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tv   Bloomberg Markets European Open  Bloomberg  February 13, 2019 2:30am-4:00am EST

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anna: good morning, welcome to "bloomberg markets: european open." we are live from our european headquarters in london. i am anna edwards alongside matt miller in berlin. matt: today the market say take a cue from wall street, global stocks extend the rally as asian stocks hit a four-month high. is an em extending into overbought territory? just 30 minutes away from the open. anna: let it slide, president
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trump signals he could extend the deadline tariff for more talks if they are close to a deal on trade. santander gives a reminder that juicy yields can calm with nasty surprises, after skipping a call option. disappoints in the fourth quarter, covering plans to bulk up its dividends. good morning, less than a half hour away from cash trading across europe and in the u.k. i am looking at a three-day chart of treasuries, yields continue to climb over the last three sessions, looking at 2.69% on the tenure paper. look at futures, we have gains in european teachers as well. they are not as strong as the gains in nasdaq futures. the u.s. could have another
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positive day. dax teachers up 0.6%. 0.6%. futures up what else do you see showing risk on signals today? anna: risk on signals coming very clearly through, and appetite for equities and emerging markets and other fx. the dollar fairly flat this morning. the markets seem to get an adrenaline shot in the arm whether it is the trade talk or the possibility of extending the deadline after march 1. or whether it is the likelihood of avoiding another shutdown, even though plans to fund the wall remain shrouded in mystery. the markets picking up on the positives and going higher. i want to point out the new zealand dollar, up by 1.5%. they are not taking a dovish turn as expected by some in the markets.
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markets, a look at the mark cudmore joins us, bloomberg strategist in singapore. let's start with the question of the day, which is, which assets will crack first? the s&p 500 or treasury yields? which is rubbing closer against the feeling? it is causing some debate -- which is rubbing closer against the ceiling? >> people are wondering why yields are not going higher, the seeing inving we are u.s. stocks. from my point of view it will continue to the u.s. stocks that outperform. i think they will break the soonerhigh above 2000 than u.s. yields will break out of the january range, 2.8% high. we are in a goldilocks scenario,
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maybe not a sustainable one but one that can last a couple weeks. the data is showing a slowdown in growth, inflation will not run away read there is no reason for more tightening, and growth is not coming down much. , and assets last year, in a world where there is liquidity, growth is ok. earnings are good even if they are coming down from last year's record earnings. all that context is important. rather than slowing earnings, it is realizing they are coming down to strong levels and still positive. matt: although yesterday we saw morgan stanley say earnings growth will only be 1%. kyle bass and paul krugman saying a recession is likely in the following year. does of people say the fed not have enough firepower to
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fight that. what do you think about that sentiment? mark: i do not think they need to fight it. we have to remember earnings are up, we saw a record last year. disappointing that we will see earnings flat, and there will be less expansion. but in the context that growth is not collapsing, earnings is not collapsing, why would the fed need to cut rates when you was growth will come in around 2.5%? earnings are flat and not booming, but because they were so high last year. it is based effects that makes it more look negative. i think overall the environment remains constructive for risk assets this year. because there is less of a one-way bet, a less brilliant growth story, volatility will remain. it will not go back to pre-2018,
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we will have painful corrections and pullbacks, but this should be a good year for risk assets even with volatility. it has to do with dovish this from central banks. the central bank in new zealand not getting the memo, not providing a sense of the dovish side expected by many in the market. , we see a popular new zealand dollar this morning. absolutely, it seems a little exaggerated. they were not hawkish, they just .ere not as dovish even more so in the fx market, fx traders have seen an opportunity in the new zealand dollar, and that the dovishness would crack through the bottom of the range and we would see more to the downside. the fx market was positioned negatively. they are very much neutral, and
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the next move could be a cut or a hike. saying thiswe are in the new zealand dollar. i am not sure it is sustainable, it is cleaning out excess positions the other way. matt: since you came into the studio, richard jones, our fx strategist put out an interesting piece on the mliv saying it is flawed to expect support for the dollar during this fed easing cycle, saying the other central banks cannot out cut the fed, and may not be able to go as far. what do you think about the strength of the dollar? has it topped out? mark: i think record jones' not thatvalid, it is other banks can cut. if you are trying to say dollar based on that idea that other banks will cut more aggressively, you are barking up
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the wrong tree. it will be harder to play the dollar overall, a lot of currencies have problems and it will be negative in other currencies that they will not get normalizing. europe will not be of to tighten policy anytime soon and they have growth problems. the euro is a large weight in the dollar index, that means overall the dollar will be relatively strong. i do not think the fed will cut soon, and i think the dollar can we can against em currencies but do ok against developed market currencies eke is overall we will have a risk positive environment this year with volatility. even though the dollar will not think versus the euro, yen, sterling, etc. anna: mark cudmore, bloomberg strategist from singapore. if you want to join the conversation and get involved in any of the topics, you can do
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particularly on the question of the day, which usrects first, reach out to on your bloomberg. let's get the first word news with debra mao. donald trump says he is open to letting the trade deadline lapse if the u.s. and china are close to a deal. march 1 with the day set to double the tariffs on $200 billion a chinese goods. both sides are meeting in beijing this week. reports say president trump will meet the u.s. delegation on friday. president trump is playing down the threat of another government shutdown. he is likely to grudgingly signed a deal reached by capitol hill and use executive powers to fund additional border measures. he says he will get almost $23 billion for border security, but
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did not explain how he arrived at that number. jay powell says there is low risk of recession in the u.s. the fed chairman says the economy is strong but the benefits have not been felt evenly across america. alan greenspan is warning about the risk of stagflation, his concern is the ballooning budget deficit at a time when growth is slowing. the bezos scandal is adding to the national enquirer's woes. they reported a $31 million loss in september -- since september, and that was an improvement. wealthzos increased his by a bigger dollar figure than all of ami revenue for the first half of the year.
