tv Bloomberg Markets Americas Bloomberg August 29, 2017 10:00am-11:00am EDT
♪ vonnie: will have the latest on harvey and also north korea in the next two hours. we start with abigail doolittle. consumer confidence for the month of august. the actual index is coming at 122.9, higher than july and very much higher than what we had in the lows. the recovery continues to tread theer and we have a beat on consumer confidence number. we of the worst drop in about a
lows earlierf the in the day. than .8%. down more incident with the north korea missile going over japan. he considers that to be a knee-jerk reaction. situations and he thinks this could be similar. concerned if it broke below that range. 500, we look at the bet, all of these chairs are and well biggest drags off the lows as well, dragging nonetheless. risk off days, these are the names of some that risk off.
financials really being dragged on by the rally. we see the 10 year yields down 10 tracking financials. we have jpmorgan and citigroup down sharply. eye on the sector. just rounding it off in case you higher question, gold is and a dollars shopping against the yen. and the vases up 13%. still below 13. risk off his relative. mark: north korea file -- fired the missile over japan death by 1.1% and earlier, 1.7%, biggest drop since july
last year. down and we are up over the 30 day average. highlights the moves we have seen to save assets. today after the missile was launched over japan. on track forield its fourth weekly drop back in july 13th. the peak in the one-year horizon, it rose to the highest level since january of 2016. downward.is 60 basis points back in july. it is a big moment. the euro climbing for the first time in more than two years. just hours after north korea fired the missile.
best ever start to the best year as a whole the best year as a whole since 2003. from a technical perspective, vonnie. the ecb meeting officials expressing concerns about the currency strength in the minutes from the last meeting july 20. .5% in the second quarter is bang in line with two quarters, and in line with the earlier estimate of 1.7% year on year. atpare that to the euro zone 2.2%. the french economy is growing slower than the eurozone after a significant drop in polls. the macron administration will cover the five-point plan to overhaul the labor market before going on to set out his spending
september 27th. the wrench economy up 5%. click thank you. m a has the first word news. >> thanks. fourth-largest city in the u.s. will be inundated to 20 inches more of rain is in the forecast. harvey is set to crash a sure once again tomorrow on louisiana order. president trump is on his way to the region now. suck texas are starting to recover from the storm. if the store makes it second as expected, the nation's capital oil refinery could be hit.
louisiana toes in new york and other demand centers. texas will get emergency disaster it quickly and present trump said there will be a rapid reaction. to financial services committee chairman suggests he want to cut benning to pay for the response global news -- global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> geopolitical tensions rekindled after north korea washed a missile that flew over japan and landed in the pacific ocean. u.s. president jott -- donald trump spoke by phone about north korea poses latest missile task and how to respond.
question fan's position completely matches that of the united states. --th korea's missile launch i'm in complete agreement that we must increase pressure. >> earlier today, president trump issued a statement saying threatening and destabilizing actions only increase in the korean regimes isolation in the region and all options are on the table. headwinds to discuss veteran.ear market on this particular geopolitical threat in the coming days, how much will the emphasis return to come back at potential debt ceiling problem?
cost there are a number of headwinds september that for the market has been quiet and sanguine in a very low volatility environment between north korea, the russian investigation, the debt limit, to see whether or not we will discuss tax reform. we are not seeing stocks were yet right now. notwo stocks continue to worry even as the 10 year yield goes to 210? could it is a remarkable point because last week, bonds rallied when the president said that he was thinking of shutting the government down to fund the new mexican wall. -- the wall. gold continues to rally so there is a lot of concern in certain parts of financial markets. the equity market is interesting. only 4% of trading have seen a 1% daily change. the historic average is about
24%. we are in an environment where equities are very complacent. there is a lot of risk out there because of this complacency. bottom and lower top. i will we see the changes occur where we start having more volatility, the likelihood is we will see follow through on that. a couple of the 1% moves happened in the past few weeks. a little more worry in the market but not a lot to be truly concerned yet. quite clearly remain bearish on financial markets. this will be an event? what are the triggers for the potential trigger point? >> there are probably at least for events front and center that could serve as triggers.
