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tv   Bloomberg Markets  Bloomberg  September 12, 2016 10:00am-11:01am EDT

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vonnie: we are going to take you from washington to south korea and cover stories out of the u.k. and mexico in the next hour. -- the worldor's is in a sea of red as there are concerns over the limits of central bank stimulus. we are awaiting the fed in a few hours. mark: they are going to create the worlds of biggest supplier. they crossed the $30 billion plan to become the largest supplier of industrial gases. vonnie: hillary clinton's health is threatening to mushroom into a political crisis. donald trump is wishing her
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well, he wants her to release more information about their health. we are 30 minutes into the trading day. julie hyman has the latest. julie koman all three indexes have turned around. after the sellout we saw friday, the deepest since the brexit somein the u.k., we have stocks higher across the board. the nasdaq is up about a quarter of a percent. to be sure, these are not a gains, it does represent a .napback from friday there were analysts saying you should come out and buy stock after the drop we saw on friday. it looks like at least some investors are taking their advice. friday isse we had coming down to some extent today. initiallye seeing
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looked like to return to volatility was going to be a multi-day event that is no longer the case. you can see it has turned a little bit lower. it is still above 17. it is above the very low level for that index lately. i am going to call in audible up here. we will take a look at the sectors that are leading in the gains we see. it's pretty broad-based, even if it's not a big game. financials are the only group in the red at this point. many of the groups beat up friday are coming back today. telecom and utilities, consumer staples are leading some of the declines. some of these groups have flip-flopped. if you take a look at oil prices today, they have been declining. this is the 10 year yield that has been bouncing around. oil prices are down about one third of 1%. they were down much more.
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they have been climbing back along with stocks. marathon and occidental are still trading lower. we had occidental being downgraded to underweight by jpmorgan. quickly, if we can talk about a couple of big retailers, callan is upgrading walmart and downgrading target. walmart will increase and continue its positive u.s. traffic. target is going to take some time to improve its grocery store presentation. all of this is playing into what is now a turnaround in the u.s. stocks. mark: you are helping us. we were down 2%. the biggest fall since june. we are now down 1.2%. personal household goals -- goods are flat on the day. the gauge is down by 3.1%.
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that's the most since july 6. the stoxx 600 is the lowest since august. how are things turning around in the last week or so? you were talking about technical analysis, which brings me to this wonderful chart. this is the stoxx 600 over the last year. the blue line is the 200 day moving average. was aappened on friday golden crossing. this happen for the first time in 20 months. the last time that happened, the stoxx 600 rose 20% and reached a record high. that is significant if you are a technical analyst. let's look at the volatility gauge. chart. a 12 month we rose for a second day. we rose 20%. rise sincebiggest
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january last year. we are at the highest level since july. we are nowhere near the level we .aw pretty -- pre-brexit we saw the depreciation, but we are nowhere near those levels. in auguste disruption in the financial market. the bond market seems to be at the core of the movement we witnessed across all offset -- asset classes. this brings me to france and germany. germany is creeping above zero. they moved to zero for the first time since july. we're back to 0.02. germany went as low as 18 basis points in july. france saw a record low yields. the yields are creeping up the 10the eurozone in
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year portion of the yield curve. vonnie: let's check in on the first word news. we have more from new york. trump says the health of the candidates is now an issue in the race. hillary clinton has been diagnosed with pneumonia. she appeared to stumble as she was helped into a van. this was after a 9/11 anniversary ceremony. donald trump says he will release more health records. the president of the philippine says the u.s. special forces in that country must go. he says he will review the policy of letting u.s. troops fight muslim terrorist groups on the island. he says their presence makes matters worse. americans have been on that island since 2002. china is saying don't blame us for north korea's nuclear ambitions. a spokeswoman said the korean nuclear issue is all about the con put between north korea and
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the united states. question the value of economic sanctions on north korea and if the problem can be solved through consultation. rebel groups in syria are skeptical of a cease-fire. the truce was announced on friday. it takes effect today. one group aligned with al qaeda is not signing on. part of the truce cause -- calls russia and the u.s. to attack al qaeda in syria. brazil.arched in the rally was organized by the leftist party, some are linked to the him preached -- impeached former president. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. mark: thanks.
