tv Bloomberg Markets European Close Bloomberg September 22, 2017 11:00am-12:00pm EDT
♪ mark: the top stories from the bloomberg and around the world. u.k. prime minister theresa may outlined her grand vision for brexit in a speech in florence. about the two-year transition. and the negotiations between the u.k. anti-e.u. -- and but e.u. polls onome brand-new whether the chancellor will crews to a four term --fourth term in power. uber hits a critical roadblock. their license in london has been revoked. how damaging will that be in what other cities be following suit? let's look at where european equities are trading. slightly updated.
decline isterling's listing the ftse 100. 1% ofund was down 7/10 of she dollar during may' speech. she said the u.k. will honor its commitments made to the budget bonds commodities. this is your final three columns. this is a wonderful function on the bloomberg. we used it ahead of the u.k. election and ahead of the french election. and we are using it ahead of the german election on sunday. it is everything you need to know about the german election. the race for third place action end up having an outside influence on the election. merkel is poised to win a fourth term. there is a combined tally of about 22%. sociale as schulz's party -- score.
this is one of the charts. i can bring up 11. the other party's languishing in third, fourth, fifth and sixth place. it is going to be a fascinating sunday. this is how the german market is faring as they prepare for the election. equity investors are not being complacent. timesx trades at 13 expected profits over the next 12 months, well below the price to earnings ratio. that is the purple line. think is plenty of upside to the german benchmark according to the bank. the dax is the best performing developed market gauge in september. at the same time, expectations for equity turmoil has plunged
to levels not seen since march. s&p valuations is the purple line. and the white line is the stoxx 600 -- the white line is the dax. the blue line is the stoxx 600. this is the spread between italy and germany, the white line, and then france and germany. the blue line was the interesting spread blowup ahead of the french election. spread could be narrowing -- brits have been narrowing since then. bond markets have found support. 90 minutes into the trading day in the u.s. >> we have a slight negative bias to in the week. all three major averages are down, but not by much, trading near the record highs. we saw them hit earlier in the week. sort of a down note, part of the declines not just today, but
some of the turmoil we have had this week and technology, theresa is back to apple. we got that on the bloomberg, the weekly tally on a percentage basis for apple. we are looking at the worst we going back to april, may for the phone maker. i say phone maker even though apple makes more than that because it seemed like the decline had to deal with the iphone 8. reviews have been mixed with some user saying consumers woman --think consumers will wait for the iphone 10 instead of buying the iphone 8. this.l keep on in terms of individual movers, we are watching t-mobile and sprint. we got another reuters report saying the two are close to coming to some sort of merger agreement. bloomberg news reporting that as well. just continued chatter about the
continuation of the two. on the downside, tiffany is falling. neutral,cutting to saying weakness in the company's high price category could delay the time i for a broader sales recovery. roger was elected as the next chairman of the board. he was at ralph lauren previously. united health core falling with health insurers broadly. in washington, unh has been mostly that is reacted to that debate. but the shares are falling. it is also the target of a lawsuit that has to do with denying coverage of patients. and finally, a quick look at what we have seen for the stock market reselling. this is a look at the s&p 500's average selling percentage range, percentage change. as we look at different measures of volatility, the vix, etc.,
you can see at the end of the chart, this far he will percentage change on an average basis so far this year. the smallest change going back to the 1960's. we have had a lot of moment on the individual stock level, but it has been far he small and incremental -- but it has been far he small an incremental. vonnie: thank you. mark: let's get back to theresa may's speech. she said the transition. they'll would be two years. toi do not want our partners fear that they would need to pay more receive less over the remainder of the current budget plan as result of our decision to leave. the u.k. will honor commitments that we have made during the period of our membership. mark: joining us from florence is bloomberg's anna edwards. simple question -- was there
meatea -- was there enough on the bone? >> let's find out what we did learn. she came all the way from london with prominent members of her cabinet to show that she can talk to your rock -- that she can talk to europe. in terms of what we learned, transition, two years, is the u.k. going to pay? we don't know, but she said we will honor our commitments to the budget. she wanted to bridge the budget. on the divorce bill, she did not give any clues. she said she will make ongoing contributions to cover the fair share of costs. on the subject of e.u. rights, ae said that there will be
resolution body. on the various models of trade, she rejected norway, canada. she talks again about a deal. not very much detail. he delicate a far balancing act. she had to appease three factions -- the e.u. and the two factions within her own conservative party. let's call it the hammond side and the johnson side. did she manage to appease all three? ita: there was something in for all of them in a sense. if you talk about the e.u., she talked a lot about partnership and cooperation and shared values. could gone of this down well in brussels. also words about not being --
also not putting a security threat. perhaps that helps with the tone of all of this. on the divided u.k., this is interesting because there are two things that seemed boris-inspired, saying we can do great things. these are boris lines. in the q&a about those aborted for brexit and whether they would be disappointed by this, suggesting that some of immediate things the brexit voters will be disappointed with some of the transition elements. johnson tweeted that he was pleased and like the speech. something in it for everyone perhaps. 10colleague says he counted uses of the word creative or created. mark: great job, anna. mark, from brexit to the
standard for the e.u., now there is little doubt angela merkel will secure a fourth consecutive term as chancellor of germany. the latest poll shows merkel leading her main opponent martin schulz 36% to 26%. but it is the new makeup of the coalition that will matter for the coalition. peter, us from berlin is political analyst for the polling. peter, what do the polls show about potential coalition government? as in the previous weeks, there are only two viable options at this time. we have grand coalition, which would be able to form a majority. and we have the option of a jamaica coalition. all other options would not be viable as far as we can see. vonnie: what are the poll
suggesting people want? peter: this is avery -- this is a very mixed picture. this of the the first time for this to happen in germany. it is not very popular at the moment. most popular would be the grand coalition, but this will do been very much on what the negotiations will be like and what the outcome will be like. the people will have to become accustomed to a three party coalition. mark: peter, some are saying the race for third place might be more interesting for the top two parties. i am talking about the ast and the left party. it suggested they could do much better combined than they did in 2013, even though they won't have a place at the table. if theyt of influence
increase their share of the vote could they have in sort of determining the agenda and policy going forward? expecti don't really much influence on the afd agenda to the other parties. majorities toher become viable. any forces that would be willing to give way to demands on that. it is a very different party and very radical party, totally different from all the other parties from the conservatives to the left. mark: peter, when it comes to pulling, specifically in the u.k., as you know, there have been some surprises in recent years, whether it was the last
election, or the referendum. would it be a surprise if there was a last-minute swing? what could be? actually i don't really expect any surprises in this election because the main picture has been very stable for a long time with a clear lead with merkel against schulz. and very clear views of the voters being seen as more competent to lead the government. there might be short-term changes within the two camps, between the left and the afd. there might be minor changes until election day, but i don't really see any bigger potential for a big surprise on election day this year. mark: peter, thank you for joining us. chief political analyst.
vonnie: breaking news on a key vote that has some serious consequences for u.s. solar companies. let's get straight to julie hyman. julie: this is the international trade commission that is issued this rolling saying that u.s. solar manufacturers are being harmed by imports. is advances a trade complaint to the president to decide what action should be taken. should tariffs or quotas be in place? vote.as a 0-2 to address the imports surged president trump by november 13. the president will determine a remedy if any. it is interesting. it is an interesting split in the u.s. alone industry. behind me, you have shares of first solar. and theory, would be one of the parties that would be hurt by what this report is talking
about, that is chief imports of solar components. now, you see first solar initially spiked on the report. kit is coming back from their highs, but higher on the day. there are not many pure plays u.s. solar-based manufacturers. any other side is the utility part of the industry, the installation part of the industry. those that put solar panels on u.s. homes or in larger scale for corporate use. that as a $29 billion industry overall, including first solar, has largely opposed these kinds of terrorists and quotas -- kind of tariffs and quotas. so you have a privately held company that is based in georgia that initially said it was seeking these import duties that brought the case initially, but then you have, as i say, the other side, the installers, the
utilities that aren't necessarily wanting these tariffs to happen. we have been wanting for solar and wanting canadian solar as well. they may not be exempt from these tariffs. they will continue to monitor this. vonnie: one of our -- about a third of u.s. solar imports come from free trade agreement nations. you can see why there is more volume in the stocks right now. they will continue to monitor. let's get first word news with courtney donohoe. courtney: north korea and the u.s. are engaged in a poor force this morning. president trump says kim jong un is a madman who doesn't my starving or killing his people. that is after north korea warned it could test a hydrogen bomb in the pacific. president trump has ordered new sanctions on people, companies, and bank doing business with north korea. there is a report that the trump administration will replace its travel ban with the restrictions.
according to the wall street journal, the new order imposes limits that theory by country. the restrictions will be based on cooperation with the u.s. and the threat posed on other countries and other factors. puerto rico, hurricane maria has her the chances of a speedy resolution. has lost powernd and swamped by flooding and the cost could hurt $30 billion. and opec in russia say they are halfway declaring the global oil glut. they are urging fellow producers to stay focused and finish the job. ministers from the oil cartel and their allies are meeting in vienna. opec secretary-general mohammed says reducers and implemented within 100% of their pets. -- of their cuts. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm courtney donohoe. this is bloomberg markets. mark: breaking news, helmet and
drag out for a while. uber has been entangled in some of these over the years. this is definitely one of the biggest because london is a very important market for them. this will be appealed and maybe during this process, the two sides can reach some compromise. may be uber takes on some tougher restrictions that it had in the past. lawyeringis a lot of going on. mark: what is it 21 days? >> yes. mark: pretty damming indictment. vonnie: that they are not able to higher --two hold a license. how does the new ceo deal with this? >> this is just another controversy to throw under the pile for a new ceo. what the city is accusing uber of is a lot of safety violations. one, not doing proper background checks with drivers, and also
things related to the medical care for drivers. and also a program that uber had in which it used software to essentially skirt government regulations. taking it all together, it is really kind of an indictment of the company's culture and business practices. mark: does this embolden other regulators and other constituencies, to take a tougher stand against uber? >> we are seeing that for tech at large what it is facebook, twitter, google, uber certainly. altogether, you are seeing governments pushing back against a lot of these companies that have its related a lot of power. over is a unique case because -- uber is a unique case because it is so visible on the streets and the effect it has had in london with the black cab industry that has a lot of political weight. a lot of these sites in each politics andn to
constituencies that are at play. vonnie: the black cab constituency is powerful in terms of policy. i want to read what the mayor said in a statement. of companies in london must play by the rules. providing services must not be at the expense of safety and security. he is in an awkward position. he may want uber around, but he sightskeep taxis in his and the death of the safety of londoners. is a lot of social issues in play. the one hand, the city after brexit is trying to demonstrate that it is still open to the world. that is what the mayor is trying to do, that it is to open for business, but here is a move in the business community that people see is against that. there is a social element, too,
600 did rise for a second consecutive week, the first time in two months. it is led by travel and leisure, oil and gas some of the best industry groups today. this is a pretty wonderful chart showing you all the various asset classes since prime minister theresa may took office in july last year. the white line is the all shares index. it is up 11%. it is off highs. the other line is the bloomberg bond index, the index that throws together over u.k. bonds. the blue line is the bloomberg pound index, which is down, which is one of the reasons why the ftse has been rising. it was an interesting speech. some say there was a lack of details. sterling initially fell against the dollar. theresa may said the objectives
have not changed since january, but then she did show there was a change in tone by saying there will be a transition, and it will be two years in duration, and the u.k. will honor their commitments when it comes to the budget. something for everyone as our reporter anna edwards was saying in italy. eu, theto appease the pro-brexit pierced, and the anti-brexiteers within her own party. the biggest gain since may 2010. the death of lillian, who is the heiress to the world's fuelsiest empire, that speculation about nestle's 23% stake in l'oreal, which is worth over 23 billion euro.
there is a number of permutations being discussed out there. this will be the focus when it comes to l'oreal's shares when it comes to the next few months, what is nestle going to do. shares of l'oreal up 2.9%. the euro area economy may have wrong at the fastest pace in over two years in the third quarter. the private sector activity gauge today, the opposite index -- composite index of the manufacturing and services sectors rose 56.7. markets say that equates to growth of .7%, the fastest growth since 2015. some companies raised concerns about the strength of the euro, but markets say the currency apears so far to have had
modest impact on exports. vonnie: it is friday, and we are seeing an escalation of geo tensions. japan aeeing a bang on little elevated from yesterday. on the u.s. dollar, stronger yen. the overall picture for the yen has been in that direction. we will see if that continues. this is probably an opec committee meeting story as we see strength in crude oil, the vti staying about $50 a barrel. it is not looking bad for shale producers. this 2.26 is a holdover from the fomc decision and janet yellen's press conference. let's move to gnn. if we look at the g20 movers, this is where we see more of the political currents.
south korea down 1.2%. ndex.r pound i the mexican peso today is up about 0.8%. fta is on the back burner as we talk trade around the world. mark: thanks a lot. let's get to the top story in markets today. sterling finding its way back to where it was before theresa may began speaking. stors wantinginve more out of britain's fiscal commitments during the two-year transition? richard jones is a strategist for bloomberg live. sterling dipping down, it is coming back, retracing most of those losses. from the currency standpoint, what was the main takeaway? richard: if you look at the
reaction in the pound market, it was not a game changer. if we look at where we were this time last week, we are not a million miles away from those levels we are a little weaker versus this time last week. perhaps disappointment that we did not get more specifics out of theresa may, and given the fact that the speech was not seen as a massive game changer in terms of negotiations. i think you are right when you said earlier that the town is perhaps a little more conciliatory now than it was before. i was speaking to one of my market contacts at the time, and he said to me this is a speech theresa may probably should have given before triggering article 50 rather than six months after. mark: given sterling's recent strength and it has been propelled in large part by what the boe has said, what will cause the next shift up or shift down now that we have had this more conciliatory tone from
theresa may? she has put a little more meat on the bone. now we know what the bank of england is thinking. what is the next stage for sterling? richard: i expect what mr. barnier has to say about theresa may's comments will be important. the tone of negotiations and paste will be the thing that drive sterling. the bank of england is priced for two hikes next year, one in february and one by the end of next year. it is hard to see the bank pricing shifting much more from this. that is in terms of driving the pound. it also comes down to progress that is made. we're six months into this process already. time is ticking. vonnie: richard, it was more pronounced in fact versus the u.s. dollar than against the euro. there is a must know reaction against the euro, but 7.7%
against the dollar. is there any trading around the german election this weekend? richard: i think it was interesting that the data we got out of germany today was strong, the pmi was strong across the board. as we go into the election sunday, that is good news for angela merkel. it is probably a foregone conclusion that angela merkel will be able to form the next government, but it is the formation of a coalition that will be the big driver. there are a lot of permutations there. once we get the results sunday, it will be a little clearer what the coalition will look like. that could take a few months and lead to uncertainty. vonnie: there is trade around that whether it is a volatility trade or otherwise, right? richard: i think directionally the euro has done well not only against the dollar but against the pound since emmanuel macron was elected in france. if you get a continuity
coalition in germany, that will probably be the best result in terms of being euro supportive. that is not a nailed on conclusion. that will unwind itself in the next few months. mark: the big event of the week was the fed. it is fascinating that investors proved a smooth the how smoothly to medication was on the balance sheet and the dollar decline has ceased now. the bottom was a few days before the fed meeting. has the fed because of the projected rate cap it outlined -- path it outlined this week put a floor under the dollar? richard: it certainly feels like that might be the case. it may have stopped the dollar's decline, the fact that the fed up with the december meeting back in play. we have a little north of a 60%
chance of a rate hike in december. those probabilities were considerably longer not too long ago. that balanceact sheet normalization, the whole process has been laid out. i think it will be a smooth as can be expected. i think we have probably seen the near-term floor on the dollar. as we going to 2018, there's a lot of uncertainty about who will be the next chair, stan fischer is leaving, the composition of the fomc will change. for the next few months with december in play, the dollar may have found likes down to the lower levels. vonnie: it pretty signific ant upping in escalation between the u.s. and north korea and chinese banks, that was the case as the pboc issued edicts.
we are not seeing reaction markets, why not? northd: the reason why korea and geopolitics has weighed on u.s. yields, given the fed's posture there was an attempt to take rates higher, but now that we have headlines out of north korea, those headlines have reversed a little bit. we are not moving that much. i think geopolitics is dragging yields lower, whereas the fed path and that the dots are higher than where the markets is right now has an upward trend on the markets, so that is why we are going nowhere. mark: thanks a lot, richard jones, currency rate strategist for bloomberg news. willingness shows a to move forward. we stand ready to discuss the indications of her speech, mr.
barnier says. clarify theoes not stats on ireland. we need progress on those before we can move on to the other issues. it shows a willingness to move hasard, he says, and may expressed a constructive spirit. you have to say he has received this speech well given how he has often received prior speeches and points to the process from when all this began earlier this year. we will keep an eye on mr. barnier. let's check in on first word news. courtney: opec and russia say they are about halfway to declaring a global oil glut. ministers from the oil cartel and their allies are meeting in vienna. they say producers have implement it more than 100% of their agreed cuts.
a big win for the american solar industry. the u.s. international trade commission has determined imports are hurting solar manufacturers. it is up to president trump to decide if terrorists or quotas -- tariffs or quotas are needed. facebook announced that it will give congress 3000 advertisements purchased by a russian agency. thep responded, what about totally dishonest media coverage about crooked hillary? global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney donohoe. this is bloomberg. vonnie: thank you. productswest line of gets a tepid response from reviewers just as the iphone 8 its stores around the globe. this is bloomberg. ♪
♪ mark: live from london and new york, i am mark barton. vonnie: i vonnie quinn. this is the european close on "bloomberg markets." 12%ftse dropped as much as before reversing, and is now up 9%. what are the details? >> that is unusual to see a swing about that. they were down 4.5%. this is what we were seen in the apparel industry, the athletic apparel industry. there is falling demand. that is what happened for finish line. they had to do a lot of promotions. the company says it is focused on working down inventories.
part of the reason it was slashing prices was to get stuff out the door. you'll look at the issues they are selling, and analysts are saying this is a product driven company. if you are going to get people in store cannot buy stuff online, it will have to be about start products. they have been redoing their stores to try to get people through the door. the key, came on the call when they said they expect to see gross margin improvement in the fourth quarter. gross a chart of the margin figures, which were 28 percent in the last quarter. see grosse going to margin improvement after working down inventory, that is perhaps better news, a ray of sunshine. how is this impacting other athletic footwear makers? >> we have seen swings in their
stocks as well. we have created a chart of the largest suppliers. nike is the biggest supplier for the company, adidas as well, under armour, and foot locker is a big competitor. the stocks are mixed. adidas just closing with the european close. it is mixed as finish line itself shoots up. 9.7%,s those shares rise if you look at the longer-term chart of the stock, is still looks pretty dismal. the five-year chart, more than 50% decline in the shares. there are industrywide issues that are affecting finish line. vonnie: julie hyman, thank you for that. that is our stock of the day. mark: let's talk apple, the iphone eight available in stores across the world today. we're getting a live shot in the
apple store in san francisco. we have heard reviews have been lackluster. apologies, we don't have one. mark gurman covers consumer hardware for bloomberg news. what is up with the reviewers? why aren't they happy? i think a lot of people are waiting for the iphone x. if you look at the eighth and eight plus, in that load $900 range, this phone is lackluster compared to what samsung has on the table. people will wait for the iphone x for something that is special that stacks up against the competition. reviewers are comparing this against other flagship phones, which is the right thing to do. it is interesting to see apple
splitting up the line even with that high price point. vonnie: what do consumers traditionally take notice of? do they react to the reviews, or do they ignore them? >> i can tell you for my own experience, but i was fairly interested in ordering the new apple watch that can connect to cellular networks, but some of the people that received early review units said the lte connectivity would drop after some usage. the battery life was quite abysmal compared to an apple watch without cellular. i decided to hold off on buying one of those until those issues are fixed down the road. vonnie: what will apple release? will we get any data or numbers and when? >> i don't think we will get any specific numbers on this opening weekend, frankly because they know lots of people are waiting for the iphone x, and these
numbers when they are announced a really going to affect the stock price in a negative way when they announce them as you only have two thirds of the new models out this week. you will see a lot of people waiting for the iphone x in november. traditionally the people who would line up and preorder phones every year are apples must oil supporters, -- loyal supporters, people who don't want to wait, early adopters. a phone for is early adopters. those people are going to wait for the iphone x, and that is why you will not see strong sales this weekend. mark: it is not uncommon for apple products to get bad reviews but still sell like hotcakes. will history repeat itself? >> that is right. we have seen in the past people worthwhileness
of products. when the apple watch it, people said maybe you don't need a smart watch. out, peopled came ask why did you need a tablet when you are to have a phone and laptop? we are seeing specific flaws across these products that people are pointing out that apple has promised software fixes. three out of three products are receiving specific criticisms. mark: thanks a lot. bloomberg technology reporter mark gurman joining us from san francisco. you know what time it is. it is botc time. digital money bitcoin takes on traditional currencies. who has the advantage? this is bloomberg. ♪
the most telling charts of the day. you can always access these on your bloomberg by running the function at the bottom of your screen. we're back toward traditional friday battle of the charts. two judges and two contestants. >> thank you. the advantage is with the pound today. that is after theresa may's brexit speech and ahead of the german election on sunday. conciliatorywas and optimistic, which is why investors are running on short-term gain of the pound against the euro. this means investors are paying a premium to buy the pound and sell the euro. that is causing a give urgent with longer-term sentiment, which you can see in the l line here, the one year risk reversal rate for eurosterling, and the blue line is the one week risk reversal rate. it is still positive, meaning
investors are still positive on the euro longer-term. will that change this sunday with the german election? we will see. check this out and find out more by downloading this chart. mark: great chart. very topical. beat that. >> it is hard to beat that chart. bitcoin has been one of the big stories in recent weeks. is this the cryptocurrency in a bubble? over the last year, even with the recent decline, bitcoin is up 500%. that is simply shopping. that is leading people to wonder whether or not it is a bubble. bitcoin has started to tremble, well off the highs. jamie dimon says he thinks bitcoin could be a bubble. last week, bloomberg had the scoop that one of the chinese exchanges is going to stop trading bitcoin at the end of the month, causing bitcoin to
slide below its 50 day moving average. right now just above it, and the last time we went below the 50 day moving average, we went down to the 100 day moving average, 40% decline. this could be a 60% decline for the coin. you can see my chart on the bloomberg. vonnie: i know whose world is fascinated by the bitcoin story generally, but i think given that it was theresa may's speech day, my vote goes with the oth er. technicalve the analysis of the going, but christine because of the topicality. dumbo. ♪
♪' jonathan: from new york city, with 30 minutes dedicated to fixed income, this is "bloomberg real yield." ♪ jonathan: coming up, janet yellen brushes aside plans to unwind the balance sheet and teases out rate hikes before the year-end. deliverrea threatens to a hard-line response to president trump. proxy, heavy for a debt loads continue to haunt retailers. why