tv Bloomberg Markets European Close Bloomberg November 23, 2016 11:00am-12:01pm EST
"bloomberg markets". ♪ mark: we will take you from washington to london. we will cover stories out of new york and vienna. here is what we are watching today. five months to the day after theain voted to leave european union, u.k. chancellor philip hammond says the economy will grow more slowly than previously forecast and the governments will need to borrow more. vonnie: president-elect donald trump makes more appointments. ben carson gets a job at housing secretary. nikki haley will be ambassador to the united nations. shares of eli lilly are getting hit today, and experimental alzheimer's drug failing in its final trial. gmm go is a function.
stocks rising, gaining for a third consecutive day. these are all the currencies falling against the dollar, among them the pound. we have bond yields rising. you,corporate news for jenna raleigh 2% lower -- generale 2% lower. what it wants to do is increase efficiency, improve capital risks.ion, and mitigate generateny plans to one billion euros from disposal and lower operating costs by 200 million euros in its mature markets by 2019. european insurers struggling to sustain earnings as investment returns fall and competition puts pressure on prices as well.
2% today.n by the headlines for us at bloomberg, the economy will grow 1.4% next year. the 2018 forecast is 1.7% versus 2.1%. it will increase with an extra 122 billion pounds to be raised compared with1 the march predictions. the government is no longer trying to balance the budget by according to hammond, but he did pledge to balance the books early in the next tenure, in the next parliament. the 10 year yield up by 10 basis points because of all that extra borrowing. today. economic growth accelerating to the fastest pace this year, a tongue twister.
to add morempanies workers and raise prices. are manyng about you i fracturing and services. the composite index rising to 54.1%. that isthat is showing there ist of a recovery, gaining momentum, giving some relief to the ecb. itsmber 8, will it extend 1.7 trillion euro -- let's get over to julie hyman.
in other words, it is historically at a relatively high level, around 18.5 at the moment. toething for investors consider as they are trying to figure out whether to buy here. we are seeing volume 19% below the 20-day average. are the last few years and what we've seen last year. the s&p moved 0.01%. also watching the bond market in the wake of that economic data and ahead of the
fed. mark talking about a little suspense around the ecb. we are seeing the two year yield rise to 1.4%, the highest we've seen since 2010. where are watching oil in the wake of that inventory number that came out at 10:30 showing an unexpected draw down inventories. there was a headline from the iraqi prime minister that iraq will bear part of the cuts. a headline from reuters that we would see microsoft get approval for its acquisition of linkedin with conditions from the european union. aboutin shares only up two thirds of 1%. reaction to those headlines when they came out. vonnie: thanks very much.
courtney donohoe as margaret courtney: president-elect donald trump is on the verge of making two more high-level appointments. he plans to name south carolina governor nikki haley as ambassador to the united nations. a formerered republican rival ben carson the job of secretary of housing and urban development. person is a retired neurosurgeon who ran for the republican presidential nomination. house democrat who wants to replace nancy pelosi as minority leader once the party to focus on uneconomic issues. tongass and tim ryan says that's the way to win back mid western and southern voters who back donald trump for president. >> the fact of the matter was his economic message pushed out elserowned out everything he was talking about or that other people were talking about. at the end of the day, i feel it we are better on those issues than he will be.
courtney: ryan says the democrats problem is that they are no longer a national party, they are a coastal party. german chancellor angela merkel said she's not happy about the potential collapse of the transpacific trade deal. merkel warned germans against terming -- turning to economic .solationism a federal judge in texas has blocked an obama administration policy that would have given overtime pay to about 4 million white-collar workers. 21 decision a victory for states and dozens of business groups that sued. they say the new rule will cost states more to enforce and put employers on the hook for millions of dollars. global news 24 hours a day, powered by more than 2600 journalists and analysts in over 120 countries. i'm courtney donohoe. this is bloomberg. mark: that's get back to the big story in the u.k. today.
