tv Bloomberg Markets Americas Bloomberg February 12, 2019 10:00am-11:00am EST
york, 3:00 p.m. in london, and 30 minutes into the trading day. vonnie: live from new york, i'm vonnie quinn. guy: live from london, i'm guy johnson. survey was looking for a turnover rate of $6.85 million. that is more than anticipated. we had been at a multi-month low for job openings and labor turnovers. let's have a look at what markets are doing. a bounce on the idea we might have an agreement on something congress can get together with president trump on in terms of the wall and a shutdown deal where shutdown wouldn't happen. that is helping the market along. crude oil higher by 2.6%. of that -- opec says it might
cut again as supply out of the u.s. is hurting the chain. -- jab looking to get more shares. under armour has turned around. it started lower but is getting they didlot of blokes pass estimates and the future is a little brighter for under armour. in the european markets, the dax is outperforming. bye 100 underperforming, up .1%. dax trading strongly. from a positive noise emanating from the trade story. the president talking about the possibility of meeting president xi jinping soon.
that is a positive narrative working its way through. dax trading strongly today. ftse 100 is underperforming. we have a decent pop back in brent, off the lows from yesterday. forces coming into play and one report with the demand issue into it. we have the saudi oil minister talking about they may overstep when it comes to the opec cuts. that is helping out on the supply side. dollar weaker today. the other story is what is happening in spain today. is worth spending time on. have ended up with a slightly less business friendly since then. there have been issues surrounding retail reviews.
between december 1 and this coming march 1. once the two sides said they were going to keep talking, the markets set it aside. my expectation is, if we put it off, we are going to say, well, there is no trade agreement. on the other hand, the two sides are not walking away. they are talking. it is a nonissue.
stage when reach a you cannot kick the can down the road anymore. that may be by midyear. jon: let's talk about the market rally. my sense is this has been an unconvincing risk on rally. the animal spirits are not charging at this stage. would that be your view as well. addition to that, i would point to the significant pivot which from jerome powell, told the markets they have several months of life left. in other words, rather than have as rate hikes during 2019, the chairman suggested in december, he is talking about a pause and the markets are
expecting a cut in interest rates. that is propelling the market in a big way. it is not the economy. they are not the fundamentals which are doing it. stimulus fromout that fed easing goes away, you are back to the old situation. this goes back to the question -- has something fundamentally changed. except much has happened removal of temporary uncertainty. what is the -- for the s&p 500 for the rest of the year. komal: it will be range bound until we see more signs of a recession take place. the fed may have postponed the recession of my expected date of late 2019 to sometime in 2020.
if the fed does increase in the next several months, rather than twice, even if it does at once, bond yield isyear at about 17.5 basis points and that will probably invert and go into the negative. that will be a sign to me the recession might follow. that is not good parts for the equity market. for now, the equity markets are fedying the benefit of the taking place. on the bond market side, we have had the yield curve remaining flat. is ais a great -- there great piece in bloomberg opinion which discusses that. if you do the comparison with 2006, when we had the inversion of the yield curve in october, november of that year, which 0 yield curve2 to 1
being relatively stable in june through august, the great recession followed a year later. the comparison with what happened in the last recession are not promising either. vonnie: thank you for the shout out for the story. will get back to this conversation in a moment. stays with us. asked the may has house of commons for more time to renegotiate her exit deal with the european union. the prime minister says the u.k. onll aims to leave the block march 29. >> we need to hold our nerve to get the changes this house requires. by getting the changes we need
to the backstop and protecting workers rights and environmental , we can reach a deal this house can support. >> the prime minister has been asked to rule out a no deal brexit. she will not say if she is supporting leaving the eu under those circumstances. mark kelly announced he is running to finish john mccain's last term in the senate. he is a top recruit to challenge the republican candidate in the next year. inspector general review spacex peer they apply toake sure they regulations. the evaluation will begin this month, but it did not say what
prompted the review. the united nations refugee agency has noticed people fleeing south to don. they have been gripped by violence since december. 13,000 people have fled the fighting. many into neighboring congo. 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 am kaileyines -- linez. we talked trade and let shut down. all of spanish politics, those still to come. equities on the front foot. a trade story providing a much-needed boost to those equities. more on the markets next. this is bloomberg. ♪
guy: live from london, i am guy johnson. vonnie: i am vonnie quinn. we are seeing a bounce today. you were saying on trade and this potential deal. athave a cabinet meeting 11:30, which we may or may not get more information on the deal. on's look under the surface what is going on in the markets. on rally here.sk not just in the u.s., but globally. look at the s&p 500 and the nasdaq, up. .he japanese nikkei, up
the possibility another u.s. shutdown will be avoided. also rising. the s&p 500 cap by its 200 moving day average. we have a sideways trend over the last year. for much of the volatility, that is the list. in the fourth quarter, below the 200 moving day average, let's see if that happens. at top stocks, coty is soaring. we have bright house financial up 12.3% on a strong earnings report. finally, the 10 year yield, it was higher, telling there was risk on tone despite the fact we have mixed on tone.
