tv Bloomberg Markets European Close Bloomberg June 9, 2016 11:00am-12:01pm EDT
atching the "bloomberg markets: european close." we are beginning do take you from new york to london to brussels in the next time. here are some of the stories out of europe today. what's the game plan for currency traders. >> european union policy makers are gathering at the brussel economic. program gets under way. we'll bring you the highlights. >> trying to get a foothold in the competitive grocery mark here in the u.k. >> it's 19 minutes in the trading day in the u.s.
>> lot has been accelerating. i'm just noticing the volume is lower today. that's 7.5% below the 20 day average for the s&p s&p 500. all three major averages down around a third of one percent. s it the banks to continue to lead decline. when you have these stocks decline and decline by relatively high magnitude here you have a being drag. wells fargo, j.p. morgan, bank of america. lot of concern out of year europe about the stimulus effort. that have put pressure on the bank. we're watching commodities today. oils is pulling back. natural gas in the meantime is higher after the latest weekly storage data out of the united states. came in with a smaller gain. smaller build in that storage than had been estimated. that implies that might be
decrease in reduction. we're seed feed through some utility companies as well and conversely banks tend to do better when yields fall. that's another benefit. ameren consolidated and southern company are all trading higher. utility is one of the groups bucking the down trend. airline are higher today. that's after american airlines reiterated its forecast for passenger revenue per available seat. it is lieding some -- leading some of the gains. >> june has seen all rise. today we're seeing a diver earnings. on the left hand side you're see european equities falling. bond deals are falling. bond beneficiaries of this quality. commodity lowest today. all assets groups have been rising up until today. that's been an interesting trend.
some of the individual stuff i want to tell you about today. remy fell today. it wouldn't give specific sales forecast for the next fiscal year. citing volatility. remy is confident in focusing on spirits. priced $50 or more per bottle. the guidance was vague. these are the big drinks makers spirit drinks makers in europe in 2016. remy best performer this year. the biggest decline by company is -- it's a u.k. company. it manufactures things from tooth paste to packaging.
it's unlikely to chove financial results -- achieve financial result it predicted in february. these are the big players in the global mining sector since january 20th. angelomerican, wha a return. 201% higher. >> unbelievable lot of focus on gold miners. >> starting with politics bernie sanders has meeting at the white house. the democratic presidential candidate is scheduled to meet with president obama at this hour. you'll see their live photos of
the entrance where bernie sanders is set to meet with the president. of course he has come under pressure to drop out since hillary clinton became the presumptive nominee this week. he requested the meeting. likely democratic presidential candidate hillary clinton is mobilizing major fundraisers for the general election. they've been asked to what they raised for primary. the clinton campaign wants to raise $1.1 billion by the november election. on capitol hill, the house and senate will try to resolve their differences overpaying kuwait funding to fight-- fight zika virus.the house approved half that amount. john cornyn predicts the measure will be passed by the end of next week. in iraq today two suicide bombs killed at least 21 people and wounded dozens. the deadliest attack took place
in baghdad. a bomb exploded in a commercial area of a shi'ite neighborhood. other suicide bombers struck north of the iraqi capital. in peru all of the votes have been counted. 99.99%. pedro band low is inching close -- pedro pablo is inching closer. the winner will be announced this weekend. they are seen as market friendly friendly. global news 24 hours a day powered by 2400 journalist. around world i'm taylor rigs. >> traders are bracing the chaos some electronic platforms sales during the storm of volatility. traders are ready to trade over the phone to make sure that expensive rush of trade will be
filled. >> volatility and pound exchange rates soared. increasing are nervousness. for more on other currencies bring in daniel katzive. we began on the pound currency weakness? would it take an exit or will it take a remain. >> will you see volatility no matter what. mark mentioned the shock we had over a year and a half ago. difference here, this is an event that markets has been preparing for. it's not something you wake up and find out about not having inclination it was going to show up. market position accordingly, people know it's coming. >> longer term would it be -- curbty weakness for the british pound. is leave the european union or
stays. >> it's not as short as we had a few week ago before the polls first started to move against exit. the sharp position covered quite a bit. markets still short. we may not see as much weakness as some people expect on an exit vote. it's going to be a volatile time. >> we got a chart that shows historical voltity for a host of currencies not just the pound. it shows the euro, the brazilian and iran. you can see, recent volatility is is pretty similar to recent volatility. does that tell us that traders unprepared for the worst relate.
