tv Bloomberg Markets European Close Bloomberg September 14, 2016 11:00am-12:01pm EDT
vonnie quinn and you are watching the european close on bloomberg markets. mark: we are going to take you from washington to paris and cover stories out of switzerland, new york, and japan in the next hour. here is what we are watching. monsanto clenched with a fourth bid to create the world's biggest supplier of seeds and pesticides. the ceos of both companies are speaking to bloomberg. isnie: jean claude juncker his state of the union speech, warning about the dangers of antiestablishment forces saying it is as strong as it was in the 1950's. we hear from the formula i.e. profile, pluswing what he makes of liberty's deal
to buy formula one. have a look at european equities, under 30 minutes until the end of the wednesday session. these are equity indices. many trading in the green, especially -- including the ftse 100 driven by commodities producers. the benchmark is up 4/10 of 1%. 600.e up on the stoxx that trend for now is coming to an end. check out this chart, showing the broad-based selloff of the stoxx 600. more stocks have full and the european benchmark in september than any other month since august 2015. this is what the chart tells us, indicating a wide loss of faith since the recovery in june. an average of 326 companies have
dropped each day this month. nearing the 330 decliners and last year's summer tumble which was brought on by the chinese devaluation of the yuan. what a wonderful machine the bloomberg is. let's get to bayer, a big deal. the fourth time successful. shares up 1.2%. we got the deal, $128 per share. that was the big deal. we have waited since may when the initial bid was put on the table. .inally we have got a clincher bloomberg just spoke to the chief executives of both companies. one of the big gainers in europe , a swiss company that helped ,usinesses expand and asia upgraded from outperform to underperform. francs up is 80 swiss
from 55 swiss francs. it sees opportunities for stronger revenue growth improving consumer margins, more active use of its balance sheet as well. the price target implies a 50% upside from the current share price and 23% above the average analyst price target of 67.7 swiss francs. shares up by 5%. we are 90 minutes into the trading day in the u.s.. julie hyman has the latest. : u.s. stocks are extending gains at the moment, the nasdaq up two thirds of 1% and the dow and sap s&p gaining ground as well. technology is in the top spot that want to point out with apple shares are doing. we saw a rise in apple yesterday after t-mobile and sprint indicated a small -- a strong
demand for the iphone seven, up more than yesterday gaining up to 3%. the u.s. telecom provider circle around to semiconductors. to the u.s. and he's apple shares. that is a big support for the market today. ,e are also seeing yields fall reversing. utilities in particular, but i want to point out a couple of stories. aep, american electric power agreeing to sell a set of power plants in the midwest to blackstone for $2.17 billion. those shares are not doing that much, only up 3/10 of 1%. we have seen a roller coaster ride in oil ever since the inventory numbers came out. it has taken a leg down once
again. big surprise was that unexpected drawdown in the overall inventory number. more of a surprise because we saw such a drop in inventories last week it was described to what was going on with the tropical storm, hermine. we thought that would reverse. it did not. offsetting that a big build in distal let's and that appears to be what is responsible -- in istallat.t's -- d es vonnie: let's check in with courtney donohoe. courtney: hillary clinton has just gone through one of the roughest stretches in her presidential campaign and a bloomberg poll underscores the challenges. it has donald trump leading 48% to 43%.hio,
trump pulls well in ohio among yen -- men and union households. one of clinton's problems is the nafta trade bill passed when her husband was president. hillary clinton will be back on the campaign trail tomorrow after sitting out for a few days with pneumonia. rally inbe heading a north carolina. yesterday, president obama campaigned on her behalf. bill clinton said his wife has "been feeling great." president obama meets with the defective -- de facto leader of myanmar. business groups and the u.s. complained that economic sanctions have shut them out by ofe estimates up to 70% their economy is off-limits to american companies. the u.s. has agreed to its single largest pledge of military assistance to another country ever.
