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tv   Bloomberg Markets Americas  Bloomberg  July 24, 2019 1:30pm-2:00pm EDT

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that does not conclude that he did not commit obstruction of justice. >> that is correct. >> what about total exoneration? did you actually totally exonerate the president? >> no. mark: mr. mueller being questioned by chairman jerrold nadler of new york. mueller made it clear he did not want to go beyond the findings in his 448 page report. new british prime minister boris johnson is promising the u.k. will get a brexit deal or will leave the european union without one. johnson delivered his first speech as leader outside number 10 downing street. p.m. johnson: it is vital at the same time that we prepare for the remote possibility that brussels refuses any further to negotiate. and we are forced to come out with no deal, not because we want that outcome, of course not. but because it is only common
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sense to repair. mark: during his remarks, prime minister johnson tried to show his administration will have priorities beyond brexit. he promised to increase school funding, lower taxes on capital investment, and fix the country's social care system. bernard made office asking president trump to shorten his 150 year prison sentence. the financier who was sentenced in 2009 to 150 years in prison has filed a request for a commutation with the department of justice's office of the pardon attorney. he was convicted of running the largest ponzi scheme in history, stealing an estimated $64 billion from investors. three mile island unit two has been closed since 1979 when it was the sight of the worst ever u.s. reactor accident. now, energysolutions of salt lake city is in talks to buy and dismantle the facility. the deal does not include unit
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one, the owned reactor that is scheduled to be closed in september. terms of the agreement were not disclosed. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. shery: live from bloomberg world headquarters, i'm shery ahn. amanda: live in toronto, and amber can work. welcome to "bloomberg markets." we are joined by both are bloomberg and bn and bloomberg audiences. here are the top stories we are following from around the world. mueller takes the make the former special counsel -- counsel is being questioned on capitol hill in front of two
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congressional committees. boris johnson takes the reins. the new u.k. prime minister has already doubled down on his brexit plan in his first address outside of 10 downing street. facebook versus the fed. the doj and the ftc have the social medias giant site slapping on a privacy settlement let's check in on all of the market action. a mixed trading day. largely driven by inconsistent results that we have been getting through the earnings season. the dow is the under performer. largely in part because of weakness we are seeing in shares of caterpillar, as well as boeing. boeing burning through $1 billion in cash as a deals with the grounding of its 737 max jets. it is the inconsistent picture that we are seeing of how the global economy is faring? if u.s. caterpillar, quite poorly. particularly in asia.
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ups, surging the most since 2008 as it managed to eke out revenue growth, thanks in part to new cost-cutting initiatives as well as next day delivery. shery: it seems to be that all of these big industrials have concerns about a global economic slowdown. perhaps a reflection of that on the underperformance on the dow. not surprising, given that we have seen the slowing manufacturing pmi numbers. we got the u.s. market data. barely avoiding contraction territory. hanging on that 50 threshold. not so lucky for germany which we just saw that they contrasted even further. their manufacturing pmi falling to the lowest in seven years. the line in blue. same thing and contraction territory for spain. also france. barely hanging onto the 50 level. last night, we saw japan pmi fall and contract for a third consecutive month. for europe, it does not make it
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any easier as we head toward that ecb policy decision that you continue to have these issues over brexit and the leadership. amber: you highlighted that it is not just brexit that is weighing on the u.k., but the global picture is not supportive. let's go to what boris johnson will essentially be inheriting as he made his first speech since becoming prime minister of the united kingdom. and says he will take on the responsibility of negotiating a deal for the u.k. take a listen to what. . he had pm johnson: pm johnson: to say though i am today building a great team of men and personalwill take responsibility for the change i want to see. never mind the backstop, the buck stops here. next step, clearing out senior members of theresa may's cabinet. guy johnson joins us now from london. as boris johnson made his first speech as prime minister, he
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seemed to really draw a line in the sand that october 31 is the deadline, no matter what, the u.k. must leave. guy: absolutely. he came from buckingham palace where he saw the queen, he got in the car, arrived at downing street, i sat next to him as he got out of the car. he burst out of the car, bristling with energy, marched his way toward the podium, gripped it, and delivered this speech which was full of passion. will that passion get him very far? he is determined to change the tone, determined to inject energy into this process. he is determined that the u.k. will leave on october the 31st with or without a deal. what was interesting in the speech was that he started to lay the groundwork for blaming the eu if a deal is not done. the u.k. does not want to leave without a deal but if it is forced to do so, that may well turn out to be the case. boris johnson making it very clear that he is determined to
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leave on the october 31 eight. he has a range of factors lined up to make sure that does not happen without a deal. there are many mps that have decided that they will vote against him if that were to happen including the outgoing johnson. -- hammond. boris johnson's determination is going to hit a number of large obstacles over the next few weeks. his energy today, very strong. shery: we are getting the latest breaking news out of the u.k. saying that boris johnson has named sergey david as chancellor. we know he has been shaping his ministerial -- his cabinet. what else can we expect throughout the day as we see who takes on these leading positions? guy: he is by no surprise to anyone, he will anticipate that he will be taking over that role. three key positions are likely to be determined. i would expect over the next few
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minutes you will get news. will be seeing the home secretary potentially being bertie per towel. she was ousted from the government a while ago but she has been close to boris johnson. likely to come back and and become the home secretary. it is likely that dominic raab, a former brexit minister, will take over as his secretary. those are the three big roles that are likely to be announced. what we are seeing here is basically a takeover by the brexiteers of the cabinet. up until now, theresa may has tried to maintain a balance. this is a brexiteer takeover of the british cabinet. that fits with this boris determination to deliver brexit. he says before october 31. shery: guy johnson, thank you so much. guy johnson there in london with the latest on brexit. and the new leadership in the u.k. let's continue this
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conversation. joining us is the founder and ceo of sg h macro advisors. great to have you with us. we see this new shape of the u.k. cabinet, now taking shape. will this change anything for the u.k. economy given that the brexit deadline, october 31, has not changed? >> i think these are great moves. i'm not speaking in a partisan way, i'm speaking looking at risk management, what has been happening in the u.k., the sclerosis we have had under theresa may who came with high hopes for her leadership. what guy was talking about as far as oris johnson -- boris johnson's energy, he is also taking control. it is not just random energy. this is a problem theresa may had with her own party, her own parliament. beau joe is making sure he makes it in the body.
