tv Bloomberg Markets European Close Bloomberg September 25, 2017 11:00am-12:01pm EDT
vonnie: i'm vonnie quinn. this is the european close on "bloomberg markets." mark: here of the top stories we are covering from the bloomberg and around the world. german chancellor angela merkel secures a fourth term, but faces some difficult coalition talk in the weeks ahead. we will show how her weaker than expected show could affect investors. taxes could go down for corporations and the wealthiest americans -- details on proposals that could be unveiled later this week. commodities, gold covers -- , itrs around the $1300 mark has been up-and-down for gold mines. we had to the denver gold for .im -- forum
a look at european equities and how they are trading right now. the biggest declines for greece's asc since june 24 last year. spain lower. italy. referral stock markets declining. stock marketsl declining. one of the many questions that will be uncovered as these coalition talks begin in germany. euro down on the back of the german election. bond yields declining. some corporate stories to tell you about today. unilever agreed to buy a south korean company for 2.2 billion euros.
shareholders who own it are bolstering unilever's position in one of the world's biggest skincare market. the brands include dove, ben & jerry's. the acquisition marks a shift from other recent purchases. shares, to be fair, are barely changed. u.s. private equity firm hellman net,reeman agreed to buy adding to a wave of acquisitions this year in the payments industry as investors seek to profit from growth in online commerce. up by 6.3%.ts hellman and friedman will offer shareholders cash. that is the day before the company received the takeover
approach. higher than bit their ipo one year ago. look at sterling. last week, sterling gains to dollar for the first time. investors moving on from theresa thes speech, overlooking moody's credit rating downgrade on friday, and choosing to focus on mark carney, who will focus -- speak later on this week, and on some data. money markets are penciling in a rate hike in february next year. the focus seemingly still on one the boe will raise rates. day,nutes into the trading how is it looking over there, julie? it was an houran ago, certainly. the comments from the north korean foreign minister said commentsident trump's
amount to a declaration of war. it is fascinating because the stock market has been relatively resistant to this kind of rhetoric between the president of the u.s. and kim jong-un of north korea. we are seeing the nasdaq, which more than doubled its losses in the wake of these comments. the dow and the s&p losses accelerating. what we have consistently seen is that currency has been more reactive to this kind of commentary. if you look at the japanese, you are seeing some reaction. the dollar dropping versus the japanese yen, pretty dramatic move as the dollar is now down about 0.25%. we do have a little bit of a push and pull within the stock market of the u.s. technology, the big drag. energy is the counterweight to
those declines today. brent has been rising. level inat its highest eight months. there is a potential supply disruption. from the more than 20% lows it reached back in june. we are also watching some various offshore drilling stocks. from neutralraded to buy. buy the in talks to drilling business of maersk according to people familiar with the matter. currently up by 6%. maersk is not terribly heavily traded here, but you do see those shares higher. mark: julie, thanks a lot.
