tv Bloomberg Markets European Close Bloomberg April 11, 2016 11:00am-12:01pm EDT
♪ we are going to take you from new york to london to milan. here is what we are watching today. pm david cameron addresses parliament. how he explains this controversial i investment to parliament. betty: italian banks have been the black sheep of europe as bad debt piles of help may be on the way. more from the private meeting. has wipedcommodities out much of the energy industry but there is still some that are benefiting because of low oil prices. it is 90 minutes in the
trading session in the u.s. let us go to julie hyman. she has the latest. losing steam in this rally. julie: it was kind of puzzling to see the rally in the face of the poor sentiment of the earnings season that is about to begin imminently. chartsd to bring you two tom bloomberg today that has do with earnings season and valuations for the s&p 500 right now. let's take a look at the first one. great story on bloomberg news today takes a look at bank of america earnings revision ratio in blue. that is the number of analyst revisions upwards to company earnings versus downwards. it hit a low last month of 0.47. that was a seven-year low. inbounds a little bit. the other line is the -- it's bounced a little bit.
the other line is -- we have seen convergent lows and then bounce so this time could be potentially separate bounce once again -- set for bounce once again. the p/e ratio for the s&p 500 is shown here with various standard deviation lines on the five-year chart. we are above the average over the past five years for that pe approaching 19. it is run 18.5 right now. some investors that valuations are getting richer giving the back and we are going into what could be a tough earnings season. mark: getting away from earnings, one of the more volatile stocks leading the gainers today. julie: it is chesapeake energy. it is the best-performing stock in the s&p today. there have been concerns about the company's debt load. it said it is pledging
additional assets of collateral to maintain access to his $4 billion line of credit. looks like a relief rally in the stock although it is heavily shorted. on the flipside, at the bottom of the s&p 500 today is another energy stock. national oilwell varco. cutting its quarterly dividend by 89%, joining many of his peers who have made similar moves in order to preserve cash in a tough environment. betty: thank you so much. we have breaking news right now on goldman sachs. as you know, they are selling with the department of justice on its handling of mortgage banks. details have been released earlier, but today they are confirming it will be about $5.1 billion to settle this u.s. probe. it is all in an effort to hold the wall street banks accountable for what happened during the financial crisis.
the vetoes of this includes $2.39 billion of civil penalty. $875 million in cash payments will be made. $1.8 billion in consumer relief. this is all according to the justice department. goldman is scheduled to report their earnings on april 19. we'll see what impact it has on its earnings. mark: let us chat about the european stock market because we are rising. there are 30 minutes left of today's session. up aboutx 600 is a fifth of a percent. it is that china inspired rally because we had an inflation they out of china earlier on a month lik by month basis. daily mail's big story today. mail's parent company is
in talks with a number of potential bidders for yahoo!. the wall street journal first reported the discussions between the mjt and private equity firms. shares are down by about a quarter of 1%. if there are a lot of interesting parties for yahoo!. sap, the software company, earlier today sales missing estimates. some deals in the american region were signed later than expected. shares down half of 1%. very quickly want to show you this chart. it shows out new caps off sat there since the wider index took a big low on february 11. they have outperformed their bigger peers, the euro stocks 50. this chart shows the small stocks have outperformed right now by the most in two years.
good stat there. how theyart showing us have rebounded after february 11. betty: pretty nice return. let's check in on the bloomberg news. matt miller has more. matt: a yuan agency used parachutes to airdrop food a to aide to a city -- syrian city under siege. it is enough to feed 2500 people for one month. more airdrops are planned. brazil is deploying thousands of troops in the capital city of brasilia this week. the government is hoping to prevent violent clashes as congress holds both on the president. of the 's special committee will begin voting today whether to move forward with the impeachment request. the full house could vote in less than a week. 15 former american bar
association president are joining the bush to urge push to supports obama's supreme court justice nominee merrick garland. he is adjusting to bring up politics in the courts that materially hampers the operation of the judiciary they say. republicans have no plans to move forward on violence nomination. -- garland's nomination. a shocker at the masters. finishing at five under for the tournament, the englishman's victory was made possible by a collapse by jordan spieth. he had a five streak lead with nine holes to play, and he shot a double bogey. it is the first time for 29-year-old danny willett to win his second attack that the masters. global news 24 hours a day hour-by-hour 2400 journalists and more than 150 news bureaus from around the world.
