tv Bloomberg Markets European Open Bloomberg April 5, 2019 2:30am-4:00am EDT
anna: welcome to "bloomberg markets: the 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 buy the rumor. japanese shares and u.s. equity futures head higher after trump hails the granddaddy all trade deals. the cash trade is less than 30 minutes away. . anna: a new consensus. and u.s. futures
climb after washington and beijing hail progress in trade talks. the second referendum on the table. theresa may and jeremy corbyn consider letting the public decide on the exit deal with suggestions donald tusk could consider an extension. hopingta from the u.s. for a rebound from february slump. president trump is said to select a political ally for a seat at the fed. matt: i want to look at german bunds. very interesting move in bund yields. this is a three-day chart, but you now get paid for lending your money to the german government for 10 years. it had been negative over the past days, the past couple of weeks. you now get six basis points. investorsg to see feel comfortable enough to let go of german debt, even with the numbers we gotic
yesterday. factory orders dropped 4.2%. today, we will get more german economic data and industrial --duction -- index real industrial production already came out, which is my -- why you may have seen that. futures, you are not seeing a lot of movement in futures. equity index futures right now. butare seeing a green arrow as we know, investors tend to sit on their hands ahead of this job's number. even the u.s. jobs number will have -- result in lighter volume's ahead of the release in europe. we will get that at 1:30 p.m. london time is when that jobs number comes out. the: edging seems to be word to describe the asset moves overnight. let's show you where we are on the asian session, edging higher in asia but down for big players. china and hong kong both closed, edging higher on u.s. futures.
edging lower in the dollar as we await the jobs report. we talked about the trade headlines. trade between china and the u.s., dominating market thinking at the moment. xi calling for rapid conclusions, trump talking about a monumental agreement but we don't see facts to back up real progress on trade. platinum on the dropping this morning. it was up in april, though. it has been playing catch-up with palladium. oil, dropping lower for its fifth -- lower, but heading for its fifth weekly gain. let's get the first word news update with debra mao in hong kong. european council president donald tusk has proposed a 12-month exit thission according -- comes as theresa may and jeremy corbyn are trying to forge the divorce deal. they both face opposition in
their parties. jamie dimon warns the risk of leaving without deal. a hard brexit would be a beal -- really bad recession for britain. it wouldn't be great for europe. it will not affect the u.s. much. it isn't earth shattering, but a bad idea. flaws and american capitalism could lead to a revolution, he says education, mobility, and income. this is according to a new essay by the billionaire founder of the world's biggest hedge fund. he says the bottom 60% of u.s. income earners keeps falling further behind the top 40%. amazon is reportedly ready to take on apple's airports. bloomberg has learned -- air pods. the form of wireless earbuds. it could be at the early ready as the second half of this year.
it lets people use their voice to order goods, access music, weather, and other information on the go. 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. thanks very much. debra mao in hong kong with your first with news. introducedinet has measures to boost the economy, even as the treasury prepares to slash growth forecast. the economy is expected to rise 0.1% this year as other european states are showing increasing concern over italy's debt pile and its deal with china over the belt and road initiative. let's get to the brexit spring form. ambrosetti
francine lacqua is joined by the foreign prime minister. francine: he was also for many years and insider in the workings of brussels at the commission. thank you for giving us a little of your time. yesterday, bloomberg learned that growth will be lower than expected. what does that mean for the budget? >> in italy? well, these are two parties with very different ambitions, and for each of them, delivering on their relative coral promises is much more important than the outcome on the economy and there is competition between the two as to who delivers most, so this is a very unsettling framework. they have the inner conviction or alibi that because italy has not been doing well in
terms of growth for many years all past recipes were wrong and they just have to do exactly the opposite of what was done in the past so obviously, it is a risky bet. francine: given all this, will the coalition hold or will we see early elections? mario: a will depend a lot on the outcome of the european elections in may. it is possible the coalition renewed balance because the league has come up stronger relative to the five the party but of course, iceberg which could cause vote is for this fancy next year's budgetary vote
because in this year's budgetary vote, the have already put quite dust beneath the carpet and they will not be able, i hidingo do the same exercise next time. do you think this is a dangerous game, italy getting so close to china? they obviously need to their investment, the rest of the eurozone is skeptical of that relationship. mario: that relationship must not be over exaggerated, but it can bring some marginal advantages to italy, on trade but of course, strategically, this is not going to strengthen either europe or italy in relation to china. sign ofanother small