let's get to the german election following a big day yesterday. euro falling against the dollar after what some are calling chancellor angela merkel's nightmare victory, losing voters, but winning enough support. matt miller joins us from berlin. is there a lot of soul-searching going on in germany? definitely seems to be getting worse through the day, as well. bundsre talking about earlier. the buying in the bunds is big to me. a drop by 4.5 basis points is pretty big. we are down to a three handle from a four handle. schulz fory at saying that the spd is not even willing to talk about the possibility of a coalition. schulz saying he will never be a minister in merkel's government. possibly about the cfu
threatening to drop out of the union block. it has been a dramatic day for german politics. vonnie: yes, the asc got 12.6% of the vote. it got more than the left and the green. to make a coalition is an on thing in this case, where another party actually won much more of the seats, right? matt: the coalition is going to be difficult matter how much each party got. as long as it is mathematically possible, she was going to try it. the problem is you got the liberal party, the sdp come on the business friendly, free market side of things. the green party does not see i to them on very many issues. they will have to get those to agree.two to even in the best of times, this
takes weeks or months and this could drag on beyond christmas or beyond. mark: great job. busy day. post-german elections. let's get more insight on the elections. the new round of brexit negotiations kickoff this week. out......the way now, soon, in four years? >> in a few months. mark: really? trump you got right. you did not get macron right. >> i did not. "dead woman walking." editor of the "evening standard." let's give you the two center-right parties led by experienced female politicians. one got 43% of the vote, the
highest share the conservatives have had since the war. the other got 30%, the lowest share since 1949. apparently won lost the wontion, the other lost -- the election. this nonsense about victory. yes, they scraped over the line ahead of the even weaker performance by the socialists, but this is a very poor result and it is controversial. afd is not a normal party, let's be quite blunt about it, is merkel's creation. her policies, have unfortunately created load dynamics we could talk about ad nauseam. germany is a rich, strong country. the economy is doing well. there are no obvious crises, unlike britain, where we have brexit. mark: that you still think she will be gone in a couple of months? >> i think this overheads will realize, much as she took out chancellor kohl in a backroom
party coup, i feel something like that will happen, or if she has any sense, she will give it six months and stand down. she has been there too long. she has made a lot of mistakes or what the electorate thinks her mistakes. all this nonsense about merkel taking over from obama and leading the liberal world, german voters did not like that. vonnie: who would take over them? is there anyone waiting in the wings like she was with her predecessor? you bring the party or the woman? >> i hate to personalize it, but i think on this occasion, i think it was her own issue. no, i'm not intimately involved in knowing who the next generation of german politicians are, but it will be somebody younger, it will be somebody new, probably somebody we have not really heard of outside of the world of german politics. vonnie: in the meantime, while we have her as chancellor, and
we assume there is some sort of coalition government formed, what role does the afd play? just a mischiefmaking role or more than that? >> they are toxic. think all the other so-called responsible parties will not wish to engage with them. i think they will make a lot of noise. it is an unprecedented situation for german politics. i don't think they will play much of a role until we get closer to the next election. mark: you cite theresa may. theresa may in florence. for a bit of fun, some of florence and a word. >> beautiful city. [laughter] >> they tried the backdrop. it was a lovely piece of theater. to come up with this sort of nonsense story about 350 years of trading relationships and the anglo-italian relationship. there was one piece of new information or two pieces of new information. one was that the tory party
stitched some sort of compromise together finally, which was needed, brought boris on board. secondly, they offered the two years and the 20 billion. this is an attempted bribe to say we are trying to square the numbers and here is 20 billion to try to make things a bit easier. reactionu saw macron's over the weekend and he must be considered the lead of europe to be quite frank and he was pretty dismissive. the eu has been pretty clear, you must pay our vast bill and if you don't pay this enormous number, we won't even talk to you about the future. i'm afraid i see that is where it is going to go. mark: carney is talking about brexit. may was constructive in the florence speech, getting closer. we have often talked about jeremy corbyn. great piece today on the bloomberg. jeremy corbyn "pulls off feet of
not discussing brexit at conference." it is remarkable how he is managing to avoid the biggest issue. >> is not avoiding it. mark: i suppose he is worried if he addresses at that the party might implode. >> you are right. they are as split as the conservatives. cops makingthe good a lot of noise to stay in the single market, but at the end of the day, there was a very clear answer in political history for wants to a straight question when jeremy corbyn was asked yesterday on bbc and the question was, do you think we should stay in the single market? he said no. the second question was, why is that? he said, it is very simple, if we want to have state intervention, which is what i believe in -- a medic my little parenthesis -- proper socialism, that is not compatible with single market or eu membership,
proxy or otherwise. secondly, we want to nationalize the railways and so on and so forth. he has answered it very clearly. mark: stephen isaacs. good to see you. chairman of the investment committee at alvine capital management. vonnie: good stuff. we will be speaking about gold. this from the denver gold for him. this is bloomberg. ♪
following the german election results. berrick gold is the world's largest gold mining company. bloomberg is with the president, kelvin dushnisky, at the denver gold forum underway in colorado. >> thanks very much. thank you for making some time for us today. >> my pleasure. >> gold miners have come to -- through the trough. berrick is focused on balance sheet. are you one target to make your debt reduction target? >> yes, very nice target. and our target is to reduce that the $1.4 billion over the year and we reduced our debt by $500 million and then last week we announced another $731 million of debt reduction. we are nicely on track. betop of that, we intend to
$5 billion in total that by the end of next year. >> for 2018, that was going to be my next question, whether you can meet next year's debt without selling anything? >> we will see. danielle, we started this debt reduction journey with $13 billion in 2015. we reduced that number by $3 billion. in 2016, $2 billion. this year, $1.45 billion. we will do it again, combination of cash on the balance sheet. nothing, unless we are getting full value. >> let's pick up that investment thread. assuming that you would be selling a non-core assets and correct me if i'm wrong about that. side, which of those would you most likely go? >> i would not handicap it. no fire sales. we are patient.
