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tv   Bloomberg Markets European Close  Bloomberg  November 8, 2017 11:00am-12:00pm EST

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quinn and this is "the european close." ♪ here are the top stories we are covering from the bloomberg and around the world. treasury secretary steven mnuchin joins us in an exclusive interview. what is the latest timeline for parsing tax reform? of the trump administration, it is the one-year anniversary of president trump's election. credit spreads are the lowest in 10 years. where markets are headed, next. can the euro regain its momentum? questions loom about the ecb's tapering commitment. we will talk with kit juckes, global strategist with socgen. have a look at where european equities are trading, 30 minutes
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to the amd desk end of the wednesday session. sterling down against the dollar as is the norwegian krone. bonds are falling. cfo helenporate news, where is stepping down. that is a clothing retailer that is extolling rating court -- store closures. urgency suggests the new chairman has stamped his authority on the retailer just two months into his tenure. shares up 1.5% today. they fell by 5.3%, beating estimates. boostingg cement, profit as the u.k. misses out amid uncertainty caused by brexit. shares up today. german makerman --
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of building materials. weaker emerging markets like donna, thailand, and egypt are passed their lowest point. in contrast, the u.k. is a rare weak spot for heidelberg. uncertainty for brexit curbing the demand for cement. the operator of food lion and stop & shop plans to buy back to billion euros of shares after third-quarter earnings beat estimates today, helped by cost savings from the merger. today.up 4.8% 90 minutes into the session in the u.s., julie, how is it looking? julie: we have very little change of a look at the major averages, although the nasdaq did just slip into the green come helped in part by apple. the dow and s&p slightly changed to the downside.
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which is of small caps seen by some as a proxy for sentiment surrounding tax reform , down 4/10 of 1%. speaking of politics and tax cuts, i thought it was a good time to check in on the s&p 500 since the election. the s&p 500 is in yellow and we have seen a gain of about 21%, the best-performing group technology in blue. you can see it surging especially in recent days as financials, the number two group , has been turning down. the worst are telecoms in purple, suffering or in concerns of deals falling apart, and finally energy in orange, which has been perking up to some extent as of late but still up only about 8/10 of 1% since the election. taking that last group, it has
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been a half-hour since the oil inventories report so we are checking on what oil prices are doing. lower, they bounced off the lows, but we did see the unexpected build in oil inventory, 2.2 million barrels. in terms of some of the fracking stocks, they are also under pressure. pressure even after it reported earnings that beat estimates. emg and marathon taking a hit. some other losers we are watching, the vida, shares down 9.5% after their numbers missed. wendy's which has been seeing the competition from the likes of mcdonald's, same-store sales up 2% that is worse than estimated. fossil has been struggling against the wearable market and the company says sales will fall as much as 11% in the fourth quarter. vonnie: julie hyman, thank you for all of that.
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let's get the first word news with courtney donohoe. courtney: president trump arrived in china to news that the trade deficits are as big as ever. some sightseeing in beijing's forbidden city but will soon get down to business. new figures show the you'd -- trade deficit is roughly the same as last year. earlier this week, mr. said the deficit has to come down. on capitol hill, tax writers may look at appealing obamacare's individual mandate. defined $74now have billion in revenue to make up for that. going after obamacare would more than make up that difference, but that could make it harder to get a tax bill passed in the senate. it was a big night for the democrats. in virginia, ralph northam was elected governor.
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he beat ed gillespie who ran on trump style issues. the president tweeted that "gillaspie did not embrace me or what i stand for." new york's democratic mayor was reelected. british foreign secretary boris johnson will try to keep the ..s. in the iran nuclear deal johnson is flying to washington to meet with congressional leaders. president trump said he will not certify that iran is complying with the deal. on his is under fire comments about a british iranian woman held in iran. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney donohoe. this is bloomberg. mark: thank you very much. kit and i are playing with the function. all will be clear in just a second. 20 of big narratives for investors to ingest.
