tv Bloomberg Markets Americas Bloomberg September 25, 2017 10:00am-11:01am EDT
"bloomberg markets." ♪ vonnie: here are the top stories we're covering from bloomberg and around the world. to tackletrump tries his agenda, he makes new comments but his comments about nfl players keep taking the spotlight. any chance of legislative success for the president? in europe, angela merkel secures a fourth term but faces a tough task of building a coalition with unusual partners. we are live to find out how german business is reacting to the election results. later, an interview with the former reserve bank of india governor vice-chairman of the ,ank for national settlement what he says about the outlook for central-bank policy.
a big show coming up and we are already remittance into the u.s. trading sessions. julie hyman is here to give us a rundown. >> more negative when you look at the nasdaq here today. rundown. we have appear the 10 year yield . we seeing some buying but not much as the 10 year yield fluctuates above and below unchanged. i'm talking about the 10 year yield. interesting here, we are seeing a change in session and for the u.s. treasury market. take a look at the bloomberg in terms of positioning. asset managers on out net short the 10 year treasury contract -- contact. this is the first time this year they have been. in other words, the view is that yields work -- will continue to rise. ofwill hear from a number different fed officials this week.
the commentary has already begun and we will hear from janet yellen tomorrow. that is pertinent to the positioning of we will see if it does indeed stay in this direction. two stocks, you notice we were look at the major averages, the nasdaq was the underperformer and tech was the big drag today. down .6%, we don't have any actual numbers from apple from the iphone 8 sales. a lot of analysis and a lot of reports on the line for the iphone eight and it looks like the indicator from those is there was a weaker demand for multiple different outlets. there is speculation that pushes demand for the iphone x. but we don't yet know for certain. the nasdaq more broadly. another set of movers of caught my eye. one of the worst performing
stocks in the s&p today. ratesaft medicare payment , from medicare to these types of companies. that has pressure earnings from the companies. that accounts for the losses we are seeing there. mark: we're up by one quarter of 1%. telling everything you need to know about the results of the german election. pressing -- press on the trending chart portion in the top right. a bit of a surprise for the two is both parties experienced a drop off in the share of the vote. drop,'s parliamentary
33%. the s&p 25%. 12.6% was a big surprise. the s&p, 10.7%. it .9%. it is the makeup of the coalition. when it comes to valuations, look at the discrepancies. the lower line is one of the final remaining hurdles or financial markets in 2017 as angela merkel returns. it is a bullish sign for money managers like franklin templeton and credit suisse who say, albeit in conjunction with rising popularity of the right-wing, boost their optimism for german equities. about 13.2 times its expected profits in the next 12 months, well below the ratio, roughly
16.5. sticking with the theme of the german election, this is the difference between the german two-year and the 10 year. yields are following right across the curve in germany. that is the blue line p are the white line is coming down today. angela merkel pauses victory marred by the worst than expectedangela merkel pauses viy marred by the worst than expected results facing the most splinter parliament in modern history. the prospect of another round of elections prove to be unattainable, it will certainly weigh on the euro in the medium-term. an important chart to keep an eye on as merkel tries to form a coalition. vonnie: a big weekend for sure. let's check in with the first word news now. emma: president trump and republican leaders plan to
release this week will dramatically cut taxes. proposal to cut the corporate tax rate from 35%. tax lobbyist familiar with the changes, cutting the top individual tax rate to 35% down from the current top rate of 39.6%. meanwhile, the president is about nfl players. he says nearly has nothing to do with race. it is about respect for the country, flag, and national anthem. the nfl must respect it. about 200 nfl players set to neil while the whole team stood with locked arms to display unity. brexit negotiations resumed in brussels today and they come after theresa may except for the first time that britain would pay its dues, contributing to the european union budget in 2020. she is also said she would honor the commitment more broadly.
the german press is calling it turned nightmare victory. she won a fourth term as chancellor but with a smaller share of the votes. the country's far right party posted surprisingly strong results. of theom the head germany association in just a moment. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. mark: thank you. coming up, optimism about production cuts sending to their highest level in eight months. futures in focus are coming up. this is bloomberg. ♪
mark: let's turn it over to matt miller. matt: thanks very much. standing by with the head of the german exports association, and let me get first in her on last night's election. merkelmerkel 6 -- angela securing a first term but doing it in a way that looks almost like a defeat. >> the news is changing i think. germany is going ahead and mrs. and sheill go ahead
will continue with her policy and of course, there is the question of the possible parties, she will make a coalition. nevertheless, it will neither affect the markets or the german .conomy or european development everything is going on as it did in the past. been -- many has matt: germany has been -- >> -- >> what you're working with here, does it make a difference if you were to go at the greens and the jamaica coalition, or? >> it will not change much. it will always be the same as the economic side. i'm quite sure nothing would change. matt: last night, martin schulz for the first time,
really an aggressive opponent of uncle merkel -- angela merkel. >> you have to look at the next three weeks, another important election in germany. case. to and in any >> after three weeks, then we will see what is going on. that party effectively controls the 20% stake. and it comes lose in, it effectively puts it not only in opposition, but enough
position at dieselgate as well. >> i do not think so. it is such an important issue because germany has only social democratic parties, the britons democratic party, and the greens. is like a big container ship. the important issues, there is a big concern with german , theament, the iran crisis problem the american president has, affecting the world markets, what about the brexit, what does theresa may say? these issues are really important for us. and these arguments, these , for the world economy
and the german economy, -- like havings it them gain power? is it a precursor of things to come? is it a concern for you? >> not at all you look at other countries and you have a situation even worse than germany. it is a sign of nowadays political framework. you have populists in france and italy and in spain, you have the problems. especially this week with the problems in scandinavian countries. why don't we have the same situation in germany? no one could really explain it. now we have these guys and these people in our parliament. democracy, society, and the economy are so strong that they
never bother making any problems. matt: 79% did not vote for matt: 79% did not vote for either of the two extremes him a left or the right. interesting stuff. thank you for your time. really appreciate it. back to you. mark: great job and great to have you on the show. oils: futures in focus, gains gains as opec and russia say they are halfway toward -- they urged fellow producers to stay focused. joining us is todd. this reassurances from this rec that things are going well, that is supporting the oil prices? >> it is the market excepting the fact that since last november when we got first wind of the cuts, things were starting to happen and price
movements were starting to reflect lower production and lower supply levels that we had been getting over the last several months. i likewise think the coming together of the opec and non-opec groups is starting to be more fluid. that is your positive for oil. in theu throw geopolitical tensions and whether issues, it is now prices toward higher oil and taking us out of the comfort zone we have been in for the last several months. the 45-50 range. play along, its is the one thing we have not seen yet. nowe are above six dollars between wti and brent. >> brent's more global oil. you look at the u.s. and we have got u.s. production which will come back online. we had a bit of a stall here. it is really going to push the wt lie oil from seeing these
stanchion, the upside that brent may have. >> the yield curve as well after the fomc meeting mainly on the or do does that continue we going to a low now? >> the yield curve is suggestive that we will see a rate hike and all data and all fax we have seen point to that. but after december, the fed wants to talk about three rate hikes in 2018 and three more in 2019. they do not know who will sit at the head of the table or the right of the table. you will have a new fed chair or yellen there but you will deftly have a new vice chair. to make those decisions and allow the market to price those expectations when you really do not have key information. december is a done deal at least for the market right now. made a coupleave weeks ago to now a 60% odds of a rate hike in december. that is a done deal.
will be a different story because we do not know who the fed chair will be and we need to have some of these gross numbers hold up. >> thank you. a lot of unknowns. todd was today's futures in focus. mark: great chat here it time for a look at some of the biggest business stories in the news right now. cyber attackers have reportedly targeted big accounting firms. compromised confidential emails and plans of some of its top clients. they discovered the attack in march but hackers may have had access to the systems before last year. a big week to hear from central bankers. yellen's biget seven economic conference in cleveland. on thursday, mario draghi, bank of england governor mark carney, and the fed vice chair stanley fischer will address a bank of
england event. in london, the chief executive of uber offering contrition for past mistakes just days after london's transport authority said it would scrap the company's operating license. a newspaper acknowledging the company got things wrong. on the way, he says the company appeal the decision but do so appeal the decision but do so with the knowledge that we must also change. that is the latest of the bloomberg business flash. still ahead, president donald trump is doubling down on his the nfl and for the lead to fire players who kneel during the national anthem. will the feud hit the nfl's ratings? this is bloomberg. ♪
mark: this is "bloomberg markets." vonnie quinn. president donald trump is doubling down on his criticism of national football league players who kneel during the national anthem. his tweet this morning -- respect for the country, flag, and national anthem in the nfl must respect this. the nfl began at his rally friday when he called for players to kneel in protest of police brutality to be fired. that is where it started. the rhetoric has backlash. capital partners managing partner. bancfirst -- thanks for joining. at least eight nfl donors donated to trump for the victory party or something. millions. do they stop doing this now? he is attacking their industry and most prized possessions.
>> it is likely they will not give millions anytime soon. the nfl and teams are businesses. the first concern is not taking care of the relationship with the president but protecting business. so yes, there will be a so yes, there will be a diminished response between the nfl and the team owners and the president. vonnie: do they take a stand or stand with players? some players feel differently than other players. true, but the a business. advertisers and fans support the business. a business. advertisers and fans support the business. huge fans showed up, the biggest of the season at all of the games, to see what would happen after the president's tweets had incited both sides. advertisers are remaining quiet. you do not hear anybody pulling
their advertisements out of the is it business a may have the audience. is it business a may have the audience. president trump said in his initial tweet in alabama, the nfl ratings are way down there they are not. last year, the nfl set a viewership record and are on track to do that here. they had two bad weekends between harvey and irma, the hurricanes knocked out games and distracted everybody with the 24/7 all hurricane news, but yesterday was a record viewership and you will see the nfl bring the advertisers right in and the fans as well. mark: trump is hopingmark: trums walk out of stadiums and stop watching the nfl. you do not think that will happen. >> it will not happen. the game is the game. people are going to separate sports and politics despite the fact that politics is always for the last half-century been integrated inside sports. mark: his base is clearly more nascar than nfl.
he has got nascar on his side, doesn't he? approximately, proximally two thirds of the nfl fans are basically trump supporters. richard petty of nascar advocated yesterday that any activist who decries the national anthem or tries to make any kind of protest should be banned from racing. that was not nascar management or an advertiser. it was a team manager and a former racing star. corporate partners, one and a quarter billion dollars. none of those court and death corporate partners so far, except under armour, have come
out on any side. do they? be as quiet as a church mouse because they cannot afford to upset the fans. the fans are their customers and that is why there in the advertising business. >> does this impact the quality of the game? >> i do not think players are diminished one bit but i do think activism will spread and you will see it next in colleges and probably high schools. it is a major issue. the racial divide in the country is very significant. bibb.: thanks, porter governor.d, the utah how could the potential repeal benefit? this is bloomberg. ♪
republican senator senators were circulating a new version of the obamacare repeal measure late sunday. that is according to people familiar with the matter. the changes, as the gop plan -- ared headed were aimed at the holdouts. we're joined from washington dc is the republican governor of utah who supports the legislation -- thanks for joining. perhaps you can say why you supported it so full throat of the? >> first, i think it is a common sense approach where every state could have whatever kind of health care program they want. you can have a more liberal approach if you're liberal state. more for -- assert -- conservative approaches and everything in between. it is probably a proverbial vonnie: may now follow ted cruz and not supporting this
legislation? >> there are issues out there that needed to be fined tuned. the senators looking to find a way to get to yes. we need an opportunity to have health care reform. the status quo is not acceptable or sustainable. this is a way to empower states to be creative and find better ways to spend taxpayer dollars and get lower-cost and better health care outcomes. >> it must be confident utah will do the right thing what makes you feel confident that everyone with -- every state will do the right thing? >> trust the governors and the state legislators, they are close to the people. about about them than the utah governor and utah legislator. i would say the same thing. no one cares more about coloradans -- they would like to have the flexibly to address their own unique demographics and cultures and politics.
blocke analysis says the grants could reduce health-care funding particularly impacting low income americans. what would you do to ensure it does not happen or that -- what would you do to tell us that is not justifiable? be aates will actually will to do more with less. my wife put together a budget and my local government would come to people and say i will exchange it dollar federal money for $.85 of state money. the red tape in the system is expensive. we're better off not taking money from the state of utah, giving it to washington and getting it back. we are better off spending it at home. improve health care outcomes and spend must of the taxpayer dollars. said, no state should be advantaged or disadvantaged, which is what is happening currently under the obamacare plan. >> there was a lot of controversy about the changing
howhen it comes to showing states will actually provide for people with pre-existing conditions and so on. what guarantees are there that the less fortunate will be looked after from state money? looked after from state money? it might be better spent, but what about the guarantees for those less fortunate? >> what about the guarantees of the federal government are keeping promises? 20 million and rising. when you talk about guarantees, the problem we have right now is not sustainable. our costs of health care have gone up dramatically. an additional round of increased taxation this next year that has not even hit yet. president obama postponed. explosion of an cost. it is not sustainable and we have got to make some adjustments. the best we could make involve the party in power and
responsibility back to the states who care about their people and are closest to people who spend the taxpayer dollars more right -- more wisely and get a better health care program. not told me exactly how the less fortunate would be taken care of. -- to the react from strong rebuke from the health care industry this weekend? the hospital came out and said this could implement dramatic cuts to programs like medicaid? >> also, you do not want to have we stick it turned off him will come up with programs that are less expensive. we always had a high risk pool for those who have insurance. every state will do that. it shows an absolute lack of trust from washington dc to the part of thehat is problem. whether this transportation or education, the washington establishment is saying we don't trust states to do it right.
we are doing it better than they are in washington. ,> given that john mccain potentially ted cruz, ron paul, these are all know's -- no's. d.c. the legislation passing this week? >> i am hopeful. i know the challenges to get to 50. everyone has the pet ideas and issues and concerns. certainly, we have a fragmented republican party on this. i think john mccain is an example someone and said he would vote for it and i know in talking with the governor of arizona, changing his mind. bipartisan have some approach. this cop -- becomes bipartisan because the states can dictate their own outcomes. if you want a more robust program like in california and new york and new jersey, you can do that.
alternative to germany posting from washington. from washington. jacob, thanks for joining us today. to believe it is the most likely outcome, how long will it take to forge such a pack? >> we looking at maybe christmas. they are very far apart on many things. striding --made strident comments. it will take quite some time. toward the end of the year. mark: what importance will the during on your related important coalition discussions? really, a fundamental doesn't want to govern what does it want to do? it will not be able to get much of what
it campaigned on. they have got to pick their battles. eurothey pick battles over integration, the macron proposals we will see, i do not know the answer and i do not think anyone does. the reality is there will not be to answer the proposal in berlin for quite some to answern berlin for quite some time. mark: will merkel be -- then a grand coalition? >> there is no doubt in my mind she will be a weaker leader. it is clear her own party sufferedit is clear her own pary suffered greatly largely because of her own policies largely related to immigration. the coalition is three parties, even for -- four. rather than two.
she will not have a majority in the german parliament upper house. they will be able to block a lot of legislation it wants to do. unquestionably, she is a leader after yesterday. mark: even though they are backing away from any coalition ambition, do you think they could change the tone in weeks and months to come? i'm personally surprised there is no leadership challenge to martin because he seems to have failed completely as a leader. the question in my opinion should be whether or not you need new blood at the top. you so far have not seen that. secondly, if the jamaica theition breaks down, really only is another grand coalition available if you want to avoid a minority government, something in germany is very
do because of the german constitution and there is no tradition for it, so i think potentially come november, the be rethinking its position or be rethinking its position or least angela merkel ask them nicely once more. mark: two you think wolfgang will keep his position as finance minister? >> i think it is still the base case largely because it is not clear that either the green candidate an obvious that has anywhere near his stature. at the same time, does it really want to put him a lot of to oust one ofal germany's's most popular politicians from the finance ministry when they can get something else is part of the
agreement? i am doubtful. butink they will continue it is not as certain as it was last week, for sure. mark: obviously, the big surprise package, do they have an influence as the third-biggest policy -- does this reflect a change within german society and with an german democracy? does.hink it it means whether we like it or not that germany is becoming a normal political country in europe and it means we do have these kinds of parties represented in parliament. you see that all across europe and now in germany. to biggest challenge will be stick together. they have 100 new mps. these people will be under a
media spotlight all the time. some of them may be prone to strange political comments. there will be scandals. can the formal leader has now left the party and will run as an independent. there are questions. have an opinion because they will affect german simply becausely they're there and immigration putting a driver for them there, something any new government would have to address. there, senior fellow on the day after the german election. vonnie:, thank you. coming up, a conversation with the vice chairman and former reserve and community -- of india governor and his thoughts
former congressman anthony weiner sentenced to 21 months in prison. this is for exchanging sexually explicit messages with a 15-year-old girl. he pleaded guilty back in may to one count of transmitting obscene material to a high school girl in north carolina. all of the scandals wrecked his career and marriage and played a role in the final days of the 2016 presidential campaign. anthony weiner himself, he said i was a very sick man for a long time but i
am responsible for the damage i have done and i have no excuse. once again, the former congressman sentenced to 21 months in prison. prison. the national association of business economics annual meeting is underway in england, ohio. we will send it to mike mckee, standing by with a vice chair and former reserve tank of india governor. mike? >> thank you very thank you for joining us. you are a central banker looking at a world where central banks are starting to move in the same direction of tightening policy. does it worry you and is the right move at this time or do we still need a lot of stimulus? >> we have eight or nine years of a comet of policies. at some point, i guess you have to exit. the well advertised exit we have had from the fed i think is
important. i think the bank of japan will stay with policies for some time and it will not all the ethics same time. probably the ecb next and of course the bank of england has an talking about moving. i think we will see less accommodation going forward. this is warranted given central bankers have done pretty much what they could and it is now up to the rest to start following suit. old ugly things a recession is not in the cards immediately. a lot of central bank and -- bankers are suggesting the economies are getting stronger. book05, you wrote a famous talking about things that others want seeing. are not something we seeing now? are we overconfident about the economy? >> as janet and others have said, don't die of old age, they die because there are
fragility's. one could be inflation, which of tighteningral bank is an attempt to ward off. the second could be financial sector fragility. probably because of long accommodation like the one we have had is explicit leverage as andave seen in china countries like canada, but also implicit leverage and positions that are hard to unwind. what we're seeing is the what we're seeing is the possibility that some of these might be sources of fragility. not a clear and present danger but as the accommodations get withdrawn, some of this will come to the fore. somewhat argue that long-term are strongly priced at degreeint because of the of accommodation that has been
there and of course because of quantitative easing. the point is if accommodation is , it is possible to let the air out of some asset prices without causing enormous disruption. pace of withdrawal has to be tightened because of contingencies, then you can get sharper price reactions. issues you look at the central bankers face, is there anything more they could or should be doing? >> part of the problem is you do not know which asset is bubbling and where the problems really lie. stock know, the 2001 bubble turned out not to be such a big problem. in much smaller sub prime mortgage problem, in terms of overall dollar magnitudes, they caused enormous upheaval. whether it is a
problem or problem or stock mat problem, where it is located, how transparent holdings of that particular instrument are. it is hard for central bankers to tell this will be a problem in this is some the we have to combat. that is where think at some point, more accommodations, waiting for more activity might he the wrong policy. it makes sense to start withdrawing when you can. big topic fora the wave central bank for -- bankers can do with things. what about regulation in general? there is talk of rolling back dodd-frank. do you think you could do that and still not leave yourself exposed? problem is you rush to close all the doors you left open. we had extremely high levels of
leverage in the banking system and bringing that down was very important. had we gone too far? in requirements for small and medium banks, it may not be systemic risk in the way that the banks are. it is worth at this point exploring or examining what we have done is regulators and asking, have we in certain cases gone beyond what it -- what is needed? is not to say there is not work to be done and there may be places where we could do better, for example in what is known as the shadow financial system, have we done what is necessary? the we done too little on financial system? more uniform across the let -- the board regulation. effective regulation is what i think we should be looking for so we allow the system to do its
job but ward off risks. book, you warned about what might happen in a society with income disparities. we want your take it for we let you go on what is happening with population movements around the world in the u.s., germany now entering parliament. what will be the ultimate -- >> i think this is deeper and more long-term. after the french election, people said it is over. the voices of the establishment have one again. won again. the working population has seen the wages are increasing at a reasonable weight -- rate. not see much opportunity as they had. with technology improving by leaps and bounds, take for example the job of truck driver
which automated driving would do away with it. it is one of the most important jobs for high school educated people in this country. looking forward, we have to topare the prepare the workforce much better and examine the kinds of societies we have you are they providing enough opportunity for everyone? that is something that has to be done across the country but also in the emerging markets. they are starting to see the same problems. >> thank you for joining us today. we will send it back to you in new york. >> thank you. from the national association of is that -- business economics. hour.or the stock of the down once again today, shares of apple. the stock is well off its low point, they follow last week off his 5% decline. abigail doolittle? abigail: you would think with all the hype we're hearing about
the iphone x, it would be that but it is about the iphone eight. demand is pretty weak. estimates were lowered for the fourth, the said number quarter, $1.79.ow at it isit is a blow to investors thinking perhaps everything is not rosy here. last week, a similar call saint demand for the iphone eight is weak but i was also told in the phone conversation that he inks there would he a december quarter, around 145 million units for the december quarter. thinks they could come in closer to 100 million units. if we hop in the bloomberg and take a look at the financial analysis on apple, we will see that the fourth quarter of 2017, looking for year on year growth for fourth quarter of 2016.
11% growth, so that could really be a negative for the stock for short. either --rish could >> if you take a look at the chart, there is a reliable pattern. .his is 9306 at the bloomberg a two-year chart and we see the shares of apple have dropped through the 50 day moving average in the 100 day moving average. it tells us the sellers are stepping in. when that has happened in the past, stocks have gone down and when that happened last year, it was apple the take annual iphone product launch event. product launch event. in 2015, there was a bigger drop and the question is how bad would it be? >> thank you for that. stocks are taking a leg lower
now. getting some comments from the north korea foreign minister who said the u.n. charter gives members the right of self-defense and north korea has a right to shoot down u.s. strategic planes. andlso reminding you members that the u.s. declared war on north korea. the u.n. charter gives members the right of self-defense here down one quarter of 1% and the s&p reversing .3%. off thoseking comments up 10.4. mark: we are following stocks less than 35 minutes away from the end of the monday session. we have got gains for the european benchmark and the germany. declines elsewhere. the close is next. this is bloomberg. ♪
this is the european close on "bloomberg markets." mark: here of the top stories we are covering from the bloomberg and around the world. german chancellor angela merkel secures a fourth term, but faces some difficult coalition talk in the weeks ahead. we will show how her weaker than expected show could affect investors. taxes could go down for corporations and the wealthiest americans -- details on proposals that could be unveiled later this week. commodities, gold covers -- , itrs around the $1300 mark has been up-and-down for gold mines. we had to the denver gold for him --