Skip to main content

tv   Bloomberg Markets European Open  Bloomberg  June 6, 2017 2:30am-4:01am EDT

2:30 am
delivers consistent network performance and speed across all your locations. fast connections everywhere. that's how you outmaneuver. ♪ guy: good morning. you're watching "bloomberg markets: the european open." upfirst trade coming shortly. i am guy johnson in london. this tuesday morning, the final countdown. polls tighten ahead of britain's general election. also, welcome to the jungle. apple takes on amazon as it launches the home pod. is this innovation? we hear exclusively from ceo tim
2:31 am
cook. he will talk about product, politics and terrorism. conflicting reports from banco popular paired -- popular. is there a buyer waiting in the wings? just 30 minutes until the open of stocks in europe. first off, let's check. qatari stock market, right now what you are looking hang on for a- second -- is yesterday's trade. yesterday we saw a drop of 7.3%, the biggest for qatari stock by9 after they were cut off four other gulf nations including saudi arabia. today, we are seeing a less steep drop for qatari stocks.
2:32 am
down at about 2.2% to an even 9000. we will keep a night on middle eastern stocks has this problem is being worked out. president trump assures the world he is going to step in and de-escalate the situation. as far as futures are concerned in european equity indexes, take a look at my screen. this is a weei screen. youk on the futures box and get the mispriced calculation by bloomberg. like we will see a down open across the board, the exception of the ftse in italy and the omx index in stockholm. the ftse, cacfor and the dax indicated for the open. check out the bund trade here. half-hour ofst
2:33 am
trade and last night's trade for the bund. yields are coming down as investors are buying up this debt. are seeing this safe haven run across the board in the overnight trade, asian stocks going down, traders going to safe havens. , someesterday pentecost markets playing catch-up. be aware of that. what is interesting is overnight, we see asia selloff. it doesn't look like europe will a mildly going to see negative open in europe, but not the kind of magnitude we are seeing in australia were markets are down 1.5. no change from the reserve bank down there. the nikkei was off by nearly a percent overnight. begin safe haven trade. dollar index down .2%. we may be resetting the clock
2:34 am
when it comes to europe with a more manageable kind of mood -- move, but a big down day yesterday and overnighter asia. i wonder whether we are setting the clock in europe. we will try to figure out which to theas we make our way open. let's get a bloomberg first word update with juliette saly. in australia, islamic state has claimed responsibility for a hostage in melvin taken that left three police officers injured and another dead. following a standoff, officers shot a 29-year-old after he fired at police with a shotgun. he had taken a woman hostage and it is believed by police to have killed the receptionist. has saidhief executive the company helped u.k. officials investigate terror attacks.
2:35 am
more pressure has been put on technology companies to prevent services from being used by islamic extremist. >> we have been cooperating with the u.k. government in not only law enforcement matters, but on some of the attacks -- i can't speak in detail about that, but in cases where we had information, and they have gone through the lawful process, we have not just given, but we do it very promptly. juliette: the u.s. said it will -- a white house spokeswoman said president donald trump wants "to deescalate the crisis and is committed to holding talks with all parties." the saudi's and three regional toies suspended flight
2:36 am
calcutta, sending qatari spot -- stocks plunging. solidarityt night in with the victims of saturday night's terror attack. thousands gathered near london bridge to honor the seven people and dozens others injured. event came as donald trump took to twitter to criticize the mayor, one of britain's most popular muslims. boris johnson will today claim that only theresa may can get brexit right. this comes two days before the general election. the focus of the campaign is changing to the welfare of retirees. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg.
2:37 am
matt? very much.s let's check back in on the starry -- qatari stock market. 1.75%.ly down yesterday, we were down 1.25 percent on qatari. it is not taking the kind of hit it was yesterday. it was the biggest drop since 2009. to keep an eyee on this, it is a huge issue for the markets. thursday is a big day for the markets for a couple of reasons. on thursday, also the ecb decision coming on thursday and former fbi director james comey is testifying in front of the senate in the u.s.. which of these events will have the largest market impact? mark cudmore joins us from singapore to help you set up for that trade. what do you think? which we.k. elections,
2:38 am
are not going to be able to discuss on thursday because of the regulations in the u.k.. rates,u have the ecb that will be in estonia, i am going to fly in for that. we also have james comey's testimony in front of the senate. everyone is chomping at the bit to watch. what will be the biggest market mover? resolve then't debate today. as you pointed out, the events aren't simultaneous, it will be the ecb first. the reserve you view amongst the team there is a risk of a less dovish statement from the ecb. that will have a significant impact after draghi sounded dovish last week. the ecb surprising in a hawkish slightly more than expected, will have global implications. of course we have the u.k.
