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tv   Bloomberg Markets Americas  Bloomberg  November 30, 2018 10:00am-11:00am EST

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welcome to bloomberg markets. vonnie: here are the top stories we are covering from the bloomberg and around the world. investors with a meeting between president trump and xi that could decide the course of a trade war. we hear from hear from winsock,e getting ready for a hard brexit? in november is set to be the worst month for crude oil at a decade. we look ahead to the big opec meeting. let's check is equity markets which are a little mixed right now. abigail doolittle is here. abigail: there is small moves, investors and traders are tired after a pretty big week, three updates in a row for the major
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averages culminating in a big rally on wednesday. a day yesterday but the three major averages on pace for the best with the performance since february. on the month it's a bit of a divergence, a of the key meeting between president trump and xi. let's take a look at the monthly performance because this is pretty interesting. we are coming out of a rally basis, over monthly the last year and a half or so, we see mainly up bars. earlier this year we did have a volatile february and march where we had two down months in a row and right now what is really stand out is that for the month of november, the dow in the s&p 500 in blue-and-white are apace -- on pace for an out month the nasdaq is down .4%. the nasdaq 100 down more, but really speaks to some of the tech volatility we have had. the nasdaq in october has been sincemonthly performance
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2008 and that has carried through to some degree to the monthly performance for the month of november. if we take a look at the big movers in the month of november, we see huge declines. 18.6% from that disappointing holiday quarter guide on pace for its worst month of performance since september 2008. nvidia, down 20% on pace for its worst of the performance since july 2008. they missed estimates and activision, blizzard, and qualcomm down sharply. nasdaq nasdaq with a bigger way in for the sorts of names down for a third month in a row. if that happens, it will be the first time since 2016. let's take a look at the 10 year yield, we do see a drop down pointing basis points as bonds of that nasdaq falling. does have something to do with the powell put on wednesday.
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there's a bit of a risk off tone considering bonds are rallying in november. for a third month in a row. in europe, we are approaching this critical weekend which could determine so much going forward. the stoxx 600 down but not that much, a reasonably cautious story. the president is just arriving at the g20 as you can see, walking through. we will wait and see if we get any comments from the president. departurecated on his , we did see him indicating the possibility of some sort of a with the chinese. with the chinese. that certainly set up this meeting is being something that will provide i think an interesting monday morning. it does seem to be and interesting place to be right now. vonnie? let's bring in michael let's bring in michael
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mckee, bloomberg's international correspondence partner. we have the optics of a ceremonial trade deal signing the usmca and we also have robert lighthizer saying he expects the dinner between president trump and xi to be successful. the wellpoint point to a positive outcome? -- do all points point to a positive outcome? not necessarily. he expected to be successful but he did not define success. whether or not there is a deal will depend on the presidents of united states and china, if they feel like doing one, they will. will donald trump feel like doing a deal when he sits down with xi jinping? the outlines of the deal as it has been suggested in recent hours are that the chinese would buy more american-made goods and the u.s. would hold off on tariffs. the two sides agreed to further negotiations, a glorified kick the can down the road. is that enough for donald trump, who promised to get tough on the
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chinese? he's under pressure from lawmakers who want to do that and he is under pressure from business people who don't want him to. a lot is going to depend on the presidents mood when he has that meeting. vonnie: domestically, things are little rough, not just on the points you mentioned but also politically and legally, things are rough. does that make him more hawkish with china? or maybe were willing to do a deal -- more willing to do a deal given that the stock market has taken a bit of a beating in the last few weeks? michael: donald trump always equated the stock market is something of a referendum on his presidency. the fact that it went down and ifmake them happy the market is going to crash on deal he mighted be a little more reluctant. we don't really know because at the same time, he has been very tough on china. dealnobody really expected himo through with the tariffs he did impose. it's hard to say at this point
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and that's why it's really hard to trace. storyet's talk about the from the chinese point of view. we had manufacturing pmi data out from china a little earlier on, very weak. the steel pmi even weaker. the president of the united states talks on his way to andrews yesterday about the idea that the chinese really need to do a deal, does today's data confirm that? michael: they strongly suggested. it's hard to know exactly what would it take to confirm the need for a deal for xi jinping, because he is a different legal system and he doesn't have to take the risk that donald trump does in keeping with sanctions program going. maybe he wants to hold out because politically, it's better for him not to be seen to be in to the- giving united states and try other means of stimulating the economy. china's economy has been slowing down outside of the trade impact anyways, perhaps they feel they could survive the trade problems
