Skip to main content

tv   Bloomberg Markets European Open  Bloomberg  March 29, 2018 2:30am-4:00am EDT

2:30 am
matt: welcome to bloomberg markets, the european open. guy johnson is off this week. the cash trade is less than 30 minutes away. ♪ matt: nervous being tested. asian trading mixed, investors sell some of the biggest winners the third --et as first quarter draws to a close. -- cme giant jimmy to is eyeing a stake in
2:31 am
swiss way. shareholders have until 1:00 p.m. london time today to decide if they will accept a hostile breaker bid by melrose or up the company. let's take a look at some of the assets moving in today's trade and last night in the markets that are closed. the marketing -- market index, the big movers were to the downside and the tech stock continue to drag. if you look at the nasdaq 100 or the same plus index, you see continued drops, there were a few gains in asia, it was more mixed and we saw u.s. -- then we saw u.s. markets. the drops were not bad on the u.s. markets. as far as forex is concerned, we see a little strength, investors going for other safe haven plays and that was one of them as well. take a look at the commodities
2:32 am
trade, take a look at what we saw in bonds and all of those charts here. for copper,gains that is a sign of optimism and asian investment and as far as sovereign bonds go, we saw investors selling the short end of the japanese curve pushing the two year yield up to 1.5%. is a longer -- we did see investors buying for the perceived safety of government. we do have positive errors across the board. investors are going to shore up their portfolios into the long easter weekend. there is no trading tomorrow and monday. you see eurostoxx futures up. are up .25 ofes
2:33 am
1%. this is a three-day chart of u.s. treasuries. we saw the yield come down below 2.8% yesterday in the u.s., that wethe first time since 2017 have seen at that low. we are holding at that level. the question now is we have had a number of guests who are short u.s. treasury, will the yield stay there or bounceback up as investors want to buy the shorter end of the are and selloff the 10 year yield. let's get the bloomberg first word news with debra mao. debra: the leaders of north and south three a have agreed to meet face to face on april 27. the announcement comes after officials held talks on their heavily militarized border. a summit between kim jong-un and president moon jae-in could set the stage for similar meeting between kim and u.s. president
2:34 am
donald trump. a summit between kim and shinzo abe may take place as soon as early june. detectives investigating the poisoning of a former russian spy and his daughter. believe they first came in contact with the nerve agent at their home. the metropolitan police said specialists have identified the highest concentration of that highly toxic substance on their front door. that comes as friends of the pair who are in, as in the hospital said they should be allowed to die. u.s. president donald trump has said he will replace veterans affairs secretary david shulkin with the rear admiral ronnie jackson. the ousting comes amid a wave of resignations and dismissals and the trump team's senior ranks. following the departures of economic advisor gary cohn, h.r. mcmaster, and secretary of state
2:35 am
rex tillerson. year marks exactly one until britain is scheduled to leave the european union. prime minister theresa may will spend the day touring the country to gauge the mood of the nation. .he may not like what she hears a bloomberg investigation that included 133 interviews found divisions have hardened since the 2016 referendum. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. matt: thank you for that. stocks in asia were mixed today, .quity volatility and a slide joining us now from singapore is mark cudmore, bloomberg mliv strategist. i wonder what you think about the continued slide in the fang stocks. does this concern, should this
2:36 am
concern investors? it is clear that everything cannot continue going up and these were the big winners from last year. yeah and it is not just the fang stocks. isthis video -- whether it i.t. or cryptocurrency exchanges, the video is behind them all. broke its one year trend line. the fact it is the single main stock and the purest presents the broad macro tech sector. the fact that it is reversing is a negative sign for macro top-down investors who do not look at the bottom up but go there is a major shift in the outlook and it is starting his with the video is saying. matt: is the concern about the trade war, is that behind us? it does not seem like anyone
2:37 am
remembers what happened last week. it does not seem to be on top of mind right now. easter is on top of investors' minds. we have a couple more weeks or even months. even the stage of trade wars until we get the clarification of which countries will get exemptions and which tariffs will be implemented will carry on for the next few weeks and you have the [indiscernible] it might come back as soon as tonight. there is a chance that trump announces the tariffs. the list might come out soon. there is a chance it will come back on the radar. this is a story that will stay with us for another few weeks. it is not a story that will go one way. it will create ongoing volatility. that it is something
2:38 am
investors look for refuge. do you expect the seafaring trades to keep performing? treasuries can rally a lot farther in the next few weeks. you talked about investors coming on and seeing whether the yield will stay or go higher. there is a third option, they go lower. theamentals are that outlook for growth is deteriorating, financial conditions have tightened. to tighten policy. there is a haven demand. we have this technical break and we know that positions are off side means people need to start cutting positions. they will be to the downside in the weeks ahead. matt: we see oil continue to --p up what looks like against what looks like resistance. is that a concern? like technically it looks
2:39 am
it is the double top and i am someone who has got the oil market wrong because i did not think the oil rise was sustainable. it is hard to comment. it looks bearish at the moment and the news we are getting about u.s. supply is slightly negative for crude. it seems to have been resilient when you have these dips. much, marks her cudmore, bloomberg mliv strategist. he does have strong views and you will enjoy reading them. go ahead to the mliv blog. there are a number of other strategists, economists, former traders on there. cme group confirms it will buy next. is a key market for trading u.s. treasuries. the shares jumped 11% when bloomberg reported the deal on the -- reported on the deal talks. this is bloomberg.
