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tv   Bloomberg Markets  Bloomberg  April 21, 2016 10:00am-11:01am EDT

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betty: we'll go from new york to london to read. mario draghi said the ecb remains ready to step up if the outlook for the euro worsened during he is keeping monetary policy steady. hoping inflation will pick at. mark: a bloomberg exclusive interview. they are taking the shares of the german advertising firm. the company blocked cross hairs. betty: shares of google's parents out of it is up. a preview of what to expect. the company faces new challenges.
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let's go straight to the markets desk work julie hyman has the latest. it looks like mario draghi caused a bit of a selloff. can debate theou combinations. it is causing a slight selloff. dowcontext for the s&p and is that we close the high for the year. yesterday was the high since last summer. so, investors, as we get to the sorts of levels and valuations, you get a regular says it as to whether the recent rally is justified. of course, mario draghi asking for the ecb stimulus measures to work. that is having a clear impact in places like the currency markets, we know that mark will ve more details on the euro. here is the dollar, looking at the bloomberg index, you saw as
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drug use speaking, we have a rebound back up 1/10 of 1%, also, looking at a movement in oil prices. down, still above $43 per barrel. that is the mario draghi ripple effects side of the region. companies ine 109 the s&p 500 that reported earnings. is a looking at the bloomberg. it is hanging onto a gain of 60% of the companies beating estimates. here, you have the earnings. you have the drop. let's take a look at some of the earnings. you had union pacific.
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it had volumes down in the rail industry. said second-quarter earnings. increasing sales. southwest turning around. ,n the downside today travelers, the insurance company first order profits are down 17%. imagine as you can see, things are evolving even as we speak, biogen had earnings beating estimates. issues willng labor put pressure on the second quarter earnings. mark: the stoxx 600 was trading lower head of the ecb announcement. it is still lower. hopefully, i'll be able to give some of the sections for you. we do not they said need to do more. he said let's give it time to see if they will do more.
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they've moved into 17 and 18 and trying to figure out how lending travels were approved. it is still early. this is a great charge think about how the euro has fared. the euro was at 116. when we begin in march of last inr, they went from december 106. we are at 113. we were down about 1/10 of 1% earlier. guests about the euro movement. they are focusing on the credit channel. today,, they need $10 billion to resolve civil claims by the u.s. government and lawsuits over american car owners. there's according to a person saying that was a big fall last
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year. then, before they had the market capital at 76.7. to 47 in billion. they are coin back most of the market cap since the commission scandal broke last september. maybe, we will more from vw in the next hour. betty: mark, let's check jan first word news. vonnie quinn has more. vonnie: president obama says the u.s. is committed to helping the persian gulf. presidentrabia, the met members of the gulf cooperation council. he said the u.s. will improve their military and said they will make sure they are not improving ties at their expense. >> none of our nations have an
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interest in conflict with the iranians. take appropriate steps in the region. bonnie: president obama also said the nuclear deal could not have happened without the support of gulf nations. explosion killed 13 people at a camp on mexico's southern gulf coast. the blast in the fire close evacuations in that area. the state oil company said 136 workers were hurt. those earthquakes that struck tourism japan may cost money. the quakes killed more than 50 people. the cause widespread damage. and, queen elizabeth ii is 90
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years old today. the longest serving market in british history has rained for 64 years. she met with well-wishers. thousand the lights apartment will be lit red white and blue for her honor. howard around the world. i am vonnie quinn. let's go to the ecb, staying the course. leaving its rates at record lows. draghi president mario reminds us that the bank stands ready to act, if needed. mario: the risk for outlook remains through to the downside. our recent monetary polities decisions have improved over old financing decisions which should support consumption investment. we will relate in particular to the developments
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of the global economy in geopolitical risk. mark: join us now is a known expert on inflation, johnathan loyd at capital economics. is it time? willing to bear fruit? >> i think it will where some fruit. when you look back at policy measures they have in place over the last year, and thinks about where we are in terms of growth and it nation now, think you have to be quite confident to suggest that the ecb has done quite enough. they're trying to figure out where policy measures are required. this may lead to helicopter money. let's just listen to mario draghi's comments on that today. us manyhis cost brings difficulties. the bottom line is that we have
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never discussed it. mark: is it completely out of ,he question that one day helicopter money will be implemented in the eurozone." backs that is not completely out of the question. we try to figure out how economic news shapes of over the next year. i think if they need or policy support, helicopter money has some theoretical advantages. it allows you to distribute money without getting wrapped up in the qed. said, it is not on top the list. betty: there have been a few really great bloomberg stories out about the economic cost of the low interest rates by the ecb.
