tv Bloomberg Markets Americas Bloomberg September 6, 2017 10:00am-11:00am EDT
welcome to bloomberg markets. ♪ julie: we will cover hurricane irma and president trump's meeting with congressional leaders that we start with breaking economic data. here's abigail doolittle with the isn report. abigail: that ism nonmanufacturing composite came in at 55.3 and the survey called july's6, this after reading of 53.9. economists were calling for a rebound but just a small miss on this service is part of the economy. anything above 50 indicates expansion. not much of a reaction for major averages. we were looking at small to modest gains for major averages going into the non-ism,
nonmanufacturing ism. ther yesterday's selloff, worst in three weeks, after investors contend with uncertainty, whether geopolitical tension, hurricanes, again, small gains as investors regroup after that day yesterday. we also have the dow jones industrial average rebounding today. what was weighing on them earlier or the airlines. we will seek sharp declines on the airlines on the day, including american, delta, united and southwest. all the stocks are down about 1% or more. united down the most about 4%. is weighing on these shares and some airlines are cutting flights in the caribbean but united airlines did cut their revenue view within the airline industry and george ferguson of bloomberg analysts say it is pretty
sharply, so we see those sharply. back to you. julie: thank you w. -- thank you. we have overnight breaking news of the bank of canada raising and we see a drop in u.s. dollar versus the canadian dollar. the bank of canada saying it is raising rates to remove "some of the considerable monetary policy stimulus in place." at the same time, it is flagging risks to the economy and has a cautious tone. interesting they are raising but having a cautious tone but the dramatic market reaction, mark. mark: we are looking ahead to the ecb decision tomorrow. expected.h drama a little change, down earlier, about .4. the upon list to the lowest
level since february. for the industry, the insurance industry, it is 33, close to being oversold. we rebounded from a decline of 1%, holding that first day decline with the first gain in three days. this is the european gauge, a fourth day.for the market is rising, the fix indexis the -- the vix is climbing earlier. even despite those gains, and any other games pre-french election, the u.s. november election and the brexit vote in june last year, that puts the moves in perspective. in june, the correlation between
the stoxx 600 and s&p 500 in dollars was the lowest this cellennium, and that divergen happened after they traded above -- there day moving 200 moving day average. the two indices are close together, as you can see. we will see the correlation strengthens between the two indices the cousin that. ahead of the ecb tomorrow, or euro is trading stronger on the back of that dovish rhetoric from various fed officials in the last 24 hours. investors also adding upside exposure. the common currency hitting the strongest level in one month. the euro dollar rose on whether to incorporate ecb decision risks,, sending hedging costs to their option pricing, suggesting will hold dr.nge
draghi's press conference -- hold after draghi's press conference. i cannot wait. julie: the suspense. first wordahoe has news. brittany: south korean president is seeking vladimir putin's help on north korea. the south korean president warned that it north korea's provocations are not stopped now, they could turn uncontrollable. there's no point in backing north korea into a corner. president trump ended a program -- arting the immigration congress fails to take action on matters by then, the president action has put in limbo about one million people who consider themselves americans. president trump takes his campaign overhaul to north
dakota today. he will have an unusual guest on air worst one, the state democratic senator heidi heitkamp. the president will argue his tax cuts are worthy of both parties. he is reading details up to republicans in congress. the most powerful storm to take form in atlantic is taking aim at florida. hurricane irma has topped withs of 185- has topped winds miles per hour. the worst-case scenario has damages surpassing hurricane was the mosth expensive natural disaster in u.s. history. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. julie: thanks. as for the braces for hurricane texas is still reeling from hurricane harvey, which caused widespread damage, power
outages, flooding and almost 1/5 of oil capacity off-line. yesterday, they discuss the fallout of hurricane harvey. >> the likely effects of hurricane harvey raise uncertainties about the outlook based on past experiences it appears likely that hurricane will have a notable effect on gdp in the current quarter with output likely to rebound by the end of the year. julie: for more on that current economic climate and hurricane effects, let's bring in michael mckee with bloomberg news. you have been looking at the darius economic cost of hurricanes -- various economic cost of hurricanes. did say we would see a rebound by the end of the year. michael: they do not tend to be sustained as she suggested.
