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tv   Countdown  Bloomberg  March 2, 2016 1:00am-2:31am EST

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anna: donald trump and hillary win big on super tuesday. we will have the latest. global equity rally gains momentum in asia, as economic data from the u.s. and australia likes risk-taking. anna: china blaming rising debt and falling reserves. manus: and black rock brexit, offering a lot of risk with little reward. ♪
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manus: welcome to countdown. anna: a very warm welcome to the program, just past 6:00 here in london. manus, let us talk about the last 24 hours that was equity markets. rocking, bouncing off a very positive month for equity markets. the nasdaq having the best day in six months, just to put that in context, the year-to-date losses trend down to just 3%. some real equities coming through. manus: that is what we have here. this is the s&p 500, as you say, the loss trimmed back to 3%. volatility trimmed back by 14%. sinceggest one-day drop january. deutsche bank saying get on with it. 11% since the middle of february. the u.k. market has rallied 11%.
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as in the rallied 8% since the middle of february. it is a real shift, having passed through the needle. , there counting the msci asian market lagging. you have that downgraded by moody's on that view of china. the yuan is stabilizing. the manufacturing data really caught the zeitgeist. anna: anything positive around that, to put it in context with that comment from the bank calling from a rate hike from the u.s. in march. still only a 22% chance. a nice line, manus. let us check in on some of the ofk assets, get a gauge where people are putting their money in the overnight session into australia. 0.72 on the aussie dollar, on the back of that gdp number, the dollar rising for a third day. gdp at 0.6%, better than the estimate. and the q3 number, also up.
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that helps. man is going up to 1.1%. the reserve bank of australia on pause. but dollar-yen, let's be fair. we dropped to 1.2% yesterday. the reason why i put euros sterling on there, there is a new feature on the risk radar. sign.s the sterling has rallied for five days against the euro. +++
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of last year. the question is, have we priced in or are we taking a breather on the brexit risk? there is more to come with blackrock. anna: we will revisit that story. on the pound against the dollar. let us get the bloomberg first world news. nejra: donald trump has a firmer grip on the nomination, taking seven states as part of a commanding super tuesday showing. ted cruz won his home state of texas, as well as oklahoma. meanwhile, hillary clinton liver a decisive performance, defeating bernie sanders to give her and all the insurmountable lead. moody's has cut china to negative from stable, because of rising government debt and declining reserves. the state debt increases to 43% of gdp by next year, they are affirming the long-term rating, wouldeijing's policies slow the reform of state-owned identities. loretta lynch has challenged apples refusal. interview with bloomberg, she said the company has been doing similar things for years. seen how wee have do in fact balance privacy and security every day. in fact, until recently, apple was able to comply with our request. they have the toughest security out there. and we have not seen that parade, in those cases either.
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nejra: earlier, lawmakers in washington heard arguments from both sides on the phone encryption issues, that pitted the tech against the government. >> there were no demons in this debate. the company is not evil. the government is not evil. you have a lot of people who see the world to lenses, who care about things. all the same thing, in my view. companies care about public safety, the fbi cares about innovation and privacy. we devote our lives to stop people from stealing our innovation, secrets, hacking into our devices. we care about the same things. it should make this, and away, and easier compensation. >> what happens here is that apple is forced to write a new operating system to degrade the safety and security in phones belonging to tens or hundreds of millions of innocent people. it will weaken our safety and security, but it will not affect the terrorists. u.k. will generate
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less economic growth and have a drop in investment, if voters decide to leave the european union. that is according to blackrock, the world's largest money manager. vice chairman says that the brexit offers a lot of risk with little obvious reward. stay with bloomberg. we will be speaking with one of the authors later this morning. australia's economy grew faster than forecasted in the final three months of last year. and a plunge in household savings since the lowest in 2008, underpinned by record low interest rate. the australian dollar jumped on the news. global news 24 hours a day, powered by 2400 journalists and more than 150 news bureaus around the world. manus: thank you very much. let us get up to speed on asia. back-and-forth from the u.s. last night.
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suliette saly i standing by. juliet: good morning. we are continuing that relief rally we saw across wall street. asian stocks actually now at their highest level since january 2008. you see this very solid line coming through across the region. the shanghai composite in late trade up by 3.6%. investors shrugging off that downgrade in ratings by movies. australia saying that the cut should have a muted response from investors. that is certainly what we are seeing in this region. the hang seng in hong kong of 3%. closing higher i over 4% today, we are seeing the yen little changed there. closing at a high of the day. the 200 in australia up 2%, now back above that psychological 5000 point level, helped out by
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the better-than-expected gdp reading. every sector is moving higher in the region, oil materials, and gas stocks leading the charge. industrials very strong. here is what we have been watching in the region today. there have been big news. by 21% in hong kong after agreeing to take full control of sab miller's 49% stake. almost 5% in australia, reporting to cut 500-700 jobs. certainly, investors moving out of those safe haven assets back into equities. taking a hit in australia today. saly withette the latest on the strong session in hong kong coming through. let us talk about u.s. policy. donald trump and henry clinton were the big winners on super tuesday. they turned their attention to each other, offering voters insights into what might happen ahead. secretary clinton: it is there
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tonight at the states in the selection have never been higher. and the rhetoric we are hearing on the other side has never been lower. trying to divide america between us and them is wrong. and we are not going to let it work. manus: donald trump hit back, taunting clinton as whether she would emerge as the party's choice. mr. trump: i am unifier. believe me, i am a unifier. once we get all of this finished, i will go after one person -- that is hillary clinton. on the assumption that she is allowed to run, which is a big assumption. i don't know if she will be allowed. anna: joining us for a closer look is our washington, d.c. bureau chief and government executive chief megan murphy. great to have you. clinton and trump going after each other there. does this mean that the primary races are effectively over, or might these do still lose their ground?
