tv Bloomberg Markets European Open Bloomberg August 17, 2017 2:30am-4:00am EDT
♪ guy: it morning and welcome. you are watching bloomberg markets, this is the european open. 30 minutes till the first trade of the day. matt miller is in berlin. what are we watching this thursday morning? a business breakup.
donald trump's business council this banded as ceos jump ship over his comments on race. van andcatch steve comments on china?
the inflation puzzle. the fomc remains confused and divided over white prices, price rises are still up 2%. will jackson hole deliver any clarity? asking permission. president on's donald trump is the situation on the currents -- korean peninsula beginning to cool? matt: we have best is coming out with earnings, second-quarter euros.s 279 million missing the estimate by about 61 million euros, the street
was looking for 330 million euros. the company still sees full-year holding ebit margin, forecasts but missing in their reporting quarter. we will see how the market treats that. the outlook is more important
but the market often wonders if it means something when they ebit.- miss ebit and revenue both missing. we will speak to an executive from that company and a little bit. where less than half an hour away from that european open. take a look at where stocks are trading. -- had gains yesterday across the board. today futures are down. we open up in 28 minutes and we will see if that carries through to read euros for the cash trade. bunds, take a look at the investors are getting back into safe haven assets. here's a one-day trade of the fund -- bund. coming down in a half hour since the market opened. we're looking at 0.43 for the
yield on german paper. guy: there's an awful lot of korean on the screen. the gmm, i highlighted a couple of things and i want to highlight what is happening in the metals market. metals are very strongly bit. -- bid. metals have been on the move. metals deadly on the front. you have zinc trading higher, copper trading strongly to the upside. it was the singapore contract that went through, that is the first time in 10 years you have seen that happen. let's get a bloomberg first word news update. juliette: white house chief steve bannon has gone public with his long simmering food with some of donald trump's top economic advisers. he told the american prospect magazine that he often battles with treasury secretary steven
over taking ary: tougher position on china. bannon did not respond to our request for comment on the interview. south korea's president said donald trump must ask for consent before taking military action against north korea. marking his first 100 days he said only his country could greenlight a strike and he s regimehat kim jong un' is crossing a line. u.s. federal reserve officials engaged in a detailed debate about inflation while keeping the door open for a september announcement on the timing of balance sheet reductions. the minutes of last month's policy meeting showed a majority of the fomc sticking with the forecast that inflation would gradually rise to their 2% target over the medium term. many saw some likelihood that inflation might remain below 2%
longer than they currently expected. from the will back brink of a violent electoral dispute after the main opposition agreed to contest the outcome in court. the president was declared the winner of the vote that is made rival said it was stolen. security forces and opposition supporters had clashed when the --ults were announced riyadh were announced. the uk's next phase of brexit talks with the european union could be delayed until the end of this year. according to sky news, citing sources, cabinet ministers involved have indicated the next talks may not happen until christmas. that as some figures anticipate a change in angela merkel's coalition partner will make discussions easier than with the current coalition. japan has posted a trade surplus for a second consecutive month in july as exports continue to
grow. exports rose by 13.4% while and thesurged 16.3%. latest sign that domestic demand is recovering. that left a trade surplus of $3.81 billion. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. guy: thank you. president donald trump's business form has been disbanded after a growing number of ceos quit and rip have -- quit in protest to his response and remarks for the violence in charlottesville. as a savvyhimself businessman who would cut taxes and regulations and unleash for american companies. larry summers said the trump administration is unlikely to enact significant tax reform. someybe there will be taxcutting, but i think the
reform,s for structural which was the aspiration the president laid out are minimal at this stage. kevin brady, the house ways and means chair said tax reform is apparently still on the agenda. >> of tax reform is all about helping every american, of every size isize and every less, making sure they can pursue their american dream whatever it is. this is the right issue for the right time in this country. mark hads talk to more. you talked about the fact that there is zero chance of reform priced into the market right now. a negativece in number when it comes to that , they, things get worse
do not stay steady, the get worse because the business community and the white house are at such loggerheads? mark: good question. i do not think you can't price and negative. is not expecting the tax situation will get worse. it will be tax cuts if not strict -- structural reform. you can get a negative sentiment. that is pricing a bit of a negative. there is a lack of positivity. that this administration that can -- can get anything done that is positive for business. many leaders have argued that has been the case in america and this is not new but they were hopeful they might get support because that was the one pillar that this administration was going to bring to the u.s., it was going to support does this. that does not appear to be the case. guy: where you are sitting right now, how much attention is being
interview that bannon gave yesterday, talking about the battles that exists within the white house between himself and gary: and the treasury secretary mnuchin about how to approach china? and in talked about economic war. we have seen business leaders walk away from the white house, they are not employed i the -- if they were to do the same, would you worry that the situation with china could get more problematic quickly? mnuchin or cohe away, -- they bring a moderate hand on trump's shoulder at least when it comes to the economy. that would be a big low for the administration if they did step away.
