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tv   Bloomberg Markets Americas  Bloomberg  June 6, 2017 10:00am-11:01am EDT

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vonnie: here are the top stories we are covering from bloomberg and around the world. havens rally, gold heading for a seven-month high end of the yen yen climbs. testimony this thursday. in an exclusive interview with bloomberg, tim cook says president trump's decision to quit the paris agreement was just wrong. plus, president trump originally said he wanted to defuse the -- punitivetar
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measures from a saudi led alliance. we are 30 minutes into the tuesday trading day in the u.s. julie: we have stocks trading a bit lower, the nasdaq has just turned higher. it has consistently been the upper former here. the trading ranges have been tight recently. up -- itll 2000 continues its underperformance of these large caps. if you take a look at the bloomberg and the groups that are on the move today, we have financials that are the big drag along with consumer discretionary. energy hanging on to some gains in today's session. if you look the banks, that's where that drag is coming within the financials, the big banks today. even though they are not down that much percentagewise, they tend to pull back gains could bank of america down 1%.
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reporting that china is prepared to increase its treasury holdings under the right circumstances. china judge treasuries are becoming more attractive than other sovereign debt. stabilizing is helping as well. it has been adding at the beginning of the year. we are seeing buying in the treasury market this morning. that is hurting financials. as you look across other types of assets this morning, we are seeing the risk aversion also being reflected. people are buying gold, people are buying the yen versus the u.s. dollar. mark: look at this. we are down for the seventh day since reaching that play
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month high on may 10. , the biggestrlier drop after one of its drug studies disappointed. less appetite for riskier assets .oday this is one week we are nowhere near the level we saw before the brexit referendum. interestingly, the tory leaders shrunk to 1% -- it was at 17%. the polls are still showing a gap between one percentage point and double digits.
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bond investors reworking that scenario for guild and of the election -- ahead of the election. that is the green dotted line. between 1.4% and 1.5% should a former minority coalition government -- the other scenarios the most bullish scenario. conservatives achieving a smaller majority than they held in the last parliament. pushing the yield to 19 basis points -- 90 basis points from 98 basis points today. index felln stock 7.6% yesterday. for arab nations sought to isolate qatar over its ties to iran.
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president donald trump starting his infrastructure push yesterday, touting a plan to modernize and privatize the air traffic control system. today, he's tackling other parts of his agenda. he tweeted "big meeting today with republican leadership concerning tax cuts and health care. we are all pushing hard and must get it done." kevin cirilli joins us now from our d.c. bureau. where are we on the timetable for the president's agenda? kevin: i just spoke with a source is going to the meeting with vice president mike pence later today to discuss these issues. the senate is really where all of this is going to be in a jam. here's where it gets interesting tax reformnot get to until they pass a budget. vonnie: thursday is clearly the
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most risky event this week. what can be done legislatively ?efore next week kevin: james comey will be testifying for the first time since president trump fired him. should he release some type of smoking gun or something that could impact the ongoing russia there's no evidence right now, but should he provide new evidence, that would very much impact the president's ability to accomplish anything. vonnie: what is congress doing this week? maybe some health care legislation? kevin: there's report on politicos and the timeline for , they aree reform trying to move that along
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faster. i spoke with another source earlier today who said the showdown will be in the senate because the senate banking committee chairman has been tightlipped in terms of his priorities to repeal parts of dodd-frank. unlike the house, they do need democratic support in the senate . there's not much appetite to repeal any parts of dodd-frank among democrats. mark: we have the election here in the u k and the ecb meeting, all potentially market moving events. 's what extent could comey testimony move markets? it could impact markets in the sense that should he response to a question from a dust all eyes will be watching it.