are liquidity continues to improve. we ended the quarter with 2.2 billion dollars in cash on the balance sheet. where situation arose there was a strong price for something, we don't feel the need to make any divestments. >> is there any compromise on meeting your debt target if you can't get the kind of price you would like for an asset? >> we will see. up until now, we have been successful at achieving the debt targets. we will see as we start up next year. we will look at the situation and decide how best to achieve the $1.45 billion. >> and you would not sell a core asset? >> we would not sell the core asset. we sold 50% of a mine for strategic purposes this year.
we received $960 million. there was more to it. that was the first aspect. we may restart construction and beyond that, the third piece of that agreement is we are working together to look at the 140 kilometer belt that straddles chile and argentina to see if there might be something to do together. >> is that a decision we could see next year? timeline has been slow. >> not really, we are working very effectively. the first step is to make sure we are incorporating. i'm delighted. i was just in san juan province and i met with senior people, senior government people, senior community representatives, that integration is going well. everything in its time. >> your new mantra has been
saying they want to buy a stake in ask you this every single year, at this point, how much of it is about you guys not agreeing on price and how much of it as the call to read the two companies not being able to get together? >> i don't get has anything to do with culture. there is one bidder that surfaced well above the rest and the transaction never finalized. we always said we would like owning the asset, it is a great asset. for the right price, we are sellers, but we are happy to continue owning it. turquoise ridge -- have given any discussions about them selling you their stake in turquoise ridge, maybe as some kind of deal that would see you hand over your stay? >> you know, we don't comment on
market speculation. we can't confirm nor deny, but we have said that we are open-minded for anything that would make sense for our shareholders and i could not comment on anything beyond that. >> i have to ask you about acacia, as well. acacia has dropped dramatically given the tanzanian's government attempt. berrick has been leading negotiations on acacia's behalf. what is the status of those? >> discussions are ongoing between berrick and the government of tanzania. i can't comment beyond that? >> are the going well? >> i really can't comment beyond that. >> we will leave it there. kelvin dushnisky is the president of berrick. back to you. vonnie: fantastic stuff. our thanks to danielle from the denver gold forum. we do have some more breaking news. brent crude is at its highest 2015.july that is more than two years. 2.7% higher.
live from bloomberg world headquarters in new york, i'm vonnie quinn. mark: live from london, i'm mark barton. let's get to the bloomberg business flash and look at some of the biggest stories in the news right now. $2 billion deals in the auto industry today. genuine parts buying allianz. distributess replacement parts, products. stores andy-owned
outlets in france, the u.k., and germany. new york fed chief expects inflation to pick up with prices nearing the fed's inflation goal. speaking in syracuse, dudley also said the u.s. economy is in a good place with a slim chance for a session in the near term. he expects the fed to remove monetary policy accommodation gradually. that is your bloomberg business flash. we are nearing the end of the monday session. gains for the benchmark. the stoxx 600, declining. declining in london, paris. this is bloomberg. ♪
1%. shrugging offtors the german election results. health care, food, beverage and media rising for a third day after a second consecutive weekly gain last week. i thought i would show you the 5.01% --le changed, up 0.1%. for thebullish sign likes of franklin templeton, credit suisse. the dax trading at about 13.1 times, well below the msc pra rating. freend coalition of the democrats, the greens, angela merkel's block would be the worst outcome for the country's utility. meanwhile, we are getting
comments from ubs. greens car industry, the want to prohibit the registration of cars with combustion engines from 2020, 2030 onward. block wants to have subsidies on electric cars. why the discussions to create what is called this -- they are not going to be easy or straightforward. this is euro-dollar. both declining today, german bonds declining right across the board today. euro falling for the first day in three. the prospects of another round of elections, should this coalition prove unsustainable will weigh on the euro, according to one analyst.