reality. >> they don't think it's necessarily a major event for the u.s. economy or the global financial markets. it's something that affecting sterling and u.k. market. >> do you agree with that? surely the euro, the u.k.'s big trading partner might be affected. some saying we'll see a flight to frank, the japanese yen. which are the currency can be on the downside. >> it it does turn out to be an event, which disturbed global financial market, you will see them do better. because they're backed by current account surpluses. what you have to remember aftermath of whatever happens, the outcome is going to play out over a extended period of time. it's not necessarily something that has next day implications for global market. i think that maybe why you're
seeing this disparity in how the markets. >> generally it's been a little wavy. you're calling for higher euro versus the dollar. why would the euro get the benefit? >> we think the dollar is quite vulnerable after the data last week it takes the fitted out of -- fed out of the equation. you will see the dollar lose ground versus surplus backing. unless there's forces moving against that. on the japanese yen, the bank of japan will push back. ecb, we had a meeting with them two weeks ago. they sent a message that they're watching and then to evaluate how the latest measures play out before they do anything new. that leaves euro dollar with
more scope to move on the upside. >> targeting 116. >> we think 116 over the next few weeks is doable. >> what about emsx. since january, we've seen a big rebound. run out of steam about the end of may. since the beginning of june we've seen upward move in the emerging market currency because of that weak jobs report. what next? we've seen the best of the gain? >> it's interesting observation it's commodity in the exports and canadian dollar and australian dollar done better. we think there's scope for that to reverse. the market taken the message, the number was sort soft and that means the feds on hold. it will draw people into putting on a risky trade. the data really -- if the data really reflects where the u.s. economy is now and job creation
is 70k, markets will move towards the worst outcome. risk of recession rising. which owled not be -- which would not be good. if the data gets better, what we saw last week, then the fed is back in the picture pretty quickly. we're not really buying that big risk on reaction to the data. >> daniel, you have to come back very san. >> definitely, thank you. >> daniel katzive director of fx strategy. there's just about 18 minutes left until the european close. much more ahead on "bloomberg markets." we'll dive into the fiscal policy debate live from brussels. >> there are many in political region to delay structural
>> an event outside of the white house right there today. president obama is meeting with bernie sanders this morning. the two are set to meet. we also be continuing to monitor bernie sanders will be holding a rally tonight in washington d.c. also meeting with capitol hill leaders. there you have it. live pictures of the white house. european commission vice president says he sees greece returning to growth.
he made the case to bloomberg tv matt miller. have a listen. >> economically, speaking, we can see economy is continuing to recover. what needs to be done to strengthen the recovery. there are a number of factors and challenges they are facing. it's much more volatile from economic and also political if u.k. stays in the eu. more southern and eastern neighborhoods, it's quite a challenge. >> everyone clearly hoping that britain stays in the eu at least here in brussels. it looks like from a polls there's a one in four or almost one in three chance that they
exit. don't have you have to be a contingency plan? don't you have to be ready for that possibility? >> of course there's an assessment. as a conclusions are clear. now, choice is with the british people. we hope for a policy result and will continue to work with the u.k. within the eu. and to implement agreement. also to allow prime minster to stay in. >> what do you expect to do if they leave? are you worried about a contagion. how will you address the other countries that are on the brink? >> we know what happens in that scenario is that you'll start negotiations which take sort of years on proper exit. nothing like changes from day one to day two.
time for preparations. >> eu commissioner valdis dombrovskis earlier today. joining us now is matt miller. what were some of the highlights from the forum? >> well, it has been really an amazing day. for me, as a new yorker, who's been watching this dramatic historic drama unfold, getting to come here to inner workings has been amazing. i got to watch mario speak for an hour. he's been asking for policymakers to give him fiscal help. he did say, he can control inflation with monetary stimulus. it would be quicker if he would get some cooperation from the governments of the european union. that was very interesting to hear. it was also interesting to hear all of the commissioners talking about how they would deal with the countries that aren't doing
reforms quickly enough. the president of the european commission, has said, they doesn't feel in the past that he can push france hard enough. it's very difficult politically. on the oater other hand, they are demanding structural reforms of greece and withholding bail out money. i heard from a lot of people they are closer to completing that bailout. and it will be done by the middle of next week. it's been an amazing day. there's a lot going on and lot still to come from this economic forum. it only happens once a year in brussels. you should have been here. >> that interview you did with commissioner dombrovskis i'm sure will please david cameron the u.k. prime minster. he wanted to reassure the known euro members of the eu, even though they're going if push the euro members together.
he doesn't want to alienate the noneuro members of the eu. >> absolutely. i talked to pierre european commission responsible for finance. he was saying, there are certain members of the european union that use the common currency. there are certain numbers that don't. they do not want to push the britains in that direction. it doesn't mean when you hear for example mario draghi complete that. there's been interesting day. you talked to important people that are running this great experiment, mark. >> matt, great to see you. matt miller in brussels. >> we're continuing to monitor an event out of the white house today. bernie sanders has arrived to meet with president obama.