2:39 am
likeion and it does look it will be a conservative majority but there is a risk of a hung parliament. therefore, the market is on this -- divided. the comey testimony, recently u.s. political events haven't caused sustained damage to markets. there is a serious risk that comey with this culture of note taking might suddenly have something more deeper implications on trump, or if he doesn't produce something more already,than leaked markets may have a relief rally. three big events, markets are deleveraging in advance of those and we probably won't see much action in the next 48 hours. guy: let's come at this from a different direction. where is the greatest potential for two-way risk? mark: good question. but we are noticing is sterling as a pair -- sterling-euro as a
2:40 am
pair is trading weaker. you would think it would be perky at the moment. all the news in the u.k. is negative. we know the long-term fundamentals are negative beyond the election. -- the brexit in negotiation and the cap deficit. trading ok. is on the flipside, euro is looking to struggle to make for the ground despite the fact we are seeing more analysts get on the bandwagon. it shows the position in euro-sterling is the market is euro and already short sterling, therefore the easier site for euro-sterling to travel is probably lower. guy: mark, thank you. growth --re, matt macro strategist. are two ways to get access to this ongoing story. mliv or tliv.
2:41 am
debate,ant to join the you can use the tv function here. normally we talk about the sidebar here, which is fantastic, but when i want you to uses this function down here, the ask a guest a question. get involved in the conversation. get your views across, joined the debate. this is an interactive product. you can ask the guest a question, allows you to use the your bloomberg. let's talk about the political story in more detail. the polls are critical. prime minister theresa may to resign amid funding. third terror attack in less than three months. may has offered that her rival would on be an -- piano -- be
2:42 am
unable to keep the country safe. the conservative lead is as narrow as four percentage points. let's get to anna edwards. anna: thanks, guy. good morning, matt. you mentioned the latest polling. we had another poll overnight that said the gap between the tories and labour are only 1%. the message is the polls have been narrowing for a couple of weeks. let's get a pollster's expert view on what is going on. good morning to you. what is your take on the latest? we haven't had anylet's get a pe saturday's attack. is this going to have a material impact? >> we can't know until the polling is back at my thinking is it probably won't. if you go back to manchester early in the campaign, saw a small increase in the gap in favor of conservatives over the
2:43 am
weekend following that. that is understandable given the government monopolizes the news immediately after these things. they are the people offering solutions and can explain the details and things. even then, the cap went from 5% to 7%, then back the following days. gotten back on the offensive with things where that was different the other time around. maybe but i don't think so. saying terrory events always lead to better performance by right of fence parties in elections. spain in 2004, one example they site. what is your experience there? joe: if you look at experience in this country, whether it is etc., there is not much change in the polling. and you look at things that happen in campaigns and other
2:44 am
there hasn't been much movement either. spain has been the only real exception and that was suggested to do with the way the government handles the attack in -- when itming turned out to be al qaeda. i created that feeling and made a difference -- reported to have made a difference. i don't think it will happen this time. a rainy're standing on day, rain is one thing that affects turnout on election days. other things affect turnout food it. are we in danger of some collect oral fatigue care -- here? is theere certainly potential. for some it is the third in three years, i could have an impact and turnout will be crucial in this election. as pollsters, we are interested in new people support, but the
2:45 am
most important element is whether people turnout or not. it is that that determines the result of the election, and how they turnout in each of the 650 constituencies in this country will determine the winner. to better for britain, who is here with us this morning, she took the government to call and was suggests -- successful. she is involved in the campaign, pushing for something like a softer brexit. she was talking about turnout and suggesting turnout matters and they have been influential on getting in people to register to vote. that is something we have seen, young people registering to vote? joe: yes, millions of british vote and many are young. analysis of the similar phenomenon in the eu referendum -- those people were registering again because of information or simply with no need to do so because they had seen they must
2:46 am
be registered to vote. in the eu referendum, it didn't make much of a difference, we don't know what impact it will have your. certainly the turnout of young people, who have a historical lower level of turnout, could determine the size of the majority of the conservative government or if they get a majority at all. anna: what about the ability we -- this is the problem with the electoral system. model that tries to do that. how confident are you this is good at what it is doing? joe: in the old days, you turn on the tv and people talk about the swingometer. for geeks like me, that is interesting but we know that doesn't work anymore. the kind of swing happening across the entire country doesn't happen because of
2:47 am
scotland, it all gets very complicated. we have tried to replicate that and it is an experimental model which we think will provide a better insight. the proof will be in the pudding. our latest has a full range of possible outcomes. it can be anything from 275 seats, which would mean a hung parliament, to 345, which would mean a majority of around 20. broad range. anna: joe, thank you very much for joining us. matt? matt: thanks, anna edwards there at a rainy westminster talking about the election coming up. that is this thursday. apple's chief executive has said the company helped u.k. officials investigate the terror attacks. tim cook's exclusive interview with bloomberg comes as the third terror attack in britain in less than three months has
2:48 am
put more pressure on tech theiries to protect services from being used by extremists. in an interview, emily chang asked cook if apple's new operating system helps strengthen user security. attacks, andorist her heart goes out to everyone affected by them. horrendous and the u.k. , for us, we have been in the u.k. pretty much the whole links of time for our company, and it feels like they are a neighbor. we have thousands of employees there, and so our heart goes out. so what do we do for helping with this? we have done since the beginning of the app store, we curate the app store.