is garnering little attention in asia. a lot of the events of the last week or so, a lot of the turmoil around the trump administration is being ignored. even some of the statements that were big news in the u.s., over here in asia, they are barely a talking point. we have become normalized to this behavior. people are focusing on other issues. they are worrying of how it will affect trade with china. that will be an issue but that is the angle, not about whether there is any, in the short term. matt: how much have you heard investors and clients, are they talking about the fed? is the fed news which would forally be the top headline any financial news agency today, has it been overshadowed by this trump drama? mark: i do not get has been overshadowed i'd trump, it is overshadowed by summer holidays. there are not many people
around, there are a lot of red lights in the bloomberg terminals and people are not focusing on stuff. was one of the main talking points by the fact that there is price action overnight. there was this big dollar dive again at a time when the market was starting to buy into the fact that the dollar might be set for banks. whether you thought it was a proper turnaround did not matter. it could go a couple of percent. where it went from there would be more debatable and the fed minutes killed it again. it was the main story overnight in asia definitely. you see any positioning in advance of jackson hole? are there metrics we can gauge as to how people think that is going to be delivered as a story and whether it will be market moving or not? mark: you saw the reaction yesterday when the draghi comment about how they would not announce stimulus, there was a
sharp and immediate reaction. it was exaggerated by illiquidity. there was some kind of betting going on that the ecb might announce their plans. jackson hole will be a big anticlimax. policyxpecting any major . the fed has made very clear the position that they want to go ahead with alan sheet unwind and we are expecting more details in september, we are not expecting any major policy announcements that was confirmed with the ecb. it might talk about the policynt longer-term framework but not for trading after the jackson hole meeting itself. guy: thank you. you can follow smart analysis throughout the day and it is really good stuff.
you will get that fantastic function at mliv . matt: i am sure that most of you use mliv as it is. you can watch tv . you can open in a different window. tv shows you the video stream i have got open here to our flagship morning show. you can also follow the functions and charts that we use as well as the blue link at the bottom of the scream, go ahead b us a question. we will talk to the ceo of west farmers. the company reports full-year earnings. we are live in perth. this is bloomberg. ♪
matt: welcome back to bloomberg markets, the european open. we are 14 minutes away from the start of cash trading. we are going to singapore with juliette saly. juliette: companies behind the most popular u.s. credit cards have said they are severing ties with extremist organizations that insight violence. discover financial services said it is ending merchant agreements with hate groups. visa and mastercard said they were cutting ties.
the move comes after they came under pressure to stop providing ways for whites promises groups to raise funds in the wake of the violent protests in charlottesville, virginia. tencent shares have jumped the most in a year in hong kong profits posted record after the chinese internet giant announced a 70% surge in net income to a record $2.7 billion topping analyst estimates. the company is benefiting from the popularity of its smartphone game called honor of kings which gives the company more than 200 million players. elliott management has bought on cord electric delivery. familiar,to a person the firm has acquired $60 million of leverage eye out notes in energy futures intermediate holdings. elliott and sunrise partners which also opposes the option --
offer own a majority of impaired credit and a company. shares in cisco systems have fallen in extended trading after they predicted another revenue decline as the business tries to remake itself amid a changing networking industry. the currentvenue in time may decline as much as 3% from a year earlier. the ceo of cisco systems will be joining us at 2:30 p.m. u.k. time. that is your bloomberg business flash. guy and match. guy: thank you. names, all bunch of core stocks, you can find bloomberg, you need to make some changes at the top with the timing but it will confirm which dividends are going out today.
or which stocks are going ex dividend. is what we are at here. let's talk a little bit about what is going on, we're looking around 8:30he ceo a.m. u.k. time. the numbers have missed. how are they maintaining guidance? we will figure that out. there's another interesting lunch of questions, talking about, they are looking to get battery business and you can kind of understand why. coming fromoth flow into the grid and the way you smooth that out is by battery technology so you put the battery next to the turbine changebe you start to the dynamic of wind in terms of its abilities to fit into the
wider grid. we will ask the questions after the open later on. matt: there is a huge debate here in germany about the placement and the existence of these wind turbines. this country lanes green so they are happy about the renewable energy aspect that a lot of people complain about the -- what they consider the eyesore of these wind turbines, donald trump famously complained about them trying to put up these giant windmills by a golf course of his in scotland. my personal opinion does not matter but i think they look great. guy: get a question you should ask, when you drive around and you see an old windmill, you think that looks ugly as well? look i think they fantastic. they are -- look like works of art.
