tv Bloomberg Markets Bloomberg November 4, 2016 10:00am-11:01am EDT
vonnie: we want to take you from new york to london to washington, hong kong, and pakistan. here's what we are watching. jobs day in the u.s. and payrolls grew by 160,000 in october and wages improved. we break down the report with ian shepperton. mark: it has been a wild week in the u.k. as the challenges of executing brexit come into full view. we discussed the dynamic between the high court, westminster, and 10 downing street. vonnie: the final days of the u.s. presidential campaign 2016. hillary clinton has the upper hand in early voting. donald trump is demonstrating strength in iowa and ohio.
about 30 minutes into the trading day in the u.s. let's see where things stand with cmm. it is set to the united states of america. the nasdaq 100 making the biggest move your the s&p 500 down .1%. that is better than when it started. it is improving thanks to utilities and health care. they are doing well in the session. energy is dragging things down. currency, the british pound and swiss franc are doing the best. the yen is performing pretty 103. still below we are looking at current is again in a few moments. we did see buying in the longer in of the treasury curve. yields dropped for the 10 year and 30 year. currencies, the dollar index is a little bit weaker thanks to the strength in the yen.
also seeing strength and other major currencies. not the turkish lira. there's a lot going on in turkey. the pro-kurdish head of the turkish party are being rounded up and jailed. is 3.16 to the u.s. dollar. an ouncee $1300 before the election on tuesday. .ark: this is the stoxx 600 every industry group is trading lower. down by 1% with shares falling for the ninth day in 10. yesterday we had the stoxx 600 rise by 0.01. of a point.h we're close to 10 consecutive days of losses and on track for a second weekly drop here the longest losing streak since october 7. the 3.7% fall is the biggest
since february. nerves are frayed ahead of the u.s. election next week. this is the fear index. .he v stocks index the key volatility gauge is rising for the 10th consecutive day. the longest gaining stretch since august 2011. we are the highest level since july 7, pre-brexit. gauge rosese -- the sinceay, the highest 2011, the closing was 40, the highest since august 2015. this tells you the level of fear volatilities are experiencing. this is the decliner of the stocks. jc deco, down 10%. the biggest fall since june 27. the world's biggest outdoor
advertising company. third quarter best estimates. organic growth was 1.5%. a trend the company hopes to reverse in the fourth quarter. they cite a global economy and uncertainty over the brexit and the volatility in most markets. sterling against the dollar headed for the biggest weekly advance and smart. it received a double high court boost since yesterday. 6this rising for the consecutive day and has risen against all 31 of its peers. it is still followed by every brexit.ce this is since december 31 last year. what a week. vonnie: it will be another one next week. let's check in with bloomberg first word news. >> u.s. intelligence alerted joint terrorism task voices that al qaeda could plan attacks in
three states according to a report i cbs news citing unidentified people familiar with the metal. the states believed to be possible targets our new york, texas, and virginia. iraqi forces have began their launchingmosul utility attacks on urban neighborhoods of the city held by islamic state. on tuesday troops entered mosul. they're backed by the us-led coalition. in turkey, a car bomb killed eight people and wounded 100. 2 killed were police officers. the attack took place in an area where the majority are kurds who have been demanding independent. in paris, clearing out 3000 migrants who have turned to sidewalks to make makeshift camps. the migrants are from sudan, ethiopia, and other
countries be a they're being taken to shelters to apply for asylum. the former secretary of state .talke -- tops trump handle theclinton to economy and health care. trump has the edge with corruption, the government, and immigration. global news, 24 hours a day, powered by 2600 journalists and analysts. this is bloomberg. vonnie: the u.s. added 161,000 jobs last month. the jobless rate falling to 1.49%. 2.9%, a .4% gain month over month. the fed will move in december. look at the work function. the odds have risen to 76%.
