tv Bloomberg Markets Americas Bloomberg August 23, 2017 10:00am-11:00am EDT
♪ vonnie: u.s. stocks open lower as the president threatens to debtdown the border wall over the border wall. more on that in a moment. first, here's abigail doolittle. abigail: a big miss for them month of july. in attual number came 570,000 homes. this is not entirely surprising. we are certainly seeing this expectedn a less than new home print for the month of july. not much of an effect on major averages.
nasdaqdeclines for the well off the lows. the nasdaq s&p 500 have been it is worthto .5% .oting we had a rally investors giving some of that back today on uncertainty. a look at one stock related to 5%,es, down affect -- about on pace for its worst day of the furloughs miss top and bottom line estimates earnings by 3%. they are benefiting for not as much as home depot. results were a bit disappointing. it is having an effect on home depot, down more than 1%. it had been lowered by 1% slipping higher by nearly 1%.
to of the for the entire sector. in case you were wondering, there is a small risk matching small the clients for stocks. this is a chart for the 10 year yield. at 7:00, it took a dip lower two basis points. a risk as investors are digesting president trump''s comments trade and a government shutdown. we see the yen is rallying against the dollar. up about one quarter of 1%. they modest -- modest risk for trading in the u.s. mark: we are digesting president trump's comments yesterday. three groups gaining today, no surprises.
town, thisry in chart is going back to january showing hurdles that the company is facing. down by as much as 13%, the biggest decline since 1990. advertisinglargest company. expected to be between 0% and 1%. thinking about spending on consumer goods such as laundry detergent toothpaste. revenue coming under particular pressure. products are increasingly focused on cost cutting and scaling back marketing budgets. another factor, it did not experience any significant
losses for declines or data from the cyber attack. drop, in an earlier germany, rising to the highest level since 2009 against the pound, he did not express any concern about currency strength in that. growing, a regular guest of this show from credit he does not think parity will happen. why is that? he says brexit negative already in place. prospects are very hard exit. shows it should be 88 per euro. should be 92, 24. some data at the eurozone.
57.4.cturing rising to highest rating in two months. unexpectedly calling for a seven-month low climbing at a decade high feeding confidence inflation will eventually pick up. manufacturers, and impressive performance with orders surging at the fastest pace. more than 60 years. the data is strong as we await the speech on friday. funny: president trump us his latest comments once again sparking market uncertainty during a rally in arizona yesterday. the president threatened to shut down the u.s. government over funding the mexican border wall.
me, went trump: believe have to close down the government, we are building that wall. let me be very clear to democrats in congress who oppose a border wall and stand in the way of border security. you are putting all of america's safety at risk. rhetoric. our next guest says politics aside, we are the late stages of an extended run. a 30 year bear market. the ceo of milton berg advisers joins us now. call used inng many polls so far. predicted the market would go up as it did in the next few months. 30 years in the bear market. >> it seems like a strange call. we had a bear market on real
terms. 1990 92 2014. we had a 29 year bear market to 1995, taking and adjusting for inflation. the public more involved with stocks than ever in history, boosting the markets, and they are turning down the full-year bull market and it is obvious to me we will see something like it you make money as it sets in. inflation.showing some people would say that thousand's the best indicator of stock performance. well overvalued here. >> if you look at the market,
when internet session -- session was overvalued, very undervalued. inaverage, all stocks history, it is very difficult to make a long-term case for ball mark is making a lot of money over the next 10 or 15 years here at >> timing is key. if you list that timing at the beginning of the year, a 14% run. when does this start? july, the in august, decline, just 2.9% and attend a basis, measures for standard deviation of greater than march 2007. many are expecting a bear market to begin.
we told the clients would get along yesterday. we look at change on the basis. each, a minimal rally 0.8%. a probable target. mark: are we seeing evidence investors are starting to smell the coffee? >> bear markets begin in their own way. the bear market begins and they recognize the risks in the market. to get investors a bit more -- more complacent.
volatility and the bull market. we like to trade both sides with the markets going down on the short side. there will be much opportunity for hedge fund managers. classical places much as 10% of your assets in gold. good advice or not? >> i call myself an expert on gold. it is really a commodity. a tremendous 12 your bull market for 2000 and 2012. we will not see a similar bull market anytime soon. close to $1000 a year and a half ago, they will hold five or 10% of that level. do not chase gold. gold will not run away from you at this line. >> what is fair value now? >> it is interesting. we measure the price of gold for
house pricing in the united states. prices have come up and it is pretty much stable. relative to the housing crisis, it is fair value. i think seven or $800, if you want to buy gold, you really want to buy gold. i cannot project that -- >> a massive running commodities. i have the chart which shows called there you high level gold miners back here. we have seen it crash again. what happened with commodities? or 2012.ughly get 2000 should have four or five year consolidation phase. we are probably in the second year of that phase. you look at the price of copper i think we have to
trade these things at the rally. >> if you see a bear market in stocks, that is what i do not understand. where does all the money go as it comes out of the stock market? come normallylly some of that would going to treasury. goes down to $200, you don't sell it. it is not an argument they would ever make money with of where the money goes. markets fluctuate historically with bull market and bear market. i showed them this chart. you had a 29 year bear market and a 58 bear market in 1999. do not expect to make easy money until the next when you want to buy it.