keep an eye on that chart. functionur wonderful which tells you everything you need to know about the german election results. this is the outcome of the election. the big takeaway, the emergence of the avp, lackluster results of the two biggest parties. vonnie: following on from what you were saying, the weaker euro have when the dollar to some strength today. 92.6 roughly. the yen is having a little bit of a day. abe has called for elections, not impacting the yen, but now we have new comments out of north korea. crude oil very supported today by opec, comments last week. 51.72. speculative money coming into
wti contracts. the 2-10 spread is continuing to narrow. this is the two-year. 1.42%. global macro movers, a week picture across the board for many of the emerging markets. mark, you pointed out the mexican peso lower. yields higher in places like russia. some of the commodities are doing extraordinarily well, mainly the hydrocarbons. mark: theresa may wants the eu to keep trade terms for two years after brexit. her intention was made clear in a recent speech in florence, italy. for more on the odds of the eu complying is our brexit editor. more of the same? constructive, custom positive things in there, strong comments, but once again asking
for more progress. the settlement is the key thing. on friday, may said they would pay into the eu budget for two years, 20 billion, and also she also said that they would honor other commitments. broader commitments. one does not know what she means. some of my colleagues say that would amount to another 20 billion. that number is nowhere near the numbers being knocked around in brussels. mark: talks are underway any minute. fourth round of talks. third round was spurned because of the speech. translate those broad ideas in the speech into the nitty-gritty, they have working groups on the irish border, citizens rights, the bill. ministersrom some
, while they saw some positive advances in the speech, they also want to see more detail. mark: october, that near-term deadline to achieve fulfilling those requirements to move on to the next age, isn't looking iffy? minister saidrime that all is not lost. at the moment, it is too early to say. october not likely, but it's possible they will have made some sufficient progress. the question is to what extent the brits are prepared to bend this week. mark: thank you, emma ross thomas. vonnie: in the u.s., taxes and health care dominate the week on capitol hill. with more is our national cook political -- national political reporter sahil kapur.
apparently there is a framework agreed upon by the administration and congress. do we know what is in it? >> the framework is not finalized yet, it could still change. based on details florida ron washington that we have gotten a hold of, the plan is to have it learn the top individual tax rate from 39.6 percent to 35%, a pass through business rate, and a corporate rate, aiming for 20%. they're also talking about doubling the standard deduction in which is the big benefit for the middle class, the limiting state and local tax deduction, and eliminating the estate tax. this will be a starting point for the debate that finally seems right to get going. vonnie: the president making the on, here and there about the tax plan. i want to point to this chart. personal rates lower than
corporate rates, but high relative to history. explain this to us. >> what they're trying to do is essentially lower tax rates across the board. federal income taxes largely paid by the wealthiest people, 1%.top most of the benefits would go to them. this would be a big whipping tool for the democrats. they will lambaste this plan as a victim away to the wealthiest people in the country. there are political obstacles that the president has to get through. he has talked about this as a relief for the middle class. this plan does not do that. vonnie: the entire focus cannot be on this, as much as some would like it to be, because health care is the deadline to pass something. friday is the deadline. will try to pass this revised version of the graham
cassidy bill which started coming out last night, officially posted this morning by one of the authors, bill cassidy. it changes some of the formulas to, ironically, direct more federal funds to states like alaska, maine, kentucky, where three of the critical holdouts are. rand paul, kentucky senator, has come out and said the new bill does not satisfy his demands. john mccain of arizona is still a no. he has process concerns about how clear this was done. two other key holdouts, susan no.ins, says she is leaning she doesn't like the medicaid cuts, changes to pre-existing conditions. and the lisa murkowski as well. they need at least 50 to get this done, so very difficult. cboie: we heard from the that it will hope to have a preliminary analysis of the bill today. we will get an estimate of how