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on fridaye jolted with more willingness to raise rates. made itfed president clear he does not want to make any waves in advance of the meeting later this month. he offered up this assessment. >> notwithstanding a few monthly reports, from the institute for supply management for example, i am satisfied at this point the conditions warrant that serious discussion. are countingrs down to 1:15 p.m. in new york. let's sort things out. specialistto the fed paul donovan at ubs wealth management. is a lot of tantrum talk around, whether it's the tantrum 2016, is it right to compare
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the backup in on deals we have seen across the globe in recent days to those two key events in recent years? ofl: it is a dizzying height 0.03%. 1994 styledly the selloff when the bond market actually had applications. i don't think we can claim what we see today has any meaningful economic implications. i think a lot of the problem that we have at the moment is central-bank policy has become a lot more complex than it used to be, it's a blend of monetary policy and regulatory policy. tokets find it difficult confirm how policy will impact the economy and the economic outlook. mark: there was a wonderful piece saying how the boj is leading global bond markets.
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is that how you view the global macro standpoint right now? is the boj leading things or not? things, howing important is the 20th and the 21st when we get the unveiling? paul: i would be concerned if they were leading central-bank policy. independence has been compromised. i think that's extremely dangerous in this environment. is -- awhat we have is divergence. the federal reserve has been fight -- tightening quantitative policy. a sharen a following as of gdp. that is tightening policy. they have tightened on terri policy and i think they will do so again. frankly given their in placement -- inflation position, they are behind the curve.
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the u.k. has special circumstances, they have been fairly cautious. i think they are stacking the bond market. mark: when it comes to the bond market, japan is leading. u.k. i would say it's the its leading. if you look at the gilt market, regulationulated by and the pension fund industry in particular. with a combination of regulation and central-bank hikes, every market is trading below their value yield. that is going to continue to be the case. with the 10 year at 1.67% now, is there a disconnect between the u.s. curve and the fundamentals of the u.s. economy? got in think what we've the united states at the moment is an inflation problem. there is a disconnect, yields
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are too low. i think that will remain. virtually every inflation measure in the united states is running at or above its 20 year average. the sole exception is a couple of headline numbers that have the lingering after affects of low oil. core cpi, not the matter which one you look at, they are running at or above their 20 year average. the bond market and the monetary policy is very far from its average. that is the real disconnect. vonnie: do we get an increase next week? paul: if i were running the fed yes, but unfortunately i've got the wrong accent. i think they are going to pause. i think the factions of the fed have not been pulled together closely enough yet. i think they probably raise in december. i would not rule out september entirely.
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there is an attempt to try to move things along. i think what we get is a signal in september and a decision in december. mark: what's the signal from the bank of england this week? we heard a lot of comments from mark carney. what can we add to what the governor told us last week? paul: i think it's unlikely we would get further rate moves. the effects hit the economy. a lot of the banks were very slow to pass on to mortgage players. it hasn't hit consumer spending. to try to move on rates now would be too soon. i think the bank is reluctant to take rates lower anyway. we could see some quantitative policy. i would question whether that is going to achieve very much in the current environment where we've got uncertainty over the referendum, implications still , thehe labor market
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inflation story has yet to fully hit. i think caution from the central clearly signaling they are ready to act in the future. mark: thank you, paul. it's good to see you. state payment to bloomberg. the chicago council of global affairs. coming up, we look at the stocks moving in the early u.s. session, including transportation stocks. in case you missed it, we are barely in the green for the u.s. majors. the dow is up 6%. the s&p is up 1/10 of 1%. even the nasdaq is up about 3/10 of 1% higher. equity markets around the world stay in the red. this is bloomberg. ♪
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mark: live from london and new york, i am mark barton. vonnie: you're watching bloomberg markets. it's time for the latest bloomberg business flash. they will restart trading in columbia. trading was halted in july after a request in the wake of the brexit vote. they agreed to sell .5 u.s.rties for $275 million dollars. ,ank of america and its new ceo this is as soon as this week. the current head of bank of america's italian operations. before he could be appointed, the ecb must give approval.
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he is trying to raise $5.6 billion to replenish capital. that is your bloomberg business flash. mark: the major averages could be slightly up. let's get back to the winners and losers. julie hyman is looking at some transportation stock. alix: some are winning and losing this morning. julie: american airlines is out with their traffic numbers. the company is referring -- reaffirming unit revenue will fall by 5%. that's an important number. the shares are down. ual came out with its august traffic numbers on friday. traffic is up 6/10 of 1%. capacity rose by 1.9%. those are not down by is much. 3%, which is a
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little bit of an increase. we are looking at ch robinson, the trucking company. the analyst says they could face a difficult near-term outlook because of stabilization in trucking markets. the price was cut to $72. , those shares are up 2%. elon musk has unveiled a new version of the autopilot program. it has come under some scrutiny after it was related to the death of the driver in may. the biggest change is radar will pay a bigger role. it will be more reliant on radar to sense where the other cars are in relation to the tesla. thanks a lot. still ahead, another big scoop from our global deals team. gas giants are in merger talk.
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why the deal collapsed and the other big m and a news. this is bloomberg. ♪
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vonnie: you're watching bloomberg markets. i am vonnie quinn in new york. mark: this is bloomberg television. another megamerger gets added to the m&a graveyard. they both have market caps around $30 billion. they called off in all stock deal. it fell sharply after bloomberg reported the termination of merger talks. joining us is one of our emanate reporters who helped break the story. one of the talks fell apart? it's issuesthey say over governance. digging behind the scenes, there were a variety of issues. what kind of responsibility have in europe?
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it sounds like the guys in munich, some of the labor reps were pushing back because they wanted to secure more operations in munich. that was an issue. mark: the strategic rationale for the deal is there. it's the governance that's the issue. issueshere be regulatory when it came to this deal? >> the big deal when this was announced, it looks like they are moving ahead. they had agreements on management's and the terms of deal. shockingly as we started hearing rumblings last night, it will part out of the blue. no one saw this coming and it fell apart on the soft issue like jobs and location. there might have been some disagreements from the management board and we are hearing more and more that there were rumblings about who was behind that, including the cfo. agreement for an
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two big canadian fertilizer groups to merge. is this good for the industry? does that mean we are facing more years of down trodden crop prices? >> it's good for the companies. that's a difficult industry. they will be able to cut out cost and get more purchasing power and impact prices. it's good for them and that's why investors like the deal. when we broke it, both stocks jump in we see positive reaction. they talked about shaving -- saving $5 million year. that's why people like the deal. other any kind of estimate about how many? quotes i have not seen any figures on job cuts. if you're looking to cut out that much in costs, it could cost jobs. they are going to merge into one head office. they will look everywhere to try and trim the fat. mark: it would not be right up
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we had you on set and did not talk about our favorite deal. ayer and monsanto. they are in the in game. when do we think the in game will actually be? >> we think it's coming soon. it could happen this week and that would end over three months of back and forth and they are not quite there in terms of price. it looks like they are on track. as we see, it's not done until it's done. mark: you will be here to tell us all about it. thanks. david cameron, the former uk prime minister is to stand down as an mp. he is and him p in a district. we hear the press association tells us that he will stand down. that will trigger an election in that district. referendum.brexit
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he said he would step down as soon as the new leader was named. the new leader was named sooner than people imagined. has stepped down as an mp of the whitney district. that is breaking news. not completely an anticipated. the timing may be later than people expected. hillary clinton's health care is in danger of becoming a political price -- crisis. but that be another landmine for suddenly vulnerable markets. that's next. this is bloomberg. ♪
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♪ live from bloomberg world headquarters in new york and london, i'm vonnie quinn. mark: i'm mark barton. let's check in with alisa
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parenti with more from our newsroom. saudi led airstrikes in northern yemen have reportedly killed 30 people and wounded 17 according to a you and official. it is one of the deadliest attack since peace talks collapsed. british home secretary amber rudd said work permits may be a way to control migration into the u.k. after brexit. she also said britain's will have -- british citizens will have to accept the caesura. -- into europe. -- iament wants to the government says it hopes to hold the election this year. austria's constitutional court voided the results of may's relet -- election.
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president obama will meet with the top foreign leaders of congress today. this comes with another government shutdown deadline fast approaching. leaders are moving towards a deal to fund the fight against zika. also on the table, a 12 nation asia trade deal. the protest movement in the nfl appears to be gaining momentum. several player showed their support for colin kaepernick by locking arms, raising their fists, or kneeling just before or after the national anthem. he is protesting the treatment of african-americans by police by kneeling during the national anthem. the san francisco 49ers take the field tonight against the los angeles rams. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm alisa parenti, this is bloomberg. vonnie: now to u.s. politics
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where health has emerged as a top issue in the presidential campaign. hillary clinton's undisclosed bout of pneumonia threatens to turn into a political crisis. as she was leaving, she was caught on camera stumbling into her van. for more on all this, let's who was kevin cirilli at that ceremony. does clinton need to be a lot more open about health issues? is it becoming something that will darker for the rest of campaign? kevin: there is no question that she is facing several weston's yesterdayhandling of in new york city. for about 20 or 30 minutes, there were a lot of questions. number one, where was she? would she be coming back to the surface -- service?