it could be something we don't see. working a financial asset bubble. they do not react to fundamental news or development. they have a disconnection from reality and that is what we are seeing have. jonathan -- that final possible rate hike penciled in my not actually happen in 2017? >> it is a fantastic question. if any ofsee it is these events escalate to become the larger and more serious issue, then of course the rate hike gets pushed out. the way the jobs data has been, it is remarkable. a 4.3% unemployment rate, a 4%
-- rate with this point spread between the two. from an economic perspective, the fed should be tightening. the rally in treasuries continues to ease financial conditions. the 10 year treasury yield is pro-we 35 basis points lower than the year even though we have had to fed funds hikes already. have financial conditions continue to ease? when they start the process in september, they hope that push yields up a little. >> there seem to be dislocations but i do not know that there are. it is $5.5. they continue to strengthen versus the u.s. dollar and we have yields right back below to 10 on the 10 year. does that wind -- unwind where
asset -- prices are fairly valued. >> there is a large number of speculative -- long on the euro. tapering, we are talking about the strength of the euro. anythingot seem likely more hawkish with the current strengthening. the dollar is set with a rally. it is more than just a bear raid on the currency. like you said, the 10 year yield is not consistent with were equity prices are now. it is all a combination of these different bubbles occurring the someone need to start being wrecked that's probably before
year-end and especially after the summer ends. >> where you particularly bearish on financials? >> the interesting thing with financials is there has been a huge rally with the election especially on the hopes of the steepening yield curve. is at its tightest level since the summer and obviously there are financial deregulation being pushed by the trump and anything the trump administration has been pushing for, they have been very much unsuccessful and obviously, we saw the federal reserve come out in the past couple of weeks pushing back on deregulation, so i just think those gains have priced in a lot of optimism we are not seeing results for yet. you have to be cautious going forward. >> thank you. chief market strategist. >> thank you.
>> we have a flint refinery that will start today. it is a big refinery. two of them will try one of them today. not severelyhose damaged, and remember these refineries know how to handle .hemselves we have not heard much from the others yet. i'm guessing they will be online sometime in the movement of getting them whatever they need allows. look for that late this week thursday or friday to hear more positive news with refineries which should eventually put back offerrude oil and sometime later this week or next week. mark: it is not just tropical storm harvey today. it is the north korea missile
launch holdover. we are above $1300 looking at gold futures will be stat that level? in decemberto 1330 futures. it is quite a rally. we are at a point were probably the smart money will take something off the table here. you are probably getting a bit itad of yourself but no, will take something else to break it. we have so many events ahead of us. we have the president with the debt ceiling in the wall. we have the big jobs data this week. you have got to learn to take money off the table and put it back on the table. pointk you are at that with gold where you will see some profit in. with today's futures
in focus. the red cross asked king for your help with the disaster in texas. the organization army has dozens of shelters up and running and expects this crisis to grow exponentially. thousands of texans will and apply on the red cross for food and water and a place to stay. your donations will help. go to red cross.org for further details. vonnie: timeout for the business flash. citiesices in 20 steadily in june. 5.7%, above the consensus estimates for 5.6%. shortageg inventory contribute to the gains. best buy posted its biggest sales growth in more than seven years. the consumer electronics chain raised its forecast.