is the most expensive that $160 billion. you can see the list there. andrew was number three in 1992, the last category 5 to hit the united states. there have only been three, camille and the labor day hurricane before they gave names of 1935. this will be an unprecedented event. the model shows it might skirt to the east of florida and hit the carolinas, but there is an estimate from a reinsurer that hit miami today, it could be $300 million worth of damage, and that would be a sizable hit to gdp and take longer to washout. julie: you are talking about increase in population -- umably michael: 600 thousand additional people have moved to the miami area and that means more houses. they have toughened building codes but a category 5 does not care about that.
mark: we have had a couple of two or three dovish fed speakers, which leads to the question in the wake of hurricane harvey, what impact might it have on fed policy making in coming months? michael: not likely to have much. first, the fed is not expected to consider raising rates until december. brainard said we may have seen some of the money low back into the economy already. we have ever had back to back major hurricanes, so it is uncharted territory. mostly not enough to slow the economy where the head with get involved. after katrina, the dead met 20 days later and to go vote on whether to raise interest rates and they did because they felt on a 9-1 vote, it would not have the in effect on the long run for yo. mark: we surprised by the tone
of the fed speakers yesterday? anything that stood out to you yesterday? michael: nothing really, mark. reluctantard has been to raise interest rates and has been laying out at case to vote against them. not ari's comments surprise in the sense he has a dovish and strong against raising interest rates. it is hard to match his argument that we may have done harm to the economy with the data because the fed has raised rates three times this year and gdp has gotten stronger in recent quarters and unemployment has gone down. the only thing that has not responded is inflation and monetary policies are supposed to work with long lines, so in theory, the rate increases should not have hit the economy yet. it takes 12 month to 18 months before they show up. julie: to contrast the situation the u.s. with canada a few
moments ago that they were raising rates but keeping a cautious tone to the overnight lending rate going to 1%, but it is interesting that they are still maintaining this caution at the same time of raising rates. michael: it was a cautious statement they put out. they said they wanted to remove some of the "considerable monetary stimulus" they had put in place, but they talked about lots of slack in the economy there, concern about geopolitical risk, the canadian dollar, and the fact inflation remains low there, as well. it is a free be. -- freebie, it will not affect the markets, so raise rates while you can and take a look at if you do it again soon. julie: interesting, some commonalities between here and north of the border. thank you, michael mckee.
♪ mark: live from london, i am mark barton. julie: from new york, i am julie hyman. this is bloomberg markets. oil is holding gains near their highest in prices as key refineries restart operations following shutdowns from hurricane harvey. gold is pairing an earlier gain as korean tensions simmer. joining us with more is joe cusick, head of the cusick
group. it is interesting the action we have seen in oil. not just today, but the fourth day higher for wti. how does harvey and the coming storm irma play into what is going on in the oil market? irma holdingseeing up the oil markets. unless we had these storms, i do not think crude would be at this level. we will watch closely the track of the storm. if it moves more into potential he the gulf region, you could see west texas could have a catalyst further to the upside, especially if it looks like it will hit any reduction refinery areas in that gulf coast area. julie: it is interesting because receiver turning supply from libya's largest oil field in the oil market is shrugging it off. normally, that would be a
negative in normal circumstances. joe: again, the risk is that we saw we got to harvey and the refineries did not take as big a hit as what could have possibly happened. that was a good news. the top news now is that if there is further infrastructure damage in the gulf region or in the panhandle region there, you are going to start talking about disruption as far as movement. that is why it is holding up. as far as opec, libya, saudi arabia and non-note pick nations -- non-opec nations saying they will adhere to their output, i take that with a grain of salt. that is why i think west texas will hold off looking at the weather situation. julie: i want to ask you what is going on there because you do have these korea tensions on going it doesn't seem like there are near-term resolutions. is that what is providing the catalyst for gold?
