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tv   Bloomberg Markets European Close  BLOOMBERG  May 31, 2016 11:00am-12:01pm EDT

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york. amk: live from london, i mark barton. this is the european close on bloomberg markets. ♪ we are taking you from new york to london to frankfurt in the next hour and we are going to kick off a major week for the global economy. the ecb meets tomorrow, opec begins its meeting in vienna on thursday. we will cover what's on the agenda. stocksemerging-market are back, rising to its highest levels in three weeks. filledrency gap has been by men at the biggest banks but now women are taking the reins. what is causing the shift? 30 minutes away from the
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end of the tuesday session. the function that tells you everything on one screen, this is the equity column and there is a lot of red, stocks are falling in europe the first day in six, currencies, cbs's and commodities, everything in one shot, what more could you need? i will move it on because there was a lot going on, mostly for volkswagen shareholders, shares falling as 4.7%, the most since february. market operating margin a .3%, for shorter than the medium-term 6% -- far shorter than the medium-term 6%. i have shown you the performance of europe's carmakers since the
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emissions scandal broke on september of last year. interesting to see fiat chrysler down.porsche down, bmw is bmw is not the worst performing european automakers in the scandal broke, last september, but still, it has a lot of work to do to claw its way out of its issues. to the west -- these are the best and worst performing industry groups. leisure are at 5.5%, showing resilience after the egyptair plane crash a couple of weeks ago. the worst performing industry group is basic resources, down by 9.5%. best performing
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industry group on the stoxx 600 this year. the world's biggest steelmaker, shares up i 3.8%, the stock was raised, the price target is 4.5 euros. a price target of 4.89 euros, 117% since rebounded low onll to a 13 year february 11. that is the third-best performer on the stoxx 600. 90 minutes into the trading day in the u.s., let's get over to the markets desk were julie hyman has the latest. julie: we+++
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stocks are lower and they are pulling down that index. s&p just holding on and the nasdaq up about a quarter of 1%. as we are on the last trading day of the month, i want to look at the monthly performance and it is looking good. this is as eag -- underlying security, you are looking at, this is the average of the past five years and here is 2016 and as you can see, three of these blocks are green and that means three up in a row. last year, we did not have three straight up months. we have not seen this since 2014, so a bit of a winning streak for the s&p 500. we've got telecoms up and that is on the union agreement that was reached at least tentatively at&t and sprint are also gaining, today. on the flipside, we are looking at the big movie studios the cut they had some disappointing results over the weekend. 21st century fox with the x-men apocalypse.
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consider that it had $80 million in ticket sales, 28% low the prior x-men installment and disney's alice: through the looking glass proving disappointing to that particular studio. you heard mark talk about a big steelmaker, cleveland cliffs is these tilted stock -- is the steel related stock we are watching. jpmorgan raising its recommendation on the company, the biggest iron ore miner and the u.s. and this is because of higher steel prices are running to the analyst that opens the door for cleveland cliffs to turn around -- cliffs naturally -- cliffs natural resources. and allows it to potentially raise prices. a quick check on oil prices. we have a gain of about 1%. at one point, it did take above the dollars a barrel and came back down, it has been hard to
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sustain that level over the past several weeks. betty: a lot going on, thanks. let's check in on the bloomberg first word news. taylor riggs has more. killer: donald trump is itching -- taylor:, donald trump is inching closer to the republican nomination. he has a two-point gain from the previous week. sanders leaves donald trump by 12 points, about 52 percent to 40% in a hypothetical general election matchup. that a trump has found a way to cut his income tax bill. records show that he transferred more than 100 donald trump trademarks into a new delaware corporation. delaware does not tax income from royalties on intellectual properties. among the trademarks he moved are his own name at some of his best-known properties such as trump towers.
