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tv   Bloomberg Daybreak Europe  Bloomberg  November 10, 2016 1:00am-2:31am EST

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>> asian equities rebound and regional bonds tumble. a billion said he bet dollars on u.s. stocks immediately after the election results. a nation divided. and market expectations for a fed rate hike after dipping in the immediate aftermath of donald trump's victory.
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a warm welcome to "bloomberg daybreak: europe." . us.s cranny is back with he is in dubai. good morning to you. he's been asking about the potential applications of donald trump's victory and what it means for the middle east. manus: i came down town to divide, i caught up with the billionaire, a self-made billionaire. what he had to say about iran and the potential for trump, we discussed in the next 40 minutes. all the reaction from the middle east right here in downtown dubai. >> let's break down the numbers for you, fourth quarter industrial business profits, coming in at 2.40 5 billion
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euros. wereonsensus expectations 2.40 one billion -- $2.41 billion. net income at $1.2 billion. there were some concerns about the future outlook according to barclays and deutsche bank. they're seeing headwinds for macroeconomic-- growth. fourth-quarter sales up to 22 billion euros. iny see you modest growth and the fiscal year profit margin of 10.5% to 11.5% with industrial business. atr to date you're looking
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gains up 12%. 17 analyst have by our hold. anna: we will pick up some of these themes with our guest, the ceo of siemens. said, it's quite complex. a lot to talk about with regard to opportunities for this company and others like it in the united states. other breaking news, deutsche telekom. 5.50 4 billion euros, falling in line with estimates and their confirming their guidance for 2016. againstslightly estimates but keeping the outlook there.
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what we've seen in the markets over the last 24 hours. we have a chart that shows the spread in the treasury yields. we've seen the spread widening and bond market expectations serve -- surging the highest since july. what's coming up from the statement from donald trump is that he's looking to invest in infrastructure. that tends to be inflationary. if you adjust for the current yield levels which are at historical lows, you're looking at a magnitude rise it is not been seen since bloomberg started compiling data in 1977. anna: it brought a few people into the market. that's what we see on the risk radar.
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the yields coming up a little bit in this morning's session. by four basis points overnight. japanese stocks down more than 4% yesterday. 500 currentlyp called .3% higher. board, andcross the a similar case for aluminum and nickel. some of the levels are the highest in more than a year. it comes down to the infrastructure. anna: that seems to be the theme that is moving all kinds of assets. the dow making a new record high in session but somehow that gets lost among all the other news. bloomberg first
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word news. >> thousands of demonstrators have taken to the streets of manhattan, converging on trump tower to protest the election of donald trump as president. boston, chicago, seattle, and washington, crowds chanted slogans including, the whole world is watching. billionaire investor carl icahn said he left the republicans victory party in the early hours aboutsday morning to bet a billion dollars on u.s. shares. >> i couldn't put more than about a billion dollars to work and then the market got away. but i'm still happy about it. >> the white house has not ruled out issuing a pardon to protect hillary clinton over her use of
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a private e-mails server. threatened to assign a special prosecutor to investigate the former secretary of state. the yuan has slipped to a six-year low on concern about china's trade relationship with a more protectionist united states. the bank's estimated such a move would cut china shipments to the u.s. by 25% in the first year. new zealand central bank says it's done in a to return inflation to the target after cutting inflation rates to a new record low. belowion has languished 1.3% for two years now, despite some of the strongest growth in the developed world.
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the u.k. prime minister and chancellor are holding talks with the chinese prime minister as britain pushes for investments following the brexit boat. theresa may has just returned from a visit there and will hope for more success as she tries to show britain is forging trade deals outside the eu. global news 24 hours a day in more than 120 countries. find more stories at the bloomberg. this is bloomberg. yousef: let's see what is going on in the markets in asia. julia?e you looking at, >> i'm looking at the recovery rally. look at the nikkei in very late 6.72% as it heads into
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the close, recovering from the selloff in japanese equities during wednesday's session. australia lows tired by more than 3%, the best rally in five years. trump seen as being a spender and that will be positive for the industrial metal sector. elsewhere the regional index rebounding on the steep decline we had seen since brexit. now holding at an eight month high. up by 2% ing index late trade. only one stock in the red. asve been watching bonds we've seen investors move back into equities. look at the yield on the 10
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year, up over 20 basis points in australia, giving the best returns since may. and the kiwi dollar also in focus. low,ng rates to a record saying the currency is still far too high. pick and asset class this market, it's on the move. the focus shifts to donald trump's agenda as president. we are all rooting for his success walls bigger the house paul ryan said the president elect has earned a mandate. x i've instructed my team to follow the example that president bush's team set and work as hard as we can to make sure this is a successful transition for the president
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elect. we are now all rooting for his success in uniting and leading the country. >> i have spoken with donald twice in the last 18 hours. i spoke to my good friend mike pence twice as well. we are going to hit the ground running. we are very excited. when i say seven out of 10 americans don't like direction the country is going, they just voted. he heard those voices that were out there that other people worked hearing and he just earned a mandate. we now have a unified republican government. guy johnson is in new york. good morning to you. what have we learned about the transition of power and donald trump's plans as president. again.gov, this is the from website that has
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been set up. chun on a large financialk services. the last bit of the last paragraph and what it has to say on dodd-frank. we will be working to dismantle the dodd-frank act and replace it with new policies to encourage economic growth and job creation. the implications are massive for the financial sector. you could see this going horribly wrong. you could see a return to the difficult days when the financial sector had to separate investment banking and retail banking, all the things people are really fearful of that dodd-frank tried to deal with. the implications to the financial sector could be absolutely massive. i don't think we can underplay this.
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some saying it will be an absolute disaster were against happen. other saying they simply cannot see it happening because the implications are enormous. but it is here already in black and white. this could be one of the first areas the transition team tries to tackle. to be the financial services front and center for the new administration coming in. considering moves in markets that we've seen, the moves higher in yield also has some people interested in where the policy goes from here. what other reactions have we seen to the election results.
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interesting, it came down from a regular 65% down to around 50%. the rest of the world doesn't know how to price what comes next from donald trump. last night we saw a process here and hererk, chicago, in new york they started down at union square. you have a splinter group breaking off and heading toward trump tower. i've walked around there a number of times yesterday. scenes of chaos, they parked a outside of dump trucks trump tower. nypd,cret service, the all kinds of security services around that area and the traffic chaos at the top end of fifth
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avenue. no traffic is allowed down through their but you have big protests around america last night, reflecting what we saw with brexit which is a rural-urban divide. guy johnson live in new york. michael, thanks for coming on the program. the market caught completely off guard by this one. we are seeing aggressive repricing across asset classes. what is your key take away? what is your reaction on this? >> from a market perspective, people learned their lesson from brexit, knowing there could be a surprise. investor positioning going into the event was very light.
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people have been sitting on the sidelines. they are looking at wherever the opportunities are to put cash at work. makes you say they were better prepared than they were with brexit. a lot of people we've had on the set said hillary clinton is going to win, be confident about the asset allocations. day, we aref the bullish on this. the market really hasn't learned anything here. it's a new geopolitical world, clearly. it sets a completely new president. the rulebook for the last 10 years has been thrown out the window. the geopolitical rule will for the way policy is implemented domestically is changing. perspective,tor's
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the reason we are seeing markets have such a positive reaction is really because now we have the situation where the republicans have power in both houses and also in the white house. this will be really influential. anna: that's why some think inflation lies ahead because he has the ability to pass legislation to increase infrastructure spending. of the few things he actually really talked about. .ots of people are undecided there is another view saying all .his takes a very long time the market may be getting ahead of itself in terms of inflation saying onn and hsbc paper he has the ability because he controls the house and senate but he has fallen out with a lot of the republicans and a lot of them will not like all this spending.
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quick we had three inflation coming as a theme in the market. we started to have headline inflation rates. core inflation at 2.3% for some time. you have a case where the u.s. economy is at reasonably full capacity. you're having expectations of a new fiscal spend. that's from about the middle of next year. you have an extra time when the economy is near full capacity. that will feed straight through to higher inflation. anna: when does it worry you at the debt level? >> from a markets perspective, it's not so much the debt levels. that will come in in march when we read the debt ceiling negotiations once again.
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from a market perspective, it's a potential selloff in bonds. if you think the last few years you that equities and credit, assets doing well because the value of bonds has increased, you've had that environment. yousef: we've seen the yield curve shift significantly in the last 24 hours. is this coming from the infrastructure ambition in terms development? >> first there is domestic inflation but there is the risk premium people will be applying. they will have to apply and inflation premium to the bonds.
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--y will also be applying people want to be compensated for locking their money away for 10 years. let's get the bloomberg business flash with jill you. -- with julia. >> goldman sachs's employees have been named partners. the promotions take place every two years. 110 were elected in 2010. they are known as participating managing directors. they get the opportunity to invest in private funds. the british day trader accused of contribute to the 2010 flash crash has become the second person convicted of manipulating commodities markets by placing orders he never intended to fulfill. he pleaded guilty to wire fraud
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in chicago federal court and agreed to forfeit $12.9 million in ill learned gains from his trade. he faces a prison sentence of as long as 30 years. atrent and former officials some of south korea's biggest companies are being questioned as part of the influence peddling scandal. donations made to foundations allegedly controlled by a confident of park. representatives declined to comment further. a spokeswoman said the company does not come it on legal matters. that is your bloomberg business flash. as well as the inevitable political fallout from the election, markets have been considering the monetary policy impact. blackrock says markets resulting
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from the victory may call that's cost the federal reserve to hold off on a hike next month. san francisco fed president john williams said adjusting rates are policy will be a gradual process that takes a few years. >> inflation has been incredibly low. the running about 1.7% over last year. we want it to be 2%. from what is happening in the inflation'm expecting will move back to 2% in the next year or two. we are close to achieving our goal. this currently stands at 82%, up from 76% at the end of last week. our guest is still with us.
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anna: up from yesterday even more. how does this change how the fed operates? convinced they might move given donald trump's victory? want toink the fed will continue to convey that it is an independent organization. it will probably try to step away from the election results and focus on the economy. williew is that they proceed and they will hike rates in some way. you think it won't make , coming around very quickly is the idea that just because we had this change in emphasis at the white house, the fed is staying the course.
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>> particularly with the employment rate pointing to heading lower. anna: there's the argument around gradual rate increases. is that subject to hearing from president-elect tromp what he plans? one hand if they do put forward these proposals that means the fed should hike more aggressively next year. doese other hand, trump have some control over the fed in terms of the two empty seats that need to be real point to and if the government is putting forward these plans to stimulate the economy, they were probably not want a fed that puts too much of the brakes on that. how many rate hikes do you foresee for 2010?
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we are hearing whispers of three. are you on the same page? subject to what we get from the republicans. anna: what does it do to your calls on various currencies? you can set it so it shows you the moves since the election victory. the date stamp and timestamp are exactly when bloomberg announced that dollar from had won the election. they jumped a little more than you might've expected. what is interesting is the extent to which we've seen a boost in commodities. of people said if donald is elected it is bad for emerging markets because people
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fear about global trade. view around emerging markets is quite clear. the amount of liquidity is getting tighter and emerging-market currencies will keep falling. predictthat's hard to is the commodity outlook. strengthens, currenciesmity keep falling. it seems some of the correlations could breakdown going forward. it's amazing the fed is still the key factor you are looking for. michael, thank you so much. up next, after a strong second quarter, we get earnings from
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sportswear brands. we will talk to siemens about their opportunities in the united states later on during programming. this is bloomberg. ♪
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yousef: a live shot of the imperial palace in tokyo. a line up from the , donaldt of the u.s. trump. he wants to bolster special ties between the u.s. and japan. still ongoing fallout from the results we got overnight. breaking news from a number of corporate here in europe. came in at $3.6 billion.
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we will get more details as they come through this morning. let's look at some of the stories in today's edition. market reaction to donald trump election as stocks continue to rebounded asia and the dow jones touched its all-time closing high amid speculation a republican controlled congress will pursue is nice friendly policies. carl icahn said he went straight to put a billion dollars to work. go big or stay home, something like that. investor sentiment may be changing. black rock, jpmorgan and others said it may prompt a delay.
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astrazeneca will give an idea about how challenging business is. those numbers are due at 7:00 london time, that's 29 minutes from now. a lot of appetite for drug companies yesterday as a result of donald trump's election. does that mean the pressure is off? it's not hillary clinton clamping down on the price of some of these drugs. we will discuss that in the weeks ahead, no doubt. yousef: stocks in asia rebounded since brexit following donald trump's victory. >> the u-turn in investor sentiment from risk off to risk on has continued into the asian trade.
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the net effect over two days is pretty much unchanged. rallyseeing a broad-based , raw materials producers are leading the day. health-care stocks up 5% as well. materials of almost 6%. part of this is down to the rally in commodities. also speculation that infrastructure spending will boost metal. copper, nickel, and aluminum have risen to the highest levels in the year. gains of more than 9%, the most since 2009. if we look at the currency space , the aussie dollar up .6%, outperforming. the mexican peso up .5%. end rose as much as 3.9%
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yesterday -- the yen rose. these are two the most interesting things i'm watching this morning and i know you have been also. it totally turned around. 10 year yields surging more than 20 basis points yesterday. speculatione 2% on that trump's policies will be inflationary. perhaps were at levels some investors are finding treasuries attractive as the gills come down for the first time in four days. retreating after hitting an eight-month high. treasuries and the dollar are the two of the hardest things to call at the moment. anna: hours after the election,
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congressepublicans in got a mandate for their agenda to replace obamacare. >> i would like to congratulate donald trump for his victory in the election. we heard his electoral slogans when he was a candidate and he spoke about resuming and restoring relations with russia and the united states. >> it's good news for france. >> the person who leads this great country with its tremendous economic might, it its cultural influence, carries a responsibility that can be felt all over the world. listened to donald trump call for american unity. i in turn would like to call for european and transatlantic unity.
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>> in the name of italy, i congratulate the president of the united states of america and wish him a good job. the country and myself or convinced that the italian american friendship will continue to be strong and solid. forward to work and iresident-elect trump look forward to welcoming him to brussels at our next summit next year. >> i congratulate donald trump on being elected as the next president of the united states. britain and the united states are and will remain strong partners. yousef: michael, listening to some of those leaders and heads of eight speak about the election of donald trump to the top post, how does the world change in a donald trump world?
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what happens to foreign relations and foreign economies? uncertainty.big i think you have to break it down in terms of policy. his strong policy with regard to trade. there is a lot of uncertainty. tradeansatlantic agreement is probably now dead in the water, unfortunately, and nafta will be renegotiated in some form or another. and then central trade deals with the u.k. specifically. then there is the geopolitical side. trump's comments around nato and military support to foreign countries. here i think the in result is
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ultimately more defense spending from around the world. more of the fiscal policy will be directed at defense as countries tried to bolster european military. anna: we have a great story this morning that said people inside theresa may's government now believe that because of the military spending, perhaps that gives some leverage in a world where we are questioning the united states commitment to nato. that gives the u.k. a little more leverage in its brexit conversations with the rest of the eu. doesn't impact the pound at all? position,s the u.k.
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more inward focus, or focus on a country's nationals as the priority of the government. it puts in focus upcoming elections in europe, the key focus will be on the italian referendum everyone election that is not gotten focus yet is the austrian election taking place in early december and the elections next year. yousef: you have italy, austria, the netherlands, rants and germany. what are the key lessons we can take away as the market collectively from brexit and what happen in the u.s. and be more prepared for what is coming next? at itterms of how we look and how investors are looking at it, it's looking for investment opportunity. at the end of the day were trying to make the best investment. in terms of the asset impacted
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most during previous european tensions, that was the euro. were probably not going to see the currency move a huge amount off rising tensions. interest rates in europe have been moving lower because of the ecb's qe. now there's more talk of the pace of qe slowing. bond yields are still going up. anna: you're talking as if it is a contained story in terms of the rise of populism. the ecb is still in the drivers seat more generally. when does it turn existential? how many of these elections do we have to see for people to the integritying of the ro, and then things change completely.
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>> we are a long way from people think that -- thinking that. at least 12 months. seeing iseed to start the mainstream politics and particularly in europe focusing on avoiding a similar move in the u.s. and the u.k.. anna: thank you very much, michael, let's get breaking news in the last few minutes. the french business that officers energy and environmental services throughout the world, ,istributes natural gas engineering services. breaking news from them in the last few minutes saying the 2016 net return income will be at the low injured -- low end of range. salesre saying nine-month were hurt by lower commodity
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prices. they might be pleased with some of the bounce we've seen in commodity prices since donald trump won the election. coal assets were lower in australia and the margins fell in chile. yousef: iran's president says donald trump would be able to thatthe nuclear of court was done last year. let's go straight to the middle east. how might donald trump deal with iran? he's going to need a lot of global support if he's going to change anything in the nuclear accord signed in 2015. rouhani says they are on an irreversible path to growth. president who is a
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hands-on ceo. has a republican congress behind him. he needs to bring europe on board and corral support from russia to effect any kind of change. otherwise you're looking at splendid isolation. up with a local self-made alien there. he was very clear about his perspective on iran. >> he promised to dismantle the between theement united states of america and iran. there's a lot of things he promised to do. just before you came on
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board, he said i want nothing to do with this guy. now he says wait and see. he deliverse what on. the politics of the middle east are a precarious thing, as you well know yousef:. a lot of pieces in this puzzle. how might the syrian conflict be impacted by the shift in the united states, if at all? i'm having a little bit of difficulty hearing you. let's touch on syria. in the run-up to the election, trump made many substantial statements. some say the grand plan to deal with syria, he has lbasted clinton terms of her handling as
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secretary. for as his grand plan sad? part of it does not seem to include removing assad. we wait to see what his grand plan is to fight isis. let's bring you some live pictures from an anti-trump rally in los angeles, california. that follows similar protest in new york, chicago, philadelphia, and oakland. the fact that hillary clinton won the popular vote is clearly not sending these people home very quickly. for testing and saying this is not a president they want to see in office. still to come on the program, a shot in the arm.
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can after zeneca's third-quarter results keep up the positive momentum? anna: gridlock in manhattan, but the -- could there also be roadblocks within the gop? we head back to new york. yousef: plus profit at siemens beats expectations. we speak with the ceo from munich. this is bloomberg. ♪
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.nna: welcome back we've seen protest taking place in various parts of the united states, including in new york. and theres up by .3% dow made a new record high in the session before paring gains a little bit yesterday. let's get to the bloomberg news
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flash. profitsr than expected for siemens. euros in2.40 5 billion the three months through september. europe's largest engineering company also announced plans to spin off its health care division. atwill speak with the ceo 7:15 a.m. u.k. time. goldman sachs said 84 employees have been named partners. the promotions take place every and the most since 110 were selected in 2010. partners receive a $950,000 pooly and a special bonus and the opportunity to invest in private funds. day trader accused of contributing to the 2010 theh crash has become
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second person convicted of manipulating commodities market by placing orders never intended to be fulfilled. he pleaded guilty in chicago federal court and agreed to forfeit $12.9 million in ill learned gains. he faces a prison sentence of as long as 30 years. current and former officials and south korea have been questioned in part of the influence peddling investigation. it's over donations made to foundations allegedly controlled i a confidant of park. representatives declined to comment further. a spokesman said the company does not comment on legal matters. that is your bloomberg business flash. let's talk about the election results and u.s. markets. one of the singers -- single
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business day reversals. investors are assessing the trump presidency. guest oversees $2.3 trillion of assets. let's take stock here. we don't have much to go with the terms of how donald trump plans to spend the government budget. what is clear is he has a majority in congress. how realistic is it that he will be able to tackle the investment scene and build infrastructure? >> its early days, but what we have seen is the rhetoric running up to the election which is all been about lower taxes and higher spending. what we have now is a president who is a seasoned ceo and not a seasoned politician. he's going to spend and you can see that having effects in the
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areas sectors in the stock market. the industrial sector and raw materials are arty moving. -- already moving. pharmaceuticals will benefit from this as well. combine that with potential ofer taxes, repatriation profits and lower taxes. you can see that happening in effect. you saw the bounceback on the dow. u.s. credit markets will do well at this as well. ona: a wild ride we were with the s&p and the swings in theht as we arrived office yesterday. we saw how negative ey were at one point and then to see how positive the data was. well -- how much higher do we go in u.s. equities?
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a lot of the move higher in driven by the search for bond proxies. >> your first point on the market reaction seems to mirror the brexit reaction. it's a shock to the market. the markets were not prepared for it. the short-term dynamic was not that surprising. people thought this is actually good for corporate earnings, probably good for corporate profits. we do have the situation of the bond proxy in where the yield curve goes. you have the fed potentially in play. that will be an interesting dynamic. as the policies unravel, you could see a scenario where inflation picks up. then the yield curve will start shifting and that will be an important dynamic. about: we keep talking
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increased volatility in the run-up to the election. should we brace ourselves for policy -- if we look at how , and duringed donald trump's speech, given that we don't have much information to go with, this could remain the case. >> we have the fed coming in. the fed will be cognizant of market stability. over see how it plays out the next few weeks. there's so much uncertainty about how much policy formation has been done in the background. i think it is fair for investors to demand a political risk premium. potentially more outside the u.s. than in the u.s. as well. anna: so where is the biggest
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opportunity for you? new energy stocks slumping yesterday. victory.fter the banking, there is slightly a confused picture there. rhetoric,ack to his he's talking about spending for infrastructure. the industries that will be construction that, companies have moved already. you have the debate that will arise further about obamacare, so you can see pharmaceuticals moving already. cross over tot to some more light pictures we're getting from los angeles. anna: the latest anti-trump protest taking place in los angeles.
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talk abouttinue to the political events and what it means for the u.s. economy and the investment climate. this is bloomberg. ♪
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guy: asian equities rebound and industrial metals surge and regional bonds tumbled. thousands take to the streets across america to protest against trump victory, highlighting a nation divided. market expectations for fed rate hike next month asked after giving into the immediate aftermath but does the u.s. central bank face and overhaul onto the next president?
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welcome to bloomberg daybreak europe. anna: we are waiting for corporate news to drop this orning, it is 7:00 in the u.k. we are expecting to open up across equity markets this morning. u.s. futures are higher once again. >> let's look at the key benchmarks we are keeping an eye out on. returned ofoing risk to markets, risk appetite is what we are looking at here. that is still holding above the 2% mark. we spoke about how the 30 year has changed dramatically.
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a lot of it a reaction to what happened overnight. the: that is reflected in stock market move. the bond market also gaining, then on the fact that we saw the u.s. ten-year go above 2%. that was enough to get some investors interested. we had futures for you which you can see we're going higher and the copper price going higher. many investors betting that more spending in the u.s. and infrastructure would be positive for the commodities complex. 0.22% inhe u.s. and germany. thousands of demonstrators have taken to the streets of manhattan converging on trump tower to purchase the election of donald trump as president. similar scenes in
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several cities including boston, chicago, seattle, and washington. chanted slogans including on our president. angie: carl icahn told bloomberg he left the republican victory party. >> i tried to put a lot more to work but i could not put more than about a billion dollars to work. and then the market got away. i'm still happy about it. not ruledte house has out issuing a pardon to protect hillary clinton from prosecution over her use of a private e-mail server. donald trump threatened to assign a special investigator. they will meet with barack obama today.
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has told -- trump called china grand master at currency manipulation. america --h bank of bank of vestry has estimated such a move would cut china's shipment to the u.s. by 25% in the first year. >> they cut interest rates. rate to 1.75%. inflation has language below the 3% target. this is the strongest growth in the developed world. for investmentes following the brexit vote. theresa may who has returned [inaudible] the whole from more success with the chinese delegation as she
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tries to show britain is forging trade deals outside the european meet the will also bank of england governor. find more stories on the bloomberg. we are getting these numbers. core eps coming at one dollar 32. this was for -- a miss on the third-quarter revenue price. anna: this is coming in from astrazeneca, final guidance remains unchanged. which perhaps is the bottom line here. they previously said they expect mide two decline and low to digit decline. we're looking out for the red headline coming across the bloomberg.
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one dollar and $.32. they are very much ahead of the estimates. some people have been talking about whether there might he and eps downgrade with this set of results. that is one thing that has not come to pass. perhaps this will be well received by the markets and we're getting the usual update. yousef: an interesting set of numbers for astrazeneca. let's check in on the markets in asia. chartking at the two day gives you an indication of what we saw today across asia and it of a bit -- or a lot recovery rally. this is what the nikkei did when there was the uncertainty over the outcome of the presidential election. this is what it did today, recovering everything in lost and adding more. in the -- in australia on the
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asx 200, it had its best day and five years up by over 3%. a lot of mining players doing the heavy lifting because we saw and iron orenum price by the most in a year. the big picture is risk on across asia in light trade. the hang seng is up by 2%. a couple of stocks in the red, very different to yesterday's trade. every stock listed on the hang seng index very firmly sold off. jumped and bounds yields rising on the estoril you and new zealand 10-year note. pointsp over 20 basis and the 10-year note in new zealand as well. the best we have seen since ron may. having a quick look at currencies, the new zealand dollar sold off after you mentioned the bid. they cut the cash rate to that
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record low 7.5 suit -- 7.5 percent signaling that the kiwi remains too strong, sold off to .7262. of a lot of recovery rally coming through in those markets today. anna: thank you. donald trump heads to the white house, the focus shifts to his agenda as president. which may see him revamping financial rules and replacing obamacare. barack obama said we are already for trumps success now while speaker of the house paul ryan said the president-elect has earned a mandate. president obama: i have instructed my team to follow the example that president bush's team set eight years ago and work as hard as we can to make this is a successful transition for the president-elect. because we are now all rooting for his success in uniting and leading the
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country. >> our relationship is fine. we spoke last night and again this morning. friend mike pence twice as well. we are talking about getting our transitions working together. we are very excited. when i say seven out of 10 americans do not like the direction the country is going, they just voted. it is an animus feet in that he heard those voices that were out there that other people were not hearing. he just earned a mandate and we now have the unified republican government. anna: let's get to new york, guy johnson is there for us. good morning. what have we learned about the transition of power and trump's plans as president? we heard a little detail in his speech but infrastructure has been what the market took to heart. guy: we still -- so what happened to the mining companies
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and copper. you were bringing up those numbers earlier. that is the story we will continue to focus on on a headline level. we have to get an understanding of what the transition team will be focusing on. was is what donald trump putting up, the videos are worth watching and the bit about financial services, it certainly is worth focusing on because this could the and easy -- not easy but a place where the new administration may start to focus on regulation. there is a section of financial services there, the financial services policy entered -- implementation team are working to dismantle the dodd-frank act and replace it with new policies to encourage economic growth and job creation. the dodd-frank came in in 2010 after the crisis designed to make the financial system safer and imposed significant regulation on the financial sector. word to be done away with, would it mean an easier policy, a
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lighter touch, or would it mean a potential return to the era of glass-steagall? a second -- a separation of investment banking come retail banking effectively. are we heading back into that kind of landscape? sectorancial system -- will understand what this means and understand it very quickly. they will look for information that this could have a massive and meaningful impact on the banking sector. that is what we are understanding at the moment. infrastructure will be a big part of this, that will be the legacy story for donald trump. financial regulation looks pretty near the top of the agenda as well. anna: when you see a divisive campaign that many people said split the country and as you can see from the results split the country, it is difficult with those emotions back in the well., we know that very what kind of reaction are we saying to the election result? guy: we are seeing what we saw in the u.k. they talked about an independent london. they talked about the difference between the urban vote and the rural vote.
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i think that is probably a bit ita blunt instrument but probably is reasonably accurate. once again we are seeing a very similar reaction in new york, and chicago, in l.a., and san francisco. yesterday, it was bedlam around you'vetrump tower and got to see that again and again, the security is absolutely massive up there. before theavenue park, last night we saw demonstrations, they started -- started in union square and they made it up to ward trump tower. there were a number of arrests and it has been a similar story around the country that the urban vote comes out and makes its voice heard and its concerns surrounding the next four years for this country. anna: thank you very much, guy johnson in new york. yousef: just to topline thoughts
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on the latest images we are getting out of various parts of the united states. anit was always going to be emotive result. and it feels like post the u.k. has legitimized populism. although this will calm down. when i am concerned about is how this spreads through europe and we have a number of events coming up in the next few weeks, few months. have antially could greater impact than some of the election results we've seen in the u.k. and the u.s. anna: what concerns you about europe? you ruled off the list of companies -- countries that are facing challenges of some variety. ande and small countries all parts of europe. where do you think the pressure point is, italy? yousef: italy is first up. you have austria coming which people forget about, the
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netherlands and france. marine le pen was one of the first to congratulate trump. the point of this is the legitimacy of the populism, the vote may change. investors should be expected to receive from investing in europe and the european bond markets should be crazy. anna: those the populism beget populate his -- populism because we have seen it clinched elections in the u.k. and the united states are you does that give energy to those similar movements in europe, do you think? one of the interesting things i heard was the suggestion you need to add five percentage points to the polls. we understand that populist parties seem to be underrepresented simply speaking in a lot of the polling. >> i think it definitely does help mobilize the perspective and if you look at participation rates they are [indiscernible]
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to only need to start mobilize the populist base with the disaffected vote and you could have significant swings in the outcomes. 75% of we're looking at governments that are in play in europe. what does that mean for the unity of the european union at the policymakers are struggling to hold together? >> i think this is going to have a big impact in 2017 on how europe faces the challenges. i think as we stepped through they aresical events coming thick and fast in the last quarter of this year. onare going to see stresses the bond market, we will see stresses on how investors look into europe going forward and the ecb is going to have to be in play for a lot longer. about theere talking latest images coming through from the u.s., what does the vote due to the big picture calls, we talked about the stock market but elsewhere. theou are on the bloomberg,
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rise that we saw in the dollar as a result, that was not the initial reaction. as someone said yesterday this is like exit on steroids. the market conduct quickly with its thinking on where asset classes are going. how much stronger does the at just a feds th story? >> it is a fed story and policy story and a flight to the dollar. one of the things that is worth keeping and i on is how rates move and how the bond market moves. we have had this time when we have had this [indiscernible] in low discount rates europe. i think if you start getting a concern about inflation, you start getting a concern about what the fed is doing potentially hiking rates and the curve moving. that will start weighing on investors' mind by the asymmetrical outcome of bond investing. yousef: where do yields go from
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here? bill: my concern is look at the breakevens, the spread between nominal sand index linked bonds. they saw -- soared yesterday which means inflation expectations are going through the roof. yousef: we will have to leave it there. that is bill street at state street global advisors. announcing plans to spin off the health care division. we get into the numbers with the ceo. that is next. "trending busines this is bloomberg. ♪
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yousef: you're looking at live images out of london. it is 7:20 a.m. trading almost at 1/5 of 1%. fairly clear skies, not as bad as the weather we saw yesterday. anna: siemens reported higher
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than expected profit in the first quarter and revenue advanced to the most of its industrial business units. let's hear from the ceo. great to have you on the program. inc. you for talking to us. i want to start on the health unit which you are talking about listing, wanting to get a few more details on that. what do we know about the timing and what industrial logic is behind this? guest: there is the announcement that we going to take the public health care sector and that is a very -- there is timely. maybe look at the strategy of our company and how it would be by 2020. is one that health care of the most attractive businesses if not the most attractive one. however we believe it would be more successful, you want to
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focus it more and make it clear that you can invest into it and therapy and diagnostics. and so the unit has been carved out, was in the con -- company if you look at the numbers. the as we have been outperforming the market and our competitors. we have great technology and now we take it to the next level. very logical step of what we hour --n describing an we announced it now and we begin to operate these -- and execute goingas we move along forward. how much control would you like to keep here? our pressyou look at announcement on health care, the headline says siemens is going
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to strengthen its health business. so that means this is something we want to direct, something we want to control, something we want to bring to the next level to the great in a fit of the shareholders and health care as the reasons -- and siemens. -- in siemens. do you plan to keep control, keep a majority stake in this business? guest: we said we're going to that saidext step and we're going to strengthen our health care business, we believe the next important step on this one is that we bring our health care business public and that is as much as we want to say today. we're looking into the opportunities which that brings with us and we will take it from there. markets are getting very excited yesterday about the potential for infrastructure investment. what does seem and planted gain
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under president trump? guest: the american people have voted, they made a decision so we congratulate the president-elect esther trump. we look forward to working together with him and his administration as he has done .ith all the presidents we have more than 50,000 people working for siemens in the u.s.. the country is by far the single biggest market in the country the world. and our revenue is about $22 billion u.s. in the country. there is a big opportunity here when the government and the president wants to rebuild infrastructure, make sure that the last technology of industry simulation isand going to be implemented.
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i would know someone who could help them. theef: the talked about geopolitical government remaining intense -- complex. does this feed into this title populism that appears to be spreading around the world? guest: not really. if you remember our 2016 guidance which we laid out just about a year ago which, by the way was twice repeating it in the end. the single biggest risk was the geopolitical risks all around the world. there was no donald trump or u.s. election at that time. what i mean is that the world has gotten ahead of itself -- a itself in terms of the geopolitical populism that we have a lot of countries which are so great but the leaders do not understand how to integrate
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their people. that is continuing to be the case. this is something which our customers look into because they need to make great and important and big impact decisions on their business. hesitate, they will wait and see. your -- willthink you rethink your emphasis on renewable energy with donald trump in the white house? guest: absolutely not. people have selected their president and we work together, we cooperate, we extend all the power which we have to help him rebuild this great country. it is already great i think. it can be greater. we are there, we can help him, we are committed and we will take it from there. anna: thank you very much. joining us here. the european open his next.
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this is bloomberg. ♪
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>> the european open. where we have your first trade of the day. it will be a busy session. just as busy i suspect. caroline hyde is over in london. what are we watching? the trump jump, share gain on spending pledges. how do investors position themselves as questions of policy still remain. , rip dodd-frank. what will the new

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