tv Bloomberg Markets European Close Bloomberg June 9, 2017 11:00am-12:01pm EDT
this is the european close on bloomberg markets. ♪ mark: here are the top stories we are covering from the bloomberg and around the world. in the u.k., theresa may struggling to keep control. what does this mean for brexit talks, which are in days away? germy corbyn says he is ready to serve the country. we will hear from the labor mps who supports the leader. and in the u.s. come the day after fired fbi director james comey accused president trump of lying, the president is turning his attention back to his attention that agenda with an instructor speech this hour. that agee a look at
estimate. investments in europe started off the election results with stocks up by .25% today, led by kenneth cole's construction materials basic resort that resources today. awn for the week and down for third weekend for. those are the stats on the week. fourth week, fourth day, and five days running earlier, just a small decline there. this is interesting. sterling is down, ftse down -- the blue line's ftse 250, which is also up. is the ftseine small-cap. we saw the 250 and small-cap fall, weighing on those while benefiting from the export oriented constituents. what a day.
in pounds, petroleum is rising today, 2.2% higher earlier 5,ay, the most since july and theresa may, the prime minister, striking some kind of arrangement with the head of the party.-- dup in percentage terms, its biggest increased or highest term since july of last year, and volatility decline. sterling falling, volatility declining. is a looking? julie: we are building on early gains, and that is a record for early averages in the u.s.. here is something interesting you will notice. the dow is up .5%, the s&p is up .5%, but the nasdaq is only a .25%. we have the big banks that are conjured getting to the most gains here, but we are not
familiar with some of the familiar momentum with amazon, not risingothers today. this rally is happening without them and is quite interesting and unusual given what we have seen through the year. there were also 2000 or the party. this has been lagging. come thes an white last record that we saw was actually back in april. we made an attempt earlier in june and did not quite get there, even as the larger cap was setting records, it was not happening there. another stock setting a record again today is nvidia, the chipmakers continue to be on fire today. best for55% here, the the year today. merrill lynch has a new price target on the stock, one dollar -- $185 is the price target for the stock they are looking at today. --y given a index of one. 185. one -- $180 yesterday.
260 this 1.6260. mark: and of course from westminster, and edwards. -- anna edwards. threeas been just over hours or so since we heard from prime minister theresa may. she made a statement outside number 10 downing street, having been to see the queen to ask permission to form a government . in her statement, she talks about the government she would warm would provide certainty for the u.k.. onesrvatives are the only with the means to form a government, but the conservatives have failed to get a majority in the election. the only way for them to govern is to form a coalition. she talked about an agreement reached with northern ireland's
democratic unionist party. it is not clear quite yet what exactly sort of agreement that is. it looks like it might be a bit more of an informal coalition than what we have been seeing between the conservatives and the liberals back in 2000 10. theresa may also talked about security, fighting extremism, and fairness and opportunity. ultimately, she said this government and this arrangement which has been so far formed will push ahead with brexit. she said let's get to work, and theresa may does have her work cut out. we are expecting her to name a member of her cabinet later today, but they have also had calls for her to resign. the question is whether she will be able to move toward at the moment or whether she should buy her time. atnie: anna edmonds westminster, what does this mean for brexit? the stargate is not necessarily in 10 days, is it?
they will continue with their agenda and they are supposed to start talks before today's times. the clock is ticking in many senses. is goingrgue that this to clear the path for brexit or be harder for brexit. and former chancellor, he said earlier on that this throws hard brexit in the dots -- dust. it will not embolden the hard brexit, but the softer side. even the u.k. independent party say that a clean brexit is in doubt right now. on the other hand, they wanted a full comprehensive trade agreement with the rest of europe. what does that mean for the brexit conversation? look at how the liberal democrats performed. they did not have a late night. nobody saw a great surge back to them and they were the party that was equated to any kind of remaining votes.
so it will remain to be seen groups special interest of all varieties will try to push around the prime minister, who has been really weakened by this. the whole point of this is to increase her mandate, increase her ability to lower the run of brexit. will verytory mps strongly about brexit, so we could see a hard brexit here and trying to push her around from their corner as well. a lot remains undecided on the brexit runt -- front. mark: bonnie, let's move it on and stay on the same subject because we have more insight into what this means for markets. ,enning had a multi-asset funds chief executive of hermes and that is management -- hermes executive management. before the brexit vote coming for 30% of your fund into cash, which means you had a bit of room to snack up some bar in --
snap up some bargain. where would you position yourself for this vote and what could you snap up afterward? cash,had quite a chunk of and most of our risk positions are overseas. we have very minimal investment in the u.k., and a couple of weeks ago, we have gone negative on sterling, which turned out to have been quite a thing to predict. it is all quite muted, and we that isterling weakness very useful. it is not the total shot we had after brexit. prudent to use this move to continue to domestic it sterling or not? domesticate sterling or not? >> we think about what we do know, and that is that the scales have a lot more uncertainty.
judgmentd not college -- that call into judgment call into judgment the decisions of the prime minister. the eu, for example, she made a speech this morning and said very clearly i'm going to move forward is the prime minister. -- as the prime minister. she said we will start talking to the conservatives about helping out. that points to uncertainty. they do not like uncertainty. so what are you telling your clients this morning? are you buying volatility or how are you playing this? >> i said that it is right they should go against sterling. i am not sure about volatility, because that has been , andrically right across we are telling them to concentrate and that stocks are not effective at this stage, and to start thinking about the fact
they will not have rising interest rates in the u.k.. >> what about you -- vonnie: what about you? you said you were looking more abroad. might that change? >> not usually. we have a global synchronized expansion, so there are more interest in parts of the world economy to expose our funds two, like european stocks, some of those financial sector across europe and the broader world, and far east and emerging. all of these will benefit more probably in the u.k. markets from revival in that activity. >> we are talking about bond markets and volatility yields, and -- >> they are asking for more money, which is essential to spend. if you look at the insurgents we had before, 2% to 40% of the vote, that population is fed up from austerity and advising have
more public spending. thedup once open borders with the -- the dup wants open borders with the republic of ireland, and you will have a bit of an increase in the u.k. stocks. vonnie: let me ask you what your views of the euro are. some of you mentioned that some areas of europe look attractive. where will the european six b in 6 -- euroro -- six months? >> ♪ ♪ the euro is recovering quite strongly in germany, and at some point, we will see the ecb make some more serious noises about ending its qe program and
signaling probably in 2018 that we will see the first rate hike. startry policy will timing out in europe, so that kind of higher activity level will see the euro somewhat stronger against dollar and sterling. >> i agree what he said. you can see the strengthening in and you willanies, see strengthening in the euro aside the greenback as a result. and i think there is a lot of opportunity for other stocks here in europe. there is also a possibility for the recovery. gentlemen, more records to come. are you cautious about u.s. stocks? >> it is becoming a bit over stretched, and certainly evaluation is the comments made earlier, the fact that the tech to lack abeginning bit and investments are beginning to tire of the
excessive valuations there. we will probably see markets it will take its place in the world. valuations are stretched in the u.s., there is a lot of hope in the u.s., and for viewers from america who are my age, it reminds me of wiley coyote running around. vonnie -- and what it with that the? mark: bonnie, you never ask anyone their age. thank you so much for joining us. vonnie? in.ie: let's check >> president trump is wrapping up his infrastructure plan today and is looking for a road,
regulatory relief round table. he wants to pay for improvements with $200 billion in tax breaks that could leverage $1 trillion in construction. lawyers for president trump plan to file a complaint to the justice permit about former fbi director james comey, with his revelation that he leaked information about conversations with the president. according to a person close to the legal team, they will also follow up with the senate judiciary committee. korean companies have quit complaining about having problems doing business in china , and a south korean airline just got the ok to double the number of flights to china. all of this happening after south korea's new president has the u.s. deployment of missile defense system that child the best china -- china complained about. and he used to take us for granted, but now it is very
focused. the biggest investment sale happened in the past eight years, and pushing a $4 billion loss on pharmaceuticals. this is bloomberg. mark? the: coming up are on european close, more insight into the election from labor and pk. party leader germy corbyn announced another offense -- jeremy corbyn announced another offense. this is bloomberg.