the important part is what you are seeing is something that is saving us from more carbon monoxide poisoning. carbon dioxide in the atmosphere as well. that has to be a good thing. i want to point out that we are going to talk about west farmers earlier. i mentioned the company, a story's largest target employer. they reported full-year net income that missed estimates, 10% of the population works for that company. it is an important. it there and around the world. there is a wide range of businesses in australia and abroad. that company acquired food and hasor retailer coles and interest in coal mining and chemicals, fertilizer production, just to name a few. it is a fantastic read on the bloomberg description page if you want to check it out. joining us now is the company's ceo.
welcome to the european open. let me ask you first of all about the possibility of a sale of your resources business which is the headline that sticks out at me on the bloomberg from this morning. you say you are pursuing strategic options. these kind of reviews lead to sales. is that a possibility? richard: it is a possibility. increasebusiness may profit. we are talking to various parties at the moment that said they will be in our camp but there is a possibility we will sell the coal mine [inaudible] are fantastic generators of cash for the group. guy: what kind of fire would be interested? they are performing all right right now. : they are because export
prices have been strong. businesses and the owners are talking to us as our other parties. it isms of the business, other coal miners were talking to us. we have got, these are really good businesses with positions on the cost curve and good quality product coming out of them with good infrastructure. they are really good assets. we are looking at what the best thing is for shareholders in terms of that strategic review. as is retailbility -- retaining the businesses. data coming out of
australia in terms of the jobless numbers, much better than expected. the jobless rate continues to come down. you are a huge employer in australia. do you think we will get to the point when you start to see the numbers, meaning you will have to pay people more? sense, paying people more is something we would all like. the usthe issues in trillion economy has been low wages growth. environment, an expectation of that it would be nice to see some wages growth and it is pleasing to see unemployment rates fall and certainly unemployment numbers have -- implement numbers have gone up. there is still some fragility in the domestic economy. i do not think we will see ry pressure on wages in the near term. those things are all important in terms of building some
confidence in an environment that the economy will continue to grow as a straw you has for an extended time. like ours will invest and out of that will come job opportunities for people. tot: i assume you're looking -- you can focus on coal so you can focus on target. what is being done to make those businesses more competitive? richard: we would love to grow our industrials business, the other parts of our division, chemical and industrials and fertilizer performed well and they have terrific growth prospects. , we havethe rate stripped back and taken costs out, we can now grow that business. we have to get the assortments right.
guy: minutes to go until cash opens in europe this morning. they day for divvies -- big day for divvies. we are expecting european markets to open softer. here we go. here is the screen. you get the fair value calculation. we are not going to be down by much this morning, but maybe .1% , .2% will be the wider story. matt: thinking about something mark cudmore told us earlier about the drums. i was looking at the u.s. 10 year. reading theple are
story about the concern they have of not being able to reach their inflation target, and yet the 10 year yield, the range is the tightest it has ever been in three years. to pick upt going and turn around so you can see real movement on the 10 year? guy: let us talk about this market open. there you go. it is flat, i think, is probably the best description. is down by .2%. we are inspecting pretty similar numbers around the whole of europe, down by .2% at the get go. plenty of things to watch out for. take a look at the retail members coming out of the u.k.. walmart reporting numbers later on, something to pay attention to. we have the ecb accounts to think about later on in the morning as well. yeah, absolutely. i am looking at the imap. you know what is interesting is the last couple of days --
yesterday, we saw a big jump for stocks, relative to the kind of moves we have seen in the last month, massive jumps for stocks. the biggest losers were the defensive's. health care utilities, and telecoms, which were being yesterday, but not at the pace of something like consumer discretionary stocks. we saw them up at the top. health care, telecoms, and utilities are among the gainers, with material. everything else is losing today, so maybe it is kind of a risk off day with the only stop that people are buying, those income payers, those defensive stocks. guy: let us take a look at the mov screen. i'm going to look at the index points. is ex-dividends at a. you have got a whole bunch of x-d's today.