not to hold high, but -- at least to hold near these high levels? joe: yes, when you hear you will start to militarize even at a small level, there are some baby boomers that were concerned about that. they are our allies but they are starting to see uncertainty in the marketplace. also, we are about to hear from congress now that daca is in play and they have six months then you have the debt ceiling. the uncertainty in the political and geopolitical environment has given a bid to gold and i think that will continue as this continues. julie: thank you, joe cusick. mark: great stuff, time for the bloomberg business flash. it is a partial victory for intel in a battle with the eu over a $1.3 billion fine. the eu courts of justice ruled
the lower courts had to re-examine intel's appeal in the antitrust case. there could be ramifications involving u.s. tech companies, including google and apple. suspended their review of the biggest takeover ever in the southern conductor industry. that means more delays for qualcomm's proposed takeover of nxp semiconductors. provide it failed to important information they requested. that is your latest bloomberg business flash, julie. julie: happening now on capitol leaders have house gop speaking, addressing funding for theey, the aftermath, and house is planning to vote on the first vote of emergency aid in response. you can watch the full conference on the bloomberg at
♪ mark: this is bloomberg markets. i am mark artan in london. julie: from new york, i am julie hyman. nissan is taking aim at tesla. nissan's first electric car got with self parking, a longer driving range and other features. david westin is standing by with a top nissan executive. david: we are joined by posing munoz, theose chairman in north america. good to have you. what is new about this car and why are you bringing it out now? jose: good morning and thank you for having me. yesterday in las vegas, we were having the reveal of the brand-new leaf.
everyone knows nissan is the global leader as we watch the leaf seven years ago and we sold more than 280,000 leafs worldwide, being in the united states, the number one. is a next her offered to the customer because in theg you a new design exterior and interior, trying to attract a broader audience and more importantly, we are again showcase technology of the nissan at this moment, which we called nissan intelligence mobility. we have both the intelligence driving, power, and integration. the intelligence driving is highlighted by introduction of the new battery, which has a longer range of 40% more.
we are also bringing in a ancalled copilot, which is atomic miss the technology, which allows you to drive the car economists we on a highway -- baton immensely on the -- andnomously on a highway higher power and we bring in the latest in state technology on the automatic braking, emergency braking, and the very latest and greatest in terms of integration with nissan connect, which allows you to operate your leaf features through your iphone, and also android, and more importantly, we bring it and an affordable price. we are launching it this week and it is under $30,000.
it is lower than the current model on sale in the united states, so a unique proposition. david: let me ask the question everyone is asking and that involves tesla. tesla has a model 3 they are breaking out and you have already sold many leafs already deposits already has from 450,000 people. do you see this competing directly with the model 3? we have driven our vehicles for more than 2 billion miles worldwide, and our customers are giving us good input. they want to utilize advantage of the technology at an affordable price and with the latest and greatest technology, so the market in the united states is booming. while the market is getting softer overall in piv, the
battery electric go vehicle affordability is growing, so we believe this is the right niche and those customers are telling us they want a little more range but they do not want to pay too much. that is why we came up with the perfect combination to allows to achieve our goals. david: the growth is dramatic. you are starting with a low base, not just do but all manufacturers. that what point can they be a part of -- at one point can they be a part of new material sales the united states? jose: it is taking longer than we initially thought but there is no doubt the technology is booming. all competitors are bringing in new technologies, cars, and they are about to do it. probably we are going to see in 10 years to 15 years and i think we will get a significant growth in this segment. again, if we look at the market
today, we see a growth of 50% in the market, which is softening. we can see the future very bright and i would say very soon we will see about 10% in the ev market in the united states. david: jose munoz, thank you. julie? julie: thanks to bloomberg's david westin bringing us that info on the nissan leaf. happening now on capitol hill, house speaker paul ryan is taking questions from reporters and says he will not leave until hurricane harvey aid is done. you can watch that full conference on the bloomberg live . this is bloomberg. ♪
so new touch screens... and biometrics. in 574 branches. all done by... yesterday. ♪ ♪ banks aren't just undergoing a face lift. they're undergoing a transformation. a data fueled, security driven shift in applications and customer experience. which is why comcast business delivers consistent network performance and speed
we will continue to monitor his comments. let's check in with other stories making headlines. courtney donohoe has first word news. >> it is a storm for the record books and it is on to florida. hurricane irma has topped winds of 185 miles per hour, the strongest atlantic storm on record areas it pass through the caribbean this weekend and has led people to prepare to evacuate or hunker down. one worst-case scenario says irma could be the most expensive natural disaster in u.s. history. south korea's president has asked vladimir putin for help on north korea. moon said russia and china are the only one capable of what he calls north koreas provocation. says -- vladimir putin cutting off north korea's oil supply would hurt his people.
