Skip to main content

tv   Bloomberg Markets European Open  Bloomberg  September 30, 2019 2:30am-4:00am EDT

2:30 am
anna: welcome to bloomberg markets, "the european open." we are live from the conservative party conference. alongside matt miller in berlin. matt: we are watching markets with a sudden selloff in treasuries. we also see futures across europe pointing to a mixed open. we saw mixed trade in asia overnight. the cash trade starts in just 30 minutes time. leader's plan to. lay out his vision are
2:31 am
overshadowed by allegations of sexual assault. the prime minister denies those allegations. the u.s. ways -- place down turnt, but asian stocks lower. the king of ipo's, ab invev's budweiser brewing unit surges on its first day of trading in hong kong. breaking the trend of lackluster debuts party -- debuts. we are 30 minutes from the start of european trading. take a look first off at the treasuries trade in my terminal. this is a three-day chart. a big spike as investors are selling the debt. the question is, what does that mean? are we looking at more of a risk on session now? if you look at futures, there is still a very mixed picture in terms of what we see happening in german futures.
2:32 am
they are up a little bit. dax futures are down a little bit. really not a lot of indication as to the direction we are going to see. up for moreing political action today as the conservative conference. anna: absolutely. let us remember this has been an event that has moved markets. we have seen movement in the pound as a result of things set on stage here at the conservative party conference and things that have happened at fringe events as well. that's why we are here. the big message the government wants to push home here, overshadowed by the controversy, what was the extent of the relationship between boris johnson and an american female entrepreneur who received money from the mayors office when boris johnson was the mayor? he denies allegations that he assaulted a female journalist. that is all swirling around.
2:33 am
the government is trying to ram home a different message around getting brexit done. investing in the nhs, in infrastructure. of that really falling to the background. getting brexit done, that seems to be the big message the government wants to ram home. we are keeping one eye on what's happening here in manchester where in. we are very much keeping our other eye on westminster. normally you would not see much action during a conference. that is not the case this time. there is nervousness about what the opposition party and rebels might be planning down the road in london. back to the to get markets? cranfield, are bloomberg mliv strategist. it looks like the trade story has driven the mixed picture in equities over the past couple of sessions. the question is will the u.s.
2:34 am
look to limit chinese investment? will the chinese continue to open financial markets? verydeed, it is making it difficult for people to make up their minds what to do. they have the chinese holiday coming up, would already put people on the sidelines. this is just making it even worse. what do you do in this kind of that is being threatened? market restrictions are a serious thing to talk about. difficult for the united states to even do such a thing. surely if the united states was ready to pursue it, there would be reaction from china. certainly making investors extremely nervous as to what kind of route this may take in the future. it is just adding to what is already a confused picture ahead of the chinese holiday.
2:35 am
the hopes for trade talks after those holidays of course have also been put in jeopardy as well. the chinese have clearly said they want to see things on equal terms. when you put these questions into the markets as well, it's no wonder the yuan is weaker. chinese equities softer as well. is a couple of days, china not around to respond to this, but we could get high volatility when there markets return next week, in full-scale, that is. we are going to be without china, of course. friday was the last trading day before the chinese holiday. today is the last trading day. let me ask you the question of the day you have been dealing with on the markets live blog. how far can stocks rise without china? there could be nervousness. revelations next to bloomberg reporting partially walked back by some in the white house, what is the thinking
2:36 am
about the link between u.s. stocks? -- this china >> even without those question marks from the u.s. treasury, isn china is away, liquidity sucked out of global markets. maybe it is just a coincidence. exactly a year ago when chinese markets were on holiday, the u.s. s&p 500 went through quite a big decline. october was a terrible month for the u.s. markets last year. about 7% decline approximately. there are other factors going on at the same time. certainly china is a big liquidity provider to asset classes across the world. when they are not there, that does take away the support for markets. it may have already been a headwind for the u.s. markets this week. course, there were compensating factors from the u.s.. theral fed speakers over
2:37 am
next few weeks. to a ratek on track cut later in the year. when you take away china, it is a big factor in markets these days. it will not be easy for markets to rise -- u.s. stocks to rise. saw demonstrators setting subway entrances ablaze in hong kong, throwing molotov cocktails at police. these protests are set to intensify over this holiday. are the markets bracing themselves for more unrest in hong kong? or are the markets used to this and brushing it off? enough, hongly kong markets have been relatively sanguine. they seem to have reached a point where most people who are really nervous, the hong kong market knows -- fairly