investors question whether best buy can stay on this half in the face of amazon and others. shares fell in early trading. the advisory board has been split off, the unit will devise the health care operation. will -- quity about $1 billion. that is your latest bloomberg's nest flash. jonathan -- mark dolan -- mark: 4:00 p.m. london. i look for to that one. this is bloomberg. ♪
persistent has ever paired we will hear about it now from .bigail doolittle here to look at high-yield dividends is the senior etf analyst at bloomberg intelligence. ., thank you for taking the time. find the topic to be interesting. investors are still looking for yield. you are saying there are clean vanilla dividend yields out .here can you talk about those? >> within the s&p 500, there are 80 stocks yielding more than 3%, which is what the corporate bond will give you. there is one that literally stocks.ose 80
spider s&p high dividend etf. thekey thing to note is equal late of stocks. jews up on your yield a little but because you're tilting it to smaller size large caps. it is going to be little more volatile because of the equal weight of exposure but it has got a 4.4% yield well ahead of corporate debt. one does something similar, the high dividend etf s phd, that is a monster. fastest is the vanguard high dividend, which only yields 2%, but it is very safe. very similar to the s&p 500 whereas the other ones tilting to till it is have a little less tech as you imagine. they are all taking in a decent amount of cash because as you
said people want income. >> something that stands up to me is the fact that dividend etf's you just talked about our yielding more than junk bonds. it is amazing and speaks to what is happening with the etf. if you could talk to us about that. >> how many our yielding more than hyg -- hyg. there are five dividend etf's. the big thing you have to look at, these have a mandate to go anywhere and get a lot of yield. themhave a lot -- all of have over 20% and have small caps which tend to yield -- yield more. they also have mlps here. the thing is these will be a little more rate sensitive but some of these again, they have really juicy yields. with everything that is a -- rd, there is a risk
>> senior etf analyst and back to you, vonnie. vonnie: still ahead, dealing with issues both foreign and domestic. quick 84 victims of hurricane harvey while warning north korea -- all options are on the table following the latest missile test. we are live at the white house next. theks are on the decline in dow is now one quarter of 1%. s&p 500 down as is the nasdaq. the dollar index is below 92 right now. year yield is stabilizing in the session at 2.1 euro percent. this is burke. -- this is bloomberg. ♪
>> president trump this morning saying options are on the table when it comes to north korea. the white house issued a in thent before landing pacific. presence of north korea signaled its contempt for all members of the united nations and is only increasing and zone isolation. president trump is on its way to texas to get a first look at the disaster. inundated with floodwaters caused by tropical storm harvey and they may get another 20 inches of rain. some estimates say damage may reach wanted -- disrupted production. harvey may make a second tomorrow on the texas louisiana border. the president is pleasant to get emergency funding to texas quickly. the promise may collide with the reality of how congress works and lawmakers have usually asked
for details in plants. conservatives are likely to toand a be offset by cuts spending. global news 24 hours a day powered by more than 2700 --rnalists and analysts in in more than 120 countries. >> thank you. for more on the president passes trip to texas, we're joined now house reporter. the president already -- over the weekend. the president will be hearing about how theders
federal government can help with the rebuilding effort and then he will fly with our -- to austin to get a sense of how the effort is going on here about how the federal in theent can help recovery efforts as well as the rebuilding efforts that will take place in the months after the storm is over. >> it is before he takes off his rallies tomorrow. what will see -- what will he say about funding and what can he offer? >> he said yesterday he believes congress will pass a funding relief measure very quickly. he believes this will sell through congress. he might be optimistic. it is a long-standing debate in congress for years about national flood insurance programs, emergency funding, whether or not there should be