minutes time. let's get back to the latest on the election. theresa may's future as premised are, a hot topic. we are standing by outside westminster with a clear you from the later party -- labour party. get a fewmanaged to mps to come talk to us. great to have you. you have not one, but you have exceeded the very low expectations that people had around this. >> there were huge low expectations, it has jeremy corbyn is many things and certainly has had a forgettable campaign, campaigning for 30 odd years and has done very well. and against his party? >> sometimes it is true, against his party, but there are a few things. there is a surge of young people, 72%, switched to the
labour party and cannot and registered. and there was real concern that --, but that did not happen. our electionok at result in 2015, we were at a very low base after that because figure may has become a that is laughable. but jeremy corbyn is not a figure that one can laugh at. but she had such a bad election that it ended up in a hung now the minority will fall apart, and now the labour party can step in. >> to we get another election this year? historically, minority governments do not survive for very long. she has to renegotiate the terms now with the eu, and keep her own party happy with different on theetween someone left of her party who wants a
soft brexit and those on the hard right of her party who want a hard brexit. so i feels the dup, like she will not survive. >> and a lot of people are trying to work out in the markets. will this hit from the labour party perspective? -- something a little dr. softer than the tories are planning? >> i do not see now how we can have a hard brexit, how we can exit the single market of the customs union. >> [indiscernible] >> but she will also have soft brexiteers, and have position herself in the middle because the country has rejected the hard brexit mandate that she gave to them. that a hardow brexit is over, it will not happen, and if it did happen, frankly, she would come back,
have a vote of no-confidence, and lose power. we are in very volatile times, and this is the beginning of the end of brexit as we saw it previously. >> you talk about the youth vote coming out and voting labour, that does seem to be a phenomenon in this election. what did that mean for young people getting involved in the official political process? urban versus rural, young versus old, how do we go around mending some of those decisions that are quite well felt right now? >> when theresa may came to a one nationffered vision. unfortunately, the campaign was the opposite. she did not run as a one nation tory. divided,ry is hugely there is a lot of western democracies, including the united states, for example, that are pretty divided at the moment. that healing is not going to be
achieved through austerity, and that is something we should not underestimate the british people ur.ected by a vote to labo they were sick of seven years of pain and austerity, and they thought to kick up taxes for the rich in society to fund our public structure. >> a busy day on the green outside of parliament. mark: a busy day, fantastic day -- job, anna. right, vonnie? vonnie: some great interviews and interesting to hear the different perspectives. coming up as well on bloomberg markets, an exclusive completion with blackstone ceo dean schwartz and -- stephen schwarzman. and investing in infrastructure as well. speaking of infrastructure, president donald trump gave remarks at -- is set to give
vonnie: live from bloomberg world headquarters in new york, i'm vonnie quinn along with margaret and in london -- mark barton in london. let's look at some of the the newstories in right now. pandora is getting $480 million for a series of cash investments from satellite radio company serious xm. sirius xm. they are looking to become a streaming music service to be for paying subscribers. -- $1.6.6 million billion deal today in data
storage. fabrications -- -- dupont favreau's -- elliott management is raising its stake after a , andd takeover by elliott that is your latest bloomberg business flash. four minutes until the end of the section -- session -- and what election, bonnie -- vonnie? fell 2.5%.rlier the biggest drop since june 27. closes next.
all functions. the ftse 100 up .9%. , currencieslines falling against the dollar. look at the u.k. five-year down by 4.5 basis points. earlier, 2.5% earlier. that is the biggest decline since june 27. love this chart, redline, top line. that is what happened if the tories got a big vote, didn't happen. line, that, green was if the tories got a small win. third line, blue line, if labour party one.