to london with the founder and chief economist with pantheon economics. most of the people we have spoken to say this is a solid jobs report but there were patches of weakness. there are a couple of weak bits. retail was soft. 44,000, that was a welcome surprise. i would call it good enough. it was a great. the unemployment rate has stopped falling because participation has gone up. we're not doing the steady downward trend. the broad unemployment rate came down by .2% to a new low. there is enough for the hawk to make the case they should go in december. i think the market has read it right and increased the odds. i think it will happen. vonnie: you can argue the
overall employment rate came down a little because participation rate came down too? ian: it did. on the website there is a table that tells you if any of the numbers are significant. if they pass the test of randomness. none did. the movement is all statistically insignificant. what matters is that the unemployment rate has averaged 5%, low and stable. that is starting to push up the growth of wages. 5% -- 2% for five straight years. now it is 2.8. that is quite a big move. it is time to get the attentions of the market on the fed. next year above 3%, it will be a big driving force of what the fed does. mark: does a donald trump victory derail the fed in december? yes, it does.
i think it is extremely unlikely. clinton suffered a little over the last few days after the e-mail investigation story broke last weekend, but looking over the latest she seems to be bouncing back. in the swing state polls she is solidly ahead. i'd be surprised if trump won. market forecasts, investment strategy, it is all out of the window. mark: in 2005, you are one of an worst to warn of impending housing crash that would send the economy into recession and it would take years to recover. what is your starkest warning when it comes to the global economy? ian: there are a few things to worry about, but i'm not sure any are in the. i do not like china's credit bubble. it makes the u.s. in 2008 look
prudent and well-managed. that is scary. it is difficult to say it will be a problem in the next six months or a couple of years. it is a lingering fear appeared and lingering fears about europe , particularly italy and france. economy.s. the domestic looks solid. have seen a collapse in the oil business, and that is the biggest drag but it is over. the cycle downshift is probably over. x orders seem -- exporters seem to be having a slightly better time. from a big picture perspective in terms of clear and present danger, in the next six to nine months, there isn't a lot on the domestic verizon. -- domestic horizon. that, healthen care, and finance hiring up, not so much manufacturing and retail, but those parts of the economy were up, is it possible in awe may not be
secular changing labor market? ian: we haven't seen secular change in the labor market. it won't go back to 2005 and 2006. any left you probably won't come back. shifte seen a continued away from manufacturing into services for the foreseeable future. what we will look at now is the overall market. you can see in the surveys companies are screaming i can't find the people to hire. they're poaching staff from competitors rather than pulling people into the force. the price of labor goes up. the fed is obsessed with wages. in februarytold us that he wants to see wage growth at 3%. we are 2.8 percent this month. i think we will be a 3% by december. next year, how will the fed respond? my guess is more than the markets think.
mark: in london, the bank of yesterday.t neutral we got a neutral bias leading to the question is the next groove in u.k. rates going to be up or down? ian: that is tough year it will not be soon in either direction. what they're looking for is the impact on import prices and the mystic prices. we can -- and domestic prices. we can see domestic prices are spiking hard. critically into wages. the u.k. labor market is tight. the last time there as a currency crash in the 1990's it was loose. it is a different story now. the bank is getting nervous that with a tight in premarket and drop in sterling there is a risk of sustained relation in the next year. think the next one we will be up, but i don't know when it will be. vonnie: ian shepherdson, founder
against the layer, led by the pound of 2%. -- the lira falling to record those. stocks are falling with the police rounding up pro-kurdish opposition leaders prompting investor concerns that the increasingly autocratic government is dismantling democracy. this is an extension on the crackdown of the opposition following the failed july 15 two with tent -- july 15 coup attempt. lastg the currency of the three months. that tells you the story. the lira down to a record low against the dollar. vonnie: a chance to show you later. the final week of the campaign. donald trump is in new hampshire, ohio, and pennsylvania. hillary clinton is in pennsylvania and michigan.