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theresa may could lose a second member of her cabinet and brexit talks persist. kit juckes is here. this is what we were looking at. wcrs function, this shows the sterling since the close of the day before the bank raised rates, november 1. it is from the close of november the first. it measures that against every major currency. only the lira, the turkish lira and ruble have fallen. every other currency has gained. has sterling's weakness played out or is there more to come? kit: it is going to be increasingly hard. you have to pull the elastic quite hard to get sterling any weaker than this in trade weighted terms. you can get a bit -- the news is and presumably the political
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news might get worse in the next 24 hours or two hours. the economic news is not likely to get better. it is likely to deteriorate over the next year steadily. no good news, but already very beaten up. racks twice as fast to good news. mark: election news, let's talk scenarios. are we in the last throes of this conservative administration? talk me through scenarios and what it means for the pound, because ultimately it leads to what does an election main for brexit? kit: it does, although if i i gor around the world, if to places in the world where they consider jeremy corbyn to be scary, i can talk to some think the jeremy corbyn led labour government is not that friendly for the city of london. let's take you back. an election is good for sterling to the extent that it increases
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the probability of the softest version of brexit, of membership of the single market in some sense. under that scenario i suspect sterling might get a 10% rise. if people think an election means there is a 30% chance of that, i guess that outweighs the political negative. a fairly significant shift to the left politically. mark: and on the corbyn argument? which is more domestic oriented, how does that feed into assets? say, that is and negative is it is corbyn plus the labour party. a left-leaning labor party plus brexit is another negative in a world which was already priced for some significant negatives, so it is dragging down, probably is outweighed given the starting
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point. , itie: if we look at europe has its own things going on, not just the brexit issue which will play out over the next several months, but also other things. are there systemic risks in the system still? do we have to worry about anything failing? italian banks, another upset? kit: there is less to worry about because there is a tailwind. the european economic economy is doing better than anybody thought it would be. it is picking up momentum and doing all the right things, i think doesnse, make a difference. we will have an election in italy next year. i do not know what the probability of a populist government getting in power is. it is not a high probability, sort of a 10% chance or something.
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the most likely outcome in terms of government is a coalition that will muddle through, not a strong government, but the italians have had plenty of muddle through governments over the years. that probably does cause some nervousness when opinion polls come in, but otherwise there is not an obvious source. there is political weakness in europe but there is economic recovery and economic recovery trumps most things. vonnie: will a one point 16 euro -- 1.16 euro? kit: the story of this year in a sense is that the euro was at 1.03. if he said the euro was at 1.03 in january when we were impressed with hopes of what the trump administration could do, frightened about what marine le pen could do in france, and the 10 year differential between the u.s. and germany was wider than
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any point since the berlin wall came down. by the end of the summer had seen some narrowing in those yield differentials but also had the central conference in portugal at which mario draghi introduced the idea that he was going to further slow the pace of ecb bond buying. that propelled us to 1.21. pretty much to the end of the summer, as we are seeing they are not stopping, 30 billion a month for the next year. you have seen the markets start to reduce its long euro position . yield differentials moving back in favor of the dollar. if i was a genius -- i am not -- i would know exactly how far through that adjustment process we are before i can start buying the euro again. it is 1.15, 1.14. i am not a genius. mark: kit juckes, socgen, stays with us. we are going to tackle the
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dollar as investors on u.s. tax reform and the president's high-stakes china visit. vonnie: an interview with steven mnuchin. this is bloomberg. ♪
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♪ live from bloomberg world headquarters in new york, miami vonnie quinn. mark: i am mark barton, live from london. let's turn to the dollar under pressure, concerns over tax reform in the u.s. taking center stage and also looking at geopolitics as trump continues his tour of asia. still with us, kit juckes. flattenedcurve has versus the last five presidents. them all.as flattened he has beaten four out of five. what is going on with this 2-10 flattening? this is a question from our ib. kit: yes, we can get flatter
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overtime. the yield curve predicts the economy because it inverts ahead of a recession. it also inverts at the same time of the peak. you could say the yield to her -- curve inverts at the end of the cycle. what is significant about this time, that it is so low. that is true of yields, rates on everything we know about. it is not totally surprising in that sense. what i think is worrying to people is that the economy is trundling along at a steady pace, no inflation, fed raising rates ever so slowly. it increases the fear in people's minds that the yield curve tells us something about the economy away from where the fed is going. it says, we are approaching the point where the economy might just slow on its own, reach
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stall speed and lose momentum. i am worried about what people will think if you get a couple of snowstorms in january and february and the yield curve after one more rate hike is even flatter. vonnie: not just that, but also issuance. if we are going to see some tax reforms resumable he we will have a bigger deficit and there will be more issuance from the treasury. we have definitely had a 45 basis point bump up since the president was elected. kit: we have had a bump up in economic optimism and hopes of what he would deliver, and we have given back a hunk of what be bumped up. mostly what we are seeing at the moment is a market that is consistently pricing a peak in fed funds at to point something -- two point something. we do not get them below two.
