tv Bloomberg Markets Bloomberg June 15, 2016 10:00am-11:01am EDT
mark: and from london, i am mark barton. this is bloomberg markets on bloomberg television. vonnie: we are going to take you from new york to washington to london. stocks are rebounding ahead of today's fed decision with markets factoring no chance of a rate hike today. he will tell you what clues to look for in the statement. when the polls are saying yes, the markets are saying no. you will have a roundtable on the case for a u.k. exit from that is entering the final stretch with eight days to go. a new bloomberg poll shows hillary clinton opening up a double-digit national lead over donald trump. those polls echoed one of the mainstream -- "never trump."
minutes into the trading day. let's head straight to the markets desk where shery ahn has the latest. >> we are seeing u.s. stocks finally add offensive and gains auto after declining for consecutive days. and they are now emerging from a three-week low. up .3%.500 is the nasdaq is also gaining. so we have seen the s&p 500 slump. we have seen the longest losing streak since february. we are out of that. take a look at the imap function on the bloomberg and you can see what sectors are gaining financially. that is after declining fourth quarter was consecutive days. pricing in a 0% chance of a move when the fed comes out after the meeting. but they are pricing in a 16%
chance of a rate hike in july. let's take a look at energy movers. oil is now falling for a fifth consecutive day. exxon mobil is down .2%. chevron is down .7%. let's take a look at oil. the fifth day of declines. this is the longest run of declines since february. we had american petroleum reporting that inventory rose 1.2 million barrels last week. in 30 minutes we will get data from the energy information administration. we are expecting them to report that the image or a has declined more than 2 million barrels last week. so this will be quite an interesting thing to see in half an hour. let's take a look at what other metals are doing. copper just saw the best day rising theber 18, most in three month. take a look at futures. up 2.9%.
old futures are unchanged at the moment after gaining for five consecutive days and trading near a five-week high. -- they haveocks just led a rally. so where seeing a mining rally across the world. mark: stocks are rising for the thet day as investors weigh outcome of the latest federal reserve meeting. every single industry group is trading higher today. the last five days saw 7% of value disappear. yesterday, we felt to be low with level since february 24. today, as shown by europe's fear index, the stocks index is falling for the first day since it shot up by 64% in the last five trading days. the highest level since august the china devaluing all of
highs since 2011. the markets are feeling less stressed today. movers.e of the against this is a spanish company. you know it's change. -- you know it as zahra. revenue is rising 15% for the first week in the second quarter. this is incredible. this is the amount of stores it has in 19 countries. what it is doing is scaling back and pushing further into internet shopping. in the last 12 months, shares have been down by 3.4%. h&m, shares down by 30%. the stoxx 600 is 20% lower. h&m said may total sales rose 9%. that sales rose by 11%
and chairs are rising today. big news today is that an m&a deal has fallen apart. had proved to be short-lived. the two companies ended negotiations two days after going public. they sought to resurrect talks earlier. the integration costs would be too high. those concerns remain. 2%.eider is up that is the big story. we are waiting for the fed. we have a said special here. let's check in on the bloomberg first word news. >> french police have been warned that extremists from syria may seek attacks in france and belgium. the warning came less than two days after a man claiming allegiance to the islamic state killed to french police officials. officials say they have no information about specific targets.
and a demonstration end up injuring at least 26 people. were rocked when police responded with tear gas. this is part of new labor reforms. is sending a it clear message to russia by increasing the number of troops in eastern europe. multinational force will be deployed in poland. they all border russia. nato is trying to allay fears in the former soviet countries of an attack. u.s., hillary clinton opened up a double-digit lead over donald trump in the race for the white house. a new bloomberg politics national poll shows clinton leading trump 49% over 37% among likely voters. and 55% of those surveyed say they will never vote or trump. donald trump has an edge when it comes to fighting terrorism.
boaters say he would do a better job. and sticking with politics. president obama at the republican house leader find themselves on the same side of an issue. in the wake of the orlando shooting. both are calling donald trump's muslimsut preventing from coming to the u.s. -- ryan says he is still backing donald trump even though they don't agree on everything. global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. vonnie: thank you. the federal reserve is set to announce a monetary policy for june today. investors don't expect a rate hike this week. janet yellen's news conference -- on the timing of the future increases. our next guest says the bar is too high for a hike.
