tv Bloomberg Markets European Open Bloomberg April 30, 2019 2:30am-4:00am EDT
>> good morning and welcome to "bloomberg markets the european open." i'm anna edwards alongside matt miller in berlin. proceede markets say with caution. signs lead china slowdown might not be over. gains on the mainland muted as europe points lower after a slew of earnings released this morning. the cash trade is less than 30 minutes away. ♪ ♪ anna: china's engine sputters.
april,turing pmi fell in as the recovery in asia's largest economy moderates. u.s. negotiators land in beijing today for another round of trade talks. billion-dollar buyback -- standard chartered gains in hong kong after getting approval to return money to shareholders. beatnder in spain estimates despite falling profits in the u.k.. president trump sues to stop german lender deutsche bank from being forced to reveal his financial records. in banking, goldman sachs ceo david solomon speaks to bloomberg about deutsche's next steps. >> it will be interesting to see how the leadership figures out how to leverage the strength that institution has, how they managed to balance the businesses where they are not as well positioned on a global basis. matt: taking a look first off, in my terminal i have the s&p 500 here, just to show you this,
three trading days. we had a new record yesterday, before rolling over a little bit after the disappointing google earnings. if you take a look at european futures, speaking of rolling over, you can see that we are looking at red arrows across european futures as well, indicating possibly a lower open, especially in france. cac futures down 0.3%. dax futures in frankfurt down 0.2%. anna, what do you see on the gmm? anna: a fairly muted session from asia, and disappointing data on china. this is the picture on the equity and fx markets in the asian session. hong kong, south korea, india all looking weak and equity performance. the south korean won showing weakness today, and the australian currency weakening, as a result of weakness in china. it is often a proxy for data in china. we had manufacturing pmi.
interesting looking at the united states, with the market moves in mind. touching new all-time highs again in the u.s.. the inflation story really interesting. what does that do to the fed narrative? in terms of good news, treasury secretary steven mnuchin suggesting progress is being made on trade talks, so maybe we start to focus more on that as we go through the week. a quick look at the other side of the gmm. a few comments on the oil story in the last few minutes, the saudi strategy. how responsive are they to requests from trump, one of the key issues. keep an eyte on rubber prices, with a storm heading towards part of india that produces rubber. let's get an update on bloomberg first word news. aivia: theresa may faces backlash from her leadership.
the party will hold a meeting after 10% of leaders called for her to go. the convention decision is nonbinding, but potentially humiliating for the prime minister. some activists have refused to campaign for the party ahead of european parliament elections. president donald trump is suing deutsche bank and capital one from releasing his financial records, in response to a congressional subpoena for the information. the complaint says the action is intended to harass the president and rummage through his private life and family. the blackstone chief executive says trump policies could shock the economy, and hit out at the federal reserve. >> the fed is the guardian of the system, not the enemy of the system. if we have a lot of wage inflation or something else, which seems somewhat unlikely, but, and they start increasing interest rates, most probably
it's because it is the smart thing to do. japan's emperor is stepping down, the first abdication of the chrysanthemum thrown in two centuries, due to health concerns. akihito was the first to modernize the imperial family and the first two reign entirely after world war ii. global news 20 boroughs a day, powered by journalists and analysts in over 120 countries. matt: olivia, thanks very much. olivia hows in london with your first word news. asian stocks mixed after disappointing data on world'suring' at the biggest phone maker. korean giant samsung posted profits missing recently reduced analyst estimates. the s&p 500 topped its record high overnight, and futures
point to a lower open this morning. let's get to the markets with mark cudmore, our mliv managing editor in singapore. the first thing to talk about, china pmi's might be disappointing, but because investors can expect more stimulus from the pboc, we saw chinese stocks lift a little today. is that logic sound, you think? mark: that was certainly the narrative going through the markets, that bad data was in fact good news for stocks, because it shows the pboc can't afford to step away from its efforts. i'm slightly worried about that logic, especially going into the holiday today. it is important to emphasize, the pmi data, it shows analysts suddenly got too optimistic, so from that only a few months ago, they shipped -- shifted
rapidly to expecting too much from similar separate. switching from being very bullish, to bearish. i think we will have more of a correction, entering the holiday. -- pain could pop probably last until after the holiday. we have to reassess next week to see if there was enough of a correction. overall, the story in china is that we are seeing a slight improvement, just not as quickly as some people think. anna: good morning, mark. with that in mind, our markets live question of the day. aes china pmi missing, or likely china-u.s. trade deal, matter more to the market? one could be a function of the other. we could see developing's in pmi reflecting a trade deal, but what do you think? mark: i think that overall for this year, i think the trade deal is still the most dominant story. wither -- either when we get that deal signed, ratified, in place, or if talks break down,
that will dominate every thing else. but in the short-term, pmi matters more. we expect more trade talks, soundbites, but it is unlikely we get a conclusion unless it is a bad scenario. most likely, the negotiations will carry on for some time. even after there is supposedly a deal, there might be some rumbling about enforcement of the deal. the trade deal is more important, but a much more slow-moving story. perhaps in the short-term, even more important than pmi or the trade deal is the china holidays affecting short-term pricing quite a bit. matt: what do you think about the earnings picture, the fed's position in the u.s.? we have another all-time high on the s&p 500, and, ok, to be fair, on the sell side i hear a lot more analysts in new york who say this cannot continue. mark: i'm actually turning
bearish on equities. i think it's time to turn bearish. think will lead the way down for a little correction. not long term, but there is a chance for a material correction here. the one thing that worries me, we don't have stretch positioning to the topside, which makes me wonder whether we can grind a little further, but i am not sure where we get the positive catalyst. while the earnings season has been solid, guidance looking forward has been much more negative, and we see estimated forecasts pulling down a little bit, meaning the forward-looking price-to-earnings ratio of the s&p is 17 as opposed to the 10 year average of 15. i'm not sure what the positive catalyst is. the fed is either going to emphasize the economic outlook is gloomy enough to justify the dovishness in rates, or they have to guide yields higher. either way, don't see how that
is positive or equities, and we could get negative soundbites on trade talks. not sure what catalysts might be, but i feel some u.s. equities are looking vulnerable. anna: with that in mind, interesting to see bank stocks doing so well yesterday in the u.s. market, and before that in the european open as well, mark. was people, jp morgan more positive on the banking sector yesterday, but others talk about the potential steepening of the yield curve. what do you see in treasuries, and whether that will make life easier or harder for banks who try to make money when they land -- lend? a moreverall, there is positive structural story in banks. that is something in the medium-term or long-term that will be supportive of the market, another leg higher later on this year. i am not so sure it will dominate in the short-term. as we get data in the next couple weeks, that will be the focus in the very short-term.
anna: mark, thank you very much. mark cudmore, bloomberg's market live managing editor from singapore. you can get involved in our question of the day, does the miss we saw on chinese pmi data or a trade deal mean more to markets? coming up on bloomberg, we speak to ken griffin, the founder and chief executive of citadel. don't miss that extrusive any of you from the milliken annual conference this afternoon. don't forget, bloomberg is available on your audio device or dab digital radio in the london area. this is bloomberg. ♪
♪ matt:matt: welcome back to "bloomberg markets: the european open." 15 minutes to go until cash trading, and looking at red arrows in terms of futures.we could trade, especially on the continent. olivia: standard chartered will buy back as much as $1 billion of shares, the first time the lender has returned cash to investors in over two decades. this comes after an over $1 billion settlement with u.s. regulators for repeated violations of iran sanctions. goldman sachs has not discussed
a potential plea over the 1mdb scandal, according to chief executive david solomon. this comes after u.s. prosecutors recommended the lender plead guilty to settle the probe. we haven't even started discussions with the justice department. we are very focused on getting this resolved in the best way we can, and we will do that for our shareholders and clients, and try to get this behind us as soon as we can. biggestthe world's co-working company plans to go public. joining a wave of highly value technology stocks in the u.s. market. it filed with the sec for an ipo, likely to be the biggest of the year behind uber, valued recently at $47 billion. anna: thank you very much. olivia hows in london. bloomberg learned telephone giant vodafone found security ei equipment as
much as a decade ago. chinese found the company could have gotten access to sensitive user data. vodafone started a deeper probe into vulnerabilities in 2011, and found that backdoors were present in its italian fixed access network. vodafone and huawei both maintain the issues were resolved shortly after they were raised, but bloomberg sources insecurity discussions said the vulnerability's remained past 2012, and were present in the u.k., germany, spain and portugal. let's get details behind the bloomberg scoop. our media and telecom reporter joins us. good morning to you. run us through the timeline of vodafone's discoveries? rebecca: thank you for having me on. this is a story by a senior reporter in "le monde," we spent a long time talking with sources and working through vodafone
internal documents. was tryingn huawei to expand in europe, it landed a big contract with vodafone to supply home internet routers, and all most immediately vodafone had problems with the routers. they found vulnerabilities, including backdoors that would have given unauthorized access to a customer's home internet environment, the computer and potentially the wider vodafone network. in 2011, there was a deeper probe vodafone connected into the routers. according to the documents, vodafone confronted huawei, asking them to remove the backdoors. they were particularly serve it -- fixated on a telnet service that would have allowed access to both the customer's home environment and the broader network. huawei agreed to remove them, according to the documents, and vodafone found with further testing they were not removed. in those documents, you see the frustration from vodafone's
chief security information officer at the time as to why huawei didn't remove the router vulnerabilities. matt: you know, you can still buy routers in the u.k. from huawei, can still use them with vodafone and other telco operators. why haven't they removed the does, and -- issues, and why companies continue to work with them if they don't resolve these issues? rebecca: to be clear, vodafone told us that in 2011 they found the problems and huawei worked quickly. in 2012, there were additional vulnerabilities found and vodafone and huawei said they were quickly resolved. the report found that they continued for years. the report said vodafone continue to work with huawei because it was cost effective, they were a low cost provider. vodafone would argue that the
issues were fixed and that all network providers have vulnerabilities in equipment that are quickly fixed when detected. anna: what additional reputational damage does this do to huawei? this is a business under considerable fire in the u.s. and europe. do we understand businesses will continue to work with huawei? rebecca: huawei is at the center of a global trade war between the u.s. and china, and the u.s. is trying to convince european governments to block huawei from their phone network. i think this revelation will undermine huawei's attempts to portray themselves as a secure and honest broker, and potentially will bolster u.s. efforts. vodafone's ceo has been outspoken in defending huawei against any potential bans in europe, and the european governments so far has not imposed any. matt: of course,, we find these issues have not been resolved. we at bloomberg have found these
backdoors are still open. rebecca, thank you very much for joining us. 's rebecca penty, joining us on that. just to be clear, huawei and vodafone both maintain that these vulnerabilitjes discovered -- vulnerabilities were discovered and fixed and were part of the normal process of rolling outh products. uawei said that software vulnerability is a industrywide challenge, and that when they are identified we work closely with partners to take corrective action. vodafone responded to bloomberg -- "in the telecoms industry it is not uncommon for vulnerabilities in supplier equipment. if a phone ability exists, vodafone works with that supplier to resolve it quickly." of course, the issue here is that it wasn't resolved at all. we are minutes away from the open. up next, we take a look at the stocks to watch at the open,
were covering about vodafone and huawei. vodafone said to have found huawei security flaws from 2009. vodafone and huawei, as we said many times, say the vulnerabilities were resolved. the story is that we learn those vulnerabilites existed beyond 2012, and what happened after that remains less clear. that is the story this morning. let's get stocks to watch from around the newsroom. bp.a, let's get to you on maria: bp in line with expectations, net income at $2.36 billion, very much what the street expected. cash flow, a key metric, look at that in the context of the bhp acquisition. jumping about 600 million
dollars. ceo bob dudley said his strategy has paid off. we will hear more from him when we speak to him later on bloomberg tv. matt: let's get to joe easton on airbus. what is the story? first-quarter quarter earnings were slightly better than analyst expectations, driven by the a-320, the competitor to the 737 max from boeing, which we know was grounded. however, airbus cautioned they aren't likely to see a huge sales, given that these orders are made a few years in advance and the plane is sold out for the next two years nonetheless, airbus confirming that guidance and we expect minor share price upside today. back to you. anna: dani briefly on standard chartered? dani: shares in hong kong already up over 4.5%, and we will likely see something similar in europe today. buyback, plansus
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matt: one minute -- anna: one minute until the start of cash equity trading. let's look at how markets are positioned. this is euro-dollar, fairly fairly flat on the single currency. brent 72.24. some comments from the saudi's in the last couple of hours or so. let's look at where we are on the equity markets, the chinese equity markets and expectation around how much will be forthcoming. the chinese equity market, trading high despite the disappointing data on the pmi's. disappointing data on the official pmi, manufacturing
components of it coming in weaker than anticipated. on the futures, we are expecting to see it flat. a negative session for european equities in around five seconds time. down.d cac futures called this look at markets fresh tuesday morning, pricing in what we have learned from the asian session. pmi data happening central. we are without the japanese markets this week. without chinese markets from tomorrow onwards for the rest of the week. weaknesseing a little in the equity story between south korea and the australian currency, all of that reflecting concerns around global trade and that out of china. on european markets, the ftse 100 a little more resilient.
how week will the mining sector be in reflection of the weakness in the chinese data? and theibex down .2% stock reflecting that, waiting. is crucial foror london so we will see how the material sector shapes up. negative territory right now. we will see whether the concerns around growth is affecting the market. some notlth care week, today we are rotating into more defensive plays. energy is a standout performer to the upside, as is i.t.. we've had individual corporate's reporting, ams positive on the i.t. front. we had the samsung numbers negative for chipmakers. bp is no doubt in the mix. what do you see on an individual stock level? see 250 five winners, 312 losers this morning.
you really do see earnings playing a part in some of the big dinners. ners.i standard charter, a $1 billion buyback. you see them as one of the gainers. austrian -- you see a lot of tech companies, asm leading the way on the upside. asm up more than 15%. on the losing side, you see micro focus down almost 20%. that company, losing 1/5 of its value. micro focus dividend is out today and that is the reason for that. you see other dividend losers. bute is paying a dividend, with a earnings losers group of scandinavian banks, to the is a loser
downside and weighing on the stoxx 600 index. it is a busy week in europe. we have a raft of not only earnings, but key economic data coming out. inflation and gdp from the euro area. earlier, we saw france first-quarter gdp met -- missing estimates and now it is spain's datawith its first released after the snap election. maria tadeo is standing by. : the spanish economy grew 0.7% in q1. that is a beat. the spanish economy gained momentum at the start of the year. that is good news for the prime minister and also for the euro area. you can see additional stimulus to the european economy. retail sales that came up today, good news for the spanish economy. it is a beat and it shows a gain to moment him at the start of
the year. a continuation of the recovery we have seen play out for five years. let's look at the market reaction and see the euro jumped on this but the action today is mutated. traders are waiting to get the euro area gdp data later today but it is good news from spain. a beat on gdp q1. anna: maria tadeo, putting the pieces together on european growth story. joining us on set, the founder of abp invest. good to have you with us. picturet your big thoughts on these markets. all-time highs, u.s. markets yesterday. growth data out of europe. today, the french number coming in line with estimates. the spanish number, not to disappointing. reason to be cheerful or cautious? >> i am cautious. it is a good element of risk on since the beginning of this year. however, volatility has been excessively low.
butth numbers are positive, things will still be lagging behind in europe, behind the u.s. and china. from an economic differential, i still feel europe will be on the back foot versus the u.s. but albeit, positive data coming through. at markets,ou look what do you think about europe versus the u.s.? he had an all-time high on the s&p 500 yesterday. european markets have done incredibly well year to date up 18% and 17%, cac even ftse up more than 10% but it still has catch-up to play with u.s. markets. do you see that happening? thanos: my concern on the differential between the dax and the s&p is mostly on the geopolitical side. i think president trump, who has been focusing on the sino-u.s. relations, will gradually shift
his focus away from china and on to europe and specifically within euro germany. andpect political tension tough negotiations ahead of the 2020 elections coming through. i am more worried about that and did not expect the dax to reach the s&p performance. at thenteresting looking french gdp number because a lack of exposure to global trade cushions franch more than germany because of the headwinds you point out. you expect more fiscal expansion in europe. do you expect that -- where does that leave the ecb? were from? the u.k., germany? thanos: the imf in its outlook expansion in the peripherals, i believe the expansion will be more in the core. this is where we see this political fragmentation. this is where we see a lot of social unrest taking place.
more fiscal stimulus in this core area and i think the ecb will expect highly -- higher levels of inflation if this came through. you will stick with us. thanos papasavvas is from abp invest. he is our guest cohost. next, stocks on the move this morning including amf, the chipmaker surging after second-quarter revenue forecast beat estimates. you can see the stock here, up 16%. this is bloomberg. ♪
matt: welcome back to "bloomberg markets: the european open." 10 minutes into the trading session. a mixed picture across equity indexes. let's get the individual stock stories with annmarie hordern. >> standard chartered to the upside this morning after the announced the $1 billion buyback. it comes ahead of when they got the announcement would come at the market is liking that. we see shares higher in asia. this should be ams. it is the biggest gainer on the stoxx 600 this morning. revenue beat in a big way, lifting shares.
logitech had earnings in line but the departure of the cfo is offsetting earnings. leaving, given his strong execution. anna: ams is trading up 17%. that was the company you were going to tell us about, the biggest gainer on the stoxx 600. let's talk about the u.s. economy. chief executive of goldman sachs says jay powell is doing a good job at the federal reserve. he adds he doesn't expect a lot of policy activity through the rest of 2019. david solomon sat down with erik schatzker at the milken institute global conference. >> throughout the quarter, activity levels have improved. he had a speed bump in the fourth quarter, government shutdown contributed to the environment at the beginning of the year that the underlying economy in the u.s. has continued to do well.
as we move through the quarter, you saw a little more of a move back into risk asset markets have performed well. , theu get around the world stimulus from china has helped fuel improvement in china. i was there a couple of weeks ago. europe and japan lagging a pivot central banks made in the first quarter has been constructive. activity has improved. nice level.nly at a erik: how do you think the result on financial markets will influence the way central bankers will think about policy going forward into the year and 2020? >> policymakers have been pretty clear on their communication throughout the year and into 2020. erik: you could make the case that in october, jay powell may
have screwed up a little. david: i think the chairman is doing a very good job, a difficult job. as you translate forward, it doesn't look like there will be a lot of policy activity through the rest of the year and to 2020. one economist is predicting one increase late in the year 2020. he is cautious on the fact that you could see in any way, shape, or form, a cut. it doesn't really see that but right now, the economy is chugging along pretty well and policy will be stable. erik: one of the places you see the impact of stable policy is the credit market. david: the credit markets are pretty constructive. erik: money is pretty easy. david: money is pretty easy, but when you look at the big banks, the participation in the big sale credit markets, there i don't think there has been real movement in credit standards. i think what you are alluding to a little bit is when you get out of the regulated institutions and and some of the shadow
is a lotarkets, there of capital moving that direction, there is less transparency around that activity where it is harder to see but that is an area to watch. erik: do you think that is a problem? david: i don't think it is necessarily systemic at the moment but it is an to watch. some of the capital in that state is longer dated capital so it is not money that can run away very quickly, but as those shadow credit markets grow, that will be something to watch and monitor. look, the regulatory environment has pushed more credit lending in that direction. that will be something to focus on. erik: what is the better alternative? that regulators pay closer attention to the shadow market or change the rules to allow more credit to go back to regulated institutions like yours? david: i think it is a balance. over time, finding ways to have a better understanding and more transparency as those markets grow will be important for the construct of credit markets and i'm sure business leaders in our
part of the business and regulators are thinking about those things. matt: that was the goldman ceo david solomon sitting with erik schatzker. i want to quickly bring you some , the abunews on adnoc dhabi national oil companies looking to raise billions of dollars for its national gas pipelines a month after it got a $4 billion in investment on its infrastructure assets from kkr and blackrock. we will continue to keep you updated on that story. let's get back to thanos papasavvas. it doesn'testing, look like the fed will do anything much in the future. that was partially david's point here. people aren't so split on whether the next move will be a cut as the market is pricing in or a hike, as the economy
continues to grow and inflation still isn't that far off from the 2% target, even with the one year low we got in the print yesterday. is the my view underlying economic factors do not merit a rate cut. the u.s. economy is quite strong, consumer sentiment is quite strong. the global environment is strong. i don't think there is merit for a rate cut but in my view, the significant rally in asset classes in the stock market, we could see a tightening by the fed later in the summer, after the summer, so as to prevent a bubble from being created. i think the fed will look back at what greenspan did not do in the mid-1990's but also before the global financial crisis. he cut rates too far, he kept them low for too long and when
he started raising rates, it was slowly and prescriptive lee. that instigated those asset class bubbles. looking back to all that exuberance of the late 1990's and early 2000's. andme show you this chart matt was talking about inflation. in the yellow, we have pce. we saw it retreat yesterday. it is a difficult narrative for the fed to tell, we are spiking despite pce coming down. thanos: i agree, but it will not be an easy position to take but it would be easier to take that later in 2019 then it would have been in 2020 because 2020, we are hitting -- heading into pre-election and there will be more intervention from president trump. they will get some heat should they increase interest rates but it would be less later on in
2019 than any time in 2020. matt: it is important to mention both the blue line, the cpi, and the yellow line, the pce. those are both court -- both core numbers and they remove anything you need to live. food and energy costs, which people are complaining about rising in the u.s. this is what we are hearing about as far as the inflation story in the u.s. energy, the food, paper towels and diapers are getting more expensive. do you have any concern about inflation? thanos: i think you mentioned the energy prices and this has been a key driver of trump's policy. clearly having a strong relationship with saudi and the uae, with russia in containing prices. i think the impact with the canceling of the waiver around sanctions will not, in my view, have significant impact. the eia's recent forecasts have
suggested a positive excess supply of oil during the summer. the first time this has happened since 1960 and the loss of iranian barrels fell 1.5 million per day can be covered by the saudi's. i do not expect oil to become a concern, especially leading into 2020 elections next year. of abphanos papasavvas invest stays with us on the program. marketsok at what the are doing from a sector perspective. .1% on thewn by stoxx 600, the ftse is flat, the dax and cac retreat a little. retail is the biggest gainer, up. resources, an area of weakness into the second-biggest negative move from a sector perspective, down 1.3% on the back of chinese numbers.
markets: the european open." 23 minutes into the session, look at the major indexes. very little change in london on the ftse, the dax in frankfurt down .1% and the cac in paris, down .4% to 1%. -- .4%. in asia, a mixed trade after china's manufacturing pmi slipped in april, barely making it above 50. it signals economic stabilization in the first quarter is still fragile. the factory gauge is expanding, but at a slower pace than in march. thanos papasavvas from abp invest is still with us. we had a lotting, talkingusly big bigwigs about investing in china at the milken conference yesterday. howard marks was talking about dipping in, we heard steve
schwarzman talking about investing in china but it does look like the green shoot we saw last month is starting to wilt a little bit. thanos: i believe the green chutes will remain and if there be reinvigorated because the number one policy in china is for the chinese party to stay in power, to maintain cohesion. to support the fiscal stimulus support is important and i believe it will be successful. let's not forget we are approaching the 30th anniversary of the tiananmen square event, another event which will not raise headlines but it is a signal that it is important to maintain social cohesion and economic growth in these times. anna: the geopolitics, you believe keeps the stimulus
coming in china. that is an interesting chart. emerging-market further failing to meet estimates -- in the west, we take for granted that come earnings season, a lot of companies beat estimates because we have been through this before. maybe it is not so much the case in emerging markets. is this the center of things for you in terms of where corporate's in emerging markets head? do more concerned about the direction of the dollar? thanos: china is critical for that and i am confident in the latin american region. they contain inflationary pressures and support the real interest rate differentials you get there. number two in terms of dollar, i believe it will strengthen against the majors, the euro, thesterling, but i expect renminbi to continue to appreciate against the dollar and emerging markets, i am split . i am still very concerned about turkish lira and the indian rupee. both of these, because of the central bank lack of independence. i like the mexican and chilean
and brazilian real. matt: thank you for joining us. thanos papasavvas is the founder and cio at a bp invest and he onl join us later on bloomberg radio's "daybreak: europe" live on london dab digital in the london area. early are up early, very in new york for staying up late in california, check us out on sirius xm channel 119. a quick look at where we are half an hour into the trading session this morning in terms of the equity indexes. we are looking at a little bit of red on the iberian peninsula and in france. the dax and ftse, little changed as is the ftse mid in italy. not a lot going on today. a little bit of a risk off day
matt: let's get your top headlines off the bloomberg terminal. china's engine sputters. manufacturing pmi fell in april as the recovery in china moderate. u.s. negotiators landed in beijing for another round of trade talks. billion dollar buyback, standard chartered plans to return money to investors for the first time in 20 years. please speak to the cfo at 10:00 a.m. london time. plus, president trump sues to stop deutsche bank from being forced to reveal his financial records. solomonsachs' ceo david
speaks to bloomberg about deutsche's next steps. david: how the leadership there figures out how to lever the core strength of the institution and how they manage or balance businesses where they are not as well positioned on a global basis. matt: welcome to "bloomberg markets: the european open." i'm matt miller in berlin alongside anna edwards in london. anna: half an hour into the trading day and we're slightly underside it on the stoxx 600. 300 going down and the rest to the upside. fairly evenly split between the fallers and the gainers on the european equity market. interesting stories and we don't know what to do with the tech sector. outperform to the upside come up 18% this morning. on the negatives, we had mornings out of samsung, the lackluster offering from them,
playing on the tech sector for some. more around ad sales but another part of the tech story, adding to the global picture around technology. standard chartered, up 4%. let's get to the other side of the stoxx 600 and look at what has been weighing on the market this morning. micro focus is the biggest fallers on the london markets, down 15%. this is a home for all the technology software. danske bank down 6.9%. they had numbers out earlier. we've got ex dividend in the mix amongst these and interesting to see glencore down 3%. the mining sector showing week is as a result of the chai and that's china pmi data, weaker than expected. let's get a first word update with olivia hows. olivia: alphabet shares are
falling, sparking concerns advertisers are shifting from google to other rivals. revenue from advertising rose 15%, the slowest pace since 2015. this is stark contrast to facebook. last year, it reported a 26% jump in ad sales. a bloomberg scoop, boulder abilities going back years. phone companyst identified hidden backdoors as early as 2009 and says the issues were resolved the bloomberg has learned equipment was present in the u k, germany, spain, and portugal. ofwork is joining a wave tech startups moving to the u.s. market. the company confidential filed sec.n ipo the it has been valued at $47 billion. japan's emperor is stepping down, the first abdication of the throne in two centuries.
this is due to health concerns after he helped modernize the monarchy. willrow, the crown prince assume the throne. 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. thank you very much, olivia hows in london. president trump is suing to stop deutsche bank from revealing his financial records to democratic lawmakers. it is another twist for germany's biggest lender which saw talks with commerzbank fail through last week. david solomon spoke to bloomberg about deutsche's next steps. to seeill be interesting how the leadership there figures out how to lever the core strength of the institute -- institution and how they balance
the businesses where they are not as well positioned on a global basis. steve schwarzman highlighted germany's need for a banking champion. steve: deutsche bank has been in the spotlight for the last few years in terms of performance and it is tough to manage a bank when everyone is looking at it. everybody is raising questions. germany needs a national champion. aery european countries needs significant credit extender, they believe. comes amid a host of earnings from european banks, including santander, danske bank, and standard chartered. joining us, dani burger has been pouring over the details of the earnings season. let's start with standard chartered. they announced a $1 billion buybacks earlier than
anticipated. it is none saying we are on the right course. the ceo has been under pressure to right the ship since he took over in 2015. shares have fallen 30% and they have had to deal with loan losses, regulatory penalties, they are saying we have solved the iranian sanctions violation and they are getting closer to the 10% return on equity. just under 10 for the most recent quarter. shares rallied 4% but it seems the market is agreeing bill winters is on the path he laid out for standard chartered. matt: how are european banks dealing with the difficult growth environment? punishingly low interest rates, the lending market's squeezed. it seems banks need to find some other avenue to stay profitable. for standard chartered, it is about efficiency, which is allowing buybacks.
for spanish banks, it is about diversifying away from europe. mexico was the one bright spot in an otherwise grams earnings -- green earnings. santander, we heard from them. latin america was a boon for earnings and it was highlighted today. environment in europe in general is challenging, despite which, we continued to grow revenues and improved credit quality, and were able to cut costs. undoubtedly, the market conditions in europe and specifically in spain are clearly weaker than in latin america. dani: that is what allowed capital levels for santander to surprise to the upside. anna: danske bank, cutting their outlook. how much is that down to the money-laundering scandal? implications are still rumbling on. with they are also dealing
low rates environment but the scandal was present in the earnings. ity are having issues when comes to investor sentiment and their funding costs are higher. this will take a hit to earnings for the foreseeable future. matt: thanks very much, dani burger the look at bank performance. coming up, we speak to the cfo of standard chartered. that is at 10:00 a.m. london time. this is bloomberg. ♪
anna: back to the european open. 20 minutes into your trading day, this is what european equity markets look like. ftse 100, fairly flat. other major markets leaning to the downside. annmarie hordern has her individual stocks tories. -- stock stories. >> ams is up nearly 20%. second-quarter revenue forecast beat estimates in a big way. dsp to the upside, a danish company. logistics and transportation. they reported an opera riding -- operating profit that beat estimates. to the downside, serious
minerals,- sirius down 17%. they are building a mine in northern issue. this is a rights issue. the company is selling new shares. china's factory growth slowed this month and we have seen the effects on today's european equity markets. manufacturing pmi came in at 50.1, below the estimate of 60.5. that ups the stakes for chinese and u.s. negotiators as trade talks resume in beijing today. joining us is the chief asia economist at pantheon macro economics. thanks for joining us. let me ask you about the trade conversation at the moment. in the short-term, signs seem to be good but i notice you talk about long-term problems resurfacing. explain that to us. why the mixed message on trade?
>> absolutely. our position since the g20 meeting, since november last year, has been there is enough common ground and both sides come at this from a position of weakness. they will try to iron out differences in the short-term and certainly since then, the signs have been good that the sticking points that have arisen seem to have one by one be overcome to. forced technology transfers, forced -- the mechanism with the u.s. indicating they would have a way of a two-way enforcement mechanism and the renminbi's ability issue still outstanding, but there probably is enough common ground in the definition of renminbi stability for them to hash out some definition that could fit the bill, particularly we expect them,
to improve transparency and overall to recognize it is a contextual definition of renminbi stability. if there is the market pressure there, the chinese stepping in and trying to keep things stable but also bowing to the market pressure to an extent. overtly trying to depreciate the currency and i think that will be enough for a trade deal to come through. there is a key man risk element to this on the u.s. side if robert lighthizer falls afoul of mr. trump were on the chinese side is praised too much by the u.s. side, that could undermine his position at home as a reformer, and the allegations of u.s. influence on his part but overall, it seems in the there should be a deal that is reachable in the imminent future but as we said,
the longer-term problem is that china's economic structure will and that will continue to be reliant on external demand. matt: does the slowing growth evident in the pmi figures push them along, encourage them to make a deal? do they have that impetus, do you think, because of their situation economically? i think markets got a little carried away with the march data in general, which was led by the pmi, the big boost in march and then some of the activity data came through and seemed to confirm that, though there was a lot of distortion going on in the data in the first quarter of the year and it had to be taken with a large pinch of salt. the april pmi is telling us to be a little calm. yes, there are green chutes.
the trade story is less bad, though not registering above 50 on the sub indices but that is a critical point that needed to be utes for china ch but not a sustainable recovery evident in the real economy just yet. that does factor into authorities wanting to make sure tariffs aren't raised and that they are reduced so they can feed into that recovery which we do expect to come through in the second half. matt: thanks very much for joining us. freya beamish, chief asia economist at pantheon macro to us out ofming newcastle. blackstone's ceo says the world's biggest alternative asset manager is raising a separate fund for growth investing this year and the high price of deals right now means extra caution is necessary for investing. steve schwarzman spoke with
jason kelly at the milken conference in los angeles. biggest think the concern are high prices and that is a valid issue. >> higher prices you will have to pay for deals? >> well, everyone is paying as a result of markets going up. that is a concern. on the other hand, the alternative class, private equity, real estate, and credit, has done so well for these investors over very long periods of time that they continue to increase their allocations and that is certainly good news for us, but it is a time where you need a little more caution for investing then when prices are lower. jason: as you look across the suite of products you are
offering, is there one that seems to be drawing a disproportionate or little more attention from the big institutions right now? i'm asking you to choose among your children, i know. steve: that is a tough one. we love all of our children. the bottom line, is we've had huge demand. partly because we've done so well for investors in every one of the classes and the investors themselves have more money, if you will, when markets go up. the size of their funds are they are biasing things to experienced managers in a higher price environment to protect capital and do the right thing but also to ride the cycle and be able to put money in at the right time. jason: can you think about the
appetite for funds selling out, you talk about getting to a trillion dollars in a few years in asset management -- you are more than halfway there. how much do you worry about getting too big? there is too much money you have to put to work? steve: you always worry about things like that and the nice thing is you can do something about that. it is mandated. you don't want money you can't invest well. our business has gone from no assets to the largest in the $512 in our asset class at billion because we are careful, because we are prudent, because we understand we are playing a long game and if we do poorly, the only people who remember that is everyone who gave us money. so we only want them to have a good ride and it is up to us not to have too much money in any strategy.
what we tend to do, jason, is expand not by making one fund gargantuan. we do it by inventing other strategies or going into areas we haven't. where we think the investments are good. we are looking at growth buyouts, now growth investing, in equity. we think that will be very good. jason: feel raise a separate fund for that? steve: we are also expanding in life sciences -- live sciences. we think that is an interesting area, very technically intensive group we purchased in paris that does third stage trials. and actually does the trials for large pharma. ceo: that was blackstone's steve schwarzman speaking with jason kelly at the milken conference in l.a. news from turkey, in the process
of being announced and handed over to the markets. life go is the function on your bloomberg. banksrkish central keeping its year-end inflation estimate at 14.6 percent. we have seen weakening in the turkish currency this morning. dollar has climbed against the turkish lira and april has been a tough month for the turkish lira, down 6.7%. it is the worst-performing emerging market currency in the month of april and it is its longest losing streak since early 2014. the lira could depreciate 15% in 12 months. up next is battle of the charts. bloomberg terminal users can interact with the winning and losing charts using gtv . you can also browse other charge featured in -- charts featured in the show. battle of the charges next.
annmarie hordern is in the studio and goes head-to-head against maria tadeo. >> looking at oil positioning, the oil bears are hiding. the bulls are out and investors are most long in six-month and blue is the brandt snedeker long positions. hedge funds are betting as many as 14 times more that oil will rise, wti, as opposed to falling. we see a lot of suppliers coming into markets around the world and investors are worried, betting prices will go higher. something to look at as sanctions return for iran thursday. anna: i was reading morgan complacenthow markets are on oil prices. is earnings season and i am looking at tech, particularly global. accurate -- google. advertising revenue jumped 15% but that was the slowest pace in
many years. q have to go back to 2015. google didn't say what was driving this weakness. they said it had to do with currency fluctuations and product rollout, but that was it. when you look at them compared to facebook, which they did manage to beat estimates. facebook did better than google and the question is whether this is more of a company specific story rather than the sector. anna: maria, thank you. i will go with maria because i think we need to talk more this program about what is going on in tech. we have the advertising numbers from alphabet which look to contrast facebook. that is important to get in the program. i liked the oil reference, as well. gtv is the function to use to get those charts in your own research. matt: and i want to mention we are giving you the eu data like spain gdp growing faster than anticipated.