the u.s. and israel are supposed to sign a 10 year 38 alien dollar agreement today according to people familiar with the matter to replace a long-standing deal that calls for israel to spend money on us-made military equipment. a typhoon battering southern taiwan, now headed toward china. it knocked down trees and street signs. hundreds of flights were canceled and at least nine people have been injured. lobanews4 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. i'm courtney donohoe. this is bloomberg. mark: thanks a lot. stocksioned european seeing their steepest slide since july. our next guest says investors should be -- avoid being whipsawed for making investments. , how do you keep
your head when all about you are losing theirs? you are looking at that chart from the referendum to today and if you think of all the doom stars who were -- doomsters who were around. mark: the world was ending. think about life, phone a few people and we just started going on the market. some of the share price reactions were huge. we have seen shares up 25%, to 30%. mark: among those that got hammered, homebuilders, some fell 40%. did you buy? andy: everyone in this game gets very emotional. , someonee referendum phones me and says this house has come up. you might want to get involved with your kids.
i have all these buyers. through, thes market is collapsed, there is no other buyers. i was not interested anyway. i saw her the other day, our market is fine. it is a most like dealing with goldfish. they have gone around the bowl once and the story is not different. looked, the population of the u.k. was growing at about 500,000 a year and we were not building that many houses. the danger now is that just as my kids move out that my mom moves back in. mark: scary thought. andy: mom, if you are watching, it is not a scary thought. there is a danger that we will get whipsawed because people say it is all going to end. if you are a company you have to almost stop looking at your share prices. some of the most successful
companies have large shareholders with the owner entrepreneurs and they tend to take a longer-term view. invest accordingly and you have to get into that mindset and stop getting fixated. i will come back to my mom, after the referendum she said, i have a life of penury ahead of me. i said, let's look at the facts, have you got more dividends than last year? yes, but the shares have gone down. then it is fine. vonnie: what do you foresee in terms of the u.k. economy going forward? people are saying everyone overreacts but there is going to be some kind of an effect on the u.k. economy, whether the bank of england can neutralize that we do not know. obviously on sterling as well. andy: the uk's economy was
already slowing down ahead of the referendum. gdp in the second quarter was .6%. we are looking for the number two b .3% so it was slowing down. thank god mark carney has come along and cut interest rates, otherwise we would be in the depths of despair. they were going through the slowdown anyway and what is going to happen is they will be looking at this ahead of the autumn statement in november and say, gdp has slowed a bit, we have to maintain conference. that's confidence. let's go to the infrastructure and get sources out. i was just amazed the amount of building work going on around here. his easy to think nothing is happening. overall, what we have done is we have managed a very sneaky currency devaluation which the
italians and french would love to do with the euro that they have not managed it. vonnie: all this is predicated on the idea that things will be fine going forward. jobs will stay in britain and maybe immigration to britain will tamp down a little bit. what if those things do not happen, what if jobs leave britain and what if other problems do not get solved? give you one guarantee, immigration will be higher than it has ever been ahead of anything it has that's ahead of anything that happens. immigration -- ahead of anything that happens. immigration is going to be a big thing. the u.k. is still the place to come and a lot of companies are saying they are going to relocate. that was in the heat of the debate when people were making ridiculous promises. if you want a rational view of what happened, read the
weatherspoon's results from last friday where tim martin spells it out. ,e says all of those people doom and gloom, everyone is going to leave. no one is saying hold on. mark: he also said they are selling off more -- they are selling us more than we are selling them. andy: why not just put tariffs on them? mark: i think you voted brexit. andy: my mom will kill me. mark: how is it going to work? may seems convinced, she wants to control free movement of labor. how is that going to work when the rest of europe is saying, not a chance? what is the end deal going to look like? andy: if i knew that i would not be sitting here. will we ever leave europe? probably not. we voted but it has such a long drawn out process and there is a
central policy has been to skewed toward iving pop -- the market. in an interview with francine lacqua, he gave his views on intervention since the 2000 and eight financial crisis. paul: i think the interventions we have seen at the end of the increased -- the debt has increased and has given us limited economic growth. someone argue it is a further disaster, we might have been in a worse position. the reality is is not giving us the growth we expected. the reason for that is the system is too much toward the capital market. >> how do you fix that? paul: if you take the u.s. for example, many companies prefer to do this share buybacks and really have significantly reduced investments and their own companies.