>> from london and new york. >> i'm mark mark barton. amazon jumping into one of the world east competitive grocery markets. amazon fresh foods delivery service will be available in central and eastern times. joining a very crowded market. it's the first time the service is being offered outside the u.s. why would anyone want to join this cut throat grocery market?
>> lot of people are asking that question. for amazon this is about trying to draw more people into amazon prime. i spoke to them yesterday they were -- if they can fix it here, why not anywhere else. >> after a little while, those members would have to pay extra, about $10 to enjoy delivery within four hours. how does this stack up against competitors? >> pricing model is different. amazon need the prime membership for a start. the fresh delivery pass. that gets you free grocery
deliveries if they've over 40 pounds. if they're less you have to pay another four pounds. it prices up the groceries. they pitched their offering just below the cheapest player currently in the market. it does deliveries if they've over 40 pounds. if they're less you have to pay another four make exact comparison quite difficult. >> let's be blunt. this hasn't gained a lot of traction in the united states. it's the dream to roll it out everywhere. >> amazon they haven't got exact plans for the countries they want to go into. this is in retail. they want toe try to own as much retail as possible. groceries make up a huge part of that. it's a natural move for them. >> is it natural they're losing money? >> they certainly can. they take a very long term view on things. that attitude is a problem for their competitors. the likes of wal-mart, they really struggle to make money in this business. >> they got the likes of little to compete with. they had a partnership with morrison. >> only u.k. grocery who got a small amount in this development. they are going to be supplying a
lot of the fresh groceries for the amazon service. >> sam great to see you. specifically in london, bloomberg, sam chambers. 4:45. take a look where european markets are hoodie -- heading. stocks are falling. right across the board. falling for a second consecutive day. every industry group is falling. real estate, energy is basic resort telecom. "european close" is next.
decline. down by 1% today. the lowest evaluation relative to global shares. this index, the europe stock 600 since january 2016. that's a knockout stat. many doubting the ability of the ecb to stir economic growth. one stat stands out. the s&p 500 very close with all time record high. the stocks europe 600. 17% record below of april of last year. real concern about earnings. let's have a look at some of the big moving industry groups. starting the u.k. banks. we had a very interesting note. britain's biggest bank, which is down 28% on average over the last 12 months has even further to fall. that's u.k. vote to leave the eu. why they say they haven't priced it in. that's why they're worried about the likes of barclays hsbc.
this is the 350 banks index in the last 12 months. shares risen by 14% since falling to a 70 or low on february 11th. last piece of trade data before the u.k. referendum in two weeks was released today. what a bit of surprise it pulled out the bag. exports surged in april to the highest level in almost three years. britain shipped more to countries both inside and outside the eu. 9.1% increase left a trade deficit. little changed 10.5 billion pounds. you'll see all the figures minus and b minus since 2011. way before britain tends to import more than it's exporting. wonderful chart today, 1st quarter earning season coming to a close here in europe.
a number of analyst raising their profit estimates has increased or has exceeded those lowering them for the first time since the end of may 2015. that was just after mario draghi started buying program and skyrocketing and buy to sell ratio. upgrade ratio. back then rose to the highest levels last career in four years. however, this is the other side of the coin. earnings estimates to 600 members. lowest since 2012. this charge -- this chart tells two different story. which one is right? >> i'm keeping an eye on. starting with dollar yen. indicators really. we have the dollar yen 10649.
it's relative value trade. not helping the bank of japan. we have the bank of korea cutting interest rates overnight. that had an impact. you heard him talking about volatility which will be on the rise. we're seeing increasing in there vix index. this ten year yield it a big find. treasuries are over. lindsey book says, that's hugely important level of 1.6% is what we should be watching. two cent spread narrowing just holding on above 98 points. down today, s&p 500 down more than .4%. the dow is back well below 18000. at least for now in the session and nasdaq is down .4%.