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what has flattened the curve in that environment is just the continued lack of inflation and continued lack of acceleration in any of the economic variables . i am not sure that will change. the flash -- tax plan would have to be incredible to dramatically change the growth from where we are now. it is still hard from this side of the atlantic to imagine how a really big fiscal expansion either gets through the republican party, or makes sense in an economy this close to full employment. mark: trump one year, discuss. part two -- where will the key assets be in a yard -- in a year's time? kit: i think the dollar will be weaker because the rest of the world's economies are picking up. economy will further accelerate.
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the japanese economy is picking up here is the chinese economy is being kept under considerable control by the authorities. the emerging markets are modestly improving. the dollar will be weaker as a function of what is happening around the rest of the world. u.s. rates probably because they will be a little higher but not much higher than the markets are pricing, so if we have not got a , we areint -- 3% probably still in an ok environment for equity markets and i will be praying for volatility. credit spreads, are the story we will be talking about, balance sheet reduction at the fed and how that is crowding investors out spread product back into treasuries. vonnie: you think there will be a strong bid for treasuries? when, and what will it do to yields? kit: not so much a strong bid,
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that if the fed is selling more bonds into the market now because they are reducing their balance sheet and still have a deficit, the issue for me is how much does that push up yields in the u.s. and how much does it push up yields elsewhere to attract money back in? you crowd investors back into treasuries and agencies out of something else. the uncertain question is -- how much do you have to move u.s. yields in a world where we have been starved of safe dons, to get that crowding to happen? the yields that move, the tale of the snake, not the front, where the treasury market is, that is where the bigger reaction will be. mark: what is the latest conspiracy theory when it comes to china and the currency as trump visits? kit: the chinese are, of all things -- i think there is a really important point about the
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chinese currency from a chinese perspective. they are not as interested in the value of their currency against the dollar as they are in its trade weighted value. more interested than anything else instability and not having to weigh risk around that. -- two way risk about that. the chinese succeeded in stopping their currency depreciating and let it appreciate against the dollar while not appreciating on a trade weighted basis as the dollar fell. in the process, they have seen a massive improvement in their balance of payments in the sense that the pace of capital outflows from china has slowed dramatically. they now have a net healthy balance of payments position, which pleases a regime that likes to be in control of things. they do not want the currencies to move too wildly in any direction. as their currency strengthened, they were accumulating foreign
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exchange reserves and leaning against that, buying treasuries, helping weaken the dollar. when they eased controls on outflows of money again and declared victory at the beginning of september, we saw the high on the dollar. have seen the best of the emerging-market rally. it has been much more difficult since the eighth of september. the conspiracy theory is what do they do next? mark: we will save that. kit juckes at socgen, thank you for joining us. vonnie: an exclusive interview with treasury secretary steven mnuchin at the bottom of the hour. the topic -- tax reform. it is in focus on the hill, the markup continuing. lots of questions for the treasury secretary. ♪
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♪ vonnie: live from bloomberg world headquarters in new york, i am vonnie quinn. , with the mark barton
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close roughly five minutes away. time for the bloomberg business flash. not keeping pace with its rivals at the burger business. same-store sales rose 2% last quarter, short of the growth posted by mcdonald's and burger king. wendy's posted revenue that was less than expected. tencent has taken a 10% stake in the parent of snapchat. they bought almost 146 million shares of nonvoting stock. they are excited to overhaul the mobile messaging app. that is the latest bloomberg business flash. have a peek at what is happening to equities as we head to the close. ♪
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♪ live from london, i am mark barton with the european close in a matter of seconds. vonnie: live from bloomberg world headquarters in new york, i am vonnie quinn.
