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tv   Bloomberg Markets Americas  Bloomberg  June 28, 2017 10:00am-11:01am EDT

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bringing the highlights from those central-bank speeches, a very interesting forum. i'm vonnie quinn, in new york. live let's go over to julie for breaking data. maye: home sales for falling .8, said that means back-to-back declines. aonomists were looking for gain of 1%. if you look at the year over ofr change, there is a gain .5. recent homes data has been choppy. it has partially to do with inventory. there is lean inventory, rising prices, and that home index has had a 5% or more gain for 21 straight months. that is one of the things
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crimping the housing market. we have builders rising. they were rising going into the report and it looks like they may be trimming some gains. overall, we are taking a look at a soft market in the united states that is higher, although the nasdaq is gaining less than .1 at the moment. the dow and s&p gaining more this morning but still seeing some weakness within big cap technology. there have been ripple effects from that ecb conference through the currency market. seeingthe things we are is a continuing climb in yield. big climbing yields. selloffs in the bond market selling bond yields on the 10 year up another two basis
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points. that is helping banks today. we will get the second part of the government stress tests, which could pave the way for them to return more capital to shareholders. we will get that after the close of trading. one of the potential outcomes could be warren buffett taking a larger stake in bank of america. he has said the bank raising dividends might be one of the things that triggers him. into thiseck on oil morning's inventory report which is under 30 minutes from now. we have seen oil rebounding over the past five sessions. it has been bouncing between gains and losses today. we will be watching gasoline closely and import data, especially given that affect of tropical storm cindy. mark? mark: what an extraordinary day.
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most of the fun out of sintra, portugal. we have got these comments from euro system officials that suggested that markets misread draghi's hawkish comments briefly reaching a small gain and declining once again. these of the industry groups. banks are rising as yields gain some other movers. against dollar. it has been extraordinary. essentially, yesterday, draghi innplaying inflation risks this hawkish speech. then we heard from euro officials, which basically said we misjudged his speech on stimulus. it was intended to strike a balance between recognizing telling usconomy and
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more stimulus is needed. the euro rose yesterday 1.4%. you saw the euro give back those gains. the euro is rising once again on the day. this is a lovely chart showing the intraday moves in the german to 2015.going back yesterday was the worst year for the 10 year on the back of the initial draghi comments. we will chat about this. come down after those comments. officials saying we misread those comments. yields are rising to 38 basis points. we heard from mark carney a second ago and he says the boe's monetary policy committee may need to raise interest rates. they are probably thinking, didn't he say he doesn't want to raise interest rates? know, he said he was commenting
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about the last yearly meeting. everything changes in sintra. this is sterling as a result. we are rising for six consecutive days. biggest stretch since november. it is all happening in sentra. vonnie: -- happening in sintra. is stillark carney speaking. in london, investors are digesting a series of messages from central bankers. today, all eyes were on the ecb chief mario draghi earlier. there will also be the bank of japan and think of canada to speak about. -- bank of canada to speak about. we are joined live from london now to make sense of the market moves. lots of to wait risks -- two-way risks. our traders confused or are the
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ones who made the so-called runway bet trying to make the other way bet? >> i think what we have to consider is the markets love and narrative. they have got a hold on this idea that some kind of behind-the-scenes coordination is going on with the central banks that now is the time to move on policy. switching with canada to a hawkish approach, people reading into comments from as far away as australia, norway, and the comments from draghi -- that was a preprepared speech, so it wasn't that he said something of concern it is that the market reacted to it. the euro is holding on to those gains from yesterday and the markets -- it will be pretty hard to keep that reaction from continuing to roll out. mark: some pretty interesting levels because the euro has
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broken through the posted november election high -- brokerage of the post november election high -- row can through broken through the post-november election high. it has taken a key levels. paul: yeah, because they do not want the euro to go up too fast because that risks and doing the inflation they have been working hard to bring back to the system. that is the dilemma for draghi and ecb. but the market, once it starts to feel the momentum shifting, it isn't going to wait until it is given the green light by policymakers. mark: mark carney, the governor of the boe, in light of this comments in sintra, he says they may need to raise rates. the week ago, he was more on the
