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tv   Bloomberg Markets European Close  Bloomberg  November 21, 2016 11:00am-12:01pm EST

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mark: we are going to take you from washington to paris and cover stories out of germany and the u.k. and next hour. here's what we are watching. jeremy corbyn speaks to bloomberg. stay tuned for his take on government support for business, brexit, and president-elect donald trump. vonnie: then the latest in european politics. the former french minister posting a surprise first place finish in the surprise -- in the primary. in germany, angela merkel confirms she would indeed seek a fourth term. brazil bonds could sidestep the recession to post some of the world's biggest gains and now succumbing to the global selloff.
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mark: have a look at where european equities are trading. green.of equities in the left column and stocks rising. volatilityl getting intraday for 10 consecutive days. that's something that hasn't happened in well over two years. look at these currencies are rising against the dollar. we had a big spike in sterling in the space of literally one minute. sovereign bond deals are falling. individualsome movers, this is the big decline or -- this is a u.k. company that makes plastic caps and cigarette filters. it cut its operating profits forecast and says trading and
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components solution is in line. performance of high protection technology remains subdued. on junea company that 9, shares fell the most on record after warning four-year profit would be lower than expected due to the likely loss of a larger order from a major tobacco company. shares getting hammered today, losing 1/5 of their value. i thought we would look at recruitment companies because hsbc has a raised recruitment hold.ies to buy from thing the company's discount on their larger sector multiples is unwarranted and labor markets are on a slow growth path. the u.k. has been stronger than expected in europe so far has seen no big effect from brexit. rick -- risk looks to be
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subsiding. from inflationt if it occurs. if not, have solid balance sheet and cash flow's as well. up by 1% today. in silver, which is the best performing precious metal through the first three quarters of the year are heading for the exit. this chart shows that clearly. $17 million was pulled from the ishares silver trust, said for the biggest monthly outflow since january. prices of the metal heading into a bear market. 19% sincee fallen reaching a two-year high in august. 21%. up by
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90 minutes into the trading day. let's get over to julie hyman. julie: we have been bouncing between gains and losses here, still coming off the highs of the session for the three major averages. we saw .7% increase in the nasdaq and that has been cut not quite in half. coming off the highs after the major averages got close to intraday records. this is the past six months for the s&p 500 on an intraday basis. the last time we saw an intraday record was back on august 15. we got within less than $.10 a little while ago. there and then stocks pull back on the ties.
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breath ontwo to one the s&p 500 with technology shares continuing to strengthen. we had seen a lagging performance in the wake of the election. tech has been coming back a little bit and facebook, amazon and apple are among the gains. then there is the oil story, the possibility opec will come to a production agreement. barrel.l above $47 a not everything is higher. wells fargo falling after the office of the comptroller of the currency came out friday and said there would be new regulations on the company, or at least they were no longer getting a waiver on their regulations. products destroyed or falling after an analyst said
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amazon is likely to come to a distribution deal with one of its rivals and 3m is falling on an analyst comment from goldman saying this is not one of the companies that's going to benefit the most from trump administration policies. onnie: let's check in now the first word news with courtney donohoe from the newsroom. courtney: more meetings on tap today for president-elect donald trump. over the weekend, he met with mitt romney and the number of candidates for the post of treasury secretary. today, the president-elect will talk with former texas governor rick perry and a former oklahoma governor mentioned for interior secretary. stanley fischer hasn't repeated the central bank toss advice to president-elect trump -- use public money to make american workers more productive. fisher says that stimulus should be developed so that it gives the economy more than a short-term boost.
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>> fiscal measures which increase growth over a sustained time would be terrific. others would have short-term require further actions down the road. courtney: he has said the a, has moved into the vicinity with employment and inflation. in france, police say they have stored in a potential terrorist attack and arrested several people in strasburg and marseille. the rest comes five days before the opening of the famous christmas market in strasburg. at least bomber killed 20 people inside a shiite mosque. like thesunni muslims taliban considered shiites to be apostates. global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. donohoe.ney
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this is bloomberg. mark: let's turn to emerging markets. our next guest says we need to pay attention to transition, transition is the most important. talk us through this. guest: we have reached an inflection point. the election of trump is not the first one. then you get the fundamentals. we are transitioning from austerity to fiscal stimulus. how does that play out.
