tv Bloomberg Markets Americas Bloomberg July 30, 2018 10:00am-11:00am EDT
vonnie: the italian prime minister visits the white house asay with tariffs in focus technology shares slide again. more on that in moments. a key reading on the u.s. housing market. theending home sales for month of june and we are looking at a beat. they came in up 9/10 of 1%. survey had been calling for a reading of 1/10 of 1% so a big beat. also considering last month was down half a percent. this is the first up month for pending home sales. this is one bright spot we have seen for the housing market in quite some time. averages to the major not a lot of influence on that. a small gain for the dow, the s&p 500 has been higher but is
now slightly lower. both of those indexes last week up for weeks in a row but take a look at the nasdaq down about 1%. the nasdaq 100 down nearly 1.2%. the nasdaq down for a second week in a row. let's look at the last three days. 2.4% since the end of march great this has to do with the faang trade. facebook down more than 3% today , down more than the last three days. that is bleeding into some of the stronger performers on those fears. amazon alphabet what a great quarters but they are sliding on contagion fears. netflix down, the lowest 100 day moving average. let's hop into the bloomberg and see what's happening for the nasdaq because the has been some weakness here. you can see this and we see this is a six-month chart.
a lot of choppy trading. on the recent weakness, take a look at that. the nasdaq is hitting down on the 50 day moving average. it will be interesting to see whether it holds or falls. caroline: i love that. 90 minutes to the close of trading and we are seeing tapped as the underperformer. i see off by a percentage point drag the lower. on the overall we are seeing better risk aversion. to cut.bers not looking earnings still front and center but mainly central-bank action. we are looking at the bond market today, yields rising higher as the boj intervention buying up bonds trying to control yields ahead of the decision tomorrow how many feeling they will change their policy outlook that will affect global. maybe this normalization is a
boost? checkout what happened in terms of european banks last week. we've had the best week since all the way back in april of 2017. earnings beating it. will this week spell equally positive momentum for the likes of credit suisse which is coming out with its numbers. we will keep an eye on those earnings. i want a quick look at what's happening in terms of the other sectors and other areas. will have to look at heineken in a moment. it was an underperformer on the back of its numbers. i'm looking at the fx rates because we are seeing dollar weakness. the e-krona, look at the out -- the krone, look at the outperformance. exports in the consumer driving the swedish economy. union: the usa european
look to be stepping back from the brink of a trade war last week. tensions between the u.s. and china continue to simmer. for more on where global trade tension stand we are joined by adam tooze. a new book coming out. written.er books he's which won several prizes. he is with us in studio. i want to begin with a quote from an op-ed. "normal talk about globalization and competitiveness is directed inward at the nation. taking the idea and pointing it out work, calling out his suppose it foes. in doing so he do liberally fosters economic nationalism."
what exactly is happening with globalization and nationalism? adam: the thing we have to do is distinguish between the run-of-the-mill competitiveness talk with national survival in the global market. it is spoken all the time and all sorts of different forums. from what president trump seems to be doing which is an attack mystic relationship. for me the shock was the description of the eu as a foe. he immediately backpedal to say they are not that guys, but the way he turned competitive relationship into something more like a boxing match, you are changing the nature of the game for everyone. vonnie: this is what president trump is so brilliant that along with the brexiteers. financeuring and over
our top order. this cognitive dissonance is being used to give them more power. is deeply confusing. if you ask what the largest car exporter from united face to china with which america runs a surplus, it is bmw and it makes it part in south carolina which is its largest production facility in the world. if you ask what blue-collar americans drive, the constituency trump is looking at, they drive compact cars imported from mexico and south korea. the sense of the car industry as an american industry is a figment of trump's imagination from a past period where it really was true that what was good for gm was good for the united states. that is no longer true. vonnie: where do we end up with all of this? president trump came last
weekend talk about free trade and fair trade. what happens, does it take the midterms and beyond to see where both parties stand economically? >> it is an astonishing confusing picture running a multiple different speeds. renegotiations, the chinese-american standoff. scrambled bys an the internal confusion within the trump administration when you have the president making policy on the spur, a struggle between mnuchin and light eyes are very that you have procedures of an investigation like the one in the auto industry which could run an entire year and the rest of the world has to respond to this confusion and respond to the fact americans pull the trigger on steel and aluminum. the large auto producers of the world have to meet to consider their possible