president obama will campaign as well. mike, let's look past the elections for the moment. there has been chatter about who might form a cabinet. one of the positions that will is treasury secretary. all of the talk about fiscal policy and how different the willdate's fiscal policy be. give us a rundown on who is making the short list on both sides. mike: the transition teams are putting together the lists. on the clinton side hillary clinton has not weighed in. some of the names being floated they want toest use this for a woman or minority. 2 names that are floating around our sheryl sandberg of facebook and a woman from the federal reserve board. ferguson,s like roger
who would be the first african-american. that would be a signal of a different cabinet. these jobs have always gone to white males. on the other hand, donald trump is thinking about people that are very successful investors like carl icahn. vonnie: the cabinet, half will be women. that lead you to believe the women on the shortlist have a better chance here to relatives and she needs the most? a business background? the federal reserve regulatory background? mike: it needs to be someone who has fluency in the regulatory world and the market world, in the business community, someone who can talk to congress, talk to foreign leaders, foreign finance ministers, talk to markets, talk to the public. you have to have fluency on
different levels. those things are all important. you have to make your own judgment about the trade-offs. we are glad to be able to -- mark: i'm sorry. how does she navigate the tensions between the liberal wing in her party? that is tricky? mike: that is what makes this interesting. this is going to be the most visible early choices, which whill show how she will navigate the tension between elizabeth warren and the liberal progressive wing and that is this-friendly wing.this'll be signaled to how she will navigate . part of the leeway in navigating will depend on the senate outcomes. if the senate's republican, there's no way they will confirm someone who is a highly progressive treasury secretary. there are lots of variables in it we knew who was elected. tuesday forn to
we have been following currencies. we have been looking at the korean won and the chinese renminbi. investor flows, it is difficult to tell on first glance, what you?tf's telling you mentioned foreign currencies. they are happening. etf's are accessible to everyone. is the mexican etf. it is so beyond its norm that you rarely see something like this. $400 million a day. everything changed one week ago numbers beganoll to surge. they caught fire with volume and short interest here it short interest has doubled. you would short this etf if he
wanted to bet on trump and long if you wanted to bet on clinton. it tracks mexican stocks and it has the peso. the peso is part of the return. it is down 5% this week. it is probably the most sensitive etf to the poll numbers. it is the proxy to the election. it is not unusual to see a single country etf become the way to bet on an election. usually that is where the election is. here you have any tf not our country that has become the proxy to bet on the election. it is unusual. vonnie: you will be able to see the short interest and volume. that is eww u.s. equity. etf.es we can expect that to continue. what else?
talk about volatility. vxx.x, traders love it has been up here it closed up 8 straight days. it has never closed up 8 straight days, not even 6. what is interesting about vxx closing up is that the total gain is not that big. it is little games. there is a cautious optimism. not a complete panic. vxx is up 18% in the past two weeks. it could go up 18% in one day if there is a real panic. that is one to watch as well. vonnie: i have it on my bloomberg, up 8 straight days correlated to the s&p down eight straight days. talk to us about individual sectors in the u.s. and what investors are doing. >> everyone is piling into treasuries. there is a shift out of equities
into treasuries. what is interesting in treasury int --s it is not going it is going into the middle of the curve. when you see investors piling into all treasuries it is more of a hedge for a crisis than a move against the fed. will we see a reversal the day after the election? >> it depends on who wins. vonnie: we will leave it at that for now but we will push you on it next week. the senior etf analyst at bloomberg intelligence. you can see the 10 year after jobs report yielding 1.78%. still ahead, talking brexit plans. this is bloomberg. ♪
elise of currency has more from our newsroom. >> it is four days and counting until the election and a nationwide tracking poll has hillary clinton with a 47% to 44% lead. yesterday inned north carolina. he said he could not imagine clinton as commander in chief. while polls show the race is tight, trump's path to winning electoral votes seems harder. according to newly released e-mails, james comey was called a bad choice. a laptop used by former congressman anthony weiner, the estranged husband of a clinton aide contained e-mails related to a probe of clinton's private
