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tv   Bloomberg Markets European Close  Bloomberg  July 9, 2018 11:00am-12:00pm EDT

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vonnie k. and mary in london. close.""the european ♪ vonnie: here are the top stories we are covering from the bloomberg and around the world. brexit below, theresa may faces another defection. boris johnson stepping down. we look at how the markets are reacting. >> more trade tension, a meeting with angela merkel with a trade one in for president trump. of we will hear from the ceo the largest chemical company about his plan to invest in a second complex in china and how trade impacts that. let's take a look ahead how
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the markets are trading, particularly equities as we are about 30 minutes from the close of equity trading in europe. this is how it is looking. gaining for a fifth straight day, the best performance in terms of a run of gains since march 12. acrossf green looking the wheel at the industry groups. it seems in the absence of any concerning or a bad news in terms of trade, the markets are rallying, certainly when it comes to equities. outperforming come energy stocks, i.t. stocks, materials and financials. underperforming, really those defensive stocks, utilities and communications, that tells you something about the risk appetite in these markets and particularly in comparison to friday, where you saw some of the defensives outperforming. european equities are gaining. let's take a look at what is happening. it is interesting to see, if we look at fx, dollar weekne --
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dollar weakness. and we have seen some from the euro trades. it was high earlier. cable has been interesting, because we did see this move higher earlier in the session, even as their we saw -- even after we saw david davis resigned. it seemed like markets where seeming ok about the prospect of theresa may staying in power, but also the prospect of a softer brexit. but since we have had the resignation of boris johnson, the pound has gone lower, down 2/10 of a percent. so we have dropped from the 1.33 handle. and moving higher, last i checked we were up two basis points, up by more earlier. and some commodities bid, which sometimes shows you something about risk appetite in these markets. and pound volatility, something we were talking about with our fx reporter earlier. pound volatility really has been subdued, trading at a range.
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pound dollar one-month volatility, seeking direction among the ongoing brexit turmoil. a lot of questions still for those traders to grapple with in terms of where we go from here. and then, finally, wanted to mention e.m., because we have seen a rally in the fx today. you look at the emerging markets, the fx index, that has actually risen from the october 2017 low in the session, i have highlighted the lira. and this is crossing its 50 day moving average for the first time since february. nera, 19 minutes into the trading day in the u.s. and we have a look at the u.s. markets. >> the same rally in the u.s. the dow, s&p 500 and nasdaq are all sharply higher. on pace forthan 1%, its best day in more than a month. the investors not caring about
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the trade war that started last week between the u.s. and china. one trader told me because there was no surprises, we are buying the news. typically you buy the rumor's, but here is a bit of the opposite consented they have had weeks and months of volatility. they are buying the debt -- dip. take a look at the s&p 500, lots of green. seven sectors higher and on the bottom we have the more sensitive sectors trading lower, that is because of the 10 year yield being higher. haven bonds selling off in confirming the facts that we have stocks higher, on top of financials and industry. it is some of the industrial strength explaining the doubt's outperformance. -- dow's outperformance. we will say that caterpillar, boeing and em are all -- 3m are all sharply higher, all among the top for the dow among the day. and all of that helping technicals. going back into the bloomberg
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and taking a look at the technicals. we have taken a look at this chart before. lester, the beautiful uptrend when buyers were in control. and this into the official start of the trade war, and we recently had the dow trading below the 200 day moving average, telling us that sellers were taking control, but now we have the dow back above the 50 and 100 day moving average. so the volatility and excitement continues. it will be adjusting to see how it plays out. we will be here to report on it. nejra: thank you so much. turmoil in the british government as far as boris johnson resigning, heightening the chance of a leadership challenge to the prime minister, theresa may. she is facing questions in the house of commons right now. is's bring in tim ross who standing by for us at westminster. it is great to see you. the big question after we have had the resignation of david davis, and now boris johnson, is
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where does this leave theresa may in her position as prime minister and a leader of the tory party? anything we can learn about that from the address she made to the u.k. parliament? well, she is still talking to the m.p.'s. it will be crucial how she carries that performance. later on, she is going to be meeting members of her conservative party, where she will have to sell that brexit plan. two cabinet members quit. nejra: some have said this will strengthen her hand, because it gets rid of the centers. -- dissenters. tim: that is one way of looking at a credit if you look at the history -- at it. if you look at the history come aboard johnson has been a difficult -- boris johnson has been a difficult colleague, david davis also has been ready to resign. last night, he finally did it.
