tv On the Move Bloomberg September 25, 2015 3:00am-4:01am EDT
by 180 points. jonathan, what a brutal week. we've had almost 400 billion euros wiped off the value of the stocks. futures looking very green indeed. appetite?sk doesll see a rate hike, that bode well about global growth? or is it that the shorts are just coming off? low.ax hit a year to date is it time to ease back on your negative bets? someup, we are getting
equaling. the dollar moved on the back of what yellen was saying. meanwhile, that drives the euro lower. less appetitewer, for gold when we expect rates to rise. down from .6% this morning. optimism potentially about global growth. a little bit more risk appetite, a little bit less betting against the market. costs rising in the u.s. as we see in potential for a rate rise later this year. the bond prices are falling. some particular stories we're following this morning.
none of them are open yet, we will wait to see if they populate. once again, being embroiled in the petra graham scandal that there is really a concern in brazil for the first time ever transocean being linked to payments. and it will get a lift ahead of good nike earnings after the bell. we saw the market move 8% for nike. look for that stock, could the k+seholders buy into because they think there could be a revaluation? 1.3%, for the autos, up do we wait for bmw to pop? it might not be embroiled in the scandal that has been hitting volkswagen hard this week.
will there be a new ceo announced today? thank you very much. we bring you some of those movers later in the show. let's wrap up the asia trading week with david inglis in hong kong. morning, perhaps here in asia it is a similar story. things look to end higher. anan has been close for hour, and very strong finish for the nikkei. that's a drop in inflation for the first time since 2013, they may expand or adjust the scope of its bond buying programs. kong this one has about an hour left. offy up, but we are well the lows of the day.
wild moves we saw back in isember, what is curious levels of laste friday. let me show you a map of asia to give you a sense of what is happening. overall, we are up by a third of a percent. that has been so much short interest in the market, short interest, i won't go into details. perhaps given the drop you are seeing, there has been some interest in recovering those short positions. japan was the out performer today, less so in southeast asia. volumes are a little bit lighter. next week, a holiday across hong
kong, china, and so forth. perhaps that is why it is fairly quiet. jonathan: you enjoy your weekend, thank you very much. that is what is happening in asia. show, fed chair janet yellen says fed rates should be raised by the end of the year. will be driving volkswagen? japanese inflation meets japanese growth in negative territory. to bere any reason optimistic about the world's third-largest economy? 2015 just got a little bit bigger. janet yellen affirmed she is ready to raise rates at some point this year. here is what you need to know about her speech. >> most of my colleagues and i
anticipate that it will likely be appropriate to raise the target rating to the federal funds rate sometime later this year, and to continue boosting short-term rates and a gradual pace thereafter. forc were to delay for too long, we would likely end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of our goals. united states has experienced very low inflation since the financial crisis. in part, that reflects persistent economic weakness that has proven difficult to fully counter with monetary policy. jonathan: let's get the conversation on central banks.
gentlemen, great to have you with us this friday morning. charles, to you, i believe there are some available spaces on the board. if you were on the board, how would you be voting right now? charles: i think that i would have voted to raise rates, but 12.5 have raised them by basis points just to indicate it will be a gradual, long, drawnout increase rather. yellenn: to follow up, said she would wait and allow the labor market to get hotter. do you think that is a policy mistake? charles: the speees she made reiterated the same points that she made before september, and before may as well. having said that twice, then shirked doing anything, why
would you do anything in december? after all, if one uncertainty declines, another will increase. by the time you raise, you have all the worries about the fiscal buttion, about a budget, will happen to debt in the u.s. there was always more uncertainty coming down the line. there is great concern about when wil she do it. jonathan: james, do you agree with that? did the window just shut on them? james: i certainly think so, given the credibility of the board -- here is a lady that said she needs to see real evidence of the global economy is now stable. thatil -- she will not get evidence.
thisants to have evidence. jonathan: as a policymaker, you see a slowdown in china, do you wait for it to show up in the data? or do you try to act preemptively? james: it has already shown up. before moved commodity prices decline. the people that suffer have to react or than the gainers. the developed economies around the world works strengthened as commodity prices go down. the happened after immediate effect on the emerging markets. in have already seen that brazil, turkey, and others. jonathan: are we overstating the slowdown in china, and understating the domestic issues in the eu?