mark: what is the trigger? what are we looking for? yields at 2.8% in july of 2011, yields go up. they will be doing that. it is the straw that breaks the camel's back. some subtle changes in the last few years. people are convinced that goes up and that is the truth. >> today saying the end of the market night. could the u.s. president trigger this? not begin with trump. it does not begin with obama. it does not begin with bush. they decided to create that input. an overleveraged economy will cause problems on an economic asus for the country.
i think president trump is doing the right thing trying to eliminate them, some of the bureaucratic economy. very little that the president can do. overvalued markets, and too much liquidity here in >> to you have a forecast for yields? >> we will not see 2.8%. i don't think will see inflation in the bear market. it will be disinflation, deflation, with the risk and it will take yields higher. >> some of -- no more time. we will have you back again. >> the president spoke at a rally.
the u.s. navy has responded to a rash of accidents for japan-based -- saying it had lost confidence in his ability for command. that happened days after the uss john mccain was involved in the collision. there have been four accidents , two ofmmand this year which have been fatal. a strong performance this month. the market gauge and manufacturing unexpectedly rose in august. the fastest pace in more than six years. theresa may vowed to take back control in europe and now her government is lying to accept the close -- by theopen to abiding
>> i believe right now, it is a range bound. the momentum to get over the 52 handle, there has been no followthrough whatsoever despite inventory levels coming down high,march, the all-time i believe especially with the glut of inventories at the refinery level, we will stay range bound until the september contract expires and i believe heavy buildup of oil is on the lakeside. that's by i think venezuela and saudi arabia will follow through. untilll not see that october trading. >> how do you trade in an environment like this where we are seeing stagnant oil prices and yet there are plenty of events that could tip the markets?
>> the big thing for me is focus on what is moving. you mentioned gold. those highs getting to a triple top level. i disagree with your previous guest. commodity indexes usually trading at a four to one first the s&p and right now it is at a one level. any pullback their market, especially with a lot of high debt we're seeing both at the consumer level in the u.s. and in china, where basically they borrowed $20 trillion to create $5 trillion in gdp, both of those things have debt ceilings very high. that will lead to inflationary concerns with gold here i believe it will go above 1320 before november. vonnie: that is what you're concentrating your trades on? i find buying gold futures now.
i hope we get a pullback like we did, the previous couple months. i'm buying gold futures right now portrayed above 1300. >> all right. good luck with that are we will check and see how that works out. bell curve capital with today's futures in focus. mark: great stuff p are shares are plunging. i will speak with the chief 4:00 p.m. london, 11:00 a.m. in new york. since 1998. this is bloomberg. ♪
mass-market cars. any onlian-american come say thatl brand, they would make fear chrysler more tractive for a possible combination. posting second-quarter earnings and missed estimates are net sales also came up short. posting better same-store sales growth. we will have more on those coming up in a few minutes. thank second is at bank of america are debating whether the eu trading hub -- where the eu trading hub should be after brexit. the --
vonnie: oil inventories in the u.s. let's get a check of u.s. markets and where we stand right now. getting back some of yesterday's gains dow is down at down quarter of 1%. the s&p 500 lower on disappointing earnings reports. a second day of declines. the winners in the s&p 500 include foot locker and some of the chipmakers. this is bloomberg. ♪
of more than 3.2 million barrels. as always, you can follow bloomberg coverage for weekly inventories at the function t live go. >> they have just come out and we are looking at a match. barrels, basically on target with expectations. 8.9 milliondown of barrels. the big disappointment last week which caused oil to follow the do haveinventories, we a drawdown this week that is more than what investors have been looking for. it drawdown of 1.2m in barrels for gasoline inventories, the expectation of the survey had been for about 600,000 barrels. this appears to be a bullish report. not enough for investors.
down more than a survey, right on target. we see a small spike higher and a little bit lower. oil is flat right now tiered it could take time for investors to digest this more, as was the case last week. i was speaking to mike, a commodities strategist at bloomberg. what he continues to watch is the direction of inventories. he is not as concerned by the week over week change. this is 8385, a longer-term chart. we see the direction over the last five years of inventories has been much higher. investors are so concerned about causing the oil price crash. the possibility of peak inventories, you see oil inventories have been dropping steadily this year through a moving average.