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should he's a just that there's reason to believe there was collusion or should he offer new insight into the conversations he had directly with the -- republicans will press him on leaks. all of that could jolt the narrative and impact markets . mark: kevin cirilli. on thursday, full coverage and analysis on james comey's testimony before the senate intelligence committee. that will start at nine clip 30 a.m. washington time -- 9:30 a.m. washington time. for insight on how investors are bracing for risk events, we are joined by mike regan. statistic, the yen is
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trading at a 109 handle now. what does that say about how market sentiments have changed over the last two to three days? mike: it's one of many trades out there in the markets showing sensitivity to risks on thursday. gold is pushing $1300 an ounce. the old curve is down again. -- yield curve is down again. a relentless grind lower in the treasury yield. step back a bit and look at how the equity market came into this week, it was very strong, most of the technical indicators we suggested we were due for at least a pause. the market was very much overbought. we're somewhere in the neighborhood of 240 days now with only 5% drawdown in the s&p
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500. the longer that goes on, the more nervous it makes people. in this low volatility environment, something has to cause a crack. something has to happen. we have these three events coming up. , there ish elections risk therefore gilt yields. i don't see a broad risk offside reaction regardless of the results there. i have the ftse 100 versus the stoxx 600 implied volatility -- volatility is picking up here relative to ftse and of the election -- ahead of the election. are investors adequately pricing
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scenario like a the labour party winning or there being a hung parliament? is it being adequately priced or not? ilts aredoubt u.k. g pricing it in the go back to brexit, it would be hard to imagine that sort of scenario on a global basis. market specifically, there could be a lot of volatility. locally, it is a matter of people don't like to have to focus on three different major events like this. it's natural to pull some money back and get into the haven traits going into that. that.en trades going into the: which one could call
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corruptions? -- eruptions?- mike: we saw dramatic reaction in u.s. stock market when the memos were reported. he is not shy about surprising senators and the market in general. from the u.s. perspective, comey is probably going to be the most closely watched. elections will. be closely followed. vonnie: mike regan, thank you . you can follow our markets live blog on the bloomberg. u.k., 48 hours before voting begins in the general election. theresa may is sending boris
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johnson to the northeast of england today. those areas voted to leave the european union and the referendum last year -- in the referendum last year. jeremy corbyn will try to show his support in working-class areas. british police have named the -- he'sndon attacker believed to be an italian national who lived in east london. all three were shot dead last sunday. the attacks left seven people tha dead. helpedk says apple has british officials -- julie: in cases where we have
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information and they have gone through the lawful process, we have not just given, but we have -- we do it very promptly. emma: law-enforcement officials have criticized that move. we will have more from our exclusive interview with tim cook later in the show. tim cooglobal news 24 hours a d, powered by more than 2600 journalists and analysts in more than 120 countries. , gold gaining on a slide to safety. that is next. this is bloomberg. ♪
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mark: live from london, i'm mark barton. vonnie: live from new york, i'm vonnie quinn. this is "bloomberg markets." gold gaining for a third day as investors brace for a string of key events thursday. joining us now from the cme to corbett -- tom -- it may not be gold that is the driver here, but rather a search for safety. >> right now, gold has some upside to it, despite the move we've seen today. as yous been on a tear see despite the fact that we have the dollar trading mixed and trending lower. they will raise rates, which will be an adverse effect to gold. right now, gold trading on its own. trade. caution
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it has legs up to at least $1320 given the price action. watching this thursday. we get there by thursday or friday? >> gold is an emotional trade as well. we are not seeing the same affect in other extenuating markets. look at the equity markets and treasury markets. they are moving, but not that level. when you get to thursday come if we get any reaction, we could see a light pullback or the trend continue. this started well before there were issues from last weekend that would extend into the u.k. elections. vonnie: what about oil? it's about $47 a barrel. dispute inrom the other nations. >> since we got past the opec
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meeting and oil saw its price declines, we set the range between $47 and $50. renault can the general range will be $47 to $50 until we see supply numbers and usage numbers. this is the big season for oil and gasoline. we need to see those numbers increase if we are going to see an increase in oil prices right now. opec will maintain their production cuts but not increase the size of those production cuts. vonnie: a couple of exciting days of trading. that is today's futures in focus. mark: time for today's bloomberg business flash. if sprint merges with t-mobile, lenders make it left out in the the all stock option
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would eliminate the need for financing. the majority owners still aren't sure. british airways blames cuban -- anfor cancellations engineer disconnected a power supply that led to a surge that resulted in major damage when the hub was reconnected. that's the latest bloomberg business flash. , etf's attracting investors at the fastest rate ever. we will track the close, next. this is bloomberg. ♪
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mark: this is "bloomberg markets
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." vonnie: time now for a tuesday etf's smart data segment. julie: with me is eric balchunas . --rt been etf's has taken in he covers etf's for bloomberg intelligence. you say that number is underwhelming. putting $7 billion it sounds like a big number. is it not relative to the whole etf universe? are in an absolutely wild year this year. they've taken into a good billion dollars through may -- $200 billion through may. that is triple almost any other start to a year. $2 billion relative to billion is roughly 13%. smart beta etf's makeup 30% of the pie. the trump trade has changed the game.
