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tv   Bloomberg Markets Americas  Bloomberg  October 25, 2016 10:00am-11:01am EDT

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welcome to bloomberg "markets." vonnie: from san francisco to milan and cover stories from washington and wall street in the next hour. first, breaking economic data. julie hyman is with us. julie: consumer confidence coming out much weaker than had been anticipated. the richmond fed manufacturing index coming out with a reading of negative for in line with estimates. the consumer confidence read fro milan and cover is surprising bursting what analysts had been anticipating. 98.6 versus 103.5 last quarter. i will keep looking at the numbers to see what is going on.
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it looks like we are not seeing any kind of take market reaction. stocks remaining little changed. investors looking at individual movers. hearing from so many large companies at the moment. getting to some of these and talking about the big earnings movers. .e have baker hughes in particular, north america, some of those readings better than anticipated. procter & gamble beating estimates. united technologies and the winners column as well today. if you look at some of the big doing the very worst. it isompanies saying seeing weakness or challenging.
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-- missing estimates. general motors numbers looks good. the issue seems to be the cost associated with brexit. europe is the second-largest market. when you talk about brexit, investors are concerned. 3m seeing issues in the consumer electronics division that led them to come out weaker than had been expected. we have a third of the companies in the s&p 500 return -- reporting earnings. i also want to talk about what is doing on in the currency market. in an interview with bloomberg, the value insaid the dollar will pause. white 10 year treasury yield
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in blue. jp morgan things that is not going to continue. 90 minutes away from the end of the tuesday's session. at the percentage change column today. minor 0.03%. zero 00%.fore plus we are gone nowhere for three consecutive days. basic resources, check out this takeaway. at the industry group, the highest level since 2015. the index is itself is unchanged. days, sharesight 68%.risen by
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they have risen by 27%. fallen by 23%. they are now lower. the chief executive promise to return to profit. what a wild ride. love this chart. this shows the stoxx 600 bank index impressive. just where they were before exit. back over theept past month because of the deutsche bank resurgence. down 18% for the year. before then, the low was since 2011 was a 36% year to date. no longer banks the worst performing industry. reallyg with banks, simple chart. indexs stoxx 600 bank price to book ratio, the white
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line. we were near .50 a few months ago. price-to-book .95, which leads to the question, do we have a valued stock? we will ask that to one of our guests. vonnie: spot on. checking in on the news. more from the new york newsroom. >> the british government has ended years of the lays over one of the most pretentious issues and politics. approving a $20 billion expansion of the heathrow airport that would allow it to handle 130 5 million passengers per year up from 75 million right now. this may be one of the biggest asset seizures in u.s. history. federal prosecutors are preparing to charge several
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individuals and confiscate the property for allegedly looting the state owned oil company according to people familiar with the case. $11 million may have been's: from the company. the houstonsets suburbs. philippines president says he is no lapdog of the u.s. for the u.s. or any other country. he said he wants no more foreign troops on philippine soil and misses to go he just returned from a trip to china and now headed on a three-day visit to japan. hillary clinton proving chances for a path to push away 270 $5 billion infrastructure plan. the proposal would be paid for by changes in the corporate tax code. supporters said it would come from a low work tax rate. would produce a one-time
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bonanza if companies bring their earnings home. the world series it's underway tonight in cleveland as one team will end decades of frustration. they have not won a series in 108 years. the cleveland indians, it has been 68 years. the average price is almost $1200. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. vonnie: thank you. back to italy. .ild swing the ceo unveiled a new business land. closing 500 branches in bad debt through profitability. potential new investors this week. >> what we're trying to shoot
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project investors is to solid growth. the credit portfolio. general.t structure in in themore, bringing bureau chief in milan. any idea who these investors might be? >> he did not disclose the names of the potential investors. he said he was banning on starting talks with these institutions. the italian press has speculated they could be sovereign wealth funds based in the middle east, and china perhaps. he did not name names today in his conference call with morning were with the press conference this
