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tv   Bloomberg Markets European Open  Bloomberg  November 28, 2018 2:30am-4:00am EST

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i'm in product development at comcast. we're working to make things simple, easy and awesome. anna: welcome to bloomberg markets, the european open. we are live from our european headquarters in london. i am anna edwards alongside matt miller in berlin. matt: asian stocks rallied into the close as tech shares gathered pace with investors optimistic about a breakthrough in u.s.-china trade, or possibly the fed officials slowing down rate hikes. the cash trade starts in 30 minutes' time. anna: fighting the fed,
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president trump renews his attack on the central bank, saying it is to blame for the stock selloff. we hear from governor jay powell later. the prime minister is said to back down from a key battle with parliament. will it increase the chances of a no deal brexit? asia rally as traders hope for a breakthrough on u.s.-china talks, but larry kudlow warns of more tariffs if no progress is made. matt: less than half an hour from the start of european trading. looks like we could see gains in stocks on the continent and in the u.k. we have futures trading higher. we also have 10 year treasuries climbing just a little bit. if you look at my three-day chart, we have come up from a dip yesterday around 8:00 p.m. european time, 2:00 p.m. u.s. 3.06%,coming back up to
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which means investors were willing to let go of that paper, let go of the perceived safe haven and by riskier assets. anna: we see risky assets doing well in the asia section. asian equities and the broader equities already trading. appetite for risk assets. is it the comments around g20 or hoax around she 20 -- g20 lifting things or the fed and president trump? president trump says he finds little to liking jay powell. sticking to the script, though in steady rate hikes. james bullard admitting there u.s. be chinks in the story. show you the stocks story and the commodity space. iron ore bouncing, up 1.9%. goldman sachs showing the selling might be behind us.
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oil prices, higher after a 30% drop from early october prices. european prices may hold their breath -- breadth. u.s.-chinasions in trade talks and possible opec cuts. now from singapore, mark cudmore, howard bloomberg markets strategist. there are so many decisions a couple of now and weeks from now and we could see markets in a holding pattern until we get resolution. people are going to be slow to trade enthusiastically, the new macro theme, until we get resolution on brexit, g20 and trade, fed guidance, and opec supply cuts. until then, volatility but more than micro-stories that
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dominate. orgle name stories individual commodity stories. i expect that seem to continue. slightly frustrating environment for the macro trader, especially since this is the time of year when people chase trend into the looking forriod patterns of performance, but i don't think we will have that opportunity this year. matt: will we see the fed consider a pause? more investors are saying they need to do that. we hear bullard saying he sees cracks in the economy, boston saying pockets of trouble. is it time? fed -- fednk the may may guide in december but le ss hawkish but i don't expect them to go dovish immediately. the market may be right, but i don't think the fed is going to concede to the market until the
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december reading. -- rating. they will wait for the press conference and if it is clear in december they got ahead of themselves on the dot plot, they but roll back expectations i don't think how old will interrupt the narrative today and i expect the overall minutes in the 24 hours will say the fed is willing to push higher with rates. in the near term, the surprise for u.s. yields is a little higher. anna: 3.06 is where we trade on the u.s. 10 year yield. there's a lot to talk about with the fed conversation and it makes you wonder about the banking stocks because we are asking on the mliv blog, which banks will perform best in 2019 and it seems a year or so ago when we were talking about the extent of the rate hikes to come, other central banks were expected to follow suit, it seems ins may play out better for the banking sector.
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perhaps they have played better? mark: absolutely, there is massive optimism for the banking sector. in the u.s., the tax cuts, trump cutting back regulations, the monetarylobalizing policy. all of this was meant to support the banking sector and given volatility, it should be good for market makers and trading departments. we expect a good year for banking stocks. will they do better next year and if they do better, which stocks may outperform? the answer is outside of my will house -- wheelhouse, but i am curious to hear from our listeners. cudmore, bloomberg and let, joining us on the possibly more micro focus in these markets until we get the macro issues sorted out. by can join the debate
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giving up your answer to the mliv question of the day. on your bloomberg. the question of the day, in which country banks will perform best. let's get to the first word news with desley humphrey. desley: prime minister theresa may is said to have backed down in the u.k. parlett -- parliament. preventing the house of commons from changing the terms of the eu agreement but according to a bloomberg source, lawmakers will be free to vote on potential changes to the motion. amendments could include calls for another referendum or a different deal with the eu. the bank of england will publish its financial assessment of the brexit withdrawal agreement at 4:30 p.m. u.k. time today with governor mark carney holding a dress conference 15 minutes afterwards. bloomberg television will bring you full coverage later today.
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president donald trump has told "the washington post" he is not even a little happy in his choice with the central bank. he complained about jay powell, blaming policy for recent declines and gm's announcement it would close five factories in north america. egypt will not ask for further funding from the international monetary fund when it $12 billion program expires next is open to the lender to reinsurer investors. the financeomberg, minister said the government is taking steps to become more attractive to institutional investors. go for theoing to international market this year, this financial year. theaven't decided yet on time. --are very interested and markets, currencies, products.
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desley: president donald trump will meets xi jinping over dinner saturday evening at the g20 meeting. larry kudlow says trump is hopeful for a breakthrough but is ready to impose more tariffs if the upcoming talks don't produce products. the meeting marks a criminal moment in the trade war between the world's two largest -- critical moment in the trade war between the world's two largest economies. the lion air jet wasn't prepared even though it failed on a previous trip. -- problems the jet has suffered an earlier flight. boeing has said it is working closely with investigators and its 737 max jets are as safe as any aircraft that has ever flown. global news 24 hours a day, on-air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.
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this is bloomberg. for usesley humphrey with the update in dubai. next, another reshuffle at the top of deutsche bank. struggling lender could see more top executives depart the company as regulators circle. we are live in frankfurt with the latest. matt? matt: if you are traveling to work, you can always tune in to us on bloomberg radio. you can get its live on your mobile device. london, you can listen on dab digital and in new york, tune into sirius xm. this is bloomberg. ♪
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anna: welcome back, everybody. this is "bloomberg markets: the european open." we are 17 minutes from the start of cash equity trading. things to watch out for this wednesday. in the united states, house democrats will have a closed-door meeting. so far, no challenger to nancy pelosi has come forward. xi jinping is meeting with king the g -- g20d of at the end of the week. at 4:30 england time, the financial stability report, the results of the bank stress test and the assessment of the brexit withdrawal agreement. that will be the focus after markets close.
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the governmentom with various scenarios and the economic impact of those on the u.k. economy. let's get the bloomberg business class with -- flash with desley humphrey. continuing to back its rhetoric by investing more in its massive u.s. plant that is as the german carmaker shows off to suv's at the los week.s auto show this speaking to bloomberg television, the ceo says both models will be made in the company's factory in south carolina. we are producing the product in the main markets and the main theets is the u.s. market, majority of those cars will go in theunited states united states for the united states, and we will continue to invest in spartanburg. slumpedgeneral motors
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as president trump warned he may terminate subsidies for his electric car programs in retaliation for the decision to close factories and cut thousands of jobs. he tweeted his anger at the the ceo, writing that the u.s. saved gm in the past and is being repaid with job losses and closures. the president question why no plants are being shut in mexico or china. microsoft has surpassed apple as the world's most valuable listed company thanks to a $300 billion rout. it briefly took the crown monday, but yesterday's close saw the market cap rise to $828 billion, more than a billion ahead of apple. data shows microsoft was last in the league in 2010. apple has slumped this month on concerns of -- over iphone sales. unilever is said to be in exclusive talks to buy -- from a drugmaker. a rival bid from net -- nestle
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-- beaten to buy them all multi-beverage. it could come with a price tag of about $4 billion. that is your bloomberg business flash. that,thanks very much for desley humphrey in dubai with the latest on horlicks. deutsche bank mulling a shakeup in its top ranks again as regulators express frustration. a source told bloomberg the bank's chief regulatory officer and tom patrick, who runs u.s. operations, may leave the company. any final decisions have yet to be made. the reshuffle could serve as another blow to the credibility of the lender. the stock hits a record low every couple of weeks and investors worry it is being drawn into more recently danske bank's multibillion-dollar laundering scandal.