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last moment before putting her deal before parliament. the move was discussed in a bar in brussels earlier this week, lawmakers will be forced to choose between the deal or a lengthy brexit delay. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. matt: thank you very much, debra mao with the first word news out of hong kong. president trump signals he is flexible on the china tariffs deadline, we will ask if the biggest economies can reach an agreement on trade. bloomberg radio is live on your digitalevice or on dab in the london area. this is bloomberg. ♪
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matt: welcome back to "bloomberg markets: european open." we are 15 minutes away from cash equities trading, let's look at futures. and theains in europe u.k., ftse futures up 0.4%. dax futures up 0.6%. the other side of the atlantic, president trump is open to delaying a march 1 deadline to raise tariffs on chinese goods
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if the sides are close to a deal. they are the strong us indication that trump is willing to give china more time to firm up an agreement. will, what isrek the latest on trade, how far have the sides come? >> they have answered one of the key questions which is what do you do about the deadline? there was going to be a problem saidg up because trump had he would not make a deal before talking with china's xi. they were not supposed to meet before march 1. they have a problem, chump signaling he is ready to send this -- extend this deadline. that is a big easement from the u.s. president. thater big thing, reports president xi will meet with
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steve mnuchin, the top u.s. trade man bob lighthizer on friday. that would be a positive signal. what we are looking for this week is signals, to see if there are happy noises out of the negotiations. showdownp to a big between trump and xi in mid-march. anna: is the deal likely before -- is theestion mark deal likely before march 1? >> i do not think you are .ooking at a former deal coming donald trump has said only he and xi can make a final deal, and he wants something big, from everything from intellectual property theft to how you enforce things like that, big
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media issues. a clue i have picked up is that the u.s. delegation includes people you have never heard of who are officials on agriculture, energy. these are little things that matter to donald trump and his base. let's look at agriculture and energy and positive signals by the end of the week. is president trump leaning one way or another on signing a border deal to avert a government shutdown again? >> it certainly looks like he is leaning in favor of it right now. he has not said he guarantees taking a second u.s. shut down off the table, but he is sounding happy about it. ,ne thing we are watching went onike sean hannity his show and said, i do not like this deal, but maybe trump can sign it, it is not the worst
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thing in the world. trump says this deal offers him some amount of money for the deal seems to allow, and it looks like the white house is exploring ways to , possibly ar money national emergency declaration. all the signs we are getting are not the signs you would get from a president who was looking at blowing this up and shutting down the government again. anna: thank you for joining us, bloomberg's senior editor in singapore. that's get a business flash from debra mao in hong kong. debra: santander has reminded investors juicy bonds can come with nafeesa prices. they rattled the market saying it will skip an option to call 1.5 billion euros of notes next month. the announcement came at the deadline for the decision. the need to balance interests of all investors.
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8% of staff at activision as part of restructuring. the videogame maker delivered a disappointing forecast, and revenue of $2.8 billion missing by $3 billion rejected analysts. activision says sales of key games has been disappointing. tesla is rushing models to china, they have at least three shifts to arrive before the trade truce expires. the tensions could ratchet up and it will make cars more expensive in china and boost cost of key components. aboutin talks with amazon the startup, the deal could value the company at between $1 billion and $2 billion, it could be a blockbuster for trucks and suvs as it moves to gain an edge over bigger rivals.