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dovish side. we have had so much discussion since one week ago, given the comments, the split with the mpc, and depending on various factors, it seems rates could after all go up. he may be looking toward that eventuality. it brings it back to the unreliable boyfriend comments. are we in that territory? paul: [laughter] it is so difficult for him. it looks like it will carry on, wages are growing at the same pace as inflation, so that means people are losing money. as economy is not growing fast as it can be, so you have this risk of stagnation temporarily. what does the central bank do? if he raises rates, it might inflation,ffect on
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but it may be bad for the rest of the economy is he says, we are going to carry on seeing this risk the other way. a difficult situation. others will be speaking as well, constant chatter. what will they learn from one another? them we like this idea of having a coffee afterwards or having lunch before, chatting about what is the situation here? it was interesting, a note i read this morning by an analyst in colorado, he saying that the noises we are getting out of the central banks is pushed toward more hawkish positioning and that needs to stop basically, he says. it seems central bankers are worried the markets are priced
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into it. maybe this is the way to have a healthy correction. talking not necessarily in a coordinated fashion, but if it works that way, we can hit the brakes and the way -- in a way. vonnie: janet yellen just talking yesterday about the federal reserve. janet yellen speaking yesterday about how their might be a little asset price inflation. yeah, so the dollar has been coming back a long way, giving the federal reserve more room to go. i think what we are waiting for next is probably more information on the timing of the beginning of the unwinding of qe by the fed. and probably, they want to see how the market reacts to that. governor, is we
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are to believe both finishes 10 year in april. ,uroda should finish the term that is from one of his allies. is what anow the talk difference does it make? paul: i do not know. i think he has the market trust. seems to be something pretty constant with growth in japan, so it makes sense to have the continuity going on. vonnie: paul dobson live on the bloomberg, thank you. you can follow his comments and continued to catch the sintra forum on to be go. -- on tv . have microsoft analysts
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traced the hacks to russia. this software updates contained a virus. the cyber attacks have reached asia. on capitol hill, the stage is on the senateng plan to replace obamacare. republican leader mitch wait on thecided to d health care after it became clear there wasn't enough support to pass it. in france, a major step toward loosening up the labor market. they released a plan to make it easier for companies to fire employees and to negotiate their own wage deals. british prime minister theresa may told parliament she will not
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accept an unlimited transitional phase as the u.k. leaves the european union. chancellor philip hammond is one of those trying to soften the country's approach. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. vonnie: thanks. coming up, under pressure. oil is bouncing around the head of key inventory data to later this hour. this hour -- due later this hour. this is bloomberg. ♪
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♪ mark: live from london, i am mark barton. vonnie: i am vonnie quinn.
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this is bloomberg markets. time for futures in focus. droprasing its earlier kind of inventory data. it is getting higher. joining us from the cme is a senior analyst at lynn and associates. can we anticipate this bounce should hold? we do get inventories in a few minutes. >> we are looking for where does the market get traction? the market has been falling as the figure of opec has taken the market by surprise. gasoline prices are lower than at the beginning of the year. i do not recall that the current, so supplies are large but we are in a demand period and outlook for the market to gain traction in the $42 to $45 range, maybe back into the high 40's. not bullish. vonnie: but would drive it if we have not seen post memorial day
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bounces in prices and why should 4?happen post-july ira: i look at the demand cycle and say, all the bear news is coming into the market. we do not see any inventory draws of meaning. we need to get them. if you get them, you get your summer bounce. after that, we see a fall and winter demands. i am looking at the markets down the road trying to find a trading bottom and then you sell into that again. in other words, i do not see a real change in the building supply. watch out come the end of the summer. vonnie: what is the chatter at the cme group about the cyber attack and whether it is impacting the price of oil or ability for oil to travel from one place to another? ira: we saw that yesterday because transport companies got hit.
