tv Bloomberg Markets European Close Bloomberg September 21, 2016 11:00am-12:01pm EDT
>> 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 called atlas.
atlas was later subsumed into targa resources. you can see the shares are coming down off of their high. where else are we seeing a market reaction? take a look at the floor, you can get to our many different funds and holding sources. here we are looking at omega advisors. i have clicked on energy target resources, as you can see, the second largest holding in the group. i have also been looking at financial holdings. first data and navy and -- not the and -- navient. if you look at first data, we are seeing those shares taking a leg downward in the wake of these headlines. it looks like investors looking at different holdings, perhaps
speculating in the flash of this news. perhaps speculating about what might happen to his holdings in the wake of an allegation like this. first data trading off now. those shares selling off down by 3%. seven minutes left in the wednesday session. we haven't even had the rest of the session with these equities and gains today off of the highs of the days -- the day. these are your currencies trading against the dollar. bond yield, rising today. the doj is endeavoring to , aroundthe yield curve 0%, giving itself more timebility, at the same keeping the monetary base around ¥18 trillion. ,t can vary, going up or down in the big announcement. on the inflation side it is
really tightening the forward guidance, reaching above 2%, keeping it stable. they aren't going to stop until that is achieved. keith will no doubt answer that question. thanks to the rallying today on the back of the doj, is this a snub towards further decline in the negative interest rates we have seen in japan and other countries? some banks will certainly hope so. barclays is rising today because it was updated -- upgraded by hsbc. assets should be very positive for shareholder value, according to hsbc. they have raised the price target from one pound 92 150. pound 90 to 150. the flip side of the coin,
majestic, look at that decline, 24% lower today. biggest decline ever. it says profit is going to be held by setback at home and in the united states, with majestic running into difficulties into areas outside of uk retail businesses. both of which were previously described as growth and shares, now getting hammered. with gold producing its cheapest in two years, it might be time to stock up on mining stocks -- excuse the pun. the p are index has served over 50% this year and then fallen 20%. that means the index of these mining companies is closest to the lowest since november of 2014 on an estimated profit basis. right. simone.t over to
leon cooper berg has been charged with insider trading by the sec. thanks for joining us. what do we know? >> we knew about this investigation for about two years. it's been a long-standing thing. we reported earlier this year that he received a notice signaling that he's likely to be charged with something by the sec. it's been a tough time for omega. possibly because of these issues . assets have really flown out of his fund overtime. certainly amongst the investors i talked to, sort of top of the list, top three of the list of the funds that people are speculating could close down this year. vonnie: simone, the sec says --t material nonprofit
nonpublic information incompetence is what they are charging. what happens next? once you are charged, is there some kind of trial? how does the sec continue the investigation? simone: the sec is seeking disgorgement and certain bands for omega and mr. cooperman himself. we have to see how much teeth this has. so far, to this moment i have not seen a form filed from the doj. my understanding is that no -- nothing criminal yet. i think we'll have to see. mr. cooperman has said in the past that he's denied these charges. it remains to be seen how much he's going to fight them. he has been very clear that he felt he did nothing wrong. this is part of an ongoing
crackdown, simone, on insider trading. on wall street, especially since the financial crisis. it's clear that some of the early victories that the government scored were easily overturned, weren't they? simone: right, exactly. a string of early victories were overturned. really calling into question the power of the u.s. attorneys office. that said, this is actually filed through a slightly different office. filed in philadelphia. certainly, if investigators were to be able to nail down this toe, it would be a blow regulators generally in being able to prosecute things like insider trading. cooperman has been accused
of insider trading over the buying of atlas pipeline partners. let's move onto another big today. global stocks rising after the bank of japan announced key rates unchanged. the countdown is on to the fed decision, three hours from now, 2 p.m. new york time, 22% chance of a rate hike. there is always the possibility that the fed will surprise. four out of 100 focusing on a hike today. it's slim pickings, isn't it, keith? why shouldn't they hike today? keith: there is a case for hiking. we have seen some improvements in the labor market over the last few months with a bit of a pickup in inflation, but it would come as a big shock to the market and janet yellen is not want to shock the market. bek: i said it was going to
a big shock to the market and that's why we shouldn't do it. he didn't like the word egg. i said it would be a shock, just look at our work function. few economists are forecasting a high today. it has a bit of a global mandate as well, creating volatility that can be tied to monetary conditions. i wouldn't rule out a hawkish statement. mark: hold. a hawkish hold. they want to prepare the ground for september. vonnie: is the bank of japan aiding in a little way, really? talking about controlling the statements on the yield curve, that in syria should bleed over to help the u.s. curve as well, right question mark keith: yes,
-- as well, right? keith: yes, but the thing with the bank of japan, i think they would actually like to weaken their currency a bit. but what you are seeing has been the yen strengthening later in the day, probably unwinding some of the action that the doj took. tighten, toike to push the yen the other way. vonnie: exactly. what happens to the u.s. dollar after today and through year-end? economies and companies would like the dollar to weekend as well. as well. opportunitygot the to do it now. the economy is a bit further in the third quarter. inflation is picking up. a lot of global turbulence.
