tv Bloomberg Markets Americas Bloomberg September 7, 2017 10:00am-11:00am EDT
." ♪ julie: here are the top stories we're covering from the bloomberg and around the world. euro draghi says volatility is a source of uncertainty as he opens the door to start winding down qe. what do traders think of this somewhat dovish sign? -- president trump sized with democrats on a short-term debt deal. what are the further points on getting significant legislation through? mark meadows ways in. and hurricane irma has already hit the caribbean and it's on his way to florida. we will look at the potential impact on everything from insurers to commodities like orange juice. 30 minutes into the trading day and abigail doolittle is here. abigail: not a lot happening
right now. opened with gains but now we are looking at small declines. not a lot of conviction from investors area they are dealing weh so much at this point, also of course have the influence of central bankers and mario draghi with all of these hurricanes and right now we are looking at unchanged markets and on the week we are also looking at the kleins based on tuesday passed big pullback. thee was mentioning influence of hurricanes on the financial markets. let's take a look at those influences. if we take a look at the commodity complex right now, taking a break, its first down day since the department of energy report came out. it will be influenced by hurricane harvey investors. gold is trading higher. orange juice futures are up 3.5%, getting a big boost ahead
of hurricane irma potentially hitting florida and the declining complex really getting a hit from the bloomberg dollar index, the u.s. dollar down for a six day in a row at levels last seen in 2016. turning to some of the insurance companies over the last week, really taking a big hit not just on hurricane irma, but hurricane harvey. allstate, travelers, progressive, trading lower racing ahead of hurricane irma. very interesting is the fact that the insurance companies of the insurance companies are taking a bigger hit. they are handing it off to their insurance companies. if those losses are huge, we will see investors race for that florida.irma hitting finally, let's end on a bright spot. mastercard and visa trading
higher after mastercard raised its guidance or a set of street.s 5% above the this is according to andrew jeffrey making that projection based on this three-year growth rate that the company provided. looks like americans are not failing to use our credit cards. check out what's happening on the intraday chart for the stoxx 600. then we went up by one quarter of 1%, rising for a second consecutive day. the 2019 forecast, they called it tiny, the cut, underlying pressures remaining with the bulk of qe decisions, he said,
probably take into the next meeting on october 26. didn't discuss sequencing, raising the 2017 forecast to 2.2%. you will notice that i haven't mentioned the exchange rate. doggie -- mario draghi. >> the reason volatility in the exchange rate represents a source of uncertainty that requires monitoring with regards to its possible implications for the medium-term outlook. mark: he said that the exchange rate is in the volatility target, music to the years of euro gold.
this is the intraday euro, , the biggest gain since june 27. rising for a fourth day, highest january the second, the biggest one to watch is 119 and 79. the highest close since january of 2015. will behold in time? 3.6% in has risen by 2017. that is the best run year to date. this is what happened as the press conference began. seeing where the man -- where it would close, 54 basis points.
look at where we have come since july. down to 31 basis points. back at 60 basis points, it has been forgotten, the gdp data out of the eurozone highlighting a strong recovery. what a day it has been. julie: thank you so much, mark. the u.s. debt drama has been delayed, but a new drama within the republican party appears to be developing. chuck schumer and nancy pelosi, funding the government through mid-december. he spoke about the deal yesterday in north dakota. >> we had a great meeting with chuck schumer and nancy pelosi.
we walked out of there, mitch, paul, everybody, kevin, we walked out and everybody was happy. julie: but today some republicans are expressing disappointment, including congressman mark meadows. kevin cirilli spoke with him earlier in washington. >> dealing with democrats is one thing. rift it sets up in december before christmas is not good. but it does show you always look for a silver lining and that is one of the things i'm looking or . in this particular thing it shows that the president is myopic late focused on -- myopicly focused on tax reform. that is what the administration is saying, that he have to make .ure that tax reform happens this clears the playing field, so to speak, for the next three
months. partyot of folks in your feel blindsided by this deal, caught off guard, don't know what to make of it. is this a breach of trust on behalf of the white house? >> i don't know if it is a breach of trust, but it is people blindsided. yes, was i surprised? without a doubt. down.t know about let there are two things, you got to make sure that the debt ceiling tax increased and that the reform happens. so that when you see that it's not as much being let down as it is where do you go from here? of us, there was not a conservative solution out there. want to criticize the trump administration for making this call. we were talking about a clean debt ceiling months ago. conservativeot a
alternative, why should you get surprised? >> i want to talk about policy and tax reform, but it got to be frank, there's a republican-controlled house and congress, so what do you say to conservatives who are scratching their heads saying that a deal was made with democratic leadership? have those calls starting yesterday, when the news was announced at 2:00 eastern time. as you look at that, those calls, what was the president thinking? yes, the outcry from the grassroots is undeniably disappointing. that being said, it's incumbent upon us today, getting conservatives to work with administration officials to say -- what do we do for a conservative wing going forward? i have said for a long time that there was never going to be a clean debt ceiling. when mnuchin came out it was
going to be one with a democrat fingerprint or republican fingerprint on it. obviously this one is a republican fingerprint, and yet, without a doubt, even though the president is signing it in, chuck schumer and nancy pelosi negotiating the deal, i don't see that as having anything more than a democrat fingerprint on it, but we shouldn't be surprised. , myctor mick mulvaney former colleague, put forward a to our leadership, saying that we need to deal with harvey, the cr, and the debt well, yesterday they did all those things, just not in the way we thought what >> him think a lot of people outside washington want the government to pay bills, wanted open, and make sure that the folks get relief in texas
and louisiana. every one of those things happened yesterday. you can do it in a conservative way or a way that frankly sets it up is a very poor negotiating position for the president and this administration in december. can you imagine all of those things coming due in december, right before christmas? there's no way the president will be negotiating from a position of strength in december. so, the freedom caucus has ceiling, wee debt took an official position on that. we took four months to get us to the 16th. i have been around, watching. enough to know that nothing good ever happens in december in washington, other than the lighting of the christmas tree. which actually happens in november. [laughter] --k: what did you tell
kevin: what did you tell president trump since this deal with the democrats? >> normally i don't comment publicly. i have spoken to the president since then and certainly it was all about getting down to business today. we will leave from our interview here, going to the white house, talking about tax reform. part of that discussion will be the debt ceiling and how we do funding going forward. disappointed with the speaker's leadership? >> a lot has been reported about conversations and i don't comment on conversations i have with us weaker, my conversation with the speaker yesterday was more focused on where we regroup or get tax reform done. i think that he is all hands on deck as members of the freedom caucus are kevin: we talked
about your priorities several weeks ago. you will be calling for abandoning neutrality. speaker ryan suggesting that this is something that they don't agree with. >> it doesn't surprise me that they don't agree with it. normally revenue neutrality would give the money to special interests. for me it is looking about how we make long-term tax reform and tax cuts, more on the reform, how do we make them as permanent and aggressive as we can be -- they can be? in our plan we are looking at have pitchedt we to the freedom caucus, expanding the budget window to allow for a longer planning in washington, .c.
for a business guy, that's seven to 10 years, so i want to give them at least two cycles. julie: now let's check in on the bloomberg first world -- first word news. takingy: hurricane irma aim at florida, it could turn out to be the most expensive storm in u.s. history. forecast to hit by monday afternoon. mandatory evacuations have been ordered for downtime miami -- downtown miami and miami beach. the wind devastated the chain of islands, blacking out much of puerto rico. hurricane harvey said that first-time claims went soaring in 2012 with initial jobless claims rising. of texansousands filed the application. in south korea, another warning that north reay may launch a
missile on saturday, the day they celebrate their founding. it came as for launchers arrived at a military base. china objected to the system saying that it would disrupt the balance of power. cohn bannon says that gary should resign if he can't stand by president trump. he spoke to charlie rose, critical of the message after protests in virginia last month, saying that he absolutely had an obligation to what. this is bloomberg. julie? julie: the threat of hurricane hurler continues to push higher this week. futures in focus is next and we will discuss from new york.
mark: live from london, i'm mark barton. julie: and in new york i'm julie hyman. ."is is "bloomberg markets orange juice trading at a four-month high as hurricane irma threatens to wreak havoc on farmland. president is the vice of the futures group. i was looking at the numbers, florida is the number two u.s. produce our, generating $1.2 billion in produce annually here. here, firsta risk of all, is the orange juice crop generally under from this storm? >> the exact amount of the loss, we will have to see what the track of the storm is.
a couple of days ago it looked like it was going to go on the west side of the peninsula, which would have brought the most damaging winds into the heart of the production area. now it looks like it will go of the eastern side of the state. it's still going to be extreme, no doubt about it. things will diminish somewhat, which might save some of the production. from lake okeechobee to the north, most citrus is grown in the state of florida, with quite a bit of sugar cane in the area. as you travel far away from the lake headed north with other types of fruits and vegetables being grown as well. justu think that -- julie: quickly, is it pricing in the worst-case scenario? or is there chances for further upside? jack: there's a chance to see
.he november contract go to 165 we did kind of get to a target yesterday pretty close to 150 in there is a chance for the market to go higher. it's waiting to see how damaging the storm is and it is looking over its shoulder because of the damage isn't too much, there's plenty of competition out there for orange juice in the vitamin c category. the upside might not be too terribly extreme. a quick thought on oil with inventories coming up at 11:00, oil has been rising here because of this storm. what do you think we will see from the inventory data? jack: we will see that the inventory is there and that we are looking at what the spread is between the product
inventories and the crude oil inventories. andave seen arising of oath i think the inventories will tend to be there with the market correcting lower as perhaps the situation isn't quite as dire as we thought. there are storage facilities in the caribbean the need to be checked in the next few days. , thanks herscoville checking in with today's futures in focus. policymakers edging towards a settling the future of their programs. this is bloomberg. ♪
were waiting to see whether he would talk the euro down after it's 40% rise. frankfurt.om given the reaction of the euro, does that tell us that he wasn't forthright in his jawboning? paul: he didn't use words like he did in the past like serious concern, but he did point out the potential for concern and yet the market did look the other way. generally focusing more on the fact that the asset purchase decision will reach a next month, probably, the bulk of it. which tells you that at some point in the near future he will be on his way and that is what .he markets took, not his words mark: what does it mean for timing, paul, that the bulk of his decisions will be taken in october? that doesn't
necessarily mean we will hear about it in october? paul: no, it doesn't. some governing council members felt that it wouldn't settle all the details until december, he effectively confirmed that today, the chance that in october you will get something, abroad plan, a number that won't be everything and you may have to wait until december, about 10 trading days before the end of the year. tightomething of a timetable with a lot of decisions to be taken. those-- mark: in decisions, what are we looking at in the tweaks, the qe, the parameters? how are they going to balance it? that remains to be seen. he made it clear that they talk about various combinations of of duration and volume monthly purchases, but they didn't discuss the parameters, ruling it out as something that could change at a later date.
they discussed the sequencing and whether it could rise before the end of net asset arches is. at the moment, those are the kind of practices, it's a mix and match of what fits together with what. paul gordon of bloomberg news, reporting. thanks a lot. paul: the ball is in -- julie: the ball is in the court of president trump after the latest vacancy. stanley fischer had an unexpected exit that could shank the mission -- shake the mission from the central bank. that's next. this is bloomberg. ♪
courtney donohoe has more from new york. courtney: one of the most powerful storms ever reported is headed for florida. it could hit by sunday afternoon, leading to vent -- mandatory evacuations in miami beach and rattling markets, from orange juice to insurance. 180 mile-per-hour winds damaged in barbuda. homes this also blackout much of puerto rico. vladimir putin said that he he wanted to diffuse tensions over north korea and that diplomacy was the only solution. that aties warned missile may be launched saturday. president trump surprise the on ther the showdown debt limit with a stopgap resolution.
giving the democrats the upper hand on spending. the measure designed to convert into british law. they are unlikely to have enough votes to derail the government plan. analysts inists and 120 countries. julie? julie: the latest vacancy at the with stanley fischer and his unexpected departure, it's sparking questions about the vision for the leadership on the central bank. "the wall street journal" is saying it's unlikely that he will nominate gary cohn to leave the fed after the reaction to the trump response to charlottesville. we should note that bloomberg
news has not confirmed the report. our senior policy analyst joins us now with more on what's in store in washington. thank you so much for joining us. first of all, i have to ask you what you make of this from orton , because there has of course been a lot of speculation that he would he named fed chairman or at least in the running. do you think that that is still the case? >> the great thing about the intrigue in the trump administration is that what's true today may not be true tomorrow. gary may be out of the running as it stands this morning, but in three weeks or four weeks if they make progress on tax reform, he and the president could be best buddies again and he could be back as the leader in the clubhouse. we still keep him at the top of the list as a potential fed chairman when the president has to make that call in another couple of months.
as you see him sort of remaking the fed, what do you think, in as much as the presidents priorities going to be? philosophically, policy wise, what's you looking for? you really hit the nail on the head, the great uncertainty about this president is that he has no ideology in a traditional sense area if we had a republican president who was one of the other candidates, we would he expecting someone who was more hawkish on monetary policy, more strongly the regulatory. this president, however, is a real estate developer and someone who has spoken highly of keeping interest rates low, trying to juice up the economy. it's one reason why i think that keepn is in contention to her job and why some of these other more traditional pick, --
this, it's hard to see president wanting to see monetary policy going in that direction. but will yellen be behind a big revamp of dodd-frank? surely that's behind the top of the presidents wish list when he ,orges this new central bank albeit the fed board. jaret: that's one of the great things about gary cohn as chairman, from the president's perspective, you get someone who onlikely to be more dovish monetary policy and someone who is likely to favor significant deregulation of the banks, has worked in the banking industry, understands the industry. theould see him changing leverage ratio rules and other onerous revelations. yellen has made it clear that many of the post crisis moves
are needed and it would be a much more cautious approach. but with gary cohn out of the running, the president is going to side with low interest rates over repealing dodd-frank. he's been slow to fill positions given that he ultimately might have to fill five of the seven fed or decisions. that's a lot of decisions to fill. we might be looking at a legacy time here. extremely polite when you say slow. , fulfillingacial these jobs, which is surprising. the president during the talkedion, you know, he an enormous way about the vice-chairman, supervision, this idea of rethinking -- retaking control of the central bank. you would have thought that he
would have been far more aggressive in filling these federal reserve slots. in fact, it's gone extremely slow. there are two other vacancies that he could fill immediately. with fisher departing, that's a third slot. yellen posta parch or, we assume that she will leave the board when her term as chairman is up. it takes time to confirm people and they are way, way behind if they want to put their stamp on monetary policy and bank regulations. what can we extrapolate from all of this about the banks themselves? on the one hand if they are more dovish and the rates stay low, if you get a decrease in regulation, that could stay positive. what is your ultimate takeaway here? jaret: that strong economic growth is most important to the banks.
that fuels loan growth, people are repaying loans on time. i think that the banks want somebody who isn't so hawkish on rates that we will be at risk of raising to quickly and is willing to ease the rules. the senate banking committee today approved, that's a great example of that. the banks have a lot of comfort quarrels. about radicalking change here. this was baseball, not a copy trying to knock the ball over the green monster in fenway. it's much more national league andball, months -- bunts singles. the banks are comfortable with that. julie: we will end on that date -- on that analogy. mark? mark: competition in the what is industry,
♪ live, from new york, i'm julie hyman. mark: and i'm mark barton. taking off at a global aviation festival in london with leaders in the industry putting the spotlight on evolving as the skies get more crowded. anna edwards joins a with more. >> that is certainly part of the story in india. let's talk to the founder, founder of spice
jet, ajay singh. it's been huge growth that we have seen in airline travel. overcapacity there is real concern in that market. jay: we are one point 3 billion people in the country and we need less than 3% to fly. the market is growing, clearly there is capacity in the country. the growth rate is about 20%, calling for 90 planes to be added every year. we are not even close to adding 90 planes every year. i would think that the demand is very much there. of course, there are certain challenges, like infrastructure and others to deal with. medium to long-term, that's tremendous growth. >> even if the demand is there,
they will need to fill more runways and airports. is a huge challenge, but you know, there are 400 airports in india, of which we use only 75. the government of india launched that sought to connect to the other 300 airports and get them into the airports that could eventually be used. going forward, we think that there is potential for other unutilized airports. another area of growth that your company is pursuing, and i know this because we discussed that this morning, whether you fly local or go into other parts of the world, you are talking at airbus and boeing
about who you pick to win that battle. we think that with 1.3 billion people, so many of them wanting to fly overseas, there is a tremendous market for an airline to fly them overseas. what is important is that we bring the cost down so that we can stimulate the fares as much as we can. today the short-haul low cost is 75% to 80% of the market. ,learly for that to happen particularly for an airline like spice jet, we need to bring down the cost. if it goes long haul, does that matter? ajay: there will be more than one that go international with a
low-cost run from india. the market is really large. and regulation? ajay: no more so than any other country with regulation markets. with arrangements in the , as you of the airspace know, it's strategically placed between europe and africa. we have our own large consumer base. that makes it ideal for developing a vibrant sector with aviation hubs. that is what we are all working on. anna: are you interested in buying any bit of it? we are too small, we just came out of a very difficult situation just three years ago and are too small to be looking. but certainly it is a brand of the needs to, it's symbolic of
our country. it has great protection to us. ajay: do you know who's going to buy it -- anna: do you know who's going to buy it? ajay: absolutely no idea. anna: thank you so much, ajay singh, joining us from the aviation festival. mark: great to have you on the show with us, anna edwards, from london. rh is the furniture center formerly known as restoration hardware. this morning the ceo said that the overhaul is starting to pay off. year, butshare this joining us more is taylor -- with more is taylor. taylor: usually thought of more has upscale membership business models. they had a few sales stumbles
last year, making quite a bit of a rebound this year. what is driving that? you know me, you see it coming 2.4 billioning from dollars to $2.6 billion with analysts expecting the low-end of that range. earnings-per-share guidance coming in well above estimates and the ceo seeing that most of the struggles that have been hurting them is behind them. looking forward to growth more. julie: what are they saying about the ability of the company to get traffic back in in this troubled sector? taylor: you have heard a lot about amazon making slow inroads, they are coming out ahead of that. they are working on rh hospitality to make it more of an experience. instead of opening new showrooms, they are trying to enlarge the existing ones, making sure it's an experience and getting that traffic in there.
mark: live from london, in new york, i mark barton. julie: and i'm julie hyman. this is "bloomberg markets." a long road to recovery is underway. refineries starting to boost operations, the only company in the u.s. exports natural gas. experts spoke to jack fusco about how the company is getting back on track. jack: new into the storm without any upset to operations, producing a significant amount
of lng through the storm with a lot of water. port arthur, right by our facility in one day got 27 inches of rain, unheard-of levels. now we are dealing with their all that water is flowing. it happens to be flowing down our channels. we are waiting for the ports to reopen. julie: what's the cargo situation like? jack: well, in our discussions with the port and the coast guard, we received our first tanker yesterday. the tanker has been filled up and is ready to leave. but the currents are still high and there is debris coming down the channel. what do you expect once it's open? jack: we have six tankers and waiting. we would expect two of them at a
time for 12 to 14 hours per tanker, getting them on their way area quested you have to declare force majeure in any way through contracts in another way? we have not had to do it ourselves, producing lng, the obligation to customers is that it's already at the dock. which it is. there may be one or two cargoes that get disrupted, but we don't see anything material. >> you are also under construction for corpus christi. did any of it get delayed? for how long? we are in the process of getting the workers back on site. we have spoken to all of the , with 1200n workers
give or take yesterday at corpus christi. we will hit the ground running. we don't expect any major delays. julie: obviously, the abigail: alix: whaty, -- about the competitiveness in asia? jack: lng demand growth has been around year-over-year, 14%. in china it's over 40%. the numbers are staggering. the chinese of electrification plan that they just released will take them from 35 million tons of lng to well over 100 million tons in 15 years. we have seen a lot of opportunities in china. we have seen our first office open in beijing recently and we have delivered a dozen cargoes to various counterparties.
the question is the arm spread, can you make enough money shipping it to asia? where is the spread now? alix: do you have that? it's a good living. i feel like a farmer sometimes. you needt is the level to put more money to work in the u.s.? i would love to hit a low three, that would be a good spread for us to facilitate the building next to the trains, which we are permitted for an shovel ready. alix: in terms of waiting for interest on the final investment decisions, where are you in that process? threeit's corpus christi past six, those of the trains
that i'm willing and able to develop as soon as we get fully commercialized. alix: how close are you to those decisions? lots of discussions. i hope that they stick and we are able to get it commercialized and keep everyone working. can you give me insight on where your most recent cargo is going? in asia, specifically? can you tell me? we don't really disclose, a lot of times those are cargoes from our customers. if you look at the map, out of the hundred and 70, -- 170, 40% central america and south america. we are going to be extremely competitive in the market and they have a phenomenal need there. looking forward, nothing compares to the growth that we
see in asia right now. you mentioned train number three in corpus christi. do you expect costs to stay stable or do you think they will increase? if there is a labor issue? what do you think about that? alix: in -- jack: initially the costs will go up a bit, dealing with the damage, most of the construction workers are more migratory in nature, moving from site to site. overall it will stabilize and i think we will come out ok. tons of hurricanes coming into the gulf coast, do you need to move your export terminals to cut -- california? do you need to kind of get closer to that source?
we have great, redundant access to a very liquid natural gas supply. we are in states that really like our business and want us. alix: california, not so much. [laughter] with: that was jack fusco alix at the energy conference. mark: coming up, following stocks at the end of the thursday session. .ominated by three letters, ecb full details in a moment. this is bloomberg. ♪
"bloomberg markets." we begin with breaking news. u.s. oil inventories about to come out for the week. they are out now. let's get straight to abigail doolittle. it looks like a larger bill than estimated. abigail: indeed. that's consistent with a confirmation i had with bloomberg's commodity strategist. the survey for september 1 was calling for a bill of 3.7 million barrels. instead, it came in at 4.6 million barrels. that is rounded up. these numbers do influence or were influenced by hurricane harvey. we have gasoline inventories, a much bigger drawdown.