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tv   Bloomberg Markets European Close  Bloomberg  December 24, 2018 11:00am-12:00pm EST

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care line: here are the top stories from around the world. u.s. stocks are hitting a low as treasury secretary minimum children tries to calm the markets. president trump treating the only problem our economy has is the fed. shares of mind body soar as the company enters into an agreement to be arequired for $1.9 billion. and some opec members hint production cuts could deepen after oil prices suffer their worst quarter since 2014. the worst selloff on record. meanwhile, let's check in on how the markets are performing. volatile trading, we have been in the red and the green, but notably volumes are higher despite the shortened trading day. >> that's right, caroline. we are seeing high volumes on many usually say this says a lull and a shrugging off this day in terms of the market. we just turned green on the
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nasdaq. we have seen it fluctuating between negative and positive territory. for the most part, markets have been under pressure today. i want to take a look at the u.s. dollar, the bloomberg u.s. dollar index, down .4%. we have concerns the u.s. government shutdown, as well as many are saying president trump was discussing possibly firing the fed chair. we also just heard from the president in a tweet saying the fed is the only problem in the market. i want to look deeper into what's been going on in the s&p 500. if we could just pull up that chart on the bloomberg. we do have, it's on track -- this is actually volatility in the energy markets. we also can talk about that. but what i want to tell you is the s&p on track for the worst december since 1931, which is quite a big gap, and it's having its worst month in nearly a decade. today it's down more than 1%. fourth consecutive day of trading. here's the chart. you can see it's the worst month since 2008. the financial crisis, as you were saying, we are seeing
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volume higher today. markets are not going to be as lifeless between christmas and through year. let's dig into some of the individual movers, and that volume, we really are seeing it come in through the financials. bank of america, citi group, goldman sachs all down today as the treasury set steve minimum children was set to call him. many are asking, why is minimum chin answering a question no one seems to be answering. also autos under pressure this morning. i want to kick it off with tesla, down more than 5%. they cut its prices for the model 3 for a third time in just two months in china. cars will be cheap if her you're a beijing buyerment general mortal down. this can be a read across. china is general motors' biggest market. tesla is cutting prices. is g.m. next? ford down more than 3%.
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wall street journal saying ford needs to share more detail on its revenue with investors. caroline: fascinating update. thank you. let's get over to the breaking news. president trump has just been tweeting. of course, getting back to our tweeter in chief saying the only problem our economy has is the fed. they don't have a feel for the market. they don't understand that necessary trade wars or strong dollar or democrat shutdowns. the fed is like a powerful golfer who can't score because he has no touch. he can't putt. also, the u.s. regulators are telling, meanwhile, the united states secretary of treasury, steven mnuchin, he's been told there's nothing out of the ordinary happening with the markets. treasury secretary mnuchin previously had been citing the volcker rule, high frequency trading as an issue with volatility. he came out with a statement saying that he contacted the six biggest lenders in the united states to see how their liquidity positions were. we're now getting breaking news
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that overall u.s. regulators are telling secretary treasury mnuchin that there's nothing out of the ordinary when it comes to the markts. we'll keep a close eye. meanwhile, political turmoil is keeping markets on edge. earlier on bloomberg, money managers and strategists weighed in on the d.c. drama. take a listen. >> it's unlikely that powell would get fired. that would be unprecedented, and nothing is off the table with trump. but it would be unprecedented, and it would have severely negative implications, because one would always question the independence of the fed. >> when the democrats take over the house, we've already had kind of a glimpse of what that relationship is going to be like. they didn't want to look at him in the eye, in the oval office. it's going to get ugly from now on. >> that leads us to some extent into uncharted territory. i would think that on a fundamental basis, markets are looking quite good value, but on a political risk basis, don't know yet.