responses to the market escalation. that ann's fundamental -- that adds fundamental radical uncertainty. it was one of the steady features of the global economy. one of the deepest integrated sectors. caroline: fundamental radical uncertainty. this is something the markets have to navigate. i'm looking at how the market reaction is. we had earnings from caterpillar with $200 million tariff related headwind. tyson foods blaming the trade dispute. ramifications across several sectors we are seeing. it is also in part because of the tit-for-tat quality of this. all of a sudden you find u.s. agriculture in the firing line. bmw finds itself in the
crosshairs not simply because it , but a lot of fancy cars also it's the largest american car exporter to china and it finds itself caught up in those interconnections. this is before we even start talking about places where you can find a major merger between the european-american chip producer foiled by refusal of chinese regulators to give the green light. we've seen a shaking of the fundamental assumptions about what the future looks like and where we are headed. the consequences of that in markets we see. we see the prices of autostart gyrating. there is very serious uncertainty in which market active lab to hedge against. see the shaking of the market in terms of auto sectors, we sought gangbusters in terms of u.s. economic growth. when i'm looking at that, we saw the trade uncertainty may be
higher than they would be and the crowing of 4.1% growth may have to be dialed back. when you think the trade tensions will hit economic growth and bring something to bear for president trump? an effect with people stocking up on u.s. soil particularly. that is going to disappear as we move forward through the year. see a similar phenomenon and the question is the long-term impact on investment in particular in the rearrangement of supply chain to -- chains of a global level. numbers in the night is a cell phone up sharply. uncertainty on both sides with chinese real estate investors whether or not they will any longer be possible to take money out of china. those kind of effective going to come through over the medium
rather than the short term. vonnie: if you were to write a new afterword or new introduction, what parallels to today do you think there are? adam: the really alarming parallel is the significance of the united states leadership in the world economy with politics or its absence. if you want to know the switches are which fundamentally change the parameters onto which somebody like hitler's came to power but also the switch which allowed japanese imperialists off the hook or mussolini in the 1930's, it is the waning confidence on the part of elites in all of those countries that they can count on a future shaped by an american power. this was the gamble of the 1990's with regard to china. if we build it they will calm. if we build the framework, china will emerge as a responsible
stakeholder. emerged, certainly just an extremely challenging way. if we give up on that play at this point, it takes the decision-making of everyone in , regimes and administrations and governments which orientated the elves with a long game on the part of tpp whichpresented by was written not by the trump administration in the first days. tooze is am professor of history at columbia university and is staying with us. caroline: plenty more where that came from. kailey leinz has more from new york with the headlines. >> bloomberg has learned the board of cbs will discuss the future of les moonves today. six women accuse him of sexual harassment. he admits decades ago he may
have made women uncomfortable by making advances. cbs is hiring their law firm to investigate the claims. california, a deadly wildfire has forced tens of thousands to flee their homes has slowed down. people are optimistic of the first time in days. more than 800 homes have been damaged or destroyed very a report from the malaysian government does little to solve aviation biggest mystery. malaysia airlines flight 370 was probably veered off course deliberately over the ocean. on march 8, 20 14 with 239 people on board. the report says investigators were unable to do -- determine the reason for changing course. the bank of england governor says he spends half his time preparing the financial system and economy for brexit. he said the central bank has a responsibility to manage the downside if there is a certain outcome.
global news 24 hours a day on air and on tik tok on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz, this is bloomberg. caroline: a quick look across the assets. big movements in bonds. goingies leading us down as low as the technology industry as well. the s&p 500 off to a similar degree. ,heck out what's happening dollar weakness today with a rebound slightly in the chinese --. brent oil. this is bloomberg. ♪
caroline: live from london, i'm caroline hyde. vonnie: this is "bloomberg markets." asuge weekend -- a huge week leaders meet to discuss their policies this and the fact we are approaching the 10 year anniversary of the financial crisis. we are back with adam tooze, professor of history at columbia university. i want to read another quote. " whichhor of "crashed will be out on shelves next week. the translations will be out within the next six weeks. here is a quote. "in the 10 years since the crisis, the idea is the economy
has moved beyond politics and play of international power has been exposed as a self-serving illusion. donald trump's must attack of the manifestation of the disillusionment and the one that matters most. with little respect for the market unless they deliver the outcome he likes." how would president trump have dealt with the crisis of 2008? question hank paulson was asked. i think it's a little unfair to trump. trump in fact in 2008 was an obama'sn advocate of policies and went on to defend the stimulus. the question really is whether interventionism would permit him also to think hard about the international dimensions which were key in 2008.