that goes at the expense of longer-term growth so you have to move the system in the right direction obviously. you have to see what can be done to cut out of this obsession with the short-term. many of these issues of food security or employment or climate change cannot be managed focusing on the quarter to quarter. are hitting the planetary boundaries on issues like climate change, we need to start valuing it and put a price on carbon, for example. then we need to move our economic system more toward rewarding labor and putting more unrewarding, if you can use that word of the capital market. mark: that was unilever chief executive paul polman speaking with francine lacqua. vonnie: tonight bloomberg premieres a big series, big problems, big thinkers. hear from a series of leaders including ted turner and
madeleine albright. they will focus on global climate change. here's a sneak peek. >> prosperity can work to solve .he population problem the data show that prosperous countries tend to hit replacement rates were slightly below when people do not think of their children as being their social security. if you think you need seven kids because five are going to die and you need the remaining two to take care of you, he will stay as fast as you can, but is countries have become more prosperous the fertility rate has gone down significantly. vonnie: get our first edition of thinkers," at big 8:00 p.m. eastern. ♪
vonnie: live from london and new york, i am vonnie quinn. mark: i am mark barton. this is the european close on "bloomberg markets." nine minutes left of the european equity session. luxury goods taking a big hit. you can see the shares falling today. our mess biggest fall -- hermes biggest fall since 2010. andrea felsted is joining us. signal the end of the end. andrea: it has been a good performer and if they are suffering that is not a good sign. mark: maybe these comments from the likes of ridgemont and the
other company hermes come at a time when there are positive signs in the luxury industry. andrea: product couple of weeks ago said they thought things were improving in china, japan, and macau. there is even an increasing macau gaming revenue which some of the analysts think correlates . we have not seen any stronger swiss watch sales coming through yet. there are the sort of glimmers , a very difficult second half and and of the year for the luxury group. it has only gotten a little better and they will get a bit of a gain. vonnie: is this a secular shift in how people are spending money or has this to do with things like currency weakness and demand dropping globally? mark: is it a secular shift?
i know you could not hear. on how people are spending money or is it related to a currency shift? andrea: we have seen industry affected by a lot of factors. currency was a big problem. the u.k. has really benefited from the pound falling. there has been lots of demand for the u.k. but there does seem that a command -- concern perhaps consumers and emerging markets are spending their money in different ways, and that is not great for the luxury industry. vonnie: there is constant chatter about how to fix this, including things like see now, by now after fashion week around the world. or is of that a solution it just a little bit of a cell for the moment? are showings if you increase new nest and innovation, that can help sales. gucci has a new designer.
it's styles are very desirable and that is really coming through in stronger sales so there are things you can do. it is about innovation and reinvigorating the brand. there is also self-help, another trend we are seeing a store closures in some areas hit hard by the downturn. there are various things the countries can do. rmes big knock, 8%, if you look at the valuation of this country it is priced to perfection. andrea: it is priced like one of its birkin bags. mark: 32 times estimated earnings and richemont is 20? andrea: it has been a good four months but that valuation was really stratospheric. one of the more worrying things we talked about was it has increased production of its bags. that is great now when it needs a kicker for growth but when
things turn up, does that mean that it's exclusivity is damaged since the waiting list is not so long? maybe lost a bit of its luster. mark: andrea felsted. you can catch all the gadfly columns on the bloomberg. take a look at where european markets are trading today. we are four minutes away from the end of the wednesday session . it has been another choppy session. will we close higher for the first-day in five? earlier.own that has not happened since june . four minutes to go to give you the narrative. ♪
finishing the wednesday section -- session. the first gain in five days. the four-day losing run was the longest. if we fall today that will make five and that is the longest stretch since june 14. today the peak for the stoxx 600 was .56%. yesterday the peak was .56%. just a quirky fact to keep you on your toes. it has been a day for luxury companies that many will want to forget, especially those long and the market. hermes the biggest drop since 2010, abandoning its sales growth estimate. lower.shares 8.8% that the client
about 44%, adding to the gloom's reading across the luxury industry. -- gloom spreading across the luxury industry. shares down 3.9%. today there was some data out of the u.k., employment data. the unemployment rate at an 11 year low. economy continuing to add jobs, unemployment falling to 1.3 6 million. the lowest level in 11 years. the number of people and work adding 174,000 to the 31.8 million. that is the highest on record. the numbers for july were not so strong. employment fell in july the most since march, 105,000. the number of people claiming jobless benefits rising by 2400. this data proving the resilience of the u.k. economy, which leads
me to the u.k. gilt market. my narrative was going to be yields are rising for the six consecutive day. on the u.k. 10 year, the narrative has been destroyed because it is falling. earlier it was rising for a sixth consecutive day, the worst stretch since november. this is an interesting circle as before brexit. before the bank of england added more stimulus, we were at 80 basis points. we are at 88 which leads us nicely to the bla tomorrow. -- boe tomorrow. vonnie: and the fed next week. let's look at different types of asset capital to see what risk sentiment is like. nymex crude about 2% down.
