tv Bloomberg Markets European Close Bloomberg November 29, 2016 11:00am-12:01pm EST
"bloomberg markets." ♪ nejra: we will take you from washington to vienna and cover stories out of london and berlin in the next hour. here is what we are watching. goldman sachs out with a new note calling for 30% chance of an opec aspen deal. we will head to vienna and saudi arabia, said to reject a deal unless all members participate. ubs wealthie: management arm said donald trump breaking down the latest moves in currencies. the president-elect has chosen congressman tom price a fierce critic of the affordable care to lead the department of
health and human services. more announcements today. let's look at where european equity fund trading now, under 30 minutes to be close at a very different picture from yesterday because we have been seeing a italian banks rebounding, pulling up the ftse and giving lift to european stocks overall. european stocks are still hovering near the lowest level in more than a week. a little bit of thin trading ahead of this referendum and the head of the opec meeting later this week. , italy'se equity space ftse makes up 1.9%, the cap 40 in france at 9/10 of 1% and greece up more than 1%, the euro stock of empty -- weakness in the ftse in the u.k., the ftse 100 down some 6/10 of 1%. the u.k., starting at 7/10 of 1%. we saw this brought below 124 earlier.
we will break down the moves later. 6.20uro unchanged, one of --106.20. the 10 year yield in italy down 10 basis points. yields are coming down elsewhere in europe. and how the 600 sector breaks down, overall, the benchmark of some 1/10 of a percent and energy stocks very much underperforming, down 1.4%. no surprise with the weaker crude oil price because of this deadlock ahead of the opec meeting on wednesday. materials also doubt a tenths of 1%, including the commodity producers. a pullback in a number of the london metal exchange after the index hit its highest level since may of 2015 yesterday. are shaping up with sectors and financials you
can see the best performers up six cents of one present. banks rebounding for the first time in five days. italianou banks -- banks are some of the best performers. italy with ae he three month -- with a 3 -- we are keeping a close watch on this deal. johnson & johnson raised its takeover offer of europe's largest biotech's firm. u.s., take a look at the stocks turn higher, not by much, a reversal from earlier, the doubt about 15 and the s&p rising by four and the nasdaq up a third of 1%. still shot of the record levels but still going in that direction.
of november, it has showa strong one, we will you the heat map for the s&p 500 month by month. if you go over to november, a 3.8% gain for the index which is the biggest monthly november game going back to 2009. november is seasonably relatively strong but this is strong even by the typical november standards. we have seen a rally in the wake of the election. getting back to today section, wait on the major averages, energy, we were talking about that, crude oil in the u.s. off by nearly 4%. increase doubts about opec deal and gas higher on forecast for a coming cold weather to the northeast of the united states. a divergence there, gas up for a seventh straight session.
industrial metals under pressure. we recently have seen highs and now there are some signals that onna may be putting a curb speculation on industrial metals with copper, zinc, lead, nickel, trading lower. the retailers today, strength there, tiffany with their numbers, even that those sales are lower, earnings came in better than estimated and that is on the heels of better than --imated numbers from the optimism on luxury. redbook -- redbook came out with its sales stores indicators, 1.2% year-over-year gain, the first 26 days of the month. we are seeing gains on department stores at least related to that. vonnie: you mentioned it with the gdp numbers, confidence numbers, making things look more rosy for the u.s.
julie hyman, thank you. let's get the first word news. >> authorities in: via trying to figure out why a jet carrying a brazilian soccer team crashed into a mountainside. survived.people the plane was carrying a brazilian first division team. it was moments from landing when the crew reported electrical problems and declared an emergency. investigators are looking into an account from one of the survivors that the plane ran out of fuel to former labor secretary elaine shalit said to be announced as president-elect donald trump's choice to lead the department of transportation. they ran the labor department under george w. bush. the transition team said she met with the incoming president at trump tower last week and discussed labor and transportation policy. donald trump has named a staunch critic of obamacare to be
secretary of health and human services. -- price of georgia was also has said that the affordable care act interferes with the ability of doctors and patients to make medical decisions. the mayor of london says he has been a short the european union citizens living in the city will not be forced to leave the country after brexit. the idea that people can be used as bargaining chips is offensive. i have no doubt at all and i have been told this by the government that it is inconceivable that you would be forced to leave london. in ifertainty is crucial you are a londoner -- that certainty is great -- is crucial. if you are a londoner, you are welcome here. >> about one million eu nationals live in london. thanews powered by more 2600 journalists and analysts in more than 120 countries. this is bloomberg. nejra: thank you.
