tv Bloomberg Markets Bloomberg August 30, 2016 10:00am-11:01am EDT
we will take you from washington dc to dublin and cover story set from germany and france. consumer confidence out in a few moments. going to straight -- going straight to the markets desk where abigail doolittle has the latest. >> it does look like consumer confidence beat estimates coming in at 101.1 versus the x 97.3. expected 97.3. interestingly, we going to the bloomberg and take a look at g#btv3076.
we see an interesting chart. consumerhe u michigan confidence index. the point is, the middle class is less confident. the lower class. the middle class. we see a decline in expectations for the middle class around consumer confidence. taking a look at the major averages to see what the reaction is to the consumer confidence number. the three major averages right around even, mainly unchanged. we do have a bit of breaking
news on the news that potash and agri-him are in talks to merge. -- potash and agrium are in talks to merge. farmers are also making less purchases. a potential merger could be announced as early as next week. now, let's take a look at apple. shares are trading lower on news the company may be -- is facing a $14.5 billion tax bill from the eu, plus interest. this after the european commission said ireland is taxple'slashe bill. gene munster thing he is unconcerned about this vonnie:. vonnie:the stop only up slightly on the year. going to be very interesting. a lot going on in the next two hours. stock only up slightly on the year. what is going on with european markets gek? toes.i am on my 90 minutes left of the tuesday's session. one industry group falling today. strong dollar. by one point 9%. check out some of the individual
mergers -- movers. wasgerman payment processor upgraded to equal weight of barclays. barclays says the company has built a strong, strategic position for product in regional perspective in the past decade and said well positioned. price tag up by 21% to 58 euros. 89% of analysts have a buy rating on the stock. you know the company, the world's biggest immense maker. m hold.raded to buy fro it says the emerging market recovery self-help likely to fuel further re-rating and cash returns as well. the price target implies a 13% upside from the current share price. today we are at 53.20. that is an swiss francs. swiss.
economic confidence in the euro area worsening more than analysts anticipating in april. this is heading household and companies. this does provide a case for stay in thes to recovery and revive inflation. we get inflation data tomorrow. it should show a pick up 2.3%. going to bloomberg first word news. senate minority leader harry reid is asking the fbi to investigate the threat of russia tampering with the u.s. elections. in a letter to the fbi director, the trump campaign and russian interests. he notes evidence of russian efforts to intervene in the l a portal process, including half of democratic political organizations. tuesday told primary elections.
in arizona, john mccain seeking a six term. main primary is kelly ward. he is hoping for a big victory so he can focus on the general election challenge. in florida, senator marco rubio is facing carlos borrows. patrick murphy and alan grayson are squaring off. british prime minister theresa may will let parliament have a say on starting a formal process for leaving the european union. this looks and says the timetable will be resolved in the coming months. the prime minister has said she will not trigger the exit process before the end of the year. i typhoon has slammed into japan threatening to bring floods to an area still recovering from the 2011 tsunami . the typhoon made landfall last night. even before landfall, the storm
paralyzed traffic, caused lockout and prompted officials to urge residents to evacuate. news 24 hours a day powered by more than 2600 journalists and analysts and more than -- in more than 120 countries. going to our top story, the european commissioner has ordered apple to pay a record tax bill. delivering the landmark ruling today at a briefing in brussels. benefit in ireland are illegal. two tax rulings in ireland have artificially reduced apple's tax burden for over two decades. apple will have to repay the benefits worth up to 13 billion
euros plus interest. >> more on what this means for apple and other companies. thank you for joining us on this massive day. howhas ireland responded, has apple responded, and how has the u.s. treasury responded? think there is massive shock today around this figure. it was as lowrday as 100 million euros. we began to hear things yesterday afternoon that it might be in the billions. i do not think anyone was prepared for 13 billion euros. there is shock here at that number. intense debatean about what ireland should do next. there has been an angry
response, both from ireland and apple, back to the commission. 's check out the commission response. there has been obviously u.s. on thatm the on state encroaching tax affairs. it said today treasury is disappointed at the commission. it is a parting from the important progress the u.s., the eu, and the rest of the international community have made together to combat tax avoidance. to what extent is there a feeling that the eu is unfairly targeting american companies and threatening global tax reform? i think ireland feels today it is a bit of upon between bes -- u.s. and eu. there is a sense the eu is trying to reassert authority.
basically what they are trying is have a high profile test case where ireland can be seen to exercise its smallover a relatively country. having said that, apple is a ampany with 200 billion and cash pile, so it is hard to feel too sorry for them. overall, ireland would say they are caught in the crossfire between the eu and the u.s. vonnie: what is the ground for appeal? ireland says they will appeal. what will they make their case on? the suggestion for the commission is there has been a sweetheart deal that apple was advantagess of an
that it was told in advance how it could minimize the tax deal. ireland is asserting although it did offer this, they were just trying to help the coffee give an idea of how it would go about paying taxes. according to them, they were nonbinding and therefore, could not be considering -- considered a sweetheart deal. that would form the code -- the core of the defense. is this a first time there will have been an appeal like this in the european courts? >> my understanding is the other u.s. companies that have been hit with similar rulings are appealing those cases. in the wider area, it is basically unprecedented. this will be forwarded to the appeals court. by far, apple is the highest profile. tax is 40% of their overall
base in the given year. we are talking huge amounts here. six figures at state as well as an international reputation. vonnie: don't miss our interview next hour. the europeantager commissioner for competition will join us at 11:00 eastern, 3:00 london time. ireland's finance minister will join bloomberg television at 11: 15. stanley fischer clears the air about the central bank's next move. we will bring you that it was the interview. that is next. this is bloomberg. ♪
mark: live from london and new york mark:, i am mark barton. vonnie: i am vonnie quinn. a look at some of the biggest business stories in the news. , i am mark barton. vonnie: i am vonnie quinn. a look at some of the biggest business stories in the news. u.s. home prices increased moderately in june. case-shiller 20 city home price index was up 5.1%, the slow with sincever-year growth face last august. home values still soaring in the northwest but have slow to more sustainable rates elsewhere. a and a airlines will have to replace some engines on the boeing 787 dreamliner. turbines in the engines of three planes leading to a number of canceled flights. the problem will lead to paths.ed not drinking as much beer in china. revenue and profit felt the first six months of the year. behind the disappointing
results, bad weather and china's economic slowdown, both of which hurt sales. businesshe latest flash. more evidence the fed will continue the data driven on interest rates. can't asked the vice chair if the fed would implement one and done or even to an done hype he the sheer. policy this year. choose paste but we choose paste on the basis of data coming in. i do not think we know at the time we start with one and done for several. it depends entirely on what is happening in the economy. you stated i am an optimist.
you were surrounded up pessimism. i want you to redefine the comment in jackson hole of pervasive pessimism. it is out there. it exists today. how do you push back against that? >> the question, what is the pessimism about? it is not about employment. it is about growth. that problem is largely about productivity growth, something that is very hard to control by policy makers. enormous sleep on what private individuals are doing in their companies. it is very slow at the moment. it changes from time to time, but we do not know when it will change. i expect it will change. there are remarkable things going on.
unmitigatedtion the lessons. you insured yellen are operating a central bank from the challenges that others have. do you feel this going into the september meeting or december meeting that you are the central bankers to the world, or can you be discreet and look only at the apco >>ates economics the world is becoming ,ncreasingly interconnected increasingly the capital markets of the world. so what we do affects many other countries. that was always so. it is also true what they do affects us. so we are dealing with interconnectedness, and we are probably the most important of the central banks but the european central bank is operating in an area of about the same area of gdp.
tom: different economist, paul krugman has a primal screen to go back to simpler economic models to move from the modern mumbo-jumbo back to simpler the realre hoped into economy. the debate at jackson hole and the debate at the fed, does it need to go back to simpler models that you taught years ago at m.i.t.? >> we do love simplicity. - dsguestion is, dst - models and the expectations matter. those that are more traditional that may be very big. the basic model that the fed is actually large and quite complicated but the structure is
that you could explain to economic students. say what i would a lot oflly, i saw economists talking to each other at jackson hole. when we look at negative rate that youctivity mentioned, i don't see the economists addressing the dysfunction to the financial system. within the debates you are having for september and december, are you sensitive and aware to global finance and global thinking having to deal with negative interest rates? we are sensitive to what is going on. one hears and breathes about and talks about. what is happening in japan for .nstance yes, we take all that into account. the united states is fortunate we are not in a position where
i would like to bring the etf analysts into the conversation. this may be a week before the long labor day weekend but a lot happening. we did have janet yellen's big speech at jackson hole last week , and we have seen quite a reaction around many of the asset classes the possibility that the fed will tighten. tell us what you are seeing around the dollar etf's. >> right. the one seeing the most action is the powershares dollar bullish. it traded 70 million friday. there is definitely some heat around it. goes long the dollar index by shorting a basket of currencies. this is heavily developed markets. one, thete on that newer one but getting bigger is trade the wisdom
bloomberg dollar index. at has emerging-market currencies and there. and a littleerse cheaper. it is going a little faster. >> both are taking up on the expectation rates would go higher. today's news is around apple and the news that the company may taxes4.5 billion in back around ireland giving a tax break. which companies do you see being influenced by this? >> what is happening with apple is why people use etf's in the first place. apple.this is that is a lot. if apple were to go down of percent today, it would skew it a lot. k is another one that is 13% apple. unless apple goes down 10 or 15%, it will be a little bend.
some people do like them for the idea of less apple. interesting diversification. going back to the fed. i know you are looking at iau. ?hy are you looking at that etf >> because it is still taking in money. this is the fee. it is used i retail investors. i find it fascinating it has taken in quarter of a billion dollars. -- i find it fascinating. still investors are allocating. 2008 in mind. they still want the crisis hedge . so people are still allocating two goals even if the hot money is ailing. >-- bailing. >> i know there was a recent outflow. they are not you
solution to keep enjoying the benefits of the european union are diminishing. the u.k. will have to pay into the european union budget if it market have the advantages. >> before freedoms of the market are linked together, there is no possibility for example to keept the free movement to all the other freedoms. this is one point that may not be in line. secondly, i think if someone wants to benefit from the european union market sector, contribute to the cost of the operation.
no one talks about that. more on this big story in just a second. we will carry on with this door he in a second. the latest first word news. >> and italian state general today paying tribute to 37 of the 392 victims of last week's earthquake. the evening mass is taking place in one of the towns flattened either earthquake. this after residents balked at the government planned to hold it in a distant airport hangar. in brazil, and peach met proceedings continued after bill marie failed to win over senators who will decide whether she is permanently removed from office. answering questions for 14 hours in her impeachment trial. to build appear
against her tomorrow. a tropical depression is threatening the coast of north carolina. the depression is moving north with a forecast track that shows the center will be north carolina's outer banks. it could become a tropical storm later in the day. u.s. olympic swimmer ryan lochte not saying whether he will return to results to face a charge of filing a false police report. his legal team is dealing with that situation. he admits he lied to having a gun held to his head at a rio club.on -- rio de janeiro global news powered by global news and analyst. this is bloomberg. mark: going back to the brexit fall. the u.k. moving forward. the question many have time -- tried to figure out is what
relationship will they have from here you go join me as is the deputy prime minister joining us. this will represent from the biggest is the sloppy. there is a big eu summit taking place in early september. one of the things up for debate is how will the eu cope without non--u.k. eut is a going to look like? what is your early view of it? >> first of all, we need to have a good relationship. we need to have a very good regulation, and need to go further with this kind of activity. it is our duty to do more. i do not think it will be possible to take concrete actions. maybe monetary union,
some social issues. it is possible to challenge together with certain member states. this. need to take there are other things to do. how can you continue to have a good relationship with the u.k. on trade if the u.k. wants to have continued action to the market? that does not seem palatable. will britain pay to have continued access to the single market? work am sure we will together. nato anden this inside