total trading software as well. the banks got big enough in the states. it was a delayed reaction to the fed minutes. one of the most obvious reactions as you looked at on it was the fact that the banks went on offer stateside. little bit of followthrough coming through on that into the european space this morning. on the upside, let us slip this back to the percentage line. kinetic doing well out of the u.k.. novo nordisk trading recently. trading to the upside. that is the kind of makes you are seeing this morning. interest -- it is interesting that the banks have softened up a little bit. i wonder whether that is just a reaction to what we saw yesterday vis-a-vis the fed. little bitaccounts a later on. president donald trump's business forum has been
disbanded, this after a growing number of ceo's quit in protest of the president's response to the violence we saw in charlottesville. larry summers spoke to bloomberg yesterday about this news. larry: by encouraging the president to stay away from his embrace of white supremacy, he might return to the economic fores that are important many of these companies. you know, the purpose of tomorrow -- of yesterday's conference as it was billed by the white house, was to focus on streamlining infrastructure approvals, something that is iny is america -- america's corporate interests. that was entirely lost because of this. guy: larry summers speaking to bloomberg. .eoffrey yu draw a lineo between what is happening surrounding the president and
the financial markets, but increasingly, that line becomes less blurred and more obvious. tax reform looks increasingly difficult when you do not have the ceo's giving you the advice, giving you the kind of ideas of where this should go. you take a look at the share prices of certain companies that may or may not be affected by this story. they moved around a little bit. you saw that with merck. when you look at the story developing in the states, do you ignore it, do you increasingly price it in, and if so, how? geoffrey: the attitude is ignoring it. we are seeing the impact of brexit on broad market sentiment. aving said that, there is huge cost. the opportunity cost. what should have been done is not getting done. tax reform that was anticipated is not being done, so people are holding back. they are hoping that incurs a cost. it is a more subtle cost. it is not that the american
people or the world economy will be poorer for it. they could have been richer for it, and now that is a huge loss. matt: do you think this is one of the reasons we failed to see inflation picking up? that the phillips curve cannot take hold? to behings do not seem working out the way they should be because everything is kind of on hold financially? geoffrey: pay close attention to what is happening out of the fed right now. , we askverall right now that question. do we need a big infrastructure push or productivity boost to get it back in shape? possibly, yes. if so, there is an opportunity cost. that is not happening. economic structural normalization is not happening, and that is a loss at the end of the day. guy: the u.s. economy in some ways does not need stimulus right now.
the fed was going to take stimulus away from the u.s. economy. he would assume that was in the first four years of the trump administration, there will be a recession. you can argue that in some ways, this is actually doing us a favor because we do not need the stimulus now. we may need it in two months time when the ducks get in time stars get in line and the aligned. are we just just keeping our powder dry? geoffrey: you would be a brave man to call it any point in the economic cycle. the central bank managed to push -- grewuld be great if we like australia. the opportunity cost is there. there were powder, quite a few saying the fed is hiking. that is facetious. that is valid. you can argue that has been incurred that you have something
to work with and if you get -- if we get it -- it is not fed driven. guy: do you expect clarity from jackson hole? you read the minutes, and there is clearly confusion about why inflation is not a target. we have to ask that question. if central banks -- they have moved from forward guidance up to actually retaining some degree of optionality. you have to keep all your options open even until the last minute. go back to what we saw in march. no one thought there was going to be-, and suddenly, they retain that optionality. that is quite powerful as well. what is there guiding line right now? favor to keep market positioning at bay for now? matt: i have a chart on the bloomberg, g #btv 9030.
you see the u.s. 10 year breakeven. in white, the actual 10 year yield. it is not much higher. i don't need to show you the chart. i am sure you know it by heart. we were talking about the range and the fact that this 10 year yield has been stuck in quite a tight range recently. do you expect us to move out of that range in jackson hole? do you have any sense of direction? geoffrey: probably not. bias is very different from how they are positioned. they are not positioned for any upward shift. if you want to position for jackson hole, you could argue that you want to actually look for something more positive, something more hawkish. not just from the fed, but for the ecb. are they going to negotiate expectations right now? that goes against providing optionality. you don't generate --
you keep your powder dry for now. when you have enough evidence, waiting for data. once data confirms they can move, they will act. matt: we are going to continue this conversation. geoffrey yu, head of the u.k. investment office at ubs wealth management, is going to stay with us. we will discuss whether or not there will be taper talk at jackson hole. we will look ahead to today's ecb accounts. we will continue our discussion on central bank action or inaction. this is bloomberg. ♪
matt: welcome back to "bloomberg markets: european open." i want to get a quick check on the market moves 12 minutes into the session. we are seeing down arrows across the board with loss of about pointed percent on the broader european index any stoxx 600. cac both about .3%. fairlyosses actually are substantial compared to the moves we have seen over the past month. we are giving back a little bit of what we got. you do see also kind of a risk move, a risk-off move in european bonds as well.