both the breadth and the vti crew lower on the day as pessimism sets in on the chances of an opec deal. the opec minister has spoken, saying that all options are on the table, that we need a supply deal to speed up recovery. ministers from every opec member will hold talks this evening hosted by qatar and saudi arabia. we are live in vienna with a special guest. take it away. we are seeing goldman sachs saying 30% chance of a deal at the moment. a lot of momentum ahead of tomorrow, especially when the ministers will meet tonight. i am joined by someone coming to opec since 1986. michael rossman, thank you for joining us. bloomberg learned that the saudi's are taking a hard-line,
that they will not cut it iran and iraq do not join. what is your take, is this hardball or real? >> it is real, i think, they to make abody wanting gesture and leaving countries out of the agreement is not acceptable. an all ored it as nothing, either all our participating or we are not here >. on oilre all dependent for the primary sources of revenue, there economies are centered on petroleum. the saudi's have a social contract and have been bleeding out the reserves for two years. the fact that they have been pushing opec towards a deal since february is what the issue seems to be. iran is trying to gain them and see what they can get from the saudi position before they agree or do not agree to an arrangement. >> for this meeting, who is the most important member? >> typically it comes down to the saudi position.
they are making it clear to in thedy that all people group have to make a gesture about participating. iran agreeing to freeze production from a theoretical level that is above what it has produce is not a consolatory gesture and that seems to be the last thing up. >> what do you think the iranians will do? >> they may walk away, they took the position seemingly that they have to win at the expense of saudi arabia and it goes back to a very long rivalry. it predates my attending opec meetings. that seems to be their mindset, not logical from the point of view of income, make a 2% cut in production and have the price of oil go up 20%, that is a huge set of numbers. is the thing, they are fighting over literally barrels -- in the grand scheme of numbers, not a lot of barrels, what does it come down to? >> a political issue, iran is locked into this conflict with
saudi arabia, not just arabs versus persians or shiites versus sunnis, the dominant position in the gulf reason is the base, it goes back a long ways. of the opec meetings, this is not that big of a hurdle to go over but at the end of the day come if they cannot come to terms, the meeting will end without agreement. >> if there is no deal, what happens to opec? >> they will sit and wait until the june meeting unless the parties are not agreeing to make a concession come back to the table. >> no deal, where does oil trade? >> and will drop 10% to 12% from the recent high levels, that is it. president of the cornerstone, an interesting few hours. as things come down to the wire. nejra: a deadlock at the moment. thank you. we will have much more on the outlook of oil with a head of
that counting down to the european union -- close which is about 50 minutes away. the strengthening u.s. economy may have boosted the economy according to the executive chairman at templeton emerging markets. he spoke with us in singapore earlier. >> i do not see a softcore emerging markets. forill see -- a selloff emerging markets. the key will be the flow of money coming from the u.s. after all these corporations comment with lower taxes and expanding in the u.s. which will have an impact globally. vonnie: the outlook for the u.s. dollar, he says donald trump will want a weaker currency. >> he will try to weaken the dollar, his program will be
heavy infrastructure spending, spend like crazy, build up a huge deficit which will be concerning to the rating agencies which will help push the dollar down which will be good for him because it means that americans can export more. us that there is a great opportunity in the mexican peso and in the volatility. look: let's take a deeper into foreign exchange, particularly as it applies to the dollar-yen and sterling. ubs says the will strengthen to 98 per dollar this time next year after they expect the sterling to rebound big-time. joining us now is richard jones of bloomberg first word. what ubs is saying is that yen traders have donald trump all wrong and we will see the currency strengthen to 98 per dollar i this time next year. i have a chart showing you the