bloomberg has more life from the nasdaq. >> as you mentioned, we do have a nasdaq down .4 of one percent. microsoft shares are down more than half percent. falling three days in a row. today is the international data corp. said they see the 2016 global pc shipment being worse. they've cut it. they see a drop of 7.3%. they're saying stability remains elusive in this market. microsoft, of course, is working to move towards the cloud. we take a look at two year chart. investors are pretty positive. the stocks traded higher. last volatility that could reflect uncertainty about the drag of legacy products. as for the stock now, moving average is a line in the sand. stock manages to hold that support suggesting that the longer term buyers are really staying in place. it could be bullish for the
stock. it's below the last two times the stock fallen more than 10% in the near to median terms. we'll have to keep close eye here on the shares of microsoft. >> analyst -- anything we should be concerned about? >> we have one analyst making upgrade and a downgrade. it's starting off with the positive. we have citigroup upgrading on that trip to asia, he's becoming more bearish on sky -- he believes that the evaluation now is probably a bit too high. especially considering a lack of premium products. he sees modest up stock of shares. bloomberg news. >> france is ramping up security
for tomorrow's start of the euro 2016 football tournament. thousands of police are on duty. they staged more than two dozen drills across france. the french interior minister said there's no guarantee there won't be a confrontation with terrorists. the tournament will draw about 2.5 million spectators. two political foes join forces in northern ireland to speak against brexit. former british prime minster warned that leaving the european union can threaten peace in northern ireland. brexit will throw all the pieces of the constitutional jigsaw into the air. german industries putting the pressure on chancellor angela merckle to ease her stance on russia. progress on a peace plan for eastern ukraine is enough. eu said sanctions won't be
below zero. at the same time i would not characterize it as a bubble. that is real driver. natural backdrop that it really underlying this is the fact that there's no growth. no inflation. bond prices reflect that in part just being pushed further along by what the central banks are doing. >> bond prices are reflected in that. couple of days into the ecb
corporate bond buying program. i think we got a chart showing the average yield going to bank of america, merrill lynch index. is it the yield too little for you? >> yes, it's a treacherous space. ecb, embarked on this journey yesterday. there wasn't a tremendous amount of activity. the markets haven't behaved all that well as a result. not not sure it's related. you haven't seen price action globally perform the way many thought it would. there's real skepticism. it's unclear real effect it has on the marketplace and overall economy. investors have seen this movie time and time again and there's a lot of skepticism around it. the prime example is japan. the boj has continued to push
the envelope in terms of purchasing different products. that hasn't done much for the broader economy. >> is it giving you any opportunities and the sense that the ecb can buy bank bonds? it can buy the lowest grade bombs. is that programs presenting you with opportunities in europe? >> we're not staying away. there's a lot of opportunities. there's more opportunities i've seen in sompanies issuing in europe. we see real opportunities there. i really see opportunities. to me it's the opportunity is not in what the ecb is buying. but what they're not buying. you mentioned bank paper for sure, i agree with that. i think the real opportunity is in crossover bonds and high yield bonds. the product they're not buying
directly. if you believe the premise that the ecb is trying to force you out the portfolio channel and risky assets that's the investment that you want to have. >> are you staying away from sovereigns completely? >> we continue to play the prefers -- peripheral. as far as the negative yielding assets that's an area we are staying away from. we see more opportunities in the spread markets than we do the sovereign markets. i think that's something that will continue. the ecb bond buying program just accelerates that to a certain degree. at the end of the day, wie see opportunities in spread markets and corporate markets. >> how does u.k. see ahead of the referendum and might the opportunities arrive whether the u.k. votes -- to remain or leave? >> it's unknowable. it's hard to protect yourself
from the portfolio standpoint. it has slowed down trading activity. it probably slowed down economic activity. what's happening here the brexit vote is really endemic what's happening all over the globe. you're seeing in the u.s. around the election, you're seeing in france. you're seeing it in austria. you're seeing it across the globe. the population went large is quite dissatisfied. it's manifesting itself through politics. i think brexit is one example. once we get past brexit, we're on to the u.s. political scene. then we'll keep moving. the backdrop environment that we're in is a volatile backdrop. >> greg peters senior investment officer. got breaking news on bernie sanders. >> just moments ago, president obama and the senator walking into the oval office for a meeting. those are the pictures. some are calling for sanders to drop out of the democratic
presidential race. it's unclear if sanders will make any comments before leaving. he's got a meeting with senator harry reid later on. that's scheduled for 2:00 p.m. later on, they hold a rally in washington d.c. both those men behind closed doors right now speaking. we'll bring you all of the latest live from the steps of the white house. you're watching "bloomberg markets."