you see germany, for example, yields as well as gilt yields. a factor inlar is this as well, i would argue. a quick look at the mov screen to find out what is going on right now. these are the movers. the market is down, as matt mentioned. a couple of the highlights -- thistock is down 5.06% morning. the market does not like the miss it is seeing in front of it. the other thing to mention the as well, a bunch of ex-d's. on the upside, connecticut in the u.k. -- kinetic in the u.k. morning.% this it is doing well on the back of that story, as you can see. trading quite richly. matt. right, we will have to
focus on in the eurozone today, gdp data shows the region's economy gathering pace in the second quarter, growing .6% quarter on quarter. this up suing was led by germany and spain with france and italy as well. release.that a couple of hours later, we will get insight into mario draghi's thinking with the location of the ecb july meeting accounts, so we will get some of the -- i guess we will get kind of an early lead into what we will see out of jackson hole. all gordon joins us now from frankfurt to talk about all of this. paul, let us talk first about the ecb. the last meeting was quite brief. what close do you expect to get from the account? what are you looking for in frankfurt? paul: the governing council members are quite keen to get this over with. maybe get on with that. there may not be a great deal in
the account this time around. the economy is looking strong enough. inflation is looking potentially self sustainable, or close to the point where it is self sustainable, so you can get around to talking in the summer -- after the summer, about when they might wind it down. any clues on that would be very welcome indeed. wantpaul, i have a chart i to kick out. this is daimler and the euro, and diesel as well. daimler has been going down. the euro has been going up. week ago, people were talking about the fact that drug you might talk down the euro at jackson hole. yesterday, that story got a little bit don't upon. what do you think? what could we expect from jackson hole? read of the tea leaves for me. difficult one to judge. you are right. there is a sense the governing council should be waiting for
the september meeting to discuss what it does with qe and for draghi to up run that -- i don't think he will from iran that. he has a track record of setting the scene, setting the framework, to make any decision entirely logical. hedid it back in 2012 when set the theme for omc. it would be no surprise for him to say something along the lines of this is where we stand today and let everybody draw the natural implications from that. jackson hole is jackson hole. it is quite likely he will say something of interest, for sure. guy: it was heavily flag he'd make a speech. still with us, geoffrey yu, head of the u.k. investment office at ubs wealth management. do you think draghi is going to change things? geoffrey: given the headlines yesterday, and was interesting -- there seemed to be a debate. it is not really a one-way bet on policy. if you look at that chart, if you look at carmakers, and how
that is performing, if you look at the correlation in q2, it was positive. when the market is positive about reflation -- we got past the political miss that -- your offset by being in demand. at some point, we are seeing euros over sought. people are going to worry about the demand that the correlations lips again. is the global economy strong enough to hold up german company, german industrial? i think that will be very interesting. when you look at the euro strength, do you then to buy companies that export, that are based in europe, that export, or do they all hedge effectively?" what investment decisions can you make on the euro? geoffrey: i don't think any
company -- very few companies embraced the pace of the last few months or so. trade indexn which you use. that is not something you can hedge against, so if you are more sophisticated, that will be -- in terms of which companies high-valuen, the without substitute, those are ones which are better insulated. guy: i have got this chart. that is the wrong one. let me go back. hopefully, it saved. why do you think euro-yen is the more interesting aspect of this? when we have the situation -- geoffrey: when we have the situation where the car is the high-value -- there is some swiss exporters.