we are at 127.38, the hung parliament has not materialized. one analyst says a could fall as low as 120. this is the u.k. 10 year yield. said yields could rise between one point 6% and 1.7% if the labour party wins outright. 1.5% was if labour party would inherit a minor coalition. the most bullish scenario was if the tories won a small majority, which has not happened. 90 basis points today. , a wonderful function. 317 for the tories come shy of the 326 needed. it is fascinating how it
is all panning out. we will be talking about how the parliament and government gets made up. let's have a quick look at jurisdiction. has given backx most of those declines we saw in the last use sessions. stronger again as well. $46, oil just above helping some currencies. 87 basis points is steepening the u.s. yield curve. those currencies are in proving as a result of the oil rebound. you see the canadian dollar there. , buturkish lira suffering the british pound is the main one we are seeing software. we want to get to abigail doolittle having it deeper look
at technology companies. >> we do have record highs today, including the nasdaq. recorditting another high, now a market cap of $62 billion. it means tesla is the fourth-largest automaker in the world. toyota,ll behind , buter, volkswagen surpassing gm and ford. this is remarkable given that gm produced 10 million cars relative to tesla's production of 83,000. delivering 76,000. #9263, surpassing, ford,
gm. let's turn to two other big movers. one out performer and one under performer. single the out performer up 60%, 47% year to date after morgan stanley raised his rating to overweight and took the price to $4.50 per share. endo international down 15%, its worst the day after the fda suggested the company pull its opioid with the growing opioid crisis and addiction. bloomberg intelligence says this is largely expect it and they have been moving away from this drug. mark: thanks a lot. of all the things, and certainty is not what the economy needs.
with theresa may's lack of majority comes lack of clarity on sterling. what a day. iyc shows the yield curve. the green line is today, the other a month ago. the yield curve is slower. .- lower what will we be looking like in a month? seelearly part of what you has been a global move rather than a specific u.k. even. this forward, there is take risk around brexit and what kind of reg said we will get. is thishe key takeaways movement towards the retail
rather than the wholesale or industrial and. it in voting, so beings this personalization means greater demand on the government purse strings. thereby the fiscal deterioration is the big risk. if you are an overseas investor in bonds, what are you thinking today? >> i think if you are faced with some marginal fiscal relativelyon and a benign prospect of a softer brexit compared to where we were expecting it, that brings the currency into question, whereas previously you might think the bond market would do well, but you have negative expect tatian on the currency come then you would think twice about
investing in u.k. bonds. if you think sterling stands a chance of appreciating over the next two years because we end up with a better deal than previously discounted, then all ild looks like a better investment. is important for investors and traders to look at now? the fomc is front and center next week. >> in the short-term, the fomc. is come almost everyone is expecting a rate what happensis thereafter, because the inflation data shows the economy is growing well in the u.s., but you are not seeing the inflation numbers. you can see core inflation headlines debt lower, and that takes away some of the rationale
for the fed to keep moving. we may actually pause in september and not see a rate hike. vonnie: the market is pricing in more of a december move. you would ben moving around securities over the summer? what will you be doing with your fixed income port folio? >> we are not that pessimistic for bond markets. path ofink there is a growth in the u.s., and that data out of europe remains benign, but it is worth remembering that inflation is had aabsent, and having correction in some markets, , but in value to be had this environment, it is still something of a goldilocks involved so we remain
in emerging-market duration and spread markets, and to hedge that out, we have defensive characteristics in some markets. afterecb, what is next yesterday's tweaking of forward guidance? dovish.aghi remains clearly they are having this crisis of confidence about the inflation risks. they still don't think they have done enough. they don't believe they have done enough yet to create inflation. they are not seeing the wage gains they want to see. that means they will be really baby steps, not a lot for the rest of the year, extending
it was infrastructure week. we are hearing about how we will be the in be of the world or it i am wondering what we will hear that we did not already know from the campaign trail. thing president trump introduced this week was a plan to privatize the air traffic control system. it is not clear where that is going to go. fake series of promises the president made during the campaign, including spending $1 trillion on infrastructure funded by public-private partnerships. on thatot get details this week. this week was overshadowed by testimony of james on capitol hill in yesterday with a series of long shell accusations. mark: let's talk about it. it was a big event.
he was neither exonerated or convict it. where does that leave the trump agenda? >> the agenda right now on capitol hill, republicans on capitol hill responded the way they have with every one of these controversies. they just shrugged it off and said we will keep doing our work and not let it get in the way. that is easier said and done. oxygen andngs need time and have everybody talking about it to move ford and advance. not happening. the senate is working quietly on a health care bill. it is a cloud as president trump called it. he said this of russian investigation is a cloud over his presidency. that is an accurate statement. quote ron wyden is telling
you "i believe the evidence keeps piling out that there has been very real presidential abuse of power." how actionable is that? senator wyden one of the people in that hearing was questioning james comey and argued that the testimony suggested that there was abusive power. everything is centering on the question of whether the engaging in what is known as obstruction of justice. it is a serious crime it if true. if investigators find that to be credible and cooperate that, we could see that escalate, but right now it is still a political question because there is no evidence that the
president engaged in wrongdoing. thank you for that. coming up, the president making comments now from the transportation department. >> thank you, everybody. this is very nice. beautiful. i want to thank you. you have been so amazing as the leader of this department and the progress being made is so important but leaders and officials gathered here from across the country have all praise the work the secretary is a safe, modern, and reliable transportation system for the nine states and it's great, great people. i also want to thank secretary's zinki to clear the way for new infrastructure and economic development. chao and zinki
joined us yesterday for a meeting to develop plans to replace america's decaying infrastructure and construct new rails, pipelines, tunnels, and bridges all across our nation. we are here today to focus on solving one of the biggest obstacles to creating this new and desperately needed is theructure, and that painfully slow, costly, and time-consuming process of getting permits and approvals to build. i also knew that from the private sector. slow,a long, unnecessarily burdensome process. my administration is committed to ending these terrible delays once and for all. the us cruciate in wait time has inflicted enormous financial
pain to cities and states throughout our nation and has locked many important projects from ever getting off the ground . many, many projects are long not getause they could permits and there was no reason for them. we have already taken historic steps to speed up approvals, it includes the approval of the keystone xl pipeline, which was quickly approved. peoplethere a long time, saying the project was dead, and i came into office and the consultants went to the head of the company and were told what a great job they did. money,ked for a lot of most likely, but we got it approved, and we got it approved fast. i am also proud to say the decode access pipeline is now officially open for business. 120 days ago, and
now it officially just opened for business. i am very proud of that. [applause] >> we are also excited to be joined by representatives from , including thes north american building trades union, which i know well, and the laborers international union of north america. go ahead, fellas, take a little bit of credit. come on, fellas. [applause] roleu will play a central in rebuilding america, very important. as well by joined many distinguished members of congress who share our total andion and desire to repair restore america's highways, railways, and waterways. in the audience is a man i have gotten to know well and who is
doing some job. it is not easy, but it will get a lot easier. house bill shuster of the transportation and infrastructure committee. stand up, bill. thank you, bill. great job. [applause] working closely with us including our proposal to traffic delays by reforming air traffic control. we have an obsolete system. i have to say before a lane got here, they would spend $7 billion on a system, a waste. we will have a great new system. the top-of-the-line, the best in the world. right now we are at the lowest part of the pack. it will be the best in the world for a lot less money than they have been wasting for years. for too long, america has poured trillions and trains of dollars
into rebuilding foreign countries, while allowing our own country, the country we love, and its infrastructure to fall into a state of total disrepair. deficientructurally bridges, claude giroux's, crumbling dams. our rivers are in trouble. our railways are aging. and chronic traffic that slows commerce and diminishes our citizens quality of life. other than that, we are doing very well. [laughter] instead of rebuilding our country, washington has spent decades building a dense thicket of rules, regulations, and red tape. it took only four years to build the golden gate ridge, and five ,ears to build the hoover dam and less than one year to build
the empire state building. people don't believe that. it took less than one year. but today, it can take 10 years and far more than that just to get the approvals and permits needed to build a major infrastructure project. these charts beside me are actually a simplified version of our highway permitting process. it includes 16 different approvals involving 10 different federal agencies being governed by 26 different statutes. as one example, and this ippened just 30 minutes ago, was sitting with a great group of people responsible for their states it economic development and wrote ways, all of you are in the room now, and one gentleman from maryland was talking about an 18 mile road,
and he brought with him some of the approvals that they got in and paid for. they spent $29 million for an environmental report weighing 70 pounds and costing $24,000 per do me a favor.d, i going to make a speech in a little while. you might if i take that and show it? so i am going to show it. [laughter] you are watching the president of the united states
at the department of transportation, demonstrating getcharts that it takes to through regulation, taking up to 10 years to get a permit. these are the same things we have heard on the campaign trail and mick mulvaney. get back to the president and his comments in just a moment. let's listen back in. >> millions and millions of dollars -- when i said how long is this short roadway been talked about, the gentleman say 20 yearsf you coming you are safe. i said, don't say anymore. months, a major front-page story, but these binders on the stage could be replaced by just a few simple pages, and it would be just as good. it would actually be much better. these binders also make you do a necessary things that costs
billions and billions of dollars, and they actually make it worse. example, the 23 -- if you look at it in ohio, the ohio river bridge, $2.3 billion, a 150,000that amassed a page administrative record. 150,000 pages is a five-story tall building. think of it. if you put the paper together, it is a five story building. how can a country prosper under this kind of nonsense? i know it. in the private sector, but come you know, in the private sector coming you move, wheel and deal, hope and pray, and maybe it goes faster, but it
is a horrible thing in the private sector also, and we are talking about reducing that for the private sector like wise. why should we continue to accept what is so clearly unacceptable? often times for consultants who are making a fortune because you can't do anything without hiring them, paying them a tremendous amount of money, having them write up this nonsense, you can't get approvals. york, the case of new albany, the state capital, or here they go to washington, they want to make it really tough because that way you have to hire them. it is a terrible thing. it is a group of people that nobody has heard anybody talk about. they work hard to make it difficult, and some are believers, but most aren't, most want to make a lot of money, so they make a very, very simple roadway or what ever you want to
build a very complicated subject , and they make it much more expensive and make it worse. it is not as good as it would have 10. i was not elected to continue a failed system. i was elected to change it. all of us in government service were elected to solve the problems that have plagued our nation. we are here to think a big come act boldly, and rise above the petty partisan squabbling of washington, d.c., here to take action. it is time to start building our country with american workers and with american iron, aluminum, and steel. it is time to put up soaring new infrastructure that inspires pride in our people and our towns. i approved the keystone pipeline, i said, where was the
pipe made? unfortunately they had purchased a lot of it, but i put a clause at the bottom, you want to build a pipeline in this country? by american steel and let it he fabricated here. american steel and let it be fabricated here. [applause] >> very simple little clause written in hand, but it does the trick. it is time at last to put america first. americans deserve the best infrastructure anywhere in the world. they deserve her roads and bridges that are safe to travel and clean water delivered into their homes, not like what happened in flint, michigan. they deserve lanes of commerce that get people and products where they need to go on time.
most of all, americans deserve a system of infrastructure that is --ked upon, not with pity the world in many cases is so far advanced that they look at our infrastructure as being sad. we want them to look at us with envy, a system worthy of our magnificent country. we allow these rules and regulations to tie down our economy, chain of our prosperity and sap our great that is spirit here it why we will lift these restrictions and unleash the whole potential of the united states of america. to all of our state and local leaders, i appreciate you being here today. thank you. thank you. thank you, bill. help isou to know that finally, after many, many
decades, on its way. we are giving control back to the cities and the states. you know best how to plan your communities, analyze your projects, and protect your local environment. of the get rid redundancy and duplication that wastes your time and your money. our goal is to give you one point of contact and deliver one thesion, yes or no, for entire federal government and to deliver that decision quickly, whether it is a road, a highway, a bridge, a dam. to do this, we are setting up a new counsel to help project managers navigate the bureaucratic maze. this council will also improve transparency by creating a new online dashboard allowing everyone to easily track major projects