ♪
the chairman of shore capital. survey.d fund a the first two weeks of this campaign have been going. some would say it has gotten quite ugly. howard: some would say it is a vibrant debate. mark: vibrant is a nice way of putting it. is ad: yeah, i think it vibrant debate. mark: i would love to hear your opinion of the director of the bcc, broke ranks with the members, back to the so-called brexit. were neutral. he lost his job. do you feel sympathy for him? do not know the circumstances around why he said what he said and whether he was authorized to say what he said. it is true -- and our survey tells us that -- a large number feel the eu hinders
their business. we found two-for-one they felt it was a hindrance rather than a help. 80% were concerned about employment and health and safety legislation. vonnie: do they just hope to do their business in the british system? are notsme's trading in europe. does nothey are, it mean they are necessarily in favor of staying in the eu. i think the difference between sme's and large companies is are from on for norse and founders who take a long view. they are thinking in terms of
decades about what is good for our country, our family, our business, rather than thinking about the short-term impact of any dislocation immediately following a vote. about their materials, raw materials, and what they sell, even services wise? businessot hope to do with the eurozone in the future, or will they just be doing it in a different way? howard: look, we have a 50 billion a year trade deficit with the eu. i do not think any sensible person is suggesting we will not be able to continue to trade with the eu in the same way we are at the moment. n think the main argument the i campaign would put forward, if we leave, we will not have a seat at the table to determine the rules. mark: and you disagree with that? no, you have to
counterbalance the benefit. history tells us, all of the time we have been in the eu, we are failed to significantly affect the world. only a small proportion of the officials in brussels are brits. we were late. the french and the germans have dominated it and we have always struggled to influence the rules of the game. the best way to influence the game going forward is to grow our economy, because if we have more economic stick, we have a bigger say, and the best way to grow our economy is to deregulate. we cannot deregulate without leaving the eu. say that it, some would take years, possibly up to two years, to negotiate with the european union. that's a long time of uncertainty. look at what happened to sterling in the week after the referendum was called. do you not except if it were to take that long, that is too long
a time of uncertainty for many people? of all, should we be thinking about future generations or the next 12 or 18 months? and i don't think anyone is suggesting our free-trade arrangement with the eu would change at all. there is a vote on thursday, we vote to leave friday morning, nothing would change. on ourhave been focusing trade agreements with non-eu countries, and obviously if you were the government and you are focusing on those renegotiations, you would focus on the six or seven largest s that we trade -- the u.s., china -- seven out of 10 are eu nations. howard: that would not change. vonnie: howard -- howard: yes? sizee: the small to medium is misses you survey -- with
banks, for example, what would happen with the banks were the brexit to happen? howard: most banks are not sme's, so -- vonnie: they need banks to function. howard: i don't think anyone is suggesting that banks would stop providing liquidity for customers. thing is that some element of investment banking services might leave london and time to elsewhere in europe. i actually do not believe that argument. i think history tells us that talent, legal infrastructure, transport inrastructure, human capital order to carry out financial services on a scale that no other european city, for the foreseeable future, could possibly compete with. mark: could we withstand economically brexit?