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the house ways and means committee has been marking up the tax bill and continues to. the senate bill expected to be released tomorrow. let's handed over to michael mckee mckee who was at the treasury department with an exclusive interview. here at the u.s. treasury department with secretary steve mnuchin on bloomberg television and radio worldwide, also on the bloomberg terminal. thank you for joining us. bad news in the headlines this morning here at republicans did not do well in the off year elections. given that a lot of people told exit polars they did not like this health care reform and when you go in with less than 50%, does that change your strategy? sec. mnuchin: not at all. i am not concerned about that. there is big concert -- support for middle income tax cuts and making our business tax system competitive with the rest of the world. that is what this is about.
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michael: the senate is apparently considering a one-year delay in implementing corporate tax cuts to make the math work. is that acceptable to the administration? sec. mnuchin: our preference is that the corporate tax rate starts next year. the longer we wait, the worse it is for the economy in making companies competitive. michael: but you do not rule it out? sec. mnuchin: the president's strong preference, he feels strongly he wants to start this right away but we will have to look at the entire senate package. i assume it is a money issue as to how they are moving the pieces around. i am sure they would like to start this as soon as they can. michael: the ways and means committee yesterday gutted the excise tax provision and makes another $74 billion hole in the tax package. how do you feel that? sec. mnuchin: we are going to
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raise very healthy process. we started getting the house, senate, and administration on the same page so the fundamental goals and parts of the bill we have agreed to. they are going through a very detailed process. very technical issues on everything from the international side to pass-throughs. i think we are going through a healthy process. michael: one of the things being talked about to fill that hole is to kill the individual mandate from obamacare. does the administration want that brought into the tax debate? sec. mnuchin: the president would like that. i was at a press conference yesterday at the senate and senator cruz gave a compelling pitch for that. we will see. that will be one of the things that is talked about and will be considered. michael: when you do the math on who would vote for the package, does it concern you that obama care complicate things in the senate? is twouchin: to me, it
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different issues but i think the appeal of putting that in, it gets rid of a very unfair tax and it frees up a lot of money that would go to a middle income tax cut. having said that, whether that is included or not, we are determined to make sure we get the tax cuts passed. and localalt, state tax deductions in the senate bill, they are talking about getting rid of it entirely. is that acceptable to the administration or do you end up with a bill that cannot get enough republican support? sec. mnuchin: fundamentally, we agree with the idea of getting the federal government out of the business of subsidizing the states. that makes a lot of sense. having said that, several of these states are a big part of the economy -- new york, new jersey, connecticut, california -- and we are sensitive to the impact on those states. we will continue to work with the house and senate and look for the right decision.
