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tv   Bloomberg Markets Americas  Bloomberg  August 27, 2019 10:00am-11:00am EDT

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vonnie: it's 10:00 a.m. in new york, 3:00 p.m. in london, and 30 minutes into the trading session in the united states. from new york, i'm vonnie quinn. this is "bloomberg markets." we are getting some consumer confidence data from the conference board, is the august data. we are getting a more positive reading, 1.35 -- more positive reading, 135.1. we are coming down, but not as fast as economists anticipated. the richmond fed manufacturing index has come in positive. we are getting a plus one reading, so that should console come of the people out there looking for worse economic data. let's have a look at u.s. markets and how they are performing today. the dow is up for 10th of 1%, the s&p up half of 1%, and the nasdaq up 6/10 of 1%.
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of to a good start on this tuesday. negative atead is 1.51%. apparently phillip morris and ultra are going to try to get back together -- and altria are going to try to get back together. phillip morris is down. europe, a nice bounce with the stoxx 600 up 6/10 of 1%. the ftse maybe the best ib themer -- the ftse m best performer for individual indices. weaker by 6/10nd of 1%. in a bloomberg opinion piece today, former new york fed president bill dudley calling president trump's trade war with china a "manufactured disaster in the making. the question for policymakers is e policy mitigate
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the damage or refuse to play along? increasing the risk of a stateion, officials could officially that the central bank won't bail out an administration that keeps making bad decisions on trade policy, making it abundantly clear that trump will own the consequent is of his actions." we are joined by michael mckee, and it washington, d.c. come a trade reporter shawn donnan. michael, this is a very interesting piece because, in a sense, bill dudley is putting a question out there that wasn't out there. we had the fed being called upon by president trump to lower rates, but the fed wasn't suggesting that it mitigates any problems that might come up in the economy from the trade war, was it? michael: the fed has been talking about mitigating the damages from the trade war because that is what they are supposed to do. the question dudley raises is
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should the fed not do that because they want donald trump to know it is his mistake hurting the economy. saidowell in jackson hole that setting trade policy is the business of congress and the administration, not that of the fed. our assignment is to use monetary policy to foster our statutory goals, which are maximum employment and stable prices. powell and the fed are going to stay on their course and stay out of politics because there's no way for them to win this battle. if we put them in the middle of the political fray, they wouldn't necessarily get much support from democrats, who do want something done about china. at this point -- by the way, imagine what would happen to jay powell. the president wants to fire him anyway. the fed will stay out of it. vonnie: is it a little bit of misdirection to suggest the fed will be mitigating what the president is doing in china?
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the fed has to look at the economic data and keep the economy growing. it has to keep to its mandate, as you say. mentioning this in advance is really just being responsible. they are not saying we'll cut rates if this gets really bad for you, president trump. michael: they are not putting it in context of president trump, but the general conclusion of everybody at jackson hole was that the global economy is slowing down, the u.s. economy has problems in manufacturing that could spread to the rest of the economy, and it relates back to the trade war because of uncertainty, businesses stop spending, and if consumers stop spending, you fall into recession. they keep an eye on trade wars and say they are prepared to do something about it, and it is basically why they are cutting rates right now. the markets want them to because they think the trade war is going to hurt the economy. vonnie: shawn donnan, we have a little bit of calm, it appears, overnight.
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president trump saying china wants to do this in a calm way. what's next for discussions between the u.s. and china? do things quieten a little now? shawn: we get a little bit of an august recess from the trade war's after a pretty tumultuous few weeks. we are looking for some more working level talks by phone this week, and then we are all keeping an eye on september to see if the chinese come here for face-to-face talks. those are the calendar items we are watching, but we are getting signals from beijing also in the last few days, and even donald biarritzerformance in at this press conference, and which he stressed the chinese were ready to make a deal. we are hearing from chinese officials, from our colleagues in beijing, that they are kind of perplexed by all of this. the president mentioned phone calls yesterday that the chinese don't know what he's talking about.