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megan: much over at this point. we saw a strong showing by bernie sanders in some states, or delegate lead is very big. as big as obama's was in 2008. and she has really had these huge gaps, she focused on her base of african-american voters, women. she had huge margins tonight. on the republican side, little bit of a different story. yes, we saw a big win for donald trump again. he has won seven states already. he will probably win alaska, from the early projections. what has happened now is what everyone had feared, that the establishment wing of the party is left in israel and the central crisis about how they can move forward. their chosen candidate, marco rubio, had a very bad night. the only 11 state, minnesota. he lost nearly in virginia. it is increasingly difficult for him to convince establishment donors that he is the man making coalesced behind emily keeps coming in second and third in
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these early contest. , if it was a general election, many are saying this last night, super tuesday was indeed that moment. that potential sort of insight. for hillary clinton and donald trump, the train to finally come unstuck? megan: it is hard because you basically have a politician in donald trump who is unbound by any of the traditional boundaries that we traditionally see candidates bound by. he will say anything. he has no limit for what he will do, what he will provoke others. how he would treat others, sort of changes from day to day. since herinton, stunning loss in new hampshire to bernie sanders, has really gone down to what she is best at. discipline, organization, really trying to refine her message. breaking down barriers them as you freak really says on the campaign trail. head to head, this is a trickier matchup.
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he has shown a willingness to go to places in the cycle that no one else will go to. and he is surly not going to leave anything on the table with hillary clinton. anna: megan murphy joining us there in new york. let us get to our guest for the hour, bob parker, senior adviser at credit suiise. let us put this politics into wider context, if you like, look at it through the lens that you use. look at it through, well, asking the question, what are the markets prepare for? bob: wait to be have certainty. i think we have a very high possibility that the democratic candidate will be clinton. i think she now has the momentum in her campaign. so i think the probability of a clinton upset is a very low probability. if we did have hillary clinton as president, i think probably economic and general geopolitical policy would be
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similar to what we have had under the obama administration. anna: the stability of voters. bob: exactly. what could concern voters is the deficit. she will be very relaxed about the debt ceiling. it is no longer a problem. the budget deficit has come down very significantly indeed. we had the budget deficit as a 2009,tage of gdp back in that is now less than 3% of gdp. i think clinton would represent a continuation of economic policy over the last 3-4 years. i think investors would be relaxed about that. now, where we have uncertainty, trump lately has momentum. but we do not know whether the republican establishment, who clearly very sort of upset about the probability of trump being the republican candidate, it will be an attack on trump from the republican establishment. will that attack be successful?
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we do not have certainty as to whether he will be the republican candidate. if he is, and if we get a trump presidency, we will actually have a number of very serious concerns. particularly, protectionism. manus: you talk about protectionism, the u.s. had tariffs on chinese imports, country.h another protectionism is already alive and well. bob: which is negative for the global economy. manus: ok, but if i look at the double risk with this man, if he gets the nomination, if he does not get it for some reason, what is the alternative? and that has legs? think one has to recognize that whenever there has been an independent candidate in the past, have always failed. manus: i challenge that in that this man has defied every convention. it is does not seem to apply. bob: it comes back to my point.
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what investors are looking at, what is uncertain is the proper that the democrats will choose clinton. what is uncertain is that will the republicans end up with trump? if they do not, what is the alternative? if they managed to remove the establishment manages to remove trunk, does he run as an independent? manus: where would you prepare fx?20%, would be equity, which are completely underprice them is that something we should think about? ob: if you get a trump presidency, the impact on the u.s. dollar would be fairly neutral. the impact on u.s. equity markets, particularly i think sectors which are vulnerable to protectionist measures, i think then you would have serious problems. us not forget there would be severe restrictions on the flow of labor, as well. his anti-migrant policy is
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actually very negative for the flow of labor into the u.s. economy. so again, labor-intensive industries would be hit. anna: quick word on the economy element of some data yesterday that suggested things were not quite as bad as things believed the beleaguered manufacturer sector was. bob: i think you actually have clarity for the first half of this year, possibly going into the second half of this year. after that, very mediocre growth number for the fourth quarter. yes, it was revised up to 1%. that is still a very mediocre number. but i do think that led by consumption, some moderate recovery in manufacturing, focusing on the domestic factors of the economy, we will see growth just over 2% in the first half of the year annualized. is that enough to trigger a fed move in march? my view is probably not. i agree with the markets, that we will not see much movement. i will stick to the idea that we
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will see movement, and a fed rate between 75 basis points at 1% at the end of the year. rates are going up. but as janet yellen says, the pace will be very slow. anna: here is a look at your day ahead. manus: executive board members speak in frankfurt. closely scrutinizing the address for clues ahead of the policy address. that is next thursday. anna: they only have a short window. communicate anything material to the market, that explains the focus there. at midday u.k. time, we get mortgage application data in the united states. and an hour later, adp employment change figures, head of friday's payroll report. moody'soming up next, and china. and this latest piece of bad news for the world's second-largest economy. all that and more, right here, on "countdown."