many americans would be kicked off insurance, or how much it costs. if the legislation does not pass , what impact does that have on tax reform? do a preliminary analysis, releasing a figure that basically gives the green light or the red under senate reconciliation rules. it has to save at least a billion dollars in order for it to be passable. it says it will not be able to do a full analysis of the coverage impact, what would happen to premiums, how many would lose their insurance, that sort of thing. that is the important thing. blind, and agoing sense. the most important thing right now is the political impetus. republicans are desperate for a major legislative victory. the president has talked about this being the single biggest priority right now, eager to focus on taxes. it health care fails, if they don't get something passed the senate and house and onto the president's desk, the desire to
get something done on taxes will only be more accentuated. that is their last option to get something big done this year. vonnie: sahil kapur, thank you. the cbo aiming to publish a preliminary analysis of this new legislation -- new bill. let's check in on the first word news. >> travelers from eight countries will face restrictions on entry to the u.s. ranging from a total ban two-background checks under a new do policy unveiled by the trump administration. the new rules would impact the citizens of chad, libya, north korea, syria, venezuela, and yemen. it will go into effect october 18. the german press is calling it angela merkel's nightmare victory. she won but with a smaller percentage of the vote. more coming up from berlin in a bit.
japanese prime minister shinzo abe says he will dissolve the lower house of parliament on thursday and called for elections next month. heightened tensions with north korea have boosted his approval rating after a series of scandals and may help him to retain his coalition. search teams still digging through piles of rubble today, hoping to find survivors in mexico city. only 1% of mexico's schools opened up today. a 7.1 earthquake killed at least 300 people. global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. i'm courtney donohoe. this is bloomberg. marcio argentina's mcilroy makes good on many promises, and that is boosting investor confidence across the board. more on the argentina economy next. this is bloomberg. ♪
mark: live from london and new york, i'm mark barton. this is the european close on bloomberg markets. stocks rising after making an acquisition to increase its footprint. 7%.ine parts shares are up julie hyman is here to explain why. i keep on wanting to call the genuine auto parts as well. napa auto known for parts, the distributor of those replacement parts. it is buying alliance automotive group for about $2 billion from a coalition of private equity managed by blackstone group. it will repay the company debt
as well as by the company outright. it will get 1800 company-owned stores and affiliated outlets in france, the u.k., and germany, and will also add to earnings in the first year. 1.7 billion dollars in revenue in the first year. why is this interesting for genuine parts? the company is pretty much just exposed to the u.s., very small exposure to canada, australia, new zealand, mexico. this will give it a new market for the company. what's also interesting about genuine parts, a lot of their business is to your neighborhood garages. bloomberg intelligence has written in the past that it is less exposed to the amazons of the world because it has this relationship with local garages, and when they need parts quickly, they will turn to genuine parts, versus going on to amazon to buy something. i also want to point out the effect it's having on the rest
of the industry. decent amount of consolidation in the auto parts retail industry, as well as wholesale. autozoneee o'reilly rallying as well. vonnie: based in atlanta, georgia. inc. you. global investors are seeing favorable returns from argentina. the country once burdened by skyhigh inflation of occurrence devaluation, and sovereign default. the reason, progress on reforms promised by president mauricio macri. the country's how financial sectors are improving, and why, we have matt winkler. how did mauricio macri implement these reform so quickly and get them to work? >> this was his agenda when he ran two years ago. he said the most important goal for argentina was to stop
whatay inflation and end had been a vicious cycle of default, which is all too familiar with the people of argentina. for almost a century now. first bysentially the making everything that the central bank was doing, government was doing, transparent. for the first time, we saw last year what inflation was. that was a big step forward. he eliminated all sorts of trade barriers, cost controls. by doing so, freeing up the economy, it gave investors a lot more confidence that the government for the first time was serious. that was the first big step. inflation has come down about 50% in a few months. the trend is very favorable. declinet inflation came almost a stampede of