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one company said they were impacted and later said their production was not. that is down the road because stuff on the seas already is coming to us. it is important but they will find backdoors at this. try to buy a bitcoin. have you ever tried? it is an easy. it is not do it -- easy. i understand only about 10,000 has been taken in so far. these cyberattacks will happen more frequently and so they can figure out a way to not have a backdoor. that will be the problem for the markets. vonnie: ira epstein, thank you. great stuff. time for the bloomberg business flash. it is the year of the soybean, a boost to earnings. the company posting estimates --
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posting that beat estimates. monsanto is the subject of a takeover by germany's buyer. blue apron has cut their ipo from $10 to $11 per share. the american meal subscription services hopes it will convince investors to buy shares. 1200 office jobs are being cut in the u.k. and india. plus, the weaker pound has made imports more expensive. tesco reduced its global workforce i 2% in the last fiscal year. workforce by 2% in the last fiscal year. we will hear from one of the world's biggest robot makers.
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find out where he sees growth opportunities in the world of uncertainty. plus, central bankers continue to speak and portugal. -- to speak and portugal. watch it on the bloomberg, tv . this is bloomberg. ♪
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♪ this is bloomberg markets. i am vonnie quinn. mark: i am mark barton in london. to the increasingly competitive market in china, that is where tom mackenzie caught up with the ceo of a robot maker to discuss their new digital strategy in the world's second-biggest economy. >> you look at the drive of robotics, there are three keys in china, one is the labor situation. the second is productivity. that third parties safety and health. all of this together makes china
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the largest robotics market on this planet and it will be for the next 10 years. they have invested 30. >> how would you prize it against robot makers? they are fully -- >> they are fully committed and the only in the world that has the combination up artificial intelligence and robotics and opportunities. the use of ai today is spreading quickly in abb. they can take the rubik's cube, look at it and solve it in less than two minutes. increased skepticism now be administration will be able to put their it's infrastructure spending plans. we have seen that in the imf reflecting its forecast. how much of a missed opportunity
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is this? >> if you look at it long-term, the u.s. will need to invest in the infrastructure, in the road system to really have a competitive form going forward. at the moment, it looks like it allowed a couple of ripples in the system. it is not going as smoothly as anticipated. i think it will be sorted out quickly and it will be a system that gives a good platform to go forward. >> to what degree>> do you see reduction in political risk in europe given the election of macron in france? or does the question of brexit overshadow the perceived reduction political risk and the more positive fundamentals we see in europe? >> i think it has improved from the beginning of the year. in the beginning of the year, we
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did not know how france would come out, and you had brexit. france is now sorted -- is now sorted out. we know the agenda going forward. it looks like in germany, the predictions of that it will be a predictable environments. the brexit situation is unfortunate from our perspective because it raises uncertainty and insecurity, and that is something we have to overcome as entrepreneurs going forward. altogether, i would expect europe to be quite favorable and predictable in the next year. >> how much of a drag has the week oil price in on the oil and gas part of the abb business? contractions.ward if you look at the marine the oil and gas supply,
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more than 70% year and year, so this is something we have dealt with. if you look -- this was a highly profitable sector in the past. we have contracted. we had cap the top unsteady and held the margin and even increased it. that was an exclusive interview with the ceo of swiss robots maker abb. vonnie: we are moments away from weekly oil inventories in the united states. we have been climbing back up from losses. today, this is bloomberg. ♪
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♪ bloomberg'se to world headquarters in london and new york. i am mark barton. vonnie: i am vonnie quinn.