willingness to converge relative to mainstream europe because some of them hate main street europe. -- mainstream europe. accept a will they will theyension and put strong conditions attached to it? on brexit? end, except the long extension. i hope they will make the extension as long as necessary, but also insist on maybe new u.k. of the game once the is back in. maybe you're a second referendum, and if we -- through a second referendum. deal,ears time into the it will be great to have taken on board the u.k. or have it not leave, but if the u.k. were to , to have the passive
or negatively active position within the view that has impeded progress in the past, many people would regret. francine: are there conditions brussels will impose -- we understand they want the u.k. to have european elections because they are coming up. what about the choice of a commission president? what about extra money into the budget. how will that play out? mario: much of it remains to be determined and it is on those issues that we see whether the u.k. eventually, if it wants to despair simply out of ita semi defined brexit or has considered the thing on the merit and wants to stay in the eu generally. francine: how will europe deal
in the possible trade concerns? we have the u.s. and china fighting it out. when they have an agreement, will president trump go after tariffs on carmakers, especially in germany? mario: he may. know,are already, as you frictions concerning the high tech in china, concerning 5g, etc. over, deal with china is is concluded positively, i think the whole atmosphere and psychology, however difficult to forecast of president trump, may calm down a bit. francine: thank you so much for joining us. mario monti, the former italian prime minister and former commissioner of the eu. i will send it back to london. we will have plenty more from the ambrosetti forum throughout
the day. lacqua with that beautiful backdrop talking to the former italian prime minister mario monti from the ambrosetti spring workshop. plenty more from italy through the program. coming up, has china sees a new consensus in trade, president trump says a monumental deal is in the pipeline and could be ready in a few weeks. is coming up next. remember, bloomberg radio is live on your mobile device or dab digital in the london area. this is bloomberg. ♪
matt: welcome back to "bloomberg markets: the european open." 15 minutes till a card -- start of cash equities trading. let's get more on what is going on in the world with a bloomberg business flash with debra mao in hong kong. jeff bezos will retain 75% of his amazon stock following his divorce from mackenzie bezos. this eliminates investor concern that it would influence his control over the company. bezos will continue to be the largest shareholder of the e-commerce giant. mackenzie bezos retains 4% of amazon, making her the world's fourth richest woman.
elon musk and the securities exchange commission have two weeks to work out differences over how the billionaire chief executive posts on social media. they claim he violated in october settlement and want him found in contempt of court. a u.s. district judge says the sides should reword the deal to remove ambiguity on what he is and isn't allowed to post. that is your bloomberg business flash. anna: thank you, debra mao in hong kong. china and the u.s. both say progress has been made in their talks to end the trade war. president xi jinping is pushing for a rapid conclusion but president trump says an agreement may be some weeks away. >> we've never done a deal like this with china. unique set of circumstances that is a massive deal. it is the biggest deal ever made, if you think about it.
there can't be a deal like the snow matter where you look. this is the grand daddy of them all. anna: as we way for more detail, let's digest how this is playing out in markets. for cudmore is in singapore us. i want to ask about your preoccupation with the pboc's balance sheet. facts aroundr more the trade conversation, what worries you about the progress of the balance sheet in china? mark: absolutely. over the last decade since the financial crisis, due to quantitative easing from central banks, we have seen an explosion in central bank balance sheets. that has coincided with a long bull market. the balance sheet started growing at a steady pace since february 2009, a month before the stock market bottomed and they peak early last year as the stock market peaked.
it was a difficult year last year for stocks. in december, we saw central bank outlets sheets rebounded in december. it was the pboc's largest surge in years. that is why we saw a great start of the year. in february, we saw all central-bank balance sheets, all the major banks reducing balance sheets. fed, and we saw the pboc reduce theirs. it would be the first time in years all four have reduce their balance sheets for two consecutive months. when youimately not get the data and you trade off at that moment. this is ultimately quite a negative impulse for financial markets for the months ahead if we get the confirmation. the pboc is also reducing its balance sheet. matt: let me move on to the u.s. jobs number, the granddaddy of as weonomic statistics.
have been calling it even before donald trump was president. day mliv question of the says is a deteriorating u.s. market a prerequisite for a fed cut. two things strike me. do you expect a deteriorating u.s. labor market? also, did anyone talk about the possibility of a fed cut before the last couple of days? mark: i think we have been talking about a fed cut since january, since that dovish shift in january. in the last meeting when it moved more dovish again, it was more clearly priced in the curve. we know that in the rates curve, a cut is priced has more likely than hikes. the job market in the u.s. is still doing well overall. few inconsistent numbers but it has been exceptionally strong. the unemployment data is low. what do i expect today?
i will not try to out forecast the economist's, but there is a global theme of strong labor markets but there is lack of inflation. it would point out to me that the phillips curve is broken and our obsession with inflation targeting is stupid and misaligned. it seems like the central bank will not change the policy. if inflation is collapsing, will evenal banks cut rates while financial assets are soaring, economies are strong, and employment markets are strong? risk blowing up even more bubbles. mark cudmore, bloomberg mliv managing editor joining us to discuss the important issues. on the join the debate question of the day by writing mliv go. we are minutes from the open.
matt: six minutes till the start of trading. your stocks to watch from around the newsroom. swedbank, gvc. what is the continuing story on this scandal? >> we found this morning the chairman will be stepping down immediately after a week that the ceo had left the bank. this has to do with allegations of millions of dollars of money laundering. investigated in sweden, estonia, and the u.s. the scrutiny of swedbank was interfering with his other job, the ceo of another company. anna: e gaming operator, what
are they saying? >> fourth quarter update is strong but it should be noted march is seeing something of a slowdown in the growth rate. the reference weakness in both margins in italy and the u.k. rallied sincee falling heavily last month on a thect share buyback of chairman and ceo. tomorrow we have an event in the u.k. betting calendar, the grand national. it could be the shortest priced favorite in 100 years and if that goes in, it would mark a particularly weak start to the second quarter in terms of the margins. anna: thank you both on the stocks we are watching. first go is the function on your bloomberg and mobile app. at an increase in guidance. seeing calls to the upside,
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anna: good morning, a minute to go. better data around germany, helping the euro go higher. yesterday's date it was disappointing, today stronger. oil prices weaker this morning. are we heading for a fifth straight week of gains for oil prices? when will president trump speak about that? chinese market closed today, hong kong closed, but edging higher in asia. this is the japanese market. the pound edged higher in the early part of the trading day, on the back of her bbc report that said donald trump -- might
give an extension of 12 months. what will be allowed by the eu 27? this is what the futures look like, pretty uninspiring. it's the jobs report later. we're waiting for a reassessment and some news on trade. let's get the last trading day of the week underway. waiting for the jobs report, hundred 80,000, a little lower than that -- 180,000, a little lower than that. having the forecast has come down a touch in the last day, but not far off. we're looking for that, early afternoon, european time. also looking for solid news on trade. we understand xi in china wants a rapid conclusion to talks. we haven't seen solid news flow. the trading session in europe is getting underway, better than anticipated. 1%, the 100 up 2/10 of
cac also up 1/10 of 1%. the ibex and dax a little higher, the dax not much higher this morning. let's look at how things are shaping up, see if that gives us any clues. energy is stronger. maybe that's a substantial part of the u.k. market. maybe that has to do with how performance. energy, telecoms moving higher. health care moving higher. undecided in how bullish we're feeling today. industrials and basic materials mixed. not seeing a big bounce in this stocks exposed to the tray conversation. there has been just trade conversation. there has been more positivity, but not enough to make a big start to the trading day. matt: no, and it doesn't look like we'll see a lot of movement until the jobs number comes out, 1:30 u.k. time. a lot of time, traders will sit
on their hands until that happens. we do have gains, 383 stocks are up, 190 are down. if you look at the stocks that are rising, you've got some consumer staples there, defensive stocks up, nestle, anheuser-busch adding to the stoxx 600. and then you've got some of the miners and oil companies adding. bp is again or, rio tinto -- is a gainer, rio tinto. on the downside, insurance is taking the most, dropping 5%, zurich insurance is. then you got s&p falling, as well as deutsche. watch for more weakness in the dax than you see in the cac and on the ftse. anna: let's talk about the global picture for growth. european markets opening higher,
perhaps the basic resources and oil businesses. this follows remarks out of china and the u.s. progress is being made in trade talks. maria, as now is senior multi-asset strategist. pleased to have you with us. let me start with where you see global growth heading because we were warning of synchronized deceleration in global growth. we've seen more positivity around the trade conversation. what do you pencil in for growth, and is a dependent on where trade talks go? maria: first of all, good morning. we're on a constructive side. itself, buthing it's somewhat robust. i have to say, we're privileged to have indicators to look at strength of the u.s. economy with online prices in the u.s. and that gives us indication of
whether traders are feeling strong enough to raise prices. the last couple of months, we've seen improvement there. there is robustness. today is jobs day. latest numbers were constructive, in a way, thinking wages were growing. consumers feel more confident, very important driver. of course trade is important. we hope for a deal. no news is good news. anna: mood music counts for quite a lot. matt? matt: well, i wonder what you think about the idea that the fed could get more dovish. mark cudmore was talking about the possibility of a cut, part of the mliv question of the day. but what do you think about how much that plays into gains in markets? marija: i mean, we know central-bank expectations have come down substantially.