investment into argentina, to the extent that if you look at two categories -- one is the bond market. in just a few months, since june, argentina is leading just about everybody with total return in the bond market. vonnie: you mentioned inflation, down 60%. if you look at the bloomberg chart, you can see the argentina breakeven. the narrowing get between inflation linked and not inflation linked bonds, this one is maturing in 2021. look at the difference, down to 11 points in the spread. good anat is as indicator of confidence coming back to argentina, a big step , because he will be tested a few weeks from now in the polls. it looks pretty good for him but it is not done yet. mark: it is fascinating to look
makeup of the success of the stock market, traditional sectors that we know about over the decade. it is less of a focus now. it is more financials now, isn't it? historically, argentina has had a very fragmented financial industry that has not been sufficient for its economy, which has been historically very rich in resources like copper, gas, oil. what we seeing today is perhaps a turning point, a financial industry, while not as robust as it needs to be, is outperforming, punching above its weight. even as the economy has become more diverse. banks look at the seven domiciled in argentina right now, they are outperforming their peers in latin america, even the major economy banks. that is a big surprise. chance yes or no, any
christina to kershner can make a comeback? matt: hard for me to say. however, what macri has been able to do so far is bring the people of argentina with him. he has essentially said, no gain without pain. so far, they are following him. so far, so good. vonnie: you can report after you go down there. thank you, matt winkler. more on the german elections, next. ♪
what will it mean for germany and the future of the european union? with us is the former president of the efo institute for economic research. talk about business confidence, it's been pretty high. does this give the business community more confidence of a stable environment, or the fact that the vote was a little more broken up, is that a note of warning to the german electorate, business? today, there was a new indicator which went down a little bit, but the questions were asked quite a while ago. this has nothing to do with yesterday's election results. vonnie: so you don't know yet then? you can make a judgment as a former president of the ifo institute, whether this will impact the ifo reading. >> it could come up the
indicator is not just a sentiment indicator. it is a questionnaire with 7000 report about their business contact. this is really hard data. i don't think it will be very much influenced by political phenomena. are your early thoughts on the prospects of coalition building? how quickly will it take, what sort of coalition might chancellor angela merkel end up with? >> originally, i had thought the old coalition was something that the democrats would continue to this is something mrs. merkel would prefer. but the losses of the social democrats were so enormous that they have now decided not to participate in a coalition. , becauseother option
of the colors of the parties, party, more or less, the greens, yellow, which is the liberal party, which had enormous success in the elections. the fdp, the greens, csu maybe do not agree on all of the issues, how difficult of a balancing act will get be, what are the far-reaching consequences for the business community? a very good question. it will be very difficult to find a compromise. the greens want multicultural economy, population, with lots of immigration. their main theme is environmental issues.
they will insist on environmental policies, and they will get it. the liberal party is very rescueal about the euro operations. mrs. merkel has no choice. she basically has to find an agreement with them. what it means for the markets is probably not good news. thank you, sir, for joining us. we have to finish because the show is coming to an end. former president of the ifo institute for economic research. this is bloomberg. ♪
vonnie: here are the top stories on the bloomberg and around the world that we are following. topident trump and republicans are facing a big to do list this week with major deadlines on health care and tax reform. can the administration get much-needed points on the board with key holdouts still holding their ground? center inont and colorado as industry leaders discuss the biggest challenges they face amid growing rusher on the stock price of the precious metal. goldberg,ak with gary resident and ceo of newmont mining. ellen will speak with pao, chief diversity and inclusion officer about her new book. also,