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this is bloomberg markets. we are moments away from weekly oil inventories. it has expanded. we are looking for a drawdown of about 2.1 billion -- million barrels. let's get to julie hyman as the numbers come out. inie: it looks like a build crude oil. 118,000 barrels, so there was a drawdown in oklahoma. a smaller drop than anticipated. also looking, gasoline what a larger estimated draw down. that should in theory be bullish for oil prices, as should a drawdown of this would inventories. products, those numbers look more bullish for oil prices but the overall crude oil supply not looking as bullish. you can see a pop in the oil futures market, up about .3 in
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the aftermath of this report. we do tend to get a lot of bouncing around after these numbers come out. we will see if it sticks. just something i wanted to point out is the short interest in oil right now is quite high. here are oil prices in green. oil,is short interest in which has only been climbing and climbing. if there is some kind of sustainable more positive reaction in oil today, you could see short covering that exacerbates that move. i will be back at 11. i will give you more reaction. the first reaction here was positive and now oil looks like it is down by about 10 cents or so. we will update you in a little bit. vonnie: that would be the obvious market reaction. julie, thank you.
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you can get an analysis of the oil data on the bloomberg. for more on today's data and the market, let's bring in stephen sanartz, who joins us from diego. the department of energy surveys have not been all that correct lately. we have been getting drawdowns when looking for bills. sillinessrscores the of trying to predict these numbers on a weekly basis. when we think about what it takes to ship oil and get it to markets, do you think you could -- do you think we could gauge that on a weekly basis? then god bless. shouldty markets is good oil and gas rise, fall at this point. what we have been seeing is what
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you expect to see. you expect to see crude oil supplies fall at this time of the year because we have record demand for this. the fact we got an increase today is somewhat bearish but the market. with regard to gasoline, yes, gasoline supplies are supposed to fall. on the here and now, this report strikes me as a push, neither bullish nor bearish. vonnie: prices have been going down. two pieces ofose information for me. >> that is a concern right here. if you are bullish on oil, the narrative is a mirror image to last year. crude oil prices are falling. we are down nine dollars a barrel. a huge draw and that has to be a concern for the bull because oil demand has never been stronger.
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prices are still falling. your concern now is, what happened since september right now, record -- what happened since september? least agoing to take at million barrels of demand out of the market the next two months. producers are well hedged. they will continue to add barrels to the market. at this point, what happens when that demand falls in september and u.s. producers are putting oil on the market? that is your biggest concern for ls at this point. mark: how much lower could it go in the medium-term? and inhe medium-term, the immediate medium-term, there is a tremendous amount of short interest. wall street's risk appetite for
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oil has bloomed, so we could eat in and probably are in a countercyclical rally now as the shorts begin to cover. longer-term, where we are here, the next target is that $40 psychological threshold. to be specific, there is a range between $41 and $37 a barrel, so between now and the end of the third quarter on the low end, we could break $40 and get as low as $37 a barrel. abilitys opec lost its to dictate the level of oil prices? >> absolutely. this is where wall street got it wrong last november when opec had the cut. wall street bought a tremendous amount of oil betting on higher oil prices.
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but wall street did was over emphasize opec spindly ability to dictate price and what they did -- opec's ability to dictate price. specifically united states becoming the world swing producer. there has been good cohesion on production quota, when you look at opec, much greater than historical norms, but to that point, you have libya and nigeria, where production has been very strong and they are not the holding to the quota. you juxtapose that with rising shale production and to a greater extent, opec's ability has been minimized and hence, where we had these lower oil -- the demised. hence, why we have lower oil prices. vonnie: how far can that rise? pointt is an excellent
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and part of what i said before how the narrative has been turned over its head year-over-year. counts wereil rig down 80%. they had lost more than 1300 rigs since the record was set in fall of 2014. since last summer, those recounts are up -- rig counts are up 140%. we had 1300 rigs exercised out of the market and have only added a fraction of that back. producers are well hedged. there was heavy hedging with spot oil prices between $47 and $50 a barrel, which translated to oil on the back end of the curve. if anyone is looking at oil prices today, potential going down to the high mid 30's, and expecting a pullback in production, be careful because a lot of production has already
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been hedged. we can expect those rigs to climb. vonnie: i am interested to know what you think about the cyberattacks and whether they will have any impact on the price of oil. the guys at cme seem to think they will because there will be delivery delays. hard to make banks it is too small of an attack to think it will make a difference in the price. >> no, it is absolutely a direct in the here and now in a short-term. i will give you, for instance, we had tropical storm cindy last week, so that did spew up shipping schedules and likely skewed today's report and next week's report as refineries had minimized operation, ships coming in and out of deliveries
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that were delayed. that will have an impact. it is a short-term impact on volatility in the now and it could lead to some interesting short-term market movements. from a longer-term, fundamental perspective, that really knocks out and i would expect short-term volatility. vonnie: thank you. we will let you get back to enjoying san diego. >> i appreciate that. mark: that's stick with energy -- let's stick with energy. president donald trump's protectionist policies could change steel operations. bloomberg's reporter joins us now. >> thanks for being with us. let's jump into it. you have major operations in north and south america with the tariffsity of impending from the trump administration.
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what we have to look out for? >> we think it is beneficial for the industry. the trump administration is recognizing the need to fight the unfair trade. section 232 is a broad opportunity. we do not know the final outcome but we think it is a good initiative which will benefit mainly u.s. trade. >> do you think if we end up seeing tariffs, you see the benefit you might expand in north america because of that? >> today, we have a lot of room we havey the market, so enough capacity to support and supply all the market. in and ins you are between place. have you thought it through completely or are you confident whatever comes down, you are prepared? >> we are prepared because we had the capacity. we are ready to supply the
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market. we are ready for this because if it comes up some kind of terrorists, this will -- riffs, this will help. there has been a lot of optimism on that. >> are you optimistic or is policy getting in the way? >> we are optimists that it will happen. maybe it will take longer. there are other discussions on the way. us being here to supply is important for us. >> so you are somewhat anticipating some sort of increase in demand from infrastructure. >> that is what we are hoping for. it has been a long time debating about the structure, but we think it is time for something to be done. the trump administration is
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showing signs of moving in that direction. are you looking at north america for other opportunities? >> we have a balanced portfolio in our key regions. u.s.,rate in brazil, north america. we are exporting more from brazil. we had the advantage to be north america, which is a growing market. -- are youstors looking at the possibility of plants and india and mexico? are there buyers interested? >> i would not comment on a specific country. we believe in diverse make. our ultimate goal is to stay in operations where we have a better profitability. that is where we are going. >> on the operations, are you seeing risks coming from that? >> know, we still -- no. we still uphold a position we
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did not do anything wrong. we did everything right. so we are waiting. >> a quick word, second half of 2017, what is your outlook? >> for north america, which by their. we are seeing good signs of consumption. in brazil, sideways. >> thanks so much. we will throw it back to you. mark: thanks a lot. great conversation. we are getting breaking news, friends has announced president trump has accepted -- rants hasn't -- france has announced president trump has accepted an invitation to visit in the bastille day parade. that gives the president a couple of weeks to work on his handshake after macron crushed the president's hand in brussels last month. vonnie: i thought you were going to say his branch. it gives it dashes french -- his
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french. coming up, the health care setback could have a domino effect on the rest of the policy agenda. in toto into blue -- tune bloomberg tv july 4. be a fireworks spectacular live from boston. this is bloomberg. ♪
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♪ live from new york and london, i am mark barton, along with vonnie quinn. this is bloomberg markets. vonnie: time for our bloomberg quick take. today, we are looking at the
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battle over u.s. health care with the senate building its vote on the replacement for the affordable care act. the affordable care act was passed in 2010. the individual mandate has been its least popular parts. -- here isicans have the situation, the bill passed replaceouse in may with the continuance coverage. under that plan, there's no requirement to buy insurance. the senate bill would require people who go without coverage for 63 days to have to wait six months before getting new coverage. u.s. president donald trump has given his support to both bills. he has not discussed their mandate provision specifically. both the individual mandate and the continuous coverage proposal
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address the concerns that older enrollees would push up premiums, while younger ones the side they could skip insurance, leading to a depth spiral. -- to a death spiral. one said it was part of congresses power to tax. many economists attribute the recent comments of obamacare to get enough healthy our young people to buy coverage, but wouldn't that be motivated by higher premiums or a six-month wait down the road? that remains an open question. you can read more about health care and are quick takes at ni quick on the bloomberg. for the latest on the health care bill, let's get the kevin cirilli. we have seen a delay of the vote trade when can we expect this to
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be taken up again? kevin: mitch mcconnell saying he will not have a vote until after the july 4 recess. we should note all the top republican senators met at the white house yesterday to hopefully begin crafting what they hope will be some type of legislative push. candid, i have spoken to several republican communications officials from the conservative and moderate movements, and they are scratching their heads. they do not know whether or not a majority leader will take this bill further to the right or to the middle. he risks alienating either side anti-can only afford to lose -- and he can only afford to lose two votes. byk: our leaders surprised the objections within the party? kevin: i think they are surprised the majority leader has crafted a bill that suggest which way he wants to go.
