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tv   Bloomberg Markets Americas  Bloomberg  January 6, 2017 10:00am-11:01am EST

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vonnie: lots to get to from digesting the jobs data to president elect trump and moves in the yuan. more eco-data to break. upable goods, transportation .6%. factory orders were down, down a little bit more than estimated. good,ent data has been but the actual hard data has been very weak in the last number of months. on.her when we concentrate a little bit of a mixed data there. and capitalrs goods, nondefense. reaction some market
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from abigail doolittle. >> basically in-line jobs report. we are looking at unchanged markets for the major averages. and the nasdaq up 3/10 of 1%. the nasdaq is on pace for another record close. in fact all three major averages are on pace for a weekly gain. turning to a market where there is a little more volatility on the day. that oil had been higher and starting to treat lower. iran sold maybe 13 million ahead off offshore oil the supply cut deal. basically taking advantage of those higher prices ahead of the deal. great -- the hear
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two year rate trading higher. this tells us bonds are selling off area the two year yield is actually up on the week. these rising yields are helping the bloomberg dollar index. rising rates in the bloomberg dollar index. think the rates will rise more, in light we have the bloomberg dollar index. in blue we have dollar positioning. there has been a nice uptrend since june. this may suggest there are lots of longs out there. would certainly support more strength in the dollar index. warner, at&t and time bit of mixed action.
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at&t trading down sharply. all this after at&t said it received from the u.s. a request for an extended time warner antitrust review. >> what a week it has been. we took the day getting the week off. it by 10th of 1%. falling afterfter the first week of last year. hilary clark, queen of charts. it shows how global stocks -- the fall line is the country world index. the s&p 500, the blue line. the top half. rising 1%.
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with concerns about china rippling through the market. some sizable declines. stoxx 600, down six points. msci emerging markets down by 6.8%. still focused on china. what a difference a year makes, which is absolutely wonderful. this is sterling dollar, which is the blue line. the white line is? surprise index. weather data is beating or missing estimates. it started to do since braggs it.
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strong pmi data on construction manufacturing. after brexit he saw economics apprise rising. us that politics is trumping economics, which leads me to a quota of the portfolio manager. from positiveturn economic surprises will continue to be a factor. possibly by the end of march. let's talk about the wild weekly we have seen. some analysts also reiterating the bearish currency. the most since last year, a 2.5%
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surge. the yuan giving back some of these gains. that short squeeze we saw in the beginning of 2016. echoes of 2016 at the beginning of 2017. stock markets have completely diverged over the two years in the first week. let our viewers know that s&p shooters are climbing on back of that data. treasuries are selling off the 10 year yield, it had been down as far as 2:34. officialslligence reef president elect donald trump on what they say are to influencepts the election. a trump is skeptical, he has publicly challenged their findings. he will be briefed by the heads of the cia, fbi, and director of national intelligence.
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a joint session of congress is set to count the electoral votes in a traditional ending to a very unconventional election. at donald trump will be declared the winner at today session. he will be sworn in on january 20. trump won even though keller clinton receives 2.9 million more votes. hasinued unrest in mexico led to four deaths paid officials say 300 stores have been ransacked and more them 700 people have been arrested. a police officer was killed trying to stop robberies at a gas station in mexico city. russia is taking a first step at a reducing its military forces in syria. withdrawn from waters off syria. so are several other warships. rush has been supporting syrian troops which had recaptured the syrian city of aleppo. global news 24 hours per day
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powered by 2600 journalists analysts and over 120 countries. this is bloomberg. the last payroll report says the u.s. economy added 160,000 jobs in december, providing an upward increase in november. the media forecast calls for 175,000 advanced jobs. ..9%, that is the main metric wage growth aside, brace for a recession in 2018. he is cohead of multi-asset solutions and chief investment officer is. you say to look for stronger ands and a stronger dollar the idea of tighter financial can issues -- financial
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conditions. >> i think if the economy plays out as we expect, continuing recover and stronger capital , the fed is going to be falling behind the curve. at the same time corporate margins are quite high. probablylt you will see earnings start to decelerate or decline into 2018. will it be a strong or a deep recession? be a deepxpected to recession because we haven't built up the type of axis is that need to be worked out. consumer is taking on lesson that than 2007. i don't expect that to be a deep recession but i do accept it to
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be a decline in growth. at the end of 2017, what is the trigger point and by how much do u.s. stocks fall? how much are is they going to go up in front of it. the key issue is will it start to look as if the fed is falling behind the curve. you really are in a very challenging situation. the market has run up in anticipation of everything that is going to be good. favorable tax, everything is favorable. deliver you will see we -- will see inflation. >> how are you positioning your selves? are you continuing that?
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>> as a result of what i just mentioned, what we have done is shifting the equity exposure. which are further behind the business cycle. we shifted away from very deep valued type of exposures. becoming increasingly critical. bloombergterview with last month, you talked about european banks. you said you had a meaningful exposure to spanish banks, fresh banks -- french banks. no italian. i'me is a limit to how far going for value. you start to dip your
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toe into the italian banking sector. european banks have rallied 50% since their lows. >> we have had much of that exposure. progresses, cycle the laggards are laggards for a reason. is seens me comfortable the mechanism or framework to see capital recovery or capital buildup. and there is some conviction for the capital rebuild. it is very difficult to be optimistic. >> where else do you see value? >> euro is one of the regions we see a wide evaluation spread. the hope has been priced in. in europe it is still a little bit of uncertainty. stocksf the cyclical actually benefit from the weekly euro. an economy to
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strengthen are still quite attractive from the valuation. >> you mentioned emerging market currency. it sounds dangerous to me. >> it is still a risky exposure but there is not a lot of value opportunity. it is the currencies we are seeing some opportunities. part of it because of the decline associated with their own internal government struggles. part of it is tied to the u.s. election. we do think they are bottoming out at this point. we actually have a basket that consists of everything. >> in the biggest central-bank risks. aboutwe are wrong inflation decelerating we will be wrong about the trade. >> we will put your feet to the fire on that just yet. thank you for joining us. later today and exclusive
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interview with robert caps on. more on bloomberg markets ahead. this is bloomberg.
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mark: live from london and new york. vonnie: this is bloomberg markets. for aeceived a request review of its deal with time warner. down 2%.e joining us is bloomberg regulatory reporter. what is unusual about this if anything?
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>> the justice department will take a close look at the deal on antitrust grounds. the company says it may be able to avoid scrutiny by the federal communications commission. >> with a new commissioner in the incoming administration, what do we know since yesterday that donald trump is still against this deal? said tod trump is still be opposing or critical of the deal in private conversation. that is very much of interest. didn't shed any light here in washington as to who he will choose. waiting closer scrutiny by the regulatory authorities.
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in the dark on how washington will treat it. scrutiny, isoid that a massive hurdle they have overcome? a standard.udges the majority of commissioners will decide at any given time. they can send deals to a lengthy extend and that can further than the companies will like to go with their financing. do we have any idea whether trump will try to influence the merger? what are analysts saying whether this deal is actually going to happen? >> like so many things, we are not sure how he is going to treat it. and to what extent will a trump
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white house be in communication or let his preferences be known to the trump antitrust department? we are not sure right now. we will have to see. down 2% ont is today's trading. regulatory reporter for bloomberg in washington, thank you. the yuan repairing its weekly rally. china raising its rate to less than projected today. this is bloomberg.
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vonnie: i'm vonnie quinn in new york at mark: 3:21 in london. interbank borrowing rates soared. -- analyst stephen
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has the latest from hong kong. >> the pbo see in beijing raised its daily fixing rate less than projected. of banks reiterated their bearish views on the yuan. the interventions fleshed out short positions to suck what happened this week. the yuan bears got squeezed. curve a defending it to record outflow of the currency ahead of the december foreign-exchange figures. likely felt by another $30 billion last month. of soon dropping below the psychologically key level of $3 trillion. bloomberg news.
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a weekly look at etf's. abigail doolittle has more. revenue growth has lagged by a lot, which has many asset manager struggling to survive. senior etf analyst at bloomberg intelligence. >> the big story has been assets and flows are going into etf's. is true. the etf is going from one trillion to 2.5 trillion. from 3.5as only gone trillion to 6 trillion. you would think revenue would be more like 9 billion, not six. the two reasons revenue growth has an cap depp, there is a fee
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war. cutting fees on existing asset basis. investors are sniffing out cheaper products. etf took into $236 billion this year. there is a real drive to get the cheapest product on the market. revenue growth will leg asset growth. >> are there any issuers benefiting from this dynamic? >> we are talking about issuers. of the 6 billion blackrock takes in 2.5 billion of that. funds.mpares to mutual blackrock 2.5 billion. vanguard is the second biggest issue.
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12 in revenue because they are so cheap. the reason for this is if you have a liquid product that trades a lot, you have pricing power. firms have older products that don't trade a lot. -- you havehave blackrock really savvy when it comes to that. outcome for this situation in etf? a good sign for the financial industry at large. if you have money moving from hedge funds and mutual funds, and moved60 billion to etf on index funds, they are moving 80 basis points to about 12 basis points. right now the market returns come out. when that stops you are going to
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see an industry hollow out. thank you for that. still ahead, we are going to hear from the 2015 nobel prize winner in economics. presidency was not a great deal, so what does he think now? take after ais jobs report shows the economy added 156,000 jobs in december, 20,000 fewer than forecast. the dow and the s&p changed. this is bloomberg.
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vonnie: live from bloomberg world headquarters, i'm vonnie quinn. mark: i'm mark barton. let's check in on the news.
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more from our newsroom in new york. >> president-elect donald trump says he will demand mexico demand building -- reimbursement -- reimburse the united states for a wall at the border. prime minister theresa on aenter top two aides secret missing to the -- mission to the united states to develop a relationship with president-elect donald trump. top republicans in congress won't say of people will lose their health insurance once they repeal and replace the affordable care act. that could put them on a collision course with president-elect donald trump. budget officenal has said it would strip insurance from about 19 million people if they repealed obamacare. the philippines says crime has dropped 33% since prime minister
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roderigo duterte started his drug war last year. te has an 83% job approval rating. global news powered 24 hours per day. mrs. bloomberg. -- this is bloomberg. vonnie: the economy added 156,000 jobs in december. the unemployment rate rose a take. -- tick. wages grew year-over-year. this is all the backdrop of the international -- american economic association's annual meeting. michael: good morning, bonnie -- vonnie. we are here with the 2015 nobel prize winner for economics.
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you can't talk about the economy these days without talking about the incoming administration. you've said he were no fan of donald trump, but you were not a particular fan of hillary clinton. have a problem with what you are calling the technocrat love the road, they don't feel what the people field. >> that's right. there really is a problem of failure of representation in america and in europe. , but iffferent forums you think of scotland, where i grew up, when the trade unions first went to parliament in the early 20th century, those were trade union workers who have worked on the shop floor, the shipyards, the mind, and were arguing for their own people in parliament. you don't see much of that in the u.s. anymore. there is a sense in which middle-class ordinary people in america are not very well
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represented. the presidential election is a different matter altogether. mike: in this country, we have had a tradition of very wealthy man representing the working class, franklin roosevelt, john kennedy, now you have donald trump coming to office. wealthy men. they: yes, but i think were a lot more men of the people, not so much woman of the people, in the past than there have been recently. and thethe clintons obama administration have been very technocratic administrations with the result that the politics of ordinary people somehow gets lost. mike: what do you see ahead? you have done a lot of work recently on white debt rates. there are a lot of leaks in there. -- leaps in there.
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if you look county by county, where the votes for donald trump was very high, that is also reach rue -- true of other pathologies. lots of other people have found other correlations. that does not give you much of a handle on the details of what is happening. death rates isng something going seriously wrong. people are killing themselves quickly by suicide or slowly through drugs and alcohol, that is a terrible thing and it should not be happening, but it is happening in the same areas where there is a lot of dissatisfaction. mike: income and equality is a major reason for that? angus: we have been trying to track that down and that is a pretty hard story to tell. if mark zuckerberg gets really rich by inventing facebook, why does that help kill people? what harm does that do? in fact, does a lot of good.
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same for the iphone. a much stronger case could be made for the fact that the people on the bottom have not had very much incoming reese for long time. ,f you look at family incomes it is quite hard to link that. we are struggling with this. there is a simple income related story or any quality related story. much as i would like it to be. design a policy to deal with the problems you are finding? angus: one place we can start is tried to stop this genie that got out of the bottle with the opioids in which these things are being widely prescribed for chronic pain. you've got a tooth out and they give you what is essentially then you a pill and get addicted and you are found dead from an overdose and
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perhaps 200,000 people died. mike: going into this new administration, however it is going to turn out, what is your view of the u.s. and the global economy? you have a panel this afternoon where you will argue that we need to take a longer, more optimistic view. angus: i think it is always good to get the optimistic view in mind. if someone asked me for policy , i'm fairly optimistic about the next hundred years, that is not going to help the very much with policy. the dominant feeling his enormous uncertainty for the next five years. we have no idea how the trough administration is going to play out in washington. whatve very little idea the various elections in europe are going to bring. the eu seems to also have a very severe democratic problem and a
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lot of people feel not well represented. much easier to diagnose the problem spent to say what is going to happen. can you diagnose or make a prescription for what should be done? the bit thatike these people are supposedly getting a voice. whether they will or not. think of is finding technocratic solutions to political problems, it is not a good idea and maybe if we could back away from that. go without't let you asking about brexit. you are good against the leave campaign. a leaved against campaign. the economy in britain has performed remarkably. were you wrong or were you early? angus: i think we were early. i don't think we were saying what is going to happen over the next couple months. i don't think we were speculating on the markets in the short run.
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you must remember, i'm scottish. i grew up in scotland. i feel very strongly about scotland and i feel that scotland should be part of the united kingdom and i feel that the scots should be part of the europe. one of the things i hate most about brexit is it puts all that it risked. mike: how would you vote of scotland were to hold another referendum? angus: if there were to be a hard brexit, there would depend on the nature of the terms. i would imagine a world in which i would vote for scotland to separate from england, with the normal list sadness. ewan said he ian mc did not feel like being torn down the middle. i feel the exact same way. my father is english, my mother was scottish. i feel strongly about both places. i feel scotland has got a lot of its benefit and greatness and
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serve the world through the union of the countries. glad you are here in the united states. angus deaton, nobel prize winner for economics. professor at princeton. fascinating conversation on inequality and solutions and the incoming administration, along with other matters. that is michael mckee in chicago. we will return throughout the day. up, president-elect donald trump says he does not think the russian government was behind the election hack attack. will today's intelligence briefing changes mind? this is bloomberg. ♪
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are watching
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bloomberg. i'm vonnie quinn. mark: i'm mark barton. this is your global business report. the u.s. economy added fewer jobs than estimated and the jobless rate came in at 4.7% in january -- december. vonnie: samsung posted its best profit in three years despite the recall of its fiery phone the galaxy note 7. mark: eight closer look at north korea. what makes this dis-tatar ship -- dictatorship different from any other? vonnie: the final jobs report of the obama administration. employers added 156,000 jobs in december. the jobless rate came in at 4.7%. wages were up 2.9% from a year ago. here is mohamed el-erian on what it means for the federal reserve. mohamed: this is unemployment that will encourage the
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fed to hike three times next year. the fed is going to move beyond being short-term data dependent. it will move to becoming more strategic. mark: british consumers will ease back on spending this year. up becauses speeding of the drop in the pound. that will put a drop on consumer spending power. a department store chain reporting a week holiday season. jcpenney says same-store sales fell 0.8%. weakness in women's clothing was a big factor. shares fell on the news. the stock rose 25%, beating many of its peers. world's largest smartphone maker samsung unexpectedly posted its biggest profit in three years. rising memory chip prices helped the company bounceback from the
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death of its fire prone galaxy note 7. the debacle cost them more than $6 billion. background.ext and north korea is set apart from other dictatorships due to a couple of others. program and aons young, unpredictable dictator. the asian countries aggressive rhetoric and regular nuclear tests are vexing the international community. here is the situation. in 2016, north korea conducted its fourth and fifth nuclear tests in a decade. kim jong un began 2017 saying his nation is in the last stage of testing an intercontinental ballistic missile. --. presidential president-elect donald trump distributed death disputed the
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claim in a tweet. claims --xtended sanctions against north korea. the year-end brought a possible , the impeachment of south korea's president park. a history ofas escalating and de-escalating aid and security assurances. a 2014 u.n. inquiry accused the regime of human rights abuses on the scale unparalleled in the contemporary world. here is the argument. according to u.s. critics, china and north korea's biggest trading partner could do more to make sanctions effective. china fears the collapse of the government might prompt an influx of millions of refugees and create a well armed u.s. allies -- ally straddling its
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border. a collapsing north korea could be more dangerous, some say. you can read more about north korea and all of our quick takes on the bloomberg. that is your global business report. president-elect donald trump will receive a full intelligence briefing on the russian hacking later today. he will meet with james clapper, john brennan, and james comey, who will meet their case that russia was behind the hacking. will they be able to convince trump, who has been critical of the u.s. intelligence? joining us from outside trump tower, kevin, is the meeting with likely to leave president-elect donald trump being less skeptical? kevin: well, in the past several days, president-elect trump has been incredibly critical as what
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he sees as the politicization of the u.s. intelligence community. he was tweeting against a report last night that president obama received the intelligence briefing that he will receive in just under two hours in trump tower behind me, saying that this was again another example of politicizing u.s. intel. the top transition sources i'm speaking is saying that trump is increasingly frustrated that the u.s. intel community is getting him analysis and conclusions that he feels are not able to be proven. this is the first meeting between trump and fbi director james comey since the election. obviously, james comey played a crucial role in the u.s. election with his comments regarding hillary clinton. a lot happening here today. i do expect criticism coming from trump to continue regarding what he feels is an unfair politicization of the u.s. intel community. he wants thely,
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intelligence community on his will have to work closely with the intelligence community. does that mean after the meeting he will essentially have to try to put on some united front? kevin: will have to work closely with the intelligence community. yesterday on capitol hill, we heard from james clapper that there would be a prescription prescribed, if you will, in this intelligence briefing for why russia has meddled in the u.s. election. whether or not trump agrees with that conclusion remains to be seen. he is facing increasing pressure from within his own party, most notably senator john mccain to come out against russia and take a stronger position against russia. clearly, senator mccain elevating his stature in being a thorn in the side of the incoming president when he takes office within his own party. vonnie: i think we actually have some sound from that portion of the hearing, if we can play it?
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let's have a listen. you are going to be challenged tomorrow by the president-elect. are you ok with being challenged? >> absolutely. senator mccain: do you welcome it? >> we do. >> do you think it is appropriate? >> we do. >> are you ready for the task? >> i think so. vonnie: what will klapper and his ilk say to trump? going tothink they are lay out the case. early reports suggest that they feel russia was trying to gain influence in the western hemisphere, not only in the u.s., but also across europe. they are increasing their presence in the states. i would also raise the issue and suggest that president-elect trump has a choice to make about whether or not to keep director call me as the head of the fbi. he said he has not -- he has not said whether he will call for
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the resignation of james comey or have him finish out his term. there are key staffing implications and the implications this has for staffing in terms of the u.s. intel community are quite large. clearly, the basis of potentially whether or not they are going to remain on staff in the incoming trump administration, we could be witnessing here behind me in just under a couple of hours. vonnie: thanks so much, kevin come outside trump tower. we are just getting headlines from the transition spokesman thatspicer, including one says mike pompeo, including others, will attend the intel briefing. --ll ahead, with president-elect's trump's twitter campaign against automakers. ♪
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mark: i'm mark barton with vonnie quinn in new york. president-elect donald
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trump has fired off a series of tweets aimed at the oil industry and manufacturing jobs in the united states. on wednesday, he tweeted a thank you to ford for scrapping a new plan to mexico and creating new jobs in the u.s. yesterday, he aimed his message at another automaker, tweeting, "toyota says it will build a new plant in mexico to build corolla cars in the u.s. -- no way." toyota issued a statement shortly afterward saying that production volume and production -- not increase test decrease as a result of our new plant in mexico. we produce and mexico, but we produce also a lot in the united states. we have the largest manufacturing plant in the u.s.
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640,000 cars. we are heavy in the u.s. all our capacity is full. there is a new administration coming. there will probably be new policies being implemented. we are business people, we will adapt to the new policy. our strategy will take this into consideration. >> but what does that mean? >> it means that additional capacity to come in north america will take in consideration the policies that will be prevailing in the united states, in mexico, and in canada. so far, the policies have been left up. this was the agreement signed between the markets. .e adapt to nafta if there is a new agreement or no agreement at all, we will adapt to this position. as it stands now, clearly
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he has targeted mexico. if you are going to add capacity, it would be in the u.s. or canada? >> well, again, i don't want to preempt on what is going to be decided when the new administration will be in position, but i can tell you that we will not make any move before understanding exactly what is going to be the new policy of the american administration. this is the second largest market in the world for car markets. obviously, you want -- when the president of the united states says something, you listen. nissan ceot was the from the consumer electronic trade show in las vegas. we have much more on the auto industry and the trump administration and manufacturing. we will talk to the general motors ceo mary barra. up on "european debt," we will talk fiat
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and european inflation. we will hear from bill gross and mohamed el-erian as to how they are reading today's figures. take a look at european stocks 30 minutes away from the end of the friday session. what a week. the stoxx 600 is in a bull market on tuesday. it is down. look at the ftse 100. for nine consecutive days. that is the longest winning run since 2013. there is another stat on top of that one. seven of the nine have seen record highs for the benchmark share index in london. the close is next. ♪
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mark: it is 11:00 a.m. in new york, 4:00 p.m. in london. 30 minutes left in the trading day in europe. vonnie: i'm vonnie quinn. this is the european close on bloomberg markets. ♪
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mark: ok, we are going to take you from washington and cover stories out of london, hong kong, and moscow. there is what we are watching today. the u.s. labor market turned in a solid performance. 156,000 job increase followed a 200,000 rise in november and a jobless rate kicked up due to growth in the labor force. chrysler.look at seal ken sergio marchionne make the debt disappear by the time he steps down into years? intelligence officials in the u.s. will greet president-elect donald trump and brief them about the russian attempt to it -- influence the election by hacking. as weno

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