there is no bid for haven bonds, confirming the risk on picture we have globally. guy: fascinating stuff. us from losh angeles. question abouta the dollar. the expectation is it would go down once the fed pulled the handbrake. the dollar has continued to rise. are you surprised? komal: i am not surprised. the dollar will strengthen further during the rest of 2019. even though you have the fed pause, the european scene you discussed in the program is weaker and that, along with the issues we have with japan, brexit, all of those are leading to the weakness of the pound sterling. that is translating into
dollars. become a huges question. the oil market and everything depends on it. given that we are getting news today there might be another opec cut, how much does the price of oil factor into your vision of inflation? for toi am not looking increase very much. as far as inflation is concerned, even though opec announced they may cut further, because the world demand is slowing, it is like trying to catch a falling knife. you have global growth slowing rapidly. as much is opec going to cut oil production in the united states keeps increasing? when you put it together, the supply demand imbalance will lead to lower oil prices. far as myvorable as
vonnie: live from new york, i am vonnie quinn. guy: in london, i am guy johnson. this is bloomberg markets. vonnie: a look at the biggest is the stories in the news. money gram missed the lowest analyst estimates. the ceo tells bloomberg the lower numbers were expected. itsaid they are rethinking strategy for the future. aree are down a bit, but we
repositioning the company. we are thinking differently about consumer interaction and how we go to market. we are doing things intentionally. it is going to have a great effect for us over the long term. vonnie: the earnings-per-share came in at just one sent last year. -- at just one cent. -- shareholder activism thanks to work on a chinese search engine. the company could enable censorship by the chinese government. losing florida railroad is set to make the biggest initial public offering of the year. backingbranson is virgin trains usa as it seeks $538 million in an ipo. theirlan to expand
high-speed luxury service to disney world in orlando and then begin service connecting southern california to las vegas. charge related to the compensation of carless -- of carlos ghosn. latest bloomberg business flash. we are going to talk about the catalan crisis and how it is impacting a vote in parliament tomorrow. it could result in a general election. this is bloomberg. ♪
has not decided if he will support the congressional deal on border security. billion provides $1.3 for 55 miles of border fencing in the rio grande valley area. trump wants $5.7 billion. the agreement rejects limits democrats sought. the white house is waiting to review the full language of the deal. what theyrespond to insist our russian violations of a cold era packed. -- cold era pact. to returnurged russia to compliance with the treaty. initialnd fire crews could allow them to -- ground fire crews missile could allow them to launch an attack with little or no notice.
evidence of anted block of software and hardware infiltration. hackers are said to be behind the attacks and are known as apt-10. u.k. lawmakers are criticizing a report on the autumn budget. brexit agreement could deliver what is called a deal dividend for the british economy. mps argue hammond's ideals are not possible. they promised to erase the deficit by 2020. 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. this is bloomberg. our attention to spain. the prime minister's budget plans are threatening to unravel.
he is considering calling a snap election for april. we are joined by our spanish our spanish bureau chief joins us live from madrid. charles, can you walk us through venn diagram of a catalan separatist trial and what this could mean for the general election? >> yes, good afternoon. there are two drummers playing out here in spain today and they overlap in at the supreme court, we have the start of a trial. the leaders of the catalan independence movement of that tried and failed to declare independence from spain back in 2017. -- it was a tumultuous moment for spain. spanishhave the government trying to line up support to pass the budget. where do those two events overlap?
sanchez needs of the support of his minority government, and the catalan independence parties to get his project through parliament. he has indicated in the press that if you cannot get it passed, he will be forced to call a new election. when did we think those elections might be if they are called? charles fish a good question. that is where we are venn somewhat. option,ht be a possible to coincide with the european elections. and also you are municipal elections in spain. although some people say that some people in the socialist party don't like the option. a spanish new service yesterday that reported that a date in april could be
under consideration. but there were reports from the government pouring cold water on that option pretty quickly. guy: is the centrist government perceived as being is that is friendly? i am trying to work out what the reaction to the government falling would be -- is being business friendly? may have significantly increased the minimum wage, started to stabilize the property market by looking maybe to extend reviews from three years to five years, and if you are an investor, increasing the rent reviews to even longer, i feel like they might not be that market friendly. over the last few years, spain has built up a head of steam, money has been pouring into the market. tell us how investors would react if the sanchez government would fall. charles: in response to your question on whether the socialist government is market friendly or not come out of think we have seen any sign, for
example, in the bond market, that anyone should be concerned about spanish government policy. the economic team is highly orthodox. the economy minister has a strong track record in brussels. perhaps the key issue is the strength of the government, this is a government with 84 members with 350ment deputies. --it is a government that is that has to fight to survive. perhaps some investors might feel that if elections were to be held, then a stronger government for mission either from the left or right -- government formation would fall into place. the political structures might become firmer, that is one way of looking at it. you charles, we appreciate
joining us. thank you very much, indeed. our spanish bureau chief. vonnie: guy, we are checking up. markets now, the dow is a bit, moderating gains when we opened up at 9:30 eastern, every single stock in the dow was higher. percent, and .08 the kospi is also higher. -- mattel is up another 7%, under armour is also being appreciated today. investorsors were -- were skeptical at the beginning of the session but now it is up 7%. this is bloomberg. ♪
♪ guy: live from london, i am guy johnson. vonnie: and from new york, i am vonnie quinn. this is "bloomberg markets." white house financial is up 13%. david havens of imperial capital puts it as successfully navigating the financial shores of the first quarter of 2019 in the capital markets. the best performer on the s&p one.s this
, let's get to bloomberg david wilson will give us a little more detail on this. jab holdings, which we know very well, has a large portfolio of companies and is increasing its stake in this company. is this part of it? david: it could be part of it. already owns a 40% stake in cody. they are talking about a billion dollar tender offer which if they bought all the shares would raise their holdings to 50% and give them majority control. vonnie: the price is a lot more attractive than a year ago. what happened, and is jab getting a burden? has changed their business, a year ago they bought a bunch of beauty brands from procter and gamble. more recently, they made a push into luxury come as whole idea
of making perfumes for other companies, like burberry for example. that amounted to 40% of their revenue the last quarter, so increase i come at a are going in that direction. it is a different company with a different profitability and that plays into my jab is interested in increasing the stake now. vonnie: do you think shareholders will be happy to give up some stock at this price or maybe hold on to it as the shares get better? david: yes, you have to wonder whether people aren't going to ja be, because we know they have it come of it has spent it on the likes of character, dr. pepper a whole lot of other companies. we will see if they respond to the market, what it is telling them about the value of your offer. vonnie: another one is this one, it is down about 10% now. it feels like investors are
either rewording or punishing individual companies more than they used to. is that just an impression? david: it may be. rs has a particular story, they have been part of the consolidation of the beer business and we have seen increasing competition from the craft brewers, which may be why it has struggled a bit in the third-quarter sales. they did not measure up to analysts expectations. on top of that, they had accounting issues, they had to go back and restate two years of results. when that happens, some investors run for the hills and we're seeing that reflected in the stock performance. is up 4%.rton david: there are numbers that came out that suggested home prices are rising. fourth-quarter increase of the order of 4%. a figure that is a plus for the builders. if you look at interest rates, this year, is likely have seen
in the last couple of years, people were anticipating rates would finally start rising, that would be bad news for the builders because it would be expensive for people to buy homes. out.s already played we are coming towards the spring selling season, a big deal for builders. so it may be that people are trying to get ahead of some positives they see coming down the line in the next couple of months. vonnie: for stocks in the dow are now lower, and when reopened, 30 were higher. the whole theme of the border beingwn potentially averted, potential improvement in the u.s.-china trade talks, is that impacting the market today it is? >> in the background come and the question. thateal issue is it is not a good thing for the companies't for profitability. when you put it all together, it
is a part of the mix, although you do have the day-to-day flow of company news on top of that. vonnie: dave, our stock exports, always good to have you in the studio. thank you. guy: let's get a bit more granular. these shares fell initially as the market opened, they are now rising. let us welcome our next guest to get a take on what is happening here. can you walk us through how the onket has evolved these numbers today? >> it is kind of a classic seesaw. you look at the report and say, this company has been doing really well, we expected, more after the owner of louis vuitton had a completely fantastic report and lower real and others in the sector did especially well. they might look at this and say, frompected a little more
kerring, but then they look at the 20% sales growth numbers, maybe they think it is time to buy the shares after all. vonnie: why are these companies getting involved in controversies? there is gucci, prada, several more in the last few months alone. he would think they would be aware of what is going on. yes, there is controversy over the latest sweater from gucci, the blackface controversy. wonder? to , what is going on it seems to be a particular problem with some of these italian brands -- gucci, prada, dolce & gabbana in china, all. >> falling into these controversies you have to wonder where they don't hire somebody to look at these things more carefully? i would imagine that process is now firmly underway. despite the controversy, and it has been documented on social media and elsewhere, there is a slight concern that gucci, in
particular, is becoming un controversial, that it is becoming a little bit mainstream. tore up the script a few years ago when it came to gucci's look and feel but now it is concern that it is becoming a little bit more mainstream? >> yes, the brand over the years has gone up and down, up and down, depending on the star designer who is there or not. the current one completely transformed it. they had years of 40% sales years.the last couple of they go down to 28%, that is pretty good for a lot of people, but there is concern that that is the only leg bent kering is really standing on. they haven't got a source of growth at the same magnitude as gucci. you can hearken back to the days of tom ford and all of
them, how that kind of really set the company rally. then we have the mergers & acquisitions story. eric, thank you very much. forecasting less oil demand. let us bring in tina davis, bloomberg managing editor for commodities in the americas. really interesting headlines from the report. can you give us the lowdown on what opec is thinking without? tina: sure, it was interesting, they curbed their demand outlook for 2019 just a bit, but it was enough to draw some interest because if you are talking about curbing demand for 2019, they are also talking about added supply coming in from non-opec and non-opec ally nations. you are essentially seeing an acknowledgment of loss of market share. if you are opec, that is not what you are trying to accomplish with the production cuts that went in in january. vonnie: how does that fit side-by-side with the comments of came out, which suggest that
opec, or saudi, at least, is thaning up to more cuts the opec do had described? tina: we do see over compliance in last year's production cuts. so far for january, the report indicated about 86% compliance. saudi arabia is basically accounting for the majority of that compliance. what was interesting about the the saudi oilt minister essentially said they will be at 9.8 million barrels a march. if it is true, it would be the lowest output level for them since early 2015. it also represents 500 barrels a day more than they promised to cut. you can see there are quite serious about trying to maintain prices. the oil price today has kind.ded in vonnie: right, wti is up by about two dollars a barrel. what does this say about the u.s., what does it portend for u.s.?
