tv Bloomberg Markets European Close Bloomberg May 16, 2016 11:00am-12:01pm EDT
and you're watching the european close. we will take you from new york to london and berlin in the next hour. this is what we are watching. retreat,shares are in falling for a third time in four days but stocks in the u.s. are showing some strength, rebounding from the longest streak of weekly losses since january. global investing strategies are what we are talking about. betty: warren buffett takes a bite into apple as the shares arising after berkshire hathaway stock1 billion of company and the oracle of omaha has shunned tech companies in the past but what has changed? crude oil is jumping to
the highest levels in six month after goldman sachs increased its price forecast adding that there is a sudden halt to the output surplus. about 90 minutes into the trading session in the u.s. a let's go back to the markets desk and julie hyman on this rally. julie: we are definitely gaining some steam as the day goes on. all three major averages are at the highs of the session and the nasdaq is leading, up about 39 points as the dow gains more than 100 and the s&p 500 gains 13. let's look at the biggest contributors to the s&p 500. we have talked about apple and it is on the list. it's gains are accelerating and it's now up about 3.5% on the berkshire hathaway news. general electric, home depot and exampleger is an of the energy lift along with
higher oil prices. as for his individual percentage is thefreeport mac moran biggest individual gainer and the price target has been raised. the shares are getting a boost on that and gains in gold prices. talking about the more general lift we are seeing in stocks, in the midst of what is pretty negative sentiment, this is a chart shown earlier. this is the earnings yield for the s&p 500 versus the 10 year yield. the s&p 500 earnings yield is higher. down here you're looking at the spread between the two which was lower and now it has widened. in this search for yield in this environment, one of the beneficiaries has been the stock market. the yield in the bond market are moving higher today.
we are seeing selling of treasuries and buying of stocks and the yield on the 10 year remaining quite low. there is a splintering and the bond market at least among strategist. s. we have been seeing the forecasts all over the map because there is an argument about what the fed will be doing. is it behind the ball or ahead of the curve? the highest forecast for the end of the year is 3.53% in the is 1.5% and the averages is 2.2% for the end of the year. the gap between the high and low is the highest in three years. matt: very cool stuff. to win the chart battle of the charts this morning. that's a good one. let's take a look at european
equities. they are closing up here. take a look at the ftse. you will see very little item across the board. the stoxx 600 is not changed. only about half of the market that could treat our open completely. italy and spain are doing electronic trading but germany and switzerland are closed for the catholic holiday, pentecost. is gaining about 0.25%. 3% andrude is up almost it's hovering around $49. let's check in with what's going on and other commodities. gold and silver are gaining and we see aluminum and copper getting an iron ore is down a little bit. because of news out of china and what central banks are doing around the world, commodities
have rallied. you see the stoxx doing well during the live british trade. ftse ishe reaso the doing so well. if you look at my terminal, i've got a chart to show you. stoxx 600he broader in white. in purple, the oil and gas index and in blue, the miners. index the miners and oil and gas stocks of one better than the broader indexes in europe. the bond trade is interesting because at one point, we had stocks down and bonds down with yields rising. we saw the stocks in london turnaround and the bond continued to fall and investors got more risky bets. thank you so much.
let's check in on the bloomberg first word news. r: the supreme court has handed a setback to the financial services industry. justices ruled that investors can go forward with some securities fraud paces in state court. the court set a federal statute let's local courts handle them under their protection laws even if the case may involve some federal issues. billionaires wanting to give money to donald trump have a problem. who do they send money to? it's because donald trump condemns super packs. he is far behind hillary clinton and having a network of big-money allies. the hillary clinton super pack is going to kick off eight or $82 million campaign in three weeks. moody's says the summer olympics in rio de janeiro will not do much for the battered resilient economy. some companies will do well. among them is a card payment
processor and rental car companies. the highest-paid female executive in the u.s. according is themberg pay index co-ceo of oracle. she was awarded $57 million pay package and the bulk of that was in stock. coming in next, alphabets chief financial officer with $41 million and the general motors ceo was. global news 24 hours a day powered by air 2400 journalists and more than 100 -- 1500 news bureaus around the world. matt: thanks very much. global equities may have rebounded from the oversold level of february but fundamentals have weakened. betty: where are the investment opportunities? our next guest says it's emerging markets and europe.