philip hammond delivering his first budget statement to parliament, cutting the outlook for growth next year to 1.4%. we will maintain our commitment to fiscal discipline while recognizing the need for investment to drive productivity. in fiscal had room to support the economy through the transition. headroom tol support the economy through the transition. mark: joining us from our , bureau at a marshall. >> i think it was a responsible, solid, and focused statement from philip hammond. in particular the fact that he found extra fiscal headroom for
new investment in infrastructure, in broadband, inroads, in housing, is particularly important for business. getting those fundamentals right will be important to helping british businesses navigate not just brexit, but the future more generally. mark: what else could he have done? what else if you had a wish list would you have liked to have s een him implement? >> business lobbyists like me always have a wish list. one of the things i would have wished for would have been more business on property taxes, which are extraordinarily high in the u.k. course, we would always like to see more investment in things like our infrastructure, which is chronically challenged both on the road, on the and our energy infrastructure. philip hammond may not be able
to do everything he has wanted to do. i think he's navigated that particular tight rope right but businesses will want to see now is delivery of a lot of what was announced today. i think you said beforehand or suggested in your statement afterward that dismisses would be relieved that the chancellor did not go further in cutting the corporation tax. he stuck with the plan, 17% come 2020. why do businesses want him to go further and cut even more? businesses like tax reductions. corporation tax isn't a priority for most us-based businesses. they want the upfront costs reduced. they pay for the consequences of decisions.policy
there are pension requirements being introduced on them as well. all of those things stop many businesses from making profits that would let them pay corporation tax in the first place. mark: i knew president is house. into the white allegedly under obama, the u.k. -- it was at the back of the queue when it comes to a trade deal. given the contacts you have there and the figures you have spoken to, are we now at the front of the queue? adam: house. it's a good question. it is one the president-elect will have to pick up when he comes into offices. what businesses in the u.k. and united states tell me is that they have been trading successfully together for a long onlyd of time, but guessing that will see more transatlantic flow of business.
we will be looking at the signals from the new administration on that regard is. mark: what are your business contacts' early views on mr. trump? most of them are focused on this issue of u.k.-u.s. trade. the u.s. is the single biggest trading partner for u.k. firm. the president-elect has his investments in the united kingdom and a number of places. he has a strong interest in an affinity with the country. affinity with the country. mark: the big buzzword of the cbi earlier this week was cliffs
edge. the prime minister seems to be open to some sort of transitional arrangement. is it viable? will europe really come up with asransitional arrangement soon as a two-year process comes to an end, we don't literally fall off a cliff and have to wto standards? do you see a transitional agreement being viable or not? wto standards? adam: i think that we will see in the sober light of day is weighing up of political versus imperative. imperative. i hope it is the economic imperative that wins out as that two-year period plays out. if that economic imperative wins
out and governments realize it own companies, their own livelihood and their own individual voters who will lose it those terms of trade are not maintained, own companies, their own livelihood and their own individual i hope they will make the right decision. mark: great to chat to you, thank you for joining us from washington, d.c. vonnie? vonnie: coming up, president-elect donald trump six south carolina governor nikki haley to be ambassador to the united nations. 'se latest on truck's -- trump efforts to form a cabinet. this is bloomberg. ♪ so
let's turn back to the latest, president-elect donald picking south carolina governor nikki haley for u.s. ambassador to the united nations. be president-elect said to offering ben carson the position of secretary of the department of housing and urban development to. aides saying there may be another cabinet level .nnouncement today let's start with ben carson. he had said he wasn't qualified enough for a cabinet position. what suddenly changed? >> we know ben carson has at least flipped to the point of considering the job. it's not a job he expressed a whole lot of him as hhs secretary.
he has said -- they consider the offer during thanksgiving. it's not quite clear to me what carsonsurgeon like ben would bring to the job of housing, it's a job to deal a lot with safety and housing. it deals with low income housing and homelessness. it's an area he doesn't have a ton of experience in. we will see where this goes. i think the pic of ben carson more broadly and picking nikki haley to be ambassador to the u.n. is symbolic anyway. these picks mark trump's first african-american pick and woman pick to the department. vonnie: it does feel in some ways that trump is satisfying certain elements of the party and placing people in spots that they may not necessarily be best for.
haley, she's governor of south carolina right now, she hasn't engaged in international in ars or with the u.n. meaningful way before. this would be some new territory for her. she is term limited out in 2018 as governor. she would be cutting her second term short a little bit. who herremind us replacement in the carolinas would be if she were to take this position. >>. i don't know. that's a good question. chess pieces being moved around here, right? >> right. ben carson was a former rival of donald trump in the republican primary who didn't really go after donald trump, didn't really attack him and then
became a strong supporter when it was clear he would win the nomination. nikki haley was somewhat more critical but also in a subtle way. she backed marco rubio. --ly ayotte and dean heller sorry, joe heck -- a senator and candidate for senate, it were very critical of trump and who ,rump has rejected for cabinet at least that's what he suggested yesterday in an interview with "the new york times." there's a little bit of that going on in trump's mind. people who are on his side are likelier to be considered for this sort of thing. mark: what can we expect from the president-elect over thanksgiving? he has been sparing. he has adopted a new approach with the media and social media since he was elected. how is that going down? >> donald trump has not done a press conference since july 27. it's unusual for a
president-elect to go 2 weeks without having a press conference. he's been updating people through his twitter account. because used his twitter account -- he used his twitter account to go after snl, "the new york times." this is somewhat unusual in that abiding byt quite the norms and traditions that previous president-elect's do. kapur inahil washington and rdc bureau. that. for at the very top, what will donald trump say next? the tweets directly from you don'tccount so have to have them coming up on
mark: the european close about five minutes away. vonnie: i'm vonnie quinn. opec members failed to agree on the role of iran and iraq in a supply deal just one week before the cartel's official comments. premised areraq's called on opec to cut production by 100,000 barrels a day. the citigroup head of commodities research and more says he thinks an output deal is possible. >> the saudis put themselves in
a bind by being so aggressively in favor of the cut, and i think they should have been playing it more coy. when the heart of opec once to do something, they need to get the periphery behind them and this time a little bit of bad diplomacy failed to get them there. i think in the end, the iraqis will be peeled away from alliance with iran. iran is very unlikely to want to stick to that alone. sentiment isame goodbye the cavs extend president earlier today. markets bloomberg cannot afford to be squandered, especially from the saudi perspective. >> an agreement will be reached. i was in saudi arabia this year. i know the situation. they have lost a lot. everyone is interested in stabilizing and helping increase oil prices. they have lost a lot.
mark: let's look at where european markets are trading. finishike it's going to touch and go. london, frankfurt, and paris. in the currency markets today, all eyes on the account after the autumn statement. let's leave you with the bond board, the yield on the u.k. to the highest since may. you are watching "bloomberg market america's." this is bloomberg. ♪
the rift between european and u.s. stocks keeps on rising when it comes to stocks. companies on the stoxx 600 estimated2 times earnings, the lowest since july 2012 versus the s&p 500. basic resources rallying, the best performing industry. hopes of infrastructure spending boost or splurge after the election of -- after the election of donald trump in last week's election. ,he two-year yield in germany one of the more interesting market moves today. earlier the yield on the l for thephil -- fel eighth consecutive day. we fell to a record low of -.74. what then happened was a bit of reversal. 0.70, is the ecb was said to be considering lending out the securities to avert a market freeze, making it
easier for banks to borrow bonds so they can be used as collateral for loans. what a run it's been ahead of the ecb meeting, when the ecb has a big decision to make. does it extend its euro bond buying program, which is due to come to an end in march. investors are bailing on dodd holdings at etf. the fed preparing to hike rates, stocks notching records and donald trump gets ready to take off after dropping for 9 straight days, assets in bullion backed etf have contracted 71.8 metric tons in november, tons.ting to 1915 that's gold versus etf's. nice chart here, for the first time since 2007 a majority of italians, 50.7%, say their
personal economic conditions were either good or very good. still 12.9% say they were not at all satisfied with their economic situation. a lovely charts ahead of the all important italian referendum on the fourth of december. justwe are just more than two s to go. here in the united states, i'm having a look at country market movers. all in the red today except for the dow jones industrial average. materials dragging down. the most part, so metals and mining the most parto metals and mining producers and aluminum, gold, and silver for the most part responsible for that drop. if we look at currencies, we see the bloomberg dollar index has resumed its gains another 7/10 of 1% increase. we have to mention crude oil. you are not seeing huge moves, but we are coming ever closer to
those meetings in vienna at brent crude just under $49, wti just under 48. when it comes to treasuries, we are seeing quite a lot of selling today. the 10 year is up 8 basis points, which is quite a big move, this reversing a little bit yesterday's buying of treasuries. moving to the currencies for the most part, 101.65 on the dollar index. yen., major move for the just touching on $1200. look at this, the yuan continues to weaken. we will hit 7 shortly. vix -- we take less and less notice as vix is a fear gauge. the 10 year yield is up to 240 now, another 9 basis points higher. 1.86%.
let's check in now on the bloomberg first word news. courtney donohoe has more from our newsroom. courtney: jurors deliberated less than two hours before guilty. a man say his home was full of nazi literature and memorabilia. the president of and is praising u.s. president-elect donald trump for his comments about democracy. he spoke to bloomberg in an exclusive interview. >> he said a very important thing, that there's no need to spread american values across the whole globe, not knowing governments that telling everyone to be like america. so he said a re-state -- every state should be worked with individually.
courtney: he has also said he won't hand over power to his children when his term ends in 2020. he has ruled kazakhstan since 1989. the u.s.' upcoming withdrawal from the transpacific trade deal has focused attention on another set of pre-negotiations. next week talks are set in indonesia. unlike the transpacific deal, this one includes china and not the u.s. ita deal can be reached, would further boost china possible as a geopolitical leader. theres on wall street say is no danger they will be replaced by robots, according to options group. the four masked finance professionals how technology will affect them. at least 8% of them over 26 protected they will leave their job. virtually none of the workers agreed. they said technology will lead to a better work-life balance. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries.
i'm courtney donohoe. this is bloomberg. chancellor philip hammond delivered his first autumn statement earlier. he cut the 2017 u.k. growth two pointo 1.4% from 2%. he pledged to increase borrowing pounds.illion >> we choose in this autumn statement to prioritize additional high-value investment. pounds. mark: getting reaction from opposition labor party. you very much. i'm pleased to say i'm joined by the opposition labor party mp, a member of the treasury select committee. very good to see you on bloomberg today.
those who are just about managing -- there was something for those people, wasn't there, in this budget? increasing the minimum wage, a change to tax credit, tapering, things he would welcome? >> yes. thosewas a little bit for people but probably not enough to offset the increase in inflation that is coming their way. he was undoing some of those cuts. not undoing all of them. i think they will still feel pretty squeezed. >> with debt as high as it is and such uncertainty around the u.k. economy, the chancellor decided to invest in infrastructure. that's the right priority, is it? >> i think his investments in broadband and transport and housing are all perfectly sensible.
it would be nice if we had a bit more. it would be nice if they change this fiscal targets so the borrowing to not include the capital spend. that would be a more sensible thing to do. the oecd said we should be spending a lot more to bp on these things. it's a step in the right direction. >> something that also some commentators are looking for with the skills gap. were you expecting to see something more around that? >> i'm very surprised that the whole brexit approach hasn't involved that. their arguments about migration -- people should get those jobs straight local people can only have those jobs -- what about the conversation more broadly?
clearly the party has been divided by this. party coming to a conclusion, a consensus around what it wants from the brexit vote now? >> very definitely we are. we are saying, we must go ahead with brexit. that menaans staying in the customs union, continuing to copyright 1 -- cooperate on things like the university r&d program. the most striking thing about what the chancellor said today was that the odr budget forecast show that the brexit impact was mammoth. it was the largest part in the decline in the public finances. we see business investment going down by 13% as compared to the previous forecast. these are significant changes. everything you would want to go up, like gdp, is low. everything you would want to
come down like inflation or unemployment is going up. the economic background is now extremely difficult for the chancellor. >> you said there was an unusual level of uncertainty around those opr forecasts. >> the government can't to know, can they? even if they were to play their cards were openly, they don't know what is at the other side of the bargaining table. they don't know what the french and others will allow britain to have. it would lessen the uncertainty. in a situation where uncertainty is a problem, i would've thought that would have been a more responsible approach for them to have taken. >> we are looking ahead to the supreme court in early december where we get a decision on whether government did not what its appeal and whether the government would trigger article
50. what will the strategy be around that, do you think? what kind of vote and discussion do we need to see? >> the supreme court will uphold the high court. i think the government will bring short legislation in january. i think that will be enough for us to test whether negotiating plans are. -- what their negotiating plans are. thank you very much for giving us your time this evening. just getting dark here. thank you very much, we appreciate it. the day of the autumn statement, the last one, in fact. these things come and go, it seems. mark: anna edwards, fantastic
former credit squeeze chief -- backing from royal families in state funds. according to a person familiar with the matter, he lined up $1 billion. egypt is hoping to raise $6 billion from international bond sales through next year. in an exclusive interview, the country's finance minister tells bloomberg, for sale may be delayed for a while. >> we were planning to do it by end of november, but there has been volatility since the election because maybe of the change in the philosophy, and basically the plan of president-elect. we're waiting until then. reducet just trying to
