tv Bloomberg Markets European Close Bloomberg November 30, 2018 11:00am-12:00pm EST
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 meeting diversifying where china is
buying some of its key commodities. that is an interesting side story. european stocks flying, though the s&p is sitting high, europe is flatlining. take a look at volume. nobody is out. the argo's may taking a few positions but i'm not sure they are having a busy afternoon. we are waiting to see what comes and what effect that provides going into the opec meeting could deutsche bank , the stock chosen with a seven earlier. we have been focusing on goldman sachs and deutsche bank. in some ways you can see similarities. deutsche's having a tough time with things at the moment. let's look at what this month has meant. this is the gym and function you can find on your bloomberg. remember, this is a standard
deviation. the market, from a standard deviation point of view, has had a negative month. the london market and the german market both standing down. storyllar has had a good over the last month. ,hat being a positive thing negatively fed back into the aussie equity market. this side of the screen is less exciting than the side of the screen. the commodity story has been amazing. steel, shanghai futures down 27. gas and oil trading down 23%. keating and oil down 20%. .29%.down 22 what a month. abigial: what a month indeed. on the day looking for small moments between the major
averages in the u.s.. the dow is down fractionally. the s&p and the nasdaq of up about .2%. on the week, a bullish week, the best since november 2016. the s&p 500 and nasdaq, the best week since february. the bull is out this week, but on the month we have the nasdaq on paper the third down month in a row. as for what is moving on the day , let's take a look at the bigger movers. at&t is trading higher. this on the company's analyst x .nd positive news coming out the ceo stressing the debt reduction and wireless growth. under armour up 2.4%. fargo think itls will be positive. and take a look at workday, those shares up 12.7%. they beat estimates on billing strength. across asset classes we do have wobbling.
let's take a look at the dollar, the10 year yield -- bloomberg dollar index up .3%, suggesting there is a bid for a haven. the 10 year yield eating down one basis point point and oil down 2.1%, flirting with that $50 level. it will be interesting to see what next month brings. what a month it has been for ge. this is incredible. going back to 2009. ge on pace for its worst monthly performance since 2009. i will also like to point out, over the last two years, just four off months. this company cannot catch a break even as turnaround plan after turnaround plan is bandied about. in 2009, the worst month in february was followed by an uptrend. let's see if that happens this time. vonnie: abigail, thank you. chrysler spikes, it is now still
lower by 2%. it has been raised to investment grade by fitch with an outlook of stable. chrysler upgraded fiat to a triple b minus. this weakness is potentially because there are reports fiat chrysler may bid for exeter financial, which is a unit of blackstone. a financial company. it does have some stake in subprime auto loans. potentially fiat chrysler may bid for that company. there's also a lot of news in point is there is. trade takes the spotlight. for more on what's happening we are joined by michael mckee, bloomberg's international policy and economics correspondent.
so far we had most if not all the leaders, with the exception of one join. merkel cominga late because she had airplane problems. got on a commercial flight from the dreaded to buenos aires. president trump was supposed to meet with her this afternoon and said they would meet tomorrow. it has been a day to talk about trade. the potential for a trade deal with china is on everyone's mind. this morning the president joined with the prime minister of canada, justin trudeau, and the president of mexico, at least for the next 12 hours, and they signed the nafta accord. setup up to be signed by their trade ministers. nafta 2.0 is now not effective because it has to be ratified, but the beginning of the end is insight. always a story
that goes on, which is the journalists are talking to each other and you could journalists coming into these kinds of summits and you get a mingling of ideas going on. what is the assessment in the press pack of what this weekend is going to generate? that is a good question. the general feeling seems to be not much. there is hope for a china deal and there is a watchfulness toward some sort of deal on oil. beyond that there is a concern these meetings have gotten too large and less effective in a less multilateral world. one of the measuring sticks is going to be whether they come up with a communique. the reports are there still working on trying to find language that is acceptable to all 20 nations. discovered the last couple statements at these international gatherings,
because they do not like the language on trade. they may still falter. there is also talk there might be a separate statement issued by 18 or 19 of the other countries leading the u.s. on climate change. drama still to come on the effectiveness of this g20 meeting outside of those bilaterals that will produce most of the news for the markets. vonnie: michael, thank you. thanks to bloomberg's michael mckee at the g20 summit all weekend. guy: volume like today. monday morning can be busy. we are trying to figure out which assets will move the most cease-fire.al trade here's what some of our guests have had to say. australiang like the dollar is an obvious favorite in that particular paradox. in terms of other asset classes, you are looking at those will be benefiting from the presumption of trade activity being more optimistic.