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that is your bloomberg business flash. debrathank you very much mao in hong kong. we are minutes away from the open of stock trading across europe and the u.k. we will look at the stocks you want to watch at the open, including heineken as the dutch beer maker sees the fastest sales growth of its namesake brand in a decade. this is bloomberg. ♪
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matt: welcome back to "bloomberg markets: european open." seven minutes to go until equity trading. and burger and paul jarvis annmarie hordern is focusing on heineken. what is the story with abm? dani: the big news out of the earnings, they are scrapping their plans for increasing dividends. 85 million euros and extra costs they are dealing with which is why they cannot up their dividends. they had more bad loans and customer due diligence program. this means they can go ahead with plans for the dividend. we spoke with the cfo, clifford abraham earlier. >> going forward we are making no commitments regarding dividends in 2019.
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it is extremely early. we are well placed to consider additional distribution for 2019 am i and we will make decisions for the dividend at the end of the year. dani: these have been big issues for investors, we may see the stock take a hit off the back of this. to paul on go santander. paul: right on the closing bell of european markets, santander the options to call 1.5 billion euros of convertible bonds next month. potentially, that could drive up costs across the market. it shows it is not necessarily the case it can be called at the first opportunity, and it is possible other banks could take a similar line. there will be concerns in the market this morning.
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matt: annmarie, it is almost cocktail hour, what is the story with heineken? annmarie: maybe in tokyo but not berlin. the calls are saying it will jump 3% to 4%, they beat estimates think to their flagship namesake brand. nonalcoholic beverages did well. brazil was a key driver of gains. in 2017, they became a top brewer in brazil. the u.k. and russia was good geographically for the company. it is looking good for heineken this morning after earnings. anna: thank you very much for the updates on the stocks we are watching. if you want all the latest stock stories the equity team is following, at first go on your bloomberg terminal.
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coming up, the start of european equity trading. we will keep
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anna: just a minute to go until the start of cash equities trading day this wednesday morning in europe. a little bit stronger at the start of trade. the euro fairly flat, dollar is fairly flat. oil prices gathering a little bit of momentum despite some gloomy talk from opec about supply and demand. in terms of the asian session, a little stronger on the chinese equity market the trade talk from president trump. will he offer china an extension? that is the optimistic talk at the moment. the pound up by 1/10 of 1%. brexit looms largely tomorrow.
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the political conversation around spain. the dax futures up. all higher as a result of what we see the shot in the arm by trump to equity markets in the asian session. certainly the trade conversation sending markets higher. will be open considerably higher or firmer on the equity markets? is that optimism around trade and lack of a shutdown justified? we will have that conversation with patrick armstrong, our guest. this is what we see across equity markets. up, but no big moves in the pound. overnight reports suggesting that perhaps it had been the plan for theresa may to offer her deal or an extension. that is what one of the domestic channels has been reporting. the pound not moving that far ahead of thursday's voting fest.
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let's leave those markets to firm up a little bit. not to see a sector perspective, mostly green the moment. energy looking pretty good. financials not looking too bad. health care looking good. it does not tell me many clues about what is going on in the markets this morning. there is a sort of mix of cyclicals moving higher right now. staples and utilities to the downside. a little bit risk on on the asia session. matt? matt: let's take a look at what is going on in terms of -- 429 stocks gaining right now. only about 142 are falling. in terms of the winners and losers, let me switch it over to percentage -- points to see which companies are adding the most points to the indexes. hsbc right at the top, carrying after yesterday a gainer as well. the oil companies.
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royal dutch shell is up, bp is a gain or. on the losing side of the point, abn amro is a big decline or and percentage decliner. down four and two thirds percent and taking the most points away from the stock. interesting to see these banks and others, including lloyds, socgen, all following and all weighing on the stock 600 this morning. anna: european markets opening broadly higher. following progress in u.s.-china trade talks. joining us now is patrick armstrong. good to have you with us. as one of my colleagues was putting it, and adrenaline shot in the arm by president trump on the shutdown and trade. suggesting maybe march 1 is not
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a set in stone deadline. do you think the optimism around trade is well-placed? patrick: we have been buying into down days, basically thinking we will get a truth. not an all-encompassing deal. that will be very hard to achieve but that has been a big overhang on markets. tariffs, i think we were going to get a delay, increase and rollback progressing through q2. that is a clear risk to markets, but common sense will prevail. matt: once you get past that -- how does the market look in terms -- judged by fundamentals? we had a warning from morgan stanley yesterday that total earnings growth in 2019 would only be 1% for s&p 500 companies. patrick: it is not in line with what we are thinking. we are thinking 2%. we think topline revenue will be ok, meeting close to consensus. operating in private margins is where our concerns are.
