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tv   Bloomberg Markets  Bloomberg  September 21, 2016 10:00am-11:01am EDT

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this is bloomberg. ♪ mark: we are going to take you from washington to malan. theill get stories out of wall street, uk and africa in the next hour. vonnie: the reason i'm at the plaza hotel is the u.s.-africa business for him. we will be speaking with leaders countries in africa. a wonderful spotlight on partnership and it is being run in conjunction with the u.s. commerce department. we will hopefully be speaking with the president of rwanda. decision day for the federal reserve, the hike chance
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-- we talked to an economist who is going against consensus and says today is in play. fromank of japan refrains another interest rate cut and instead pledges to bolster the market yield cuts. how investors are coping in a less than zero rate environment. football and potential fraud. how a chinese investor group is seeking funds to buy ac milan, false big report during the initial bank negotiations. a lot of market action today, we have already seen some movement after the bank of japan's decision. let's get straight to julie hyman in new york. potentially, a lot more to come this afternoon with the federal reserve. all three major averages are rising. we saw an increase in stocks in
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japan and an increase in the yen, even after the bank of it is not that necessarily limiting asset purchases, it won't make any more for the moment but there is skepticism being expressed on the part of investors. in the u.s., all three major averages are trading higher by .5% going into the fed commentary this afternoon, even though there is broad expectations for no rate increase. 22% being priced in at the moment. there are a lot of questions about what we will hear from the fed. here, you can see a little bit of a bump up in yields. 0.8% for the two-year. a couple of things to look out for in the fed's statement, will there be dissent? people have been slightly increasing hawkish commentary. so will they speak out in
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dissent as to whether there should be a increase? thewill he fed talk about risks to the economy being more balanced? potentially paving the way for a rate increase in december? of the fed mapping members own expectations for rate increases. 2013.oes back to as we know, the dots have come way down as the fed has had to adjust its perception of the pace of rate increases. will that further be adjusted today? will we see the dots get thrown out together? there is suspense around that. , in the wake of the bank of japan action, this is the dollar versus the yen. we saw the dollar fall and the yen rise. finally, going into oil inventories, we have a up as the
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api reported an unexpected draw down. 90 minutes left of the wednesday session, up by .7%, not as high as earlier in the day following the post boj enthusiasm. we were up 1.1% earlier. -- yieldshree words, " control." attempt by the boj going forward to steep in the yield curve boosting banks and the fact that they didn't cut the negative interest rate further leaves the possibility that it is possible that the boe or the ecb could follow. but the best one day again in a month. a lovely chart that shows the correlation. even though european stocks move in opposite directions, the long-term correlation with this chart between the s&p 500 and
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at atoxx 600, it remains four-year high. a .75. right now..7 five economists don't expect the fed to do anything today that that a rise warning in u.s. borrowing costs could drive down european and u.s. shares. it is the world's biggest clothing retailer, they reported earnings that week analyst estimates. first half operating profit rose. her teen percent in the first weeks of the third quarter. slowing down from a growth of 16% in the first half. happynalysts were not so that the margins of the growth margin would be stable in the second half. and let's see the impact on the german bond market from the boj's announcement today.
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it is well up behind last tuesday. theasis points, that was highest since june. so the hike that we saw last week has come down but still, the 30 year yield has moved between gains and falls today. investors have felt the impact of the boj on the global bond market. vonnie: i have been digesting a lot today. it is time to get a check on the general news. that ahmadors say ahami praise -- he has been charged in the bombings in new york and new jersey. he criminal complaint says conducted a try run days before he exploded the bombs. he was captured after a shootout with police.
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china's prime minister says he is positive that u.s. relations will remain positive no matter who the next president is. he didn't have anything to say specifically about hillary clinton or donald trump, calling the election an internal affair for the united states. a u.s. show of force aimed at north korea. bombers flew over north korea and one landed at an airbase. the flyovers are common when tensions rise in the region. earlier this month, north korea tested the biggest nuclear warhead. the white house is charging that either russian or syrian warplanes attacked the aid convoy in syria where 20 people were killed, a damaging blow to a shaky cease-fire. the kremlin has denied responsibility. british lawmakers warned that military strength alone won't be enough to defeat the islamic state. and its allies need a
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grand strategy to defeat extremists in iraq and syria. the current strategy says western air power combined with ground groups needs political progress. global news, 24 hours a day. powered by our more than 2600 journalists and analysts, in more than 120 countries. mark: thank you. this fed decision day, take a look. the september hike at just a 22%. two are going against the consensus by predicting that they will raise today. joining us now is bricklin dwyer. thank you for joining us. he for we talk about your call, i want to show you a tweet from the former u.s. treasury secretary, larry summers. check this out what he had to say.
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he basically says that the fed shouldn't raise rates because it will come as a shock at a fragile moment. but are you sticking with your core? if the fed did rise, isn't larry summers right? big shock -- this is not an environment where all the sudden the market will price in 100-200 basis points in the coming year. this is a market that expects the fed to raise at a gradual pace. our expectation is that we get the dovish hike, a hike that comes with the guidance that they will go at a very slow pace. that information will keep the markets contained. for our clients, no one is terrified of a rate hike. whether it comes now or in december, 25 basis points isn't going to shake things up that much. ,ark: if it doesn't come today
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is december nailed on that a hike in december will happen? bricklin: that is kind of our expectation. we get a dovish hike or a hawkish hold. the balance of risk language, that is key for us and we think it will change a bit. we think they will move to language that talks about the , the balancee me of risk changing quite a bit. mark: have a sip of water. vonnie: get your breath. the bank of japan made an impact on the market. there isn't much to it at the end of the day. will that happen this afternoon, after the fed? or will the fed try to tighten financial conditions by putting a hawkish tone in there? is about balancing financial conditions, rather than tightening. we have seen them in and it is
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about putting things back in motion. that is the key for the fed right now. and what about the election coming up? we have had some suggestions to ae effect that if it were trump presidency, december would be off the table and therefore september is either go now or go never. bricklin: i think these elections are getting played up too much. the fed needs to focus on the real economy and what matters. they can't look at weather moving ahead of the election will influence the election or not. if they are caught in that trap than they are on the wrong side. a have to stay away from that. they need to focus on the real economy and i think that is what they're going to do. janet yellen an apolitical person. i think she will continue to be. is the take away from the bank of japan? reaction telling us
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everything we need to know about what investors take away from the more flexible anchor japan? it's interesting. they didn't deliver a whole lot of flexibility. disappointing some expectations that they could have more easing and yet markets have digested that quite well. some of the biggest upside to the bank of japan may actually be a fed move. right? tightening in the u.s. markets will certainly put pressure on the u.s. dollar and create easing for japan. so we may get some easing in japan. bricklin dwyer, thank you for joining us today. he sure to catch our special coverage of the fed decision later. andill bring you bill gross alum blinder. it all starts at 1:00 p.m. new york time. this is bloomberg. ♪ next.: and a treat,
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we have the ceo of standard bank, the largest bank in africa. he will be speaking us -- he will be speaking to us. that is sim tshabalala up next. this is bloomberg. ♪
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vonnie: this is "bloomberg markets." we are broadcasting live from the u.s.-africa business forum in midtown manhattan. we are celebrating the partnership and putting the
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spotlight on the largest economies in africa. joining us now is the ceo of the largest bank in africa, the universal bank. sim tshabalala is joining us. explain to us about standard bank. of lending ands financing for companies? sim: it is a universal bank. ,e have a wealth business insurance, asset management, life insurance and all the businesses one would associate with a wealth business. we have a personal business banking which does retail banking and ranking for commercial enterprises. and then we have a corporate investing bank. vonnie: and you are impacted by everything. obviously, the political dispatches in south africa at
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the moment, you are trying to work with the national treasury to boost the economy, what if the finance minister is arrested or gets into more trouble? we are in extremely intertwined with the economy. the political economy relates to how we conduct our business. it is determined by what happens in the country. your point about the meetings with the minister of finance -- is this, government and the labor movement in south africa are working together to try and avert a downgrade. a tremendous amount of work is happening and the work is consistent with the nine point plan that has been issued by the government led by the president of south africa. it is all about the structural reforms that are needed in the to create an inclusive
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growth in the country. -- alluding to the potential risk of the minister of finance, the rule of law applies. one would hope that the country continues to execute its fiscal policies without hindrance, and one also hopes that the laws of the country are obeyed like all of the workers in south africa. it was saiderday, that jacob zuma has to go, a direct quote because it is to during investment. is that the case? africa is a modern democracy. it has a great constitution and a separation of powers. the lead party is a strong leading party. , the political party will make the decision and
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south africans will dissipate in the election at the appropriate time. arguee is to continue to for the rule of law and cousin and national policy. isnie: but the time important. we were speaking with one of the biggest lenders to south african government quite recently and he was saying that the outlook is too muddy and too murky. is it risking its economic health? sim: to the extent that south africa does not execute rational fiscal policy, to the extent that the debt to gdp ratio accelerates or that the population growth is higher then we gdp growth, south africa does run the risk.
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so we have to do everything in our power as south africans to avert that. and this is what we are doing through the efforts. -- twice this year and thedo so before the end of year. helping banks like yourself but also it might have negative effects. sim: monetary policy is educated did -- is executed by an outsideal group with -- presentet range of the heaven 6%, one would expect authorities to take action. and that includes interest rates. vonnie: this morning, the number came in just below. yes, and the strengthening of the rand may give us the space to stay on interest rates. many countries are
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experiencing low growth. can you boost earnings in an environment like that? sim: you are alluding to the fact that a bank grows under the opportunity of growth. in south africa and on the continent are living in a great we are likelyere -- so we are able to enjoy the benefit of continued growth while people joining the banking system, that is at the risk of penetration. isk. vonnie: we hope to talk to again when you return to the imf meeting. a great interview. much more ahead from the u.s.-africa is this forum. president obama will address in the next hour. don't miss it. still ahead, we look at the stocks moving in the early u.s.
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session. fedex delivering positive results, shares up 5.9%. this is bloomberg. ♪
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vonnie: this is "bloomberg markets." i am coming to you live from the u.s.-africa business forum. mark: and live from london, i am mark barton. vonnie: we are going to get a check on the markets now at the world headquarters from julie hyman. julie: i am looking at movers today. we had a big backdrop from central banks. trading at a record high. having the best single biggest day since 2014. that is after the company came out with estimates that beat. and record fourth-quarter profits that will be estimates.
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software is delivered over the cloud. the company has been doubling down on the cloud delivering software and this quarter after a disappointing last quarter, this quarter seems to be paying off. we are looking at fedex. that company came out with first-quarter profits that beat estimates. a addition, it provided detailed outlook at the impact acquiring that company saying it would generate $700 billion in benefits with the integration is complete. although that won't happen until 2020. shares are trading higher by 6% today. we are looking at retail today. macy's is in focus. that is after cleveland research says that the company's third-quarter to date has comparable sales which seem to be trading better. that is according to cleveland
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resource. target has a share repurchase they have alsoh talked about shorting the stock. so that might be mitigated gains. finally -- approving wednesday the sale of two thirds of its fertilizer sale business to mosaic. so those shares are trading higher. vonnie: thank you. we are going to come back and have a listen to the president, president obama speaking from the u.s.-africa business for them. this is bloomberg. ♪
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vonnie: you are watching "bloomberg markets." i am mark barton.
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this is a bloomberg television and it is a big day for oil. a formal meeting in algiers next week but meanwhile, oil industry data breaking any second now, julie. is there a rumble? from: there is a rumble the industry data that came out last night and shows a drawdown. a drawdown of 6.2 million barrels last week. 3.4 million barrel build was estimated. it looks like there is a drawdown in gasoline. although distillates did climb so that is something that could potentially be offsetting. let's take a look at oil prices. we are seeing a reaction to the
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spike in oil on the back of this drawdown. this every, we do week. there tends to be a 20 minute-half an hour where traders consider all of the data points coming out. so we will see if distillates climb in inventory and if they and of having a dampening effect. but for now, oil prices are spiking 3%. there is an opec meeting that will be coming and it might become a formal meeting. that is something that has been given oil prices a lift. you lookon to that, if at inventory numbers, here it is. this is a drawdown. what is unusual about the drawdown, remember we have the destruction from the tropical storms that cause a -- and it was thought by analysts that there would be a rebound because
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it was an artificial drawdown but the fact that it did not gives word to the oil bulls this morning. the biggest since a closing basis in september. let's check in on the first word news. new survey predicts the bank of england will cut interest rates close to zero later this year. according to the monthly bloomberg poll. concern about the longer-term impact of the brexit vote. signs of strength have not convinced economists. a judge accepted prosecutor's argument is that there is not enough evidence to bring him to trial. there are allegations that he took part in a wide breaking kick back game that he has denied any wrongdoing.
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high-income voters are narrowly supporting hillary clinton. clinton leads donald trump 46%-40 2% with household incomes of $100,000 or more. since 1996, republicans have always one that demographic. tensions remain high in charlotte, north carolina after night of after a violent protests. at least 12 officers have been injured in a clash with demonstrators who blocked highways and try to overturn a police car. police say the man shot pose a threat but the family differs. loretta lynch says the incident is being reviewed. and chicago is hiring more police officers as the city struggles with an epidemic of violence. than 900 to add more new positions over the next year. the city has recorded more than 500 homicides this year. that is higher than all of last
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year. global news, 24 hours a day. powered by our more than 2600 journalists and analysts, in more than 120 countries. vonnie: thank you. we are getting a headline crossing the bloomberg that apple is said to be in talks , that isren technology from the financial times. earlier today i spoke with jay ireland. africa is obviously a melting pot of innovation for ge. it is boosting revenue there and the headcount. it is facing difficult challenges that have a listen to what the ceo of what ge africa, jay ireland, had to say. >> we are working with a lot of development banks and commercial banks, exports and imports. and we are working from that perspective. projects areur
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focused around changing the dynamics of how things might get finance. we have a project in kenya where you're outfitting 98 hospitals with diagnostic imaging. and we worked through a couple of regional banks, standard bank and they have been great from the standpoint of putting together a structure with the government of kenya around public hospitals on a pay-as-you-go model. vonnie: you mentioned several different agencies and banks. make.s. bank can't decisions beyond $10 million, has that been a hindrance? jay ireland: it doesn't help. you from our perspective, we go elsewhere. france, the uk, italy, switzerland, china, india -- we also use that from the standpoint because we manufacture products there that we end up selling in africa, as well.
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so we are very flexible and agnostic about where we can get financing. vonnie: is the u.s. falling behind when it comes to competition? you say that there are others, and even local competition? j ireland: it is obviously a big political issue but it is an issue with diplomacy and how it plays out with the future, especially within africa. and when we were asked about an investment by the united states in their country because the united states is investing in their project, so i think there is a little mismatch around what people think in the rhetoric versus the reality. vonnie: apart from china, india and the local banks, are there other u.s. private entrepreneurs or operations? yes, we are starting to see structural oriented funds. there is a lot of liquidity out there. is the riskg -- iption in the balance
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think we still seeing a lot of interest. they are putting these projects together in a way that they feel comfortable. vonnie: what obstacles are there to that in terms of bureaucracy? j ireland: it isn't so much bureaucracy as infrastructure. making sure power will be there all the time. and we have invested in facilities over the last two nigeria, south africa, ethiopia, kenya, mozambique -- so we are continuing to invest. what we're finding is that if you come in with a jobs program, you get a lot of help from the government from the standpoint of not having as much bureaucracy. stand --here do we
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there is a patchwork of companies. are there any countries that you are stay away from, where they are too dangerous? obvious ones. there are ones with conflict, others with standpoint of being able to do business as an american company or multinational -- the countries we are in are the ones where we feel good about the stability and the rule of law. the election cycles and countries cause concerns but we have seen a number of elections over the last five years that i have been there, we are seeing peaceful transitions. subsequent administrations honoring the prior administration contracts. i think the nigerian election where you had changes of party, not just changes of people within a party, was an example of that point. the goal is still to continue to grow. we want to be a major player in
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our generation. aviation, business and continuing to drive health care. we are also in the oil and gas equipment which is in a little bit of a down cycle and also transportation. so when you look at africa and see the issues that they face in economic growth and in people's lives, the stuff we do really can impact them. and that is one of the things that attracted me to go to africa. selling a power plant or a hospital where people don't have it, versus just an additional one, it is really impactful. what is the commodity downturn doesn't switch over at some point? j ireland: we are here for the long term. we've been in africa for over a hundred years. we've been around for 130 years. we are going to be there for a long-term. we will be there now and we will continue. ireland -- that
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.as jay ireland we want to get to julie hyman. julie: the financial times is reporting that apple has approached mclaren technology, owning a formula one team. this is the clearest sign yet that apple is in talks to transform the auto industry. shares of apple had been lower, , down justthis story a very very marginally. now according to the financial times, mclaren is likely to be valued at one billion pounds-1.5 billion pounds, all people familiar with the talk. it is not clear if they talk or deal could get done but if it did it would make it apple's
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biggest acquisition since the $3 billion by in 2014. so an interesting story here. we are not seeing much other ripple in auto stocks. coming up, controversy off the field for the football club, ac malan. who negotiated a deal to buy the club may have used false financial documents. this is bloomberg. ♪
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you are watching bloomberg, i am mark barton. this is a global business report. how strong is the current climate for advertising?
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-- take on whether the the ad industry can do better. with helping to fuel the world's largest clothing retailer. and in today's quick take, angela merkel, kenji hang onto power? a look at how a deliberative approach to the refugee crisis and the debt crisis is playing amongst voters. still ahead, customer spending on advertisements is tracking gdp growth. martian sorrell spoke with bloomberg television. >> the underlying growth rate was 3%-4%, depending on whether you look at revenue. now, that is not bad but it is not great. i would like to see more worldwide gdp. the projections for the next 3.5%-4%.
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but we are early in the cycle. i would like to see gdp up 100 basis points. mark: he says that since the brexit vote, they have been making acquisitions in germany, france. -- slump this year because of the exit vote. they predict that prices of the most expensive prizes -- expensive houses will fall. they call the brexit vote a reality check to the high-value end of the market. the world's largest clothing retailer posted first-half profits that the estimates. they operates eight brands including zahra and has more than 7000 stores in 90 countries. the company is putting a priority on boosting online sales rather than opening more stores. apple's iphone margins have narrowed with the release of the latest model according to an
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analysis by a research firm. the report says the iphone seven costs more to make because of the greater storage options and glossy back cover and advanced displays. iphone sales make up two thirds of apple's revenue. i'm here with your quick take. we provide context on issues of interest. is aa merkel's chancellor physicist by training and the country's first female chancellor. her supporters have viewed her as able work against threats to the germany economy. insistence on- austerity. here's the situation. summer of 2016, she face new challenges prompted by a state of violent attacks at home and his decision to exit the eu. refugees ballooned and she announced xenophobia and insisted on europe's moral
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obligation to shelter them. -- her a sharp contrast impulse was the same. germany set an example. -- admitting mistakes in the handling of the refugee crisis. her family soon moved to east germany. she rebuffed recruiters from the industry. she was swept up in the euphoria of democracy at the age of 35 and and that aligned with west germany's christian democratic union, puzzling her friends. -- her deliberative approach and anti-politician image, she was reelected twice. -- pay off in the long run while rising courses of southern europe say her step-by-step approach has led to stagnation. on can read more about this
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the bloomberg and that is the global business report. mark: let's get to an exclusive bloomberg story uncovered by a team of reporters in hong kong. the shocking discovery that a group of chinese investors ilan mayto buy ac m have used false documents. what do we know? we did a big investigation from asia to europe. it.ind out who is buying it is a little-known group of investors. we managed to get documents and we found that one of the banking documents that was sent in april at the early stages of the acquisition is false. we have the bank in china telling us that they never released that document and so
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obviously, this does cast doubt on these investors. mark: getting breaking news from the fcc. it has charged leon cooperman with insider trading. amigoooperman was an advisor. it alleges cooper man generated substantial illicit profits. profits from purchasing securities. that is the breaking news. d charging leon cooperman with insider trading. coming back -- does this me on -- does this mean this deal could be stopped? know, they are working to close the deal. it should be closed and the chinese group, their goal is to complete the deal.
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investors say they also found of thee financials consortium and -- clearly what we see here is something different. we are not saying they don't have the money. even if they reported they were seeking it. but we did find that they presented them false banking documents. so we will see what will be the consequence of this report. mark: the fantastic scoop. has to reiterate, the sec charged leon cooperman with insider trading. he had been charged and they allege that he generated substantial illicit profits from beforeing securities atlas processing facilities. and it charges cooperman with failing to timely report information. the hedgeerman was
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fund manager and has been charged with insider trading. we will have more details on this. this is bloomberg. ♪
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mark: you are watching bloomberg television. breaking news. the sec has charged leon cooperman with insider trading. coopermane that generated substantial illicit profits from purchasing securities in atlas, securities before the atlas processing facilities sale. they charge him with failing to timely report in formation. that is the breaking news and we will continue to bring you any development on that story. hope fora glimmer of the stoxx 600 in europe which
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they say may breakout of a deal if a recent positive earnings trend takes hold. analysts have started to improve their forecast in recent months. --, who coversis european equities. great to see you. so what signs are emerging of a recovery in european earnings? >> so what has happened here is that most earners -- most analysts think earnings will fall at what has happened in the last few months is that they have tempered their forecast for a decline. and the reason why this is so exciting for europe is that really, european earnings have been stagnant. investors have been holding on to even the slightest glimmer of hope. mark: and what is behind the uptick in the tide? according to ubs, it is driven by strong performance in emerging market exposed stocks
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and also the stabilization in commodity prices. these are the main factors that might contribute to the momentum keeping up. and if it does, it might lead to a substantial uptick in the stoxx 600. if i can bring in the forecast this morning that trade is slowing down across the world and might contribute to global stagnation, how will that play into the ubs forecast? ubs is really looking at this year and next year. and is really looking at some internal forces with in europe that might provide an uptick. i'm not sure whether they have taken that into consideration. and there provided an enormous list of risks that might interfere with this. however, they are more bullish than most. they really do think that the fact that emerging markets have been doing better and the fact
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that oil prices have been stabilizing -- they think this might provide something of an europe.or the trend in europe and i guess we will see whether that pans out. but they are more bullish. mark: thank you for bringing us more on that story. just to reiterate the breaking news. leon cooperman has been charged insider trading, as well as his firm, omega advisors. they are alleging that he generated substantial illicit profits from purchasing securities in atlas pipeline that ran operators networks in oklahoma. we will continue to bring you updates. this is bloomberg. ♪
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>> 11:00 a.m. in new york, 30 minutes left in the trading day today, i mark barton. -- i'm mark barton.
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>> and i'm vonnie quinn. we will be hearing from president obama, the keynote speaker in this hour, and we will be speaking with the chief aecutive of the chief -- of conglomerate with lots of executives in africa. mark: we will take you from washington to london with stories out of africa and japan in the last hour -- next hour. lots and lots, coming your way. the trading day in the united states, let's get over to the market desk. julie hyman the latest on that breaking news. advisors, the long-time veteran of wall street, well-regarded. here on the sick -- sec accused of insider trading. it has to do with potential insider information related to the sale of natural gas assets from a company cal

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