tv Bloomberg Markets European Close Bloomberg March 15, 2016 12:00pm-1:01pm EDT
this is the european close. we are going to take you from new york to london in the next hour. here is what we are watching -- global stocks dropping in the biggest two-day slide for commodity prices, reminding investors of the financial .arket turmoil hoping to cashs in on the growing popularity of cocktails. scarlet: and alex and i go head to head in the battle of the charts. we are well into the trading day, so let's head over to the markets desk where julie hyman is tracking the moves ahead of the fomc decision tomorrow.
two elementse affecting stocks today. weighinge central bank on the investor. other is oil, which continues to head lawyer -- continues to head lower. if you look at the groups on the move, energy is the biggest declining group today, down one and three quarter percent. materials and financials also declining today. iran is not going to sit in at any meetings on a potential production freeze. thatard that yesterday iran was unlikely to join the freeze, yet we see oil prices down again today.
i also wanted to get a check on the bonds because of the anticipation from the fomc. them move oneing the 10 year lower today, though it did eke above that line briefly. alix: valiant looking at another unbelievable decline today. valiant is not on the s&p 500 but it seems to be casting a generally.ealth care it is a record one-day drop. the company cut its forecast. doubts about its ability to replay it that's. a lot ofear to be doubt whether it can do that.
story hereincredible in one way to tell it is looking at the market cap. here's the market cap going back three years. the market cap was climbing and the playbook was to make a play with bausch & lomb are -- about -- with allison long. it made a number of small ones along the way, about 50 atuisitions and then peaked about $90 billion before plunging. remember they got the subpoena from house democrats questioning its drug pricing methods and there were questions about the fcc looking into the company and now the market cap is below $13 billion. remarkable moves.
mark barton, we need to check in on what is going on in europe. mark: these are all the industry groups from the stock 600 today -- stoxx 600 today. led by basic resources with a drop of 5%. this is one of them -- it was getting hit even harder earlier in the session. this is a copper producer controlled by the richest family in chile. .hey are down a mere 5% the biggest fall in four years. annual profit fell by 99% because of the metals route but the bad news for investors as they are ending the dividends, tinto. the likes of rio
this was one of the worst performing constituents with shares falling 38%. this year, they've risen 55% since they fell to a seven-year low on january 20. we spoke about campari yesterday, but it is being isfirmed today that campari buying grand marnier. the deal values the company at 6.84 million euros. 60% toa premium of friday's closing price. we will speak with the ceo later. scarlet: looking forward to that one for sure. it meeting right now. the bank of england on thursday, let's the likelihood of any kind of action there. .ark: very little the economies we have -- the
economists we have surveyed say the chance of a rate cut -- a month ago, they were saying 10%. of course it leaves very interestingly into the referendum. that is what economists are worried about. the uk's days in the union, don't expect there to be a cut. economists are suggesting there will not be a rate hike until the first quarter. last month, they were saying the fourth quarter of this year, so economists are moving closer. probably won't be a rate hike for a year or two. on the european close, global stocks in the red today. will the fed reinsurer investors when it addresses markets tomorrow? scarlet: come party quenches it's thirst with the purchase of
has become the main battleground for republicans. an average of recent polls shows governor john kasich with a three-point lead over front runner donald trump. pulls show trump with a double-digit lead in florida. a loss there for u.s. senator marco rubio could put an end to his campaign. for the democrats, hillary clinton is expected to increase her lead in the delegate race. she is favored over bernie sanders and four of the five states. don't miss a special edition of "with all due respect" at 5 p.m. new york time. the obama administration is continuing to lift restrictions regarding when and why americans can visit cuba and what cuban merchandise they can buy. which take effect tomorrow, say individuals can go to cuba for educational travel as long as they have a schedule of authorized activities.
