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tv   Bloomberg Markets European Close  Bloomberg  February 22, 2016 11:00am-12:01pm EST

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♪ >> we are going to take you from london to new york to barcelona in the next hour. a quarterly loss of 858 million u.s. dollars. working toget by oil andh a hit gas companies. a split over leaving the euro. half an hour from the close of trade in europe, tell us about today's market action. mark: rally on.
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2% gain for the euro stocks. rising for the fifth day in seven. the ftse 100 rising despite what is going on in the currency markets. performer year to date, that is worth remembering. rebounding, j.p. morgan chase saying an exit would be quite negative for the market. it does not expect u.k. to leave. the bank just turned overweight. valuations,ctive lower commodity exposure. this is the story of the day. mayor,ohnson, the london moved to the markets today. he will be supporting the leave campaign, and the pound falling against all 31 of its major peers. of the more substantial moves today, falling as much as 2.4% against the dollar.
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the biggest move since 2009. heading for its lowest close since 2009 as well. is 5%as down as much earlier. it is down in your 1% today. europe's biggest bank has reported a fourth-quarter loss that was unexpected. gasnue drops, loans oil and companies, and impairment charges. >> the economic highlight of the day was the eurozone data. what was the take away? mark: the eurozone is showing signs of strain from the global slowdown. pmi manufacturing, pmi services both,the composite of deflationary forces intensified. we are putting more pressure on policymakers to add stimulus. this is the economic surprise index.
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our very own at bloomberg. any figure below 100 shows that economies forecast a missing estimates on average. -- we can see, you can have been below 100, with the trend as a downward one. it is all happening in the lead .p to the big ecb meeting >> fascinating. let's go to the market desk with the julie hyman. julie: rally on. that is what we're seeing here in the united states as well. following the rally we are seeing in europe, following on the heels as well in oil prices. all three averages down off the high, up 1% across the board. it is the commodities producers that are leading the gains today. materials and number one, of 2%. rallying with metals and energy
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stocks, along with oil prices. as we have seen during recent rallies, once again in terms of the biggest contributors point wise, we have seen a lot of the individual tech stocks rebound. is a mixed bag between energy and banks. that is the other group that we have seen coming back recently. wells fargo and bank of america, and then chevron on the list. to what we have seen on the other updates. >> fascinating, we are now in positive territory for the month of february. julie: we are at least flirting with it. it is barely positive for the month. the nasdaq is the exception to this. has lagged.
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though banks, even and tech have been bouncing back on the recent rally days, they are still lower for the month today, along with consumer discretionary and health care. what is higher on the month? andth care, energy, materials. it looks like these will be stocks to watch. .he month is not over if we fall in february, it will be bit second straight monthly decline for the major averages . >> thank you. let's check in on our bloomberg first words news. we have more from our news desk. >> the u.s. and russia have agreed on a plan for a limited five year-longhe civil war. the trees will start on
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saturday. two suicide promptings -- bombings underscore the problem. islamic state claimed responsibility for both. british prime minister david cameron warns that there will not be a second chance on staying in the european union. a referendum has been set for june 23. cameron made his pitch to stay in the eu in front of parliament. >> the government's position will be to recommend that britain remains in a reformed european union. mr. speaker, this is a vital decision for the future of our country. i believe we should also be clear that it is a final decision. >> cameron is going up against the popular mayor of london, boris johnson. he has come out against the seating in the eu and is still answering questions at the house of commons. we will bring you the latest headlines. accused of
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killing 16 people in michigan will be in court today. they call the killings random. getpple wants congress to involved in the dispute over unlocking a dead terrorist iphone. apple is resisting a court order to help the ip with the phone, with the company saying today that the government should withdraw the court order and the congress should form a commission to discuss privacy and personal freedom. they say that helping the fbi would create a dangerous precedent. global news 24 hour days prompted by our 2400 journalists and more than 150 news bureaus around the world. mark: thank you. european close. we will take you straight to barcelona, and hear from the deputy chief executive from one of the world's largest telecommunications companies. ♪
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mark: live from london and new york, this is the european close. time for the bloomberg business flash. the biggest stories in business news right now. jets are getting the royal treatment. the royal saudi family has in operations overseas. changing the terms of its rewards program. starting in april the rewards program will deliver points
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based on the amount of dollars spent. forcedgen may be to clean up the air its cars polluted. one proposal forces them to clean up five times the amount of pollution produced by the dirty engines. ink: caroline hyde is barcelona today at the mobile world congress. theis standing by with deputy chief executive of orange, one of the world's leading telecommunications companies. caroline? >> thank you. say,e, however you want to you are an international company. give us a sense of the backdrop to this year's mobile congress. many concerns about the global
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slowdown. how is that playing into your industry? >> when i look at the -- good afternoon, i am very pleased to be here. i think first, when i look at the operators, we see some slowdown in the onset, but not in the usage. usage of the device is growing in the europe and u.s. markets. people, the transfer of data, video, gaming, work, digitization of many services, we see that growing. reasons, a slight slowdown in onset sales. things in the onset for people to change quickly. , it is different in
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terms of timeframe. they are different than they were last year. the will be different next year. >> we are now seeing much of the smartphone being unveiled by samsung. all this is building on your of you that we are seeing more data consumption. within that, you're having to provide the connectivity. m&a going to go for that with plowing money in? >> what you call in market or in country consolidation. three and a to have strong network. this is what you serve, and they
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are full operators. in france,ing to do and it's has happened in germany, and austria, what is happened in the netherlands. we wait for the institution of the eu on u.k. and italy. carefullylooked very ust.rneath the anti-tr 45% today, itt will be about 17% by the end of 2016. we need to continue to make investments in the space in terms of capacity. >> how is the process going at the moment? you are looking at telecom in france. how's the structure of the deal managing for an applicant?
