tv Bloomberg Markets European Open Bloomberg November 20, 2018 2:30am-4:01am EST
♪good morning and welcome to anna: "bloomberg markets: european open.". i'm live from our european headquarters in london. ♪ stocks in asia decline after apple and facebook drag down wall street. european equity futures point to a lower open. quelling the rebellion. tory rebels failed to secure a no-confidence vote. says hee, jeremy corbyn is not ruling out a second brexit referendum. >> we will keep our options
open. are pressure now is on the government not to accept the deal that theresa may has brought back. anna: nissan stalls. the carmaker dropped as much as 6.5% after the arrest of the chairman. renault's board meets later today. less than half an hour to go until the start of the european equity trading day. we are expecting to go in little bit weaker at the start of the european trading day. no surprise perhaps, given what we have seen in the asian session. you can see this writ large across the equity session in asia. with ms. coming through on africa -- weakness coming through in africa, turkey. one thing to worry about his trade, the other is tech, and to some extent these to come together when you think about global supply chains.
we see the australian dollar a little bit weaker, a proxy perhaps for some concerns around trade. i want to bring you that, because we have seen some selling in chinese equities and perhaps see a little bit more appetite for sovereign bonds in china. is not forget what we are talking bout with regards to energy prices. brent crude down by 0.6%, so another drop in. fuel prices. we spoke to the. agojet ceo a little while and he was reflecting on the oil price. tech stocks have been plunging, leading a rout in global stocks. all major u.s. benchmarks were down more than 1.5%. the nasdaq dropped 3% on the concerned trade war what supply -- impact the supply chain. through the $5,000 level for the first time since october of 2017. joining us now from singapore is
mark cudmore. very good to have you with us. it seems we are focused on trade tensions and tech, specifically issues surrounding apple and whether we will see further regulation of the tech sector. these concerns come together with concerns around technology supply chains. >> absolutely. certainly that was the theme in asia. apple is a large supply chain throughout asia. the trade war, asia has been one of the most vulnerable all ye ar. that one of those issues today was that there was so many negative stories, in terms of the oil price collapse, the bitcoin collapse, the tech collapse, trade tensions, and all these idiosyncratic company stories, whether it's nissan or apple. there is a broad negativity. it was surprising that asian
equities did not trade-off even worse today, giving the -- given broad negativity. anna: i was looking at some of the specifics around the apple story and the reaction in the asian session. tensionsof those trade and more generally, not to necessarily attached to tech. in terms of those trade tensions, the question of the day is which assets will see the largest reaction to a u.s.-china trade war to price? -- surprise? >> i think people assume the only way for a possible surprise is if we get a trade deal. that reflects the fact that expectations are negative overall. there is a chance for this to escalate further. we could still see taxes on a larger amount of goods. there is a chance for surprise in either direction. i think many people think the default for a positive surprise are in fact soybeans.
that market has a chance to rebound a long way and has been in the targeting line for this. i think one of the best risk ssets is chinese equities. we actually saw chinese equities bottom out over a month ago in october 19. leadership made clear they are offering unwavering commitment to support local companies. chinese stocks are having a change in sentiment that's counted to the negativity nearly anywhere else. anna: let me ask you about trade tensions more. to be surprised by any outcome of the trump-xi meeting, you have to have a base case, which turns out not to be the case. what is the market factory in as the base case andre -- case in trade? a likely truce does not mean anything in the long-term and the ability to return to tensions. right.'s absolutely
one of the problems is that people cannot narrow down what the base case is. if you are going to try trading any macro story you need to know what the base case is, because you need to know that your view of how it plays out is different from the consensus, and that's how you assume the mispricing. no one is sure about what the base case is at the moment. i think it's pretty negative, i think we've seen that. we've seen little sign of a sustainable improvement. hopes remain low this time around, especially after the exchanging barbs between xi and weekendce -- x i and pence over the weekend. be a long time before we actually get some compromise that sees the tariffs already imposed lifted.