2:38 am
comfortable with what they have. there are some stocks, the hong kong dollar curve is flat considering the risks are skewed toward volatility. that is probably something which is reflective of the relatively quiet markets. remarkably, hong kong stocks are having a decent day today. ipo. a successful there are a few things going on keeping the hong kong market a little bit stronger than you might expect. when you look ahead over the next couple of months, there are certainly bumps where it could easily derail the market. it's going to be very hard for people to get really excited, to get very bullish about hong kong in the background. at the same time, the most bearish people have already stepped aside. anna: talking about bumps in the
2:39 am
head, could be talking about u.k. politics. i'm here at the tory party conference. a lot of talk about getting brexit done. in fx markets, you see increasing heading around december volatility. markets are looking at those periods, the eu leaders summit, the possibility of elections, what is your latest thinking on brexit? remarkable. options are still on the table, which really does seem bizarre seeing it has been three years. one of those which is starting to weigh on people is we did have another extension to brexit and then we may have to price in the election which takes place between now and the early part of next year. that is going to be difficult for markets to adjust to. if you look at the options curve , it's not really for an election, which forces the issue sometime around january or
2:40 am
february next year. that needs to be adjusted. it is probably one of the reasons why you see the pound is weaker. also, this uncertainty over whether an election may take place. the polls tell us the election outcome looks to be fairly clear-cut, but who can trust the polls after results we have seen over the past few years. all these things are now coming back for people to reprice into sterling curves. these things will have to be done over the upcoming weeks. there is still room for volatility. there might be a positive outcome on the pound. it is very difficult. anna:
2:41 am
2:42 am
2:43 am
2:44 am
matt: welcome back to bloomberg markets. this is "the european open. red arrows across the board. a mixed picture earlier with dax futures still clinging to gains. those look to have been given up for now. still not a lot of movement. we are getting headlines out of jp morgan saying the bank now thinks european equities, euro area equities should be an overweight in your portfolio. jp morgan is recommending an upgrade to euro area equities. joining now ubs. a couple of the big banks are recommending european equities. let's get the bloomberg first word news. for that we go to london. president trump is calling for the democrat leaving the house impeachment inquiry to be questioned for treason. he is demanding to meet the anonymous whistleblower who
2:45 am
launched the complaint. pelosi is telling cbs news she is calling on president trump to cooperate with the inquiry. oath of office to the constitution of the united states. speak the truth. let us work together to have this be a unifying experience, not a dividing one for our country. don't make this worse than it already is. >> saudi arabia's crown prince is morning war could bring down the global economy. mohammad bin salman saying the price of oil would go unimaginably high if the country went to war. he urged the world to take firm action to deter iran, adding he prefers no military oppression tehran.n -- pressure on >> the region represents 30% of the world energy supplies, 20% of will trade passages.
2:46 am
about 4% of the world's gdp. imagine all these three things stop. this means the total collapse of the global economy. >> in austria, sebastian kurtz is on track to return as chancellor. -- theple's party leading candidate for coalition partner tripling their share of the vote. negotiating a deal might be tough. global news 20 hours a day -- powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna: thanks very much. back in manchester at the conservative party conference,
2:47 am
our attention in goebel markets is on trade tensions between the u.s. and china -- a global markets is on trade tensions between the u.s. and china. a treasury official said washington has no plans for growth at this point to take such a step. china vowed to continue opening up its financial markets ahead of the next round of trade negotiations. we are joined with the latest. positionhe u.s. latest coming out of the white house? >> the treasury department put out a very narrow denial of the story. the question of whether the u.s. would stop chinese companies is only one of the options apparently being discussed within the government. like arguments were things stopping u.s. pension funds from
2:48 am
investing in china, stopping u.s. flows from going in chinese stock and bond markets. different number of problems the u.s. sees with financial contact with the chinese economy. the treasury's denial that for the time being it is not looking at chinese currency listing on stock exchanges is only addressing one part of that. obviously, as we reported friday, these are very early discussions. what policies that could lead to , still very unclear at this point. notu.s. government has denied these discussions are ongoing and they are looking at how they might decouple the u.s. economy or the financial system from china. they are mulling these things. what has china's response been?