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now theresa may can move on and bring in new people. we will need a new foreign secretary pretty soon. she will be tried to do everything she can, i think to cling onto her job and convince people she is up to it, and convince people she has a plan that will went over her own party and be ok in europe. that is the key. nejra: what happened with michael gove, with the weight - wait to see who becomes the new foreign secretary? and on that note, who will become the foreign secretary? tim: he is a key figure. he campaigned alongside boris johnson to take the u.k. out of the european union. since then, he has become a pragmatic figure. may season met somebody she can do business with, someone who will be realistic and make compromises. i think the chances at the moment it looks like he is going to stay poinut.
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no indication he will leave. but you never quite know how it will pan out. things are very volatile right now. vonnie: it is easy for us to sort of focus on the personalities is, but what have all the events of the past 24 hours or so done to change the brexit plan that the u.k. will present to the european union? tim: i think it is -- or it has been a dramatic change. think about friday night when she was managing to get a plan together, but whole cabinet signed up to. it looked like a document of 100 pages that they could give to the european union and say, this is our plan, let's talk about it. now that agenda is up in the air. nobody knows whether or not there is a credible plan that theresa may can sell at home. until she has that, the european union i think will be reluctant to engage and they will want a more -- will want more clarity
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behind the u.k.'s ambitions before they start talking. vonnie: the fact we have seen the resignation of two key brexiteers, does that mean the u.k. could be heading for a softer brexit? look at the if you plan that theresa may came up with last week, that had the backing of the cabinet, but now we have had two departures, many people see that as a blueprint for a soft brexit. in a sense, what johnson and davis are trying to do is kill off that plan and to bring her back to what they see as the original idea, the clean break, leaving the whole single market, leaving the customs union, and taking back control of the u.k.'s lawmaking. i think those are the issues we will see and it is difficult to say how it will pan out, because it depends on how this goes between the hard brexiteers and theresa may. if she is still there and her
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plan survives, we will be back on track for a softer brexit than what we thought we were going to get a year ago. nejra: the president of the european council has a said politicians come and go, but the policies remain. i can only regret that brexit andnot left with johnson davis. who knows. vonnie: is there the possibility that brexit might go away at some point? it feels like it is past the point where that could happen. is brexit going to happen? it looks like it is going to happen. i think in order for not to happen you would need at least one or two more full national votes. that could be another election, that could be another referendum. and there was a campaign already up and running for a referendum on the final deal that theresa may comes back with a from her negotiations.