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myple are reallocating riding his agenda in bonds or international. people tend to go with a core market cap type product as opposed to beta during a shift like this. you saw money go to hide evidence and low volatility mother was always a smart beta hot product. julie: is that also being reflected within smart beta? what strategies are doing well? tom: sectors are driving what's going on. eric: we saw value do really well early in the air. banks were crushing it for the first two months. they fell and now, tech has taken over. momentum and growth are leading
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the regime change. the growth etf is up 18%. momentum is up 18%. you have seen some flows go into those targets because they are heavy tech. at this time, tech is what is bringing these up. when it comes to smart beta, you will see flows follow performance. beta: even though smart has not gotten the biggest increase overall command has been one of the most popular in terms of new launches. what has been the hot new smart beta etf? eric: all the new launches are smart beta. in,re's no more pla vanilla etf's to launch.
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there's some risk managed ones that shift to cash if the market gets rough. some have $60 million -- early successes, but nothing like the $200 billion we have seen into etf this year. mark: still ahead, apple chief executive tim cook speaks exclusively to bloomberg. why he doesn't want to be on the president's advisory council, next. this is bloomberg. ♪
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vonnie: live from bloomberg world headquarters in new york and london, i'm vonnie quinn. mark: and i'm mark barton. this is "bloomberg markets."
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emma: china is ready to increase its holdings in u.s. treasuries. officials suggesting treasuries have become more attractive than other sovereign debts. plus, the yuan has stabilized. president trump may be adding pressure -- mideast leaders he met last month accused qatar of financing extremism. in london, future terror attacks -- if prime minister theresa may wins thursday's election. could losehat london 13,000 police officers if may
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wins. joseph will be named comptroller of the currency -- he ran one west bank when steve mnuchin was its chairman. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm emma chandra. this is bloomberg. vonnie: president donald trump's decision to pull the u.s. out of the landmark paris climate accord received backlash from business leaders come including elon musk and bob iger. cook in an asked tim exclusive interview about his relationship with the president. this come after cooker urged trump not to pull out of the agreement. tim cook: i think he did listen to me.
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he didn't decide what i wanted him to decide. i think he decided wrong. it's not in the best interests of the united states, what he decided. thing, dolook at this you interact with politicians or is that first and foremost, things are about can you help your country. if you can help your country and you do that by interacting, you do it. country eclipses politics. emily: you have other people leaving the table, like bob iger and elon musk. is the president jeopardizing his relationship with the business community? tim cook: i would differentiate -- i would differentiate leaving
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and advising in a way that you think can help our country. the first one is a judgment call that people make. i didn't join a council. i understand both sides of that. advising on something you believe will help america i ceo. is a requirement as a to go pitch chance the paris agreement again, i will do it again. i think it's very important that we engage to fight climate change on a global basis. this is something where you can solve it country by country.