toricans will be allowed purchase cuban alcohol and tobacco products while abroad. these changes come ahead of president obama's scheduled trip to cuba. manager whoy oversaw flint, michigan during the switch of its water source says in hindsight, he realizes he should have done more to challenge experts to say the city's water problems were harmless. before atestifying congressional hearing saying he was grossly misled by state and federal experts to never told him lead was leaching into the cities water supply. president obama celebrating st. patrick's day a little early, welcoming the irish rime minister to the white house. it may be the last time the irish premise or makes the trip. his party lost the majority in last month's elections and he's trying to persuade rivals to back him for another term. investigating a
berlin car blasts that killed a driver as a targeted homicide. they say there's no indication of terrorism. the 43-year-old man who died was tourkish citizen with ties drug rings and other organized crime. the station wagon exploded in a residential district not far from one of the city's three opera houses. news 24 hours a day, powered by archway 400 journalists in more than 150 news bureaus around the world. scarlet: americans don't save enough for retirement. studies show me 5 million people poverty by the middle of the century. tony: 401(k)s are inefficient. have to be invested in liquid securities only because the holder could pull the money out. second, human nature being what it is, people do pull the money
out and spend it unwisely. notnd, -- thirdly, it does convert to an annuity. only half of working americans plans dot have pension not have 401(k)s anyway. and importantly, the fifth reason is for people below median income, they don't have the savings to put in the 401(k). the tax three purposes deductions affluent savers get and gives it to the people in a lower income. erik: this chart exclaimed -- this chart explains graphically how it would work. it, you makething sure there is no drop off. tony: right. as long as you and your spouse live, you will have that income. erik: the retirement savings can
be achieved with no tax increase, at no cost to lower income households and little to no expense for most employers. the question, who's going to pay for this thing? tony: repurpose thing that and giving all workers up to a $600 credit into the savings plan, that $600 year will pay for the savings of median income or below. we are moving that around and that's an important underwriting. erik: you are taking a regressive system and putting it into a progressive system. tony: exactly. they view that as more tax management been funding their
retirement. going to be what they are going to retire on anyway. it's not serving the purpose it was set up for. i know you want this proposal to be taken seriously. of a couple of arguments that potentially stand in the way of that happening. you are conflicted -- the proposal makes a case for longer-term liquid investments like hedge funds, private equity and real estate. the same assets managed by the blackstone group. tony: right. because we manage the money, we know what returns can be earned. there's going to be thousands and thousands of asset managers that will benefit, i suppose because more savings and benefits benefits all i said
managers of every stripe. for blackstone, it is small, it is retail and our funds are oversubscribed. the second 1 -- you have interior motives. is this just tony james angling for a job in hillary clinton's cabinet? certainly not that. i can see the problem. it is crystal clear. 86% of americans worry about retirement security. what else do 86% of americans in agree on?ry from my standpoint, you have this huge issue shared by all americans and no politicians talking about it. i have a seat, have some expertise. i should do something about it. i don't care of my plan works or not. i just wanted to be dealt with
seriously and discussed. was an exclusive interview with erik schatzker. full disclosure, the chairman of bloomberg lp, the parent of bloomberg news is a nonexecutive director at laxton. scarlet: time now for the bloomberg business flash. corporation has said no thanks to a takeover from apollo global. no word whether the company plans to engage in negotiations or if apollo plans to return with a fresh proposal. representatives from both companies declined to comment. alix: shares of valiant pharmaceuticals are plummeting today. its ceo is warning that the challenges of the past few us.hs are not behind the stock has fallen 76% since august. scarlet: a former equities trader at schroders has pleaded
guilty to insider trading and will be sentenced in june. the charges relate to trading in companies like homebuilders swan hill. is a bloomberg business flash. still ahead, we are going to tell you about a deal raising a lot of spirits today in italy. is one part campari with a splash of the french riviera you. the chief executive is coming on that. do stick around. ♪
mark: you are watching the bloomberg close. i'm mark barton with scarlet fu and alix steel in new york. let's talk about quenching one's thirst. the italian spirit maker campari agreed to by the french company grand marnier. the acquisition says -- is said to help campari mix up its portfolio of well-known brands. will investors raise a glass question mark let's ask the chief executive, bob kunze-concewitz joins us on the phone. good afternoon. thank you for joining us. why is this such a goodfit question mark why were you so interested in grand marnier? bob: this is our 25th and largest acquisition. it fits perfectly in our acquisition framework and brings an iconic, unique rand -- brand with high cash generation whose
geographic footprint overlaps with our own distribution network. synergistic from a sales standpoint and this is an iconic, must have brand. it enables us to become an even stronger player in the area of tossic cocktails in addition campari, the sprints is, the old fashions with wild turkey would be able to provide with our consumers. also with margaritas and cosmopolitans. making me thirsty. more than half of its sales come from the united states. are you going to change the geographic spread? : we think in the first initial years, we will leverage the current geographic skew and expand the brand internationally. got to ask about this
villa in the south of france which many of our readers are interested about. it is quite pricey. -- you are trying to sell it. this is in one of the most expensive areas in the entire world. how much is this villa worth and how sin do you want to sell it and why do you want to sell it? why don't you keep it as a corporate headquarters? bob: [laughter] is ang it a villa understatement. it is an impressive mansion and an exclusive enclave in the south of france. it has a lot of value. the family shareholders to leave --has a very important believe it has a very important value. the agreement reached with them said it will be sold and any of the proceeds exceeding from a net after-tax and after real estate transaction standpoint 18
million euros will be paid out to existing shareholders. i gather it's not as easy to sell property in that areas because of the troubles may russian economy. what kind of price are you expecting and how sin might you get a sale? -- how soon might you get a sale? bob: transactions of this type may be haven't -- maybe happen once a year or two years. but we are patient and we will be happy to keep it for a while. in the mid-to long-term, we will find a buyer because it's a very unique and aspirational property. mark: what is next when it comes to an end a? you were highly acquisitive in 10 first seven years of your years and have had a bit of a lull.