costerg joins us now. so would you say that the nsp that we just got a few days ago, that it gave janet yellen a free pass or it is indicative of the economy weakening? thomas: i think there were signals into report that showed the economy is weakening. working hours are down. temporary jobs are also down. and i think that cycle is slowing down. it will be very difficult for the fed to raise rates. that theomeone said fed needs to increase which is why we are seeing that with the economy. some people are saying that by december we need to cut again? thomas: the fed is very sensitive to economy growth. we have seen that in the past. i think the cycle will slow down. i think that we will decrease by december and i think the fed
will have to cut rates by then. there is a risk that the fed could increase rates by july if dataeven is strong. but in my view, that would be symbolic. mark: so you are saying december but let's discuss. on expectedpullback rate hikes in 2017 and 2018? will it alter the longer projection? sure.: i think there are two main messages. there is a hawkish message about the short term. i think they probably still see to rate hikes for 2016. so the median may stay with two rate hikes. but i'm more interested in the long-term terminal rates, which i think might go down. i think the fed is like peeling
an onion. and the are peeling it rate is going down and down. i think that is key. because it seems that be fed is losing faith in the rate hike cycle. mark: what about inflation expectations? check out this chart. i think this is a really important chart. it shows long-term inflation expectations for u.s. consumers. they have pushed down to two point 3%. that is the lowest in records going back to 1979. is it time for the fed to revisit the view on inflation expectations? well, the thing with inflation expectations is that it isn't clear what they are looking at. if youill say is that look at the five-year rate, it in december than when they started raising rates. so i think that is a single that
-- a signal we should pay attention to. and the yield curve is flash right now. german we just saw the going to a negative yield rate again. that is pulling down rates. is that pulling down the u.s.? megan: -- ,homas: there is global demand especially as europe and japan go into negative territory. , in the u.s.,ime inflation remains up. is rejuvenating the premium for the u.s. treasury. so i think u.s. treasury yields will stay low. and they may go down even further. mark: there is probably some relief in the fed that the jobs june off theken table, to the extent that they don't have to worry about that u.k. referendum. exitlet's say that break
does occur, does that take july off the table? i think it would be quite difficult to see a july rate hike with a brexit vote. because there could be some market disruptions with the vote. and we know that the fed is very sensitive to that. we will watch the dollar. that is something that the fed has been sensitive to in the past. and i think they will remain sensitive to that in the coming week. but youave u.s. data need market conditions. these will be key. i think there is a chance of a july rate hike but he would really need to see a strong pickup in payroll and consumer spending. i think the data bar is too high. mark: great to see you, thomas
biggest business stories in the news. -- it would be better if the you k stays in the union. the ceo wrote that staying in the eu is best for workers, customers and suppliers. and it could affect decisions on where to invest. group he came the world's largest mutual fund manager by offering low-cost investments and now it wants to cut fees even further. they want to increase market share and boost investor returns at a time when returns are low. then guard says -- then guard compares to an industry mean of one dollar. investors are spending -- sound cloud. the investment is part of a larger financing round expected to amount to $100 million. that would value sound cloud at $700 million.
twitter has invested in startups like mobile marketing platforms. that is your bloomberg business flash. let's go to the markets desk where shery ahn has the latest. taking a look at natural resource stocks. they have let the rebound in europe and it is carrying over to the u.s.. that comes on signs that china may be willing to build more of their base metal stockpiles. they are the largest consumer of these metals and they could be trying to seek a supply and demand allen's. alcoa risinging almost 3%, that is after falling for four consecutive days. take a look at nucor, they are also up. we also have learned that the basal industries, we are talking
about chemical companies here, up 1.5%. westlake chemical is also up 1.5%. and we are hearing they were upgraded to a buy from a neutral by suntrust because they think the company markets those products at an opportune time. also, take a look at agrochemical stocks. let's start with monsanto. they are up. we are seeing the ubs group saying that i dream has reiterated a buy rating there with a $102 price target. ubs is calling a bottom for fertilizer markets. mark: thank you. right, 3:18 in london. in new york. hillary clinton leads donald trump by 12 points.