anna: you can join the delay and tells what you think of our -- onon of the day on the your bloomberg. a diary date for you. the financial stability report and stress test results will be published on november 28. the date change relates to brexit analysis been commissioned -- being commissioned. this could be interesting, of course, given the start the bank of england took ahead of the referendum in 2016. we will see just what they think of the deal on the table from theresa may and what impact that will have on the economy. the dup voted against the government yesterday in a vote the government needs to publish on various economic scenarios around brexit. it just goes to show that the government cannot necessarily ote.t on the dup's v
that's get a bloomberg first word news update. >> the anticipated rebel against theresa may appears to be running out of steam, with her opponents yet to reach the threshold for a leadership challenge. so far more than 20 tory lawmakers have publicly declared they want theresa may to go, but speculation that the 48 threshold was close to being met have proved white of the market. markof england governor carney appears in the u.k. parliament later today, with brexit likely to dominate lawmakers questions. in an exclusive interview, anna edwards asked jeremy corbyn at the chairman of equities trading act was exchange was right to describe a corbyn government and hard brexit as armageddon. >> he's got a pretty good sense of imagination, but tell him i think that he should read something a bit more positive in the future. i don't want a no deal, i want a
deal, and i want a society that works for all. i am not comfortable living in a society where the u.n. tells us that this 14 million people living in serious poverty in britain. that's a serious indictment on our society and i want to change that. >> nissan and mitsubishi motors shares have fallen in asia after the arrest of carlos ghosn for allegedly should of financial law. he underreported income and misused assets. renault's board of directors is set to discuss the allegations at a meeting this evening. it's too early to speak about the facts, since i don't have additional details, but the french state as a stair -- shareholder will be extremely vigilant of the possibility of the alliance in the renault group -- the stability of the life in the renault group and the stability of -- alliance in
the renault group and the employees of that group. >> global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ anna: thank you very much. innext, nissan shares plunge tokyo as the chairman, carlos ghosn, is arrested over financial misconduct. renault will discuss the allegations later today. it is the -- is the world's biggest auto alliance under threat? we are available on digital radio in the london area. this is bloomberg. ♪
♪ anna: welcome back to the market open. here in europe we are 17 minutes -- 13 minutes away from the start of it european equity trading day. let's get your bloomberg business flash. generale has agreed to pay $1.3 billion to resolve allegations it violated u.s. sanctions against iran, cuba and sudan. this comes just five months after the bank agreed to hand over a similar some to terminate
two other cases. the payments are substantially lower than the $9 billion paid by bnp paribas four years ago. apple shares have fallen close to a bear market territory on concerns consumers are no longer clamoring for the iphone. since closing on a record high on october 3, the stock has plunged within 20% as multiple suppliers indicated the company is cutting parts orders for the latest iphone. apple says the company can still generate revenue growth by charging more per device and seven customers on increasing amount of digital music, movies, and other services. the chairman of barclays bank told bloomberg that the current market volatility is set to continue. >> the breakdown in multilateralism, the rise of the nationstate, and because the markets found it very hard to price those risks, they tended to ignore them, but these risks
are now manifesting themselves pretty much everywhere you look in the world. i think that is volatility and this uncertainty will continue. >> that is your bloomberg business market/. back to you -- flash. back to you. auto industry's biggest alliance has been thrown into turmoil by the arrest of carlos ghosn. nissans board will vote on thursday to remove him as chairman. renault's board meets today. just a few lines coming out of the french state. the french finance minister speaking, saying that the french -- saying that he will speak with the renault management on tuesday morning, so this morning , and will speak with the japanese economy minister about the situation with regards to carlos ghosn. he says there is nothing unusual osn's tax gh situation.
let's bring into the conversation from crawford in germany -- from burkett -- from ommberg in germany. we hear from the french government that they want to strengthen renault-nissan. will renault-nissan survive? >> i guess the joint venture will survive. it is too important for both sides to preserve this operation, but it should at the end of the day not be run by a one-man show. anna: indeed. tells about your concerns with regard to how this business more broadly operated. i am thinking of the dutch business that includes many of the other joint venture partners. will have and the ongoing concerns about the way that's operated -- what have been the ongoing concerns about the weight that is operated -- way that is operated?