are you going to sit on your hands or is there more dealmaking to be had? bob: we have to wait until this transaction closes. hopefully by the end of june this year and then we will integrate the rand into our distraction network and start leveraging our market know-how. generative cash brand and i think within four months, we will be back in an acquisitive mood. mark: a quick question on the upcoming referendum taking place in the u.k. in june. will the u.k. leave the eu? from the outset, do you want the u.k. to stay in the european union? bob: definitely, i think it would make a lot of sense. i think the best thing they can negronis and few
look at what the rest of europe has to offer. mark: what is your favorite cocktail? is the same as a wild turkey -- it is the same as a negroni but you replace the gin with wild turkey bourbon. , the bob kunze-concewitz chief executive officer of campari. europeaneek at the markets for minutes away from the close today. looks like stocks will finish the tuesday section lower after the biggest tuesday increase in over three weeks. the european closes next. stick around. ♪ ♪ mbendap ,y yowa
buy grand marnier. inis of course used cocktails such as the cosmopolitan, which i understand, madonna drinks. there you go. let's get more perspective. joined over the phone . we are waiting for the fed, are we just going to sit on our hands until we know what they do? >> i think that sounds about right. i have been waiting for central bankers for much of this cycle. it seems that way anyway. the main thing for us is the economy. but we have seen -- the last data points that were really interesting work the core cpe the in the u.s. that showed effects of oil prices may be transitory, which has indications on how we -- what we
think of interest rates for the rest of the year. alix: i'm glad you brought up oil. take a look at the bloomberg. i'm looking at the s&p versus oil. i want to get a sense of your correlation, the historical spread. correlation has picked up as oil has gone up over all. the last few days have been different. oil has gotten how did -- pounded hard. are we recovering from that? >> it would be nice to think so. i think the really sinister thing with regards to oil that we have seen over the last year and a half in particular is the link between oil and long-term inflation expectations. as monetary policy has been so anchored to the sponsor rate, every time the oil goes lower annexes haitians though lower, you let out the scat remaining remaining error.
more broadly, in a sense, they should be less correlation with oil prices now because the energy sector is a smaller contributor to s&p. back in 2013 it was about 12%-13%. now, it is less than 4%. the correlation should be falling away a bit. scarlet: once oil starts to fade, what do you think might replace the? your guess is as good as mine, i guess. i think what we have seen is ist -- what we need to see economic fundamentals reassert themselves. get you will see, if you do -- it looks like u.s. manufacturing is starting to find a bit of a floor.