2:49 am
we don't want hate speech on there, we don't want these kind of recruiting things on their we have tried to be very careful from the beginning about not having that stuff on their. i'm not saying will never make a of ake, but i don't know case were something has gotten through from that perspective. we are very vigilant on what happens from that point of view. we have also been cooperating with the u.k. government in not matters,enforcement but on some of the attacks -- i can't speak in detail about that, but in cases where we had information, and they have gone through the lawful process, we have not just given, but we do a very promptly and so, i would
2:50 am
hope they would say that we have been cooperating well. and i think that some valuable information. there is a misunderstanding about -- encryption doesn't mean there is no information. likely metadata exists and if you are putting together a profile, is very important. emily: can we assume that apple is making encryption stronger? tim: the reality is the cyberattacks on people and governments -- it is happening left and right everywhere -- these affect your safety, your security. so it is not just privacy. it is not privacy versus security, it is privacy and security versus security.
2:51 am
so we are always working to try and stay one step ahead of these hackers that, frankly speaking, have gone from the guy in the basement that is a kind of -- to a sophisticated enterprise. it takes all that we can do to do it and we don't think our users should have to think through all of these -- it is not practical for people. we try to stand up for users and stay one step ahead of these guys. tim cook speaking to emily chang. up next, airbus. it is downgrading production of its a3 80, a lack of orders an issue. ahead of the paris air show. it always rains at the paris air show. the open eight minutes away. this is bloomberg. ♪
2:52 am
2:53 am
2:54 am
♪ welcome back. we continue to watch a number of stocks ahead of the open. banco popular on the radar screen. -- the seemslender to be ambiguity surrounding whether they will be meeting with the ecb to discuss emergency liquidity. the ecb is saying it is perfectly informed of pop alarm's situation. popular's situation.
2:55 am
we seek clarity on the situation. we have seen a very sharp drop in the stock price. the other stock i want to mention is airbus. 380 program, the superjumbo. we are going below rate one. they will be making less than 12 a year. this ahead of the air show, the flagship event in france, paris outside of paris, in which the 380 has been a crowdpleaser. this seemed to be struggling to be market please her. getill be interesting to mr. clark's view as to whether he has more orders and mine. he would like a re-winged version of this aircraft. need to talk about the oncology state. fell yesterday in the u.s. trade 8% in new york. it is coming down -- looks to come down in europe as well
2:56 am
after their new breast cancer drug barely beat the old one. the old one came out in 1998, the new and doubles the monthly cost but may not be worth it. we will watch that at the open. this is bloomberg. ♪
2:57 am
2:58 am
2:59 am
guy: minutes tilde cash open. five stocks go ex dividend today. if you want this function, that will produce for you some numbers. five stocks going ex dividend. the editing and want to mention, we have been talking about the fact we have got -- germany closed yesterday as was switzerland. following the fair value calculations, points to it -- a bigger drop on the tech around.
3:00 am
-- the cap. london looks a little better. i am looking at the haven assets. library.e you can see gold and begin in blue-and-white but the 10 year yield in yellow. investors are piling into haven assets. guy: markets are opening. ash is opening, but we have bit of catch up this morning. and negative session from asia overnight. we expect a mildly negative open in europe. interesting to see how key stocks perform. down reasonably hard. london opening softer, down .1%, the cac down by a little more. we will break down the individual stocks. germany playing catch-up. yesterday, soft opening because of pentecost.
3:01 am
that's get details. gilts opening now. manus: not just the u.k. political -- creates political risk. you have middle east risk, how these risks over the ocd manifest themselves. we look at the risks on our map today, it is about the ecb and the polls narrowing in the u.k.. more from and on that. financials down, bengal popular, what happens next? in terms of the spanish lender, euros worth billion of nonperforming loans. it is a critical test in the ecb and the banking system around europe. stocks are lower, but in the euro, there is a fervor in the market in regards to europe. the market has positioned itself aggressively, the most aggressive long positions in six years.