e-mails. a judge set the bond that $10 million for a man charged with first-degree murder and the deaths of two police officers in iowa. scott michael green made his first appearance today. he was secured with handcuffs that had belonged to the officers that were killed. the philippine president says he may not be able to survive his six-year term. rodrigo duterte outlined the obstacle he confronts in his deadly crackdown on illegal drugs. he says, will i survive the next six years? i would make a protection they be not. he did not explain but he said there were people who want to remove him. staying in is said to headline the first concert in france -- ing is set to headline the first concert in
france a year after the attacks. global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. i am is lisa parenti. vonnie: i want to check in on oil prices, crude headed for its biggest weekly loss in months and we are seeing an extension. it is under $44 a barrel. earlier we heard from the saudi minister for oil at an event in london and he said he does not think opec should cut. if thereying by itself were not any countries not in opec cutting then it is not going to happen. there has been escalation that perhaps saudi might raise when it puts out if others do not agree. either way, crude oil futures, wti down below $44 a barrel. we're getting a headline, the saudi's did not threaten to
raise output and a vienna meeting according to the opec secretary-general. over and back, oil back up again, regaining some of its losses. it is now above $44 a barrel in that two minutes. mark: the saudi conservation to the meeting was also constructive but it shows you the attention within the oil market at the big opec meeting later this month. talk about brexit, a rough week for theresa may after having lost a key court case about her ability to trigger article 50. another tory lawmaker has resigned over the handling of brexit. .oining us is simon kennedy i just want to show you the front of a couple of the newspapers today. this is the daily express. we must get out of the e.u., an enemy of the people, the front
page of the daily mail. emotions are running high after yesterday's court case ruling. simon: they are. result of yesterday's court hearing, we are pushing back against what they perceive is an attempt to stop brexit. mark: the balancing act of theresa may, it is so difficult, isn't it? she has to unite the country and the party behind her vote. today's resignation of stephen phillips highlights the difficulty of uniting a party let alone a country. simon: this is a little-known conservative lawmaker but a former judge. he supported brexit and now he is saying theresa may is attempting to bypass the parliamentary system. they have put him off for politics and he stepped down. the other parties were used to a
pressure made to give up more toormation -- pressure may give up more information than she is comfortable. mark: it is the tory party. that is a lack of comfort. simon: she will likely hold it. mark: she is going to put plow on, to trigger article 50 by the end of march. the supreme court has probably the most difficult case in its history to roll-on at the beginning of december -- rule on. simon: it is not like the u.s. supreme court with over 200 years of history and controversy . bush, gore, and other cases throughout its history. this is the biggest test yet of a supreme court that has only existed seven years, 11 judges, very off the public eye. from april 2
thousand 15 it oversaw about 90 appeals and upheld about half of them. it is busy. this is perhaps the first time there has really been a huge case as the newspapers demonstrate today, will be on the front page. vonnie: i was looking at some of the other newspapers. the telegraph saying that ironically this is what the brexit vote was for, so that parliament could have a say in the matters of its own country. and yet now it looks like this decision is going to be appealed and the prime minister is not happy. but effectively that is what the brexit vote was for, a vote for parliament to have a say in its own decisions. simon: to some extent, yes. there is an argument that we are going to take back control and obviously a couple of the cartoons pointing out may saying
she wants back control but not just yet. the worry less so of her office but from the pre-brexit cap is that others will use this to railroad brexit and derail it. there are very few lawmakers saying, their hope is to shape brexit not to avoid it. vonnie: what are the opposition leaders saying anything at all? simon: they are saying lots. that is all they are talking about. labor party leader jeremy corbyn yesterday saying that he respects the referendum but he wants to see a negotiation within parliament, debate within parliament over what exactly brexit entails. theresa may famously has kept to herself and says she does not want to say too much for fear of undermining her negotiating abilities once she made the europeans.
