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tv   Bloomberg Markets European Close  Bloomberg  July 15, 2016 11:00am-12:01pm EDT

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scarlet: we are live in london for the next hour, bringing in full coverage out of france on the latest details after the terror attack in nice killed more than 80 people. eight months after the attacks in paris, terror struck france again last night. television and amateur images showed a truck allowing into a late-night crowd in nice on best deal day. the french president met with victims, adding france isn't done with terrorism. and the new uk prime minister theresa may says britain is on high alert. thehe threat level in united kingdom is already at severe. that means that a terrorist attack is highly likely. senior officials today will be reviewing what more we can do to
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ascertain whether there is further action we need to take. but our security services and police are ever vigilant. market: we turn to the reaction after climbing all week, stocks are taking a pause. mark: let's have a look at where european equities are trading with 30 was left in the friday session. we are down today, events have been overshadowed by the tragic terror attack in nice thursday evening. stocks are falling, but we are on track for the biggest weekly gain since may. the stoxx 600 still 2.7% below the close on the 23rd of june. let's not forget that the impacts of terror attacks on financial markets is proven short-lived. look at the attacks in paris in november, in london in 2005, in madrid in 2004. these events spurred selloffs, but they were short-lived, lasting days or weeks.
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initially, the reaction was clear, but eventually we saw equities wrap up. were down by 1/5 of 1%. i wonder show you the european auto industry. this is a year to date chart, the big auto players, fiat chrysler, volkswagen down by double digits as well. we had some european car sales data today, sales growth slowing in june as the brexit vote weight on business and consumer confidence. yes registrations rose by 6.5% from a year earlier to 1.5 one million vehicles. first-half sales rose 1.91%, and year-to-date market share of vw, which is still impacted by the emissions scandal is still mired .t its lowest level since 2011 june marking the 34th consecutive month of auto sales gains in europe. stocks are lower this year. this is a lovely chart showing the correlation between the euro and the stoxx 600.
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the brexit vote and concern about the strength of italy's banks has spurred a breakdown in the link between a weaker euro and stronger stops are in -- stronger stocks for the first time in three years. have actually moved inversely proportional to each other since 2013. they reached a negative correlation last year on a record basis as the ecb expanded stimulus measures, but we get the currency and boosted exports of -- boosted exports. we have final estimate for june, we are still just above zero, .1%. a far cry from the 2% level the ecb is striving for, in the last four months, we have been pretty much close to zero. mario draghi's preferred forward inflation swaps are 1.3%, very close to record lows.
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the ecb has a lot to do, julie, to boost inflation to that 2% target. week, the ecb meets. in 90 minutes, we are 90 minutes into the trading day in the u.s.. get over to the markets desk. julie hyman has the latest. was it looking like? julie: looking next. to fed here has a job increase inflation as well. earlier today we got some consumer inflation numbers coming in a little higher than estimated retail sales beating estimates. consumer confidence missing estimates. right now we are seeing very little changed. the dow and the s&p, and again today will be a record close for the two major averages. i have seen a winning streak now for the major averages as well. if they hold onto the game before days ended. we have seen a bit of a downturn in u.s. stocks. to go to the bloomberg for the groups on the move to explain what exactly is going on here. obvious the, the picture looks mixed. we havelus side,
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materials, health care, utilities gaining today. but financials have now fallen into the bottom spot. we got earnings from citigroup and wells fargo. let's take a look at how the stocks are trading right now. citigroup on the one hand reporting a profit drop of about 17%. the company's consumer banking business is not doing great, fixed income beating estimates. overall, numbers beating estimates, but the shares have turned lower. as for wells fargo, profit down 2.8%. the mortgage lending unit seeing some weakness, that's a huge profit center for wells fargo. a big part of its business. those shares are lower as well, which is pulling down the financials by extension. the other big stock we have been watching his herbalife, the conclusion of the investigation into the company. herbalife settling with the federal trade commission for $200 million. also making some pretty big changes to its business and the way it operates, in terms of how it classifies its members, how long it takes folks to be able
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to open one of the nutrition clubs of the company is associated with, etc. carl icahn will be able to raise his stake in the company to as much as nearly 35%. these shares are bouncing quite a bit. the other man who has been very involved with herbalife has been bill ackman. ackman in 2012 said he was shorting the company and thought it was a pyramid schema, said it would go to zero at that point. he reiterated that stance many times in the years since. just a look at his position now -- when he announced his call, the stock was at 4273. conventional wisdom is that he shorted it somewhere in the 40's, perhaps even upper 40's here. this is a line of 40 to 73, it has been trading above that level for some time, the thinking is he would have lost money on this. it is still unclear what the new regulations mean for the life, and what they're going to do to the company.
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very quickly, i want to take a look at the 10-year note. we have seen a big move in the 10 year this week. this is the game we have seen in the yield this week, the biggest one-week loss for price gain for yield and we have seen going back to february 2016. scarlet: thank you, julie hyman for that check on u.s. markets. with giga headlines on bloomberg first word news. taylor has more from the newsroom. taylor: justice france's cautiously returning to normal, the french president is once again rallying the country in the face of another horrific terror attack. >> whole world knows, however, that we are a strong country, able to overcome whatever is thrown at us. we have had a number of those attacks in the past few months. i think we are shown a great example to the rest of the world , because we have been able to and togetherness.
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>> earlier he visited some of the wounded. 84 people died and dozens of others are in the hospital after a driver rammed his truck into a crowd of people celebrate in france's national holiday. the attacker was shot and killed theolice, officials caution dna identity checks are pending to fully verify the identity case in. world leaders wasted no time condemning last night's assault. president obama called a horrific terrorist attack. donald tusk called it a tragic victims meeting the were saluting liberty, equality, and eternity. -- and fraternity. the french prime ministers as the country will observe a three-day span of morning -- mourning starting tomorrow. the tour de france continues a day after the deadly attack.
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the defending champion, who is the races current leader, posted a picture of the blue white and red french flag on twitter, writing thoughts are with those affected by the horrific terror attack in nice. spain is maintaining his national security alert is one step below maximum following the attack. it will step up police controls and transport centers such as airports, tourism sites, and places where large number of people gather. flags were flown at half mast outside state institutions, which also held a minute of silence to commemorate the victims of the attack. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm taylor riggs, this is bloomberg. you, taylor.k breaking news on the local front. donald trump to twitter, of course, to announce his vice president opec, indiana governor mike pence will be his running mate.
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there has been so much back and forth, he was scheduled to hold a campaign event today and he canceled it in the wake of the french terrorist attack. this has come out regardless and now he says is going to be a news conference at 11:00 a.m. tomorrow. clinton haslary called mike pence the most pick in apick -- vp generation. we await her pick, some have suggested to trump trump, you need to announce her pick asap to bring back control of the news cycle. he can: he has him what to make sure he grabs attention of the news cycle. mike pence is the governor of indiana and also, a longtime supporter of the tea party movement. we want to transition back to the top story of the day, france. a terror attack in the coastal town of nice has left scores injured after a truck drove into a crowd celebrating bastille day. --ning us is carolyn kanaan caroline connan.
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what more you learned? caroline: this is the same face we've seen during the november 13 attacks. details we also have from the president, who was paying tribute to the security forces and managed to stop and kill the truck driver after he drove into this crowd last night, killing at least 84 people. -- hollandeong the didn't conclude that this driver could have had a cop says. >> [speaking french] translator: one man, possibly a group, wanted to launch this cruel attack. on our citizens.
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obviously, all the attention will be on the investigation. at the moment, the ex-wife of the 31-year-old tunisian man living in france, who was driving his truck, his ex-wife given custody. he was a family man, divorced recently and as we were hearing from the president, the investigation is focusing on the promises. focus on thed to facts, they said the truck was rented, the attacker shot several times a policeman got us the first we've heard of that. the attacker had weapons, real and fake in the truck. that is something that the media was reporting. the gun and ammunition and fake guns were found in the truck. the ex-wife of the nice attacker is in custody.
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can we just turn the focus onto the victims? what do we know about the victims? those who were killed, those 80 or so, and the many scores who were injured. it injured about 50 people, are between life and death. we have that from the president earlier. among them, lots of young children. becausea tragedy, bastille day is a family event, people want there to watch the fireworks from the waterfront with their children. lots of children have been killed, according to the former mayor, at least a dozen children have been killed. tourists enjoying holidays on the french riviera, we know for now there were at least two americans, dad and his son being killed. three germans, schoolchildren in
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, and some ukrainians as well. belgian and turkey as well, about 20 people. we haven't heard from the city of nice, it's still under lockdown. the singer rihanna was supposed to give a concert tonight in nice, that has been canceled. the fireworks from last night have been canceled. and the focus right now is on the grief and the families of these victims. scarlet: we just want to add more headlines that are coming out right now, the prosecutor has named the attacker. we knew he was. attacker wasthe and this isolice new information from the french prosecutor.
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caroline: we actually knew that from earlier, this is not exactly new information. we know that mohamed lahouaiej bouhlel was known for violence against his ex-wife, but he was not on the terror watch list. he was not in the intelligence services radar. word that the final prosecutors said the attackers wasthe sort of attack encouraged by extremists. is telling you all about the story. sterlingberg markets," closes in on its best week since 2009. does it have further to go? who better to answer this
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question than richard jones, he is next. this is bloomberg. ♪
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mark: live -- scarlet: live from london, i'm scarlet fu. mark: i am mark barton, this is the european close on "bloomberg markets." sterling is coming to its best week, amid signs of political instability in the u.k.. it was the lowest levels of machete five, still about 10% lower since the country voted to leave the eu last month. jones, us now is richard it's been quite a bounceback for sterling. it hasn: --mr. jones: been. the pound index is 10% lower
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than it was on the 23rd of june, which is the day before we had the big selloff. we had a 3% bounce back this week, and a lot of that may have been driven by yesterday's bank of england decision to keep rates on hold. this puts more emphasis on the meeting for the bank of england which is on the fourth of august and expectations are high that they will cut rates and perhaps look into qe or other areas. the trade weighted pound declined about 8% from its average the month before the brexit bow. what may have played into a monetary or easing condition, allowing mark carney to put off decisions to cut rates? mr. jones: that plays into their thinking, and we are only three weeks after the vote, they haven't had enough data to look at yet. we are going to be getting some data next week, including a one-off pmi reading, which focuses directly on the.
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period afterhe brexit. the bank of england chief economist today was very strong, zynga are a much looking to be aggressive, and it could come as early as next month. mark: the currency of the week, besides sterling, you have to say the yen supplants sterling. it's been a massive move for the end this week. we had all sorts of phrases introduced to the lexicon like perpetual bonds and helicopter money. mr. jones: that's been the thing that really has been driving global markets for most of this week. today we have seen a bit of a jump in u.s. yields based on u.s. data. i would argue that really, it's what's happening in japan this week which has driven asset classes abroad more than anything else. japanese quities switched quite a bit higher, the yen has weakened the most since 1999.
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is usually a strong correlation between the 10 year u.s. yield and the dollar yen rate. usually it's the yield leaving that. this week i think it was actually events in japan that led yields higher before the move we saw today based on the data. scarlet: you can see that on the chart on our screen. going forward, who's going to be the dog and who is going to be the tail? mr. jones: we are probably going to have a little bit of both. the expectation that we're going to get additional fiscal monetary stimulus from japan, but we have a fit meeting in a few weeks and everyone is going to be looking to that. as the data improves in the u.s. -- mark: worth telling us our favorite function? mr. jones: if you look at a potential rate hike, the possibility has doubled. we are still well into 2017 before we had it over 50%. scarlet: march 15, 2017 on a less. rick --chard jones,
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bloomberg strategist. the european close is nine minutes away, we have more today. the bottom of the hour, we speak with the former secretary of the department of security, michael chertoff. this is bloomberg. ♪
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scarlet: live from london, i'm scarlet fu. mark: i am mark barton, this is the european close on "bloomberg markets." look at the biggest business stories in the news right now. europeans are -- car sales growth slowing after the the brings it weighs on consumer confidence. european automobile manufacturers association says registrations were up 6.5% for 1.5 million vehicles. june was the 34th straight month of auto sales gains in europe, but the growth rate was the slowest since march. the top gainers included daimler and b&w.