the chinese equity market has suffered over the past few months. find co-option on the h&p would be a great way to take advantage of a positive outcome. the entry point is quite attractive. >> the reason being that is the -- thehere a majority chinese bank, chinese investment companies. big moves, that is probably the market. >> you do get a cease-fire and both sides will continue to talk, you will see a bit of a bounce. is not any cease-fires are joined communication from both sides, you could see a bit of a pullback on monday. guy: let's bring another voice into the mix, simon derrick
joining us from the bank of new york. i actually think there will be less volatility than people expect. when you look at december, their semi-other risk events coming up, whether it is brexit or the fed or the government shutdown in the u.s.. almost certainly, once you get beyond the initial excitement about the trade deal, you get beyond that excitement i think people will want to talk about the next thing. guy: the markets are about worry. the trade story has been one of them. -- forcan put that into the next six months, that removes a big risk. it will change the trajectory of the fed and all kinds of things could happen. the fed is saying is close to neutral, neutral could be 2.5 to 3.5. simon: six months to 12 months
out what we have is a very difficult three weeks in highly liquid conditions people have to navigate. that risk startup immediately at opec. if we hear something about oil, that could be different and start to sow the seeds of a deal being struck at the opec meeting. arguing it is not going to be a huge move on the bank of england initially. vonnie: if you have taken your big positions on the future of europe, on what happens with trade vulnerability in the intermediate term, will there be anything soon to change your mind and will that be a reason to change positions? simon: i think the person i would think about is the bank meeting. prices and on crude the reality is it is the start of net -- at the start of november yields have tracked
more than oil prices. that could have a meaningful difference. it is harder on the other stuff. i think the market is to sanguine on the brexit story. maybe the deal is almost certain to go through -- i think there is a decent probability we could have something else. i think there is still plenty of downside risk. the reality is this market is now largely retreating to the sidelines. the low-volume today is a perfect example. the problem is in the liquid with high, you end up volatility later in the month. isuspect this g20 meeting not the thing that creates that volatility. vonnie: why are we seeing the dollar index in this range?
how has it not broken out? simon: that is one of the great curiosities. we are talking about what the dollar has been doing over the course of the last few weeks. that to me as a sign of very light stage dollar rally. think the signaling from the fed chair and everybody else has been pretty clear. indication oft the dollar starts to turn. i think there could be a sustained weakness in the dollar. guy: why do you think we have claimed more clarity on the fed? i would say we have gained less clarity. the fed has given itself optionality to a greater range of outcomes. that it about the fact
is close to neutral. the channel for neutral is potentially between one and five rate hikes. simon: i would say the change in the wording itself told you. tomoved substantially away where we are now. that difference in the wording suggesting a change of thinking at the fence. what it -- at the fed. what it suggested was a fed still sensitive to markets. fed isnal under the new they are as sensitive as they always were -- the suggests caution going into 2019. it should have suggested caution at the start of 2016, they were starting the hiking cycle. there were signs early on there were concerns with china, a signal you have to be cautious. guy: i take your point. before the fed was on rails and
we knew there was this number of pipes coming. in markets got one priced which takes us to the bottom end , or just above the bottom end of the neutral channel. market could be still massively underpricing hikes for next year. i wonder if we are entering 2019 with a false sense of security on where we think the fed is going? michael: that is it -- simon: that is entirely possible. the very fact they choose to signal now tells me there's something more going on. it seems clear from how in early november that he is worried about the housing market. he is worried about global growth. all of those things suggest you have to be cautious about suspecting the fed to continue on the same trajectory we thought they would have even a month and a half ago. guy: thank you for stopping by
to see is that bloomberg. simon derrick, chief currency strategist at the bank of new york mellon. guy: we will get a little bit more detail on the brexit story. liam fox joined us earlier on to talk about exit. he is now backing theresa may's brexit deal. we'll hear at the secretary for international trade has to say. vonnie: looking forward to that. let's check in on the first word news. here is kailey leinz. kailey: it may be one of the biggest data breaches ever. a hack involving unauthorized access to its guest reservation databases in 2014. marriott begins the databases had information on up to 500 million property guests. there payment information may have been accessed. areu.s., canada, and mexico signing a new trade deal to replace nafta.
the agreement still has to be ratified by lawmakers in the three countries. the signing and ask a number of immediate provisions, such as protection from auto tariffs. meanwhile the ceos of the three biggest german automakers are going to the white house to talk trade. the chief of volkswagen, bmw, and the parent of jim daimler -- iteet -- of daimler could be a way to push the european union to a broader trade deal. former trump campaign deal paul manafort will be sentenced march 5 on two conspiracy charges. his lawyers were in current for the first time since robert mueller accused paul manafort of lying to investigators and liking his plea agreement. the lawyers want more times to respond to mueller's claims. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over than 120 countries. i am kailey leinz. this is bloomberg. vonnie: thank you. coming up, more on one of the biggest tax in corporate -- the
vonnie: from new york, i'm vonnie quinn. guy: in london, i'm guy johnson. this is the european close on "bloomberg markets." vonnie: marriott international investigating a hack. shares taking a drop on the news . let's bring in bloomberg's patrick starkey reports on the hotel industry. talk about the extent of this and the breath of this. is it just this one bank? the hotels married acquired,
the sheridan, the four points, there are a lot of brands involved. .00 million hotel guests may have lostests information like passwords numbers, loyalty program accounts, and so forth. ?uy: is that the dividing line it strikes me like those details are incredibly valuable. some of those hacks do not get that far. the fact that may of they may have decrypted the software and allowed access to that marks me as one of the more significant packs. patrick: absolutely. there was also a credit card information that got hacked. if you think about what is more profound, it may be that somewhere out there is a record of every starwood property you
years.ated over the years. not just me or you but ceos of companies, world leaders who have stayed in any of these hotels. potentially there is an ability to go back and know where people were. i think security risks associated, this one could be on a different level than some of the ones we have seen in the past. vonnie: where does the fault lie? on the one hand, marriott takes your passport number and a lot of details for your security. so you can be safe staying in one of their properties. on the other hand, this happens and your identity can be taken away. who is at fault? patrick: at the end of the day, marriott has to accept blame, and i think they have. the blame is for not detecting the sooner.
2014.each occurred in marriott is own starwood in 2014 -- marriott did not own starwood in 2014. they conduct a cybersecurity assessment and it was not until september of 2018 they begin to detect this problem. i think marriott has to accept responsibility for not catching the sooner. vonnie: have they said anything? patrick: they have apologized, but that is only the beginning of what they may eventually have to do. vonnie: we will continue to monitor the story, as will patrick clark, who covers the hotel industry for bloomberg. cashgtb go is a fantastic -- gtv go is a function on the bloomberg. we use these charts on the bloomberg television. you can use them as well.
guy: four minutes to go until the end of the regular trading session in europe. the last trading session of the month will be in december, monday morning. mining stocks in particular, under pressure. .3%.ax down the cap has been the -- the cac has been the underperformer. we are three minutes away from the end of regular trading. this is bloomberg. ♪
most but other markets flat. volume is quite light, particularly in the netherlands, which seeing very light volume, the head of a g20 which could produce some interesting tail risks in a number of asset classes, trade the big story, oil not far behind in terms of order of magnitude. seeing some interesting levels. ftse 100 breaking through 7000, trading below that. down by 60 points. the dax not breaking through some levels, down by about half a percent. decent 40, relatively compared to its peers, trading just below 5000. let's go into some details as to what is going on here in terms of the monthly performance. in some ways, stocks over the last month, have gone sideways.
only down by 1.22% on the stoxx 600. into november, in some ways, stocks have drifted into the last few sessions, certainly the last couple weeks as we work our way toward the opec meeting. in terms of the breakdown, below the surface, in terms of the super sectors, this is where life becomes more interesting. we have seen some rotation. when you have seen over the last health,, foodoms, and beverage, utilities being bid. rotated during the month of november into some of the safer areas of the market here in europe. at the bottom end of the market, the trade story, basic resources taking a hit. the auto sector for also under pressure.
that is an interesting aspect to what we see. a big rotation taking place in his european markets. that is a look at the european markets in the last month. vonnie: interesting dichotomy between the oil and the dollar. the dollar index up above 97 to finish the week up point or percent -- 0.4%. nymex crude has recovered a little bit but still below 51 as we await some news from the opec meeting, maybe even something before then out of the g20. 2/10 spread below 20 basis points. belown, a quick check, $4000. we have seen some volatility in global equity indices. today no exception with south africa and australia lower. south africa, weakness in oil.
also a lot of weakness in emerging-market currencies, rupaul, lira, mexican peso weaker against a stronger u.s. dollar today. off ofties, natural gas its highs, down 2.3%. heating oil as well lower. you can see some of the other on potentialrading trade negotiations here at the g20. guy: let's go back to the battle over brexit. we have been speaking to the u.k. international trade secretary liam fox. he says he is concerned parliament may try to look at u.k. into a customs arrangement with the eu. >> the cabinet will want to get through and be successful in the vote in the house of commons. if we are unsuccessful, at that point, we will consider our options. ar key goal is to get that vote to the commons and to
remind members of parliament who wanted to leave the european union that there is still a remain majority in the house of commons. my biggest worry is we would be locked into some kind of customs union arrangement by parliament, and that would make it impossible for us to carry out an independent trade policy. very clearly that you would not support a second referendum. if it were to fail in the house of commons, what would be your preferred next outcome? would you support a norway --norway-style deal? >> whatever deal we want in the future still requires a withdrawal agreement. whether it is the deal that the prime minister set up with the european union or a norway-style , or even a canada-plus fta, they still require the withdrawal agreement. we must get past this hurdle or we will leave the european union
without an agreement, or we will not be able to leave the european union at all, and neither of those are accessible outcomes. guy: you have been talking to some of the brexiteers, persuading them to vote for the deal. what kind of feedback are you getting from your colleagues? give us a sense of the lie of the land. aboutleagues want to know the freedoms that we would have if we went down this particular style of agreement. we have a conversation about how we get that balance. there are some who would say we should have absolute freedom to do everything we want in terms of trade outside the european union, even if that means less access to the european markets itself. my concern about that is it does not take into account a lot of our jobs and exports are still tied up with the european union and we need comprehensive access to that market. it's a question of balance.
others will have political and economic considerations within that. it is up to us to make sure mps and make their decision with us much information as possible. guy: you said you would not support a second referendum. too early to talk about the potential other options on the table, were this to fail in the house. if it were to fail in the house, given all of that ambiguity, difficulty, do you think theresa may should resign, if that were to happen? no, nor will i go into conversations that have at least five one it's. our aim is to get the vote through the house of commons. we are going to do that. should we not, the cabinet will consider its next moves. guy: liam fox talking earlier from bristol. the issue of what theresa may were to do next is something the market is trying to figure out right now because it could lead
to a general election. that is causing some interesting outcomes, particularly at the longer end of the gilt market. our bloomberg columnist joins us now. is that what the market is worried about right now? brexit is difficult to understand, fathom, but the market can run the numbers on what a carbon administration would look like if theresa may were forced to call a general election. the labour party is pulling ahead of the conservatives at the moment. -- fromet can price what i'm seeing -- a few polls suggesting that. is that what the market feels? >> i think that is spot on. certainly the longer end of the gilt market, buy and hold investors, they are not panicking into short-term gilts come out of equities, whatever it may be. they have time to think about what happens. they don't need to rush in and
by gilt yields. 10-year yields were fallen sharply. yields have been moved, they have risen. the type of people buying them are not putting your money in. already below inflation and they don't want to chase them down. who knows what will happen. no one can tell us what will happen under the myriad of situations under brexit, but one thing we can go back to is the labour party manifesto. we can price some of that out, and that does not the good from inflation, particularly if brexit happens in a bad way. that will be bad for bonds in the first place. the other consideration is what would any new government which imported to come in and the economy, how much will the gilt market do that? all scenarios do not look great which whichgilts,
are that portion of new financing. vonnie: how is there any optimism left in this market? 119 days to go and theresa may is relying on a liam fox to make a speech in bristol to plead with holdouts? colleague wrote an interesting piece, there is some blue sky thinking in sterling. under the scenario that this deal gets through, that is definitely standing positive. that could lead to all the u.k. markets doing pretty well, equities certainly, even though you might argue a stronger sterling doesn't help the exporters. pretty much all the equity markets and u.k. related assets would rise on that. and some derivation of that. they don't deal brexit would not help. it is clear how the market react to that. initially, longer-term, we may be surprised. a delay would probably be even worse for markets. at the moment, there are
different outcomes. theave to wait until december 11 wrote. certainly for the moment not much good news. pointt sense, there is no trading sterling, which is why it is not moving around much. it is driven by where the dollar is going. then the second vote, and then the third vote. the skews telling us, volatility's, volatility metrics telling us about how big details are right now in the market? >> it tells you that people are moving away from risk. that is the why long and gilt yields are rising, not falling. that is where risk is taken. to take a gamble on u.k. interest rates, yields, you do it long end. likewise, if you look at the short end, interest rate
expectations in the bank of england. they have not reversed, they have just made it. they expect another rate hike to happen, but expectation is lower. look again at the volatility of sterling, very low. guy: thank you very much, marcus ashworth there talking about what is happening at the long end of the gilt orchid. -- market. vonnie: let's check in on the first word with kailey leinz. it took a year of tense negotiations the president trump got the deal he wanted with canada and mexico. now he has to convince congress to go along. the three leaders signed agreement that would replace nafta. lawmaker still have to ratify the deal but some provisions will take effect immediately such as protection from auto tariffs. it's a corporate data breach for the record books. marriott is investigating a hack of the guest reservation database added start would unit
affecting 500 million guests. for most of them the data includes passports and mailing addresses, and some credit card details may have also been released. this may rank only below yahoo! in 2013 when 3 billion users were exposed. a federal judge is hearing james's challenge as a subpoena from the white house -- house judiciary committee p they want to talk to him about decisions made by the fbi in 2016 including a call not to recommend criminal charges against hillary clinton. comey says he would appear in a public hearing that is refusing a private interview. 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. i'm kailey leinz. this is bloomberg. thank you. european equity markets are closed for the month of november. we have worked our way through the auction price. the ftse finishing sub 7000.
the cac 40 above 5000. london suffering today as a result of some of the big mining stocks coming under pressure. if you are wrapping up your wheat, getting in the car and driving home, you can join jonathan ferro and i on the cable show. that is on all of your bloomberg devices and on dab digital radio in london. this is bloomberg. ♪ bloomberg. ♪
prices, the united states oil fund. it saw a 306 he $7 million inflow this month, the biggest monthly edges in since june 2017. if you look at oil prices, wti falling 20% alone this month. what is interesting about this etf, flows and oil performance tend to move in opposite directions. investors using it as a tool to make bets on short-term price reversals. in the bottom panel we can see $9 billion traded hands, the highest value traded in a single month for uso in two years, definitely an interesting trading vehicle to watch in the oil trading space. great stuff, thank you. let's see what vonnie has got. vonnie: taking down the bulls. there is sentiment is growing. the bull-bear spread index is negative. bank of america points out that
38 of the last 39 weeks people have taken money out of european .quities john has been talking about this as well, a regular on the show, talking about the fact that people think if valuations are cheap, they go back to flat, fair value, tha that is not what happens. they go from cheap to very expensive quickly. guy: fantastic charts. we can find them on g tv . i'm going to give it to jessica only because this month has been so fascinating for the crew story. that turn on the volume is worth highlighting in terms of the story we have seen emanating from crude. that short-term tactical etf story, something great to look at. this is bloomberg. ♪
shinzo abe and donald trump. trade, we are doing a lot of business in trade. the deficit is coming down, a massive deficit between japan and the united states. it is coming down. [speaking japanese] >> japan is buying large amounts of our fighter jets, f -- 35 and others. we appreciate it very much but they are really working with me on trying to balance our deficit. we do have a deficit that is pretty substantial with japan. we hope we will be doubt -- balancing it very quickly.
