tv Bloomberg Markets Bloomberg June 6, 2016 10:00am-11:01am EDT
vonnie: we are taking you from new york to london to beijing in the next hour, here is what we are watching. brand-new concerns over a potential brexit. more of britain favors leaving the european union. mark: an exclusive interview with janet lou from beijing out of his talk with chinese officials. calling on china to improve monetary policy communication. vonnie: heating up on capitol hill, republican congressman tells us exclusively why he wants to -- how his plan would promote growth. first, let's head to the markets desk were julie hyman has the latest.
julie: we have stocks trading a little bit higher as investors tried to figure out what to make a friday's jobs report and look ahead to janet speaking, today around midday. the dow leading the gains as the nasdaq is the lacquer -- lagger. shares up more than 1% as a group and that is the leaving gain in the s&p 500. materials also higher, finance bouncing back from rightist decline, industrials and tech up as well. -- oil could reach $60 a barrel by the end of the year. they did say the global oil surplus is being worked down more quickly than had been anticipated, oil prices higher by 2.5%, still shy of $50 a
-- in thethe jewish u.s. iron ore miners and miners of other metals are rallying as we see the underlying metals rally. in looking at the bond market, we saw a big drop in yield on friday following the jobs report. this is the first increase that since may 27, up to 1.73 percent and looking at currencies as well, the dollar strengthening versus the euro, the pound and the yen. focus, theas been in latest poll numbers showing the odds of brexit higher. -- the poll effect on the pound has been incredible. mark: i want to show you how the
equity market is faring. we are trying to make sense of what happened on friday, what that jobs report means for u.s. monetary policy. oil companies up by 1.7%. basic resources up by 4.5%. the rally is propelling bloomberg commodity index toward a bull market. and closes above that level, it will be a close -- officially deemed able market. you mentioned a few of the miners. i want to show you how miners have fared since the stoxx 600 basic resource index fell to a year low in january. bhp billiton 52% higher, lend core up by 100%, shares have doubled since anywhere he. anglo-american up 200% and 12% higher since january.
there have been three polls in the last 24 hours which put the leave camp ahead in the referendum on june 23. very clear what is happening today, it has risen to the highest level in seven years. this chart only goes back to 2011, and quickly, we had the yield on the u.k. 10 year falling to a record low, on friday in the wake of the jobs report and fell to a record low of 1.276%. marginally higher now, but there is a real rush to safe havens in light of those results on the referendum. vonnie: let's check in on the bloomberg first word news.
aid: an international organizations says the islamic state has been firing at civilians. a number of civilians have been killed trying to cross the euphrates river. 50,000 civilians remain trapped in falluja. flooding the cost of as the river receives from its highest -- from its highest level in three decades. -- says he will stand down after chancellorlowing merkel to propose the next head of state. the mostlypied ceremonial post since 2012. the president of turkey and the king of jordan have joined a long list of world leaders, religious figures and
celebrities to speak at muhammad ali's funeral on friday. president bill clinton will deliver a eulogy. global news 24 hours a day. u.s. treasury secretary jackie lou and secretary of state john kerry are in beijing meeting with their counterparts in the chinese government. discuss from both sides, slowing growth and territorial disputes. we are traveling with the treasury secretary and our joint from beijing -- and are joined from beijing. >> you look at what jack and -- 20 about market reforms, currencies as well. china still has a long way to go, he says. >> where we have challenges that
are of the moment are on structural reforms. the question of excess capacity in particular. we are seeing global markets in steel and aluminum being distorted by excess capacity. futurena's own economic to be bright, they are going to have to deal with this question of excess capacity. it has a corrosive effect on future growth if you let the problem linger, but it is a hard transition. the prospect of finding work for millions who would have to get different jobs is a daunting one. is aslocating workers serious problem, politically and socially. you talk to chinese policymakers and they are confident they can retrain people.