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look, it is not getting much pick up. i do not think the labour party is interested in it, the government is not, but you never know how these things are going to go. if theresa may loses power, i think all bets will be off on that. vonnie: you might be in the running to take over as foreign secretary as a lawmaker -- as foreign secretary? we had a lawmaker on who did not have many ideas. tim: it is difficult to predict that. we had a foreign secretary a few minutes ago and he has just gone. i think she will be looking to get somebody in on the brexit back inside, like johnson. we will see who she picks. vonnie: you will be watching for us. tim ross outside of westminster in britain. let's check in on first word news. courtney: let me get you caught up. in thailand, eight members of a soccer team have been rescued from a flooded cave. that means four players and a coach are still trapped. the rescuers are racing to
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finish operation, because heavy rain could lead to more flooding. and president trump announces his choice for the vacant supreme court see tonight. bloomberg has learned tom hardiman is a strong contender. he was a runner-up a year ago when the president selected neil gorsuch. you can watch the president's announcement tonight at 9:00 p.m. eastern. david westin will be reporting from washington. and china making the latest move in the trade war with the u.s. the government told companies to boost imports of products from anywhere but america. last friday, the u.s. imposed tariffs on $34 billion of chinese goods, and beijing retaliated with their own duties on american products. and anthony scaramucci has big plans for sky bridge capital. the financier who was briefly the committee cases chief for president trump is back at the hedge fund he founded. >> i do not think there is any reason why we cannot double the size of the firm in five years,
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that is 15% growth. sort of like seven or eight from the market, and obviously growing externally through good distribution and adding on products. i do not think there is any reason why we could not be a $20 billion firm in five years. courtney: more on the interview coming up at 1:00 p.m. eastern time. global news, 24 hours a day on air and on tictoc, powered by over 2700 journalists and analysts in more than 120 countries. i'm courtney donohoe. this is bloomberg. vonnie: coming up, the ecb president is taking questions from the european parliamentarians in brussels. we will bring you the latest and the reaction continuing to boris johnson resigning on the heels of david davis resigning. this is bloomberg. ♪
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vonnie: from new york, i am vonnie quinn. nejra: and in london, i'm nejra cehic. counting you down to the close of trading in europe. mario draghi is speaking and joining us in frankfurt with the latest is our bloomberg european economy editor. what have we heard a so far? marioeed, president draghi has just finished his testimony in capacity as ecb president and what he called -- told lawmakers was in line with the latest ecb policy decision. he explained to them that the ecb will end asset purchases at the end of the year. that the ecb is planning to keep interest rates unchanged, at record lows, through the summer of next year. he said, inflation is on a
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sustained upward trend, so expressed confidence that the inflation rates will recover further, that they will move closer to the goal of just under 2%. and he said the economy is healthy enough come even though he did point to the risk of protectionist pressures. nejra: that is interesting, because over the weekend we also heard from the ecb executive board member, who actually struck perhaps a slightly hawkish tone. we have seen the euro rally on that, in terms of saying not to expect too much pressure on the eurozone because of these trade tensions. jana: yes, the ecb is very worried about the impact on growth of trade tensions. what they do not quite know is how those trade measures that have been announced or threatened, will have on inflation. pricesraise the tariffs,
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will go up, so that might actually push inflation rates up as well, so the overall trade is something that the ecb watches at the moment, because it can impact confidence and it can impact growth and inflation. and while the impact on growth is relatively clear, the impact on inflation is not as obvious. vonnie: how much has he said, does mario draghi has the full -- have the full backing of his team? jana: i did not hear the question. how much support is there behind his a strategy? jana: um, the council is very united at the moment. those who are more conservative, who would or who are not as much in favor of quantitative easing, who would have ended it a long time ago, they are glad that
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asset purchases are finally running out. and those who are more in favor of an easier monetary policy have been reassured by the fact that the interest rates will remain low for basically another year, or even longer. at the moment, the council is united and the decision was taken unanimously. and they are very much on the same page. and there is no reason to expect any move away from that in the coming months. vonnie: thank you so much, jana for us in frankfurt. nejra: from london, this is bloomberg. ♪
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vonnie: companies caught in the crosshairs. china wants to open more industries to foreign investment, while uncertainty surrounding trade leaves
