tv Bloomberg Markets European Close Bloomberg May 19, 2016 11:00am-12:01pm EDT
markets." we will take you from new york to london to frankfurt to paris in the next hour. a developing story, egyptair flight took off from paris headed to cairo and vanished from the sky. we will be monitoring the story for details. betty: the referendum vote to decide if britain stays in the eu is a little less than a month away. oil prices hovering near seven-month highs as crude closes in on $50 a barrel. we will hear from the kuwait oil minister. betty: it is 90 minutes into the trading session in the u.s.
julie hyman has the latest on these markets. after notaining lower opening up that sharply down, but now, losses happening seller rating ever since the opening bell, now down about 1% across the board come even though there wasn't much negative reaction to --s fit minutes yesterday those fed minutes yesterday. the toials and telecom worst-performing groups. -- two worst-performing groups. we now have buying in treasuries, not what you would expect when the number of that officials are saying june is a life meeting. -- live meeting. sort of confusing, the reaction we are seeing.
telecoms are trading lower come even as bond yields are moving downward as well. trading lower out of the open, down about .4%. now down by about 1%. this is down to this degree, even though we have two big gains. walmart with earnings that beat estimates, cisco also beating estimates. a forecast ahead of estimates. what is dragging on the dow? the two worst-performing stocks by index goldman sachs and boeing. what is interesting about boeing , you see airbus actually rising come even as boeing is falling. a bit of a confusing session hampered finally, gold and lower. is declining.
-- a bit of a confusing session. finally, gold and oil. june is live and stocks are low. that is the mantra today as xx 600 is 1% lower. is one of thesure 19 falling today. the news from of the overnight disappearance of the egyptian airbus over the mediterranean. a busy day for earnings. k reported first quarter profit that beat estimates today. boosted by the acquisition of
u.s. farm equipment -- pharma can a companyr that has been restructuring for eight years, has not launched a new drug in over a decade, but the 5%lders will welcome increase in the share price today. the biggest wealth managers has net new money from clients -- ited to less than 3% its call for a 4% increase through net new money. according toopardy julius baer. shares are unchanged on the day. some big data we had out of the u.k. today.
a turnaround in retail sales after two months of declines. that was ahead of expectations. it paints a stronger story of what is happening that is surveys, disappointing trading statements. this is the economic surprise index for the u.k. anything above zero shows the data beating forecasts. anything below zero shows it has been missing. we are at the lowest level in two years. a bit of a pickup today because of retail sales. the trend from april has very much been a down one. something the bank of england is all too aware of ahead of the referendum in five weeks time. betty: let's check in on the first word news. taylor: egypt and france trying
to figure out what caused an egyptair jet to does. does to disappear over the mediterranean. it was 30 minutes away from touching down in cairo when it vanished from radar screens. 36 passengers and crew were on board. -- 66 passengers and crew were on board. they say they cannot rule out terrorism. more tension between the u.s. and china over disputed international waters. two chinese fighter jets -- the chinese jets came within 50 feet of the u.s. plane. residents who fled ravaged byds town wildfires will be able to return in a couple of weeks. 80,000 people were evacuated from fort mcmurray. the fire has cost the industry one million oils per day of production.
the government is preparing to approve more than 25,000 claims covering $4 billion in losses. madoff is serving a 150 year sentence in prison. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. thank you very much. sterling has shaken up and no longer the worst-performing g20 currency this year after polls show a brexit is increasingly less likely. a brexit could be the beginning of the end of the eu. joining us now, brunello rosa. rodling has been the hot
for referendum sentiment. we've seen a turnaround this week after a number of polls. do you share the optimism that the remain camp might be feeling right now the five weeks away from the referendum? brunello: it is way too early to say. the referendum will be decided in the last few days. depending on the events, especially the events in europe. a number of things can go wrong. it can turn british sentiment towards europe from the potential banking crisis, the emergence of the migrant crisis. and, of course, hearing today that news regarding the plane. all these things tend to have an impact on sentiment and can make the vote swing one way or another. it is way too early to know whether there will be brexit or not. happen andexit does
it is a 60-40 result, could that to a disintegration of the eu --d why? dust of the this integration of the eu and why? brunello: think of how the others would react. one option they have in mind, creating the single treasury for the eurozone. the rest of europe is well united come even if britain leaves. with the positions of the various countries toward new institutions -- the germans say, beatly, we have a way to the countries that need to be disciplined while italy and
spain say we can have all the funneling for structural is the best card others can play against brexit. you can imagine what sign of unity that would give. betty: i want to take you to the affect in the u.s. he made a few comments about the impact on the u.s. >> the prospect of the u.k. exiting europe poses risks to u.k. growth, european growth, i would sense. there would be spillover to u.s. growth prospects. is the likely affect on is hard tohe u.k. estimate.