if there's one thing we have learned about the crisis in the years since is the significance of its global dimension, particularly in the relationship between the u.s. and european banks sector. and what really made the difference compared to sit a great depression in the early 30's with the ability of the fed the entire dollar-based global banking system. that is the trillion dollar question about any future management of global financial races as well. -- to the national authorities of the united states have a license to do what's necessary to stabilize the global economy? they did in 2008. caroline: i'm also looking at central-bank policy across the world. now when we are looking for , with suchon international ramifications, i'm looking at how the bond yields are all fighting to climbing today on the back of expectations that the oj may
start to fine-tune their guidance tomorrow. we might see a hint of normalization from japan. this has huge global affect. -- is this just the new normal? adam: it's difficult to know what normal means. the entire global money machine has been subject to massive intervention by the central bank and even when they are not intervening, we are asking why aren't they intervening. it's a bit like paradise. that's the world we are in. significantot just in quantitative terms but also symbolic because it's the last bank standing in the qe game. the ecb has announced their plan out. the boj has got its foot firmly on the panel. that's the question markets are posing couple will the japanese ease up. givenestion is can they
that commitment to a 2% inflation target with they are well away from achieving. that i think is the dilemma. can they keep going faced with the side effects and damaging consequences and distortions created by the monetary expansion they've engaged in. vonnie: given you've been contemplating macro questions of last several months, let me ask you this. is the liberal order failing and if so, what is next? undoubtedlyk it is going through a spectacular crisis. it is a system that needs driving and it was driven badly in crucial moments and that has profoundly delegitimize denver the systems managers at crucial moments were revealed in competent that was profoundly delegitimizing. and the nations that were taken to stabilize as spectacular as they were lacked the political legitimacy to make them permanent. i think that's really the question.
we really are now at a time of testing as to whether or not the liberal order can be re-stabilized by intelligent policy and that i think is the fundamental question facing europe, the united states, japan and their partners in east asia. adam tooze, professor of history at columbia university. author of the upcoming book "crashed." this is bloomberg. ♪
coming into the corridor. -- into the quarter. apple manufactures 100% of iphones in china so that's a big deal and they are in a transition to new services and other products businesses that includes the air pods and home pods. , ihink the quarter accounts think it matters in terms of how they grow, but all eyes are on the future and how things will develop. do you think it could affect them in terms of the assembly? >> they are at risk of tariffs there. i don't think they are affected in the latest round. apple watches been a candidate there but the iphone is not on the list. all the manufacturing of the iphone is in china and so there is -- they are still in the crosshairs of things escalate. caroline: lastly give us a
breakdown of what we expect. >> we get about 15% growth in the iphone, the iphone x is the one everybody is watching, that is a low-volume phone in terms of sales but it carries a very high price and so that has been very good news for apple because what they are trying to do is get that price of the iphone up as volumes slow. you, senior thank telecoms analyst for bloomberg intelligence. up next, we will be discussing markets. this is bloomberg. ♪ oomberg. ♪ retail.
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vonnie: that is some of our reporting streaming live on twitter. live from bloomberg world headquarters, i'm vonnie quinn. caroline: live from bloomberg's european headquarters, i'm caroline hyde. let's check in with bloomberg first word news. kailey leinz has more in new york. >> italy's prime minister is preparing to -- it's governments ties with president trump. supporttical sponsors the anti--- rhetoric. major car producing nation's it will move on the the u.s. to discuss a response with the threat of tariffs. the european union, canada, mexico, south korea and japan will take part in geneva. president trump heads back to
office. u.s. taxes i keep technology and pharmaceutical companies were shifting profits offshore. instead it may boost taxes for wall street. the reason it will have big banks offer operations even of they already are paying for taxes. bank lobbyists are urging the treasury department to come up with a fix. the first election since independence in 1980's the doesn't have robert bugatti -- s name on it.' the main opposition parties claiming the odds are stacked against them. gabe's rule ended in september. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz, this is bloomberg. we are looking at bitcoin trading a little bit lower today still above $8,000
this after regulators rejected plans for a crypto etf. michael.o get to eric asked him about his plans. you was just in asia and can't be a crypto investment bank without being in asia. 40% of the volume and the excitement is there. >> in spite of the restrictions. >> japan and korea had really been gambling markets. here's trading markets, i think japan will remain that. they are apt to say put a kibosh on it after the hack. there was another exchange the got hacked about three months ago. they've cleaned that up. it was run by bill partner from goldman sachs.