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>> we knew that it would be a long process. has no consensus. our orange is too big to buy by itself. go to the may have to other players on the market. there is always more details to finalize. we have made some commitments, we want to create value for our lunch. we want a deal that is socially acceptable at the moment. --want >> is there a date?
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>> we have said that we should set it in the next few weeks, air,se with a deal in the it is not good for anybody in the industry to have it there forever. within a few weeks we should be saying exactly what we said last week when we announced. >> what about fourth quarter m&a? >> i assume it is a very good idea, but to push the american politicians, when you see this fragmentation of the european carrier, the european can - - - industry, we still think that the framework is not completely there. if i take orange, we will
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achieve a lot by merging with the purchasing department of someone may else. the is a big part of synergies. >> what is the sector ready for in terms of innovation? it is the area, is this the five? -- fight. >> most of this, including bp in a productivityis for everybody. if you want to solve the capacity issue you are mentioning in the medium-term, we need to have less connectivity at home, and you or wat.o that
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about three years ago, and the big-name, we will not mention it. this is clearly the productivity and age of investment. we have customers that are gun shy. when i look at the fixed line market, and i look at what we can offer to them, we can offer new services. not always, but you want new things at home. do not use your phone to
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your mobile operations? >> are you getting your own act on the apple ios? >> no. has you able to do contact list payments. contact is when you take the metro or a bus to the payment business. is not despairing. we think that apple will finally accept it. noncontact,and the on customer credit, making deposits.
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my look at the competition today, bankers are incumbent. we are the managers. >> thank you. it is so wonderful having you on. >> thank you. at the mobile world congress in barcelona. still ahead, shares in the red after the largest bank posted its first quarterly loss in five years. that is after this. ♪
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>> live from new york city and from london you're watching the european close. it is for 22 p.m., shares
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of hs ec are down today. it posted its first quarterly loss in more than five years. it reported a pretax loss of almost $900 billion. why do we have this unexpected loss? >> hsbc is suffering along with the asian economies, and those commodities crash as well. it really has shown a lot if load increasing. it is under risk control. not able to expand as aggressively as it had planned. theyi spoke to the ceos i plan ining a china by two years. they're not putting assets in the country as quickly as they had land.
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we are seeing ambitions being checked by the macro environment. they will have to go with plan b. had: we have already twoures announced in june cut 25,000 jobs. is plan b more cuts? >> is my being. -- it might be. the program might not be enough in the current environment. quite curiously, the only institution to report an increase with the investment bank. they are propping up the consumer as you know, most of the european status quo is simply not the case. >> is there a chance that this is one case when we investors should give the run more time? this is actually his first quarterly loss since he took over in 2011. we should not give him too hard
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a time. fishers did recover from being down 5% earlier in the day. investors got more colorful with what they put out. it is not necessarily time to sound the alarm. they are not throwing it into reverse. >> thank you so much. we appreciate it. couple of minutes away from the european close. look at the numbers we're watching for you. the stock indices, games all around. -- gains all around. rising for the fifth day in seven. how about those big u.k. assets? backing the lee's campaign. he was the u.k. to leave the european union. david cameron, the prime minister, speaking in the house
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of commons right now. he is trying to persuade his fellow mps to take his lead and support him, support the uk's membership of the european union. the big story took place in the currency market today. --ill show you a chart with which highlights volatility. volatility has been rising ahead of this debate. this is sterling, euro volatility. expectations for movement in the exchange rate in the next six months. rising to the highest level since 2011. we are only four months away from the referendum on june the 23rd. european markets close in a matter of minutes. stay with us. ♪
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when you're on hold, your business is on hold. that's why comcast business doesn't leave you there. when you call, a small business expert will answer you in about 30 seconds. no annoying hold music. just a real person, real fast. whenever you need them. so your business can get back to business. sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. >> you are watching the european close, live from london and new york. stocks finishing up the day in
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european trading, let's take you through all the market action today. it is the fifth day of gains for the stock 600. led bycross europe, minors, oil companies. miners have been instrumental in the rebound of european stocks since february 11, when they fell to their lowest level in two half years. hase then the stock 600 rebounded by 9%. yes, we have got a plunge in sterling. footsie is rising -- ftse is rising due to the sales abroad. that's the big story of the day. but the boris of the banks, the mayor of london, a big popular politician here saying he will be voting for the -- for the leaving of the eu. this is one of the more substantial moves in sterling today. there were many, falling as much
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as 2.4% against the dollar. the biggest decline since 2009, falling to its lowest level since 2009. this is a 2090 2016 chart. hsbc, it is 1% lower today. anope's biggest bank posted unexpected fourth-quarter loss. the first loss since april of 2009. driving a jump in impairment should -- impairment charges. but you know what? it's all about doris. much, mark.k you so another story happening in britain is the home retail stories. home depot stories are out this week, but home retail is the subject of a bidding war right now in britain. and it owns our ghosts. i didn't know that, mark. -- argos. i didn't know that, mark. mark: that's right.
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a bit of a bidding war is going on. steinhoff international holdings , based in johannesburg, they own been sincere in the u.k.. late on friday they said that they would bid 175 pence per cash in share -- you know what i'm saying -- for this company. has already freeze agreed to the cash and share offer worth 167 pence. coming against tomorrow's deadline, a good time from steinhoff. analysts say that they will be coming back. retailers,for home shares up by 13%. happening right now in london, david cameron and secure -- answering questions from the house of commons. these are live pictures you are watching. >> the government's position will be that britain remains in
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a reformed european union. mr. speaker, mr. speaker, this is a vital decision for this -- for the future of our country. i believe that we should be clear that it is a final decision. senate -- his stance is something of a setback. let's bring in ron wood, who closely follows this as the chief u.k. economist at the bank of america, merrill lynch. for thank you so much joining us. does it really matter how many people move over to the boris johnson side and here johnson going forward? is obviously one of the most recognizable politicians and the u.k.. his decision to support has had a large effect on the pound here. what matters of course is what politicians recommend but also how the campaigns go over the people movings,
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over to his side of the fence. remember, the prime minister is recommending that the u.k. remain as a part of the eu. boris is obviously dominating the news. the dealhe details of that have been hashed out are fairly arcane. it meant that he could go back to say that he got a deal done. the fact that these changes might happen in the european union, will that make any difference? changesk, some of these were worth having. will it fundamentally change the way that the u.k. and eu relationship works? and think a lot of people have question that. so, yes, there are changes there. i think now the campaign really goes to the much bigger question better off u.k. is remaining in the eu, taking advantage of the single market and trading opportunities with product enhancement opportunities provided, or is it best provided otherwise?
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my view is that we are better off remaining in the single market. i think that's a valuable benefit of eu membership and i think it is unlikely we would be able to replicate the benefits were we able to leave, but obviously others would disagree with that. mark: we have a chart showing the risks of the brexit. risk premium exaggerated? the odds if you look at paddy power? the same states before the scottish referendum are at 25%. greater at this juncture of proceeding. is it exaggerated? will find out, but that is the only reasonable response. what we know this time is that the polls are a lot closer than and there are high-profile politicians supporting the outcome here. that does seem to us to be a .ery serious risk of brexit
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something we have been arguing for many months now that investors really need to take notice of. i think that the events over the weekend, because of boris johnson, were not really focusing attention on this, but they are now having a referendum and the issue becomes more tradable than it was. mark: what about the flipside? many people saying that a brexit would affect mainland europe. have you started to think about those permutations? we have, indeed. i think the u.k. would be the worst affected by a decision to exit. these are be the decisions likely to change the most. indeed, exchanging those relationships with the eu would pull it out of their hands. from an eu perspective, the exit potentially sets a precedent of a country leaving.
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that would beell a president that other countries might want to follow. from many perspectives that's the real danger, but it leads to further questions about the integration. potential for a scottish referendum as well. it matters a lot for the catalonia regime. it is almost a similar situation where you have part of the country currently in the eu that may potentially be voting to split. vonnie: i want to refer to an op-ed in the telegraph the johnson wrote. are to be exaggerated but not dismissed entirely. given that he wants to be the next conservative leader before 2020, when cameron is supposed to set down before then, will he have to change his mind? he needs the city of london, right? again we will see a future vote from the u.k. public. city ofingle -- from a
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london perspective, being part of the market is important. the ability to sell and locate across the eu, in london, frankfurt or elsewhere, that's really important for the u.k. financial sector and i don't think the back and be dismissed. nother it is exaggerated or depends on who is speaking about it. but they are material risks. i mark: does it make a difference to the thinking of the boe, this upcoming referendum? factors into the decision in the sense that over the next four or five months they will know the absurdity, so it makes it less likely to change rates. i think that the fall in sterling becomes an increasing issue, because the longer it goes on and the further it goes the more it pushes up inflation and potentially that medium-term inflation. remember, we had a report from may where they would had to take
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into account these levels. mark: rob, thank you for joining us. yes, european markets are done for the day, u.s. markets are still open. up, the dow is up over 200 points and is on track for its biggest winning week so far this year, though it is just monday. let's have a look at them and nasdaq. legal has more from midtown, manhattan. abigail: we're looking at a rally here as well. taking a look at the worst percentage holder, whole foods market's. this after two food retail analysts wrote in a note that a potential height to the minimum wage could be a real negative for a nonunion store like whole foods. investors have been looking for a turnaround in this company for some time now. this could be a real difficulty if the company, whole foods, is forced to burst prices for a
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wage hike. let's get a check in our first world news right now. u.s. and russia have agreed to a cease-fire is the syrian civil war. the truce begins on saturday. it does not include attacks on the islamic front and terror groups linked to al qaeda. announcement is expected after vladimir and president obama speak on the phone. greece is expecting a growing number of refugees after restricted border access over the weekend, sparking border -- protests by afghan nationals. cap on transit and asylum applications. global weapons increasing 14% over the last five years, the u.s. is still in the top position. next biggeste
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exporters, russia and china, also increased. it is just what the organizers of mobile world congress don't a transportation strike. subway employees -- subway andoyees striking today wednesday. local news, 24 hours per day. journalists, 150 youth bureaus from around the world. -- news bureaus from around the world. mark: there is only one chart that matters today. sterling and the boris affect. don't miss it. ♪
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vonnie: it is time now for our global battle of the charts.
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here we take a look at the most telling charts of the day. investors can access these charts on the bloomberg by running the bloomberg function on the bottom of your screen. mark is kicking things off for us in london. this massive day when sterling has fallen against all 31 of its major peers, down to a 2009 lower -- low against the dollar. i want to put it back into perspective. this is the referendum in scotland of 2014. the dollar was rising. the pound was falling ahead of the referendum. the euro really didn't move around the time of the referendum. as bloomberg intelligence has said, it was falling because of fears over the euro. not because of the referendum. we know that because once it was over we didn't get a rebound. this was the election last year. the pound euro didn't really move, but volatility did move
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back in 2014, in september, when we had the scottish referendum. its highest level since 2011. euro pounds, six month volatility, not rising as much. in the election we had a similar move. one month pound, dollar volatility. ist has been happening today astonishing, six-month euro pound volatility at the highest level since 2011. all we can expect is more volatility, with another 122 days to go. can i cope? i love that i can see the london eye in that volatility chart. i think you did that on purpose. joe: it's a rallying, there has been a nice comeback in u.s. of the but globally some most beaten-down areas of the world are seeing monster surges. a one-month chart here that had been exposed to the global market turmoil, glencore, a big
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commodities trading house, up like 8% from its low. iron ore, closely associated with china. it has been surging. the middle ofn all the volatility in the middle east. oil has been surging. wrote -- around the world these assets have been doing well, but question is -- is it in cap rounds? i don't know, these are some powerful moves and it looks like fears of the worst happening. oil, china, commodities, clearly starting to receipt. vonnie: i love it. how did you come up with that? joe: we should have that function, rotated assets. iron ores more about crossing 50, dubai stocks back in a bull market. these are the things that people really dislike and suddenly seeing major turnaround. was there a judgment a
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little bit on your charts? i do think it was of it testing effort. joe: appreciate that i get credit for the effort. mark: i think that marked wins, though, i love that london eye in the volatility chart. big praise from the crowd in the audience, mark. thank you so much. we are headed to london fashion week for the big burberry show. christopher bailey on his company's move straight from the runway. stay with us. ♪
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mark: all eyes are on burberry. it's london fashion week. big changes this fall. everything seen on the catwalk will be available to buy immediately. the grantup with chief executive and creative officer, christopher bailey, backstage. have a look.
