tv Bloomberg Markets European Close Bloomberg April 28, 2016 11:00am-12:01pm EDT
close on bloomberg markets. ♪ betty: we are going to take you -- mark: we are going to take you from new york to london to frankfurt. european bankers continuing to roll through cost keep -- cost saving measures. betty: from europe to the heartland, cma also reported results. what is their long-term plan? we will hear from the chairman terry duffy. golf we are going to talk and the countdown to the ryder cup with david love the third and darren clarke. betty: it is 90 minutes now into the trading session in the u.s. julie hyman has the latest in a day that has been dominated by
m&a and earnings and what is happening overseas. julie: the s&p turned higher. still maintaining its lead among the three major averages, even as the dow legs. let's take a look at the dealmakers. st. jude medical, $25 billion acquisition from abbott labs, those shares up 7%. dreamworks to be acquired by comcast. medivation bringing its offer public for this company. haynes buying a big australian underwear maker and shares are being rewarded. if you look at earnings related movers and some of the highlights, you can see facebook is trading higher after they came out with earnings and sales that the estimates. paypal also beating estimates.
amidst all of this news, there is a milestone to talk about. today matches the second longest bull market run that we have ever seen in the united states. tomorrow will surpass it and become the second, going all the way back to march of 2009. as we get longer and longer into this bull market, the debate rages on as to whether it is justified or not. because we are seeing it long in the tooth does not mean that it is going to end. take a look. this sort of encapsulates the debate. here you have the s&p 500 in white, the federal reserve balance sheet and purple, and the s&p 500 in blue. has this been fueled by the central bank or profits? whichever you believe probably means you are bull or bear. betty: we are up -- mark: we are
up from a third consecutive day. what a turnaround. basic resources all higher. the boj sitting on its hands to wait and see whether the stimulus that was implemented in january seats through into the economy. the stoxx 600 up by 1/10. it is all about earnings today. electrolux, you know the company. today, the most since january last year. europe's biggest maker of home appliances reported a third-quarter profit that beat forecasts. the market of home appliances in the u.s. will grow 4% to 5%, raising their previous forecast of 3% to 4%. clarion shares, this with canada
or maker, up by 9% today, -- the swiss chemical maker, up by 9% today. they beat estimates and are focusing to make higher-margin plastics and coding. for cosmetics as well, this is a company that is falling. 7%lier shares had it down by and now airbus is down 5%, the most since 2013. -- and a glitch shortage of cabin equipment held back handovers of the a 50 wide-body and new production is also affecting the a4 m transport plane. do not worry, because tom mendez says those setbacks should not
affect its goal of delivering 650 aircraft this year. i got all of those planes out without making a mistake. betty: thank you so much. let's check in on the bloomberg first word news, taylor raikes has more. taylor: north korea may have failed in its attempt to fire a ballistic missile today according to south korea. the north korean missile is believed to be able to reach u.s. bases in japan and gone but there are doubts about its accuracy. in northern syria, air attacks killed more than 60 people according to monitors and activists. one of the places is a hospital hit in a rebel part of aleppo. east, vicethe middle president joe biden made an unannounced is it to iraq today, his first since 2011.
the iraqi prime minister is struggling to maintain his grasp on power. army ise, the iraqi planning on a battle to retake muscle -- mosul from the islamic state. many obama care insurers will ask for premium increases because they have been a drain. are asking forne an increase in price tag from 9% to 39%. i am taylor raikes. betty: thank you. it was a big win for gotti. candidatetelevision anchor a lang joins us now from toronto with the ceo and montreal. amanda? amanda: thank you so much.
thank you for being with us. you called in the conference call, the delta order a game changer. it raises the question whether you are still seeking government money from the canadian government. is that the case? obviously, -- yeah, can you hear me? i can hear you. amanda: go ahead, please. >> can you hear me? yes sir, if you can comment on whether you need federal government money. said, like the delta deal is a big deal for us, a game changing deal. donelidates what we have in terms of investing billions of dollars and erupting this new aircraft. can you hear me?
amanda: yes, sir. ok, so we have been in discussion with the federal government for a few months and we still have not found the right solution. we are seeking a win-win solution and we will keep talking to them. we would welcome them to the program. this is a very exciting program where the early phase of the long journey, and having the federal government as a partner would add financial flexibility ,o bombard ea -- bombard here and keep us investing in aerospace in canada. amanda: can you comment on the suggestion that the government would require you to change your dual class share structure, and the fact that any investment might raise the ire of your competitors?
no, i mean, i am not going to comment on the detail of the negotiations. this is between the government and us. these are complex negotiations and i do not want to start any speculation. though,do you believe, that your competitors would allow such an investment without raising any questions about its structure and competitiveness? >> we have done a lot of work with quebec and with our lawyers to make sure that the deal we did with quebec is fully compliant. if we are going to do a deal with the federal, we will ensure that we will do the same thing as well. amanda: one of the questions about the company has been the rate of which you are burning through your cash. this is a vote of confidence from a big customer, but you are still burning through three quarters of a billion dollars of
cash. how will you address that? how will you assure investors? >> if you look at what we have do over the past 12 months, we have raised over $5.6 billion of new liquidity and we have said that we are in a very good place. we are in a very good cash position. at $750 million that you are talking about is actually better than we were forecasting or the street consensus for the first quarter. we have a turnaround plan and are executing on that plan. we are getting very good traction and i feel very good about where we are today, and where we are heading moving forward. amanda: there has been so much the c-series, getting that to market, and getting it into the marketplace that we may be are not paying as much attention to your other divisions. you have canceled some big jet programs, you are late with a
prototype streetcar for ontario. are you operationally executing in other parts of your business well? >> you are touching two businesses so let me start with the first one. aircraft, last year we took a to of very decisive actions reset our production rate. it was no market demand. the schedule on our new global 7000, is going to be the best business aircraft in the world. if you look at what we have done so far the first quarter of 2016, you can see that we are getting pretty good performance and the orders have been solid in a pretty soft market. i feel that we took the right decisions on the business aircraft side to make sure that we keep on driving growth in
this great franchise. we have the best business , and ise in the world have high confidence that we are going to keep on drawing this business moving forward. on the train side, clearly we can do better on the execution front. that is the reason why i made significant leadership changes. we are not where we want to be. i am disappointed with the performance that we have, especially with the total situation. i feel confident that we will put in place the right actions to adjust the problem. i am fully committed to that and so is my new team. is our great trains. their performance and service is very good, so it is not about the quality of the product. it is about the challenges that we have a manufacturing side, and we will address that. not have a lot of
time, but do you expect the delta order to lead to other orders? >> absolutely. order in termsk of adding to air canada, adding to korean, and now with delta it gives us tremendous momentum. ,e have over 300 firm orders 800 if you include the options, so i think it has put us in a very good position. most importantly, you are talking about key customers, world-class airlines. delta is one of the best airlines in the world so i think them as a customer is a clear, strong endorsement of the value that the c-series will bring to customers. amanda: we have got to leave it there. we appreciate your time today. betty, back to you. betty: amanda lang from bloomberg television canada
terry duffy, the cme group chairman and president. always good to have you. terry: thank you. betty: coming off of this earnings report as you are looking at growth toward the rest of the year, i know you expanded and continue to expand your global footprint. where are you looking to expand? terry: i think, betty, highlighted in a moment ago. revenue, up 29% from the fourth quarter of last year to the first quarter of this year, and year over year we are up 13% in volume. that is pretty good expansion right there. it is amazing how our products and distribution have gone all over the world. we really hit it out of the park with the energy trading and that is because it is coming from participants all over the world. betty: i am curious whether the continued uncertainty around oil
prices, around the fed, is that helping your business? terry: anytime there is uncertainty, people need to hedge, but whether there is uncertainty are not the margins have gotten so thin that people need to head in all asset classes because the exposure today that companies cannot afford to keep on their balance sheets, been a to use products like ours to offset their risks. you still made to offset risks to run a successful business. about thek to me merger. they said they are going to go ahead with this. are you planning on stepping in, and how are you preparing? on whate do not comment cme is doing or not doing as it relates to mergers and acquisitions. we are always looking at different ways in order to build and grow our businesses so again, we do not comment on any specific transactions that are
publicly announced. betty: i am sure you have got to prepare for this transaction going through. how are you preparing for that? let's just make the assumption that that transaction is going to go thrgh. what does it mean different for my business? betty: precisely. terry: see, betty. betty: you can do my job. have put ourselves already in a very strong position with our asset classes, with our distribution around the world. we feel that we can continue to compete with anybody, but at the same time will be looking at strategic initiatives that we think we can continue to build. the world is getting smaller and smaller, so we will continue to look, analyze, and decide how we want to approach it.
we have built a strong business and feel comfortable competing with anybody. betty: in terms of competition, is there any room for you to raise fees at all? terry: fees are a function of the marketplace just in general, so it is interesting you raise fees because our rate per contract was down a little bit this quarter but our volume is up. we have more participants in the marketplace that were hitting the volume incentives, which drove the rate per contact down. -- rate per contract down. you do not want to price yourself out of business. we are still the most cost-effective way for people to manage risk and we plan to continue to do that. terry, good to see you. terry duffy, the cme chairman and president. terry: thank you. betty: deutsche bank reaping
mark: you're watching bloomberg markets. i am mark barton in london, this is the european close. deutsche bank first quarter rising,shares are beating estimates after analysts had predicted a lost. joining us from frankfurt is nicolas. capital ratios down, revenue down, the stock of. how does this figure? nicholas: that is a good question. forexpectations were so low the trading revenue, which is such a big part of deutsche
bank's revenue composition, the fact that they did not fall as far as some expected is good. we have also had some very cfo one sounds from the having more time to comply with the capital ratios that regulators will hold the bank to, more time to generate earnings to set aside to raises capital ratios. mark: do investors have faith, belief that deutsche bank will be able to achieve that? it depends on the investor, obviously, but the people we have been speaking to today have been saying they really need to see a stronger trend for couple of quarters to get particularly enthusiastic. yes, it is a positive reaction today, but the concern is that is a blip. if you look at the comment from the bank today about 2016 being
a weak year, a year of restructuring with high litigation costs, even if they are below last year cost level, it really does not look like we are going to see the bank turned the corner anytime soon. is whetheron divides that will happen next year, and if the bank can earn enough in the meantime to carry it through its overhaul because markets are just so sour, and not supporting the bank. mark: and the meantime, it is chopping cost, isn't it? it says it has room to do even more. nicholas: precisely. that is a big question when we saw credit suisse come out a couple of weeks ago and say they would be deepening cost cuts. it is a different situation at deutsche bank as they have not been blindsided by a buildup of illiquid positions. nonetheless, it is another positive today that the bank is
not unaware of the environment. they are willing to take action if need be. what exactly that will look like and whether they will do so is no question, because they said we are not going to issue new cost guidance because the last two months that kind of ok. it does look like they will be accelerating a cost cut plan if there is a sustained weakness. mark: nicholas, thank you for joining us, nicholas comfort talking about deutsche bank and deutsche bank shares. trading up 3.95%. have a look at my european stocks, we are literally four minutes away from the close. looks like they could close higher for the third consecutive day. ♪
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stoxx 600. looks like we could finish higher for the third consecutive day. we were down as much as 1.5% earlier. as the boj chose not to increase stimulus. over the half of the economists that we surveyed thought they would do, but closing higher today. deutsche bank's surprise profit in the first quarter, legal expenses, performed better than expected. bbva reported lower earnings, currency fluctuations. lloyds banking group, profit unchanged. revenue fell 1%, missing estimates. 2016, a chart for you, all these three.
bbva down 8%3%, and deutsche bank down by 28%. the big story today, m&a, the french drugmaker mating -- making a bid. what it wants to do is gain experimental cancer therapy after the drugmaker. the u.s. san francisco-based drugmaker spurned its advances. a few shares down 1.5%. w t p, the world's biggest advertising company, they will close up one half of 1% today. client spending more in the u.s., u.k., western europe. it reiterated a forecast of revenue growth for well over 3% this year. benefiting from my three favorites, the soccer olympics in, the
brazil, and the united states presidential election. betty: what was also exciting in the media world, comcast agreeing to buy dreamworks and a deal valued at $3.8 billion. you can see dreamworks surging on that news. it shows you just how important content,have original the value of that content. a big win for jeff katzenberg. i like the backhanded, went that viacom gave this deal -- backhanded compliment that viacom gave this deal. dreamworks put out two movies a year. paramount, we put out 15 and it validates our valuation as we are looking to sell part of paramount. he is giving jeff katzenberg a little slap, but at the same time, taking the best out of it. mark: are we going to see more
shrek movies? that is the big question. betty: probably. mark: how many are there, four? betty: i am sure i have seen all of them. let's check in on the broader markets and how we are trading. we are pretty much make, turning it -- pretty much mixed. abigail doolittle has more from the nasdaq. one of the biggest are fallingx shares after they offered a fiscal year 2017 earnings you that fell short of estimates. consensus called for growth of about 9%. bloomberg intelligence analysts say this looks like their strategy to ramp up investments and he says that some analysts
are questioning the time of this, saying it could signal a competitive threat from intel. they are saying to by the weakness, that has taken the shares of xilinx down to long-term buying support. betty: almost all of the internet companies have reported. not amazon yet. how is it doing? abigail: the stock is trading higher, ending a three-day losing streak. a wide range, a loss on the low end of $.18 per share. another analyst sees the company making $1.18 per share. consensus is looking for the cloud unit to grow by 61% year-over-year. lots of uncertainty, touches in the earnings range but in the stock training itself, a big, wide range. the sellers have started to push the stock down. betty: abigail doolittle at the
nasdaq. let's check in with taylor raikes. taylor: greece may be one step closer to getting more bailout funds. they may process in negotiations. are demanding that greece impose more austerity measures before they release any more money. there is no chance at peace talks in the battle between turkey and the kurdish separatist group according to a top advisor. erduyaneveryone is -- wants to finish off the group. portugal is willing to take 10,000 refugees that ended up in europe but so far, just over 200 have arrived. portugal's jobless rate is
almost three times that of germany and that maybe hurting the country's appeal. russia successfully launched their new rocket from the new space facility today. the booster blasted off and three satellites were placed into orbit several hours later. day,l news 24 hours a powered by our 2400 journalists and over 150 news bureaus around the world, i am taylor riggs. mark: the s&p poised for its second-longest rally in history. it advance began in 2009 and is quickly closing in on the biggest all market run in the 1990's that ended in the.com bubble and burst. betty: investors may be doing well on the surface, but bubbling underneath is a cauldron of economic and fiscal uncertainty. can investing help soothe investor anxiety?
let's ask anthony todd. .ood to have you with us how exactly has it been that want to outpaced human trading? increased, it has central banks have always been a key driver of trends of momentum in the markets, and that is exactly what our models capitalize on. anything that is reinforcing those trends. in addition, we have seen a marked shift in central bank over the last 10 or 15 years. contrasting with the 1980's or 1990's where central banks might keep an element of surprise in the markets. now they are trying to signal. betty: become more transparent. become a greatas benefit to companies such as because we are
trying to identify and capitalize on trends in markets worldwide. betty: do you expect that to continue? anthony: it very much depends on the jurisdiction so that central-bank activity, sometimes it can be well telegraphed. the situation in europe, we have seen very persistent fames, persistent quantitative easing themes that has triggered some strength in the fixed income market. if you look at other sectors, for instance the u.s. market, there is a great uncertainty of the time of the next rate rise. the mobile markets will respond to that and automatically scale back the amount of risk. mark: so we should not worry about a breast-fed -- a brexit risk? anthony: i think the market is quite right to be concerned about the brexit risk. in terms of our markets and , thes, we are trading
pound against the euro has been a key position for us in the last few months. we have benefited very strongly from the downward trend in the pound. more recently, opinion polls have shown that may be brexit is not going to happen. we have seen a rally in the pound, allowing gains. we responded and scaled-back our exposure. mark: anthony, talk to me about the industry in general, because dan loeb from third point said an interesting thing or two yesterday. we are in the first dealings of a washout in hedge funds and he said investors have seen one of of most catastrophic periods hedge fund performance then we can remember. what is going on? some hedge funds will be able to provide uncorrelated divorce the fine sources of returns -- diversifying sources
of returns. in 2014, we caught a very strong negative trend in energy markets. 2015, we saw a continuation of that trend in the energy markets and we failed to capture the collapse in metals market. we have been able to do exactly what we set out to do, providing undiversified correlated returns to our clients. betty: given the good performance, have you seen more flows going in? anthony: yes, we have. our team out here has actually never been busier, so there is a real focus at the moment and i think particularly with compressed fixed income yields. they can no longer rely on fixed income markets. managed futures, that is our specialization.
again during the first two , thes of this year financial crisis in 2008, we have consistently been able to provide that valuable source of uncorrelated diversifying information for our clients. we are seeing extremely strong demand from institutions and pension funds and insurance companies, but that repeats across the globe. mark: are you thinking of introducing any new strategies? anthony: constantly. we believe the markets are always evolving. the space and which we are operating is hugely competitive. we have the risk of alpha erosion or alpha decay. constantly trying to identify and uncover new models that we can add to the portfolio. in london we have a team of 72
people on research and development, and every year we aim to cut over two or three additional baskets of new strategies or improvements in the portfolio. mark: anthony, do come in cs when you're in london. still ahead on the european close today, attention gold fans. we have the 2016 ryder cup captains. david souther first and darren clarke, will the u.s. finally get a win or will the european reign of victory continue? betty, it is me versus you. ♪
and youam mark barton are watching the european close on bloomberg television. and look at some of the biggest business stories in the news right now. berkeley's executive plans to remake the executive suite. the ex cheesed of its -- chief of its investment bank will be an outsider. he's back more than three decades at jpmorgan and has already brought in a number of his former colleagues. the bank of scotland it's casting doubt on his plans to pay a dividend. it may miss in eu deadline to sell prince william. the cost of the expose a -- -- it has notbe paid a dividend since the government bailout in 2008. that is the latest bloomberg business flash. gold fanatics come
at the 2016 ryder cup count down. thehups start today at haseltine national club in minnesota. going tope, i'm not remind you, it enters the conversation with a bit of an edge because we have won the last three ryder cup's. betty: are you trying to rile cap? -- rile me up? david and darren. let me start with you, because as mark has just mentioned, europe seems to be on a winning streak. how is the u.s. team going to win? darren: we will have home field advantage. hopefully it is going to come through. it did not in my dinah a few years ago, but we are close.
hopefully the home field advantage will be the difference. toty: is tiger woods going join the team? david: he is already committed to being an assistant captain. backe hoping tiger is playing here and making a bunch of points and on the team. at least we will have him in the team room one way or another. back atryn, let's look history at the miracle of medina as they call it. you were a vice captain. for those who may not know, europe was 10-6 down going into the last day and they made a miraculous comeback. what do you learn as a vice captain, a captain, a player, it does one learn when you come back from such a level of being victoryo pulling back a , and improbable victory, how
can you take that into this 2016 ryder cup? darren: i do not know if you can take anything from it. i think everything has to line up to have a comeback like that. the americans did it in 1999 at brookline, come back from a four-point deficit. was just around the tables and on the green. you saw some putts go in that are extraordinary that you never see. that is what makes it so exciting. is just toaptain prepare our team as best as we can, and make the guys as comfortable as they can be, give them every opportunity to be relaxed and play their best. that is what both of us are striving to do. david,i have got to ask, about golf, it is not just tiger woods. jordan spieth and others, we have some great stars in the
sport so why is it on the decline? get on a roll we for a while and never get behind. when we lose, we get more prescient -- more pressure on ourselves. they have momentum and these young guys have to get a little more passionate about it, more excited, and play with confidence. they need to play like the u.s. team and they can win. mark: darren, europe is on an incredible winning run, winning the past seven. just to reiterate it, when you played under some amazing captains, what tips have you picked up from some of the captains and the past, montgomery? you played with them, worked with them. who were the great captains and what did you learn from them? darren: all of them have been
different in their own way. some have been very much arm around the shoulder type of captains and others have been more standoffish and stuck to their opinions. golfer should we say, is a lot more pampered then when we used to play. there are just different characters. understand, find out what makes each tick. as long as you can get your players on side, it is really irrelevant what the captain does. we're just a small called in the whole scheme. , and yout your players have a happy team, that is usually a successful team. clarke, david love the third, captains for the 2016 ryder cup. of the last eight ryder cup's
betty: it is time now for our global battle of the charts. we take a look at some of the most telling terms of the day and what they mean for investors. you can access these charts on bloomberg. kicking things up -- off his joe weisenthal. way of looking at the initial jobless claims data, it continues to be
extraordinarily strong. i have made a 30 year chart of jobless claims versus the spread on high-yield bonds. you see they frequently move together and that makes sense. in 1990, claims went up. the global recession, spreads went up, claims went up. we had a surge in spreads recently and the question was, is this something about the economy or is this just something about high-yield energy debt that does not have to do with a longer thing? so far, the verdict is the economy is fine. initial jobless claims have not picked up. so far, it does not look too bad. you can see that chart on bloomberg. betty: it is so interesting, that die version over the court -- that diversion over the course of three decades.
mark: how effective has the boj's monetary stimulus been? you can look at data, consumer prices. i want to look at it in a slightly different way. this is the monetary base since 2013 which has risen from ¥150 ¥355ion to ¥355 -- trillion. how much activity is spurred by the additional capital? it fell to the lowest ever level on record which leads to the question, does the bank of japan need to think outside the box to boost inflation, to get companies to borrow, to get consumers to borrow, and to get this economy up from its knees?
it contracted in the last quarter and is said to contract this quarter, the yen is soaring, and there is no evidence of inflation. do not forget the japan money multiplier. a compelling chart, almost looks like a flag but i'm going to hand the wind to joe, leaving us with quite an interesting question at the end. mark, you have a brexit special coming up. mark: just because we beat you in the last ryder cup, you are taking it out only. we do have a brexit special tomorrow, very much looking forward to that debate on bloomberg television. that is who is going to be on the panel. ♪
scarlet: from bloomberg world headquarters in new york, welcome. tracy: here is what we're watching this hour. u.s. stocks are bouncing around. is the market tuning out central banks? scarlet: dreamworks has found a new home. it is being bought by comcast. is this a good business move? shares of facebook are soaring after hitting an all-time high today. can the company continue the rapid pace of growth? first, let's check in the julie hyman because we are halfway through the u.s. trading day. the dow is still negative. julie: the dow was negative and it is earnings and in the day driven. there has been a surprising