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tv   Bloomberg Markets European Close  Bloomberg  July 19, 2016 11:00am-12:01pm EDT

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left in the trading day in europe and you are watching the european close on bloomberg markets. ♪ >> we will cover stories out of washington, brussels, and london in the next hour. fine. hits -- with a my interview with commissioner margaret coming up. donald trump's net worth has increased over the last year. we dive into the figures. we will hear from the ceo after swedish and networking giant missed estimates.
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let's have a look at where european equities are trading now. half an hour away from the european equity market close. i want to show you the big picture first. you can see the germany index down .8%. the bigger losers in western europe. we see a weaker euro today down and aainst the dollar weaker sterling down .9% despite the fact we had that better than expected inflation data out of the u.k.. you can see the 10 year yield down also six basis points. then moving on just to show you
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how the stoxx 600 is doing. so that is how the benchmark is doing. predominantly is in red. down also six basis points. leaving the losses down 1.2%. telecom following behind down .4%. it is very much those materials the most on the downside. looking at the upside, the best performer. jumping the most on record up 22% right now. concern over falling profitability. >> a mixed picture with the dow
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holding up better and potentially on pace for another record close -- close if it hangs onto the gains. the dow is trading lower at the moment. i wanted to update you on the health care stock we were talking about. lawsuits.follow agreed to by humana for , a $46illion and cigna billion takeover and shares have also been moving lower in the .ake of these headlines it does not always happen, but at not also seeing a slide in today's sessions. that is part of the pressure we are seeing overall on the stock. there are two stocks that are definitely contributing here. ibm has given up some of its gains. bouncing around all morning after earnings beat estimates.
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johnson and johnson, the gain has been solid today. the numbers beat estimates and raised a forecast for full-year , after division sales in particular came in stronger than estimated. in the dow is goldman sachs. that stock has been bouncing around quite a bit. it is back in the red after recently going into the green, though fixed income trading beat estimates, there were negatives in the company's report. equities trading fell an investment bank trading fell and the company did not raise its dividend. i want to check on the cross-border potential deal we have been watching. monsanto coming back is morning and saying the buyers offer is still much adequate, but it is still open to talks and shares bouncing a little bit still far below 125.
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lower by 1% in german trading. >> julie, thank you. let's check in this morning. courtney has more from the newsroom. courtney: asking whether a refugee was part of a terrorist group. shot a 17-year-old after he wanted four people critically. investors -- investigators found a handmade islamic flag in his home. theturkey president says cabinet will meet tomorrow. the government has cracked down on opponents. more than 6000 soldiers have been detained in about 9000 police officers have been suspended. more missile launches from north shot, kim jong-il and's three missiles into the sea. the third might have been an
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intermediate range missile. south korea called the launches a reckless provocation. the campaign trip -- donald trump's's campaign chairman rejects claims that milan a chump lifted part of her speech from michelle obama. betweenre similarities her speech and the one given by president obama's white in 2008. ms. obama: barack and i were raised with some and he values like you work hard for what you want in your life, that your word is your bond and you do what you say you want -- do what you say you do. ms. trump: the value that you work hard for what you want in your life, that your word is your bond and you do what you say and keep your promise. chairmans campaign said milan a trump used common .ords and values
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global news 24 hours a day powered by more than 2600 journalists and analysts in more than 100 countries. this is bloomberg. >> thank you. truck makers are green to pay regulators a record $3.2 billion for for fixing truck prices years. we spoke about europe's banking crisis. >> we are talking about a damaging cartel that lasted for 14 years. all of the european economic area. these are very important vehicles for the entire european economy. these are the elements that go into our guidelines in order to calculate the find by the end.
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vonnie: -- in the future? >> fines are not a thing we plan. if we find an infringement, the fine will depend on the -- in that respect, we hope that this shows we are willing to show that it could not pay to form a cartel. >> is that also a way of sending out a message, a warning sign? >> yes, obviously. because forward because of leniency, and you see the first here actually avoided a fine of 1.2 billion euros.