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it requires a global action. emissions created in one country affect another. it's something we feel very strongly about. i wanted to do every single to tell howld do important it was tuesday in the agreement -- two stay in the agreement. emily: why didn't you join a council? job isk: one, my primary being the ceo of the company. i spend the bulk of my waking hours doing that. i do so 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 secondly, i don't find these councils and committees to be
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terribly productive. it wasn't about not wanting to advise on something that i thought we could help her we had a point of view that should be we had a point of view that should be heard. i am first and foremost an american. mark: tim cook also unveiling apple first major product since the apple watch -- tim cook: apple is a company that deeply cares about music and wants to deliver a great audio experience in the home. we feel like we reinvented it in the portable player area we think we can reinvented in the home as well. pod competeis home
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with the amazon echo and google home? cory: i think it can. it is certainly a more expensive product. they claim the audio quality is better. the demand for these products has been extraordinary. the amazon echo has sold out in the holiday season. apple thinks they can make a goal of it with this product. speaker and alent siri connected device. how much it's going to be open for other developers to write their own software for this --duct, that's the question lots of developers created their echooftware through amazon and google play. it's unclear how much apple will d and theoth the homepo
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siri architecture. ar, augmented reality are the buzzwords. to what extent is it a game changer as we approach the release of the next iteration of the iphone later this year? cory: it will matter how much developers will take them up on their offer. a lot of the folks of the -- focus of the presentation was indeed a are. the -- was think of indeed ar. think of the success of pokemon go -- they had to represent those on the phone itself.
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apple released a series of software products that would help developers plug and play and instantly develop those ai things in a much more simple way. they have given the tools to the developers to write that ai stuff. newie: what about the -- mac revenue is not massively important to the company. but it is potentially important. compared to the iphone, nothing is a big business. mac has been a successful business over the last five years. as the mac business has grown club the recipe seems to have been contracted --
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mark: thinks a lot -- thanks a lot, cory johnson. innie: the global economy is focus at the annual organization for economic cooperation and of andent in paris -- development in paris. caroline conan is at the meeting in paris. guest joined by special jacques van den broek. good afternoon. , you said you started on a positive note with momentum in europe and the u.s. what are the challenges ahead? acques: this momentum in
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europe and france and italy and spain -- we feel good. in america, it is ok, but not as good as europe. market..s. is a big -- are the second-biggest with the labor market tightening in the u.s., is it getting more difficult? 4.5%.mployment is around it is definitely getting more difficult to find people. but pricing has been good. it's an area where we have more pricing power. is still growing. >> you were mentioning france,
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which is also a big market for you. we just had to the french prime and esther giving details about labor reform. i think labor reforms are badly needed in france. quite a few laws have been proposed. advocate organizing organizational french labor laws. >> facing elections and you carry in just a few days. his brexit having an impact on your business? jacques: it is actually much better than the stock market anticipated. we are back. the u.k. for us is rather small, 2% of our profits. the market is not worsening.
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we've seen the u.k. before brexit being a weaker labor market compared to europe u.k. is sluggish. >> is it going to remain sluggish or be worse as the u.k. elections -- after the u.k. elections? jacques: u.k. elections won't really solve the issue. there's uncertainty around brexit. it will remain for quite a long time. it's unclear how the negotiations will end up. will it be hard or soft? we need more time, at least a year, i think. >> you concerned about the recent report that google is making strides into the job search market? jacques: we are not concerned. google is a strong player. 60% of job searches start with google. it's important for us to stay through google and
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monster, we are working together people when they do a google search they end up on monster. we need to be close to google. . this is all about the active job seeker. in europe, it is about the passive job seeker. that we workortant with google, not against google. >> the challenges for the job market around the world -- mark: coming up, president donald trump unveiling his proposal to spin off the air traffic control system.
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more on the president's plan to bring the private and public sector together to fulfill his infrastructure agenda. that is next. this is bloomberg. ♪
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vonnie: live from new york, i'm vonnie quinn. mark: in london, i'm mark barton. this is "bloomberg markets." shareholders and general motors have sided with management and rejected a proposal by david einhorn to split the company. 90% of the luminary votes were against the plan. einhorn wanted to divide gm -- a into two businesses
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federal judge has fined dish network for making robo calls to consumers on do not call lists. dish plans to appeal. the company blames all the calls on contractors and subcontractors. 20% three foxes diving deeper into video games. is divingntury fox deeper into video games. terms were not disclosed. the game will come out before the avatar film sequel due in 2020. that's the latest bloomberg business flash. turning to washington, d.c. now commit president donald trump began a push to fill a pledge to improve the nation's infrastructure with a proposal to reform and privatize air traffic control. we explore how trump plans to do
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this through public-private partnership. the subway extension and the denver international airport -- landmark american public workspace for the traditional american way. canada australia and much of western europe do it differently , through public-private partnerships. consortiums of private companies raise money and they design, build and operate projects for returns over 30 years. the governments make yearly payments or dedicate a revenue stream to the lifetime of that contract president donald trump's pledge was part of his campaign. in the budget he released and make him he proposed to spending $200 billion in federal funds -- the plan relies
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heavily on the use of p3's. scholars trace the contract back to the roman empire, which enticed investors to build postal stations and highways. the u.s. tells a different path. new york state sold bonds to build the erie canal in the early 19th century. p3ntries that use the strategy often find projects can be delivered faster and cheaper. advisors have argued that his tax credit approach would mean less taxpayer money would be needed upfront to fund his plans. paul ryan says he will not support for stricter spending without offsetting budget cuts. trump's plantbe at corporate welfare.
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inocrats say they won't work rural or low income areas that cannot generate enough user fees to support private investment and more direct federal spending is needed. you can read more about our quick takes on the bloomberg. mark: still ahead of the -- president trump took to twitter to weigh in. that is next. this is bloomberg. ♪
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mark: life from london and york, i'm mark barton. vonnie: i'm vonnie quinn. this is "bloomberg markets." president trump is weighing in --qatar, tweeting today
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leaders pointed to qatar. this tweet comes just a day after the white house said the president wanted to de-escalate the crisis over qatar's ties to iran what could the president mean when he says look? i think he's pointing to what's happening right now, saudi arabia, uae and egypt taking action, closing their borders, closing their airspace to qatar. , there wasrspective , "are weup saying seeing the end of terrorism?" he's pointing to the actions taken by these arab countries and saying maybe this will have a result.
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notee: i was reading a saying we are back to sunni versus shia one more time. does it escalate from here? i don't know right now. we are seeing now the beginning of the mediation efforts. leadered to the qatar last night. he's on his way to talk to the saudi king about it. s have come out saying they don't want to escalate this further. they are seeking remediation, hoping to resolve this thing. mark: i have a chart here priceg that etf yesterday, a record decline.
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it's bouncing back a little bit today. does that tell us the worst of the market reaction is behind us or is it too early to say? >> you have to say it is too early to say. it was a pretty steep drop yesterday. today, the market was one moment up, down the next. bond yields continue to rise. other markets still indicated a concern. jumps likee market that, there's people who see a by option. -- buy option. mark: some are speculating about the possibility of a regime change in qatar. could you see a complete change in policy by qatar or not? >> that is certainly what the
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saudi's and emm emirates want. if fundamental change in the way qatar is approaching foreign policy. anything from making a statement saying we agree with the saudi specificon iran to measures like taking action against some of the media they say is a problem in terms of the support for the muslim brotherhood and external groups. vonnie: thank you for that. mark: coming up, 35 minutes away from the end of the session. ♪
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♪ mark: 11:00 in new york and 6:00 p.m. in london. 30 minutes left in the trading day in europe. from london, i am mark barton. vonnie: from london, i am vonnie quinn.
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this is the european close on bloomberg markets. ♪ mark: the top stories we're covering from the bloomberg and around the world. with less than 48 hours to go until voters head to the polls, the london terror attack continues to dominate the election and the london mayor say terrorism will be harder to stop if theresa may wins. we are in westminster with the latest. apple tv executive tim cook says the tech giant is hoping the u.k. investigate terror attacks and is working to stay one step ahead of the hackers. more of the exclusive interview with tim cook this hour. president donald trump infrastructure plan continues to rollout, we will hear about the architect of the plan to privatize the nation's air

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