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investors unsure. a ceo spoke to bloomberg about the company's plans to launch in china and how trade war's will impact the goals. memorandum of understanding with being sick of governor of the province of guangdong, and it is about bsf having the opportunity and support of the chinese authorities to investigate the construction of - from both sides in the province. i think it is a very important milestone for the chemical industry, certainly the chemical market, because so far until recently it was restricted for the foreign capital -- foreign comeau -- chemical company to own so much. so we will be the first one to elaborate on this opportunity and we are very happy about it and i think it is a strong sign of trust. time as been for a long
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pioneer in china. we have a long history and we will be doing a joint venture with them at tech in beijing. this is an import cultivation to open up the market. it will be an investment as, as we can see, 100 billion u.s. dollars by 2030. so it will be our largest investment in our history and it would be the third-largest in the world. so, this is a very important step for basf's growth vision in china. but we have to keep in mind that today come already 40% of the chemical market in the world is china. and it will grow to almost 40% in 2025. so as a global company, you have to have china in your growth story. >> this will also give you local production or a better overview of the local production. we are in the beginnings of a trade war, or a trade conflict, so how does this local site, how
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will it help you navigate this? >> we have always built our investment in markets where we wanted to sell. we did this as a risk mitigation, because you have cost, revenue and earnings in the same currency. looking in hindsight, in today's world where we have to deal with these problems, and maybe you have one globalized -- trading world anymore, i think it is the right decision. even more today, you should have investments with other markets. we will always have trade between the regions, but i think it is a very important step to be with your production where your customers are. >> you mentioned the difference between your previous investments in china and this one is that you will have full ownership of this new site. what does that tell us about the opening up of the chinese market? is that happening now? >> i think we have been addressing the need for opening up to china for a long time and i think it is going, stepwise, we had just recently seen the
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automotive industry have some topics of opening up, or for the banking industry, so i think the banking industry has always been important for the chinese government. it is a huge industry. and it is also the time to open up the chemical industry to the world and give investors more freedom in what they want to do as their individual companies. in that respect, i would say it is one more important step of the overall opening up of the markets in china. >> you will sign or you side the agreement today -- signed the agreement today. angela merkel is in berlin with the chinese prime minister today. what do you need to do to make the next steps happen? >> we did the signing in the presence of the premier of china and angela merkel is it shows that we have full support from the chinese government, and on the other hand it also shows that it is a building block in the chinese-german relations,
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because that is an order of magnitude and a commitment of a german company to china. in that respect, it is part of that bilateral collaboration, and also the european and chinese collaboration, and a very important one. if you are in this order of magnitude, you always somehow the attention, and you need to have the support of the government authorities. nejra: that was an interview with the ceo of basf. now, a quick check of the markets. as we learn that theresa may may face a leadership challenge. vonnie: the markets shrugging it all off. this is bloomberg. ♪
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vonnie: from bloomberg's headquarters in london. we are finishing up the day on european trading. nejra: as you can see from the
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left side, we have been seeing a lot of gains in european equities. the 100 and the u.k. up more than 1%, holding up despite all the movement we have seen in terms of two resignations from the u.k. cabinet, following theresa may's checkers plan on brexit from over the weekend. cable is weaker, down now 3/10 of a percent. and usually sterling and the 100 have an inverse relationship, but the pound going lower, jumping below the 133 handle -- 1.33 handle following the news of the resignation of boris johnson. naira, the euro is steady. 1.1747 is where we are trading right now. and yields moving higher as well, although it was not moving quite as much higher after we saw the resignation from boris johnson. and we have had a line -- we have had a line from theresa may, ruling out a second referendum, do not know how much
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that is affecting prices. generally, it has been risk on. and you can see a number of commodities, bids, a la momentum -- aluminum, gold is higher. and let's take a look at what is happening with equities. stoxx 600 closing of higher, gaining for a fifth day, the best one since march 12. and you can see it is mainly green across the wheel in terms of industry groups. energy, i think my materials outperforming -- it, and materials outperforming. real estate and telecoms underperforming. and taking a look at carmakers, because it has been those stocks in carmakers that have been largely hit during all the concerns on trade tensions. european carmaker stocks trading at their lowest price in two years. something to bear in mind when it comes to favor equity sectors. and taking a look at the euro, it was trading higher, pushing up against some technicals.