it has been the major driver for first-quarter rally. ago, back to six months 300, 400 basis point rate rises in g10? now it's negative. equity markets, risk markets will take it constructively. do i think we get a lot more? i'm skeptical. we see the economy somewhat constructive. i suspect probably there. doesn't mean we're back on waiting tracks? no. we'll stay fairly subdued. anna: in terms of the fed and the impact the jobs report has on fed thinking and maybe the impact we see the fed having on the u.s. economy, will the fed ease, assuming you see easing, even if jobs are strong? suppose is difficult to ask the question because the jobs report
is backward looking. it's very interesting dynamics this year. normally, you see weakness of data and the fed or central bank responding to that. data will improve. we've seen slightly different dynamics. did it was ok, and then data really tanked -- data was ok, and then data really tanked. the fed was one step ahead of the data. now data is somewhat bottoming out. i come from equities. earnings season will be key for us to look at the strength of the economy. to me, that's more important than the jobs report because it's so volatile. matt: we've had such a strong gain in the s&p due to the devastated.
-- the dovish pivot. the s&p has rallied compared to the shanghai stock exchange compared to chinese stocks. ande that place is overdone you should continue looking for strength in china. what do you think about those two assets versus each other or even as standalone? marija: i have to say i'm a structural bowl on u.s. stocks -- bull on u.s. stocks. i'm not yet ready to give up on that trade. i think u.s. stocks have strongest return on equity, highest margin,. highest growth dynamic yes, expensive, but stronger fundamentals justified. i'm a believer in growth trade. we think world is slowing. interest rates will stay low for quite some time, which is a boom for growth stocks. definitely to think about the u.s. very much. i'm a big fan of u.s. stocks, staying with that trade, matt. anna: thank you very much.
this is the european open, 10 minutes into the trading day. slight gains across the continent, up 2/10 of 1%, although the dax turning down to unchanged. let's get top individual stocks tories. we go to annmarie hordern in london. annmarie: thanks. sps higher this morning, really surging more than 6% as they had a successful launch of satellite. designs also higher. downe downside, hammerson nearly 3.5%, u.k. property company. they were downgraded. the company now has six holds and six sales. anna: thank you very much. theresa may and jeremy corbyn are locked in intensive talks as they try to find a path forward. a second referendum is among the options, but leaders are facing battles within their parties over a new public vote. is bbc reports donald tusk
offering a 12 month extension. sterling is gaining. joining us is maria tadeo to give us more on these reports and what delay might be offered. what will european leaders decide about whether to grant an extension? morning.ll, anna, good the term is brextension. that's what people are talking about today. it's not a new idea. donald tusk, head of the european council, proposed a 12 month extension with an early callout. that means the u.k. could leave before that if there's a deal and that is approved. in a way, you could argue this is an idea u.k. would like. you would not be trapped. you will leave with a deal. having said that, donald tusk does not speak for the european commission or on behalf of the
eu 27. we still understand there is a real debate among european capitals as to what to do with the extension. anna: we certainly heard -- maria, thank you very much. maria tadeo in brussels. matt, today is jobs day, and the question on everybody's mind is -- according to bloomberg economics, we've seen perils jumping to 175,000 in today's meeting. the chief economist is even more bullish. "more normal number". paul donovan, chief economist, sees a smaller rebound. he says the problem is there are not enough workers to higher. nonfarm payroll growth. and there's just over four hours
left to input your forecast at with go. .- whis go they have estimates ranging from 70 economists. matt? matt: i'd say that's one of my top 10 favorite functions on the bloomberg, wesco. -- whis go. it enables clients to compete against each other. the march jobs report comes as president trump is said to nominate a political allies to the federal reserve board. herman cain is a former kansas city fed director and a pizza company ceo, who you may remember from his presidential run in 2012. he also advocated a return to the gold standard at one point. jpmorgan ceo jamie dimon says he's not the right fit for a central banker. jamie: they don't seem like the right people to put on the fed.
