tv Bloomberg Markets European Close Bloomberg April 4, 2019 11:00am-12:01pm EDT
european trading day. vonnie: this is the european close on "bloomberg markets." guy: disappointing data out of europe. what we are seeing is actually an interesting response. european stocks drifting sideways today. euro-dollar trading down a little bit. is there a sense that europe is beginning to bottom out? plenty of our guests are saying no, it is going to be a long and bumpy bottom. that is what is happening right now. we are also watching what is happening with the brexit story. the dollar is a story we are watching.
commerzbank trading up by around 3%. of a squeeze going on but we have this unicredit story. the possibility that unicredit would bid for commerzbank. the u.s., then s&p 500 is clambering back up. one of the better performers is all of theven after revelations from amazon cloud servers that there are millions and millions of pieces of user data. micron is down 2.8%. enthusiasm has gone a bit too far according to wall street. in fairness, the person who pointed this out has been talking about overly enthusiastic analysts on chip stocks for some time. dow is one of the better performers in the s&p.
nearly 11% gains since it started trading on tuesday. we turn now to brexit as negotiators for theresa may and jeremy corbyn continue intensive talks to see compromise. someone who knows about the art of compromise is diplomat kim darroch, u.k. ambassador to the u.s. he has served in many roles in the united kingdom and elsewhere. he joins us from our washington, d.c. bureau. the future of brexit, what is it? kim: it is about negotiations going on in london between the governor -- the government and opposition. it is about the hope that they will find common ground and a thennsus, which we would hope gets supported by the house of commons and then the prime minister will take that to the european council on wednesday of next week, ask for an extension,
but if there is agreement on a package in the british parliament, then we only need a technical extension, may be until the 22nd of may to get the necessary legislation through. ofnie: there is a little bit fantasy there isn't there? you would see conservatives and labor negotiate over something that could not get through parliament because conservatives could not agree among themselves. kim: if you look at the voting patterns, there is disagreement in both the main parties about the report. issue that has divided the country and parliament is reflecting that. ,t is also extremely important and right that parliamentarians should think about their constituents. we have reached the point where
we need an agreement. we need a way forward. verynk it was a brave and rinse a pulled step by the prime minister -- principled step by the prime minister and the light of -- in light of the defeat on the government's package to say that -- to say let's see if we can work with the opposition, find a deal that the majority in parliament can support. i think it was the right steps and i hope that will provide the deal we have been looking for. the unitedador, if kingdom stays in a customs union with the eu, how will that change the relationship with the united states? kim: that is taking quite a leap ahead. important hugely
trading relationship between the u.k. and the u.s. they are our biggest bilateral trading partner. deal ofthere is a great potential to increase that. a free-trade deal is one way forward but there are lots of other things we can do as well in terms of regulatory alignment, removing barriers to trade, encouraging exporters to look to american markets. there are many ways in which we can take forward u.k.-u.s. trade but what we would like is a deal that delivers what people voted for in june 2016 and allows us to strike new trade deals with our most important trading partners. up in thewhere we end next few days. as: has the uk's credibility a counterparty to the united
states been damaged? kim: what i find is a lot of americans asked me now about what is going on in brexit. they mainly want to understand what is happening in parliament, how the government is handling all of this as the clock ticks deadline.at new as you take them through the process and explain this is democracy in action, people are generally supportive and they are confident we will find a way through. a lot of people are watching all of these parliamentary events. the speaker has become something of a cult figure in the red states now. -- the united states now. confidencelot of both in our institutions and the
government that we will find a way through that delivers what people voted for and also creates a good environment for the future of u.k.-u.s. relations. once you explain what is happening, people feel reassured about where we are and feel confident about the future. few days ago, the prime minister was dependent on the dup and now they are nowhere to be seen and suddenly jeremy corbyn, who does not mind if there are european parliamentary elections in britain, where theresa may has a problem with that, and part of the problem is that people did not know exactly what was being voted for, the specific concept in that concept has not been fleshed out in any way that is acceptable to everybody. is it your base case that a fourth deal gets done? kim: we need to see how the negotiations between the
government and opposition go today and whether they can reach an agreement. b they can't, there is a plan which is more votes on options on monday that might emerge from parliament. that is another way forward. the objective is to find something that parliament can support before the prime minister goes to brussels on wednesday. that would allow her to ask for get theextension to necessary legislation through. has not changed but they are understandably looking at every option to find a package that parliament can support. mp'serstand why britain's are taking this so seriously and are struggling to find the right way forward.