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but after a dismal last quarter, the euro is set to advance. een the best- b predictor. they see the euro moving higher. and as a can see, the forecast 130 --it all the way to 1.30 by the end of december 2019. that is a look at your european market. vonnie: it seems like all of the interest has moved a little bit from the u.s. china relationship, right over to great britain. a lot going on. macro-wise, looking forward to the u.s. and russia summit, fallout from mike pompeo in korea, but all of that put the side because we have been watching theresa may in parliament. that said, we have reaction in the united states to other events happening. the dollar weakness has paused, back above 94. and the tucson spread. and still holding onto the 73
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plus dollar mark today. and we see the chinese yuan is back at 6.62, so stronger. a strongis not exactly number, but a stronger than it has been for the last several weeks. the opening -- mostly priced in, so that question will be if we get a second round of tariffs. i took the g20 movers, mainly to point out that soybeans and corn are still lower. and aluminum, copper and sterling recovering a little bit. nejra: let's turn back to europe and trade and angela merkel meeting with china's prime minister today. announcingthem agreements with chinese partners, including a plan of a chemical complex being built in china. and we are joined now by david powell, our economic senior euro
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area economist. does this meeting between angela merkel and the chinese prime minister suggest we mean actually see less trade at the end of all this, just a shift in how the trade patterns emerge? >> china and germany are trying to keep the world trade arrangements up and running, but this relationship certainly for china is no replacement for the united states. it is not a- t replacement. for germany, the story is different. jimmy exports almost as much as it does to china as it does to the u.s., so this helps cushion any blow their, more for germany then china, but nobody can really forget about the u.s.. . after all, it is the world's largest economy. and the consumer's last resort
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is america, as it was one said. the relationship weaker with the u.s. nejra: and we have seen the tariffs and their impact. one of them stronger on european carmakers. 600 droppingstoxx quite significant leak. he said there is no replacement for the u.s. consumer, but in terms of german cars, could the chinese market in any way make up for any sort of pain they get from the breakdowns of relationship with the u.s.? david: it might cushion the blow. this is something that is not new. germany has been reorienting trade patterns for a long time toward china, at least for a decade they have been very strong. and the chinese to purchase a lot of luxury goods, including german cars. but the u.s. is at a much more developed stage and that just
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means it's consumers have a lot more money to spend than the chinese, so even though china is an important source of growth for german carmakers, it will not replace the united states. so, germany will have to remain very concerned about that relationship with the u.s., and also have a tariffs on german cars play out. vonnie: what next are you looking for, david? of thereally, in terms trade war, we probably want to see, you know, the immediate effect of all this. will it start showing up in the economic data? essentially, what this is for consumers around the world, typically the u.s. consumers, it will be a shock to really comes. they will -- incomes. they will have to pay higher prices. inflation will go up, very similar to a happened in the u k when the pound weighted down and foreign goods became more expensive. similar to what would happen if oil was to spike, consumers have less money to spend on other
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things. so we will see what impact it has on the economy in the u.s. and elsewhere, but fortunately for the u.s. their economy is going into this with a strong position. and also, we have the big fiscal stimulus coming up, so if there is any time this has to happen, you want to go in in a period of strength. vonnie: what would it take to see a slump in equity pricing, or the effect of falling? would it take like another $50 billion in tariffs? do you have some kind of idea about how much in tariffs it would take for that to happen? david: probably the equity traders are going to be less fixated on the exact amount of the exact size of those tariffs, and more looking at the actual impact that it has on the economy, and on consumption, and there for the sales of those companies. consumers can adjust by either
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saving less, and keep spending as much as they have, or reduce their consumption and maintain savings when the prices go up. we will see which way they react. we know in the u.k., after the british referendum the consumers actually saved much less and they continued to consume, even though the foreign goods became more expensive, because the pound depreciated. i am sure the equity markets are paying close attention to the economic data coming out over the next few months, as well as earning statements from companies. nejra: where also watching how the central banks will react. i want to ask about the ecb, because we heard from mario draghi, and also over the weekend in an interview the executive board member saying that the trade war challenge is not shaking the ecb's past exit. what would it take for them to be shaken? david: the ecb will be fixated on the data, so really they are making decisions based on the economic data coming out.
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what is the impact on the economy. and i know that the euro area is recovering, almost completely recovered from the euro crisis. it was a long time coming, but the capacity should be reduced to almost nothing and inflation is picking up. if anything were to derail that, there is a risk for that to happen, but we do not think just yet, the ecb would have to react. the right now it is just a risk. but it is something to keep an eye on, as mario draghi has said he is doing. nejra: thank you so much, david powell. our senior economist in london. vonnie: time to check in on the bloomberg first word news. here is court name. courtney: a move that increases british primet minister theresa may will face a challenge over her brexit policy. boris johnson has resigned from the cabinet. he was the face of the brexit campaign. his exit sends a message to those who voted to leave the european union that their decision is being betrayed.
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theresa may defended her policy in parliament today. >> it is a proposal that will take back control of our borders, money and our laws. but do so in a way that protects jobs, allows us to find new trade deals, and keep our people safe, and our union together. courtney: last night, brexit secretary david davis quit. he says the play from may puts the u.k. in a weak position. president trump making it clear where he stands on nato before the alliance's summit in brussels. he tweeted, "the u.s. is spending far more than any other country." he says it is "neither fair or acceptable." in japan, authorities describing floodwaters and mudslides as historic. at least 110 people have been killed, 80 are missing, and 23,000 have been forced into evacuation centers. companies like mitsubishi and
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mazda have shut down factories. the weather is expected to improve this week. and in brazil, a series of judges has raised the stakes for the election in october. they have blocked in order to release the former president from jail, despite his 12 year sentence for corruption he remains the most popular politician in the country. he leads in the polls for the presidential vote. global news, 24 hours a day on air and on tictoc, powered by over 2700 journalists and analysts in more than 120 countries. i'm courtney donohoe. this is bloomberg. ok, we want to point to the mexican peso, trading at 19.14 -- as the incoming president says he wants to see growth from mexico and he reiterates he will keep gasoline prices steady, in real terms. he also says he will urgently look to rescue mexico's energy sector. and will follow through on a plan to decentralize government. the incoming president of
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mexico, was again, is causing the mexican peso to move. weakening now to 19.14. this is bloomberg. ♪
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nejra: time for our global battle of the charts. you can see them on the bloomberg by running gtv go. kicking things off his joe weisenthal. joe: remember the jobs report on friday, another strong month for job creation? again, the wage number came in weak. it is a monthly conundrum we keep having. why is it a conundrum? businesses claim they are having a hard time hiring. so in the survey of small businesses, they say, what is one of your biggest problems? and that is the blue line.
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every month, more and more businesses save finding quality labor is the biggest problem that they have as a business. so you would think, if more companies say fighting quality labor is a big problem, then wages would not be stagnating, but you see the gap between the two lines and that is what everybody is puzzled over. will we get another small business survey report out tomorrow morning at 6:00 a.m. eastern, so we will get a chance to see whether that gap continues to expand between wages, which are not going that fast, and companies' compl aints. you can see that chart at gtv go. nejra: a different take on the phillips curve. vonnie: and we were starting to get excited about earnings season kicking off again. friday, that got derailed this morning with the resignation of boris johnson, on the heels of david davis, but we will see an earnings season.
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and obviously, it will be moving money around the place. i thought we would take a look at where emerging markets are, given all the trade turmoil and weakening in many currencies. and it turns out that emerging markets are way cheaper than the developed markets, or the world markets, priced book wise. you can see the discount. that is all happening really in the couple -- last couple of years. but there has been a drop in the last couple months. if money managers i think about moving money around, they don't kind of discount they can get in knowing markets -- they what kind of discount they can get in emerging markets. nejra: what a love about your chart, there is an element of action ability on it, but joe really brought up something that has been puzzling central bankers and markets for a long time. i will have to make it a tie. joe: i will take it. nejra: this is bloomberg.