i do think a couple is very bright, and i think the fed people -- i don't agree with everything -- but i think they are great people trying to do the right stuff. i don't think they would be pushed around much by tweets or words. matt: marija is still with us, former chief strategist at state street. does it concern you as an investor when you start to hear somebody advocating the gold standard will now be have a seat at the table of the federal reserve? marija: i mean, yes and no. on one hand, you want a more orthodox central banker. on the other hand, the fed is responding to the economy. it's responding to economic developments. i would not necessarily think that nominating ronald, a policymaker, changes the direction of the fed. i think it's important at what data is saying. it's data dependent.
they're looking at what markets is doing. they're looking help economists are progressing. probably more important for that thinking. matt: or they are looking at markets, right? marija: should be. but markets are looking at the economy, as well. it away, somewhat circular desk either way, somewhat's -- either way, somewhat circular. the economy strong enough or not, more stimulus or the stimulus. it still goes down to underlying fundamentals. anna: so the road goes round. listening to the press conference, jay powell talking about the role of the fed, not just jobs and inflation as being the dual mandate, but talking about sustaining the cycle. that's linked to those, too. that's also something that can be seen as positive for stocks. marija: absolutely. i was interested in hearing this
undershootingsate previous years. is inflation, 2%, absolute target? they see undershoot doesn't. or is it kind of cycle average? mind, is nothing i have to say. matt: i just want to draw attention to this chart. anna, i believe you sent this around first. i suggested sebastian use it for battle of the charts, but i'm not sure if is going to. normally, ahead of a recession, which are these red shaded areas, you get fed futures pricing in 100 basis points of rate cuts first. we haven't got that here. marija, what do you think of the chart? is that a good indicator of an upcoming recession? marija: absolutely, love your chart.
that's the right function, tv presenter. but in general -- anna: flattery gets you a long way. marija: not my way. [laughter] i find thiseneral, exceptionally interesting that bond markets are fighting recession. we've seen some version of yogurt, bond yields -- yield curve, bond yields going down. i'm coming from equities background, i would come to think that more constructive outlook is probably correct. to me, the key points to think about recession right now, if you want an underlying to your chart, look at real interest rate. they normally spike up. is why wey, -- to me, see inverted yield curve. why we see the fed action
killing and imposing recession. it is not what's happening right now. fed has increased interest rates and real interest rates are barely positive. that's an indication maybe recession is not coming yet. anna: thank you for your thoughts. marija joining us on set in london. the u.k., we talked about brexit earlier. theresa may is said to be running to the eu, asking for further brexit delay, according to a u.k. official who confirms a letter is being written by theresa may to the eu council donald tusk today, according to an official. it doesn't say how long the delay is she is going to ask for. we heard earlier on a report from elsewhere that suggested tusk might grant a 12 month extension. conversationre the of length of delay goes. it reduces or expands the number of options that could lie ahead. up next, we'll turn our
matt: welcome back to the european open. we are 23 minutes into the trading day and not seeing a lot of movement. the dax unchanged. there really isn't a lot of trading going on ahead of the jobs numbers coming out later, which could lead to some change. that's why my head is on the central bank. here in germany, there is hope yet for a recovery. factory output rose more than expected in february, just slightly amid a surge in construction. it was a rare spec of good news amid a barrage of bleak reports.
multi-assetor strategist at state street, is with us. this is a little bit of good news. driving bund yields positive. but yesterday, we got very bad news on factory orders, a drop of 4.2% when we were looking for a gain. what do you think about the german economy? is one of they weakest economies of global growth. i'd rather look to u.s. for opportunities. weak asmaybe not as people are terrified about. it's not a strong spot. anna: does that mean we go equities on? you're not interested in equity stocks? marija: absolutely. europe is a released favorite region. there are two fundamental reasons for that. we don't think europe is as
cheap as people suggest. anna: why? marija: main reason, earnings have been disappointing. we're still not recovered to where we used to be, so it's hard to be excited. but more important is banks. 25% of marketve a capitalization -- 20-25% of market capitalization, trade is in line with the yield curve and the slope of the of curve keeps getting flatter and flatter. it's very difficult to see how banks will get out of that. we do need help from ecb, hardly forthcoming. matt: indeed. when we talk about deutsche bank about to buy commerzbank, one of the problems is commerzbank is holding so much debt valued well higher than it should be.
do you think if the ecb comes in wehelp with tiered rates, could see relief for equity holders in banks? marija: i think anything the ecb does will be helpful, but i it will solve fundamental problems with european banks. there are low demands in europe, loan growth, minimum wage. we draw the pie chart to show loan growth in europe from ecb surveys. to decade high, which is 2.5%. i think that's the story, decade high. that's a challenge european banks are facing. i need make loan growth -- anemic loan growth. anna: and somewhat say there isn't demand for it. thank you very much. marija joining us from state street. she stays with us on the program. let's check in on the markets.
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trading day, let's get your top headlines. stocks in europe and u.s. futures climb after washington and beijing hail progress in trade talks. -- learns thatns theresa may is asking the eu for a further delay. tuskts suggest a donald could propose a 12 month extension. and investors awaited jobs data from the u.s., hoping for a rebound from february slumped. to propose ag political ally for to spare seat
in the fed. i am matt miller in berlin alongside anna edwards in london. anna: 30 minutes into the trading day, let's have a look at where we are. 370 stocks up, a slight upward bias. of course, we're waiting for the jobs report coming after lunchtime. that is going to be something that investors might decide they want to see first ses is an interesting one, global satellite operator up by over 6% this morning. satellite launch of a , but we also saw strong moves the united states heard ems up by 5.6%. we got better guidance from that business. that has lifted that stock. also higher by the start of trade, they have increased guidance.
look at what is weighing down markets. we have the forrester product business down by 4.3%. iliad weaker this morning. . few u.k. names i noticed sap was falling, didn't quite make it into the top 60. there are quite a few broker downgrades and upgrades. let's get a first word news update. premier hasice hailed a new consensus when it comes to trade. this comes after a meeting with the white house. president trump talked up the prospect for a monumental if you ago, trump touted the idea of a summit with president xi jinping. dalio says closet american
capitalism have greater destructive social gaps and could lead to another revolution. she says that they could reinforce differences in mobility, assets, and income according to a new asked -- essay. he says that the bottom 60% of income earners keep falling further behind the top 40%. ecuador plans to expel julian assange from its london embassy according to wiki leaks. the say the nation has a plan in place for the u.k.. they said they granted asylum by ecuador in 2012. she jumped bail he refused the extra to sweeten and set at that time that he was facing trial in the u.s. for publishing secret government documents. amazon is reportedly ready to take on apple's air on. -- air pods.
they could be ready as early as the second half of this year. the headphones will reportedly left people use their voice to order goods, access music, weather, and other information on the go. global news, 24 hours a day on air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna, matt. matt: thanks very much, deborah. -- debra. the german government will keep a stake in the new entity should commerzbank be bought by deutsche bank. annmarie hordern has the latest on the story. annmarie: as you know, it is going to be a key weekend for both of these banks. ,his is when commerzbank could as early as this weekend, decide whether they want to continue discussing deepening talks. for the first time, we have obtained this memo from he commerzbank ceo and we got insight into where his thinking
is. he said we will take further steps to increase growth and profitability, the question is whether it makes strategic and economic sense. , when speaking to employees who have lambasted the idea of the deal, said that what you should take away is the alternative of doing nothing is not an option. for me, it foreshadows the fact that changes will be coming to commerzbank. making clear the bank needs to do something. know, thisna, as you has been an uphill battle for commerzbank. employers are not on board -- employees are not on board, jobs could be lost, and politicians and the public have spoken out saying they do not agree with the acquisition. anna: we will keep an eye on this over the weekend. annmarie hordern joining us with the latest on the story. let's talk earnings, samsung has reported the worst operating profit drop in years.
income fell 60% in the quarter. they issued a rare warning that its results would be short of estimates. the senior multi-asset strategist at state street is still with us. he said that this was an exciting thing with you. where are you most interested in the earnings story? maria: the u.s. is absolutely more interesting. what isound is that extraordinarily interesting is the earnings expectations for this year in the u.s. absolutely collapsed. in the middle of last year, we expected earnings to grow, going from 20% to small teens in single digits.
that rarely happens, i have to say. it can happen, but it really happens your we don't think economies are an absolute disarray we are quite over the last couple of weeks, we are beginning to stabilizationups in earnings forecast and even some upwards momentum. to me, that is absolutely critical. i would like to see it as an our thinking is that there has been a massive, massive investment. we are correcting and analysts have probably panicked to some degree as well. we are looking closely, and to me it needs hard data to judge. anna: next will be pleased to hear this. he won our battle of the charts yesterday by talking about the uptick in u.s. earnings. matt: the stabilization you are
talking about, heck, i will go ahead and rollout that chart i won with yesterday. is theto admit, and i one who drew my attention to this in the first place. i've got s&p 500 forecasts for this year in white, next year in blue. stoxx 600 forecasts in yellow, here in purple. -- next year in purple. you can see they come up a little at the end. forecast earnings have fallen further this year than european forecast. are stillnk analysts too bearish on u.s. company earnings? marija: that is really the cracks of our argument. -- crooks of our argument. analysts have panicked and gone way too far. if you look at the actual numbers, it is quite extraordinarily book -- bearish.
so i am with you, fantastic chart. [laughter] anna: thank you very much, thanks for spending your friday morning with us. senior multi-asset strategist at state street. up next, we will talk about the u.s. a jobs report. proved to's reading be a blip or the start of a negative trend. that conversation next, this is bloomberg. ♪
matt: welcome back to bloomberg markets: the european open. in seeing a lot of movement equities because it is jobs day in the u.s. and economists are hoping to see a rebound from february's slump in nonfarm payrolls. of expectation is for a gain over 177,000 jobs. the hiring must contributed to the recent, albeit temporary, inversion of the three-month-10 year yield curve. where march the month indicators were reversed? so joining us now is the chief market strategist at zurich insurance company. do youfirst ask, what think about the brief yield curve inversion that we saw?
a harbinger of bad things to come, or is it different this time? guy: good morning. i don't think it is terribly different, the only difference is that there has been so much more attention placed on the version of the yield curve. but i think it is a good warning of a fairly good predictor that when you get this inversion across the curve it is a harbinger for slowness or weakness ahead. but remember, it may still take time to manifest. i think that comes later. anna: good morning to you. let me ask you about what you are expecting to see from the payrolls number. of course, last month's number was dreadful. it puts in context just how weak that number was, but there are a lot of concerns about the shutdown in the u.s.. what are you expecting to see from the jobs picture, and how material is that?
guy: morning. indeed, last month was an average number. -- aberrant number. is thatg i always say although there is so much attention paid to payroll data, it is subject to huge revisions that may well be the case today. i look more at broader indicators, and there is no doubt the labor market is in good health. 202,000, that is remarkable -- saw 202,000, that is remarkable. good,bor market is very but as you said, it is a lagging indicator does not tell us much about what is going forward. i'm still concerned that as we , wethrough some rebound will be on the defending
trajectory for u.s. growth into the end of the year and certainly into next year. so, you think that the future does not look as good as the jobs market would tell us? what do you think are the most important indicators we -- four looking forward? guy: certainly, some of the new order indicators. i think the initial claim is quite a good indicator because it gives you a week by week basis of the change in that track. . again, some of the more forward-looking survey data is what is very important. and it is fair to say that things are still decent and will be into the summer. when we speak of the labor weket, one thing i think need to remember is that it shows you there is less spare capacity in the u.s. economy then there has been. at three point 8%, is getting harder and harder to
find workers. that means the rate of change is likely to slow going forward because things are very good currently. anna: that is an interesting point. clearly, the white house wants more jobs to be created. interesting story by one of my colleagues called don't fight the white house. as we see the president wanting to appoint more of his supporters or political allies to the fed, would that seem like a good mantra? listen, the main asset a central banker has his credibility and independence. therefore, anything that tarnishes that independence is a negative. not just for the institution, but for the u.s. economy are probably -- more broadly. it is interesting to see the pivot that mr.