a lot of parliamentarians and people on her side are saying that is not good enough, and the high court to make them strength. mark: 2014 referendum in scotland, 2015 election here, 2016 referendum, 2017 another election? simon: the chances went up yesterday. the guys at eurasia group see just a 20% chance. if you look at the opinion polls the theresa may would win the .lection she does not have a personal mandate. she could use that as a referendum on her negotiating strategy. for her the labor party opposition, a lot of reasons to go next year against that. there are the important ones. she has repeatedly said she does
not plan to go before 2020. it would require parliament to get out after that fixed term, and the public appetite for another election, i think anytime she is building a case for brexit that is against it. mark: bloomberg brexit editor simon kennedy. coming up, little corruption -- political corruption, military coups and domestic terrorism. pakistan'scts growing economy and modernizing society. ♪
is your global business report. u.s. payrolls rose by 161000 and october. it missed analysts estimates. was it good or bad? vonnie: bmw out with third-quarter earnings. mark: a quick look into pakistan, the world's sixth most populous nation is trying to modernize despite the constant threat of terrorism. vonnie: u.s. jobs rose at a steady pace and wage growth accelerated, both sign the labor market and economy made steady progress. the labor department says they andbed 161,000 last month the jobless rate fell to 4.9%. >> i would admit, it is a good report. i zeroed in on two important factors. earningsweek is up and were growing more than normal as
well. combine goes and that is good for the consumer going forward. -- theow come he is government raised residential purchases except for first-time buyers. home prices have risen 13% since the short-term dip that ended in march. third-quarter profit rose at bmw, beating estimates. demand for suvs boosted sales in china and europe. still bmw sales have slumped in the u.s. since her cities bans has been attracting buyers with updated wattles of its popular variety -- models of its popular varieties. the maker of cartier jewelry is shaking up as management because of decreasing sales. eight of the directors will step down, the ceo role will be
abolished and chiefs report -- report directly to the board. vonnie: time for our bloomberg quick take where we find context and background on issues of interest. terrorism and a threat of a military coup, pakistan is a pressure cooker but it is still growing. it represents a fragile and modernizing society. in september, india attacked terrorist camps in pakistan as retaliation for a pakistani strike that left 18 soldiers dead. in 2013, the prime minister gained public favor for improving the economy by liberalizing investment policies. nonetheless, domestic terrorism still limits investor interest. the position weekend after mass --tests demanded his
pakistan supported the taliban in the early 1990's to subvert afghanistan's soviet-backed government. after a 2001 invasion, taliban residents found refuge in pakistan. more than 59,000 people have died in terrorist violence since 2003. here's the argument, one view of pakistan holds the military's and its is irreversible turbulence is part of the growing pains of a young islamic democracy that is maturing. it's fiber it used culture promotes women's participation into the society. pakistan's media has grown to be a robust force and the middle class is expanding. performed soex has
well that the msci included pakistan in its benchmark indexes. that is your global business report. had to bloomberg.com for more stories. mark: u.s. jobs continue to rise at a steady pace in october. the data pointing to a continuing economic date -- recovery and it means that likely the fed will raise in december but paul krugman says they should hold off because the fed does not know what is coming down the road. paul: we do not know when the next u.s. recession is coming. we do not know when the next adverse shock is hitting. ask, doeson we should the fed have the ammunition to deal with it and it comes? the answer is clearly not. rates are close to zero and you cannot cut them significantly further. it would help a lot if we had a little bit more inflation so that you could cut real rates further when the recession comes. if by saying inflation is coming
up on our target baby, not above it -- target maybe, not above it, you are throwing away the chance. it seems that you are close to the shore and it is not looking like he will run aground but you want to get ways away from it until the next storm hits. the fed is determined to act as if things are normal. >> you would say do not raise rates? paul: do not raise rates this year or next year. do not fire until you see the whites of its eyes. >> in japan, the latest big step for governor kuroda is to say we are not going to be specifically targeting monetary base but the yield curve. yield curve control. policy,you make of this will it succeed in raising japanese inflation? paul: i am unclear. it is worth trying stuff and kur
a much more adventurous and determined guy that most people expected. the problem with japan is it is very difficult to raise inflation simply through monetary policy when you are already at zero. nothing you do really has very much direct effect, it is all a mind game trying to convince people that there will be inflation which generates inflation, trying to pick yourself up from your own bootstraps. that is very hard to do in the only way it has a chance of succeeding unless it has support from other stuff, is if you have something that is a clear regime change were people say this is not the world we were in before, inflation is coming. i do not think a switch from monetary base to yield curve targeting is going to do that. policy?s to be fiscal
paul: it is hard to say what more. abenomics thatow was supposed to be monetary policy, fiscal policy, and structural reform. the second arrow has not arrived. >> i want to look at trade in the context of the asian nations , and they are looking back at the u.s. we will delve more deeply into the issues for the election. hillary clinton has pulled back her support for free trade and donald trump is bound and determined to make the changes. from an agent perspective, -- asian effective, what does it mean if the u.s. pulls back? paul: there are two very different stories. one that we do not proceed with tpp. in concrete terms, it is not a
good deal -- a big deal. the tpp is mostly about intellectual property and dispute settlement and those are arguable, but the point is we have already taken trade liberalization virtually to the limit. there are only a few pieces, agriculture, if you others that are almost free trade. that is not a big deal except for possibly global diplomacy. the other is an actual. if the u.s. starts raising tariffs, imposing quotas, if we start going back on the whole wto system that we built, that would be a huge event. i think that is pretty unlikely. i would say based on this morning's upshot model there is a 4% chance of happening. tradethere a problem with deals in compliance or is there a problem with management and
unfair advantages? some feel they are being taken through currency manipulation. thing,he china currency it is funny how that story has changed and the political discourse has not kept up. china is supporting the renminbi on a massive scale and leading reserves because they are trying to support it. five years ago it was a real issue but i do not think it is the story right now. mark: nobel laureate paul chryst and on bloomberg markets yesterday -- paul kruger on bloomberg markets yesterday. vonnie: keith mcnally's new restaurant, this is bloomberg. ♪
a littleing his luck further downtown in the beekman hotel in the financial district. he welcomed the bloomberg cameras in for a private tour of his new restaurant called augustine. >> welcome to augustine. arrives and gets transported, that is what you want. everything costs a fortune with me so i'm the worst person to invest in a restaurant, and i thought it might be nice to be in this neighborhood. i had never come down to the financial area so i am hoping there are others like me that might take the chance and come down and find something. we have only just finished the bar, we have finished the bar and everyone will tell you that we were unhappy with it. we redid it. the mayor was very old. it took two years until we got
the tiles we liked. we built the clock. we found one like it and did not like it so we ended up building one similar. the chandelier took about 18 months to build properly. i suppose a criticism of me would probably be, and probably will be that a lot of my places are similar. i suppose to some degree they are. i think they are all a little bit different but it is like somebody has twins. you see them as vastly different but from the outside they seem like the same person. shane, theyo and still despise me that they put up with me. >> we are going to do a simple burger with brisket. onions get glazed at the end with some whiskey. -- i am sorry, scotch. that is the sound of a crisp french fry.
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and extra benefits all in one complete plan for a low monthly premium, or in some areas no plan premium at all. other benefits can include: $0 co-pays for an annual physical and most immunizations, routine vision and hearing coverage, and you'll pay the plan's lowest prescription price, whether it's your co-pay or the pharmacy price. or pay zero dollars for a 90-day supply of tier 1 and tier 2 drugs, with home delivery. don't wait, call unitedhealthcare or go online to enroll in aarp medicarecomplete. vonnie: it is 11:00 a.m. in new york, 3:00 p.m. in london, and 11:00 p.m. in hong kong. i am vonnie quinn. mark: i am mark barton. welcome to bloomberg markets.
vonnie: we're going to take you from new york to london to los angeles, frankfurt, and istanbul. it is jobs day in the u.s. and inrolls moved by 161,000 october. wages also improved. the election is driving market volatility and the final days before the big vote. what will happen after tuesday? we will break down which sectors will see the biggest swing. vonnie: turkey's lira has plunged to a record low and stocks are falling. police rounded up pro-kurdish -- and saying -- leaving people believe a more autocratic government is taking hold. we ar