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anna: welcome back. 6:20 in london. let us get the bloomberg business flash. shares have soared in hong kong after agreeing to buy sab miller stake. it would give china full control of the world's best selling brew, and smooth the way for the miller takeover by in bad. it still needs approval. iconic capital, which helps manage the fortunes of look on valley billionaires, has hired stanford university. kim will focus on private markets, including making coinvestment alongside private equity firms, according to her linkedin profile. the code finder of chesapeake energy is facing allegations he worked with an unidentified competitor to keep the price of
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land artificially low. aubrey mcclendon, a pioneer of fracking, is accused by the justice department of orchestrating a scheme between two large oil and gas companies. he has not responded to phone and e-mail messages seeking comment. that is your bloomberg business last. manus: thank you very much. moody's cut the outlook for china from negative to stable because of rising government debt and declining reserves. sees ahe agency says it debt increasing to 43% of gdp next year. moody's of farmed -- affirmed, saying that it may slow the reform. bob parker of credit suisse is still with us. what worries you most about chinese debt, what the government is on the hook for? what the population owes? or are the two sides of the same story? bob: breaking it down by
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components, the first point to make, chinese debt is very low indeed. and yes, there is cause for concern that the reserves since 2014, which he at 4 trillion u.s. dollars, are now down to just 3 trillion u.s. dollars. but it is still the largest pool of reserves globally. calls fort think this concern there. but if you look however at the chinese corporate debt levels, they are high. and they are obviously concentrated in certain areas. you know, those areas are number one, i think one still needs to be concerned about the real estate market. though over the last six months, look at the real estate market price movements, early in beijing and shanghai, it is still performing. but you still have problems in the northeast with ago cities, frankly, the debt is not would be repaid on the speculative real estate developments. i think the second area to worry about is obviously the state-owned enterprise.
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it is deliberate chinese government policy now, actually to grasp that problem. so, to next year or reboot the state-owned enterprises. there will be some debt right off there. i think just the other areas you mentioned consumer sectors, i want to emphasize that the chinese personal savings ratios are still very high. by global standards. so i not worried about consumer debt. there has been a lot of concern about the shadow taking market. i think that concern was justified to-three years ago. but i think the ministry of finance, they have managed to restructure the shadow banking problem. manus: when you see the reserve requirement comes through, g-20, a great deal of handwringing that g-20 did nothing, where do mp? fall into the ca
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versus other methods that may be out there. the markets -- i love this. a bit of wallpaper, but it is more intensive to ensure yourself in china and the philippines. idiosyncratic, or a bigger trend? what do think of the stimulus program that comes next? one observation on that graph, that is actually a very positive statement on the philippines. and i would actually argue that in the last five, probably 10 years, we have seen a quantum improvement in philippine economic management. well the philippine equity market became very expensive. now it has had the correction. it is still reasonably expensive, but much less. all good news in the philippines. i think it is reflected in that cbs graph you have there. that is not necessarily a negative statement on china. it is a positive statement on the philippines. that experience in size. coming back to china, if you look at chinese government bond
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deal, they actually have been quite high. relative to come at know, other developed economies. of furtherthe scope easing and monetary policy, as the economy has slowed it down. and this year, i stick to my view that growth will be between 6% and 6.5%. we have is continued slowdown, but no hard landing. it is absolutely right to ease monetary policy further. now in addition, i think we will see fiscal measures over the coming months. anna: might we get some of those at the weekend, bob? we have the people's congress coming up. bob: absolutely. it needs to be eased further. i think that will happen, and that will underwrite growth close to six and a half percent. anna: bob parker from credit suisse stays with us longer. manus: coming up, we will talk spain. the government presses on to end the deadlock at a critical
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phase. we are live from a drip. what happens next? and the markets? bob parker stays with us. ♪
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manus: 6:30 in london. let us get the bloomberg first word news. jra: hillary clinton has delivered a decisive performance, defeating bernie sanders by wide margins in the democratic primary to give her and all but insurmountable lead. meanwhile, donald trump had a rmer grip, taking seven states. ted cruz what his home state of texas, as well as oklahoma. moody's has cut its outlook for china's reddit rating to negative from stable because of rising government debt and inclining reserves. n.c. state debt state that
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increasing to 43% of gdp by next year. movies confirmed its long-term debt, saying that the policy to support growth may slow the reform of state-owned enterprise. deutsche bank, one of the federal banks that trade directly with the federal reserve, says they should raise this month if the latest economic data is any guide. the chief economist for the company in new york says manufacturing, factory jobs, consumer spending, and inflation are all improving. the u.k. would generate less economic growth and a drop in investment if voters decide to leave the european union, that is according to black rock, the world's largest money manager. ite chairman hildebrand says offers no obvious reward. london is the stock power capital of the world, generating more jobs and proving more diverse the other cities. that is according to thde loitte.