powell has had but it is essential for the credibility to be sustained. matt: as you are the chief market strategist there, i have to ask you what you think investors should do if you are worried about the future of the u.s. economy, european economy looks week as well, where do you put your money? guy: i think it will be patchy. i think we will have a time for the economy will do better. european data has been so awful over recent months, i think you will get a rebound and it will broadly encourage investors. i think if bond yields pick up, there is some value to be had. i think the equity cycle has got further to run, there is not that kind of euphoria or excess there just yet. but as i said earlier as he get into the summer towards the back end of the year, that is where caution will be warranted.
one of our big issues is that the credit markets have been doing very well. we typically see them as the canary in the coal mine for the broader risk asset folio. off, thatthat taper should be a warning sign that we should be thinking more defensively. anna: thank you very much, guy miller, chief market strategist at zurich insurance company. jamie dimon weighing in on the u.s. economy set of the u.s. needs to deal with serious issues with china by imposing tariffs, regardless of what it meant for the economy. theeighed in on conversation while speaking at the council on foreign relations in new york. president obama came to the the rta couple of times and at one point complained that the best-selling about his china, and when i go, they tell me how great it is. i think that's true i think the business community has spent a lot of time, not just worried now the botcn, and
supports tariffs, issues about the chinese -- ip being stolen, enterprisebout beyond what is fair normal. -- fair and normal. those are serious issues that japan am europe, and america all know is true, and the chinese notice true. i think lighthizer and mnuchin have been doing a good job. we don't want a soybean deal. they agreed to buy $200 billion of goods, that does not fix the problem. europe and japan really want us to do this, so i was not in favor of the tariffs and the threatening, but absolutely in facing the issue. you've got to deal with the serious issues, and if you don't
, well we are better to deal with it now. , think both parties want it but it is also a bad idea to say they have to. they don't have to, nor do we. david: you have your pulse on the finger of the u.s. economy. what do you think the state of the economy, if you worry about a recession in the near future? really, china will grow at 6% because they can. state-controlled , they simply can't do monetary policy, youbank build the road, they will meet their objectives. it's not great growth, they are building imbalances which i think eventually come talk them about the for the next couple of years, they will hit their targets. japan doing 1%, brazil 1%, brazil has turned the corner. the united states is chugging along.
forget the noise, and all the political stuff about sex market and all that. is going down, confidence is high, almost the highest all-time. it's still in the upper quartile. it's coming down because of the shutdown and trade and brexit. supply, youn short don't have the leverage like we had before. it does not mean you can't have a recession. my view is that we are plugging russia,and venezuela, possible fiscal policy , thoseing policy errors are mounting issues which can easily derail an economy. but this will just be more on the camel's back. we don't see it now, but you
have got to be prepared. we all should be prepared for something that. -- bad. 2022, there'sy be a notion to be 2019, that structure. -- that is not true. matt: that was jpmorgan ceo jamie dimon speaking in new york with david rubenstein. up next, we will take you through the charts that show you trade with paid and those that didn't. by the way, bloomberg users can interact with all the charts we use here on the terminal. we will add a lot more. this is bloomberg. ♪
matt: welcome back to the european open. we have breaking news on brexit about theresa may is writing a letter to donald tusk seeking an extension to article 50 until june 30. looking for an extension until really the middle of the summer. the u.k. is asking the eu to ratify a deals to for may 23. theresa may wants to get a deal untilnd have an extension june 30. the u.k. is going to prepare for it you elections in case the deal fails.
this developing story, obviously, will continue, possibly until the end of time. maybe just until june 30. european stocks are finishing higher, starting higher, i should say, but there was more money to be made elsewhere in the market. paid look at trades that and those that didn't. joining us are dani burger and sebastian salek. in terms of a week, it was very unusual for bitcoin. that's right, on tuesday, bitcoin surged more than 60%. more than three standard deviations. it's set them to end the week of higher by more than 20%. for me, the biggest trade of the week with people who held on to that point. anna: good call. sebastian, what have you got? trading 22%, but
♪ francine: trade headway, global stocks rise after washington and beijing hail progress. investors awaited jobs data from the u.s.. theresa may asks for a delay until june 30. donald tusk is reportedly proposing a sliding 12 month delay. and we are live, where i will be speaking to business leaders on italian growth and the world economy. good morning, everyone, good afternoon if you're watching from asia.