2:49 am
>> there has not been an official response from the chinese government yet. there were reports on sunday about what had been reported. that this treasury denial -- but there has not been an official statement referring to these reports. the ministry of commerce had a press conference where they did not address this issue at all. they did release a statement saying they would continue to open their financial sector, which is what they have been doing now. gradually, they have been opening more of the financial sector, allowing for financial services companies to have full ownership of their companies in china. they are increasing the amount of money in the mainland stock exchanges. they released on the weekend as a response to what was reported friday. we don't know that for a fact. it just seems to be the pattern
2:50 am
suggests that's what they were doing. china is open for business even -- butu.s. is looking to there has not been any official report. anna: thank you. the latest on the fascinating new development in the capital war. let's take a look at what you should be watching out for this week. the u.k. conservative party conference continues in manchester. we will be bringing you the latest from this event throughout the morning, including some key interviews. chinese markets close tomorrow for a seven-day national holiday as the people's republic of china turns 70. also tomorrow, a rate decision the rba. the central bank is expected to cut rates are the first time in five months. -- the third time in five months. matt: the reserve bank of india is expected to cut friday as the country grapples with a negative output gap and below target
2:51 am
inflation. plus, it is the all important jobs day in new york. washington, really. non-farm payrolls are projected to have risen in september with unemployment steady at 3.7%. we will have someone stationed in the capital under lockdown until those numbers are released. we are minutes away from the open. next, a look at the stocks to watch this morning, including ab inbev. the asia unit is rising in hong kong after its listing. this is bloomberg. ♪
2:52 am
2:53 am
2:54 am
anna: welcome back to the european market open. let's get around the newsroom and have a look at what the team has picked us there stocks to watch. annmarie hordern is looking at ab inbev. --i burger is focused on of abuccessful launch inbev's asian unit, rising 7% at the debut of those shares. they raised about $5 billion last week selling shares. the bottom of the price range. that's going to help ab inbev reduce its massive debt load. it is a bit of a vindication.
2:55 am
this is the second attempt at their asian listing. let's get to. what is the story with kpn? about 3% are trading to 5% lower. leroy is under investigation about a possible insider trading in shares of a former employer. the chairman said it was a difficult position, but the certainty is -- the uncertainty is not in the interest of kpn shareholders. with what is the story sophie? >> the pharmaceutical company ofking at buying -- one their big treatments is for liver patients. this is valued at millions of dollars, cash, debt as well. we expect declines here.
2:56 am
typically the one doing the acquisition has a bit of a dip on the day. all for joining us. get the latest stock stories by typing first to go on the bloomberg. ♪
2:57 am
2:58 am
sometimes your small screen is your big screen. and with the xfinity stream app, which is free with your service, you can take a spin through on demand shows, or stream live tv. download your dvr'd shows and movies on the fly. even record from right where you are. keep what you watch with you. download the xfinity stream app today and get ready for xfinity stream tv week. watch shows like south park and the walking dead october 7th through 13th.
2:59 am
matt: a minute away from the open cash equities trading, let's take a look at the market. an recorder is tending by. annmarie: -- annmarie hordern is standing by. annmarie: good morning. msc i asia-pacific down. while they seem to be expectations -- beat expectations, still below 50. 1.7.en trading at we could see it rallying, given geopolitical risks. analysts are about 1.05, the pound study at 1.22 as manchester now plays the main epicenter for fx traders, not
3:00 am
lender this morning. pvr for futures, ftse 100 unchanged, text features to the upside, and tech on futures softer. you can see is relatively flat across european futures. mixed session across asia. it's now 8:00 in the city of london. we do have your market opening up this morning. ftse 100 opening up flat, but a little bit to the downside. as i was saying, manchester takes center stage, especially with fx traders, as we have the tory party conference having their meeting. anna edwards on the ground. she says the banners say get brexit done. boris johnson's speech is critical this week. euro stoxx 50 relatively flat. softer swiss franc, a little bit softer u.s. dollar. netherlands to the downside, 2/10 of a percent. france's open flat. we are seeing a relative flat date across the picture. let's look at sectors.
3:01 am
a quick glance, financials to the green, health care to the green. energies and materials a little bit mixed. interesting because basic resources with the biggest gainers friday. the pmi data could help midners today -- miners today. matt, individual movers, who are you looking at? matt: its one of those strange days where we have the stoxx 600 index down, but more winners than losers trading here, 300 or up, about 215 are trading down. as far as winners are concerned, gsk putting up a gain of three quarters of 1%, such a big stock, that it's adding the most points to the stoxx 600. and then some banks on the gain this morning. hsbc is up, franco santander. b.n.p. paribas is a gainer this morning, as well. on the downside, total and
3:02 am
nestle are swapping places for the biggest drain on the stoxx 600. you can see nestle is only down a quarter of 1%, but it's one of the top three stocks in terms of weightings on the stock 600. it takes a lot of points away with a small loss. total is down this morning, as well. though you don't see -- will you do cbp also falling, so a couple of the big oil names down, as well as some of the other pharmaceutical names. roche is down. we see a mixed picture this morning in terms of the breath. there isn't much to the upside. you still see european markets falling in terms of the broader stock 600 index. anna? so a little bit of weakness coming through, a lack
3:03 am
of direction for the equity markets as asian stocks end the day mixed. u.s. point higher following a denial washington could pose box -- blocks. joining me is bob. great to have you with us. we saw these reports friday, the extent of which the trade war could be turning into a capital war between the u.s. and china. would that give you reason for concern? that story brought back a little bit by the white house, denials they are planning some such move. you concerned with the of morphing of the trade war into a capital war? be careful about it. the u.s. could easily put restrictions on chinese companies, raising money in u.s. capital markets and notably, listings on some of the new york stock exchange is. that could be achieved. the impact of that would be minimal because no chinese
3:04 am
companies could easily raise funds on their domestic equity markets or in equity markets outside the united states. yes, america could do that, but the impact on chinese companies would be minimal. where it becomes more come to get it is the second issue, which is the question of, is the u.s. administration capable of imposing capital controls on u.s. investors, such as the large u.s. insurance companies or pension funds? and hedge funds and private equity firms, from investing in china? and i think that's a much more difficult question. i think the u.s. administration would really struggle to impose capital controls on investing in china. matt: on the other hand, china says it will continue to open its markets, bob. evidence -- its certainly they're doing it. the question is, what's the
3:05 am
pace? bob: the pace has accelerated. you're seeing that in the fixed income markets. the chinese bought markets, it's now part of the bloomberg's aggregate bond index. jp morgan announced recently the chinese government bond market would be part of the jp morgan emerging markets government bond indices, plus we've had restrictions on qualified foreign investors. their quota system, essentially that has been unwind. there it -- unwound. there is much more access into fixed income markets. you see quite of flow of capital into the chinese government bond market, where 10-year yields are above 3%. if you contrast that with european or japanese yields, the bond market is attractive. in terms of capital flows into
3:06 am
the equity market, we've seen a strong presence of foreign capital and the chinese equity market. the only observation i would make is because of the trade conflict, the chinese equity 300 or thether csi shanghai composite, the price earnings ratio is cheap relative to other markets. anna: let me ask you about the chinese economy. celebration,the pmi for manufacturing in china, no growth in september, better-than-expected, but still below 50. your thoughts, concerns around the growth story in china at the moment. bob: if you break it down into the consumer sector, we remain reasonably -- it remains reasonably strong. retail is still running at or above 7%. we have seen a clear slowdown in manufacturing, as demonstrated
3:07 am
by pmi number. the pmi numbers are number -- covering plus or -50 -- orering, -- hovering, plus -50. the manufacturing picture is under pressure. linked into that is the export sector, exports year on year, they are flat. let's going to remain the case. so, the economy has seen a pickup in services. consumption remains robust. investment spending, exports manufacturing weka. what does that -- weak. what does that mean in terms of growth? the consensus is moving the growth in china. plus or -6%. the risk is slightly under 6%. is growth seen so far well above 6%. that period is now behind us. matt: bob, you're going to stick
3:08 am
with us. we're going to bring you the stocks on the move so far in trading, including sobe. the drugmaker is buying dove us pharmaceuticals for almost $1 billion. this is bloomberg. ♪
3:09 am
3:10 am
3:11 am
matt: welcome back to bloomberg markets. this is the european open. we are looking at drops, for the most part, across european equity indexes. we see a slight gain in spain. the ibex 35, madrid up 2/10 of 1%, but of the else is falling, very little changed. austria has handed sebastian curtis an historic election victory. he's headed for tough coalition talks before a new government can be formed. the greens are the leading partner candidate after the triple their vote share to 14%. it will be difficult for him to put away three-way coalitions. joining us is boris, the and is bureau chief -- bloomberg's vienna bureau chief. we saw something similar attempted in germany when the city you try to put together a coalition -- the cdu tried to
3:12 am
put together a coalition with the greens. that didn't work out. is it likely it will in vienna? boris: it will definitely be difficult. it will please -- and be easy to form a two party coalition, not a three party coalition. but still, you have a lot of policy differences between kurz and the green party. however, his other options are not so great. i think he's definitely going to give the first try, he will try to start talks with the green party for new government and try to find common ground. anna: boris, good morning. what is the big stumbling block? what will prevent the steel from being done? boris: on the one hand, you've got kurz with a clear program on issues like migration, a big thing for him. he advocated tough line.
3:13 am
he wants to lower taxes, not invent new taxes. the greens are favoring a new tax. and they are also less restrictive on migration. those are two issues that will be difficult for them to square. much, borisyou very crandall, bloomberg's desk ground all -- boris crandall. boris johnson had been hoping to use the conservative party conference to launch his election campaign. instead, he's fighting for his credibility, faced with other occasions of sexual impropriety. the prime minister is in a bind with no sign of the brexit deal. bob parker is still with us. the banners above my head suggest that getting brexit done is really the key exit -- key
3:14 am
objective. what kind of odds do you attached to getting a brexit deal done? bob: we've got a range of uncertainties. one thing that is certain is the parliament passed this bill saying that the u.k. is not allowed to leave the european union without a deal. there is speculation to whether the johnson government will try and circumnavigate that act of parliament, which i think is going to be rather difficult. but no, that position by parliament against no deal is frankly, one of the only certainty. we have a wrath of uncertainties, most notably, will delete u.k. put forward -- will the u.k. put forward to the eu a phone proposal? proposal be put forward the next week or two? obviously, time is running out. the next uncertainty, with the eu accept that?