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creating 200 35,000 new skilled jobs in 2013. london now employs 95 nationalities. and the rapidly warming tides between cuba and the u.s. will see the rolling stones play in havana. they will be the most famous western act to perform their since the 1959 revolution. concert planning a free in the cuban capital, and a country that once persecuted people to listening to rock music. the latin america tour, the band says it will be a landmark in their six-decade career. global news 24 hours a day, powered by 2400 journalists and 150 euros around the world. anna: don't know if you will be there, manus. three days after president obama's visit. and it is free. manus: it was very tricky. anna: let us move on. talking about leaving the markets through the trading day,
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guy johnson is on the set with us. bob parker still with us, from credit suisse. the big question this morning, guy, we saw such a big rally. march not bad so far, one day. is it stable? guy: do you want to be checked in this rally? look at tokyo. a lot of catch-up that needs to be happening. a lot have outpaced the last month, year to date actually. what has been happening in japan and in europe, here is the thing. look at dollar-yen. that is a useful indicator. three major houses in japan are calling dollar-yen significantly higher. so, what -- where do i take that? you would have thought this was a story, if that is something to be aware of what i think about my equity market positions as well. what is the median level? 3 now. at 11
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manus: you just see them forecasting on bloomberg, median expectation for dollar-yen. guy: look at the second one down. 108. manus: 109 for the first quarter, 108 for the fourth. bob? is: on our models, the yen undervalued. that is the obvious thing. look at where he came from the last 3-4 years. 72, we thenround had all of the reversal back to almost 125. recently, we have stabilized the range of 110-120. the argument for strengthening have a theirf we market in global equities, because that would drive
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japanese investment cash back home. or aenever there is a risk bear market in global equities, that results in a strengthening of the yen. the other argument is, obviously, we have quite significant current account service in japan. but the bank of japan, i think that would protest 108. -- they were very uncomfortable a few weeks ago when dollar-yen have to 111. ,deally, the bank of japan while they would not say that exquisitely, implicitly they would prefer stability in the range of 150-120. i would be surprised if we get to 108. the negative rate conversation. we will pick up on that in the next part. guy, thank you. bob parker stays with us. manus: in spain, the party leader has taken the first crack at winning the confidence vote in a country entering a critical
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phase. anna: asking lawmakers in madrid to oust mario, the people's party, after they produced an unprecedented deadlock in parliament. make areoposals that i three. one, let us get spain out of the stalemate it finds it in. two, put into action the change that millions are accessing four. this question of whether to vote for sanchez, the answer is a simple yes or no. and in that moment, we will know where everyone stands. manus: let us get more now with our spanish reporter maria taddeo. a very good day to you. what can we expect from today's vote? maria: good morning, manus. today, finally we are getting real action in parliament, like you said, the political
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deadlock. it is a big day for pedro sanchez. he faces a confidence vote. if he wants to become prime minister today, he will have to when an overall girardi. by the looks of it, it looks like he will need a miracle for that to happen. just to recap for viewers, back in december, the socialist had a pretty bad election result. the numbers really do not add up for him to win that majority that he needs. he will have to have the support, and of this state, that looks very unlikely. however yesterday, as you showed in that clip, he made it very clear that his strategy is to put them aside and focus on them. he knows he has moderates in the bag. so is about targeting, making attractive deal. he talked about renegotiating spain's deficit. he talked about first aid, more rights for workers. he is trying to pile on the when they voteat
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no today, which is very likely, and makes them look bad. but also loves the pressure into friday, which will be the final and decisive vote. anna: you said you might need a miracle, assuming no miracle is forthcoming and he loses, what would a second vote look like? maria: definitely, that would take us to friday. which is the final vote. really his very final crack at it. at that stage, he is only going to need a simple majority. by that, we mean more votes in favor them against. crucial, it becomes trying to force them into abstaining, that is a good deal for everyone. those are words for everyone. if you do not vote yes, if you do not abstain or make it happen, it will really put the country back into deadlock. most importantly, it gives him power. manus: maria, thank you very much. maria taddeo in madrid.
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we will keep you updated on everything that develops on the story. we have a live blog at 7:50. what you have to do on bloomberg, top live. anna: expectations are high that the ecb will step in for more stimulus next week. leaving the argument for more action, and fell to -0.2%. manus: and festers will be watching the speech -- investors will be watching the speech this morning for clues on the ecb thinking. the address in frankfurt comes ahead of the quiet period on march 5. let's bring bob parker back into the conversation. i love what you said in the break. why should we be so focused on benoit coeure? bob: he always give speeches when the ecb's concerned about the strength of the euro. this is actually unusable.