most estimates are that it would be manageable in the u.s. betty: would you agree with that? u.s. downtaking the to recession is a longer shot. it would require a number of things going wrong, especially in europe. you need to have quite a serious europe.n demand across we need to be careful about this. there are a number of challenges. one of them is straight finance. u.k. banks are extremely important in that context. you saw in 2012 what happens to trade when there are big shocks. there is a collapse. channel, contagion
can be very fast, including in the u.s. any immediate impact could be what if we saw a brexit? brunello: the key point you have you will have a slowdown first, potentially a recession in the u.k. and then in europe. but you have such a big component of global demand diminishing, that would tend to have an impact on global economies, globalized economies such as the u.s. open as other economies, but is still influenced by what's going on in the rest of the world. the u.s. is not anymore isolated than some thought in the past. we saw the federal reserve place more and more importance towards
what's going on in the rest of the world. there is a fed meeting just before the brexit vote. what does that actually mean? it is taking place before the brexit vote. we know not to trust u.k. polls. effect does it have when it takes place before the fed meeting? brunello: the banks will meet before the brexit vote. there will be a tendency of being cautious, especially for those who want to keep some powder dry in case something goes suddenly run. that's suddenly -- in case something goes suddenly wrong. , there isf brexit consideration at the bed, the
referendum looming large over the june meeting. -- consideration at the fed. it will not have any immediate impact. you want to be cautious and wait .or events mark: thank you. good to see you. brunello rosa. that: some developments on case involving insider trading. guilty onrman pled may 16 to 12 counts come including perjury. goter phil mickelson insider information from dean foods. this when wew return on "bloomberg markets."
mark: live from london and new york. betty: this is the european close. fiat chrysler recalling about 500,000 jeep wrangler suvs worldwide. the recall covers wranglers from the 2007-2010 model years. they are not aware of any injuries blamed on the problem. its car sharing service to boston, chicago and washington. chargeser to zip car eight dollars an hour.
that is your bloomberg business flash for this hour. mark: deutsche bank holding its investor meeting in frankfurt today. said he is committed to the securities trading business. investor sentiment was rather mixed. >> if you make a record loss, positive --tart off at the same time, coming back to shareholders saying we have a new system and we want you to approve it. there was not enough concentration to shareholders. >> we want some answers on our corrections where deutsche bank is spending in five years.
deutsche bank seems to be a large restructuring unit. where does the banking business that's where is the banking business of the future for this company? calm compared to last year. , james had a speech and overall, the was a crisis mood in the auditorium. cryan's new, he has to cleaned up. the management. --t she has to clean it up he has to clean it up, the management. win over thean doubters? it does seem like he made a positive impression on not ,nly the large shareholders
some of whom we just heard from, but definitely from the smaller shareholders as well. the germans have traditionally urine for a german ceo. yearned for a german ceo. a swiss man took over. there have been concerns that the bank was not as worried about germany. , who isohn cryan british, spoke very good german and refer to germany as the homeland. the most positive thing by far they said to shareholders today, they will not be needing a capital raise. that has been the concern for the big investors. they raise capital three times for $22 billion and the market cap is the less than that right now. less than that right
now. the fact that he says they can make it through this restructuring year without increasing capital is very positive for shareholders. were shareholders encouraged by the fact that he is committed to the global markets business? matt: different shareholders have different perspectives on that. it is a strategy decision. some shareholders would like to see the investment bank completely reduce to almost a minimal level and deutsche bank should just focus on retail banking operations or wealth management operations, like we've seen at their european rivals. others have been encouraged. the share price was up all morning. statement is the most important one in the news today for global wall street.
the fact that deutsche bank is willing to stick to this international investment banking and trading business has to be good news for bankers around the world. frankfurt.miller in betty: continuing news on phil mickelson and his insider trading case. released a just statement here saying that phil mickelson was an innocent bystander to alleged wrongdoing. violate and is not charged with violating the securities laws. agreed tolson has return all the money he made over $900,000 in trading in dean foods in the 2012 investment. he has agreed to return that and close the case on himself. those are the latest headlines.
mark: we are six minutes away from the equities session in london. take a look at the major equities benchmarks. june fed meeting is life. that was the take away from the april minutes. live. june fed meeting is about 4% earlier this week, the probability function. almost seven times that level now. it has been a fascinating day today among the worst performers, basic resources, chemicals, of course. r news, take over talks
with monsanto. finishing off with the currency market today, sterling rising for a fourth day against the dollar. it is rising for a fourth consecutive day against the euro. highest level against the euro since february as polling data continues to concern the remain the european close is minutes away. don't move. ♪
the session lower. lower -- june is a live meeting. interest-rate probabilities have moved up risk assets getting hit hard today. not only did we have the news of the overnight disappearance of that egyptair airbus a320 jet over the mediterranean, which has hit travel and leisure companies across europe today, but also, thomas cook today said bookings for this summer are currently down by 5% overall. the man's for turkey significantly lower than last year's levels. it was unable to fully shift the man from turkey to other locations. the terror attacks in belgium
affecting travel to the country. sure is done by 19% today. france's oil services company, europe's biggest as well, it is basically merging with fmc technologies, an all stock deal. the u.s. company is the largest provider of equipment to the oil industry. deliver or billion dollars in 2019 -- $4 billion in 2019. technip shares up. this could be a biggie if it happens. deal.yer-monsanto it will be the biggest german takeover ever. it launched an unsolicited bid monsant, which has a
market value of $40 billion. bayer falling today on concerns that a large purchase would weigh on its credit rating and forced the company to sell more stock. bayer shares down by 8.5%. walmart is doing the opposite. betty: that's right. i am watching walmart and their earnings results which surprised. it beat wall street estimates. that camp down fears that we are in a retail industry slump. tamped down fears. about the worried american consumer after seeing retail sales numbers coming out from companies like gap and
macy's and other department stores. it might be that lower gas prices have helped the walmart consumer. and its turnaround plans may be taking shape here in -- at the retailer. moving on from stocks, let's get the latest on that egyptair flight. the flight was headed from paris to cairo when it disappeared near the greek island of crete. there is a major surge underway for the wreckage. the greek defense minister spoke about this. at 3:37, the aircraft was approximately 10-15 miles inside egyptian airspace. feet,altitude of 37,000 executed a turn of 90 degrees left and then in turn up 360 degrees toward the right.
to about from 37,000 15,000 feet and then the picture was lost at 10,000 feet. joining us now, caroline connan and riad hamade. they believes say the plane was down by a bomb. what is the latest on this investigation? haveine: we don't confirmation of this information quite yet, even though all the government officials have spoken throughout the day saying nothing can be rolled out -- ruled out. hollandeh president
saying it is the duty of france and egypt to find out exactly what happened. we may have to wait a little bit until we get this confirmation. are they egyptian officials approaching this investigation in a different way -- are the egyptian officials approaching this investigation in a different way? brunello: they are saying the same thing -- riad: they are saying the same thing. if anything, it is a little bit more likely to be a bomb or terrorist attack than mechanical failure. there is adjusting that they want to wait for the results before making a clear-cut judgment. the planesing on itself, it is an airbus plane, what do we know about this model?
airbus's best is selling aircraft. they have been telling it since 1988. 6700 of this model flying in the air space at the moment. the a320 is a very popular airplane because it's capacity of 140 passengers, which is good for 1-5 hour flights. even though there's been 13 crashes in its 27 year history, compared toow millions of flights. we all remember the recent one, the russian airliner metrojet was shot down over the scene i -- sinai last october. paris-cairo plane
follows a number of issues in egypt. riad: tourism is a very important sector for the egyptian economy, which has not been doing so well ever since the revolution in 2011. news -- bad news, whether it is a bomb attack or mechanical failure, it is the three incident. we had the bombing of the russian airliner and the hijacking of the previous egyptair plane. it looks bad. bombing, tourism to egypt dropped by 40%. 2010were already down from
significantly. mark: thank you for joining us. .aroline connan and riad hamade you can follow the latest developments on the bloomberg at . taylor: euro area considering a new way to ease greece's debt burden. and when imf support for a bailout. there's a proposal to buy $60 billion of loans other countries may degrees. that's made to greece. france's lower house of parliament has approved the two-month extension of the state of emergency declared after the deadly attacks in paris.
the measure is aimed at covering the european championship soccer tournament. police have been given more power to make arrests and authorities can restrict movement of people or vehicles. over russia's objections, nato is expanding for only the seventh time in its history to invite the balkan nation of montenegro to become the 29th member. the nomination is subject to launched aniran has offensive at financial elite. executives in london meeting with their counterparts. the u.k.'s royal mail will cash in on the referendum over membership in the eu. surge in sales for
delivering leaflets. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. look at the take a broader u.s. markets and how they are trading right now. lots of fed speak affecting the markets. the latest from bill dudley saying the june meeting is still livemuch alive -- a meeting. the dow off by 200 points. abigail doolittle has more. abigail: we are still looking at a selloff at the nasdaq. being led by tech and biotech. the biggest drag, microsoft shares down sharply. the company's confirmation yesterday morning that they are kelling their nuclear -- no ia phone app.
