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tv   Bloomberg Markets European Close  Bloomberg  March 11, 2016 11:00am-11:47am EST

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free-trade agreement with europe after revising it to calm fears of corporations would be overpowered, on concern that trade talks on the u.s. and the eu. the eu trade commissioner in washington is therefore a series of meetings with officials, including michael froman. i spoke with cecilia malmström yesterday about her ambitious trade agenda and i started by asking if it is too late for the u.s. and the eu to reach a trade deal before president obama leaves office? cecilia: it is not too late, that is our plan a, we are working very hard to achieve that. we are committed to intensify our contacts during the spring and over the summer and to see if it is possible. we have done a lot of work but still things to do. content is more important than speed. wish is to sincere
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do everything began to conclude this before the end of the obama administration. mark: who is to blame for the holdup? cecilia: there is no holdup, we are working through chapters, sections, it is complicated, the most ambitious trade agreement between the two biggest economies of the world. we need to get it right. we both have different interests , i have 28 member states and they have their priorities. the u.s. has their priorities. it takes time to get it right. nobody is holding it up. we are advancing and committed. mark: can you tell us what the main sticking points might be? cecilia: now, we have had a long discussion on regulatory operation, and innovation in these agreements, trying to see if we can recognize different audits, certification schemes to
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avoid duplication when it comes to pharmaceuticals, inspection of medical devices factories, labor -- labeling of labels in clothes. content, fabrics, washing device. if we can harmonize the way we look at the seatbelt clicking cars to avoid the vocation. . this takes time. side, we haveean interests that we need to negotiate further on the public procurement on geographical indications and other market. we still have work to do. mark: you have pulled off -- you have breathed new life into stalled trade talks with canada, which has led many to ask the question, can you pull off a similar diplomatic coup on a
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bigger stage? cecilia: that is what we are trying to do. that will hopefully go into ratification with member states and european parliament, a very important deal for europe. it would mean a lot to consumers and entrepreneurs. we hope to achieve at least that would be americans. we still have some work to do. this is what we will be discussing. they have discussed it because the canadian prime mr. is in washington right now. -- prime minister is in washington right now. mark: is a trade deal more likely now in the near term than a trade deal with the united states? cecilia: we are advanced with japan, but it is true that it has been a bit stuck lately. we do not see enough movement from the japanese side. we meet regularly and have
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agreed on many things. it seems that the upcoming elections in japan has made it a little bit difficult to advance but we are preparing new negotiation rounds and hopefully we can conclude this this year. we also launched negotiations with the philippines and are preparing for australia and new zealand, possibly indonesia. we will see if we can exchange offers with -- we have a very ambitious trade agenda. other examples. had 15hina, you have years to prepare for this decision on whether to recognize china as a market economy. why is the european commission failed to make a proposal to you governments and the european parliament? can a decision be made by the december deadline? cecilia: we are looking at this very carefully.
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impact. we are doing impact assessments and consulting with stakeholders, there will be a public event next week. we are finalizing our impact assessment on what that could be done. we have not made up our mind yet because we need to consult very thoroughly with european parliament and member states. we hope that, if there is a proposal to be made, that would be by the summer. it is complicated. u.k.,eople, including the directected -- not a link but an indirect link because of the huge overproduction of steel in china. mark: let's talk about the upcoming u.k. referendum on eu membership. thatf the core issues voters are going to have to deal with, can you in light and as on how difficult it -- enlighten us
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how difficult it would be through the u.k. to read negotiate access to the eu single market if it did vote to leave the european union? cecilia: i am afraid i cannot because it depends on if the british people vote to leave which i hope they do not. that depends on if there is a wish to leave. what decision the government makes and what kind of relationship we wanted to have with the eu. something for us to decide, and especially by the government and we will see what kind of relationship that would be and how we negotiate it. it is impossible to say today. the euthe eu -- mark: trade commissioner cecilia malmström speaking, avoiding that question, a hot topic. you caught up with the commissioners counterpart in the united states. david: i talked to ambassador about then, we talked
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transpacific partnership, the big deal he had been working on. impressed with how much time he's been in airplanes. working diligently with his counterparts in europe, stressed a lot of trade barriers necessary. in his words. >> we still have terrorists are manufactured products coming from europe, a highways well-regulated economy, we have to link our economies more closely. the challenges is whether we can bridge the gap between our regulatory regimes and our standards without lowering our level of health -- health, safety, environmental protections. the kind of dialogue we are having. david: the sticking point is agriculture, he says the european union should relate more on science than on other things when it comes to agriculture and say that he'll swear regulators will work together more closely. -- he hopes rate letters will work together more closely. mark: interesting to see him
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hopeful there will be a deal ahead of the obama administration because i know that optimism is not shared by all sides. only time was out with a matter of months to go. still ahead, lots more to come, 11:21 in new york, more changes for deutsche bank. any cut its bonus pool and industrywide in trading revenue. we will bring you the details next. ♪
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mark: big banks in europe, deutsche bank says it expects the industry's revenue to drop this year, the attribute is bonus pool -- they are trimming their bowman -- bonus poll. -- pool. that 11% cut in the bonus pool, was it a surprise? >> it was. we were expecting something a lot deeper.
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in october, we were hearing the investment bank alone which accounts for the largest share of the bonus pool would be cut as much as a third. it is exciting to think what could be driving that less than expected reduction. i think a lot of people are saying the bank is pointing out it has to hold onto talented staff. they must have realized there are a lot of people they want to hang onto. mark: can it still compete despite this 11% cut in the bonus pool? --that is what we are seeing the numbers are not as bad as some people had feared. we do not have the graduate he to know what business like they are paying best in and which they are taking a tougher line on the eye imagine the fixed
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income which saw some of the heaviest declines in revenue, they will be taking a hit. elsewhere in the bank, equity trading, advisory, equity capital markets, they want to expand upon these. probably some happy people in those businesses. david: about what else we learned from this forecast, the first full year forecast we have seen. there were changes on positions to minerals and mining, what else did we learn? >> we learned that it will be a tough environment to carry out the overall. if you are overhauling your business, not a fun time, large cost coming in terms of severance, firing people. if the revenues are not supported by that time, that compounds the problem and makes the headache bigger. it is not the pitch he wanted to start the year with. ,s to the quality of the loans
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a deep dive in during the coming days and analyst and studying it in detail. the exposure to oil and gas is a big concern over because couple of weeks. deutsche bank did not quantify numbers it had to the come in line with other banks. mark: thank you. a quick look at the final numbers ahead of the close, four minutes away from the end of the week's trading session. what a rally post-draghi. ♪
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♪ mark: live from london and new york, you are watching the european close, i embark martin -- i am mark barton. let's take you through all the market action, a rally propelled by the ecb's stimulus measures
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yesterday, a rally many might say should have happened yesterday but postponed by 24 hours. this is the stoxx 600 today chart appeared in a decline at the end of yesterday by 1.7% over the two days, the stoxx up a 9/10 of 1%. i want to know whether this has risen for the fourth consecutive week, the longest winning stretch since march. i will find that out in the next two minutes, the euro initial that initially fell by 1.6% and finished today 1.6% higher. 1.5%.he two days of mario draghi did not manage to push the euro lower against the dollar, similar to december 3 when his actions fail to impress the markets and the euro rose by 3% against the dollar. one portion of the bond market i want to look at, the spanish bond market from the two-year to the third year portion of the curve, yields are falling, yesterday, the spanish 10 year
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fell by 20 basis points and rose by two basis points. today, yields in the periphery are falling more than the core which will please mr. draghi. we are seeing positive reaction across all the asset classes. david: the credit risk has plunged in europe following the announcement yesterday, how big are we talking about? mark: the biggest one-day drop ever. the european corporate credit gauge, the market tracks the european index, the cost of insuring and grit -- investment-grade companies against default. ,ook at this move, down by 18% the most ever since its gauge was created in 2011. 600 fell to ax 2.5 your low on february 11, this gauge has sunk by 43%. an almost three year high. how things changed in the space of three weeks.
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look at that big move today, massive move. biggest percentage move ever, draghi managing to deflate credit risks. david: a precipitous drop. european markets done but u.s. market still open, let's look at the major indexes running with the dow come a one and a quarter percent, 17,200. 1.5%.sdaq, up almost doolittle's at the marketplace in midtown manhattan with more. >> the nasdaq trading nicely, one tech winner -- the company beat third-quarter estimates and offered earnings for the fourth quarter above consensus appeared to upgrades. shannon is encouraged by the company's guidance, saying this
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could be the inflection point he has been waiting for back for earnings growth after two years of decline. david: you are looking over these reports. any other place worth noting? >> symantec up nicely after rcb capital took rating to outperform. and analyst encouraged by the company's opportunity to cross sell products, says there is a pat to possibly achieve greater than 30% margins. expectations on the stock are so low, something that could help drive the stock higher, perhaps doing his price target of $23. david. david: thank you, abigail doolittle in midtown manhattan. mark: seeing a rally in stocks around the world, the latest endless move from the ecb, is qe finally starting to pay off for equities a year after the ecb started its bond buying program. joining us is patrick spencer.
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his company has -- buy equities or not? >> you put me on the spot the last time. i did say i think it had bottomed. for what it is worth, i still think that is the case. just keeping it civil is quite important. i think mario draghi -- in the europe equity markets, yields of 2.25% on the s&p and some of those of blown out. yields of 1.9% on the 10 year in the u.s. i looked again more precisely this morning and ever since 1930, only five occasions where the equity market is yielding more than the 10 year. maybe five occasions and i think, apart from only one, the market was 30% higher the following year. mark: you are not suggesting we
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have a 30% rally coming our way? >> the other statistic i saw, if you look at markets that moved within the color of not more than 5% and not less than 5%, and 75% of the time, the market has been up at least 20% in those times. the following year. you never know. you might get a nice move in the markets. draghi now has done innovative things, deployed all or most of what is in the toolkit, what could happen next when you look at what policy measures the ecb might do going forward? >> i think he has played a blinder. if you look at what has happened with tarp in the states, the fed has doubled its balance sheet since 2008 in money supply is up 7%, 8%, not huge but it got the
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depression pushed to one side. even now with tvs stocks in the eu, i- qe stocks in the suspect with this bazooka he adopted yesterday and things 's complextro instruments, actually giving banks, allowing banks -- paying banks to lend money. tltro'sitself, plus the will see money supply growth and that is the big problem in europe, slow growth and credit. this will unleash it. he says they will not lower interest rates but he said that before. he can do what he wants. he can even get down to buying equities, potentially. there is a big tale of opportunity behind us. a lot more he can do. it will put one hell of a bit underneath the equity market. they used to say do not fight the fed and in this case you do
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not fight the ecb. david: i imagine these next few days will be a good deal of psychoanalysis of the members wondering what they will do next week during their two-day meeting. this combo take what they are facing going into that boardroom next week? >> i think it might have taken a bit of pressure off yellen in so much -- i know the euro has come under pressure again but certainly the japanese yen and the euro have been appreciating recently against the dollar. it has taken that pressure off. if you look at all the u.s. economic indicators, and a part from concerns about inventory climb, most of them have been reasonable. you are in an environment where you can see some interest rate increases. now that yellen has put a bid under the european market, they
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can give her a slightly easier basis to raise rates. she can feel more confident that the european issue is being challenged. you have this go issues with governments -- fiscal issues with governments who have to spend but he has done his best to curb the situation and yellen will be pleased. we put-- mark: how do our money to work in the if history proves true, a rally awaits us? environmentirst, an when interest rates are going up, value stocks, you are starting to see that rotation. we talked about oil stocks last time. the violation there, the material stocks look interesting . all the risk on stocks, which a lot of them have sold off and we have seen nice moves for the outside. value stocks and certainly risk on. within that, we like the health
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care stocks. we like the technology stocks. we like consumer discretionary stocks because the consumer is two thirds of the economy and in pretty good shape. banks, not our favorite area but given what mario did yesterday -- mark: the readthrough in the european banking industry? thencouraging, in that stabilization of oil prices, there has been a correlation between oil prices and banks because everybody is concerned about what the risk on the balance sheets with regards to oil is. that has gone away. the net interest rate margins that everybody is concerned about in the u.s., with interest rates rising, you will get better margins and you better get that are margins now because of ltro's in europe. -- not our paired favorite area, it will become
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our favorite area because they do it cheap. relative to fundamentals, quite exciting. there are questions about the investment banks. i would have thought more about the high street retail banks, wells fargo, that does have an investment bank but a mortgage site as well. pnc, blackrock p or i like the financials, personally. nc, i like the financials, personally. mark: thank you. david: bloomberg first word news. >> an endorsement, ben carson says he is buried the hatchet with donald trump. the former republican presidential candidate endorsed the front runner, calling him a very cerebral person. donald trump talked about his relationship with the republican party. >> there is a big disconnect between the so-called leadership and the people. the people are much more important to me because they are
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doing the voting. that is why i am standing up here today. >> what are they not understanding? >> the republican party lost its way, lost two elections they have one, the last election they should have won easily. an easy victory. much easier than the one we have coming up. >> he is favored to win two big primaries next tuesday, florida and ohio. two executives from winter we are projects have been ousted following a probe of their finances. -- wounded were your project have been ousted boeing a probe of their financial. they spent money on extravagant parties. other veterans charities these -- charities have overhead cost that is less. an uproar in the u.k. over comments made by president obama, the british press calling it an and president -- unprecedented attack on david cameron, he called libya a mess allies.ed european
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serious opposition groups will go to talks in geneva after violence dropped following a truce brokered by russia and united states. that cease-fire went into effect in february. global news 24 hours a day powered by our 2400 journalist and more than 150 news bureaus around the world. mark: thank you. the battle of the charts. how has the euro reacted to the ecb's qe adventure? ♪
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♪ david: welcome back, time for global battle of the charts.
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some of the most telling chart of the day. you can access these charts on the bloomberg by running the function featured at the bottom of your screen. editor,ee, economics what do you have? >> i will do something elegant and simple. markets are up because of what the ecb has done. this blue line is the federal reserve, they have been pumping money into the u.s. economy for ands, starting back in 2009 the s&p has gone up by 200% since its low. european stocks now starting to rise because the european central bank is finally getting into the game. they put more money in during the greek crisis and let it all roll up because they were not buying bonds, they were renting them. they are starting to buy and they are actually going to pass the fed on their plans target. at some point we will see ecb cash than we have from the fed and that should be good for
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equities. we hope it will be good for the economy as well. mark: the understated -- david: the understated minimalism. i will not say gerrish but brighter coloring. mark: central banks do not target currencies, do they buy these unconventional methods? that is what they would have us believe. let's say they do target currencies. let's see how much success mr. draghi has had since the whole qe adventure begin. it began last january, january 22, that is when draghi announced, i would do qe, the dollar -- the euro was at one dollar 16, it began at march the ninth last year. the gap between there and then was eight cents. we fell to 105 in march last year which was the lowest in 12 years. it was a different year as we
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approach december when draghi necessitated, we need more qe. that day, the euro was at $1.06, as you can see leading to today, since then, it has had the required effect. if it was a required effect in weakening the currency, the currency has risen through before yesterday to $1.10 and almost $1.12. the moral of the story is qe, when looking at the ecb, and recently in the doj history, does not seem to weaken your currency but that is not what they are intending. david: from being the coanchor to the neutral arbiter. -- mike, i handed to you with apologies to mark barton. congratulations. >> now we can unite our party
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between mark and i. david: still ahead, rugby has logged been -- has gained traction in america but can it compete with other known athletic sports? ♪
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david: live from new york and london. mark: this is the european close. time for the business flash, the big stories we are following. global sales fell a little less than 1% last month and volkswagen being hurt by the diesel engine emission standards -- emissions scandal. spot was porsche, profits rose 25% last year. setting a record. getting a boost from its new compact suv.