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to refer people in in the first place because one newsur partners broke the to the commission and other authorities, then you are in trouble. everyone expected you to do. vonnie: the very fact this cartel and existed in the first place, is that a sign of any failure in the heart of regulators? >> i think it is a sign of failure in these companies that they have to hide it or seven years on the level of senior management, that they decided to launch newways to technology, to have higher environmental standards, just to take two of the things. it is a failure on them and benefitdgment, to
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european customers. >> you have already said today that a deal on italy thanks might be quite close, talking about the italian bank. that this is very important. if you of course want to protect -- ators and the bank, can bill in? >> what would be the end result -- with theete italian authorities, that remains to be seen. they endorse that the commission do a finding on the commission to make sure that members know how we're taking. the rules have an used in more than 22 members eight so far. for us, it is an important ruling that shows to be
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foreseeable, those are the things we actually cherish an order for investors and banks to know how we would react if they would want to give out -- >> what sort of agreement do we see being reached on time banks? >> the most important thing at reasons,, for obvious to stay calm and see what results come out of the conversation with italian authorities. applied inas been more than 22 member states. i think it is beneficial for
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taxpayers to know there are limits as to how much can go into a bank. vonnie: ahead, turkey markets are in chaos and the credit rating after fighting attempted coup. this is bloomberg. limits as to how much can go into a bank. ♪
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the failure of infrastructure. and that is your bloomberg business flash for the hour. turkish debtof rose for a third day and bonds fell after moody's investment
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signaled it was signaling cutting a credit rate to junk. and also lower borrowing costs. falling it the university faculty across the country would resign. it is broadening, and that followed friday night. the currency extending declines on that. director, thank you for joining us. cuttingsideration about turkey's credit rating, is that more about politics or fundamentals? >> there are two elements. one is political risk, which has present in turkey for some
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time. theust a manifestation of very shifting type of political landscape we have. that has implications on growth potential and on the advancements and lack of. and potential external shocks. >> what do you make of the bank 's's decision to slow rate cuts? does that have an impact on your decision? they have to react quickly. two of the the news today -- to absorb the news today or yesterday, they made an announcement over the weekend --ut the banking system
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>> we have seen the lira decline versus the dollar. gradehave an investment rating. to place this rating under review clearly indicates there is downward pressure. prospectsthe economy were quite strong in the level of political risk was much more and the policymaking was signaling a change, and advancement, a very significant economic reform that ultimately would use -- reduces exposure to external shock.
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>> we dip into the bloomberg terminal and we can see turkey changed, theyave were higher but certainly not at the highs of december and september. president manages to return control to the country? take to regain a better outlook? >> i think our assessment is really taking a view in the medium-term. what we will looking during the review is how the government will take to regain a respond not just in the immediate aftermath of the crisis, but what is the plan on the economy front to help the economy advance, to protect the external division of the country, which is fragile and exposed to investor confidence.
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this country relies heavily for growth on international investors, and the amount of that thefunding country needs every year represents about 25% of gdp. a very significant number for an emerging market economy. >> steve, thank you for joining us in our london studio. have 340taly banks million euros -- what is italy doing to solve the crisis? this is bloomberg. ♪
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vonnie: this is the european
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close on bloomberg markets. over the top eu court backed rules preventing taxpayer-funded bailouts. the ftse italian oil shares thanks index already around 4% this year, for context, i want to bring in alastair right now. if you get an index of nonperforming loans in italy, it has just blossomed. there we are, a spike higher if you like and now we are staying at that point. what does this mean? >> as you say, a lot of money at stake here. really the italian banking , it has muchh more broader consequences.
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really, the studies it has done, italy is taking a long time to resolve these issues, issues i have known about for quite some time. we need to get a move on because the markets are moving against them here. >> tell me how sicilian mortgages show how difficult it is to rescue italian banks? you have written a great story on bloomberg today talking about this. english, packaging of loans that have gone bad, where people have not paid, they have been put into bonds and sold to investors. that is part of italy's rescue plan.