a possible impeachment, or the fourth australian prime minister. i'll be understating the politics in each individual country? charles: of course, it is almost ironic that u.s. and that trading a credit bubble and it grow in the to states itself. of course it is correct to say we cannot just have a single focus on china. looking at economies like malaysia, struggle in indonesia, brazil,rica, turkey, all of those economies are places where we have to be on our toes. jonathan: is the debate the same debate for the officials on threadneedle street? do they have to watch different gauges? arles: i always thought the
best way to forecast the u.k. was to look at the united states then add six months. jonathan: so they will hike when? charles: it's a dependent where the americans hike, maybe february and may if the united states hikes in december. jonathan: will they wait six months? recognizes. carney that global returns are really small. gentlemen, thank you very much. james will stay with us. coming up, rating vw, we talk volkswagen's future. ♪
priorities is climate change. with analystne estimate it is the first and the gauge has gone negative since april of 2013. welcome back to bloomberg tv, let's get you up to speed on where markets are trading this morning. a bounceback across most of europe. 94 points.0 up the dax up almmost 200 points. some auto stocks in their we have to talk about. what a week for foreign exchange. the dollar having it's biggest advance since july. u.k. nothetoric in the matching numbers.
the turkish lira hit an all time low against the dollar. those are your market moves. aswoes grow investigations go global with spain and south africa the latest nations to announce probes. in wolfsburg.s when do we get the new ceo? hans: potentially sometime later this morning, or this afternoon. it could be the ceo of the porche group, one of the 12 brands within the overall group. tech.very versed in
porche has virtually printed money under him. this is a big challenge to 20-95 kilometers. they should be careful to keep new orders because it is a huge industry.for the car dangerhere is a regulators go too far. jonathan hans: we spent a lot of time talking about banking regulators, now automakers will be in a similar situation. whichill find out
jurisdictions are facing particular challenges. being0 vw's are investigated in spain. anotheren talked about 11 million, we don't know where those 11 million are, it appears some may be in spain. also, south africa has announced they will test the diesel emissions. in germany, they will be doing spots checks. there are arrivals and new positions. arehead of audi research leaving the company as part of a broader shakeup. jonathan: hans, this is what i am trying to gauge, he has the
support of two important families -- put that up against what the strategists think. do they think he is the right man to be running this company? hans: what they are saying is that he is familiar with the financing of a lot of things. when you look at where their are in ation is, they good situation. whether or not he will get good marks on the public policy side of things, we don't know. porche hasn't tried that -- they unveiled this electric car, but haven't tried to make carbon reduction a mainstay of what they are doing. they had some hybrids, but only offer one diesel. suv's been about selling in china and russia and printing
money. asy haven't tried to be environmentally friendly as possible. then said, they have made strides. but how will he deal with regulators, or call the front of congress? how will he explain the company's footprint. jonathan: vw stock up 3.5%, three days of gains, but the otherside is that it lost a third of its value in three days. a possible ratings cut, they are on watch for a downgrade. i am pleased to say the director at fitch ratings joins us. the first question, is the company less credit worthy based
on the dent to its reputation? emmanuel: as you pointed out, it is difficult to see with the financial impact would be. the we are assessing is reputational damage. we don't know for sure what consumers or regulators will do. it is early to say this is the final impact and the rating. we don't know for now. jonathan: if you can, what are your basic assumptions? how does that shape your view of their credit? emmanuel: it could lead to a downgrade. the idea is to weigh impacts
from the fines, the criminal charges, this may amounts to 10-15-20 billion maybe. we don't know how consumers will react. will tha tbe only a 3-6 months impact? then there will be another story, and they will go through another automaker back to volkswagen? at this point, a one or two notch downgrade is a possible outcome. but if we see that the impact would be long lasting, that could lead to a further blow to the ratings. jonathan: you know the number
circulating right now, it could blow up anywhere to $18 billion. you wake up and you have to price that into your basic , a fine of $18 billion how much is a damage the credit profile? emmanuelle: that is not the main trigger. $25 billion has in gross cash. the potential to cut top eggs if they want protect their profile. they could afford the fine, but it would be a huge blow to their profile. the long term damage is the bigger question, the issue with
regulators. fine.an afford the jonathan: great to have you with us. james bevin is still with us. it is well known you manage money for the church of englans. -- england. a checkered governance history. the bistro surprise in terms -- it is no surprise in terms of the challenge. that commitment to cleantech has been very verbal. there was clear risk a directly from litigation, customers say
the value of my car is not what it was. i think this will run and run. i equally think the damage to large shouldrit not be underestimated. german auto industry is a crucial part of the german fabric. performance has been very poor, take spain. at how strong the spanish economy has been this year. if you have a look at the contribution, it is absolutely enormous. jonathan: let's look at the damage right here. when i look at some of the movers, i look at bmw really slipping -- ripping this index to pieces. the selloff did not
discriminate. james: i wanted to be stock specific. one of the things that's is that itry clear is very difficult to meet the technical challenges on the missions if you have diesel technology. conventional,with we did nothing we could do it with diesel. i am amazed more people in this wonder that they can do this and they can't. spent a lot of money trying to do it. james bevel will stay with us. the inflation rate in japan goes negative.
it is emerging markets that with the headlines. that dollar story, the wondered .ocus is david yellen the stockback to stories, so many movers out there. caroline hyde has some of them for you. caroline: we talk about a snapback in glencore as well. saying some ofut the steps they are taking to renew that balance sheet wasn't enough. today, we get a bit of a bounceback. miners are regaining, and leadin=g the
charge. yesterday there were concerns they were being engulfed in a scandal that they were swallowing volkswagen. clarification was that they in no way meant that bmw had manipulated the missions test. a sigh of relief as the stock rises higher. the downside, bad news once again for zodiac aerospace. 8%, that wasn after we understand that american airlines has had enough. it no longer will be this flyer of libyan business class seats to american airlines because it delayed. up the pace come
all the airlines want to have a better experience. with other airlines follow suit? jonathan: glencore a penny stock, thank you very much for that. the bank of japan governor kuroda between the prime minister later today. the main inflation gauge goes negative since the first time in first time since 2013. >> what the boj has said they been targeting for inflation is the consumer prices with all
fresh foods. obviously, this is something that they have to reach 2% on. down to the point it was before governor kuroda started his quantitative easing policy. another gauge that we've been emphasizing more recently is was strips out those fresh foods. that hit 1% in august. nearso, prices are nowhere what the boj has been targeting. if it is 1%, it is not with the banks and said it would be. to fight anyble
economist that thinks inflation will take out anyone near where the bank of japan was. jonathan: this reminds me of the debate here in europe at the turn of last year. when the ecb been up to pull the trigger on qe, we do the same thing with japan all over again. to october 30, and say what does it mean for the boj> what is any of this mean? yearaid it is deja vu last in japan as well. cpi, the bank of japan moved in they added to their stimulus policy.
in the last a of october they will increase their stimulus again. it feels like a year later and nothing has changed for the bank of japan. nothing has changed for the people who were looking at the bank of japan trying to guess what it will do next. thank you very much for joining us this morning. , let's couldnk you more from james bevan. we can just turn to central banks and say you have to do more. what about the third arrow? james: what happened to the first arrow, fiscal policy? we are absolutely dealing with a challenge. quantitative easing is now counterproductive, not even functioning during damage to economies. before the show, we discussed
the hard reality that the bank of japan is an overwhelming force. this is really very bad news for the structure and functioning of japan's economies. we talk about a death spiral and so many things, but is the doj now in a death spiral? to the head to just load up the balance sheet? james: it is clearly a deliberate policy recognition, not a death spiral. japan's investors and private investors, therefore japan needs simply allow it to run off. japanese and tolerated such low growth for so long. a politician comes in with a
strong mandate to reform then focuses on the military start to the country. what is going on? why hasn't he taken advantage of the mandate he was given? abe's plan.s mr. seriessn't a plan, but a of platitudes. yesterday, and says he wants there to be more economic activity. i think it is a great idea but aware of the details? he has some very material problems. the corporate sector lead some to drive. that money might be a short-term but they need to be focused on adding value and increasing value. oncedded perspective
stability. udp, gold, i want to shoot 72, that's the fed thing go longs, europe up in dollar yen, one asset manager was sitting in front of me -- ames: when you lift the lid an individual stocks there is little focus on turnover valuations. we think in global automobiles markettoyota is a leader. the concern we have is that it may get a larger slide because of the take. the cake itself may be shrinking. also in japan, i find very little that is deeply commanding of attention. thank you very much for joining us this morning. thel to come on the show,
she placed herself firmly in the camp of favoring a 2015 increase. the next decision comes on october 28. is expected board name the successor to martin winterkorn today. a joint investigation has begun after they were accused of cheating on emissions tests. they are trading up 2% today. mostountries second populous region has an economy of 200 billion euros, that is about the size of portugal. welcome back to bloomberg tv, let's get you up to speed him a stock market. yesterday, the dax hit a 2015 low. tell you that every single
stock on that index is in the green this morning. a bounceback for some of those automakers. 100 moving over 100 points, call its 2%. atr in the u.s., a look nike. a slamdunk as they beat earnings estimates. here for more is caroline hyde to break down the numbers. just did it.e he did like what was coming off the back of their earnings. a seller performance in terms of estimates. check this out, profit up 23%. it brought in more than a billion dollars for the last quarter. sales are up 5%. what is also really helping fuel the optimism is the fact that the future orders are looking strong. this is a proxy for how sales will continue. 17% higher, that was a boon.
they're upping the prices of their goods, and a lower tax rate. the stock reaction, this is aftermarket the moves. we will see whether they hold onto these gains, but up more in after-hours trade. it is a billion dollars added to the market valuation. this makes it seven times the adidas in terms of market value. now, china, the emerging markets, they have tremendous growth opportunities in the emerging markets. china, they said the brand in never beenlace has stronger. everyone has been so worried about the chinese consumer, but they posted 30% growth in china. future orders up 27%. china is strong, therefore we see the upward trajectory.
a sigh of relief today, that is a look at what nike has been doing over the past couple of years. they have been expanding into women's clothing, this has really helped build the brand. online, direct to consumer, this has been building up. benefiting from the fact that it to be comfortable, and casual. areamanaged to the fashion as well. mark parker is on a growth trajectory himself. they believe in his vision, it seems they are managing. adidas also rising on the back of this. jonathan: there's apple's 11 iphone stilltor -- have it's cool factor?
is that million? phones annd 34,000 hour. the new phones go on sale today. nate, we come into this and expect a boom for iphone sales. that is a difficult one to follow. : they have started to trend lower in a certain extent. analyst expectations are they growth is slowing down. youepends on exactly where look at things. tim cook has said that in the future china will become the largest market for the iphone. it is already bigger than europe. the launch point of last year versus this year, china will be on sale this time. we may see the first week sales
are higher than last year, but it is because china will be getting in on the action right from the very beginning. at this: we're looking company to evolve the something be on the iphone. this is still fundamentally is iphone, inc., isn't it? nate: it accounts for some of 60% of total revenue. it is a big part of their business. it is absolutely key, one of the things we saw last year is the new models did particularly well if you compared them to how samsung performed the sum of its galaxy phones. we expect to see a continuation of that trend this year with people sort of finding that the model designed is basically the same as last year, which is what people wanted. the bonus now is that they have more features and the camera,
that is a massive part of the iphone and it is significantly better. jonathan: i have it in your hand right now. it's a good long time for anything like the death of microsoft to play out. your handyou have in right now make samsung very nervous? nate: even down on regent street this morning, there are people in samsung flow distending us of the apple store trying to get people's attention. it is very clear when you see something like that, they have reason to be nervous. they have great phones, but apple has ace which pull with this design. my bank account is nervous, how much does that cost? nate: you are looking at 600 quid. jonathan: another huge week for
know for a fact that our vehicles are performing. clear industry was very in the releases that they made nout the fact that this has relation with the industry. every single member of the association makes their own statements about what they are practicing, and what kind of devices they have. >> you do have potential on some ramifications on the car side, but those who want diesel's wanted diesels. >> carmakers have to adapt to this. >> the european union, and other countries, made it very clear they were working on different standards. we have to continue to work with the epa around the world to make sure our test match the real world. >> we are confident all of this will happen.
>> we will work together to do that, it is in our interest as well. what a week for markets here in europe and globally. here are some of the charts to sum up the past five trading days. of course, volkswagen stock after the decimated world's biggest carmaker admitted to blatantly deceiving emissions test. has lost its ceo and about a third of its value. glencore has had a pretty rough ride as well. pence a share100 for the first time ever. check out glencore shares, down about 80%. check out the dollar index, jumping this week after some heavy hitters. night, janet yellen begin the fifth member of the fed this week to openly endorse a rate hike.
that is it for this hour of i'm pleased that "the pulse" is coming up. look at the dax, who could've guessed that? italy outperforms germany? francine: when you look at the the periphery countries daxnow outperforming the from the beginning of the year. it seems crazy when you put it into context with that qe is not doing that much to support a core europe. we are asking our chief investment officer's what they think about that. jonathan: what has changed? is the question. janet yellen says 2015, but last
thursday she did not do anything. so why 2015? jonathan: i feel like they want us to be so fed up with it that it no longer matters anymore. the market just says thank you, let's move on. francine: that is why a lot of these equities are up today. you, do you think it was too much transparency from central banks as people tend to over communicate, they end up muddying the waters. jonathan: we focus so much on the data, maybe the whole exercise has an about communication and trying to flag when it is coming. francine: or it may not. jonathan: coming up for the next two hours, stay with us. that is it for me for this week. the dax bouncing back, a rough ride for vw. if you want to
for 2015.fed pushes janet yellen confirms the central bank is on course to raise rates sometime this year. the dollar and american stocks jump. who's driving vw? the supervisory board is expected to name a new ceo. and, back to work. the begun j main inflation gauge falls into negative territory for the first time in more than two years. welcome to "the pulse