interestingly, we are still down about 5% this month, the worst since march. oil inventories not helping the press of oil now. give it time. >> there are many factors to consider -- to consider in the market. president donald trump is turning up the departure to deliver on his agenda. supporters in arizona he would build a border wall if if it leads to dire consequences. have a listen. me, ifnt trump: believe we have to close down the government, we are building that wall. let me be very clear. to democrats in congress who oppose a border wall and stand in the way of border security, you are putting all of america'safety at risk. >> we are joined now with what that is threatening for congress.
he talked to republicans in the speech overall as well. >> the redline was against donnelly democrats but also republicans in congress telling them it is my way or the highway when it comes to the border wall. he says he must have money in signudget or he will not it, veto it, potentially shut down the entire government. a bright let -- bright red line the president drew and it leads to a showdown not only between democrats and republicans but -- republicans in congress and the president and the white house and it could end with the entire government shutdown if they don't come to resolution between now and the end of september.
mark: this issue could get wrapped up with legislation to raise the threat -- you raise the federal government debt limit. >> that is right. it cannot only include shutting down the federal government, it could -- it could+++ shutting down -- defaulting on the debt. if the president were to insist on the funding of the wall and republicans would potentially not get time for wall funding, it could lead not only to the government shutdown but the default of the u.s. debt limit. it would be catastrophic and it is something neither the
president nor republicans in charge of congress want. it seems we are inching in that direction with some of the rhetoric last night. vonnie: with all of the theatrics last night, and that will be more is today goes ahead in a similar fashion, mitch mcconnell and the president need to get on peaceful terms with each other. they are not happy with each other. if could anything get done the majority leader in the senate and the president are shouting at each other? >> it is a huge question. on the lower rungs of the administration, people are working relatively well with and there isngress i could completely blowup the entire process. they have not spoken in a couple of weeks. there is not a lot of room for error as we get through the raising of the debt limit and all these things are on the when they get back. on president weeding out public and senators and mitch mcconnell, it does not look like they are anywhere close to a resolution. >> great work at the white
house. our bloomberg washington correspondent. thank you. let's check in on the first word news. jaredte house advisor kushner was snowed by the foreign ministry today. --pt positive top diplomat about the members of the u.s. and debt -- delegation about the decision to reduce and delay financial aid to egypt. president trump emergency management erector pushing for an overhaul of relief. states, cities, and homeowners should bear more of the cost and he says taxpayers should not be on the hook for homes i keep flooding. ahead of the european central , for guidance has been a success. mario draghi spoke in germany. expectations on future shorter rates. interventionrected through markets through large-scale asset purchases.
to influence the yield curve beyond the short-term. >> he gave no clue as to when he might end stimulus. >> he gave no clue as to when he might-- now is the time to back out -- bow out. he will continue to -- global news to my four hours a day powered by more than 700 journalists and analysts in more than 120 countries. this is bloomberg. stealcoming up, trying to the smartphone thunder. the electronics company coming out with a new galaxy. ahead of the apple big reveal in time for the 10th anniversary of the iphone here plus, the stock thans the hour today, lows
neither doing much. meanwhile, home depot when it comes to the multiyear rebound and remodeling. its- the company lowered earnings. >> a few reasons why shares were down. mess and likea you mentioned, they lowered the prophet foyer to about $4.2. can see why it is down as much as 7% this morning. if we take longer-term view, you benefited fromve the remodel boom, just not as much as home depot. that is where you get tricky. i want to bring in facts about home depot, one of their main competitors.
you can see lows has fallen behind home depot for every quarter in the last five. some say home depot just has better locations in the northeast. sales up, they beat estimates and it does trail for the growth about 6.3%. also, the operating margins. one way to combat the growth for home depot is open up or stores. longere to pay people and that is cutting into operating markets. analysts expected an increase of a nine. look and see how the rest of the year hands out as operating margins get a little bit --
months of couple of --lining sentiment, >> i know when the value of your home goes up, you thought the money you put into it would pay off and you are more keen on you can see on the home builders remodeling level, everythe 50 quarter since the first of 2014, when it goes under 50, it means remodelers are seeing more people versus fewer people remodeling. vonnie: thank you. mark: great stuff. time for a look at some of the biggest is the stories in the news right now. shares of the wells fargo advertising company fell more in 17 years in the -- revenue growth will be between
0% and 1%. consumer goods such as detergent and toothpaste has it under particular pressure. i'm joined at the top of the next hour. do not miss the interview. the biggest banks in the u.s. would cash and if the trump administration carries on it land for deregulation. the bank, a $27 billion growth of profits. jpmorgan chase and morgan stanley would benefit the most. that is your latest bloomberg business flash. samsung getting its turn in the smartphone worse. the company set to unveil the samsung galaxy. the launch comes out of the much awaited reveal the iphone 8. for more of what to expect, let's bring in salina from samsung headquarters.