yen's worth -- worst month since 2009. where do we go from here? >> the consensus call is we get a stronger dollar into next year. infrastructure spending, higher u.s. yield, differentials working in the dollar's favor will probably lead to a stronger dollar is the consensus. i have said before this view because -- i have sympathy for this view because the stronger dollar view may be getting crowded. if you think back to what has driven the dollar higher, i think we're still looking at the speech donald trump gave after he won the presidency. there is a lot of details to be worked out. we do not know all the moving parts behind what will happen from mr. trump in terms of policy. i think ubs may be onto something and the market perhaps has gotten ahead of itself and is not necessarily clear-cut
that we will see a stronger dollar. bloomberglook at the dollar index, down over the past few days, unchanged now. losses over the past few days, do you think that was down to technical factors? we were seeing -- >> i think it was down a lot to the month end time where we had dollars selling. the dollar-yen, exporters have been selling the dollars and repatriating begin at the months and. -- month's end. looking ahead, i think we have much bigger macro things to look at. there will be a real push and pull on the dollar, consensus is that the dollar goes higher. vonnie: you have to have a view on the euro. because wer or lower are at 106 now and for the
dollar to go higher or lower, the euro will play a major role. >> i think it will and one of the things that will be interesting in the next week or so, the ecb interest rate announcement next week. there are a lot of headwinds or the euro and a lot of political risk. the economic recovery is nascent. we have been here before and failed. one of the biggest concerns draghi has is that core inflation is not picking up. german inflation numbers today, they were weaker in november than october. we are not getting the traction for inflation and that is something that will keep the ecb in an accommodative mode. vonnie: we can get weaker sterling and weaker euro and weaker dollar, can we? >> i think we could see, it depends on the pairs you are looking at, dollar-yen to me is the one that perhaps has room
for downsize on the dollar. stirling is interesting because we have a lot of bad news priced into the town. -- pound. the prognosis is uncertain politically. we could see the pound doing quite well against the dollar but more so against the euro which is facing big political headwinds. i am not sure we see the headwinds in the price of the euro yet. nejra: it is interesting you talk about the pound versus the euro, i have been asking people are you shorting sterling or long the pound versus the euro? today, we see sterling right now, what are we, 124.99, below 124 yesterday. what are the dynamics? today, mortgage approvals come is that white sterling is pushing higher today -- why sterling is pushing higher today? >> we have a lot of volatility
around the finish of the month and the consensus view is that sterling will go lower. it does have some upside but over the past couple of days, it is the month finish consideration driving things. next month, the account may have upside given the fact that everybody thinks it will go lower. nejra: richard jones, thank you for breaking down both economics and the fx market. s. breaking news. after: wgl has a fight they are said to be weighing a possible sale, they received takeover interest to this is according to people familiar with the matter. their work limit our he talks -- there were pulmonary talks. bondholders are starting to demand better terms for mergers, we will look into whether they will get them. this is bloomberg. ♪
nejra: live from london i am nejra cehic. just about five and it's away from the european close. -- five minutes away from the european close. vonnie: let's look at the biggest is the stories in the news. housing guys has risen above its prerecession peak. that is the s&p core logic case filler data. it shows home prices in 20 cities up 5.1% in september over last year. the u.s. economy in the third quarter grew at the fastest pace in two years. the second of reading shows stronger consumer spending than first estimated. the commerce department said gdp expanded at an annual rate of 3.2% in july to september. up from two point not percent in the first reading.
from 2%& johnson -- up in the first reading. johnson & johnson increases earlier bid of $26 billion, the new priced cannot be confirmed. lion 71st offer was too low. -- said the first offer was too low. as we european markets head to the close, the european close a few minutes away with the stocks 600 up 6/10 of 1%. we are seeing gains, ,.rticularly, the ftse up 1.8% . close, it to the looks like we could european stocks resume gains. market,at the fx
sterling up six cents of 1%. gaining against the euro and the dollar. the euro against the dollar, that is unchanged at one a six-point in. the bond market, auctions in italy today, five years and 10 years. yields generally coming down. german 10 year bond deals up three basis points. this is bloomberg. ♪ seeing is believing, and that's why
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european trading. let's take you to the market action today. weifferent picture from what saw yesterday because yesterday we saw losses in italian banks waiting on european stocks. halting a three-week rally that had been the longest run of weekly gains for the stoxx 600 since july. today, italian banks rebounding, puddling up italy's ftse, up 2% on that. equities in greece higher. stock up, that is eurozone stocks. the ftse 100 down 5/10 of 1%, breaking the trend of a rally across a lot of equity markets in europe. sterling, up 6/10 of 1% on the pound. below 124rling break yesterday. looking at the euro, i believe it is unchanged against the dollar. ahead bond space yields
-- lower in italy. if we look at what is happening across the sectors on the stoxx 600 as we close the trading day here, the stoxx 600 overall going higher, near it its lowest level in one week, up to tenths of 1%. outperforming, a gauge of banks rising for the first time in five days. we take a look at what is happening on the downside, materials down 6/10 of 1% which includes the commodity producers, no surprise. energy stocks down 1.1%. on a weaker oil price no doubt. we see some the deadlock in the
talks ahead of the opec meeting this week. one stock we are watching, actively and shares jumping, up 10% at the moment after johnson & johnson raised its takeover offer according to people familiar with the matter. johnson & johnson is reviewing the financials and discussing various structures, it significantly increased its offer from an earlier bid of 246 swiss francs a share. if we look at the bond space, the italian 10 year yields moving lower and we saw an auction of five and 10 year debt which attracted strong bids. the 10 year debt auction entry the highest demand since november 2015 as we look ahead to italy's referendum. spreadseeing this bond being italy, germany yield gap narrowing today, falling at the end from its widest since june of 2015. vonnie: let's look at market
movers in the united states. major indices in the green but not huge moves. the downturn we saw yesterday is not carrying through. i would not call it a risk on rally but the markets watching oil. brent trading with a 46 handle at wti with a 45 handle. dollar, thean canadian dollar weaker and the yen is weaker. trading close to 113. -- theed about the ubs market has this dollar straight move wrong but it is dollar strength that is weakening the yen. rates, the curve we have been noticing has not changed but it is interesting to year whiche the 10 is trading with the yield of 2.33%, a lot of the trading has
been within the five basis points of 2.30% and 2.35%. the 30 year yield if i can find it is actually not moving too much today but right below 3%. the 30 year has risen. let's look at currencies. the dollar index continues to strengthen. not so much today but in general. i wanted is a currency to point out, trading above 65 now as we wait the outcome of those opec talks and then crude in new york is 45.37. let's go to the news. columbiaigators in trying to determine why a aarter jet crashed into hillside, six of 81 people survive. it was flying a soccer team to a
match in the city of medellin. the group reported an electrical failure and declare an emergency. one of the survivors said the plane had run out of fuel. the men who attacked fellow students at ohio state with a car and knife had complained about poor treatment of muslims. saidnforcement officials he said in a facebook post he was sick and tired of seeing muslims killed and tortured. 11 people were injured and a police officer shot and killed the suspect. elaine chao has been selected to lead the department of transportation for donald trump. she ran the labor department under president george w. bush, the transition team said she met with donald trump last week and discussed labor and transportation policies. at goldman sachs, the president
put a list of people making an isearance at trump tower, he meeting today with president-elect and vice president-elect mike pence. for ahether he is in line job or just offering advice. dayal news 24 hours a powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. nejra: thank you. by lossestors scarred are pushing banks to change come investors who have enabled $1.2 trillion of mergers this year are staring down mountains of debt that needs to be sold for deals that may never see the light of day here in our next guest see the way back -- says the way banks sell today is antiquated and needs an update. so great to have you on the program, david. antiquated and needs updating,
tell us more. >> a system that has been around for a long time here while we have that technology come into other areas of the market, this is one that has resisted. it resisted for a lot of reasons but it is unfortunate. you, whatanted to ask we had earlier this month, by the markets standard board which is a london-based trade organization made up of big investors, investment banks, for anybody who does not know. they outlined reposes saying that banks -- proposals to say that i should the close policies for divvying up debt to investors. they are talking about the process of book building. these proposals are aimed at fixed income markets in europe, do you think they should be employed globally? >> you need transparency through all aspects of the capital allocation process.
what is going on in europe is a good start. the recommendations they have talked about, they are still gathering comments and they should be rolled out globally here trent -- globally. transparency is good for markets , it allows a better allocation of capital. vonnie: we are getting more transparency as the days go on. advantagest of the of the whole bond world. what in terms of feedback are you hearing from people who are suffering from the transparency? >> there are puts and takes, transparency is a lot like isking at how the sausage made which is sometimes not pleasant and parts of it that you need to see improvement and there needs to be regulation. i go back to the more transparency and efficiency markets will become, the lower the cost of capital to people who need capital to invest and build and hire people and it
allows me as an analyst to make better decisions. vonnie: what do you make of pricing, we have seen a lot of corporate debt rise in price and transparency has to do with price because there is no market making anymore. there is a price and that is it. what do you see for prices for corporate bonds, the highest rated going forward? >> a great point, the corporate bond market is suffering, suffering from liquidity which is resulting in more volatility than we have had in the past and we expect that into the future. one of the things about regulatory changes are a change in the book a role which should which-- olga rule -- should allow people to intermediate more which will hopefully reduce volatility and trading costs for investment managers. nejra: what parts of the credit markets are more attracted to
you at the moment? >> i personally like financials. they are in a fantastic point of the cycle. they are still building capital. they are getting stronger. the recent rate moves are very good for banks, equities and earnings which at some point they need to return capital to shareholders. the one thing i would caution on , we are starting to see a relatively quick return to normal asset quality. what that means is usually you have a sock over quality over the last, -- few quarters, a move to the normal level, not a high-level but a normal one. vonnie: we were speaking earlier with someone saying the high yield is in a good spot at the moment and he sees it going higher in price. what about you? >> high yield has done very well
and when you think about broad investment ideas, you are a little bit suspicious of an asset class that has done very well. i would be a bit more cautious on high-yield. vonnie: thank you. cat of credit research. -- head of credit research. nejra: the axel springer ceo has ventured further online than most publishers and it is paying off, we will hear from the man who transformed the company. this is bloomberg.
this is the european close on "bloomberg markets." the nasdaq has hidden intraday record for its highest since 1971. -- up six days of 1%. -- 6/10 of 1%. time for the bloomberg business flash, some of the biggest business stories in the news. wgl holdings is weighing options including a sale after receiving interest from a sprain company according to people -- spain company according to people will move your with the situation. -- familiar with the situation. representatives of the companies declined to comment. live times of said it has run -- live times of -- luftansa said it is -- has run out of --
some of the world's biggest automakers would join forces to set up a european network of fast charging stations for electric cars. andinclude vw, ford, others which want to establish a lot of charging stations by the year 2020. that is the latest business flash. germany's business that's biggest newspaper publisher him says he seesner a lot of potential. real relevanthe thing is people who read something on facebook are remembering the content of the story they have read. 43% of the people today say i read it on facebook. thatis something
publishers of branded content have to work on, make sure people say, i read it on bloomberg. are readingpeople bloomberg stories on facebook, does facebook become the the all and end all -- be all and end all for media? dr. döpfner: it has a tremendous this provision platform. -- distribution platform. it is about connecting people, a platform bit like a telco in the old days, it brings people together and facilitates communication. perhaps it will be a reality conversation we have on facebook. company and alogy platform, not a content producer. it takes no responsibility for content and it should not. it is a misleading debate. , whatnnot blame people
they have shared during a telephone conversation. the only restriction for facebook i think should be be rule of law. what is against the constitution and what brings people to jail. that cannot be published on facebook. the idea that they should have a editor would transform them into a media monopoly and that is going to the wrong direction from the various points of view, from a democratic point of view and a publishers point of view that is going wrong. us, thethat is up to journalists, the content publishers, to make sure we are trustful sources and take responsibility of truthfulness of what we are publishing. -- truthfulness of what we are publishing this -- what we are publishing. job, we want to get
paid from subscribers and advertising clients. that is a different model from facebook or snapchat or pinterest. matt: we have not seen facebook by content providers, they tend to buy other companies. , globalable operators telecom operators, looking to buy more content providers. are these partnerships that we will see more of and are they good for both sides? ceo of aer: for me as publishing company, this is great news because it shows that everybody needs content. social media, being a search engine, e-commerce tech platforms, cable companies, telcos, they all need constant because content creates because loyalty they all need. we, theto make sure
content producers, do not , helpr our stuff for free access torms to get data and monetize the data, we have to make sure this is helping. the more demand that is out there, the more players need content, including apple and samsung. the better is our position so we can monetize through revenue share models and output deals and subscription deals. through all kinds of corporations and publishers -- that will help in the long run. it is still the constant everybody needs and that will help to create a sustainable business model for us. was the axel springer chairman and ceo, mathias döpfner. coming up, as opec members small and output freeze, u.s. oil
♪ nejra: time for the global battle of the church. we look at us -- charts. we look at some of the most telling charts and what they mean for investors. off is joe.ngs >> u.s. equity markets higher today, solidly in the green. i wanted to snapshot something that happened earlier today, this red line on the chart, the blue line is u.s. futures, s&p futures, the white light is 10 year rates hit look what happened at 8:30 a.m. and we got strong gdp data, further
evidence the economy is doing well. the white line jumped up immediately and equity futures immediately fell. later on, more economic news. or potentialear message in that instant reaction to the good news which is that it is possible that investors are starting to get nervous about the idea that the u.s. economy is starting to take up, more stimulus and more rates and higher rates will hurt equity markets which arguably have benefited from lower rates. in the instant reaction to the good data, some reasons why equity bulls may be nervous. you.: thank vonnie? vonnie: you have to use your imagination and maybe a little -- onfect on discharge
this chart. it shows the amount of oil race operational in the u.s. with preproduction. crude production -- with crude production. stabilizes,duction the price of oil in your mind, if you can overlay the price of oil, as they decline, you get the plateau and at that point production stabilizes and the rate count goes up. you see a coming together of these. what actuallys -- happens on wednesday? do we get an agreement or not and that will impact the amount of rigs we see come back online. you can see my chart on the bloomberg. >> i love the chart and use
questions about what we will accomplish. i will be hanging on these opec headlines. vonnie: didn't help i gave in and direction to your show. joe wins itnk because there are limits to my imagination. but also because we have been asking how much this equity rally has to run and your chart points out interesting questions. it is close but i will give it to joe. vonnie: i think you are right. nejra: later today on bloomberg television, erik schatzker will be back with an interview from the robin hood investors conference. join us onson will his investment outlook at 3:45 p.m. eastern and 8:45 p.m. london time. do not miss it. do not miss the european close. let's see where european markets
vanished the day. -- finished the day. we have seen banks rebound today and the stoxx 600 closed up slightly higher, up 3/10 of 1%. the ftse 100 down for tenths of 1%. let's see how fx markets are doing, a stronger sterling today. yendollar and the euro, the resuming its slide. let's check on the bond markets. if we had five and 10 year auctions today that went well -- this is bloomberg. ♪
david: covering stories from havana and washington and vienna. oil falling below $46 a barrel as opaque members have failed to bridge -- there views on production cuts. donald trump takes an obamacare opponent as secretary of the department of health and human services, what this means for health care in general. we speak to the ceo of 11 james, they think it is time consumers share timepieces willingly as they share rides and rooms. watching whattors is going on in vienna. >> earlier we had stock , perhaps even in anticipation of the uncertainty around the opec situation. that