>> [speaking japanese] >> just in finishing, we are two countries doing well in different ways. our military, working together, having to do with north korea, and other factors really has been strong. our partnership has been quite extraordinary. we will be together for a long time. probably there is no time in our history where we are closer. i'll be going to a tremendous event in japan, i was invited to be invited. >> your emperor. your emperor. >> [speaking japanese]
>> also acknowledge and directly mentioned the alliance between japan and the united states has become more robust than ever. we areo this fact that having another round of meetings on the margins of this g20 summit is actually the symbol of the robustness of our alliance. >> [speaking japanese] >> every time we see each other, we always have a very candid discussion. today, i look forward to having another candid discussion with you on the regional issues including north korea, as well as japan and u.s. economic relations, includingyou on the e
relations and other important topics. >> our thank you very much. thank you all very much. appreciate it. ukraine. we don't like what happened. we are not happy about it. nobody is. hopefully, they will be able to figure it out soon because we were looking forward to meeting with president putin. on the basis of what took place with respect to the ships and sailors, that was the sole reason. i will be meeting with china. we are meeting tomorrow. we have already spoken and we are working hard. if we could make a deal, that would be good. i think they want to, we would like to. we will be meeting with president xi and a little while. or the most part tomorrow our big meeting.
in the meantime, our staff is working. they have a lot of talented people working. representatives are dealing with them on a constant basis. we will see what happens. thank you. good question. thank you, everybody. vonnie: press secretary and larry kudlow exchanging a laugh at the end. press availability with president and shinzo abe, one of the easier ones to begin with, both being complement or with each other. he says the leaders will discuss trade and hopes japan will balance trade with the u.s. abe congratulated president trump the historic win in the midterms. not quite sure if he is fully aware of the strategy there.
not exactly an in-store win for the republican party in the midterms. no, but it's interesting how the president talks about the trade imbalances that exist between japan and the united states. one of the interesting aspects is try to figure out exactly how the united states will keep its allies close but at the same time trying to model some way forward to deal with those imbalances that it feels it exists at the moment. the same could be applied to europe. this brings us back to one of the issues the market is tried to grapple with, getting an understanding of what's happening with the trade flows between the united states and europe, particularly relating to the auto sector. this is where is getting tricky for the u.s. to manage that story. clearly, the president wants to make changes when it comes to the tariff story, and the pickup
of gm is an interesting aspect to all of this. how does he do that at the same time keeping these key, strategic allies in some of the major theaters such as europe and asia, on board from a geopolitical point of view? that will be one of the fascinating issues that i suspect david westin will be talking about next. david: i always like to talk about automobiles, even though it is as complicated at as it is now. it will be a fascinating weekend down in argentina. we saw president trump meeting with prime minister abe of japan. there may be some more difficult things to say at the dinner tomorrow night between president trump and president xi but in the meantime they have a dinner with all the leaders and their spouses, and a family photo session. at the same time, earlier we had the leaders of canada and mexico and the u.s. get together and
sign that usmca agreement, replacing nafta. we want to go to argentina for a report on the ground. schatzker, let's look forward. what to expect for the rest of the day and tomorrow? erik: today is not a particularly active day, some bilateral meetings. president trump meeting with shinzo abe. there was supposed to be a meeting of trump and angela merkel. that has been rescheduled for tomorrow. you may be aware angela merkel's plane had serious technical difficulty, had to make an emergency landing in cologne yesterday. she is en route from madrid as we speak. her has complicated schedule as well as the schedule for other leaders. was heldry session today, we don't have a clear readout on that. the eu leaders, those that are here, are talking about the need to defend the existing world
order. there is a question of the communique. you are well aware of this. whenever leaders gather at an event like this, there's always an effort to build some kind of a consensus. coming into this g20, everyone was aware consensus would be difficult. one of the stumbling blocks, what you would expect, the brazilian delegation is giving an indication that trade issues are one of the things that the different delegations are having trouble getting over as they try to build a consensus. communiques are vaguely worded, but the wording on anything would be an achievement for this group. david: some commentators are wondering whether the g20 is really even worth it because they have to water down everything. let's go to something that we all