what are the standout features for the new no eight? >> stakes are superhigh. the last one was recalled after reports of catching on fire. the expectation of that will be a large phone notoriously known for being big compared to the tablet. probably more than six inches in size. expect an upgrade for the camera and several other bells and whistles that will put it .head of the iphone expect it to come out for the coming months. >> i am wondering if samsung could get out and a raffle of some of the features that apple grab some out with, market share and perhaps reverse the trend? >> samsung has bounced back from
last year's debacle and regained their position as the number one smartphone in the market. obviously, the competition is heated with apple and they have had a lot of competitors in the android market on the lower end as well. picture,k at the big samsung is well-positioned. it is estimated samsung and apple have an estimated three quarters of the market share in america and samsung as well ahead of apple in the global market. samsung is resilient and they have emphatically bounced back in the last year. mark: thanks a lot. global technology reporter ahead of the launch of the note eight. still ahead, scoop of a brexit over bank of america. where should post the eu trading have? is it paris or frankfurt? that is the question in this is bloomberg. ♪
vonnie: paris or frankfurt. that is the big question for bank of america investment banking. divided over the european union trading held -- hub. debate and what our sources telling you? reporting, going on to really figure out where the trading headquarters should be. there is paris, frankfurt, also in the mix. >> amalgam of options. they could possibly have more
than one hub. classic exactly. you have read the story. mark: always. >> it is a possibility for bank of america to go ahead and choose multiple locations. some of our reporting was showing that we may have equities in frankfurt and then split off six income and that could be am paris. , debating ideas. mark: vonnie? vonnie: if i can, is this all or thelic consumption regulator consumption or the people who could possibly offer incentives? odd.rikes me as the more you say you are divided , the more people will offer you things, right? case, and france, officials there are saying we
really like these to come here. they are offering tax benefits. they will roll back from the taxes on this potential new employees. when you look at that, bank of america needs to take those things into consideration. thing is where do employees want to work? you have to shoot -- choose how to attract these employees. far? who's winning so banks slowly but surely making preferences public. --
some of the european capitals, you know, maybe a little more culturally entertaining although i don't know. it seems like banks are not really considering it. one to the only major dublin in any case. what you're looking at is more the client perspective. a lot of clients are necessarily in dublin whereas in frankfurt, you have got the whole continent at your disposal. it is more on that side of the picture really. of all on the trail these movements. thank you for that. mark: in a couple of months, new eu regulations will take effect. require brokerages to charge money managers to search rather than offering -- along
with other services. some resisting the idea of paying anything. regulators may step into help blunt the fallout from these the rules. let's bring in bloomberg investing reporter julie. thank you for joining us today. how can washington blunt the fallout from these rules? >> interesting question. we heard the fcc is ready to issue a new action letter. banks do not want to stop and register as investment visors to receive payment for research because now and the eu, investors have to pay for the research they consume from research providers. means they will still have access to that research. u.s. banksly sold
might have to withdraw that access because registering as investment advisors would have to be -- for them. mark: the big argument is who pays for the research, the fund manager with investor? who is winning? >> exactly. we know that wealth managers and private banks are saying they don't want their clients to pay for research. asset managers are likely to absorb that cost and pay themselves for it. it makes sense if you think about the fact that it is what they need to come up with their own investment decisions. an internal cost. >> what are you hearing about how people are lobbying in washington? apparently a lot of investment advisers and brokers are into washington right now.
a last-minute dash to get this down in some way. >> absolutely. we're hearing the fcc is responsive and they are listening to inventory representatives and are willing to come up with a solution. originally, we were not sure what would happen. we knew the european commission was aware of that conflict. one member of the european toliament brought the issue it itself. .nd the fcc as well they are now willing to consider to have providing an exemption to u.s. banks. mark: thank you very much, giving us the latest. still ahead, vp shares our pleasure today with a lack of esther forecast. we will see that coming up in
roughly five minutes time. coming up on the european close, lesson 35 minutes ahead of the wednesday equities close. we're down today and investor still mulling over president trump's speech of yesterday. stocks down i .5%. the euro's ascendancy continues, particularly against the pound. up to 92. they have not seen these levels since 2009. that is something we will discuss with simon kennedy, our editor in about 10 or 15 minutes. the close is next. this is bloomberg. ♪ .
bloomberg markets. ♪ mark: top stories we are covering and around the world, wpp shares were at one point down the most in two decades as the world's biggest advertising company grapples with a slowdown in corporate spending. we will talk to their chief executive martin sorrell in a few minutes. and politics, theresa may makes another concession on brexit negotiations. compromising on the role it eu law, bringing up a key question -- how more down will brexit become? mario draghi gives a preview of his big speech this week at jackson hole, telling an audience in germany that central banks must be open-minded and be ready to throw tradition out the window. ♪