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betweena euro that is 108, 109. it is very clear. again, they would never say it in public, i think it is obvious that the ecb does not want a stronger euro. they do not want that. it means they do not want a euro between 112-115. ideally, they would prefer a dollar-euro rate over the next few months closer to 105. i think there is a very high probability that that will happen. and given the dovish statement from mario draghi and others, i think there is a high policy we will see monetary easing when they make the announcement on the 10th of march. anna: expectation has been high in the past. and we have not quite lived up to it. bob: that is absolutely right. and the markets and the markets a shot back in december, when i think it is fair to say that markets were led to believe the monetary policy would be eased. and action taken was much less
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than market expectations. i hope and think that market expectations are right this time. i do think we probably get an extension of negative interest rates. i think there is a high possibility that qe will be increased. i also think there is a chance he may expand number of asset places. manus: that might actually be the sort of shift them of going beyond government bonds. guy did an interview yesterday with the ceo who was very effervescent, the understatement of 2016. negative rates are a real issue. they are useless for his clients. it is absurd. he talks about a whole raft of issues. but he is really both severus in erous inicism -- vocif his criticism. one of the conversations, what is it doing to client money? the first, to make is that
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obviously this is negative for the banking sector. balance sheet with negative rates is a huge challenge. particularly, when you cannot pass those negative rates on to your domestic deposit base. now, in terms of clients, whether it is pension funds, sovereign wealth, insurance companies, clearly running income portfolios in a negative or very low yield environment is a huge challenge. it is unprecedented. and i always come back to the comment when my life is very easy and 1980's, when we had 10-year bond yields up 10%, and 10 year u.s. treasury yields, one stage we were close to 17%. life is very easy them. and as negative field environment, friendly you think of all ideas. anna: as years gone by, we know what that means. bob parker, senior adviser at credit suisse, stays with us. manus: u.s. attorney loretta
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lynch has challenged apple's refusal to unlock an iphone. in an interview with bloomberg television, she said the company has been doing similar things for years. ms. lynch: in the present, we have seen how we do in fact balance privacy and security every day. in fact, until recently, apple was able to comply with our request. and they have some of the strongest security out there. and we have not seen that parade of horrible come true in those cases either. and on caroline hyde joins us with some analysis. a forceful argument coming from the u.s. attorney general in an interview in california. what do you make of this? caroline: it is fascinating, on apples home turf. coming out and saying apple has been doing this for years. it is only now because the operating system has become that much more encrypted that we need their help. her argument was that they have been doing it for years. she also forcefully said that it is one company dictating the way
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this issue goes through from here on out. she really does not feel it should be left to apple to decide the future of this investigation. but she is facing adversity. just yesterday, a new york magistrate ruling in favor of apple. on actual deal of a particular argument, this is very similar to the san bernardino shooting. this one, they wanted an iphone unlocked a drug dealer. this is what was being asked for by overall by the institution from the government. apple won that case, but it does not mean they will win once again on march rate second. at the moment, apple is using that court order obtained by the fbi remove some of the security features so they can get in and hack one of those iphones used by the san bernardino shooter in december. clearly, we have someone speaking out in rejecting apple's contention that it is
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against the constitutional right. manus: caroline, and terms of the battle, there is a battle between the state and the tech companies. it is being waged on the other side of the u.s., you have a congressional hearing in washington to debate the law enforcement authority to access encrypted medications. caroline: such a busy day. greta lynch in carolina, and in washington, you had apple squaring off with the fbi in terms of a congressional hearing there. you are right. and we heard from the fbi there, that particular speech from james comey really trying to iron out that this really should not be that contentious of an issue. at the end of the day, everybody wants what is right. have a listen. james: there are no demons in this debate. the company or the government is not evil. you have people who see the world are different lenses, who care about things -- all the same thing in my view. companies care about public safety. innovation and
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safety. we devote our lives to try to stop people from stealing our secrets and hacking into our devices. we care about the same thing, which make this an easier conversation. caroline: clearly, the fbi rather flabbergasted this has gone to the extent. this is against the fact that apple should not have to go to the court to argue this out. they feel it should be a congressional matter. rather than something going to the court. but apple just sticking to their guns at the moment, really trying to say this is not just about one particular iphone, one particular scenario. t a shooting or elsewhere. tim: what happens here is that apple is forced to write a new operating system to degrade the safety and security in phones belonging to tens or hundreds of millions of innocent people. it will weaken our safety and
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security, but it will not affect the terrorists. in the least. representing apple, bruce sewell. march 22 is when the hearing is scheduled. apple so far as using that particular phone that was used by one of the shooters in the san bernardino terrible atrocity that happened in december with the killing of 14. they feel this is a question of civil liberties. meanwhile, of course we have a government still desperately trying to gain that access. both fighting tooth and nail, which ever side of america they happen to be speaking on. anna: thank you. fascinating story. the swiss economy, breaking news, expanding by 4%. ander than the investment, the estimate was 0.1%. all of that in the face of a stronger swiss bank. manus: i am just pulling this up.
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bob, we have him from credit suisse. i am pulling up the euro-swiss competency. we have traveled all the way back. i was trying to work out the percentage. those are pretty good numbers in the face of, still, quite a big move in the currency. economyhink the swiss having had that shop over a year ago, i think it is fair to say that that drove the swiss economy into quite a significant downturn in the first half of last year. now, the swiss economy actually has adapted. we have seen some movement back in the swiss franc against the euro. right. consumption has improved. i think the export sector, which took a huge hit them has now adapted somewhat. the numbers, let us analyze it. around 1.6% annualized. i would not actually say it
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is a rapidly growing economy, but i think it is over the shock that this was economy got this time last year. anna: bob parker, senior adviser at credit suisse. up with my weak manus: we're going to talk blackrock and brexit. why the world's biggest money management does not see the rest. thewhat if the u.k. quits eu? ♪
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anna: welcome back. 6:52 in london. now, the u.k. would generate less economic growth and have a drop in investment if they decide to leave the european union. that is according to blackrock, the world's largest money manager. vice chairman hildebrand said that brexit offers little risk with little obvious reward. manus: meanwhile, norway has
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losing ahey risk key ally. if they choose to exit. >> the u.k. is a strong i live for norway -- ally for norway. there is strong emphasis on competitiveness, on simple vacation. and is brought to the table firmly by the u.k. and of course, the standpoints are often shared by norway and of course the u.k. has influence in the european union. anna: bob parker is still with us. bob, how are you waiting your concern around brexit, and the market general? found a report that was somewhere to what blackrock came out with just the last day. i think i will break it down. the fiscal impact, i would highlight two points on the
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politics. i think it will trigger another scottish referendum. i think this time, there is a high probability that scotland would go independent. that is the first political fallout. the second political fallout, it would encourage independent movements. particularly, in spain. movement, ande n i think it would have a negative political impact on the european union. you then have to look at the economics, the economics inevitably would be a significant downward move in foreign investment in the u.k. let us not forget, mark carney highlighted this recently in a talk, which is that the u.k. account deficit close to 4% of gdp. they need capital inflow. outside of the eu, we would not get that. manus: the early 80's? bob: one final point.