mark: you are watching "bloomberg markets." i am mark barton. vonnie: the latest bloomberg politic poll is out. hillary clinton has a 12 point edge over donald trump. she is leading 49% over 37% among likely voters. let's get more on the results from megan murphy who joins me in the new york studio. clarify when this poll was done? before orlando? were in the field before orlando but we stayed in the field after orlando happened. vonnie: how did that impact? that: what you can see is
people's confidence -- it was interesting. and youapproval rating can see people concerned about the future of the country. that is always going to be something that cuts to the core of what people are concerned about. poll, there ishe so much good stuff in there. you would have to say that hillary clinton is coming away from this poll a happier person. a muchthis poll shows wider margin between donald trump and hillary clinton than other polls at this time. other polls were showing them within a 3-5 points. what you see in this poll is the impact of trump's messy couple of weeks that he has had very at starting with the controversial comments about the hispanic heritage of the judge involved in a lawsuit with him and also , peopleonses to orlando are seeming to be feeling less comfortable with the bombastic rhetoric he has become known for. and people are also seeing that
itlary clinton supporters -- is a real positive for her. she has struggled with the bernie sanders juggernaut to get here. and this is going to be a really important development in this race. mark: trump is viewed as stronger among voters in combating terroristic threats at home and abroad. that matters, doesn't it? it has more people are saying that terrorism is the most important issue. megan: he has a narrow margin and he has always had that margin but you have to counterbalance that. the majority of voters say they would never vote for him. 60% of women say they would never vote for him. you will not going to win a general election if 60% of female voters won't vote for you. vonnie: before bernie sanders was no longer a contestant, he matched up better with donald trump.
hillary clinton's unfavorables? whon: in terms of people would never vote for her, it is 43 -- that is still high. unprecedented levels of high unfavorable it a. it is athe time when snapshot. we have a long way to go. we always expected her to become -- to get a bump when she became the nominee. larger margin than people expected. some people think the margin will continue to widen. it'll come down to whether donald trump changes his game. atk: should we look too much national trends? is it better to look at the 12 battleground states? megan: national polls are a difficult reflection because the -- it isll decide
really about demographics and turning out core voters and who you win over in the state. it still comes down to ohio, florida, the same states as we see every year. but forming a narrative that hillary clinton is so much more dominate and him will help her to raise money and with the ground game. so they are important although not necessarily a measure of where we will be in november. vonnie: the libertarian candidate was in this poll and got 9%. what do we read into that? megan: it is interesting. libertarian to do better this election. that sentiment is actually closely aligned with some elements of the sanders cap and the trump camp. of whatt intersection can and can't happen. so that will be a fascinating dynamic to watch. vonnie: all right.
in new york. mark: i am jealous in london. you are watching "bloomberg markets." we are seconds away from a weekly report on oil inventory. shery ahn has the latest. we are waiting for data from the department of energy right now, showing the weekly inventory data. americanta from the petroleum institute yesterday showing barrels rose 1.2 million barrels last week. but now we are seeing from the department energy that the u.s. crude oil inventories declined more than 900,000 last week. 933,000 barrels last week. that is a smaller decline than we had expected. it is also a smaller decline endinge previous week, june 3. we have gasoline inventories that are important now that we are getting to the summer
driving season. they are down more than it was expected. in the6 million barrels week ending june 10. that was more than the estimated. u.s. distilled inventory data. risen 786,000lly barrels last week. we were expecting a decline of 30,000 barrels. the four we had this data we had seen oil falling for the fifth consecutive session down more than 1%. it is not reacting that much. where we are seeing oil data but it is still trading at $48 a barrel. vonnie: thank you. let's check in with the first word news this morning. taylor riggs has more. kerry says iran
should use its influence over syria's government to ensure humanitarian aid deliveries. during a forumme following the meeting with the foreign minister on iran sanctions relief. he also indicated that the u.s. patients with syria and the russian allies was wearing thin. investigators are now focusing on the wife of the orlando shooter. shenews is reporting that may face criminal charges. she told investigators she tried to talk her husband out of the assault. authorities say she drove her husband to the nightclub before the attack. she was reportedly with him when he purchased weapons. over the in china disputed south china sea has ended in confusion. a joint statement from southeast asian foreign ministers expressing serious concerns about the waterway and then it retracted the statement.
the philippines and vietnam are among those challenging china's claim to more than 80% of the south china sea. as a bizarre story out of argentina. under the secretary president has been arrested. burying bags containing millions of dollars on the grounds of a convent outside when it there is. as much as $8.5 million was involved. and prince william is appearing on the cover of british magazine "attitude." member of thet royal family to appear on the cover of a gay magazine. global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. mark: he campaigns for and against keeping the u.k. in the european union laid out opposing
visions of the referendum debate enters its final stretch. matt winkler wrote an article that focuses on the pole. in it, he writes that a week before britain votes on whether to leave the eu, polls show that the public preference is to close to call. financial markets provide a different view. expectation, when markets and polls point in different directions, markets tend to be superior prognosticators. on the other side of the aisle, economists say that modeling results say the u.k. would be better off without eu regulation. let's open this brexit roundtable. if i can start with you, the , george osborne, has and has basically
said that we face a fiscal crisis if we leave the eu. there will be a 30 billion pound blackhole in the public finances. taxes would have to rise. cutting spending on defense. education and health. what is the answer to that? this is my personal opinion, and not the opinion -- my personal opinion is that the chancellor's warnings on the and the broadle analysis we have seen from david cameron is known as project fear. which leads to a whole shocking list of things that will happen to the u.k. economy should there be a brexit.