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>> we've got risks in every corner of the globe right now, and that didn't play out well. this malaise in washington certainly adds to the negativity. i mean, markets are all about perception versus reality, and i think perception right now is so negative that it's hard to shift investor sentiment into a positive bias. >> there's a disconnect between the market and the fed, and that -- i think that has been the worrying point. not so much to do with president trump and steve mnuchin calling the banks to ask them whether everything is ok. obviously not everything is ok. caroline: joining us now is the founder and c.e.o. of n.g. capital, a real estate private manager. there we have it, a whole host of experts on the reaction to the fed and notably trump's reaction on the fed, too. what do you make of this latest tweet coming from donald trump today, saying that the only problem our economy has is the fed? do you agree?
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>> absolutely not. i think it's an essential component to our economy that the fed remain consistent their monetary policy. we've seen the built-inesque lation that the fed has undertaken in the last 36 months, have been part of a practice that we anticipated. i think now the markets are just unable to anticipate the fed's additional monetary policy. caroline: how much of a hindrance to the market do you think this is, the ongoing criticism of the federal reserve coming from the most powerful man in the united states? >> well, i do believe that in these types of situations, we should let the fed chairman do his job and focus on what's most important as they are looking at the bigger picture of how the monetary policy impacts the u.s. economy. caroline: and how is it impacting the economy and, indeed, your business, eric? the fact that we have seen them hike, as was expected, but interest rates continue to go higher.
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from your perspective, has the federal reserve gone too far? >> well, i do believe that the previous nine rate hikes over the last 36 months were sufficient. that's an opinion that i hold. but as we look into 2019, our concerns are that mortgage rates are now at a point in which it's become a little bit more difficult for u.s. consumers to absorb that 5%. in addition to that, the consumers are being impacted with everything from auto loans to personal loans with the fed rate hike. and that's going to have a direct impact on g.d.p. if housing starts begin to decline and all the prifferyal businesses that feed housing starts decline. that's going to have a big impact on the u.s. economy. caroline: do you see any concerns about a recession? the amount of market volatility, the nadir in terms of the ongoing selling, previous guests saying this is a bigger sign of panic they've ever seen in terms of what the market is trying to say. do you think it smells recession?
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>> well, i think that there's a lot of impact, a lot of circumstances that are impacting what's going on in the markets today. it's not just the 25 basis points we saw last week. that was anticipated. we knew it was coming. we are concerned about what is going to happen in 2019 and the likelihood of a recession, which is looming. i think if the fed continues with the same monetary policy throughout 2019, we could be in for a bumpy ride. caroline: how much is the fed or how much is actually the u.s. treasury? today of all days, u.s. treasury auctioning bills. we're seeing more and more supply come into the market. that must have as much an effect on borrowing costs assist indeed the fed had, to a certain extent. >> well, you have to country about the contributors to g.d.p., right? i think most importantly, if we begin to look at housing starts, lending, everything from auto loans to personal loans, what we're seeing is that the average consumer is being impacted by the decisions that are being undertaken at the moment.
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and when the average consumer across the united states begins to feel a concern about their ability to spend freely, then that's going to impact everything from retail to consumer goods and the like. so it's a chain reaction all the way through. and i think we'll be able to tell a lot more based on how the holiday sales turn out this year. caroline: great perspective. we thank you, founder and c.e.o. of m.g. capital. great to get your perspective. now march on treasury treasury steven mnuchin, he's also saying he's been speaking to regulatorser who trying to calm him, and in turn, perhaps he is trying to calm the markets. let's get to our banking reporter. first of all, we've had this breaking news that steven min chin has been talking to regulators, and regulators have been saying, look, there is nothing out of the ordinary in the markets. he's also been speaking to banks. how rare is this? >> it's extremely rare. i mean, it's not rare for
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regulators to be communicating with banks, but it is rare to be putting out a statement just because the markets are down quite a bit. and just because the markets are volatile. and so it did cause a bit of fear over the weekend as we're seeing some of those fears are mitigated now as regulators are telling him that there's no problem here. i think the problem with the statement was that what he first came out and said, you know, what he was asking them about is whether there's sufficient liquidity to handle a storm. and as we've seen in the 10 years since the crisis, the banks have been proven to be in very good shape since the crisis. so the question here is, and for me, at least, if you look down to the very bottom of his statement, it's the fact that he's trying to say that the treasury department can function in a government shutdown. people are more worried about the government shutdown as of right now than they are about how much capital the banks have. caroline: how much could either of those things really impact so-called liquidity? liquidity has been a concern for the markets, particularly in the wholesale markets. people in many ways concerned
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particularly about what the federal reserve is or isn't doing when it comes to its balance sheet. how real is the concern among the banks and the people you speak to there and investors about the liquidity situation in the moment? >> well, the liquidity situation at the moment is not such a fear in traditional stock markets as it is in other markets, bond markets, leverage loan markets, and so the thing is, people are definitely moderating the situation, but nobody is seeing a full-scale crisis like we've seen in 2008. you know, tomorrow is christmas. everybody is resting fairly easy. nobody is in full crisis mode. so that's a good sign. however, with that said, there's nobody that's sitting here today thinking next year is going to be this blowout year like this year was. caroline: certainly. when we're looking at the boyout year, we're looking at bank stocks, it has been from bad to worse the last three months, for example, in particular, bank of america, we're seeing trade off by one percentage point. what are you hearing from the investor base in terms of when
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the bleeding stops for financials? >> the bleeding will stop for financials once the volatility is not the kind of volatility that's stopping people from trading. this is so-called gap volatility that people are pretty concerned about. but once we turn to january, people come back to the marks. people are going to perhaps feel better if the gap voluntarily tilt subsides. we have first quart irearnings coming in around the second week of january. most are predicting a pretty rough fourth quarter, especially relative to the year. bonuses are going to be flat to down. so we may be starting with a year that's a lot more muted than we've seen in the last couple of months. caroline: yeah, all eyes on volatile never been quite right for the banks. thank you for the perspective amid all this breaking news. now let's check in on the bloomberg first record news. >> hey there, caroline. a senior russian diplomat says moscow is open to having a summit between president vladimir putin and president
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trump. the two had planned to meet at the recent g-20 summit in argentina, but president trump canceled the meeting. russian and u.s. ties have sunk to their lowest level since the cold war, due to the war in syria and reports of russian medaling in the 2016 u.s. presidential election. some indonesia residents are being warned to avoid beaches for at least two days. there are fears that ongoing volcanic activity could generate another powerful tsunami. the weekend's disaster killed at least 373 people and at least 128 more remain missing. the tsunami could hurt their tourism way and weigh on the nation's currency, among the worst performers in asia this year. security is high in barcelona following a u.s. warning that the city could be at risk of a terror attack during christmas and new year's holidays. an alert was posted online and sent to u.s. citizens in spain's largest city. it exercises heightened caution
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round buses, public transport. the downtown boulevard was targeted during an attack last year that killed 14 people. and the former prime minister of pakistan has been convicted of corruption. he has been sentenced to seven years in prison after a court found he had accumulated wealth through unknown means. supporters say the decision was given without any evidence of proof of wrongdoing. and that it will be challenged. he's being probed by the national accountability bureau. global news 24 hours a day on air and on twitter, powered by powered by more than 270 journalists and analysts in more than 120 countries. this is bloomberg. caroline? caroline: courtney, thanks very much. coming up -- some christmas eve m&a? mind body gets scooped up. more on that deal next. ♪
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caroline: this is "bloomberg markets." now let's talk m&a. private equity firm vista equities partners has agreed to pay for mind body, a software provider for yoga, pilates and other fitness centers. mind body was found 30% this year, but shares surprisingly shot up today on the news. for more on this m&a deal, let's bring in our deals reporter, keeping us by on it eve of christmas. what do you make. premium being paid here? >> it is a big premium considering where the share price has been this year, along with a lot of other tech stocks. this has been hard hit. they're down about 30%. talking to my sources around the company, you know, there is a feeling that it could have
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been worth more, this company has two businesses that's been primarily focused on like a business to business platform providing software. but they've also got an app that they developed a couple of years ago, which lets you book classes through that app. and they haven't really monetized that app. it's got about 12 million subscribers to that app. 12 million people use it to book classes. but the company doesn't actually take a cut of it. some people feel like once they monetize it, perhaps this is a business that could be worth a lot more. >> interesting it's got a 30-day shop period right now. are we expecting anyone else to see the sudden value in the business too? >> exactly. and that's the thing. there's a company called recruit, which is very big in japan. and in europe, they have -- they make more than $1 billion in revenue. it's those sorts of strategic buyers that could be interested. there's also booking out there.
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and other private equity as well. because as i say, people feel has this is a company that untapped potential. they haven't really spent a lot of money marketing that or developing it, to be honest. so those are the reasons that you might see these other players come up. it's interesting to see the 30-day period. they said that they are going to now solicit offers and go out there and see who also might be interested. caroline: given the market selloff, given it's been a rather tough time perhaps from a valuation perspective, this is interesting to be marketing off the end of the year just before christmas with this sort of deal in the tech space. >> yeah, maybe they're hoping the christmas timing means nobody else can do the work to come in and sort of spoil their party. so that's one thifpblg as you say, december hasn't been a great month for deals, so it's interesting to see this just before christmas. but tech deals this year are up about 80%. it's been a pretty big deal. as the prices have come off,
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more and more people have become interested, which is not a surprise. caroline: certainly isn't. always great to get your take, particularly on a day like today. monday m&a for us, and, of course, eve of christmas m&a. quick look at the markets. they're giving us plenty to be digesting on the eve of christmas, too. on the shortened trading day, plenty of volatility. we've had a turnaround. we were higher on the nasdaq. we're down .6% anyway. leading us lower is the dow jones industrial average off by 1.6%. vols are hire, up 37% compared to the last 20-day average on the dow jones. this is bloomberg. ♪
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caroline: this is "bloomberg markets." i'm caroline hyde in london. bank of america chairman and c.e.o. says that the dispute between the u.s. and china will take its time, speaking exclusively to bloomberg. he said some of the issues dividing the two sides will be
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hard results. >> it really depends on the client. some clients, they couldn't wait to find out what would happen and would have resolved. they move, if they could, they started moving the production goods out of china to other places that wouldn't care. or they believe they can't pass through the price. you're seeing that. that's cotts them money without any real benefit, because you're going to sell a piece of clothing for $20, you can't rise the price. now you have to move it. and so that's been disruptive. you had certainty that this could cause the economy to slow down as disruptive in people's minds. so i think we've got -- some of these things have to fall in place. so mexico and canada fell in place. now we got to get the deal approved. that's got to work its way through the system, and i believe my personal belief is we've got to make progress on china, but it's hard.
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that's the thing people forget. trying to work with china, they're not in barriers, intellectual property. those are much harder issues than just the question of equating kind of transfer pricing and stuff like that. why so hard? it's competitiveness above countries and what they're up to. i think this will take a little longer, but it needs to get resolved. >> how much is the trade tension? how much is actually the cheap ease economy? how vulnerable are they? >> in china, it is slowing down, and you're seeing they're talking about doing some stimulus to try to speed it back up. they have a need to continue for the societal purposes, continue to bring people from urban working production and services. all that's been their goal. there's no mystery about this at all. i think it slows down, and i think that affects europe more than it affects the united states because the linkage is
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there. you're seeing it affect some of the economies around the world, obviously asian economies. traditionally they've proved fairly quickly, and they're doing a lot of the work, and moved fairly quickly. but it has slowed down. >> what is the risk that actually global growth will slow down because of china? it has generated such a decision proportionate portion of global growth. even if slows down even a percent or two, it really takes the growth. how could that reflect back into the united states? >> you really have to worry about china. it's big enough to make a difference, a $12 trillion, $13 trillion economy. i think people are very concerned. in the linkage of their growth to other people's growth. i think their track record is around 6%, so it's not going to make a world of difference. but europe is more tied to it than the united states, and that's why people are talking about being worried about that. and so, remember, the core
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prediction for most people, the market, the average blue chip economists is for worldwide growth to slow down a little bit so. that's been in the prediction. so there's no surprise there. by the way, the u.s. is going to slow down. caroline: that was the bank of america c.e.o. speaking to our very own david westin last week. now let's get a quick check on what's happening right here, right now, because it's been a volatile trading session. remember, it's a shortened week. i mean, shortened trading day. we're off by 1.6%, worst week for the s&p 500 since 2011 last week. we are heading further into bad territory on the nasdaq, the financials call it mnuchin inspect. this is bloomberg. ♪
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markets.s bloomberg it was a half-day in european trading. it was a down day across the board.
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stocks by 4/10 of 1%, closing at its lowest level in november 2016, seeing most interesting groups in the red retail, personal house hold groups. outperforming up 2/10 of 1%. plus one at 20% of its market value in terms of dollar terms. deck about to tense up and percent helped by -- on the downside, 5100 by 5/10 percent forming as well. remember, european markets on course for their worst year since 2008. not a happy holiday for oil. crude prices, they cannot find a bottom. plus, supra country looks to extend and deepen cuts here for more, let's bring -- bring in tina davis. start to see the price of desperation to a certain extent coming from the cartel. you heard a lot of reassuring noises over the weekend as we had the arab
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members of opec meet. a lot of those governors are saying they belong in the lines of we will probably exceed the 1.2 million barrel cuts that they announced just this month. as you said, oil is down another sinceay, down about 40% the october hide. it is down 15% since then. if the goal here was to stabilize the price, that has not happened yet. caroline: certainly not, 1.2 million was more than market expected. what are they to do, why are we seeing such continued selling pressure? 2 -- tina: it is a lot of concerns. the equities market has gone down substantially. we have been reporting on the correlation between brent prices international benchmark for oil and equities markets. the last time oil to a tumble in 2014, those two things were disassociated. it seems like oil is a much paying attention to what is happening in global equities and there is concern about the broader economy and what equities markets are signaling
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and turn for oil. you have concerns about what the economy is doing and what that will mean ferdinand going forward in 2019. caroline: you have told us before the level of pain and how much anyone can stomach. in a moment, we are at $52. lower for the wti contract. when will we start to see the text being turned off? when will he see any impact on united states share -- shale? i think, in part, what we saw is in the past couple of weeks, we saw the u.s. government put out some data on august numbers. these are obviously trailer numbers. on august numbers. especially from the permian. they are much higher than anyone had anticipated. we have been reporting on the bottlenecks permian and need to build up the infrastructure to help move out all the added oil production. that has not had that he has not taken out quite as much production as people were anticipating so far. we will continue to see --
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continue to look closely at the the u.s. production figures are because they are so elemental to what is happening in terms of market fundamentals at this point. if we are talking about under $45, it starts with really those show producers, they will not all be economic and all plays at $45. some portions of the permian where you can get up around 30 come of this will cause some people to start to turn the tap. caroline: will it caused russia to turn the taps? they were the ones that were tough to come to the bargaining side of the equation when we had the previous opec plus meeting. it took some time to get them to sign up. there is worry that they can make oil pretty cheaply. an interesting case. that depends what the ruble is doing. if you are selling fewer barrels of oil, there is a strong dollar and you are getting more ruble in turn, it is not necessarily painful as it might be elsewhere. not entirely enthused with the idea of a new cut.
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they were the ones who kind of helped make the deal work with opec and it is not opec allies that have been part of this 1.2 million barrel cut. what is interesting is it will be adjusting to see what the saudi's are doing. they have already said they will go beyond what they have promised. cut, we saw compliance rate of about 120%. not all of that was voluntary. we have places like venezuela where the output continues to spiral down the matter what they do. if we are talking about going well beyond the 1.2 million, the goal is to try to stop -- try to stem the flood of oil prices downward. caroline: are we expecting anymore meetings, anymore perspective, anymore headline risk coming from this group of producers? tina: the have said -- and one of the things that the uae minister said over the weekend was they stand ready to have an emergency meeting whenever they need to. i think that is probably the
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next most interesting turn of events. on january 1, we will see the cuts come into effect. it will be interesting to see how quickly those things actually are manifest. do we see sort of export data immediately talking about a reduction? those are the two things that we are looking for next. industry much and equities macro story at this point. what is happening in the broader economy and what does that mean for oil prices going forward? caroline: great perspective, as always. thank you. we continue to see the downward pressure on prices. sticking with commodities, the world's largest iron oil -- or much this is staying -- despite the ongoing trade war, last months for its ceo told us that she is confident demand will remain strong. what i think, was the consistency of messaging. similar themes. the next year of opening up a reform for china, for us, that
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is positive. we are seeing that very strong production. that striving demand for iron ore. and confidence to make our investors decision like lee -- likely -- earlier this year. consistency is key for us. >> you talk about the points demand from china. it is also being percolated by stimulus as china trust accounts are that capture or any slowdown from this trade war. how long do you see this current uptick continuing and is it sustainable in 2019? >> i think it has defied expectations already. a billion tons of steel. that far exceeded anyone's expectations. i do think the chinese economy has a number of leaders can be used to continue to stimulate demand. we are looking at the next 12 months as positive. investment in infrastructure, rail, the investment in and airports, and other forms of infrastructure that still driving the very strong demand for steel.
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we're not seeing steel as an increase could steel stocks are being consumed. it is a very high level of steel. there is a demand for a good that is driving demand for iron ore. >> what is your view on the trade war? australia, you have benefited with the iron ore spiking up. australia, how do you see this -- from your purge in australia, how do you see this playing out? >> we have get to see with the impact of tariffs will be. it has not been positive for global growth. we have some concerns about potential impact. we are also seeing that china and the messaging heard from president g yesterday is that they are very positive about the outlook. they will continue to drive that demand and demand for steel and iron or her and we see that in a positive for china moving forward. number one your customer, you do want to
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diversify the customer base. japan, south korea, india, trump is announced his potential steel tariffs. that could impact the country like india significantly. how does that change your plan? >> we think that over the long-term, we will see substantial growth through the region. there may be some short-term impacts from tariffs. we think that over a long-term we will see growth. strong growth in china over the last decade or so we do take a very long-term view over -- before the region more broadly. let's check in on the news. here is donahoe with more. steve mnuchiner thoughts have come top u.s. banking executives about market same fory, -- did the him today. officials from the federal reserve, fcc, and other agencies assured mnuchin that they see nothing out of the ordinary in
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the market. brief phone call, hughes and regularity -- regular calls during the government shutdown. meantime, president trump blasting out of the federal reserve on twitter. blaming it for the recent plunge in the stock markets. reports said that he had considered firing chairman powell. the president said the only problem our economy has is the fed. the have a feel of the market. they don't understand a trade war or strong dollar or strong democrat shutdowns over borders. the fed is like a powerful coal per but can't score because he has no touch, he has no put. over brexitided come together as political opponents looked akil that kill the deal negotiated. they said it is time to put aside our differences and focus on what really matters. -- rights that the sooner parliament agrees on the right brexit deal, the sooner britain can focus on keeping domestic issues like practice and health
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care. the foreign minister says his country is working with other nations toward a possible u.s. investigation into killing of jamal khashoggi. speaking today during the visit to tunisia, the social says the party specifically wants the saudi's to explain what happened to khashoggi's remains and who is in charge of handling them. the show he was killed at the saudi consulate in istanbul in october. global news, 24 hours a day. powered by more than 2700 journalists and analysts in more than 120 countries. i'm courtney donohoe. this is bloomberg. caroline: thanks very much indeed. let's have a quick check on the markets as we had to break. looking at once again, down day. the nasdaq has been a performer. amazon bounces back. nevertheless, in the red. further into bear market territory. crude oil lost by 2.6%, even the opec promises further production century.
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looking for a haven, gold come up one percentage point. seeing money move into the yen. the crypto, up 70% on bloomberg outlook on crypto. this is bloomberg. ♪
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>> -- caroline: time for our global battle of the charts. kicking things off is bloomberg steel reporter. the menuiquidity is on this christmas eve. i wanted to show you some of the ingredients that go into that. of course, treasury secretary steve mnuchin -- spooking the markets. chiefg around the bank
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executives yesterday and asking them to reassure him that the banks have enough liquidity to continue lending markets and businesses and homeowners. one of the things that he got today was -- from regulators that liquidity is fine in the market at the moment. and banks had ample capital, should they need to liquidate quickly. how can they be so sure, here is one of the menus -- measures i wanted to show you. this shows the liquidity and securities held by the biggest banks in north america. that includes the bank of america, jp morgan, morgan stanley, wells fargo, the lot of them. you can see were they are. business security, these are assets that can be liquidated quite quickly, which includes treasury holdings, assets like that. look at this, 2007, we were back then here. look at how much they have increased with liquidity and the holdings of securities over time. about $2.3 trillion.
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if you are worried about liquidity, here is something to help you sleep better tonight. fantastic. you can check that out on g tv . view andsound point of very on the news. we like it. let's check out --. bloomberg intelligence. >> thanks very much. let's talk a little media here. media stocks in the s&p 500 down about 15% here today. down over 20% from their recent high. bear market territory here. what is going on in the media sector, clearly, the craziness in the markets overall is definitely impacting the media sector. there is more than that. media investors are concerned about the underlying business model supporting all of the media ecosystem. that risk can be summed up in two words. court cutting. what this chart shows is a decline in the orange bars and a decline of the traditional pay-tv households in the united states could those of the cable companies, the satellite
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companies. in 2017 teen, there are about 90 million in the u.s.. million overall household spear that is forecasted to declined to about 75 million pay-tv households in by 2022. significant decline. all set in part by what we call skinny bundles. something like a sling tv where a consumer can get 20 or 30 channels versus 500 for maybe 20 or $30. why is this a real issue for the media sector? have 90 million people, households willing to pay 80 to $100 per month for content and that is slowly declining, that is a problem. not only for the cable companies like comcast, but also for the entertainment come is like disney, the broadcasters like cbs, and the advertising agencies like wpp. the pay-tv ecosystem declines, everybody feels the pain. you might be asking is there any company that is benefiting from
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this trend, that would be netflix. netflix stock is up about 25% this year. almost 400% over the last five years. subscribers are actually growing. they are getting a lot of these pay-tv subscribers that are leaving. they are really benefiting. that is another chart for another day. caroline: no wonder they have analysts said -- saying by the stock. brilliant perspective. i love both of them. had a on the news and she great perspective in terms of trying to ease the markets tension when treasury secretary mnuchin was adding fuel to the fire. i will give it to our debut of the day. what a fantastic set of charts and what a clear trend that we will see throughout 2019 as well. paul sweeney. from london, from new york, this is bloomberg. ♪
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bloombergthis is markets. what a day for the white house. u.s. regulators briefing steven mnuchin today on their plans to monitor the markets. the partial u.s. government shutdown is now in its third day. not to mention a tweet from trump really just a getting the federal reserve. -- is live outside the white house to break it all down for us. what is getting you guys talking the most -- behind the scenes? visit trump's rants against fed or mnuchin trying to come the market? >> it is all the chaos happening at one spirit you have the markets that are in a tailspin. the president tweeting angrily against his former officials including his defense department. who is leaving earlier than expected. you also have the president very
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upset about what is happening, not only in the markets, but also the government shutdown. the fact that he is not able to get some sort of deal to get the government backup in and get funding for his border wall. there is a lot of turmoil and chaos happening for christmas here at the white house and the fact that the markets have been declining for the past week is oft added to the sense tumult at the white house and is part of the reason why the treasury secretary decided to call all of those major banks yesterday and make sure that they knew that he was on the case and trying to call the markets and make sure that they are liquid enough to withstand whatever, might be ahead in the economy. also spoken to the regulators today who say everything is fine in the markets. there is nothing to worry about here. how rare is it for a the treasury secretary to get banks from the phone? >> it is rare for the types of meetings to happen on such a large scale.
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especially right before the holidays. it is rather that the treasury secretary would feel the need to put up these calls and to convene these working groups to make sure that they are all court in eating to make sure the market is operating in a normal fashion. it is rare that this is happening. it may indicate that the treasury secretary is seeing some information or some signals that the rest of us have not seen yet. that he is worried about. and wants to make sure that the government is showing that is is on the case. or it may just be an attempt to calm the markets, which have been very jittery over the past few weeks. concern over what is happening in washington and happening with the fed. it may be an attempt with the recent news that president trump was considering firing the fed chairman jay powell to calm the markets and let everyone know that everything is going to be fine. it is not yet having that impact yet as we have seen the markets continue to fly today. that may be what the treasury secretary was trying to do. caroline: just adding fuel to
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the fire. hitting session lows as we speak. attention to the chief. he shot of once again against the federal reserve. that is a on the problem in our economy is the fed. withso used an analogy gulf. a man who likes golf and none in golf courses. what do you make of this the moment? >> we were expecting the president to see public treating against the fed after the recent announcement of the rate hike on wednesday. he did not put out any tweets. not make any public statements about jerome powell. we reported over the weekend that the president behind his team was taking the pulse of his advisors and wondering whether or not he could fire jerome powell. this is finally spilled out in .ublic the president saying he is unhappy with what the fed is doing and blaming the fed for what is happening in markets saying anything else is fine. the fed is the reason why things
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are not looking so great on wall street. the president is letting his opinion be known. which has not been a secret in washington, that he is not happy with the fed. whether or not he will do anything about it remains to be seen. whether or not we will see him being able to lay claim here whenblame game the markets are not going in the direction he wishes. there are still higher on the back of his election. half of the overall gains. talk to us about what is happening in terms of the government shutdown. if anything, that adds to economic pressure. happening at all this christmas eve. the president is here behind be at the white house in the residence. he is not having meetings with members of congress who mostly have left town. they will come back on december 27. that will be the first opportunity they have to try to put together close for a deal. right now, there is not a deal. the president will be meeting with his department of homeland security secretary to talk about
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part of security. maybe, try to work out some sort of offer to make to democrats in congress. right now, there is no sense of this is not going to bleed over into 2019 when democrats take control of the house. fantastic sum up of what is a very busy white house. we thank you for all the perspective and plenty of breaking news to be but try testing today. a quick check on markets and how they are digesting all the tweets and the news in terms of liquidity. we are seeing selloff. hitting session lows once again. s&p up -- feeling the pain as we know that the secretary and treasury has been putting calls to the bank. the dollar down by 5/10 of 1%. money moving to the haven. this bloomberg. ♪
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caroline: noon in new york.
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5:00 in london. 1:00 in hong kong. this is bloomberg markets the close. now, what stocks extending the kinds after the worst week for new year's -- equities in nearly a decade. trump claims the fed again. concerns, magician called the large u.s. banks over the weekend, come to check on their liquidity. meanwhile, regulators tell him there is no problem. oil downward spiral concerns over the rising u.s. supply sending crude below $45 per barrel. even as opec signals it may extend output cuts. all that and plenty more coming up. let's get a quick check on the markets. >> let's kick it off for the majors as we are seeing some under pressure this christmas eve. one strategist saying markets are not going to be as lifeless


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