other cities. this will be more difficult. have a realle to division of the u.k., but certain challenges for the u.k. because if you want to take part, you need to finance this. as a third issue, there is the margin issue. it is possible not only to have goods and services that goods the people. this is linked with the and will solveat the migration issue. it was the most important issue, the migration issue. is a challenge for both sides
to work together. as a long process of negotiation during two years. vonnie: how long is it palatable for your governments and the wider european union to wait for the united kingdom to say exactly what it wants? we are still waiting for that. of course we will take note it as a very clear decision. there was a request to take part in the european market. they want to stay together. part in true to take the international market, and we prefer to do that, it is very to share the charge of that. we know that we have the same situation with norway. a are all of the opinion that they want to take part in
certain activities of trade and investment. if it is true it is the same situation for the u.k., we will negotiate that. it is very clear for all the british people. vonnie: would you negotiate as one voice within the european union, or will you be looking for different concessions from the u.k. if you do trade going forward? >> we need to go further together. of course, the decision by the that, buted to manage on the other hand, it is possible to take concrete action . , not onlyome urgency
in the monetary union, but we have real challenge is about value of the the stocks of the european union. so we will work on both sides. it is possible to stay in a good relationship with the u.k. as a third country outside the but possible to go further. maybe just with the members of the eurozone about social issues and budgetary issues. if it is needed, less than that. we will come to you to do that. possible to go forward with fewer countries. mark: what is the relationship with the new prime minister? ratherotable for making
and or create gaps in the past, and some accused him of lying and he talked about britain leaving the eu. what is your personal relationship like with the new foreign minister? >> first of all, i regret the decision taken and the u.k.. meetings nowlot of in some weeks. he is playing a very important role to stick together. .e had a meeting and nato the nato area clear that we would continue to work together on this end. there is a coalition on -- in iraq and syria. i am sure we will work more and more together. share intelligence. issue, it economic
will be more difficult. theeed to look at investment with the u.k., but it must be a difficult charge in the u.k. to pay for that and to pay for participation in the international markets. i get your reaction on the decision of apple and ireland and ireland needing to recoup 10 years worth of tax revenue. something that happened in january where you were ordered to recover 700 million in tax revenue? what is your reaction to the decision? >> i did not understand that. the decision that ireland needs to recover taxes from apple. back taxes. what is your reaction? same decision in the u.k. and european union. it is possible for the
commission to decide we have had [indiscernible] it was the case and ireland. we have known that for many years. contradiction. now it is the decision of the european commission to ask for apple to pay. vonnie: the same thing happened to belgium in january. you had to recover taxes on 35 companies. this will be a problem going forward for many european countries. but we are working with all of the companies in the european union. it is the real competence of the european union to manage fair competition. not only fair competition among the companies but among the states. with not the first case
apple. it is the decision of the commission to stay if it is possible to have a fair game among the different multinationals from everywhere. now is a chance to apply the decision by the european commission and ireland. all for justice. belgium haveight, prime minister, thank you. mark: we have much more ahead on the eu decision on apple. for the response, ireland's finance minister, michael noonan 11:15 eastern time. what an afternoon, morning we have for you on bloomberg. ♪
vonnie:vonnie: you are watching bloomberg. i am vonnie quinn. what we are watching. apple is being hit with a massive tax ill. charging more than $14 billion because of the illegal cap and if it. -- tax benefits. volkswagen lays out the timeframe to reform the company after the gas investigation. the government fears the reconstruction. we look at what is being done to
minimize damage. they european commission has ordered apple to pay more than 14 billion dollars, plus interest and a long-running tax case. the largest tax penalty in the three-year crackdown on so-called sweetheart deals. quick this selective tax treatment of apple from ireland is illegal on the state aid rules. it gave apple a significant benefits compared to other businesses. the eu says in 2014 the tax break on the european profit was five 1000 of 1%. apple and ireland said they will fight the eu decision. the chief executive of volkswagen says it will take two to three years or the turner ground plan to take cold. -- turnaround plan to take cold. a cultural shift to get the eu brand and divisions to quaff