think the danger with the it has been that wildly overstated. so much so that i think project fear, the campaign to persuade voters to stay in the union is actually backfiring. it, will there be a world war iii? is it going to be the end of western civilization? that isthe answer to that we will wake up next friday and tuck into our cornflakes and things will be much the same as before. mark: do you accept at all that this is the number crunching politics -- when you were last on may 10, the probability was 22%. we are double that now. you say the chancellor's assertions are wildly overstated on the effect of the economy.
do you assess any part of their will ben that there economic effects? one of the interesting things on the modeling studies carried out by the business school, the cochair economist, a 40 years economic modeling the -- he made it very clear that a lot of the assumptions with the treasuries and with other forecasting agencies is that it has been assumed from the get-go the worst-case option. brexitg outside of doesn't see any change whereas a free-trade option has lots of benefits. and whether that is modeled properly and in the case of
they did nots, model the free-trade option. so actually, assume the answer straightaway. i think that goes a long way to invalidating the message. my personal view is that i think brexit is a good thing. i think our economy would improve. i think we would be free of eu regulation. but it is a bit of a raw deal. this isn't just about economics. it is about politics. about how you want to be governed. if you want to be governed by three politics who don't stand for election, go ahead. but people aren't happy with the lack of accountability. the way decisions are made. way i would which
go. vonnie: some arguments there for exiting. we want to bring in match winkler. you havene thing -- been looking at markets which should be pricing and the economic argument. and you say markets are saying there will be a brexit? krishna: replete -- matt: markets, as you are probably aware, they are apt to change. they are sensitive to uncertainly. and the way to interpret markets right now is that on a short-term basis, markets have great anxiety about this event next week. andyou look at the markets what it tells us for months to come all the way up to one year from now, they are saying very little is going to happen. vonnie: so what indicators are
you looking at? because volatility indicators -- matt: we look at the currency, the pound. vonnie: there is a lot of bearishness with the pound. that the market thinks it will weaken? matt: no, it means the opposite. basis, there is a great deal of volatility for the pound but on a one-year aces, the gap is about as wide as it gets. when you see that kind of divergence from what the market in the short-term they are hedging the risk of uncertainty but in the long-term, they don't see it. vonnie: i know that you use prognosticators as opposed to uncertain jurors. but if you look at only the market, and i'm comparing it , canthe federal reserve you tell what is going to happen just by looking at what markets are saying? matt: you can in the case of
events like this. inallel offense are back 1995, scotland in 2014 -- a very similar dichotomy between the short-term and long-term volatility. the long-term volatility was next to nothing but the short-term was very high. in each of those examples, the outcome was that voters said they didn't want to change and go with uncertainty. the market recognized their preference. off withwill finish you. what is the worst-case scenario for both camps? what happens in the eventuality of a closed vote? 52-48? neil: certainly, i think investors recognize that. we have seen the market price action in the run-up and there is volatility and uncertainty. which is also given the baros of
the statements from the imf and the world bank and the bank of england -- they are saying that all bad things will happen. so markets are now pricing that in. there is another interesting issue. whatever happens in terms of the outcome of the referendum, this uncertainty will not go away with regards to the eu. we have a spanish election on june 26. and the referendum in october. we have german elections next year. mark: does that mean that longer-term implied volatility has been kept low. will we start seeing it coming in longer-term? i think, absolutely. investors i have spoken to are more worried, regardless of this outcome, that in the longer term, the recent surveys show that the eu is not popular with those in france, spain and italy
but the eu is a hard sell. maybe the integrated approach is peaking. i wouldn't be surprised to see european markets pick up and persist for the next 12 months. matt is going to respond. say, we don't know what is going to happen in the future but we get look at what is happening right now. u.k. bonds are the lowest ever. that is an expression of confidence in the u.k.. the equity market in the u.k. is trading at a premium relative to europe. people have more confidence in a u.k. stocks and there is less volatility. that is data that we can look at right now and is projected into the future. so it is kind of saying that the confidence is britain, where it is right now in the you best in the eu, is good and it will get
stocks are rising after a 7.4% loss. we are awaiting the fed. that is in a few hours time. that is the big macro event of the day. have a look at industry groups on the stoxx 600. the weaker dollar is boosting a sick resources. retail is lifted by the world's biggest clothing retailer. are on the up. food and beverage are on the up. the bond markets -- it has been a time where we have seen record low yields in the u.k.. and in germany. let's have a look at how the bond market in germany at the u.k. is faring today. same old story. record lows for the u.k. 10 year. 1.12%. stillrman 10 year is below zero. stirling is rising against the dollar.
the euro is down against the pound. stirling yesterday hit the lowest level against the dollar since april. wille: abigail doolittle ring us the latest from the nasdaq. trades movingve modestly higher. that is ahead of the fed decision later today. helping the nasdaq today is one of the best percentage performers -- bed bath & beyond. this is after news that they are buying an e-commerce site specializing in furniture and home to core. and analyst says this is a relatively small acquisition and is unlikely to move the needle but it could help boost the company's e-commerce. others. pressure so this is not a large acquisition. but investors seem to like the news. vonnie: it is fascinating.
at one point, one kings lane was a multibillion dollar company. we areatching -- watching it get acquired for almost nothing. so there is a winner but there are any other stocks you want to mention? abigail: one standout drag trading lower is cisco systems. downgraded shares from a neutral to a by saying that the celebrating earnings growth and also slowing stock buybacks are less of a reason to be positive. todid cut the price target $35 but even so, this is just more of a 10% upside and it is above the average price target of less than $31. odd nuances there. we see that this stock, like so many others, it is stuck in a trading range. it's a just that the downgrade will prove true. sellers arehat the pushing the stocks back down into the range. the bottom of the range is
$22.50. again suggesting that the idea of a downgrade on cisco systems could work out nicely. vonnie: mark? we have a bloomberg business flash to look at some of the biggest business stories in the news. there is a new twist in the saga of sumner redstone and the media empire. daughter has talked -- shealibaba founder also spoke to dreamworks chief executive to see if he was interested in running viacom. there has been no word yet. doesn't's theme park even have the official grand opening until tomorrow and already, the company is expanding the resort. his niece chief executive says construction has begun to
tell me about this restaurant. how do you get a table? >> getting a table is challenging right now, you given the news. reservations open july 1 for october. everything until then is sold out. the have to get ready at your computer on july 1 and pray for good luck. mark: what is so special about this? what is so special about the world's number one? >> there is a lot that is special about this place. my husband and i ate there on our honeymoon. it is a restaurant that has an unusual philosophy. the chef does some amazing things. the way i like to talk about it is that you can get a memorable meal at restaurants around the world but this is one of the only chefs that cooks with his memory. there was a dish we had called "think green."
it was asparagus with some kind of truffles. to us, it tasted like being on a lawn of freshly bone grass in the summer. oftalks about his memories watching cows roam the pastures in italy. he is cooking with his memories and it translates into the memories of the people who are eating the dishes. vonnie: and you sure there wasn't a bit of hypnosis? just thinking, we could start booking july 1 -- we could get a head start. >> that is sneaky. coste: how much does it you to have a meal like that? butt is constantly changing it would be at least $200, that is the entry-level price per meal. wine pairing is another 120 euros per person. you can do the math. vonnie: thank you.
you have to check out that story and all of the other winners as well. reflecting global pallets. is said to be valued at $28 billion in the latest round of funding. that is didi. we will bring you more on that as we find out more. they have raised $4.5 billion in a round of funding. we will hear from denmark's central bank governor who says they have unlimited firepower in the form of currency intervention to ward off any threats that might follow a brexit. the european close is next. ♪ . .
mark barton. you are my -- you are watching the european close on bloomberg markets. we are going to take you from new york to london in the next hour. here is what we are watching today -- stocks in europe rebounding from their lowest levels since february while u.s. markets are getting a you -- muted but spirited performance. decision andomc statement at 2 p.m. today at a press conference at 2:30 as fed watchers are ready to dive not only into the rate decision but the fed's up dated forecast and chair yellen comments stop mark: brexit backers launch and our motto while the chancellor warns of a leak future if written votes to leave the eu. eight days to go until the u.k. re