2:40 am
2:41 am
2:42 am
matt: check out those shots of our still relatively new european headquarters in the city of london. it is suing to be in here. 17 minutes until the open of european stocks. acquired thech
2:43 am
irish stock exchange said it will seek more deals but targets must be willing and eager to be bought. in an exclusive interview the ceo spoke to bloomberg about the future of the ifc and why it is a good investment. acquisition of the stock exchange is a fundamental decision about the quality of the irish business because of the great quality of the company, because of the great position with more than 30,000 listed here, and more than 1008 -- etf's. it is a great business. the irish exchange is located in ireland which is a great time -- country with the great growth prospect. it is a bit on ireland and
2:44 am
quality and to a certain extent it is a bet on the potential work to come from the consequences of brexit. there is more unknown uncertainty in the current brexit prospect. great -- this is a addition to the euro next model. >> will you be living stocks movingndon to dublin -- staff from london to dublin? >> we have a significant operation in london, a large we aref centers and staying close to our clients and oflong as a large group clients are in london we will have large operations in london. that was the euro next ceo speaking to bloomberg. it can cap -- you can catch that interview on rules and returns
2:45 am
at 8:00 p.m. london tomorrow night. let's get a bloomberg business flash. we go to hong kong and debra mao. : softbank is edging closer to a deal to buy a stake in swiss three, value the reinsurer at as much as 39 billion dollars. according to people with knowledge, the company is holding talks to buy a 25% stake. the acquisition would [indiscernible] with healthy cash flow. --wiss rate representative swiss re-representative was not available to comment. it is considering a bid for shire. if the offer goes a headache could approach $50 billion which would make it the japanese company -- make the japanese company's biggest takeover.
2:46 am
the ceo is seeking growth overseas. with a shrinking domestic population limiting opportunities. cme group has reached an agreement to buy next group. the value is at 3.9 billion pounds. acquiring next which runs markets for trading currencies complements of their operations. cme offers derivatives on many of the same things. and that is your bloomberg business flash. back to you. matt: for more on the cme and next deal, m&a going on this week, we've -- will hatfield covers market structure and joins us on set. let's talk about what this deal does for cme. what does it give them access to, is it mostly treasuries trading? >> the treasuries trading market is the dominant market. it is a fantastic asset which
2:47 am
will be available for them. also the currencies business is marketshe largest cash globally. they get a post trade business which has generous profit margins. matt: how does the price look for cme, how does a look for next investors? >> for cme it looks pretty high. next investors they will be pretty happy. michael spencer yesterday made 55 million pounds just from yesterday's share price move alone. cross-border aspect, does that make it more difficult? >> probably not. although it is dominant in these couple of areas, cash trading and treasuries trading, it is londone the scale of a stock exchange. it is unlikely to get very
2:48 am
excited about the deal. matt: you do not expect any action from regulators, does this help them create a platform through which they can make more purchases? ceoust heard euronext's saying he wants to make more m&a activity for his company if it is good for the target. >> he has much smaller pockets than the seam -- cme ceo. is terry duffy interested in doing more deals? >> he probably is. this is a big win to get done. he will face some competition. matt: we always look -- like to talk about the next deal. is that a challenge, is that going to take time? >> it will take time but they could now face a competing bid from another business, maybe
2:49 am
lsc, maybe ihs market, someone like that. these assets do not, very often. someone else will be interested. be in play.d still it is a 10 pound deal per share, 3.1 billion pounds in total. you think someone could come in eclipse that? >> with -- we will see what shares do when the market opens. that will tell us a lot. matt: thank you. we are minutes away from the open of cash trading in europe. we will take a look at some of the stocks to watch. obviously next is going to be a is one after that -- nex going to be a big one after that deal. the open is 10 minutes away.
2:50 am
2:51 am
2:52 am
matt: we are minutes away from the open of stock trading. joining us from the equity team is paul jarvis. let's talk about g km, we have been waiting for more details on the deal. paul: potential deal. we have a big fight coming up in cardiff tomorrow night, unification on the heavyweight division. here's the corporate version. here in the corner, gkn. they have been on the ropes but they have been throwing back punches of their own. they are in a pretty strong
2:53 am
position but in the red corner we have melrose, the young contender coming in. they will find out today whether the punches they have been landing have had an effect. 1:00 p.m. in london, when shareholders have got to decide n to continue or if they want melrose to take over. matt: it will be interesting. we have been following this for a long time. i want to talk about swiss ri. softbank is reporting that they are getting closer to the 25% stake. the reports we're seeing are between 100 and 125 swiss francs, valuing the company at 37 billion swiss francs. you compare that with a closing price of 9516, there is likely to be up swing.
2:54 am
matt: i broke the headlines with a profit warning. going to see a stock that is death only going down. a big warning this morning, revising their full-year guidance in terms of organic growth and profitability. analysts are saying a 10% downgrade. reflect that in the share price and it is going one way. matt: let's go back to the stock that may be going up and that is next group. with one of our market structure reporters to see what the market makes of this. the cme bid is for 10 pounds so if it goes above that it means the market thinks -- paul: it is a cash and share order. someone elseinks
2:55 am
may be coming in here. let's take a look at that. matt: there will be one of the most interesting things that we see this morning because if there is another bitter out there that could mean a bidding x, great for sir michael spence and shareholders who are already getting paid a pretty penny. paul: this creates a transatlantic joint. let's see where the shares were. shares were trading at six pound 70. you could say the bird has already flown. much.thank you very paul jarvis is on our stocks team and you can get the stories he is talking about. just type first go on your bloomberg and get all the rocket moving news that you need. news you moving need. coming up, it is the market open.
2:56 am
futures are pointing up here in europe, we see green across the screen after light red in the u.s. yesterday and a mix to trade in asia. the open is next. this is bloomberg. ♪
2:57 am
2:58 am
2:59 am
♪ matt: we are less than a minute away from the open of european stock trading. let's look at the factors that could influence today's trade. starting with the euro-dollar, coming down. it had ramped up to early morning trade, it is now coming back down. loyal has been all over the place. we were talking about this earlier. analysts believe oil will come back down. that is bad for the price. brent crude was above 70. it is below 65. oil, no matter which contract
3:00 am
you look at, coming down. the nikkei did well overnight. even with tech stocks doing poorly in the u.s. u.s. indexes doing ok overnight as well. 0.3%, not badwn considering the big ones, amazon and facebook getting hit hard again. let's look at the ftse coming out of the gate. see a slight positive on the ftse. we see ftse futures as well positive. we see positive futures across the continent. we should see slight positives with the dax opening stronger than the other indexes. the ibex open now as well in spain, 0.4%. , 0.1% onpen now early
3:01 am
the dax. we are waiting for the cac and smi. we are seeing decent gains across the european markets this morning. let's look at how the industry breakdown looks, and use the imap function on the terminal. the europe 500 index, we break it down by industry groups and see who the winners and losers are. financials are doing well with one red pocket. we see consumer staples and health care doing very well. the brighter green pieces of this pie means they are up more than the rest are. down, as sectors that are i.t. is more red than green. a bright red slice like it has been the last couple days. we see a little recovery in tech alsos with industrials doing well, as well as energy
3:02 am
and consumer discretionary. everything doing ok today except for tech stocks, compared to what they have been doing the last couple days are kind of mixed. that see what the indexes are doing a few minutes into trading. a lot of opening trades take a while to settle. we see the ftse up 0.1%. the dax only up 0.1%. futures indicate they will be stronger than this. we see the ibex still up 0.4%. we are waiting for the cac to open. the smi coming out of the gate up 0.1%. across the board, european and london indexes are gaining this morning after a mixed trade overnight. let's look at the individual movers and see a across the continent which companies are doing well. as far as the laggards, we see a