tina: and continues to see higher output from the u.s.. we are looking at numbers from the energy information administration about what the outlook will be going forward for u.s. production, and whether or not they will also curbed demand. we have the iea also putting out monthly report tomorrow, a more conservative group in terms of oil demand. i don't expect them to do any kind of big cuts, they usually tend to wait until the imf moves, but if you are talking about reduction of opec, the u.s. is a major concern. are refiners still struggling with access to the finer crudes due to venezuela situation? tina: we have definitely seen the price of heavier grades of oil go up, not only because of venezuela, but also output cuts saudis are the targeting the u.s. in terms of where they are cutting shipments, so what is interesting, we saw the chinese
overnight selling the heavier grade at a five dollar premium. usually it sells at a discount. it indicates some tightening in the market. if you look at venezuela specifically, the report today indicates that they had that 19th consecutive month of decline and they are producing at around the levels that they were in the 1940's. it doesn't yet show the effect of u.s. sanctions, so that could go even lower in february. vonnie: a lot of reports and agencies is reporting inventories for the rest of the week. so we will be ok as long as you more acronyms for you. come, howstill to will the oil market play the latest news? we find out. features in focus is coming up from chicago. this is bloomberg. ♪ ♪
vonnie: time for futures in focus. we continue our conversation with our guest on oil. what do you make of this gain in oil prices? is it sustainable, given there was a pause following the opec headlines? >> good morning to you. sideways on trading oil, if you look at it. but looking at the price, it has been stuck between $50 and $55 a barrel for most of 2019. upside breakout target $60, so the key component of what we are talking about is the dollar, for sure. but you want to tie what is happening to oil. to the macro market if you look at the s&p 500, the swing highs we had last week, we could be targeting 2800, and then. vonnie: an attack on the all-time high. what would bring us there? would it be something macro like
a border deal or some kind of agreement on trade, or would it come from the oil market, or the equities market? not so sure. but looking at the price action, you have to be confident in the way stocks have rebounded. exact price pattern in the global market. let's put the word growth in there, that was a concern. the pace of growth was looking like it would slow down. the dollar is up here very close to is year high. we had the euro currency, it was 1.16,g between 1.14, and and a bottom could be in, we will have to wait and see. i am not sure the dollar has any power left in the fact that 97.50 is the halfway point in the last four years, we are close to that. and we are not looking at any rate hikes for 2019. this may be the last gasp in the
dollar. vonnie: thank you so much, alan. stay warm out there in chicago. allen: thanks. guy: good advice. sharestop of the hour, are falling for this industrial giant after the product pledge in the first quarter -- profit plunge in the first quarter. this shifts into a wider narrative, this is a german bellwether, at the heart of the industrial machine in a germany, and you can see that the stock is low but it certainly was hit hard. this talks about germany more broadly? is itselfrofit plunge tied to the u.s. steel tariffs, and it adds to the portfolio of evidence we are seeing about a week or germany. look at the bloomberg gtv chart we have here for you, it shows of this group against business confidence, in the
white line. they tend to track each other pretty well and are both falling at the end. it also had the pmi manufacturing data at the worst in four years. another group of german companies, siemens, damon chrysler, all coming out with less than better ask -- coming out with less than expected results. conglomerates going through a turnaround. ge is doing slightly better, take a look at the bloomberg again, we have put the shares against each other and you can see that ge is doing ever so slightly better, but still down. vonnie: thank you, emma chandra. this is bloomberg. ♪
european trading day. from london, i am guy johnson. vonnie: from new york, i am a vonnie quinn. guy: let's talk about the markets and show you what is going on. a big divide across the english channel, and not about brexit, it is about the market story. the dow responding strongly to narrative intive the trade story. stocks having a solid day in europe today. part of that is the trade narrative and part of that is company --he german french company generating good deadlines. the dax is pushing a bit higher today. the ftse 100, though, lagging, on the up about .1%. industrials are leading the market lower today, adding as a drug. we saw a downgrade for the sector yesterday. nevertheless, this is a sector that is increasingly correlated