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it leads to questions of how the campaign is communicating with reporters. donald trump has also not released his health records -- full health records. a campaign aide telling me he would make a physical report available that he took last week. facing questions on their transparency regarding health. that video of hillary clinton leading -- leaving the 9/11 memorial service truly shaking this race. vonnie: there is no absolute mandate to release your records. why don't they both just do it? are they trying to hide something? kevin: i have been all over the country covering donald trump's campaign. when i talked to undecided voters, they tell me that they think that having access to health records is part of their decision-making process. as we have seen, bloomberg had a
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report over the weekend, wall street has taken concern with regards to not having transparency with the health records of the two candidates. tradition anda there are new questions for hillary clinton to answer. schedule forer monday and tuesday to get back on track from this illness. very rare is a instance where donald trump has kept his mouth shut. i know that those close to him think this could be a defining moment in the campaign. definitely, they feel, a defining moment. the health episode coming less than 24 hours after the fallout of another clinton gaff when she told private donors that half of trump supporters are a basket of deplorable's.
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-- deplorables. he is going to take her on head on for that comment at a speech in baltimore. a colleague of mine and i spoke with multiple campaign aides. -- they took a look at that video and i think that the response that everyone had when they watch that video was what is going on with hillary clinton? this is someone who was clearly sick and needs to get better. -- the obvious worst case is that she drops out of the race. no one is beginning to discuss that, are they? kevin: nobody is discussing matt. -- that. mark: what is the worst-case scenario? kevin: i think the worst-case scenario for the clinton
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campaign is that this is a larger trend of the lack of transparency. there have been questions that democrats tried to display as merely conspiracy theories. concerns onushes hillary's health. the democrats already pushing that and saying donald trump should also be held to that standard and also have to release his health records. when you take a step back and you look at the past weekend for the hillary clinton campaign. when you take the health episode and you added in addition to what happened with her comment in which she called essentially half of donald trump supporters that gets. that puts them on defense. we are ancient closer to that first presidential debate. you can bet that donald trump and his campaign will be pushing that in the debate. mark: great to see you, kevin. let's move on and talk about
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politics markets. volatility resurfacing after cruising's murphy -- cruising smoothly. one of the reasons we have seen this new volatility is the expectation that hillary clinton will win the election. thet time to recalculate risk reward of a regime change in the white house? it might be. it is hard to suss out any kind of market view. it is a discussion that is important. you have to be careful on how you look at it. there has been no discernible outcome on how markets are viewing any kind of preference on whether markets have a preference. if you look at trump's rise
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through the republican debates and getting the nomination, there was no clear reaction positive or negative from markets. is really hard to interpret the news over the weekend. it is difficult to figure out what markets view in terms of either candidate. we do know that a clinton -- it'scy would largely the same party as the incumbent president. a lot of policies will probably overlap. i think you can objectively say there is less unknowns involved with this president's -- that presidency. assume thatets there will be a transition with trump ar. mark: there is still an element of complacency. expectations, she will prevail in november have been a
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factor in the markets. markets are beginning to wake up and think about a donald trump victory. are you saying there is still an element of complacency? perhaps it will be at -- it will be a debate. will donald trump's silent debate work on hillary clinton? perhaps i could put it in perspective. , we despite the 2.5% drop are still pretty low in general. there is still a complacency within the market to a certain degree. how much of that tied to -- is tied to politics, we will find out. we are also in an election year. vonnie: what's fascinating's this -- this year's we are
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seeing a reaction outside of the u.s. you see a reactionary mexican peso. that is a country that will probably be very affected by a trump presidency. oliver: the rhetoric would point that way. two things i want to point out. the first thing is the caveat. you are looking at financial market versus news market. they are two very different frequencies and two very different data sets. that being said, we can obviously see that this is not a coincidence. popular hasg more not been so great for the pay so given all of his -- peso. it tells us that markets do react to politics. in terms of what each politician will do.
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trump has talked about his spending plans. that would be for infrastructure. very eatingot of viewpoints on what each candidate would do. varying viewpoints on what each candidate would do. vonnie: we also don't know a lot about their fiscal plans. the great unknown is whether those plans will be implementable because we don't know what happened with the house or senate. i wish it were something more discernible and more exciting to speculate on. at the end of the day, i think that is why that until there is a very clear shift towards trump inconsistent polling or a major news that puts him front and center, we will assume a clinton premises -- presidency. would that means is a
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continuation of many policies that are there and also this gridlock. gridlock means things don't get done, which means things don't change. vonnie: oliver renick, thank you. vw hasn'tng up, turned a corner completely on the emissions scandal. tomorrow, bloomberg will have -- will be live from buenos aires. we will have exclusive interviews from the president and bp ceo bob dudley. -- the argentinian president and bp ceo bob dudley.