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we want to make sure middle income people in those states also get tax cuts, and that is what the house bill allows. michael: the president campaigned against carried interest here it does the gimmick of people holding it for three years satisfy the promises? sec. mnuchin: he campaigned against carried interest for hedge funds and that industry, that is what he is focused on. i think the house's move from two years to three years is a step in the right direction, and as we progress through this process we will review these details with the president. michael: experts say the ban on private activity bonds would do a lot more damage to their industry than people realize, eliminating 30% to 40% of the industry and that would make it hard for localities and states to improve their infrastructures and economies. did you realize it would have that effect and is that all right? sec. mnuchin: these are details
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going through the committee process. one of the things we felt strongly about is that cities and states could borrow on a tax-exempt basis. we felt that was important and that is what has been protected in the bill. michael: independent analysis of says you give middle-class families a tax break but it goes away when those provisions sunset. how do you reconcile that to the base? sec. mnuchin: our expectation is a lot of the things that are sunsetting is just a function of getting the bill within the trillion and a half dollars. our expectation is a lot of those things would be renewed by congress down the road, so we are focused on what gets the most money to the middle income now, and that is the focus. michael: the senate is talking about keeping the estate tax, dropping the repeal out of the bill. given that it affects so many desks so few people, does it
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really matter whether it is in or out? is something this fundamentally, the death tax, the estate tax, you are taxing people twice. they have already paid taxes so this is a philosophical issue for republicans. michael: except for capital gains for securities that are held in these portfolios. sec. mnuchin: that is a different issue with the step up and everything else. these are details the president would like to have it repealed, but we will look at the entire package and review. michael: we are talking with secretary treasury -- treasury secretary steven mnuchin. let's switch gears a little bit from taxes and talk about trade. the dollar has been strengthening recently. a stronger dollar tends to raise the trade deficit, so does a strong dollar policy work against the trump trade agenda? sec. mnuchin: as a general matter, i do not comment. michael: you are the only one
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who is allowed to. sec. mnuchin: i do not comment where the dollar is in the short-term. part of the dollar strength is a function of the u.s. economy, how people perceive the u.s. economy, which is very strong. u.s. interest rates relative to the rest of the world, so the dollar has appreciated overtime. having said that, there are short-term concerns about trade. the main focus is that we get free and fair and reciprocal trade, and a big part of his conversation in china and other parts of the trip will be making sure that we have fair, reciprocal, two-way trade, and deal with the trade deficits. michael: federal reserve, you have three governorships to fill. then you tell me about the process and the timing and what you are looking for? sec. mnuchin: our focus was obviously on the fed chair. the president was extremely involved in all aspects of that.
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now that we have that done, we are turning our attention to other positions and we look forward to filling them. it will be a robust process of considering people and interviewing people for them. looking for aou phd economist for vice chair to complement jay powell? sec. mnuchin: i would not describe a specific criteria. there is a lot of things that we look at what the vice chair is a very important position. that is something we are already considering people for. michael: has janet yellen indicated whether she would stay on as a governor, or could we face a federal reserve only three governors? sec. mnuchin: i had the pleasure of having breakfast with her this morning. we meet on a weekly basis. i do not think she has made any decision yet. endael: what happens if we up with only three on the fed board? it administration has made
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virtue that a lot of the positions are unfilled. sec. mnuchin: our priority is to fill the positions quickly. our focus is on the chair and now that we have resolved that issue we are looking for people for these positions. michael: debt ceiling, in its latest refunding your treasury office of finance says you can pay the government's bills through january. is that the x date? sec. mnuchin: we said we could at least pay them through january. we felt it was important that we set guidance in the case that a deal was not reached by december 8, that we had the ability to get through the beginning of next year. there is a lot of assumptions that go into tax collection spending but hopefully we will get it raised in december. if not, we will give additional guidance. michael: you were in saudi arabia before the crown prince moved. did you deliver any message
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suggesting the administration would be in favor or offer it support? sec. mnuchin: in regard to what issues? michael: the arrests he has made and the corruption crackdown. sec. mnuchin: we have a lot of discussions on terrorist financing. we opened the terrorist financing targeting center together. we did not have any specific conversations on corruption. michael: so the treasury secretary was not carrying a message from the president? sec. mnuchin: i was not. --hael: does the prints's 's arrest have any concern for you? sec. mnuchin: i will not make any specific comments on that. we look forward to dealing with the saudis as they deal with these corruption issues. we look forward to working with them on the details. michael: back to taxes for one last question. the president said, if anything
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goes wrong i will blame steve mnuchin and gary cohn and they will hear from a. has he called you? involved,e is very and gerry and i are very comfortable being accountable. this is the president's most important domestic agenda item and we will get it passed. michael: when? sec. mnuchin: in december to sign. michael: why do we need it by the end of the year? sec. mnuchin: we need economic growth, we need sustained economic growth, and the tax package is a major part. we want to make sure we get this passed, that companies can make decisions, that middle income people can see cash in their pockets, and we can see the economy continue to do better. michael: treasury secretary steven mnuchin, we will let you get back to works a you do not get angry phone calls from the president. vonnie: a wide-ranging
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interview, thank you for that. mark, an awful lot to go through here. some of the most important comments were the ones he made at the end where mike asked him why so quickly and the secretary said we need economic growth. course the administration needs economic growth to pay for some of those tax cuts. mark: his comments on yellen i thought were interesting as well. mike pushed him firstly on the vice chair and mnuchin said they are talking to people right now. he asked him whether yellen would remain on the board, of course, and mnuchin said he had breakfast with yellen today that it seems as if no decision has been made. if yellen leaves, that leaves three members of the board. mike pressed mnuchin on the fact that that is quite a sparse board but mnuchin did not seem worried. they are looking at filling all
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those positions, so business as usual on the board. vonnie: no specific criteria for a vice chair but they are looking already. he would not comment on the dollar either. a couple other interesting things on tax reform, he said the president would like to kill the health care mandate which would free up a lot of money. it sounds like the efforts are going into trying to find the money to pay for the tax cuts the administration is so bent on, as well as the gop. a littleant to give market reaction not just to that interview that to the entire day. the fix is still below 10. but the dollarts index is trading below 95. the 10 year yield is a 2.31% and the market metric of the day, the 210 spread below 68 basis points at 67.77 basis points. we also have a headline coming
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out of the senate on the tax bill which i want to bring our viewers right now. apparently, axial's is reporting the senate will not release its tax ill on thursday. the senate said not to release the tax bill on thursday. perhaps they are waiting for the house to finish its markup or perhaps there is something else going on. coming up, may the force be with the box office. after a summer of disappointments, can box offices pack theaters? we speak with the imac ceo richard gelfond. this is bloomberg. ♪
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♪ mark: live from london and new york, i am mark barton with
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vonnie quinn. this is the european close. the wednesday session lower, down one 20th of 1%. busy earnings day. .redit agricole slump rivaling that of socgen. falling 28%. up banks trading business because of the focus on bonds, which fared worse than equities. shares down to uber stocks in focus, a rise of 9%, climbing estimates makers beat . the jump in sales is just what it needs right now to fend off
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french conglomerate vivendi which has accumulated a stake in the game maker. at last check, what a week it has been. i say that in the wake of the corruption purge that is taking place. benchmarkmance of the has basically mirrored every single day, has replicated itself every single day. monday we saw a decline, by the end of the day a rise. the week starts on sunday and what some are saying is the kingdom's sovereign wealth fund could be boosting stock purchases to avoid a meltdown. for the four days it is down a 3/10 of/10 of -- mere 1%. vonnie: such a fascinating work. -- week.
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we did not expect to be quiet but i do not know if we expect it all this. it was not a great summer for hollywood, but imax did not feel the heat. they topped analyst estimates and generated $169 million for the global box office, but will that momentum continue? with us is imax ceo richard gelfond for the bloomberg year ahead summit. he is also the ceo of imax china, a separate company. let's start with the year that was, a 5% decrease generally in theatergoers and kind of a tough time for stocks. regal and imax, which is the yellow line, doing better than regal or amc. theaters are really challenged right now. richard: first of all, we are not an exhibitor.
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we are a technology provider and the way our business model works is related to movies and we get a percentage of the box office from the studios and from the exhibitors. while the third quarter was significantly down, the theatrical exhibition was up for imax. our business is blockbuster movies so as long as we have some big movies that do well, our model is good. we are about 70% international, 30% domestic. during the last quarter, " wererk" and "it tremendously successful. vonnie: and of course all the sequels did really well. disneyuld you make of a sox deal? richard: we are in the blockbuster business and i think disney is the biggest creator of blockbusters.
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it might decrease the total amount of movies being made, but i would tend to think it would increase the number of blockbusters, big budget films, is that is where the studios seem to be going anyway but with more capital it would accelerate . i think that would be good for us. because disney is very much in favor of the current windowing system, that will be another reason. vonnie: the windowing system? richard: how you roll out films after the theater. his name really believes in the current window weighing system so what they would be good for imax. blockbustere in the business, but not all blockbusters connected this summer, and that is reflected in the overall box office over the summer period. is this just a summer thing, a one off summer, or is there something more sinister? consumer ares the
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a bit more fussy when it comes to sequels and so forth. richard: i have been with imax for over 22 years and when you are in a slow. -- period it feels like it will never end. my experience is that movies go through cycles. there are bad and good cycles. hadou look now where thor one of the biggest openings and over $120 million domestically this past weekend, it is about $450 million worldwide. then you have justice league featuring wonder woman is a fabulous success for warner bros.. of course the biggest of them all, star wars episode eight at the end of this year, so i do not think there is a systemic change. it is about the movies. what about technology? what are you investing in? what form of technology are you excited about and what form
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should we as the viewing public be excited about? we are always innovated. imax and vented stadium seating and these cameras that travel into outer space. we also invented modern day 3-d so which try to always be on the cutting edge. the biggest new thing to come along as laser projection. there is already digital, but digital is not based on laser technology. he have put them in, in some of our theaters and will be doing a lot more. it provides better contrast, brighter images noticeable to the public. we are also always evolving the sound system. we are always trying to think of -- the reason i hesitate is every year we have a new big thing. for us, it is not a one-year thing. anniversary,50th and not to bang many
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entertainment companies have been around for 50 years. that is because we are trying to go to places before the audience knows they need it. you are depending on content providers and you mentioned that disney is putting out more next year. how concerned are you that content is really challenged right now with the likes of netflix and even youtube being a huge competitor? richard: i think you are looking at different segments of the market. our business is the blockbuster business. films that cost 150 million dollars, $250 million. netflix is not doing those kind of things. they are doing more midmarket things like adam sandler movies or woody allen movies. we have taken advantage of that so we put "game of thrones" in imax a few years ago. this year we premiered a television series in imax. we are trying to adapt to the
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changes in windows. vonnie: what do you make of the movie pass idea for people to buy a subscription to go to any movies? you have been against it. richard: i love innovation, so we have done projects with netflix. i think it is always good to try new ideas. in its present iteration, the prices probably too low for it to work and it will lose money in the short term, and it does not include imax. pricing.trying dynamic as the world goes forward, you cannot sit still and say, let's not change, so we will see where it goes. mark: this is a movie geek question. you are celebrating your 50th anniversary. give me one film over that period that you have to watch in an imax theater, just one film. richard: "rolling stones at the max."
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there is no way you have ever seen a concert movie like that. when you watch it, people stand on their chairs and light lighters. it is like you were on the stage at wembley stadium with the stones. vonnie: it is a date, mark barton. there i was thinking he was going to say "star wars." guest, imax ceo richard gelfond here for their bloomberg year ahead conference. at 2:00 p.m. eastern, the citigroup ceo joins from the year ahead senate. this -- summit. this is bloomberg. ♪
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vonnie: it is noon in new york, 5:00 p.m. in london, and 1:00 a.m. in hong kong. i am vonnie quinn. shery: i am shery ahn.
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welcome to "bloomberg markets." ♪ from bloomberg world -- vonnie: from bloomberg world headquarters in new york, here are the top headlines. resident donald trump arriving in beijing, looking for wins on trade and north korea from his chinese counterpart. will his personal round of diplomacy reduce results? day three for the tax-writing committee work up of the gop plan. a $74 billion revenue hole needs to be patched. this may put obamacare appeals back on the negotiating table. we had to sunny los angeles for .n interview with steve ballmer his take on tax reform, tax relationship with washington, and the future of the nba. shery: a

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