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i have been looking back at some of the deals and they have gone bad and they have not worked out well. one of the deals that caught my eye was called island refinancing from 2007. securitization of nonperforming mortgages in sicily mainly that have gone bad . the story there is it has taken a very long time for the loans to be worked through. 2001, a 2007 deal, from that had loans in it from 1998 and now 22016, a longtime of unresolved -- to otheraly compared countries? >> in italy, the average is about eight years versus two years in the rest of europe. andreece, less than a year a never -- netherlands -- it is
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remarkable it has taken so long. it is very long and drawn out and leads to stagnation in the economy and the banking sector. thank you so much, taking us through the italian banking sector. close, just four minutes away. the stoxx 600 up .4%. ftse 100 unchanged. dax leading losses down .8%. come --e're watching watching, this is bloomberg. ♪
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♪ live from london, you can see it, a gorgeous, sunny day. live from london and new york,
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you are watching the european close. up close, stocks finishing with the european trading day. all of the market action starting with the equity benchmark and the stoxx 600, closing lower, down 4/10 of 1% on the day on the stoxx 600. risk aversion in europe. look at the industry groups, the great majority have been declining the commodity producers down 2.5%. carmakers down 1.4%. the number of stocks we have been keeping a watch on, mrr, the best and worst performance. the best performance, jumped the most come up 21% at the close after the online apparel retailer raised its for your margin.- four year
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concerns over profitability. shares seen ericsson down. the worst performer, down 5.7%. more on this later. mess thoughwere a they announced more cost-cutting, investors not convinced. not huge moose but down more than 1% at the close after monsanto said that their latest offer of 65 -- their latest offer is financial inadequate and does not ensure a deal will be competed. -- would be completed. there will be further conversation. vonnie: dollar index. 97 for the first time. dollar, weaker by
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1.4% after some easing. the kiwi weakening today. the lira, 1.6% weaker in the last few minutes. continued weakening. let's look at the broader index, the dow barely changed, up six points. the s&p down to tenths of 1%. -- 2/10 of 1%. /the nasdaq -- >> the nasdaq down. something standing out over the last few trading sessions, i'm eating trading. -- uneven trading. up and down, up and down.
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you often see this after a big move. 10.7% rally out of the brexit bottom. it will say whether that is a relief rally that will take us deal,ower or the real perhaps the nasdaq and others to new highs. is microsoft, netflix, the big story is netflix down 14%, its worst day since october of 2014, subscriber growth missed estimates for the second quarter, the door quarter guide was week -- the third quarter guide was week. weak. as for what is going on, i asked whether he thinks the weakness
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is a reflection for near-term concerns or if there's something longer-term, he said he thinks it is both, relative to the domestic, it could be longer-term, that growth will continue to swell, especially as the company sees more company from amazon and hbo. internationally, he thinks the trend remains intact. he says the fourth quarter is key to knowing what is ahead. vonnie: thank you. let's check in on the first word news. more from our new york newsroom. >> turkey stepped up its crackdown in the wake of the failed to, the government fired a most 24,000 teachers and interior ministry employees set to have ties with the alleged coup plotters. almost 1600 university deans were told to resign. the british prime minister says her government must not be defied -- defined by the decision not to leave the
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european union, she told her senior ministers that all of them would share responsibility for making the departure a success. the u.s. expect to raise at least $2 billion from governments around the world to help iraq, two dozen countries taking part in a conference tomorrow in washington. some of the money used to iraqi armyer the first islamic state forces out of falluja and other cities. only a last-minute surprise can stop donald trump, he is just hours away from winning the republican presidential nomination. the republican national committee chairman says the campaign has a crucial task. >> if the campaign can get the seente donald trump to be publicly, i think he will win. >> he spoke of a bloomberg breakfast -- he spoke at a bloomberg breakfast.
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bloomberg. >> thank you. giant product ericsson -- ericsson will ramp up cost-cutting after sales missed analyst estimates. second-quarter sales fell 11% to $6.3 billion, driving shares. earlier today, we asked their ceo how many more cuts will happen to reach their goal? >> one program that has started. it is now bearing fruit on our operating expense levels, that was important in the second quarter as we saw a decline. now we have more cost reductions, mainly because that volumes are coming down and to reserve probability. -- preserve possibility -- profitability.