3:15 am
and will and amendment to the existing withdrawal agreement be accepted by parliament? so a raft of uncertainty. behind all of that is what is the timing of the general election? my own view is the conservative government is being a little bit naive in assuming they can easily win a general election. there are also's of complexities here. matt: yeah, but probably not much risk of a no deal brexit, bob. i mean, jp morgan today is upgrading euros on stocks to an overweight, saying brexit is a riskier. -- a no deal a risk here risk here, but no deal is a risk scenario. do you see that in the pound at 1.23? bob: yes, i do, and i agree with j.p. morgan. there are two issues here. the first is what is the outlook for the pound? the pound indicators is very
3:16 am
undervalued. although the u.k. economy shows significant signs of weakness, particularly on investment spending, export numbers at a record high. it's clear the pound is undervalued. the market is short. if we do get a delay or second referendum or agreement, one of those scenarios, sterling has upside from current levels. the probability of the u.k. crashing out without a deal is now quite low. to your second question, european equities, equities have outperformed the s&p over the last month. i think that continues european equities reasonably sheet. -- cheap. ecb --active by the backed up by the ecb. anna: pointing out along sustained stagnation for the u.k. economy, they say that's
3:17 am
what gilt markets are telling them. do you see the same? bob: i think if we do get clarity on brexit, whether it is a second referendum or whether it is a soft exit in an amended withdrawal agreement, then i think pent-up activity, the delay in activity, you'll see some improvements. so, whereas i think the whole of europe will see a period, perhaps of two or three years, of moderate growth, and by moderate growth i'm saying plus or minus 1.5%, i think the u.k. will participate in that. unemploymentption, the reasonably low, and delay is an investment spending i think will be brought forward an agreement. i wouldn't say we're going for a period of stagnation. i do think you should assume mediocre growth at around 1.5%.
3:18 am
anna: thanks very much. bob parker, he stays with us on the program. later today, we'll speak to josh hardy, to pity of the confederate administration at 8:30 a.m. u.k. time. we'll get the business perspective. and reported has the top stocks stories -- annmarie hordern has the top stocks stories. annmarie: a swiss pharmaceutical acquire dilmato pharmaceuticals. that's nearly $1 billion. kpn to the downside, down 2%. as they attend the appointment of dominic leroy, the ceo now being withdrawn after reports of investigation into the sale of shares of her former employer. novozymes to the downside,
3:19 am
downgraded jp morgan. the report is getting a bit of it. matt, anna? matt: thanks very much, looking at the stock movers. up next, equities close-out the third quarter with a whimper, not a bang. how are investors positioning to close out the year? we'll talk strategy. this is bloomberg. ♪
3:20 am
3:21 am
3:22 am
anna: welcome back to the european open, 22 minutes into the trading day. looks like we were going to be fairly mixed. that seems to be what we got. we got some of the markets going downward, 10 1/10 of a percent or so. politics to the fore. please take a moment at local equities, ending the quarter with a whimper, 20 basis points through today. european stocks have been able to eke out again, but investors are paring for a volatile -- preparing for a volatile and. peers bloomberg's dani berger. dani: the most port thing to keep in mind, european equities outperformed this program -- quarter a 2% gain, beating out all the other developed market peers. but do not let that return
3:23 am
through you -- fool you. investors are positioning themselves very defensively. it's the most popular smart beta style out of any in the third quarter and now they are at a record. this plate makes sense to some degree. we had an ecb decision coming up, brexit coming in this quarter. falling more than 3% through friday. this is the worst quarter for sterling in five. a lot of macro concerns, not the least of which is economic growth, kevin ollie a dark shadow over markets. they have fallen behind the wider global market, so this is the surprise index, deeply negative. to really understand what it is, i have to take you to the charts to get a comparative view. if we look globally, we can see the economic reading, the
3:24 am
surprise index, turned negative around zero, which means the reading largely met analyst expectations. europe is the opposite. in the white, pc this sharp decline -- you see this sharp decline. later today, we get employment numbers for the euros are. overall, this underscores your environment heading into the third quarter. matt: thanks for that, dani burger looking at the fourth quarter. bob parker is still with us. go back again to the new recommendation out from j.p. morgan today, joining you bf and recommending euro area stocks. jp morgan says the ecb's quantitative easing and stimulus is going to be a backing, and a rotation into value stocks is going to support euro area out
3:25 am
supports compared to the u.s. what do you think? bob: i wouldn't disagree with that. the first point to make, european evaluations are cheap relative to the states. i think of us -- i think the second observation is we've had this policy by the ecb. i don't see any backtracking on that. quantitative easing will start in november at 20 billion pounds a month, that is reflected into things, first of all, very tight spreads between european markets, even italy versus bunds, now down more than 40 basis points spread. other spreads are, by historic standards, very tight. it also means the negative yields we have, for example, the german and the dutch and the french markets, that underpins equity markets in europe, as well. the other aspect, if you look at
3:26 am
the european economy, one has to look at the dividing between the mentioning sector, exceptionally weak, and we saw that highlighted in the german pmi the last month. i do think we are probably starting to see a base being formed in european manufacturing. i'd highlight one statistic, european -- export growth has turned positive. i do think a base has been formed there against a background of consumption staying reasonably strong. german retail sales up 4.4% year on year. the service sector is holding in. manufacturing was weka. --weak.t's i think is forming a base, but don't expect too much of a bounce. anna: that's expecting -- affecting the service sector. thanks for joining us. bob will be continuing the
3:27 am
conversation with us at bloomberg, this time bloomberg radio at 9:00 a.m. u.k. time. trip demands to meet the whistleblower at the heart of the impeachment inquiry. more on that next. this is bloomberg. ♪
3:28 am
3:29 am
3:30 am
matt: 30 minutes into the trading day, johnson battles u.k. leaders plans to lay out his brazen vision as the conservative conference is overshadowed by accusations of sexual offense. thoseime minister denies allegations. the u.s. played down a report a could walk chinese companies from lifting in america with asia stocks turning lowered despite the denial. budweiser surges as much as 7% on the first take of trading in hong kong, breaking the trend
3:31 am
for big-name listings. this is the european open. i'm matt miller in berlin alongside anna edwards is the conservative party conference in manchester, england. anna: absolutely, controversy continues, mostly around his private life. he denies wrongdoing on a number of fronts over the weekend. that's not the start he wanted. the banners read, get brexit done, invest in the nhs and police. those of the messages he wants say jeff hardy is the deputy director general with me in manchester at the party conference. good to have you with us. the u.k. chancellor said nobody knows the exact cost of no deal. i'm sure many businesses have
3:32 am
been trying to establish what the cost would be. what is the assessment? guest: if you're talking about the economy in general, loss of gdp, but it's quite hard to get what that means. it's useful to talk to individual businesses. businesses are spending billions of pounds on preparation. that's bad for the u.k. because it's opening up overseas. offshore in your supply chain. even with that preparation, the impact of tariffs and the exchange rates and destruction at the border is damaging for businesses. the thing that stands out most is when he talked to ceo's and say they can no longer ask international investors coming to the u.k. because things are uncertain. you cannot deny business evidence that will be a shock to an economy.
3:33 am
anna: we see here at the party conference, and get brexit done is everywhere. it's on the door above your head. clearly, that is what the conservative party wants to do. if they do that with no deal at the end of october, does that bring any and to the uncertainty? >> it makes uncertainty far worse because no deal is not an in-state. no deal is almost starting again. it's getting 100 different negotiations. we need to have it trading relationship. the idea no deal ends uncertainty couldn't be more wrong. side those on the brexit of u.k. politics suggest we stay on wto's not an option. josh: i don't think many are saying that's the option you want. anna: canada, plus plus. josh: exactly. we start conversations again. what is the first conversation? what about the irish border? what about the bills?
3:34 am
it's almost the ultimate extension. anna: give us an extension of how the businesses are. confidence was back at 2016 lows, 43% of businesses surveyed say it would have a negative effect on their business. does that fit with your thinking? aboutyou're thinking making an investment in machinery for new jobs, very hard to do that because you don't know what lies ahead. here we are at the conservative party conference. what do we want to be talking about? jobs, infrastructure, investment. there's so much we can do. if we can get a deal, that gets us into transition. the unlocks investment. it relies on a deal. anna: not everything is waiting on brexit to get done.
3:35 am
roads and pounds in buses and the like. i'm sure you welcome that. josh: very much so. what do businesses want to focus on? how do we get people in the workforce that we need? how do we make sure over regions are addressing the policy we have? that relies on infrastructure. had to we hit that target? the more we can talk about that target, the better. we have to keep saying it. that is so much easier if we have a deal. if we have no deal, it dries up. the hits government spending and slows and everything. anna: some are talking about a stagnation for the economy. that's the signal from the gilt market. is that your assessment? josh: it's definitely a risk. our economy is fragile, adding another economics truck -- shock, it's worrying. it doesn't have to be that way.
3:36 am
the landing zone for an agreement is pretty small now. but it is there. if the premised are can agree and parliament can help get the deal through, then i think we shouldn't be talking about stagnation. we should be talking about investment and growth. josh,thanks very much, joining us here in manchester. later in the day, we speak to claire walker, director of the british chamber of commerce.we continue the conversation about what businesses think about brexit at this point at 10:30 a.m. u.k. time. usually in karen's in london. leanne: good morning. the u.s. has no plans to start exchanges,panies on after we reported on friday the white house is exploring limits on u.s. investments in chinese companies. meanwhile, facing its value to continue, to encourage foreign
3:37 am
investment, trade talks are set to restart the week of october 7. arabia's crown prince is warning a war with iran could bring down the world economy. he says the price of oil would go imaginable he high the price just if the country went to war. he urged -- if the country went to war. nourged the country to add pressure to tehran. >> the region represents about 30% of the world's energy supplies, about 20% of trade passages, about 4% of the world gdp. imagine all these three things stopped. this means a total collapse of the global economy. governmentspean need to spend more to counter the global economic slowdown. that's what ecb chief mario draghi told the financial times.
3:38 am
he's urging members of the single currency to commit to closer physical price. he quotes him as saying we need a common euros on budget. units enjoyed a strong debut in hong kong. budweiser brewing rose after pressing shares after the market rate. it's a positive signal for lackluster ipo markets, as a for that beer maker. the offer was back in july due to market conditions. spacex's elon musk announced plans for a starship. it's a next-generation vehicle that says it will eventually take humans to mars and beyond. musk says he intends to make space travel like air travel. that came on the anniversary of the space rocket reaching orbit. that was for the very first time. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries.
3:39 am
matt: thank you very much, leanne garin's in london. donald trump has agreed to meet the whistleblower. the person is under federal protection out of here for his or her safety, according to cbs news. in series of tweets over the weekend, the u.s. president called for adam schiff, the committee chairman, to be questioned for treason. joining us from london is the government reporter, kathleen hunter. kathleen, what is the latest from the democrats? how do they want to continue or proceed with this impeachment inquiry? pelosi,: well, nancy house speaker over the weekend, made an effort to get her caucus singing off the same sheet of
3:40 am
music when it comes to why they are pursuing the same impeachment inquiry, policymaking the case that it isn't trying to counter the accusation is a witchhunt, but instead it is an attempt by the democrats to preserve the constitution and counter what they see as a national security issue, brought forth by trump's call with ukrainian president. i think that's what we'll see going forward, that the congress is on a reset. has members are not in right now. we do expect the work of the intelligence committee to proceed as planned. they will be gathering information and potentially, there could be information coming out about the information they are gathering, even the suggestion the house will come back early to do with this issue. anna: what are we going to be watching for this week, cathing -- kathleen? kathleen: we will be looking to see if additional information comes out of the house
3:41 am
impeachment inquiry out of the intelligence committee. also, folks will be watching the polls. there is a risk for democrats of a political backlash here, and what they will be looking for is has members that are in districts that trump won in 2016 are watching the numbers closely. we have seen a movement nationwide in support of impeachment. the needle moved a little bit there on a nationwide basis. i think people are going to be drilling deeper on those numbers and seeing whether this movement on the democratic side in favor of democrats, or in the direction of democrats, particularly among republican and innovative voters, whether trump support their, which is been rocksolid, shows signs of wavering. if that does happen, there's potential for republicans to be more critical, openly, of the president. matt: kathleen, thanks very much, u.s. government reporter
3:42 am
reporting to us live from london. up next, we bring in the stock movers, including home serve. rbc has raised the home repairs company to an outperform, calling it a strong defense of pick. this is bloomberg. ♪
3:43 am
3:44 am
3:45 am
matt: welcome back to the european open, currently 45 minutes into the trading session, looking at red arrows across europe, with the exception of the ftse, currently unchanged. the cac is unchanged, as well. the dax and the ftse mid in milan are down 1/10 of 1%. let's get individual stock stories. we go to an recorder in london. annmarie: a lot of and -- we go to annmarie hordern in london. annmarie: one of the biggest gainers on the stoxx 600, rbc upgraded to a performance, one of the best defensive growth stocks in the business service sector you could be picking. to the downside, marks and spencer down about 2%. a lot of issues right now facing the month -- the company's closing and home division. it is far from fixed. sound a to the downside, down more than two by 5%.
3:46 am
morgan stanley says growth story remains intact, but it starts to x andprofit from cellne following strong gains. all these analysts up and down calls. thank you very much, annmarie hordern, with the latest on your movers. i'm live with the u.k. conservative party conference, keeping track of u.k. politics. we've had a number of lines crossing from the chancellor just in the last half hour or so. some of those we put to the cbi, difficulty to exactly get your head around what impact no deal brexit will have on the u.k. economy if that's where we end up. there's significant government response of no deal. they are working on meta-getting no deal brexit impact. a number of lines around the subject of no deal. let's move on.