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we have a higher than consensus view on the u.s. economy. the economy will continue to grow. companies are not going to benefit as much as they have in the past because of that. we think wages will continue to move higher. operating margins will go higher. higher interest rates. basically tariffs are still going to be a drag. we will not completely get past it, we just don't think there will be any escalation and some drawback by the end of the year. anna: hold on to that thought. spain, i was mentioning political risk in spain. they have a budget vote today. there is the possibility that th e leadership, sanchez, calls a snap poll. we are hearing from a spanish radio station, radio network in spain that sanchez may opt to call a snap vote. we will discuss this is around 8:40 london time. we have a guest expert on the
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spanish political risk story at the moment. let's come back, patrick, to what you are saying about risk assets and optimism around trade, common sense prevailing. i see it is easier to take that the wind you see a dovish fed. let me ask you about this chart, which is something that came through from your notes which shows the fed effective rate and u.s. gdp. what are you expecting from fed policy? patrick: we think growth will spark the upside. we think wage growth is going to come and that will lead to persistent inflation hovering and moving higher. we think the fed is going to be hiking in the second half of the year. anna: you are making a link between gdp and how high wages go. patrick: it is basically showing, this chart shows policy is accommodative. saying we are not at neutral. december, he said we are at neutral. now he has changed his stance that we are going to go either
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direction. we think interest-rate policy is still very accommodative. i think that is the best way to look at it. we are still in very accommodative territory. we don't think it is the fed going up. with the economic growth will slow, but they will converge in both directions. matt: what does that mean for the dollar? patrick: we actually are not positive on the dollar the way we were last year. it is not because of the fed. we think the fed hikes, but we think he of so much political risk around the united states right now, the art any sovereign nation i would want to diversify my reserves away from the u.s. dollar. we think gold is very attractive. potential trade issues with the u.s., you don't want to take a pure play risk on reserves. we think reserve diversification is going to continue. it will move into gold, other currencies and that is going to be a headwind for the dollar. you are not going to have the
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dire situation in europe that everyone is so worried about. europe is not going to grow much, but we don't think a recession is happening. anna: we will talk about your top call shortly. i want to ask the question of the day and this is around the interplay between stocks and yields. it asks which will break out first? a big breakout in stocks or breakout in 10 year yields or yields in general, treasury yields? which do you think will break its ceiling first? patrick: i think we get back to the ceiling on 10 year, back above 3.15% by the end of the year. stocks, i don't think we will have the highs we were at september of the united states. i think it is significant, because there is less optimism in the rest of the world and more valuations. matt: we will give you with us.we have a lot more to talk about . patrick armstrong. six with us for the hour. next, we will bring you the
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stocks on the move this morning so far including abn amro. it is the biggest drag on the stoxx 600 this morning. the dutch letter down as lower profit hurts plans to increase its dividend. this is bloomberg. ♪
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matt: welcome back to bloomberg markets.
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this is the european open. we are 11 minutes into the trading session, looking at gains of one third of 1% across european equity indexes and the u.k. call 1.5an option to billion euros of cocoa bonds next month, sending the price tumbling. convertible bonds become
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centerstage but santander rattling the market and decided to skip this call option of 1.5 billion euros on the cocos. you can see the bonds really slumping. the big question now is they are going to be backlash within the market. buying these bonds with the expectation that was there is the option to call, banks will take that opportunity. the next question is santander is one of 10 banks who have this call option. the others coming up -- there it is. here is what is coming up -- barclays. the next few that have caused this year. that is one of the biggest questions. one investor called this disastrous. all they we will be on coco watch. anna: thank you very much with the latest on this asset class. still on set with us is patrick armstrong. coco has been controversial from the start. they have this marmite affect appeared people love them or hate them, although you have slightly more nuanced mood. can you tell us why this makes sense as a decision by santander? patrick: definitely. the cost of funding is what you should be looking at. if you have lower cost of funding on the new issue, do it. if you don't, you shouldn't. it is a perpetual bond. that is the decision santander has made. they have not called it because the interest rate will go down.