would be think brexit a good thing. sterling may be volatile. a lot of that potential volatility is in the price. we have to take a long-term view rather than a short-term view. what i would expect the bank of england to do is provide a lot of liquidity into the system if we decide to leave to stabilize markets. howard, good to see you. the debate carries on and on and on. howard shore there, founder of sure capital. coming up next, battle of the charts, a little early today. mario draghi announced qe on january second last year. i will be taking a look in today's battle of the charts. stay tuned. ♪
telling charts of the day and what they mean for investors. you can access all of these charts on the bloomberg by running the function at the bottom of your screen. the champion of the charts from london, mark barton. like to be reminded of that. all right, let's start with my chart of the day. andou know, mario draghi his colleagues at the ecb very likely to add further stimulus to the economy thursday. it was last year when draghi said, yes, i will add stimulus. he started the process in march. keyid, let's look at the marks. inflation fell 2%. eight days after draghi inflation fell to minus point six percent. it slowly improved -- you see the green line, came back down,
down 2.2%. so core inflation is exactly where it was when draghi announced qe. draghi's preferred inflation gauge? this is the five-year forward swap rate. this starts and 221. it follows the fortunes of cpi. this is the red line through last year. look what happened from the end of last year. whoosh. low,me down to a record which tells you investors are confident inflation expectations will hit rocky's level of 2% in just over two years -- draghi's level of 2% in just over two years. and the consumer price index fell to its lowest level in three years. btv can see my chart -- g #
474. i gather we found joe. vonnie: joe weisenthal, what do you have for us? joe: that is the perfect segue to my chart. i'm looking at the gap between the u.s. and the eurozone. this is the spread between the yields on sovereign debt in the u.s. and germany, hitting the highest level since the crisis. actually about a 10-year high right now. it's another way of looking at the divergent pattern between the two economies. the two-year spread often seen as a proxy. the u.s. getting lifts, divergence once again. vonnie: if the ecb does go into negative territory, what on earth happens to this? joe: markets are betting that it is going to widen. a stoneware policy is going, they do not see them converging anytime soon. give it to going to
joe. market, i'm so sorry. #btv 475. vonnie: only because it is so topical. all eyes are on thursday. you will have more chances later this week. mark: i wish to lodge a formal complaint. i consent to joe's victory. well done, joe. theill take you through final numbers before the close. looks like stocks are going to fall for only the second day, investors focusing on the china national people's congress. i will have all of the closing figures for you and just a minute. stay with us. ♪
york, you are watching the european close. let's take you through the market action. news fromdigesting china from the national people's conference. 6.5%irmest topic was the to 7% growth range. the takeaway seems to be debt growing even as growth slows. eight week. looks like the stoxx 600 fell off their rising three consecutive weeks. 2.6 percent lower earlier. looks like it will finish higher. the egg is said to be working with advisers and financing chemicalthe biggest company is said to be working and financing banks. this was the stock jumped of the day and of the last three weeks. drill shares rising as much
most ever. it fell to a record low it february 11. since then, it has rebounded mainafter the oil drill's owner raised $510 million in ash, fueling speculation of bailout. the oil driller has seen a surge in its shares since february 11. vonnie: what is behind that gain? mark: up by 7%. the is the intraday chart, -- up the most in seven years. earlier, it was up 12%. it is considering all options for the business as part of a strategic review. sky news reported oh n.l. plans to split its standalone
business. it will make it march 11. we could and should know more march 11. iron or, am watching copper, and the yuan. crude.ook at the nymex up 3.5%. ore up 18.5%. ,nd if you look at copper $2.2665 per pound. 6.51 as the celebrities -- as the festivities continue. governmenthinese will have more reforms.
pissarides, a nobel prize-winning economist, who met with china's premier last month, how is that being taken? what did you discuss? christopher: it was to discuss the reforms we need to get the going.ase of growth was thatund positive the prime minister was well aware of what was needed. he had a deep knowledge. on advice.rely he really knew what was needed. he said they would be doing it, onecially their initiative industry 2025, bringing new technology and pursuing more toeralization of sme's encourage more job creation in the service sector.