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profit falls due to weak demand in asia and europe and the strength of the swiss franc. estimated sales are to have declined about 12%. of watches say costs are increasing after decided to retain employees, despite the slump. shares of herbalife moving higher today after reaching a $200 million settlement with the federal trade commission, which says that the maker of nutritional shakes is not a pyramid schema. and'sment with the ftc than two years of investigations that follow the shortselling campaign by bill ackman. herbalife says its board has freed investors by 35% of the shares outstanding. that is your business flash update for this hour. b, you say herb. scarlet: tomato, tomato.
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we could go on all day. mark: we are literally five minutes away from the end of the friday session. it's been a day dominated the tragic events that unfolded last night in nice. as has been proven again and again, it it is something that is worth repeating again and again, the impacts of past terror attacks on markets has often proven short-lived. scarlet: this is just for the day. for the week, if you look at the major industry groups in the stoxx 600, all of them are higher for the week. mark: a look at currencies before we head out, we are seeing sterling up. the close is minutes away, four minutes. there you go. you get what you ask for here. this is bloomberg, stay with us. ♪
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♪ live from london you are watching the european close.
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check it out, see what is happening. global macro movements, stocks, currencies, arms, and commodities. .tocks down for the second day a weekly gain, a number of currencies falling against the dollar. iceland, denmark. commoditiesup, among the decliners today. let's look at the industry group that many of us have our attention on following the tragic event that took place, the terror incident in nice that led to the killing of over 80 people and the injury of scores more. performer,he worst all but three are following.
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thomas cook, a core, easyjet, they are a big jo -- decline. we often see quick flip backs. that is worth noting. today,pse in profit 50%-60%, analysts expected a 22 drop. sales missed estimates as well. ands markets like france markets like france are going to be hurt even more. shares down even more. the final chart of the week, instagram, this shows you everything. the best week since 2000. there was a week earlier this
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year that was better, but let's forget that because it spoils my narrative. we will continue to watch the pound. in the u.s., stocks little changed in numbers but directionally they are all down. investors looking at a weekly advance in which nine out of 10 industry groups are higher. the exception is utilities. for more, let's check in with abigail doolittle live at the nasdaq. abigail: a little bit of a breather, 10% rally out of absolute breaks it bottom on june 27. --it of a reserve reversal. biotech's are gaining.
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cognizant technology down 2.8% ,n sympathy with its competitor which guided u.s. revenues down for 2017 in the u.s.. easier i.t. outsourcing companies. for the a barometer global i.t. spending. it's a just it is a bit gloomy and there is a bit of a bearish feel. if there is followthrough, investors might look at the need , such asechnology microsoft. this could be a trend to pay attention to. scarlet: abigail, you mentioned biotech is gaining. biotech sector was down on wednesday but today the up.ech index are
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it is not here to be on anything specific. it could be a reflex. on the year, the biotech index down, the nasdaq is slightly higher. 14% leading to the nasdaq. something will have to give around the divergent, scarlet. scarlet: thank you. reporting live from nasdaq. let's get an update from bloomberg first word news. hollande is ins nice. woundeded some of the and offered words of comfort and support to the traumatized resort town. he later addressed the french people at commended doctors and for working frantically throughout the night and the officers who took out
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the attacker. >> our security forces are fully committed to this fight. pasthas been busy in the few months, of course, after the attacks in november in paris. i would like to pay tribute to dust the forces, they are the pride of france. taylor: a truck plowed into a crowd celebrating a french holiday, killing over 80. prosecutora france is providing details of the attack. of 84 people killed when the truck rammed into the crowd, 10 were children or teenagers. the number of wounded is 202, some on life support and in critical condition.