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this is the trump election. we have gone from traditional politics to populism and populism is coming to europe as well. how do you price that in the u.s.? we are going from globalization to isolation. and we're going from volatility subsidy to normalization. you put everything together, it's going to be a difficult market with a lot of rotation. convictions are going to be a big debate. you need to make sure you are in
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liquid instruments and the volatility might take you offside on your position. a very difficult transition here where you have transition, transaction costs and a trump premium. you recognize investors take place into this great migration. does the presidency change that call? guest: it makes it less directional. both of them are important for emerging market fixed income. premiumar under a trump , we don't know if it's a flight to quality or will continue to rally. the main variable emerging market managers are used to
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pricing as well, idiosyncratic risk in politics. what does it mean? -- this is what the market is buying today. you have a three-year input that might happen out of the blue. you could get some confrontation and with emerging to build aaders tend relationship with their own people and bypass congress. through, this happens
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social media where they have this relationship can indication and that might set a lot of volatility in the market. youie: in the countries deal with, which one is extraordinaire really related to the united states and which can you trade a little divorced from this particular story? any of them have seen on of their difficulties solved the last few months. i'm thinking brazil in particular. guest: this is very important when you look at two things that are important. a lot of leaders have to their homework and make sure they are managing not a bonanza, but commodity exporters. is veryfiscal policy
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important for commodity exposure because you are not going to find copper in the u.s. like this. if you want to go ahead with the fiscal plans, you need to make sure the commodities might be difficult for manufacturers. if you compare america versus aazil, this is where you see totally different picture. the last time i saw you, i told you it was time to be selective. commodity exposures and mexico, south africa, turkey the ones -- these are that got a lot of crossover the situation will be going forward. plenty more central banks meeting thiseek. do you need to wait to see what
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they do before making any other decisions about what to buy? guest: i think central banks are in a situation to cut rates and stimulate their own economy. they are not in the driver's seat and make sure where the dollar lands with respect to the currency. how much inflation do they import? what are the balances of flows? is there a lot of dollar repatriation coming back to the u.s.? going from a hiking cycle. might just step aside and give you the time. black rock's head of emerging markets joins us in just a few seconds. we will get his take on portfolios and decisions in the air. in the broadcast,
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we will hear from u.k. labor party leader, jeremy corbyn. his take on the brexit and president-elect donald trump. this is bloomberg. ♪
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vonnie: mark: from new york, on vonnie quinn. mark:i mark barton, counting you down to the european close. let's get back to the investing landscape and what it means for emerging markets. charts withoomberg emerging markets, falling between 2% and 4%. how much further is there to go?
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the key variables you need to take into account is where is the dollar going to go and where our u.s. treasuries going to go? those are the most difficult questions to answer. what is important is as we go back to this trinity, the transition in fixed income is very important because how the hell are you going to make money in fixed income going forward if you are exiting the bonanza years of qe? it's going -- how you position your portfolio, if you are longer credit with a very thin spread and might not pick up another selloff or steepening of go torve, you need to high yields. this is where emerging markets offer a buffer because we are trading around 6.5% and we have
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taken a small hit. this is good for emerging markets to reprice quickly. the next one might be a bit more violent. think about the fiscal stimulus scenario we are in, you want to be long commodity exporters. these are the guys paying very juicy yields. if you think about russia, dan, brazil -- russia, because extend, brazil -- then you have flows and you want to be liquid. don't want to be rotating liquid stuff, so you're going to focus on that. --ention russia and brazil if you go down the liquidity and go more into the corporate side, you make sure you want to hold
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these materials. the corporate market offers and adjusting composition between spread and duration. is going to fare much than theth pricing long duration on the local debt. do you need to do bottom of analysis or can you treat this as a macro type of trade where you can take industries and companies just based on what they do? the bottom-up analysis needs to come at the end of your asset allocation. if you say am going to go along commodity exporters, which are the ones that offer the best value, this is where you decide from the bottom up. what we are going to define is the structure. the structure of your portfolio
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is long high-yield, hedge with treasuries, very liquid and all your bets have to be a small size so you can bear the volatility. this is where we are positioning our constraint fun so we can absorb the volatility without being in a situation where you cannot handle it anymore. once you have defined that structure or portfolio, this is see whatwhere you can is going on and get most of the juice. mark: thank you for being with us. the black rock head of emerging markets. vonnie: coming up, we will hear what jeremy corbyn thinks of his government's report for business, brexit, politics in europe, and of course, president-elect donald trump. this is bloomberg. ♪
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mark: live from london, i'm mark, counting you down to the european close. vonnie: i'm vonnie quinn. time now for our bloomberg business flash, a look at the stories in these right now. shares of tyson foods fell after the company posted lower than expected earnings for 2017. tyson has been hurt by a glut of meat on the markets. they announced their ceo is stepping down after seven years. he will be replaced by tyson's president, tom hayes. apple is taking a step to sharpen its focus on consumer products. people familiar with the matter say apple has disbanded the division that works on wireless routers. they have not updated their routers since 2013. for the second month in a row, japan has hosted a surplus driven by 16% climb in the value
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of imports. exports fell to two drops in autos, seats -- steel and equipment. ups is developing apps to help customers track packages with voice command. programs use artificial intelligence to interact with customers. a check on the european markets ahead -- the close five minutes ahead. stocks rising, the stoxx 600 up by point 25%. earlier today, the stoxx 600 was trading at its lowest level since americans went to the polls, almost wiping out all the post trump rally. stocks alternate
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between losses and gains and we are gaining with five minutes left and declines in london, gains elsewhere. something strange happened to sterling an hour or so ago. a big move up in a matter of a minute. no real explanation. theresa may made her presence felt at the cbi today. the pound is up against the dollar. that is significant because we had a 10 day losing streak through friday, the longest losing streak since the euro's in sentient in 1999. the closes next. ♪
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record. betweenbeen alternating gains and losses on an intraday basis for 10 consecutive days. oil stocks rising, best-performing group on optimism. will strike a deal to freeze or cut production next week. let's talk about the euro, the euro rising against the dollar for the first day in 11. that has been the longest stretch since 1999, held by news that uncle of merkel -- that angulo merkel -- that angela merkel will run. voss -- bnp paribas
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-- spurred by monetary policies in the ecb. is the relative strength index, which is still below 30, telling us the euro is still oversold. this is one i haven't talked about, the baltic index. this is a measure of surging to, a two year high. infrastructure, it would be a boon for owners of vessels, fairies, and other -- others, ferries, and commodities. it would see a big boost in infrastructure spending, which would benefit companies carrying raw material. that is the reason for this two year high. big news in germany that merkel
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will run for fourth time -- for a fourth time as chancellor. surprise, former prime minister won by 16 percentage points. alainl face off against juppe. 47 basis points on friday. now we are awaiting the runoff next week. many say the winner of that could go on to win the presidency next year. one of many elections we are looking forward to. upset ford one more the books. a lot of what you have said is reflected in -- you have the nasdaq rebounding and hitting earlier records. next to technology shares, they are having a great day. things like facebook, google,
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and apple. they did have a huge drop in the last few sessions. some of theoned, currency moves are up from what we have been seeing. you can see that with the dollar index down 3/10 of 1%. the british pound trading at 124.52. wti up $3.68. brent..61 for we are getting a quick look at more currencies. let's go to yields. .32 on the 10 year that spread is continuing to widen. we took a look at crude. we can get straight to our next board. actually let's get the first word news. we go out to the newsroom. courtney: british prime minister theresa may is offering an olive
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branch to business. in a speech, may says she will not force copies to appoint workers or union representatives to corporate boards. she also urged executive to not miss the opportunity presented by brexit. >> this gives us a once in a generation chance to shape a new future for our nation. the chance to build a stronger, fairer country. that is the kind of change people voted for. not just to leave the european union, but to change the way our country works and the people for whom it works forever. courtney: may spoke at the confederation of british industry's annual conference. syria has refused a proposal for truth in the battled city of aleppo. a human rights group estimates close to 200 civilians have been killed in a aleppo since government troops renewed their assault last week. crews -- ndia rescue
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at least 142 people were killed and 150 were injured. rescuers used torches to cut open the cars and lifted them from the tracks. the president of south korea is one step closer to impeachment. is nowon of lawmakers calling for her ouster over and influence peddling scandal. that puts opposition near to the votes it needs for impeachment. park has shown few signs she is willing to step down. global news 24 hours per day powered by twitty 600 journalists and analysts in 120 countries. 2600 journalists and analysts in 120 countries. merkelhancellor uncle of -- chancellor angela merkel says she will indeed seek a fourth term.
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he knocked out former president nicolas sarkozy and will face uppe.unner-up, alain je earlier former u.s. ambassador today to nicholas burns told daybreak america's that the state is -- that the stakes are incredibly high. >> as you know this is our leading trade pop -- trade partner. and there are elections in austria, the netherlands, france, and germany. thewhole direction of continent is going to be set by the elections. it will behoove mr. trump to be conservative about this and not try to think he can engineer these elections in france. carollet's start with
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lane in paris. won by 16 percentage points, how did that happen? guest: at a time -- nicolas sarkozy called him his assistance. eliminatedke he just -- juppe was the front runner. but a lot has happened in the last two weeks with the election of donald trump. fil has a right-wing approachlon on has a right-wing
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approach. an admirer of margaret thatcher. he says we need a more political europe. >> the brexit deal may be a deathly cool -- maybe a deadly coup if we don't act. the nations always revenge themselves. jury move a federal europe is finished. the communicative he and system as it is today has had its day. we need a more efficient europe, a are up focused on strategic priorities that will give back everything else to state authorities. mark: i assume this means fillon ,s the favorite against juppe and thereby in turn he is the favorite to be the next
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president. guest: fillon had 16 percentage points more than a lane juppe -- then a lane juppe -- than alain juppe. it would be logical if francois fillon won this publication. the firstmost like round of the presidential elections. shown he wille likely face the republican nominee in the runoff in the next election. vonnie: thank you. let's turn to berlin where on color merkel -- where angela -- saysays he will seek she will seek a fourth term.
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that will make it 16 years if she will win and serve out her full term. is that wise for any country? guest: that is a very good question. doesn't have any limits on the terms by the chancellor. she has several hurdles to overcome. about those.me if popular in all parts of the country? an: that is a key point, she has yet to receive the backing of her bavarian allies. they have been among the most strident critics of her refugee policy. came frome refugees the south, through the north.
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that is one obvious hurdle. fight thise has to election, which polls suggest she would come first. germany is a coalition system. it is not clear what can a government she could bring if she did win. mark: she says these times are uncertain. how is she positioning herself that she heads to the next election? it was interesting to hear yesterday evening that she was very clear in batting away this of the german chancellor being the leader of the free ,orld, the liberal leader taking it on from obama. she said it would be even grotesque and absurd to expect one person to take on that mantle, let alone a german chancellor. wasn't too keen on that
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aspect. mark: thanks for joining us today. bloomberg's alan crawford in berlin. chancellor angela merkel says she will run for a fourth term. exitg up, the latest on and what president-elect trump can expect when he meets with the labor party leader. this is bloomberg. ♪
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mark: live from london in new york, i am mark barton. this is the european close on bloomberg markets. time for the bloomberg business flash. is wrapping up its presence here in the u.k.. the social network will employ
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500 employees. facebook is moving to a new london headquarters next year. many of the new hires will be high skilled engineers. anchored executives planning to move operations out of the u.k. because of exit -- because of brexit has been told to relax. there will be no mover advantage when it comes to getting regulatory approval, that is according to people familiar with the discussion. airbag --the japanese the biggest auto recall. there have been news reports -- newher air reports of other air bags made by the company -- and i do get out about who has the best chart for this drought. this is bloomberg. ♪
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mark: let's get right into an interview with the u.k. labor party leader jeremy corbyn. he says he is disappointed theresa may is -- they began with brexit negotiations and whether a state intervention is good for business. jeremy: i think state intervention can be very good. the history ofat industrial developments in italy and germany, it has been a substantial state role to play. byporting the state industry a degree of support intervention is surely a good thing to read it provides the platform for our
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manufacturing industry to develop. anchor bank theresa may acknowledged calls to avoid a brexit scenario. what would you say? i would say first of all make it very clear there is access for british companies to have trade with europe. have beenghts that gained through european membership will be defended and continued. and we intend to work with europe in the future. what would be called , much more than half of trade is with europe and it would begin indeed. businessese expressed concerns to you about this? jeremy: every trade union i met, every worker i have met are concerned about it.