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that should be in the second half of 2017. it should impact employees as we are doing these transformations but contractors we are working with. putting in a new corporate structure designed for lower costs. all this in place and we are executing on a larger cost reduction. that means we can invest more in certain areas in order to be competitive. let's talk about the jogger feet of where you do business, acer -- asia has been 10% of your revenue, the boosters of the business, are you seeing signs of slowdown in asia? what can we expect in the second half? >> asia has been good, we have gained market share and eight -- china is very stable. the place in asia we see less of
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activity is india. we see lowercase on investment of infrastructure. see in asia.we >> big subjects that come to mind, you have been running this for six years, brexit, you do business in europe, advice for the businessmen lobbying the new administration in terms of the u.k. position as he goes to see trade deals and potentially a new relationship with the eu. >> we believe in free and open trade, it a big investor in the u.k., 4000 employees in the u.k. working from the broadcasters to the telecom operators, the u.k. is an important market. trade free of u.k. will be
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important. we wanted the eu to be united and have that as a strength but now it is to see that trade relations continues. a large and very important market. question,al shareholders have value, they raise many questions, looking at your position, you have 4%,vered a return of under that lags your peers, institution shareholders, that has questioned the strategy for you, are you set to remain at ericsson? are you fearful that institution shareholders could hurry you from your position? >> we are doing a lot of transformation, changing corporate structure, on the forefront of 4g.
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>> will use day to see it through -- will you stay to see it through? >> my job is to continue to execute and that is what i am focused on. >> that was the ceo of ericsson speaking with bloomberg earlier today. erickson shared -- shares closed down 5.6%, the worst performing stock on the equity benchmark in europe. -- a 74%oldman sachs increase. analyst focused on cost-cutting as they have been four previous banks who have reported, is it that big of a deal how much percentage points? >> it is, when you have no income in the world we are with net -- lower interest rates, you
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have to look at expenses. if we had rising revenues, we will not be as concerned with the expense cutting and we have not had that. vonnie: at some points, cost cuts bad or harder to get. >> you have had some people like goldman in the past that say we want to continue cutting but with fixed income, we do not want to get rid of that totally. we are pulling back from here, a strategic decision. you do have the diminishing returns. goldman sachs is the u.s. bank most reliant on trading. the bond trading games that help boost the profit, investors see this as a positive? >> yes, fixed trading income was very nice compared to estimates.
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banks,d to some of the the rise was not as good as at goldman and some of the others, bank of america included. we are watching that in terms of thinking about goldman's market share. >> the dividend disappointed somewhat. >> exactly. $.70 per share and the bank kept that unchanged at $.65, a disappointment for some shareholders. >> lloyd blankfein, what did he have to say or his cfo had to say? >> they talked about brexit, one of the few banks that have provided some clarity, a contrarian view, brexit is not a headwind for us and he said they make it better m&a deals out of that. advise goldman sachs may in a low interest rate environment.
