tv Bloomberg Markets European Close Bloomberg October 31, 2016 11:00am-12:01pm EDT
vonnie: we are going to take you from new york to johannesburg to cover stories of the united kingdom, washington, and vienna. national polls between hillary clinton and donald trump. we will get and investors take. growing lists of opec members seeking exemptions from a plant supply cut is seeing future fries -- future price drops. mark: south african prosecutors withdraw fraud charges against finance minister. tensions within the government subside for now. vonnie: we are about 19 minutes into the trading day. bloomberg's julie hyman has the
latest. moreanges are little bit positive but nonetheless, not seeing a lot of changes. in earningsto be season as well as trading on some of the big deals that we have been hearing about over the past couple of days. if the s&p 500 ekes out again today, it will be the first game in the past week. look at the chart. you have here, we have seen a 1% decline. we will see of that losing streak is broken today. games we are seeing, amazon is the biggest contributor in the s&p 500, up nearly 1.5%. a market share in the tablet market rose for amazon 7.3%. these are third-quarter numbers even though overall tablet sales were down.
watching sales as those opec talks indiana have not yielded much. falling, exxonil falling suit. chevron is trading higher by three quarters of the percent. with the commodity market, we are talking sugar and cocoa. both of them are falling. sugar down on technical reasons. at a is also trading lower quarter percent. and for a longer-term look at these candy related commodities, look at the bloomberg terminal. we've got sugar in white, cocoa in rns, and what we are seeing today is an increase in sugar prices with cocoa going down. hearing dark chocolate with a low percentage of sugar, maybe you are in a better financial state this halloween. mark: i like my milk chocolate
with a high proportion. there you go. i am cheap. have a look at the stoxx 600. we are 90 minutes away from the end of the session. we are down for the second consecutive month. trending gauge that is in a range of less than 15 basis points since it reached a four-month high in september. construction gaining down by 1%. downnd gas down point -- by 1.2%. quality divergence is the reason for that. they are increasing their next to 123,856ures contracts in the weekend of october. that is what this chart is telling us. rise 1/10 of 1% on
friday. b i is reopening that investigation into hillary clinton and the euro is falling. of moreelivered a boost than 518 billion euros for the asset purchase program. they have seen their yield cross above the central banks -4.4%. this is the german yield curve. two is the white line months ago and this is the yield curve, the green line, today. the curve is steeper. years below seven the deposit rates of -4%. because of the move up in yield. now, the yield is up to four yield for trading.
i y c is the function. look at oil would with the 15 day and 100 day moving average. all you need to know is the white line is the 50 day moving average. is just on the line of where the 100 day moving average is. the 100 day moving average is $48.23. but on a relative strength basis, oil is neither overbought or oversold. keep an eye on those moving averages. that is big for momentum. vonnie: really interesting thing. let's check in on first word news. courtney donohoe has more. >> the latest news about hillary clinton's e-mails have some impact on her support. poll,ing to an abc news she holds a 46 to 45 lead on donald trump nationwide.
last week, the poll had her with a 12 point lead. director james comey said they discovered files that may pertain to the investigation into her e-mails. italy's prime minister is finding temporary housing for people displaced by a series of powerful earthquakes. magnitude measure a 6.6. no one was killed. the quake destroyed a cathedral, a medieval tower, and scores of other buildings. has been sworn in for a second term as prime minister. she won a confident vote in the spanish parliament. agree to socialists abstain from the boat, clearing the way for rajoy to form a new government. children all around the world
breathe highly toxic air. two thirds of them live in south asia. there are some areas where air pollution is six times the safe level. venezuelan president nicolas missouri roads -- nicholas o.zura opponents are demanding a recall election before the end of the year. they want the release of what they call political prisoners. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am courtney donohoe. this is bloomberg. vonnie: back to the markets now. u.s. stocks calling for a breakout or breakdown. stuck on a is trading range of around 155 points. reaching that record back in august, there was tightening talk and earnings season economic data, none have been
strong enough to draw stocks out of this range. the chief now is market strategist at oppenheimer company. >> i think we do breakout towards the end of the year to the upside. we have had enough containment that whether it is the election or the feds or earnings or what have you, pressure on the market has been pretty steady. issues of uncertainty have set into volatility both in terms of bonds as well as the stock market. been,ve to where we have that kind of uneasiness is likely to be gotten over once we get into next week. -- justwhat will these simple release? what about negatives, just the idea that we are safe in a recession if we are not in months? mi?economic data didn't
of that iser side what we consider the glass to be half full rather than half-empty. in fact, a little bit better than half-full. it was tied to inventories and agricultural components but when we look at gdp months, what we will be looking at is the effects of earnings from the third quarter and revenues which will likely feeding nicely. addition to that, we would have to think that this is going to be the eighth year that u.s. investors have lived with what i call near zero interest rate protocol. at this point we can't help but think we get multiple expansions via individual investors and even some institutions have been reluctant to add equities. recognizing the fact that bonds are not going to do it near-term. turning the earnings
after five quarters of decline? is this where we see the change or not? >> i think it is the support. , whether you look look at the bloomberg numbers , sonues and earnings plus far, 58% of s&p reporting over 1% instead of a negative, such data, which is a blended number is very similar. this is a very positive indication because going into this, my recollection is the going intocommunity the earnings season was looking for about a 2% line in earnings. and instead of a 1% gain, i would take it. mark: this is a lovely chart. you were talking about the election. thehows the performance of
s&p versus 90 days after the election. the wide bar is one week after the election. initial climb and before that we were down. typicald so forth, how -- how difficult is it to predict how the markets will fare after a week and three months hence. >> insisting terms, very difficult. -- in the sink terms every difficult. data,r it is the economic the beginning is that the fed really means what it says and says what it means people -- what it means. they going to help if raise in december.
>> one of our charts today, it is basically talking about you market neutral value factor in their best month since 2014. where would you go in this environment that you are losing money around? >> we like cyclicals. we have like cyclicals since the beginning of this year. we were looking ahead. we see growth from recovery into the current expansion. we see consumer discretionary and technology as among our favorites. a contrary and pick in defenses would be health care, just because it is so despised and there is so much concern about what the government may do to pricing across the board moving forward. evenuld also tend to look, though we are underweight utilities, utilities are very as a bomb proxy
got sold off a few weeks ago during the third quarter. so we would have to think there might be some opportunity there only we remained underweight utilities. we rates got killed and can't help but think that was way overdone. mark: show some love for the european stock market. it's been giving the u.s. market lots of love. without the six day and the two months, investors are going to be pulling money out of funds for 38 weeks. that shows the extent of the stock market. >> you don't have to. only if you want to. the longest for europe, we can't help but think the ecb manages through quantitative easing with all the structural problems they have, they are headed in the right direction. it sounds like bernanke in 2013.
problems were deeply embedded over the last several decades. we can't help but think that within europe, the global multinationals, particularly the names in consumer staples and consumer discretionary, some of the names and materials as well as the view that our information technology offer opportunity going forward. vonnie: a little something for everyone. at oppenheimer. a quick programming note, we will have special coverage of the federal reserve's rate decision this wednesday. traders are going to have to stay in our longer. bloomberg tv it on and bloomberg radio and bloomberg.com. mark: coming up, from the big oil play to the telecom tie up.
mark: live from london and new york, i am mark barton. vonnie: i am vonnie quinn. this is bloomberg markets. julie hyman has been watching the stocks. >> it is a really interesting reaction with general election -- general electric. i have been talking with an intelligence analyst to figure out what is going on with general electric combined with baker hughes. it is going to be 62.5% of the company. baker hughes shareholders are going to get a $17.50 dividend
as part of all this. the chairs are going to be publicly traded. baker hughes shares traded more than 8% on friday. we are seeing a pullback today after that. also, oil and gas companies pointed out that the valuation of baker hughes is relatively high. that is one of the reasons this is a complex deal. that could be one of the reasons behind baker hughes's pullback. and not terribly strong performance. the other big deal today is centurylink's agreeing to buy level 3 communications. ctl shares down. level three gaining about 3.2%. these companies have big
network traffic and they have done that through deals throughout the year. it brings this together an interesting deal and finally, team health. blackstone is buying the company. 4358 -- $43.50 a share. that this latest acquisition comes amid an activist campaign led by jana partners. the other intriguing thing is amsurg had been for team health about a year ago for almost $70 a share. now going out at less than that in a go in private transaction. 390 london, 11:19, new york. ahead, african currency
vonnie: this is bloomberg markets. i am vonnie quinn in new york. mark: from london, i am mark barton. the range is surging today. says he didn'tr intend to act unlawfully. a significant victory in his tug-of-war with president jacob zuma over control of the treasury. johannesburg, managing editor for bloomberg news, anthony, how much of a surprise was it? becoming -- it has been coming all weekend.
a few days ago, we didn't expect it but it is going to come ahead of this on wednesday. there have been a lot of talks that the case itself wasn't very strong. mark: there has been a sense gore dan didn't have much left in the cap it up. is it tricky to oust him from the cabinet now? >> definitely. if he had charges hanging over his head it would have provided a reason to step down or step aside. right now, he is not under any charges. --had a good budget let's next week -- last week.
vonnie: that was the point, that was the fear that the credit rating would downgrade the country. thus, if there were continuations similarly, it would work in the favor of the prime minister. what happens now? does he try to replace the finance minister? >> well, it is just a battle. it is not a war. they are still potentially facing charges in the investigation into whether there was an illicit use. that is the last. the president, himself, is involved in another court case but tomorrow, that starts. there is a lot going on. toprovides a little space focus on the economy ahead of a decision to moderate. and it may well mean that we don't see any reshuffle.
we don't see it anyway before the ratings decision is out of the way. >> inflation running around six i think growth is just above 3% right now for the country, what metrics should be changed and how does the finance minister and the central bank go about doing that? there are a lot of challenges. the biggest one is the growth forecast. it is currently about 25%. that is very low in an emerging market economy. the government wanted to achieve 5.4% growth so there is a very long way. to focus on making changes to the economy, there are going to be a few tax increases next year. there is going to be expenditures to keep debt under control. clear a few of the
distractions for you. mark: thanks for joining us, anthony. just check out w crs world currency rancor. the majorrank of all currencies and every single one is falling today. read all downsizing today. vonnie: i just want to point out silicon valley has paypal founder peter thiel speaking at the press conference in washington dc. he says trump supporters are "tired of war." this is bloomberg. ♪
vonnie: let's take a look at the major industries two hours into the session. the best performer there are utilities right now. up as a the index whole, still only about a quarter of a percent. the dow jones industrial average, the nasdaq up 2/10 of a percent. isking into the nasdaq abigail doolittle, live from the market site in midtown manhattan. >> basically unchanged, as you mentioned, up slightly. a total of war between the bulls and bears. there is a tug-of-war with health care, and express scripts , the top, in the same news. they are trying to figure out ways to reduce their hemophilia drug costs after a patient recently had a $6 million
hemophilia drug filled. this is according to chief medical officer stephen miller. apparently, the prices have risen 22% over the last year. shire is one of the dominant players within the drug trade. they will own 37% of that marketplace. increases, it is well-known that presidential candidate hillary clinton has not been a fan of drug pricing increases. some attribute the biotech air market to a tweet last year from hillary clinton against drug pricing increases. interestingly, when we look at g 4351, what we have is clinton polling in blue. the biotech index. when clinton polls well, biotech
goes down. see thateresting to the biotech index is down 1% today with the clinton polls that we still have in divergence. say there are other factors as to why biotech has been especially week recently, considering the obama board ineat could beat triggered 2019 and this could threaten revenues for the biotech company mark. mark: let's look at first word news. courtney donohoe has more. >> iraqi troops have captured the last village on the eastern outskirts of mosul. special forces are located less than a mile from the city limits. to recapture the cities from the islamic state is in its third week. bank of england governor mark carney is looking to stay for his entire eight-year turn --
term. he is likely to make a statement this week about his term which ends in 2021. prime minister theresa may would support him staying on. hillary -- italy has been rocked by a powerful earthquake in rome. >> the earthquake has destroyed the benedictine cathedral and lost power with other landmarks in the central regions. the quake was a magnitude 6.6, the strongest to hit in 36 years. the prime minister says the nation's soul has been shaken. >> the italian quakes have left more than 50,000 people without homes. turkey has expanded the crackdown on the news media in the wake of that failed to. has detainedogan
the editor of an opposition newspaper. they are accused of committing crimes on behalf of the terrorist organization. 1 global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am courtney donohoe. this is bloomberg. mark: oil falling today, trading below. opec failing to finalize a proposal for the impasse. oman and russia say they will only take an agreement. the secretary general weight in from the anna earlier -- the vienna earlier. >> we still have about a month. mark: for more on what these latest talks mean, let's bring in --
significant progress was made. what was achieved in 18 hours of talks over two days? good question. you have to have low expectations for these talks. and made their first step now they've got the slow work of trying to ratify the details. it is a huge task for these countries, for opec to get these countries involved. russia, freezing out in russia is a huge deal. that goes for all the countries relying on sales. they didn't do a lot. but maybe, it is. methodology tome be used for allocating our quotas. that is progress.
that is a tricky one. >> they sat down and they did talk. all these things are positive but i wonder if they will look , to say yes,on this is really going to happen. again, it is a big thing. we are getting to a point where that becomes difficult. vonnie: but to an extent, what is so big about it? put a number on it and that is your number. the countries don't even know themselves or are saying they don't know what they are putting out. >> i think that they know. there are disputes about what those figures really are. iraq, look at the case of
it has two sets of numbers. primary numbers and secondary numbers, which collated from a range of sources. when it comes to iraq there is a big discrepancy. they say it is trying to resolve those issues and resolve the difference between those sets of numbers. so that they can commit. but it is -- any disagreement on -- iraq doesn't like it's numbers when someone else complains and suddenly it is becoming much more difficult. a great deal of diplomacy is required. when she did a great job today as well. vonnie: it is tough. but at the same time, every agreement between nations is tough.
they had algiers, they had this meeting indiana, what are we looking for? what were the final statements, if there ever is one? bulls, theyl market would like to see clear numbers, to say that it would take this much or you run would take that much, everybody's position is very clear. , so thato mechanisms you know you are doing what they say, -- mark: you come to an agreement and everyone abides by it. correct >>. at a time when there is so much pressure, the price is low. and need all they can get they have got to try and find a way through this.
mark: if they don't actually reach an agreement and the consequences if they don't follow through, already, this is a chart. the 50 day moving average. the blue line comes in the 100 day moving average. is the market beginning to lose faith in opec? >> i don't think it is losing faith. i am looking for reassurance that what it said it will do, it will do. you are looking at the very real obstacles. >> all that figures out. all that figures out how much oil will fall in hurdle one or hurt two. hurdle two. -- >> the market is already reasonably skeptical with pricing.
so i don't think it is a doomsday scenario. people are not seeing a doomsday scenario anytime soon. yes. mark: we shall see. mark:november the 30th is the big one. i'll lighten gale of bloomberg news. iceland's independent party wins the election this week. we will break down the results of what it means for the country moving forward. ♪
let's look at some of the stories in the news. iran says new deals will be finalized soon. iran has agreed to buy 111 aircrafts from airbus and also boeing. it is the first since 1977. the three biggest shippers create thell largest box carrier. chinberg's rosalind reports from hong kong. japan's three largest shipping companies will merge their container operations. it will be the world's sixth largest container liner. the company is expected to start services in april 2016. they will have 31% each of the new entity. there won't be any change to
their separate bulk cargo businesses. news.ng surged in among the interesting parties, career shipping and private extended its deadline to november 10. they filed for bankruptcy protection in august. vonnie: sony has cut its forecast by 10%. therepanese company says have been a loss of component units. sony reports details earnings tomorrow. and that is your bloomberg business flash for this hour. mark: if you have been watching election results out of iceland, it resulted in a win for the conservative independent party, the popular pirate party. omar reports from reckitt
benckiser -- party hasntries emerged as a winner. however, before a government can be formed the chairman of the north atlantic islands political work.s will only the president will meet one of the party leaders, to mandate the government. there are other options on the table when it comes to forming a coalition. political analysts and people within the grassroots, however most people believe that either the bright future party or the reverse party is the likely outcome. how long it will take to form a government is a bit of a guessing game. it may take as long as 26 days before everything has been done and tested. s&p global raisings --
ratings remain at risk of a further downgrade because of the country's future outside the eu. today we talked to ratings officer maurice cramer about the decision to uphold the aaa rating. >> you need to remember that back in june, after the referendum, we lowered the rating by the u.k. by two notches.-- two surrounded byly the fact that we think the decision-making has become much more difficult and less rational and predictable than in the past. ,here are so many uncertainties it is not very much. we have seen a couple of months of economic performance but nothing that would change the game one way or the other. >> thank you for joining us.
give us a sense of the reserve currency. status, thatts could push the rating lower as it remains on negative outlook. when would you perceive that that would happen? that is one of many factors i have been watching. when we assess, it is one which since this is a situation that has never occurred before. past, the u.k. has always had the privilege of issuing reserve currency which makes it easy for the government and also the u.k.-based issues to borrow at long terms at low rates. now, we think these are glacial events, they take a long time to change. because the allocation of central banks, for example, in
, this iserves something that they would monitor over the coming years. >> the personalities matter when you look at how the rating is constructed. carney wants to step down. does that make a significant difference to your view of the u.k.? >> not in itself. we are not waiting for certain individuals to be in positions of authority. but i think it would be something that i would have to analyze. if you are hoping to look back you have noears, reason to disbelieve that. but it is the same time. there have been some problems lately about whether the prime minister uses the central bank.
there is not really any fundamental questioning for the bank of england, given the bank of england's role in independence only dating back to 1997. if it were to be the case that at a less be looking independent regime for the central banks, this is something we don't have baked into the rating yet. >> what about the expectations for the financial sector? you sit with the bank surrounding in-flight -- in frankfurt. much would you bank in anticipation of a hard brexit? we think of a hard brexit as currently the most likely outcome. let me explain this to you in the context of last week. this is the trade deal with canada.
this has been negotiated for a very long time. this is much narrower than what the u.k. had negotiated. start, it was basically conducted with a mutual understanding, it was conducted in good faith. clear therenly not is an overlap of interests in the u.k. side and on the european side. to put it carefully. in this instance, personalities matter. it depends on what climate you have at the negotiation table. it doesn't currently look like it that way. mark: that was mark kramer, s&p global ratings chief sovereign ratings officer. vonnie: still ahead, battle of the charts. you take on one of our economics editor's in new york. we will see. this is bloomberg.
mark: it is time now for our battle of the charts. vonnie: we will take a look at the most telling charts of the day and what they mean for investors. you can run these on the bloomberg. london, you have another hour to go in trading so you are not so pressured. kicking things off is matthew poser of our federal reserve. >> new inflation data shows the blue line. services inflation is running at a faster pace. you can see that that is actually finally matched with consumer inflation expectations for the first time since the recovery. why arewondering, inflation expectations at a record low?
maybe it has something to do with the rate of services. cycle attracted closely. maybe we are getting this touchdown to actual inflation. the big point to make is that if you are the fed and worried about long-term inflation expectations this might be why. add to the to ceiling on actual inflation over the past several decades. you are trying to get back up to your 2.4% target. >> consumers are now saying that inflation even five or 10 years from now is going to be lower than they think it was. >> inflation has been going up recently. it has been so low for so long that it might not matter. vonnie: my best is that by the time this starts to come through we might be measuring inflation another way that that is for
another day. mark? mark: could the strong dollar undermine the economy for raising rates in december? the fed could hold fire if it's trade weighted measure of the greenback climbs to a level since january. back to 2014, last thursday, high levels. it has risen 5% since reaching that one year low in may. about the dollar strength, given the impact of financial , it could delay its first rate hike in december. says if similar conditions arise, with the dollar decreasing, that will determine it. the white bars is the index body. it tracks the overall level of financial strength in money, bonds and equity markets.
readingsd negative since july and negative value indicating higher financial conditions. in august last year, one final point. the resilience showed by other asset classes, despite the dollar strength in recent months , could actually encourage the fed to tie. 46, 38, i love your isrt but i think the winner matt boesler today. this is bloomberg. ♪ .
bloomberg markets. ♪ mark: we are going to take you from houston to london and cover stories out of japan, washington, and spain. here is what we are watching today -- the chief executives behind the new $32 billion oil services giant, we will talk to the chief oil and gas executive on baker hughes. vonnie: policy decisions are playing second fiddle. we will bring you the latest on global, central bankers. hillary clinton's allies -- in an effort to send political damage after the reopening to clinton's emails. it