i read in your notes that you believe that despite low rates and the fed the net, data that it's becoming more hostile to hold equities around the world >> are you >> yes, we are arguing that people need to be very selective. overall, we are toward the end of the earnings cycle. there are better opportunities in other asset classes. betty: where is the biggest opportunity? >> we think emerging markets and europe. betty: but where exactly? what is the contrarian play in emerging markets? >> we like brazil, russia, turkey, china. isthink the dollar weakness allow the pressure to come off of commodities. giving you a little
rally we have had over the last few marks. what gets interesting is very depressed earnings in the end and just beginning to stabilize and beginning to pick up. with is the beginning of a more secular rally. matt: it has to all be based on that. fundamentally, the companies have to improve their earnings regardless of what the fed does and regardless of what the dollar does. what you think will provide that list? think the bases very important. em margins used to be the highest in the world and now they are the lowest. it's the opposite in many developed markets. you look at what we are doing to our macro forecast, leaving them unchanged for developed markets. you look at the leading indicators, they are showing the same thing.
stabilization is part of the story. there are very depressed em earnings. cominged markets are down and we have no earnings for developed markets this year. we still have seven or eight emerging markets that of come her the first quarter. for the first time in three years, the majority of these companies beat expectations. and: when you stand back take more than a 35,000 foot view from the moon -- there is an anti-globalization sentiment around the world. donald trump wants to quit the free trade agreements and forest johnson wants to leave the eu. has that affected emerging markets? i would think they need the globalization to stay put to continue growing their gdp. >> long-term, it clearly does.
they are dependent on financial flows globally. closedlatively economies. 50% of european revenues come from outside home markets and the u.s. it's about 1/3. these are reasonably closed stock markets. the economies are somewhat more open but our would clearly -- but there would clearly be an impact. betty: what do you make of the energy field emerging-market rally today? >> we are bullish on energy. think opec strategies are working. the oil rebound combined with a weaker dollar has been the ingredients for this initial eem market rally. betty: thank you so much.
much more ahead on bloomberg markets. as we go to break, look at the dollar against the russian ruble. the russian gdp contracted by 1.2% in the first quarter which was better than estimated. the ruble gained more than 13% against the dollar since january and that was the best performance globally so far for the ruble this year. ♪
gate announcements. they won't call me when i'm late? betty: i think so. matt: matt miller, please get to the gate immediately. we e moving on to the bloomberg business flash. we're going to pfizer. for the new deal is a 55% premium to the anacor closing price on friesian it would gain control of an experimental drug to treat eczema. for the new deal is a 55% premium tothere is a pr battle for tribune advertising from gannett. the new bid is almost twice what tribune was trading for before the first offer was made. tribune publishes a number of newspapers.
resume between verizon's and union representing 35,000 striking employees. workers walked off the job more than a month ago. get say verizon wants to rid of pensions. they say these issues need to be discussed. that is your bloomberg business flash. turning our attention to platinum, shares have risen for the most in 12 months after the company says it was cash positive in the first half of the year. platinum has climbed about 18% this year following a precious metal rally in a short all in supply. johnson with an interview this morning. >> we are focusing on the things week control and therefore we continue to cut our costs and want to make sure we position this business in the best
theible way so that if prices increase, we are only increasing our liquidity and and value tor cash shareholders so it's important we increase the cost-cutting program. what we have already done right two of theave closed shops already and we of two more to close. we will utilize that process to make sure this business is well-placed to benefit that we have seen since november and the prices have been going up. >> you talk about the fact that you cannot control the prices. do you think the recent low is behind us? >> i have a feeling. i think the recent low seems to be behind us and there is an upward trend. dealer prices have been up since january. rand prices have been up since november.
we will continue to do what we can control to make sure we benefit more. >> what is your long-term cost target? what do you expect the business to be operating at question mark >> when we delivered last year, $10,400, wet of promised we would keep those costs flat for three years and we have achieved in this half of the year is 10,600. after we removed all of the effects of the restructuring we have done, this quarter is at 10,390. we are in line with their promise and we expect to maintain that cost line for the next two years. pressuresere will be of labor increases and pressures of electricity increases but we expect our productivity efforts and cost-cutting and removing the bad cost will help us maintain that target. spoke here at bloomberg
news with 12 traders of platinum. they all agree that the bottom was behind us. take a look at this chart. this is platinum and palladium going back to the beginning of the year. we have fallen to the lowest level we have seen in half a decade but we have now climbed about 20% depending what you look at. spot platinum is in white and spot palladium is in blue. those are important to car manufacturing especially palladium used in catalytic converters. as we need more of those metals, the traders we spoke to in the survey think those prices will continue to climb. ahead, we will talk about apple with those shares in positive territory after warren buffett revealed he took a stake worth $1 billion at the start of
e press the country's growth. >> we have to expected to be slow but if you look at the growth profile in china relative to the rest of the world, you still have growth rates which are in excess of developed markets. if you couple that with a reform agenda, i think they are in a position where you will find great assets long-term in the chinese market. >> it's still very sticky. we saw policy driven investment growthn that side of the in china over the weekend. retail sales were still very weak so where is the turnaround going to happen? >> i think it will just take. tim movinggot a big economy from meat manufacturing lead to what will be consumer led and a number of organizations from financial as well as in china. i think you will have that transition that will take years.
i think everyone is looking toward -- you saw a reinsurance rum the pboc and i rank that will take some time. many think there is an over dependence on monetary policy. is pboc there? if you look at the announcements over the last couple of weeks from them, i think the fed is more aware and attuned to not just actions in their own country but how this will impact the global market. it's comforting. we will be in the market of near-term volatility next few quarters but the realization that the impacts it will have an home country will have global ramifications is providing some sense to dampen that volatility. >> that volatility still persist
s and will probably increase. --ding black schrock blackrock strategy this year looks into how you look at the region. >> there is no doubt and if you translate the optimism about growth relative to the volatility, in some respects, i think you will see new and innovative investment solutions active ands around passive strategies and the continued use of etf's where can make asset allocations more tactically. n stork fromas rya blackrock. let's take a quick look at where european markets have ended the day. stoxx 600 down about ftse is up and the
2/10 of 1%. we don't have any trading going on in germany. the dax is closed. it's a catholic holiday called pentecost and the same is true in switzerland. looking at the oil story, that has been off the hook today. at was rising as much as 3% one point. brent was right up there with it on the back of the goldman sachs call. you can see nymex was closing at $47.42 or i should say heading there. and 5:30 p.m. in germany 11:30 a.m. in the u.s.. stay with us. ♪
berlin, and new york city, i am matt miller. betty: this is the european close, looking at how we are building on this rally we saw earlier this morning. points. the dow up 126 abigail doolittle has more from nasdaq, including tech movers like apple. apple has the biggest boost, really driving most of the rally. warren buffets in berkshire addeday disposed and since march 31. this is a relatively small position for him. people think his investment deputies are setting up apple could rebound from the big slump in iphone sales over the last six months to a year. a big question going forward is whether or not berkshire as a way to add to this position, signaling they see longer-term
turn on a soft study down for the 5% from the record peak last 25% from the record peak last april. betty: let's talk about yahoo! reporter: what is trading well. warren buffett made back a group of investors bidding for yahoo!, including quicken loans founder dan gilder. warren buffett stayed away from to internet booms, but now is a position in apple and ibm, it suggests that berkshire hathaway is moving to technology also consider yahoo! to be a larger media company, a place in the sector that he has experience with. as for yahoo!, the stock is positioned quite bullishly. it is up 1% this year, putting in eight golden cross, a 50 day moving cross. this is up for 200 days, saying there is buying interest.
the last two came ahead of big upsides for yahoo!. yahoo! could trade higher from current levels. betty: thank you so much. abigail doolittle at the nasdaq. let's get more with warren buffett find apple. we have a reporter who covers berkshire hathaway and the billionaire. people say this is a surprise to see buffett in both of these companies. reporter: it certainly, the apple thing was a lot of surprise for a lot of people. yahoo! is a little more expected. apple.were surprised by buffett has long said he did not really understand a lot of technology stocks. he himself has not made a lot of tech investments. ibm is a big investment. betty: he is friends with bill gates and everyone at microsoft. reporter: that is true. this is a guy that set out the.com run in the 1990's.
really, that was a surprise from that standpoint. but some investors i spoke with this morning were really talking about how apple is a consumer products company. and on the other hand, this could have been an investment initiated by one of buffett deputy investment managers, the two guys, one is todd, the other is tim. they have been at berkshire a couple of years. they do not talk in public as much. we are not as sure about buffett, what they like and dislike. i am using the hgf function on apple. in acan show holders certain stock. i am certain you are familiar with it. if i look at berkshire's holdings and apple historically, this is a much bigger holding, 9.8 million shares. historically they have earned some apple, selling in and out of it.
is that just for trading purposes, or have they been sniffing around for a while? no, i am not familiar with that data, but that could be in perhaps some pension funds of berkshire subsidiaries. what we are talking about here is something that buffett or one of his deputies might have directed. matt: that would make sense. and what you do for this, just go to apple equities and type in hgf. you can crank -- click on berkshire at the end, you can see the white line, very interesting stuff for any equity on a bloomberg. what do you think this means, $1 billion stake, and you mentioned it is not a big deal for berkshire. it is not a huge deal for apple. they are only the 57th largest holder. but does this mean warren buffett thanks or his deputies think apple is at the bottom?
could they build a bigger stake? reporter: they certainly could. oftentimes they are inclined to financial help. ofs is, there is not a lot turn in the berkshire portfolio. so it is likely this position will be on the books for a while. all right, thank you so much. a lot of news to cover with apple and the yahoo! news as well. he covers berkshire anne hathaway for us. warren buffett for us. we seem oil rallying the highest in six months. -- goldman sachs raised its price and said they saw supply deficit sooner than expected. wti above $47, brent at $49 and
change. we talked to julia lee, the first world oil strategist joining us with more from london. julian, thank you for sticking around at bloomberg. let me ask you what you think about goldman's forecast. the bank has trouble with its asset class forecasts, but are they on the money here? reporter: we have certainly seen the things they pointed out. we saw strength in demand growth being reported by the international energy agency. they raised their assessment of first quarter demand growth. they have not really done much with the four-year demand growth picture yet. they have shifted things around of some of the asian economies, less growth in europe and places like the middle east. but i think there is a sense that demand growth is a little more robust. it has seen more robust than it
did two or three months ago. on the supply side, we have seen a fairly significant disruptions of a significant amount of oil temporarily disrupted from the canadian oil sands, but also in nigeria. we have seen a lot of oil, the market as a result of the attacks and accidents that have damaged various export streams there. betty: how long will those disruptions last? reporter: that is the big question. in canada we are seeing companies already starting to plan for the return of their production. one are to have already put plans into operation. that production should come back online over the next two to three weeks, perhaps a month. nigeria is much more difficult. insurgency in nigeria in the
niger delta has lasted many months and years in the past. this new group seems to have made at least one audacious hitting an underwater pipeline. the government has said it will respond forcefully, but this is a very uncertain time for nigeria. betty: is it possible we could still see oil take a leg lower before it sustainably moves higher? reporter: that is certainly possible. we have a lot of oil that is currently disrupted. canada and nigeria are the big ones, but we have also had a number -- another set down in libya because of the sales stand up between the two rival governments in libya. iraqve ongoing outages in due to a government decision on exports from the north of the country. we have similar in the neutral
zone shared by saudi arabia and kuwait, awaiting government decisions there. if that production comes back, it could come back in values that would far outstrip what the current sort of deficit is. that could put us back in to a situation of oversupply, and that could have a negative impact on prices again. i have a chart of prices that was one of the most popular charts of the day on the bloomberg terminal. you can find it by finding v1321. art, or bt this is the line that has got to reach goldman's forecast. one of the things i think interesting and following oil is stockpiles versus production. you talk about production, it has: off and can be moved off --
.t has fallen off and stockpiled inventories to remain at higher levels and we are seeing. is that a surprise helping to push the price up? not only production is falling but inventory is not as strong as we thought? reporter: in this resolve, extremely strong. there is a lot of oil in storage, not just in the united states where it is very visible, numbers are published every week . but also around the world. saudi arabia is self has a lot of oil in storage. china has been balding -- building volumes for strategic and commercial storage very rapidly in recent months. we are seeing high levels of storage in a lot of commercial storage facilities around the world. so inventories are still high. we are not really seeing anything more than a normal
of inventoryern draws at the moment. we are not seeing yet inventories being eaten into in order to make up for supply shortages in any major way. matt: thank you very much. julian lee, first word oil strategist. if you are using a bloomberg, most quickto get the news on your terminal on the scrolling stream. we are talking more on oil today at 12:30 eastern with dan juergen of ihs. he said we can see $50 oil by the fall. more from him in the next hour. and then the goldman call straight from the horses mouth, global head of commodities research jeff curry will join us at 4:30 eastern tomorrow from a conference call in california. betty: definitely want to tune in for that. let's check in on news.
taylor has more. getting: economies closer to pulling out of recession. russia's gdp fell 2% in the first quarter. doing better than expected. the largest energy exporter has been hurt by the collapse in oil prices and international sanctions. hasing google trade freely made russian industries mark repetitive. and the u.k. has got its growth forecast for the british economy. the fascination of industry warns the referendum on the european union membership has put a dark cloud of uncertainty over the outlook. the group sees gdp rising 2% and next. young somalians tired of war are giving up on the homeland and going to europe. they do not have exact numbers, but the rate of departure has almost quadrupled in the last six months. somalia's the war has been going on for more than two decades. it is a first for germany.
they supplied almost half of the country's demand. the milestone for german chancellor angela merkel. she wants to boost renewable energy while feeding out renewal -- nuclear and fossil fuels. and no one is harder than england for the european football championships. a british bookmaker says this is a big risk to the profit. says lead brooks could lose $1.4 million for every game england wins in the opening half of the urnament global news 24 hours a day powered by 20 more hundred journalists in more than one out of 50 news bureaus around the world. betty: right now, president obama is honoring 13 law enforcement officers with a metal of valor at the ceremony in the east room of the white house. they recognize exceptional withge to save human lives
♪ matt: it is time for the global battle of the charts. take a look at the most telling charts of the day. you can access these on the bloomberg by running the function featured at the bottom of the screen. i will be judging today, my first time judging from the city of berlin. let's check it off with joe weisenthal. the of all of her running also well. -- oliver renick. i'm talking about nigeria
and what is going on. oil red chart is nigerian production going back five years. you can see it plunged to the lowest level. mexico's back much longer. -- it actually goes back much longer. this white line is the 12 month that that the country would have its currency pegged to the dollar and the value. collapsing,n is that hurts revenue. the bets that it will fall are surging. one of the biggest jumps in a long time. that is the story, i'd nigerian oil production falling, and then pressuring the nyro pay. btv 1324. e that at oliver: i had to do something outside the u.s..
looking at the risk premium in brazilian markets. your white line is the expected return based on bloomberg galatians using -- calculations using crt. the blue line shows the 10 year yield on the generic government bond. what has happened is something interesting. among 45 countries that the function surveys, this is the only country where you have negative equity risk premiums. this is the difference between the two year and the value dipped under zero. it begs the question about what is going to happen with investors if they do not find that report from the equity space. why are they going to go there? you can see the some strength in the yield and treasury. but it is so high in generic bond but there is a lot of doubt -- so there is a lot of doubt with a risk-free asset which is usually the generic 10 year bond. btv 1327.e that at jonathan: --
matt: oliver, i have to give it to you. that is very interesting. joe's chart was great as well. we are talking about oil obviously. it is interesting to focus on nigeria. but you show us a new function, crp, which i pulled up on the bloomberg terminal, and it is pretty amazing what you can find , the information you can get with this function crp. let me pull it up next to me, and we can showed viewers what this screen looks like. it shows you a lot of information, and i love it. country risk premium. i did not realize you can get that. congratulations. oliver: i know you like functions. matt: betty take it from there. betty: he is just pandering to the judge. , howighest-paid women ceos
♪ matt: you are watching bloomberg markets. i am matt miller live from berlin. betty: you must be having a good time. i am betty liu in new york. this is the european close. the businessr flash, a look at the biggest stories in the news right now. let's kick it off with finish crane maker kona cranes. they have abandoned to bite the u.s. company terex. they will buy it lifting your business for $1.3 billion. that clears the way for a chinese company zoom lion to buy the rest of terex. inres rose as much as 20% trading.
phillips is looking to raise as much as $1.1 billion in the ipo of its lighting unit. the dutch company is offering a 20% stake after a five it sale process failed to find a buyer. this will focus on the global health care market as well as consumer goods. health prices and the u.s. rebounded. asking prices rebounded 4% to an average of $442,000. prices for properties usually stop by first time buyers jumped by 6%. investor move, the rush to be introduced next month. it resulted in a shortage of houses for sale because london home prices are not high enough already. and that is the latest business flash. betty: the witness -- winner for the highest-paid female goes to sandra cap. she raked in $50 million last
year, first among women on the pay index which tracks the 200 highest paid executives at publicly traded u.s. companies. alicia richie joins us now. so issue number one among females i'm a but number 18 overall, right? the bloomberg is a index which values the highest-paid executives. we do not narrow it to just an index like the s&p 500. publicly ownedy company to see what is the highest in each company. betty: so tell us about the other women on this list. it --er: we have ruth car corrett. she is still ticking on the cso position at morgan stanley. million forng $41.4 the fiscal year 2015. and the third is mary barra from
gm, one of the first female of the year for an automotive company. betty: and what was interesting is that women get higher and higher, the differential between men and women shrinks, is that right? finding: what we are and we worked on this story and spoke to eric hoffman, he said that when women are in this status, gender seems to fall off of the radar. it is how do you pay with a position? party pay for a ceo, cfo? there seems to be an equalization of pay once they enter into that space. but it is a matter of getting women in to the top spot to make sure they can occupy more of the highest-paid positions in the bloomberg pay index. --ty: the top 10 or eight 817 are men, who is at the top of the list?
from br: patrick young and k west. it is not until we hit number 18 we get the first female, second on the list was from ptg partners. and there were ipos this year. there is a boost in the pay line when it comes to pre-ipo shares and what is company -- happening during that process. thank you so much. much more on bloomberg markets ahead. ♪
-- disappointing chinese data fueling concerns about the largest data. scarlet: and the market seeing a rebalancing act. there could be $15 oil -- if the dollar oil by the fall. alix: and sitting down with mahindra and mahindra founder. we will get his plans for international expansion. first, we are halfway through the u.s. trading day