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joining us from frankfurt, and german banks reporter. how certain is this and where does it come from? at people getting pushed out, or people leaving because they are frustrated? >> i mean, look. as we pointed out, deutsche bank has been a focus for compliance deficiencies for a long time. german regulator recently took the unprecedented step of installing and anti-and -- anti-laundering monitor at the bank. or have been questions about the efficiency of their controls and we have been hearing she has been in the spotlight for a long time. .he has been under criticism maybe she is tired of it all. deutsche bank is a hard place to work at and whether this comes to fruition, it is not helping her now that this story is out,
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a goodoes seem there is probability we will see something happening, but as you have said, it is not certain yet. reshufflecertain the takes place. how important would it be for deutsche bank if the reshuffle happens? steven: there has been reshuffling. the most important one was the ceo change in april and since then, the new ceo christian sewing has replaced the chief operating officer and the head of the asset management division . this would be the third went to go, so he is reshaping the management to his liking. that is probably good for him, but will create uncertainty for the bank. would need to reestablish the regulatory relationships built up over the last three years. that will be difficult, as we said, control deficiencies are a
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big problem at deutsche bank, so post is important for deutsche bank and it will need to find someone to fill those shoes. matt: thanks for joining us. steven arons, our banks reporter on the ground in frankfurt. we are minutes from the open of stocks trading. we will get a look next at which issues will be on the move, including sap after a rough few weeks for tech. can cloud software stocks in the u.s. send good fives over here -- vibes to their european counterparts at the open? this is bloomberg. ♪
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>> we will have a very good year 10%,ina with increase over and we mentioned in china, especially in our motorsports cars like the 718, a very big increase. we have good success with the new high-end. matt: those are the thoughts of porsche chairman and ceo all of blume from -- oliver los angeles. let's get your stocks to watch. and reordering is looking at sep. joe easton is covering
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glaxosmithkline and maria tadeo is focusing on bayer let's hear about the good vibes. linked european company, salesforce earnings you look atong, if extended trading, shares were up 9% yesterday. this is a read across story from europe. we potentially see after tech being beaten down in europe, we could see s.a.p. get relief from these "good vibes" from the state. matt: what do we have on glaxosmithkline? joe: unilever in talks to buy the nutrition unit, which includes the popular hot drink. it might seem like a strange pairing from a company that is more used to aspirin, drugs, and
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other pharmaceutical areas but it could be worth up to $3 billion, possibly even more for the dealny and could be crucial to underpinning next year's dividend. -- it ismportant important for glaxo. the stock is benefiting from a weaker sterling, but we could see more upside in the shares this morning. matt: it is indeed a surprising piece of news. it is almost like they went out and bought -- >> i am looking at bayer. there were reports the company could be considering a new cost-cutting plan and that includes job losses. we think it would be in the pharmaceutical research division, but also its health division. on this report, which not confirmed by the company, would be in operations that do not affect germany.
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the plan is to streamline operations and perhaps sell some of the smaller brands. matt: thanks all of you for joining us. geters and listeners can all the latest stock stories from our equities team. type first go, and you can get it on the mobile app. is the revenues? anna: nor brings a released the number earlier on. opening calls suggesting the business could go higher. the competition regulator is concerned of its takeover. -- keep an eye on aviation. the u.k. is close to an open skies deal with the united states. in terms of the futures, let's see whether the optimism in asia filters through to the european session. matt: it looks like it is going
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to. you have definitely seen investors letting go of treasuries. the yields are floating up. we have seen higher futures across the board with ftse futures up one third of 1%. market open in four minutes' time.
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anna: good morning, everybody. less than a minute from the start of the trading day. let's look at how the markets are positioned. --s is euro-dollar, 112 1.1278. the oil price is stronger this morning. we have seen a drop since early october. interesting research by bloomberg intelligence suggests many people out there believe that there will be a cut in production from opec and friends. csi 300 in china, up in the session and we have seen optimism coming through in the asian session. is it to do with expectations around the g20, or expectation progressivey not as
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in 2019? the pound fairly flat against the dollar at this stage. stronger atested the start of the trading day in europe based on some of the things pushing the asian equities session higher. some optimism around the g20 where we get some deal between xi at president trump. also, president trump's comments on the fed. influence or not, jay powell and his team? at what is happening right now on the european equity markets as we open up this morning. the ftse 100 is up .4%. ibex is up .4%. we wait for the rest of the markets. the cac up .3%. let's have a sector breakdown. in asian trading, we saw
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tech stocks leading the way. anne-marie was telling us about effectsible positive for s.a.p. in frankfurt. we are seeing tech stocks lead the way in european trading, as well. we also see utilities up, energy, real estate. all of the 11 or so industry groups -- exactly 11 industry groups on the eurozone 500 are doing better. only consumer staples trailing. those are some defensive sectors. if it -- it is good if you are long stocks, not short. some big gains in the industry groups and really positive breadth. on the stoxx 600, 414 stocks up. only 141 are down. anna: that is the sector picture. let's look at the individual stock movers. this is the mov screen.
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what is moving across the stoxx 600 this hour? electra to the top. some scandinavian names at the top of the leaderboard this morning. bpm is in there, so there is a banking flavor. cotto group up 2%. at the downside and see what is leading up lower -- leading the losers, i should say. 600.e up .4% on the stoxx storebrand down this morning. they offer services in norway. the shares dropped the most in more than six years in this morning session. gvc down. m&s, down. a mixed bag of movers. some of those brochures, not doing well even though they are selling so much horlicks.
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let's get to the gains we saw in the u.s., in asia. europe, as well. meanwhile, president trump has blasted the fed. speaking to "the washington post," he blamed the central bank for stock market declines. he said "i am not happy with the fed. so far, i am not even a little bit happy with my discussion -- selection of jay." joining us now, grace peters from j.p. morgan. this gradualnue on hike path, are we going to see equity markets continue to tank? e, will wed's -- paus get a recovery? >> the fed is critical. in october, the comments from jerome powell suggesting neutral being some way away and the idea
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of the strength of monetary policy and that force another leg down in markets and as the market got its head around the idea of stricter policy and the impact on profits when we were already seen pete data and profits going through. any hint of a pause in the fed path will be very constructive. anna: this chart seems crucial to me right now and many people. this is short-term inflation expectations in the united states. two's, fives, and 10-year breakevens. this adheres trump, the messaging, but also sees risk. bank hase central operated independently and jerome powell, recently new to his rule, will be pained to maintain that independence. unemploymentthe market, we have seen that coming down.
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there are signs of wage growth coming from the u.s.. fedher key indicator the will be looking at, so putting that together and what is going on in international markets, any sign of a pause would be a healthy development. matt: i have a chart, as well, here. check it out. a look at the federal funds target rate in blue. this is the gradual path higher and then the bloomberg dollar index. despite trump's talked about how 2018.t climbs up from it has been getting stronger, almost back up to the heights we saw in 2016-2017. can donald trump stop this? grace: the rally we have seen in the dollar's february is very much coincided with growth divergence we have seen around the world. is the u.s. has seen
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this extraordinary growth through 2018 thanks to a strong underlying economy and the positive impact of tax reform. the u.s. will also start tapering off, as we saw from markets earlier in 2018. in the short-term, the dollar does remain supported and part of that is dependent on the path of the fed, but those are the more medium-term, we think you can see dollar weakness through the second half of 2019. anna: you have talked about things that are risks to the market and that is the head -- fed hiking to harm, global trade, things that are topical today. in your notes come you talk about record buybacks in the fourth quarter offsetting that. will that continue if the fed sticks to the hiking path? it becomes more expensive to borrow, to buy back? havingcompanies are not to borrow because of the corporate tax and strong profits, and the fact that corporate's have this mindset of maintaining a conservative
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balance sheet anyway. the idea of levering up to share buyback is not something shareholders support. organic cash flow and the savings and corporate tax reform is something that enhances shareholders in a positive way. we have seen a huge step up and buybacks this year. we don't just over halfway in terms of buying back at stock, so that lens a reasonable amount of support to sectors like technology, health care, and from financials. matt: we have a lot going on today, so we want to keep you with us a little longer. grace peters is the european equity strategist at j.p. morgan private bank. up next, we will bring you the stocks on the move so far, including sap out of waldorf, germany, moving higher after its u.s. cloud here salesforce beat revenue expectation last night and there are others to join it.
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we will wrap it all up for you when we come back. this is bloomberg. ♪
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anna: welcome back to the european open. we are 10 minutes into the trading day. by .5% on the stoxx 600. annmarie hordern has the movers. >> s.a.p. up from .8%. this is the reader across saying
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good vibes coming from salesforce, which had a strong revenue forecast and jumped through after not -- after hours trading. some good news for the cloud-based company. unilever, softer this morning. horlicusive talks to buy ks, seems to have beaten out nestle. now that the earnings season is behind us, the deals will be center stage in big market movers. erickson to the upside nearly 1%, nearly .7%. , the likes zealand of australia, banning 5g -- citingfrom security concerns. banning huawei. matt: thanks very much for that.
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let's focus on the auto industry, keeping a close eye on donald trump's policy and talks around the sector. the limits are -- administration may eliminate all subsidies on electric cars. bloomberg spoke at the auto show about his relationship with the white house. i think it is well accepted that we are the biggest net exporter in the united states. you are exporting cars. footprint ind south carolina. we have apprentice ships but we are always with bashing dialogue with the administration and we need to explain our business model and our assumptions for success, as well. we are continuing that dialogue with administration and washington. >> are you going to meet with them anytime soon? there were reports you would. >> we have no official
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invitation from the white house. with theialogue administrations across the globe and we have discussions with administration in washington. >> let's talk about another big issue. yesterday, gm said they will be culling sedans, laying off a lot of people. is this a signal there is an inflection point for the auto industry? maybe the best times are over? we are kind of in the beginning of the down cycle? how do you view that? >> if you look at bmw and our strategy, i remain optimistic. we have the biggest product momentum in our lifetime at bmw and our history, and if you look there is huge momentum of the new suvs like the x5, x7, x4. from my perspective, i would see growth next year in the united
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states as well but it is getting more competitive. it depends on the strategic direction we are heading with the product portfolio we offer for the -- united states. it is the perfect time for the u.s. market for us. for sure, there will be changes in the business you to the digitalization, autonomous driving, electrification, but we will offer by 2025, electric five models and we are the market leader in europe, selling electrified vehicles. >> it is also very expensive to do all that. vehicles, have you thought of all about culling some of your models? certain sedans that aren't selling as much? in the u.s., gm, i know those are mass-market manufacturers, but is that on the table for bmw? the new seventh
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generation series we will show tomorrow at the l.a. motor show. the street series is always a successful car in the united states. heavilyook, we invested into suv's and that is why the new x7 will come to the market next year. also,oduct offensive was one bit was electrification and the other was the suv offensive. if you think of more luxury products like the convertible product which premieres tomorrow, as well. we're looking on the luxury ontor like the x7, and electrification but for sure, you need heavy investment in the future for all of this. on the other side, we are always focused on efficiency and we have seen complexity of the product, sete variants, bumper variance, and saving costs to invest into more electrification.
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anna: that was the ceo of bmw speaking to bloomberg exclusively. morganeters at j.p. private bank is still with us. interesting to hear the ceo talking about the whole relationship with the u.s. government, the tariff story in the united states, and it reminded me of the tweet we have had from president trump yesterday directed at mary barra and gm, unhappy with the decision-making there. how much do you think these kind of relationships with the president are impacting businesses' ability to make the decisions they are right? grace: it is impactful and the auto sector has been hit by a number of factors this year. the broaderone, slowdown in emerging markets given the export nature of the industry, and also industry-specific issues around admission standards. anna: unlike the fed, it is hard to remain data dependent.
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grace: absolutely, they have to commit, form a strong business plan but also, the uncertain environment is weighing on profits for the sector. it has weighed on investor sentiment and you have seen the auto sector being one of the worst performing markets in europe and so far this year. it is tricky to see how that changes in the short-term with this modest slowdown in global growth. -- cyclical sectors more broadly have been sectors we are moving away from, more toward quality and structural of growth and that fits with the mood of the market given the economic backdrop. the real thing that could make a difference is clarity on trade. when we look across market and see which areas are carrying the highest risk premium, european autos, the dax where a lot of companies are listed and it could be as much as 20% upside in a positive scenario, but we are not convinced that will ultimately play out. that ishave a chart
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listed -- was lifted from tom keene's "surveillance" yesterday, but this shows in blue the ford company, in white, general motors. since the gm post financial crisis ipo, the two had been moving in lockstep together since 19 -- 2011 at the end of 2014, ford had to invest a ton of money to make the big cars because they have canceled their excursion, had enough -- not done the lincoln navigator, they started putting v6's as they are mass-market engine, which is a sin in the u.s., but the other shutting downs businesses that were not profitable. european businesses, now it wants to shut down businesses that are not profitable in the
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u.s. and it seems to me they are picking -- we are seeing edrporate america pitt against this populist, protectionist administration. do you make a bet on gm? can they win the battle or does the administration win out here? don't want to comment on gm specifically, but the structure you mentioned is something we have seen in the u.s. and increasingly in europe. activism is featuring more in europe and that is putting ceos on edge to make decisions around their core business. what are we good at, where can we defend prices and margins, ,nd focusing on that core area those core competencies. the result is they are spinning off non-core. the cash around the market is a good environment to be selling assets and we find shareholders to reward that quite handsomely. not maybe over a couple of months, but over an 18 month
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period, you can generate outflow by picking up on these corporate restructuring stories. grace peters at j.p. morgan private bank stays with us. let's check in on the european equity market, up .2%. we will talk more about the u.k. and exits next. this is bloomberg. ♪
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anna: good morning, everybody. this is "bloomberg markets: the european open." let's focus on the u.k. philip hammond said staying in the eu is the best outcome for the u.k. economy but that is out of the options that deliver on the referendum results. theresa may's plan is the best. for more, error european news editor. david, good morning to you. these comments from hammond are no surprise because he campaigned for remain, but this is his version of being supportive, isn't it? does this tell us anything about where the debate goes? see from hammond and the bank of england later this concerted effort from the treasury, the bank to make this economic argument for misses may's plan.. the government is laying out the reasons to change their mind before the vote.
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mr. hammond is about as supportive as he can get for brexit, that out of the options, this is the least damaging. the banksnow what will say, but they are putting out their forecast and you can expect the same thing. this is all about trying to change the minds of mps lining up to vote. will it make any difference? if you strongly believe in brexit, the former brexit secretary has come out to say it rehash,fear mongering, so will it change the mood? , thethey are aiming for strategy is to change the minds of the public. theresa may is touring the country and is part of the economic argument laid out today as part of that strategy. anna: trying to get the public and business on side, because what hammond is saying is what the cbi said we could go. from a market perspective, your base case?
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grace: it is hard to have a base case, but we ultimately get to a negotiations outcome. the path is not going to be easy. it will get worse before it gets better. as we hear more about project fear. edtimately, there is a v-shap recovery in that there is no alternative. forced, notbably be at the first or second votes from parliament, but ultimately as we get down to the wire, there will be a vote. anna: and it will depend on believing there was no alternative. 200 read she could lose by out of 650. important news flow from our colleagues at bloomberg about may backing out, whether the motion can be amended. this is something labour party wanted? had --up until now, she
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she has changed and it is a concession. are probablyt betting that none of these amendments are going to command a majority in the house of commons, either. there is no better alternative. a motion could include something like a second referendum. is there going to be a change in the labour party on that position? is there a majority in the house of commons for that? i wouldn't bet against that, so maybe the possibility of a motion passion -- passing back to the public. yet more chaos and uncertainty. anna: the leader of the liberal democrats suggested that is how a second referendum could come about. that will be interesting to watch. grace peters and bloomberg's european news editor on the twists and turns over brexit, which you pour over, matt
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miller. matt: i am very excited, i am just marking my calendar for december 1120i will start paying attention again. the boe to publish its financial stability report later. this is bloomberg. ♪
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♪ matt: 30 minutes into the trading day. let's get your top headlines. fighting the fed. trump renews his attack on the central bank, think it is to blame for the recent selloff in docs, and maybe for gm cutting stocks -- jobs as well. we hear from jerome powell later today. theresa may is said to back down from a key battle with parliament. will that increase the chances of a no deal brexit on december 11? the asia stock rally trickles into europe as traders hope for a breakthrough in u.s.-china noks, but larry kudlow warns
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more progress will be made if china does not step it up. good morning and welcome to "bloomberg markets: european open." i am matt miller in berlin, alongside anna edwards in london. a look at where we are 30 minutes into the trading day. this is a picture on the grr function, the group ranked returns. auto and parts moving to the downside. bmw speaking to bloomberg and what you have been speaking to the -- we have been speaking to the porsche boss. to the upside, and this is interesting, technology stocks are up by 0.8%. oil and gas higher. the oil price is higher this morning and that typically has some kind of correlation with the stock. it is interesting to see technology as the biggest beginning sector. there has been a rebound in tech stocks in asia.
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we will keep an eye on that. that is the sector breakdown in europe. the kick in bloomberg first word news update -- let's get a bloomberg first word news update. >> carlos ghosn has denied reports he passed personal trading losses onto his former employer. a newspaper yesterday reported that he may have offloaded ¥1.7 billion investment loans to nissan in 2008. it is the first attempt by carlos ghosn to defend himself after the automaker said he misused company money for personal matters. president donald trump has told "the washington post" he's not even a little bit happy with his choice to head the central bank. the u.s. president complaint about jerome powell in the interview, blaming his policies for recent -- blaming the fed policies part recent stock market decline and gm's job cuts
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this week. president donald trump and jinping will have a dinner at the g20 summit. trump islow says hopeful for a breakthrough but is ready to impose more tariffs if the upcoming talks don't yield progress. in terms of the much discussed meeting that's going to be a dinner meeting between president trump and president xi and representatives from both sides. it will be bilateral. i want to mention what the president told us a short while ago, and that is in his view, there is a good possibility that a deal can be made. crude rose on hopes of a trade breakthrough at the g20
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and on signs that the u.s. demand for fuel remains robust. the american petroleum institute was said to report a 2.6 million barrel drop in gas oil infantry's last week. goldman sachs echoes the view that crude will bounce back. >> at $50 oil we think it is in the u.s. interest to see oil prices higher because you are digging into the cost structure of the industry. between trade war, u.s.-china relations, and the potential opec plus production cut, that's really the basis of our call here. >> microsoft has surpassed apple as the world's most valuable listed company thanks to a $300 billion rout. yesterday's close sockets market cap rice to a hundred $28 billion, more than just rise -- $828 billion.
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apple has slumped on concerns of iphone sales. 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. the united states is refusing chinese capital and the european union is imposing a confident wide that in process for china -- vetting process for chinese investments. other countries have been much more welcoming. as china's president visits spain and portugal today, maria tadeo is breaking down the details of those newfound friendships. there are a number of reasons that a country like china would want to invest in countries like spain. clearly it gives access to the european union, but also markets in america, and if we get some deals by the end of today that would be the continuation of a theme we have seen across the
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european periphery. china has built up a trade surplus for about 10 years now. thehave to see this in context of global trade tensions but also the sovereign debt crisis in 2012. because of the volume of some of these deals, because some of the specters china is going after in europe, you are now seeing the european union wanting to take more time to vet. they are reaction -- the reaction on the european periphery has been different. the summer debt crisis, they really liked cash. china spotted an opportunity to buy on the cheap and that's reflected in my second chart. the european periphery is the favorite destination by china to invest. that's taken over the united states and the rest of continental europe. matt: maria, thanks very much.
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maria tadeo with a walk-through. the british government is expecting to publish its assessment to the impact of different brexit outcomes today, including a comparison with remaining in the european union. in the afternoon the bank of england will publish its own report outlining the implications in the banking sector in each scenario. today we are asking the question on our mliv blog, which countries banks will outperform in 2019? joining us now is filippo alloatti, senior credit analyst at hermes fund managers. let me ask you first and not limit you to u.k. banks are european banks, but also u.s. banks. where do you think we will see the best performance from financials next year? filippo: yeah, good question. have sorte u.k. banks
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of suffered a lot under these brexit uncertainties. potentially does one situation that's clear, for good or bad. we should have potentially -- in the u.k. financials, especially in the credit market, where we have seen the credit spread going wide for u.k. financials. anna: let me ask you a little about what we will hear later around the banking sector. after the close of equity trading we get the bank of england statements and stress test on the sector. there are some brexit scenarios in the mix. be the exposure? -- is lloyd's going to be the biggest exposure? filippo: for lloyd's it can be just about --
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this year there is a lot of the new country standards. its complex in its implementation. we don't know how things work in a credit crisis moment. matt: did you expect that we could see more m&a in banking? aknow that the lack of european banking union completion has turned a lot of ceos off. someone aked to couple days ago, he said if executives want to do it, they would do it. i think we will see probably more consolation within the internal domestic market. countries like spain and italy come to mind. i'm not sure it will solve the chronically profitability's that some of those banks have. they ared of the day,
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very much dependent on the shape of the curve and the level of interest rates. we need to see how the qe will eventually translate in quantitative tightening next year in europe and if there is any hope, or eventually some rates rise, which at the moment does not seem very likely. anna: what do investors in the banking sector make of the possibility of a labour party government? resigned, werob saw rbs shares down by 10% or so. oversuggested this was concerns about the labour party's plan to interfere with the strategy at rbs. is a predominantly state-owned bank. they have a lot of capital. i think rbs would be one of the best out performers today. what are they going to do with this excess capital? that ak -- the risk is
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more, should i say, interventionist treasury may have a different idea on what they can do with rbs. anna: what else can we hear with regards to the stress test today? the chiefll of executives are the u.k. banks are talking about their capital distribution plan. we see lloyd's adding on that. ceo arelays ceo, rbs painting a rosy picture of eventually returning more capital to shareholders. i think first there will be a reality check. if they get too close to the underrate, the bank of england may say it's fine and andy, but you may wait -- fine and dandy, but you must wait one more year to implement --
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maybe we will have some new information around some sort of liquidity measure in case of a cliff edge brexit, similar to the one where right after the referendum. matt: thanks so much for your time this morning. there, seniorti credit analyst at hermes fund managers. last night salesforce came out with revenue -- a revenue forecast that be the streets estimates and the ceo said -- beat the streets estimates and the ceo said that company will continue to expand. that stock is off to the races, as well as adobe, etc., digital services companies. sap is getting a little bit of a list from the as well. 0.66.you see sap up
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here you see sap rising almost two thirds of 1% on the day. anna: up next on the program we will bring to you the stock movers this morning, including renault.-- run out -- 0.5%.t up this is bloomberg. ♪
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♪ welcome back to "bloomberg markets: european open." we are 45 minutes into the , 46 minutes and looking at gains across the continent and in the u.k. as well. let's take a look at mid-cap movers. >> we start with a german company that is the biggest gruck maker and a huge brakin manufacturer for the trade world -- train world. third-quarter earnings up 13% year on year. tenaris down more than 7%. shares plunging as their billionaire chairman has been indicted.