we will find a way through? yes i am. vonnie: you were chair of the national police council and a national security advisor to prime minister david cameron. how concerned are you about outbreaks of conflict or violence in the case of a no deal brexit, which european see as more the likelihood than they did before. police to have 10,000 officers at the ready to deploy in 24 hours notice. preparationsmade and looked at what might happen. one of the encouraging things about the last few weeks is how this extraordinary debate has been conducted in the right institution, in parliament. they are all talking about
brexit, but it is happening in parliament. there are peaceful demonstrations, pro and against brexit outside parliament. i have been back in the u.k. recently and have seen those happening, but parliament is the place where this is happening. that shows confidence in the institutions and i think the british people will respond peacefully and correctly to whatever decision emerges from parliament. what most people want is they want an answer for this. they want this deal done. that is certainly the government's intention over the next few days. of thebassador, leader labour party jeremy corbyn now has a seat at the table. if the government was headed by jeremy corbyn, how would the u.s. security authorities, how would the white house react to that? thati am very confident
whatever democratic outcome from brexitthe u.k. or a general election in the future, that there will be a strong relationship between the u.k. and the u.s. and i am confident that the whole defense and national security relationship, which is crucial to both sides, one of the major foundation stones of the u.k.-u.s. relationship, will flourish. strongell you now it is if not stronger than ever. the level of cooperation between defense forces and security agencies is stronger than ever. i am confident that will continue. guy: one of the stories that europe is watching carefully is the outcome of the trade talks taking place between the united states and china. we have a meeting in the white house to discuss that issue this
afternoon. the fear is that once that deal is done, the white house will turn its attention to europe. is that something you hear in washington when you are talking to people there? right that the u.s.-china trade talks are important. there is another round of those talks for the next two days. we are all looking for a successful outcome which can benefit all of us, especially with some of the barriers in the chinese market brought down. theare right that administration is unhappy about some aspects of their trade relationship with the european union, particularly about lack -- the european side of that argument is that there are health and safety reasons why some american products
cannot get into the european union and that is something americans want to debate. there are talks going on between the eu and the u.s.. plan a is that they should reach a successful conclusion in the u.s. trade negotiator and the eu trade negotiator met a few weeks back and they will meet again soon. we will see those talks produce a successful conclusion and a new trade agreement between the eu and the u.s.. it is important that free-trade continues and that we build on that relationship whether in the future of a u.k.-u.s. steel while we are in the eu. vonnie: what is your best guess as to when the next general election will be? kim: i think that is for the government and parliament, not to be speculate it on -- speculated on.
-- a brexit package that we can then take to that european council on wednesday. vonnie: we will talk to you again soon. thank you to the u.k. ambassador to the u.s., kim darroch. let's check in on the "first word news." here is courtney donohoe. courtney: today president trump meets with china's chief trade negotiator. the goal over the next few days is to agree on core issues that would allow the president and chinese leader xi jinping to hold a signing ceremony. filings for unemployment benefits in the u.s. have hit a 49 year low. surprising drop another indication that employers are reluctant to let employees go. ghosn has beens arrested again.
he calls the arrest outrageous and arbitrary. he vows that he will not be broken. he has been free on bail for less than a month. he has been accused of financial misconduct. global news, 24 hours a day, on air and at tick toc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. i am courtney donohoe. this is bloomberg. guy: we are heading toward the end of the session in europe. generally a mixed session. the ftse 100 trading down a little bit. the auto sector is surging ahead. i wonder whether that has to do with the data on tesla. anyway, they are trading pretty strongly. the markets are closing next. this is bloomberg. ♪
vonnie: from new york, i am vonnie quinn. guy: and in london, i am guy johnson. this is the european close on " bloomberg markets." at -- ae still looking fractional decline for the s&p 500. investors consolidating the rally we had, waiting for more information. earnings season is ahead, so that will be the next big source of information. german bunds down. we do have a flight to safety for bonds, that is true for u.s. 10 year yields as well.