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there is one church in particular that i thought was fascinating. they talked about german savers and their return they have got on their assets, which is pretty much nothing it's mario took over the ecb. so, according to their numbers, if it costs 125 billion euros, a big problem they are trying to push under the rug's? it is part of a one-size-fits-all policy. there are certainly some countries that would rather see interest rates high. there are others in the peripheral countries who would like to see them even lower. appeasey, you cannot
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everybody all the time. it is made the point that not everybody has helped. there are many in the economy for whom low interest rates should have advantages. is dealing with that issue right now. as we look an hour bloomberg here, about 62.5% of traders are the year will get some sort of an interest rate hike. one or two. how will that impact europe and your rates? >> it might help, if we see high interest rates u.s., we're likely to go up more quickly. that might be one factor that helps to bring the euro down against the u.s. dollar. and, perhaps give you a little
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more activity in the eurozone. there is the danger on the euro market. the have the potential effect on bond markets. mark: and, a weak euro has an impact on some of the countries of the eurozone. this is the swedish krona today. this goes to her all the currencies are essentially falling today. the japanese yen is rising. as we are seeing an unconventional means of the central banks in the bond buying program, they're having less on that. do expect that to continue? >> we have many different banks trying to do the same thing at this time.
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they cannot all the that. also, we are grown with monetary policy and the mary is expected to reach their limit. markets are no longer bringing in substantial further policy like the eurozone as a whole. that has taken away some of the factors that they needed. mark: thank you for joining us. betty, back to you. betty: we will look at auto stocks. we have settlements from volkswagen. we will get how shares are reacting to that.
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mark: i am mark barton.
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betty: i am betty liu. you're watching bloomberg markets. we'll get some of the biggest business stories in the news. with the stateng and the dutch phone company. the move would come less than three years after the mexican billionaires go through the 21 are staying valued at 3.5 alien dollars. edison will pay 975 billion dollars to form a joint venture with equity partners. link u.s. gas fields through the market. stagecoach guest services will be managed by chris would. they will be open through new york. the center this morning is ripping as he seeks for letting steve cohen start his own firm. he reached agreement that bars him from running a hedge fund. yield to not prevent him
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from starting a new investment firm from last week. senator lawrence says it raises questions about the ability to protect investors. that is your business flash. we go straight to the markets desk julie hyman. earnings.ng out with >> they had earnings far ahead of estimates. all regions ofss the globe, the have record results in north america. that income doubling from earlier. even after vehicle or sales were down, so, it is interesting here what we saw happen. , kevinook at unit sales over a bloomberg intelligence oneself that it was really truck sales driving profitability at general motors because it had a renewed appetite for trucks.
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they had volume of light truck sales versus the general motors car. and, because trucks are more expensive, it boosted sales numbers, and has higher margins. , that companyhium is coming out with a second order forecast. the maker ofols the auto components is out of the numbers that the estimates. then, there are various emissions scandal's. ew, according to people with direct knowledge of the matter said the company will set aside $10 billion to resolve civil claims by the u.s. government. they are also over the rigging of the diesel. shares are rising. they're up more 3%. mitsubishi motors. interesting situation from japan after this company said it has
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manipulated fuel economy test. now, there are a lot of questions viability. the 20% drop is not a form of trading. result ofs the compiling sales orders through the end of the day. so, interesting situation here. see if thehing to same thing happened with the stock tomorrow. carson blocksead, targets to german advertising companies. pushing shares down 38%. the company's response, that is next.
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mark: questions on the central
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investment block advertising. shares have showed steuer as tumbled. the position was posted on the website. in that x visit interview with bloomberg go, block laid out his research. >> we have been looking at a german advertising company for stroller. has this is a company that been an out of home advertising company. one, it announced a digital strategy. it's then, they have had a lot of different businesses. a patchwork in the digital industries. i looked on their website, it appears that they have a rather dramatic growth. revenue growth, profit growth, 100% digital. >> you know, one of the things
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we point out is the way they calculate organic growth, we cannot get the numbers to tide. so, for example, they announced growth wast organic at 34%. using their methodology and numbers, we get 2.2%. david: that is why the numbers climb so hard. in 2014, they wanted from calculating organic growth, so for 2014, they began to include acquisitions. but, when we calculate these numbers, we use their formula and their numbers, and it just does not add or come even close to adding up. >> their earnings per share looks like it is going up. if they are making good acquisitions, why does it matter whether or not it is organic? >> how do we know they're making
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these acquisitions? they pay over 100 million in cash over the last. they increase their share count i heard. there is a lot of allusion there. we're falling to the bottom line. it is unclear the quality of that. we have a lot of concern about accounting. for example, we think there are things putting on the balance sheet that are decreasing. heree think there is a lot underneath the surface. mark: this is a publicly traded company. these are public numbers. you suspect or believe that their misreporting their numbers." wouldn't that be a security violation? block: it is not my question --
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is not my situation. there's certainly a lot of russians we have about these numbers. we did catch who we believe is their auditor making a clear error in the cash flow statement. david: how big was a? it has to do with borrowings. if you look at the year and cash flow statement, it does not look like the company borrows at all. when you look at it by quarter, they're actually drawing down real amounts of money which indicates of the cash flow of the business is not necessarily that consisted or that strong, again, when the auditor for. it for zero borings through the end of the year, in our opinion, that is a complete misapplication of international accounting standards and very misleading. that was carson block and an exclusive interview with bloomberg . .e reached out to them
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the company said upon first glance, the report is far-fetched, contains nothing new and is defamatory. our underlying business outlook is excellent. nothing changed since the last publication since they had a 10% growth in the first quarter. they had full revenue. company ended the initial statement by making sure they will protect the rights of their shareholders. still ahead, bloombergs. company like to think big. it made a huge bet on projects like the self driving car. are they paying off? ♪
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thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business. betty: i am betty liu. mark: i am mark barton. in with vonnie quinn and
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our first word news. hello. body: a warning from george soros. he said china's growth is projected to happen was that have been nine years ago. soros said most of the money the banks are making is to help keep businesses. there are heading for the opposition held town in central syria. the condo is made of 65 trucks. electricity generators, and other materials. in two-month-old was jeopardy in part to improve access to the scene area. expected countries are to sign the agreement on climate change. companies will set their own targets for reducing emissions and other greenhouse gases. are not legally
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binding, but companies must update them every five years. u.s. and china said they will join the agreement this year. senate republicans will given a part of the emergency request for the zika virus. ours a is according to focus friend familiar with the environment. the president asked for twice that much to keep the zika virus spreading. airlines want to double the number of commercial jets. there are not enough people to help them landing take off. airports across the world are testing remote towers. they allow controllers sitting hundreds of miles away to monitor flights. it may help keep smaller remote airports stay open. global news, 24 hours a day powered by our our 2400 news journalist. you.: thank
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let's get caught up on our action around the world. we started asia where we saw a big rally, almost across the board. are all up on energy shares. also, one big story from the china, economist saying central bank is staying on holder the fourth quarter. we will have more on what they will do. mark: survey says hold we look at the latest poll. we will keep rates where they are. all the way into september before announcing them. the first rate cut of 2016. these regular cash injections that we see here, almost daily will tie the economy through another transition year. the difference between the view in march in the view now is that the data has been shown improvements. might be too much.
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we are 6.5% growth for 2016. from bloomberg hong kong. mark: let's look at european equities. will see stocks fall for the second day. much of a stock stimulus today. there was no real reaction to the fact that the ecb did nothing. much itwait and see how stimulus worked. the euro stoxx 600, there you go. two thirds of 1% lower. have a look at the european bond markets. the bond by portion of the ecb's program has not yet begun. we'll have more details about it today. let's take a look at the currency markets. the euro moved the last two times the ecb was at it stimulus. today, falling into the
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dollar. interesting that it is falling against the crown. the dollar is also falling. the swedish central bank, the risk of bank today, added to its program. it will buy more government bonds. it is still dealing with the case of a central bank stimulus rising. let's get to the u.s. bloomberg abigail doolittle has the latest. : hello. we have the nasdaq trading flat right now. the biggest boost for the nasdaq was syntax systems. significant beat a 28% above consensus. are being, they driven by the product portfolio. that will continue through the year.
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the company did raise its product forecast. a lot of products with scott seller. he took his sales of $96 per share. they may keep the stock above a long-term trading range. that, for the of technology companies, what can you tell us? abigail: after the investors, microsoft are looking for some relatively muted growth. low single digits for both earnings and revenue. they have slowing pc growth as the company moves to the cloud. relative to alphabet, investors are trying to figure out what the company will adapt its business for mobile growth. investors are looking for 21% growth and earnings. 19% in revenue. revenueferent in growth
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and microsoft. one thing they both shared was a common trading path last august. said what they share in fundamental basis is transparency. something that institutional money is willing to be involved with. mark: great to see you. thank you for joining us. let's talk about google. betty: alphabet. at let's continue the conversation. be core business seems to humming along. the company does faced some challenges. is with margaret w bear. it was interesting the point abigail made about transparency. more numbers big investors want, i am curious, the second report is alphabet. the second public report is alphabet. we will get more information about the biggest business which is youtube?
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david: thank you for having me. that we will get a specific range of for you too. what we can say is outside of dust top search, google or alphabet have created within the core business and number of large-scale businesses like the youtube mobile search. the display at the businesses. there are multiple seats at the stool here. to see are expected today is ongoing strong growth in the margin. betty: what are you watching out for? :: -- we are looking at the earnings number. we have the other bets diluted to margin growth. keep in mind that google is coming off of the year where they posted strong growth with investors who were concerned. facebook competition.
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google, i think for this quarter has to show investors that they can sustain the high levels of performance. mark: i know you're excited about the cloud services, why is that? >> it is potentially large business for google. similar to amazon, google is basedng up this service on its core infrastructure that runs its server, so, we know that amazon has a $10 million business here and growing quickly. we see google will catch up in a very short amount of time your so, that adds another layer of potentially a good margin or google business which we think will help. mark: is there any existing hardware or software companies actually immune from the emerging cloud services?
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>> is a good question. we have a strong tail here of disruption. it is incumbent along those legacy companies to adapt quickly. i think we saw that with where the introduction of the cloud enterprise business has in fact given them a second lease on life in the enterprise perspective. clearly, amazon and google are putting a lot of pressure on traditional software companies. betty: there have been questions raised about how some other businesses are run like nest, and other life sciences businesses. critics have come out about the management of nest. thoseeve that altogether, projects cost google $3.5 billion and 2016, is that only going to get higher and increase." how long will investors tolerate that?
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>> we have the laws increasing this year. these are long-term investments. about $4t will go for billion, just to give context on that. google is a company that thinks in years, not quarters. so, they do have a lot of patience. so, i think for investors, as long as there is instrumental benefit and productivity from some of these businesses, they will give google alphabet that flexibility. mark cohen the big news with the eu launching this fresh antitrust complaint against google, is this going to lead to massive fines or a radical change in the way that the company does business? would be afines positive case scenario for google.
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i think they'll be fine writing a check. i do not think the nuclear scenario, forcing a big change to the search algorithm is likely. i think google would rather just a lot of the eu then give away their secrets. i imagine they have a compromise somewhere in between. in some respects, google is a victim of its own success. share on the smartphone in europe is to blame for where they are. they have to be very careful with how they manage business. mark: thank you. sebastian of robert w bear and co-. coming up, what wall street wants to know about the young prince reshaping the saudi arabia and economy. but as next, right now, mark carney's "it new york at the united nations. he is his case for a new
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financial system that is needed to deliver on development goals. we will continue to monitor those headlines. you can watch that unfold on the bloomberg at live/go. ♪
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mark: we take a look at the biggest business stories in the news right now. they filed for chapter 11 bankrupt. it was down $3.1 billion on paper. it also missed deadlines, raising questions about the quality of the company and send investors running for the exit.
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they are considering a jewel lifting for the shares. solomon telling bloomberg news there can also be a spot in the united states for trade and investment. ipo: could be the world's largest and is expected to take place next year. company isecurity planning to go public this week. it would be the first initial public offering for the company this year. the company is looking to raise as much hundred 57.5 million ipo schedule after markets closed later today. they are offering 9 million shares. moving down to $17 each. latest bloomberg business flash. president obama is
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summit to help them contain the iranians. this may be music to the saudi prince. the 30-year-old recently took full control of the economy and vowed to reduce their independence on oil. the is the cover story of new business week. i want to go to reporter met fellow. i know we have said this repeatedly on bloomberg, remind us, or tell us again, who this is, and how important he is to the future saudi arabia. >> let's start by telling everybody that his nickname is mr. everything, which is to say that he is basically been put in control of massive swap of saudi arabia, the kingdom, he has a
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portfolio over economic policy, he is a charge of the state oil monopoly. charge of the defense ministry, he is in charge of the national and estimate fund. it is 31 years old, the youngest son of the king. he is the prince which puts him thend in line session over last year or so, he has consolidated that and rolled out what is a very dramatic and theessive plan to redo kingdoms economy and society. betty: he is not the next to the throne, but is he a newered emblematic of generation of leaders saudi arabia? consideredy, as well that at one point he will sit on the throne of the kingdom, he represents basically, half of the country's population that is under 30, educated, and very underemployed.
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the state basically controls the economy, there's not a lot of job opportunity the private sector, he is working to expand that for members of his generation, he is interested in loosening up women's roles in the kingdom. tosees that as a headwind ring in modernity into the kingdom, and bring in outside investment as well. he does not care for oil is lower $70, he wants to the dependency on oil within 20 years. how realistic is that? >> that is amazing for him. that is what he told us here so, his point is that that is not his battle, but have the lowest cost of oil on the planet. they can produce below anybody else. the way he sees it is that prices are high, that is more
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revenue to diverse disperse into his wealth fund. a lot of this will move overseas. it rises all, that gives them the chance to grab a greater market share. from there, they will move into asia. mark: this is a big movement that he wants to implement to a conservative society. there are a lot of family members who could be standing in his way. what has been the response to this vision? last year, there was a letter signed by a number of the princes, 10,000 of them are so. he had clearly ruffled their feathers. this not only means less power for them, but also less money, i talked to senator lindsey graham last week, the impression he got was that he really wants to
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define the royal family by their obligations. no longer by their pedigree, or by their wealth or how much more they have. huge change. it'll be a delicate maneuver for him politically, he feels like he has the backing of the country because they are of his generation and ready for change. betty: thank you so much. fascinating read. matt phillips, you can read more about the prince in the latest issue of bloomberg business flash this weekend. test 12ead, we take the for a test drive. they go through wars in the desert -- powerful production car in decades.
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mark: ferrari is out with a new predator. challenge all the eco-friendly cars. it is already s 12. it is their most powerful car yet. hannah elliott takes us on a test drive. hannah: the world of cars, there is a ferrari, and then there is a ferrari. 12 is20,000 ferrari is decidedly with the latter. we are in the mojave desert. it is the perfect juxtaposition to this. xl 12.nder gas guzzling
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it gives a 731 horsepower. everything in this car makes you want to go fast. is the car ferrari made to drive to the track, on the track, and the drive home. i'm happy to report that the interior is big and roomy. these are racing, adjustable, sports seats. there are a few spine spots -- blind spots. do not go over any dips higher than a speedbump.
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and, you will get at most 18 miles per gallon. it is a great driving machine. ferrari is extremely proud of what they have achieved. and rightfully so. it is the most powerful road car ever built. in my mind, the ferrari california is the car you buy your spouse or son. the x12 is the one you want for yourself. take that elon musk. that is basically what they are saying. mark: she said it is the car you buy your spouse or son. hint hint. hint hint. betty: a little bird told me that your wife's birthday is coming up. mark: no. thankfully, she cannot drive, or
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does not want to. i am her official butler and driver. there you go. betty, this week, we have had blue diamonds from shirley temple, uber in the skies. which one takes her fancy out of all of them? betty: that car was very hot looking. 0-60 in 3.1 seconds. very fast. coming up in the next hour, the european close. we will examine the lace and cut -- the latest comments from the ecb president. to john nelson. have a look at how markets are faring. already minutes ahead of the close. this is bloomberg markets. ♪
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♪ betty: it is 11:00 p.m. in hong kong. i'm betty liu in new york. mark: i mark barton. you are watching the "european
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close" on "bloomberg markets." ♪ we are going to take you live to new york to paris and the next hour. mario draghi staying the course defending the stimulus policy saying they just need more time. tragedy facing pressure from german politicians, who claimed the ucb is working retirement plans. betty: president obama heading to london where he is expected to talk to prime minister david cameron. exclusively to talk about the impact of the , and the brexit chairman of lloyd's of london. producers and other

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