3:02 am
91 .44 is your ticker on that. you mentioned the gilts. 1.02. two year tenure, a 35 year high. outlier to consider an possibility, and labor victory. that would be a bigger risk to the gilt market. it is not the consensus position, not the given position. they sold treasury, sold gilts, it is an outlier risk. for gilts would be conservatives achieving a smaller majority than they had in the last parliament. that would take you to around .9. cracking story on the terminal this morning. those are beyond consensus. that is worth considering. shanghai composite up one third
3:03 am
of 1%. seeing a little move higher. commodity stocks down 1/8 of 1%. price on your opening roche. down nearly 5%. i'm off to radio. guy: thanks. about the stock story in a little detail. five stocks going ex dividend, well represented on the screen. dividend, this guff and going ex dividend. another interesting stock stories we are paying attention is down by 4.76 after disappointing oncology news. have bank a popular down 2.07% this morning. ambiguity surrounding its relationship with the ecb at the moment and whether there will be a meeting between the ecb and
3:04 am
its chairman. let's take a look at where the upside stands. these are percentage gains. pandora, kara up. interesting downside stories. 20 of ex-dividends to be aware of. story, just two days away from the general election in the u.k. as jeremy corbyn and theresa may make their final pitches for votes. markets brace for a bumpy ride. let's talk about volatility. one week, one month volatility spiked higher. capturing the risk event. we have other risk event's in the next few days including the ecb, lust the testimony of mr. comey. we're watching carefully. joining us is an fx strategy at ing. good morning. let's start with the pound.
3:05 am
kohl's have tightened, we take our choice on which we don't believe. how is the market set up in sterling going into this event? >> the knee-jerk reaction for sterling is a function of getting a stable political environment. the status quo of the conservative majority and a small gain in seats should be modest, but our view is for sterling to move higher now, we expect -- we need mrs. may to get a lead of at least 50 and at least close to 100 realistically for sterling to move higher from here. we think 132 against the dollar is more likely in this scenario. matt: we have a great story hedged whattting looks like a remote possibility of a labor win. are you hearing about other players in the market doing that
3:06 am
and how remote is that looking closer to thursday? >> our view is that the downside risk in sterling markets is a hung parliament. maximum chaos would be if conservatives only managed to seats, 325200 nine seats. this creates a great area for uncertainty where you have not enough for a conservative majority but equally markets not seeing and of stable labor led coalition being formed quickly. for sterling and the pound, it is perfectly political uncertainty. we are expected to fall 1.24 against the dollar. guy: which pair are you washing -- watching? euro-sterling, sterling-swissie? viraj: our estimates, we think sterling against the dollar is fair valued at the moment.
3:07 am
the sentiment for political risk is being shown in euro-sterling. that is where you can get the maximum correction in sterling lower if we get the status quo outcome. there is limited upside potential in europe, a lot of risk is already priced in. the u.k. election isn't the only event on thursday, i'll be there for the central bank decision in estonia's capital. james comey will testify in front of the senate stateside. the ecb seems like it is going to have the quickest effect on markets if anything since we won't know the result of the vote on thursday and won't get the comey testimony till after the close. what do you expect from a change in language? if there were a lack of that? our base cases we don't think the ecb meeting will be much of a game changer for euro-dollar. the narrative going into the market -- or the meeting is that
3:08 am
draghi will disappoint and look to buy the euro. that such a low bar for a hawkish surprise and that dip may not come if we get some hints from president draghi at the meeting. in reality, what is priced in versus the mixed signals you are likely to get on inflation and growth, we think the impact on the euro should be overall neutral once the initial reactions take place. guy: what is your medium-term expectation for the single currency? the data aren't getting better. and we saw improving that with pmi's yesterday. how long can draghi draghi's feet is question? the euro-dollar will move higher, we expect a move higher up to 1.15. that is when they take the put off the pedal in qe tapering.
3:09 am
they have to walk over the next six months and that strong forward guidance may cut the flatline around 115. the next bet is next summer, when we start considering rate hikes and that is when you get the move up to 120. two-stage move up very gradual. matt: you expect that next stage to come? it doesn't look like inflation is sustainable when you look at the super court the ecb has indicated that it watches. are we going to get near 2% on that level? viraj: the inflation story may be a function of the second stage. the first stage is now a question about the near-term momentum in the economy potentially preparing markets for the eventual unwind of qe. that could happen in summer, july, ahead of december --
3:10 am
september ecb meetings. guy: thank you very much for sharing your views, viraj patel, joining us on set. if you are a customer, you can use tv . it tv on your bloomberg. you get this landing page here. hit interactive tv and you can get radio stream and the other streams. what you get as well is this sidebar. you get data checks, you get selected functions, tv , you can click those as well. you can join in, ask the guest a question. there is the function there. a little blue button-down there. sure you don't miss that function. we will be live from the ecb. forum, the ceo of synnex out.
3:11 am
then later, calling for calm in qatar. president trump's team vows to diffuse the risk in the gulf. we're live from dubai to go over every detail. this is bloomberg. ♪
3:12 am
3:13 am
♪ welcome back. nearly 14 minutes in the european test session. .3% on the stoxx 600.