500, there isp the possibility that consolidation could be greater than just small. we go into the bloomberg and look at the trading envelope. the s&p 500 moved reliably up and down through that trading envelope and than the downside in q4, this year we are clearly hugging the upside. at some point if trading does normalize, it will move back toward the bottom of that range. something to keep in mind. have the financial sector being helped out the most by bank of america and close to the bottom, the tech sector down 8/10 of 1%. giving some of that back, weighing on the tech sector. also lower, the new zealand dollar.
down about 1.8%. a little bit more over that time period. the reserve bank of new zealand has put a surprise interest rate cut into play following the elvish tone of central banks around the world -- the dovish tone of central banks around the world. vonnie: thank you for that. for more market analysis, we are joined by the editor for bloomberg markets live blog. it did feel like there were individual stories to keep things moving and it did not have much to do with macro factors, and then we got that big bounce on the china trade headlines. a wait and see attitude in the market right now. everyone is checking the headlines for progress on trade negotiations. also the jobs report will be a big deal. clearly the jobless claims are heading a 49 year low -- hitting a 49 year low is fine but any
deceleration in jobs growth, people will take notice of and then of course we have earnings season coming up. upis a very interesting set to go into an earnings season that is expected to be so bad with so much momentum behind the stock market, really bumping up against those momentum indicators. thatket that has really -- is really wanting to go higher but being held back by momentum indicators. that is a lot of momentum to bring into an earnings season. the question is, have analysts set the bar so low, projecting a decline in earnings, that investors are sniffing that out and thinking they are being too pessimistic or will there be surprises on the downside? it is an interesting set up. guy: let's get back to the payroll number.
the claims number was solid today but the market does not appear ready for a disappointing number. if we get anything close to what we got last time, what are we going to see? michael: obviously the question is that on hold or is a cut coming? we might get a rate cut back in would obviously be positive for equities and bonds simultaneously. it is sort of a goldilocks number. it might turn out to be a nonevent but in general, you have to look at the job market as pretty strong considering the phase of the cycle we are in. the thing that would worry me is if you start to see those claims inch higher and you see job growth get close to zero or even negative. that is when the equity market turns into -- where they start
not contributing to the stock market but also pulling money out to just pay the bills and it seems like we are not anywhere near that at the moment. vonnie: dow and boeing are having an outside affect -- upside effect on this market, indirectly to the china trade story but they are very story specific. michael: that's right. following such a major weight on the dow, particularly that you have to ignore the dow for a while until boeing's troubles are straightened out. vonnie: michael regan, thank you. you can follow him. the european close, 10 minutes away. this is bloomberg. ♪
the s&p 500 is unchanged now. , down 8%, the worst performer in the s&p 500. guy: european stocks, drifting sideways. waiting for the next escalator to take it up or down. i think the trade narrative is a big focus today. waiting for news out of the white house later on. hard to get to directional ahead of payrolls tomorrow. that is the biggest story the markets are focusing on now. the european closes next. this is bloomberg. ♪
let's take into the markets. the individual markets in europe to have slightly different tales to tell. ftse 100 down .2%. today is thursday. knows, u.k. stocks going to dividends on thursday. 12 stocks going next her dividends today -- going extra dividends today including lloyds. the dax is trading higher. auto stocks doing that. tesla having a bad day stateside. case. is the base just waiting. let's see what happens with trade in the payroll numbers tomorrow. let's dig into the individual stock stories. commerzbank, talked about that a little bit. trading higher.