great in the technological changes. the company is still trying to giant emissions cheating scandal. ofnwhile, american owners the diesel cheating volkswagen's have been given a choice, get the car fixed or get your money back, and they are lining up for the cash. whose half of the drivers cars are in violation of pollution laws have signed up for the settlement program so far. asking for the buyback. a 70 year low in 2016. there may be a shortfall ahead. the scottish consulting firm says explorers discovered a 10th as much oil since 1960. reason, drillers have made drastic cuts in the exploration budget. vonnie: time now for the bloomberg quick take. background on issues of interest
. tropical storms and hurricanes have wreaked havoc around the to climate change the world's oceans are warmer. that will mean more storms are more intense storms. now live within 200 kilometers of a coast line. each year many year storms, high winds, and flooding, and the government fears the reconstruction cost. in the atlantic basin, forecasters predict the november hurricane thann will see more storms the 12th that occur in a normal year. hasacific on the el niño left the ocean temperatures somewhat cooler and has reduced the pace of storms in 2015, which included the strongest storm ever encountered. japan was hit with its first typhoon and 11 years. the devastation caused by hurricanes and storms has been a constant struggle to those who live near the sea. lowerers have forced some
colonies to rethink defenses. in galveston, texas, the 10 miles he will raise the city by as much as 17 feet after one of the deadliest storms in u.s. history. and, in new orleans, levies and canals have been used to harness the mississippi river for years. this has lead to flooding from hurricane katrina in 2005. -- more than 900 people died and 300 homes were damaged. there is a divine ruling on what to do to prevent the damage or even to rebuild. tokyo bill that massive to version lead facility. new york is expanding a protection system around lower manhattan. some environmentalists are challenging the right for people to rebuild after storms. you can read more about this on the bloomberg. that is the global business report.
mark: live from london in new york, i am mark barton. i am vonnie quinn. shares of hershey taking a big hit. the stock down sharply after they walk away from a takeover attempt. hershey has been the subject of takeovers before. where does hershey go from here? bringing in craig jia mona. at that point will hershey have a rethink? >> it does not seem like right now they want to do anything before the board of hershey
trust is reconstituted. 80% of the voting right. in the past they have been a barrier to a deal. flux.ard is in it sounds like hershey is saying we will not make a move until 2017 when the board is put in place. vonnie: it does sound like there is a price. >> vincennes we want to start talking at 125. even if that scenario, we have the issue of the trust. mondelez says we are going home and not going to further negotiate. theoes this confirm reputation as the company that cannot be bought. >> it does. once again, hershey's it has been an attractive company over the years, but there is a huge barrier dealing with hershey's trust and the politics. i just think people will look at
this and think it is a very difficult company to buy. mark: does this mean that other balk atl suitors might the opportunity to pursue hershey? >> that is the sense we are getting. that people will look at this and say they came in with a very nice offer and got caught up once again in the politics that surround hershey's. vonnie: definitely internal politics, but it seems like the consumer is getting healthier or maybe avoiding things. wouldn't this be in their best interest? >> you would think. they made a big push to beef to go moreave tried premium. you're right, people are buying less hershey's bar. that is what will are where they are. mondelezont elise --
maybe we can slip in there with a knife bit and get this done. but i think with the way it unraveled, this company is proving it is a very tough target. vonnie: where does the pennsylvania attorney general come into this? have oversight because of the way it is set up. the pennsylvania attorney general has the right to review any deal if they feel it would change the financing of the school, the school for underprivileged children is funded by the trust and operated by the trust and the trust gets a lot of its money from the chocolate company. it is sort of a convoluted thing. it is just another thing that hangs out there with this. vonnie: can it survive the way it is on its own? >> they say they can. they have done a lot to diversify the portfolio. they struggle, and that is why it has been a target. coming up, much more ahead
on the european commission ruling. the european commissioner will join us. minister,finance margrethenan and not as those interviews. stocks rebounding. help in no small part due to the declining euro. that is giving a boost to euro area exports. that is the currency board today. pound.o down against the the closed is literally 34 minutes away. you are watching bloomberg "markets." this is bloomberg. ♪
mark: you are watching the european close on bloomberg targets. -- market. we are going to take you from washington to dublin and cover stories from germany and france in the next hour. here is what we are watching today. we will talk with margrethe decisionabout her ordering apple to pay a record $14.5 billion, plus more in taxes in ireland. the largest penalty yet on corporate tax avoidance. apple and ireland are vowing to fight the ruling. we will get the response from and why he said the commission left him with no choice but to appeal the decision. and in an interv