>> carlos ghosn was running it basically on his own. he was saying that the boards of nissan and renault had their saying on what i did, but at the end of the day he was so powerful and nobody was really in a position, or willing to .bject to his goals he was the one-man show, who in particular was also responsible for rmbb. anna: you have said that these that we cannot exclude a nissan renault takeover. ?ell us your thinking there exactly. if you calculate very thoroughly and include the stake nissan already owns in renault, the purchase price for the european operation is less than one billion euros after the collapse of share prices yesterday, and
that for a company which has the third-largest market share in to be, in my opinion, so attractive that nissan will probably think about making a reverse takeover. -- there areourse of course voices saying that the french government. might not like that. . i'm not sure about that. for france right now. faye is the moat -- for france right now, psa is the more important investment vehicle. renault is not really the concern. i do not see renault also closing factories in france. ,s no necessity right now except of course if it european market collapses -- european car market collapses, but i don't see that. manus: we are getting these --
anna: we are getting these comments from the finance minister coming through right now. kind of impact will have this -- what kind of impact will this have on the business? will this be something we are fascinated by as analysts and journalists, but sales continue? i think the latter is true. the man or woman on the street who wants to buy a car will not be concerned about the as noton, as long much more severe news coming out of this catastrophe scenario -- catastrophic surround the -- scenario surrounding mr. carlos ghosn. i think the business will continue almost as if nothing had happened, so therefore in business terms, profit terms, revenue terms, volume terms, i don't think renault will suffer from this. anna: thanks so much for your
♪ , ii don't want a no deal want to do, and i want a society that works for all -- deal and i want a society that works for all. not comfortable living in a society where the united nations tell us that there are 14 million people living in serious poverty in britain. that's an indictment on our society and i want to change that. anna:. that was jeremy corbyn. will bring you that exclusive interview later in the program. lets get around the newsroom and go to our stocks to watch. we are joined by chris jasper, who has been pouring over the details from easyjet. paul jarvis from our equities team also joins us and annmarie hordern is focusing on society generale. >> easyjet has told us they are
pretty optimistic for demand levels next year, which comes as a bit of a surprise with brexit looming. bookingssome of their are slightly ahead of 2018 and their 50% booked up for the first half through march. that does not mean they are out of the woods. oil is a major pressure for them, as it is with all airlines at the moment. on the brexit front they are very optimistic. they, as you heard earlier, are suggesting there will be no major disruption to air travel. anna: in didi, suggesting nobody has put off booking those easter indeed, suggesting nobody has been put off -- has put off booking those easter holidays. >> i wish i could give you such optimism. thertunately bad news for
telecommunications company. isy say that 2018 ebitda going to be significantly below expectations. they are talking about continued customer turn in their network services division. this is going to lead to a very weak share price this morning from a company, telecoms is one of the areas that markets look to traditionally as a safe haven, so this sort of thing in what is already a nervous market is not going to go down very well. manus: they say they are -- anna: they say they are reviewing their dividend policy. briefly on socgen? >> they are paying $1.3 billion to settle a case. they are the first bank to settle a case under the trump administration of violating u.s. sanctions against cuba, sudan, and iran. anna: thank you very much for
>> less than a minute to go until the start of equity cash trading in europe. little weaker, oil price down by around 0.6%. to has been the trajectory of travel in recent weeks, a downward move in oil prices. the picture in asia is a weak one with technology concerns and concerns around trade really plaguing the asian equity session. those two forces coming together. the pound against the dollar, a little flat, but a little bit of volatility on some news flow in the last hour. yesterday we saw theresa may maker pitch to businesses.
she has not yet come to any leadership challenge. it could still happen, but they have not got the numbers yet, it would appear. we see that weakness in technology stocks coming through in the european session. this is the picture we expect at the start of the european equity trading day. we were down by more than 1.5% on u.s. overall indices yesterday on the big one, and the nasdaq was down by more than 3%, so certainly tech is certainly at the heart of this, but it's not just concern about apple, it's not even just a concern around what you wish and in the tech sector. is about equity markets, how are they have been german up by technology and -- juvenile but driven gy -- jordan -- --by technology direct ibex an early mover, down
by 0.4%. the ftse 100 down. there is really not a day where the sector picture matters all that much. i would not be surprised to see technology names in the weak spot because of those concerns about technology that are highlighted coming through from the asian session. will look to see whether that is the case. in terms of the individual stocks i am watching in europe, we have had a few corporate reporting numbers. let's start with the upside. health is up. electrical components moving higher. i wondered whether the fact that it was a tech company might play to its disadvantage today, not the case. compass group up by more than 2%. let's look to the downside and have a look.
cybg, one of the challenger banks in the u.k., will it mix of it couple of banks -- well a mix of banks put together, it is down by 4.6%. their numbers did not look great. their net interest margin guidance was a little bit weaker. it has been a poor stock performer for the sector, a bit of a u.k. proxy. micro down by 2.6%. all major u.s. benchmarks were weaker in the session yesterday, down by more than 1.5%. the nasdaq jumped more than 3% to the lowest since april on the doncerns the trade war woul disrupt supply chains protect companies. forour tech companies --
tech companies. where do these concerns around tech companies stem from? what's the story. -- story? >> the report from apple supplies does not look to be too positive for the outlook. one of the few winning trades we have had is u.s. tech and it has overvalued,wded and on certain companies valuation concerns are more relevant now. you factor in the trade tensions with the u.s. and china, which do not seem to be going away. this weekend there was the breakdown between mike pence and xi. anna: you point out that even if we saw some kind of coming together of china and the united
states, or at least it cap set for negotiations in the future, that still would not take traded off the table as a wary -- trade as a worry. timothy: its reliance on the dependability of donald trump to keep his word, which has -- is a questionable strategy. even if the u.s.-china story dies down, and i'm skeptical it will. it is more about global hegemony and who is a leader in the world. ?nna: it's not just trade , is it? timothy: not at all. the focus could shift to the eu, which is still running massive surpluses. this detente between trump and juncker earlier this year, i suspect it might be rather
flimsy if this is where he chooses to turn his attention. anna: let me ask you are question of the day -- our question of the day. if there is a surprise to be had i me, where will we see a reaction -- meet, where will we see a reaction? timothy: i think the australian dollar probably gives you the best risk reward. it's been so be enough that it looks fairly attractive now to risk evaluation. i think it gives you that more attractive profile relative to maybe chinese equities, which of course would perform well, but are subject to a lot more volatility. the aussie looks quite nice from that perspective. you might open the door for the central bank to have more leeway to normalize interest rates, which is not really the base
case right now, quite the opposite. for me that's the most important -- that's the most attractive. for the level of risk involved, that's the most attractive. anna: what would define a surprise on the trade front between xi and trump? what is the base case? ist is the market assuming going to happen here and therefore, what would be surprising? is that the best we can hope for? timothy: i think a true's is ce is probablyu the best you can hope for. i don't know that this is all about trade. this is about the u.s.-china geostrategic relationship. just simply coming to an agreement to reduce trade tensions does not necessarily answer the bigger picture question. i think the surprise would be maybe not going any further than
that are already announced to take effect next year, and perhaps an eventual removal of that. is not a lovely way for me to see a positive surprise. leewaye will -- a lot of for me to see a positive surprise. anna: our guest stays with us on the program. up next, we will bring you the stocks on the move so far this morning, including enel. they opened with considerable gains after they announced they will maintain their dividends pay up for next year. 's stock is up by just shy of 1.5%. this is bloomberg. ♪
♪ anna: this is the european market open. we are 10 minutes into your trading day on this tuesday. a negative session is upon us in europe, thanks to what we saw in the nasdaq and asian session with regards to technology. socgen, downt with pay 1.3they agree to billion u.s. dollars for violating u.s. sanctions by selling to iran, cuba, and sudan. they don't see any additional impact. enel up more than 1.5%, one of the biggest gainers this
morning. it is italy's biggest utility, who raised their 2019-2020 earnings. they looking at their dividend payments unchanged until 2021. renault done more than 2.5%. yesterday -- down more than 2.5%. this is after carlos ghosn was arrested. concerns about the repercussions. a lot of analysts coming out. commerzbank saying that carlos ghosn is a mess that by the alliance together this bind -- binds to get it. -- together. anna: theresa may faced growing unrest in the cabinet and her party last week, but there is mounting evidence the plot to oust her is faltering.
it is not -- has not necessarily disappeared, but so far no sign that the brexiteers have the numbers. does her brexit deal have any chance of getting through the parliament? yesterday i spoke with. jeremy corbyn. >> we will keep our options open. our pressure now is on the government not to accept the deal that theresa may has brought back. anna: on what conditions would you support a second referendum? >> we will come to that when we know what's happening with this deal first, but the priority now is a deal, and after that if the government cannot deliver, then you ask yourself the question, how stable is a government that does not have a majority in parliament? isn't it time to have an election so the people can decide who runs this country?
it seems like you could argue there is quite a lot and the deal that does fit the text, whether its reference to a customs union or the backstop. back theresa may's deal? she says it's in the national interest. >> what does it do but put us into a customs arrangement for several years that we have no say over it whatsoever and can only leave with the permission of the eu. --a: at the backstop, yes that is the backstop, yes. >> if nobody intends to use it, why is it there? is does not deal with the question of northern ireland. border will be an open one, but where -- the land border will be an open one, but where is the border going to go? who: when about labor mps they think it's in the national interest to back her deal. >> i would say to them, as i
we set down them, those tests. we do not believe this deal means those tests. we believe is our duty as the opposition to hold the government to account, and we will bow against it. i believe all labour party mps will understand that and the parliamentary party will vote against the deal, and it will be defeated in parliament. i expect all of our mps to agree with this position and we have forced the government to accept that this deal is acceptable and they will have to go back and do something else. anna:. she says there is no time for that. when you accept that it -- will you accept that if you do not accept this deal, you get closer to a no deal? >> i simply say to them, this deal is not acceptable. and represents a failure of a
negotiation. i believe there is a majority support for that. we have spent a lot of time talking to people all over europe in the past two years. we cannot negotiate, we are not a government, but we have make for the kind of relationship we want to have. we have not sent the equivalent of liam fox around the world to signed up for faulty trade deals. we can cut wages, cut conditions, and have a tax haven on the shores of europe. have something more positive. anna: things like this could set us closer to a no deal. is this a price you are worth paying? >> we will demand a deal with the european union that protects jobs, protects workers. the eu has a whole history of say nothing can be changed. i remember the lisbon treaty.
that was my exclusive conversation with the the u.k. leader of the opposition, jeremy corbyn. for more on brexit and what it means for u.k. assets, tim graf is still with us. i spent a lot of time with jeremy corbyn tried to talk about how he is going to vote in december. he says he is going to rejected the deal. you do not think this is going to be a one-time affair. i spoke with a manager from not make who said this is not going to -- nutmeg who says this is not going to be a one and done situation, that there will be many iterations. tim: i don't know about that. is certainly seems like the choices becoming deal, or no deal. he says in its present form, or at the present time. it seems like there is wiggle room emerging as far as the brexiteers maybe wanting to
scrap the backstop. weautomatic operation of law leave the eu on march 29 of next year, so there is not a lot of time to get this done. whether there will be multiple votes on this, i have no idea. anna: but it's the base case that something gets past somehow? tim: that would be my base case, yes. maybe you reject the deal once in parliament and the markets will probably react quite badly to that. similar to the tarp program passed in the u.s. 10 years ago, you look into the abyss, and inasmuch as he didn't all of the labour party mps will vote with him in this deal, i suspect they will have to have their own say about that. is not clear in my mind that would actually be the case. anna: what about u.k. assets? no need to be a hero, you say, when it comes to the pound. tim: right now the levels of
conviction are so low. the headlines could change in 10 minutes. i would say sterling over the long-term i am still pretty optimistic about, because you have a value case to be made. you have a push for no deal or this deal. that opens the door to quite a lot of upside, i think against the euro, probably against the dollar as well. you have a lot of downside risk priced into the pound already, which i think it tells you the upside surprise potential is greater than the downside surprise move if you get a no deal scenario. that is where i would see it with pound. now again, a headline could change everything, but right now the way the risk reward is skewed, vasilevskiy it. -- that's how i see it. anna: if we do see a deal come to pass, we would have to factor in what the bank of england reaction is going to be. if there is a deal past, how
quickly do we wrap up expectations of rate hikes -- --sed, how quickly delete up expectations of rate hikes? it does not strike me from their comments that they would be super keen to cut again. their willingness to hike looks far greater if you get a positive resolution. anna: you believe that would be the thing they would do, rather than cut to support the economy? tim: i think maybe they will reverse the hike that was a reversal of that previous cut. i'm not certain about that. i guess we will see a lot more today. at things as though their bias is to think that -- it seems as though their bias is to think that the labor market is healthy enough. tim graf stays with us on
anna: welcome back to the european open it. where 22 minutes into your trading day and a negative trading day it is. look at the red across the european map of european markets. the tech selloff, the tech wreck. we saw the msci asia-pacific down by just shy of 1%. the shanghai composite down by 2.1%, so tech and trade converging to leading to a selloff, certainly in asian stocks, and we saw that on the nasdaq yesterday. the fed will stick with its campaign of gradual rate hikes, according to the new york fed president, john williams. he said the goal was to boost economic expansion and keep inflation low. >> and unemployment is very low, the economy has a lot of positive signs. for us it's about keeping a positive balance, keeping the economy strong and stable will likely mean rising interest
rates somewhat, but it's really in interest of a strong economy. anna: tim graf is still with us. give us your thoughts on the fed? thoughts?our tim: i don't really see that, actually. people were positioned for the fed to keep going and we know the market is long on dollars. a little mini bounce in oil we had in the week was used as an excuse to sell the dollar. i'm not sure a whole lot has changed as far as the dollar and u.s. rates are concerned. this has been one of the most shallow fed rate hiking cycle's in a lifetime. there are worries about the slowdown in the global economy feeding back into the u.s., but the u.s. is a relatively closed economy. i suspect the bigger worries are other economies having to shelve
their normalization plan for the future. very gradual, very slow, very data dependent and i don't know if the recent comments last week change a lot of that. anna: how much do you worry about the housing market united states? i have a chart showing the sentiment indicator for u.s. house builders. it is simply turned downwards in a way we have not seen since 2014 or so. tim: it is where and in two respects, if you believe -- two respects. certainly,orrying, but it's coming off of very elevated levels, so it does not concern me quite yet. i will start to worry when core inflation starts to roll over in the u.s., or things like jobless claims, which tend to be more leading indicators, when those
start to trend higher, that's when i start to be a little bit worried. for right now, it does not suggest the fed has to do anything other than what they have set out to do in their dot plot, a hike in december, and a couple more hikes next year. the rate market basically telling you they're going to hike in december and once more in the next two years, and that's it. anna: so you believe the market -- don't believe the market, not the fed -- you don't believe the market? tim: i still believe the dollar has some gains left in it. i think it's at the very least. well supported. anna: good to speaking this morning. microstrategy of at state street. we speak to the ceo of the london bullion market association, ruth crowell. we will have that exclusive conversation coming up shortly on the european market open program.
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♪ >> 30 minutes into the trading day. here are your headlines. the technology stocks lead the declines in europe after a brutal session on wall street for apple in facebook. tory rebels failed to secure a no-confidence vote against theresa may. meanwhile, jeremy corbyn tells bloomberg he's not ruling out a second brexit referendum. we'll will keep our options open. the pressure now is on the government not to accept the deal that theresa may has. >> nissan stalls. the carmaker drops as much as 6.5% after the arrest of the chairman. they extend losses ahead of the
board meeting. ♪ >> good morning and welcome to "bloomberg markets: the european open." i'm anna edwards. let's have a look at what's happening on the stoxx 600. this is the mrr function, the biggest gainers. we are all about measurements, instruments to the upside. this one is up by 8.6%, a technology manufacturer, a cost reduction program going down. sticking with that measurement, this one is up by 2.9%, health and safety sensor technology delivery numbers better than estimated. business, upering by 3.6% this morning. their numbers are coming in with organic growth better than estimates, leading the company higher.
we have a restatement and upgrade to their guidance from that business. we will be speaking to the ceo later on. let's have a look at what's moving to the downside. technology is the big theme in the asian session. on the nasdaq yesterday in the united states, we had a little bit of that going on. components moving lower down by 3.8%, a little more complicated. cyb g to the downside. challenger bank, they missed their profits. the net interest margin guidance looking a little poorer. a proxy for the u.k. and that is to its testament -- to its detriment. the market felt something to object to hear, down by 5%. credit suisse also down by 3.4%. let's get the bloomberg first word news update. >> thanks. revolt against
theresa may appears to be running out of steam, with her opponents yet to reach the threshold for leadership challenge. so far, more than 20 tory lawmakers have publicly declared they won't make it work, meanwhile bank of england governor mark carney appears in u.k. parliament later today, with brexit likely to dominate questions. will keep the options open. the pressure now is on the government not to accept the deal that theresa may has brought back. we will vote against it in parliament, and if it comes up in its current form. nissan and mitsubishi motors shares have fallen in asia after the arrest of a chairman for alleged violation of japanese financial law. he underreported income in misused assets, and
the set to be removed by the board. meanwhile, the board of directors of directors is set to discuss allegations at a meeting this evening. have the discussions with the people that are in charge, and we will take those decisions as soon as possible to ensure stability and long-term vision for both renal -- completed oncks unsold homes surged by almost half this year, as brexit uncertainty and affordability issues. the housing market. jumped to more than 2300 at the end of september, the most on record. area in croydon and out of the south has the biggest stockpiles. global news, 24 hours a day and at @tictoc on twitter, powered by over 2700 journalists and analysts in more than 120 countries.
this is bloomberg. >> thank you very much. let's talk about something a little different, the gold market here in london. london's gold market has come clean about the biggest secret, it's not as big as some thought. on average, about $37 billion of worth is traded every day over-the-counter otc market, much less than industry markets. so what's the story? joining us, the ceo of the london billion market association. good to have you with us. tell us about this disclosure. how much gold is traded? i read one of the headlines. usd for $5 billion silver. it doesn't get talked about as much. -- do yous a number think it will take the market by surprise? my colleagues who follow the gold market suggested there were
expectations of a bigger number. >> i think it's interesting. i think it will raise eyebrows, but what's important for us is the first snapshot of a fuller picture of real data, granular data, as to the size and volume of the market. today we are only announcing last week's data. that $37 billion is indicative of only five days of trading. but as we continue the data set, it will be interesting to see how it grows. >> is there any reason to believe that this release is not indicative, skewed for some seasonal effect? >> what i would say is that is not the complete picture. part of that is currently we have all market makers included. that was a major point. but it's a misconception that it's an exchange, or there's a magic database that has all this information in terms of total trade. that didn't exist until we launched it this week. makers,ave the market we have many of our full members
, but we have another 15 joining in january, and we also look at the otc market outside. >> so there could be data from other places coming in. so how many banks are currently participating? >> there are 13 market-making banks and 45 trading members in addition to that. that's a combination of trading houses, not just banks. >> how does that help you in bringing transparency and trust into the gold market? that was something you are trying to do with the release. >> absolutely. we first started that initiative when we lost the vote data last summer, and you had $340 billion usd worth of gold. that camee a data set out on a regular basis and gives more certainty in terms of the stock. previously while you have some eyebrows raised as to what the correct multiplier should be, right now we have actual data to deal with. ultimately you will start to see the bigger picture -- it's just
a week snapshot. it will be12 months, interesting to have a fuller look. >> where does this transparency come from? there have been controversy around conflict golder market rigging. is this an attempt to put a stop to that kind of talk? >> ultimately, the challenge is -- the gold market in london is otc and bilateral. you have to gather them, then you have to get permission. one of the biggest challenge to be faced is satisfying the banks that clients are protected, that none of the positions can be exposed. that was quite a challenge. we are there now, it is one of the reasons you see the data aggregate. we intend to go to daily reporting, but we want to see the data for three months, get comfortable, then move. >> how do you think your data set compares to those available in new york and other places? a lot of what my colleagues are interested in is how big is the
market versus new york, for example? does the transparency you provide -- what is available? >> that's what's going to be interesting -- the relationship has always been a partnership. you have future trading or paper weekng -- we only have a so comparing like to like they are quite similar. we will have to see how it evolves. >> thanks for joining us. the ceo of the london bullion market association, joining us with a different story, but an interesting one, about the size of the bullion market in london. let's go to the stock of the hour. this is one we are closely watching, the stock is under over inable pressure switzerland. morningutting mode this
after a decline in assets. ,t's a bit as a blow to the ceo not so long in the business. assets shrank to 395 billion francs from the end of june. gross margins and a key measure of financial strength slumped. it's a lot for markets to digest and worry about. wealth managers are contending with the volatile markets and increasing trade tensions. up next, we will bring you the other stocks moving around this morning. british homebuilders come under pressure following a report suggesting a surge unsold properties in london. this is bloomberg. ♪ . ♪
♪ warming up the downturn, it will have continuity, cohesiveness. i think europe will have a greater challenge, because they don't have a common fiscal policy. they don't have unity within the countries, they don't have unity between the countries, and they have big structural issues,. so i would say that europe probably would be the most strained. >> that was the bridgewater
founder and cochairman, ray dalio, speaking exclusively to bloomberg. let's take a look at the mid-cap movers. >> really a down day and we are starting with one of the chipmakers that is falling. it is flirting near bear market territory and they cut orders for chinese companies into the european shipment. down nearly 1.5%, another read across with u.k. homebuilders, particularly those heavily exposed to the london market. a new report found stockpiles of unsold homes have surged by nearly half in 2018. another to the downside is casino, down .6%. the supermarket chain is freshening up management to fend off short-sellers.
the new cfo is david knew back taking the helm. >> thanks very much. tech stocks plunged, leading a rout in global stocks. all major u.s. benchmarks were down by 1.5% yesterday. the nasdaq dropped more than 3% amid concerns that the trade war will disrupt supply chains. bitcoin has been sinking, falling through the $5,000 level for the first time since october, 2017. let's talk about tech. our bloomberg opinion tech columnist joins us on set. good morning. we have been talking about apple and apple suppliers for a while. how is that story gaining momentum? >> we had a report over the weekend saying that they reduced the orders for all three -- previously we have seen drips coming out of asian media suggesting that they are cutting components. it is hard to get a more broad
read across apple unit demand, and now this report offered plotsy, saying that the are all seeing lower numbers than had been expected. for apple, that is a necessarily the end of the world. we already know what apple's outlook is for the coming quarter, and they are making more on each handset, but that margin doesn't necessarily translate to supply. >> if apple can find services revenues to compensate a be the suppliers cannot. more recently, we have started to think about trade concerns and the tech sector. we've been dwelling on trade in autos but the tech sector is also a very integrated global supply chain. there have been some exemptions from u.s. terrorists -- what is the concern around tech in
trade? >> is a vastly complex supply and we are still trying to get these silica and substrates into the semiconductors -- munich might supply china, who supply someone in taiwan. latency in the trade of goods is a problem. is that it concern has been on a tear, not always able to meet demand, and has ordered a lot of manufacturing components and then all of a sudden they have a huge amount of overcapacity. >> is this a european story as well? you mentioned a german business. even though it's a high level also some of the asian markets -- there are
certain key players that feel that global supply chain. >> yes, absolutely. the companies in the semiconductor space are the ones who make the machinery. those orders taper a little bit firmsmpanies in europe -- , and xp, theyo supply the automotive industry, which is something hit by trade barriers quite significantly. >> what about regulation? this is something that is focused on facebook and others in the social media space. is that also weighing on sentiment? >> i think certainly in the u.s. -- they came out in an interview with axioms, saying they expecting the regulation of tech services. apple would like to see themselves excluded. but the mood in the u.s. has certainly shifted.
over theght they were worst, we saw a flurry of stories and reporting on the mood that has declined because they are fencing the appetite for regulation. >> bitcoin, i need to ask you about bitcoin. what has been going on? >> i'm not in the middle of the bitcoin conversation. the read across for semiconductors is significant. nvidia, which makes a lot of graphics chip, does bitcoin mining, and they are down 20% lessons they reported earnings. the impact on the real economy is significant. >> thank you very much. our bloomberg opinion tech columnist, covering a host of subjects, from bitcoin to semiconductors.
we have some big guests coming up. later, we had to the oil conversation. we talked to the ceo of nl. we will also be speaking with the chairman and ceo of morgan stanley. that conversation is after 5:30 p.m. london time. bloomberg users can interact with all the charts they see on bloomberg tv. you can browse those charts, use them in euro reports. up next, battle of the charts. this is bloomberg. ♪
♪ welcome back to the european open. 52 minutes into the trading day. across europe in the united states, concerns around the tech sector. time now for battle of the charts. alex is going head-to-head with anne-marie. today,tive trading day negative trading week for oil last week. you can see here the cboe, nymex oil volatility index. it spiked to the highest level in two years last week because we saw that bumper slide in crude, which sparked talk of options going crazy, really forcing that selling in the oil market. the question is what next? we saw it come of highs, and there's a bit of disagreement. the ceo saying they think volatility is here to stay. jpmorgan said they think opec
will manage the market. citigroup sees volatility coming lower, but only after the opec meeting. so what's next? there is money to be made in lots of volatility, and we will find the answer . next month. >> anne-marie? >> i love that chart. i normally do commodities, but today it is all about tech. apple is nearing bear market, down more than 19%. 20% is the threshold. this is since the high in october. there is darkening demand about apple's latest iphone, and we have seen this around the world, and how it is impacting other countries. we saw in asia with chipmakers and in europe. this is the chart that matters today, not just the fact that apple, which is quite cheap to buy right now, but the impact it is having. >> i'm going with anne-marie, i like that. topical, ties into the
technology conversations. european markets are weaker. thank you, everybody. you can find all the charts we are using during our battle of the charts, and more broadly. g tv is the function. breaking news on m&a. boston scientific has agreed to buy btg for 840 pence per share, in cash. the share price looks pretty stunning. a big spike up. global health care company based in the u.k., london in fact. 2.6 billions around pounds. the company focuses on medical technology to help physicians treat their patients through minimally invasive procedures, and it seems they are being bought out by boston scientific. we have had lots of conversations about whether brexit will put off m&a, or whether it makes m&a better value. it also depends on what you are
buying, whether it is a u.k. exposed business. across's the picture btg. let's have a look at the markets. european equity markets are on the back foot, down by .8% on the european equity picture. the stoxx 600, ftse 100 down, cac 40 down, the worst of the losses down by 1.2%. in terms of the sector pictures, financials are under pressure. julius baer disappointing some, and on the same day we see that, a much smaller affair, the stock down by 8.8%. negative in terms of the financials. about their assets in the management. a miss assets, according to bank
♪ >> tech tanks. the selloff in the u.s. drags u.s. lower -- drags tech lower. newsom is that too -- the state of the auto transition hangs in the balance. and calling the rebellion. tory rebels failed to get a no-confidence vote in theresa may. labor doesn't rule out a second brexit referendum. >> we will keep our options open. the pressure now is on the government not to accept the deal that theresa may has brought -- we will vote against it in parliament if it comes out in its current form. ♪