threading that needle is hard but you did not have a choice. capacity, youcess are down your potential future growth, that is not good for people, so they made the policy commitment to make these changes. they now have to implement and , and in china, the line between government and excess capacity is a hard line to see, so it is some of the provincial governments who are owners of the excess capacity. >> what do you make of the market reaction to what we saw with the currency over these last months? all, what i think something thatas
was confusing that gave rise to figures in the chinese economy in a weaker place than it actually appears to be, or was perceived by policymakers to be. china's economy is not as interconnected to the global financial system as the u.s. or the european economy. >> that would surprise some people to hear. thehat is interconnected is flow of purchases, imports and exports. -- if you think growth is dropping faster than it is, it adds huge impact to what you think the future looks like. the world saw a policy that was the government meant to be a move toward a more market oriented exchange rate, that it was interpreted as an attempt to drive down the rmb because of fears of economic reap --
economic weakness. as they communicated more clearly, it kind of settled out. it underscores how important that as one of the two largest economies in the world, china become more adept at communicating its policy and its analysis of its own economy, world markets are hanging on what china believes is going to be the next step in its economy. >> have you made that case to your chinese counterpoint? i have had many conversations disruption in markets, i was actually on vacation and on the phone with china for much of it, first asking them to explain what they have done. theyi understood what
perceived their action to be, i immediately said that is not what the world saw. >> they were receptive to that? days, but them a few the deputy governor of their central bank went out and offered a much more clear explanation that started to help settle things down. governor gave a long interview where he explained the views and the thing about communicating government policy is, we know all too well, it is not something you do once. every day, people are wondering if things are the same as they were, yesterday. >> he says he will keep at it, this week. mark: does he feel like he has a lot of clarity when it comes to china's economic plan? i was curious about that in light of what he was saying
about communication. it has been reported that he has very -- a very good relationship with his counterpart and they talk regularly. i asked him if he could convey to investors if they have a plan , and he says they do. out these plans for industrial overcapacity to be brought down and both the administration and the chinese administration of economists understand what they are talking about. areespects that there politics involved, just as there are politics involved in the u.s. and europe and it is hard to do this sort of thing. if you are going to scale back industrial production, you are talking about a dislocation of a workforce in china on a massive scale, and he understands that by doing that, it'll will put a lot of these politicians in difficult positions. are participants concerned about what is being said on the campaign trail by donald trump and bernie sanders about u.s. china relations? environment,rowth
many economists talked about how oft breathes in word a sort nationalism. one of the vice premiers spoke about how the campaign trail, there has been a lot of protectionist talk and he said one of the principal purposes of the dialogue is to get behind --t, not get caught up about caught up with the rhetoric on the campaign trail. his opinion is that they are able to block that out and move a word. vonnie: thank you. stocksmoving on, biotech moving in the wake of a big conference. we will bring you the names you need to know about. ♪
mark: summer has begun. vonnie: a glowing 10. you are watching bloomberg markets. it is time for the bloomberg business flash. goldman sachs is selling minority stakes in five hedge funds to affiliated managers group for about $800 billion. they said asset under management is set to increase by $55 billion to almost $700 billion after the deal. ang will pay cash.
economists are giving a more pessimistic outlook about u.s. economic growth. -- calls for gdp growth of just 1.8%, that is down from their forecast of 2.2% in march. 57% said that uncertainty over the elections led them to reduce their expectations. ge is rethinking its annual raises for employees. me company rating staff on five point scale and decisions can come over the next few months. those are your business flash stories. let's head to the markets desk where julie hyman has a look at biotech shares. julie: we had that big meeting of cancer doctors over the weekend. many stocks rallied into the meeting and are rallying after the meeting after getting some various study results.
one of the stocks that is not rallying is at the -- abbvie. -- the drug did not show great survival rates according to analyst, so shares are falling. meanwhile, bristol-myers were more encouraging, shares trading higher. when you look at smaller biotech companies, you have big moves in the wake of that meeting. one of them is puma biotech, showing positive results from a trial of a drug to treat breast cancer. it is up just about .4%. was teaming up with a number of pharmaceutical companies to look at a drug to treat colorectal cancer.
finally, the blt, that company talking about one of its drugs to treat of varying cancer and says there was a survival benefit, so here you get your gain, up up 58% -- big 58%. a bigeeting is opportunity to show these results. mark: still ahead, we are following the market reaction to new brexit calls. favoring an exit from the european union. ♪
exiting the eu. a new poll found 45% would vote leave compared with 41% opting to remain. a survey showing 43% backing in the u.s. -- backing the eu exit in an online poll shows 48% supporting quitting the trading block well 43% wanted to stay. let's get the latest with bloomberg news's rob hutton. literally, 12 or so days ago, a gap was opening up between remain and leave in favor of the remain cap. -- camp. and i was wondering how i would keep the story interesting. 'srk: which leads me to today paul which is basically a foot
-- poll which is basically a flip. you see that blue line taking off, that is what has caused all the upset. rob: it is not the first time it has been ahead, but it is a big lead, the biggest it has had in the role month. three.nd it is one of rob: mid, we had a poll from icm -- midmorning, we had a poll leave, soith the 48% that has caused a lot of volatility. mark: we have one poll that says levers ahead. -- leave is ahead.
rob: reasons to be cautious, all of these are online polls, you know that online polls tend to show bigger numbers for leave that remain, so that is the first -- than remain, so that is the first caution. there were rumors that were there will be a phone call saying one of these is not true. is, do thequestion people who are producing these believe the? over the weekend, i was talking to one of the guys at art -- icm, who produced the poll and i said to him, do you believe your own numbers? he said he does not know. he said it is a below -- he will the ring event -- he said it is a be will the ring -- bewildering event.
you have to have a lot of skepticism, and some people that i talked to on the remain side, some of them are really worried and they say they don't trust the polls. other people i talked to on the remain side say just hang on a second, we had this in scotland where leave moved ahead and everyone panicked. we know we cannot trust the polls, they said. particularthere any event that tipped the scales, this weekend? rob: i think it is just that we are getting closer. we had the first of the prime ministerial television events. how many people are watching that on a thursday night when there is put all on the other side -- football on the other side? here is another alternative as to why this might be wrong, it comes from the guy who used to
run you go -- ugov. i'm just fed up with everything, and i am going to vote out, and then you get a bit closer, and they say maybe not. basis, two weeks out is when you would expect a role. mark: thank you very much. watching brexit as well is the federal reserve chair and she is speaking out about it. we will have live coverage of her speech at the luncheon event. tune in for that. ♪
of some of the clouds that we have been seeing. you are watching bloomberg markets. mark: live from london, you are watching in london, as well, a similar temperament here. let's check in with an much andra for the first word news. emma: more revelations from the panama papers. -- 2400 us-based clients over the past decade and set up at least 28 companies on their according to the new york times which reports the companies were established in the british virgin islands, penama and other jurisdictions that specialized in hiding wealth. president obama will make his first visit to spain, next month. the white house says he is heading to poland starting july 7 for a nato summit and will add a stop in spain on july 9. the president will meet with acting prime minister during his
visit as well as the king. helga goes into tomorrow's california primary needing just 26 delegates to clinch the democratic nomination according to the associated press. california, new jersey and four other states go to the polls on tuesday. including one who argued his sentence was based on his right -- on his race. -- duane buck was sentenced to death after a defense expert testified that black people were more likely to commit acts of violence. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. republican victory in the november presidential election could have a scaling back of financial regulations is that -- and that is what house
financial services chairman representative is hoping or. the texas republican is unveiling a dodd-frank replacement plan. it also calls for scrapping for restrictions on bank trading. kevin's are really spoke exclusively with the representative who began talking about a portion of the bill that would provide an offramp for banks. i >> if they elect to be a strongly capitalized bank, which we are going to define as a 10% simple leverage ratio, considerably higher than what is required under dodd-frank and considerably higher than what is required under the basel accords, the bank chooses to do that, they will be subject to other capital and liquidity requirements of basel or freelyank, they can lend and do capital distributions, freely, they can engage in mergers and acquisitions.
it is an equity finance market-based dodd-frank offramp because all the promises of dodd frank did not come true, six years into it. and too big would to fail, and it did not, they said it would make our economy more stable and it didn't. freeed to unleash enterprise because this economy is not working for working people. >> the critics are going to say, what incentive what a financial and touche and have to bolster its capital in order to get rid of some of these regulations? what was the incentive be on their end? >> i don't plan to be the federal regulator in the board room. they have to decide for themselves. some may be happy with the status quo. i don't care to paint with a
broad brush, but there is a washington, wall street axis. someone to rely upon the in order for there to be a bailout fund which is in dodd-frank. designationscity important. ofyour bill would get rid city designations. how would that prevent too big to fail? >> we would get the federal government out of the business of designating firms too big to fail which becomes a self filling prophecy and under dodd-frank, the big banks have gotten bigger and a small banks have gotten fewer and the taxpayers remain poor. we get rid of the designation, we get rid of the orderly liquidation authority of dodd-frank and we substitute for it, bankruptcy. if you had to reduce this legislation to its lowest common denominator, economic growth for
now -- for all, bailouts for none. we believe that market discipline is going to help the economy a lot more than federal micromanagement which is, to some extent, what we have now. the incentive is to allow you to be a banker to help yield the economy. >> there is a huge section in your dodd-frank alternative that you are putting out about the consumer financial protection bureau that would significantly reform it and hold it to congressional oversight, increasing congressional oversight to the cfp be. you know that senator warren, your friend on capitol hill, the democratic senator from massachusetts is not going to like this. why are these reforms needed? >> i'm not going to lose sleep over what elizabeth warren thinks about the bill. this -- we have a
national consumer nanny or dictator. one individual can decide if a , a bank account, an auto loan is abusive, whatever that means and outlaw it, even if an american understand understands the terms and once the product. happeningely, what is under dodd-frank and the cfp b is consumers are losing. free checking has been cut in half at banks. the qualified mortgage rolled when fully enacted, 20% of the people qualified for mortgage in 2010 will no longer qualify. we've got 15% fewer credit card offerings and they cost on average, 200 basis points more and consumers have been hurt. we need a consumer watchdog that enforces the law. >> would also increase penalties against wall street and i'm coveringor people
donald trump and both parties, they don't feel that wall street would -- was held accountable from the 2008 financial collapse. forward your party due to make sure that wall street is held accountable for things like insider trading? >> we have both washington accountability and wall street accountability. andfines would be doubled tripled under our particular legislation purcell dealing, insider trading, for fraud, a number of the signs have not been updated since the 80's. >> how are you going to work with the standardbearer of your party? have you had conversations with his campaign? >> i have not spoken to him personally, but i hope to. there are a lot of things that donald trump have said -- has said and done that i do not agree with, but when i do what i -- what i do agree with is that dodd-frank has failed and we
need to promote economic growth. i know he is interested in doing that, and my crystal ball is fuzzy on who is going to be donald, i hopeif to be able to work with him. coming up on bloomberg markets, the change in the vc landscape, we take you live to the great crop summit born exclusive interview with cofounder and industry pioneer alan patrick off. -- alan patricof. ♪
from the end of the monday session. stocks are rising, shrugging off concerns that seeped into markets on friday after those forecast. commodities leading today's rally. europe 600 -- stoxx 600 up 1%. have a look at the best and worst performing industry groups on the stoxx 600. airlines are among those declining, a fascinating day for currencies, sterling rolling peerst all 10 of its 210 after polls put the leave camp i had in the -- i had -- a ahead in the referendum.
yield on the german 10 year fell to a record low on friday. fascinating times for the markets. let's get back to the u.s., abigail doolittle has the latest live from the nasdaq. areail: right now, we looking at a modest rally for the nasdaq, up about 4/10 of 1%. after -- whole foods made a positive mention, that they see the possibility that the stock could return 20% over the next 12 months, including dividends. driven by cost cutting it legacy stores and new shop designs. this is -- this was one of last year's worst stocks of the nasdaq, but shares are higher and hazard it to break above a trading range, telling us that sellers are weakening, buyers are strengthening and that there could be in fact more upside
ahead. mark: that is one of the best percentage performers on the nasdaq. what about notable laggers? a sector down created the casinog kong and sector was taken down to a negative. in macau, based on recent macro developments, however this was also one of the worst stocks at the nasdaq, this year, buyers seem to be much more interested in the stocks of win resort. this is money 50 day moving average moves up through the 200 day moving average, telling us there is a lot of buying interest and momentum. the last time this happened was in -- was back in 2012 when the stock more than doubled. perhaps there is an upside ahead for this one. abigail doolittle at the
nasdaq. vonnie: staying on tech, the annual great cross summit is on were private companies are gathering to discuss the interest technology and media as the current climate for vc investors. is live at the event and joins us exclusively. tell us what you are hearing from companies and investors that are participating. interested iny is moguls. that is the hot button. it is getting so strong. you cannot be in this business without being mobile. the other thing you are hearing about is artificial intelligence. there is so much data coming out , although frankly, artificial
intelligence has been around since the early 80's. the word ai has only reemerged to 24ength in the last 12 months because there is so much data coming out of companies as people figure a way to deal with this in a non-manual basis. how to make sense of it and how to use that data to increase productivity and come up with new ideas of usage and products. vonnie: the news of apple trying to potentially acquire some content providers. what are people saying about that idea and whether or might whether orisian -- not it might come to fruition? that i cannot speak to activity, but there is no question that people are focused on content. i don't know whether content is
king as an expression is still prevalent, but you see it every place. there are so many more buyers of content than we ever saw before. verizon is buying content and amazon is buying content. apple has to join in the group, just like google and everybody else. content is critical. that is a good area for investment. mark: on the issue of content, yahoo! is in everybody's thoughts. do you have a view on how much , what isng to sell for the most desirable path for this business? part.search is one yahoo! finance is another part that is valuable. my personal feeling is that this
might be more valuable a company in pieces than in any one overall purchase. there are some people interested. you read about the ones who have the inside track on yahoo! and at&tankers know, certainly is very prominent in that conversation and verizon. yahoo! -- they are still a force to be reckoned with that has enormous traffic and i think it is going to go at a better price than most people think. mark: you recently said that hillary clinton is not as close to wall street as people think, and she is actually closer to people like and i went to work -- closer to people. how does she changed -- how does she change the perception?
i'm glad you brought that up, because i have said that. i'm happy to have you repeat it. the reason i say that is, i would bet that hillary clinton has not had a wall street and people like morgan stanley, etc. in the last three or four years, whereas the always be seems to around, and i don't mean to characterize one of the other, i'm just saying -- i'm trying to create a contrast, i think she in the hands of wall street than in any other industry. she has a very open mind, she she has anl, and
amazing way of digesting ideas. you are a know that clinton supporter, when your advice to her be in order to galvanize bernie sanders voters in california? alan: i would say, just look at the facts, who can actually get something done. what bernie sanders promises, i think it is virtually to accomplish 90% of what -- virtually impossible to accomplish 90% of what he talks about. force been an invisible and all of a sudden, he has captured the imagination of a lot of young people who have not looked at the facts. hillary clinton has not promised things she cannot deliver. ofis nice to promise lots
oppenheimer blue diamond went for a week ago. >> just over $57 million and they are really two different -- es and the stone we are offering this week is a intense blue diamond and it is 24 carats, so we are looking at a difference in $4 million per carat versus about $1.5 million per carat. what kind of prices are these for diamonds, now? >> these are very strong, the ,arket for colored diamonds particularly blue and pink diamonds, is very strong and the ceiling keeps getting broken for higher prices.
with the oppenheimer which was a world record, nearly $3.9 million per carat. it is a matter of constant supply -- static supply and increasing demand. mark: where is the supply coming from? where is the demand coming from? >> -- the supply is coming from two areas. as one of the stones comes up in the last few years and makes headlines with these record-breaking numbers, people who have owned these diamonds tend to come forward and it is a very limited number and a basis. frome same time, the mines which the stones are being offered has produced some significant blue diamonds that have broken records. it is a matter of a strong
market for private owners to bring a stone out if they have one in their collection, and a fortuitous time with the mines. mark: whoever bids for this and victorious, do they end up wearing it or is it hidden away? >> we hope that it will be worn at some point, obviously not every day or even every year, but they are such beautiful products of nature that it would be a shame that it would not be part, it for the most would be put away in a very safe ance and is thought of as investment in terms of a hard asset. it has shown growth over the last two decades, but it will be put away for the most part and one from time to time. you would probably spend as much on insurance and housing that beautiful rock.
mark: coming up on the european close, we follow the plunge in the pound as new polls show many of britain favoring the country leaving the eu, plus marriott international chief executive joining us. we will check in on how its acquisition of star when has been have lamented in the global outlook for lodging. 34 minutes away from the close after friday's warm-up after the forecast jobs report, stocks are trading higher, led by mining stocks. ♪
close" on bloomberg markets. ♪ mark: we take you from new york to london. here is what we are watching. sterling takes a leg lower against its peers after a surprising turn on the referendum vote. momentum for brexit is growing, taking a lead in the latest polls. deal,: with a starwood almost one quarter of the world's 3.8 million branded hotel rooms will be under the marriott name. we will check in with arne sorenson. mark: for structuring of the world's largest bank continues. after falling 17% this year, will hsbc stocks recover? vonnie: