tv Bloomberg Markets Americas Bloomberg September 27, 2019 10:00am-11:00am EDT
york. 30 minutes into the trading day. from new york, it is vonnie quinn. i am guy.london, happy friday. vonnie: happy friday. what a week it has been already with a strange we cycle. -- news cycle. we have high frequency economics to cap a week of economic data. we are getting consumer sentiment. in contrast to other sentiment figures. it is the final data for september. expectations and current conditions coming in better than their previous reading. we got pce eta this morning as well. let's check on the markets. right now.hanged mixed markets are the dow is a little higher, the nasdaq lower, primarily on micron, which
really disappointed, both for earnings and its forecasts, down 8.7%. many analysts saying this is the bottom and that things will get better than here and that expectations were too high in the first place. wells fargo finally has a new ceo. that has that stock up 4.7%. 170.s at they needle is getting smaller and smaller. guy: i think they are calming down. let's take a look at the week. let's take a look at exactly what we have come. this is the week that was -- incredibly tight ranges apart from one day. that is the impeachment scare, that is the effect it had on european markets. if you exclude that, take a look at the rest of the week. trading rangeht
for european stocks. the pound was down earlier on in this session. trading 1.23 now. a hawk now turned dog is starting to indicate that rate cuts in the bank of england could be required, even if we get a briggs deal. off of that, the ftse 100 trading higher. what is happening -- 80 -- a big deal is in crude market. we saw prices go up on the saudi attack and have now come back down. brent, 61.67. vonnie: breaking news. is beingdropping it sued by the sec over a failure to disclose a possible loss. the sec says it is suing the generic drug maker over failure to disclose a possible loss. mylon is -- mylan is dropping on the news. we will continue to follow that.
back to markets, stocks edging theer potentially today as we from washington over shouting -- overshadowing. we will get to some of your themes and a moment, but what have clients been calling you about this week even that there is now a real risk of a president that will be impeached? >> political uncertainty is the focus this week. of course, the impeachment inquiry was top of mind. and trade has continued to be this overhang of uncertainty over the markets. in our view, as far as which political event is more likely to weigh on markets, we are focused on trade in terms of its potential to have implications on the real economy and has been the primary mover of markets over the past few months. each day, we get news that is a little more optimistic or pessimistic. we have seen equities almost in
wedlock as it digests these headlines. vonnie: you have done a phenomenal amount of work at ubs global packet of themes every year. this year it includes things like generic medical devices, e-commerce, energy efficiency. how does day-to-day news on something like trade would impact how you see these themes? laura: with the somatic work, we take a longer-term focus. what is great is when we have these noisy markets, where the markets are moving every day on political noise, it is great to have long-term ideas and trends to point to to keep clients invested. during these markets, it is tempting to want to hide out in cash, but our messaging has been that it is important to stay invested, because on any given week, you have a 43% chance of a performing stock. but if you look over 20 years,
you have a 0% chance of a performing stock. so the long term themes help focus our clients on the more secular trends and opportunities that play out over the long horizon. guy: one of the themes out there at the moment is everybody wants everything to come with a nice defensive sticker stuck on it. is that theme getting too far over its skis right now? the opera performance of anything attached to safety, the it -- the outperformance of anything attached to safety, be it bonds or whatnot, is are getting overdone right now? would say so. we have a focus on the consumer as well as secular growth trends. some of our equity sector overwrites now are in consumer discretionary, consumer stable, and consumer services.
you have this secular trends of digital advertising balanced with telecom exposure, which tends to be defensive. growth to defend some and have a more defensive stance but avoid more of the stretched opportunities in that mindset. guy: is there a message i can take away from yet another ipo coming from private to public? i am talking about pellets on -- peleton. is there something you can deduce from that in the mindset in which traders are working? laura: i would be careful about reading too much into the broader economy from the success or failure of any one ipo. we have seen some high-profile ipo disappointments of late, but on balance, we have seen just over half of ipo launches outperform the s&p. it has been a mixed bag. there has been focus on some of these disappointments not have come in sequence, but i would not read too much in terms of
broader economic implications. vonnie: one other the themes you talk about is commodity producers. but that is closed now. as i have something to do with the china trade story? laura: so commodities are obviously linked to the economic cycle, and we have seen global growth softened and the outlook has softened, so that is in one of our top ideas at this point in time. is what i am sure this you talk about specifically in terms of the themes you are speaking on, but one of the themes is buy america. does that carry on? the dollar is going up, the u.s. economy looks good, the rest of the world does not look so hot -- do i carry on overweighting the american economy and american market? laura: we see relative strength in america compared to the rest of the world. the bright spot continues to be the u.s. consumer. consumer spending
growth a little bit weaker than expected, but we are not put off by one data point. the trend has been strong. income levels have been rising pay the labor market is really tight. putting all of us together, we continue to see the consumer as a bright spot. given that the consumer represents roughly two thirds of gdp, we see this as something to hang our hat on amidst the more negative news we see around the world in terms of economic data points. vonnie: thank you. laura kane, ubs global wealth management head of thematic investing for the americas. let's check in on bloomberg first word news. trump is lashing out at the person who gave information to a whistleblower. at ade the comment closed-door meeting with formats. >> i want to know the person who
gave the whistleblower, the person who gave the whistleblower the information. because that is close to a spy. you know what we used to know with spies and treason. led severalnts democratic house committee chairman to warn the president against witness intimidation. washingtonng -- released that transcript, pressure is worried. a spokesperson says that russia would hope that it would not come to that one asked if moscow was worried about transfers between trump and putin. he added that relationships between the countries are already troubled. hong kong police are banning a national protest day march. they based the decision on the last few days of protests. the march and rally were planned in an area close to what they call a high risk building that could be subject to violence.
protest organizer say they will go ahead with their plans anyway. in france, health concerns after a huge fire at a chemical plant. nobody was hurt in thursday's blaze, but residents say a foul smell continues to spread over the area. the cause is under investigation. the plant is among the highest risk industrial sites in eruope. global news 24 hours a day on air, and on @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. vonnie: thank you. checking in on mylan, the generic drug maker, this after we learned it was sued by the sec, accusing mylan of failing to report a possible loss. this is why they're there company overcharged medicaid by hundreds of millions of dollars for sale of the epipen.
last five days. some have at your do this to mike zuckerberg hinting the launch of the company's libracoin may be delayed. joining us from geneva is libra association coo and managing director. ae first question is straightforward one -- are we going to see a delay? bertrand: what is our situation right now is we are engaged with a discussion with regulators on both sides of the atlantic. those discussions are important. that is the reason we have taken so much time early before launching anything, because we knew we would have questions from regulators from different parts of the world. right now, our discussions with regulators is for us to prove that we will provide proper
solutions and proper answers to their questions and concerns, where one it turns out to counter financing of terrorism. the launch date will depend on how those discussions go and how -- get approval from regulators. guy: the pushback from regulators has been fairly fierce. do you think you will be able to bonds -- launch in the first half of 2020? for now, we are still discussing with the regulators. is, aswant to be clear we said, we will not launch a platform that is not compliant with regulations across the world. as far as we do not get those proper regulatory approvals, we will continue working on them.
we will not launch anything before that. vonnie: how is your application for a license going for the swiss regulator, who has to be on board as well as the u.s.? bertrand: a few weeks ago, they decided that we should be regulated as a payment system. this was the announcement made a few weeks ago. we are in the process of submitting and applying for that license. over the course of the next few months, ideally before the end of this year, we would be applying, and then they will weiew our application, and will decide upon the license for this payment system network. vonnie: talk to us about hiring. what does it look like right now? how many do you have in geneva
and how many are you hoping to hire soon, and will they be technical or will the technical staff be more in silicon valley? bertrand: geneva is the headquarter of the libra association. right now, we are a little shy of 10 people. the idea is we will start staffing in different areas, whether it is compliance, finance operations, tech operations. also, we will have some engineering people here in geneva in addition to the resources in silicon valley. advanced in hiring, in your regulatory approach, as you would like to be? did you expect to be where you are now, or did you expect to be further forward in all of this? everyone would prefer to be more advanced. but all the discussions we are having with regulators and the
questions they are asking and the fact that we want to build a long-term platform that is sustainable and compliant, i think it is worth having those discussions and going through the details with regulators, even if that is consuming time. it is worth it, because we are here to build a long-lasting platform that is there for the long term and will bring a lot of benefits for customers, but we do not want to do that in competition against compliance. that is key to our platform. and we better have those discussions in advance. that is why we decided to announce that project at an early stage so we can clear that an make sure we provided the proper answers to the questions. once all that is clear, we can move into the execution phase. guy: how do you see this as being used and what do you see the competition as being?
beingsingly, the world is divided up into the u.s. and chinese sphere of influence. is that how you see libra being divided up? or do you see it operating in china and the west? there is a lot of talk about a digitized chinese currency. where does libra fit in? bertrand: there is a chinese initiative that has been announced and other kinds of initiatives. telegram has also been announcing in that area. the 1.7 is to reach and try to reduce the gap among those populations and bring them a basic need, send, receive,to and store money. for now, i am not thinking any kind of jeer strategy or geopolitics. it is basically focusing on that pocket of people who have been existingnd by the
economical a system and try to provide them with something that havingsic human need -- a way to store money and receive payments. i was at the u.n. today, and that civil fact of having a way to store value and send and receive payments is in line with a lot of the sustainable development goals that the u.n. is having across their programs. vonnie: the u.s. said recently that they believe you are only in the very early stages of putting in place and time on elin during -- anti-money laundering compliant systems. can you axley what you have in place and where you see yourself on that spectrum? in you explain what you have place and we see yourself on that spectrum? bertrand: we have solutions on the protocol level.
there is nothing i can share publicly, but we are confident from the technical perspective and within the protocol, we will be embedding a set of functions and measures that will allow better detection and better prevention of money laundering and financing of terrorism, in addition to more traditional operation kind of organizations within the association in order to detect and report that kind of issue to law enforcement authorities. guy: thank you for joining us from geneva, libra association coo. million to the0 sec lawsuit. this is bloomberg. ♪
vonnie: time for our weekly etf fridays segment. recent conference, experts talked about the death of the fee war. our bloomberg intelligence etf analyst. why are people saying the fee war is over? would you agree? >> the ms is that this is old news, fees are already low. the data says it is not over, and we have a few ways to look at this. one of our favorite ways is look at a chart of what percent of the flows are going to etf's or products charging less than 2%. right now, it is at 98%. this is a trend continuing over going interm and is markets, down markets -- it is
not stopping. the rising sea level of the asset management industry is a little scary. guy: what should we be looking at? example isspecific vanguard versus ishares. if you look at these products, they compete against each other, and last year, they had the same fee. what happened his eyes are dominated vanguard inflows. earlier, vanguard cut their feet from five to four and 43, and you would think one basis point is not a big thing, but vanguard is now dominating ishares in these areas. vonnie: what about the active side of things? this is the passive side here. james: when you look at active, we see a lot of the same stuff. the flows are going out of high cost things and going into the low cost things or at least not leaving low cost things. if you would expect to see a performance -- if you are out performing, you
are less likely to see outflows. if you are performed, 63% of those funds have seen outflows, which is scary. it may mean that fees have become too important to some of these investors' decision making process. vonnie: james seyffart, always illuminating. whilee were waiting for a . wells fargo has found a new ceo. how the embattled bank is looking to turn things around. what is the plan -- that is next. this is bloomberg. ♪ here, it all starts with a simple...
a camera might figure it out. that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today. vonnie: live from new york, i'm vonnie quinn. guy: from london, i'm guy johnson good morning. vonnie: leaders at the united
nations general assembly paying close attention to impeachment proceedings in washington, d.c. shery ahn is joined by south korea's top diplomat. shery: i am here with south korea's foreign minister. thank you for coming in. let me get started with the u.s. -south korea alliance. we are seeing this impeachment drama play out in washington. you concerned that this will take focus away from your alliance with the united states? and also other pressing regional issues like north korea. ms. kang: i won't comment on the domestic political situation here in the united states, but i can say, per the alliance, that it is strong, unwavering, and solid, as we affirmed in the meeting between my president and president trump earlier this week, at the u.n. shery: north korea, a key issue.
any indication at all when will north korea again resume negotiations with the u.s.? ms. kang: we expect that to happen within a week. there are indications that the readiness to come back to .iscussion is more complete the meeting between the presidents was a wonderful opportunity to touch base on where things are, and to exchange ideas on when the negotiations to resume, how to take the issue and produce some concrete results on all the areas that were agreed to in koreaore, which is north denuclearization, certainly, but also establishing lasting peace on the korean peninsula, and also improving relations between the united states and north korea. shery: would leaders meet again soon, perhaps in north korea this time? ms. kang: that is a big
hypothesis. but we would want to see real movement on the discussions on the nuclear issue. shery: of course we have seen direct correspondence between washington and pyongyang. have leftdoes seoul to play here? ms. kang: we are there. we live there. we are the primary part that would be affected by how the negotiations proceed and the outcome of those negotiations. we are absolutely at one with the united states toward our goal of complete denuclearization, and strategizing and getting that from north korea. so we are absolutely confident about the u.s. approach to the negotiations with north korea. you can call us the mediator, facilitator, whatever, but at the end of the day, we are the primary stakeholder on this discussion. there,you are right
right? are you concerned? how concerned is washington about short range ballistic missiles from north korea? ms. kang: i think we are all concerned. there have been a series of these short launches, short-range missile launches. obviously, it does not help the dialogue momentum, and reviving the dialogue momentum, and we make that very clear. the north koreans, stop this. the two militaries are identifying exactly the nature of these short range lunches. -- launches. but we have also been measured in our response so as not to disrupt the dialogue momentum that is picking up again. so we watch every move very, very closely, and read the applications. a very solidupon combined defense posture and readiness on the part of our military. shery: has your alliance with
the u.s. seen any impact from south korea exiting the intelligence sharing packed with japan? -- pact with japan? expected,the u.s., as expressed disappointment with our decision, but we have explained the compelling nature of our decision, which was triggered in fact by japan's very unexpected and unilateral trade measure. respecte, i think we the u.s. position on this, what i think our position, the decision we have made and you are talking about, the military intelligence sharing agreement -- this requires a great deal of trust between the parties. has placed trade restrictions on us, based upon the rationale of breached trust and for security concerns, then it does not make sense for us to maintain this agreement, which requires a higher level of trust. shery: in the past, washington
has played the role of mediator between japan and south korea many times. what role is washington playing now? ms. kang: you know, washington, i think, is of course urging the two sides to talk, in the first instance, but also using opportunities with us vis-a-vis japan to make the point that the cooperation is very necessary and important as we deal with the north korean nuclear issue and other security issues. and we respect that. we understand that. we are very much a part of it. and it may not be playing a role visibly, but it certainly is theg what it can to keep trilateral security alliance strong. shery: you have just met your
new counterpart in japan, prime minister touching midsummer take japan, theterpart in minister. have you talked about anything concrete? ms. kang: as first meetings go, it went well. i think it was cordial. it was forthcoming. of newness or oldness of personalities, the issues are there. we have big disagreements on the issues at hand -- basically, the trade restriction measures, and also the disagreement over our supreme court issue on the forced labor. they are there. we need to work through that. but we are both committed, as i shared a commitment with his predecessor, the two ministries
talking at every opportunity that presents itself to us to try to better understand each other and to narrow the gap so that we may be able to find a of theward on the issue forced labor, but also on the trade restriction measures. shery: minister, 10 seconds or so -- the weakness and challenges in your ties with japan -- will it benefit china? there is lotsink of analysis, a minus on this side, a plus on that. i don't think global diplomacy and coordination, cooperation, is a zero-sum game, so that a loss here is a benefit there. i think in the end we all have to see the shared strategic goal in this region, which is north korea's complete denuclearization, and lasting peace on the korean peninsula. shery: prime minister, thank you so much for your time. thank you very
michele davis, who covers banks. now -- itation right is not ideal he is going to stay in new york. michelle: the big thing this does is it answers this overhang for six months, who the ceo was going to be. the fact that they named him is good, but he is not the only one skeptical about this decision. kbw put out a note saying that scharf is good. but the fact he has been at three companies in the past three years means can we trust him to stay here. he was brought into bny mellon in 2017 to turn the bank around, and here he is two years later, in the middle of that business -- in the middle of unfinished business. people are like, we will take a wait and see approach. michelle, he clearly likes a challenge. the political spotlight is going to be on him. when are we going to start
hearing from politicians, and how important will their voice be and how we think he is going to be able to do? michelle: i mean, we will probably start hearing from them asap. it was political and regulating pressure that led to tombstone pressing down -- that led to the last ceo stepping down. i think elizabeth warren will say something. challenge is going to be can charlie scharf actually convince regulators that they can lift the cap. that is going to be his big hurdle. vonnie: jamie dimon of all people -- we learned a lot. he spent a long time at j.p. morgan before moving about. can we assume he has picked up a fortressake balance sheet out of this balance sheet? michelle: if i were j.p. morgan, i would be scared. people always said that wells
fargo, sales scandal aside, are a strong bank, healthy assets, not too risky. if they can get the sales scandal out of the way, with someone like scharf at the helm, i think they really can become a new j.p. morgan. n'sarf was diamond -- dimo protege. started as his assistant 20, 30 years ago. now he is leading a bank that could one day be a rival to jp. up 4%e will watch wells, right now. the street is looking at this as a good thing. that is bluebird's michele davis davis.mberg's michelle of come complaining about the whistleblower, exclusively obtained by bloomberg news. pres. trump: i was the -- who was the person who gave the whistleblower the information?
that is spying. you know what we used to do in the old days, when we were smart, with spies and treason? we used to have them go to the -- guy: for more about president trump's interactions with the ukrainian president, we are joined by josh blue in washington. is the president's reaction to what is happening to this story going to encourage the democrats to push harder? josh: absolutely. what you see right now is the president digging his heels in on a defense that really from the get-go was his own choosing. he disclosed the transcript of the call with the ukrainian president, which has led to the impeachment inquiry. aside from the whistleblower complaint, now the whistleblower complaint is public, and the president has followed that up with rather antagonistic comments about the whistleblower. he has done that on twitter. he has done it publicly.
and then he took the furthest steps in that clip you just saw. in a closed-door meeting with guests from the white house at the u.s. mission to the united nations, he took a shot not only at the whistleblower calling the person highly partisan and a fake, but also issuing this veiled threat to people who would speak to a whistleblower, or be a whistleblower themselves. that set off alarms not only with the democrats, but also with republicans like susan collins, who found the remarks very troubling. there are whistleblower laws and protections in place in the u.s. , as in many western countries. i don't think he -- i don't think that tack is going to cause democrats to back down here. vonnie: josh, talk to us about the timeline. as of now, it appears that we are going through thanks giving
potentially on any impeachment proceedings. -- going through thanksgiving potentially on any impeachment proceedings. would congress not go on its two week vacation? are you hearing anything about what congress might do? josh: the timeline question here, no, i have not heard anything yet about the two week vacation. this is the kind of thing they would skip a two week vacation for. this is really extraordinary. the best model we have for timeline is looking back at the clinton impeachment. it actually happened -- the inquiry started around a similar time of year, and it took about five months through january. that would make sense in this case as well. by through january, i mean all the way through to if there were four votes on the impeachment in the house, and then it would go .o the senate for a trial with clinton, it happened in january. that is likely the window that
congress and the senate will be dealing with here. january is a break for the supreme court. justice ofs, chief the supreme court, would have to preside over any impeachment hearing in the senate. that might be an interesting timeline to keep in mind when you think about how long this will actually take. josh, thank you for joining us from washington, d.c. ton starts onelo shaky ground in its first days of trading. the ceo tells bloomberg it is about the ride. >> the biggest thing is we are playing the long game. we see this is literally building millions and millions of subscribers around the globe in the coming years, and now we have the money to do that. ,e are fully funded after this today's primary. we are feeling confident. down about 9%n
since its ipo. let's bring in leanna baker. this is a bit of a surprise. -- peloton was supposed to be good after disappointing ipo's. is this the environment, or the company, or what? did blamee ceo political uncertainty yesterday that was roiling the markets. but another ipo endeavor decided to pull its offering. uncertainty inch the market, with these companies which are losing money. effect?this the we work is it casting such a long shadow that people are pulling out? leanna: it did not help and i aroundt created a crowd what ipo investors were looking
at from these unprofitable companies. when i spoke to sources close to the endeavor ipo yesterday, they said we work cast a cloud on peloton, palatine -- cast a cloud on endeavor, and other companies are thinking we should not go public. why take the risk of going out there, when you could stay private, if you do not need the cash? endeavor had a huge amount of debt. it's prospects were entirely different. peloton was supposed to have a huge business model. did investors look at the prospectus and say, there are a few too many risks? are investors getting more wary? leanne: it was the same sort of investors meeting both in their ipo roadshows. pricedloton, they did
the ipo pretty richly, at the high end of the range, at $21. there is a question whether investment bankers were trying to invest richly to get the full payout for investors. it is a question of whether it is unprofitable companies they are forming. thankhank you -- vonnie: you for all your coverage through this. much appreciated. ahead, oil erasing all gains since the saudi attacks as the country moves to ease tensions with yemen. what closed the gap? we talk about that next. ♪
johnson. this is "bloomberg markets." let's talk about the crude space. brent bouncing back after saudi arabia moved to impose a partial cease-fire in yemen, bringing hopes of easing tensions in the middle east. more on oil, let's bring in phil struggle -- let's bring in phil from the cme. we had this gap higher when the attack happened. since then, all prices have been coming back down to where we started. we filled the gap. given that tensions are still high, even if we get headlines suggesting we are going to get a partial cease-fire in yemen, are you surprised this has happened as quickly as it has? phil: it was an incredible turnaround in oil prices. we have been holding some of these geopolitical tension numbers above 60. and aramco doia believe they can get back online in a very quick and decisive way. you look at the oil inventories.
we are back over the five-year average. i thinkear average -- oil prices, although it is a bit of a fluid situation here, with conflicting news coming out of iran, whether there is some kind of almost peace talk going on with them, u.s.-china trade are supposedthey to negotiate again and meet on the 10th. these are different moving targets. i still think oil prices are currently going to push lower, to about 52.75. beenhave you baz -- talking about how an impeachment proceeding could affect the financial markets? what conclusions have you come to? phil: it was very interesting. when we saw the news come out that they were going to move forward with this impeachment, we saw gold futures skyrocket. s&p 500 fell significantly. once prompt came out on president -- on television and discredited it, and used it as a
way of talking about the trade deal, we saw the s&p did not continue to fall. gold futures quickly reversed and the s&p moved up. you might want to look at those two particular products, if you are going to monitor this impeachment. want these proceedings to move forward, we will see gold futures catch a bit off these lows, and equity futures could be susceptible to a correction. guy: phil joining us out of the cme. vonnie? vonnie: it is time for your latest bloomberg business flash, some of the biggest business stories in the news right now. on of credit suisse's top shareholders is urging the company not to fire top officials in a surveillance probe. he said it would be damaging to the bank and its stakeholders to lose any member of senior management over the scandal. the credit suisse board is trying to find out who exactly was responsible for having a former wealth management had followed.
-- head followed. commerzbank is giving up its gold for growth. it's as an economic slowdown and lower interest rates have forced it to speed up cost-cutting. stephen engle says the new strategy is sobering late realistic. soberinglyg late -- realistic. we are going to be speaking to the president of the african development bank. he is going to be in new york city and he will join us. a look at u.s. markets now -- the s&p 500 up just more than 0.1%. the dow up zero point 3%. the nasdaq down three points. ♪
>> we have 30 minutes left in the european trading day. the europeanis close on bloomberg markets. guy: let's see where we are. volume isn't a great. we continue to see these volume days. the story out of europe is the pound on the move, but not for breakfast -- for brexit reasons. wen if we get a brexit deal may need a rate cut. miners are well bid today. brent crude down .7%. basically, there was a headline earlier on suggesting that maybe we are going to get a partial peace deal in yemen. that sent prices lower and we closed the gap between the spike higher that we saw off that the saudi attacks to where we are now. vonnie: in the u.s