disney is ventureing into china and with us now on that and on many other matters is bob eiger. we will listen to sound from bob eiger. the big question is can china become disney's major market. the companies opening in shanghai shanghai disney land. disney is going to start making disney-branded films in china. at least one headed to production over the next year. disney chief executive bob eiger spoke with tom mckinzy in shanghai. >> we have a lot of activity in china. >> are you able to tell us which patterns you'll be looking at in china? >> you know, i'm not able to -- only because i'm not 100%
certain what we've said publicly. we're very far along on this process including developing ideas, concepts for films and identifying talent all ready to actually make those films. >> can you give us a bit more clarity on the time line? >> shortly. >> within a year? >> we won't have a movie released juan year. with you within a year we'll have a movie in production. >> joining us now is paul sweeney of bloomberg intelligence who will be heading to shanghai to take a tour of the new park. >> i've not seen work craft. it's not expected to do well here in the theaters here in the united states. huge run in china. they had a great opening night a couple of nights ago. china is going be a huge market. >> if we can extrapolate that means that disney got china?
>> i think they're making a huge investment there. over $5 million invested in that marketplace. they are making a major long term investment on mainland of china. they have hong kong disney. the park in shanghai bob iger said in the past. major bet for bob and the company. >> paul, what's the competition like? we were that. juan jan lin seems to be the competition for disney. >> interesting, disney clearly is going -- they first to market with a major investment. comcast is with their universal park. disney will be there first. there are local players there and the wanda corporation
announced they will build up to 20 parks around the country. those will be smaller parks. they're going to be closer to various population centers around the entire country. there's a lot of investment going into the theme park business in china. if you walt disney want, you want to get into china. it's very difficult to get your movies into china because of the -- they have certain limits on foreign production allowed in the country. the theme park business is disney's first step in the country. >> paul sweeney thank you. >> time for the latest bloomberg business flash. look at some of the biggest business stories in the news. lockheed martin is one of $3 million order to fighter jets from denmark. agree to buy 27f35. the planes are replace old
f16's. the planes have been flying since the 1980's. big energy project will cost german utilities more than twice as much as expected. they are estimated they'll spend more than $11 billion to link wind turbine in the north with the biggest industrials in the south. the main power cable needs to be buried underground. silicon valley, don't waste your time trying to buy spotify. the chief executive of the swedish music streaming company says he'll never sell out to needs to be a big u.s. tech company. european companies do sell themselves a holding back the region technology sector. that is the latest bloomberg business news. it's bocc. battle of the charge. as we approachth flows.
>> it's time now for global battle of the charts. we took a look at some of the telling charts of today. had two people invited to come tell us about them. what they mean for investors. you can access these charts on screen. we have dani burger and mark barton. >> we are looking at the most aggressive traders are doing with their money as the s&p 500 marchs towards all time highs. to keep that in context, i put a nice s&p 500 lane graph at the bottom. top panel, these are two ets. which tracks traders who are convinced. top one here. this is the total asset for ets
which swings three times as much as s&p. if you're bullish you will put your money in this one. if you're bearish this is the inverse. three time the what the s&p 500 is doing. you can see that throughout the past year the bullish etf has total asset has been above that of the bearish. look what happened over the past two months. there's inverse here. this is the first time these item have flipped in terms of which one has more total assets since 2013. the bears are win out here. i think this is really telling not online is that the bears these are people with extreme bearish view. they will convince put their money in etf which swings three times as much. >> i like it. it speaks to etf flows. >> you can find this one --
>> that is dani burger. mark you're expert at chart. >> two weeks to go until the u.k. referendum. we have not asked one question, how u.k. stocks faired since the u.k. joined theeu. we're not going to be into 1973 when the u.k. went into thee going to this date. november 1, 1993 in that was when the u -- eu under its under guise came into effort. the footsy 100 is up by 100%. not bad. it's lacked lot of body spared to spain. the stocks 600. top of the charge, germany which is up by 180%.
will they use this as reason to leave the eu. u.k. stocks under performing since joining the eu. >> master treaty. mark, you really pull things out the bag. i'm afraid i'm going to congratulate dani burger today. she's standing right here behind me. we're continuing to monitor president obama and senator bernie sanders. they're meeting at the white housely. still inside. sam some are calling for standers to drop out. we'll continue with that slide.
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>> from bloomberg world headquarters in new york. good afternoon i'm scarlet fu. >> stocks ending weekly today. equities running too far. safety trades are pushing treasury yield. >> same happening in commodities. crude oil dropped for the first time in four days. >> billionaire investor george returned to investing. half way through the u.s. trading day. we want to get a snapshot. looks like if you're starting with stocks, equity indexes are