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the company planning a hybrid version of its 9/11 model in the near future. involvingk for cp, the gulf of mexico oil spill, a court ruled they will not have to pay for lawsuits by energy companies over losses they blamed on the offshore drilling ban imposed after the disaster. they are already paid out $55 million -- they have already paid out $55 billion from the oil and damages. -- in damages. that is the bloomberg business flash. jersey. new teams from europe are playing in the united states, the sport gaining traction in america, the fastest-growing team sport in the u.s., more than one million people played the sport. during us to talk about the growth of the sport is bob casey, chief executive of london irish. trifecta knock off the
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of basketball, baseball, and american football? surely it cannot in popularity in the united states. >> i am not sure about knocking them off but we can bring something different to the american public. the values that rugby has and the fact that players are very accessible, we can add to the sports market. mark: how big is this game? the first premiership game to be played in the united states, is rugby going to be as big bear as basketball intimate -- as big bear as basketball and american football when the u.s. comes to london? >> ticket sales would show that it can be. there has been a huge amount of excitement since we announced the fixture. it is a premiership game and we are playing the champions in rebel arena ads to the occasion. -- red bull arena after the
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occasion. david: good weather, hopefully that will bring people out, how do you monetize the growth? >> we have been working hard in year one an important that everyone enjoys it. to our partners, it will be coast-to-coast, very important it is a good product. we think it will be and the weather will help. david: when you look at the growth of this game globally, where is the u.s. in that level of growth? excitement over probably -- rugby returning to the ebix desk the olympics. >> with the latest world cup, a huge success in england, we believe it will grow and grow. you can see from the partners, nbc here, the global sponsors, it resonates with a lot of the big -- we think it has great
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potential to grow. david: there will be a domestic league in the united states that kicks off this spring, six teams. in the future, could we speculate that it will be similar to the football story there. ? the likes of david beckham headed to los angeles to play, , inyou see jonny wilkinson the twilight of their careers playing in the united states? >> wouldn't it be great if we got to that stage? it is early, professional rugby is in its infancy, only professional 20 years. when you look at the nfl and premiership soccer, how long they had been going. i am optimistic it can be a success but it is baby steps at the moment. mark: in case our viewers do not realize how matthew are from ireland, and in case our viewers do not realize, the six nations champion is ireland. about the gameou
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that matters, you will say, i am right, the england-wales game. who will win? >> that is the game that matters. i think england can do it. they have been very impressive, only completed one try so far and they have home advantage. a bit of a fortress. mark: london irish it self, are you going to start writing on the table? plan, we believe that the positive reaction in new york we have had from everyone, especially the irish community, we are hoping this can propel us of the leak and reignite our season. -- the league and reignite our season. david: take a look at where the u.s. markets are trading, the dow about one .3%, to 15 points.
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the s&p 500 up and the nasdaq up 1.5% at 4737. mark: the european bosses, a stat you did not know, stocks in europe finished higher for the fourth consecutive week, touch and go, that is the longest winning streak since march of last year. stocks rallying on druggies stimulus, but -- draghi's stimulus. the euro did not follow the script over the last 24 hours. ♪
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♪ >> it is noon in new york and 1:00 a.m. been cut -- in hong kong. welcome to bloomberg markets. ♪ >> from bloomberg world headquarters in new york, good
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friday afternoon, i'm scarlet fu, energy stocks of struggle mightily but david news hazard -- neuhauser says there is value. oil prices moving higher today, has the market finally hit bottom? goldman says so. yahoo! ceo knows she is in trouble but doing whatever she can to keep her job, even as it changes hands. get a snapshot of today's market activity. let's head to julie hyman where she is looking at investors having second thoughts about their initial reactions to the ecb moves. julie: an interesting 36 hours as investors have a digestion of the ecb stimulus which initially

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