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vonnie: from new york, i'm vonnie quinn. nejra: and in london, i'm nejra cehic. let's turn to our stock of the hour. and we are focusing on air france, the shares jump in the most in more than a year today. from where we will go to our correspondent in paris. the stock surging as much as eight .5% today, what has happened? -- 8.5% today, what has happened? >> two things, shares reported better-than-expected. over 9traffic with million passengers for the month of june. that is indeed better than expected, considering that the air france unions have staged walkouts since february. you could have expected
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passengers to pick another airline. but they didn't, and that is very good news for air france. and another reason, the speculation over the new ceo of the company, as you may know the previous ceo resigned in may. yesterday it was reported that a front runner might be the current director of the paris metro operations. nejra: what about strikes, may there be more and what would the impact be? ania: strikes have already cost more than three had a million euros to the company, and -- 300 million euros to the company, and there should be a new ceo made by mid-july, so they have said that there could be more strikes in the case a new ceo is not named. vonnie: ania and paris, thank you. air france's stock closing
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higher by more than 6%. big banks, their acquisitions and ambitions meeting reality. theirors recalibrating and location of takeovers. but the stress tests underscore how likely -- how unlikely that is. joining us is our bloomberg banks reporter. so acquisitions, where do we stand? the picture is a little different than it was a few weeks ago. >> there has been stuff going on for a couple of years. banks have been buying technology firms and things like that. so that is probably not going away, but earlier this year there was sort of more expectation, wishful thinking, or a hope that they would start doing bigger things because it is 10 years after the crisis. they have been building capital for years. so it must be time. but the stress tests show that they still may not have enough capital to just go to do the big ones.
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they have enough money to be comfortable, but they do not have that much to really keep doing big things. vonnie: it is fascinating, the things they had their eyes on. it seems at goldman sachs it was maybe more retailer type banking acquisitions, maybe at morgan stanley, an asset manager. is that off of the cards? >> they still want to do those kinds of things. goldman sachs would need a lending platform, which would help turn the deposits into loans. not just in the capital markets, which is the real specialty. andd morgan stanley has grown and wealth management, so asset management and wealth management work together well, but smaller things they will probably be able to do. the big one, the numbers do not work. nejra: how would shareholders react to any big takeovers, given that it might actually limit payouts? >> the biggest problem with the thing is, you know, the balance
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between capital and the cash returns is very tight. so they are doing fine, and they have managed to get approval for continuing their dividends for this year, but it is not -- if they did a big deal and they could use cash to do it, or you know, the issue new stocks, then it would hurt the current shareholders so much they would not like it. if they shareholders do not buy then regulatory my say there's not enough capital. nejra: what would be the political appetite for even bigger banks? perhaps with a new administration with what investors were hoping, that they can now perhaps convince the current regulators that they can do these things, but there seems to be no sign that that has
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really changed. regional banks, midsize banks, smaller banks definitely. the community banks, they are getting approved for mergers more easily. that is happening already. but the biggest guys, i do not think anywhere in the world still there is any appetite for really too big to fail, to get even bigger, because we are not 100% sure where we are. nejra: thank you for keeping an eye on earnings. time now for the latest bloomberg business flash, a look at some of the biggest stories in the news right now. vonnie: -- bank was to be able to retain young talent. the canadian bank is seeking opportunities for junior investment bankers. the security's unit will make be promotedgible to to associate after two years, instead of three years. morgan stanley and credit suisse has taken similar steps. and shares of -- fell today.
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the japanese automaker admitted that emissions data with fake this year during inspections. the government said the inspection process was faulty. and it is the final straw for starbucks. the world largest coffee chain said by 2020 it will eliminate single use plastic straws. moreucks has used than one billion plastic straws for years and will replace them with material ones, and recyclable strong list lids -- strawless lids. that is your bloomberg business flash. nejra: let's take a look at where markets ended the day. equities, all higher. gaining. 600 and let's switch the board and look at fx.
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the pound has been very much in focus. we have seen it weakening after boris johnson resigned from theresa may's cabinet. the pound is weaker. euro flat after strength earlier. and feels pretty much unchanged, even going lower after it was higher earlier. that is what the 10 year yield is doing. down one basis point. we were at 1.3 earlier. bundenure -- ten year yields are higher by eight basis points. this is bloomberg. ♪ . . .
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washington. noon in i am david westin. shery ahn is off today.
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the top story that we are all watching at this hour is of course the supreme court. who would be the justicet replaceo -- to replace justice anthony kennedy? for it mean to regulation and same-sexues like marriage and abortion, and one of the politics of the nominationand how the court is likely to affect no matter what happens to the nomination? ♪ nine hours from now, president trump will appear at the white house with his choice for the supreme court. with four court of appeals judges to choose from. we welcome our greg stohr. first of all, we only have nine ho g

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