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the white house has been pushing in terms of hoping to bring on board some of the lawmakers up for reelection in 2018. that is where this could make an impact, the fate of the senate and the majority the republican house. it republican from nevada, obviously, a lot of strategists focusing in on. there is frustration in the congress, that the white house has not been as engaged in terms of getting this across the finish line. decided president has notttack the media or even targeting health care. the president pushing back on that criticism in a tweet where he says he feels he has been engaged. that back-and-forth is palpable on capitol hill. recess ise july 4 coming up and constituents will be basing their elected representatives.
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what argument will be most widely heard? will it be, you are not keeping a promise of seven years or you almost a going my health care? kevin: both. i think there is going to be a lot of fireworks this july weekend for lawmakers when they return home. you have to remember that there are parts of the affordable care act that are increasingly popular, including programs for senior citizens. president trump was able to win overstates like michigan and wisconsin because of the results of high premiums, and republicans were able to get the control of congress as a result of high premiums. up -- grassroots picked lite, if as obamacare you are heading up for reelection in texas, you know the best way to activate your base is to present yourself as someone who pushes against leadership, even if it is in your own party. u ande like senator cr
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rand paul do not -- cruz and rand paul are not hurt a going against them. it helps them with their base. vonnie: thank you. we will be back to you in the next hour. i know you have an interview with jim jordan. that is kevin cirilli at the white house. ecb'sstill ahead, the mixed messages waiting on the on the you can watch all of the comments on tv . boj is mr. kuroda, the governor. this is bloomberg. ♪
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♪ live from new york and london. i am vonnie quinn. mark: i am mark barton. this is bloomberg markets. a programming note on bloomberg television, that david .ubenstein show
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tonight, the cofounder and chairman emeritus. >> when you founded the company around 1962, you knew nothing about shoe design. you did not know a lot about management and you did not have money. did you imagine when you first started this company in the early 1960's, that it could be what it became? >> when i get that question, i say, we are exactly on plan. [laughter] with you, i cannot be a smartass. >> you mean, that wasn't an original question? mark: you can see that interview tonight on the david rubenstein show tonight at 9:00 p.m. eastern. coming up on the european close, thoughts to talk about. -- lots to talk about. have a look at what is happening
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to european equities. little change for the stoxx 600. is lower, falling for the fifth day in seven. check out the currency board. lots happening in the currency markets. the euro with soaring. the euro is down against the pound but up against the dollar, falling as much as .4. sterling rallying today, after comments from mark carney. a perfect opportunity to get over to sintra in portugal, where that panel is continuing. this is bloomberg. ♪
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mark: 11:00 a.m. in new york on 4:00 p.m. in london and 11:00 p.m. in hong kong. 11 minutes left in the trading day in europe. i am mark barton. vonnie: i am vonnie quinn.
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this is the european close on bloomberg markets. ♪ top stories from the bloomberg, a wild ride or the , spikes backgames after the ecb suggests mario misread the words by mario not be sounding a more hawkish tone. prime minister theresa may in the u.k. facing her first major vote under her government formed with the help of the dep. the french president pushes for major changes to reform the france labor market. in banking, u.s. banks in focus as a result of round two of the stress test, how much will banks be hiking dividends?


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