the heavily shortstop but the story earlier on about unicredit readying a bid if the deutsche bank deal does not go ahead giving that stock a lift. ideas deal with beyonce helping its business out. that trading up 1.1% at the moment. i mentioned what is happening with bmw. one of the european stocks that is doing well. we see the major ones in the german market doing well. bmw trading up 1.31%. let's go to the aipac and find out. this is what we are seeing at the moment. slightly like in terms of the volume but not much. given the fact we are waiting for payrolls and trade, that looks like a reasonable position. a look at the european close. the usb 500 unchanged. i thought i would point to the nasdaq. down .25% on semiconductor , the worstalso tesla
performer, down close to 8%. it has been down as much as 10% earlier on. fewer deliveries than anticipated of the model 3. 300,000 fewer. weaker, down .33% against the dollar. the dollar is stronger as a result. negotiators are meeting so we will see what emanates from that. the 10 year yield is at 2.50 and holding. a quick look at tnm to see what gnm to see see -- at what else we can see. commodities in the green for soccer commodities. not so much for crude oils of the world. in terms of currencies, the indian rupee is down versus the u.s. dollar. the overnight rate at 6%. guy: let's dig into these global markets. robert baird, vice chairman of
equities joins us on set. i want to start with what is happening in europe. i'm facing a conundrum. the european data is bad. you saw today with german factory orders. the biggest drop in 10 years. that fits with the pmi data and is a consistent picture across europe. what we have seen over last couple of days is the ftse down and italy. the german auto sector over the last few days entering a bull market. how i put these things together? >> i think we should start in china. solid pmi numbers out of china. germany is a big export market. 40% of its gdp comes from exports. there is concern about china and imports. they hit the german market earlier. i think renewed confidence that
exports will pick up in germany have helped that area. the fact that the central banks have basically been taken out of the picture. ecb and the fed both mentioned they will do what it takes. i think mario draghi's terms the other day. most people, the issue about markets as they look for surprises. i've been on a long road trip recently, the far east, australia, everywhere. i've never met such resistance to equity markets. the only thing that moves markets is surprises. we are discounting recessions everywhere in the world. if you look at the recent pmi's, there is no recession to be seen. i think what is happening is these markets have discounted and any positive news will move the market sharply higher. guy: let's stay in europe.
as if the german manufacturing sector might be a recession, but nevertheless, what i hear from the other side of the atlantic, what a lot of people are try to figure out, has your autumn doubt -- has europe bottomed out? money flowing out of europe. then we start to get a little bit of moving higher. is that what we are getting? itpatrick: the european market is extremely attractive given its valuation on 16, 15 times. given where interest rates have traded, if i'm an asset manager, i've a stockbroker -- i'm a stockbroker so i will be biased. if you look a returns, you're getting 2.5 in 10 year treasuries. considerably less on 30 years in the u k. paltry amounts in fixed income. the earnings yield is quite
attractive and all of these european companies, as they are globally. the yield curve is positively sloped, which says to me it is the right place to be. getting 5% or 6% earnings yield on equities. i think that is the bigger question in my mind. where do you put your money? i think equities takes it by a long shot, i am afraid. vonnie: patrick, do stay with us. i want to bring you news. the second largest of the ipo of the year is trade web priced at $27. it is now trading at $34. 40 million shares priced at $27 per share. it opened at $34.26. tw, and for more of that let me get to emma chandra. emma: just starting trading for trade web.
opening far above the ipo price of $27. it opened at $34.26. still at $34. up around 25% from the ipo price. cap $6 given a market billion. tradeweb is a financial services company. it is trading on the nasdaq, opening 25% higher in ipo market cap, $6 million. they sold 40 million shares at $27 apiece and that was much higher than the original range and the original number of shares. it is the second biggest ipo of the year. lyft, we talked about them last week. opening ontradeweb the nasdaq at 25% higher than the ipo price. vonnie: founded in 1996.