they are not going to go to that, i don't think. but they are prepared to ground and i think it could lead to strength in the u.s. dollar. the unknown is the u.s. presidential election. if we do see a donald trump victory, i think there is a lot of volatility and the other way. mark: a donald trump victory means no fed hike in december. does it create enough uncertainty for the fed not to hike? simone: i think it propped -- keith: i think it probably would. the economy would going to pause mode. you just don't know what the government policy is going to be. i think business would hold back, consumers would hold back from large ticket items. the fed would say -- hang on their, let's see the -- hang on, let's see the impact on the economy. in simple terms they announced that they would be flexible at the monetary base. they said they had a new inflation target above 2%.
they were going to keep going until that target is stable. the big question is -- does forward guidance lift inflation next decorations? inflation answer -- expectations? what's the answer to that? the bank of japan has been trying for a long time to reduce inflation expectations in japan, and it hasn't really succeeded. it was disappointing earlier in the year when they didn't see the wages begin to rise. it is a step in the right direction, but i think the japanese public will look at this and think -- hang on, why are you now saying that you will have it in excess of 2%? at thell carry on with deflationary mindset. -- with that deflationary mindset. there hasn't really been a lot
of extra stimulus going into the economy. it's not really going to get things going anymore. it means they have taken away stimulus. keith: the monetary base could shrink back a bit. some people could see that as a crunch. mark: fascinating times. what a day we are having today. keith wade, thank you, sir. in time we will bring you interviews with bill gross and the richmond fed president as well as outland blinder. it all starts at 1 p.m. new york time, 6 p.m. in london. vonnie? vonnie: leon cooperman is denying those allegations. he is talking to cnbc, claiming they are without merit. stay tuned. coming up from the u.s. africa business forum we will be speaking with naguib sawiris,
from london, counting you down to the european close 14 minutes away. vonnie: i'm in new york, watching the european close and the fed. mark: time for your bloomberg business flash, a look at the biggest business stories in the news. the securities and exchange commission is alleging that leon cooperman generated substantial illicit profits.
the case involved the buying and selling of atlas pipeline partners. the sec that -- says that cooperman used his position as a large shareholder to gain access to confidential information. cooperman is the founder and chief executor -- chief executive of omega. he says the charges are without merit. apple is in talks about potentially purchasing the british supercar company, mclaren. they are considering either a full takeover of mclaren or a strategic investment. apple has been developing a self driving car for more than two years. cashing in on the craze for bacon and the trend towards healthier ingredients, the first national chain to offer so-called clean bacon. panera has spent the last year working with suppliers to remove nitrates and preservatives from
the bacon that it uses in sandwiches and salads. latest bloomberg business flash for this hour. bonnie? -- vonnie? today fromadcasting the u.s. africa business forum today. economies in africa with western partnerships that can be made across the ocean, if you like, between the u.s. and africa. is an association with bloomberg philanthropy. i would like to welcome my next guest. , the executive chairman of our off come -- orathcom. investmentst your that were already made on the continent of africa. naguib: mining, gold. we are the largest gold miner on the coast.
and copper. vonnie: out of the west here, are there challenges to moving east? are there any other countries you would be interested in investing in? of course there are, but in terms of the french speaking countries, we're focused there. i think that africa is improving now. more transparent. less corruption. vonnie: it seems from the headlines that we are in a bit of a spot at the moment. while there may not be a slide backwards, there are definite challenges. nobody these days is willing to invest in a country
that isn't stable, that doesn't have a democratically elected president and that doesn't claim honesty and transparency and rule of law and order as a principal. is thethe big examples ivory coast. the president has done up big change. -- done a big change. i must say, it is quite a clean country. vonnie: are any other countries tempting you? naguib: many are. it depends and the conditions. examplesive us a few of countries that you feel might be approaching that? .aguib: europa, kenya funnily enough, libya. i would like to do stuff in libya, even though their situation is very bad. , we wouldbat terror have to find a safe haven area where we could really start investing. instead of standing with guns,
coming to make a living. and in those countries? naguib: that's the stuff i've been doing all my life. vonnie: when it comes to natural resources, prices have fallen. are your investments in the likes of the ivory coast doing? naguib: very well. clear norms, they don't change the rules of the game every year. i must say, it's been excellent. vonnie: before we move off of africa, i would like to ask you about your native egypt and the potential for regulators who have been renting access to investment bank capital. it might go through again. are you thinking about looking at it once more? naguib: we are looking to do it, but the regulators have made it difficult.
vonnie: is it possible, do you think? naguib: i have tried everything until now. yet, then. quite argentina, you had $250 million in investment. you know, argentina is peculiar. in the mining area, nothing has been done and a last 12 years. it's been dry. inre's opportunity to invest exploration, which we have. of course, nothing has been done. government, new they have done a moderate step forward. we will be the first to join. are you concerned about currency fluctuations in the near future, given what we are seeing from central banks in japan? naguib: we are concerned, but i aink the government has taken
mark: leon cooperman has responded to the charge by the over -- fcc,ges the charges over insider trading . engaged inhaven't any unlawful conduct and addressed the sec and a letter to investors and says that we .trongly disagree with the sec the hedge fund manager, accused of insider trading by regulators
over his buying and selling of atlas pipeline partners. we will hear from him later, after 9:00. retracing tracing what's happening to european equities today, from the wednesday session, what a day it's been. the boj, it's going to be flexible in its monetary base. there you go, there is the reaction in its stock markets. we can go over to president obama, who of course is walking ,ut into the africa summit which vonnie quinn is attending. let's listen in. president obama: not just having this event, but for all the work you are doing in promoting entrepreneurship and the problems throughout africa. i would also like to thank our cohost and the tremendous champion of investment and engagement in africa, my great i want to welcome our
partners from across africa, including many heads of state and government leaders who are with us. i want to ignore knowledge senator kunz and leaders from across my administration who share a profound commitment to the expanding opportunity and deepening relationships between our countries. most importantly, i want to thank all of you. the business leaders and entrepreneurs on both sides of the atlantic who are working very hard every single day to create jobs and grow economies and lift up our people. i gave a long speech yesterday. some of you had to sit through it. i'm going to try to be a little more concise today. i'm here because -- as the world gathers in new york city, we are reminded that on so many key challenges that we face, our prosperity, climate
change, the reduction of conflict, africa is essential to our progress. africa rise is not just important to africa, it's important to the entire world. -- too manyy people people face conflict, hunger, and disease across the continent . yes, recent years have brought stiff economic headwinds. we have to be relentless in our efforts to end conflict and promote justice. at the same time, the broader trajectory is unmistakable. africa ismany of you, home to some of the fastest growing economies in the world and a middle-class projected to grow to more than one billion customers. africa telecom companies and cleantech startups, all powered populationgest
anywhere on the planet. as president i have worked to transform our relationship with africa so that we are working together as equal partners. i am proud to be the first american president to go to sub-saharan africa four times. the first to visit ethiopia and speak to the union. the first to visit kenya. was obligatory. i would have been in trouble if i hadn't done that. [laughter] i believe i'm also the first american president to dance the latala in nairobi. or to try to. whatever i have gone, from senegal to south africa, the people don't just want aid, they want trade. they want partners, not patriots. they want to do business and grow business. and create value.
companies that will last. that will help to build a great future for the continent. and the united states is determined to do that. so. accelerate and that is why over the past eight years, we have dramatically expanded our economic engagement. with your support, we renewed the growth opportunity act for a decade, giving africans unprecedented access to american markets. we launched trade africa so that african countries can sell goods and services more easily across borders. created doing business in africa campaign to help american businesses, including small businesses, pursue opportunities across africa. nearly 300 american companies have taken trade missions to
africa with 8000 african buyers attending u.s. trade shows. if you are an african entrepreneur or american occupant are looking for more , moret, more capital assistance, there has never been a better time to partner with united states. opec investments have tripled. corporationf compacts are now with african countries. opened up an expanded new trade investment offices from ghana to mozambique. power africark initiative, the u.s. is mobilizing more than 130 public and private sector partners and over $52 billion to double electricity access across sub-saharan africa. meanwhile, our global inrepreneurship summit
morocco and kenya and our young african leaders initiative are giving nearly 300,000 talented, striving young africans the tools and networks to become the african business leaders of the future. we have some of those outstanding young people here today. two years ago, i welcomed many u.s.u to our first ever africa business forum where we announced billions of dollars in new trade investment between our countries. you can see the results. american investment in africa is up 70%. u.s. exports to africa have surged. iconic companies, fedex, kellogg's, google are growing their presence on the continent. in lagos or an uber kampala.
microsoft is partnering to provide low-cost broadband to rural kenyans. procter & gamble is expanding a plant in south africa. mastercard will work with you d.o.b. in banks so more homepians can send money best -- mastercard will work ethiopian banks. we are making progress, but we are just scratching the surface. we have so much more work that can be done and will be done. that despite significant growth in much of the continent, africa's entire gdp is still only about the gdp of france. only a fraction of american exports, about 2% go to africa.
there is still so much untapped potential. i may only be in this office for a few more months, but let me suggest a few areas where we need to focus in the years ahead. we have to keep increasing the trade that creates rod-based growth. -- broad-based growth. our new trade hubs have supported jobs and increased exports to the u.s. by over a third. we have to keep working to integrate african economies, diversify african exports. since we are reaching two decades, we are releasing a with tradey agreements that are even more enduring. we also have to keep making it easier to do business in africa. we know progress is possible. a decade ago, if you wanted to start a business and kenya, it took 54 days. today, it takes less than half
that. governments that make additional reforms and cut red tape l have a partner in the united states. at our last for him, i announced the creation of our advisory council to guide our work together in today, i'm pleased to welcome the newest members of our expanded counsel so that more industries can shape the recommendations. you will redefine them later. they are excited about their work and excited to hear from you. also need to invest more in the infrastructure that is the foundation of future prosperity. as i indicated earlier, we are especially focused on increasing access to electricity so that two thirds of sub-saharan iticans will no longer like -- lack it. solar power and natural gas in rural rwandale in
getting electricity means students can study at night and businesses can stay open and we are not going to let up. partners like the world bank and the african development bank are mobilizing millions. last month, the government of japan made major commitments to support this work and together with ge today, we are launching a look private partnership to support energy enterprises managed by women in africa. by 2030, we can bring electricity to more than 60 million african homes and businesses. that will be transformative. even if we do the infrastructure , even if we are passing more business friendly laws, even if we are increasing trade, we will have to keep emoting that's desk keepthe good
promoting the good -- vonnie: president barack obama speaking today at the african business forum in midtown manhattan. some of the things he's been telling african leaders and ceos gathered here today is that africa as a continent once trade -- once trade -- wants trade. africa's gdp is the size of france's. there are phenomenal opportunities. live on your bloomberg. mark: we are sitting on her hands and waiting for the outcome of the fomc meeting. you --tial you for sent european stocks as
high as 1.1%, the most september 7. the biggest gain for a month, the banking index almost 2% up. keeping the 10 year yield at zero and keeping interest rates at a negative .1%. those measures might be adopted by other central banks like the boe and ecb. this is some relief for the industry group, the worst performer on the stoxx 600 this year, losing one third of its value. i want to focus on spain's intertec. reported earnings that beat estimates today, prioritized online expansion, first-half operating profit rising by a present. -- 8%.
it said that the growth margin will be stable in the second half. it today also announcing will slim down the business by selling some operations to npt cable. shares little changed come up by .3%. the bank of england come expectations for a cut in rates innovember of 17%, 25% december. bloomberg news did a survey of economists and a majority expect the banks to cut rates by the end of the year. they are divided on whether it will happen in november or december. but basically, they are forecasting the economy will slump or will grow, but much slower.
next year at 1.7%. the odds of a recession have fallen from 48%. today,still seeing gains the dow jones is up by one y .25%. the nasdaq is up if it of 1%. -- a fifth of 1%. abigail: we have the nasdaq still up .2%. gainse investors trimming and that fed meeting. we havethat fed meeting a hot ipo. an ad tech company, the ipo -- atand $18 per share $18 per share.
afteroft shares up nicely the company did announce a $40 billion buyback, also raised the quarterly dividend. up sharply after iyi has made a pledge to achieve profitability as soon as 2018. the stock is up nicely. we are looking at netflix down 4.4%. its worst day in two months corey said he sees a thestic subscriber miss in third quarter, propping him to add zero subscribers for the third quarter. there could be a big miss there for the third quarter. the shares are certainly reflecting it. getting more headlines.
it's easy has begun a call on the case of leon cooperman. cooperman explicitly agreed not to trade on this information. cooperman and omega generated of sec says $4 million profit. cooper took steps to cover up conduct. the on cooperman told investors neither he nor his hedge fund omega has engaged in any unlawful conduct. we will continue to bring you breaking news on this story. you are watching bloomberg television. this is bloomberg. ♪
mark: the investment vehicle led is dying ford european investment banks -- francine lacqua asked diamond about whether banks are on a stronger footing than the financial crisis 10 years ago. >> we under appreciate what paulson did in the u.s. eight years ago. by forcing the big banks to take a lot of equity, he took aw ay any stigma. everyone took capital. he said it's your problem to figure out how to get the loans to market
and liquidate it off your balance sheet. until you do, i will not let you pay dividends or pay back your equity. we are still resolving nonperforming loans, still resolving credit provisions, chargessolving legal that have been apparent to many of these institutions 5, 6, 7, 8 years ago. the big u.s. banks are put at a competitive advantage. francine: why are we still seeing fines? leaders,the political the elected officials still fear too big to fail. they still fear too complex to manage. the larger interconnected banks
will get buffer upon buffer upon buffer of capital, more and more fines, separation of risk from deposits and this will continue as far out as we can see. the elected officials do not believe that too big to fail or too complex to manage has been eradicated. so, what do we do? the growing opportunity is the banks below that level. that's what we are looking at. broker-dealers in the u.s. we are seeing opportunities in insurance and we are seeing tremendous opportunities in investing in the second tier banks across europe. there.ob diamond u.s.e: we are at the africa business forum in midtown manhattan. this is bloomberg. ♪
vonnie: you are watching "bloomberg markets." we are broadcasting live from the u.s. africa business forum in manhattan manhattan -- midtown manhattan. mark: this is the european close on bloomberg television. very excited to bring you an interview with the chairman and president of the xm .ank, fred hochberg fred: thank you for having me. vonnie: a lot of controversy surrounding the xm bank. why has it become such a controversial entity? all it does is help u.s. business, no? fred: we do help u.s. business
-- we have broad bipartisan support. a majority of republicans in the house who support the bank. two thirds majority in the senate. that often is not enough. we need leadership, we need the chairman of the committee to also be supportive. it's hard to move things forward when you have a german who is somewhat opposed to the ex-im bank. we have broad support. we got reauthorization through 2019. vonnie: how much has this type your hands? you three out of five or members. fred: are big competitors in africa lead us.
we are not able to do those kinds of transactions to go toe to toe with our biggest competitors. our volume is off by two thirds. this has been a substantial reduction. what kind of volume have you done here today? did 12 last year, we million. we are hurting the competitiveness of u.s. companies. american workers depend on exports. it's only 2% of u.s. exports that go to africa. there is plenty of room there. what do you intend to do to fix it? fred: the president has been a strong supporter. this is in the hands of congress
to address the forum so we can be fully supportive and be responsible. we always can do that with quorum to move forward and approve transactions. our trade dropped last year. we are still far below china and india. for the larger companies in particular, other countries are filling the gap. they are getting plenty of financing from ex-im banks in china and india. we are talking about the smaller u.s. exporters getting hurt here. who is filling the gap there? fred: the smaller companies have less choices. the have a global manufacturing
base -- the smaller businesses like the business featured this morning -- their competition is ia andna and austr france. vonnie: i don't anticipate that your answer will be in agreement with mine, but shouldn't we just get rid of the ex-im bank? let private financing fill the gap. we are the financier to add capacity. where it is hard to get bank loans. canake sure that u.s. banks level the playing field. we are doing a lot of small transactions.
we are not doing the full mandate that congress authorized us to do. give us your idealr scenario. nominees -- wewo can act on that nomination. nominated aama woman to fill another spot -- we need to move forward, do this work, support more jobs in the u.s. and do it responsibly. , thank youd hochberg for joining us. the ex-imng to need bank because those trade numbers are not growing very fast. mark: be sure to watch our special coverage of the fed decision.
we will bring you interviews , alan blinder. it starts at 1:00 p.m. new york time, six clock p.m. in london -- six clock p.m. in london. -- 6:00 p.m. in london. the boj delivered a bit of a twist today, focusing on the 10 ,ear portion of the group aiming to reach just above its 2% inflation goal. european stocks rose today for the second day in three. an exciting hour or two ahead. this is bloomberg. ♪
david: welcome to "bloomberg markets." from bloomberg world have chris new york, we are covering stories from washington to tokyo this hour. first, looking at decision day for the federal reserve. bank could surprise investors. -- leanneperman joins cooperman accused of insider cooperman leon accused of insider trading. julie hyman has the latest. julie: ahead of the fed commentary this afternoon, stocks not moving much, down off the highs of the session with the dow up .3%.