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tv   Bloomberg Markets Americas  Bloomberg  June 13, 2019 1:30pm-2:01pm EDT

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comments came following words of the two oil tankers that were damaged and suspected attacks. the video you are seeing comes from iranian tv. morning'sncern, this security incident. i strongly condemn any attack against civilian vessels. checks must be established and responsibilities gratified. today including an assault on a japanese operated vessel or the second in the months that hit the strait of oman's through which about 40% of the worlds seaborne oil travels. the incident is being treated as a quote, "hostile attack." house speaker nancy pelosi says
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president trump's quote, andifferent" about the law, she said quote, "everybody in the country should be totally appalled" about the president's remarks to abc news that he would take information from an opponent about a foreign power. >> yesterday, the president gave us once again evidence that he does not know right from wrong. it is a very sad thing. very sad that he does not know right from wrong. i believe that he has been involved in a criminal cover-up, i have said that before, and our investigation is demonstrating that. the mueller report shows obstruction of justice in at least 10 perhaps 11 places. leaderenate minority chuck schumer also weighed in calling the president's comments "disgraceful." the u.s. is urging chinese-americans from top cancer research positions. the fbi and the national
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institutes of health are targeting ethnic chinese scientists, some of which are american citizens. all of this stems from an administration drive. bloomberg businessweek looked at the case of a scientist who andersonm the md cancer center in texas. a second person infected with the ebola virus has died in uganda after health officials say a family exposed to the disease crossed the border from congo. the world health organization committee will meet tomorrow to discuss whether to declare a global health emergency. declarations almost always boost attention and donor funding. more than 1400 people have died in this outbreak declared in august. global news, 24 hours a day on air and @tiktoc on twitter powered by more than 2,700 journalists and analysts in over 120 countries. i am mark crumpton, this is bloomberg. ♪
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>> live from bloomberg world headquarters in new york, i am shery ahn. >> live in toronto, i am amanda lang. ourre joined by bloomberg audiences and here are the top stories we are following. two attacks on oil tankers orlu, youstrait of are looking at images from iranian tv and that sending oil prices higher by more than 4.5%. their are trading at lowest levels relative to u.s. stocks in crude and half a century. and on the lookout for academics espionage. a crackdown on chinese scientists accused of sharing confidential information
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overseas. we will have all of that, the first a quick check on the markets here and we do have markets remaining, it appears, somewhat focused on what the fed nowt do and some analysts reporting that these markets -- it isce in energy on the move, but communications is one group that is higher for the s&p and dow. disney is gaining. we are seeing of course reaction for treasuries as well, and we are still seeing safe haven buying going on a little bit and i will continue to watch that. shery: especially in gold. given the macroeconomic environment, we have seen gold really close to the 1350 -- $ .3/50 -- dollar level
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one investor coming out saying that gold is his favorite pickford the next several months. -- is his favorite pick for the next several months. this would be a part of his playbook for rate cuts 101. and potentially, later on sure on the dollar. amanda: yeah. all of this playing out as we watch commodities. we will do a deeper dive into this later in the show, but commodities trading at record lows, but take a look at oil on the day. this has been very development specific today, and it is the attacks on tankers. we expect to get more information on those two attacks, but you can see the reaction in the price of oil. we have seen a little bit of movement and volatility around oil based on things like the supply scenario, but really, economic outlook seems to be the name of the game driving the price. that has kept them muted.
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shery: yes, especially given that we have seen a few events. these are not the first attacks, we saw them earlier in the month as well. it could be the issue, but the wider area in the region really making investors anxious. for more on crude oil and the latest developments on the tanker attack, let's bring in bloomberg's jessica. it seems that concerns over demand, the trade tensions being outweighed by the supply concerns. jessica: yes, we have seen the geopolitical risk premium creep back into the market. the latest information we know is that it happened right at the entrance of the persian gulf. we had the norwegian back to tanker that was shipping crude over to asia, as they experienced an explosion. we also have the other tanker japanese owned carrying ethanol, experience two attacks actually. that is because they live
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concern here especially the fact that those two attacks were three hours apart. it is important to keep in mind that like you pointed out, we recently did have those tanker attacks near the straight of really and that is caring about 30% to 40% of the sea -- the worlds seaborne oil supply. the uss come out and said it was a state actor and will release more information is afternoon. recently inaw this saudi arabia, there are vulnerabilities in the system, but in terms of how it affects supply and the amount of oil shipping for what is the repercussions? jessica: this will definitely affect the shipping market here. insurance rates will likely rise and the actual additional premium that those ship owners pay to sell to the -- sail to the persian gulf also increase. lately, shipowners have been taking a breather even accepting
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charters from the middle east, so i expect to see shipowners pretty skeptical about sailing through the region. amanda: bloomberg's jessica summers, thank you for that. we are watching commodities trading now the lowest relative price for u.s. stocks in half a century. the slump follows losses intent of the last 11 years. bloomberg's dave wilson has the chart on this. it is interesting to see it relative to stocks where the commodities are. every now and again, you get temptation to say, is this it? dave: you could make that argument, but if we really see prices in relative terms that are down now for a couple of years. we are talking about the s&p ofi, so it is one gauge
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commodity prices relative to the s&p 500. made the rounds on the internet, so it really is striking just how far down commodities have come in relative terms. it popped up a bit today, but you barely even see that as a blip on the chart. shery: [laughter] if you look at that chart, you tend to rebound from those levels. is that what we are expecting? a bigger question because you look at oil, one day from recovery is not going to get you very far in terms of a rebound. you look at natural gas, for example, down more than 20% for the year, so there are a lot of moving parts in the index. i should point out that bloomberg lp, the parent company of bloomberg tv -- it has its own set of indexes and depending on which one you look at, we are at a 70 year low or a 60 year low. that history goes even far back than it does for the s&p gsci
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index. commodity prices are definitely down in relative terms. amanda: there are other reasons that commodity prices fall and it has to do with human ingenuity. we get more efficient and they get cheaper for a reason. what causes them to pop back up, is it a dislocation somewhere else in the economy or is it just a straight up shored up supply? dave: right. you look back to 2008, what was going on? crude oil going up to 140 seven dollars a barrel in the u.s. -- $147 a barrel in the u.s. ingenuity is deftly coming to play with the development of shale -- definitely coming to play with the development of shale yields, and argentina. you definitely have that as a part of the mix. we get more fuel-efficient, you do not need as much crude, and you could certainly make the case across gold which you have
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already talked about, agricultural commodities. you just not have th not had the type of recovery to break out of an 11 year weakness. amanda: great info, dave wilson. coming up next, we speak to a chief economist about key challenges to growth and the global business cycle. this is bloomberg. ♪ ♪
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♪ this is bloomberg markets. i am amanda lang. shery: i am shery ahn. global investors grappling with everything from fed policy to trade tensions. where should they hold their focus? to break it all down, joining us now is markus schomer.
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it is great to have you with us. let's start with what is next. the fed's meeting next weekend we have seen the inflation numbers, really not looking too strong. even the recent numbers, how challenging will it be for mr. powell to try to explain this to transitory factors? markus: i think the fed is facing right now i communication challenge to switch from their tightening bias over two and easing bias. -- over to an easing bias. the fed is not very quick at making the changes. if you look at past inflection points, it takes a little while to communicate that internally, change some of the forecasts, and start communicating it to the markets and acting on it. it takes a number of meetings to get there. the market is way ahead of itself right now. i just checked the bloomberg numbers again this morning for pricing in 80% chance of a rate hike -- rate cut in july, which
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i think is way too early. i think september is probably the first month where the window opens for a rate cut. i think december is more likely. the fed wants to see an accumulation of evidence that the economy is slowing, and i do not think we are there and -- we are there yet. shery: do we have to pay closer attention that it seems that the efficiency or effectiveness of monetary policy may have been overestimated? this connection to interest rates and inflation does not seem to be happening at the moment. markus: that is true. there are two issues here. we ashe fed itself and central bank watchers are focusing on the wrong inflation measure anyway. the fed likes pce and slaters certain reasons, but there is nothing wrong with cpi with the fixed great basket. i, it averages cp
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2%. i am surprised that the fed is not running victory lap's that inflation has been stable around 2%, eight unemployment under a 50 year low, but they are looking to communications changes, tools changes, and it feels like they are beleaguered by people in my business. people who watch the fed every day trying to push them into certain actions that i do not feel are necessary right now. the fed is doing the right thing game, ande patient'ce it depends how the market reacts when they are not getting what they are really clamoring for. that will be interesting to see next week. >> and terms for your outlook for the u.s. growth, you do not see a catalyst for strong growth on the business side. you do not see a recession either, you see a slowdown. would fed stimulation be one of
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those catalysts or are they pushing on a string at this point? markus: i think we are probably underestimating how powerful one or two rate cuts could be. it is a confidence game. if you look at what is happening in the economy, as we have seen a significant downward move in some of the purchasing indices which measures sentiment in the business sector, everything is stalled out because we are waiting for some kind of directional input, either the end of the trade war, or something else. the rate cut could be that something else. if there is strong evidence that the fed stands behind the economy and will active things look weak, i think businesses will start to invest again. consumer confidence is very high already, the consumer is fine. we will see the economy likely to come up again next year. one or two rate cuts could be sufficient to get as back to a growth trajectory pointing upwards and not downwards. >> one place that has been cause
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for concern has been europe, but you see potential for upside surprise there? amanda: europe is in a slight -- markus: europe is in a slightly more complicated position. there is a trade war that needs to be priced in the european markets. the other part is the fact that the ecb has no ability to provide that kind of confidence boosting easing move that we are looking at here in the u.s. thirdly, politics in europe going in the wrong direction. we think we have problems over here, things over there are a lot worse with populism getting more and more entrenched. italy is an issue. the stand up over italian deficit with the commission is a problem. and it is a very, very busy election cycle coming up over the next three years that could really change the political face of europe completely. by the way, brexit. [laughter] shery: of course, let's not leave that one. can europe really recover
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without china? how is china doing right now? markus: you are right. thatnot think europe can recover without china. we need a global outlook that looks for moderate growth and maybe even growth improvements, you need a stable china. you cannot have a china that is in the midst of a more severe slowdown. the chinese government is not really stimulating as much as many china watchers had hoped for and they certainly are not doing the same thing they did a few years ago, the last time you --t through a period this time, they are stimulating less. the consumer sector, the services sector are bigger, and much stronger. we do not see the kind of slow down and that part of the economy, and that may encourage policymakers to take it easy right now. unfortunately, it has implications for commodity prices. they do not get the same boost
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as they got last time which means that some of the stimulus that helps the rest of the world is also -- amanda: it is shaped to different. r, our thanks. purging why the u.s. is chinese-american scientist from top research positions. this is bloomberg. ♪
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♪ this is bloomberg markets. i am amanda lang. shery: i am shery ahn. it is time now for the bloomberg's business flash. the biggest meat processor in the u.s. once in on the fake meat craze. tyson foods coming out with a burger made with plant-based nuggets. then's ceo says he expects new product will become a billion-dollar brand.
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you youthne of hbc paid 70% lotts was -- 70% lower. alibaba moving closer to what could be hong kong's biggest share sale since 2010. china's largest corporation has filed confidentially for a listing in the city. alibaba could raise as $20 billion. it raised $25 billion in its new york ipl, the world's largest ever. that is your business flash update. >> call it academic espionage. chinese-americans being removed from top research institutes all a part of trump administration's push to counter
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china's theft of intellectual property. we had bloomberg's peter waldman who wrote the story, and it is a fascinating read. it is a big, long look at the ramifications. the headline captures it, there has been this ee so's -- ethos on openness on the fight against cancer. how does it slowdown that progress? summer, the director of the national institutes of health sent a letter to institutions around the country saying that we are very worried that you may have people sending ideas to collaborators in china, basically raising questions about the way that basic science is done in these collaboratives, particularly between u.s. researchers and chinese. the place that really
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kicks at this ball was md at, a huge houston cancer center run by the denver city of texas. they did investigations of five of their researchers, four of them are gone for these in china.ips story of tells the what happened to one of them, a woman who ended up leaving md anderson and is now, back in china. the canceree some of statistics, we know only in the u.s., just in 20, breast cancer ands, more than 200,000, the same thing for lung cancer. do we have any ideas how these disruptions could affect research? research, particularly and the basic sciences and on cancer specifically is globalized. it is like everything else with
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the advent of the internet, people are cooperating, working together, and as one dean of ofearch at baylor college medicine told me, if there is a piece of a puzzle across the border anyway, other researchers are going to want to go after it. 10 million people a year. it has global ramifications. shery: peter waldman, thank you so much. the bloomberg businessweek story if you want to check it out. from new york and toronto, this is bloomberg. ♪
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deviancy down to a new low." ps the president's comments were disgraceful and it's as if the president has learned absolutely nothing from the past two years of investigations. >> the president's comments suggest he believes winning an election is more important than the integrity of the election. that idea is flat out wrong. thatresident's idea winning is everything and the integrity of the election is nothing is one small step away from dictators and autocrats. abc ifhe president told a foreign power for offering dirt on his 2020 opponent, he would have no obligation to call in the fbi. a federal watchdog agency says white house senior advisor kellyanne conway should be fired. the u.s. office of special counsel says conway repeatedly violated the patch

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