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it will ruffle some feathers but if you look at the playbook of the trump administration when donald trump became president, there was a lot of controversy within the republican party. there still is. there are many people who have never been trump or's. theugh the sheer force of bulldozing over his opponents, you might say he has cowed of the opposition within his party to go along with him. jo to be successful in negotiating a hard brexit or crashing out which does not take that much negotiation, or preferably having a brexit deal before october 31, he needs to have control of his own party and go to the year paeans with that, with a stronger negotiation than theresa may had. this is critical. a great step. amber: isn't that the key hurdle, can he have control over his whole party? can he do what theresa may tried to do over three years in now a
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couple of weeks, where she was faulted for not being inclusive enough in her decision-making? are you so confident that a bulldozing approach this time around will work? sassan: yeah, i think that is the issue that i would have is that she was too inclusive. you have a situation where you cannot please everybody. you have two factions -- factions. she was trying to cater towards three out of those four factions essentially that does not work. you have to pick your base and you have to really work on your base and expand your base and force the rest of the party to come along. you have to be able to play some brinkmanship which people believe in. brinkmanship number one with the eu when you are negotiating over the backstop, where the eu has expressed that they might be willing to put some more concessions because they are
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more scared of boris johnson then what he what -- of what he might deliver. your own party, of all of the opposition and there are many people within the conservative party who are oriented, they do not want early elections. early elections last time was a disaster. they will have to close party ranks and this is a way to do it. shery: thank you so much, you are sticking with us. we will be back. we have breaking news. kuwait and saudi arabia are coordinated into resume oil output from the neutral zone. this is according to kuwait's state run news agency. the visit to kuwait by saudi statemen is going to continue talks. we have seen reaction in wti, down .25%, after three sessions of gains for wti. now holding at around $56.6 a barrel.
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we will have plenty more coming up. this is bloomberg. ♪
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shery: we have breaking news out of the u.k. as boris johnson is forming his cabinet. we hear the former international development secretary has been named secretary of state for home department. the secretary of state for home department in boris johnson's administration. we had just heard that sajid javid would also be kam chancellor. we will get you more news as we get them. let's turn to monetary policy, in an exclusive interview, alan greenspan endorsed the idea that the u.s. central bank should be open to an insurance -- to ensure an interest rate cut. alan: forecasting is very
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tricky. havein forecast outcomes far more negative facts. you will act to reduce the risk of those types of events. and that is a valuable thing to do. on aember very distinctly number of occasions, we cut thought not because we that it was highly probable that it would be necessary, but the probability of what would happen if indeed it did happen, was really large. it is a relative balance. -- must consider that are
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there are certain probability events which can be very dangerous. you canto act to see if fended off. shery: this as global central bank policy is in focus with the ecb set to deliver a rate decision tomorrow. let's bring back sassan ceo ofani, founder and macro advisors joining us on set. also with us, michael mckee. mike, let me start with you. what are we expecting from the ecb? will they preempt the fed or waited out? michael: it looks like they will wait the fed out. there was move of action tomorrow after the disappointing pmi data out of europe. it is only about 37% priced in. right now, likely that they will set the table for september. they have to decide what they are going to use as a tool or what commendation of tools. each one has problems they have to work out if they want to do tearing for the banks for a lower deposit rate, what kind of tearing program do they set up?
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that sort of thing. we will hear more from mario draghi about what they hope to do, but without details. amber: from your perspective, how extreme do you think the ecb is willing to get here? we have heard this idea floated out by blackrock ceo that you could even see eventually the ecb going out and buying stocks. one is the threshold of getting to that level? sassan: i think that is a very interesting idea. i don't think it is going to happen under draghi's leadership. they havecussions, two policy tools that they are looking at. three actually pared forward guidance, rates, and qe. they can pull the lever on either one of those. for them to have a bazooka would be to have a quantum difference in the qe and this is where buying equities would hope and a whole new universe. the problem for the ecb is while
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the swiss national bank and the bank of japan and others do this, they are quite concerned about the politics and the optics of going into the equity markets. there is this all -- there is all this discussion about income inequality and who you are benefiting. in my earlier conversations, it seemed to be in the hypothetical. i do not think this ecb under mario draghi will take that step. in the future, maybe lagarde will consider something like that, but not this or the next meeting. close to 0% chance. shery: we had deutsche bank earnings this morning and the picture is worsening for banks across europe. cuts will not help. what are we expecting in terms of mitigating measures for the banks? sassan: they talk about mitigating measures or as mike said, tearing is the shorthand for that. if they cut rates, which i think they will, and there is a chance that they may do it tomorrow,
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maybe 30%, 40% chance, only because it is draghi and he may want to accelerate the action, but it is most likely september. they will have to mitigate the measures of the banks. what they will likely do is exempt a portion of the deposits that the banks hold within the ecb, and whatever criteria that might be, they will say x portion of your bank will not have to do that and these will be kept at a non-penalized rate. the swiss national bank, they look at the required reserves versus excess reserves. there are different ways of skinning the cat on this one. they will definitely have to do that. one final thing on the negative rates, where it is most powerful is not actually in pushing money out into the system. they will definitely havethat in for doing it. it is most powerful in the currency. carrying the trade. when they did this in any 14, the euro was at 1.40 and they
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were first day ash they were frustrated that the euro would not go down. it stayed at 1.404 a week and then dropped to 1.20. if you are looking at a manufacturing problem, which the euro zone is looking at, that is when it becomes more effective. amber: speaking of deutsche bank, their research team put analysis showing that since the 1950's, there has been 19 easing cycles yet nine of those we have seen the economy slipped into recession in the deciding factor seems to be whether or not growth returns. with all of the central banks and in a coordinated easing, is at the wild-card question? will it actually work? michael: it has been a big discussion in the markets. does this accomplish anything? we are in a situation where uncertainty seems to be driving decisions not to spend rather than a lack of demand. the fed's tools, any central banks tools of lowering interest rates of trying to boost demand, and the demand will not come
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back because the cost of capital is not a problem, then you will not get a lot of results. ,t may be an effort because they will never admit it to weaken currencies. relative growth rates and relative interest rates are likely all to change. at this point, it may be a zero-sum game and nobody's currencies are weekend after everyone is weighed in. there are a lot of people who believe it may not work other than perhaps to raise a little confidence that the central banks are on the job. direct and pack it is hard to see. amber: we will see what the ecb decides to do come tomorrow. thanks so much to mike mckee and sassan ghahramani. i want to recap one of the big stories that is taking place in capitol hill as former special counsel robert mueller is on the hill testifying right now. he is in his second hearing of the day on the mueller report. it is aeen reluctant,
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long-awaited appearance before congress all day. he has resisted pressure from democrats who hoped he would reveal additional information about his investigation into president donald trump. you can watch this right now on your bloomberg terminal. just go to live go. we will be right back. this is bloomberg. ♪ g. ♪
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amber: this is bloomberg markets. i'm amber in toronto. shery: i'm shery ahn a new york. more breaking news out of the u.k. boris johnson supporter and conservative mp dominic rabb was named uk's foreign secretary. this coming at a time when boris johnson is now forming his cabinet. we had just heard the former international development secretary was named to secretary of state for the home department. also, sajid javid named chancellor.
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again, the latest breaking news, dominique rabb named the uk's former secretary. we are now seeing boris johnson's cabinet taking shape. amber: i guess this perhaps allays a key concern that he would not be able to form a government as he fills these key roles. you are saying that reflected in the british pound which is up, 4/10 of 1% against the u.s. dollar. that is a sign of stability, in addition to the fact that you have the market pricing in a lower probability of a hard brexit. we will continue to monitor these developments. this is bloomberg. ♪ this is bloomberg. ♪ we're the slowskys.
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we like drip coffee, layovers- -and waiting on hold. what we don't like is relying on fancy technology for help. snail mail! we were invited to a y2k party... uh, didn't that happen, like, 20 years ago? oh, look, karolyn, we've got a mathematician on our hands! check it out! now you can schedule a callback
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or reschedule an appointment, even on nights and weekends. today's xfinity service. simple. easy. awesome. i'd rather not. ♪ >> i am mark crumpton with bloomberg's first word news. special counsel robert mueller is confirming that the president can be charged with crimes after leaving office. he says that justice department
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guidelines prevented him for chargesng against president trump while he is in office. theler says quote, "one of tools a prosecutor would use is not there." he told the house judiciary committee this morning that his investigators cannot exonerate the president on obstruction of justice. 's report says they did not find sufficient evidence -- his report says they did not find sufficient evidence. >> you believe that he committed, you could charge the president of the united states of justiceuction after he left office? >> yes. olc opinion says that the prosecutor cannot bring a charge against a sitting president, nonetheless, he can continue the investigation to see if there are any other persons who might be going into the conspiracy. mark: before


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