am i allowed to stay come on, england? matt: yes you are. mark: well done. it has taken many years. thanks for giving me that honor. fallout from the panama papers continues. david cameron was forced to the altare investments but he told parliament he is not suggesting all mps should publish their tax returns. >> we already have robust rules on members's interests and the declaration, and i believe that is the model we should continue to follow. we should think carefully before abandoning completely all taxpayer confidentiality in this house. mark: bloomberg news reporter who covers the u.k. government is here. >> it has been more than a week.
it has not been a great one for the prime minister. while he did quite a good job of answering mps questions today, it is not going to take this away. mark: other questions is still remain? >> there are issues around what he has published or no idea that he has done anything wrong, but the situation has been but so badly that trust in the prime minister has been eroded. betty: how is he going to then this?the book on is this just the beginning or are his remarks today going to be able to start wrapping up any more allegations against him? think he has regained control on the situation to a certain extent. chancellor just published his tax return for the latest financial year, and that
is all pretty straightforward. a lot of mps are going to voluntarily come forward and do the same. i think now he has faced the music and violent. the story will move -- faced the music in parliament. this story will move on. betty: will have an impact on his pursuit of the referendum, the u.k. referendum? >> i think we will have to see how things go. the issue of trust is going to keep hovering around him. people also know he will step down before the next election. it means they are looking for mistakes, looking for missteps. it is more of a vote of confidence in the government, so you have to tread very carefully indeed to make sure that he does bring in a yes vote on june 23. mark: by saying he will not run
for a third term, is he saying he is yesterday's man? >> yes. run, byg he will not not giving a date in which he will step down, because you'd speculation on how soon is it that he causes speculation on how soon it is that he steps away from politics. you will not be able to say it will be difficult. mark: to remain, they can rebuild his standing. >> he can. it is a close vote. it will run and run. they will have a leadership challenge at one point and take it from there. mark: think you for joining us. talking about prime minister david cameron. coming up next on bloomberg television, "bloomberg markets."
mark: live from london and new york. betty: this is the european close. it is time for the bloomberg business flash. a look at some of the biggest business stories in the news right now. transcanada has resumed sending oil to the keystone pipeline. work was shutdown for weeks after a leak and oil spill in southeastern south dakota. about 400 barrels or under 70,000 gallons of oil a week.
the company has not revealed estimates on cleanup costs. amido rico is a proposal its $70 billion debt. the plan calls for bonds that would allow creditors to be paid regardless of future economic growth rates. the deal would allow puerto rico to cut $12 billion to $16 billion from its debt load. spread of ransom where is leading a new generation of software used by hackers. the virus worms its way through networks. it does not require someone to open a link. users often have to pay a ransom in a digital currency, bitcoin. serious stuff. that is your bloomberg business flash. mark: londoners will head to the polls to decide on who will
succeed boris johnson as the next mayor. spoke to the goldsmith -- zac goldsmith. >> there is this unwritten contract between representatives and the people they represent. it is the people who are presented that want their representatives to publish details, then it will be a braver presented richards is not to buy don't think this will be regulated or mandated. mark: i have your details right front of me. all very clear from 2010. of transparency, many said you should publish details of when you had non-dom spaces. will you be publishing details prior to this period? mr. goldsmith: i was asked to publish because of the tax returns. i published details throughout my time in public office. i think that is a reasonable request to have been made.
it is a reasonable request to expect, which is why published them in the form i did, but i have satisfied the questions that are asked. mark: let us talk about the upcoming referendum in june. how do you marry the fact that you are supporting the u.k. leaving the eu at the time when most of the financial industry would like the u.k. to remain part of the eu? will you as mayor be supporting the interest of britain's financial services industry, much of which are here in london? mr. goldsmith: i am the only conservative candidate in the may oral race. is not whetherk or not we come out of the european union or stay in the european union. it is whether london makes the wrong call o in june. the valve the next mayor,
however that is, is not to take us out of europe or keep us in europe. i am not campaigning on this issue because i have a job to do, and i believe that as long as london embraces the agenda, that is a far bigger risk in london than any decision british people can make. mark: how you differ? we spoke to the other candidate on friday. he said he would champion the city's financial sector. he pledges to be the most pro-business mayor london has ever had. how would you differ? it comes as part of a package which represents more hostility to companies that i can remember. they represent something truly frightening for london and the uk's business community. to have a leader in the labour party describe business as the ultimate enemy is not a
reassuring message for businesses. i will be the most pro-business mayor ever. that is saying something after boris johnson. he has championed the city of london. we need to ensure that london remains the most business from the environment. there are one million businesses in london. they have underpinned london success. that isn't about gimmicks. it is about solving the housing crisis. my plan for london will deliver 50,000. mark: how will you do that? many politicians said we will create housing. mr. goldsmith: it is a good question to ask. my action plan for london will deliver 50,000 by protecting the transport budget. the only way to online the land, we need to grow the chancellor network. that is why the labour party candidates pledged to removed
nearly 2 billion pounds from the transfer budget. mark: how will you pay for it, these 50,000 homes? mr. goldsmith: if you talk to housing associations or local authorities and developers big or small, ask them what is the biggest barrier, what do you need? it is not planning or capital. 's land. will-- it is land. ministry of defense for ministry of justice, and enormous amount of land. the government needs to release that lay in and the mayor needs to grow the transfer network to a lot of them. crossrail to will deliver 200,000 homes that would otherwise not be built. it cost about 200 million pounds and would unlock the possibility of 20,000. if you don't protect the transport budget, london will grow to a standstill.
mark: you are watching "bloomberg markets." betty: i am betty liu in new york. this is the european close. p be arriving soon as they went to find solution to address capital and bad loan issues. joining us now from italy is our green.rg news dan leaf tell us what this funding is about double by the bad banks. what are we talking about? >> we are talking about some sort of special vehicle that essentially will have two purposes. one, helping reduce this
mountain of bad loans that italian banks have, one of the highest rates in europe. at the same time, trying to make banks which are facing capitalization issues wit which must raise issues to help them sell these issues to investors. there are a couple of big deals coming up soon. one of them a fairly large bank, medium-sized bank, in northern italy. they are trying to provide an of the same time keep within state aide rules some sort of cushion if you will to get through this next round of capitalization and at the same time reduce this level of loans. betty: who would be participating in this? dan: for what we know so far, and again, the government, italia central-bank is not given
a live details yet but we are looking at some sort of solution whereby you have private unistors, italian banks, credit, italy's biggest lender will be involved. we could see a state lender. perhaps taking a small stake in other privates investors, pension funds, investment funds also contributing. mark: when are we going to get final details of this fund? it has been running for a while. are we closer to the creation of this fund? dan: well, the italian prime minister was asked that same question today. he said it will probably be sometime this week. there are another round of talks scheduled to start in about one hour involving central bank officials, private investors, in the government.