handled $50 billion worth of trade last year. a parent company of bloomberg news competes with thomson informationroviding to the financial industry. holds -- let's talk about ipo's and the resilience of this markets. is there anything out there that gets you excited for the year? patrick: i still think the u.s. is the place to be for technology and ipo's. i looked at how the dax had behaved against the nasdaq. the nasdaq is up 139 times. the sizzle is still very much in the u.s.. i think the u.s. is about to enter the fourth industrial revolution, where you will cai, you will see -- you will see ai,
companies coming out of the cloud, various services around these technologies and he will see these premiums. the financial model is changing. everyone looks for the bottom line. stocks are all about scale and growing the top line and a land grab. it is difficult to analyze. people get upset when they go to a discount because they want to take profits immediately because of that evaluation. i suspect you'll see a lot more these unicorns. they will be in the u.s. they will trade at premiums and over time they will go higher. vonnie: is it changing? back in the day that happened quite frequently. amazon is trading where it is harshly as a result of that. facebook continues to do well. lyft had a real fall off the day after its ipo. it is up 3% today but trading
just at its ipo price. will investors continue to give these companies the power of face? who knows who will end up with market share, lyft or uber? patrick: that is good point. i looked again how expensive it is to short these stocks. -- thet expensive and most expensive of any stocks are traded on exchanges. there is certainly a horrible sentiment against that particular name, which i think is unfounded. that is, to my mind, will provide a powerful buying opportunity at some stage in the future if those shorts are wrong. i do not think it is changing. i think the business model and the environment is changing but you have to give them time. it is like warren buffett says.
it is not timing the market, it is time in the market. because these tech companies are coming earlier and earlier to the market, you actually have to give them the benefit of the doubt. tech,hinese tech or u.s. which would you pick? patrick: that is a good question. given those recent returns are talked about, it is still the u.s. even though you're getting better value in china, i think that point about dax versus nasdaq will remain supreme in the u.s.. i have a plum for the u.s. tech rather than chinese tech. guy: what changed your mind? the u.s. is a market that has done incredibly well. chinese stocks still trade at a huge discount to their u.s. peers and they have a massive market. patrick: if the trade deal comes out tonight, it could be more positive than we expect. there are announcement about
joint ventures and more freedom for joint ventures for american companies than that valuation could change quite quickly. i was playing a game of golf in hong kong where a guy sells tech services to china and they are worried about selling those tech services because they think they will get stolen. if a joint venture is done fairly improperly and they do it on a proper balance, then the chinese will start to revalue. i think the reevaluation is coming dependent on the trade deal tonight. vonnie: what are you buying and what are you trimming? patrick: that is a good question . the last time we were here we talked about warming to the tech stocks and the semiconductors. they've been on a phenomenal run. maybe trimming back on those. moment,ors at the health care because of the obama health care act has been under pressure since this huge run on
the market. we still like the health care stocks. we like the communication services stocks that have some of those faang stocks. the consumer discretionary stocks, which have been improving but there are still concerns about the recession. we can still find value their curve -- value there. the most attractive ahead of the earnings are the banks. the financials to me look so fantastic. they are in the bargain bin. if you look at the banks, because there is this huge worry about equity markets, there's so much cash sitting in the banks. they pay nothing for cash on deposit. banks borrow on the short end. mortgage rates are much higher than government rates. the spread banks are making at the moment are pretty attractive. valuations are basically at historical lows and they are trading over 1.5 times.
for me the financials is the place to be for the moment. guy: we will leave it there. great to see you. patrick spencer joining us from robert baird. vonnie: let's get a check on the first word news. courtney: a proposed u.s. china trade deal would give beijing until 2025 to fulfill its promises. bloomberg has learned the agreement would allow american companies to own businesses in china. president trump and china's chief trade negotiator the vice premier will meet today and that is assigned the talks are in their final stages. meanwhile president trump renewing his attack on the federal reserve for renewing interest rates. tweeting the economy is in good shape despite the fed's destructive actions. this comes after months of criticism of jay powell, who the president appointed.
