tv Bloomberg Markets European Close Bloomberg December 9, 2016 11:00am-12:01pm EST
mark: we are going to take you from washington to vienna. we are going to cover stories out of italy, out of the u.k.. european central bank said to onect monte dei paschi's bid a capital plan, increasing the chances of a state bailout print this as the italian treasury is set to happen this hour. julie: bank of america and ceo brian moynahan says there is a glass half-full mentality in the wake of the trump election. mentality around business confidence in the wake of the trump election. saudi arabia is starting to temper production. we will head to vienna as non-opec members will attend the meeting saturday on more reduction. news, 21staking
century fox is said to be interested in buying -- just looking into the terminal. just a look at what is happening. we will have a look at sky shares. this gives you a real flavor of what is happening in the market. all those currencies in the second column. we are seeing the bond selloff continuing today. we are seeing curves steepen and commodities rising and futures gaining as well. i want to bring up sky shares. on thegoing to do this hoop. let's get to those breaking
news. 21st century fox, agreeing to buy sky. big breaking news. a possible offer for 21st century fox, they have reached a packed. sky has formed an independent committee to review the term and the independent directors are willing to recommend the proposal. has halted volatility after rising 12% in london. i'm going to do some gip to show you how the shares or holds it -- shares are holding. rupert murdoch has held a stake in sky. he showed an interest in boosting that stake. it seems the 21st century fox.
how exciting. theloping news on bloomberg. shares start trading again, we will continue to tell you about that 39% stake. breaking news there. this is the biggest gainer. most since 2008. agreeing to sell its identity management business. the unit provided biometric hardware and software. shares up by 6.8% today. looking at the euro. the euro win down 105. ecb meeting,er the initially we saw the euro shoot up.
what is interesting is the euro is weakening to parity in the 24% six months and risen to . that is before the ecb meeting. this is a wonderful story, stay with me. news is 20th century fox has agreed to buy sky and the price is 10 pounds 75. look at that. 30%. that is the sort of chart you want to see on bloomberg. what is happening over there? what stands out are the weekly gains. we have the dow, s&p 500 and the nasdaq. 6% on the week.
the dow is up five weeks on a row. -- five weeks in a row. as for the big gainers for the higher onhares are what morgan stanley is calling a sector rotation. up 15% on the week after a bullish investor day. upgrade out there as well. under armour shares are higher -- he news that investors clearly like in that. all the stocks up more than 15% pay it after what -- as for what is boosting stocks, a big boost for all three averages. for theve some sympathy apple supplier broadcom. fourth --raised the
raised the first quarter and it seems investors like those results. apple is now reverse the decline it had during the election. julie: thank you so much, we appreciate it. let's take a look at the bloomberg first word news. >> the president of south korea has been him p. -- akers voted to remove the prime minister steps in his acting president. the court has up to 180 days. on capitol hill senate democrats are threatening a government shutdown over benefits from retired miners. congress needs to pass a stopgap spending, or else some government operations will have
to cease. extension --ar instead of the four-month fix in the bill right now. goldman a report that sachs chief operating officer is foring -- is going to work the trump administration. mbc news reports that president-elect donald trump has offered him the post of national economic council director. he would also be assistant to the president for economic policy. italy's prime minister is keeping the country waiting. hasn't told italy's presidents whether he will stay on despite his defeat in the constitutional referendum. his struggle to find a new prime minister -- he wants to know if frenzy would agree to be reappointed. global news 24 hours per day. this is bloomberg.
>> the ecb is rejecting monte paschi'si -- monte dei request -- bondholders will be affected under the shareholders. are joined by malan bureau chief. the italian officials finalizing this decree law. >> the italian government, this caretaker government is moving quite rapidly after the decision not to grant the bank additional time to put together this capital increase. a decreed put together that would be approved by the government.
bondholders are going to be affected. it will soften the blow for claim investors, some who they were not provided sufficient information to make their investment choices in the past in buying security. don't know the mechanism that italy is going to use to try engineering this rescue. the italian constitutional referendum clearly making it more difficult to achieve this , especiallying plan in lieu of finding an investor, that by going ahead with the why theles, do we know ecb you refused to extend or not to? >> there has been no official communication from the ecb setting out this.
presumably we have to remember that the bank has been under a very tight timeline since july. they fail the european stress test and at the same time the ecb said you have to come up with a capitalization plan that is going to be carried out by the end of the year. additional three weeks roughly change the picture? thinkinggine ecb markets are already volatile. what are the chances of that stabilizing in two weeks, in 20 days? there is a run on the banks deposits over the next three weeks. presumably that is our thinking. they have notsed provided any additional communication. >> if indeed some rescue was
hammered out, what does that say about the current political situation in italy? considering there is no prime minister at the moment. some confidence that the trains can keep running, so to speak, in that kind of absence of power at the top? guest: not really. he turned in his resignation. the italian president asked this cabinet to remain in power to carry forward with business. in no way you could say it is promoting this private solution to a bank is now -- has it back on his lap. meeting with bank executives all day down in rome. and he is the one who is going
,o be dealing with this decree presumably. mark: thank you for bringing us this developing story. we will continue to monitor it and give our viewers and listeners all the details on paschi.nte de will havell ahead we more on the breaking news that 20th century fox has a preliminary agreement to buy sky. both stocks higher on that news. stocks were halted initially. now up 31%. take a look at president-elect donald trump's plane at laguardia airport. he is about to take off for louisiana to rally at john kennedy. a lot of trouble for the president elect in the coming days. this is bloomberg.
mark: they commend a story developing here in london. 21st century fox, controlled by reached adoch, pulmonary deal to buy sky. it has been something murdoch has wanted to do for many years. for reasons i won't go into now, 10 pounds 75 is the price. there is no certainty an official offer will be made by fox. chart, a massive leap in shares. big move.
the ecb this week, saying x and a bond buying program -- does the bond market believe what mario draghi is telling them? viewng us now is bloomberg columnist, who wrote a story on the topic. a bit of a mixed message. guest: he is treading a fine line. to take the patient's off the medicine come and those that think the patient's isn't well enough and close enough to recovery. this is almost the worst of the worlds. as you look at the reaction in the bond market. votes every six weeks. outlookou look at the
for inflation, for growth in the ozone, it is not perfect. they are still going to be behind. with improving inflation 1.7, it is not near. guest: it is really quite close. forecasting two years outcome a would you bet me that forecast is going to be -- mark: one month out. guest: he has to manage expectations paid he is saying we are not at 2% yet because the market doesn't want to get to ahead of itself. this is tapering come appearance simple. julie: when you look at the feedback loop of what the ecb has to do. market reacting
like that, does that force their >> there is extent? .n interesting chart the five-year forward inflation swap was about three quarters of a percentage point higher than the ecb is at the moment. the ecb is going a bit earlier in terms of economic conditions. and a rise in bond deals, particularly in a country like italy, you are seeing those tightening conditions at a time when maybe the ecb doesn't want to go that fast. think it does reflect a better outlook for inflation. is going to struggle to convince investors that you won't see further tapering. sounds like he's going to have a credibility problem.
seeing this reaction now in the bond market and as you say he's going to struggle to communicate, what effect is that going to have? guest: don't forget the fed -- forget when the fed started seeing tapering -- drug is trying to hint ever so gently we are not finished yet, but on the glide path of finishing quantitative easing. at the same time not just wanting to rip the iv trip out of the patient. i have some confidence it will be all right. mark: thanks a lot. average yield on the 10 year in germany is 3.4%. i never knew that. that breaking news that 21st century fox's in
mark: 21st century fox agreeing to buy sky. share print cash. rupert murdoch already at 79%. joining us from princeton new jersey, paul sweeney, of bloomberg intelligence. murdoch has long wanted to consolidate his media empire. in 2010.arded will he be successful this time? guest: this is a transaction the marketplace has been calling for
for a long time. rupert murdoch and 21st century -- has said they have all have always stated their interest in sky was not a natural state. the political winds were not right during the hacking scandal. this gives him a much broader exposure to european media. the paid henk about business globally, the european market has some better growth prospects. this is a transaction that makes a lot of sense. mark: both transactions likely to face heavy scrutiny from regulators. i'm sure they will be worried the companies could prioritize their own network content over competitors. right.xactly
the expectation is the transaction is likely to get a trump in administration, which presumably would be more deregulatory. i think the fox transaction has some regulatory hurdles to go through. they are already a 9% owner in the company. the expectation is that transaction would be approved as well. it really goes to the issue we have seen over the last four or five years, which is a global consolidation of the media and telecommunications businesses. certainly in the u.s. and we are starting to see a a lot of it happening in europe. biganies have been a acquirer of assets over the last seven years paid it seems to be the media and telecommunication businesses, bigger seems to be better for a lot of these places. julie: i'm curious about the valuation, the price being paid. mark puty as marc and it earlier, it is murdoch buying
murdoch. paul then we think this works out to over 10 times, which is a pretty reasonable -- there will be independent boards to take a look at these transactions and these committees. to make sure the valuation looks reasonable. this is a number we penciled out several months ago. i think the marketplaces seeing this valuation. sure we will be talking about this deal next week in london. what a week it has been. moment int dole
bloomberg television. stocks are rising for the fifth consecutive day. at the highest levels since january. we are rising for the fourth week in five. of sky up 26%. april luminary deal to acquire full control. there is no certainty. fox already holds a 39% stake in sky. what a story. we will continue to monitor it. the close is four minutes away. this is bloomberg.
every single gain this week has day hasevery single seen again. we are at the highest level since the early part of 2016. weekly gains since february as well. it started with a no vote in the italian referendum. it ended with a whole host of measures by thursday. this is the big developing story here on bloomberg television in the last 30 minutes. 21st century fox reaching a preliminary deal to require the full control of sky. it roughly equates to about 10 pounds per share. rupert murdoch trying to consolidate his television empire. other elements remain under discussion. don't forget fox already owns 39%.
murdoch tried to buy murdoch in 2010. of two ofrevelations his newspapers hacking into mobile phones and celebrities, that deal did fall by the webs -- fall by the wayside. i remember many said it would only be a matter of time before murdoch got his whole hands. toks like they are going finish the day 27% higher. the big $85.4 billion takeover of time warner. big -- goingg to to be big regular tory scrutiny over both deals. that is the big breaking m&a story. we can't shy away from this news today. all sorts of developments.
look how many times these shares have been halted. rejecting monte dei monte deirejecting paschi's request. italy is close to monte paschi rescue. italy on track for its best weekly gain. despite the decline in monte paschi's snare shares. this is a spread between the two year and 30 year. since novembert 2015. using the potential for further
accommodation. taking less duration. the ecb saying it can thought ecb saying it-- can buy below the positive rates. course that has steep and the bond curve across europe because the ecb will also reduce or .aper its bond buying program hence the steepening of the yield curve. morgan stanley will continue. >> i sound like a broken record. we are talking about records. they are not up by that much. them onough to bring the record. the s&p has the distinction of rising for six straight sections -- six straight sessions.
continuing be this positive sentiment surrounding growth. reading.hat confidence it is not just records for these guys. there are sub indices. it is amazing. the dow jones transportation average also touched a high before pulling back to some extent. we are watching the dollar-yen. of course it is lower on the year. month high as 10 the dollar continues its tear higher. this is one to watch as well.
for now, they are rising together. bloombergk in on the first word news. courtney has more from the newsroom. courtney: president obama has told intelligence agencies -- the report will examine what they may have had. senate republicans will conduct a similar probe. there is very little doubt russian interfered with the election. president-elect on trump has downplay talks of trump -- downplay talks of involvement. it was a wide range of institutional conspiracy, involving 1000 athletes across 130 sports. of a large evidence scale sample swapping at the winter olympics. court hasherlands the
convicted an anti-islamic lawmaker for comments he made about moroccan immigrants. a conviction was punishment enough for an elected official. builders call the trial politically motivated. his party for freedom has been rising in popularity. capsule has been launched with much-needed supplies for the international's -- international space station. nasa'sunding of one of commercial suppliers make this delivery more urgent. global news 24 hours per day power by 26 hundred journalists and analysts and more than 120 countries. this is bloomberg. >> donald trump is doing -- two years of paralysis has now ended in stocks with more than $1 trillion added to shares
election day. not since we have been chatting, he has been bullish. his forecasts have been proven true for whatever reason. how long can it continue? this rally we have seen on the ,ack of this reflation hope trade, thinking, which ever way you want to put it. >> from a personal observation it has been a hated bull market. development with trump is very significant. all year we talked about how equity yielded more than bonds. we saw the most powerful vicious bonds. .quities have now flipped more that timmy is very significant.
i think trump economics are a very powerful one. you are moving from monetary to fiscal policy, which will release the inflation genie a little. certainly the implication will be for much better growth. that favors the cyclical companies. >> which bring's us to your favorite chart. it goes back to 2004. this is value versus growth. white line and the blue line is the 10 year yield. >> it is significant, so much in the deflationary environment. growth has been outperforming value since 2006. good quality growth, a lot of people have been buying quality growth. they are being crushed by the value trade. bank stocks, the oil stocks.
in an economy that is slightly more inflationary. the pain trade, everybody is looking about the rsi. values are overvalued. the materials are overvalued. i think you are going to continue to see small selloffs to be met with large buying pressure. where this trade will continue in my opinion. is one cyclical group that falls into the growth category, and that is technology. that is also a group hasn't done as well as the others since the election. what do you make about the growth prospects for the , howtry and the stocks they were perform under a trump presidency?
the big reason they have been under pressure is because of higher interest rates. obviously bringing down the ultimate values of those stocks. they have been under pressure. i think valuations will obviously have to cycle through. i think those stocks will continue to do well. on a relative basis you see big moves in these technology stocks. willnk the performance remain with the value stocks. i think tack is a good place to be. and you can still get value tech overgrowth. i think you have to pick your spots, but value is going to outperform. >> as we get into next year and to these policies being produced, if we continue to see
bond yields going higher, is there going to be a bit of a cap on growth in the united states in terms of economic growth? and what kind of trickle effect will that have to some of these value industries that you are talking about? i think trump is the dealmaker. a put around some of the brightest brains in the country. a report that said maybe credit quality, which has been extremely tight, despite what happened to mortgage rates, basically the availability of credit. think they will continue to actually lower credit standards. a new wavell release of consumer spending. i think that will benefit all these value sectors. i do expect growth to come next
year, which will be beneficial for those areas. people are under trade. >> this is the s&p 500 financials index. love these charts. the white line is this huge leap since trump to -- trump double digits. the blue line is the s&p 500. they have been hugging each other. >> that is fascinating because i think banks are consumers stocks. a lot of people have been hiding in these quality staples. standards begin to fall, then you could see a new environment. you are seeing animal spirits
coming back, where people are starting to borrow more. the valuation of these banks, even though you see that move, they are trading a tangible book. despite that move on a historic basis, banks are still very cheap. feel that despite that move. you may get some pull back when back on thehes financing details. i have heard things like trump is prepared to let the chinese come in and build bridges. spencer the patrick bully scale, where are you? patrick: in my last interview we would have been about seven. >> patrick spencer, vice-chairman of equities. does the opec deal fall
descending on fianna. different from last week. it will be a much larger group. only 11 will be attending. the one to really look out for is russia. they said they are willing to cut this 300,000 barrels per day and able to get the opec deal done last week. russia, only oman has said they would be willing to cut as well. it will be interesting to see who picks up the remainder of the target in order for this deal to really reach some of the most optimistic endgame for opec. have a lovely chart here called the trust deficit. at the last time we had a pact between opec and non-opec in 2002.
should we feel trusting of opec? >> that charge was a mixed bag of who was willing to keep up with the deal and who was not. in 2001. was done middle of the the following year, you only see norway and mexico. history, analysts in the market are trying to say what these people say and do can be different. that is why tomorrow's meeting is so important. that is why what they do next year will be carefully watched. >> good luck for the weekend. we will see you nice and early for the weekend. >> nbc is reporting president-elect trump is offering gary cohen to post a national economic -- the post of
mark: live from london i am mark barton. this is the european close on bloomberg markets. julie: and from new york i am julie hyman. mark: breaking news from the trump personnel choices. cohenn sachs ceo gary said to be the president-elect's choice to head the national council. how is this going to impact goldman? joining us is the u.k. financial team leader. start with michael. talk about draining the swamp. is gary cohen, top of the nec, draining the swamp? trump likes to
pick people with goldman ties. he had a long career originally from ohio. he has never been afraid to say what he thinks about the economy. i think it does have some strong opinions. >> what sort of hold does that leave? michael: there has been a list of potential successors. the fear was because lloyd blankfein has left as ceo, no one could move up. you had the three vice-chairman -- chairmanr retire. there are a number of positions people can move up to.
julie: who is the next generation? potentialbe the contenders for his position? erik: lloyd doesn't seem to be going anywhere, but this could precipitate a bigger shakeup of the gold that shakeup of goldman sachs paid it could give the board recent to consider who will be the next ceo. it's going to precipitate those kinds of conversations in the boardroom. to answer your question about who might move into the there is a long list of potential names. 35 on the management committee. let's say only four are probably real contenders because of their age, their rage -- their range of experience, the amount of respect they command. and david solomon is the cohead of investment banking.
david solomon is not a gold man lifer. david solomon's younger, he came and his dna is actually drexel. if he came to goleman sacks as a partner in 1999, there is a current cfo, who has been termed as gary junior. hasooks like gary cohen and some of the same personality traits. there is the firm's chief strategy officer. mentioning, he has the deepest or the broadest background at the firm. finally an outside shot as martin shaw this, who has been the chief information officer, effectively the technologist at goleman sacks. and some people can be talked about is the next potential ceo because of this idea that komen saxes turning into a technology firm.
cohen,to go back to gary obviously goldman sachs is in the banking industry. what about the economics background? erik: i would point out must of the people who end up occupying the director position does not have deep experience. the current nec director doesn't end a private sector background. unusual to have some a common supposition that doesn't have a deep economic background. : they suddenly have a strong history of having a d.c. presence.
mark: thanks for bringing this up today breaking news story. let's take a look at the way european markets ended on the session. since october, highest level since january. we had our best weekly gain since february. we want to look beyond equities. we are seeing pound down against the dollar. the dollar rallying. a week of mario draghi and ecb yields. bloomberg markets continue after this.
david: we watching stories today out of frankfurt and johannesburg. they will economist meet next week in the markets is a 100% chance of a rate hike. executive steps down. we look at who will succeed him. and i visited the new u.s. flagship store for diamond jewelers in new york city. my interview with the ceo of that company on how uncertainty in the markets has actually been a good thing. we are halfway into the trading day. thatil: we have the news fox is in a preliminary deal to billion.or $22.2 to get