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is the government will not set out its negotiating parties or proper timetable for it. i don't know what brexit means in that context. anchor: would you support the u.k. leaving the customs union? jeremy: i think we have to negotiate on that. is also about questions about the power of national governments to invest in their own industries and also of course the power of national government to take industry such as oil companies into public ownership. we don't wish to join a public organization. we host a have an environmentally sustainable policy on trade agenda. anchor: i'm wondering how concerned you are by -- winning the first -- by francois fillon
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winning the first round. is it a favor of the less that voters seem to be voting in more right-wing candidates in the europe and u.s.? jeremy: there has been a fundamental change in politics. in the left that supported austerity in 2008 and that and then in the case greece implemented very severe forms of austerity, ended up losing out quite badly. in the united states, what is oferesting is the anger working-class communities, the lack of investment and lack of jobs, lack of opportunities, and the under investing in housing services plays to that. or they can look to the community solutions that the
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left are offering. support berniee sanders has achieved. anchor: the u.k. is considering inviting president elect donald trump to visit britain on an official state visit. have you asked to meet the president elect? jeremy: i will make it clear i do floor the comments he made with respect to women and minorities, in which he sucked to blame very hard-working mexicans throughout the whole country, very hard-working muslims throughout the whole country. the idea that you can run an economy on the basis of is somethingxation not a way forward. world whereve in a
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we don't go to war, where we are dedicated to sustaining our environment and sustaining our economies so we don't have these left behind communities as you find through the great lakes region. vonnie: those jeremy corbyn earlier. news, the s&p 500 has hit a record, eclipsing that august high. mostly energy companies are pulling the s&p higher. crude climbs as we see deals done as well. about bond. kicking things off his joe weisenthal. : one of the big questions is will we see a meaningful selloff in shark bonds?
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i'm looking at the five year yield. this is a chart behind me going back five years. shot up to we have 1.77 since the election. that ist a level consistent with other times the yield has peeked over the last five years. all hitting around the same line. medium fed term expectations. yous definitely one area want to keep your eye on to see if we can break out from this level. >> i hadn't realized it hit that level. do your worst. mark: those companies have done a pretty good job of rallying. that's what european investors got used to.
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not now is bond deals rise. this is the goldman sachs financial leverage index. this tells us that companies debt ratioshest have slumped 5.5% this month. since 2008.worst what oteri stimulus has boosted their appeal as investors look for high yield. the yield is 5%. is 3.7%. 600 but is the worst over for these types of companies? morgan stanley says no, expect worse. this reversal, he says, will continue. these are the companies with the worst balance sheets. do keep looking at this index is bond yields -- bond deals continue to rise.
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vonnie: you have to make me a promise we are going to keep an eye on this index and see exactly what happens to those companies. to award the crown to joe weisenthal, he is the winner of the battle of the charts. we are focused on the curve right now. thank you. at wheree a look european equities finished in monday's session. it was a day of gains. stocks rising. it is stunning that hasn't happened since may of 2013. bloomberg markets continues. ♪
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vonnie: noon in new york, 5 p.m. in london, 1:00 a.m. in hong kong. i am vonnie quinn. : and i am david gura.
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welcome. ♪ we are covering stories from new york to paris and tokyo this hour. optimism.on opec agrees to cut output. president obama meets in new trump meresident-elect to new york as he continues to assemble his administration. julie hyman joys us with the latest. we have touched it. julie: it looks like we are trading at a new intraday record. 2194, even. the dow earlier touched a closing record. but it is not on an intraday basis. the nasdaq is

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