3:03 am
for fortum. compass group is down almost 3%. erickson down 1.5% in sweden. stora down more than 1%. take a look at some of the winners. anheuser-busch is at the top. louis vuitton. swiss re is doing well. they are at more than 3%. there are more gainers of van losers of this morning, but you do not see a lot of size in the rightg stocks as far as now across europe. we do see a higher open across
3:04 am
the broader indexes. it was a mixed session in asia overnight. onh stocks continue to weigh the market. volatility is rising and deepening as the quarter draws to a close. joining me now is michael metcalf. thank you for joining us. let me ask what you make of this volatility. it has continued to increase. the momentum stocks were the big winners last year are the ones that continue to get her more and more. what does that say? michael: we have come from up -- a period where we were too low, and the process is correcting. that is sector specific, so it is interesting that the thing that has hurt european stocks is hting.tech waiting -- weig the key now is volatility going
3:05 am
to impact fundamentals. in general we are assuming the fundamental trends have driven decent market returns until this quarter remain in place. but will volatility shake some of it out. is volatility going to affect corporate earnings. that is what everyone is betting on. people are actually raising their corporate earnings. over the past few years, analysts start out with a high forecast. we have been in this nice virtuous circle work volatility had been low. as it flows were strong. asset managers are receiving a new cash to invest because the returns were so great. a have to invest. now volatility is shaking out some of the flows. fundamentals remain positive,
3:06 am
the question is will the money come back in? if fundamental remain strong and we get another earnings season, they should come back in. it is a question of shaking out optimistic positions in the market. you see as the fundamental story in tech. there have been earning issues. techel: the question about is how systemic is it. it is in part because of the gains in the bar -- in the broader market in tech, so if we get a fundamental reassessment we get a median term change that is a potential negative. that is something investors have rushed into so there is a threat. matt: we are seeing a breaking story i want to interrupt you for. are talkingenault
3:07 am
to merging create a new company. there is a strong alliance, and over the recent weeks or months, they want to make this alliance irreversible. you could have read into what he was saying. they are moving forward with it, and they are going to emerge -- they're going to merge. the current alliance between the companies, i would not say it is loose, but it is not as corporate as this will be. they will merge as one corporation. the japanese carmaker has a 50% stake in its french counterpart. both companies has been there forever, and he is a rockstar ceo in the auto industry. he is going to run the combined
3:08 am
entity as well. it is interesting because there have been questions about his succession at reynolds and nissan. -- his succession at reynolds -- renault and nissan. how are the companies responding? far, no response from the companies. no comments, as was to be expected. it is breaking as we speak. the french government plays a role in this. japanese government. how will the french government respond to this. will they relinquish that stake they hold in renault? the alliance has been lopsided and skewed. owns the biggest stake, but nissan has brought in more of the money. by merging together now, according to people familiar, the first step to creating a
3:09 am
counterweight. they wereave heard saying they want this alliance irreversible. this is what they were talking about. it cannot be a surprise they want to do this to investors. talk, howas always would they solidify this alliance. they said it was somewhat uneven in terms of distribution. the ceo has relinquished some authority over nissan to focus on the alliance. watch for the continued strong man in this. -nissan as a unified company will be a force. alliances are being formed. -- we have toyota.
3:10 am
this might be another attempt to create it strong counterweight in that industry that is increasingly starting to form around a couple major companies. here, ife got a chart bloomberg users want to check it out. the yellow line is renault's cap. the white line is nissan's market cap. 43 billion euros -- the chart is in dollars. this will be an $80 billion company. it is interesting because other fiat withare looking, its spinoff of ferrari has monetized pieces of the business. you have a couple of companies getting back together. what are investors going to do as far as the valuation of this.
3:11 am
that is a good question. the valuation has been a key question. renault are the junior partner in this. whether they will seek to monetize some assets, mitsubishi also plays a part in this alliance, who knows what will happen there. car companies are taking a hard look at that path and wondering are the some of the parts more valuable than the individual components. you mentioned fiat, ferrari. they have a lot of plates that they are spinning. nissan see if renault might look at the components in the alliance, whether they can bring in more elements, or the need to spin off some parts. that is the next step. will the french government play along with this?
3:12 am
it is difficult to say how they will respond, whether they will go along with it. question in this alliance. matt: i have a cool chart here that bloomberg users can connect to. this shows how investors are , nissanon up pe basis and renault right now. renault, 5.9. these are pretty low compared to fiat, chrysler at 6.30 price earnings. ferrari at 34 price earnings. you talk about volkswagen, how it investors value porsche or a lamborghini. you're not getting good value to two companies. i wonder what the average is across companies? nissan has some way
3:13 am
to go in the transformation, but they have made progress. ghosn has been at the forefront to push cars into the new frontier of electric vehicles and battery-powered vehicles. renault is a little bit behind like many european car companies. people are, what they are looking at, we saw some interesting product out of the geneva car show. it will be interesting to see how that might drive up the valuation of these car companies. probably people are thinking renault has some room to grow. they might not make it to ferrari level. matt: very interesting stuff. great scoop from bloomberg. looking at renault shares, they are trading up 6.3%. a big boost. trading on the cac at 99 euros.
3:14 am
was a front runner the one wessan, but saw at geneva, the redesigned very attractive electric cart, the nissan leaf. michael mech cap is still with us, global head of macro strategy, state street global markets. we have a lot more to talk about. fore is a lot going on thursday heading into easter. we will bring you the stocks on the move. deutsche bank is one of those after the japanese watchdog said it colluded over trading of a u.s. dollar denominated bond, bringing that regulator story swirling with rumors and news. details next. this is bloomberg. ♪
3:15 am
3:16 am
3:17 am
♪ welcome back to the european open. i am matt miller in london. guy johnson is off this week. stocks are solidly up. the indexes across european trading. let's look at the individual stocks stories. let's go to dani burger. deutsche bank is making cuts to its trading business, currently trading up 0.4%.
3:18 am
ceo john cryan is trying to make these changes and turn the company around, and be profitable, as rumors swirled the bank is trying to replace him. has just reported its year end estimates. it has cut those. its stock is down about 5.1%. it would be its worst day if it closes on this level since 2013. it is awaiting profitability in north america. a previous high estimate of 4%. has been downgraded from a neutral. llianz hasy says a upside but is not as attractive as its peers. it is trading down about 0.4%. estimates lower buybacks in cash payments. at one point this morning,
3:19 am
allianz is one of the worst-performing stocks. thank you for showing us those stocks. some of the events you will be watching today, gdp reading from the u.k. at 9:30 a.m. at 6:00 p.m. baker hughes rig countits latest data. there he interested to see how that pushes the oil price. it is below 65 on wti. there is a speech about the u.s. economic outlook. no doubt it will be positive because they normally don't talk down the u.s. economy. ,oining us is michael metcalfe global head of macro strategy, state street global markets. what is your outlook for the u.s. economy? those people think it looks good right now. what is your expectation for the
3:20 am
fed's rate hike? michael: as you say and the fed is saying, it is pretty good because it is pretty good. we have an economy which is low unemployment. and inflation, which had been a concern for much of the middle of last year now is no longer. data out today that will edge up a little bit. the fed is on a quarterly tightening cycle. i've got the dots up now. i think it is it great function and you can follow along. the dot plot here in green is ahead of what the market expects. there is a lot of talk that there could be four rate hikes. reaction, think the
3:21 am
the fed was read devilishly. it was about getting that fourth hike in. they did not quite get there. they are waiting to see how strong the fiscal stimulus comes through. because theyas moved to the dots up in 2019 and 2020, the direction of travel is clear. the u.s. rates are not just going to be neutral. unless something changes. there might be debate about whether there are three this year and three next year. the direction of travel is clear. matt: we will take a quick break, but there is a lot to talk about. michael metcalfe, global head of macro strategy, state street global markets. i want to show you a picture of how the equity trader shaping up this morning. we are looking at general gains across europe. 0.25%. is up more thanlittle bit
3:22 am
that. this is bloomberg. ♪
3:23 am
3:24 am
♪ welcome back to the open. still with us is michael metcalfe, global head of macro strategy, state street global markets. we were talking about what investors should do with their money. when i see a big slump in equities, i think is this a
3:25 am
buying opportunity. they be that is my nature. don't you think since valuations have come down it could be time to put some of that cash to work? michael: yes. i think equities valued relative to bonds are great. that part has not changed. what the volatility and some of the market narrative about trade ,ar or tech, or various points we were concerned about ,nflation, i think the market we have seen some of the froth come out. heads -- it just a hedge.ly just ahead -- a currency like the yen -- talk about the yen for a second.
3:26 am
a lot of people have been asking as tech stocks slump and investors push into treasuries, why doesn't the yen gain more strength? it is up a little bit, but why not more? michael: i think one of the key features this year and the end of last year, currency has been decoupled from interest rates. there is a broader question why the dollar has not done better because it u.s. yields, that this connection is there. one thing i would say about the yen relative to other currencies, throughout the volatility we have had, the yen has performed better than the swiss franc or the dollar. in general -- well well already. i have a chart here where you can see that. it is bouncing off a weekly support level. i don't know how much faith you put in technicals. i am used to it 24 hour news
3:27 am
cycle. i do not see it in my bottom line. michael, thank you so much. ,ichael: --michael metcalfe global head of macro strategy, state street global markets. we're going to talk about tesla.
3:28 am
3:29 am
3:30 am
♪ the: 30 minutes into trading day. nerves are being tested. it markets open in the green. keep an eye on m&a action. are in talksnault to create a new automaker as a single stock. renault is trading up 4.5%. -- anries trading giant m&a action goes on and on. shareholders have until 1:00 p.m. london time to decide if they will accept a hostile
3:31 am
takeover bid by melrose. good morning, welcome to "bloomberg markets: european open." . am matt miller here in london guy johnson is off this week so i get to spend time here at the wonderful european headquarters. let's see how things are shaping up on the bloomberg europe 500 index. trading up 4.5%. big gains for the winners. sin a world is up. -- cineworld is up. let's take a look, you see ab.geot there and ss take a look at the worst performers. delivery hero down.
3:32 am
then they get bigger and bigger. sodexo came out with a profit warning, saying 2018 numbers will be down. let's get to bloomberg first word news. >> north and south korea have agreed to meet face-to-face. today's announcement comes after officials report the countries had talks on the militarized border. kim jong-un and president moon could set the stage for a meeting between kim jong-un and president trump. in the u k, investigations on the poisoning of a former russian spy and his daughter believe they came in contact at their home. police said specialists have identified the highest concentration on the front door.
3:33 am
donald trump has said he will quit -- replace david shulkin with ronny jackson. it follows the departures this month of economic advisor gary cohn, h.r. mcmaster, and secretary of state wrecks tillerson. -- rex tillerson. >> i think potentially the development in reducing the and making higher barriers to trade is something that should worry everybody. back from we go , it is bad news for
3:34 am
the global economy. venezuela, 68 people have died. , althoughs reported the reasons were unclear, and the fire erupted in the unrest. a police station had about 60 detainees. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. matt: sebastian, thank you. cobalt prices are set to rise. there has been something of an arms race along vehicle manufacturers looking to lock in supplies. that metal is a key component in the batteries of electric cars. still with us is michael metcalfe, global head of macro strategy, state street global markets.
3:35 am
we have seen these gains in cobalt. i have been asking ceos , howding matisse miller scarce is this resource? >> one of the interesting things about the cobalt market is there is a confusion in price and thectations exploding in electric vehicle market. i think the market is sufficiently well supplied to supply automakers. the concern is as the likes of vw, tesla start ramping up production of electric vehicles, increasingly there will not be enough cobalt around. that is what is driving prices. at massivee looking numbers. i was at bmw in munich last week. the ceo said they would spend a $.6 billion this year in
3:36 am
investing in building new cars, they mean electric. volkswagen cfo was here a couple days ago at our european headquarters, he said they would spend $34 billion between now ,nd 2020 to make new cars electric. with that kind of money flooding into the system, does the price look to keep going higher? likely think it is quite , and betting against cobalt prices is the wrong trade these days. matt: you do not want to short cobalt. >> exactly. given governmental will to push diesel cars off the road as well. there is a huge amount of to make this decision a reality. reducersously, cobalt
3:37 am
are doing all they can to boost supplies as well. caution andanalysts point out the shortage that people expect will not materialize until we approach the mid-2020. want to mess't with the supply and screw up the curve. glencore is boosting output. how important is cobalt to glencore? , but it is a byproduct is boosting its margins massively. i think it is planning to double output over the next two years. further consolidating its place as the leading cobalt producer. there are others as well.
3:38 am
erg is bringing a lot this year. news about plans to increase production. risk isr factor, supply in a higher price environment, the incentive for small-scale miners to go out and look for new deposits, to try to bring more cobalt. in israel that is happening today. matt: thank you very much, mark burton is covering the metals for us. autodo you make of the industry right now? it was hit hard at the beginning of the year. there are concerns about diesel, especially the german automakers. now we have worries about autonomous car crashes and a
3:39 am
liquidity issue with tesla. things do not look fantastic for the auto industry. michael: know, we talked about the m&a -- no. we talked about the m&a issue. valuations are quite low. halves beenif there a cyclical recovery, that is supported in the sector. i think it is going to the point of electric vehicles, the government regulation is going driftourage adrift -- a that way. the more dollars going to es style funds, the automakers are going down the path of electric vehicles, it could be attractive from that point of view. that will encourage the pushed electronic vehicles further. showing pictures of what everyone agrees are gorgeous products, but they
3:40 am
cannot get them out vast enough. the casper is insane. burn is insane. mostaluation for automakers is that five or six. for tesla, there is no pe because there is no e. of ruining at risk their front runner advantage. do you think the old school automakers can do a good enough job to get back, getting their production modernized to where the global consumer wants it? michael: yes. there is a question, is it good to be the first mover. that is an old economic adage. it is not always the case that the first mover wins. electric vehicles may be an example of that. matt: michael, thank you very much. michael metcalfe, global head of macro strategy, state street global markets.
3:41 am
he will be joining me on radio daybreak here in the london area. if you are in new york you can catch us on sirius xm. you can also type tv on your bloomberg to watch the program, and there you can follow radio as well as live events. up next week will bring you the stock movers, including cineworld, it has been upgraded to a buy, and the stock is at 4.5%. this is bloomberg. ♪
3:42 am
3:43 am
3:44 am
♪ matt: welcome back to "bloomberg markets: european open." client matt miller here in london. guy johnson is off this week. we are 34 minutes -- 44 minutes into the trading day. the navigation company says they are not engaged with an advisor to look for a potential buyer. that sent shares down about 6.9%. this would be the most and biggest losses since january. the move comes as deutsche bank looks to sell the whole company or parts of the company. cineworld has been upgraded to a buy. citigroup is reevaluating the company.
3:45 am
positive estimates over the next six months. they set its price about 90% of its closing number yesterday. is up about 4.7%. 23% afterto increase the stock has suffered massive losses last week, about 23%. seeing a bit back this morning. matt: thank you, dani burger with your look into a couple of the movers. i want to highlight one myself with our stock of the hour. it has to be renault after that news from bloomberg that they are going to merge essentially with nissan. stock is up strong in
3:46 am
france on the cac, 4.5%. this is a graphic dashboard, you can do this with any stock. i'm doing this for renault right now. one of the interesting squares is the 20 day average volume which i have highlighted here in blue. we are seeing a real jump in volume. you can click into this and see the actual chart. volume is theault blue line down here. we are seeing now bigger volume. forecast ipected bloomberg analytics to climb higher than what we typically see over the last 20 days. i want to show you a chart on tesla.
3:47 am
this is the story everybody is freaking out about with tesla. inis a bond they issued august. they wanted to raise $1.5 billion. the demand was so strong they got 1.8 billion out of the market. thee are down $.88 on dollar. i think they dropped as far as $.86 on the dollar. tesla has to roll over some debt in 2019 to continue to boost its production of the model three. as we go to break, i want to look at the markets, across europe we are looking at gains. the ftse is up. the dax, cac are gaining. the ftse gaining 0.1%. everybody across europe. we saw the smi down a bit, but everybody else's gaining after a mixed night in asia. this is bloomberg. ♪
3:48 am
3:49 am
3:50 am
♪ matt: welcome back to "bloomberg markets: european open." isexactly one year, the u.k. for tasked to leave the european union, or expected to enter a transition. who isalk to nejra cehic at westminster with a guest. baker i am joined by gary
3:51 am
from the cfa institute. they have done a survey of a thousand firms globally. gary, great to have you with us. done,ird survey you have has anything changed in this time in terms of how firms do brexit? >> it does depend on geography. it is one overall sense that sentiment has started to change. emotion is coming out of the equation of the debate. to the hard analytical facts. i think the further you are away from the u.k. and the media storm and debate, i would say the more sanguine they are about there is going to be a deal. if you are in the u k and europe you are concerned about the outcome. u.k. firms are concerned
3:52 am
aren't they? >> they are. whether that is scientific, or i do not know what it will happen, i think there is an element of that. there is confusion where we are heading. that cannot be good for investment. nejra: when it comes to the fund management industry, there could be restrictions on delegation concerned are firms about this? if they are concerned, what are they doing to prepare? >> it is a big issue. they are looking at options. we are about a year out, you have no choice. you have to look at what options are. you may be investigating where ore you might go, luxembourg holland. you cannot just stand still. you have to start making choices now, you are only a year away. nejra: you talk about moving to
3:53 am
other places. what did your survey tell us about this? >> that is one of the biggest concerns. if you are a u.k. firm, your ability to attract talent is the highest thing on your radar at the moment. what you have a view on stock the, can i office with the people i need, that restriction on the ability to track talent is one of the biggest issues out there. finally,ry briefly and one of the things that was interesting is where the u.k. was marginally more positive than the eu is on the regulatory alignment. u.k. firms seem more hopeful. it is a way to rationalize of things. this will be a difficult negotiation. at least let's make it easier by not threatening to deregulate everything. if we can keep regulation on track, the prospects of a battle the -- better deal are much better.
3:54 am
nejra: thank you so much. the: nejra cehic there in westminster speaking to gary baker, the managing director for emea. one secondary emerging market status, it is the first time the kingdom has classification from it index compiler. let's get more on this from yousef gamal el-din. in riyadh, they are estimating $5.5 billion in inflow. this is the biggest capital market in this part of the world. less than 5% of foreign -- 5% of the stock exchanges owned by foreign
3:55 am
investors. this is part of an aggressive capital reform program. this get some reaction to the ceo of the stock exchange. >> this is a recognition by the international investment that the saudi stock exchange has taken in the past 18 months to address the requirements of opening the saudi stock exchange, and pursue a more attractive platform for international investors. this is a stepping stone. we are looking ahead at the msci decision expected in june. a lot of the research that has there couldimates be more inflows over the coming few years. we are talking about a hundred billiondollars -- $100
3:56 am
in the next year. that could trickle in. trading lower on the saudi stock exchange. rally,see a tremendous up almost 10% so far. this is a traditional playbook where you buy the rumor, we will have to see how the market goes from here. matt: thank you very much, joining usl el-din, from riyadh. stay with bloomberg television. up next is "bloomberg surveillance." in case you are wondering what german unemployed it, i have the numbers. down 19,000. we were looking for a drop of 15,000. this follows the drop of 22,000 last month. pension secretary will be joining the surveillance team at 9:30 london time. it is when you do not want to miss as we mark this important
3:57 am
brexit anniversary in one years time. we will likely slide into a transition period. this is bloomberg. ♪ retail.
3:58 am
3:59 am
under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver.
4:00 am
francine: renault and nissan are said to be in talks for a merger. tech giant loses $53 billion of market cap amid reports that president trump is obsessed with regulating it. and, one year until britain is scheduled to leave the e.u. while u.k. prime minister theresa may will gauge the mood of the nation, what she might not like. ♪ francine: good morning and welcome to "bloomberg surveillance."

56 Views

info Stream Only

Uploaded by TV Archive on