theira saying look at business since making sure the stuff is more robust, that there offense and defense, when you are in the crypto business you have to protect yourself from outside threats and internal threats. securityy want to have and so i think the fsa is doing a good job of getting the japanese market in shape ready to turn back on. my guess is in the next one or two months they will flip the switch and you will see more excitement of japan. korea is actually more interesting in this sense of while it's been a trader on the macro market i was shocked to see because it -- because their macro guys. what is happening now is their corporate's are saying we want to get into the blockchain, we do want to get to crypto space and at some of this reverse ico
idea. as opposed to the little guy starting it, the big guys -- >> you are talking about big korean companies. >> they see part of their future in the centralized space and they are like listen, we see the future, our artists are going to want to be on the centralized platform. our drivers will to be an essential is platform so you want to own part of it. mindseta way forward that the ceos in the u.s. at this point. so we want to be there, we want to be a part of that excitement. and when you talk about china, those companies are moving at light speed. it was so refreshing to be back because i was like we thought we were working fast. we are walking in molasses and or to some of these companies. some of the biggest integrators are coming out of china. the government shut crypto down for a couple of reasons.
most of it was the chinese are such gamblers that they were very worried their retail value would get slaughtered. >> it did actually. >> pretty much out of the regulators response to crypto around the world. what is more interesting in china is there is this tension between the central government which seems from a far, you have xi who is decided to extend term limits and you've got all this and being concentrated there's the government clearing center with all the spending data and you've got -- they have ai to figure out exactly what people are doing. they are cameras all the corners. in some way it feels like they are making a totalitarian regime. on the other hand, they are doing all they can to support blockchain initiatives. so they haven't sorted that out
yet. i think this is an opinion, i think they are pro-blockchain because they know it is coming anyway. was the galaxy digital founder and ceo speaking with erik schatzker. we will keep the theme -- keep the thing going because bitcoin is trading lower after regulators rejected plans for a crypto etf. the number one digital currency has been -- since last month. what's the best strategy for writing the crypto? residente now is alex, crypto asset manager and ceo and cofounder. taking the passive approach. how much is in there and what does this do? >> we have about 20 coins in our fund. have positioned them in a way that if a long own leverage asset that solve the complexity free access vehicle for retail
and institutional investors. be anike said you have to innovator and open up your investment management capabilities because this is a borderless asset class. caroline: and it's a volatile one. you been looking for 50 million in terms of asset management. how his interest and money flows to your funds gone? >> it is a significant lead. what we have done is reduce the volatility by holding 20 coins with slightly different levels correlations and a trailing average market cap. it needs the overall volatility of the portfolio relatively tedious bitcoin. our investors are happy. demandseeing tremendous both internationally and in the u.s..
room is u.s.he investors like passive investments. it's a good way to get that. it's a lot more efficient tax wise. the demand is there and we are following that and. caroline: you just raise a series a. you said you want traditional exchanges, a multi-coin etf. second thing put forward by the boss gemini exchange, when do you think we will get an etf into the market? when will we see more institutional activity because of this? : they want to see investor protections for retail investors and what the community is saying is these passive vehicles will increase the participation in the market and reduce those concerns. we do think the product is coming soon. perhaps in the next 18 months we will probably see a bitcoin only etf.
the product is something we would like to look out for. those are all single coin products, what's really exciting is the multi-coin part. i think that will transition the system from just access into looking at this in a significantly different asset class. vonnie: what is the benefit investing in your kind of part of bitcoin and how do you manage the risk? ali: that is that the wives important to open the benefits we provide. we hold 20 coins. your opening of yourself to idiosyncratic risk of one asset. by holding 20 the portfolio behaves in a way that's responsible. we do hold all of our coins. part of our index means we will never include a coin we cannot take it off of an exchange. the dust
we do not open ourselves up to any exchange risks and we will weer be in a position where risk our client assets. vonnie: where does it go? >> to the moon. we are expecting it to go much higher. in a passive vehicle like ours is a really good way to participate. vonnie: thank you. caroline: fascinating conversation. a big week for central banks. we will bring you highlights from a recent interview with the boe governor mark carney. how he is preparing for brexit. mackinnonar from neil , his take on trade tensions between the u.s. and china. this is bloomberg. ♪ . this is bloomberg. ♪
vonnie: live from new york, i'm vonnie quinn. caroline: this is "bloomberg markets." it's time for the bloomberg business flash, a look at some of the business stories in the news. bmw is trying to offset the cost of higher tariffs by china's trade war with the u.s.. the german automaker is raising the prices of some mid-size sport utility vehicles in china. these are built in the bmw factory in south carolina. tesla has raise rice -- prices in china. casino operators in the u.s. are jumping into the business with this up in court clearing the way. they are teaming up with mgm resorts national each putting in
a $100 million set up for online betting in the u.s.. caesar's will start taking sports bets at two casinos in new jersey this week. beerorld's second-largest maker heineken is forecasting a drop in profits. they've been expanding more than expected in brazil where business has lower margins. they said higher raw material costs and the currency headwind will weigh on profits. when you look at the round the world come in europe is performance just performing well. france,ingle out italy, spain, many others. quite a balance. and number of key markets in emerging markets performing well. i will call mexico here and then acceleratingmers recently like cambodia going very fast.
