tv Bloomberg Markets European Close Bloomberg May 9, 2016 11:00am-12:01pm EDT
european close on bloomberg markets. ♪ we will take for -- take you from new york to london, athens and in the next hour, he result we are watching. greece returns to center stage with new bailout talks. made enoughinister austerity commitments to gain the trust of finance ministers after six years of initial turmoil? the ceo on the brexit vote and what it could mean for the u.k. mark: a closer look at saudi arabia's new oil chief and why he is expected to keep production levels near record highs and what it could mean for the saudi economy. betty: we are now 90 minutes into the trading session of the u.s.. we want to head to the markets with julie hyman. deteriorated have
since we talked an hour ago. there were little changed in the dow has even turned negative by a little bit, down about 30 points. caterpillar is leading declines and the s&p not doing much of anything, only up a point. the nasdaq has pared gains to a third of 1%. accelerateds have as the group now down to percent, now weighing more. even as health does maintain some of its gains. one of the interesting charts we have been watching has to do with the yield gap between stocks and bonds. this is something that robert buckland. pointed out he said stocks will benefit from their status as the yield asset because the yields on bonds are so low.
you see the 10 year yield and this is just another way of looking at it, it is the difference between the two, it is only around a percentage point difference between these two, but stocks, as you can see, now yield more than the 10-year note. they will continue to benefit from the differential. if you look at the 10-year note it's self and see what is going on, we do see a decrease in yield to 1.76%, so just emphasizing the point of buckland is making. elsewhere, oil prices as energy stocks drop off, oil losses down by 1.4% and other commodities are also declining today. -- with their worst one-day performance going back to february and we are seeing or hearing more from but officials saying maybe we will see an increase in rates coming sooner rather than later. you often see copper futures
down for the sixth straight day and iron, a lot of bearish talk about iron ore, sending those prices down as well. here, thelar story worst performing industry groups on the stoxx 600 are mining and oil companies, but the majority as you can see, trading higher euro, as is the stocks 600, up by 1.5% -- one half of 1%. u.k. security company reporting an increase in quarterly revenue. what the company is doing is it is in the process of setting or closing of 42 businesses and wants to rebuild itself after a series of setbacks with a security -- that began with a security crisis in the 2012 olympics. the french oil group has announced an acquisition, by the french battery company, a 950
million euro deal. energy,panding in clean 36 euros 50 is the share offer, representing a 30% me up to the closing price on may 6. they make nickel and element -- nickel and lithium batteries for industries like civil and military electronics. i want to show the greek 10 year yield, this is obviously a chart going back 12 months. , greece's creditors are meeting in brussels, has the prime minister made enough concessions to gain a rather disbursement from emergency loans? what is an issue is this imf demand for contingency methods and greece needs to legislate that, that is where we have a bit of an issue.
some issues -- some policies were passed through parliament, a further round of demonstrations in athens. last august, we were roughly 15%, but the big highs happened in 2012. remember when the yield on the 10 year was 35%, we are nowhere , but are we approaching another summer of discontent in athens? betty: a hot summer, indeed. let's check in on the bloomberg first word news. taylor race has more from our news desk. more than half the ballots counted, he has 39% of his vote. his closest rival was at 22%. he promised to curb rising crime rates and reduce traffic jams. republicans in congress hope to
have a rescue. bill for puerto rico as early as. wednesday lawmakers missed one deadline to keep the u.s. commonwealth from defaulting on its debt payments. according to people familiar with the matter, republicans manage puerto rico and structure it $70 billion in debt. firefighters battling that wildfire in western canada. may get a break, this week a cold front moving through the area may bring rain and or cast show the fire moving east away from the oil operation in canada's biggest energy company. the fire has forced them to cut back on 40% of the region's -- 80,000 people fleeing from the nearby city of fort mcmurray. on whether president obama will visit the japanese cities where america dropped two atomic bombs in world war ii. no sitting president has gone
there because it might suggest the u.s. was apologizing for the attacks. day.l news 24 hours a betty, you have some breaking news? betty: that truck apparently has announced new jersey governor chris christie as the chairman his. transition team this is asked out looks more and more likely to be the presumptive nominee of the report and party for president, so donald trump announcing new jersey governor chris christie who had braced against him -- who had raced against him earlier on. mark: let's get back to greece because lawmakers passed a controversial pension and tax reform in hopes of a locking rescue funds in the country's creditors. markets reacted positively to the news, but greeks did not.
thousands of demonstrators protested the new austerity measures outside parliament. joining us from athens is -- what is the hurdle between the deal, between greece and its creditors? what is the stumbling block, right now? the first one is the issue of debt relief and whether the creditors are really serious in offering a meaningful refiling to the current government. the second issue is the contingency measures that the imf asks to be legislative with 5.4iament on top of the billion euros that have already been legislated by the government. given that the latter has crossed many of its red lines, it seems that the greek government really does not want to have to put into another bill, contingency measures.
these are the two stumbling blocks. mark: how close do you think we are to a deal? we won't get anything today, for sure, what we are looking for is the groundwork for a deal toward the end of may and hopefully, i then, there will be an agreement in place. otherwise, we are going into brexit in europe and maybe we will have to wait until july to get a good deal. andy: if there is no deal, if there are these contingency measures, what will the greek government do? will they call snap elections? one thing you can blame the greek government for is being predictable. anything can happen, but
elections, they have been saying that there is no way they will go for them or a referendum, everything is up for grabs if we don't have a deal by june because -- by july because then the greek government cannot meet its financing payment needs. -- is polls show that lagging behind the new democracy party, so it seems that there would be a new collision government in greece elections were to be held, today. betty: what would that achieve? leader is a liberal guy and said that the basic problem of the greek a lot program is that the composition of measures are looking more on tax increases rather than cutting government spending. it coincides with most of the imf demands on bringing more structural reforms to the greek situation than kicking the can further down the road and maybe what he says is a hope for this
the majority of the best silent majority of the greek equal. -- silent majority of the greek people. how likely are we to have a repeat of last summer? it begs the question every year, we seem to have a standoff between greece and its creditors. are we looking at a similar summer that we saw in 2015? >> let's hope it is not a repeat of last year. if we go to july, things will get pretty stressful and you all have grexit headlines over again. it comes down to whether greece and its creditors can reach an agreement. after that, it becomes tricky. mark: thank you for joining us.
ahead of the big meeting between greece and its creditors. betty: we have some breaking news on brazil. it looks like brazil's lower house chief is calling for a new vote on impeachment. this is according to some reports from a local newspaper that it looks like the lower house chief is going to -- has accepted the a peach meant annulment and will call for a new vote on impeaching the president. we will have more on this news. we will be back. ♪
is the european close. mark: david cameron's latest appeal to voters not to leave the european union. he warned that a praxis would be a death blow to the economy and the country's reputation. >> i understand why many people are wrestling with this decision and white their heads and hearts are torn and i understand and respect the views of those who think we should leave, even if i believe they are wrong and that leaving would inflict real damage on our country, its economy and its power in the world. mark: boris johnson responded with his own speech in another part of the capital, claiming a brexit would lead to more autonomy, and economic prosperity for the british people. >> it is a choice between a dynamic liberal, it's always in, open, global free trading prosperous britain or a britain where your main subject to an underground -- undemocratic system devised the 1950's that
is now actively responsible for low growth and in some cases causing economic despair. mark: let's chat more about this. thank you for joining us. what are the best and worst outcomes here? >> we believe that the best outcome for the u.k. would be remaining in europe and what do we mean by that, we mean a play small it allows for flexibility in the way it works. what is the chance of that happening? youty low, especially when see how europe is operating at the moment and is likely to operate in the future. second-best, leaving a sinking ship. if europe is vesting to collapse, you want to exploit with at of first move
bandage and moving well it is still alive. mark: what about the third and fourth case scenarios? >> the third is where you have the current situation, the u.k. remaining in europe as it is. a very cumbersome political decision-making process where it is difficult to get things done and agreed on in an easy way. the u.k. leaves and the eu prospers going forward. betty: it is not where the british fall on the boat, but also how white of the market is, wide on the market --
wide of a market it is, as well. >> one way for the campaign to eventually clear of on where the government, has mandated to implement the results of the referendum. we believe it is more likely that you will have a tight race with a very narrow victory from one of the two camps, and that would create uncertainty, because in fact, any outcome is open if the vote is tight. it does not mean that the remaining camp wins, that you do have remain forever, some brexit the vice versa is true as well. that lots of folks
also look to what happened a couple of years ago with the vote on scottish independence and they look at that as a possible trajectory for britain. columnisterg view pointed to that in a piece a few weeks ago where he said quote, doing the prudent thing staying in the eu only make britain more resentful. the u.k. will be more euro skeptic on and the careers of anti-eu politicians will be far from over. even if the british vote with their heads, the hearts still might say a different thing, later. and to someight, extent, i would say that there is a bit of. a symmetry in this campaign. the campaign of the remaining is based on what is convenient for the u.k., what is the right thing, a story about numbers. inflation outlook. it speaks to the head of people.
the campaign about leaving is more about speaking to the heart, to some extent of the guts of people. to thesewant to belong that this messy organization that leads nowhere and this is what is difficult to have such a clear campaign because these are arguments on very different levels. mark: thank you for joining us. you can go to brexgo on your terminal. it is always next to me. betty: i know you always have your terminal on an open. still ahead, saudi arabia's oil minister and a government shakeup. we tell you what that means for opec and the oil market. ♪
mark: you are watching bloomberg markets. betty: this is the european close. saudi arabia unveiled its far-reaching government shakeup in theing new leadership kingdom's powerful oil ministry. a 20 year reign is over. mark: care to explain what it means for saudi arabia, the global oil market is bloomberg's managing editor of the middle east and africa. he joins us live from dubai. what does it mean? how do these changes affect saudi policies? there are two aspects, one is oil policy as it has been since
2014. their insistence on protecting market share rather than trying to protect the price level, that will remain unchanged. he was part of the teen the kimball that policy and if anything, he is present team they came up with the harder line which in this on iran joining any freeze in production which seems to more accepting of not including iran in that freeze. the other part is, the story -- the count -- the saudi economy away from this oil dependence the toward one that relies on return on investment. he was part of the furniture, was indeed, at opec? -- wasn't t, at opec -- wasn't opec?op -- he at
how can we suddenly attain credibility among those who are involved in oil markets and policy? >> it will take time and i think people will want to hear more from him. quantity,an unknown he has been head of the world's biggest companies since 2009, so he is an expert in the oil industry, very much a technocrat. is also very softly spoken and with time, i think as you will get to know him and what he has to say, the markets will get to know how to interpret his comments. mean: briefly, does it because we have a new oil minister in saudi arabia, does that mean of the oil markets
will be more volatile? because't think so again, the policy, defending market share, the policy remains. from thet of the team deputy crown princes team that was to lead change in terms of how saudi arabia makes its money away from a dependence on oil but in terms of the markets in terms of policy, opec and the position, that remains unchanged. mark: thank you for joining us. from bloomberg news in dubai. and could look at what's happening in european equity markets. we will finish the monday session higher, a day were investors chose to ignore data out of china. ♪
let's take you through all of the market action. this is the stoxx 600 benchmark. it looks like it's going to close. it's touch and go. right here, we were up by 1.3%. was out of china disappointed. session,he end of the it was the miners in the oil companies that drags the index toward the close that looks to be little changed after a climb. these are the worst performers today. look at how they fared you this is how they fared since january 20. that's when the stoxx 600 mining index hit it lowest level. it has risen by 152% since then. gotou can see, you've
glencore up 85%. 24% to -- 24%. this the big earnings story today. they finished up 3.3% in they reported sales on strong demand sales in the united states. that accounts for 41% of its revenue. it grew 6.9%. really quickly, that's what's happening. we have some strong data out of germany. factory orders rebounded in march. this is the citigroup surprise and next. this shows that data has been missing estimates. see, since the three low, it has been improving.
this is on upwards projection. that is a very provocative question. something else that's going on as we are watching the trial of sumner redstone, the patriarch of fire,. fire, -- viacom. his former girlfriend wants to reinstate medical care. this could set off a chain reaction that could put stake the control of cbs. could it be turned over to the seven trustees. there is a battle going on there. that's why this trial is important. one important part about this
essentially they are trying to determine whether he is competent mentally. he said of his former girlfriend, quote i hate her. i want her out of his life and -- life. that's strong statement. there is some courtroom,, some hollywood drama. there is not a lot of drama going on at this moment. points, it'swn 60 nothing like we saw last week abigail doolittle has more. abigail: we have the nasdaq slightly higher. one of the worst drags on nasdaq are the shares of baidu. they were ordered to overhaul the ad system. assist -- student rate of -- died of cancer after using baidu to research hospitals. impact on negative
revenues over the long term. the impact is likely to be moderate over the long term. it appears to be pushing shares --baidu back down here in down. betty: what are the other big drags? abigail: jb.com. that is the worst close on record after the chinese online beattaylor -- retailer estimates. it was as disappointing. they say that it's just not good enough. the cv -- ceo is blaming the chinese economy. they are saying that alibaba is just fine. i guess we will find out. the near-term weakness has taken the shares of j.d..com back down. avondale -- you,
abigail doolittle. taylor: greases international creditors look if the country has done enough belt-tightening to get more emergency loans. the greek parliament looked at pensions. contingencyanding measures worth $4 billion. it's earnest prime minister david cameron's latest attempt to persuade voters not to leave the european union. to leave that a vote with the british economy and the country's reputation. >> i understand why many people are wrestling with this position. and respect the views of people who think we should leave. i believe they are wrong and leaving would inflict real damage on the country and our economy.
is junethe referendum 23. north carolina governor patrick cory is going to court to fight for love that limits protections for lb gt people. says.s. just department the law violates civil rights. they gave mccoury until today to see if he would enforce the law. donald trump has named the chairman of his transition team. it's chris christie. christie will oversee the team of nationals. the takeover the white house. christie endorsed trump in february. global news 24 hours a day powered by our 2400 journalists in our news divisions. mark: there are going to be a meeting severe. it's in line with the fed.
they want to be more in line with the central banks. it's going to meet a time to year instead of every month. bemeans in 2017 there will meetings in january, april, july october. this includes super thursday which is happening this month. the rate decision and the inflation report will all be announced on the same day. that's a big overall by mark carney. this is the last piece of the jigsaw. there will only be eight meetings, in line with the fed. betty: what do we have to talk about? mark: we can have a rest. behindthey have left mega-buyouts and they have jumped into alternative asset management. they have invested in airbnb and
spotify. seeat down with the ceo to what is next. >> the industry has grown up. become more complex. when i started in this business, we spent all of our time talking about why avid equity. anymore abouting whether it should be in the industry. it's how much and how to do it. it's become much more complex. should they do direct? there is a much more robust set of discussions about the relationship aspects of alternatives generally. >> going back five or six years ago, it was a different time. how are the opportunities changing? >> it was a risk on time. we were coming out of a recession. we were proud of what we did. as we got later in the cycle,
the markets have level that. we are in a stock makers market. you have to find disruptions and interesting companies and really choose where to invest. i think that resonated with our investors. we have differentiated ourselves overtime. in terms of the types of companies you have invested in, we've seen you identified in backing airbnb, true growth stories. what have you learned and how do you implement that strategy as you look at a broader buyout portfolio? >> investing is not about market share. it's about insight. we are looking for an environment where growth may be flat in a bit. if there is a disruption or change in the economy, when interest rates are low that
implies growth is worth a lot. we are trying to find areas we can sort through the disruptions and create the value suggested by growth. we sit in san francisco. as the economy has moved from a tech-based economy about coming up with the best search algorithm to a new era where tech and the old economies are coming together in companies like airbnb, we have then investing and trying to bridge the old and new world. many of the problems they face going forward for like the problems of an airline. some of the regulatory issues around hotels. we had something we can bring to those companies. >> you've been in the business for 30 years. this is the 40th anniversary of kkr. the business is radically different.
called private equity back then. it made a be need to be call that anymore. how to unify and it? >> i think we are in the middle of a massive shift in asset management. in the public markets, you can pick up share. there are plans for act of management. that is growing and healthy in the area of alternatives. some time todefine exactly what it is i do for a living. i invest. traditionally, people have sometimes called them buyouts. we've moved from buyouts to private equity. our job is pretty simple. any not to define ourselves one way. it's defined cutting-edge , differentiated
opportunities and bring them back to our testers. that,g as we keep doing there is a place for our kind of investing. >> if you look at your traded,ors, publicly across lots of different types of alternatives, how do you fit into that definition? >> we have never defined ourselves by how large we are. that's a fallacy in the market place. ourselvesd to define as being large enough to address opportunities across classes around the world. we are small enough and nimble enough to make sure that we can find ways to differentiate ourselves in areas that are not as accessible if you were going for size. the compete against excellent firms. people in private and we have
earned their place in the market. we want to be among the leaders. we went to differentiate what we do. >> you have remained privately held. many others are publicly traded. someday? >> someday that? come. i have consistently answered that. there may come a time where it makes sense for us. this isn't that moment today. it's been rumored we were going public for eight or nine years. i'm sure easy rumors will persist for years to come. >> the buyout boom led into the financial crisis. there were some huge deals being done. what is the lesson you take from feels like that? >> there are extraordinary lessons. we see the him playing out today. one of the lessons is late in the cycle after you've been
through a time of extended success, there is lots of capital available in the lp marketplace. of the things the industry needs to do is make sure it doesn't take capital that's available. that's a direct learning from what happened before. sure you don'tke lean into the marketplace late in the cycle. in general, large deals tend to happen late in the cycle. be careful about the larger deals of the marketplace. generally, the industry at any one firm should not be overrated. betty: that was jim calder. he was speaking to bloomberg television. we've got more news on donald trump. paul ryan says he would step down as the republican convention chairman if donald trump asked. paul ryan is set to meet donald
trump. he is looking like the present to nominee for the gop presidential race. stepryan said he would down as convention chair if donald trump asked. this came after news in the last hour that chris christie is going to take over as the transition team chairman for donald trump. a lot is happening on the political front. we're going to stay on top of that. ♪
joe weisenthal. joe: we got earnings out from global action giant set of these. the stock tumbled. one thing to notice is the sales of auction in hong kong are really crucial to their business. there were some signs of stabilization. check out the white line. you can see that for the last year they have really tracked each other pretty closely. it makes sense that hong kong is crucial are. there is a lot of chinese money crucial for this company. if you want to know how they are doing, check out hong kong. that's a good tell. betty: that tells you the concentration of wealth and hung on. mark, what about you? mark: something significant is
going to happen. japan monetary base, it's set to overtake the u.s.. we know it's happened to the monetary base. it's trip. $3.73 standing it trillion. the u.s. is 3.8 6 trillion. will it weaken the yen? 1996, they said it will weaken the yen and he was right. the yen fell by 29%. this led many people talk about the soros chart. 96%monetary base is relative to the united states, leading many to say the yen could weaken because of the money supply in japan.
all that extra money, where is it going? i thought they were buying all those handbag. they were buying luxury goods. i am surprised. your child today is quite clean. only two lines. betty: it's the same color as joe's. we are brothers and colors. i want to hand it back to joe for the win. telling us something different. mark, -- this was perfectly fine. formal wish to lodge a complaint. betty: better luck next time. thanks, joe. we have much warhead on bloomberg markets.
betty: we're feeling it from the philippines. he has the 16 point lead against his main challenger. here's the tough talking man. it looks like got an unassailable lead in the philippine election. he has a 16 point lead. had scratcher. consumers are buying food from discounted grocers and wearing last year's fashion. they are not pennypinching across the board. -- buying range rovers and rolexes. betty: what is going on? this is andrea felson.
she joins us from london. are we seeing some of these trends? talk to us about this. we are seeing a widening gap in how consumers are purchasing things. andrea: we are better off. we've got lower prices. we don't seem to be willing to spending. we love a bargain, but we love a bit of bling. that's what we've seen on high street. betty: ok. something -- we have seen something similar in the u.s.. we saw people trade down during the recession and start buying they realized a don't need to trade back up. they started to stick around at some of those discount merchants
even if they do have more spending power. there is more pressure in the u.k. on health care costs that are causing consumers to curb their spending here. mark: have we lost the appeal of mercedes? andrea: we will not know until we and through the referendum. there has been a sign of a slowdown. one of the areas where we've been spending money on homes, it would be interesting to watch if as we becomeo cool more uncertain on the economy. betty: we have sales numbers later this week. shannon: there is a good tell whether coming out. apparel spending isn't doing great in the u.s.. macy's is going to have to give customers a reason to go into stores.
it needs to be something that consumers feel they need to have. there is not a lot of high-fashion item that people are scrambling to get like skinny teams -- jeans. macy's could be a great one to watch. betty: or yoga pets. it's.ts are in -- -- pants. earnings will be rolling out. right now we see a mixed market. about 40s down by points. that's coming off our lows of the session. earnings will continue to dominate the landscape today. ♪
>> sumner redstone wins a suit against his ax. the ridnning the fight of a former girlfriend. the judge threw it out. the second day of the trial. it has a little bit of everything. trying tolfriend manage his money, she was helping him with his health. him and a fight between his daughter and his ex-girlfriend is well. >> it helps stop the public infighting of the family as well.