its a borrowing cost after deciding this month to let its currency float. let's move it on. that is the latest bloomberg business flash. back to the budget statement, the autumn statement. philip hammond is going to increase borrowing by a next her 122 billion pounds. that deal slumping. yields are rising. joining us now, marcus ashworth. you can find his column on the bloomberg. pounds, that's the headline for people like us, isn't it? >> i think the market figured most of this in. so, nothing too scary. i think the reason why higher in yields today is the treasury market reacted to a stronger n
umber the necessarily anything mr. hammond said. mark: spooked by the extra borrowing or not over the five-year horizon? >> i think he pled a reasonably straightforward infrastructure spend and he's taking the brexit pain up front. it leaves him some window, next year and the year after to have stronger growth to go through. mark: does it matter that he's not balancing the books? he's not put a balanced budget number. he's implying it will be 22 or 23 or something like that. that never went to the zero number. he's not falling into that trap. it's all about not revealing too much, not going too far too fast at the start of his current administration. mark: he doesn't have much room
for -- does he? >> he's willing to take that pain up front. is the gdp would wake him to the olympic steel will be better than 1.4%? >> all things being equal, it's a pretty pessimistic forecast, and i think john redwood said exactly that. what's the benefit for him not to? he has plenty in the tank if need be. he got the borrowing up front that he needs to as well. mark: what does this all mean for the bank of england? we are in the middle of the qe , the corporate bond buying program last 18 months is 10 billion. any thought of loosening of the cards?
>> i don't think anything that was said today alters the bank of england. guilts? --tlook for gilts? we have come from 50 basis points in a pretty short space of time. re: just tracking what is happening in the u.s. now? points in a pretty short space of time. his trump, the bond market all that matters when it comes to our bond market? the most important thing, plus our little special brexit issues. byreferenced what was said the egyptian prime minister. don't wait around too long to raise money, because bond yields are going higher. we may move really quickly. i think longer-term bond yields are certainly going higher. mark: it's great to see you. are we happy with that, by the way? >> yes.
battle of the charts. the u.s. versus the u.k. are kicking things off. to be talking about some of the biggest losers of the stock market since the election. let's has been made of the winners, the stock markets near record highs right now and off a little bit today. whiten see there with a line that the utility facets have come up since november 8. what's the reason? it could be surging treasury yields. when that rises, it lessens the appeal of utility stocks is a bond proxy, yield proxy, good dividend paying type of asset. what does this mean going forward? if we look at the bottom chart, we will see utilities price-to-earnings ratio. our utility stocks still overvalued, is to break -- despite being sold so often in the past two weeks. the bull market, the average is shown there with the white line. it is still well above the bull market average.
analyst at that, an bank of america merrill lynch put out a note yesterday kind of denouncing utility stocks, saying the yield risk of very real and they have further to fall. that's a utility recap. you can find it on the terminal at g #btv 5116. vonnie: mark? mark: we love divergence. we are not talking about the young adult dystopian film. divergence. look at the divergence. look at the calm in the european stock market since trump's election victory. our gauge of volatility ahead of the election, a rose to the highest in july. since then it has come down by aheadade unusual, vonnie, of the italian referendum and a host of elections taking place next year. elsewhere, reflected
which brings me to the blue line. political risk index, they gauge of risk priced in euro area assets. it is sore since before trump was elected and we are now at the highest since july. that is a clear divergence. closelytend to be related. currentlygs are underpricing political risk. he recommends buying these stocks december 25. the firs tmajor test -- first major test, that italian referendum on the constitution. austrian the presidential vote as well. we love divergence. g #btv 5115. vonnie: i love that chart because we were talking a few moments ago about how the vix is not as much of a fear gauge as it used to be.
unforced error on the part of joe. we have spoken quite a bit about this divergence. unforced error on your part, any person -- phenomenal performance on mark's part. giving mark the crown today. thanks, mark. mark: it was a day dominated by the autumn statement here in the u.k. this is bloomberg. ♪
washington, london and beijing, here is what we are watching. a breakdown on today's move by asset class. have aald trump will hard time divesting his businesses if you wanted to. and not in real estate in simple stocks and bonds. the former chief economic art laffer, joins us to discuss donald trump's policies. julie hyman joins us now with a look at the latest. julie: a mixed trade on this holiday short trading week. a little change day for the major averages. the dow jones is hitting another record with the gains on an intraday basis. the s&p and the nasdaq continue to lag.