3:47 am
credit suisse is approaching a crucial decision on management that could shape path for years. this follows a week of tunnels, which has exposed a deep risk at the top of the second largest swiss bank. they are said to decide on the fate of the detectives implicated, the former management had. they will determine who ordered and who knew about it, which place after they decided to move it. out inagement had moved january. credit suisse investigators have been honing in on the cfo, a longtime confident, while it's not clear who else might have signed off on the spying, sources say the board is leaning toward sparing the job. for more, we're joined by a finance reporter, who don't just now. what do we know about the
3:48 am
timeline of these decisions? take us through that. suisse's boardit is meeting today. then at some point, perhaps later this evening or early tomorrow, there will be a communication of the decision. it's an important decision. the scandal hasn't rocked credit suisse in years. it's the end of the week, probably one of the toughest weeks for the ceo in a longtime. matt: i wonder, it seems more and more people are saying hey, this isn't shocking, patrick. we've seen this go on at many other banks and there's a lot of money at stake here. a lot of times, people he firms do -- people leave firms do poach clients. are you hearing that, as well?
3:49 am
patrick: i think it's a less a question of was someone followed, is following someone wrong? i think it's the way this whole thing came out. is that the people, the investigation company was hired to follow him and the way it was presented afterwards, at any rate, was there were people following him around and threatening him, that happening in the middle of the street in zurich is not people -- not something people want to see or associated with the big bang like credit suisse -- big bank like credit suisse. that's what caused a scandal. doubt,lright, so no though, they'll find someone on a lower level death or someone under the bus.
3:50 am
whatever it bacon? iqbalt about it bacon -- khan? patrick: the timing is almost comical. he is due to start work tomorrow and we will hear about the results of the board meeting if you're in his shoes, you want this to go away. you have the chairman, who made some comments to bloomberg tv a couple of days ago, even up to that day, they were doing due diligence. he wanted it to go away by now. they want to get back on with their jobs and forget the spying scandal. from what we're hearing from ubs, they do expect him to start. he'll be starting with a cloud hanging over him, that's for sure. anna: thanks very much, patrick winters, the finance reporter with the details, taking on
3:51 am
strange, new forms. up next, the king of i.b. of forms. we'll get the latest from the city. this is bloomberg. ♪
3:52 am
3:53 am
matt: welcome back to bloomberg markets. this is the european markets, and we are kicking it off pretty slow for a monday. we due to the dax and the team
3:54 am
mid moving down, but the ftse 100 in london and the cac in paris are change retina. after -- right now. after a rocky ipo pass, the asian unit made its trading debut in hong kong. budweiser's asian shares rally as much as 7% from its ipo price. sophie kamaruddin has been tracking it in hong kong for us. i guess the lower end of expectations with your price, something that makes investors happier? sophie: yeah, investors cheering on the listing of the asian unit of budweiser, the most actively traded stock in hong kong. the fact it's already profitable company may be happening the performance. it's perceived to be more reasonable, especially with the carving out of the australian options, which is said to give the unit more focused on faster growing parts of the process.
3:55 am
they are not seeing much of a further upside for the share price, pressing and 34 hong kong dollars, bursting a more -- bernstein a more modest 30.10. budweiser asia is the second most expensive beer name in the world after china resources beer. after bringing down the multiple, asia will need to grow at 25% a year for two years straight to hit the multiple of 14.3%, which will be with the rival. the growth on that scale, that may be a long shot given that a ina slowed to 6% after 20% 2018. anna: and certainly, what is going to be the expected driver for growth for budweiser asia? sophie: for china, it's already a market leader.
3:56 am
it's going to be key to drive growth. that is likely to underwhelm. 47% ofr the company has the premium p or market in china -- beer market in china. unit'sakes up 10% of the earnings. asia has yet to dominate. the ceo spoke about growing more value in regional players in vietnam. it's trimming down the debt while. that opens the door -- debt pile. that opens the door. enthusiastic bringing of the gong this morning. they spoke to an optimism going forward, spoke to a listing in hong kong. matt: you know what? we're going to get that little bit later. we'll check it out later.
3:57 am
thank you for joining, sophie kamaruddin in hong kong wrapping up the budweiser story. i want to bring you an unemployment line, german under clement falling 10,000% in september. we were looking for a gain. this is bloomberg.
3:58 am
3:59 am
4:00 am
. the u.s. placed on a report that -- the impeachment situation, chris expects to hear very soon from the whistleblower and complaints. president trump demands to meet his accuser. if the prime minister plans to lay out his brexit vision. they are overshadowed i allegations of sexual misbehavior. -- by allegations of sexual misbehavior. welcome to "bloomberg surveillance." i am francine lacqua. these are your


info Stream Only

Uploaded by TV Archive on