a gas attack in the spring that killed at least 83 civilians led to a retaliatory u.s. strike. there is strongest evidence yet responsibility. syria has denied responsibility. reality of the divorce is sinking in a month policymakers and the goal is to find solutions to keep damage is limited as possible to both sides. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. julie: thank you. as commerce -- congress thereence a busy agenda, is a short-term debt limit of three months. chuck schumer and nancy pelosi said in a joint statement "given republican difficulty in finding
the votes for their plan, we believe this proposal offers a bipartisan path forward." this comes ahead of president trump's meeting with the two leaders, and paul ryan. paul ryan just dropped of that news conference and kevin cirilli joins us from the white house to sift through all of this. since paul ryan was just talking about harvey aid package, let's start there. what exactly needs to happen for that aid package to be passed at this point? kevin: hurricane harvey has become a hurricane for the debt limit debate. republicans and democrats are set to pass a 7.450 you dollar aid relief package -- $7.45 billion aid relief package for -- andand senators republicans in the senate are
likely to take a different view. pass harvey relief separate to deal with the debt amid separate but it is looking likely that that is not going to be the case. what does this mean if you are an investor trying to sift through the noise in washington? it means that could be some political leader in the next weeks, if not now over the debt to make and definitely in december over the debt limit. that is why you are hearing from many republicans that despite really we all predicted for the month of september really could most likely be delayed until the holidays in december. mark: president trump heads to north dakota today with an unlikely guest intel, the democratic senator heidi heitkamp. what is behind this? heitkamp is one of the modernist democrats the president needs to accomplish
his legislative agenda. they would love to have people like her and others to get on board with them to help spur some of the things they want to get done, whether health care or tax reform. i just got off the phone with the conservative messaging strategist and they tell me grassroot groups will be at the white house thursday and friday to try to meet contacts reform. all of that said, the debt limit, harvey funding and moving intoma florida suggests the month of september is not going to be with anyone previously anticipated. julie: before the president takes off for north dakota, he will be meeting with congressional republicans and democrats. kevin: who would have thought? [laughter] julie: really. this is the first time he has done this, right?
q say he is trying to win moderate democrats to his side. he is meeting with chuck schumer and nancy pelosi and they have not extended all the branches thus far, so how -- olive branches thus far, so how will it go? kevin: they say that maybe it is the art of the deal they are trying to get to, but democrats united in the president's decision to rescind daca and ters goingchat around that some would like to see congress address daca before tax reform. most of the conversation on capitol hill for today really dominated on whether or not lawmakers will vote to kick the can down the road and raise the debt limit and lump it with harvey funding. julie: thank you, kevin cirilli. we will see you around the time of that meeting at 11:00.
