Skip to main content

tv   Bloomberg Markets Americas  Bloomberg  December 8, 2016 10:00am-11:01am EST

10:00 am
julie: we take you from new york to frankfurt and cover stories from washington, germany and china. the have to check on stocks. in the u.s., all-time highs. in europe, the ecb just dropped up a lot of action there. mark: what a day. initially, getting for a fourth consecutive day, highest since january's four-day winning run, best run since october 4. matt miller will tell us the details and highlights of today. the initial decline, the reason is the ecb will reduce their bond buying program to 60 billion euros. it has been extended to the end of this year, so we saw an initial jolt in the markets. then the ecb expanded on its
10:01 am
thinking to buy assets below the deposit rate if thinking to buy assets below the deposit rate if needed, by bonds maturing in the one to 30 year range versus two, and the rates kept unchanged previously and downside information average at 1.7% in 2019. so much to digest the markets like it, particularly the equity markets, rising for the fourth consecutive day, and led by [indiscernible] this highlights today's market in life that the initial reaction was the ecb tapering everyone, but the ecb did not use the word tapering. mario draghi said later, and then the details came out. the ecb can buy bonds below the deposit rate, they can buy bonds in the one to 30 year range. that is why the euro is down by after initially rising by .5 of 1% earlier. we rose to the highest in one month ahead of the meeting.
10:02 am
the dollar,inst since falling to a mark lu on november 3. adam this amort from pimco said it is essentially a rate cut today. look at the reaction in the bond market. interesting. the yield on the german 10 year rising to the highest since january. this is the difference between the five year and the third year in germany. most inidened to the eight years. short-term bond yields falling today. bond price rising, and the ecb says they will buy bonds deposit rates and purchases will be reduced to 60 billion euros from april. ultimately, abigail, it comes down to inflation. this is drug use preferred five-year-five-year forward inflation rate -- this is ghi's preferred
10:03 am
five-year-five-year forward inflation rate. fascinating if you consider where we were in july at 1.68%, what did draghi say today about inflation? keith and inflation would be 2018next year and 1.5% in and in 2019 -- this is 2017 -- sorry, 2019, this is the key, looking three years ahead, he says inflation will be at one point 7%. not exactly below 2% and he acknowledged that today, saying it is not really meeting its goal of just below 2%. inflation expectations are rising. , 30 a day and morning minutes into the trading session in the u.s. records all around. abigail: absolutely. it may not look like it with the 500 and nasdaq and
10:04 am
changed in mix, but all three averages put in new highs, along with the russell 2000. yesterday, the dow transports put in their first record high since december 2014. rt reached out to technicians, the head of technical analysis that oppenheimer told us this is a signal of the broad-based nature of the rally we see in stocks. as for the buy signal around 75., go to g # btv 33 in whites, transports, in blue, the dow industrials average. the signal came back on november 7, when transports over to the april high, so there has been a bullish signal for more than one month. two other segments of the markets standing out today, the year yield.he 10 dollar index up nearly .6 of 1%, huge move for currency on one
10:05 am
day. in fact, best day since november weakness. on the euro and yields backing up, which is rising rates, supporting the dollar going higher and that is slowing rates to the bank. bank of america, jp morgan and wells fargo, wells fargo america down, but angle and jpmorgan higher. jpmorgan put in their fourth record high in a row. the second-best sector this year of more than 22%. julie: coming up, we will talk to the chief investment officer at what management, so he will talk a little bit about the banking sector. thanks, abigail doolittle. back to frankfurt and the ecb decision, which comes amid the concern that the euro's fragile recovery risks being derailed as medical uncertainties cloud outlook. mario draghi shared this assessment in his news conference. mario draghi: the outlook for
10:06 am
ecb growth is probably unchanged. surrounding the euro area is tilted to the downside. julie: for more on his remarks, let's get to matt miller in frankfurt outside of the ecb. matt, seems like there is confusion here in the wake of this decision and press conference. what is your big takeaway? well, i think there was some confusion that seem to get sorted out after mario draghi started speaking. the confusion revolves around the word "tapering," and the definition. draghi was asked how he sees that and he says for the ecb, "tapering" means a diminishing of purchases, bond purchases of quantitative easing until zero and they did not discuss that, wasn't even on the table. he took a dovish tone during the
10:07 am
press conference. if you look at a chart of the euro versus the dollar today, you will see a spike when the market took the initial "tapering," the slower for longer announcement as "tapering," if you will, but after the press conference started and he came out with dovish changes to the role -- he will be able to buy a earlier, shorter duration bonds than previously he would, they will be able to buy yields below the deposit rate, which was previously against the rules set for themselves, and he said the whole point was that the ecb would be in the market for longer and you would see the euro come back down, so buy the rumor, sell the news move with the euro and now they viewe the moves as dovish. julie: there has been talk about the political situation in europe, where monetary polic y's effectiveness runs out and fiscal policy has to pick up. did draghi comments on the
10:08 am
political situation? did to some extent comments on the political situation on the election of , onld trump, the brexit what happened in italy over the weekend with the no vote on the referendum and the pending resignation of matteo renzi. he talked about it when he was discussing the inflation outlook look, deflation has essentially disappeared up the radar, but uncertainty prevailed, and he said "uncertainty prevails everywhere," repeating himself aspires that concern. he is clearly concerned about it , but there isn't really a great outlook for fiscal stimulus to pick up the baton for monetary stimulus in europe. keep in mind that we have debt to gdp ratios of more than 100% in her referral countries. some of them double-digit if he, gdp, so thereheir
10:09 am
is no likelihood of fiscal stimulus coming from other countries other than germany, and germany is the most historically and traditionally austere country in all of europe. it doesn't look like we will have any kind of from situation going on in the time soon. mark: matt, there is no appetite for fiscal stimulus that seemingly to be in the structural reform with upcoming elections taking place in netherlands, france, and germany, which comes back to the point that the ecb remains the only game in town, isn't it? matt:d absolutely. absolutely. draw the has called for help, saying the ecb and monetary policy cannot do it alone. he wants to see some kind of fiscal stimulus of the court economy and was really pushing again today in the meeting for structural reform in the peripheral economies. you are right.
10:10 am
it doesn't look like it will come. he maintains the ecb needs to hold its position in the market. that is why he said rather than going with the six-month extension solution, as they also discussed, they chose to go with the nine-month extension, through the end of 2017. although it is a smaller rates, they are only spending 60 billion euros a month from april, rather than the 80 a month.uros more money from the ecb into the market. those 60 billion euros for nine months is more than half a trillion euros, 540 billion euros over the period of the extension, compared to what would be 480 billion euros if you had seen the non-paper extension, as it would have been seen at that level. presence in the market -- more money and longer presence in the market allows the ecb to be more flexible and
10:11 am
effective in a stronger outlook than they otherwise would have been able to do. mark: another side effect is steeper yield curves. the get germany. the spread, the differential between the five and 30-year-old, wider. we are seeing short-term bonds rise, and long-term bonds ball, and upside is the banks are gaining, good news for the beleaguered eurozone banking industry. well, if there can be in the good news for the banking industry, maybe for right now. obviously, they previously were not allowing themselves to buy bonds that had a shorter years.n of two two to 30 was the limit. now, they can buy bonds that are short durations that they are only one year to 30, so you can expect to see more buying at the front of the curve, more people get in there, pushing the yield
10:12 am
down. the yield curves have already steepen to some extent in europe, having nothing to do with monetary policy but due to the trump effect spreading around global markets. you see a continuation of that steepening trade. traders are surely getting in on this because they expect the ecb to come in on it. when you put that money in the market, you will move the yield curve around. mark: great job, see later, the stoxx 600 bank index at the january.evel since banks like what they heard today from the ecb president. julie: in europe and some extent the u.s. let's check on the first word news with lisa parenti. lisa: breaking news off the coast of california. and a break in the pacific ocean with a magnitude in the six's. different reports of how strong it was. heard 119 miles rest of ferndale in northern
10:13 am
california, about 100 miles south of the oregon border and 200 50 miles north of san francisco. we will bring you the latest. in london, the fourth and final day of the supreme court hearing on brexit. totices are being asked decide who has the power to trigger the exit from the union. lawyers challenging prime minister theresa may saying brexit cannot happen. the government argues they can use royal prerogative to invoke the formal trigger for brexit talks. theresa may is distancing herself from comments from her foreign secretary that he made about saudi arabia. last week, johnson said saudi arabia had joined iran in pursuing proxy wars in the middle east. the saudi's are one of the uk's most important allies. a spokesperson for may says johnson's comments to not government policy. the u.s. and russia had talks on syria and the bottle of aleppo -- battle of aleppo. john kerry says he is hopeful
10:14 am
the siege can be lifted. he spoke with russian foreign minister in hamburg. groups that tightened their grip on aleppo, which has been a rebel stronghold. in indonesia, more than 130 people died from that offshore earthquake and they expect the death toll to rise. it stuck in indonesia's province where more than 100,000 were killed in an earthquake and tsunami back in 2004. lawmakers and south korea are expecting to vote tomorrow on whether to impeach the president. he has been caught up in a scandal that has been the center of approval ratings plunging. if there are enough votes, you'd be suspended while -- she would be suspended while the court reviews the move. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. thank you.
10:15 am
breaking news on the political front, reports that andy partner, president-elect's expected pick for labor secretary. cke is the parent of carl's jr. favorse trump, he replacing obamacare. he blamed rising insurance premiums for reduction in restaurant revenue. we will look for confirmation of epic pick in the coming days. mark: coming up, the first new book since "lash boys." the author joins tom keene to talk about the story of two psychologist who change the way we look at human behavior, next. this is bloomberg. ♪
10:16 am
10:17 am
10:18 am
mark: live from london and new york. i am mark barton. julie: i am julie hyman. this is "bloomberg markets." in his newest book, "the undoing project," michael lewis writes about a shift in sports, medicine and government with two psychologist. let's talk to tom keene that michael lewis. tom: [indiscernible] absolutely courageous. this is the early lead there 2017, so we will jump into next year. twice this book important? -- why is this book important? michael lewis doesn't need another important book but this is important for two reasons. he has brought so i put of the foundational ideas of economics and has really brought to life one of the great losses of economics, and that is one.
10:19 am
congratulations. when you wrote this and brought it to life, it is pouring, game. , the haverhill economics, but -- behavioral -- it is boring, game economics, behavioral, so what did you have to do? to do spectacular characters with a tumultuous, romantic kind of -- theythere were points hated each other. michael: the story has a shape of a love story, so it was emotional, part of the secret to the ability to write it as a book. the other was their ideas had so many consequences in the world, touching wall street, sports, medicine, the law. what i wanted to hammer home to it opens with the houston rockets, or you see the ands being cooked up
10:20 am
actually being played with and have an effect on the late nba players are drafted. tom: these are two of score academic psychologist -- to obscure academic psychologists, and what is the claim to fame? michael: not really till they came here, but being an academic psychologist in israel in 1969 is a different thing than one here. they go off and get shot at every -- tom: one was excited for bravery. michael: he is a warrior, and one essentially designs an intake system and algorithm to decide who will be an officer and it will not. they still use it today. he did it in the 1950's. they are in, out, so in touch with the world outside of academia, that it isn't that hard to explain on the page. [indiscernible] 42,ve what you say on page
10:21 am
the exploding of lightbulbs. ifo that when i read the finance and economics part. explain the exploding of lightbulbs for someone in sports. theael: first, this is how ideas spread. the people outside of psychology said this affects my discipline, because it runs to the human mind. when you get in sports is moneyball, and understanding that the misfire ration of national athletes, which is baseball players by the marketplace, is a systematic judgment by experts. not be theould boston red sox judgment by more -- buying more? undervaluede are compared to others. it grows out of basic processes in the human minds these guys describe. tom: we witness it this week
10:22 am
with the yankees. nothing has changed since moneyball. michael: it has. i do not know if chris say this is worth what they gave up, but it is possible he is. the bigger point is the counterweight to the misjudgments of the experts is tohave a statistics analyst actually grind the numbers and give you a better sense of the probability of the future performance of a baseball or basketball player. this has swept sports. for the reasons these guys describe because experts leading with judgment make errors. tom: michael, really challenging views of the markets. he was a character in the movie "the big short." to the characters of "the big short" to the undoing project?
10:23 am
michael: the one character to establish connection between that character and these guys is michael barry's character. people know more in the movie, the character christian bale world and he was -- the was saying this and he does nothing but look at the numbers what is being packaged into subprime mortgage bonds and being replicated over and over in credit default swaps 'sat actually the world's judgment of these things is screwed up. there's more going on than just human misjudgment in the financial crisis. they're bad incentives, some people do stupid things. tom: when i look at this and i love the phrases you drop, to an each of your efforts, there it "s in the middle, "famous amos.
10:24 am
who was famous amos? neman diddaniel kah win the nobel prize in did not die, but amos is by far the but it on person, a rock star. versky too risky -- amos tce was regarded as the smartest person they had never met pray to a point where a psychologist said the longer it takes you after you met amos to figure out he is smarter than you, the stupider you are. everyone said, that is right. amos -- when he had was an inability -- was inability to see the eyes added danny and see they works in the important and give danny confidence. danny was the idea generating machine and amos just that a
10:25 am
clarity of mind. his mind was the mind of the diamond cutter and he can take ideas and ship them so the world except -- shaped them so the world accepts them. tom: for a general audience, maybe could compare and contrast "an nash of princeton in beautiful mind," and compare their accessibility to the american public with the mathematics and the a to smith ofd nash -- and the t ess of nash.usen a friendship that changed our minds. they changed how tom keene and julie hyman thing. michael: -- tom: how do they do that? michael: 10 years or 12 years of working together, finding nugget after nugget about what the mind is doing when it tries to judge concern things.
10:26 am
where are stocks going to go? or who to vote for? what baseball player to select? of you mayess not be aware as you move through life, you make a lot of risk assessment rate how people did this, they tested, they went out, showed how people did this. the way that was persuasive to anyone who read the paper. tom: you and i talked about this on bloomberg radio, there is an irreplaceable nature of famous amos and famous tverksy. i remembered when i learned this, the only equivalent is m.i.t.. explain the new book when we learn he has an incurable cancer person -- heone tells kahnmeman but no one knows. amosel: a misguided --
10:27 am
to eight he made such an impression and no one wants to lose him. when they face the problem, they ask, what would amos say? even his physical presence, like a sector of faith, a relic, and when he left behind is in the world. tom: it is essentially lending and mccarthy -- lennon and mccartney. and then you have the tragedy of john lennon's death. what they do together is unlike what they do separately. it is like marriages i know, where there is pressure in the outside road because there is uneven status in the marriage. me, it wasnship, for wo suchause they were t powerful minds. tom: you have written about
10:28 am
finance, book on frequent trading and that flashforward, "the big short," all of that trade when you look at the books, comes up to the shock of our new president elect. michael lewis view of how america, particularly american finance, will adapt and adjust to the certitude of mr. trump, and i would suggest it is the certitude not in this book. these guys are the ultimate anti-certitude, weren't they? michael: yes. tom: these guys never did this -- michael: [laughter] or put a pencil in between their teeth. they never would have done that. they would get from and with have said -- they would look at trump and i think they would have been terrified. at the center of their work, there is a keen awareness of the fallibility of the human mind. it is shameful. it is like we are wired to make mistakes. we need to understand that to
10:29 am
correct them. if you think -- if you go through life begin your infallible and you get instinct is great, you will -- gut instinct is great, you will commit horrible mistakes per you are prone to them. the first thing they would say is these guys in danger because .e doesn't realize i think it would be an impossible task is at the same time, he is certain about everything, unpredictable, basically, at the bottom of this, a weird dude. i don't know what the weird dude go do and i don't think anyone can predict it. will leave it there. michael lewis, what we can predict is another important book, "the undoing project." i cannot say enough about accessibility in "the undoing project." i will have to add that to my julie: hanukkah list -- julie: i will have to add that to the hanukkah list. let's check in with elisa parente.
10:30 am
elisa: if we had recorded a six point eight earthquake a hundred miles off the northern california coast. we are monitoring the situation and will bring you more information as a learned. syrian troops are pushing deeper into rebel parts of aleppo. they say civilians who want to leave should be given safe passage and then asked for a five day cease-fire to evacuate the wounded. syrian government officials say troops will not back off the assault. human rights watch is calling for an arms embargo on saudi arabia over the war in yemen. the group says the u.s. might be complicit in the atrocities there. more than 160 civilians were killed in one month, mostly by u.s. bombs sold to the saudi led coalition. the defense is seeking a mistrial in the charleston church shooting death penalty trial. defense witnesses say dylan n roof is evil and
10:31 am
belongs in the pit of hell. he was looking to start a race black killing nine churchgoers after joining them last year. new bloomberg national poll, it shows growing optimism about the u.s. economy following the election of donald trump. it finds 54% of americans are bullish about u.s. stocks steering, 38% say they expected by the financial year and anticipate higher household incomes. meantime, half of those surveyed view the federal reserve favorably, up from 42% the last time it was asked in 2010. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. julie: thanks. looks like the trump rally is back on, at least to some extent.
10:32 am
averages touched new intraday highs but little change right now. can they continue into the new year and what sectors will perform well under president trump? joining us is alan mcknight, chief financial investment officer which advises high net worth individuals on its wealth management side. cio, right? alan: julie: right. i thought it was correcting well reading. you deal with high net worth individuals. i am also really interested to talk to you because your outside this so-called bubble. you are in birmingham, alabama, so in you talk to high net worth clients and folks not in the east coast corridor, how do they feel going into 2017 and what are they looking to invest in? alan: right now, they are excited. there is a general euphoria after the election. to some degree, what is dampening that is the concept
10:33 am
that it was cut and the reality is there is much more to come. i think there is cautious optimism. we look at investments and think of where we allocate capital and the greatest challenges even with some of the recent news possibility of lower regulation and taxes, how do you generate returns needed overtime in a low return world, bonds and stocks? julie: what do you advise because that is a challenge for you? it is. we work with high net worth clients and institutions and foundations with pension plans, and across the board, continuum is, how much risk you want to take and what you need to do to achieve the goals? we think we are more optimistic on stocks earlier in the year based on recent news in the elections, but on bonds, we continue to feel there are challenges. with a 10 year bond at 240 and a jump from 183 to 240 in the last month since the election, we think there is more to come and
10:34 am
given what the ecb said today and what the fed will likely say next week, we think you really have to temper your optimism as it relates to total returns available in the portfolio. mark: how much more upside and stocks will we see? all three indices in the u.s. hitting records today. we have seen the rally in stocks, particularly among these reflationary sectors. how much upside considering its bills on hope, how much higher can we go? alan: we think it is limited in the short run trade with think there'll be more volatility in the market and greater challenge to push to new highs because the real work will be done in january in the united states. really understanding where we go, how much policy can be implemented -- i think the concept that all regulation will go away and all the change the look or day one is impractical and illogical. from our perspective, as the market senses that, you get this
10:35 am
discounting mechanism and it will be harder to push to new highs. mark: what will go away when it comes to financial regulation? give us your take on what a trump residency means for the financial industry. net: we see it as a positive, but regulation is not going away in her mind. re-think it could be tempered, but the hard work with congress and the president in terms of changes and modifications, but net we see is a general positive . financial services should benefit from that. when you look at the yield curve as we see spreads widened, rates going up, that is also a net benefit to financial services sector. been a netas argued benefit, many stocks have id been rising. you say you look to high net individuals and institutions of clients. what is your next phase of growth? what kind of clients are you targeting and what is your sales
10:36 am
pitch to those? alan: two year point to outset, our focus is on our key markets. when you look at our regional and state focus, we look at charlotte, miami, houston, dallas, and we work with his clients when you see economic growth generated in those areas, and to continue to serve this client and deepen the relationship. it is around shared value and the focus toward together with our clients to build a business. what we have seen thus far is as long as we continue to do that, asset levels continue to grow. as long as a focus on a goal focused environment -- which, to the question of what do we need to do? -- it cannot be about benchmarks . in has to be on your specific benchmark as an individual or institution somewhat returns you need and what is required versus what is possible and how to bridge the gap? mark: it all sounds of straightforward, but what
10:37 am
differentiates you? you are doing well. a lot of competitors are moving into the wealth management space, trying to generate fees. how do you actually differentiate yourselves from them? lan: i focus beyond the growth markets, as well as our core markets rehab, are really around a team-based approach to asset management businesses, which is andsor, portfolio manager, customizing our portfolios, rather than saying it is a one-size-fits-all. that is the differentiated model and our ability to deliver that across the market, rather than saying there was only one marketplace we deliver from, we will talk to and we feel it is important rather than when you feel it is important as a client, from what we have seen from the regards of down the polls, commentary from bankers associations, we continue to deliver on the model and stay focused more than anything else. julie: thank you for coming in.
10:38 am
alan mcknight is regions bank chief investment officer for the wealth management business. mark: coming up, the head of europe's biggest group, the chief executive talks to us on how everything from trump to brace it --brexit affects the line. this is bloomberg. ♪
10:39 am
10:40 am
julie: you are watching bloomberg. i am julie hyman. artan. am mark this is your global business report. foreign investors returning to crisis,ince the ukraine a look at who is investing in what they're buying. julie: the ecb expands their bond buying program and says the central bank can do more to reach inflation targets.
10:41 am
mark: a closer look at the congressional review act, what it is and why republicans are eager to use it for trump takes office and why republicans are getting ready to use it. julie: russia has sold in $11 billion taken their largest oil producer. buyers, glencore ann kuster's sovereign wealth fund, the biggest foreign investment in russia since the crisis in ukraine began, and a return to dealmaking for glencore a little more than one year after they were forced to raise cash and shareholders. bloomberg caught up with the u.s. state department of energy resource special envoy and got his thoughts. >> we just learned of the deal in the last 24 hours or so, and we are reviewing the deal and looking at what or how it actually works and what implications are. we are speaking with our friends and muscles to see how we all see the details of this. i think we will need a few days to look at this and figure out
10:42 am
what it is and what it is not. mark: european central bank extending their bond buying program to the end of next year, but it is reducing the monthly pace of the purchases. president mario draghi warned the latest stimulus push may not be the last of the cannot reach its inflation goal. swedish net worth equipment maker ericsson says recession will cost more than expected this year. the company is speeding on job cuts to make up for falling demands. they expect mobile infrastructure markets to fall to 6% next year. spacex lost the chance to launch a satellite for the british company. their partnern but still recovering from an explosion in september that destroyed one of its rockets on a launch pad in florida. the french airspace company will launch the satellite instead. julie: time for our bloomberg >>
10:43 am
take, where we provide background on issues of interest. president barack obama has fought with congress almost every step since taking office. he acted largely through executive orders and agency regulations. to finalizeacing new rules before leaving in january. in response, republicans are a littleng to wield use power for the congressional review act. president-elect has promised overhaul on government regulation before taking office and federal agencies are scurrying to issue new rules pollution to workplace safety. republican to hold both majorities in house and senate are warning they will use the congressional be racked, given congress 60 legislative working days after a regulation is finalized to call in about to invalidate it. it applies only to regulations expected to have an annual affect on the economy of $100 million or more. during president obama's term, they used to measure to
10:44 am
challenge rules like birth control, carbon emissions and obamacare, but lost the vote or obama vetoed the resolutions. backgrounds, the congressional review act was created in the 1990's as president bill clinton used executive actions to overstep congress. since then, it has been invoked dozens of times but only worked once in 2001 with ergonomic regulations. document is it is not just last-minute loss on congress' chopping block, any finalized risk since may risks being negated. regulations have to be rejected in the entirety. congress cannot keep parts it may like. if it does not pass, regulation goes into effect immediately, putting it before sooner than otherwise would be the case. you can read our quick takes that ni >> on the bloomberg. head to bloomberg.com for more stories. trouble demands in the you
10:45 am
can't really strong server -- despite the problems surrounding brexit. up after the company announced profit will continue to rise by at least 10% in the next three years. chief executive spoke further about the results of earlier with up after the company bloomberg's narrow change -- nejra. >> before the referendum, the powerfulange led to a .75, and now it is up 0.86, subhead the movement. the price increase has the potential with less purchase of the pound and you have on your revenues and the pound in the determined country. you have the fx, anyway, the interesting is that it is
10:46 am
obvious, at least on the consumer friends, it doesn't have an effect because of you look at the summer holidays and uncertainty, in which we had before and after the referendum, it looked like the year before, so you would not be able to's for the referendum when it took place and you don't see the movement and currency. of course, so far, the first seasons are below are cost would be good, and then of course, it is difficult to say, but [indiscernible] i would think it would not realize a little bit, so i think even the brexit did not influence the last summits. nejra: you say it is difficult to say what will happen in 2018. has say, the brexit process not really begun yet, article 50
10:47 am
has not been triggered. is there any other way you are positioning yourselves for any negative impact that might occur, whether from weaker sterling or drop in consumer demand? idrich: i would not expect we think the pulling of article 50 will change it again. there was a strong movement in short period, and quite on the contrary, over the last month or so, it has moved from 0.9 to 0.86, so i would assume that the currency think is gone. as the impact, i don't say. potentially you will see a lot of state introduced growth programs and programs that try to make the u.k. interesting for companies. maybe it is even a program, which they introduce more growth
10:48 am
in gdp, and maybe it is even something good in terms of customer incentive. nejra: of course, the other events that has upended markets, the u.s. election. -- i wonder ifn you have seen impact or expect impact from a donald trump ever that and what means, whether a stronger dollar or anything else. friedrich: less impacted than brexit because you don't have a --lly strong u.s. market because we do not have a really strong u.s. market. we are little bit impacted by the are very strong presence in the caribbean, but do i expect that the u.s. americans have less? i would not say so. and the stronger dollar might be even for mexico, for example,
10:49 am
something that would be faster for tourism. i think it is difficult to predict but we don't have too fx in an our -- plans. nejra: you said today that deal will bee tui finalized in the next few weeks. i wonder, or you be considering selling of the airlines looking at other acquisitions, any other form of m&a? friedrich: for the time being, i don't want to talk too much about the new activity of the airline with their partner e tihad. it is early days, an early term sheet, and it is affecting the part of our german allies that actually has an interest, and we had had an interest, so my view
10:50 am
would be, let's give it another two months or so and then if we want to do something together or apart, we will see. friedrich joussen there. julie: records just released showed that other banks may have been involved in the state. we have more ahead. this is bloomberg ♪ -- this is bloomberg. ♪
10:51 am
10:52 am
i am julie hyman. this is "bloomberg markets." mark: live from london, i am mark barton. we will be swift, usb, berkeley, bank of america along the banks allegedly involved in making the silver market, according to a new document that deutsche bank surrendered when it settled a
10:53 am
lawsuit that the minute related the markets it months ago. joining us, michael moore. what is deutsche bank alleged to have done here? michael: according to the documents, the plaintiffs say in their filings there were some competitive behaviors colluding with each other, so what the --intiffs one is to be able one is to be able to refile the case against the broader group of banks, not just the four they originally sued but the broader group based on the document. mark: there is a lot of news on deutsche bank today. and the passkey deal, in other news. what are these indices? these private indices that are being mentioned in this? banks use whatof they call proprietary indices,
10:54 am
, tracking a created specific thing, and some of them are used in structured products or in specific arrangements. they were used in this deal with monte dei paschi, and according to deutsche bank's bone internal review -- own internal review, which came out in the audit, there were irregularities in how those indices traded and deutsche bank, according to their own internal review, did not have the guidance or the guidelines around these indices that they should have. this is a few years ago. they had taken steps in the meantime, but it does raise questions of how this deal was structured. there is an upcoming trial regarding this monte dei paschi trade. how does this play into that? trial isright, so the starting later this month, and this audit is mentioned in the
10:55 am
court documents and this is likely something that will come up in this trial. deutsche bank and some of its former executives have been whether on the case of deutsche bank helped monte dei paschi this guys some of its losses during the crisis. julie: this is the second straight day we are talking about rigging. yesterday, it was [indiscernible] , today, gold and market rigging. , evenere been an uptick it is couple years old, is it an uptick or that it is newly discovered? it seems there is a lot of pregame in different markets. michael: -- it seems there is a lot of reading in different -- rigging in different markets. michael: it raises the question if whether it was not just
10:56 am
libor. you had currency markets and i you have allegations in the solar market, proprietary indices -- silver market, proprietary indices, and a lot of them mirror each other in terms of the headgear, thanks -- r.anks talking to eachothe it doesn't look great for the industry. mark: michael moore, thanks for joining us. coming up, the european close. investors take on mario draghi's stimulus plan. a look at stocks 30 minutes away from the first a close. stocks rising for the fourth consecutive day, highest level since january 6. it closes,. ♪ -- it closes, next. ♪
10:57 am
10:58 am
10:59 am
mark: 11:00 a.m. in new york and midnight in hong kong. i am mark barton. am julie new york, i
11:00 am
hyman and this is the european close on "bloomberg markets." ♪ mark: we will take you from washington to moscow and cover stories out of frankfurt, new york, and hong kong. here is what we are watching today. fresh action from the ecb. president mario draghi warning the newest stimulus might not be the last as it strives to reach the inflation goal. cutting deals to shake up economy markets. they join forces to buy a stake. we are awaiting a statement from the u.k.'s attorney general. mark: have a look at what

24 Views

info Stream Only

Uploaded by TV Archive on