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the president talked about a speech by liu he yesterday, the vice premier and trade negotiator, and trade negotiator, in which he called for a calm resolution. the chinese are looking at that, and people who know china are looking at that, saying that is a pretty boilerplate speech. i'm not sure what the president detected that was so different. we are waiting to see where the talks go, if there is any substance to the engagements. there's a lot of perplexed and here in washington -- a lot of in washington, as well as beijing. vonnie: i want to show one more quote from that deadly opinion piece. the trump administration continues down a dangerous path, or can signal that the willdent, not the fed,
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they are the risks, including the risk of losing the next election." wouldn't that clearly be in violation of everything the fed stands for? michael: sure, which is why the fed will not do it. the fed has one job, to carry out the goals of the federal reserve act. they've always steered clear, no matter what the debate, of anything that is not in their mandate. you hear it over and over again in the hearings. whoever the chairman is says we believe that you guys should figure out how to do this. how the president is carrying out the trade war is politics, not monetary policy, so they are going to leave that to the administration and congress. if congress wants to take him on, they will be fine with that. they don't like the policy, but it is not their job to say. we hear -- we used to
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here fed officials wax eloquent on how fiscal stimulus would help their job, but it seems that as long gone. is there a timeframe on this? at some point, will president trump get cold feet because it is looking more and more likely that this is an election threat? shawn: i think we should expect these talks to drag on, and president trump, do .2 the fed article and bill dudley's toments this morning -- and point to the fed article and bill dudley's comments this morning, he sees this as a key element in his strategy to take on the chinese. there's a longer fight going on here into the 2020 elections. be president is not going to turning things around in the next week or so, and the chinese certainly aren't going to be bending anytime soon and
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capitulating to the president, who they see as increasingly difficult to deal with. vonnie: our thanks to both of shawn donnan in washington, d.c. and michael mckee here in our new york city studio. let's check in now on the first word news with kailey leinz. iran, president hu son rouhani -- president hassan rouhani said that all president trump is looking for is a photo with him, and made it clear there is one precondition to any negotiation. without america withdrawing from sanctions and abandoning the path it has chosen, there will be no positive development. the key to the did relationship is in washington's hands. kailey: president trump said he is willing to meet to discuss the standoff over the nuclear agreement. japan wants to end the auto
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tariffs threat as part of a deal with the u.s. president trump and prime minister shinzo abe announced a tentative agreement over the weekend. president trump left the door open to imposing them later. in germany come of the economy is now on the brink of recession. the second quarter exports fell by the most in six years. that led german gdp to shrink by 1/10 of 1%, the second contraction in the past year. in italy, talks between longtime rivals to form a new government are close to collapsing. that could lead to early election. the populist five-star movement says it won't resume negotiations with the democratic party unless prime minister to set b conti is allowed to keep primeob -- minister giuseppe conte is allowed to keep that job. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg.