mark: refiners are looking for recovery after the fallout from hurricane harvey dominating the conversation at the national energy conference. we will hear from tim dove next. plus, our stock mover of the hour, hewlett-packard enterprise. we will tell you why it was just downgraded. this is bloomberg. ♪
the projected stronger than projected sales. reported stronger than projected sales from seeing a healthier demand for storage care. joining us with more is taylor riggs. today chart there, they spiked at 2% and not much changed right now as there is chatter around the earnings. taylor: i will start with good news on white is up this morning -- why it was a this morning. beat analyst estimates, rose 2.5%, up to eight $.2 billion -- $8.2 billion. i think the main take away from this company is the downsizing. i think investors rewarding the 2015 asthat back in they separated from printers and
ink and software business, so they are coming back and trying to look at the stocks that have done them well. the storage business is getting back to basics of 11% this quarter. business revenue up 16%. the good news that analysts were siding. about meg whitman talked how she did not go over and take the uber job, saying she has more work to do at the company here. what work? what are her goals now? taylor: i would argue that analyst on the street would agree there was work to do. you saw four of the major banks cutting that price target. i would highlight bank of america and jeffries, worried about free cash flow. right now, it is at about 1.7 billion and bank of america says
that will be more like 1.2 billion, so look at that yellow line coming way down. julie: all right, hp bouncing around today. mark: i was not planning to the businessis flash. amazon is planning to build their first business in new york, and employees will have the opportunity to work with advanced robotics. candidatestch of willing to pay $125,000 for a four year program that serves people with little to no experience in flying. this began last year with jetblue. latestials with their hobby, a card that does not have a fee and it offers rewards on
♪ you are watching bloomberg markets. i am julie hyman in new york and we are looking at a next picture for u.s. stocks, the dow jones and s&p 500 getting a lift after the selloff yesterday, however, the nasdaq is down about five points. infotech stocks are down if you look at the various groups in not much.t energy stocks are gaining ground. we see the lift in oil prices in part as a result of a bearing down
on the florida coast. we will get updates at the top of the hour expected from the national weather center. the 10 year yield after seeing that drop towards 2% yesterday, we are seeing a list of just two basis points at the moment. we have breaking news that the fed vice-chairman stanley fischer is resigning, effective in mid-october. stanley fischer resigning mid-october. that news just coming out. october 13 to be specific. it looks like that is the effective date. with me, i have michael mckee covering everything from hurricanes to the hurricane at the fed in today's session. marty shanker is with us, as well. michael: this is a major storm in unexpected treat stanley fischer has been that the fed since 2014 and his term expires in june of 2018 and it was
expected he might not be reappointed board want to retire. he was expected to be the person who helped lead the fed from a transition from janet yellen to a new fed chair, should donald trump make the decision to replace janet yellen. he appears to be leaving. he does not give a reason in his letter of resignation that went to the president today. he says it has been a privilege to serve and to work with janet yellen. no reason given for why he wants to retire. he has been in this business a long time, served as the governor of the bank of israel and professor m.i.t. for many years, so quite a shock for the federal reserve system and investors and traders of the world. yellen, whor janet apparently commenting, saying he has been invaluable to policy deliberations. implications because he has seen the size
janet yellen as the most important you're on the fomc? arty: from another point, donald has another position to fill. this administration has been slow in filling critical vacancies and now he has a that the fed. the speculation about janet potential gary cohn's will now become front and center. they will need to find a scher whont for mr. fich is a well-respected and moderating influence on the bed. mark: -- on the fed. mark: if i could be so crude on the dove and hwawk comments in the fed, what were see? michael: he could be seen as more of a centrist.
he has recognized the fact that we do not have a lot of inflation and has said we should or cutsly going forward them. a bit of a clash with janet but they had talked about how they have worked together. they argue about the economics and that was event to listen to, and they come to consent us on what should be done -- come to a consensus on what should be done. i would throw the set marty, the fed only has four members are now. if we did not get any of the nominees can do by the time he leaves, and there is a possibility that might not happen, the fed falls the three members, below the forum. there is a provision that says you can have a quorum without the remaining members, but how
policy would a have with having three people on the board? marty: that would be very did goats. -- very difficult. i think the markets may be somewhat unsettled by that prospect if they do not move expeditiously to find a replacement and confirm the people who have been put forward by the trump station. julie: speaking of which, what does this do to the dynamic of the replacements? does this mean we do not know whether yellen will be asked to stay on or not with him to party? would it -- with him departing? would it make it more likely for her to say and what does this do n beener chances of cohe appointed? say the chances are close to zero because the president has a couple of appointments that could changes
legacy. one is supreme court anti-is already done this. i cannot see him passing up an opportunity to make an appointment at the fed. i just cannot see him giving his history of reappointing her. michael: it is not necessarily make you recall a favorite -- make gary cohn a favorite because he is a democrat and wall street guys, so republicans on capitol hill may not like that. there are others out there who fit the republican mold. there are john taylor's, people like that, who could be put into place and it may get donald trump more flexibility because he could put in a hardliner as vice-chairman and as someone more pragmatic, allotted different possibility -- a lot of different possibilities open up.
his background, his thinking, it would he hard to see him moving to over to general vice chair. it will be interesting to see how could they can fill other things at this point. another nominee has been talked about, but they have still been way behind and now the head will be shorthanded. julie: it is effective october 13, so if there was going to be a rate increase, it would in december presumably. but the chances have been less than 30% and i think the theets have discounted possibility of a rate increase in december. to the point that donald trump has said he loved low rate, right, so when he talks about a hardliner at the fed, what do you mean? i do think there is a certain that thoughtple
the nomination to put forward to the were mainstream and qualified candidates, but they must have a list of people there considering for the fed and this will speed up that process while they are trying to do tax reform, debt limit, harvey eight, so it will be challenging. michael: it looks like will go into 2018 short-handed because even if the president were to try to nominate someone, the vetting process is long and the confirmation process has gone long when you go through hearings and get it to the floor. he would be looking at someone getting to the four around the time they expected the three-month continued revolution -- continuum from the government and that will be a major issue, the possibility of the government shutdown and there may be no time to consider a nominee. quite an interesting development firm many different standpoints. julie: i want to bring what janet yellen had to say in a
statement. she says "his team inside and -- herand -- lifelong represented the port internationally and lead our efforts to foster financial stability." obviously, a glowing commentary from janet yellen as sort of an economic policy fan boy, imagining the conversation that must have hadcher over the years and that dynamic no longer present at the fed after the middle of next month. it is difficult to imagine now with two potential slots of the grabs with the dynamics will be. michael: it's a little guys the idea -- it solidifies the idea they would go with the announcement in september
because that is some debate agreed on. there were not the question. he has time his departure for after that meeting and it looks like that with something that they would get accomplished so he could run in the background while other drama takes face. as marty says, the idea of a december rate increase up in the air, a lot will depend on now of the views of the people who will be voting on it and there is one fewer person who might be in the hawkish camp. mark: looking back at the wonderful, he was a world bank chief economist, first deputy of the imf and bank of israel government, mark carney made the leap from the governor of one central bank to another. but it is not every day you get a former governor moving over to a high position that is another central bank, is it? michael: it is not, although there is a tradition among some
banks, like the bank of england and israel, to have outsiders run them. we have had a number of americans on the monetary policy committee at the bank of england. there were rumors the fed might approach or the administration might approach mark carney and he is already said he would not be the new chairman of the fed although there is no prohibition about that person being an outsider. marty: this may speed up deliberations on those who might be janet yellen's replacement. is uncertainty is that it losing popularity and it may make the white house went to clarify over janet yellen sooner rather than later. julie: you mentioned how mainstream or conventional some candidates have been as far as
that sort of unexpected, do you think that will pressure the white house to make teacher nominations and to get it through quickly -- future nominations and get it through quickly? marty: that would be the smart political move. they have not always made smart political moves, but reaction to the decision may generate more expeditious and more mainstream candidates. julie: thanks so much for talking about this breaking news. stanley fischer will be departing as vice chair of the fed mid-october. michael mckee and marty shanker helping us digest that and they will be back to do it throughout the day, i am sure. from new york, this is bloomberg. ♪
markets. ♪ julie: breaking news, we learned that stanley fischer, the vice chairman of the federal reserve would be resigning from his post effective october 13. we have been watching the mortgage reaction and perhaps remarkably little. the dollar showing the clearest reaction to the headlines as it dropped to the lows of the session. the bloomberg dollar index down about a quarter of a percent on the day. movement downward in the bond market we did not see much reaction at all or the 10 year which bounced around a little bit, but we are seeing here a bounce of a basis point or on the two-year. we are joined by michael