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>> i love change. this has been an evolution for us. was, and fromk it that day we started to invite people to order immediately from the runway. that was built until we got to wereain positions and thinking about the shows in a different way. created format was really for the industry. for the media, for first wires. i find it confusing, today, if you have that audience, people instagram in, tweeting, all of these social platforms. the way that we have got it for so many years. it felt very natural to me. not a huge, huge change.
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>> are you surprised at the speed that we buy things or this bead with which things change on social media -- or the speed with which things change on's social media -- on social media? >> we will have as much time to create an craft those collections as we have always had. it's just that we are just moving things a different way to, instead of this one, to the show just being for the buyers, we would invite first-time ,uyers to an earlier preview which is what this used to be. it's actually really going back to how it used to be. >> the consumer hasn't really changed? >> the consumer is changing, but just because we have been given these things that enable so much power, creativity, and opportunity. i find it an exciting way of talking to people, to do that thing of storytelling through
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it, motioning through it. you get the atmosphere of a place and it means that something that's happening in, you know, this little place called london or kensington gardens, that suddenly somebody in india, china, tokyo, or los angeles, they can all feel that they are a part of it. is the main challenge, given the changes it's going to go through? >> i have always tried to look at the collections as not about autumn, neutral, spring, summer. again, i've always found it confusing. it might be cold and drizzly outside today in london, but it's boiling hot in another part of the world, you know? confusing thatt we are global business -- we talked to a global audience, all
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of these platforms are very global, yet we are telling you that it's autumn winter now. i think it's about being relevant to people. a bit of common sense. it's certainly not some kind of huge creative thought process. it's what makes sense. if i'm showing it to somebody and is boiling hot i want to show them some but thing that makes them inspired and feels relevant. andrea, just back from today's big fashion show, where she was on the, wait for it, the frow, the front row. wait for it. how was it? it was a tiered front row and it was amazing. i was on the top-tier. mark: burberry says that seasonality is done. does the rest of the industry respond similarly? andrea: they are really mixed so
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far. tom ford is showing in september with clothes available france while of caring says that they weren't going to go that way for gucci, so it is an interesting sort of most in theing traditional phone -- format. i love it when he held up the mobile, they have adapted well to that. andrea: they have. they are very active on instagram and twitter. but what they are really lacking is getting those young, digital customers to buy in, they are doing that with beauty and i think that this is a way of trying to engage those new, young customers. on friday they said they were seeing younger customers in the for the newg in
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collection, which is very good news. it's one approach that really fascinating to see how it plays out. rebecca is one says that the consumer is saturated with images. we were also speaking with vanessa friedman, who said that maybe it's not necessarily good that you can buy what you see on the runway instantly. theea: this is exactly argument from fuji. it damages the a luer of fashion. you see something on the catwalk, you have to wait for it to come into the store. you are desperate teacher named to the top of the list and really it just takes away that a luer and that magic of fashion. andrea, thanks a lot. you can read more about luxury here for your destination of the finer things in life.
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had to and i've pursuits on the bloomberg. u.s. u.s. -- vonnie: president barack obama speaking of the national governors association meeting at the white house. another reminder, you can watch this event on the bloomberg with the function live go. mark: let's have a quick peek at what happened at the end of the european equity session. it was a fifth day of gains for the benchmarks. we had a rebound of 9% in the last seven european trading sessions. have a look at the u.k. asset board. this was the board that mattered today. boris johnson, the london mayor, lead the --u.k. to leave the european union. sterling plunging against its major peers. ♪
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>> it is noon in new york, 1 p.m. in hong kong -- 1 a.m. in hong kong. welcome live to "bloomberg markets." ♪
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>> good afternoon, i'm scarlet fu. alix: and i'm alix steel. here's what we're watching at this hour. scarlet: before fueling the advance, prices have increased 7%. alix steel: hsbc may be relocating hundreds of investigators to paris, but the bank has a slew of other problems on its plate. scarlet: a hedge fund manager publicly by -- backing john kasich in his bid for the white house. who else is big money lining up behind? first we want to head open to the -- head over to the market desk, where julie hyman has been keeping track of things. julie: much like last week, the movement is still on relatively low volume below the 20 day average. a rally nonetheless

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