offsetting cuts that happened in the other parts of the budget. on these to happen of santana president is pushing tax reform and a budget trying to get a lot of that done over the next few weeks. jonathan: north korea, president trump says all options are under consideration, how like the busy to respond to the missile launcher -- seems to be much more measured from the type of line with we have seen earlier in the month. fire and yuri would be raining down a north korea if they continue with the threats. he is expected to speak with the prime minister of singapore while on the flight over. i believe the white house must a unified front end of not want to be out with the rhetoric we heard earlier this month. he spoke to the premise japan yesterday trying to get an and moveonal approach
forward. we do expect more of an approach from the white house and allies over the next few days. >> a rainy day in d.c. today, thank you. for more, we're joined by new, also in washington d c. andleaders, the president prime minister they had a 40 minute conversation by phone whether any decisions made and what with it have talked about for that long? >> the issue would be how to make this response different from previous ones. it was clearly much more provocative and action sending a group of missiles tracked the over japan. raid sirens were going off telling people this is extremely dangerous and take shelter. continuedeing a defiance by north korea particularly after the secretary
face of u.s. warnings sending a missile to guam. should we look at it in that way, but at that korea backed up sending a missile in that direction? >> i would be wary of looking at it that way. it is still a pretty provocative action. the issue and what we have seen is that the u.s. is looking to declare victory system what north korea have not done in recent weeks. when north korea does something, it changes the cap list. president trump's's remarks that all options remain on the table is more of the same, but i would expect the response going forward to really focus on what the secretary of state rex tillerson has laid out, ramping up pressure on allies come on china to enforce sanctions, been really trying to box north korea into a corner and squeezed economically. wille un security council hold a meeting on north korea today. obviously, this includes china and the russian federation as , but what can the yuan do that might push things along, or does this have to be a response from the united states and china and maybe some of the other members? >> it gets back to the age-old at thef the challenges
security council. i believe this meeting was requested by japan. the japanese ally would agree to that meeting and seek to hold it and the security council cannot this to go not remarked upon. statement issue a condemning that action. the problem is always is ok, what do you do next. north korea has hundreds of artillery pieces. go for a military strike, north korea could exact mass of the capital south korea appeared we always find ourselves back in this position in the international committee clearly exasperated with north will make north
>> the leisure trend continues to make headlines. the struggles that really are the whole industry. same-store sales are now projected to be 4.6% for the second quarter. the worst quarter since the third quarter of 2016. it really confirms the weakness from dick's sporting goods and other companies we heard from. there were other concerns the , the inventory problem and the discounting they are having to do, putting pressure on the growth margins, saying especially as the quarter progressed, discounting get heavier and new companies like under armour and nike are coming out with big ticket items anymore. and at flying off the shelf anymore -- very much.
that is cutting into them i suggest margins. companies in the industry are really getting hurt. as low as going back five years, dix sporting good and foot locker. facing a similar problem and they all have the inventory problem. the ceo trying to combat that this morning, saying is looking to get that under control at the end of the quarter, could be down 8% year-over-year and that should help. >> any impact? >> harvey story alone is very sad. coming up this weekend is a big back to school shopping weekend. texas.stores are in we have had retail sales in general could be a little bit
hit like this. 9% -- exposure, and for of the story all around. mark: it is time for a look at some of the biggest business stories in the news right now. clock is ticking for google. comply ine eu how to order to stop discriminating against rivals shopping search services. $2.9 billion, movies on the new apple television. according to the wall street journal, $19.99 for major tolywood, the studios want charge five dollars more. delivered -- ford fusion capable
of self driving. still, an engineer at the wheel. the goal is to see how customers react to coming out of their home. that is your bloomberg business flash. in france, the country's's biggest business lobby is holding -- summer university. after a summit in paris, bloomberg's caroline is at the university and joins us now. >> i am happy to be joined today by the president of the federation of german industries. he represent 100,000 german companies, 8 million. one question on the market.
today, we saw euro hitting one point -- one dollar and $.20. do you have any thoughts on this trend with the euro? germany, as like different exchange rate would be better. nevertheless, i think the german european, -- economy in total is relatively strong. our economies can cope with that. here in france today, a gathering of french companies, what is your take on the first anddays of president macron what kind of relationship do you want to develop with the german industry? >> first of all, i'm personally and to support our friends to answer that second question,
i think we are eagerly waiting for when he announces the details of the labor report. that will be very important, to see what kinds of reforms are first on the list of the agenda and i think reforms are really necessary to help the french economy. >> t think he is trained to what was done in germany in the early 2000's and do you think that is what france needs now? remember, they were once called the sick man of europe as a headline of time magazine. what happened is pretty similar to what is now on his list. a reform of the social system labor system, so from an economic point of view, he's are
the most important issues to change structures and structural reform. i just can't keep my fingers crossed. >> what response would german companies like to see? minutes away from an election in germany. do you think german businesses want to see no change meaning a possible reelection of angela merkel, or what you -- or would you like to see some change? >> it is a principal to stay andtical or neutral nevertheless, of course we have expectations for a new government and most important expectation is we need a to doment encouraged reforms. we have no major reforms since the one you mentioned around the millennium. is more than time enough to
start a new reform agenda even in germany and we need a government -- reforms inld do more what areas, exactly? >> for example, in the social ,ecurity area, we need a reform about the social security system, about what we have as a system in germany, we also need structural tax reform and not just looking at the fixed rate. there are some of -- opportunities for reform which we expect with the newly elected government will be encouraged to start. >> you criticize yesterday the for lacking ament clear course in the brexit negotiations. think we will see any progress in this brand of negotiations between the you can
the eu? progress we see that the nevertheless, i admit i am skeptical. remember the british delegation fought about that thought about taking the stage or not taking it because of a national holiday of its own. it clearly means they thought about a national holiday being more important than continuing the negotiations. just two yearsve a time frame to finish it more than three years is gone. classes that mean the u.k. stays in his position? >> we're simply not well prepared from my point of view. separate, but very dependent about the result of the
>> and speaking of german business, the porsche chief executive, you will see that first on bloomberg not :00 p.m. london time. the u.k. wants to step up the intensity of brexit negotiations and meet more often according to a person familiar with the discussions in brussels. that follows from comments on the eu chief brexit negotiator who told reporters yesterday that he had concerns over the pace of the talks. for more rounds of negotiations started monday afternoon. this is bloomberg. ♪
vonnie: live from new york and london, i am vonnie quinn. money managers compare -- prepare for the regulation and eu clamps down on those looking for loopholes. helpobably will not smaller hedge funds already facing an investor exodus and lowering the bloomberg market structure reporter -- trista joins us. thank you for joining us. is it smaller hedge funds that will suffer more from this research change than the bigger ones? thehe big hedge funds have money to hire their own internal analysts if they want to. able to absorb big blowups. hedge funds have been going under really fast since 2009. yes, the smaller guys get hit the hardest.
take noome choose to research whatsoever? might hire internally, -- mark: on the regular side, the -- losing the loophole >> it has to do with dark pools. we need to get a lot of it onto exchanges, way more transparent. another alternative for banks to use. the wording is vague. trading actually going to go back on the exchanges or not? exchanges say no way, and
they're complaining. mark: what brought about this? >> i don't think the regulars would admit this, but nasdaq, and they have been complaining publicly, that this is not fair. it will create a lot of advantages for people who operate these. mark: will we see more changes as the data approaches? >> it is a big problem? -- a big problem. the sophisticated traders and closing loopholes as we go, we're just getting started. mark: been starting on this for a while. don't forget to check it out on the bloomberg for a range of solutions for navigating europe's upcoming regulations. p coming up, the european close is next.
until the end of the tuesday session. stocks are lower today, a day dominated by the missile launch over japan from north to leader -- north korea. asset sendingl equities are check out the currency today. continues.s dissent look of the euro, 12015 p are we have not seen those levels above 120 since january of 2015 and as , in theove the point wake of north korea's assets, i will have to show you how some of the europe principal bond markets fair. we have got the u.k. german spanish and italian 10 year falling. this is bloomberg. ♪
this is the european close on "bloomberg markets." ♪ mark: here at the top stories we're covering from the bloomberg and around the world. tensions flare up again with north korea as the kim regime launches a missile that flies over japan. japanese prime minister shinzo abe calling it an unprecedented and great threat. theeuro hits his highest against the dollar. can the ecb talked the euro and doesn't want to? rein in damage totals keep climbing as tropical storm harvey continues to flood out houston and surrounding areas in texas. damage totals could run as high as $100 billion. we have got the latest on the storm, which is to pay for a second