tv Bloomberg Markets Americas Bloomberg December 6, 2016 10:00am-11:01am EST
julie: right out of the gate, breaking economic data on durable goods orders and factory orders. both for the month of october. looks like durable goods orders have a gain of 4.6% in october, higher than the 3.4% initial read here. rising.orders and revision higher in september. looks like -- these numbers coming in our sort of in line with what we have seen on the economic front, with much of the data coming in ahead of estimates. durable goods orders coming in at four point 6%. meantime, we are about 30 minutes into the trading day in the u.s. abigail doolittle has the latest. kind of a sideways trade. abigail: as you mentioned,
pausing. not a lot of action in the u.s. major averages. the nasdaq modestly higher. the dow and s&p trading a little lower. they all opened up just slightly. the energy sector is weighing down markets. it will be interesting to see how the day trades at. as for two of the big laggers, boeing and nike. , while a downgrade boeing is lower after the president-elect tweeted that "costs are out of control for the new boeing air force 1." " cancel the order." turning now to why the energy sector is the worst drag. oil down for the first in five days after the opec supply cut
last week.out interestingly, after that deal was cut, news came today that production just hit a record for of 34.6 one million barrels million 34.61 barrels a day. looking at g #btv 399. in blue, the xop. in white, the uso, and oil etf. -- s have it appears investors would rather own oil companies rather than oil it self. mark: love that chart. i was going to do it myself. european equities rising a second consecutive day. the stoxx 600 all by one half of
1%. like in the u.s., oil down. down 1.4 percent. today, the highest level since october 24. it is too late to change the rally in european cyclical shares. that is the view of deutsche bank. check the utilities. this is shares of eon, the german utility. up 4.4%. it is surging. rwe surging. germany's top court ruling these utilities are titled -- entitled to compensation for reduction rights they lost because of the country's decision to exit from after the japan nuclear disaster in 2011. judges in the federal constitutional court said that the 2011 loss set out a roadmap
for the nation's shift away from nuclear energy failed to tackle compensation to companies committed to nuclear power production. hence the rise. it is a flipside story in monte paschi. attain shane going to whether the italian lender can avoid a going to-- attention whether the italian lender can avoid a bear out. this is according to people with knowledge of the matter. monte paschi advisors are in talks to win the commitment of investors, including sovereign funds, after the constitutional made share sales more difficult, according to the people as well. bank executives are meeting with the ecb to discuss their plans. shares down this year 85%.
we continue to look at monte paschi, the world's oldest bank. let's finish with gdp in the eurozone. bang in line with earlier estimates. this goes back to 2002. private and government consumption driving euro area growth in the third quarter. trade deafening economic growth. -- trade dampening economic growth. surveyedmies we have widely expect the ecb to extend their qe program through march. the big question is when will the ecb decide to taper? for thursday. can't wait. julie: and we will talk to an annomist about that topic in
hour. let's check in on bloomberg's first word news. the president-elect is pushing to cancel the order for a new air force one after tweeting this morning. he emerged to speak out trump tower. >> it is totally out of control paid it will be over $4 billion in this air force one program. i think it is ridiculous. i think boeing is doing a bit of a number. we want boeing to make a lot of money but not that much money. >> the pentagon is looking to replace its fleet of aging 747's . and president obama will travel to florida to thank some of the force's special forces. he will defend his approach to fighting terrorism and making the case against torturing. merkelchancellor angela
says she will protect the country against future waves of refugees. she is also called for a ban on full-face veils. she spoke at a convention of her christian democratic union. she asked the party to support her bid for a fourth term. sayshief brexit negotiator the process will last less than two years. michael garnier -- michael bar barnier warned that the u.k. will be able to cherry pick what it likes about the e.u. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. julie: thanks. let's get to news in european m&a. there is apparently a bid for r. kelly on -- actelion, challenging a move by johnson &
johnson. , whong us is at ed hammond is been covering the story. thanks for joining us. why would sanofi step in now? it seems johnson & johnson was far along in its process to buy actelion. well, we think those to them companies -- those two companies are still in discussion. they are trying to work out does this fall apart. potentially, italian -- at kelly telion trying to see if other people want to bid. the headll, hasn't of the company been resisting to bids? ed: that's right.
wife created this company from nothing to the giant today. --has been assistant to resistant to sell. thisf the reasons you see company trading way below is that people are uncertain on if this guy wants to sell at all. --r if you will open it up or if he will open it up to a more traditional m&a. mark: let's talk about money. $2.50 million is the price that bloomberg said j&j would pay. a: i am not sure it is knockout figure. is just do not know if it
about money or something different, like him getting to keep a proportion of rmb. r&d.ybe -- of or maybe he was a he loves this company and wants to keep it. you look at where this was trading before. hovering around 200. it is a big jump from there. you could see someone pay more. that said, j&j have deep pockets. one of the only aaa rated last in the world -- left in the world. mark: so if someone else wants to come in, who might it be? is you havecenarios the swiss white night -- knight. roesch would make sense,
this company was originally spun out of it. they have not declared any position yet. but i think there is a fairly long list of companies. it has assets people like. and you have a ton of large cap pharmaceutical companies would look seriously at this. from what we can tell, these discussions are fairly exclusive. julie: considering we have an incoming administration in the u.s., there are some unpredictable it the about the effect of regulation. is there any timing effect on deals like this, a sense of urgency to get things done? downou could almost put its head and say j&j can use a lot of cash which it has not
been able to repatriate in this administration. indicated they may be able to repatriate some of that money, which would make less sense for them. this is probably more a function of where we are in the m&a cycle. lots of available targets. i guess they and j just thinking there are big deals -- j&j thinking there are big deals, let's do one. julie: all right, ed hammond. mark: coming up, our exclusive interview with michael milken. and another note on politics. angela merkel just reelected chairman. she has the lowest support so
♪ mark: live from london and new york. i am mark artan -- mark barton. julie: i am julie hyman, in for vonnie quinn. mark: business leaders are meeting for the milken institute's summit. manus cranny is standing by with michael milken, chairman of the milken institute. thank you. has had 40day sessions.
welcome to bloomberg. great to have you with us. mike: it's mike. i'm not old enough to be a "mister." manus: three major upsets in the world. brexit. trump. and "re-xit." matteo renzi's exit. very fewre are surprises. what has occurred here was building for a number of years. the promise of finance and the promise of capital is to create opportunities for your citizens. median united states' income is lower today in 2016 that it was in 1999. the same in italy. there's a commonality between
many of these issues you are seeing here. forink the need and search what is my career in the future, what is my job in the future, seen,s my future is being particularly in europe, the united states, japan, korea, and many countries around the world. aroundone can then turn donald trump saying he will make america great again. do you think he has overpromised? mike: well, one person is not capable of delivering. you have to be able to lead to make that happen. think the reaction to the markets is, first, in the united states, that it is over.
after two years, there is just relief it is over. that is your first reaction. givinger reaction is more freedom to the companies. so the three industries you would expect immediate reaction would be the financial sector, the defense sector, and the bio-science sector. all of those have moved a great deal. manus: the question that comes slap innd is another europe. is the western social backlash just beginning? is that the most critical risk for 2017? mike: there's always risk. i think you have to put yourself in the shoes of an individual. in the united states today, one
in six blue-collar workers has dropped out of the workforce. the only country that has a higher percentage is italy. so there is many similarities today. the fear of "what is my job in the future?" when you see driverless cars and trucks in the united states today, the number one job in many states is "driver." so for a consumer and another business seeing this, it is different than a family. it is driving for ups or as a taxi driver, or even a forklift driver, in computerized warehouses today. manus: you were talking about anderless truck drivers what the jobs were in 1970 and now. vision, as you look
at the world. changet big set piece of in economies and markets. mike: well, i think the next change here is how are we going to create jobs? the majorityy, if do not feel they have a future, there will be a change in government. so we have a reeducation in front of us. skillsng sure people's match the jobs of the future. these in, you get balances. there is not any major industry today that has not undergone some disruption, starting with agriculture. manus: in 1900, 90 8% of the world lived on farms. 98% of thee, 1800, world lived on farms. now -- mike: less than 2%.
manus: but that is globalization. mark carney said isolation and attachment by people who feel left behind by globalization. that is a personification of globalization. it has not worked. mike: i think globalization has worked. i think it is not globalization, it is technology. to happen inave the world, it can happen in your backyard. jobs.hnology has changed are we going to change to a chapped -- to adapt to technology? it is not just blue-collar workers. if you are surgeon, you get replaced by a robot that can do surgery. you are a radiologist, you are replaced by a computer that can read an mri better than an
individual. this is the exact same thing that john nesbitt wrote about in 1982. a chapter of the book was "high tech, high touch." people have to feel part of the process. today is we have moved a lot of the technology, but people do not know where they fit in. when you talk about globalization, there are very few companies in the world as globalized as google. but people do not view google as the problem. they do not view facebook as the problem. to me, it is not globalization -- tous: i made a statement figure out what the issue about globalization is.
i feel globalization has worked for me. but i have not been left behind. mike: we live in a world in two generations. 20% oferations ago, only the jobs required skill. to worka willingness hard was enough. i did not need a skill. sday, 80% of the jobs are emi-skilled or skilled. you have to develop a skill. it is important for governments to focus on "can we prepare people for the skills of the future?" there is a shortage of people that can write software and coding. so there will be a number of changes that will occur. manus: we are coming to the end. briefly, trump
talked about the need for fiscal spend. where the believe in this or not is not my point. it is about trump bonds, spending money. is that part of the changing narrative of the world in central banks? one of the most important things for an individual is they feel they have a better life. int they will be wealthier the future. if you look at japan today, people have invested their savings, $17 trillion, at somewhere between zero and minus. they have accepted it will be worth less in the future. result, their expectations of the future are diminished. you have less children, you purchase less, consumers spend less, etc. part of the slogan of "make america great again" is you will have a bright future. what is that future?
it is a partnership between the individual and the government and a partnership with finance. i had the honor of financing 3200 companies. industries.w mobile, cable, etc. what are the jobs of the future? we know there will be more jobs in health services, health care. prevention wellness will pay a larger -- will play a larger role. the u.k. is doing innovative things to try to reduce obesity. obesity costs the u.s. about $1.4 trillion a year. there is a lot of opportunities as we shift to the future. we just cannot mislead our people to believe the jobs of the past are necessarily the jobs for the future. manus: the biggest challenge of all for unemployed youth here in europe. mike milken, thanks for joining
us. pleasure to see you. guys, great conversation on globalization. it did notcatively work, but i did not get left behind. we need to get to google and amazon quickly. mark: great job. fascinating interview. 2:00 p.m. eastern time, we will continue to look at the effects of anti-globalization. to got fu will speak gross -- bill gross. this is bloomberg. ♪
first word. >> 60% of voters say the carrier ofl, which saved the jobs about 1000 jobs in indiana, use them a more favorable view of the president-elect. 74% say they support raising that on u.s. companies outsource manufacturing jobs. 51% say it is acceptable for the president and vice president to negotiate directly with private businesses. defense secretary ash carter says the u.s. will give back nearly 10,000 acres of land on okinawa to the japanese government. it was used for jungle warfare training. >> we share your commitment to the realignment and are prepared to make the largest land transfer in the history of our alliance. and i can confirm to you that we share your objective.
>> the giveback has been in the work for 20 years. russia says the u.s. has declined to meet on syria this week he at -- this week. foreign minister the two countries were closed to a deal to let rebels leave aleppo. in south korea, president park geun hye is willing to step down in april, according to the ruling party's floor leader. the opposition party says they may have enough votes to impeach park friday. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. mark: thank you. the european union signaled any transitional relationship between the u.k. and the bloc is
contingent on a permanent deal being struck first. eu's chief the was -- gave his first public news conference. did we learn anything about his negotiating stance? >> good evening. first, we heard michael garnier -- michael barn year -- michael barnier speaking in french and then english. the main thing we learned was this timetable, an agreement should come by october of 2018. the bartering -- the bottom wants tof the u.k.
keep the same access to the single market, they would have to keep to you rules -- two e.u. rules. e.u. market --no cherry picking. >> that seems to have become the catchphrase here in brussels. we also heard from mark carney, saying that the transition would eat desirable. that did not seem to be the same point of view for michel barnier, who said that can only happen once a permanent deal is reached. if they cannot cherry
pick, what can they do? to softenion would be the u.k.'s tune on u.k. -- immigration restrictions. the second would be to take advantage of political problems to negotiate a deal. however, the e.u. could see the election years coming ahead as an opportunity to add pressure on the u.k. we could also try a sort of gray , which as we call it would be the u.k. first leaving the single market. then after that, negotiate some kind of trade deal. that would mean losing some business in the meantime. we asked the u.k. chancellor here in brussels whether the
u.k. government would consider paying into the e.u. budget in order to keep access to the single market. here is the reply. >> we want to keep all options open. we are going into a negotiation. we are prepared to discuss any structure with our european partners. in the end, we will only do a deal if it is an written -- in britain's interests. we would look at the costs. and we would decide whether that was a good deal or not. all options remain open for the u.k. chancellor at the moment. but the u.k. attitude has been criticized by some here in , including one who said a smooth process for brexit cannot happen at the moment is the u.k. -- if the u.k. does not change its attitude.
mark: this meeting being by italy. a little but for greece, it was supposed to be a major breakthrough. are the new measures agreed sufficient when it comes to greece? little too may be a late for greece, according to one imf official, who says the measuresm debt relief are not enough for the imf to get involved. the spanish finance minister also said the statement on greece was not really conclusive. what was concluded last night was to waive the coupon penalty of around 200 million euros. these are short-term menus -- these are short-term moves.
the second bailout review was supposed to be finished by now, but there are still a couple of sticking points, especially on labor reform. and greece first needs to finish this second bailout review in order for the imf to get involved and then to reach the next step, which is to get greece into quantitative easing. mark: bloomberg's caroline connan. jacques is next. this is bloomberg. ♪
quinn. mark: i am mark barton. the chief executive of lego is stepping down. julie: german factory orders rose 5% in october. is this a sign that the european economy could pick up into the end of the year? mark: and a historical look at the price of oil. ♪ julie: defense secretary ash carter said the u.s. will give back nearly 10,000 acres of land on okinawa to the japanese government, used by u.s. marines ford jungle warfare training -- for jungle warfare training. >> we are prepared to make the largest land transfer in the history of our alliance. and i can confirm to you we share your objective of completing that by december 22 of this month. at the top of the
world's most profitable toymaker. ceo of lego will be replaced. lego was losing $1 million a day that ceo took over. profits were boosted fivefold after that. early this year, mercedes says it will have at least 10 electric models in showrooms by the end of the decade. to chinese government wants ensure at least 8% of sales in what it calls new energy vehicles. there are signs europe's biggest economy will pick up speed. german factory orders rose the biggest increase in two years. there was a 7% increase in demand for investment goods. julie: time for the bloomberg
pick take -- quick take. oil is so much more than fuel. here is the situation. after four years, when the highest oil averages in history seemed to defy economic gravity, which william began to plummet into that -- petroleum began to plummet in 2014. instead of stanching the glut by pumping less oil, middle east exporters engaged in a price war. adding to the oversupply, iran began exporting. nationsber, opec finalized a deal to cut supply for the first time in eight years. after saudi arabia and iran were able to set aside differences. during the mid-20th century group of multinational oil
giants, known as the seven sisters, dominated the market. fieldsountries with oil created the organization of petroleum exporting countries. few analysts expect a return surprises from a few years ago any time soon. ofs could be a new era energy abundance. meanwhile, analysts say this could slow the shift towards clean energy alternatives. could be arm, there joe maddon effect on oil if governments keep crude in the -- there could be a dramatic effect on oil if governments keep crude in the ground. you can read all of our quick takes by heading to bloomberg.com for more stories.
mark: shares in european miners have risen. enthusiasm peaked's hopes grow that the president-elect will trigger fiscal stimulus. jacques affirmed that enthusiasm. >> we can see positive impact in the trump administration. one is in the investment infrastructure, it would be a good omen for us. good, thatucture is is one sentiment. of projectsries that are being permitted. anything the trump administration can do to improve the process -- of the permitting process in the u.s. can be very slow -- so any improvement in that process could be good for
us. rio tinto has been around 124 years. we will work with the trump administration. just wonder how you recalibrate the strategy for next year, given political of events. are you accelerating any schedules at the moment? we are notien: accelerating any plans at this stage. we want to be very focused in terms of growth. what we have in our current plan is a project in relation to iron ore in australia. tother project in australia supply to the aluminum industry in china. and a copper and gold project. in means we could get 2%
growth the next 10 years on the back of this program, which is much better than any other minors, but cause -- because most are not investing. jonathan: the rebound we have seen in copper and iron ore, we have had a big bounce back. but the strategy has been volume best value over volume -- value over volume. will miners maintain those strategies? jean-sebastien: i can talk about rio tinto. we have been clear about this. is beinge means for us selective. about improving assets. about improving the quality. in order for what we target to pay superior cash returns for shareholders. our main drivers is cash return
for shareholders. having spent a couple of days in the u.s. in new york and boston, people understand our story. alix: the other theme is rising cost. you not only have oil, but many analysts think the cash inflation we have seen has bottomed. what do you see and how will that affect your capacity in production? jean-sebastien: so far, we have not seen much inflation in the system. if oil goesk naive back to $50 barrel per plus -- what we will disclose to the market is we have a plan to justase our free cash flow by improving productivity across all operations. that will offset whatever cost inflation may have been. mark: that was an exclusive
but a bounce in the interest rate sensitive groups after a decrease in yields. telecoms, real estate, and utility stocks bouncing somewhat. that is the balancing act that we are seeing in stocks at the moment. the worst performing stock in the s&p 500 after the company talked at a conference about having issues with its customer service. chipotle already experiencing a number of different issues after the company had food safety problems caused a tumble in their shares. shares off 6.5%. let's get to a bigger outlook. 2016 brought us brexit and the president-elect. anticipate tried to what could be. into sedatedy
brexit and trump. predictedrrectly brexit and trump. i got really depressed reading this. if we are talking europe, one of the things you talk about is victoryl marine le pen in france and other populist victories around the continent. what are the repressions from that? john: obviously, it is a huge election year in the u.s., but next year, the netherlands, france, and germany have elections. all three are important countries that have the same potential for disruptions that we saw in the u.k. and u.s. this year. france is a big one. right now, people are saying marine le pen's chances are not huge. but that is what people said
about trump. the big one is germany in september. germany is politically and economically the powerhouse of europe. whether angela merkel can hang on or not. julie: and you raise the question on if theresa may could hang onto her job. john: politics now is so fluid, whether in the u.s. or europe. things are so volatile you cannot rule anything out. from theresa may's position, there is an increasing split over brexit. that there really is no plan for brexit. don't forget, she has not one fell an election. and there is growing discontent in her own back benches. one have saying she is going to heart, the other saying she is going to soft. mark: and big potential problem
for the euro. takeose eventualities place, we could see a rerun of the 2009, 2012 sovereign debt crisis. john: but on a bigger scale. the worry is what if populist get into power and manage to get a referendum on to the agenda? the very act of holding a in italy, on the euro one of the founding members of the e.u., could be enough to upset the markets. mark: there are so many fascinating things to talk about. yalta 2.0.about this, essentially, is about russia and how trump treats russia, how merkel reacts. what is the pessimistic view? john: many issues the last five
or six years may end up on angela merkel's shoulders. let's say donald trump is serious about putting more pressure on european governments to spend more money on military protection. let's say he threatens to suspend u.s. membership of nato. that puts angela merkel in a position where she has to decide does western europe increased defense spending to stand up to the russian military threat or does she do deals with vladimir putin? that she has up -- does she of russianfact influence on western europe's borders? preparedxtent is she to arm up and help ukraine? or will there be a tacit
acceptance of the fact that rush is a sphere of influence extends further into europe -- that russia's sphere of influence extends further into europe. julie: what strikes me is how plausible these scenarios are. i encourage all of you to check it out on the bloomberg, bloomberg.com, the pessimist's guide to 2017. john freire -- john fraher, thank you so much. mark: coming up on the "european"" we will follow stocks. i will leave you with the stock board. both gaining a second consecutive day. "close," next. this is bloomberg. ♪
"bloomberg markets." ♪ going to take you from new york to london to germany in the next hour. we are covering stories out of switzerland. here's what we are watching today. european stocks are higher as we head toward the close. u.s. markets are looking to extend record highs. julie: then president-elect donald trump takes aim at belling's development of a new air force one. he says the latest order should be canceled. german chancellor on july merkel is a -- angela merkel is a dressing her party's convention as she aims for a fourth term. ,e are live in germany including a call for banning the full faced veil. mark: have a look at where european equities are trading.