tv Bloomberg Markets Bloomberg September 27, 2016 10:00am-11:01am EDT
vonnie: we are going to take you from new york to algiers. a story out of paris, london, and saudi arabia in the next hour. some say donald trump took the bait in the presidential debate against hillary clinton. we get the view from both camps on who was the strongest in the minds of american voters. strong moves in the mexican peso also tell a story. declines astends iran says it is unwilling to lower current production levels. it tells us how many barrels a day it wants to raise reduction, dampening the prospects of a deal. vonnie: more investor concerns about deutsche bank. we look at why it's corporate woes are the last thing angela merkel needs as she considers running for a fourth term.
about 30 minutes into the trading day in the u.s., we have some economic notes, so let us head straight to the markets desk. jamie dimon has the latest -- to the markets desk for the latest. >> the forecast was for a reading of 97. that is the highest since last september. reading the best in nine years. we also have a reading from the richmond fed that was slightly better than estimated. came up with a reading of negative eight, the manufacturing index. the manufacturing indexes are trading higher, bucking the down trend in europe. mark will give the details on european selling any moment. the initial rally in futures did fade a little overnight. see aok at futures and rally in the wake of the debate, as many investors judged that hillary clinton had won, and
then you see the futures fading going into the early morning hours, influenced by european selling, and then bouncing as we open here in the u.s. oil continues to be a factor. expressing, or not expressing willingness, i should say, to cut production. that is something that had been a condition of saudi arabia coming to some kind of agreement on production. we have seen oil very volatile in recent days, on developments surrounding this meeting in algiers. if you look at the s&p energy index over the past five days, you have seen a lot of zigzagging going on. it is of course partially a proxy for oil. it has followed oil prices all over the map on all of the headlines coming up from opec members. we have also been watching the 10 year push lower. it is at its lowest since
september 7. that has been putting pressure on financial shares. election,ed about the the closest proxy, where we have seen the most reaction to polls, has been in the mexican peso. we are seeing the peso rise versus the u.s. dollar. the most romantic move coming after the debate last night, sort of during and after. watchas been the asset to that has been linked to the election. mark: 90 minutes left of the session today. the perception that hillary the presidential debate sent stocks higher in the first couple of hours. then the shift turned to banks, to oil and gas companies. reason, expectations of a freeze in algeria receiving. oil and gas stocks are down. we saw the biggest drop for the gauge since july 6.
the other german lender is set to announce 9000 job cuts and a fault in dividend payments. this is according to handle/ --handelsblat. that comes after bloomberg on friday reported that commerzbank is paired to cut thousands of jobs. the chief executive looks to boost profitability. shares are down by 1.4%. let us get to the beleaguered italian lender, which is rising today, up by 1.5%. it said it is studying a voluntary debt for equity swap after canvassing investors, signaling it may cut back the amount of stock the italian bank would need to sell to bolster its finances in this turnaround plan. the bank says it's capital plan will be approved i the board on october 24. i want to focus on glencore, the best performer, the minor and
commodities trader. this is the relative strength index. if you push above 70, you are oversold. signal onlying happens if you get back below 70,. below 70. that tells us this momentum has perhaps come to an end. surging amid optimism that central banks will remain supportive of growth. shares have risen by 131%. rsimomentum as per the tells us maybe we have reached a tipping point on glencore shares. vonnie: let's keep an eye. we go to our new york newsroom. debate between hillary clinton and donald trump presented big differences between the candidates. the face-off at hofstra university at times devolved into an exchange of accusations
and blame on everything from race to foreign policy. both candidates claimed victory once it was over. financial markets judged it in favor of clinton. haven assets such as the yen and gold fell. we will have more coming up. authorities say a disgruntled lawyer had two weapons and more than 2500 rounds of live ammunition when he randomly shot at drivers in a houston neighborhood. he wanted nine people before he was shot and killed by police. wearingentified man was military-style apparel with old nazi emblems. million been set at $2 for the man accused of gunning down five people at a macy's store in burlington, washington. he has a criminal record dating back at least two years, including assaulting his stepfather. the stepfather says his son has a mental illness. bombingssuicide ripping through busy commercial areas in baghdad. the deadliest attack took place
in the eastern new baghdad neighborhood. 11 were killed and 28 wounded. hours later, another suicide bomber blew himself up in an outdoor market, killing six and wounding 21. no one has claimed responsibility for the attack. and another push from the european union. the economic commissioner says british prime minister theresa may needs to start brexit talks before april. the commissioner says it might .ait too long formal talks cannot begin until britain triggers article 50 of the lisbon treaty. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am a lisa perretti. this is bloomberg. the presidential debate brought out fights over trade, taxes, e-mails, race, and job. -- jobs.
mrs. clinton: we have to build an economy that works for everyone, not just those at the top. that means we need new jobs, good jobs with rising incomes. i want us to invest in you. mr. trump: our jobs are fleeing the country. they are going to mexico, too many other countries. you look at what china is doing in terms of making our product. they are devaluing their currency. because they are using our country as a piggy bank. mrs. clinton: i have met a lot of the people who were stiffed by you and your businesses, donald, who you refused to pay when the initial the work that you asked them to do. mr. trump: i take advantage of the laws of the nation. company, am running a my publication is to do well for myself, my family, my employees. need a taxn: we system that rewards work and not just financial transactions. and the kind of plan that donald
has put forth would be trickle-down economics all over again. in fact, it would be the most extreme version, the biggest tax cuts for the top percent of the people in this country that we have ever had. i call it trumped up trickle-down. vonnie: that was the phrase that was most picked up on. we will bring in the washington bureau chief. megan, we did some math and it turns out donald trump spoke 36% more of the time that hillary. terms like -- she used terms like economy and race a lot more than he did. did she win on substance? megan: substance definitely mattered last night. if you wanted to sum up the debate in a line, it would be that he did worse than i expected and she did better than i expected. she was super prepared. she was ready. she was ready to hit him where it counts, particularly on his business record, having gone
through the record and found people who were affected, which people always thought would be a weakness in his image as a super successful businessman. she hit him on his personal income tax, an issue that a lot of americans say troubles them so much about his candidacy. trump, it really was a tale of two debates. he had a strong opening half-hour. i mean really on the attack with her. debatelost speed as the caps on. he started to fall for the traps she was laying for him. i think the campaign will be disappointed for his lack of preparation and that he did not stay on message. vonnie: is her health a nonissue from now on, given that it did not come up? the e-mails -- it seemed like there were missed opportunities on both sides. knockoutither had a moment. she had a better performance overall. you are right donald trump
missed opportunities to bring up not just e-mails, but general complaints about hillary clinton and her lack of trustworthiness among voters. he did not take the opportunity when she brought up his tax returns. that would be the normal swing back. piece,u look across the one thing that is so fascinating about donald trump is, the bar is quite low. it was quite low last night, and he did not get over it. we still have two more debates to go, but whether he can significantly improve -- it could help him having lowered the bar forward, -- lowered the bar further. mark: the purpose of the debate is to solidify your core support and try to gain sway over the undecided. did best when it comes to those things? megan: we have to go back to the first hour. wasp's core message hammering on free trade, the impact of deals like nafta, that manufacturinge
base. he is looking to win over pennsylvania, ohio, wisconsin, the old left out voters who worry about the lack of opportunity for good working-class jobs in those areas. if there is a silver lining for him, it is how hard he pushed that, and her response, attacking her with her support for free trade deals in the past. on the flip side where we have seen hillary clinton's margin erode is with women in particular. it was a poignant moment, one of the most emotive we have seen, when she was talking about donald trump having called women ogs in the past. she put out an ad explicitly saying, is this the person you ,ant to lead your daughters that you want your daughter to see in the presidency? it meansght home what in terms of states, coming after the first african-american president, potentially the first female president. a lot of voters will remember
that segment and what she said about women. mark: the next debate is a foreign-policy debate. how do you expect that an amex change in the second debate? -- how do you expect the dynamics to change in the second debate? clearly, he rose to the bait this debate. megan: it is hard to say it will totally focus on foreign policy. he was spinning very hard overnight, look at the whole picture. look at the momentum in states like ohio, florida, colorado. debates are not everything. one of the points you will see him make over the next week is her performance on the trail and in front of voters. the debate was clearly a win for hillary clinton. whether it changes voters' minds has yet to be seen. i do expect him to be more prepared, more disciplined, and more on message, particularly on things like the iran deal, isis,
asia, andvot to talking points that are more comprehensive and in stark contrast to hillary clinton's vision of foreign-policy. they have fundamentally different positions on america's role in the world, and they will try harder for him to bring that in focus. mark: you want to look at the market reaction giving the edge to hillary clinton. is theght the best proxy pace so. it has been viewed as a proxy for trump's election prospects. ,e are taking it a step further looking at a dollar-peso chart. this is the exchange rate in the next three months. yesterday -- this is the five-year chart. we reached the highest level since 2011. today, we have come back down. for thety has declined
most since after the referendum in the u.k. on june 28. expectations of volatility have diminished post the debate. vonnie: we are looking for a mexican settlement decision on thursday, and perhaps an , saying in basis points it would be a hawkish surprise. looking at the bloomberg chart library, it basically shows the s&p 500, and it does not care who is leading in the polls at the moment. it is not being impacted much by the short-term moves in the election and the outlook for the winner. you see the spread narrows in blue between clinton and trump, as they have become tighter in the polls. the s&p 500 continues its climb within that range. stocksup, we look at the moving in the early part of u.s. sessions. this is bloomberg. ♪
mark: live from london and new york -- vonnie: you are watching "bloomberg markets." julie hyman has been looking at biotech. julie: a lot of movement. one pharmaceutical stock is searching on the results of a cancer therapy. it is a treatment for a type of lymphoma. 76% of patients in a trial responded positively. the company says it will file with the fda by the end of the year. that is ahead of schedule. those shares are up by 9%. we are also seeing juno rise in tandem on the coattails of kite. it is rising even more on a percentage basis. one analyst said that while juno
is roughly a year behind kite in a similar therapy, it is going to have a compelling profile in lymphoma. those shares getting linked. on the flipside, amgen's cancer drug did not show superiority over competing drugs by decatur pharmaceuticals. that was in a trial in a treatment for multiple myeloma. are down ashares well. a downgrade on that stock. the hepatitis b forecasts have turned out right bearish. a little bit of strength, a little bit of weakness in biotech. mark: 3:19 in london, 10:19 in new york. still ahead, pressure building on deutsche bank and commerce bank. -- commerzbank. ♪
vonnie: you are watching "bloomberg markets." mark: 10:21 in new york. es taking center stage. deutsche bank, commerzbank, credit suisse -- all in the red today. new concerns with european finance team leader simone meier. commerzbank,ith speculation mounting about the sorts of cuts we are going to get him commerzbank asap. 9000 jobs is the latest figure. it is going to be pretty big, whatever it is, it seems. onone: with the focus deutsche bank, people forget there is another large german lender under enormous pressure to cut costs.
commerzbank has been looking at ways to reduce costs for a while . they have a new ceo who came in in may. there is talk of roughly 9000 job cuts. that would be about 20% of the workforce. on top of that, the ceo -- mark: deutsche bank shares at new record lows. this is important. we talk about the chart over my shoulder. are other asset classes also declining. credit default swaps on the board. debt rising, tier one shares. at what point are we really reaching a critical juncture the we look at the coco's, credit default swaps, and the shares? on juniore cds's
bonds are very low. the last time we saw similar levels was in 2007. there is a lot of risk aversion. the entire market seems to be down. deutsche bank, it does not take much for shares to take another hit. there is speculation around the doj. how much capital will deutsche bank have to raise? will they have to raise capital? all of these insecurities hanging over the shares. i suspect we will see downward pressure, going forward. vonnie: we were speaking with someone yesterday who said the 10 euro mark is the point at which you get concerned about contagion and a vicious cycle starting. would you agree? is there a marker? is there a level? to be reallyve careful at this point. looking at fundamentals, deutsche bank still has a solid capital buffer, 10.8% at the end of june.
there is no reason to be concerned about that in the immediate future. ,he political talk -- berlin the opposition weighing in -- it is an election year. keep that in mind. the only sign at the end of october, when deutsche bank releases quarterly results, the capital developments -- they have been raising capital buffers. they have been trying to sell assets. we will know more than. vonnie: there is never an appetite for a taxpayer to take the burden, but it has happened in italy and ireland. do you see it happening in the likes of germany? simone: i really do not think so. there is a lot of talk about it. there is shortselling activity. let's keep in mind there is no political will to bailout a bank like deutsche bank. and there is no signal from berlin that this may happen any time soon. mark: credit suisse is mulling further cost reductions in the global markets unit. this is the division that
blind-sided it early this year. what do we know? simone: deeper cost cuts. we senior management in place. it is a sign of tremendous compression these large investment banks are facing. there have been two restructuring plans. this is another attempt to fine-tune the cost side of that unit that suffered huge losses earlier in the year. it may be there are more jobs that are going to be lost. mark: simone meier of bloomberg news. vonnie: still ahead, we are covering the latest out of the opec meeting in algiers. oil extending declines. ♪
news. the attacks were sharp, personal and highlighted the difference between hillary clinton and donald trump. at hofstra university the presidential candidates faced off for the first time. one of the issues was jobs. >> we have to build an economy that works for everyone. not just those at the top. that means we need good jobs with rising incomes. i want us to invest in you. >> our jobs are fleeing the country. they're going to mexico. they're going to many other countries. look at what china is doing to our country. they are devaluing their currency. they are using our country as a piggy bank. >> i have met a lot of the people who were stiffed by you and your businesses, donald. who you refused to pay when you finished the work that you asked them to do. lawstake advantage of the
of the nation because i'm running a company. my obligation right now is to do well for myself, my family, my employees. for my companies. >> we need to have a tax system that rewards work. the kind of plan donald has put forth would be trickle-down economics all over again. it would be the most extreme version. the biggest tax cuts for the top percent of the people in this country we've ever had. i call it trumped up trickle-down. >> a cnn poll conducted after the debate had 62% saying clinton won. the next debate will be a town meeting in st. louis with uncommitted voters asking the questions. say the chances of a government shutdown after friday's deadline are close to zero. they say partisan differences over a stopgap spending bill are
miniscule. a key point of contention is the democrats demand that money be included to help flint, michigan with contaminated water. a typhoon has been battering taiwan. 100 mile-per-hour wind and 20 foot waves. more than 260 people have been injured and four killed. saudi arabia is taking more steps to shrink a budget deficit caused by the collapse of oil prices. the government has canceled bonuses for state employees. to 16% oft ballooned gdp last year. this is bloomberg. vonnie: energy minister's from opec nations and russia are meeting this week in algiers.
the group dynamic is in a delicate balance. saudi arabia is considering a production freeze. oil minister of iran says it is not the right time. >> it is time to exchange views and make something for the next formal meeting. >> you are not ready to freeze production at current levels? >> no. we are not ready. >> you want to go to 4 million barrels a day? >> yes. joining us now is the director of the baker institute. and former u.s. ambassador to israel and syria. thanks for joining us, -- sitter. whenould there be a freeze the only likely beneficiaries would be u.s. producers? >> i don't think parties in the
region, certainly iran as you just had in your click intends to engage in a freeze. the iranians are still working on a post sanctions regime where they can get their production up to 4 million barrels a day from 3.6. indicated theve possibility of a freeze. we have to underline the word possibility. i think the important thing in this flurry of news articles on the opec consultant is its not a decision-making meeting. is that thes iranians and the saudi seem to be talking to one another at on theublicly possibilities of a phrase sometime in the future. i think that would be looking at the earliest date for the november opec meeting. we do have a formal
meeting in november. is that a more likely scenario or will the parties wait and see what oil prices do before making a decision? >> you are right on that. we have to keep focused on the fundamentals of the oil and energy market. there is still an abundance of supply on the market and demand is not growing. at this moment. in the real long-term i think demand for energy will grow. the future long-term prospects of oil demand increasing our there. of thecurrent time supply demand nexis is the critical factor in the decisions that are going to be made. you also mentioned that saudi arabia in your news clip is going into deficit financing and basically looking into budget reduced subsidies being
for its citizens. this is a big deal in saudi where citizens have been for decades really used to and dependent on handsome government subsidies. the decision the saudi's made in 2014 to go from market share. and i believe the main impetus for that was to capture and theiridate and grow market share in asia. especially china and countries in asia. think anyone including the saudi's realized how low the price of oil would go. they are under very severe fiscal budgetary constraints now. oil willyou think break out of the range it has been stuck in since april? i have a chart of wti. inm april we have been stuck a 39 to $51 barrel range.
what's going to break us through the upside or the downside? >> i think it will be a change in the fundamentals. if there is an increase in and the opec countries are now all maxed out in production. fundamentally we have to have a balancing of the market forces for the price of oil to break through the range you have indicated. it's a full errand to try to predict the price of oil in the future. as you well know. there are some important factors. to one estimate the saudi's need a market price of $67 a barrel to really meet their budgetary requirements. there is a lot of speculation that over the next year and i'm 2017 the2016 into price of oil may go up to the
$50 $60 range. that's the general assessment. see some ofyou will the north american shale producers might consider that to be enough of them to begin producing again or increasing their production. with 800,000 barrels of oil coming on the market in the next month is? it all a red herring talking about a freeze? let's say we got a freeze. what difference does it make? >> it doesn't make that much of a difference. the height on the freeze is exactly that. i don't think it's going to make much of a difference. will be iffference the opec members decide to cut production. the big difference between a freeze and cut in production. that's what we should be looking
for in the months ahead. these talks at some point have to be at least good people are coming together and speaking. hands of the the others. iran now sees saudi arabia is hurting a little more than a ron realized. what does emanate from these kinds of informal talks? are the players very good at withholding information? >> they are good at withholding information. i think the good news is that at least the saudi's and the .ranians are talking together maybe just publicly. perhaps also privately. on the oil market. so this has not happened in the past. the rivalry between iran and saudi arabia. it is a pretty profound geopolitical rivalry in the region.
something is happening here and that is a glimmer of hope if there could be more coordination within opec. maybe that's a hopeful sign. . our eyes should be on the november meeting. we will see if there is any progress made. let me repeat if we are just talking about a freeze it's not that significant as a cut in production. event we areer looking forward to in november is the election. you will excuse me if i ask you a question in the wake of last night's debate. debate focus will be on foreign policy among other things. what's your view on donald trump's grasp of foreign-policy matters? when it comes to issues we have been discussing. >> i would rather talk about energy. you have asked me a question. i think the debates last night
riveted the attention of tens of millions of people throughout the world. you have two entirely different approaches and views from dollars trump and hillary clinton. hillary clinton was very well prepared for the debate. she knew her script. and she was very deliberate about it. policiesrepeated were that she has been known to advocate for years. represent toon did the american people if i can be bold enough to try to think about what the american people are thinking. the standard candidate. a prolongation of the obama administration policies. donald trump tried again last night to feature himself as the agent of change. that politicians such as hillary clinton represent the status quo and that is not working.
trump saying there is a lot wrong in america from the inner cities to foreign-policy to mostly every aspect. infrastructure. hillary clinton saying yes we have very areas problems that america is great. is saying i'm going to make america great again. all of this came out despite the frictions that occurred during the debate. they are entirely different visions. the jury's still out. god knows where the american people will come out on this. mark: thank you for answering that question. we always appreciate your views. the director of the baker institute for public policy at rice university. saysg up, george osborne the u.k. government should aim for a so-called soft breaks it -- brexit. more from that exclusive interview.
vonnie: you're watching bloomberg markets. i'm vonnie quinn in new york. mark: i'm mark barton. hinge on a newll government in germany. the finance industry in london will remain strong. byse were the assertions george osborne. he spoke exclusively to bloomberg today in his first television interview since leaving his u.k. government post. >> brexit means we are leaving the european union. we haven't answered yet and the british people didn't provide an answer is what is the new relationship with their european allies. i believe we should have the
closest possible economic and financial relationship. i will be arguing for strong economic ties with britain's principal trading partner. do you see another referendum taking place on the basis of that to decide what kind of relationship we have with the union after leaving? answer is no. i don't think that's at all likely. people in brinton took part in a huge democratic exercise. more people voted in the referendum than in the general election. they were clear they wanted to leave the eu. what we didn't put to the british people was exactly what now is the trading relationship with europe? sure london is going to remain a major financial center in the world and britain's can go study in
europe just like european citizens can come to britain? these are all crucial decisions. has thet the moment answer to all those things. it is not surprising. it is just a few months since the vote. to get thework hard right answers over the next few years. my broad view is we should be ending up with a softer brexit than a harder brexit. the economic consequences of a harder brexit will be more severe. the idea is a little bit harder to understand than a soft brexit. there is a suggestion that we wait until the end of next year to trigger article 50. in the meantime don't you think that kind of uncertainty would damage the u.k. economy? of the most some important decisions britain is
going to make since the second world war. it is absolutely vital that we get them right. a point i may just a couple of days ago is that europe is not going to be in a position to have this conversation with the u.k. until the french and german elections are out of the way next spring and summer. to -- triggerry article 50 will have to wait for a new german government. until the german government has come to a position it's impossible to get a decision in europe. >> what does that mean for the city of london? financial passporting is absolutely critical. is there any reason to believe london will keep that passport? >> i think it's vital not just for the u.k. that london remains the global wholesale financial
center that it is. i don't see that business shifting to frankfurt or paris. otherwasn't a single european center in the top 10 apart from zurich which is not in the eu. europe's interest that london remains a strong financial center. george osborne in an exclusive interview with bloomberg television. some headlines. hillary clinton following last night's debate is campaigning today in north carolina. a couple ofg questions at white plains before she boards or plane. she said she is feeling positive about her debate performance and looking forward to the next debate and the one after that. policy differences
mark: live from london and new york, i'm mark barton. vonnie: i'm vonnie quinn. now to a bloomberg school. as. regulators hoping to send message to volkswagen after its massive cheating emissions scandal. how serious is the justice department? it is assessing how big a criminal fine it can extract without actually putting the german carmaker out of business. this almost seems unbelievable. they are working backwards to see what volkswagen can actually handle in terms of a fine? >> it's not quite as bad as that.
in the u.s. when the justice department has to come up with a criminal fine when they are dealing with the business one of the things they have to look at is how is this going to affect the company, employees, shareholders, pensioners who might have a retirement fund invested in the company. it's part of determining the fine. if they come up with a number that the company believes is too high and could put the company at risk then doj will often come down on that figure in order to not hurt the company or its employees. they don't always reduce the number. in the cases of alcoa they did. a foreign bribery case. they reduced the amount because it would not allow the company to do enough rmb. in some cases they keep the fine the same but say you can pay it to us over three years or five
years. volkswagen has already agreed to pay an industry record. it is also on the hook for civil claims from different states for more than $9 billion. that's $25 billion already. this will be on top of that. this is the criminal penalty rather than the civil penalty. one is about $16.5 billion. they have agreed to pay to private plaintiffs. they still have some outstanding. the $9 billion is actually german investor lawsuits. this is a separate issue. this is a criminal fine. is the justice department making similar calculations over the civil settlement with deutsche bank over its dealings with residential mortgage-backed security's?
>> it's slightly different. the is the civil side of justice department. this is something that is often not well understood outside of the united states. there's a civil track and a criminal track. you can have civil violations and they result in their own penalties. particular calculation they are doing for volkswagen stems from the criminal procedures that the doj is subject to. is underche bank case the civil side. from what we understand they are at least considering similar issues. . mark: vw barring the namesake brand has been doing ok hasn't it? >> it's been doing surprisingly well. audi is doing very well. porsche is doing well.
a company volkswagen has whether this much better than you might have expected from an old-line industrial company. they are generating a lot of cash and making a lot of money. it is hard for them to argue that they are really in dire financial straits and the u.s. government should go easy on them because in fact they are doing pretty well. thank you for joining us. mark: coming up, a conversation with blackstone president tony james with his take on the presidential debate and they political and market risks in europe. just ahead. this is bloomberg. ♪
you're watching the european close on bloomberg markets. ♪ mark: we will take you from new york to algiers. a couple of stories out of moscow, london and saudi arabia. vonnie: here's what we are watching. an exclusive interview with the president of the world's largest private equity firm, blackstone's tony james. he will tell us why markets aren't factoring in political risks in the u.s. or europe. a ronclining today as said it is unwilling to freeze output at current levels. the oil minister tells us just how many millions of barrels a day it wants to raise production. dampening prospects of a deal. have a look at where european equities are trin