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he was part of the so-called notebooks -- case. we should point out the spokesperson for the company did not have immediate comment. the board is monitoring the situation but they did confirm him and his place at the company. 2%.up some it's a dutch telecom company. it was the first strategy under then you ceo -- their new ceo. a bit of good news for the dutch telecom space. anna: those were the latest mid-cap movers in the markets, in a market that is pretty flat. stoxx 600 now almost entirely flat. egypt will not ask for further imf funding next year when it's $12 billion loan program expires. the finance minister says the economy is now in better shape and he is working to reduce the debt level, and gain investor confidence.
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he spoke exclusively to bloomberg in cairo. that we were happy with the imf. egypt is one of the few countries who completed such a program, successfully completed such a program, which is something good for us and for the imf as well. this program was a very strict program and it was very harsh, however, it's successful for one, because it's at the injection economy -- it took the egyptian economy to a good position. let me say that we agreed that from the point of asking for further funding, we are now in a position that we do not think that we will need further funding from the imf.
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just number one. tober two, we are committed reforming -- further reforming our economy and making sure our economic model is a good example for other countries. be, imf, of course we will you know, in some sort of forms with imf. this will give us some sort of comfort to international investors, but let me say again, this does not mean that we are going to ask for further financing. we can be in some sort of cooperation and by the way, we have already asked the imf to be engaged with us on our new strategy. >> at what point does the high cost of treasury bills keep you up at night?
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we are veryy transparent with our people and the international community and international investors that the level of debt, we are not happy with that, we are concerned, and we are working on that. of -- level as a percentage expenditure is high. treasuries, yields, and bonds went up, adding to the problem. let me say that we have a target to reduce our deficit. we have a target to reduce our debt. i have to tell you that i am just coming from a meeting with the prime minister. we are talking about specific measures and the specific actions which will help us to address both, decreasing the level of debt, and decreasing
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the level of -- i believe that by june of 2019 you will see that to have taken action and you will see that the debt level is increasing. explained lowering some of your borrowing costs. part of the strategy will be relying on the long-term treasury bonds. as you look to 2019, how much debt will you issue? what is in your plan? >> i am not 100% sure about what's going to happen next year and the year after, but it might be at the same level as this year. that was egypt's finance minister speaking exclusively to bloomberg. forget, bloomberg terminal users can interact with the charts that they see on bloomberg television or that they hear me call on bloomberg radio. just type in g tv .
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i have got it up here, to browse all of the recent charts. you see some of the charts that we just showed with maria tadeo. g.m. does not want to be like ford chart. up next, we will give you a couple more gems. it's battle of the charts. this is bloomberg. ♪
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>> i believe the course i have sent out is the right one for the country and all of our people. country and all of our people. ♪
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>> the thing about a trade war is that nobody wins. in the long-term we all lose out , and it's important for us to solve our conflict. we have been proposing reforms to the wto system, because we share the view that it's not working well enough. anna: that was the european commissioner for competition speaking exclusively to bloomberg in hamburg on the subject of global trade wars. now to our very own competition, of course it is super competitive. time for the battle of the charts. matt miller is going head to head with annmarie hordern. what have you got? >> i am looking at trump and his latest comments. he said he is not a little bit happy with what jerome powell is doing. jerome powell set to speak today. in the same washington post article he was questioning if janet yellen can really run the central bank as she is only five
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foot three inches. using the net long positions are higher as rates are going up. this may not last for long. jpmorgan is saying that these trump attacks in the fed could be evident and could mean a multiyear slide in the future. anna: matt? remember thatmay chart from using it at the top of the show, just fyi. [laughter] i think that donald trump may want the dollar to come down. it's not very helpful to u.s. competitiveness with it coming up so high. this is a chart that shows u.s., and european, and chinese car sales going back all the way to. 2000 we continue to climb -- all the way to 2000. we continue to climb higher. with all the drama around car sales, you can see the trend continues to rise.
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anna: matt, i am going to go with your chart. it is a great chart. yours a very good reminder of the underlying data on which we are all dependent, of course. that is it for "bloomberg markets: european open." this is bloomberg. ♪
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♪ >> fed up. president trump against the central bank again, saying he is not happy with jay powell. we hear from the fomc chair later today. prime minister may said to be backing down from her battle of parliament. is it a risk to her deal, or political calculation. and, the deutsche bank is said to be considering a management shakeup. ♪ francine: welcome to "bloomberg surveillance

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