the rest is about currencies. the dollar index, a little bit of weight to it. we are seeing some dollar strength. the yen, a little weaker, overall above 102. let's take a look at the broader u.s. averages. we can see the s&p 500 up about 2/10 of 1% or a little more than that. the dow is up about 2/10 of 1%. 1% nasdaq, a gain of 7/10 of so let's go to the nasdaq and abigail bloom -- abigail doolittle. abigail: this follows yesterday's big drop following the big rally on monday and following the selloff on friday. we are looking at a return to volatility. one bright spot, apple shares are sharply higher. once again on pace for the biggest three-day winning streak since august last year following
the big black monday selloff. today we have a number of analysts that are positive including pacific crest. they believe the iphone launch could beat estimates. r.b.i. believes the iphone could take market shares following the samsung fiasco. showing in as chart of apple. we see that apple is out of the range that it has been stuck in first such a long time. it has been trading out of this range for a month and a half. this is when the 50 day crosses up through the 200 moving us investorsing are getting interested in shares of apple. another winner for the day and the best percentage performer .or the nasdaq 100, viacom
shares are up ahead of their fourth meeting today and paul sweeney says this meeting could bring news about a partial or full signal -- sale of the paramount and potentially a dividend cut to repair the balance sheets. the stock up ahead of that meeting. vonnie: let's check in with the bloomberg first word news. courtn: the cease-fire in syria appears to be holding. according to a british-based human rights group there were in syria on deaths monday and most were due to injuries suffered before the truce took affect. russia has complained u.s. backed rebels are violating the cease-fire. a panel of british lawmakers is criticizing the country's intervention in libya that led to the overthrow of market off the. the british action was based on bad intelligence and faulty assumptions according to the report.
i see the prime minister did not properly assess the threat to libyan civilians. the head of denmark's central bank says it is the u.k. that should be worrying about brexit, not the rest of the european union. >> we should also take into account that although britain is a very important country, the impact on the overall european economy is limited. come tothe impact will the british economy. courtney: he also says prices will gradually increase in europe and blames the low rate of inflation on the collapse in commodities. the european commission says a plan to speed up telecom networks could boost economic out look by a trillion dollars in the next decade. they would substantially cut regulations. the eu's digital commissioner says without first class
networks there will be no digital single market. global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 counies. i'm courtney donohoe. this is bloomberg. mark: thank you very much. competition president jean claude juncker delivering his annual state of the union address in strasburg. he took the opportunity to highlight the importance of the next 12 months in defining a post-brexit europe. >> we respect and at the same time regret the u.k. decision, but the european union as such is not at risk. we would be happy if a request for brexit could happen as quickly as possible so that we can take this specific steps that need to be taken and so that relations with the u.k., which must remain on a friendly basis, can take a new shape. is simonning us now
kennedy. his post the life. simon: there is one cap in europe who says the lesson from brexit is we need more euro, or integration and another camp that says brussels, the hand of brussels reached too far and brexit tells us we need last. today he is talking about how brexit for the euro does not mean a central crisis. europe in agrating softer way perhaps, and try to move the region beyond the brexit issue. europe is united in its emergency for the u.k. to trigger article 50. we spoke to the economic and monetary affairs commissioner. >> up to now we have no
consequence from the brexit economically but if it lasts too long i am afraid that investors will start being too careful and start to wonder this is why. jean claude juncker said that, it is important the article 50 which will start the negotiations, is raised by the british government as soon as possible. mark: in the piece you have , everywhere you can get a hold of itm,ay's boutique brexit deal they take longer. some are calling for the delay of formal investigations as long as feasible or possibly when an extension of article 50 beyond two years. a delay in formal negotiations as long as feasible. onon: everyone is focusing this article 50 and the two years of renegotiating.
getting out might be the easy thing. getting back in the way we want to my be quite hard. it is striking a free-trade accord in canada took seven years. there might be this gap between us leaving europe and setting up any relationship. there are all kinds of problems for banks that will not have acces industries that might face wto tariffs straightaway. we would ask for a transitional arrangement, something that holds us together with europe a little longer until we can provide a more permanent pact. in some cases, they are saying may angela merkel -- andrea should hold off until she can get this transitional agreement. about: you talk to people this issue and the rhetoric is all about power, they need us more than we need them, a need us more than we need them. triggeredrticle 50 is
the u.k. does not have as much power in negotiating anymore. simon: that is why it is taking some time. it does not want to necessarily race to the negotiating table to find the other side has better points to make, so it will take a few months to put the ducks in a row. , they arew today making the point that theresa may needs to invoke article 50 30 quickly and do so quickly. head ofif you are household in britain, you are in limbo until this gets sorted out which might be a decade, a generation or two. simon: i think that would be quite a stretch, but certainly one of the issues my colleague scott hamilton wrote about today, everyone is celebrating the fact that the economy has not been damaged as much as everyone thought and has done fairly ok through the summer.
the points got makes, very often recessions have delayed shocks, delayed responses. the last crisis of lehman brothers, it took a while for the u.k. to enter recession in part because businesses and households take some time to adjust. they want to know the slump is real before they ratcheted up savings or start firing workers. maybe some of that is in play, they want clarity on article 50 on what the demands of europe and the u.k. will be. that might be when they start to adjust their bottom line. vonnie: that is our bloomberg news editor simon kennedy. check out that story. another one of mark carney comparing brexit to cricket. racing ahead e looking to expand in the u.s. but it may have some competition. we will hear from the chief
vonnie: live from london and from new york, i am vonnie quinn. mark: i am mark barton. this is the european close on "bloomberg markets." liberty media shares are sliding. liberty chairman john malone wants to expand their digital presence. formula one may be competing for market share with its electric cousin formula e. they will introduce a new york race next year. ceoing us is the formula e alejandro agag. how was season two?
alejandro: it is very important for us to consolidate the first season and we were fearing going down a bit. it was even better than the first season. mark: and the sponsors are coming in? alejandro: jaguar, dowdy, so it is like a snowball effect. mark: when are you going to break even? alejandro: it is looking very good. mark: soon? alejandro: very soon. mark: where is the race going to be held in new york? alejandro: stay we have an event in new york. mark: can you give us a clue? alejandro: i can only say it is in one of the five boroughs. mark: the big news is liberty media buying formula. liberty global is a shareholder in you. does that benefit you both or does that dilute you both? alejandro: liberty media and
liberty global are completely independent companies. they have a common shareholder in john malone. we do not know really how it is going to evolve. we do not see that we compete with formula one but we are complementary. not.ce in cities, they do we raise electric, they use gasoline. mark: have you spoken to john malone since the takeover? alejandro: no, i have not. mark: when will you speak with him? alejandro: i have not spoken to him ever. mark: why not? alejandro: he has not called me yet. there are larger shareholders. mark: what has he said do you sense? looking,: they are both companies were competing to buy formula one. the other company got it so i do not know what is going to happen. mark: do you have formula one
ambitions or not? alejandro: formula one is the ennacle but i think formula they become the pinnacle in a few years. formula one has fired an amazing it is kind of a luxury for all of us in motorsports that he is in. they have already someone there. could you take over from bernie one day, is that your ambition? alejandro: it is definitely not my ambition. mark: are you categorically saying that? alejandro: i am not afraid of category statements but i am really confident in formula e. i really need to prove myself first. mark: how would you shakeup global one -- formula one? hearing from liberty digital
pushing into the united states, how would you shakeup formula one to bring back the viewers? alejandro: i am not really the one to say what to do, but i think the younger generation needs to get that. the problem is traditional .otorsports, it is old you need a new kind of way to get to the fans. mark: are you saying bernie is too old? alejandro: no, he is young. he is an incredible shape. tois amazing for 86-year-old have the brain that he has, but the formula one concept needs to evolve. the young generation, they need to get to them and you do not do it with traditional television. mark: you are doing it well, coming up with some novel ideas to bring in the millennial. alejandro: we are doing things digital to get the young fan base.
streaming, mobile is a big part of our offering. we allow drivers to do snapchat. we are on all social media. mark: how can formula one track america? you have nascar, indianapolis 500. you are going there next year. how do you crack america? alejandro: that is one of the big questions and the one who knows that deserves a big credit . i honestly do not know how to crack america. they have their own motorsport which is kind of struggling or having a virus. getting to a new generation of americans, there is a big market that is digital and you need to get to them. mark: we just showed video of one of your cars running on the arctic ice cap. alejandro: we want to to show that electric cars can fight
global warming. we wanted to take a car and race it on the ice cap in the arctic, and we did. news, come toking may 1, especially when it comes to this man behind you. he is always hovering. coming up in battle of the charts, a look at the correlation the opec meetings and oil prices. this is bloomberg. ♪
vonnie: it is time now for our global battle of the charts where we take a look at some of the most telling charts and what they mean for investors. you can access the charts on the bloomberg. kicking things off is dani burger. dani: i have a chart that is very important for investors. if you are savvy, correlation is your enemy. you do not want every single
stock to selloff because of an event and that will happen when correlation is high. the implied correlation i have on the bottom looks pretty low. you see this point? expected correlation is at its lowest since 2014 so you would ask, why would we have a day like friday or yesterday where everything sold off if correlation is so low? this chart is from bernstein and it looks at factors, how much they move together. this is characteristics of stock like momentum, value, what their pe is. that is at the highest level on record ever at the very moment which means stocks are susceptible to macro moves which is concerning looking at these other high points. the market does not do well after this. you can check this out for yourself. mark: a great chart, correlation
is your enemy. ryan: oil down a second day and people saying the only way opec -- save is if they agree credit suisse says these oil talks are already doing the job and they do not need to make a deal. the blue line is your christ's -- price for crude and the white line are your shorts on oil. they tankedorts, and the oil price rose 55%. they did fail and things reset themselves but the oil prices were still high. talks, got the algeria oil climbed 60% and again the shorts tank. the i a little bit of an issue. there is a danger opec could become the boy who cried wolf.
not everybody believes that opec is going to do the job when they get together in algeria but as far as credit suisse is concerned, this is starting to work. .ark: time is running out i am going to go for ryan. vonnie: i'm glad you did because it is a fantastic chart that is ary illustrative, and beautiful graphical supply -- display of what is going on between opec and the oil market, however i'm going to go with d ani mark:. the winner is ryan. the gallery has voted ryan. that is it for european market. check out how they finished today. ♪
from bloomberg world headquarters in new york, we are covering stories from pittsburgh and washington to dublin, or lynn, and aleppo. regaining bonds composure after uncertainty over -- bayer will be buying monsanto, creating one of the world's biggest agrochemical firms. it ends a month-long courtship. google self driving cars go live in pittsburgh, when it is like to ride in one. we are nearing the halfway point of the u.s. trading day so we need to check in with julie hyman. the drags here are plentiful. julie: