tv Bloomberg Markets European Close Bloomberg March 16, 2018 12:00pm-1:00pm EDT
mark: here are the top stories on the bloomberg. stocks higher in europe and the u.s. traders looking to rate decisions from the fed. better-than-expected factory outlook in the u.s. pushing up 10-year treasury yields. rising tensions with russia. boris johnson says it's likely vladimir putin personally ordered the nerve attack on a former spy on british soil. jpmorgan'sokout decision to buy bear stearns in a fire sale during the financial crisis has paid off big time. ♪ mark: have a look that was happening.
we are up for the day for the second consecutive day. analysts feel fairly optimistic about the prospects for the european benchmark for the end of 2018. they are guessing an estimated stoxx 600 will end around 410, and implied move of 9.4% from yesterday's close. other markets are higher. the currency columns, sovereign bond yields falling. about the mattel. trading debut in frankfurt. the health equipping company's german parent raising 4.2 billion. the biggest ipo in germany and almost two decades. each.each for 100 -- 28 the price was in the bottom half 20 80ange market hit by to 30 60 each -- 28-year-old
each -- euro to 36 euor each. the divergence in the outlook for central bank currency and policy and scandinavian currency just got bigger. good news for the norwegian krone at the expense of sweden's korne. the central bank says it sees an interest rate increase after the summit this year, bringing it forward from the end of 2018. sweden's consumer price data has raised the odds of the delayed rate hike for the reichsbank that helped drive the krone two a1-year high against the swedish krone. this is the norwegian krone -swedish krone differential. the swap spread is the blue line. spatfinishing off with the
we are witnessing between the u.k. and russia. the biggest etf that tracks that investment in russian equities suffering its worst day of redemption since june. that rift between the kremlin and westminster is deepening. theresa may expelled russian diplomat in response to the poisoning of the former spy on british soil. the u.s. announced fresh sanctions over the meddling in the election in 2016. russia has denied involvement in both charges and vowed to retaliate. keep an eye on the etf that tracks russian equities. let's turn to the trading day in the u.s.. abigail: if you look at this board, it looks bullish. lots of green. but there is a familiar story. stocks are off their highs. the tech heavy nasdaq has been flipping between small gains and losses. the major averages have started higher and finished mixed or lower.
more uncertainty on the part of investors. oil spiking about half an hour ago. up 1.5%. we are looking into what is behind that spike. right now not having too much evidence of its in terms of the overall market direction. sector composition wise, the oil spike is certainly influencing. if we look at the s&p 500, we will see most of the sectors are higher. 10 of 11 are higher. energy helped by oil. on the bottom we have technology down .1%. helping to explain why that has been slipping between gains and losses. as for the big movers on the upside and downside of the s&p 500, we are looking at all to beauty -- ulta beauty. guidance better than feared according to rbc. western digital up 3.5%. an upgrade at bear. the analyst sees a 30% upside.
broadcom down 4%. they beat first-quarter announced estimates. in mind guidance not enough. that is one of the big drags on the tech sector. avery dennison down 2.6%. jpmorgan has cut their shares from underperform. the only sell out there citing some devaluation. mark: investors are eying ireland. is border remains the biggest roadblock to a brexit transition. the gap on the irish equation remains wide. that's according to diplomats who asked not to get in a fight. joining us now is savvas savouri , toscafund asset management chief economist. it is see you. you say the most amicable brexit deal is the creation of a customs union, which is a mere
facsimile of what already exists. how can a man who was pre-brexit want a replication of a customs union? savvas: is between nations trading goods and services. specific in my narrative. not to mention the free movement of labor. mind the customs unions exist between turkey, ukraine, and the eu involved near tariff-free trade that does not include a free movement of labor. mark: and the allowance of the u.k. to go out and forged trade deals with other parties. is that part of the equation? savvas: there is no strength if you have different participants on one side of the negotiation. if you negotiate with people who want -- it's a transfer of power.
in case of the u.k. negotiating with australia or china alongside croatia or bulgaria, what do they bring to that bargaining strength? we simply give them some of our negotiating power. i'm not being selfish. i think we are also fish. --t selfish vonnie: if you're part of the union, have been also go your own way? is that having your cake and eating it? savvas: that is a good cliche, somehow we want something and giving nothing back. with a pay a fairly sized divorce bill. vonnie: that's not exactly what i mean. you are part of a customs union and going your own way, how would that work? is that taking the best bits from both a union and not being in a union? why should a customs union allow you to do whatever else you want? savvas: it's probably the
biggest rebuke you hear. this is unprecedented. the referendum was called by david cameron. we voted to leave. now we are effectively trying to make the best outcome good for all parties. a trade-free flow. the u.k. has a sizable trade deficit with the rest of europe. any recitation of the u.k. would be more harmful to the countries that rely on the u.k. for the exports. no country is more vitally linked to the u.k. than ireland. union: the european is not happy with what is going on in the u.k. what does it do for you investment-wise? untilu navigate markets
you know what the outcome is going to be? savvas: there is no certainty. game theory says we get solutions at the 11th hour. a solution which is best for all parties. latticework of links between the u.k. and the union means a bad brexit for the has feedback loops and ireland, spain, portugal, greece. across all of europe, including germany and france. any country that has a interest in the u.k. neeley country that once about brexit is luxembourg. -- the only country that wants a luxembourg.s mark: is that the best is going to look incoming years post-brexit? savvas: i suspect if you bring me back in a year, it's a rather
conservative forecast. much higher in the bank of england was suggesting pre-referendum. mark: it's a long-term trend. savvas: in many ways. i don't think gdp for the u.k. is a current measure. metric that is good for countries that make one screen wipers and widgets. we are a service economy. what is your gdp contribution? what is mine? it is immeasurable. rate in may? hike will it? savvas: it shouldn't and it won't. the cpi is barely 3% which is top of the range. we have not broken up above it in a period of time. in my perspective we have already peaked in cpi terms.
raising rates when cpi is not beyond the bounds you are obliged to manage it by. can it raise, yes. will it, unlikely. mark: savvas savouri, toscafund asset management chief economist. vonnie: let's check in on the first word news in that means mark crumpton. mark: in miami rescue crews searched through the night helping to find more survivors of a partially built pedestrian bridge that collapsed yesterday. at least six people are confirmed dead. officials say the mission has shifted from rescues to the recovery phase. that bridge was being built with an accelerated construction method that was supposed to reduce risk. the u.s. treasury secretary says he is not supportive of the proposals by the organization for economical operation and development to single out big tech companies for higher taxes. secretary mnuchin says some tech
companies are among the greatest conservators to job creation and economic growth, and imposing new taxes on the sector will harm workers and consumers. 's remarks come as governments look to modernize tax laws to adapt to have digital companies make profits three users based in their jurisdiction. russian president vladimir putin has barely campaigned in the run up to sunday's election. a victory in his class for a fourth term is all but assured, but critics believe the election could actually hurt putin. bridgeswas russia's manitoba kremlin stripped him of of oil company. >> a significant part of russian society and its people abroad politics wantsian except these as reelections. his legitimacy will be w eakened. mark: politics want except these as tens of thousanf people continue to fully the
biggest exodus from the opposition health region in syria. the president has redeployed elite forces to the eastern suburbs of damascus where they hope to eliminate the last rebel strongholds on the edge of the capital, with the aid of russian airpower. airstrikes in 1200 people in recently despite a cease-fire adopted by the un security council. the pentagon has confirmed there were no survivors from the helicopter crashed in western iraq. seven service members were on board the chopper, which is used by the air force for search and rescue missions. the pentagon also said the crash did not appear to be the result of any activity. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. back to you in london. mark: coming up on the close,
♪ london, by mark barton. vonnie: in new york, i'm vonnie quinn. western governments are taking a harder line on russia. a chemical attack on an ex-spy in the u.k., meddling in the us election, in support of the assad regime in syria. does russia care? let's bring in bloomberg's national security team leader in washington. there is an element to the russian leadership's mischiefmaking. -- what does come
under the category of misses mischief making or foreign policy? bill: it is more than mischiefmaking if you're deploying weapons of mass destruction in other nation's cities. if you look at the scale of the hacking that took place in 2015 against u.s. power companies, including a nuclear plant. i think it is part of russia's foreign policy. they have always relished having more behind-the-scenes, cloak and dagger policies. frankly technology these days makes it a lot easier for them to engage in a behavior. vonnie: when our sanctions enough of a deterrent? would it need to be a bigger deterrent for russia to care? bill: i think so. the response we have seen so far has not been overly impressive. there is the expulsion of diplomats. the u.k.'s expulsion of 23
russian diplomat's. the u.s. adding some individuals and companies involved in the 2016 hacking on their sanctions list. these are all things you expect to happen under almost any condition. first of all what we don't know is what may be happening on a covert basis. fromd i think countries, the statement we saw yesterday, there may be more of an effort to try to coordinate a response. that means the response isn't immediate. it might be something we see unfolding over the coming weeks and months after president putin probably secures his election victory. putin seems to be relishing opportunities for provocation. why is this? why is he taking such a hard turn towards confrontation on so many fronts? bill: for putin, we know he has
seen the way the fall of the soviet union took place and the aftermath of that is a humiliation for russia. on a traditional battlefield type format, russia has not been able to stack up against western powers in quite a while. when you use cyber technology, more of this cloak and dagger approach to foreign policy, it is something he can keep aegon fair -- he can compete on very well. you can always say it wasn't me. it was somewhat masking themselves to look like me. those are not our chemical weapons used in the u.k. it was something someone else created in a lab elsewhere. if you can't easily direct it back to them, the way you can a mig fighter or a tank, he gives you enough tonight ability to perhaps invade the worst response. -- evade the worst response. mark: bill, things a lot.
♪ vonnie: live from new york city, i am vonnie quinn. mark: and i'm mark barton with the european close. german chancellor angela merkel is heading to france to me with emmanuel macron. is her first trip abroad since the new government was sworn in. high on the agenda will be the month all proposals for forms of the eu and european currency union. we are joined by alan crawford, european government team leader. he is live in berlin. is co-author of " angela merkel: a chancellorship forged in
crisis." what is the most we can hope for at of this meeting in paris? alan: this is definitely a significant moment. it has been almost six months to the day since the german election which led to this endless coalition forming and domestic bickering. it is a significant moment when these leaders meet. what we can specifically expect? i think they will discuss, obviously as you mentioned, proposals for a reform of the eurozone. there is a window of opportunity before the european parliament elections next year. perhaps the most pressing issue will be the threat of u.s. tariffs. that could hit france, and in particular germany hard. own party has an
aversion to risk sharing. the coalition partners, the social democrats are pressing for an embracing the proposals put forward by mccrone in bringing the eurozone and eu together. how do you mesh those two sites? alan: the chancellor is playing her card survey close to her chest as she is want to do. we heard from the german and french finance ministers earlier today in paris. put said they are going to their heads together and come up with common proposals in june at the june eu summit meeting of leaders. we previously heard merkel and mccrone want to come up with some joint idea for the way forward in europe in march. thenen those two deadlines we will get some kind of resolution. i don't think you are about to see germany dig into their
basically backup the entire europe area. vonnie: it is the staff that works all this out. the actual leaders meeting. what will they be saying to each other? surely it will be hard to get past exit talk. -- brexit talk. alan: i don't think brexit will be a huge priority for them. they are leaving that to the eu's brexit negotiator and his counterpart in his team. but it is a serious issue there is an eu summit next week. it will be addressed then. it is not quite at the critical stage. i think u.s. tariffs are more important, more pressing. and of course we have the situation between the u.k. and russia, and how does the eu respond. i doubt it will be eu sanctions
but they will at least discuss this. mark: alan, thanks a lot. let's take a look at where the european markets are trading as we head to the close. up for a second day. of for the week as well. for the second consecutive week. the big monetary policy event next week. we have the fed. we have the currency board as we mull the central bank meetings next week. three minutes to the close. this is bloomberg. ♪
rising for a second day for a second week. beating analyst estimates for the european benchmark. and for the end of the year 410 and implied move of yesterday's close amounts to a year on year gain of 5.3%. the big game today was next group, the biggest gain with a potential takeover from cme. as i cap, and other assets compliments cme which offers derivatives on all sorts of analysts. and a substantial premium to thursday's close -- because earnings growth is forecast to be strong and nex is a valuable asset and ventricle to global financial infrastructure. about berkeley group,
shares falling as much as 6.6%, and declines after the brexit vote of june 2016. of itst boost production current business plan due to constraints of the housing market and will reach production previously set out in its business plan and will be able to increase the number of homes it builds beyond its existing goals as buyers continue to be constrained by affordability issues and high transaction costs. shares down by 5%, and let's finish with sterling against the dollar heading for a second weekly gain versus the u.s. currency since january 26. make optimism that the u.k. will be able to hash out the brexit transition by next week's take
summit -- next week's big summit. andave the boe next week the eu summit thursday and friday. a bigock this betting on pound move to straddle on profits on swings either way and the pound dollar. a big week next week. vonnie: we are going to start with crude oil in the u.s. handle. to a 62 there's also the possibility that stuff might have been triggered the idea in the oil that thereicipants will be an interesting interview il pricesutes and o can be pushed higher.
was below 90 for most of the session and the 10 year yield at 2.85%, and i want to show the spread under 43 basis points are not continuing to fight in and we'll see what happens next week. yet the first conference from jerome powell so we'll see what happens to that spread. 1% asnt down 7/10 of jacob zuma gets charged and things like shaky over there in terms of stability. and seemed more outflows. and a look at some of the rest of the commodity basket as well including iron. analysts.t time for mark: what a day, vonnie. let's look at our team leader of
markets, should we start with kudlow and the changes in the white house? his comments were colorful and interesting about licking dollar dollar. the king is that the biggest when it comes to the dollar going forward? >> the political instability in the white house -- talking about the potential weight on the dollar and how much investment trust is there for u.s. assets and the turmoil going on. the dollar has come down in long way already and the euro has its own dynamics going on with the ecb mentioning a knot over worried about appreciation of the currency so far. the yen looking particularly strong and that is making the dollar look weaker than otherwise it might be. mark: with the chief economist
of the ecb speak today and he is more dovish and opposes the shifting of language on the stimulus plan. it has been an interesting week since the ecb met last thursday and a lot of commentary talking about the euros volatility. what is the big takeaway? phase from gradual the ecb? it certainly feels that way and if you look at rate markets this week, it is ever so slowly going lower. so the excitement that the ecb might raise rates coming out of the market. i think the central bank -- the less we talk about changing our interest rates now, the longer the markets can get on with the process of normalization. earlier this year
talking about the market is going to believe the hike in interest rates is a long way away. the we stop doing that market is going to question how quickly we are going to move. mark: what about european stocks which are up for a second week? european stock bears there may be something that give you confidence. the sterling is showing gains. what is the general feeling around european stocks right now? paul: we got pretty high at the end of january and came off quite hard. stocks should be doing well if you look at the economy. alongonomy is going nicely and running strong and's export driven. coming couldiffs
be a wobble and the exchange rate does it necessarily help. european stocks are a bit boring. a lot of companies are so old and established a not doing anything interesting or exciting. and you look at the u.s. where they have the tech, tesla, and you technology. is more uninteresting companies and more of the same. there was different metrics that take our attention every week, what are you looking at these days? paul: in terms of equities? vonnie: across all sectors. paul: one thing the market is up sussing over edges interesting is the possibility of a red herring. an interesting thing going on in the us markets -- the cost of
borrowing on a short-term basis has been rising a lot. when that spread is widening it is a sign that there is some sort of stress and civic going on under the service of the markets and an indication of a risk being put them. but we don't think that is the issue here. do with the way to supply is coming to the market and the u.s. is sending more government bills. there has been an uptick in the commercial pace by european banks based in the u.s. should be something the market should worry about but natural effects -- something you can skip and ignore. andie: and on brexit reform, you factor that into trading be we haven't gotten there yet? paul: it is going to be interesting over the next week because we have to bank of england meeting coming.
people are starting to say the way to look at the brexit is by looking at the short rate. that may be confusing, i would you look at it that way? get aea is if we can transition deal that is robust and stable for the u.k., and that will give the bank of england confidence to raise rates twice in quick succession. whereas we already have some bank of england moves priced into the market. if theother hand, transition blows up and the brexit risk increases, that should take the rates off the table. mark: paul, thanks a lot. wonderful function on the bloomberg. vonnie: let's check in on first world news with mark crumpton. mark: authorities in florida said the cables suspended a pedestrian rich were being tightened after a stress test when the 950 ton concrete span
collapsed over traffic yesterday, leaving at least six people dead. the collapse came after the installation was celebrated at a technological innovation and officials are expected to fight more bodies in the rubble and the mission has shifted from rescues to the recovery phase. michelle security advisor h.r. mcmaster not be the next house official to leave the white house a misprision according to press secretary sarah huckabee sanders. people from other of the situation said the president's displeasure with mcmaster has reached a critical level and there are reports that the president has informed white house chief of staff john kelly of his desire to have mcmaster pushed out. russia's top agency for major said he opened an investigation into the poisoning in britain of the daughter of a former russian double agent and the death of a russian businessman whose body was found in london this week.
the committee said today they are ready to work with british authorities and the cases of both men. u.k. police said he died of compression to the neck area. the investigative committee said they will probably case as a murder. lithuania's foreign minister says the nerve agent attack on a former spy in the u.k. is a direct challenge of the eu and will be a topic of discussion when officials meet monday at brussels. also tells the associated press that the recent provocation needs a tough response, including action against oligarchs use london as a safe haven and noted moscow is becoming emboldened by week reactions including the british response to the fatal poisoning of former spy in 2006. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark them.
mark: live from london, i am mark barton. vonnie: and i am vonnie quinn and this is the european close. hard to believe but it is actually the tenure and diversity of jpmorgan's acquisition in a fire sale of taking on the failing banks business and has been a boon for jpmorgan as a strong fixed income trading unit. a senior writer from work joins us now. i am tepid to say that this
worked out for jpmorgan. when you think about it, the crisis work for all banks and everybody we shouldn't have benefited from the crisis. was everybody else who got a little done over. >> there was a lot of emergence -- and even some parts was bought i barclays, and initially it looked like it was a great for barclays but when you look barclays islater, not doing great in trading despite what it got from lehman. bank of america bought merrill lynch harbaugh that required a bailout afterwards in the u.s. government had to give bank of america to bailouts in a few months. is in good shape. they had more capital than other ne intond had not go
the risky stuff, even with rockets trailing and it was under pressure it was not playing along with everyone else. and that helped. it was stronger and could weather the crisis and could incorporate them into its network and had a great yield with bearish stearns. vonnie: that was a hard-fought deal was a bit? n't it? --man: during the crisis they were getting together and sunday evening before asian markets open they had done everything. vonnie: we had the reaction before market movement. mark: and coming back to what worked and what didn't, the bank of america and merrill lynch deal didn't work out so well bid
did it? a lot ofhere were losses and bank of america paid billions of dollars to buy merrill lynch. it was an industrywide problem at the time -- and that is why bank of america needed a bailout. bank of0 years later, america's trading has improved and it clearly has gotten some benefits from having merrill lynch in their. -- thatloss management merrill brought with it is helping bank of america. problems ititial helped. that initial problem, you look at the stock price 10 years later, bank of america is still below what it was 10 years ago in march 2008 and jpmorgan is twice as expensive.
mark: there have been other cuts haven't there? jpmorganrelated costs, in the wake of the crisis. jpmorgan at the time calculated about $6 billion for litigation of other problems. but itt know exactly, was clearly more than that and paid about $31 billion to settle mortgage related stuff. even one third of that from bearish stern is about $10 billion. it was more than expected but they got it so cheap because it was two dollars per share and then it went up to $10. later ine now 10 years their fixed income and equities trading. theie: you have to read story this weekend and it is really phenomenal and interesting. it reminds you of all sorts of things.
andk you for that story bloomberg businessweek which is a newsstands right now. time for the stock of our shares of qualcomm rising with more talks of a buyout. their board is meeting today to discuss former chairman paul jacobs was reportedly seeking investors buyouts of qualcomm. joining us is taylor riggs. said, qualcomm shares are higher and there is a holding pattern as they discuss paul jacobs was talking about a management buyout which would be interesting if that did go through. analysts are not quite sure if that has any thing to run. stake.a less than 1% it would have to be $120 billion at least. terminal, we are
looking at shares in the pre-takeover price and analysts have dismissed the proposed takeover of jacobs. what is interesting is shares haven't gone anywhere for either of these companies. it mean for does qualcomm's takeover? taylor: analysts are saying talk on needs and xp for growth and they should be trying to get this done. thatd news this evening they had moved the review down to the south level and we hear that means it is a lower priority and could take longer. nxpihares reacting and scherzehares are lower. vonnie: that is not great news for qualcomm. i am try to figure out what it
kaylee. >> i am looking at the coin and is ann see my chart -- it exciting start watch in as we saw it skyrocket, and the story is looking rougher now and we look from a technical perspective and see the spread between the 50 day moving average has been lower this year and has not been posted 2015, way before the raleigh we saw last year. rally we sawthe last year. we are trading at less than half and we are seeing a lot of regulatory scrutiny coming into the picture and some exchanges are having issues that are bearish for bitcoin. . investors care about the technicals, and institutional investors are looking into the spaces -- it is looking like a bearish market. #btv 615.
mark: i know market securities says based on bitcoins prices three it could tumble as low as $2800. that will be a tough one to beat. vonnie: i am doing a chart on foreign treasuries, for a moment we are not seeing a huge decline. the white line is the china holdings. they have only gone down by $100 million, which sounds like a lot but it is not much when you 21.1der china holds 1.17 $6 trillion of treasuries. it is a tiny drop in the ocean. it is a total of all foreign holders and this is japan, rising in little bit. you can see the chart at the 4.oomberg on g #btv 444
of the hour. watching the white house, national security adviser h.r. mcmaster be next? we have latest on staff turmoil and the mueller probe. and a permanent extension of the tax cuts, we ask whether democrats in congress will get on board. and the continuing isolation of russia, the country facing international pressure over the poisoning of a former spy as president putin comes to a new term in this week's election. ♪ david: news continues to pour out of the trump white house with reports that national security adviser h.r. mcmaster will be the next to go, perhaps as soon as today.