3:14 am
five ex dividend stocks. the london market flatlining, the dax playing catch-up. the cac has a lot of ex dividend this morning. probably accounts for the fact it is down more than most, 52.83. let's get mid-cap movers. nejra: pretty big moves for air washers, dryers, freezers. drop as much as 10.3%, hitting the lowest since july 2016. four-year adjusted loss greater than expected and full-year revenue came in weaker as well. the company said first-quarter growth in the -- is supposed to slow significantly year on year. then i'm looking at convert tech down 4.9%.,
3:15 am
millionacing almost 250 shares, falling on the share placing. o, they, looking at aggrek ceo to step down. the ceo will leave within the next 12 months. still down 1%. think story much, nejra cehic with the market movers. a major poll shows president acron on track to win crushing majority in the two-round national assembly election this sunday. if the projection is correct, he will be more likely to pass reforms into law. >> i am joined. billion -- euro cap company, providing services,
3:16 am
good morning.ces, macron is onel month into his presidency. he said your activity in france do week in the first half, you expect a rebound fueled by services and new economic policies? >> i hope so, of course. france is a very important market for said xo. -- said xo. -- sodexo. the biggest problem in france is its unemployment. the focus on labor reform is very appropriate. i hope this labor reform will happen and will encourage investors from all over the world, but also france investors. you have job creators in france wanting to continue to hire people to tackle this enormous
3:17 am
problem of unemployment. >> we have seen polls showing emmanuel macron is on track to get a large majority in parliament, do you think this inl be enough to succeed labor reform are so many before him have failed? viraj: -- michel: generally in france, when the president is elected, the assembly follows and hopefully, he will get his majority. i think it is important to have majority to support reforms which are important for france. think this style? michel: he is from the new generation, it is good for france. france is a dynamic country and i think he brings a different perspective and new style and it is very encouraging for many. >> let's talk about the decay. the u.k. was hit by this
3:18 am
terrible terrorist attack and the concept -- in the election this week. dk represents 10% of your revenues. how do you see it going forward? do you see any impact from brexit and the elections? tohel: first of all, i have think about those people who have suffered from these attacks. i think it is terrible. in, we have some business the leisure business in london. it is too early to tell, but hopefully this will be good -- at the end of the day, the u.k. will prevail. be more int going to your business then you anticipated? michel: today we are not being affected. consequences,
3:19 am
inflation, that is for sure. we don't know how it will impact the british economy. but for us, the u.k. is an important country. we have done a lot of business in this country and continue to do that with government and private organizations. we still have a lot of opportunities. >> another major market for sodexo is north america. are the decisions from the current administration of donald trump positive or negative for a company like sodexo? michel: again, it is too early in. in purely economic decisions. i think this environmental issues are fundamental for our world and i think we need the united states. hopefully -- we have seen a lot of people in the united states and companies who are going to
3:20 am
continue and that gives me hope. >> that gives you hope. thank you very much indeed. , what are we going to talk about? calling for calm when it comes to qatar. president trump's team found to defuse risk in the gulf. this is bloomberg. ♪
3:21 am
3:22 am
3:23 am
♪ welcome back to the european market open. i'm matt miller in berlin alongside guy johnson at our european headquarters in london. we want to get to our bloomberg business flash. sebastian: banko popular's chairman reportedly won't go ahead with a planned meeting with the ecb today. people, thentified bank doesn't plan to request emergency liquidity from the ecb and this is an currently necessary. early merger talks between tomb -- t-mobile and sprint indicate a sale may be the preferred option, avoiding the need for financing. parent companies deutsche telekom don't yet know if they want a deal and sprint and t-mobile are also talking to other potential partners. any merger would also be complicated by the need for
3:24 am
regulatory approval. airbus is planning a cut in build rates for the a-380 amid a dearth of new orders from the giant. how best to drop below 12 planes a year, known as rate one. the company said july should be sustainable for next year. the decision will be made before the end of this year in the absence of further sales. that is your bloomberg business flash. guy: the u.s. has said it will seek to defuse risk between qatar and its neighbors. sarah sanders told reporters donald trump wants to " de-escalate the crisis and is committed to holding talks with all parties." saudi's and three original allies suspended flights and sea travel to and from qatar, escalating. bloomberg markets: middle east , let's talk about how
3:25 am
this situation gets the escalated. beene moment, there have talks, the turks have been involved in that. co-ats also seem to be acting as a mediator. what role of the united states playing? >> and very important role. have access to all countries in the gulf. at the existing relationship with saudi arabia, which they tried to reaffirm the visit of donald trump a couple of weeks ago. they are in a position to play a key role, but it will come to the countries of this part of the world to resolve this. kuwait will try to patch things up. crisis inime we had a the gulf in terms of diplomatic tensions was in 2014. the worst was they recalled ambassadors. they didn't cut off any connections.
3:26 am
that took seven weeks to resolve. this might take much longer given the amount of damage done. matt: what is the market impact today? yousef: we continue to see pressure on key asset classes. credit default swaps, the 12 month qatari riyal. the michigan what is happening with investors. you can see foreign investors were getting a sense already that trouble was brewing because they started selling six days before the key crisis erected in the last 24 hours. at,erms of where we are swung over to the green zone. clearly some opportunistic buyers returning, picking up stocks. they probably believe this is going to be a short spell. we continue to watch that. guy: thank you very much.
3:27 am
go on themake offensive with today's until the general election in the u.k.? we will be outside the house of parliament next. this is bloomberg. ♪
3:28 am
3:29 am
so new touch screens... and biometrics. in 574 branches. all done by... yesterday. ♪ ♪ banks aren't just undergoing a face lift. they're undergoing a transformation. a data fueled, security driven shift in applications and customer experience. which is why comcast business delivers consistent network performance and speed across all your locations. hello, mr. deets. every branch running like headquarters. that's how you outmaneuver. tthat's why at comcast,t to be connected 24/7. we're always working to make our services more reliable. with technology that can update itself. and advanced fiber network infrastructure. new, more reliable equipment for your home. and a new culture built around customer service.
3:30 am
it all adds up to our most reliable network ever. one that keeps you connected to what matters most. countdown.inal pulled tighten ahead of the general election for the apparently it is all about voter turnout. and welcome to the jungle. apple takes on amazon as it launches its home pod. is this innovation? we are exclusive -- we hear exclusively from tim cook. and the future for banco popular. conflicting reports on whether the chairman will be the ecb to request emergency liquidity. if the meeting does not take place, is there a buyer waiting in the wings? that morning, i'm matt miller in berlin alongside guy johnson at european headquarters in london. guy: matt, equity markets open
3:31 am
in 30 minutes. let's look at how things are shaping up. we are off the lows, the stoxx 600 down, ftse down, dax closed yesterday. being affected this morning by a bunch of dividend stock stories, which means that it looks like it is underperforming but isn't. let me show you the move screen to give you a sense of what's happening. it's the downside you need to focus on. edf dividend. there,e a publicist in rosche is an interesting story. we're also watching what's happening with the spanish banking story. that is why france is underperforming. edf down by 6%.
3:32 am
that is the book of the 6% you can see, and that is why france is underperforming. let's return to the u.k. and see what's happening with talks about politics or of the morning. the u.k. prime minister theresa thehas tried to recast general election as a choice of which leader can keep britain safe. labor party rival would be unable to protect the public from a wave of terrorism. by talking about her cutting police numbers. anna edwards is outside the houses of parliament, in westminster. anna, it's interesting. terrorism and security have been largely kept out of the political debate up until now. given the recent events, it is hard to avoid politicizing it. anna: yes, it is.
3:33 am
it is very much part of the conversation as we run up to thursday and the general election. domestically, the conversation is very much around, how much did the police know about the suspects, the attackers? how much do they know, what do they know what? i got a message from one gilt strategist today, suggested he thinks we don't repeat labor yet, because the fact that the terror suspects were known it means that some of the criticisms the labor party is leveling at theresa may just might stick to the conservative party. gilt yields could double if we see a victory for the labor party. these are the types of conversations going on now. given the uncertainty in the polls around many subjects, terrorism being one of them. we caught up with john tyler,
3:34 am
and he says if you look at it other campaigns and other evidence, there isn't that they shift things around very much in those final weeks. conversation the that is raging about the police numbers. that is something that the mayor ,f london has weighed in on suggesting that ongoing conservative leadership, there were 12,000 fewer officers. theresa may says it doesn't just come down to numbers. this is a very live issue within this campaign. we thought we were going to talk a lot about brexit this week, no doubt we will in the next day or so, but certainly security is at the heart of things right now. matt: anna, thanks very much. anna edwards in westminster, two days left until the vote. while you can are still seen as more business friendly, prime
3:35 am
minister theresa may has given her platform a real populist touch, promising caps on energy cost, greater scrutiny of takeover, and most critically, an exit from the european union single market. to discuss with this means for individual investment, we're joined by justina lee. what are equity investors looking out for in terms of conservative policy? who will be the winners, the losers? >> well, if you look at the tory manifesto, this is not your grandfather's conservative party. there are two targets that have united theresa may and jeremy corbyn, and one is utility. you mentioned that the tories are advocating a cap on household energy, and people are seeing a lot of u.k. utility companies falling on that news. she's also talking about greater scrutiny of m&a. but at the same time, what most people are expecting is a
3:36 am
stronger pound after the election, if we get a tory landslide, and that is typically not great news for exporters who make their money in foreign currency. but of course, broadly speaking, if we get higher political certainty, a relatively still more business friendly administration, and a stronger pound, that could be good for domestic companies, and of course the tories are traditionally better for the defense as well. those are some of the winners and losers. guy: let's talk about the labour party. mr. corbyn is not a fan of big banks. will this mean for the financial sector? >> he has talked about separating retail and investment banking. that's always a popular position. one particular stock you have to look at is rbs. the labor party has talked about consultation,ing a
3:37 am
that is something that would be a shocker to the financial industry. matt: what do the two parties positions on brexit mean for stocks? are they any different? >> that really is the million-dollar question, right? because you talked about the tories traditionally being more business friendly, but right now they are the ones talking about hard brexit. on the other hand, jeremy corbyn has talked about retaining the benefits of remaining in the eu single market. so i think for most companies and most investors, that really trumps everything else. we have heard morgan stanley saying that maybe a small majority, or even a labor lead government, might be better for risky assets in the medium-term. we really have to see how it pans out. guy: just enough, thank you. -- justina, thank you. plenty of coverage coming up on tv . ways, many ways of
3:38 am
consuming the coverage. we have a one-hour special, jon ferro and i, thursday night, 10:00 p.m., instant analysis from when the polls close, that shortly afterwards on the exit polling. we will start to get an idea as to which direction we are going to be going politically. plenty, plenty to think about, mat.. matt: absolutely. and remember, if you are a bloomberg customer, you can watch the program using tv as well as the video stream. you can follow all of our charts and headlines on the right side of your screen. you can watch the playback, as well as pick your spot if you want to rewind something. , you can usetly the blue link here at the bottom of the screen to ask us questions, asked westerns of the generally participate and interact with bloomberg television. we highly recommend clicking there.
3:39 am
up next, tim on trump. we have the exclusive interview with apple's ceo and's take on the paris clavichord. no one else has got this. you don't want to miss it. this is bloomberg. ♪
3:40 am
3:41 am
matt: welcome back to "bloomberg markets," i did miller in
3:42 am
berlin. let's get back to london for the bloomberg first word news and sebastian salek. sebastian: thanks. islamic state has claimed responsibility for a hostagetaking in melbourne that left a gunman and three other people dead. officers shot dead the 29-year-old after he came out and fired at police with a shotgun. and isarranged to meet believed to have killed the building receptionist the u.s. has said it will seek to defuse the growing rift between guitar and neighbors. the white house spokesperson says president donald trump wants to "de-escalate the crisis" and is committed to holding talks with all parties. --rlier, qatar mayor letter vigil last
3:43 am
night in solidarity with the victims of saturday night's terror attack in the city. thousands of people gathered near london bridge to honor those killed and dozens injured. the event came as u.s. president donald trump again took to twitter to criticize the mayor. america's top diplomat in china has resigned in protest after president donald trump's decision to withdraw from the paris climate agreement. he told colleagues it was because of -- in the u.k., the foreign secretary boris johnson will claim that only theresa may can "get brexit right." becomes today's before the general election. meanwhile, labor is switching the focus of its campaign to welfare support for retirees, conservatives could lead to almost 4000 more deaths this winter. global news, 24 hours a day,
3:44 am
powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. guy? guy: thank you. angle popular says the ecb is "perfectly informed" in the situation of the lender. shares plunged into the lowest in almost three decades, highlighting the issues facing the troubled spanish lender. joining us now, are spain bureau chief. chief.spain bureau there are things that seem to suggest that this planned meeting with the ecb won't actually happen. there seems to be lack of clarity this morning surrounding what is going on with ankle popular. can you provide some clarity? >> good morning. there have been reports that there would be this meeting
3:45 am
between the chairman of banco popular and the ecb. we spoke with him today, and what they told us is that the ecb is "perfectly informed" about the situation of the lender, and this comes after a period of extreme turbulence in has really, which been focusing people's attentions on the health of the bank and the feasibility of the options that has to keep going with its business. matt: i wonder -- i look at the chart, it shows default risk that has soared as the equity risk crashed. one of the things you can see here is nonperforming loans, which we have listed at almost $25 billion. of course, you don't know how transparent their books are. how does this bank getting -- how did this bank get into the mess in the first place?
3:46 am
is this just leftover damage from the real estate and financial crisis? >> i think that's right. in the first quarter, the numbers we had from march gave a figure of 37 million euros to what they term nonperforming assets. i think the market is giving it some credit for being more transparent about their issues, about the problems that they face, the web the same time the scale of the problems has become absolutely manifest. it all boils down to the lending decisions that were taken by the bank a decade ago, more than a decade ago, when they were lending into this real estate that getting them into low-quality or poor quality link to the real estate developments in spain so aggressively. this is the legacy of that period. there were poor lending decisions now unwinding.
3:47 am
there, could there be a buyer waiting in the wings? >> there could be. there could be a buyer waiting in the wings. lino santander, citigroup -- we know santander higher citigroup to analyze the purchase, and santander is seen as the bank with the deepest pockets, the bank that could take on banco popular. it would require a big capital raising to absorb these losses, and i think there are some obstacles also, things like legal claims, legal liabilities that may surface as a result of the situation, and there's a lot a lot of toxic assets to be absorbed. matt: all right, thank you very much. charles plenty, our spain bureau
3:48 am
chief, very busy at the moment with this story. we have been very busy with apples ceo tim coke. he says he disagrees with president trump's decision to pull the u.s. out of the paris climate accord. in an exclusive interview with emily chang, he says fixing the global warming problem requires worldwide action. >> i think he did listen to me. he didn't decide what i wanted him to decide. -- ink you decided wrong think he decided wrong. i think it's not the best for the united states, when he decided. of -- the way i look at this thing, do you interact with politicians or do you not, my view is that, first and foremost, things are about, can you help your country? if you can help your country,
3:49 am
and you do that by interacting, then you do it. country eclipses politics. emily: you have other people that are leaving the table, like bob iger, elon musk. does the president jeopardizing his relationship with one of his key constituencies, the business community? >> i think i would differentiate -- and i'm not speaking for the other guys -- but i would differentiate leaving a council and advising in a way that you think can help our country. one is ahe first judgment call that people make. i didn't join a council, so it's not a decision i had to make, but i understand both sides of that. but advising on something that you believe will help america i as a ceoa requirement,
3:50 am
you definitely do that. chance tof i get the go pitch the paris agreement again, i'm going to do it again. because i think it is very important that we engage to fight climate change on a global basis. this isn't something where you can solve it country by country. that requires a global action. emissions created in one country affect another. it is something that we feel very strongly about, and i've wanted to do every single thing that we could do to tell how important it was to stay in the agreement. unfortunately he decided something different. emily: why didn't you join the council? >> two reasons. one, my primary job is being the
3:51 am
ceo of a company. i spent the bulk of my waking i do soing that and willingly because i love the company and the people in it. traveling back east isn't something that i look forward to doing except when i need to do. secondly, i don't find these councils in general to be terribly productive. it wasn't about not wanting to advise on something where i or wet that we could help had appointed view that should be heard, and so i am doing the latter. i can't imagine a situation where what it to the latter, because i think it's in the best interest of america to do it, and i am first and foremost an american. guy: you don't see that kind of conversation very often. emily chang's exclusive interview with tim cook.
3:52 am
up next, out of fashion. global shares slip on a downgrade. we have your market movers next. this is bloomberg. ♪
3:53 am
3:54 am
matt: welcome to "bloomberg markets," i'm matt miller in berlin. guy johnson is in london. 54 minutes into the session, let's cross over to nejra cehic
3:55 am
to see the main movers. nejra: matt, lufthansa flying high today -- couldn't tell myself. the ceo speaking at a meeting in canton yesterday, saying that management cuts were ahead of target and will be closer to 19% compared to a previous target of 15%. he also said that they saw better than expected demand in u.s. and china, but declined to say whether the company will upgrade its forecast. nonetheless, one of the best performers in the session, hitting its highest since june, 2014 today. hand,on the other dropping the most since june, 2016, almost a year. this is after underwhelming results on its new breast cancer combination therapy. this therapy barely outperform the current gold standard drug for the disease, which is their own. this is in a study presented monday at the world's biggest
3:56 am
gathering of oncology researchers. one analyst said the results went down like a lead balloon. roche executives argue that the study was misunderstood. whatever the case, they have been cut to neutral, and cut to hold. we are seeing it lower today, down almost 4.4%. speaking of analyst re-ratings, burberry downgraded to reduce from hold at hsbc. guy: thank you very much. a busy morning for individual stock stories. we will carry on the conversation and bring you ongoing market analysis. stay with bloomberg television. francine lacqua is up next with "surveillance." she will be joined later by tom keene. matt and i are off to bloomberg radio. we will carry on the conversation surrounding what's happening in the markets. we will be looking ahead to thursday, what a big day thursday is. the ecb, the u.k. election, and
3:57 am
the testimony of mr. comey. london not exactly looking radiant today, but the weather, i'm told, will change by the end of the week. always an interesting aspect to the polling story. this is bloomberg. ♪
3:58 am
3:59 am
4:00 am
francine: qatar's crisis. president trump once 2-d escalate the situation. escalate thede situation. switches thebour focus, claiming tory plans are the biggest attack on pensioners in the generation. the investigations into the london bridge killings continues. timko tells us his company has h

11 Views

info Stream Only

Uploaded by TV Archive on