prime minister theresa may holds brexit talks to date with the opposition labor party. they're are looking for a compromise position on the uk's future ties with the european union. the house of commons rejected the idea of the new deal brexit. they passed a bill that compelled theresa may to seek an extension of that deadline. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am courtney donohoe. this is bloomberg. guy? guy: let's take a look at where european stocks have settled for the day. we are waiting for the payrolls, waiting for trade news. a little bit of the debt when it comes to the cac, but a tiny one. a similar story for the london markets. these markets have had a quiet day. the dax outperforming today. commerzbank one of those stories. the auto sector driving the dax. if you're not done with the markets and you want to carry on the coverage we provide a bloomberg, tune into bloomberg
guy: live from london, i'm guy johnson. from new york, this is the european close. vonnie: updates on that breaking news. tradeweb has just opened for trading. here is emma chandra. emma: the financial services company beginning public trading on the nasdaq around 15 minutes ago. you mentioned they are trading as tw. price 25% above the ipo
could shares priced around $27 per share. now looking at around $34 per share. they sold 40 million shares in the ipo. that was above the initial marketing number of shares and the pricing above the marketed range. the ipo price value of the company, a market cap of $6 billion. seeing now suggesting the market cap will be $7.5 billion. the first day of trading for a new company tends to be one with a lot of euphoria. we tend to see a big spike in the prices. investors will be looking to see where it settles over the next few days. this is the second biggest ipo of the year. the biggest being lyft, which we discussed last week. tradeweb opening on the nasdaq, 20ding around $34 a share,
6% above the ipo price of $27. we will be looking to see how those shares performed through the day and over the next few sessions. vonnie: thank you. the parent company of bloomberg news competes with thomson reuters and provides information to the industry. they hold a share in tradeweb. that disclaimer. guy: have to note that. coming up, the final round of our special march madness battle of the chart. it is jessica summers versus mike mckee and is happening right here. next. this is bloomberg. ♪ the biggest week in television is almost here.
it is our final round of battle of the charts. has it been mad. there's been even more wonderful submissions than usual. michael mckee was knocked out in the first round. he made a stunning comeback. summers showed her mettle, taking out tough competitors and she made here all by herself to the final. without further ado, let's start with the final. michael mckee. michael: this is for you and for are bothse you european. we have talked a lot about trade wars. it is not just the u.s. and chinese economies that are suffering. you can see it in my chart. look at what happens when you have the chinese trade wars and tariffs on chinese products. the white line is german factory orders.
a big drop today. 8.7%. germany's manufacturing sector suffering recession. chinese imports has also gone down. --nese imports from germany the germans not selling is much to the chinese because of the trade wars. that is a problem not just for germany, but for the rest of the world. the yellow line shows global growth. the red line is when the administration put the tariffs on china. since then it has been downhill, not just for global growth but for europe and the chinese as well. vonnie: very strong. michael mckee, you can see that chart on gtv. jessica summers, what do you have? jessica: we will see plenty of action with the final four this weekend so i wanted to share the action in the oil market. wti discount is nearer to the smaller since august.
that is quite interesting. essentially imports coming in from venezuela. exports surging, less applying the u.s.. wti making all the shots in closing this gap. vonnie: jessica, you have done an amazing job this entire tournament. you managed to put in the puns and make relevance to the charts you are choosing. even though michael mckee is always going to be in the wedding top -- in the winning three, my winner is jessica summers. guy: i will back you up on that one, vonnie. jessica: thank you. vonnie: i feel like the winner, now. it has been of march -- it has been a fun march madness. -- thelook at the arcade
brk . it is very entertaining. thanks to all of our players in the march madness battle of the charts. tradeweb is trading up 27%. we have the major indices trading differently from one another with the dow up .5% thanks to boeing and dow, inc.. the nasdaq down .25%. up next, balance of power with david westin. today's guests include the former reagan budget director david stockman. this is bloomberg. ♪
headquarters in new york, i'm david westin. welcome to "balance of power." michele davis on jamie dimon's annual letter to jpmorgan shareholders. from washington, kevin cirilli on crunch time for u.s. china trade negotiations and from brussels maria tadeo on preparations for no deal brexit. michelle, welcome. dimon talks about whether united states should be a leader around the world. michelle: one of the most interesting things is it was 51 pages and a lot was dedicated to his views on public policy. not much news on what jpmorgan will be doing. it is more i'm not as optimistic about our place in the world and this is what ceo should be doing to help america. guy: fascinating -- david: fascinating. we will come back to you in just a moment. we want to go to kevin cirilli at the white house. this seems to be the crunch day. where we looking for? kevin: the new york