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texas forecasters warned there could be more flooding. rivers crested three feet above previous records. upsident obama is speeding efforts to help syrian refugees. the obama administration has promised to resettle 10,000 syrian refugees in the u.s. but eight months after the program started, only 2500 have been admitted. sllies and advocacy group warned he could undercut his leadership by pressing the issue. that the official says cancellation of at least 42,000 hotel room reservations for 2018. that translates to about $20 million in lost revenue for the lodging, restaurant and tour industry. mark: euro area economic data
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shows consumer prices failed to it -- to increase for a fourth consecutive month. past three years, ecb president mario draghi has been trying to bring inflation back in line with its mandate. -- disappointing inflation news, but there may be some good news on the inflation forecast from the ecb on thursday. >> mario draghi is down to present new forecast in june -- new forecasts in june. growth forecasts will be higher than in march and this will be the best news for the ecb in quite a long time. let's cut to the chase,
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the last time inflation in the eurozone was anywhere near 2%, was the beginning of 2013. it is going to be a long call back to that level, isn't it -- long haul back to that level, isn't it? would make it in total, almost six years, well below target for the ecb, which is quite a long time. oil is going up and is going to help the ecb's work, but what the ecb really needs is wages and services to rise again because this would make the level of inflation sustainable and stable. let's not forget, this is important because higher foration means it is easier other countries to work down there pile of debt. this is important for countries like italy and greece. betty: i want to talk about the
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german jobs numbers, unemployment falling to a record. how much of that can be a treated to what we have seen so far? -- attributed to what we have seen so far? the german economy has to the ecb because of low rates and the weaker euro is helping and more consumer spending because of the low inflation and low rate. it is all helping the german economy to do well, right now. consumer spending is high, generalment is low and environment is better and let's not forget that the euro area is recovering and it also helps the german economy because it means that the u.n. can i german exports. betty: is all of that turning
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sentiment around on the ecb? something like a quarter of a trillion dollars in stimulus in the eurozone, is this turning sentiment around at all, particularly in germany? skepticism a lot of to the ecb and germany and because in germany, there was a big -- with low rates, there are low returns on saving and this is going to take quite a long while to change, because the ecb will only be able to raise rates when inflation will be anywhere near its goal and this is still a long way off. mark: thank you for joining us. betty: as we head to the break, this is a live shot of the republican presumptive nominee, donald trump, speaking at a news
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conference, addressing the numbering -- the money he -- the money he promised to place to veterans. others are disputing the $6 million. you can watch the full event on the bloomberg terminal or on our live event channel at ♪ >> i think the press -- you know my opinion.
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betty: live from london and new york, i am betty liu. mark: and i am mark barton, this is the european close. betty: now it is time for a look at some of the weakest business news. position inlarge
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drugmaker allergan. -- which was bought by what is now allergan. saudi arabia may sell as $15 million worth of bonds earning two people familiar with the matter. the saudi's have been encouraged by investor demand. it would be the first bond sale in inner -- in international capital markets. -- because that great news for craft, bad news for berkshire has beenraft heinz paying 9% on its preferred shares, that is an attractive return and a time when buffett is struggling to find some large investment. that is your bloomberg business flh for this hour. emerging-market shares
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showing signs of recovery from a slump, earlier in may. emerging-market stocks climbing to a three-week high, easing concerns. sees: our next guest opportunity in argentina, hungary and indonesia. markets debt,ging managing $8 billion in assets, good to see you this morning. earlier this year, everyone thought emerging markets, big buying opportunity, we are going in, and then people got crushed in certain markets. is that over with, are we at the bottom with emerging markets? >> anybody who took the view of buying emerging markets coming in 2016 has actually done ok. we did have a slump toward february and march, but commodity markets and mainly
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concerns about china, dissipated -- and given where valuations were spread beyond all currencies getting beat up pretty hard, last year, we had a pretty nice rebound in terms of returns when you think about where we are, year to date. local markets are up even higher and considering the slight correction we have seen this effects, this is still where investors have done well in 2016. betty: i would agree that it seems that the concerns about the fed rate hike are lessening for those in emerging markets. -- wee where it is mention some of the countries you see opportunity in. wine, and where else? we hade had -- >> countries across asia, europe,
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latin america and we have stories that sometimes will have overwhelming bottom-up drivers that certainly will overwhelm the drivers that come from world markets, but let me take the fed, think about where we are today, it is a different generation that in 2013 when we had a different story. we had an adjustment in currency, the fragile five back in 2013 and since only one of those five remains -- potentially fragile, the other for our stronger, not nearly as large a dependence on flows. in 2013, we were coming into a large environment of deposit, it has been net outflows in the past two years. violations are much more compelling than they were in 2013 and we go to the country specific environment, we can
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think about brazil, if you like resilient treasury rates, which we do, at 12 or 13 -- at 12%-13%, a hike by the fed is probably not going to be relevant for that investment thesis. if you like brazil from a fundamentally valuation perspective, you have a government with a pretty good shot at putting a stop to the iteration of fiscal accounts and argentina had an election result last year, huge upside in terms of governance gains, both economic and political that will play out over the course of the -- of the next couple of years. as much as argentina has done well, it remains one of the countries were you still have a significant outside. if you go to europe, there have been a lot of good stories over the last couple of years. forng growth, a story
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hungary begins to be part of the trade again. they have done a lot of the things right. mark: investing in these types of debt markets comes with political risk, that is just part of the -- oh, it looks like we lost him. apologies to that. i was about to ask in how do you politicalweigh up risk in countries like turkey and brazil? the gremlin to go over. opec: still ahead, ministers making their way to vienna for a highly anticipated meeting, the first one with the new saudi arabia minister.
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we are diving into what is on the agenda and what changes could be on the table global oil production. ♪
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betty: it feels like summer has arrived after memorial day weekend. we are almost going to hit 80 degrees here in new york city. mark: it is raining, wendy, indy,able -- w miserable here. this is the european close after a bank holiday on monday.
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a big week, opec leaders will meet in vienna on thursday after oil has surged over 85% since its 12 year low earlier this year. they're unlikely to reach any agreement, but according to analyst, the group is likely to stick with saudi arabia's strategy of squeezing out rivals. noticeopec leaders may more suvs on the streets of the and this time around. low gas prices are getting people to buy bigger cars all around the world. you know how we love our big cars in the u.s. currently they do in china and parts of europe. and the u.s., light trucks, as a share of total u.s. vehicles, now continuing to go higher and
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going back up a bit because gas prices are coming down. can see about a year ago when prices were rising up to higher levels, people were saying oh my goodness, hundred dollar oil or more. suv sales the client. mark: you are a gas guzzler, argue? betty: i have an suv, but it is a hybrid, i'm trying to do my part. mark: i drive a big box with four wheels to cram in the family. from ugly, but it gets you a to b. have a look at this chart, it shows the performance of the bloomberg dollar spot index and crude oil. toyou can see, they tend move inversely, but since may, they have been moving in the same direction. the spot index has risen for
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seven straight mays. it had its biggest monthly met -- gain since september 2014. the big question is, what is going to give, is it going to be the dollar or is it going to be oil? a lot of it may depend on the yet -- on the fed. betty: what are they going to do, and how that is going to affect the rest of us. mark: full coverage from vienna of opec's meeting starting right here on bloomberg television. the european close is next.
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mark: live from london and new
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york, you're watching the european clothes.
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finishing the tuesday session right now. let's take it through the market industry. everything fell today. technology.mer was the end ask was down by 9/10 of 1%. it was the longest winning run in over six week. the stoxx 600 rose for the third month. this month was the largest gain since november. vw had a day to forget. shares were down as much as 4.7%. the most since february. it highlights the issues the company still has to address to rebound from the emissions she needs scandal. -- cheating scandal. it was boosted by a special
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item. this company shares have declined by 17 percent since the omissions scandal broke. at one point they were down by 43%. it has rebounded from the worst. it is still trading lower from the september levels. the greek gaming company rose as much as 6%. it's 4% higher today. is the biggest screening company -- gaining company in greece. the chief executive said the first quarter was marked by pressure on it disposable income. the have had to weather revenue gaming tax to 35% this year. asia ventures called it satisfactory given the weak economic environment and the sharp increase. shares finished higher. let's finish off with the consumer price data out of the
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eurozone. for the fourth consecutive month, consumer prices year on year has a negative number attached to it or it it's not as bad as the previous month. it's -.1%. but the green line. inflation is still a far cry from the target of just below 2%. it hasn't been there since the beginning of 2013. three quarters of the economists we have surveyed expect more stimulus from the ecb, more stimulus from the ecb are in inflation is well below target. betty: even more money. we like talking about food. catchup, oscar mayer hot dogs. cream cheese.
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they were formed after they merged in july 2015. they are getting their ship in order. withof that has to do returning or redeeming the preferred shares that warren buffett invested in heinz a few years ago. he is going to be getting that $8 billion a back plus a little bit extra. that's good news for kraft heinz. it's working. they are cutting down costs. they are improving their profit margin and expanding. he has been getting a nice payout every year on that loan, 9% rate of return it. shares aren of those going to be redeemed pretty soon. it's another win for him with his investment in that company. let's take a look at the broader
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u.s. markets. we have a mixed session. the nasdaq is the one it gaining of this morning. abigail doolittle has more from a nasdaq. abigail: we do have a trading hider -- higher. the nasdaq is higher five days and awoke -- in a row. appleng are the shares of down for tenths of 1%. apple's product cycle for the iphone could expand three years. this is a drag on revenue. we will have to see. they have the apple suppliers trading modestly higher. we have broadcom up. sky work is up. in europe, the suppliers have been down. this is a story to keep an eye on. my chronic, the stock is up. it's the best winning streak
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since january 2013. they upgraded shares from neutral. they see improving gross margins in the second half and a 40% upside potential. the new price target is $18 per share on micron. this is a very bullish turn. it's interesting considering there is a down turn. it's a will is for two reasons. it is starting to reverse. the stock is moving above that trend line. that tells us that buyers are interested. it could climb back above the average. the last time this happened was in 2012. bullishuld be some action ahead. betty: thank you. abigail doolittle at the nasdaq. taylor riggs has more from the newsroom.
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taylor: they are looking at ways to have planes live stream more data. that would mean investigators would have to rely so much on the recovery black box recorders like the ones in the egyptair crash. jets do stream some data back to airlines. the german unemployment weight is the lowest since reunification. it is now 6.1%. unemployment for all of the eurozone held at 10.2% last month. see ificials meet to they have done enough to sustain an economic recovery. we can't step talking about brexit. supporters of the european union lead those who want to leave. the or be pulled for the daily telegraph says 51% want to stay in the eu, 46% want to plot. the referendum is june 23 grade
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is a dubious honor for london. they are the cocaine capital of europe. this was determined by analyzing wastewater. amsterdam finished in second place. it's the most widely used illegal stimulant in europe. global news 24 hours a day powered by our journalists at 150 news bureaus around the world. mark: thanks very much indeed. the countries gdp grew at 7.9% in the first quarter. the u.s. dollar has gained strength against the indian rupee. this is sparking fears of a sellout. -- selloff. about the by asking ruby, one of the worst performing currencies year to date. >> i don't think that would be a
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very accurate analysis. until august last year, it kept pace with the dollar itself. of instability in the chinese currency. we were also impacted. chance thatfter the we have had, we have been reasonably operating. the economy is strengthening. we are investment getting into the country itself, it has been reasonably large. we've been watching the situation. we have been maintaining the balance between reasonable continuing innd the current export environment. exactly doing
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extremely well. >> there is some confidence there as well. people have confidence in your government working together. how close is your relationship with him? will he be reappointed in september? said wee repeatedly importantded a very institution. we have very much dialogue. we continue to discuss all of these situations. we see what falls in our respective jurisdictions. i don't think they have any issues with each other. we have been working quite costly over the last two years.
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we implemented -- implemented some major reforms. commissionhe policy would come into effect. >> i wanted to talk about the monetary policy commission. to you condemn the people who have criticized him? willfullyaid he is trying to wreck the economy. are entitled to comment on issues. persons, comments from i completely disapprove it. >> do you condemn these comments. what about the status of the monetary policy committee. >> i am just asking about the committee now.
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the government will decide in due course. as far as the committee is concerned, we met last year. we had a provision. hopefully by the end of the year, the committee should start functioning. >> some members of your party have questioned the need for an inflation target. targetortant is the cpi for india's growth looking ahead? >> it is extremely important for us. we have a very large section of the population. we have a very average kind of resource. management is always
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important as far as india is concerned. i think full inflation is something that is extremely important for us. prices tollow food rise. targeting that inflation has been a part of the monetary policy. financeat is the indian minister. ahead, the industry has been rocked with scandal. banks have paid billions in fines. his or a silver lining to this that can bring some change to the industry? we will discuss this next. ♪
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mark: it's a grim day in london. betty gets the sun. this is london. i am mark barton. betty: this is the european close. you're always so funny, mark. concur,me might not betty. it's time for the bloomberg business flash. these are the biggest stories in the news. i'll -- airlines have a problem as they gather for their meeting. there is a slowdown in demand as carriers try to exploit lower fuel prices. that globalports passenger traffic grew last month the slowest place since 2015. deutsche bank says by the end of
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the year they will be two thirds done with restructuring. good.sults may not be he spoke at a conference in new york and -- new york. it's going to take quite a long time before you see the fruits. will not be a year in which we make a big contribution to the capital of the bank. we may not make a profit this year. he also made progress with the german workers council on headcount reductions. they are close to agreement. in europe, opec is lowering -- learning opec into buying gas guzzlers. other kindld every of vehicle in europe the first time. the trend continues this year
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without fusing -- suv's county for a quarter of the sales in the biggest european countries. that is the latest bloomberg business flash. currency trading is fiercely competitive. it is dominated by men. women are starting to make some inroads. the fallout of a price rigging scandal led to $9 billion in fines. joining us is lucy. why are women attracted to it industry that is dominated why men and plagued by scandal? lucy: they are attracted to it for the same reason men are. it's exciting and you can make good money. it's an interesting place to be. i found it fascinating.