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♪ vonnie: you are watching bloomberg, i'm vonnie quinn. mark: this is your global business report. vonnie: a top executive at volkswagen admits the company has major challenges following the emissions scandal. will $20 billion be enough to put the scandal to rest? star board takes a stake in the company and outlines suggestions. vonnie: in today's quick take. argentina may be veering under a different direction -- the philippines have been veering under a different direction. a top volkswagen executive admits the company isn't close to repairing the damage caused by the emissions scandal. says the worst is behind
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. it. >> we are trying to provide solutions, technical solutions to our customers and regulators. we have to regain the trust. we need to work very hard and we do work very hard. we are making progress, but we are far from fully overcoming the crisis. it is a long way to go. vonnie: he also said it is not clear whether the $20 billion that vw has earmarked to pay for this will be enough. linda and praxair -- linde and praxair have ended their merger talks. the stock deal could of been valued at more than $30 billion.
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samsonagreed to buy printer business for a little more than $1 billion. the acquisition is the biggest since hp split from hewlett-packard enterprise last year. activist investor star board rgeting perrigo. star board wants perrigo to consider selling its prescription drug business. the company has not commented yet. vonnie: time for our bloomberg quick take where we provide context and background on issues of interest. the philippines have been marked by relative stability and economic growth. the philippines may be veering with a newr course
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president who faces serious challenges. te scored ater victory following an antiestablishment campaign. in the first two months of his term, more than 2000 suspected drug leaders -- dealers were killed. september, barack obama scrapped at present -- meeting after he unleashed an expletive laced threat. after centuries of spanish and u.s. rule, the philippines finally got to determine its own fate at the conclusion of world war ii. is a splinteras democracy. it is dominated by --
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a quarter of the population remains in poverty partly because of regular national disaster -- natural disasters. duterte's critics see him as a threat to democracy. his challenges include and theloyment migration of educated filipinos overseas. you can read more about the philippines on the bloomberg. head to for more stories. mark: i want to reiterate the breaking news from david cameron. he says he is confirm -- he confirms he is stepping down as an mp. just to read his statement. i thought about this long and hard over the summer. the circumstances in my
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resignation, it isn't really .ossible to be a proper mp as a former prime minister, everything you do will be a big distraction and i version for what the government wants to do for the country. david cameron will no longer be a member of parliament. this is bloomberg.
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♪ you are watching bloomberg markets. i'm vonnie quinn. mark: from london, i'm mark barton. trying to put to rest that deutsche bank might sell its assets. he says they should let themselves be distracted. he is trying to restore confidence in the bank, announcing legal costs and undermineing charges --.
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it seems every time john cryan talks, he is telling us merger orculation isn't happening this asset sale unit isn't happening either. michael: the strategy he has laid out has not produced a lot of results as of yet. a lot of people are out there asking what the next move is. look at where the stock is trading, there is pressure to do something more. he is talked about cutting cost, laying off people. they have a plan out there. investors are looking for another piece. mark: it would be a big shock if they did sell it. one of the ironies of the current situation is that the units that would be easier
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to sell are the ones you want to keep. become muchment has more attractive after the financial crisis because you don't have to hold as much capital versus a trading business. it is an attractive business for banks out there. there would be plenty of interest if there were to. vonnie: is it a little bit like the federal reserve? the more he speaks, the less the markets listen? been a lotere has written about the lack of more hour at deutsche bank and the lack of employees seeing a vision. he is trying to fix that by these monthly letters to themyees, trying to make
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feel that there is a plan. he has talked about this being a tough year. morale numbers have reflected that. i think he is trying to counteract that. it does not seem he is denying things a lot. employees talked to in his latest letter about innovation. will this actually plant any action on employees? i think part of it is trying to motivate the troops. they are putting some resources behind some of these initiatives. they are trying to get to fewer operating systems and their technology, trying to make things more streamlined. they have committed to opening a digital hub in dublin to try and foster innovation there. all the banks have talked about becoming tech companies given
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all the pressures they face in the need for fewer employees. -- and the need for fewer employees. that is bloomberg's michael moore, thank you. mark: coming up on the european close, we will watch the global markets. exclusive interview, volkswagen cfo on the challenges of spurring growth while paying for the crisis. 30 minutes away from the monday session. this is bloomberg. ♪
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♪ mark: it is 11:00 in new york, 4:00 in london. 30 minutes left in the trading day in europe. i am mark barton. i'm vonnie quinn.
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you're watching the european close on bloomberg markets. ♪ mark: we are going to take you from washington to seoul. we will cover stories out of denmark and the u.k. here is what we are watching. u.s. stocks are rebounding right now. we will get investors perspectives on when the markets will return to their summer calm. vonnie: in an exclusive interview with bloomberg, the vw cfo says they are using the reason to emissions scandal as a spark for change. -- catalyst for change. shares fell


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