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tv   Bloomberg Markets European Close  Bloomberg  September 22, 2016 11:00am-12:01pm EDT

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markets. ♪ mark: we will take you from washington to copenhagen, covering stories of brussels, new york, africa. here is what we are watching today. threatellen and the leading rent -- and the fed leading rates unchanged. only a slight chance in december. biggestdenmark's company was split into separate transport and energy businesses. they will get one analyst's take on the historic shakeup. a nigerian billionaire says he wants to buy arsenal and annex four years -- in the next four years. could he carry out the plan?
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having a look at european equities. appetite for -- that's what the gmn function is telling us today. all the asset classes are green, rising. from equities to currencies to bonds to commodities. the fed did something that almost everyone expected. we will be asking our guests about that. some of the moving stocks include. rolls-royce holdings shares of by 1.3% today. it important a new cfo and pushed by the embattled company to restructure its top management layers. he is now the cfo of daily mail. he will take his new post next succeed --ecede -- to succeed david smith.
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regional airplanes, business jets, other white bodied aircraft. ericsson today shares of by 2.7%. erickson says its home country won't be excluded for the worldwide drive to cut costs and save on costs. late onwed a report wednesday. a newspaper in sweden says the company is considering are owing -- firing 3000 employees in sweden. the company ousted the chief executive in july after revenue and profits sagged and an array of investigations at the swedish maker of wireless networking equipment led to lower shareholder -- higher shareholder, they were up by 2.7% today. the french power utility cutting the upper end of its 2016 profit forecast citing safety checks that kept its nuclear
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power plant shut for longer than expected. shares of by 1/5 of 1% today. 90 minutes into the trading day in the united states. let's get over to the markets desk. julia standing by. julie: we have the fed induced rally. that is in part because there is now a bit more of a clear path on the part of the fed. not a lot of uncertainty after yesterday's commentary, although tickets -- they could certainly come back and before december. now there is a broader expectation of a rate increase after a dissent yesterday and the fed portrayed the economic risks as more balanced. the second for straight session and it's a broad-based rally we are seeing today. we have a little bit of a bug. from this particular computer. but the important thing is everything is green on the wheel. broad-based rally. all the groups are higher in the s&p 500.
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real estate is doing the best followed by industrials and consumer discretionary. real estate interesting because this is the group that tended to fall in rates go up. buying a little bit of time before rates go higher. speaking of rates, d.c. them across the yield curve. we see the decline. smaller ones it should be noted. a smaller decline in the yield on the short end of the curve with the two year yield. we are seeing a bit of a flattening of the yield curve occurred today. two movers i want to mention. amazon and alphabet. neither is of huge, although both are more than 1%. both of these stocks are at record. even though the so-called fangs have not gotten as much chatter in recent days, some of the tech heavyweights waited in the s&p 500 have been helping power some of the recent gains we have been seeing. vonnie: thank you for that. let's check on the bloomberg
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first word news. courtney donohoe has more for the newsroom. d istney: president assa blaming the u.s. for the collapse of the cease-fire. he rejected u.s. claims that syrian or russian warplanes attacked a humanitarian aid convoy. he dismissed you even set american attacks on syrian troops was an accident. >> it was four airplanes they kept attacking the position of the syrian troops for nearly an hour. intentional,tely not an intentional as they claim. aretney: is s his enemies responsible for six years of civil war in syria. major businesses in charlotte, north carolina told employees to stay home after a second night of violence. the governor declared a state of emergency and the national guard has been called in. charlotte police fired tear gas at protesters last night. one man was wounded. police say they do not do it.
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authorities say tuesday's shooting happened when a black and refused to drop his gun. ihis relative say he was holding a book, not a gun. yahoo! may reveal details of a hack this week. callaghan from early reports of the hacker was selling information from 200 million yahoo! accounts on the dark web marketplace. . who is about to close a sale of its internet assets to verizon. a last-minute scramble in congress to prevent a government shutdown. to go she ate her's are trying to come up with a stopgap spending bill that would keep government agencies running past september 30. they have not been able to resolve a number of issues including money for the zika virus and budget offsets. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. on courtney donohoe. this is bloomberg. mark: let's get back to the
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markets. global stocks, bonds rallying today. fred -- fed holding rates steady. alan greenspan tells bloomberg earlier he is worried at the market's reaction. alan greenspan: i like to think this type of bond earnings in its price market ratio. i think this tell you there is a speculative element involved in this market. it cannot persist. mark: joining us now with more -- after the fed decision to not
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hike rates, especially when you look in the equity markets and see the drastic moves today. that seems to be successive. mark: she was quizzed about levels and she was relatively calm. she looked at historical averages. nothing seems to worry her. the fed does not have the best history in guessing where bubbles are forming would you say? wolfgang: the fed is trying to labor the point hard they are very data dependent. they do not want to get ahead of themselves. they want to be reasonably sure the economy is strong enough to absorb another hike in rates.
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personally i think the economy is more than ready for another rate hike. the fed is already behind the curve. they had done themselves a favor of delaying it again, time will tell. this time they made sure to not get ahead of themselves too early. vonnie: how much influence does the bank of japan have a u.s. yield curve already? didn't exactlyan get the reaction it wanted from its own bond market. is that part of the reason why we are seeing yields fall? wolfgang: the most interesting part of the decision from the bank of japan was really the new tool for the yield curve control. that was something the markets had not anticipated to happen. the bank of japan wants to take down the 10 year government bond yield at the zero mark. the raises al qaeda
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questions and applications for other central banks in the eurozone. -- will the bank of japan be able to deliver but they have promised? do they see the 0% yield at the tenure mark really symmetrically, or do they see it more of a cap? the most important question is now they have started to
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interfere with the credit market, with corporate bonds. ecb is buying investment-grade
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bonds every month, driving spreads down roughly 60 basis points in the first quarter. lowering the prospect going forward. now the bank of england has joined the bandwagon and also buying sterling denominated investment credit. that makes the u.s. dollar credit market probably the only game in town. you don't have a direct distortion of the credit spread by central bank activity. mark: wolfgang, thank you for joining us today. denmark'sming up, biggest company will split in two. feel get an analyst's take on that move. this is bloomberg. ♪
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vonnie: live from new york and london, i am vonnie quinn. mark: roughly 16 minutes left to the end of today;s session. into two.litting splitting its shipping and energy operations into two different companies. the world biggest container shipping business has been suffering due to low freight rates and a drop in crude oil over the last couple of years. joining us with more with the sk -- that for joining us today. unlocked?alue this is >> 1000 1500 per share. mark: you have a hold rating. are you going to change that rating or not? >> not at the moment.
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we have discounted quite a significant part of it. there is still room to go up to 1100, can very much in the short-term we will return to look at the container market. we are going into the low season right now. devil put some -- that will put some lead on the performance short-term. vonnie: do you look more at macro environment to suggest the health of the covenant going forward, or is this an individual company story still? is a macro story going forward. and it's an individual story on the energy side. fundamentallynto it is about the container market. we are seeing quite a significant improvement through a wave of consolidation. there is a lot of scrapping
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going on, no new orders coming in. that of a significantly troop in the next 12-18 months. that will put quite a significant lift to earnings in maersk's line. the individual story, the focus of this refocusing of the group is to explore the benefits from the freight falling, danko delivering more volume to mark 's line --maersk's line. it was quite a significant lift. may be $600 million by 2019. vonnie: there was a story earlier about going into bankruptcy. do you see more bankruptcies? where in the world will we see them? >> at the moment i don't think the bankruptcies are just on the
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card. we have a number of medium-sized 2%-3% market share carriers. some of them, three of them are japanese connected to solid japanese groups. they are not going. korea it seems like they are going to the restructuring and restructuring might be helped by the fact the other korean carriers are going bankrupt. further bankruptcies in the short-term, i don't think so. there is a lot of thinking to become by the medium-sized carriers that have to rethink their position in the market. and probably have to join bigger units to be profitable long-term. they have lost consistently since 2009 to 2015. the industry has been losing
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money. mark: i have a chart showing maersk's share price. the price of brent crude from 2015. both followed each other lower when the rebound came for crude, brent crude has rebounded more than the share price. does that tell you the in herant problem? what is your outlook for the oil related businesses? >> first of all you can say as it is at the moment and the current structure, with the price, if you don't get higher prices in the container market you are losing out on higher oil prices at the moment. looking at the oil business, the ,our big unit set of the energy
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we think if we take the tanker business it is still having it 12 months ahead of it before it will have a significant improvement in the rates for product tankers. the market looks healthy going forward. service,wo oil drilling and supply vessels, there is no hope at this side of 2019. it has to wait for the oil companies, the oil makers to fix their balance sheet, their cash flows so they will start investing again. we believe that will happen as they get costs down. mark: thanks for joining us. up-to-date bysk 3.4 present. vonnie: we hear from the ceo of your neck that -- this is bloomberg.
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♪ vonnie: live from bloomberg world headquarters in new york, i'm vonnie quinn. mark: eight minutes ago. now to the bank of england. is it me or you? according to a policy member, the central bank may have miscalculated the impact of brexit related uncertainty in many to revise the economic outlook. we heard from the boss of one of europe's largest financial markets he said brexit makes europe more relevant. spokext to the executive earlier to bloomberg from hong kong. >> think about the fact that , 71%e the break a decision of the gdp of the european union was produced within the eurozone. after brexit, 86% of the gdp of
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the european union is not produced within the eurozone. the eurozone has become extremely relevant and one of the reasons i am here in hong kong is to entertain discussions with various market participants who are weighing their options going forward about the right way for european markets. it is postwhere present and there is more uncertainty about the future relationships between the uk and continental europe. >> is is the right time to start these talks? there was no indication the uk has any sort of timeline in terms of kicking this club. french and german leaders are jockeying for part -- for top positions. it should move to either frankfurt or paris. should it be in paris? >> i don't know. discussions will start whenever the uk government will initiate
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discussions. they will last for a long time. there will be a combination of at the business forces end of the game in terms of the substance of the relationship within the uk and the rest of your. what is clear is wherever you are on the planet today you have to weigh your options carefully because there are too many people who thought brexit would never happen, who are telling us today life will go on as it was before and it was president berman. business with 450 million people in continental europe with strong commercial companies in europe would pool of savings. anybody who wants to touch that market has to weigh carefully
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the options and not way the uncertain outcome of the negotiations. executivenext to the -- chief executive talking to bloomberg television. we are literally five minutes away from the end of the session. if they rally today. the fed sitting on his hands. maybe one more rate hike will happen this year. they suggest there will be fewer rate hikes in 2017, if any materialized at all. the stock 600 biggest gain in september. every industry group is rising today. the close is minutes away. ♪
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you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. ♪ live from london and new york, you are watching the european close. finishing the thursday session. a broad-based rally today. every industry group rising on
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600.stocks 600 -- stoxx basic resources of by 3.8 increase. with get to some of the big movers today. pearson was among the gainers today. pearson is a british education company. among the decliners, shares down by almost 1%. cut to neutral from outperform. price target cut by 8% to nine pounds. after 2016 earnings-per-share cut by 6%. 2017 earnings-per-share estimate cut by 5%. last year's shock profit warning, they needed to deliver unexpected and's to rebuild confidence. not as low as they were early in the session. we spoke about maersk. up by 3.4% today.
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they will split into separate transport and energy companies. conglomerate concluding a structural review. the decision will unlock value for investors. unlocking value was something that took place today. shares of by 3.4% today. in light of the fed's decision to do nothing as predicted by most disciplines in a bloomberg news survey, it's interesting to see what the reaction was in the german market. this is the 10 year yield going back to september. what we saw from the seventh of september to roughly the 14th was a move in the bond yield of around -10 basis points to plus two. as you can see since then the yield is lower once again. the concern about the boj, the concern about the fed has left the market and bond yields are
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on their way down once again. vonnie: i'm having a look at some things on the screen. you showed green earlier on. just about 95 now. dissent, by half a percent. what other currencies hitting a breather is the mexican peso. if itts warning today weakens that much, then we are going have to see banks lower the interest rate by 75 basis points. that is one of watch out for. that will be a huge increase. 75 basis points. 1.61% on the 10 year yield is going ever lower. 84 basis points once again. here we are. 6/10 of 1% for the dow. the nasdaq is up 6/10th of 1%.
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with good abigail doolittle in midtown. abigail: the rally continues. we had the nasdaq close at a record high yesterday after the fed's decision not to raise rates. it's on pace for a new record closing high. it is all about technology. the biggest boost today is alphabet, amazon and apple. apple and amazon trading at record highs. as for amazon, shares or higher from an upgrade to buy. the amazon prime will help this gianty be the e-commerce dominating that space. you like the company's cloud business. he set a price at $935 per share. over the last couple of weeks and had to analysts raised their price target above $1000. the street is very bullish on amazon. vonnie: it must be going to other sectors too?
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one of the best percentage performers on the nasdaq. this after milan appeared before a congressional hearing yesterday into the epipen. and what has investors excited is a really focused on milan and the fda. there is only "some discussion 's" and we do have shares rallying. milan is up itself nicely. this is a bit of a relief that the hearing was not worse than it could have been. vonnie: thanks for checking in. let's check in with bloomberg's first word news. courtney has more for the newsroom. courtney: there was a second night of violence in charlotte, north carolina over a police shooting. police fired tear gas at demonstrators. one man was shot and critically wounded, but authorities say he was not shot by police.
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police a black man ignored demands to drop his gun. some neighborhood residents saying he was holding a book, not a gun. the police chief said he watched the video of the incident. >> the video does not give me absolute definitive visual would confirm that a person is pointing a gun. i did not see that in the video that i reviewed. courtney: the chief will not release the video of the shooting victim until after the family sees a first. 1000 morens to hire spies by 2020. says new intelligence recruits are needed because of the development of technology and the internet. they would work for the british secret intelligence service, known as mi six. -- mi-6.
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with thea trade deal uk is on the list of the obama administration priorities. the decision to leave the european union but push the uk to the back of the cue. he says the u.s. is focusing on a trade deal with the eu. repair crews are working to restore electricity to order rico's 3.5 million people after a fire at a power plant lack of the entire u.s. territory. schools called off classes, hospitals canceled elective surgeries, and government employees are given the morning off. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. on courtney donohoe. this is bloomberg. vonnie: thank you. let the a sits on the doors -- latvia sits on the doorstep of russia. how was the country dealing with all the economic and you political changes in europe, including the fallout from the brexit referendum?
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joining us now is the foreign minister of latvia, a post he has held since 2011. >> thank you for having me. vonnie: latvia depends on exports, but 5% of those go to britain. how is the raise it in the triggering going to impact latvia? >> there is so much uncertainty. this is a question nobody can answer. it is true that the uk is very important export market for our industries, particularly food processing. we are also preparing for a possible negotiation under article 50 that will be triggered. vonnie: what would your main priorities the during negotiations? it may be important for one or two individuals, but overall it's only about 5% of exports. >> we want to keep the uk as
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close as possible to the eu. important theery uk is part of the market. it's important that the country doesn't be the foreign policy community. there are some issues that are of concern to us. the status of our nationals in the uk. also how we are going to reconcile single market ways immigration. -- and migration. vonnie: hattie resolve the tension? >> i think it's important that the british foreign secretary has her peter lee said the uk is leaving theeu -- the eu but is not beating europe. we have seen the uk commitment to security have been very
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strong. i do hope they will be able to find ways where the uk stays engaged in many issues, especially security. vonnie: do you have a position on if latvian nationals can stay and work in uk? >> and also british nationals in latvia. this will be one of the elements of negotiations after the trigger article 50. vonnie: what would your position be? >> our position is the status, the right to leave, especially for those that have entered the uk as it has been part of the eu, their status does not change. vonnie: let's move on to nato. that's been of a change in how nato these itself since russia's incursions and the trouble with crimea.
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-- have yout requested more troops? by the beginning of next year we're going to see increased allied troop presence. canada is leading the framework nations for a contingent that was agreed in warsaw. i also can say there are some , so we was a considerable increase of nato presence in the balkans. concerned about the redick in the u.s. campaign and the u.s. commitment to nato right now? >> i normally don't, then the election campaign, but let me outline to concerns. that two -- two concerns. we do want to see the was strongly engaged in nato after the elections.
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the u.s. andus for european allies. we do hope that the united states commitment to the alliance will be as strong in 2017. second, we are concerned about -- and this applies to both sides of the event take, about the financial contributions of russia to some political parties. i think also that e-mail hackings and everything we are hearing in this area is a concern. vonnie: your government has begun to think about what might happen under a trump presidency, should that happen. what will your position be? >> that's the choice of the american people to make in november. we are going to work with any u.s. administration that is elected by the people. again, i hope that the u.s. commitment to nato is not going to change. let me underline that the
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spending normally quoted as one of the issues, in the case of latvia, it should not be trouble. we are increasing our defense spending. latvia has played by the rules to a large extent. you pull yourselves up by the bootstraps. 8% unemployment is not ridiculously high. likeit comes to things sanctions against russia, weakening the sections, cut you talk to european partners and advocate against that happening? >> it's a rather easy argument. we have also agreed that sanctions are linked to the implementation of so-called disagreements. we don't see any progress there. we believe it's a matter of credibility for the european union. it's a matter of credibility also for the ukrainian people to maintain the sanctions until
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this agreement has been fully implemented. i think we are going to see quite a debate in october when the european heads of state and governors meet. and then in december. i would also jump to conclusions whether the sanctions are going to be extended or not. it showed remarkable unity again. latvian foreign minister, thank you for joining us in the studio. mark: the republican presidential nominee is addressing a inside conference in pittsburgh right now. we will bring you any headlines. you can tune in on bloomberg with. -- live. he expects a big history -- victory in pennsylvania. stay tuned. special coverage of the presidential debate. we will cover it live here.
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mark and john will be having special coverage before and after that. what an exciting day. this is bloomberg. ♪
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♪ time for battle of the charts. we look at some of the most telling charts of the day, what they mean for you. you can access these charts on the bloomberg by running the function featured at the bottom of your screen. drum roll. kick things off. vonnie: i will get roasted on the spit. i thought i would use of the simple and very relevant to today. as central measure of pce.
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this is what it looks like when it comes to inflation. we have many inflation readings. some show we are well above 2% and some show we are higher than that. this is the federal reserve gauging how productive and how much slack there is in the economy and where inflation is. we're still below 1.6%. we have been above that in recent history. it's been a long time since the crisis. the fed hoping they can raise one more time this year. you see that chart on the bloomberg library. 366go. mark: will all over the roasted on the spit? let's find out. all o - oliver: we are still in the fed hangover mode. we will look it with a did for this correlation we been watching for a couple of weeks a couple of months.
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a stocks and bond correlation. this is looking at the bottom. the bottom panel showing you the correlation between the yield in stocks. that is how we talk about bond prices in terms of the yield. it's a negative correlation, but that means a positive price correlation between the s&p 500 and the u.s. 10 year bond. this is now the strongest correlation we have seen going all the way back to 2005. 11 years. the past 30 days have the strongest correlation between stocks and bonds moving in the same direction. that's a big deal because they are both getting stronger and doing better. we saw that yesterday in the fed reaction. it will be an important thing to watch. there are a lot of other things as well. everything is all good in the world. everything is up. correlation can become painful. mark: does it worry you that everything is up?
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oliver: it doesn't worry me because i just watch the markets. i would be a little worried because they might selloff together as well. vonnie: are we injecting opinion and emotions? you, i mean the analysts and investors. 3722 stock-bond correlation. mark: i decided whoever mentioned the fed or the boj would lose. the problem is you both mentioned the fed. you mentioned the fed right at oe beginning of your head, -- hit, oliver. repeatedly.oned it i wanted you to think outside the box and i think oliver did
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that just a little bit more. oliver: we are relying on fundamental analysis here. vonnie: whenever a shorter on the bloomberg. mark: arsenal is not one the premier league since 2004. can africa's richest man change that? this is bloomberg. ♪
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♪ mark: live from london and new york. vonnie: you are watching "bloomberg markets." africa's richest man has his sights set on buying the arsenal soccer team. he says he will wait a few years until investments in oil and gas play out. he spoke with bloomberg television yesterday. >> by arsenal and turn it
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around. with over $20 billion for projects. vonnie: high ambitions indeed. joining us now is bloomberg news reporter paul, typically based in south africa. you know him quite well. and also his ambitions to by arsenal. why arsenal?? -- >> he is a longtime arsenal fan. it's one of the most popular teams in nigeria where he is from. --tried to buy the company the team about six years ago and he was rebuffed. negotiations broke down, but he still has the ambition. he has the money to do it. it will be his one day. vonnie: we will get back to
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arsenal in the second. give us more detail on what he does and why he is the richest man in africa. >> he is a cement tycoon. he is worth about $11 billion. he was born into a middle-class or fairly well-to-do nigerian family. he traded agriculture commodities for a while. then he set up a cement business, which is now turning him into a multibillion are -- multibillion are. aire. he's also investing in a huge oil refinery and trying to build gasp pipelines -- gas pipelines. he has a lot of things happening at the moment. mark: maybe four years is a good time horizon. he's been losing money, hasn't he? is wealth decreased this year. >> he's one of the biggest losers in the oil business this
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year. 's wealth is dropped by about $4.5 billion. that is mostly because of the downturn in the nigerian economy, which is very dependent on oil production. fallenal currencies have almost 40% since june. he owns is worth noting 67% of arsenal holdings. he essentially is the owner. does he have any into nations of selling? >> we don't know yet. when he said a bloomberg last year he was still wanting to buy the company, he did not give a time frame back then. he stayed silent and has not said anything. we don't know whether or not da gote has had direct contact with him. he is certainly not shy about making his ambitions to buy the club public. vonnie: it would be a trophy
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indeed. puaul wallace in new york today. thank you for joining us today. mark: take a look at what european equity markets ended. green everywhere. every industry group rising today after the fed sat on its hands and did nothing, as many had forecasted. maybe, just maybe there will be a rate hike later this year. investors not worried too much about that. bonds rallying, stocks rallying. the biggest increase since september for the stoxx 600. this is bloomberg. ♪
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matt: i am matt miller. scarlet: i am scarlet fu.
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welcome to bloomberg markets. ♪ scarlet: from bloomberg world headquarters in new york, we're to pakistan,ies japan, and australia at this hour. stocks are climbing with bonds after the long-term outlook added to optimism. more think has a pessimistic view. he says markets could fall if governments do not take aggressive action to further the economy. running the risk of missing out on setting the terms for international trade by not approving the partnership. through theay trading day. julie?


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