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the city of london employs, defining it different ways, about 300,000 people. it is not an unrealistic forecast to say that the job losses with a brexit could be perhaps 50% of that number. that is 45,000 people losing their jobs in the city of london. the city of london would be challenged on a brexit. a couple ofi read functions on the bloomberg, just looking at what is going on with euro-sterling. that has been declining for five days. the longest stretch of losses since july of last year. there seems to be a moment of reprieve. tolar-sterling inching back $1.40. these are some of the estimates in terms of the median going across 2016, 76, 74, 73 is where would be on euro-sterling. just this reprieve in the market but you think it is temporary? bob: triggered by two things.
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a week ago, sterling was technically very oversold. there he large short positions in the market, we have seen short covering. factor number two, let us not forget as we discussed earlier, what is going to happen next thursday. the ecb meeting going into it, if we do get further easing of monetary policy, which i act, that is obviously euro-negative. over the next few weeks, we could see euro-dollar moved down to $1.05. the ecb would be very relaxed about that. again, that is a reprieve for sterling-euro. but we still have a good three months for this referendum. i think you will see, after this reprieve, a further leg down probably in april, and further selling pressure. anna: i guess everybody has to numbers right now. for in andu.k. data out. thank you, bob parker joining us. senior adviser at credit suisse. i-tv the factor?
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we will bring you the earnings. anna: not the x factor! 6:56. see you in a minute. ♪
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donald and hillary win big on super tuesday, each strengthening their grip on their party's nomination. we have the latest. anna: a global equities rally gains momentum in asia as economic data from the u.s. and australia surges. manus: moody's cuts its outlook for china, blaming rising debt and falling reserves. anna: and lack rocks like blackrock's brexit morning. -- brexit warning. manus: welcome to "countdown."
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anna: a warm welcome to the program. just past 7:00 in the morning wednesday. --us: it's super tuesday anna: it's wednesday in this part of the world. let's talk about the markets. s&pave a strong rally, the up by 2.4%. strong louvers in the united states last night. it moves into the overnight session, asia really strong, up by more than 4%. here it looks -- manus: europe looks like it will get a good opening. up 9/10 ofotation -- 1%. i'm trying to look at glass half-full. expected.better than aussie gdp up and better. fromchina has had a knock
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the ratings agencies, but u.s. manufacturers are not bad. they have stormed ahead, up. london up 11%. s&p up 8.35%. this silent rally. anna: march has been a decent year for equities so far. not much of a statement with only one day gone. have -- it number we looks stronger than estimates. four-your revenue from this $2.94 billion with the estimate. one of saying about where they will be for the rest of the year? they say expect itv to be flat, marginally behind the market, if that is anything -- some kind of guidance. of course, this is a company exposed to what happens in the advertising market. there was some talk about a "significant cash return
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possible" from this business. 4.1p.anus: dividend is and goldman sachs is guessing higher. it's interesting to see whether that meets up with analyst expectations are shareholder expectations. they do talk about the overall advertising industry, saying they see themselves outperforming an estimate in the tv ad market. they expects -- they're proposing a final dividend of 4.1p. manus: a sticky headline on the bloomberg terminal, delivering 125p per-share. share.eviewing 125p per dotty is a retailer of -- anna: electrical, furniture, that kind of thing.
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leslie the breaking news there and get to first word news. caroline: good morning. donald trump as a firmer grip on the republican presidential nomination. he took seven states as part of a commanding super tuesday showing. ted cruz won his home state of texas and oklahoma. meanwhile, hillary clinton delivered a decisive performance, beating bernie sanders by wide margins. moody's cut its outlook for china from negative to stable. sees statesays it debt increasing to 42% gdp by next year. says beijing policies to support growth may slow the reform. the u.s. attorney general, loretta lynch, has challenged apple's refuser to unlock a dead terrorists iphone. in an interview, lynch says the company has been doing similar
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things for years. >> in the present, we have seen how we have balance between privacy and security every day. until recently, apple was able to reply with our requests, and they have some of the strongest security out there, and we haven't seen that in those cases. u.k. will generate less economic growth and have a drop in investments, if they decide to leave the european union, according to black rock. in a report to clients, the vice chairman says "brexit offers a lot of wrecks with little -- a lot of risk with little obvious rewards." the return to growth at the end of last year as it falls off the impact of a currency shot. aftercreased .4%, contracting the previous quarter. that growth beat analyst estimates.