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vonnie: thank you. coming up, a conversation with gamco chairman and ceo mario gabelli. you don't want to miss this one. this is bloomberg. ♪
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♪ vonnie: live from new york, i'm vonnie quinn. this is "bloomberg markets." let's get a check on global markets now. emma chandra is in london. emma: we are looking at global stocks in the green as investors seem to be taking the president's softer tone when it comes to trade, taking that to be more positive than perhaps the way he has shifted his tone over the course of august, and in fact, over the course of the past few days. stocks in shenzhen closed in the
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green. europe close to the highs of the session. the s&p 500 and the u.s. majors opening in positive territory for the second day in a row. sentiment remains fragile, though. that is perhaps best expressed in the bond market. we are looking at yields continue to fall. we should be able to show you the 10 year over the course of august, down around 50 basis points in that time. we are currently trading at a three year low in terms of yields. let's take a look at some of the movers for you today. i wanted to highlight johnson & 2.8%on, gaining some despite the fact that it lost that suit in oklahoma over its opioids. million penalty not enough to put investors off the stock because the worst case scenario had put that penalty between $1.5 billion and $2 billion, so investors seeming to like this news. not so much for the generic
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opioid makers. they are falling today, though they had been rising a little bit in the premarket. finally, we have had some news of a potential deal in the tobacco industry. we are looking at news that phillip morris, the maker of marlboro cigarettes outside the u.s., in talks with altria about an all stock merger. this would unite the tobacco giants 10 years after they split. also british american tobacco, one of their rivals, falling today some 2.2%. vonnie: thank you. cohosterg surveillance" tom keene joins us with a special guest. us. mario gabelli with his success in value investing and a number of things to talk about right now. vonnie, i know you want to talk about phillip morris, and cbs-viacom. i want to ask mr. good belly -- mr. gabelli the idea of what you
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do to filter the political investment of this august, this 2019. how do you deal with a news flow and investment? mario: you want to connect a lot of dots. the more important one for me is the tax rates that corporate's have sustainable. secondly, what is global growth on a basis that i can understand, why the negative currency? impacting what is the impact of the dollar? that is important because the earnings of public companies, -- 40% are non-us, being thrashed by the impact of currency. companies we own like vivendi selling into the united states get the benefit of their weak currency. tom: so are you on the cusp of buying the emerging markets, of
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the others that are out there? mario: on the others height of the coin, a company -- the other side of the coin, a company in china is selling at a large market cap because they have a big share of the premium market in china. we have a lot of dots on a global basis. what we try to buy is good businesses run by people that come to work every day at reasonable prices, and hold them for a period of time, specifically if they are cash generators. vonnie: when you have held for some time, viacom and cbs. curious if you are actually suing on the valuation. mario: is one of our teammates would say, all our options are still on the table. we want to see how far we go into the area. it's not a big number, by the way. there's only like 5 million, 10 million shares of stock. x they pay you an extra
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dollars, it's $50 million. it's not a lot of money. vonnie: are you waiting for a check, or are you actually going to take them to court over this? mario: we will do whatever is necessary to help our clients who own the stock. of the 650 million shares outstanding -- and by the way, this is a good deal. the stock is a buy, cbs-viacom. vonnie: cbs is down another 6.5% since the deal. are you buying more? mario: we are buying it indirectly by buying viacom. we havewe have -- tom: in our houses 1, 2, 5, 8 streaming services. is mario gabelli bullish on streaming? is cbs-viacom behind on streaming? mario: we are paying $40 billion for the entire enterprise. that enterprise, without a major
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success in streaming, but putting money into content is going to generate $40 billion. tom: should they bring back "gunsmoke?" [laughter] mario: that brings up an important point, and that is "dark phoenix," which lost a ton of money. so you have to have good content in the library. you want to buy cbs because it is going to work. andow they have a good team jerry is going to be in command. vonnie: what happens next, though? ,hey do have streaming services hbo, cbs all access -- mario: they are not going to buy bloomberg, so let's start with what they are not going to do. but independent of that, if i'm how i getm looking at into this in a bigger way. how do i get content? what do i do
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with my movie studio? the point is, it's going to happen. some further dynamic will unfold. hopefully it happens a year from now. vonnie: i know you are very excited about the new taylor swift offering -- mario: "lovers." vonnie: exactly. , amazon,e alibaba netflix coming in here? mario: i'm glad you asked that. we were very optimistic about "peppa pig"bout and entertainment one, and we did not expect hasbro to buy it. tencent is interested in music. they want to put a position in vivendi. if that happens, it gives the sony team, which is in aordinarily undervalued
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$75 billion market cap, i like the sound of music. tom: is there value in industrial america? i know you're going to tell me consumer goods, no, but is there a place to be, given the trade war? mario: the ceos we listen to on conference calls have a certain element of hesitancy on making commitment. tom: i'll say. mario: however, you cannot run this country without a begin for structure bill, and you've got to do more to gasoline taxes. how do you charge user fees on electric vehicles? how do you build 500,000 bridges , and 200,000 need help? to fix america's surface transportation, the highway act comes up for renewal next year. you want to buy companies that sell cement. a company in boston called grace
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construction productsonstruction companies, gcp. those kind of things. i prefer focusing in the next 60 days on what is going to happen to industrial activity when boeing gets the clearance to start shipping those planes that are piling up. they are still running out 42 a month. tom: can you buy boeing shares today with the news we had? mario: the russian airline canceled and are suing. well, it happens. independent of that, you have the following. we have a conference coming up on boeing and airbus. , kaman will like have $400 million cash to go into airbus and boeing.