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maybe some bonus. goldman sachs is a large asset manager. perhaps there is opportunities others may not have. >> thank you. at what a a look republican controlled congress could mean for unemployment rates. ♪
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♪ for our global battle of the charts. we look at some of the most telling charts and what they mean for investors. access these on the bloomberg by running the function featured at the bottom of your screen. vonnie: stick with the political
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chart buts is a together by hillary earlier --ay, the employment rate unemployment rate under the house majorities. depending on what kind of president is in power, what the unemployment rate does. control have democratic , a lot of declines in the unemployment rate, republican control of the house, increases, although conclusions can be drawn to suit whatever flavor of politician you might be. it is a fascinating chart. go look at it at 2141. >> oliver. you have one? moreshould have done one
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evident but i am myopic. this is interesting, looking at technical indicators in the stock market. the white line is the s&p 500. we have the 10 day moving average for the s&p and the 200 day moving average. down here, showing you the percentage the s&p 500 members whose wealth strength index is less than 30, greater than 70, means they are overbought and have momentum and technical analysts say they have gone too far, too fast. conflicting signals. looking at the rfi's the bar is low. the s&p is up 8% post brexit-low. 5.5% in the s&p trading above
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those 70 levels. pretty low considering how far we have come. however, the kind of momentum put into perspective when you look at the difference between the 10 day average and a 200 day average, the short-term rally has gotten pretty bad. tough one,u, it is a i love how tied to the news your chart is, vonnie. a tip oliver, a bigger font but overall oliver. i love a technical chart. love what saying about the s&p having further to go. mark should be out more often, i like this. vonnie: you can win every day in my book. thank you. >> coming up, donald trump claims to be worth more than $10 billion, bloomberg news crunched the numbers and a look at how much the presumptive republican
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presidential nominee is really worth in property and liquid assets. this is bloomberg. ♪
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♪ yorkve from london and new i am vonnie quinn. >> this is the european close. time for the business flash, the biggest stories in the news now. more problems for the airbus military transport plane, they will deliver over half germany was set to receive this year. the development has been held up because of faulty gearboxes. take a write-down in the next quarter. inflation in the u.k. higher than forecast last month, prices
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rose at an annual rate of one half of 1%, the big reason airfare which rose 11%. marketdon housing appears to have gotten slammed by the prospect of a boat to leave the eu, sale of london homes under construction plunged 34% in the second quarter, demand had been falling after the government cut tax breaks for the wealthiest landlords. that is the latest business flash. vonnie: donald trump getting ready to accept his party's nomination this week. he has asserted that his net worth is more than $10 billion. we took a closer look at how his wealth has changed over the last year and how much he is really worth. we have had this before where people have taken a good look at his life and try to figure out what he is worth, what is different now? >> 12 months after we look at
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this, his debt is up and properties are more valuable. he took on $170 million more debt to build a new hotel in washington, d.c. and golf courses revenue is up, office properties went down a little bit in new york and san francisco. a small decline in comparison to the gains on the golf properties. vonnie: what is he worth? >> we put him at $3 billion. with how hes to do values his brands, which is why he says $10 billion, he license his names to hotels, mattresses, menswear, at 3.3 billion dollars, based on revenues from those businesses, we cannot get near that figure. >> we have to talk about the
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debt, where is it coming from? >> a lot of debt against a lot of his properties, $160 million against 40 wall st office property in downtown manhattan. $100 million against his namesake, the manhattan tower. $170 billion against a new hotel in washington, d.c. and scattered mortgages and loans elsewhere. >> are you expecting any response at all from donald trump? >> >> -- >> i would how we arrive at the figures for all the billionaires of the --ld, our meta-theology methodology is available on the web. we approach these at a present value based on their actual revenues and incomes. lost --how much as he has he lost spending on his campaign? of stock inmillion
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bonds he sold over the last year. roughly equal to the amount he loans to his campaign. he has soldt mean them to fund his campaign but the numbers are similar. he has another $130 million of liquid assets. still much more equity in his properties that he could take loans out against if you needed to. vonnie: what it is credit worthiness? s&p has an investment grade on the bonds out against one of his properties, east 57th street, known as nike town in manhattan. he has two lenders he is close with. one deutsche bank. they lent to him on a regular basis. >> a fantastic read, go to the
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bloomberg terminal and read the piece. >> that does it for the european close, let's look at where market finished the day -- the market finished the day. european stocks close lower across the benchmark industries. bayer after monsanto rejected its latest takeover offer, that was down. eu drugmakers got a record fine from the eu. that is it for the european close, this is bloomberg. ♪
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/it is noon -- >> it is noon in new york, welcome to "bloomberg markets." ♪
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>> flunked bloomberg world headquarters in new york, i am scarlet fu. story from san francisco to washington to istanbul. global stocks losing some ground, the s&p 500 retreating from all-time highs as investors consider bank and tech earnings. the $40 billion cigna-anthem deal and the 37 blion at that takeover of humana could be in danger. antitrust official poised to file lawsuits to block the move. looking for the best travel deals this summer, i sit down to look at what global shock means for travel companies. first, halfway through the u.s. trading day so let's check in at the market desk. julie hyman has been tracking the moves.


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