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tv   Bloomberg Markets Americas  Bloomberg  April 9, 2018 10:00am-11:00am EDT

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♪ storieshere are the top we are covering around the world. investors are looking to china's disputesm trade between the world's two largest economies. be considering gradually devaluing the yuan. the kremlin scrambling to find ways to help. 's new ceo takes the reins after weeks of turmoil. can he steer the bank through its current chaos? we will get all of that in just a moment. we are starting off in the green on the u.s. trading session. julie: a bounce back after those
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major losses from the nature averages. we have technology as the best-performing group today filed by consumer discretionary and financials. is reflectedength in that nasdaq outperformance. i want to talk about the ripple effects on the russia sanctions. markets, a aluminum large aluminum producer in russia saying it is highly likely to default on its debt. that is raising questions about the supply of meaning. supplycount for 70% of outside of china. we are seeing aluminum prices rise with u.s. producers getting a lift. bankll talk about deutsche in a bit. i want to talk to u.s. banks and what we have been seeing over the last week. they have participated in
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weakness on friday. here is the one week performance from u.s. banks. jpmorgan and bank of america rising. we have seen acclimating yields. there has been a lot of bouncing around over the past week. new data is rising 7% today. they are selling off assets. they are selling their interest in national beef. they raised their share earnings from $.32 to $.35. they are going to change their name to jeffries, which is the unit they are best known for. we will track that can see this name changing soon. when it comes to bonds, take a look at the bloomberg. we are watching the treasury short interest, which has been planning. interest innet the 10-year note.
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we have a lot of short interest on that market, which has been rising, which implies rising rates as people are selling treasuries, which could be potentially future and good news for the bank. those banks start reporting earnings as of this friday. mark. mark: i guess we should start right here. not every day we start with russia. look at that red. 8.8% decline in russian -- decline in russian stocks today. the currency is the biggest currencies major around the world today. that is the asset market story today. the stoxx 600 down marginally now. we were up for the second day in three. we rised last week for the second week. it is very much about those moves in russia today. two weeks of gains in european stocks have done very little to
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boost the confidence in the market among u.s. investors. they pulled money from the region's largest etf. this is the largest rate in two years. 600 lost 3%, more than the s&p 500's 2.5% decline. you know the story. shares in deutsche bank are higher. decadean, a three veteran for the frankfurt lender , has deseated cryan. he took over almost three years ago. the total return, which includes dividends, down 25%. peers up 4%. last tuesday, deutsche bank's stock fell to the lowest level since 2016. we want to show you this start. hedge funds getting nervous
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about copper. they cut their long position in sinc to thest week lowest level since october 2016. concerns have been growing that efforts to force china to change its trading policies through tariffs risk escalating retaliation and crimping global economic growth. copper.nown as doctor let's get back to deutsche bank. those are the shares. john cryan is out after almost three years in the job. hiistian saving will take s place. matt miller is outside the deutsche bank headquarters with more. shares are rising. they are off of the highs of the day. what do investors think?
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what do analysts think about this new appointment deutsche bank has made? matt: it should be said they are not rising that much. they are up 1% now, and they were down 2% on friday. we are looking at an 11 euro range, the lowest point they were ever act was 2016 when they were down in the tens. they are just off of the all-time lows for this historic german bank. you have to think about christian sewing. of appointment conservative german with a lot of experience from the retail side of the bank. he has a lot of experience cutting jobs. that was one of the reasons the board pickton, the other being no one else seemed to want to take the job. no one from jpmorgan or goldman sachs would come over.
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this is best viewed as sitting on the retail side pitted against guard richie, who will now run solely the investment bank. he has 41,000 employees under him. he sent out a memo this morning saying don't worry, there will be no changes in the near term. meanwhile, we had a memo come out from christian sewing earlier this morning saying we will look at the investment bank and figure out where changes need to be made and pullback on areas that do not meet profitability goals. there is a big shakeup in this strategy, which may be a good thing. investors are not moving them up that much. they were in the 90's in 2007. what can sewing do that cryan could not do?
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what can he implement that was not already tried first by his processor? -- predecessor? he can do isng meet his cost-cutting goals. there will be no excuse that cost-cutting goals are met. did not meet his cost-cutting goals in the last quarter. that was a major concern for investors and the board. the board was concerned about millions of dollars of bonuses that were paid out last year after the third year in a row of losses for deutsche bank. before the financial crisis, they did not post an annual loss for five decades. it is important to germans to keep the numbers on the black side of the ledger. christian sewing has been working at deutsche bank since his teens as an apprentice in 1989. he knows that well. he is determined to get back to black and get the cost-cutting
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down to levels he wants to keep them at. it is still a divided board. how long does -- have? matt: that is a good point. that is what investors have been talking about. thattors are not happy pfizer has such a public, germanic saga -- dramatic saga. this is the fourth ceo he has had in six years. the stock can down from its high of 88 euros. long-term investors cannot be happy. no one can be happy unless you bought in at 2016. he will have to defend this in the shareholder meeting in may.
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one investor said he would like to see someone else running the supervisory board. mark: great job today. matt miller bringing us everything we need to know about deutsche bank. investors look to china's president to calm a trade dispute between the world's two largest economies. we will be talking to gene frieda at pimco. this is bloomberg. ♪
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♪ mark: live from london, i am mark barton. vonnie: i am vonnie quinn new york. this is "bloomberg markets." people familiar with the traits that between the u.s. and
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beijing says beijing is looking at a gradual decrease in the juan. joining us now is gene frieda from pimco europe. he is joining us in new york today. is there any situation where china would need to devalue its yuan? how much larger would tariffs have to get for china to do that? gene: i look at all the possibilities as one package. the chinese are trying to keep this dispute as trade focus. their concern is that the u.s. is trying to bring in taiwan and other issues that are of strategic importance. it is natural for china to start putting other options on the table including the exchange rate. it matters how much we escalate
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up the scale in terms of broader action. vonnie: how much more has happened globally before he gets to devaluing the yuan? analysts are talking about weaponize in the currency. there's a lot china can do before that. gene: the question is how much is it willing to hurt its self before hurting the u.s. there are other options you can think of in the interim, anything from selling treasuries to selling equities. externaloes it have an debt problem? proceeds.s gene: in the end, it is probably natural for countries that are at risk of some kind of sanction to look to alternatives relative to dollar assets. there is an issue of what can you hold? can you hold european assets?
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that is a natural focal point. you could hold cash, hard assets, gold, other options. how do you read this trade spat between the u.s. and china and how it is playing out in markets? it seems to be relatively confined to equities. moment would say at the that we are going to a stage where we have had very strong synchronized growth. to the extent that the market becomes concerned that this is , we areaterial impact --ing a broader aspect concern. the market is fearful. it reminds me of the brexit negotiations. before a lot of noise
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people sit down at the table. president xi is not to be a core component and how these negotiations are positioned. it prettyas weathered well since this spat began. we have to ask you about russia. today is quite incredible. the stock market is down by the most in four years. you are seeing the ruble decline. i just looked at my bloomberg. at the friday close, russian stocks were up 8% this year. it shows what a difference the trading day makes. tell me about your russian stance today and maybe at the close of trade on friday. gene: i would say it is another day in time. we need to look at it as a single day. there is a lot of uncertainty, which is why you get so much
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vicious reaction in markets. the actual impact of these sanctions will be, we recognize it is a step up. it is a penalty on existing debt holdings for these 12 corporations, not just new debt issuance. e.m. fundamentals are pretty good. we don't see the imbalances we saw in 2014 around the time of the crimea sanctions when oils were coming off a very elevated -- off of very elevated levels. reaction, ine-day the market starts to beco me more of a weighing machine. the ruble is doing its normal thing, becoming a pressure relief valve. i think the pressure is manageable. vonnie: would you wait to make any decisions on real --
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reallocations? is now the time to jump in on emerging-market classes? gene: wii at pimco are more of weighers than voters. to see theit and see severity and whether these sanctions will be expanded and what russia's reaction will be. we have to recognize that reaction is not just in terms of tit-for-tat retaliation but in terms of how it affects the macroeconomic policies of the russian government. do they start to become more insular? vonnie: speaking of areas where we are seeing voting, today we favor for renew its its leader . eastern europe --how does that impact eastern europe?
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does that make eastern europe more favorable? gene: with turkey, the bar is quite low for them to do something better. across the board, you find the policy stance of the turkish government has been far from optimal. there was a concern about early elections next year being brought forward to this year, in which case you could get a doubling down on some of the more policies that exacerbate the current account deficit. today's news in hungary is quite different. two thirds majority secured, that reinforces the bias for these policies, these more expansionary policies, which you have a price to pay a sometime. vonnie: gene frieda is staying with us, executive vice president and global strategist at pimco. today seeing some driving
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the u.s. after declines on friday. is 0.7% higher. the nasdaq is leading the pack today, up 1.2%. the movers in the s&p include leucadia international and merck. this is bloomberg. ♪
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forie: we get the currency april 15 any chance that we might have china labeled as a .urrency midler >> it is unlikely.
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it speaks to a broader problem of what the objectives are. we are not sure what agencies are being employed to push the chinese to sing their own trade policies. it is always a risk in terms of exchange rate behavior, beautiful to they will china a currency later -- manipulator. vonnie: their currency is strengthening externally. internally, it is weakening. that is actually a good thing for china. from china's perspective, they are trying to get to the lake germany where the exchange rate matters a lot less for basket.port the policy of allowing the currency appreciate has been to
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encourage users to move up the value change. -- chain. it is natural. the wages are high enough to their starting to lose low and cost manufacturer the region. we think this is exactly where the source of the conflict is. china is the play is to move up the value chain the area adoption where u.s. -- production for u.s. has a clear advantage. mark: let's talk assets what do we buy? what do we invest in given the increased global uncertainty investors are putting their money to work in right now? gene: our view is that in spite of the fact that you have a nice global growth, a lack of imbalances, we really don't feel like you want to put too many eggs in any single basket now. from a bond perspective, we
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don't want to get to bearish -- too bearish. we feel like the fed is more mature in its tightening cycle. at the same time, he recognized recognize thee need to attack against inflationary risks. product, credit, emerging markets, and we have found currency and affects relatively cheaper than other asset classes for you there is a lack of imbalances in these economies. you generally get compensated for the risk. we probably have a skewed toward emerging markets. vonnie: the weakening of the korean won, is that warranted? gene: i think it is warranted to
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the extent that you have geopolitical uncertainty. almost everything you need for an emerging market to be performing well, low inflation, gradual fed, stable, you have that in place. you have this uncertainty the market needs to weigh up. that will take vonnie: sometime. -- take some time. vonnie: gene frieda, global strategist for pimco. coming up, we will a look at president trump's latest plans. this is bloomberg. ♪
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>> the company best known for
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photoshop has been running a secret project to you that bransford relies on individual shoppers including their age, location and lifestyle and shopping patters on enough line. the project is named perfect patch. while adobe are the marketing tools with an ai boost, this prototype system uses machine learning to not make the same mistake twice. if a customer doesn't respond i.e. male, it may try sending a text message. adobe has accelerated its ai ambitions for marketing in the face of competitions from ibm, salesforce and oracle. i am nico grant in san francisco. you can follow me on twitter and get the latest updates. ♪ vonnie: that is some of our reporting. streaming live on twitter.
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live from bloomberg world headquarters in new york, i'm vonnie quinn. mark: live from bloomberg's european headquarters in london, i am mark barton. let's check in with first word news. russia says that israel he warplanes have carried out a missile attack on an airbase in syria. the attack came one day after president trump warned of a big price to pay following reports of a chemical weapons assault. israel is not commenting. rescue workers and activists say 40 people are killed in the poison gas attack. it took place on a rebel stronghold outside damascus. outran, the present is rash at the u.s.. he said the u.s. is failed to destroy the u.s. landmark 2016 deal that caps on iran's nuclear deal. president trump is warned the u.s. did not recertify the deal when the government -- when it comes up in may.
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the -- of qatar shoring up banks. it brought back $22 million from overseas last june and placed it with local banks. according to his latest bonds, almost $30 billion in non--- in deposits have left the country. city public show a final say on whether to expect a brexit deal or stay in the european union. british prime minister theresa may hope to finalize the divorce deal with the eu in the fall. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 20 -- 120 countries. vonnie: thank you. china is said to be weighing its options over the mountain trade dispute with president trump. one of those options might be a gradual decrease -- depreciation .f the yuan
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this over mounting concerns on wall street. we are joined by kevin cirilli live on capitol hill. might we hear anymore on paris or any other kind of response to china? kevin: president trump tweeting about the ongoing trade issues with china. he writes when a car is sent to the united states from china, there is a tariff to be paid of 2.5%. when a car is sent from china -- to china from the united states it is free. going on for years. i speak with several sources to say that they note that the implementation of the rhetoric could take months and even up to one year. secretary ross speaking on bloomberg television a few weeks ago. my sources point to that interview saying that comment could last 700 days.
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severale press -- hundred days. in terms of and demand doing -- in blending a policy, that remains to be seen. vonnie: are they all at least -- becomecope here cohesive and speak with one voice? kevin: the is -- person i speak with says president trump likes to have that sense of internal debate. you have the peter navarro, valeri cut low of the world. they are also -- the larry kudlows of the world. from a national security perspective, it was a national security issue that led to this more aggressive stance against some trade deals in the past. john bolton's first day is officially today. the president later today will be meeting with top military advisers of the white house along with vice president mike pence.
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growing tension has mounted in syria. mark: tensions with regards to russia when it comes to syria and then you have the market impact of the most punitive measures the u.s. implemented on friday. let's take syria first when it comes to russia. president trump was quite vocal in his criticism. >> i was speaking with a source with the republican lawmaker here on capitol hill who might be considered a neo-hawk. that source said there are many forces on capitol hill trying to urge the president to get more aggressive on russia. with the last way for that. chemical attack, he does say president putin and russia does blake just take some support for the --
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take that too when president trump was having dinner with the japanese prime minister and launch that military response while he was at mar-a-lago during that summit. with regards to the chemical attack that was done just more than a year ago. on capitol hill, republicans and democrats are talking just calling on this white house to continue to hold that tough stance against the regime. -- ateans going directly least from a rhetoric standpoint against russia. putin come to the white house if indeed that is his plan amidst this back drop whether it comes to imposing punitive measures on russia? whether it is regarding the outspoken tweets towards russia when it comes to syria? kevin: those tweets have many folks concerned up here on
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capitol hill, particularly when you talk about these high-stakes geopolitical meetings, whether it is with the russian president vladimir putin or north korean dictator kim jong-un. this is the type of unexpectedness that president trump supported -- president trump supporters are wary of. vonnie: we have to leave it there, our thanks. chief washington correspondent for us at bloomberg. tom fanning of the southern company joins live at the future of energy global summit. this is bloomberg. ♪
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♪ live from london, i'm mark barton. vonnie: this is "bloomberg markets. mark: time for the bloomberg business flash. cbsom wants more money from to combine the media companies. .ccording to people familiar viacom wants to raise the bid by 20%. a challenge from sherry redstone whose family controls both companies. is -- the swiss drugmaker agreed to buy for a $.7 billion.
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theis is involved in treatment of studies for a narrowed degenerative disease caused by genetic defect. facebook data was shared by cambridge analytica, you may find out soon. a detailedll post message on the newsfeed of the 87 million people whose data was swept up in the scandal. plus all users will get a message on how to protect their privacy on the social network. that is your bloomberg business flash. vonnie: let's get a check on how the markets are faring on this monday. steam, thecking up dow and s&p 500 up more than 1%. kome of the movers include merc and applied materials. as well as western digital, they are up. we hasn't down stocks including under armour and so on.
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-- we have some down stocks including under armour and so on. versuslar strengthening an array of merging -- of emerging-market currencies. you can see the hungarian currency a strengthening following elections. the russian ruble is having a bad day. down 3.5%. this is bloomberg. ♪
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♪ live from london, i'm mark barton. vonnie: this is "bloomberg markets." the future of energy global summit is hosted by new energy finance going on at the grand hyatt hotel in new york. leaders in power, transportation and energy finance. joining us from the summit is of fanning, chairman and ceo
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the southern company. the second-largest utility in the united states. 9 million customers. you it said you would be improving their utility bills by between 5% and 7% a couple of months ago. how is the outlook for that? is it thanks to corporate tax cuts? tom: i think the whole energy complex is something that is strategically important in the united states and i think frankly this administration and congress has done a lot to put us in the right direction. that is to become a major worldwide economic player in energy. it's one of the ways the u.s. can play offense and they have done lots of things for it. regulatory policy and a fiscal policy to make it a reality. some ofcan you specify those in particular that are helping your customers? which regulations have been rolled back that have benefited southern company?
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i think the united states government and congress have shown a tremendous amount of support to continuing an investment in nuclear development. it is the last project available united states to continue on nuclear. that's a big deal. we are going to be able to even with a challenge we face, unstable financials to be able to bring that project in cheaper from a rate impact and going to our customers as we were originally thought we would do. that is terrific news. the other thing we continue to make great progress on his in the renewable space. changing the business model and changing the kind of technology that will bring technology to bear for our customers in a clean, safe and reliable manner. vonnie: you are the only utility
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ceo in the country that backs nuclear. after this project is completed will you be looking for other nuclear opportunities? tom: if i heard the question correctly, we think we are in great shape to continue here. one of the big challenges the united states faces particularly in different parts of the united states and southeast where they ise organized markets keeping those very valuable plans alive. capacityhe long-term with no carbon emissions and figuring out a way to make those economically viable. the ons of new nuclear three and four, i think it is going to be a challenge. i think we still will look forward to perhaps in the 20 30's continued innovation in the nuclear space, to make it even cleaner and safer. vonnie: you have talked about
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restoring your financial credibility now that your stock prices -- price is definitely improving. how else do you plan on improving your financial integrity? i think there is a broad range. if you look long-term, which is what we are all about, i think to the extent you see in our stock price nuclear construction. we will wrap that up in the beginning of the next decade. and so there will be some perception of a discount. beyond that i think long-term what this government -- what this is doing in a significant way is thinking about this 100-year-old model of making, moving and selling electricity. is needed and
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customers are acquiring it, we are taking that make and sell model and obviating the meter, putting in infrastructure on the premises. we are leading that charge trying to invent that future with a company called power secure. we have had great success so far. it is a very challenging time. it is essentially creative destruction. playables us a way to offense and enables us to have the most amount of influence customers, first for and second for shareholders in inventing that future. vonnie: i want to ask about one of the agencies you have been involved with, the epa. there has been talk that potentially scott pruitt might not be heading up the epa in the near term, what do you make of that and how does it affect you? tom: could you repeat the question please? vonnie: the idea that scott --itt potential he might be
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potentially his time at the epa may not be as long as he is hoped for. what do you make of that talk and how would it affect you? tom: i am not getting your question. how long does scott pruitt have at the environmental protection agency? how will regulatory policy effect is going forward is that the question? vonnie: yes. tom: ok. here is the issue. my sense is the clean plow her desk power plan under the prior administration was essentially a regulatory overreach. those issues, while they may be very valid. i'm a big-time supporter of dealing with carbon and this year, the southern company is
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making a commitment to a low to no carbon future. the path we are taking would surpass with the clean power plan would have done. what regulatory policy should do is essentially manage the laws that are in place, not create new law or policy. what i think administrator pruitt has tried to do is put epa back in the place of being an effective regulator ma have been over time. my sense is that will continue. what we have to have is a balance between what is regulation and what is law. if we need to advance a law, let's work in congress to do that. tom fanning, chairman and ceo of the southern company, thank you for joining us. great interview. let's turn to our stock of the hour. an 8.7s expanding with
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billion dollars deal. the swiss drugmaker has agreed is at an 88% premium from friday's closing. -- joins us now. a whopping premium. why is it paying so much? diseases, which are is in is very desirable for companies -- pharmaceuticals right now. they are looking at a disease called spinal muscular atrophy which is a severe disease that can kill children before they even turn two years old. the only medicine on the market costsm biogen and $750,000 in the first year of treatments. and $375,000 each year thereafter. 's drug would be a
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one-time treatment and be priced according to value from novartis. when is this deal going to start to properly pay off for novartis? well: assuming all goes and that novartis can get the approvals and they would expect to seek approval in the u.s. in the second half of this year. we could be looking at the drug contribute to earnings by 2020. this is something that is a few years off in the future. mark: great stuff, thank you for joining us to tell you -- tell us about novartis. -- is the ceo of ice, so what drove him -- he spoke to alix steel and david westin this
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morning. >> we own 12 exchanges around the world. doing a deal with the chicago exchange will be our 13th. it is an opportunity to have a presence in chicago. atlanta has become a very tech centric city. we can sit here and sit in atlanta and operate exchanges around the world. chicago would be the latest example. >> did you decide to come to atlanta because of tech? >> i am a serial entrepreneur. i was living in beverly hills and running another company i started and i saw an opportunity to bring some transparency to the energy business. i saw a failing company in atlanta and i acquired it. a monday morning and there were 47 employees and i announced with all my west coast bias that i was going to move everybody to california thinking they would be thrilled. about one hour later, a person
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came to me and said we have talked to everybody and we all decided to quit. i realized then for the first time how strong this community is and recognized if i was going to build this business with that group, it would be incumbent on me to move to atlanta. which is what i did. there is a southern charm that really does exist in the business community as well as with your neighbors. people that are here love it and i have found i have been able to take the company and build it into a fortune 500 company by attracting people to live and work in atlanta. vonnie: that is the ceo of intercontinental exchange speaking with david westin and alix steel. we have a pretty up day in the united states. the dow and s&p 500 are both up 1.1%. the nasdaq firing on all
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cylinders to take back some of friday's losses. currencies are very interesting today as well. here we were up earlier, we come back from the highs. investors digesting the ongoing -- goings-on between the u.s. and china. we have russia and syria. russian markets are the most wild today. the biggest decline in russian stocks in four years. credit risk is rising as well. a look at what's happening in the currency markets today. bloomberg. ♪
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mark: it is 11:00 and new york and 4:00 p.m. in london. 30 minutes left in the trading day in europe today. from bloomberg's european headquarters, i mark barton. vonnie: in new york, i am vonnie quinn.
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this is the european close on "bloomberg markets." ♪ mark: here at the top stories we're covering from the bloomberg and around the world. deutsche bank is taking the reins of europe's investment bank after weeks of turmoil. can he steer the bank through its current chaos? russian markets tumble after a new wave of u.s. sanctions leave the kremlin scrambling to help its tycoons. an exclusive interview with another finance minister. his views on the future of europe. have a look at what is happening to european equities right now. we will get to the chart. mixed fair for europe. we


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