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and australia's economy grew faster than forecast in the final three months of the last year. driven by a plunge in household savings. of a .4% estimates gain. the aussie dollar jumped on the news. global news, 24 hours a day, powered by 2400 journalists. manus: thank you very much. let's look at these asian markets -- juliette saly is standing by. it's a push/pull in terms of what the market wants today. juliette: absolutely. we certainly have to investors in this part of the region, particularly in china, which is closing a 4.3%, really ignore that ratings cut from moody's. amz saying it should have had immediate response, and that is what we have seen across the board. if i take you into the hang
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seng, you can see that there are absolutely no stocks in the red today, showing how much risk on appetite there is. china resources up by 12% in late trade. it had been up by as much as 30% after agreedit to take -- after it agreed to take its stake in sab miller. the nikkei closed higher, up by over 4%. we didn't see the yen move too much during the day, so some really good buying coming through from the automakers after we saw february car sales better than expected. the asx 200 led higher by the commodity producers, particularly pimco. the asx 200 closing higher, above that 5000 point level as gdp impressed the market. it has been a very positive session in the region. having a look at the yen, it is wilting a little at the start of the european session, but during most of the day's trade it was
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pretty flat. the yen now down one third of 1% against the greenback. a very positive day once again in the asian region, stocks now at their highest levels since january 8 on the regional benchmark index. anna: thank you. juliette saly from hong kong. let's talk u.s. politics. donald trump and hillary clinton were the big winners. the two turned their attention to each other, offering what is perhaps an insight as to what might lie ahead. clinton took aim at trump's divisive rhetoric. >> it is clear tonight that the stakes in this election have never been higher. and the rhetoric we are hearing on the other side has never been lower, trying to divide america between us and them is wrong. we're not going to let it work. back, referring
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to himself as a unifier, and taunting clinton as to whether she would emerge as the party's choice for president. >> i'm a unifier. i know people will find that hard to believe, but believe me, i am a unifier. once again all of this finished, i am going to go after one person -- hillary clinton. on the assumption she is allowed to run, which is a big assumption. i don't know that she will be allowed to run. anna: let's get to our portfolio manager at hermes, joining us on set to put the politics into a market context. when you look at the results we had overnight, as expected, we got a strong showing from trump and clinton, still the front runners. how do you look at this through market lens? >> does surprises there, i guess. is expected, trump and clinton. from a market lens, it is too early to judge. i would expect if trump does
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seriously emerge as the front runner, if he has a chance of being the u.s. president, there is a good chance the markets may find that as uncertain. markets right now aren't really in the mood for more uncertainty. as we get closer to the election, we'll see how it will affect markets. it will probably be more of a question of going back to the story of central banks. thing from ther united states yesterday -- after you put the euphoria of super tuesday aside, the data are getting moderately better, and it has certainly excited the market. we saw a big shift in treasury, a move in terms of the breakeven in the u.s. manufacturing is reading like a summer of last year. is a time for me to move off my grinch? >> i hate to be a wet blanket, but i think it is a bit early to get excited.
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we have had appeared aware markets have been negative, an until recently, when they were in negative mode, it doesn't take much -- once you reach a very negative stage, it doesn't much to turn momentum around . i would sit and wait for now, and i think there are still big risks -- manus: at 6:00 a.m., we ran through some markets. up,s&p 500 lost, the dax london up. is that -- put it in context. a 10% rout in equity markets -- is that something more? >> it is hard to say. the only certain thing there is is that volatility will cling. i know that isn't saying much, but i think that is the case. markets are in no mood for more uncertainty. any companies or markets that are showing any signs of
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weakness, you are seeing markets punish them. anna: negative interest rates were one big theme around investments. we were talking to bob parker about how clients are scratching their heads and trying to work out how you're supposed to make money in the negative rates environment. it is something you talked to clients about as well. >> yes. you have definitely seen this hunt for yield, and it is becoming harder to find something. long-term, there will always be growth. there will always be opportunity. it's just that you need to be more selective in where you look. manus: in terms of the fed, there is this other piece from deutsche bank -- get on with it, if you are data dependent. you should be moving in march. again, there seems to be this window, is shift slightly.
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you've got -- anna: only a 12% chance of a hike from the fed. we've now got to the 14th of december, market pricing and 64% chance of a hike. manus: if anna talks long enough, i managed to get the word. [laughter] i wouldn't be surprised if we are back here in a month or three months time, talking about the expectation having shifted. wrong, weon't get me still expect another rate hike. we did even before this little surge of positive data, even though they are just trying to grab onto anything good. the action come through, and we see the vision not just by the fed but by the
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ecb, it's going to be volatile, and we are going to see expectations move all over the place. anna: too early to talk about how u.s. politics might rub up against the fed decision, i suppose. >> historically, it tends to be monetary policy and central-bank actions tend to be free. election yearn an -- i wouldn't expect any massive tightening. even before today, the fed's cycle will be a short one, even if they have hikes to come. manus: how unsettled -- as you talk in the office, how unsettling is the prospect of a trump republican candidate, a trump independent candidate? would you even consider outcomes? >> the honest answer is we don't know, because we haven't heard much from him other than on -- manus: on policy. >> exactly. just bashing
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the competition. a lot of things he said that i found offensive, especially because he did so well from capitalism and he seems to be anti-free market. i don't know if that is a fair thing for someone like him to say. that we will see. that will become more clear. in his defense, there are things he said about what you can expect from his economic policy which might not be as bad as everyone bills. it is a case of let's see what happens once whoever is confirmed, and let's hear what they have to say in terms of real policies. anna: thank you. tim crockford stays with us. ecb board0 u.k. time, members speak at frankfurt. we'll be scrutinizing the
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address ahead of the policy announcement. that comes next thursday. anna: at midday, mortgage application data in the united states. hour and a quarter after that, a gauge of the u.s. jobs market, adp employment change figures. stock as next, taking asian equities extent the global rally. what to expect from the european trading day. ♪
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anna: welcome back. it is 7:19, 8:19 in frankfurt. let's get to your bloomberg business flash. caroline: thank you. revenue,osted annual up 15% from the previous year. they announcede, a small your operating profits at 666 million pounds. beer shares have soared in hong kong after it agreed to buy sab
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miller's stake in their chinese joint venture. it would give china for control of the world's best-selling brew and smooth the way for sab miller to buy ab inbev. the transaction still needs regulatory approval. iconic capital, which helps manage the fortunes of silicone vally billionaires, have hired stanford kim. that's according to a person with with knowledge of the matter. he'll focus on private markets. of chesapeake energy is facing allegations he worked with an unidentified competitor to keep the price of leasing land artificially low. u.s. justiceby the department of orchestrating us a scheme. the charge is "wrong it unprecedented," according to a statement. that your bloomberg business
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flash. manus: thank you very much. asian stocks have extended their global rally. strengthened, aussie growing more than expected, manufacturing slowing down. anna: a little bit of data around their, if you are looking to go risk on. that's what has happened over the last 24 hours but concerns remain in asia, underlined by moody's cutting is outlook on china's credit rating. let's talk about what futures are suggesting, because the u.s. rally yesterday was sustained. the end of that rally could price into the european session, so we are expected to be 26 points higher. manus: yeah. up over 2%, flashing back up again. the s&p 500 rallying by 2.4%.
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we're seeing a little bit of a liftoff. the great debate -- what are the ones we use every day? we talk about dollar yen. it's fascinating -- we are at a precipitous moment where the biggest banks are calling for yen to strengthen down to much stronger levels and we have seen. what could that potentially be telling us? >> it's all about safety, at the end of the day. with yen, like with gold, it is about a flight to safety. your view of where the end ends is about where you expect markets in general to end. manus: this is euro-yen, for example, the whole way down, a little bit of reprieve just coming in to the trade. but it's the end of the year. >> in terms of euro-yen, this is a tricky one. question is now where and
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how do central banks move. with regards to the u.s., it's probably a lot harder to talk about policy divergence, because even though there is still a good chance of hikes, we don't know -- it is becoming increasingly clear that the cycle will be shorter than expected. now for central banks like the ecb and boj to rely on the fed to do them favors, and that will have a big where on their currency, they end the year and where they go. but with your-yen, it is harder to call. all eyes will be on the ecb. anna: let's talk about that. we have that -0.2% headline until monday. that seems to be causing a market rally. bad news is good news. 's suggesting that this was bad news on inflation, therefore the ecb will step up and do more. will the markets the wrong? really are wrongly? >> expectations are clearly very
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high now, and i think the ecb pacify.o a lot to that is a good question and we will see what happens. i think it is going to be hard for the ecb to knock it out of the park, because they want to keep some tools and reserve. they don't want to throw the big guns out yet. they probably don't need to keep it -- anna: they have to keep the germans on site. >> definitely. manus: they have to bring the big guns out. let's get the producer to pull up the challenge -- the specter of deflation that is haunting the eurozone. it's a classic graph, which just shows the momentum, the deflationary momentum. there you go. that is a shift and a half. >> there are two questions here. first of all, the question is does the ecb, like other central banks, have more policy tools? the easy answer is yes, because
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they are running on competitive policy. they can make it more unconventional. the other question which is hard to answer is are these tools going to be effective? are they going to be effective -- ecb, the issuee is that those deflationary forces are outside their control. oil, commodities, but also imported deflation. anna: so you say therefore negative rates are what is needed, more negative? or are you in the camp that says it is all about oil, not about whether the banks are lending. if you take rates negative, it doesn't make the banks more likely -- say itin the camp that is a great tool for generating liquidity, but not for getting people to borrow. the ecb, like other central banks, will have to remain loose, but they won't be able to force consumers to borrow. the european economy is
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definitely improving, but the pace will be very slow. if we take cpi and inflation out of the picture, we are still seeing positive prints in terms of employment, pmis. they are still in positive territory, but it is going to be a slow recovery. manus: in 40 seconds, through the prism of more action through the ecb, do you want to be longer on equity, shorter on euro, or longer in spreads? >> good question. i think i want to be longer of developed market. i will always find opportunities to grow within that. whether you are looking at equities, at commodities, any asset class, you have to be selective. that's what i would say. anna: thank you very much. manus: 30 minutes to go before the start of the european trading day. european futures -- set for rising equity markets. it's a bright and sunny london
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open for you. ftse futures indicate a 6175. ♪
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guy: welcome to "on the move." 7:30 in london, 8:30 in frankfurt. we are counting you open to the european open. i'm guy johnson, alongside hans nichols in the german capital. here is what we are watching. risk on. equity rally gaining momentum in asia. the u.s. stocks have their best day in seven weeks. europe called higher, but it has a lot of catching up to do. trump and clinton win big. hillary and donald dominated super tuesday, strengthening their grip on their party's nomination.


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