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if they consult some of their credit problems, for example. guy: nevertheless, wouldn't there be a greater burden on the chinese, at least from a purely economic point of view, to stem the bleeding at this point in time? i appreciate what you say about the factors in play here, but nevertheless, trade is one of them and it is substantial. michael: yes, that is why some people think we are going to get a deal because it in the mutual best interest of both countries to do that. but we can't underestimate the political need for the chinese as well -- they don't want to be seen as giving in to the united states at a time when they are trying to take over substantial portions of the global economy. that the u.s.ngs has demanded is not just that they buy more things with that they fundamentally restructure their economy, get rid of the made in 20 -- made in china 2020 effort to dominate the future. chinese are not on to want to do that, so how do you handle that?
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how do you finesse that? 80 the u.s. and administration things if they get china more time, they will figure it out, but it does seem that in terms of a larger, broader deal, there are some intractable problems. vonnie: elsewhere on the sidelines, we know yesterday president trump play down the idea that he would be meeting vladimir putin, almost canceled at one point. today we're hearing reports that they may cross paths, this out of the kremlin. and saudilso putin arabia meeting. what are you watching for in terms of headlines out of any of those sideline meetings? michael: we know that the president and the president of russia will not be meeting, but the important meeting may be the ,ne with mohammad bin salman because both of them are large oil producers and they could in theory come up with some sort of agreement to lower production and therefore raise prices. it isn't guaranteed, but the last time these two met ahead of a opec meeting, that's what
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happened. there is a question about how low they want oil prices to go. as a question about how low the u.s. want oil prices to go, if they get too low, that may cause some cutbacks in u.s. oil investment. even if the president is not involved in the meeting, he may have a stake in it. vonnie: i think the michael mckee in buenos aires covering the g20 all weekend. here's kailey leinz. kailey: it may be one of the biggest data breaches ever. marriott is investigating a hack involving unauthorized asset -- access to a database in 2014. the company believes the database had information on up to 500 million starboard property guests, names, address, password and payment information may have been accessed. the u.s., canada, and mexico have signed a new trade deal to replace nafta.
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it still has to be ratified by lawmakers in the three countries with the signing an act a number of immediate provisions including protection from auto tariffs. senators from both parties are praising special counsel robert mueller are a guilty plea from michael cohen. publican richard burr says that shows you cannot lie to congress. one -- want cohen to return to admit to line. provisions over brexit will get worse if parliament rejects her plan. aboutoke to reporters lined argentina for the g20 some as you roll out another referendum on brexit and signal she would not resign. global news, 24 hours a day, on-air, online at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.global , i'm kailey leinz, this is bloomberg. guy: europe as we approach the
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close, just under 90 minutes to go now, we're looking at the -- .1%.0 down just 1% monday morning could be a brutal session depending on the outcome that arerious meetings taking place in argentina. the brent remains one of the biggest stories, that meeting could take place between vladimir putin and the saudi crown prince could be pivotal in setting up the agenda into the opec meeting that is coming up in a few days time so watch out for that one. deutsche bank continues today at one point we thought it was going to have a seven handle we have seen the raise continuing. let's take a quick look at the gmm, as abigail was laying out, we have some interesting moves around the world over the last month. , thealia down by 2.8% german dax down by 1.6%. weightedthat these are , so take a look at where the gains have been in foreign-exchange of the dollar. in real story is
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commodities. steele, gas oil, heating oil, and brent. brent down 22.5% over the last month. we talk about that throughout the program. this is bloomberg. ♪
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vonnie: you are watching live pictures, this is president trump the welcoming ceremony for the g20 meeting president of the argentine republic. they are posing for a photograph and all the world leaders that are attending have been engaged in this welcome ceremony for the last little bit. we will be taking a quote unquote selfie photo in just a few moments. president trump with a handshake with the argentine president.
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place in ae taking working lunch in, putting people first is the theme. i imagine there will be a lot unspoken at that particular luncheon and a lot of meetings taking place on the sidelines of this particular g20. guy: a lot riding on this for investors. people positioning into this weekend trying to figure out exactly what monday morning is going to bring. the outcome of that meeting obviously pivotal to that position. as you indicated as well, the oil story front and center. peter shaffer joins us from our bg -- rbc. which asset classes do you think are going to respond most money went to whatever outcome we see coming out of the g20? >> it clearly depends on what kind of outcome we are getting. imagine something that could becoming out as regards oil in particular that would clearly move the commodity complex.
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if it moves the commodity complex, it moves bond markets in particular and some of the stocks. i would highly the other thing that everyone is watching out for is not necessarily anything on oil in particular. if something comes out of that, it seems to indicate that trade tensions might be coming off the boil little bit, it's going to feelings the risky assets if it feeds into the risky assets, ultimately the risk-free asset will be taking a dive, so those two topics i think r t. bashar t. -- are key. guy: if we see some to resolution or downgrading of tensions between the united states and china, could we be setting up for a santa claus rally for equities? how far can that take us on the s&p, do youhow far can that take
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s&p, do you think? schaffrik: i think we would have to see a very copperheads a change in the narrative because one of the things that we have seen so far is any kind of indication that the resolution i think that we would have to see a comprehensive change in the narrative. i think it's doubtful. the best i think what we can see is that of steps away from the risk off that we have seen over the last month and a half. i think a fully fledged set up seems a bit hoping for too much, i guess. vonnie: the family photo gathering is taking place right now and we saw the camera resting on mohammad bin salman, a controversial figure. he will be having a meeting with vladimir putin, the russian president, they will be talking oil. in the wake of the murder of journalist jamal khashoggi, this particular meeting is probably not going to be the most social for montville sound -- mohammad bin salman. u.s. isspread in the
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below 20 basis points for the first time and the 10 year yields at 3%, what does that tell us? mr. schaffrik: we have to question whether it really tells us a lot. i find the irony in the matter is the latest round of flattening the we have seen ashley did not happen in the wake of the substantial selloff or the wake of a very aggressive fed the expectation in the markets have been taken down. the long and has performed quite a bit. i think the fact that we could see a bit of a reversal, if indeed, the notion turns around the bond markets might not be up for rally. if we are correct and we think the economy remains strong and therefore the fed can just keep going rather than pausing, even the long end might be impacted quite a bit. vonnie: pointing out that president trump is in between the french president and also justo abe of japan and
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shook hands with justin trudeau of canada right behind him. they signed the ceremonial part thise usmca agreement morning. that family photo is a particularly interesting one this year with all of those leaders gathering and so many geopolitical decisions to be made. peter, in europe, is at the same story? what is affecting european yields? we are seeing weakness in fixed income there. mr. schaffrik: in europe, the situation is similar to some extent. one of the key drivers we have seen over the last couple of weeks, really, is pricing out of previously [indiscernible] central-bank action. that's true for the u.k. and for the ecb. this is all happening on the back of downgrading of growth expectations. we would argue that the growth slowdown that is currently implied for the future might not
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be as severe going forward, therefore, we think the short end in europe look fairly expensively priced to us. we would be sellers, here. guy: let's pick up on that point, peter. we saw core data come through from cpi for the eurozone, cory 1%. at 1%, risk core down, below its dictations. how can the ecb be talking about raising rates at a time when effectively the inflation mandate is going to be very hard to miss? -- hard to miss? is going in the wrong direction, and that is not great. mr. schaffrik: i think we have to be careful, the .1% drop encore -- on core. buts clearly not going up, i would be careful describing it as heading in the wrong
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direction. having said that, what is important for the ecb is where is their medium-term path pointing to? that is pointing up and most of us have no doubt about that. the question is about the speed and the magnitude. even in the next meeting in december, they have to take the inflation forecast down and they will be rolling out a 2021 forecast which is going to be closer to goals. from that perspective, they will have enough ammunition to do it. the current policy setting that they have was elected during a period a time when we were talking about deflation and the ecb has been stressing that quite often lately. i think they will have enough ammunition to take the first steps. guy: one of the things people have been position around his volatility in the chinese yuan going into this event we are watching now as thep president takes a seat at the table. we're going to see quite a lot of ability -- volatility.
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was on credibly week pmi data out of the chinese economy earlier on, peter. have you position around chinese bonds -- how do you position around chinese bonds given that the trade tension still exists -- we have is a weakening we weakening economy. where is the next position for the chinese yuan? mr. schaffrik: on the currency itself, as a semi-managed currency, therefore it is always to be taken with a pinch of salt. but clearly there is downside risk year. but clearly there is downside risk year. having said all that, one of the things that needs to be counterbalanced to that is the chinese authorities have been throwing quite a lot of stimulus on their own economy, and the question is, we do know any kind of stimulus measures -- not only true for china, but to anywhere -- takes a bit of time before they show any kind of affect on the real economy. once we see that, the question is whether we can see a
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bottoming out? we canshort end, extrapolate the trend the going forward we have to see. vonnie: kickstarter a pictures from the g20, a lot of smiling lot of pictures from the g20, a lot of smiling faces. he was due to sit beside angela merkel, but he had to reverse a commercial airline after problems with her airline and she will arrive friday evening. there's going to be remarks from the argentine president and after that a working lunch in putting people first. the most eye-catching pictures it has to be said, were the pictures of mohammad bin salman, the crown prince of saudi arabia, and russian president vladimir putin with a very warm handshake is the two sat down beside each other. they are clearly an agreement on certain subjects. steve mnuchin there, treasury secretary, a ivanka trump as well. i cannot exactly tell who that is, but obviously a
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representative from saudi arabia, which is interesting. peter, was talk about some of the issues that might emerge. what is the worst-case scenario out of this g20? it looks like everybody is smiling right now, but there is a lot of work to be done before we get any kind of resolution to any of the issues before them. mr. schaffrik: i would go back to the comments i made earlier. , tradee is that somehow tensions, particularly between the u.s. and china, are somehow being dealt with. the flipside is we have been here before. there is nothing the market can take away as constructive. the implication could be the reverse market reaction. thereare some talks out that the next step, as far as tariffs are concerned, could becoming even for european and european cars and all rest of it. these are clearly an escalation of these things, clearly bad for
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the global economy and certainly for the european economies. if you allow me one last 32nd 0omment on this -- 3o second comment on this, if we see further pressure for the economies in europe, that will be a very bad blow. vonnie: another embattled leader, theresa may there as well. peter, what opportunities are you seeing right now, globally and from a macro perspective? presume, as you were just pointing out theresa may, you are referring back to the u.k. in particular. i guess we can't really talk about the u.k. without talking about brexit. one of the advantages i see, there are not many of the situation, is that the market now seems to have been primed for the failure of this motion that will be tabled on the 11th.
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typically, when the market is expecting something with a very high conviction, there's an opportunity here. when i refer back to what i said earlier, the market has no priced out almost -- has now priced out almost all extradition for a rate hike next year, and we don't agree. we think the bank is itching to put rates up and clearly brexit stands in the way. if there is any kind of past the pathe found -- half -- they can be found, there's a downside on shortages rates in the u.k. caps on interest rates in the u.k. -- on interest rates in the u.k. guy: i think is relevant to most bond markets -- oil prices have dropped dramatically this month. prices down by circuit 45%. -- circa 25%. as we work our way towards the opec meeting, if opec struggles
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to stabilize oil, can we see treasuries really getting much north of 3%? or do we think treasuries will remain below 3% going forward? mr. schaffrik: it's not our forecast to say it up front. we don't think it's really going to state low 3%. -- stay below 3%. one of the reasons why the treasury market recently rallied is indeed because the inflation expectation is coming down. and that is by large the story of oil. if you paint me a picture the oil is collapsing even further, that's not necessarily are scenario, there is pressure through the break. the question that needs to be answered is if inflation is not getting anywhere close to the target globally for most of the central banks, what is the reaction function of the central banks? we will have to see about that. it's not necessarily are central
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scenario. schaffrik, thank you for joining us. ♪ time for e.g. a friday, we will bring you pictures from the g20. as an etf for everything, even one that tracks the topics among hedge funds. , what we need to know? >> let's start with this one. the ticker is gbip. essentially what this try to do is track the 15 most commonly held names by long only hedge funds. to me this is one of those products that doesn't have a ,hole ton of assets and it about $100 million, but i think it's transferred closely. investors really look at what's happening with some of these rebalances. , it was prettye good at the start of the year but has given back a lot of it since the summer. what i think is really important
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about this is a recently made some changes to the portfolio. vonnie: talk about these changes. mr. psarofagis: their interest , bowling, pg&e corporation, boy think is more interesting is from the sector positioning. the etf has always been heavy in tech names. technology into medication services. when i saw in this reason rebalance was more defensive names being pulled in like utilities and consumer staples. it's interesting to see of hedge funds have been positioning more defensively. guy: after such a beautiful -- a brutal months, do we get an outsized rebalancing coming through? we don't see these kinds of
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months very often and as a result of which, rebalancing probably looks more dramatic. is that the case here? mr. psarofagis: this is a busy week for rebalances. rebalance, and in june, we had the russell rebalance. that is far bigger than what we are seeing here. the etf market has gotten pretty good and handles and pretty well. vonnie: ntum is when we are focused on. tells with happening with that. mr. psarofagis: this is the opposite of gbip. it's become a hot story, momentum has done really well. it's rebalancing at the end of a closed today and it's going to be relation to see what names get dropped and when names get pulled in. it's important to note that this , 41%s very heavy in tech in tech it has almost no exposure to staples and no exposure to utilities. it will be inching to see what's happened in the market in october and november to see what kind of names get pulled in.
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tom psarofagis. that is your etf friday segment. let's continue the conversation around g20 and bring in bloomberg's richard jones. what is monday morning likely to look like for markets? richard: it depends on how the trump and president xi talks go. i think of we do get some thing where a trade deal looks like it doesn't happen it on his way to happening and i think we get the euro doing well and the chinese yuan doing well on the aussie dollar doing well. the dollar gets sold off a little bit because less haven demand or dollars. -- four dollars. for dollars. there's a bit of a relief rally takes place there. guy: what happens of the talks don't go anywhere? talk us through how that effects
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risk assets? richard: i think we get more of the same of what we have seen. equities will probably take that very, very badly. i think the havens will rally in the frankel rally and the yen will rally and i think the dollar will rally of the euro falls. all of these things we have seen as trade rhetoric and trade tensions have intensified, they continue and we see those moves carry on into next week. vonnie: theresa may and president donald trump are ratio a little chat as mac rate -- the argentinian president waits to make his opening remarks. will beor angela merkel in town later this evening, having taken a commercial flight to windows errors after problems with her plane. -- two buenos aires after problems with her plane. the possibility of a snap election in the u.k. and the
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election of labor leader jeremy corbyn. how likely is this? is this an outlier scenario? >> it is something that investors have to keep somewhere in mind. there is the potential that if we do get theresa may's brexit deal defeated, one of the things that might happen after that is a snap election is called. richard: i'm not sure that investors are prepared for the possibility of a labour government and all that entails. friendly business policies, higher taxes, stronger regulations. all of these things i think that investors would have to digest, taken together with a potentially hard brexit, and i think it could mean some very substantial downside for the pound. 120, it get cable below isn't something that is front and center for investors but it is something i do think they have to factor in as a possibility.
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vonnie: keeping our eyes on the room where the g20 will take place in it really is a phenomenal g20 year. so many fault lines have been exposed and it is clear on all of these leaders faces that there's a lot of tension as well as a willingness to try to keep relationships going. didn't we see structural changes in markets like currency markets over the next 12 to 18 months, given all this turmoil? whatrd: i think it depends happens to the sort of global trade regime that i think everybody has gotten used to in recent times. if we is that hear the end of last year, we wouldn't really have foreseen that we would get the kind of access from the u.s. -- the actions from the u.s. from the u.s. against china that we have. a lot depends on what we get from presidents trump and xi this weekend. -- tradeo trade him tensions have ratcheted higher has caught people off guard.
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if we do get a cessation of those hostilities, i think we get back to the type of activity and foreign-exchange market interest rate markets, equity markets that we thought we would this time last year. richard, two pieces of data really stand out to me today, and they are the pmi data we thought of china earlier on and the smallness we saw on cpi out of the euro and blend. the impact china is having is pretty clear to see at this point. can i draw a line between the deal the gets done between these two leaders -- the chinese economy of these getting some sort of short-term boost, not been feeding back into europe? is that it anyway a plausible scenario? richard: i think it's a very plausible scenario, guy. if you look at two of the biggest winners from globalization, i think china and europe need to be at the top of that list. i think if we do get a cessation of trade tensions, i think you
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will get a bump to the chinese economy, a bump to the euro economy, and as a result, from the ecb standpoint, that should start to feed into that core inflation that has really been persistently stuck near the 1% handle. if you get some upward traction there, people start talking more about ecb policy normalization and the type of themes we were talking about at the beginning of the year become the themes that are more from center should we get trade tensions ratchet lower. guy: if they get ratcheted higher, how soft lit be for the euro? -- how soft will it be for the euro? there's a downgraded expectations around the ecb's ability to raise rates. -- a do not see a d.c. decent deal with the formation of a peace treaty and rating from this g20, does it mean the euro will suffer? the ecb really has to take a look, particularly in december, at its ability to continue on the track and thought it was going to be on.
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i think a lot is priced into the euro. that's not to say we couldn't get for the downside, but i think this is a theme we have gotten used to over the past six to eight months. it's a continuation of what we have had already, i don't think it would be a stark with a moves lower would be a stark is this first became big news earlier this year. goes,that's not to say we coult get for the we have to start listening to the hawks and what the hawks are saying, not because they're necessarily in charge of ecb policy right now, but what they are saying is the economic data that we have in europe at the moment justifies moving away from emergency policy settings. i think that still stands, even if we do get a slowdown from here. the euro area economy is probably still going to grow slightly above trend this year and should be able to grow at trend next year. if trade tensions really ratchet higher, then all bets are off for that. i don't take in the near term is
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going to knock the ecb off withe and i think the euro as much bad news price did it will really need a massive ratcheting higher of trade tensions. right now the base case is there is some optimism about the deal, but i think everyone is seeing a completely baked in. vonnie: the president of argentina has to started to make the opening remarks at this auspicious g20 meeting. we have a look around at some of the leaders and you saw donald trump chatting with theresa may on one side of him and angela merkel is absent on the other, but will be attending later on. we had a smattering of other leaders, obviously the russian president was there besides crown prince mohammad bin salman. they were happily chatting. what about other leaders looking on at all of these faultlines? we justthe economy's saw -- singapore and some of the other asian economies and latin american economies -- are very dependent on what happens with
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these leaders that are getting all the attention a g20. i know we don't cover emerging-market currencies closely, what how nervous must the service -- but how nervous must these leaders be? things we were talking about with the euro can apply to emerging markets. the globalization of the trade regime we have had in place for quite a while now has benefited emerging markets as well. that is a palpable sense they would like to see a deal between china and the united states because that would feed into their markets as well. positivity would be felt in emerging markets, in addition to some of those other developed markets. there is a lot riding on this and i think everybody wants to not a deal., it is you are right to highlight emerging markets as being one of the beneficiaries of that. they really are dependent on these talks this weekend. vonnie: thanks to bloomberg's richard jones as we watch some
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extra ordinary photos. the opening remarks of the g20 going on right now, the president of argentina making those remarks and justin trudeau is listening along with all of the other leaders at this occasion. they will be having a working lunch after these remarks. the topic of the luncheon is putting people first. however, it is the sideline conversations that will be most interesting out of this g20. more coming up. this is bloomberg. ♪ >> changes that have grown accelerated. ♪
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aerks infrastructure -- >> refrigerator development. vonnie: you're watching live pictures of the president of argentina making opening remarks the 2018 g20 summit. leaders are all in their seats with the exception of angela merkel who will arrive later in argentina. we saw phenomenal groupings. it gets a michael mckee in buenos aires, international policy correspondent. problems on how to deal with global problems. the seating arrangement alone would have proved a major headache at this one. how obvious is it where the faultlines lie, given who is sitting besides whom? putin.: vladimir it is interesting seating chart. i think the leaders kind of grand seats.
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one of the interesting aspects when donald trump came in, he saw attorneys away -- theresa and walked over and he realized she was looking away. so we sat down next to emmanuel macron. it's almost like high school of the want to talk to him. they did the class photo just before the session and that was on board is a lot of leaders tried to avoid mom and installment, the saudi prince. -- mohammad bin salman, the saudi prince. their politics being played during the general session of the g20. guy: is this g20 and endorsement of multilateralism, i.e., and --ectively multiply multilateral meeting that happening here. the problem is the real headlines are being made in bilateral. a bilateral event or a
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event?teral i'm trying to figure that out, it seems that dominance is definitely on the bilateral side. michael: the hope of the g20 was formed was that it would pull countries together in a more multilateral way to confront the problems they all face. but it's not working out that way. variouse have seen local groups twitter off and countries go to more populist governments, we are seeing this happen more and more of these large group gatherings. there was more multilateralism perhaps last year in germany at the g20. this year, even less as it is a lot of bilateral meetings that really matter. there are some instances here even where groups are getting together. the g7, which includes the united states, foreign ministers here put out a statement condemning the russian takeover of ukrainian ships and holding the sailors, saying it was unacceptable. there is some multilateralism at work. guy: great stuff and we look
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forward to the continuing coverage that you and the rest of the bloomberg team will be generating out of buenos aires. we will carry on bring that to you throughout the next hour and throughout the weekend into monday morning. there is so much more market action silicom surrounding all of this as well. as we speak, the s&p is having a session high, however, you take a look at where we sit with volume right now, volume is incredibly light. very few people are prepared to take active directional stage as we this head into what could be a pivotal weekend, setting us up for the rest of the year. we are going to continue to bring you all the coverage from the g20 in the market reaction to it. the s&p near session highs, volume way away from it. this is bloomberg. ♪
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guy: live from london, i'm guy
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johnson. vonnie: in new york, and vonnie quinn. "bloomberg markets." this is "bloomberg markets." russia says they will hold oil output steady for now. at $50.50..9% let's bring in larry schober of ssg alternatives. a very quiet cme this morning. why so quiet down there this morning? with oil so low, shouldn't people come in? >> there so many moving pieces and shifting expectations, even on the market seems to have been habituated to these things for a long time, it seems like we get these gigantic moves and i can't blame anybody behind me for not trading. is the quietest it has been probably in years. vonnie: is it a binary outcome? is that how people of the cme are looking at it as deal or no
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deal? >> i wish it was that easy. i'm sure you do as well. there were so many deals and iterations of that, so i think that is why it is so quiet and that is why it is so tense behind me. when you think of the moves and the potential moves we have, but there seems to be more than just black and white, yes and no. to what's going to happen rates, to the dollar, to oil prices, etc. vonnie: what about the 10 year at 3%? anybody willing to risk a directional test here? >> that's a good point, there's a lot of short covering in the 10 year, notable the last couple of days. you would think of a deal is struck, are we going to see 3.25% yields again? my guess is no. there is so much volume and so much buying that will take , so it's a at 3.12%
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long way to 3.25% and even the fact that the outcome hasn't been in the market for a long time we've been conditioned to all the different scenarios that could play out. larry, thank you. it's the last trading day of november and congratulations, that is literally -- larry shover. the federal reserve deepens its investigation into goldman sachs involvement in the 1mdb sandal -- scandal. give us the update on what is new here. >> they can add another headache into the mix for goldman sachs. your he have the department of justice in an advanced stage with the probe related to the 1mdb scandal. upper darby funds -- a pair of abu dhabi funds have already sued goldman sachs.
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the whole he of trouble for goldman sachs and doesn't look like it's going to be resolved any time soon. walk me through what the potential action from the fed could ultimately look like here? sridhar: when you look at the entire spectrum, they have been warned about being slapped with a significant fine and every indication as we are heading in that direction but it's not just the monetary outage and. on top of that you -- monetary punishments, on top of that you have the reputation risk and goldman's stock is down 25% of the year. the bank has been saying that this whole scandal is because of one or two cricket individuals at the banks, and remains to be seen if regulators will accept that. guy: they can handle the fine, but ultimately, this could end
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up limiting its business and its ability to do business from a risk compliance point of view and from other areas as well. sridhar: that's what the federal reserve comes in. the power fore the prosecutor but look what they did with wells fargo earlier this year, the basically told them we will let you get any bigger, we will let you grow your asset size -- we will not let you grow any bigger and we will not let you grow your asset size. they fired a warning shot and i believe all banks have noticed a nest possibly one of the risks for goldman is it could go beyond the fine. that they could impose some sort of sanction which could limit what they can do. unless they have a credible defense and the fed buys it. guy: nice work, thank you. us onr natarajan joining the goldman story. as well.che bank story if the stock of the hour, this is as we see the police prosecutors in residence at the lenders court in frederick for
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the second day. and chandra has the details -- emma chandra has the details. the second day of raids over suspected money-laundering and the surge is said to include the offices of the eight members of the management board. we are looking at leaders within deutsche bank being drawn into the scandal and now we see the stock fall some 3%. take a look at the bloomberg and i got the daily moves for deutsche bank over the past year and we can see is a 3% drop doesn't seem to be as bad as it used to be. we've seen the stock plunge much lower below that and it is becoming normal, it hit a record low today. the previous record was only set earlier on this month. we are seeing another day of raise and another day of more scandal for deutsche bank. vonnie: negative news just keeps piling on. any end in sight? emma: it doesn't seem to be for
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the for seeable future and it's really tough for the fourth ceo deutsche bank since 2015. his appointment was supposed to herald a new era that's very tough for him given that he's the deutsche bank writer. vonnie: thank you. nowre seeing the s&p 500 up 4.5% dh leading gains up and another retailer, under armour, of almost 3%. an amazing day for the s&p 500, but it is the last trading day of the month and there's a lot of uncertainty going into this weekend. this is bloomberg. ♪ berg. ♪
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guy: 30 minutes left in regular trading in europe for it london, i am guy johnson. vonnie: i am vonnie quinn. this is the european close on "bloomberg markets."
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♪ guy: here are the top stories we are covering from the bloomberg and around the world. all eyes on argentina. investigators countdown to the trump-president xi dinner. oil horrible month. headsfalling again as it to its biggest market drop since 2008. deutsche's dropping again good prosecutors continue to search the banks offices. the stock flirting with a seven handoff. let's take you to the markets and show you what is going on. we just heard that china is looking to combine more soybeans from argentina could that is good for mr. macquarie. it sets up a distant -- an interesting line going into the trump/president xi

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