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still intigation is early stages. they are questioning the ex-wife of the suspect. hillary clinton and donald trump weight in. they struck different tones. trump told fox news he would be willing to have a declaration of war against islamic state. clinton called for greater intelligence gathering. we have to mission why there is more. england, paying tribute to jo cox. she was shot and stabbed to death on june 16. a private funeral was held for the legislator today. global news 24 hours a day, powered by our 2400 journalists in more than a 150 news bureaus around the world. scarlet: thank you.
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donald trump took to twitter today to announce indiana governor mike pence as his vice presidential pick. -- i am pleasedgla to announce mike pence. macon, this is an unconventional candidate. a conventional vice presidential candidate. : this is probably the least surprising thing donald trump has done so far in choosing mike pence. he was a writ to be the choice for several days now. announcementthis and how he has chosen to unveil it has not been what the campaign wanted. these are real moments in a campaign. for the last 36 hours there has been chaos and rumor and
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speculation. he has gone to twitter to do it and said they will hold a joint news conference tomorrow at 11:00. it was originally scheduled for today but was postponed because of the horrific terrorist attacks in nice. mark: hillary clinton has treated fiercely. is the mostce extreme vp pick in a generation. she released a video that said he was quote, willing to shut down indiana's economy to allow discrimination against lgbt people. what is his largest liability? --megan: he is very conservative. to turn out to the evangelical base for donald trump. in terms of swing voters, people , it is uncleared
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what mike pence is going to bring. he disagrees with donald trump on fundamental issues, one of which is free trade. he came out in favor of tbp and donald trump is anti-trade. he disagreed with donald trump's plan to ban muslims from entering the country. he said it was frankly unconstitutional. we will see how these two come together and present a united front. he brings social conservatives and helps donald trump in areas of the country struggling economically and are full of angst. whether he can make inroads against hillary clinton with people who are weighing to unpopular candidates has yet to be seen. said he wase pence honored to join donald trump and work to make america great
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again. you mentioned the chaos as a backdrop for the announcement of michael pence as donald trump's running mate. how important was this to make his announcement before hillary clinton? megan: the convention is next week and he had drama. there was tension and suspense. he ran it almost like a public contest. togave them public auditions join him on the ticket but what is surprising is that during the last 24 hours, the wheel fell off the cart. he was in california fundraising and his aides were telling people one thing and there was his team of close advisers in .is family something that should have been a real moment for him, he lost
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control of because now we are going to have a day where all the opposition and research from hillary clinton on mike pence like the freedom of religion bill that was so controversial and had a huge backlash from big business cause them to lose an event and sponsorship, we are going to see a day of negative attacks and set of them being able to get on a strong foot and make their case for unity. mark: thank you. the republican national convention kicks off next monday. coming up, continuing coverage of the terrorist attack in nice, france. this is bloomberg.