and in africa you see performing very well. launched last year and is working very well contributing to all new growth and revenue growth this year. we will bring you more highlights from heineken later in the show. that was your business flash. vonnie: still ahead we will be checking markets. let's take a look at faang partiallyht now suffering from exhaustion. down three and-- a quarter percent. alphabet down 1.4%. investors definitely showing signs with some stocks. take a look as cbs down. this is a big decline for cbs
vonnie: live from new york, i'm vonnie quinn. caroline: this is "bloomberg markets." it is time for futures in focus. climbing as concerns over supply disruptions continue. let's talk about this oil move because we have brent and wti on the rise. >> what is interesting is the they are starting to narrow that spread. the demand has been strong for crude oil recently. inventories have dropped up quite a bit despite rising production out of the u.s. and
saudi arabia. are rising,they prices are rising and demand is picking up. i expect crude oil prices to move up to about $73, with even more receptions on inventory and a possible conflict escalates with iran. tengion seven building recently. we could see them move up to $80 by year-end. on from one to another, copper coming off its lows. we have about six cents of a percent. >> copper has been weakening quite a bit especially of china. the economy seems to be tightening up. is threat of a brazilian strike and what that might do is it might be the catalyst to start to push copper prices up.
continuing to selloff copper. we need to see a justified move before we see longs jump back in the market. oil, copperaroline: in the u.s. dollar. i'm looking at function that shows the different currencies and in a moment. dollars on the downside seeing it weakening against every major training partner -- trading partner. what drives it down? >> it is had a struggle here and we saw the negative reaction after the gdp number which was spectacular on friday. if the dollar cannot rally with good u.s. economic data, it will struggle here and you have a lot of central banks coming out all starting to turn talk -- turn hawkish. with multiple foreign banks getting hawkish, we could see a
dollar below that could spark liquidation. also the bank of england. those will really, out and but the pressure on the market here. the u.s. is pretty far along in his rate hike cycle and i do expect one to two more by the end of the year but after that there will be a long pause. it has to pause somewhere. caroline: thank you for running us through assets just then. a stellar earnings report is powering our stock of the hour talking about caterpillar. still up 1% and they are here with the fly. >> it beat earnings estimates and annual profit expectations. full your eps at the announcement.
say the raising guidance raise the magnitude is likely to continue into the back end of the year and with growth across the business which we will show you that. a broadening recovery, construction revenues up 24%. mining revenues up 38% and overall product up 83%. caterpillar with one of the were starts to the year and back with the financial -- financial crisis. it seems that might not be the case now. caroline: shaking off the as good as it gets comment. it's seen as a bellwether for the global economy. take a look at the bloomberg
here with the function and you can see more than half its sales outside the u.s.. the rest is everywhere else. they did find concerns about trade and even as they raise those estimates, in a statement they said the recently imposed tariffs are expected to impact material costs in the second half of the year approximately 100 million to $200 million in the company expects apply change to continue to pressure costs. what they are seeing now is they go to try to offset those costs and it's something we can expect out of the question. our thanks to emma chandra with the stock of the hour. let's take a quick look at faang stocks setting the tone today. facebook'swer,
decline continues. the netflix down almost 4% and alphabet down 1.8%. we've of bank of america report just out two days ago saying investigators looking at monetary tightening to ensure the faang block. want to point out cbs down another 4% today as well. the regularly scheduled board meeting is taking up the question of les moonves and we will bring you any information that emerges from their according to a person familiar with the metal desk with the matter. the market overall is lower today. caroline: interesting you bring up technology. on the european close, technology weighing on europe as well currently seeing tack down by 1 -- tech by 1.4%.
pretty much flat, the dax seeing movements. we still have earnings season. the dollar down today we are seeing particular moves in the swedish krona. pound is on the higher side. we have the likes of ing call a. let's have a quick look at the bond market. this is where the action is all ahead of the boj. well they fine-tune their monetary policy yields? yields pushing higher to eight basis points in the u k. this is bloomberg. ♪
"bloomberg markets." caroline: here are the top stories we are covering from the bloomberg and around the world. it's a big week for central banks with decisions from japan, the u.s., and the u.k. we will look at what it could mean for the markets. we will discuss brexit and tech earnings with neil mackinnon from the tb capital and a big deal in private equity as the sports company genius -- we will talk with the ceo, mark locke. thelet's look at how markets are performing after 30 minutes until the end of midday in europe and about a 10th of a percent, looking at the sector breakdown because that is where it is hurting in tech.
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