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there really state-of-the-art. they do a great job, and they have heavy lift, which is what the ukrainian company that the u.s. is trying to stop someone from buying is very good at. so there's a lot going on. news.: yesterday's i do want to come back to media, hasbro and entertainment one. it is up 31%. these?see more of you said you weren't expecting this particular one, but it is a classic arbitrage opportunity. mario: the arbitrage is selling at a small premium as of last night. the u.k. market was closed monday, so i don't have an update on the price. it may still be this morning. somebody thinking that someone else could come along, "peppa pig" is big, but our analyst on this stock is holding back. sony. vivendi,
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i like a company in nashville that has a business that is that has 50 million shares. vonnie: grand ole opry. mario: yes. you've done that before. vonnie: why the investment in gam? , iio: about 40 years ago demko and cappelli asset management -- and gabelli asset management. it's not expensive if they get past this short-term dynamic. tom: the joy of talking to you is a joy of individual stock selection that we knew generations ago. and drifted away with etf's all the other bundled portfolios
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and packaged products. how do we get the kids back to individual stock selection? mario: i don't want them to do individual stock selection. i don't mind bundles. however, they should understand how companies work because i want them to understand how to allocate their own resources, how to keep options about anything that they are allowed to do for the rest of their career. how does a 16-year-old go on and win a contest that epic games is doing, and what happens then? should they do sony now? tom: make the case for sony. it's the third time you've mentioned sony. sony has been a dog for decades. a failure. why your optimism on sony? mario: i think the last six years, the two ceos, the current one being the previous cfo, they are looking at allocating a variety of resources, and
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they've got a powerful tailwind from streaming. in addition to that, playstation vibe is coming out a year from now, and that is going to affect things. not everything is simple. however, the math is compelling. good interest,, good balance sheet. tom: we've got to leave it there. i note that mario gabelli is wearing yankee blue today. thank you so much. vonnie: exactly. so much more we could ask mario gabelli. i'll direct you to the podcast and radio interview. there's a lot more behind-the-scenes talk as well, including what you do in this volatile environment. our thanks to tom keene of "surveillance." more "markets" ahead. this is bloomberg. ♪
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♪ vonnie: live from new york, i'm vonnie quinn. this is "bloomberg markets.
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let's check in on the bloomberg" . here's kailey leinz. kailey: iran's president has hungry honey -- is ron's iran's president hassan rouhani has all but ruled out a meeting with president trump. has beguns russia delivering more components of its missile defense system, despite strong objections from the united states. washington says the russian system is incompatible with nato and poses a threat to the u.s. led efforts. threatened sanctions against ankara. in hong kong, chief executive carrie lam sees no need for chinese troops to put down demonstrators. she says she's confident her government can handle the crisis. she says she still once a
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dialogue with protesters despite an increase in violence. police used water cannons, and one fired his weapon at protesters over the weekend. johnson meter boris with french president emmanuel macron and german chancellor angela merkel, who appeared to relax their line which on the u.k. withdrawal agreement, especially involving the hours porter. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. vonnie: thank you. cosmetics giant revlon has begun the process to secure a buyer to help turn around the company and keep it public. bloomberg has learned the process will begin after labor day and could see the sale of the entire company or its major brands. catherine doherty broke this story and joins us now. talk to us about the amounts involved here, and where revlon
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marketing. reporter: for sources, we have found that the formal process will begin after the labor day weekend with goldman sachs. that is their advisor on this. right now they are looking at all options that would basically boost a turnaround, so that could be parts of the business, some of their bigger brands. elizabeth arden is one that, and the last quarter, had actually been the only brand that put forth net sales positive, so it could be that they look at some , or parts or all of the business, so i think it remains to be seen, but it is basically the beginning of that process. vonnie: the majority owner is mcandrew and forbes.
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why is it taking so long for revlon to turn itself around? katherine: they are facing a number of issues that are industrywide. you're seeing some smaller cosmetic business is come forth, boosted by either a social media presence or some celebrity brands that are taking market share. so that's not unique just to revlon, but it is definitely an issue they've been dealing with, and that they have discussed on conference calls, so moving forward, they are looking at the expansion of beauty globally and seeing how they can fit within that expansion. it is not that beauty is going away. you still see people shopping and looking for new brands, new products to use. it is just, how did they adjust to this new mode of shopping? innie: that home market grew 5.9% last year. thingshas tried some
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that seem to be working. partnerships with kylie jenner, lady gaga. are those things not working anymore? katherine: is working in some senses. elizabeth arden actually produced 11% net sales positive wasth, so that one actually a little bit of a turnaround. it seems to be showing some sort of path forward for them, and it is something that they reference as a growth driver, and that actually helped boost the company's overall -- the company'y overall performance. as you say, that is a growth driver as jp morgan pointed out. vonnie: what kind of yields are we looking at? katherine: there are some unsecured bonds. we haven't seen much trading today on the news. it was mostly in equity move.
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debt holders don't seem to be reacting too much to this. i think they are going to wait and see what happens next, if there is a formal announcement that does get made. vonnie: great scoop. thank you for bringing that to us on revlon. much appreciated. shares ofcare now, johnson & johnson are in the green, even after the company was ordered to pay $572 million for fueling oklahoma's opioid epidemic. that number was less than decision. that decision now giving the green light for more cases to follow. bloomberg'sr to riley griffin. this is the first in what could be a slew of lawsuits. how did johnson & johnson defend itself? will the same tactics works next time? reporter: it's important to note johnson & johnson was the first major drug maker to go to trial on the opioid front. oklahoma was seeking $17.5 billion in damage, which a lot of analysts saw as a shoot for
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the moon kind of figure. ultimately, that is why we are seeing johnson & johnson in the green. investors really feared that $1 billion threshold, and that is lower than expected, but as we look at other cases going forward, for example, the ohio multidistrict litigation which will commence in october, a lot of questions remain, and no opioid maker is out of the woods. 3%.ie: johnson & johnson up what does johnson & johnson have to do now? does it take a right down for possible future litigation? riley: johnson & johnson has said it is going to appeal the process -- the ruling, excuse me. that is really important because the process itself could take years. it could go all the rate to the supreme court. that's why analyst investors are looking rather positively on this. we don't really know who's yet
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one the battle. vonnie: what other stocks are moving off of the back of this decision? riley: teva, cardinal. it is not just opioid makers that are exposed. it is also distributors and large pharmacies. vonnie: exactly, and he distributors at one point were very volatile on these. will there be a statute of limitations? will there be some endpoint? riley: i don't we see an end in sight right now. the market share in each state is variable. johnson & johnson, for example, had a different market share in oklahoma than it does in new york. so we can't really extrapolate the figure into other states for federal litigation. vonnie: the ruling was the first affirmation of the highest legal strategy using public nuisance
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laws. how did johnson & johnson do so well? what were their lawyers' arguments? riley: there lawyers were arguing that public nuisance was not the proper approach. the negative headline here is that the judge affirmed nuisance law, so that could be a liability moving forward and other cases, where they're using this quite untested legal theory to attack manufacturers. vonnie: this is such a fascinating case. can't wait to dig into the details a little more. our thanks to you for giving us the ins and outs. that is riley griffin, health care reporter here at bloomberg. coming up, iran's president hassan rouhani is all but ruling out talks with the united states. why he says if they are going to meet with president trump, it has got to be for more than just a photo op. this is bloomberg. ♪
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♪ vonnie: live from new york, i'm vonnie quinn. this is "bloomberg markets." iran's president hassan ronnie says he's not interested -- hassan rouhani says he's not interested in just a photo op with president trump. the iranian president insists sanctions be lifted before any negotiations. bloomberg'sd by reporter of national security coverage in washington. how would president trump give any signals that this would not be a photo opportunity, or would he want to do that?
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reporter: i think he will probably have to do something to lure the iranians back to the table. the bottom line is what iran wants to do is sell some oil. they need it their economy. they needed to show some political gains back home. president trump mentioned at the iranme scenario where would be extended credit or a credit against its oil reserves. that is one scenario. from both points of view, there's a lot of mistrust of the other side, but iran looks at it is a situation of they had an agreement. that was torn up, so the ball is in the u.s. court to bring it back. acron yesterday talking about the jcpoa as well. if it did happen, i'm sure it would be a while before it takes place, but where would they meet? reporter: there's hard-liners on
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both sides who don't have an interest in seeing it take place, but you can imagine some sort of chat taking place in a side conference room or something at the unit editions general assembly -- the united nations general assembly three or four weeks from now. both presidents would be expected to be there. leaders who don't agree with each other frequently bump into each other, shake hands, have a talk on the sidelines. that is one possibility, but there needs to be some groundwork laid by teams on both sides to see if that is really a serious possibility. you havehe problem is to ask if the president does want to have an off the camera, quick discussion with president rouhani and a side conference room, or does he actually want the photo op? after all, with north korea, it sort of turned out to be a photo op. reporter: that's exactly what the iranians are saying.
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they really want to see some concrete results. they want to sell some oil. they want to get their economy back on track, so it is not clear that that would really be sufficient. said that hemp has wants to strike a deal. a lot of senior advisors has built their careers on drawing a hard line against iran and opposing just these kind of talks. vonnie: our thanks to bloombergs bloomberg's bill faries. some breaking news now, phillip are looking atia deal -- a% no premium 52%-48% no- a premium deal.
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once again, phillip morris and a 52%-48oking to weigh % split. look at the biggest business stories in the news, home price gains in 20 u.s. cities celebrated for the 15th month -- cities decelerated for a 15th month in a row. property values rose 2.1% from last year. the weakest results were concentrated on the west coast. $1 trillion wealth fund is bullish on america to an extent. it has called for a shift away from euros in a move that would allow it to boost its holdings by as much as $1 billion. the fund wants to take a larger chunk of the biggest technology companies. for the first time, boeing reportedly has been sued by a
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737 max customer. the russian company wants to cancel an order for 35 of the planes placed before the plane $115rounded, and it once million -- and it wants on hundred $15 million in damages. that is your latest bloomberg business flash. phillip morris and altria said 52-48% split, no divestitures, no premiums. this is bloomberg. ♪
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vonnie: breaking news now for our stock of the hour. some big news in phillip morris and altria. emma chandra has details for us in london. emma: yes, we are looking at a
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merger between the two tobacco giants. we should remember this would be both a merger and reunification. the tobacco giants split some 10 years ago under investor pressure for higher dividends and more buybacks. this is also a way to set free the faster growing overseas operations at phillip morris. altria's3, it is stock that has gained the most because altria has been moving quickly to reduce its dependence on declining u.s. smoking rates. they are now just 14% of the u.s. adult population. while traditional smoking audits -- smoking product still account for most of the income, they have been diversifying. , thetook a stake in juul number one vaping product in the u.s.
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a 45% stake in canadian cannabis company and a 10% stake in ab invev. if we take a look at the combined portfolio, they would have some significant global exposure. havests at wells fargo said phillip morris is the ideal international partner for cal tria -- for altria. that is your stock of the hour. vonnie: emma chandra, fascinating. i've got to say, "house of lies" called it years ago, the cayman is -- the cannabis companies tying up with big tobacco. split that2%-48% would bring cannabis together with tobacco, which would help in washington, d.c., and bring
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tobacco more into the modern-day. for more on this merger, bloomberg's senior deals reporter ed hammond is with us. why is the market viewing this mo and bad for pm? ed: folks are looking at phillip morris and say, you are doing reasonably well outside of america. why would you do a deal that puts your exposure willficantly back in the tria a be getting this international exposure. have significant lobbying presence in washington, d.c. does. it also has significant
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reputational issues. but it is a tiny bit about cannabis. they have a $1.8 billion stake. the combined market stake would be less than 1%, but the tipping point for all of these investments into cannabis is going to be federal regulation. when that comes in the u.s., we will see potentially moves in a much more significant way. in terms of the structure of this, they've got this 48-52 split, or at least that is what they are looking at now, which would be very close to a merger of equals. fromlocked this in friday's share price before we had any room for the market. vonnie: what happened to the company strategies before they split apart? they used to be together, and then they went their separate ways.
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ed: yes, it is cbs-viacom all over again. they've obviously both gone in slightly different new things in some of juul,ed: tobacco, and of these e-cigarette products. the point i was being made this morning is you have very couple to report folios in terms of they are both huge companies with huge brands we know well, but no overlap in terms of geography. the expectation is this will have minimal devastator's if and when they put it together, which should lead to a fairly quick close. vonnie: sources telling us they are not going to make any divestitures or offer any up. if the market saying that this deal undervalues phillip morris? ed: i think the market is really processing at the moment what its own shipment will look like here. who's going to be the management? in terms of undervaluing phillip morris, it is a tough one. there's nothing that fits with ria, so why phillip
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morris is down so much i think will become clear in the coming days. the market is waiting for more details at this point. the thing that triggered this statement was not that they want to announce the deal. phillip morris pulled out of a conference with barclays that was going to be next week in boston. that generated speculation among analysts that maybe they pulled out because they are doing some kind of m&a discussions behind the scene, and the takeover will force aon statement, and that's exactly what happened here. vonnie: has the ownership of either stock changed significantly since became less en vogue to own these stocks? ed: definitely, and that has been going on over some period of time. here is opportunity because tobacco companies are best positioned to leverage
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these big bets, whether it is in cannabis, e-cigarettes, these high-growth areas we are seeing. the nature of the tobacco companies is these sort of old products that have a decline in customer base because those customers are, are in some cases are,ary -- the customers and some cases literally dying. so they are seeing a new kind of investment coming into the stock. vonnie: what about other competitors? how would they stack up? ed: they would be made smaller in terms of where they are. we seen other big tobacco in mergers. we had the british american tobacco one. there have been big combinations in the space. the regulators look at it purely on the antitrust basis, but there's also some more nuanced things they look at, which is
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there will be supplying product that don't do significant damage to young people, so there's a lot of issues around that. as you say, it is an industry that, for good reasons, has been out of vogue for a long time. vonnie: ed hammond, fantastic reporting. a merger of equals, although the stocks are not reacting that way as of now. coming up, morgan stanley's chief cross asset strategist andrew sheets joins us as we count down to the european close. we saw a bounce this morning in europe and the united states. right now we have the s&p 500 up just 3/10 of 1%, so shaving some of those gains off. this is bloomberg. ♪
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30 minutes left in the trading day in europe. here in new york, i'm vonnie quinn. this is the european close on "bloomberg markets." it is a nice green day for all of the groups in the stoxx 600, with the exception of the banks and insurance group, slightly lower now. -- in entirety, is it up its entirety, it is up half of 1%. the rest of the continental european indices doing well, particularly the ftse mib, doing well on italian talks to form a government. automakers get a nice boost, andy british pound trading at 1.2275, just about a half of 1% weaker as we await more develop and's in britain -- more develop and say britain. up s&p 500's still

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