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scarlet: live from london, i am scarlet fu. mark: this is the european close. scarlet: more insight on the terrorist attacks in france and the effect it is having around the world. --ining us as michael turn michael chertoff. months, france has suffered three major attacks. how has the terrorist attacks? evolved? myhael: let me express condolences to the french people in what is a tragedy. what we have seen in france is a number of different dimensions of terrorism. in charlie hebdo and the attacks
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club, youred at the have coordinated attacks that looked as if there was some involvement from isis overseas in terms of foreign fighters and in terms of coordination and training. what we saw in the last 24 hours, at least now appears to actor alone. he had a history of petty crime. he did not have direct conditions, so far it that we haveell -- he did not direct contact with isis, so far that we can tell. at thelooking possibility of which involve disturbed individuals who either have a history of criminality or mental illness who seize upon what they are seeing in the news as an opportunity to act out
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some of their dangerous impulses. mitigatehael, had you against what you called inspired, these almost lone wolf attacks? how does a country mitigate against that? michael: that is the hardest threat to deal with. i must say from what we are hearing about the tunisian attacker yesterday in france, it sounds very somewhat to what we heard about the gunman here in orlando. with mentalople health problems. they have a history of run-ins with the law or acts of violence and the issue is how to do normal mechanisms of government identify people who might be a persistent threat and incapacitate them or treat them in some way. that is not an area we had made a lot of progress with. scarlet: do we know what not to
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do? go tos seem determined to france, europe and the united states. what should western governments not do in response? we should notnk overgeneralize from a particular attack and come up with a magic bullet solution. many of these individuals require a different approach depending on what their history and mental state is. the other key element is response. you cannot prevent these kinds of attacks but you can respond effectively. whyfrench need to look at it took so long to interview and stop the situation with the truck. the alert suggestion system, the emergency alert system, was delayed in functioning. to the extent that you're going to have attacks like this, the ability to respond quickly, and to have trained individuals to
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give early warning to the population, will become critical in terms of mitigating the damage. mark: whether these attacks when these attacks take this, we hear about a lack of coordination between police and intelligence agencies. can you enlighten us on what can be done to improve coordination so that events like this happen less frequently? an issue i have been involved in working with europeans to try to evaluate what the challenges are and how to deal with that. traditionally, there has been a tendency to view intelligence and military activity as completely separate from police activity. but we are seeing with terrorism, is a blending of issuesand the kind of
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that are traditionally police matters. he had to look at the entire picture and see where there might be connections. there are going to have to be institutional changes in the way that intelligence is generated by the police and how that is with intelligence generated by the national security agencies. it is very much a discussion going on in europe about how to reconfigure in th the way we collect and share information. scarlet: all right. mark: thank you for joining us, michael chertoff, former secretary of the department of homeland security. president obama is set to speak at the white house this afternoon, expected to address the attack in nice. 3:1ill bring that live at
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0. scarlet: coming up on "bloomberg markets." the european close, because this is the european close. season couldon have a big impact on crop development.
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can livecommodities and die on weather patterns and we have teamed up with accuweather to track changing weather patterns around the world. and mark.alix we had letting you come in, a cold front. what is that doing to india? mark: it is a favorable pattern for india. typically when you have a la n
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ina, it is brisk. that is when we see the rainfall falling over india. we have 80% of the annual rainfall from the summer soon. there has been substantial rain in the growing areas. east, rice.he look at the rainfall. 1-3 feet of rain. in just the past week alone, disturbance moves from the southeast of the northwest depositing more heavy rain, 3-4 inches. alix: how does this rank up there to the averages of other years? so far it has been
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beneficial. everyone is doing just great here, near normal rain. the excess rainfall is shaded in dark green. the cotton, sugar cane here. wheat that is wet. it is drying out a little bit. the disturbance will be weakening. we will have more rain before the next disturbance organizes here. over the next week, it brings in another round of rain. alix: i want to tie this in with what it means for commodities. one commodity i want to highlight is sugar. ok, we will start with gold. are far, you make more
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money because you have more of the crop and you will spend it and buy gold. there have enough banks so ty .ave gold -- they do not have enough banks of they have gold. the idea is if farmers get more money, will they buy more gold? the other commodity we want to highlight is sugar. the community is really worried you might have some kind of drought in india. scenarios.2010 crop -2010 crop scenarios. mark, thank you. mark: thank you. coming up on bloomberg on bloomberg television, sitting
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down with christine lagarde in an exclusive interview. stocks rose in london today. finishing of equities . over the week, the stocks finish higher. the stoxx 600 dropped by fifth of 1%. declines in frankfurt and paris today. the day is overshadowed by the tragic events that took place in nice yesterday. you're watching "bloomberg markets." this is bloomberg.
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york.e: it is noon in new welcome to bloomberg markets.
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good afternoon, i am vonnie quinn. stories fromring new york to san paolo. at least 84 people are dead following a terrifying attack in nice. a truck plowed into a crowd of revelers last night. vonnie: donald trump picks indiana governor mike pence as vice president. gets emerging market etf the biggest one-day close in 27 months. halfway into the trading


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