-- and the government. i would bet we are not going to get a final deal today but probably this week. mark: good to see you. thanks for joining us. more bloomberg malan bureau chief. we have stocks looking like this today four minutes ahead of the close. european stocks are rising after four weeks of decline. if we have five weeks of decline, it will be the longest losing spread since june 2014. the best-performing sectors as well basic resources aderholt top of the pile driven by china inflation data. itself so that the economy is -- it tellsthat it some that the economy is stabilizing. ♪
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1% date up by 4/10 of boosted by inflation rates in china. on a month by month basis, we show you the increases. we had four weeks of the client for this. the stoxx 600 is now trading near his lowest valuation relative to the s&p 500 in more than a year. the s&p 500 trading 17.3 times estimated earnings the stoxx 600's 15.2 times estimated earnings. is looking toered sell $4.4 billion of assets in asia. it balance repairing sheet. london,s index here in barclays leading the charts today.
over the weekend, we had the ecb executive board member. a surveyd and said measures to spur growth may eventually show diminishing returns. chart showing now they are not showing diminishing returns because since march 10 when the ecb said they would buy nonfinancial corporate loans, euro investment grade spread issued by investment-grade utilities have outperformed financials by 18 basis points. the differential between the two is now at the highest since 2014. may be front running the ecb purchasing what they think will be bought. for the record, the ecb will begin buying corporate bonds at the end of the second quarter. ahead of that, we are seeing
nonfinancial utilities spread. they have been widening between that nonfinancial since 2014. betty: speaking of widening, the two stocks of norfolk southern and canadian pacific are moving in opposite directions. looks like a merger no more between the two after canadian pacific was basically rejected three times by norfolk southern. the oj voicing their concerns about these two big -- doj voicing their concerns about these two big operators. even the u.s. army saying having these two railways operate as one could jeopardized national security. another loss for bill ackman. meanwhile, european markets done for the day. u.s. markets are still open. abigail doolittle has more on
this rally we are trying to hold on. abigail: we do have the nasdaq higher but the gains have been really paired largely due to health care and biotech, especially in therapeutics. the company pre-announced a downside saying opioid scrutiny has hit one of the company's he drives in the first quarter. is a bad miss on the sales side. they are looking for the drug to come in as much as 30% of where analysts were looking for. they say this is very significant. and analyst says it could go to a year-over-year decline for this drug. there is a huge short interest. 67%, those sellers have pushed the stock recently below buying supported this year's low suggesting it could drop closer to long-term support near $10. there could be more selling ahead for insist therapeutics -- insys therapeutics. betty: tell us more about what
is bringing it down. abigail: one of the bigger drives is end of international. endo is trailing down. endo does sell pain drugs such as percocet. it has been a rough 12 months for endo. it is not clear what is possibly going to turn this one around. betty: thank you. of igo doolittle at the nasdaq -- abigail doolittle at the nasdaq. the number of refugees going into d.c. has slowed to a crawl. slowed to a crawl. more than one million people have passed since the start of 2015. new arrivals had the above 200,000 in march, but there have only been 1700 this month.
in japan, u.s. secretary of state john kerry visited the revered memorial to hear she was atomic bombing seven decades after the u.s. used the weapon for the first time in history angela hundred 40,000 japanese. today's visit makes john kerry the most senior american official to travel to -- to hiroshima. approves ofu.s. president obama's job performance according to a new poll. that is the first time that has happened since 2013. the survey finds the president is an uptick across a number of issues including the economy. 54% characterized the economy as poor. one in 10 republicans expressed a positive opinion of him for his performance. donald trump voicing his displeasure over the selection process for presidential nominees following a "corrupt
and crooked." ais as it inches closer to convention. global news 24 hours a day hour-by-hour 2400 journalists and more than 150 news bureaus from around the world. i am matt miller. betty: thank you. lester back to the currency markets. yen is fluctuating today after hitting the 17 month high again for going back. investors piled to the yen. the six-day rally was his longest winning streak in a year. mark: what is next for the currency? can it go higher? is it really running out of steam? we are told it is not the level, it is the speed that matters. is that still the case when it comes to the dollar yen? jeremy: i think it is but i think we are coming off of a
speed bump which maybe the inflation from the united states. that may have a positivity to be able to maybe not turn this trend around instantaneously but certainly slow the rate of net dollars declines we are seeing at the moment. tok: no need for the doj give their toes into the currency market for the first time since 2011? jeremy: if i am wrong and we see inflation missed and the expectations only 50% of a rate rising by the end of this year and the dollar yen continues to move lower, then yes. to be honest, it will have to be verbal in the short-term. the actual structure may not happen until july given the moves they have made throughout the early part of this year. speaking about intervention, we spoke with the farmer doj governor, former vice minister and here is where he
said that what he said a intervention in the yen. for them to intervene, allowing one of five. beenhave suffering somewhat from the high u.s. dollar. intervention will not be possible because intervention could only be done with the agreement of the counterparty. betty: does that sound right? jeremy: i think that sounds right. the intervention works best when multiple parties are working toward a singular goal. i agree that the united states looking for too much of a stronger dollar anytime soon. real markets are looking for a stronger dollar anytime soon.
commodity currencies also a bit of breathing space. as long as the pace of this yen trend starts to slow -- betty: but the 105 level could be a key level here. jeremy: it is the in the sand -- it is the next line in the sand. ifk: if they do intervene, they do it unilaterally, does that sell for another round of currency wars? to.my: yes, it has you look at the eurozone and what is happening in china and the vietnamese who have done it three times the past few months, there are other places looking to weaken the currency. if the japanese are happy to do it, then why can't they? i think the bank of england will be happy to weaken the pound. mark: that leads us to the bank of england on thursday.
it is a non-core inflation report meeting. comments. a few what are you watching out for? jeremy: there is a very minimal risk that we may get a vote for negative interest rates from one of the most of us members. the has been watching the data. data has not been great. there is express negativity around the believes that race should stay as is asterisk different cut there. in the short-term, it will be more about the comments around the referendum. it will also be the weakness in sterling and the inflation in the u.k. betty: speaking about inflation, we are going to get our own inflation data this week as well. producer prices and consumer prices. is your view changing at all about inflation and whether it is picking up in the u.s.? jeremy: i think it is picking up.
a slow,ontinuing to see steady build in inflation and inflation pickup. .2% sounds right. year. to 2.4% year on we are allowing it to remedy little bit hot. , thusprobabilities .ricing starts really silly you look at the minutes published last week. it certainly shows the market expectations of where these studies are more dovish than even the most dovish members of the federal reserve. why is the dollar misplaced at the moment? isk: after the fact, who best placed to reach their target to match their inflation rate? jeremy: i would have to say the
boe. is arisk around brexit blanket smothering everything at the minute. nobody is talking about interest rate rise. i know some people think if we pass the referendum that expectations move to 2020 to the early part of 2018. the national living wage will have a possible effect on inflation and in which expectations moving forward -- inflation expectations moving forward. those are only current situations that point to a move higher. mark: always good to see you. thank you. jeremy cook. still ahead on the european close, many energy companies were crushed by last year's once in oil prices. one large group of largely
live from new york and london, i am betty liu. mark: i am mark barton. this is the european close. time for the bloomberg business flash. a look at the biggest business stories in the news right now. will $.5 billion to handle it securities. wasallegations that it not properly vetted. it is the fifth multibillion-dollar settlement with u.s. bank over subprime mortgages.
and pharmaceuticals company is asking to cooperate with a senate investigation into drug pricing. special commission on aging says it plans to start legal proceedings against valeant.who is leaving is under subpoena to appear before the committee for an april 27 hearing. overstock.com says its founder and chief executive was a personal leave of absence. the retailer says it is unknown if he will return to work. edwards was recommended is the acting chief of staff. that is the latest business flash. 2015 was a pretty rough year for the oil industry. crude plunged 35%. dozens of energy companies were
forced to file for bankruptcy. one who benefited greatly from cheap oil and gas. joining us now with the story is javier. good to see you. javier: the people who live in crude oil and move it around the world. they are largely invisible. they are not names you associate with big oil. very senior people we don't have pictures of, but those traitors -- well in early tha traders did well in early 2016. mark: how they benefiting as crude prices plunged? javier: three main areas that benefited. first, there was more volatility. prices were moving up and down but you could see where the price is going and they profited on that.
the third one is prices decreased. with the same line of money, you could trade a lot more. you have $100 million in the oil is $100, you can only buy one million. when it goes to 25, you can buy a lot more. market -- you could buy cheap oil, put it in a storage facility onshore or use a tanker. mark: this is my favorite moment of today when i read about the overseas. is anchoredtanker offshore. they hired it to store oil. you buy the oil cheap. you hedge position in the futures market and then you sell it back. that deal made millions of
dollars. mark: it is not just independent houses, is it? the major oil players were doing the same thing, weren't they? javier: exactly. you think about companies like glencore but bp, shell, total tradersre big themselves. they profited exactly the same as they did in independence. bp is one of the few copies you provided a glimpse of what they do on trading. they have the best year they have seen in a while. as 2015.6 the same javier: i have been talking to some of them in recent weeks and is a great, we have a fantastic 2015 but we start from zero in 2016. actually, there is negative because you have to pay costs. so far, it is not good for the traders, but it is not as great
betty: it is time now for our global battle of the charts will take a look at some of the most telling chart of the day and what they mean for investors. you can access all of these charts on the bloomberg by running the function of one of your screen. joe weisenthal. later this week, we will get the next report for the u.s. and of course the question of whether inflation is building is crucial for the fed, economy markets. there are signs that maybe inflation really is building. this is something i like to track. different measures of inflation.
-- it looks at different measures of inflation. core cpi, we exclude the price of brent, 1.6%. headlines tpi over 1%. if you look underneath the surface, we are looking at more and more signs that inflation pressures are starting to build. you will what's that report this thursday to see if it gets so high the fed might have to act. you can check the chart at the terminal. betty: possibly heading to that 2% overall. ok, mark. mark: can i say that is the most lying joe has ever done. he has never done four lines. lines joe the most has ever done. two months ago today, the world
stockmarket hit a bit of a boat. -- bump. as you know, we have seen a rebound since then. i love my anniversaries so i don't let us check out to see who is the best-performing equity assets since from 11, 2016. is uphe all country world by 11.8, the best-performin stock and evolve and 94 we track is the rts index in russia. it is up by 34%, rising with the price of oil. russia relies on energy sales for about half of its budget. the best-performing stock in europe is actually euro banking. i thought this was a bank that has basically lost all its value since may 2007. this is number two. el company has risen
quite astonishingly. it is trying to get a $16 billion debt pile. we have had chinese steel imports flood europe. that has hurt these companies. but the big gainer in the last two months, drumroll, you can see it. chesapeake energy up by 130%. wow. what a gain. the gas grill or. -- gas driller. what a rebound up by 130%. if you want to check out my chart on the g. joe does four. idea do four. who is the winner? betty: you picked exactly the same color schemes as well. since we are talking about color schemes and colors, i will pick
mark today because we match. mark: that is fair. betty: alright. mark: i love your chart. four line joe they call him. let us look at the european market and how they ended the day today. it was a day of gains after four weeks of declines. slightly lower today by about a 10th of 1%. gains for the stock zero 600. rally.a china induced basic resort stocks led the rally today. banks, energy also rising. bloomberg markets continues after the break. ♪
>> from bloomberg world headquarters in new york, good afternoon, i'm scarlet. alix: and i'm alix steel. stocks inching higher. there is a report after the close. pickup in chinese industrial command is increasing the price of commodities. oil reaching a four-month high after a meeting. alix: interest heats up for yahoo! uk's daily mail includes the wide group of suitors including telecom and verizon for preliminary offers. we are halfway through the u.s. trading day. we had to the market desk where julie hyman has the latest. we are four hours closer to the start of the earnings season. julie: as people get close, maybe they get my -- more ou