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it makes perfect sense. it is good news for equity holders because they are not paying higher interest rates. i don't think it is a good headline, but the bond is probably down 2%. it is not a disaster. it is not the end of the world. investors in this coco lost 2% on capital values. anna: why did investors position that this would all of his be called? patrick: a gentleman's agreement. you have a equitation that the bonds would be called. most of the time, and makes sense for the bank to call that because they are expensive source of capital. generally, it is prudent to call early. in this instance, it made sense for them not to call. maybe set a precedence. you cannot assume a bond will be called when the result legal right for it to be called. matt: i spoke with colin, and he agrees with you. he actually likes coco bonds
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right now because the price has dropped as result of this. is going to do a little bargain-hunting. basically, had they kept this gentleman's agreement, santander would be punishing equity holders to benefit really the bondholders. because they would have been doing something that was more expensive for their business. now they are coming out and saying look, we are going to do what is economically sound for santander that will angry some bondholders that are used to being babied this way but maybe this is the end of this. patrick: a very european attitude about doing things that are not necessarily in right decision because it is the way things have always been done. i think it is good news. we don't have big positions in cocos because we think the tier one ratio's is reasonable across the banking sector and i would rather get a dividend yield a 6%t versus a coco at 5%.
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anna: talking about things you do like. oil majors have had a good reporting season and you like that sector. run on that one? patrick: getting a 5%, 6% dividend yield. funds based on $50, since the dollar oil. if you look at headline oil prices, wti is down about 10%. prices are flat where they are.on the futures curve , oil prices are up 10% from 12 months ago so that is better. they are actually higher on the longer data oil contracts and that is where you make your revenue with in oil companies. very efficient dividend yields. trading at low enterprise value. all of that makes it very attractive to us. matt: patrick, thank you very much. patrick armstrong will stick with us. the chief investment officer there. we want to get to the individual stocks stories.
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we go back over to the very busy reporter annmarie hordern. annmarie: heineken on the outside nearly 4%, riding the most since 2015. the company is relying on its namesake brand for growth and that is boosting it. also seeing brazil be a key driver for them. nearly 8% for in jenngenico. in january, they had a profit warning that was baked into the price. now it is higher on the 2019 forecast. good news. abn amro to the downside, down more than 6.5% this morning. they had some bad loans, more cost pressure on them. what is really happening is many were expecting a higher dividend but they are keeping in line but investors are not happy about that. anna: thank you very much, annmarie hordern with the latest on big news on individual equities. coming up, 2019 trade under threat. has the emerging-market rally
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gone too far? looking a little crowded. we will discuss. this is bloomberg. ♪
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anna: welcome back to the european open. this wednesday morning, 19 minutes into the trading day looking pretty positive for european equity markets, the asian session on talks of deals
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with trade. let's talk about emerging markets, key segments of the latest risk rally on the threat apparently. managers overseeing over $600 billion at a level not seen since the financial crisis, according to the latest survey from bank of america merrill lynch. ohorts are calling for a reversal in one of the hawkish trades of 2019 and that has been so far emerging markets. here is dani burger. dani: the most crowded trade always closely watched because it accurately calls what markets are about to reverse. emerging markets, 18% this month, say it is the most crowded trade. it has never actually been on the survey before so this is the first time in the service history. last month, it was the dollar at 21%. that has fallen to second-place at 17%. we have seen a big rally in the dollar. maybe it will continue, maybe it
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is not crowded out. coming third and fourth is faang and cash. if it is indeed e.m. most crowded, we will see investors leave, an avalanche of market could hit the market. that is because of what we have seen in the biggest e.m. etf. record inflows. this is the ticker etf from blackrock and its market cap. so for this year, about $5 billion has been added. --ket cap now at $60 million $60 billion rather. not only is this a record, but you have to keep in mind it is just as easy to sell etf shares as it is to buy so look out. is it indeed to crowded and investors will pull out of this? matt: i feel like, i love that chart. have i seen that chart before? dani: you have seen perhaps versions of it. we have seen e.m. inflows so for this year be at a record so that
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might be the one you have seen. but in terms of market cap, this is a fresh one for you. matt: i think that could be a winner if you were to use that -- at least from my perspective, if you were to use that in battle of the charts. thank you very much for showing that. very interesting how popular e.m. has been. patrick armstrong is still with us. what do you think about the growing popularity of emerging markets, certainly since the turn of the new year? patrick: we started adding emerging markets to an etf very similar to the eem in december and it felt like a completely contrarian trade. a lot of things working against emerging markets, the fed was a bit more hawkish. since then, it has become a consensus view so that is a bit of a worry. the fed has given a gift to emerging markets. the biggest risk was a hawkish fed. we don't have that anymore. we have a dovish fed. the strong dollar, we actually
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it will not be a headwind for emerging markets because we only expect a very strong dollar if the u.s. economy is very strong given the other political issues. trading at 12 times earnings, despite the fact you have had slows. it has not become an expensive market by any means. still trading at a discount to most traditional measures we look at. anna: crowded but not expensive. so no need for it to unwind? patrick: i don't think so. when you are getting 2.8% dividend yield in emerging markets, definitely growing, that is a nice carry. 12 times earnings is not extremely high. emerging markets can fall to nine times earnings, but 12 times earnings is cheap for emerging markets, especially not growing as fast. matt: i am trying to put together an rsi chart here. what do you think about rsi generally when you are screening assets? patrick: i don't really look at it so i'm not much into the
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technical. something if you trade, it is probably much more important. what we do is hold positions for a long time. anna: let me ask you about gold because you talk about his earlier on and you see a lot of potential for gold at the moment. dani was saying the dollar being a crowded trade, the second-most crowded. you see room to be bullish about gold. what is the driver because some of the sound structural? you are talking about gold being a place you would go instead of the dollar. patrick: that is exactly what we are looking for. we are looking for alternatives to the u.s. dollar. flight towards safety, better economic growth on the united states pushing the dollar higher. we think so many risks the u.s. is facing, potential government shutdown, trade, we think they resolved but don't necessarily get resolved. you have the mueller investigation coming to a close. new investigations and there is going to be a lot of volatility about u.s. economy and the
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dollar as part of that. within gold is a natural beneficiary. if you see a weaker dollar and some inflation, which is what we expect -- anna: the dollar sometimes does well even when there is political inflows in the u.s. patrick: i think there are so many headline risks with the united states -- the government shutdown, you have to put a risk premium on treasuries. trade war, consequences. if you look at central banks, china, two months in a row has added gold to its reserves. hedget is a very good against a lot of the geopolitical risks that are otherable in many traditional ways. matt: i figured out i could just use the rsi function on the bloomberg to look at the relative strength index for any asset. i have it in here for gold, by the way. you don't care about technicals, but if you look at this we are
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far from overbought in terms of gold. i could just use this drop-down box to look at the mxef if i want to look at the msci emerging markets index and it flirted with the overbought levels at the end of last year but coming back down a little bit now. i just wanted to point that out if you are interested in this technical stuff. type rsigo on the bloomberg terminal. patrick -- i have to say, i am really not either. i find technicals hard to stomach. patrick, we will talk to you a little bit more later on bloomberg radio. patrick
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markets and take a look at what the equity indexes are doing 26 minutes into the session. we are looking at gains. let's pull up the boards. yes, this is the world map function. wmgo on the bloomberg. you can see in the core, we have gains. 6/10 of 1% in germany. 4/10 of 1% in france. the u.k. awaiting a possible budget vote in spain. this is bloomberg. ♪ oomberg. ♪ the latest innovation from xfinity
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trading day. top headlines for you. president trump singles he extend thet -- could deadline for more terrorists would china if they are close to a, quote, real deal on trade. cocoas,ove with the investors get a reminder that you see yields can come with after skipping a call option and possibly repricing entire market of assets. loans by abn. the dutch bank this plans to update its dividends.
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the stock sinks almost 7%. one of the biggest weights on the stoxx 600. we are also getting the risk of sweden,ion out leaving a key rate unchanged at a -25 basis points. are looking at sweden's risk bank leaving the rate unchanged. the next increase will be according to the bank of the second half. give investors a little bit of a heads up there as far as rates are concerned in sweden. coming up on bloomberg surveillance, we will speak to -- riksbanks bank on this unchanged decision after the forecast for next increase coming again in the second half. we look for to the conversation. let's talk about equity markets right now. 400 64 stocks on the stoxx 600 to the upside.
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a rally across european equities. can agree to the upside. and jellico. heineken up by 4.4%. namebrand of the heineken that is doing where for them. volumes coming in better than have been estimated inches of interest. having a decent day after yesterday's for reaction to the numbers. the luxury goods company up by 2.9%. let's look at the other side and's show you what is leading to the downside., down by disappointing set of numbers. bad loans in particular weighing on their ability to distribute dividends. profits looking little bit light for the paris-based business. numbers coming out of match are in clarion's as well, both of those falling. let's get a first word news
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update with debra mao. he's tod trump says letting the trade deadline lapse if the u.s. and china are close to a deal. march 1 was the day the president was set to more than double the tariffs by $200 billion -- on $20 billion of chinese goods. go shooters are meeting in beijing this week. -- president xi theing will meet delegation. the president is downplaying the threat of another government shutdown. sign likely to grudgingly a deal on capitol hill and then made -- use executive power to try to do additional border measures. the bezos scandal is only adding to the national enquirer's woes. his publisher recorded a $31.5 million loss in the six months since september and that market
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improvement over the year before. now looks set for a fight with the world's richest man. jeff bezos increased his wealth bigger dollar figure that all of their revenue for the first half the financial year. italy's prime minister faces a wave of backlash in the european parliament. was on the populist policies of his executives. the heat exchange comes in the wake of the government's withdrawal of its ambassador from room. -- from rome. >> how much longer will you on thee to be the puppet strings? the me ask you to do one thing. moreinspiration from your illustrious compatriots. i am not a puppet. i am very pleased to work on the
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change that the italian people want. theresa may's top brexit eight is said she will wait to the moment before putting her deal to parliament. he discussed says the move in a bar in brussels really this week. he said may would force lawmakers to choose between her deal or a potentially lengthy brexit delay. global news 20 for hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. mao in hong kong. let's get back to european politics. the spanish budget debate is underway in spain. spain could face a snap election if the government's plan fails in parliament today. they are in a complicated position. support looks unlikely given the
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trial of catalan separatist leaders began in madrid yesterday. join us now to talk about concerns around the budget, antonio barrera, managing director of scenario. -- managing director of teneo. it is the support of the catalan separatists but because this trial come is not wanted to get that area is it unfortunate timing for the budget or does this go further? antonio: you have a very fragmented parliament. then is example of fragmentation in europe and because they don't have a majority in parliament, he needs the support of different parties to pass the budget. two of the key parties are included the catalan separatists. the negotiations get entangled with the catalan issue. that trial elevates the costs.
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matt: none of those people are getting out of jail, right? and the cap lawns aren't going to attain separatism in any scenario whether they left stays in power, whether the pp comes , once the best thing for the catalan sidhu here? -- the catalan's to do here? antonio: there are some forces inside the movement that are looking for a more modern position in those are the ones that want to support the budget. thatyou have those advocate for a more unilateral position. namely those around the minister. there's no clear strategy here. it seems because the budget is not going to go ahead and
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because the noise created by the trial, independence movement seems to be winning the battle. if we end up with another election being called, was the percentage chance to attach to that will deliver another divided and fragmented parliament? antonio: it's quite likely come around 75% or so. i believe the political fragmentation is here to stay, basically. it's unclear when sanchez will decide to hold it. he will have another fragments of parliament. government information will remain extremely obligated. the budgetsuch as will remain extremely complicated. what is the corruption level in spain right now? under the pp there was a lot of questioning about who was getting envelopes of money for what. and ist gotten better that looks set to get better? it's important for investors to
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know. crisis, onece the of the things we have seen is that corruption has emerged, political corruption. it's emerged as one of the main concerns of public opinion. one of the results is it has gotten much more talked about the media. all these cases affecting political parties. it has political implications that it didn't used to have. the first successful motion of no-confidence in the history of democratics painted layson june when sanchez wanted and became the prime minister. that situation has completed changed. matt: interesting -- anna: interesting to ask about. one of our colleagues write the bloomberg opinion piece today saying that the country's debt is bulletproof. more tied to german bonds in local politics. that's the perspective he takes on spanish that. thank you for joining us this morning, good to get you on the program. next, manchester city ushered
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in a new era of ultrahigh spending. and performance in premier league football. we speak to the broker behind that deal. money to lot of this football, we will talk about the next. next.
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matt: welcome back.
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this is the european open. we are just about 42 minutes through the trade day looking a green arrows across europe and in the u.k.. and climbing. 0.6%, the dax up 0.8%. the dealmaker who brokered 7.3 billion pounds for barclays in the midst of the financial crisis. role in the crucial purchase of the man city soccer team and she is frequent name is a potential future owner of newcastle united. amanda staveley, founder of antonio barroso --pcp capital partners is lie with manus cranny. live with manus cranny. she has been known to put a deal or two together. the matchmaker of capital. amanda: >> nice to be here.
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i know you had a busy time. you come from some pretty meaty investment conversations. what does it seem like investors are talking about? amanda: i think the one big how we going to get regional flows back into the local regions. there's a lot of guests from saudi and then talk to them about investment in saudi, investment in the uae. investingking at both back into the u.k. and also strong regions as well. there's obviously the khashoggi affair which we have covered extensively. has the investment appetite waned as a result? are people trepidations? amanda: of course people are
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trepidations but i think there is still a huge number that are willing to invest into shouting -- into saudi. it's an important issue locally. they have a very young population. a lot of millennials who care in theirt goes on country. and they're very excited, talking about affordable housing . and we are looking at even investing into saudi as well. that's something a few years ago we would have not looked into. obviously, times of change and economies are moving away on the reliance on oil and gas. we are seeing much more inward flows recently. [indiscernible]
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where is the appetite? what are the other main industries that you think are going to inject capital? amanda: mining. we like mining at the moment. you're looking at going into high producing mines. that's very strong regionally. there are many opportunities locally. we are looking at hotels come originally. you have hotels that are well well-run, and well-built area >> move -- well-built. about hundredsng of millions of dollars coming in? billions? i would imagine housing in saudi is going to be billions rather than many hundreds of millions. although they have a great
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, we stay awayy from the tech because there are plenty of other people recently who are investing in them. >> you also mention the flip side which is taking money from the gulf back him to the u.k.. it's a whole other topic. you seeing opportunities? what can i do in the u.k. even in a hard brexit scenario? amanda: absolutely. -- the brexitng question is paramount never buys mind. i think there will be a brexit. i think people are coming to realize that there's going to be a brexit. figured there would be a two months ago. or at least we are preparing for that. i didn't the uae a long time.
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-- i lived in the uae a long time. i'm a passionate supporter of both economies. what scale of investment are people talking? are they hungry? where the biggest opportunities? market the currency allows for upward dollar investors. it's not as good as it was even a few weeks ago. but perhaps you will see the pound strengthen. i think the pound dollar will fade. marginally from where it is in less there's a hard brexit. it's a big opportunity for us to invest in the u.k.. >> [indiscernible] is it sovereign wealth funds that are interested? amanda: private and sovereign. regionally, they are very
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strong. people that are technically very good. u.k. hasts credit, the a lot of opportunities. changed quite a medically. 10 years ago was mostly sovereign wealth funds. maybe one or two. >> command up with one less issue which is the rebirth of saudi arabia? they have not achieved with any to do. you are a global investor. what to they need to do? amanda: transparency. that's critical. if you don't get the bomb program right -- up the program right you can't get investment. thate need to understand
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the ministers are being transparent. that opinions are well written. and it's an indication among they woulda of what do with foreign investors. i think it will be pleased with that. it's a great country. >> thank you so much for taking time out of your schedule. antonio barroso --amanda staveley there. [indiscernible] anna: thank you very much. manus at the summit. apologies for the level of background noise on the one spake perhaps over there in dubai. let's get our top stories. -- to the upside,
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just under 5%. a tough fourth quarter. a bunch of investors pulling their funds and outflows. but they are announcing a higher dividend in 2018. also announcing a special dividend, akzonobel. they also announced a faster than expected share buyback program. aey are the middle of cost-cutting and efficiency program and that stocks to the upside. you might behold in a big pen right now. they are to the downside. they missed estimates in the it's anis saying uncertain trading and varmint and macro economic challenges may weigh on sales. matt: thanks for a much. including your movers a monday -- amundi. you can interact with the charts by typing to tv we will
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bring you to the most important charge of the day next. battle of the charts. this is bloomberg.
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anna:anna: welcome back. 54 minutes into the trading day in its of positive one. europe up around half a percent.
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the dax getting the best of the gains up by 0.6%. time for battle the charts. ann marie up against dani burger. cocoabeen talking about bonds all day after cents and or decide to skip that option to call 1.5 billion euros worth. now this is a worry if it's a precedent for other banks. he of 10 banks is here that have call options on these bonds. 2020 this is one chart investors are looking at in this is why in light of what they did yesterday, causing a bit of concern. april 2020, yield to conversion is at 23%. 70 investors calling the whole thing a disaster. i have here broad gauge of sentiment. the smart money index. the idea is it subtracts the first 30 minutes of trading in the dow from the last 30 minutes saying the smart people trade at
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the end of the day. i don't know how much validity there is so that but you will see last year at the end of the day, trading lower. some it we saw over again at the end of the day. look at what has happened this year. the reverse. markets are trading higher towards the end of the day. this means investors are willing to hold onto their position overnight area they are not scared of any headline risk coming out or anything that might beat up their holdings. this is a really positive sign for market sentiment. will go with anne-marie on this occasion. i like the smart money, danny, conversation with patrick armstrong about how was a gentleman's agreement that led the market position on the assumption these calls would be executed as early as possible. theot a stark reminder that age of gentleman's agreement is over perhaps. matt: i agree with you.
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topic of the day. anyone can ask is the charts we show on bloomberg television. time to tv on your bloomberg terminal. bloomberg terminal.
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♪ president trump signals he could extend his deadline for more tariffs as they are close to a trade. santander skips a call option, giving investors a reminder there could be a downside to yields. and come a theresa may's top brexit agent overheard saying the prime minister will wait until the last moment before putting her deal before parliament. ♪ >> good morning, everyone. this is "bloomberg surveillance." i am francine lacqua here in


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