the many affectionate bounces abate, i think you will see the earnings estimate recover. that could be the thing that drives the stock market up a little bit from here. created said, the myths -- we should get a clear view of both the corporate sector and the real economy. ofx: william hobbs, head european investment strategy at barclays. we turn our attention now to the fed. after raising interest rates in septembers, our next guest says .hey are in a wait-and-see mode another fall in oil prices, deflation,d expectations, and a softening in economic activity. mark b.: thank you for joining us. our last guest, william hobbs, telling us he has tunnel fi
vision on the fed. as inflation gaining traction in the united states, enough for to move forward with one or two of the dots that they forecasted? it is. inflation is coming from several areas. we are fixated on oil prices. you have inflation coming from brent, medical services -- rent, medical services. if you look at the headlines, 's official target rate, that is 1.3. whenever we talk about inflation expectations, it seems
like we rely on this indicator too much. , ituse it is market-based is inconsistent with policy makers insist that energy prices are nothing more than transporting. alix: how do you think that the fed will categorize inflation tomorrow? >> that is a good question. i'm not sure if i can answer accurately. certainly, in terms of the economy, we are looking to see if they are more upbeat. meeting,y, at the last the committee left out a bit saying that the risk to the economy was balanced. we are looking to see if that reappears or as they make the illusion that risk is nearly balanced. i think the fed has some room to wait to get too concerned about inflation. i think the concern will be on
the economy, and perhaps, looking at the forecast materials to see what the committee members are saying. mark b.: the bank of england meets on thursday. a lovely survey was done today by bloomberg on the rate cut. a month were put at 23% ago. is that a fair estimate of the chances of a rate cut in the u.k.? >> i would say, firstly, that is overrating it slightly. it is a very interesting survey. what the results are telling you is you have some specific risks which could drive monetary policy into an easier mode. that is if the u.s. referendum should focus for brexit. if you don't think there will be a vote to leave the european union, or you think the risks are small, you have to say that the of justification of a cut --
the financial conditions have eased some. to the: pushing back first quarter of next year rather than the fourth quarter, is that a fair estimate? have you been pushing back your forecast? there seems to be evidence that the economy is slowing. >> i'm not totally convinced that we are going to see a sluggish trend for the remain dor of the year. another factor is sterling has unwound the appreciation that we saw in 2014-2015. that should help to stimulate parts of the economy, as well as import a little bit of inflation as well. i think q1 next year is a reasonable guess. mark b.: thank you for joining us.
scarlet? scarlet: let's get a more in-depth look on u.s. equities right now. we have the s&p and the doubt in -- red, falling along with and the dow in the red, falling along with stocks. alix: what is helping the dow is apple. speaking of apple, let's check in with abigail doolittle. she is live at the nasdaq. : as you mentioned, stocks are lower at the nasdaq. the lowest performer is not a tech stock, but nintendo international. it is down, in sympathy with valeant. although this is a continuation of the pressure that has taken it down 15% over the last year. relies more on
generic drugs, something that pressures margins. however, one person says this is an unfair drag on anendo. alix: what is going on with tech stocks? abigail: we have apple nicely higher. reverse higher. one is amazon. amazon says it will launch a service for the cloud. it is said they are further flexing their muscles into the cloud, which could be at judgment to -- at detriment to oracle. alix: thanks so much. scarlet: let's check in now with
our bloomberg first world news. mark crumpton has that from the news desk. mark c.: thank you. donald trump and hillary clinton can each take big steps forward as five states hold primaries. for republicans, ohio has become the crucial battleground. recent polls show governor john kasich with the slightly over mr. trump. however, pull show mr. trump with a double-digit lead in florida. that could mean for marco rubio, and and to his campaign. hillary clinton is expected to increase her lead. a programming note. don't miss a special two-hour edition of with all due respect tonight at 5:30 new york time. what the discuss outcomes could mean for the white house.
president obama has reversed oil onfor drilling for the southeast coast. coastal communities and environmentalists oppose the plan, so did the pentagon. the syrian opposition says the russian withdrawal will help peace talks in geneva. russian forces began pulling out of syria today. some russian warplanes will stay . atop islamic state commander is dead. he died of one's suffered by a u.s. airstrike in syria. that is according to a senior iraq intelligence official. there is no immediate confirmation of his death from the islamic state. global news 24 hours a day, powered by are 2400 journalists in more than 150 news bureaus around the world. i am mark crumpton. back to you in london. mark b.: coming up, in the
mark b.: time for our global battle of the charts. we take a look at the most compelling and telling charts of the day, and what they mean for investors. you can access these on the bloomberg by running the future at the bottom of your screen. scarlet, kick it off. scarlet: i will still some thunder because i will focus on oil and energy.
are supposedrices to help the consumer out, but it has been debatable whether we have seen a pickup. the white line is gasoline futures. it has gone up, down, and up again. the orange line is gasoline at the pump, retail prices. guess futures tend to rise in early march. right there, 2014. again in 2015. fast-forward to 2016, you can see it here again. the thing is they tend to fade by the middle of the month. this year, the move up has been much more sizable. what does that mean for the retail price? it has only now begun to crest. what does it mean in terms of retail prices? sets up the potential for a nasty surge in gas prices for the second half of the month. that could ahead when for the -- a head wind for the consumer.
mark b.: i like it. i like history lessons. alix, you are going to have to do good to be that one. alix: i know, and i'm so competitive too -- my soul is on the line. a technical at analysis, the 200 day moving average versus the s&p. since august, you have seen the moving average slowly decline by about 60 points. since the end of february, it is down by about 20 points. this had a lot of technicians very concerned. it tends to act as some sort of resistance. you see this here. s&p what's up against it -- bu tts up against it, and then continues lower. and a downward market, you tend daily a sloping lower
average, and the s&p struggles to break above that. that is what we are seeing. it has a lot of analysts worried about the rally. you like ta, come on, i did this for you. 'srk b.: scarlet stole alix thunder by doing oil, but alix did ta, which she knows i love. by the narrowest margin in the world, alix is the winner. scarlet: it hurts. mark b.: still ahead on the european close, big fears of brexit has britain's bosses shaking in their shoes. think again. we will set you what is really keeping them up at night. ♪
scarlet: live from new york and london, i am scarlet fu, here with alix steel. mark b.: this is the european close. brexit fears -- britain's biggest bosses, the growing worry, growth in the markets. let's get a bloomberg gadfly opinion. .rexit fears, brexit smears how did you find this out? >> we thought we would look at ceo's analysis of what they were talking about. we found out that brexit is not being talked about as much as emerging markets. it makes sense if you think about it because emerging markets account for more in revenue. china is seen as the biggest source of growth. mark b.: more than germany,
according to a survey. that is adjusting. tradings our biggest partner. you cannot get away from that. >> you cannot. that is why we are not saying brexit does not matter, but it makes sense for ceos to be thinking more about e.m.. mark b.: is it time to cut losses from e.m. investments or is it time to bet on a rebound? >> who knows. you have some investment staying , some companies have been retrenching without cutting losses because they know, if you just look at growth, economic growth, even china does not look too bad for the next 10 years. mark b.: it is a two-way thing. china is of course -- we are not investing in china, china is investing in british companies, as our middle east companies. it is a fear that that path will
dry up. >> so fight is there. i'll briefly, when there is trouble at home, emerging investors like to look abroad as well. obviously, if there is a hard landing in china, who knows. things could get worse. it is something to keep in mind. mark b.: i want you to do the survey again just before the referendum. i really enjoyed that article. you can find that on gadfly. for more commentary, go to the bloomberg. scarlet, as if we did not have enough charts this hour. we have another one. scarlet: that's right, mark. it is the chart of the hour. this one is on valeant pharmaceuticals, seeing the biggest drop ever, the stock, that is, down 46%. what you're seeing is options trade on valeant.
what you see here in the far right corner, this like going straight up, the spike in the white line shows how traders are oning on more bearish bets valeant. even though the stock has fallen as much as 46%, traders are betting that there are more declines to come. alix: despite the fact that pershing square double down on releasek, a press says the vice chairman will now be on the board. they say, look, they are on they are really digging in their heels here, despite losses that are almost $900 million on the day. nonetheless, not taking that side. scarlet: you can see that chart ni charts onarts -- the bloomberg terminal. off, the s&p
off, a very quiet day. big positions are being put on before the sfed. mark? mark b.: i just want to check out what has happened to european markets. it is 25 minutes after the end of the session. every single industry group fell to date on the stocks, led by basic resources. all the main primary indices finished the session lower after the biggest two-day rally in three weeks. story inthe biggest town. it refrain from posting its record stimulus. every industry group fell. basic resources led the drop -- they of course that the rebound
in shares from the 2.5 low, which occurred on february 11. that is what is happening in the currencies. yes, the euro is down against the dollar, but it is still higher than what it was on the day. sterling is trading lower against the dollar ahead of the big one from the fed on thursday, a semi-big way one fm england on thursday. the swiss national bank meets on thursday as well. that is it for me. bloomberg markets continues with alix and scarlet. see you tomorrow. have a good day. ♪
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scarlet: from bloomberg world headquarters in new york, good afternoon parent alixn. jcpenney's ceo talks about the comeback strategy for the retailer and scarlet. scarlet: what the central access about the economy if the continues to shine. central banks has about the economy gold continues to shine. let's begin with equities where the s&p, dallas, and nasdaq are following in tandem with global stocks. alix: