tv Bloomberg Markets Americas Bloomberg April 20, 2018 10:00am-11:00am EDT
vonnie: here are the top stories we are covering around the world. oil races its gains after president trump slams opec for inflating prices. we will hear the reaction from oil ministers meeting in saudi arabia. imf world from the bank meeting, what they're saying after brexit. battle of shire's future he said. that and much more in the next couple hours. julie hyman is with us. we are off to a down start. julie: it is a little more committal when it comes to technology. we are seeing continued selling
following yesterday after a negative forecast from taiwan's semiconductor. s&p, whileand the they are not keeping their heads above water, they are only down 0.25% for the s&p 500. let's talk about general electric. that has been the standout. they are sticking with their 2018 profit forecast, above what analysts were expecting. because the outlook has been so poor, even something that is not a blow away, but meeting expectations is positive for the stock. they are up 4% today. pairing itsady gain. synchrony financial has been bouncing between gains and losses. they beat estimates on earnings, were offharge-offs
for the year. hughes, which ge spun off, sales slightly underestimates. they might be able to push up for the month, which would break a long losing streak. if we take a look at the bloomberg, it shows you a long streak of monthly losses, 14 months. it looks like the game today will be enough to push it higher for the month. it just shows you how negative the sentiment surrounding ge has been. let's turn to another one of the giants in the market, ge a former giant. this one is a present one. that is apple. apple shares fell yesterday, and they are down again today. combined losses of 6%. taiwan semiconductor when it
gave that forecast blamed a large smartphone maker, which everyone took to meet apple. shares continue their slide today. the outlook was downgraded from from the positive to otr cited by a large customer of apple. shares are continuing that slide. not good news for technology. taking a look at commodities today. president trump has been tweeting about opec artificially boosting oil prices. they are down 1% even as we have that informal meeting in saudi arabia. other commodities are also losing steam. gold is down. aluminum and nickel, which had been rising as people were stockpiling ahead of sanctions, we have seen some air come out of that. opec, oil andams
gas companies leading the decliners. we are still heading for that fourth weekly gain. busy earnings week. erickson is up the biggest gain since 2002. they are posting first-quarter results stronger than analysts expected. they are facing a weak market for mobile equipment, missteps, and the gross margin improved. that is a sign of cost cuts and leading tooducts improved profitability despite sluggish demand. look at those shares, the biggest gainer in europe today. lower, weak3.4% household pricing slowed first-quarter sales. 2%. for like sales rose that follows a year in which
their sales were flattened, hit by a cyber attack. the high gene and home division, showed volumesol growth gains in the quarter. some suffered pricing pressure, which also affected rivals unilever and nestle. shire keeps giving and giving. there is so much going on when it comes to shire.we have a guest in just two minutes. with ais returning sweetened offer for the drugmaker after the first bid was offered. 47 pounds is the new offer. shire rejected the previous offer of 46.50 per share.
all the news seems to be happening when it comes to shire. we will be chatting about it in just a minute. shire shares down 2.8%. vonnie: president trump resizing the price of oil today. at itoks like opec is again with record amounts of oil all over the place. oil prices are artificially high. no good and will not be accepted." we got some reaction from the opec ministers. what can you tell us? >> that is right. they are walking out of this meeting in saudi arabia questioning how could donald trump think this and say this when they are the reason why we are seeing oil prices at a level that shale is able to produce as
much as they are. what the u.s. is producing now is what saudi arabia was producing before they struck this deal in 2016. i just sat down with russia's oil minister leading the non-opec part of this deal. i asked him what he thought about this. he said there was a reason why texas and the oil industry in the u.s. was able to rebound. take a listen. >> i would like to express that we cannot say somebody is pushing price upward down artificially. the market is what sets the price. >> i also spoke to the secretary-general. it is his birthday today. not exactly the present he was expecting from the president of the u.s. he said he broke bread with the show producers and that the opec and non-opec deal saved the u.s. from imminent decline.
they are walking out of this meeting scratching their head. the surplus has been all but wiped out. what happens next? there is another meeting in june and maybe september. what happens next? does opec continue to plug on beyond the end of 2018? >> one thing is very clear from this meeting as well as the last meeting in moscow. opec and theret once rivals want this cooperation to continue. me hemani minister told could see this to continue. the glut is nearly gone. one thing that is interesting is
they do not talk about the five-year inventory level they have been targeting. every meeting, they talk about this level. today they have not. they are talking about other things, investments. they will actually look at a wider range of things that truly show whether they expelled the blocks or not. waiting to hear what they will be targeting. they are leaving the door open to more corporation and cuts. -- cooperation and cuts. vonnie: with the price of wti down, but still elevated, let's bring in our strategist. eric, thank you for joining. today was a bit of a wildcard. should it have moved the price, this tweet? >> the fact is we have a lot of wildcards in the market.
the second quarter has a lot of geopolitical supply risks on the horizon, whether it is iran sanctions risks, the drop in supply from venezuela, and a lot of other geopolitical issues across the middle east and north africa. adding to this seems like we are waiting for more wildcards. is a very position position in the market for risk. it is waiting for supply risks that may come. markets may already be positioned if it comes. when you have something like today that is more of a bearish catalyst, you can see sharp moves down. vonnie: it is hard to talk about a longer-term forecast. lee is quite known for its long-term forecasts. you have updated them in the last six months. where is oil going in five years?
>> i think the long-term is particularly important to the short-term. to some extent, the saudi's and movingc plus group is away from talking about short-term injuries and talking about keeping prices high and investment high to prevent a supply gap. they say they are worried that by 2020 this big investment drop is going to leave a deficit in the market. 40 essence maybe some $1 price spike risk. we are against that view. the investment is very crowded. high, they are creating this pressure that in 2019 creates a lot more supply growth than they anticipated and inventories coming off of what are low levels.
mark: are you surprised, eric, by the compliance levels, the fact that there were so many doubts at the start of this process, opec and its allies? opec has managed to bring the surplus down. it seems they want to continue and develop that relationship going forward. what can go wrong when it comes to compliance and holding things together relationship wise? eric: i think in terms of surprises, the level of coherence in the group is something that looks like it will continue to go ahead. when they talk about cooperation, it may not necessarily be cuts going on, but this framework of having russia as part of this group continuing. the thing is, are we looking at
a many repeat of 2014 -- mini repeat of 2014 where opec wants production cuts, but those ultimately being something the market is creating pressures to thwart? let's say sometime later this year or next year when opec plus see their market shares trundling because non-opec producers like the u.s. are taking up the slack, do they look back and say we remember the 1980's and when we lost a lot of market share, do we want to do that again? vonnie: it is fascinating because we had russia today talking about saving texas. what is the one big risk, geopolitical or otherwise,? for the month of may -- for the month of mya?
ay? eric: i think it is a combination. -ish all have low probabilities individually. any one or two of them coming on is significant. pricet would push into a in the high 70's or 80's, we think that would create even more pressure in 2019. our base case is we stay in the 60's throughout the year. we could see the 50's or below for wti next year. with supply disruption, you get a sharp spike this year, but u.s. supply and non-opec supply next, that means the saudi's oilt see 80 dollar sustained for a longer time. vonnie: fascinating research. thank you to eric lee.
the imf sees a solid year of growth for european economies this year. a slowdown to come. let's turn it over to tom keene and francine lacqua at the imf world bank spring meeting in washington. tom: thank you so much. at the imf meeting, there is ,ames lipton and madame lagarde finance ministers, and also the people that do the work of the imf. our next guest has been directly in crisis after crisis after crisis in europe. somebody has got to get on the airplane and go out there and give advice. francine: crisis after crisis, but he is also called a lot of countries out of crisis -- has also pulled a lot of countries out of crisis. mr. thompson, thank you for
giving a little time to bloomberg tv. when you see the concerns from european leaders and investors and finance ministers, is a trade, trade, and trade? >> i understand that at this state. from the european perspective, remember european economies are particularly open, that is a concern i would share. steel and aluminum, they have been suspended now these of the europe. europe.-vis given the openness of europe, we are concerned about the risk of escalation. ar policy advice is we have multilateral framework. we have the wto.
we think whatever concerns and grievances need to be does with in this multilateral framework, and it is critically important for growth going forward not just in europe. saidine: the imf has europe should integrate further. how can europe integrate further with pockets such as the italian election? >> i think the integration of europe is critical for preserving stability going forward. what we have learned in the euro crisis is that unless we have a deepening of the integration, when we get these shocks, they cause unnecessary instability. we will have shocks. we know that. it is about dealing with future a common backstop for the resolution fund, and giving targeted insurance, and simple fine the rule capital
markets. the genomic concerns in europe about how to trade-off risksharing and risk reduction. some countries are concerned they will just be burdened by legacy problems in europe. we need that proposal that bridges these concerns. tom: no one but you has been more in the trenches about this from the beginning of the financial crisis. what i hear in interview after interview is why can't europe, within these many debates, extend debt maturities? out five years to 15 years, take debt 15 years to 30 or 40 years. why can't we do that now what the next crisis? >> to prepare, europe has already done a lot of that. as a result of that, we talk about greece the burden of
interest payments on the greek economy has come down dramatically even though it has gone up because your has done a lot of -- europe has done a lot of this extension of maturities and interest payments. the discussion is how much is needed? we tend to have a bit more conservative outlook on greece and growth and surpluses. we think greece needs a bit more help in terms of extension of maturities and then our european partners think. it is actually narrowing, so that discussion is going up. francine: are you worried about slowing growth in greece and greece turning ugly again? >> it is important for me to clarify this. there has been a lot of discussion about these fiscal targets and whether greece can reach the targets. i have no doubt that greece can reach the targets.
what i have concern about is whether it can do it in a way that it can grow safely. much of the adjustment has been truly extraordinary. it has been done by compressing capital spending to exceptionally low levels. that is not sustainable. it in a growthng friendly manner. tom: your watch is europe. i know you don't want to speak about america and the uproar over deficits and debt in america. you see the single statistics, whatever ratio it is, which caused great concern in america. what would you say to our american viewers and listeners who say look at that one data point, that is a bad data point? how do you simple fight everything into a constructive
solution if you are just focused on one data point? >> i will not comment on u.s. fiscal policies. i have no expertise on it. you know more about it than i do. tom: maybe not. [laughter] from a european perspective on fiscal policies, let me see if i get you right. inside the eurozone, we have a number of countries with very high debt. some of them also have high structural unemployment. they faced a difficult task of striking the right balance between how to reduce this debt and doing it in a manner that is not too much of a negative impact. what we have been saying doing these annual meetings is that given the strengths of the
recovery, very robust recovery in europe, some of these countries need to do better during the times to build up coffers for the future. tom: we have to run, i think. francine: we will get him back on. tom: we would love to have you on our new york set as your schedule allows. from the european theater for the international monetary fund, poul thomsen. to tom and thanks francine. we will go back to the imf with the french finance minister. it is time now for etf fridays. let's handed over to julie hyman and eric balchunas. 4/20, at is april 20, longtime holiday for marijuana enthusiasts. eric, i think it is time to check in with the marijuana
etf's. this is a big industry. $1 billion in marijuana etf's. layout the landscape. eric: there are six all told, five in canada and one in the u.s. two are big. i get asked, which one do i pick? hmmj is in canada. etfg is here in the u.s. the big thing to know is think about the countries, candidate leans more towards canadian stocks, and the u.s. leads more towards u.s. stocks. canada one is a little more small-cap. otherwise they are pretty mixed. our senior analyst who covers this industry looked through the holdings, and he said the 80% pure play on canada sales. that is good. a lot of these products will
bulk up to get more liquidity. these are pretty pure. if you look at these etf's versus a health etf, zero overlap. 100% original exposure. that is good if you believe in the story. if you don't, forget about it. julie: it is interesting that the two top holdings of each of these are telling. aurora cannabis, which is a cannabis seller in canada. the top one in the u.s. is gm pharmaceuticals, which is developing drugs cannabis. that is a little different meaning. that is just top holdings. it is interesting if those two top holdings are symbolic of what the etf's do. eric: i think they are. i think you are right. julie: there is also a vice etf.
that includes other so-called vice. act is the perfect ticker, alcohol, cannabis, tobacco. ise is the thing, this partially what people call sin stocks. people have been talking about factor almost because they tend to be undervalued because they tend not to be included in other products. it is an interesting space. i think if that is something people are interested in, it is something to note that there is some kind of anomaly. this one is not going to get you that much. haveone, act, is going to access to larger stocks that are
already in larger indexes. julie: we have to leave it there. eric talking to us about marijuana companies in etf's. there are quite a few. vonnie: sorry, jimmy. i was distracted by your watch out. thank you for that. catch up on the majors. we are in a down day. not necessarily very pronounced. the s&p 500 down as well. the nasdaq a little worse, 0.6%. there are several hours left in this friday trading session. this is bloomberg. ♪ ♪
let's check in on first word news. kailey leinz has more from new york. ey: exchange of tweets about oil today. president trump calling oil prices artificially high. he says that will not be accepted. the russian oil minister responding saying oil prices are determined by the market. he said oil cutbacks helped to restore the industry in texas. curb an emergency law to chinese investments into the fence technology. could declare a national emergency, which would allow him to block transactions and sees assets. china says the us is acting like a bully. the negotiations over brexit is about to get deeper. eu officials are sent to project solution for the border between northern
ireland and the republic of ireland. berlin, and 1100 pound british bomb in world war ii has been diffused. constructionduring at the central railroad station. 10,000 people were evacuated from an exclusion zone around the bomb. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am kailey leinz. this is bloomberg. vonnie: thank you. president trump resizing the price of oil, tweeting earlier, it looks like opec is at it again, recommends the oil all over the place. oil prices are artificially very high. that was from his donald trump accounts. with the russian oil minister today about these comments. think thee actually
market is what sets the price, not any organization. there are many factors that affect this process. one of the ultimate factors is supply and demand, one of which is the u.s. shale fields. we have seen a price increase over the past few years, which has driven a shale oil renaissance in the united states. if you look over the last one and a half years, shale oil production in the u.s. has added 1.5 million barrels per day. this is boosting the u.s. shale oil industry. don't forget where that industry was in terms of finance and investment a few years ago. five years ago, everybody was opec announced cooperation.
>> you think he is wrong, prices are not artificially wrong? >> we cannot say that someone is moving prices up or down artificially. the market is what sets the price based on fundamental factors like supply and demand. think this is something the group could talk to rick perry, the u.s. about?ry of energy, >> we have no plans to discuss it and have not discussed it. , ande actually invited him if we have the opportunity, we can discuss this. russia's oil ministry speaking to us earlier. french president emmanuel macron is heading to washington next week as the two leaders are sounding different tones on protectionism.
let's go to francine lacqua at the imf spring meeting in washington. francine: i am delighted to be joined by the french finance minister, mr. bruno le maire. he joins us to talk about reforms, tariffs, trade. thank you for giving some of your time to bloomberg. how worried are you about trade tensions escalating into trade war? >> i am because there is a risk of having a trade war between the united states and china, the u.s. and the rest of the world. i think we should do our best to avoid that kind of war, which could lead to less growth, less employment, and more job difficulties. francine: in the more immediate you are urging the u.s. not to impose tariffs on steel. >> of course.
we cannot expect france and europe to be hit by new tariffs coming out of the united states. what we really want is permanent exemptions for the eu of the new american tariffs. we are allies. we cannot understand a policy which might jeopardize growth and private companies in france or other european states. we are waiting. i want to be very clear, we are waiting for full exemptions from the american tariffs on europe. francine: do you think you'll get some indication that the u.s. will be willing to grant you that? >> i hope so. i have been very clear with mr. mnuchin. we have had an open relationship. that has allowed us to have clear discussions entree. i will have meetings -- on trade.
i will have meetings in with officials, and i hope they will understand that we are allies. the united states and france are allies. we cannot understand that between allies there are such threats coming from new tariffs on steel and aluminum. mainine: will that be the message for president trump when president macron comes to washington? >> i think that will be one of the messages. there will be many messages. betweenl be raised president macron and the united states. want to see the opportunity of those g20 and g7 meetings in washington to explain the political position of france and all european countries.
we are allies. we want a full and permanent exemption. we do not want to run the risk of having decisions coming from one of our closest allies jeopardizing growth in france. francine: how much of the talk at the g20 and g7 level was about china, what china will do next, and what europe can do to bring china closer? >> we have to engage with china. we want china to abide by their international commitments. newant them to build a mutual approach to trade. the right solution is not to engage in any kind of war against china. the right solution is to engage china, have china on board trying to improve institutions related to trade. when we look at current institutions, we know there is a weakening of institutions
related to trade. we want to build a new multilateral order as far as trade and economies are concerned. we want cooperation. you are pushing for a lot of reforms. there are strikes almost every week. risk,hat mean they are at or will you double down? do you have more resolved to push these reforms through? the path ofeep reforms and keep the pace of reforms. with president macron, we strongly believe we need those reforms to keep the competitiveness of french companies, to improve the attractiveness of france, and to create more jobs for french people. we have already decided last year to introduce a total overhaul of the french tax
system. we have been able to modernize the labor market in france. this year, we will adopt a new rule on competitiveness for french companies, which will allow us to have more competitiveness within french companies. the key issue is to improve the level of growth and the creation of jobs in france, but also to restore the credibility of the french political power. francine: do the french want to be performed? are you concerned about strikes? >> there is a large majority of people that want reforms. we are a democracy. in a democracy, there are people who are against reforms. we have to live with that. at the end of the game, we will keep the reforms. we will adopt the laws. we will improve the situation of the country. francine: for the moment, there
is no talk of retracting some of them or walking back. >> it is not the right solution. what has been done during the last three decades, we wanted to do something. there were strikes. french decided to withdraw those reforms. we will not do that. we will stand firm. to the put the reforms end for the sake of improving the situation of the french people. we are not doing reforms for the sake of doing reforms. the point is to improve the economic situation of france and the political credibility of our nation. one final question -- francine: one final question, do you worry about the high level of the euro? >> i am not worried about the
level of the euro because i think it reflects the growth and economic recovery in europe. that is not a point of concern for us. theoint of concern is situation entree. francine: minister, thank you so much for joining us. that is french finance minister bruno le maire. i will send it back to you. mark: excellent interview, francine. excellent job at the imf with francine and tom. takedaanese company raising its offer for shire. this is bloomberg. ♪
mark barton. vonnie: in new york, i am vonnie quinn. takeda is increasing its offer for shire. the increase comes after alerga nz withdraws its bid for shire. fromeporter joins us stamford, connecticut. let's begin with the takeda, bid. is it enough? >> i think so. to thei am not privy thinking of shires investors. there is a limit to how much takeda can finance. we are close to a final bid unless another bitter comes in. vonnie: it looked for a moment like our dan might be that bitter.
obviously, they came out and say theythose reports were looking at other opportunities. what can allerganz do? anz.e are short allerg we have yet to see a strategy emerge for them. this is a self-inflicted move from them. say, there is no trial. they are either investing in shire or they are not. it seems like they did not have a plan yet. we are obviously not positive on that one. with respect to decatur, if you squint-- takeda, if you hard enough, you can see why this acquisition might make sense. it is obviously expensive, but it gives them a new corporate. -- footprint.
with this price, will they see a return? it is debatable. we are not long takeda or shire. allerganz claims it has . discounted trap value do you feel there is any value to be unlocked here? whom?h respect to vonnie: allerganz. >> there is room to grow, but there is an old adage that you cannot cut your way to growth. they need to put it to good use. they can have one. there is a way out. we have not seen it yet. mark: what is it? >> if they asked me, and free
advice is worth what you pay, i would say moving into areas that look like shire but spend a lot less money. buy some smaller orphan or pediatric companies, developing a division outside their core. mark: is there a limit to the amount of money you like to see them spend on that type of deal? >> shire would be effectively a merger of equals, so a lot less than this. i don't think we have a number in mind. , itealth care or pharma does not take a lot of investment if you have a successful drug. they have to find some new growth drivers, and they don't happen yet. vonnie: what late stage assets are most dangerous for them, most risky? >> within their pipeline? vonnie: yes. >> at the moment, they have a
drug for headaches. it is in a competitive class. there is a company we do own, looksen, which better in our view. we think they are going to win that class of drugs. there are also injectables coming. i think that is a risk for them. botox is a risk because they could see generic competition. there is the drug they tried to get to the indian tribe to keep generic competition at bay, which was a self-inflicted wo und. vonnie: short interest is on the rise, but it is not massive sales if you look at the bloomberg. what would it take for you to reverse your position? saw a strategy that was working, then there is
no reason to take the short position. mark: i am looking at our wonderful na function about mergers and acquisitions. million ofeen $558 m&a in the consumer non-cyclicals, do you think that is going to continue? why is the pharmaceutical drug industry hot right now? >> there are a lot of large companies that need compounds or drugs. there are a lot of small companies that have had exciting finds over the last few years. lots of oncology drugs. there was a gene therapy deal done last month with novartis. exciting a lot of things that are happening at the mid and large cap levels. -- mid and small cap levels.
thank you for your time today. >> no problem. mark: let's check out what is happening with european equity markets. we are 15 minutes away from the end of the friday session. main threefor the indexes. having the best run since october. dimmed fortunes remain. look at the euro, down against sterling. the dollar.gainst let's finish up with the bond board. the biggest increase in yields since january, coming down to basis points, shaving off that 10 basis point increase yesterday. up a couple ofd
♪ live from london, i am mark barton. vonnie: from new york, i am vonnie quinn. this is "bloomberg markets." apple shares are down sharply for a second day in a row, for the worst today's live since the ideinning of -- two-day sl since the beginning of february. abigail doolittle joins us with more. there are generally nervous about the upcoming first-quarter they are going to report on may 1. nervous around that. out aboutlysts coming that with cautious comments.
they guide just one quarter in advance. we have global action mixedading shares from deposit. asia, various wireless carriers, even one electronic thatler in asia suggestion the actual quarter that march could come in weak. we are looking at possible weakness for the march and june quarter. we can see why china is such a big deal. this is the sa function. in orange, you can see the overall revenue from the americas. in green you see china. that has been steadily declining. that is a concern that the chinese are not adopting the iphone x or upgrading to the 8 and 8 plus. that could be a negative for the company. vonnie: we see winning icon
demand coming up periodically. abigail: you are right about that. we have been seeing this on and off for a few months. i think it is the proximity to the upcoming earnings report. semiconductor,an which is a large supplier for apple, they actually guided their second quarter weaker than what was expected. jpmorgan says they believe that has to do with the iphone. if we take a look at this chart of taiwan semiconductor in blue and apple in white, we can see that they trade pretty closely. that direct hit from the supply chain taking apple down. i think it is the specificity we have around these reports that there could be weakening demand about the iphone. vonnie: thank you. abigail doolittle with our stock of the hour. mark: let's take a look at what is happening with european
equities. we are less than 30 minutes away from the end of the friday session. shares in london rising as the pound falls for the fourth consecutive day on comments from governor mark carney, governor of the bank of england. the dax is lower. stocksole, european barely changed, heading higher for the week, not as bad as the u.s. peers on mixed results from the tech sector. sterling down for the fourth consecutive day. the euro ftse is an interesting pair today. it is down, the euro, after touching 1.20 yesterday. the closes next. this is bloomberg. ♪ s is bloomberg. ♪ .
vonnie quinn. this is the european close on bloomberg markets. ♪ here are the top stories we are covering. withstocks falling weakness in tech shares and investors digesting the latest weak corporate results. says opec ismp added again and oil prices are artificially high with the saudi oil minister saying no such thing. takes rudyrump giuliani for his legal team. he says robert mueller should be allowed to do his job. equities 30ropean minutes away from the finish of the friday session. gmm is the function. stocks falling for the first day in