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why are they now getting to where they are? that is some of the biggest banks. that's not something we have seen before. betty: why is that happening now? lucy: we've been learning a lot about how practices have been. people are trying to clean up their act somewhat. they are more cautious. that could be part of the reason. it could just be there time. it's a very interesting replacement he made. women are moving up. mark: is this something that is an fx story. lucy: it has had such a bad reputation in recent years. we saw the rigging. we saw the three musketeers. they came across as a boys club. there were a lot of lawsuits as well.
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it is now their time to make that difference. see it across the industry. when you look at the numbers, the highest-paid people in finance, it only two of them are female. there is a long way to go across the industry. thing -- one question i have, i get how it could create an environment where you would see some of these scandalous actions taking place. does it mean that if you add women into the mix that the scandals are less likely to take place? lucy: that's a really interesting question. women are equally as likely to be criminal or misguided. ironically can claim that because women are going to be perfect. it's an interesting trend. mark: thank you for joining us.
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it's the battle of the charts. danny berger joins us. ♪
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betty: i have missed this. it's the global battle of the charts. what they mean for investors, you can access all of these charts on the bloomberg. as mark was mentioning, kicking things off with him today is danny berger. danny: this is the economic surprise index. it tracks economic releases versus what investors are
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expecting. this means they are surprising to the upside. been,ow much there has better data than what analysts are expecting this year. look at this past month. we have housing numbers, inflation, we've got that strong computer spending. -- consumer spending. this is the highest it's that in 16 months. we are evaluating what the fed is going to do. goodn said if data looks enough, they would raise rates. they are getting surprised on how good economic data is. surprisedhould not be if the that increases rates in june. all signs the to be pointing in that direction. mark: i am so predictable. what am i going to do? betty: you've already lost. mark: then i am off.
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see later. i'm going to get this back. what is the best performance asset class in may? i have scoured the bloomberg. i looked at all the asset classes. number four is the dollar against 16 of its peers. the pound is the best performing currency. it is still down by one half of 1%. every single major currency has followed against the dollar in may. the best performer out of the 153 we track is the take a stand currency. and at number three is greek bonds. agree to give greece
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this $10.3 billion payment. funds have returned 9.2%. fascinatingly, out of the equity theets, top of the board is aspen stock exchange index. the worst performer out of all of those we cover is brazil. it's down by 9% area top of the pile when it comes to asset performers orange juice futures. who would've guessed it? it's up by 16.1%. if you need a bit of flavor in on victory.ome betty: with a side of orange juice. i am going to hand it to danny. she is giving us a little bit of an indicator of what might
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happen with the fed. looking forward versus looking back, i am sorry. are going to have to do it again tomorrow. mark: tomorrow i will look forward. well done. how about a look at what's happening to european equity markets. after five days of gains, stocks fell. that was the biggest winning run in six weeks. stocks rose for the third consecutive month. there is the 600. sectors, performing there were no rising sectors. all of them were falling on that vw earnings. bloomberg markets continues. ♪
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scarlet: welcome to bloomberg markets.
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from world headquarters in new york, good afternoon. this is what we are watching. endks are on track to higher with the s&p 500 near a six-month high. economic data could support the case for higher interest rates. icahn decides to throw his weight behind allegan. have they demonstrated enough evidence of a sustained turnaround? politics are front and center again. speaking about donations. why he is raising -- falling behind raising money for his campaign. we are through the trading day. let's get a check of the markets


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