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afternoon. and -- about and how you what about italian investors? have there been anyone expressing interest? >> for the moment, i don't think so. we -- what about italian investors? have there been anyone expressing interest? >> for the moment, i don't think so. we have heard comments from ceos from the largest institutions banks that say they are not really interested in doing m&a transactions right now. best hope probably are funds outside italy. remember isd to there is a huge risk surrounding billion that he is trying to raise. it has three legs. one is finding the anchor investor, the debt for equity swap, and then potentially having to deal with cleaning up
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the balance sheet, getting rid of 28 billion euros of nonperforming loans. any of those pieces does not work out, then the whole plan falls apart. do in theough job to next couple of months. risk thethe execution reason we are seeing such volatility in the shares today? we have been down as much as 25% and been up as much as 25%. >> something like five straight sessions i believe. last week presumably some investors wanted to take profits. now that he is unveiled realizedg, people have the hard part comes now. against the market that is obviously very volatile, you have the italian referendum coming up december 4, and this is not the only italian
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institution that will be going to the market. well thatredit as perhaps will have to do a capital increase. there will be competition. could the timing become unhinged by the outcome of the referendum, and if we get a no vote, how much would it damage the prospect of the turnaround plan? >> it is important. we saw him during history to washington last week and the public comments, trying to acknowledge the no vote is ahead right now, and even if it prevails, it is not the end of the world. there is a scenario that says it, he if they lose would be asked to stay on as a in theer prime minister
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run of getting political reforms down and then holding early elections next year. 2 is there something about being first to market, does that make likely for unicredit to do the same? >> i think that it probably makes me -- makes it easier if in the sense they can find big investors, that which shrink thet would amount of cash that would need to go to other investors. mark: good to see you. shares down by 15%. it.t miss marco marelli tomorrow. bloomberg television. big interview tomorrow.
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cannot wait for that. looking at shares rising in the early session. this is bloomberg. ♪
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vonnie: i am vonnie quinn. you are watching bloomberg "markets." time for a look at the biggest business stories in the news right now. buying a startup company to expand the effort and virtual reality. iphone working to enable i've movements to control digital screens.
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twitter may eliminate about 300 as soon as this week. twitter loses money and trying to curb spending. have notrs in germany loginany evidence folks -- investigators have a fairly good picture have the scandal evolved. that is your bloomberg business flash. julie hyman looking at the fallout from the under armour tumble. julie: at one point today down the most in more than seven years. armour has been on a rapid pace of growth. even in the quarter, earnings beat estimates and sales were up 22%. this is the 26 straight quarter
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of more than 20% revenue growth. however, it is set to slow down. revenue will increase in the low 20% range in 2018. take a look at the bloomberg. i have made a revenue growth chart going back to the end of 2008. essentially this would be the slowest growth we have seen investigators have a fairly good picture have the scandal evolved. company. there has been concernsince 200y about slowing growth. this seems to be investor concerns realized. proper growth may be more slow as well as it pushes to less profitable category. company may need to spend more. he says the growth is still there and requires significant investing. that could have a potential on profit as well. we have already seen rocky
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performance and shares are down 21%. what is happening today, not but affecting under armour category ifhletic you look at the other movers. concerns reflected there as well . one of the issues has been increasing competition. nike in lululemon down. manufactures, as well as foot locker, some of the vendors. not only happening in the u.s., category if you look at the other movers. concerns reflected there as well . one of the issues has been adidas shares in germany trading a pullback of 1.5%. the pullback happened after the numbers came out. still ahead, approving a $20 billion expansion of london's heathrow airport. big news. we will hear from an executive who has been very vocal.
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clear he joins us next. -- michael o'leary. ♪
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vonnie: you are watching bloomberg markets. i am vonnie quinn in new york. mark: we have the stoxx 600 -- lower now. it was up marginally. it will change for a third consecutive day. gains in london because of the miners. cac 40 up as well. have a look at what is happening to currencies today. the euro was falling for a six consecutive day against the dollar. it is still low work. ower. the euro's slide continues. house of lords, the bank of
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england governor. the fixed income markets, the big macro peas was german business confidence, which rose to a two-year high highlighting the strength of europe's biggest economy. low crude prices still did not seem to be affecting the permian basin in the u.s. the patch of desert in west texas and new mexico turning a profit. less costly to affect -- extract the oil and gas there. today, goldman sachs global head of commodities explained of the cost of production. >> i think you have to separate the u.s. into the permian races where we have seen a significant drop in the cost structure. the cost still relatively high. the increase i merely in the
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permian. the ability mentioned is the ability to raise costs and oil service sector will be limited. we have seen too much investment that willast decade put pressure on the oil services sector as well as the overall cost of the industry. >> this is the midland basis, where the hotspot is for crude. we are at record highs here. who knew? this is pivotable. >> wheelies ask when are the bankruptcies coming? ask when are the bankruptcies coming to echo the carry on pumping. can you walk me through that? >>
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we start in coal as well. the shutdown costs are pretty substantial and that competitors want to get residual value. we think about getting to the point where they shut in production, you have to go to a solvency issue. someone else is likely to step in and you will continue to see production. peabody is cranking up production again. coal prices are up. >> just today we see copper rally in sync at a five-year high. what is the distinction between what we are seeing an oil that is still struggling versus the metal? >> i would like to argue what we are seeing in mining is the results of a successful .artel action on production cut
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china has 50% of the world's of 15%oduction mandated reduction in supply, and now we are seeing that filter through. if you look at what has happened the coalners in china, industry was losing $15 billion per quarter as now swung to a $17 billion credit. that starts to put the blood act into the system. the polar mining was stepchild in terms of the potential default. by putting the blood back in the system, you have the industry back and moving again. it is critical because it not only increases the value, it raises the cost of producing aluminum and the other metals. jeff curry, goldman sachs head of commodities research. areick look at how stocks
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faring after confidence came in a little bit lower than expected. this is having a slight impact on shares today. the dow 14 points lower. the s&p 500 is down. i do want to point out the dollar index. 99.08. the because of also, cable down 1%. the government approving the $20 billion expansion of heathrow airport. that is the news today. we will hear from this man who has been very vocal, michael o'leary. ♪
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world headquarters in new york and london. i am vonnie quinn. mark art in. >> gunmen stormed the police in at least 61 people were killed, and more than 100 others wounded. most killed were police trainees. they were part of an islamic with al group linked qaeda. seymour has become a major category three hurricane in the pacific. the maximum sustained wind increased to nearly 115 miles per hour. it is expected to begin weakening tomorrow. a new poll finds that britons are more controlled -- concerned with controlling immigration than maintaining access to the single market. those cold say they are more worried about an influx of foreigners than they are about losing eu trade benefits
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syria 58% approve the handling of brexit. global news 24 hours a day powered by more than 2600 journalists and analysts and whether 120 countries. this is bloomberg. mark: theresa may's governors has announced a decision in the longest debate of u.k. politics today. airport tuesday zynga $28 billion expansion over the busiest hub. the next best says the decision to approve one new runway is not enough. joining us is michael o'leary. is it a missed opportunity? i would say at least they
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have made a decision and 12 months time, but it is a huge missed opportunity. allowing heathrow to waste 80 billion building one more runway in london that will not be delivered for 10 years masks a solution to the problem. we need three additional runways. at least you put competitive pressure on each airport to deliver an additional runway in a i would say at least they have made a decision and 12 months time, but it is a huge missed opportunity. allowing heathrow to time and ct manner. heathrow will blow 18 million. looking to increase airport fees to the heathrow airport line. fees will rise significantly to pay for this monopoly. what do you say to those who say the reason you want to expand this? >> actually it is in my interest to only have one runway at heathrow. not in myhat is interest but certainly the interest of the u.k. economy and
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consumer is to have the same competition between runways that we now have between three competing airports in london and three completing airlines. competition works. it delivers the most competitive position for consumers. the decision by the u.k. missedent is a opportunity to deliver competition. by the time heathrow airport opens in 2025, we will be looking for where will the next we are calling on the government to allow three new runways in london and solve the political problem for at least a couple of generations. do you anticipate this will even happen? >> this is pretty much irrelevant. the politicians have to panel -- candle to the local constituencies.
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the fact this aircraft is getting quieter. also, the airlines do not fly through the night anymore. we're a better neighbor to consumers. vonnie: that is to say niy is not in my back yard. more traffic or less traffic into london. the reality is brexit has not changed the reality at all. it atill remain full for least three years. i think brexit is a distraction. outward looking with develop new facilities. if you really want to be outward
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looking, you need not one but three runways. mark: amsterdam and paris cited more runways, adding more flights. are we paying catch-up. ? >> yes, and playing from a 20 year deficit. we are still running behind amsterdam, paris and frankfurt. we need three more airports. probably the next 50 to 100 years. >> how is weaker sterling at pack -- impacting the business into next year? >> we are seeing the impact already. we are responding to the economic shock of brexit by lowering the prices.
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we expect that to continue. our passengers will have a better deal than ever before. we expect lower prices finding to europe. we are pivoting the growth away from the u.k.. grow byly we planned to 12% capacity. we have cut that fact by more than 50%. thank you for joining us. michael o'leary, chief executive officer of ryanair. moving of earnings at a time when nearly all of silicon valley has potential job cuts on the horizon. we will discuss. this is bloomberg. ♪
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vonnie: you are watching bloomberg. i am vonnie quinn. i am mark barton. this is your global business report. london's heathrow airport gets a massive expansion. an executivefrom on what was behind the position. -- what was behind the decision. streaming services are now part of everyday life for millions of consumers around the globe. explaining that streaming revolution and what is next. >> the uk government has
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approved a $20 billion expansion of the heathrow airport that will allow it to handle 135 million passengers per year of from 75 million now. a government commissioner said the best candidate for growth. here is the transport secretary after the decision. >> all three options were very good options on the table. we believe this is the best option for our future. the best of the whole country. best trade links to the world. we think this is the right decision for britain. mark: they think it will take until the first quarter next for theget approval takeover of chem china. missing the deadline to make early-stage consensus -- concessions. both companies are committed to
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the transaction. cutting the revenue forecast for the year in the world's largest maker of construction and mining equipment says next year will not be much better. caterpillar has hurt by low commodity prices. the company has proposed an annual sales increase since 2012. to overcomes trying a broad decline in serial sales. introducing a limited time girl scout cookie line in january. crunch come and caramel and thin mint. some of the proceeds will go to the girl scouts of the usa. vonnie: time now for the bloomberg quick take. people watching movies, tv shows or listening to music on their phones. the streaming revolution has made it possible that is only
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just beginning. howaming rapidly changing it is consumed, who profits, and it is made. significant revenue growth in 2015, the first time in almost decades. popular services include pandora, apple music. it has been valued at more than $8 billion. revenufrom video on demand rose almost 9%. in a nielsen survey, two thirds of respondents said they would stream video with netflix, amazon, and hulu. the background on on-demand services. streaming liberates tv viewers from schedules. in doing so, it is the latest media format. someis the argument,
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musicians, notably taylor swift complained they are inefficiently compensated. on the other hand, how to make it easier for new artists to gain a following. a new debate how it threatens .aid television most consumers regard on demand services as a supplement rather than a replacement. is long-term outlook uncertain. you can read more about streaming media on the bloomberg . that is the global business report. head to the bloomberg terminal for more stories. >> shares of twitter falling today. the company announcing widespread job cuts to be announced as soon as this week. also said they are releasing earning results thursday. isy johnson, editor at large
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joining us. are they part of twitter's go it alone strategy? >> some people are going home alone. twitter is struggling. the most important thing there on is twitter advertisers have significantly paid more and more money. the growth rate has slowed significantly. proof has been elusive, and i think that is why they're looking at cutting sales. cutting sales when sales are down is a rough way to go but they have to cut somewhere. sale?what happened to the shelf?ack on the
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>> fundamentally companies need people to sell stuff. twitter cut 8% of the staff when jack dorsey came back as ceo. the reporting suggests they will make a similar cut this time around. vonnie: why is it not continuing to gain subscribers? is it something a little bit more intelligent? >> it is entirely possible it has reached a audience it is going to reach. the growth numbers were always slow. have just kept coming down and the growth rate has been anemic. the analysts have come to expect . little bit of a pickup twitter is about what it is going to be. case forhey use every person should be on twitter. there may be a product better suited for celebrities and
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journalists to get stories out there, but it is not for everyone. mark: we are looking at apple later. numbers might we apple just released the new phone. those numbers will not be significant. what is significant, the note 7 blowup, the metaphorical way, put it a lot of the wind out of the sails behind apple. guidance will be hugely important. businessthe services going to give us some things that were? big generator of growth, hasn't it? >> the goal is there will be more growth because it is so
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hard to grow the iphone business. we solve the effect the past couple of years in the stock price. the services business is more long-term hold. thanks a lot. cory johnson editor at large for technology. bank of england governor mark carney offering questions on the economic consequences of the brexit vote. under the pressure of all sides. he says monetary policy cannot do everything. markets should have no reason to question the independence. this has been called into question post brexit. we will continue to bring you the headlines. you are watching bloomberg. ♪
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there is many information and news about coffee doing better in terms of environmental and social sustainability. and interest for coffee, not only in the oecd countries but also emerging ones. asia is the second-largest coffee consuming region after europe, which is an interesting thing. there are so many consumers who come on board the area are 1.5 billion copy consumers all over the world, and still room for a germanic increase. continuet it will
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because of the shift in the consumer economy. how does a company like yours acquired copy? >> it was born upon a dream of serving the greatest copy to the world. so we work hand in hand with the coffee growers. next week november 1 would be the very first international nine awarding the countries, the three best producers for the nine countries . here in new york and the united nations, and by working with the coffee growers we can select the best one. and the quality standards in order to make that are coffee
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more sustainable. we have a premium price in order to reward their effort. in 25 years.ers a system that is quite solid now. it is a hugely competitive marketplace. just to highlight this, $30 two thousand 12 snapping up assets. how do you compete? is anis consolidation abnormality. it has been a technological revolution. , the coffee grows faster. the only thing you can do in the traditional coffee market is consolidate the industry. coffee used to be in the copy 30 years ago. the first two players
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account for less than 40% of the volume. i would expect more concentration. in this very moment, they can say that nearly everyone feels they should become a free creator. so we want to stay consistent with our strategy i improving the execution, take the opportunity and grow faster. mark: what trends do you see in the cafe industry? i know cold brew is big now here you something that even you probably could not have predicted a few years ago. so we want to stay consistent with our strategy i improving the execution trends that we might see in the next fewwhat a?
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have seenside we there is more industry consolidation. ae exact opposite, there is different industry association. more independent cafes. ideas, testing them on the market in terms of low entry barriers. something that did occur in wine similarly decades ago. the way of doing wine.
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thank you for joining. coming up, mark carney still answering questions live on brexit. we will continue to follow his comments. he has just made the decision is an entirely personal decision and said any decision will not be reflected of the government. he is set to make a decision whether he will extend the 10 year beyond 2018 to 2021 by the end of this year. many saying the pressure he has been under by recent week could sway him to end his tenure in 2018. this is bloomberg. ♪
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mark: 11:00 in hong kong. 30 minutes left in the trading day in europe today. i am mark barton.
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i am vonnie quinn. you are watching the european close on bloomberg markets. mark: taking your from washington to milan. stories from new york and london, and asia. here is what we are watching today. rising inflation and mixed signals causing investors to pull out of certain types of bonds. we will talk to an asset strategists. a third runway will be built at heathrow airport. who is backing the bill? technology and focus. twitter planning to cut 8% of the workforce as it prepares to go it alone. apple set ep


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