other bigeakness in tech names like oracle and intel. oppenheimer outlined microsoft as a top take at the end of last year. he still really likes microsoft over the long-term. damage. did near-term he would like the stock to find support in the february lows stabilize. betty: talk to us about what's going on around cisco. stock is nicely higher, having its best day in three months. the networking giant did eat -- beat third-quarter earnings. behind this strength is a shift to new businesses, including software-based networking. the ceo says the investments
made over the last few years are starting to pay off. the lack of a lich commentary -- bullish commentary from the street, we see a trend channel and the stock hitting the top resistance where sellers are. the stock is still in that range, and ongoing battle between the bears and bowls in bulls inbears and cisco. betty: much more ahead on "bloomberg markets." next, the deal in washington that hopes to address the financial crisis in puerto rico. ♪
mark: live from london and new york, i am mark barton. betty: and i am betty liu. this is the european close on "bloomberg markets." mark: time for a look at the biggest is the stories in the news right now. says the brexit boat has already harmed the british economy. in a slowdown in domestic activity according to credit suisse come in decisions being .elayed until after the vote sales of thomas cook plunged to their lowest level in three season down travel 5%. -- in three years.
bookings for the summer travel season down 5%. causing a record trading loss of $5.5 billion -- now, he is striking back. socs suing stock jet and -- gen, saying the bank knew of his trading activities. breakthrougharent in the financial talks with puerto rico. you was house republicans -- u.s. house of a look at the democrats have reached a compromise, a positive step in the right direction. paul ryan also just made some comments as well.
protectsrtisan bill u.s. taxpayers and has no damaging precedents when it comes to negotiating with bondholders. , how did they finally come together because there were some opposition voices on the doublican side who said they this because it would look like a bailout for puerto rico? kevin: some republicans are still among the most skeptical of the bill. we will see who ends up going along with it. this is a revised version of a bill. we've seen several versions of the last two months. they had to deal with the conservatives --
this negotiation was ongoing. it appears to have gotten largely the way there. there will be changes both sides will be fighting over on the floor. is premature to say this thing is done, but it is a breakthrough. we might not see the house passing it until early june. betty: there are still many steps before it is implemented. give us the bullet points on the agreement here. kevin: most of this did not change from the previous version creating a financial control board that will oversee any kind of debt restructuring and help the island manage its economy and finances. tweaks and important how that control board itself would be appointed. something the white house and treasury department were very concerned about.
there are a handful of other changes that are quite technical and how other elements of the debt were treated. it does change the the treatment of where the general obligation bond holders withstand. there were a couple more political provisions that were stripped out to bring the democrats on board. pelosi why you saw nancy out there this morning praising the bill saying this is the right way forward. mark: there is a big payment due, a $2 billion payment on july 1. this change the payment or nonpayment of that $2 billion? kevin: i don't think we know yet. we're still looking at early june for passing the house and then going to the senate. we don't get the sense that many
in the senate wants to get in the way of this. it only takes one senator to slow things down. it is unclear whether we will and a bill on the president's desk by early june. senate changes anything, it has to go back to the house for approval. at this edging close to the july 1 date. it's not like puerto rico gets any extra dollars the day this thing is signed. it is unclear exactly whether the government will be able to make those payments, even if the bill does pass. betty: thank you so much. news on the puerto rican bill. we've been following the deanines coming out on foods and the insider trading
betty: time now for our global battle of the charts. the most telling charts of the day, what they mean for investors. you can access these charts on the bloomberg by running the function at the bottom of your screen. kicking things off is joe weisenthal. joe: there's been a lot of interest lately in the volatility stocks. with etf'suring
low volatility stocks. the company that makes armand hammer baking soda was -- arm washammer baking soda reportedly up for sale. this is 1990, $2.50 a share. now, it is $100. you cannot even see the 2008 crash on this chart. this has been a steady gainer. the 12 month earnings, barely a blip. stocks that people are so in love with right now. you can see why people are pouring into stocks like this. g #btv see that chart at 1379.
mark: let's get some color into our lives. it's been five years to the basins glenn court listed -- five years to the day since glenn court listed -- glencore listed shares. how has it done in the last five years? it has lost 75% of its value in the last i've years. biggestad as the worlds steel company. r in europe is down 80%. 600 industry group, the worst-performing has outperformed glencore.
if you'd invested in the goldmine, you would be sitting on a profit of 25%. packaging company has given you a return of 121%. it is not all doom and gloom if you've invested in mining stocks in the last five years. #btv 1377. betty: i know you've been on a bit of a losing streak, mark. i will hand the win today to mark barton. mark: i needed that, betty. lord, did i need that. betty: we will have much more on "bloomberg markets." ♪
>> from bloomberg world headquarters in new york, good afternoon. i'm scarlet fu. an egypt airplane carrying 66 passengers and crew disappeared en route to paris to cairo. the country's aviation minister says do not rule terrorism. scarlett: a german drugmaker is 45 billionpay dollars to acquire monsanto. it could be the big steel ever bygerman comforters -- german companies, but the proposal is being met with plenty of skepticism. phil mickelson agrees to repay profits he made on trading tips from a gambler. we will hear remarks on the case any moment from now.