mark: the criticism has been deleveraging, the deleveraging can has been kicked down the road. is that a fair criticism of the announcements that were made? christopher: that is the big question as to whether they will be able to manage that. they have not said much. , iyou want to be negative can see those criticizing are right in saying it. the only thing i can say is that they know the problem. they have not suggested any convincing solution. he was always, shifting the discussion to the economy and the reforms needed, but never touched the financial sector or debt problem. markere is a big question
there. i would not say it as negatively as you said, but there is a question mark there. theie: does china have economic and financial have to do some of these things? moved to 3% deficit? on and so blankets forth? mark: does it have the half to achieve these? fiscal heft?alf -- christopher: they have the ability and the willingness. even -- if they agree in their forthcoming meeting. vonnie: how will it mostly be achieved? the pboc? continued fiscal stimulus measures? think to continue
stimulus measures. i think they would prefer that. mark: let's move it closer to home. there is the brexit debate, whether the u.k. should stay in the eu. many are focusing on the battle theeen the remain and of leave campaigns. let's spin it forward to the moment, if this did happen and believe campaign won. what is the political fallout of a vote of a brexit? this david cameron lose his job? christopher: i do not know what his intentions are, but he would have to tender resignations of parliament at least, because he is taking a very strong stand on staying. he is campaigning for it. it is a massive issue for britain, politically and economically. isthe country votes no, it
like not showing confidence in the prime minister. whether we're going to have elections and chances he will win again or that the conservative party will win again -- mark: do you worry that this referendum could tear the tory party apart? battle lines are being drawn. this is two weeks into the 123 day campaign. you wonder how the jury all like it will be one month to three months down the line. christopher: my main worry is the uncertainty this is creating before and after. europe has been an issue that divided the tory party. countryt good for the in government. over thenment torn
policy that has been pursued the last 40 years, the single market, the biggest trading partner if you look at the european union as a whole, and even cabinet being divided, it is dangerous. and we may get into a u.s. primary, where we throw stuff at each other and their relationship will not be as good as before. mark: christopher pissarides use -- will stay with us. let's check with our first news. courtney donohoe has the latest. courtney: the head of the main syrian apple is in bash syrian opposition coalition has said that they will decide later whether to take part in peace talks here that will be in geneva wednesday. officials at the higher negotiations committee say they won't not accept any role from president bashar al-assad.
prime minister david cameron has sent british ships to the sea to help stop refugees mugler's. -- refugee smugglers. loss forexpensive apple at the supreme court. the justices ordered apple to pay a 450 million dollars settlement in an e-book pricing case. it is said that apple or crocheted a scheme to raise the prices of electronic books. about 90 minutes from now, peyton manning will call it quits. a month after he led denver to the super bowl title, he will end his 18 year career in the nfl. he was named the most viable player a record five times. global news 24 hours a day covered by our journalists and news bureaus around the world. i am courtney donohoe.
the nasdaq could have its first five-day winning streak since april of 2015. helping the nasdaq is the biotech sector. it is up sharply. dragging is big tech, including apple, amazon, and microsoft. vonnie: any notable name down? netflix. shares down from a bearish search. -- we spoke to paul sweeney. he says if the company misses its net weight, the momentum stock that trade-off of the subscriber numbers, netflix did trading to embarrass that cross. that suggests sellers are lurking and waiting to take netflix lower. vonnie: thank you.
coming back to europe, greece is still the world. the finished finance minister is toing the imf and ministers -- he spoke with bloomberg tv in brussels. is thee frank, the imf one pushing for the harder line in the european commission seems to be more lenient. the key is to find a solution with the upcoming weeks to months, so we are not in a similar situation of crisis as last summer. these are solvable. vonnie: still with us is noble prize-winning economic christopher pissarides these -- christopher pissarides. greece gettingte out of this, especially with the migrant problem? christopher: no.
i am worried about greece. this is not be time to get tough with greece because of the migration issue. unfortunately, as far as the rescue program, the economic program, they rely on cutting spending, cutting wages, pensions, raising taxes. those measures gave strong disincentives to the private sector to develop what is needed. i do not see development coming out of greece. vonnie: what about migration? do you see a europe-wide policy? what should europe do? christopher: it is clear we need a europe-wide policy rather than individual countries deciding what is good for them. there have been many attempts to get one, but there has not been
agreement. far from it. european nations have been diverging to the extent that greece called its ambassador back from austria. they belong to schengen, which travel withoutw any restriction. there are fences going up at borders between european nations. instead of integration, we get disintegration from this migration crisis. i fear the consequences will be long-term. with we have often spoken guests about the humanitarian consequences. what are the economic consequences of not coming out with a unified policy? christopher: they are big for individual countries like greece, because they are small and the money they have to spend -- it is small in the european context but big in terms of their gdp, especially given
their economic situation. for europe as a whole, numbers are not that big that europe cannot manage the economic consequences. if all those see want to go to germany go to germany, it is a big country. it is wealthy. it can accommodate, if it wants to. provide the problems of ghettos and crime. problemssee economic of the european level. but i see it for individual countries, especially for greece and smaller countries up north. mark: a final word about mr. draghi. how much confidence you have in his ability to get inflation back to his just under 2% target? christopher: i have confidence in his ability to do it.
i do not have confidence he is doing it at the speed it could be done. that is not him personally. i know there is pressure from his colleagues in the council to wait. three years from now, they say let's wait. that is germany, for example. i do not agree. once they set a target of just thew 2%, they should hit economy until it gets there as quick as possible. the way to do it is through qe. through interest rates. i do not see the benefit of higher negative interest rates. it is an additional cost on bank s when we want them to expand loans. make low interest rate possible. if you pour money into the economy and by assets, that will
have an effect on inflation expectations and on prospects. mark: great to talk to you. thanks for joining us. ofistopher pissarides these -- christopher pissarides of the london school of economics. since the start of donald trump's campaign, two of his dreams have been how he deals with china and the european margaret crisis. how are these proposals playing out in china and in europe? ♪
been how we deal with china and the migrant crisis. how are these proposals playing out in china and in europe? has written a story that compares him to his european counterparts. vonnie: andvonnie: jesse drucker is -- trump talked about the dangers of immigration. used all of this rhetoric. that he an irony licenses his name to real estate projects in the tri-state area and beyond for which he needs chinese investors? jesse: in this case, it is a relationship with the buildings being built by his son-in-law. the issue is a controversial program where wealthy chinese are essentially buying visas for projects that are supposed to be
in economically distressed areas that are often luxury developments. vonnie: give us the short version of why it is here. jesse: the eb five at visa program game's wealthy investors from overseas a two-year visa if invest halfling to a million dollars to a project that qualifies. one of the concerns is that it whereficult to figure out the money is coming from. there are concerns it could be used for mondor eli manning -- used for money laundering. vonnie: but congress gave it a reprieve? jesse: it has managed to survive. with a popular program people from china. there are around 10,000 visas issued and around 80% of them, from china.
isald trump's campaign filled with criticism of china and is also filled with criticism of the lack of security on our borders and our immigration process. one of the other concerns of this program is not that the source of the money may be tainted but that the people's visas get process quickly and there is not due diligence done. mark: let's get to stephan. you had a great priest, -- he had a great piece talking about trump and his relationship with europe. he said he would be easier to account the countries who do not have trump-like politicians. that despite the outcry from the press, his personality and nature are similar to his european peers. stephan: that is right. trump is new in american politics. the combination of very right
wing in immigration and national security but moderate and maybe even left wing on economic issues. but in europe, there is a long tradition of that. almost every country you can think of, their parties -- there are parties that have been growing and quickly, whether it is france or italy. we had elections in slovakia yesterday. we had two extreme right. neo-nazisssentially come to power. i could go on and on. mark: who is he most like? gert villers of holland might be one? is similar,lusconi but gert villers is very similar to trump.
he made his career attacking immigration, islamic in particular. he also started free market that has now switched to defend the welfare fight to protect it against immigrants. and they both have crazy hair. his hair is almost as iconic in the dutch context as trump in the american context. mark: stephan faris and jesse drucker talking about trump. let's look at the european markets. closing 26 minutes ago. falling for only the second day in eight after three weeks of gains, the longest winning stretch since october. ♪
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scarlet: i am scarlet fu. stocks trying to extend a three-week rally, but are things really getting better? asked to doas been more but is holding out for concessions in the migrant crisis. and china dismisses conclusions it will have a hard landing in the economy. but is it willing to do what it needs to to live up to it? first, we want to head to the markets desk where julie hyman has been tracking the moves from risky assets in china. china saying it will push ahead on focusing on growth. julie: even though it also gave a range for its gdp forecast.