that is how you whether a strong currency appreciation. matt: -- guy: does the german election play into draghi's thinking, do you think? geoffrey: more uncertainty, maybe on the margins. guy: i am curious you say that about the uncertainty. at a headline level, merkel is probably going to win, and that is probably the story. the story is who comes third? they are notftp, exact the pro euro at the moment. geoffrey: i think, in terms of harm, andnks, do no if they wanted to take a proactive stance when it comes to elections, then i think that risks interference and they do not want to be keyed into that. harm from any no central banks point of view, any policy news, unless totally
necessary, could introduce additional volatility politically on the margins. then it might factor into their thinking, but they want to be at passive as possible when it comes to this. matt: thanks very much. head of the u.k. investment office at ubs wealth management. he is going to stay with us. there is a lot to talk about we have not covered yet. next, more details in brexit talks. we look at the possibility of the next phase of negotiations being on hold until christmas. we are writing out of time, or rather, you are running out of time. this is bloomberg. ♪
guy: 23 minutes into the market session. welcome. this is the open. news,ccording to sky citing sources. talks may not happen until christmas. that is as some government figures anticipate a possible change in angela merkel coalition partners, and that could make discussions easier than with the current grand coalition. still with us, geoffrey yu, head of the u.k. investment office of ubs wealth management. what is the direction of travel here? honest, sterling
could be affected by these headlines. more clarity on the u.k. possibility it in position, so papers come out from the u.k. government and the e.u. offers a response. that is where we get to. time is short. more progress is always welcome. you look at the general expectations, and it is probably know where people expected things to be anyway. this is not going to be easy. matt: we talk about the pound a lot when thinking about brexit, and it is obvious why, but i am looking at the 10 year gilt yield, and it seems to give me absolutely no clue about what is going on and what i should be doing with my money in the u.k. -sense. this is the daily changes in 10 096. gilt yield, g #btv 3 gilts? you do with
geoffrey: you have to factor in structural factors in play. at the same time, is that really impacting fundamentals? we were talking about the u.s. 10 year? the volatility on that is quite limited at this point. it is more anchored by policy expectations. i think the boe will be looking at the cpi numbers out earlier this week. relatively perky around these levels against the dollar. eurosterling, though, that is the interesting one. guy: they are coming from quite big houses, though. these are not -- these are big houses at the moment. geoffrey: absolutely. you really have to look at whether it is a euro-driven story or sterling-driven story.
the bulk of that is euro. you have a lot of repatriation by corporate the sending profits. that is going to happen as well. you are going to get natural bias of sterling at or above -- guy: you can see on the bloomberg and trading screens the flow data. money thatpeculative shorts sterling. interesting little side. geoffrey yu, head of u.k. investment office at ubs wealth management will stick around and join us later when he comes to radio. matt: excellent. of next is the world largest wind turbine maker. it announces a buy back. we speak to the ceo. we have been talking about these windmills. do you appreciate them as works of art? do they enhance the world in
matt: business breakup. donald trump's business councils after the president's comments on schroeder's bill does this mean for regulation? what does this mean for tax reform? the inflation puzzle. minutes show the fomc remains confused and divided as to why than 2%.se still less will jackson hole deliver any clarity here? plus, asking permission. south korea's president as donald trump agreed to ask for consent before taking any action on north korea. is the situation on the korean peninsula now cooling?
good morning, and welcome to "bloomberg markets: european open." i am matt miller in berlin alongside guy johnson. guy: let us take a look at how .hings are trading we flatlined. a little bit better bid than we saw at the beginning of trading. if you are long the market, that is. in terms of things you need to be aware of, i pulled up the ftse 100 here. this is the process. i want to walk through. you put the index in. date to change the 22017, you change it to daily. it then gives you a list of the stocks in the ftse 100. it always happens on a thursday. these are the stocks going ex-dividend today, and there are a whole bunch of them. scotland is in there. a bunch of stocks going ex-dividend on the london market. let us get a bloomberg business
flash. here is sebastian salek. sebastian: thanks, guys. companies behind the biggest u.s. credit cards -- insight violence. visaid and mastercard -- and mastercard under pressure to stop providing ways for what do mrs. groups to raise funds in the wake of the violent protests in charlottesville, virginia. tencent shares jumped the most in a year after it posted record profit. that is after the chinese internet giant had a 70% surge. estimates.lyst the company is benefiting from the popularity of its hack and slash smartphone apps. elliott management has bought oncorrom -- debt electric.
according to a person familiar with the matter, they acquired about $60 million of leverage in energy future holdings. partnersnd sunrise owns the majority of every credit any holding company. in cisco systems have fallen in extended trade after it predict another revenue climb as the business tries to remake itself. the company, whose machines formed the backbone of the internet, says revenue made a client as much as 3% from one year earlier. the ceo of cisco joins us at 2:30 p.m. u.k. time. u.s. federal reserve officials engaged in a detailed debate about inflation. minutes -- showed a majoritytheir of the fomc. many saw some likelihood that inflation might remain below 2% for longer than they expected.
that is your bloomberg business flash. matt. sebastian, thanks very much for that. itsas has maintained outlook and announced a six hundred million euros share buyback after orders surged in the americas. joining us now from copenhagen is the ceo, under sharrod -- anders runevad. you miss euro revenue estimates, of global walls street. why do underperformance in the most recent quarter? anders: i mean, i would argue that it is actually -- we always knew that the year on year comparison with q2 was going to be a tough quarter to compare against. overall, i would say it is a solid result. matt: but if it is a
solid result, why is the market selling the shares so hard? you are down 6% in today's trading. anders: i cannot speculate in the market. of course, i am looking at -- and how we can improve that for the long-term. said, we maintain our guidance. the results are very much within line of our expectation. in: you have done very well the united states. you are making big orders in the united states, anders. do you worry about what is happening politically in the united states? is there a cost to you further down the road? do you think the opportunity will be as big in the united states going forward under donald trump? anders: i would say that -- i states, whatunited drives the market is the current structure. believe, and i think the rest of the market does,
that it will stay in place, and it will bring the driver in the market up to 23. we do not expect any changes there. i am really happy with the performance in the u.s.. we have not changed our outlook for the u.s. market overall. a good inflow for the end of last year and we saw a good order inflow in the beginning of this year. guy: it is interesting you talk about that. that was the point at which the trump trade was on. people were anticipating that the u.s. economy was growing -- would be growing at 3% to 4%. that is not going to take place in the near term. i am wondering whether or not --
you are concerned that not opportunity that existed at the back end of last year, or the beginning of this year, cap perceived opportunity is longer there. anders: no, if you look at analysts as well, i believe the market would be around -- that. also believe that is our poor outlook as well. we do not see the other signs. actually, if i look at this year , it is very strong in the u.s. market. [indiscernible] we continue to see a very high activity level. you aboutnt to ask energy storage, because everywhere i see all these windmills generating so much
energy, i wonder where you put it. you haveindustry gotten into. what you anticipate us to have this business will be for you in the next two years? anders: i think energy storage is definitely -- but so far, if you look at your t pure storage, it is fairly small. there are many types of solutions. there are more than 40% of the country is powered by wind. pumps,tored in hydro, in hydro that we see. it is stored in the heating system in a way, where you even out the fluctuation of wind. and it is stored in a good grid build out.
there are many ways of achieving the storage. of course, further on, we see good development in battery technology, for example. that also, i believe, will come in play when it comes to storage. but that is, to me, a little bit further out. guy: you want to be ahead of that curve, don't you? do you make acquisitions in the space? you are in a pretty good position at this point. your stock is reasonably well value despite what we are seeing at the moment. you kind of wonder how do you take advantage of this? anders: the way i see it is of course that we look at this very much from a technologist point of view. we will not be a battery many capturing company, but we are very keen on looking at it from a technology point of view,
because of course, we see opportunity to optimize the theage and optimize structure in battery from a wind turbine point of view. that is the way we are looking at this, not as a bett battery manufacturer point of view. matt: anders, i want to ask you about general electric. i pulled up a bloomberg can't page that shows -- comp page that shows general electric shares in yellow. the stoxx 600 index in orange. vestas wind systems in white. as absolutely clobbered everything else in the market. i wonder what is ahead considering ge filed a patent on
your turbines and they were successful with the same kind of suit against mitsubishi heavy industries. what do you expect? anders: they complained to me without merit. and we vigorously defend our souls. a legalw proceeding in the u.s.. i don't have more comments than that. guy: we will let the lawyers take care of that one. anders runevad, thank you very much indeed for spending so much time with us this morning. the stock is down around 7% this morning. you take a look at the long-term it, it's all the very different story. trump and his business council break up. we will bring you the latest on this story. that is next. this is bloomberg. ♪
matt: welcome back to "bloomberg markets: european open." i want to get straight over to the first word news desk. sebastian salek. gonetian: steve bannon has public with his long simmering feud with some of donald trump's top economic in visors -- advisers. he said he often battles with steven mnuchin and gary cohn, taking a tougher position on china. he did not respond to requests for comments on this. south korea's president said
donald trump has agreed to ask for consent before taking military action against north korea, marking 100 days in office should moon jae-in that only his country could greenlight the state. he said they are closely approaching a red line. britain is considering allowing european union citizens to travel freely to the country even after brexit. e.u. nationals would be free to visit the u.k.,, but settling there would require more. plans have yet to be finalized and will be published within weeks. global news, 24 hours a day, powered by more than 2700 journalists and analysts in what than 120 countries. this is bloomberg. guy: thank you very much. donald trump's business forum has been disbanded after a growing number of ceo's quit in protest of his response to the
violence in charlottesville. some tax there will be cutting, but i think the prospects for structural reform, which was the aspiration the president laid out, are minimal at this stage. our global business correspondent joins us now. geoffrey yu is still with us. good morning, stephanie. where does this leave gary cohn? has put him in a very uncomfortable position. he was standing right next to trump on tuesday when he gave those inflammatory remarks. we understand there have been reports that he is dismayed by those remarks. he has not said anything publicly. i would not be surprised if he made a move, came out publicly and said something, or even resigned. that is a huge step. we have not seen any members of
trump's cabinet resign over this. i think that is the next thing to watch. will they stand by him? the mood in the white house is apparently very low, and people are wondering, how do they continue to serve a president who hold those sentiments? his resignation seems terribly unlikely, especially considering what we have heard from steve mnuchin and trump's lawyers. other jewish members of trump team have not responded negatively to what some view as tacit -- i would not they support -- but a lack of condemnation for the anti-semitic people marching in charleston. all the public statements made so far seem to be -- steve mnuchin said "we do not support any racism, bigotry, or anti-semitism, but we have to
move past this to get down to the business of government." do you expect more statements from his team members? stephanie: i think it is unclear. we will have to wait and see. what we have seen from the corporate ceo's who jumped ship is that i think they were looking at this as a calculus. they wanted to be close to the president because they thought done.ould get things they thought they could get tax reform, infrastructure spending, that he was their pro-business pet president. even if they disagreed on a number of policies, it was worth being close. it is looking like there are constant distractions because of what trump says. hole. digging his own many are wondering whether or not he will be a will to get anything done. ay: steve bannon, he calls up journalist from a left-leaning publication and gives this
interview and talks a lot about china. and he talks about the arguments that he has with mnuchin and cohn, and you wonder how the balance of power will shift, particularly when it comes to the view on china, where either of those two gentlemen could depart. how significant was management annon's move? this off-the-wall interview was delivered. it,ou go to the heart of this is one of the most critical relationships the united they pad. stephanie: absolutely. there had been reports that brandon was on the outs -- b annon was on the outs and trump had been considering firing him. the comments on tuesday seems to have emboldened bannon and perhaps made trump rely on him a bit more. what is going on behind the scenes? clearly, divisions. a rift within the white house amongst his advisers, and
whoever gains the upper hand will have a huge impact on policy going forward in china -- forward, and china is front and central. trying to dial trump back on his more aggressive rhetoric towards china. you know, and if bannon gets the upper hand, that does not bode well. matt: what do you think about the importance of steve bannon's moves here? think, overall, from an investor's point of view, it is a question of trying to filter out the noise. you do not know from one day to the next. stick to fundamentals. on the china relationship, it is not a question of bannon here. china has been braced for an adversarial approach from the trump administration from day one after he was elected. this should not, as a surprise. beijing is trying to tone down the language to try to find
common ground and areas of common interest. so trade wars -- that is something that markets have been worried throughout. it is not price. it is asymmetric. if we get this wrong, then we are really, really wrong. before we have concrete evidence, then let us not factor it into pricing right now. guy: ok. that could upset the apple cart. stephanie baker, thank you very much indeed. our thanks to geoffrey yu, head of u.k. vestment office at ubs wealth management. he is going to join matt and i on bloomberg radio at the top of the hour. radiol be on dab digital to discuss more about what is happening in the global markets. the white house front and center in that story. let's not forget the fed or the data coming out of the u.k. later. city one one -- minutes into the session. we are off, that we have faded
i guess it is risen. shining over the brandenburg gate. it is not shining on the dax index, although the dax, the cac, and the ftse, all of them down, but none of them down by two much. little changed for european stocks after gains yesterday. yesterday was yesterday. what should you be watching later today? 11:00 a.m. you -- u.k. time, and alibaba. a lot of people watching the market cap of alibaba as it gets ready to overtake amazon. 1.5 hours later, the european central bank publishes the account of its july policy meeting, so we will get some kind of -- after a relatively short meeting last month -- some kind of look at how the ecb is thinking ahead of the jackson hole nonpolicy speech from mario draghi. japan's foreign minister and meet their u.s. counterparts to discuss north korea.
on thegs called out peninsula, maybe we will get a little bit more clarity on the possible potential nuclear situation there. guy: quick look at the mov before we moved to surveillance. cima is down. -- ji it is the biggest move since may 11. it is trading down around it .13% this morning -- 8 morning. stas is down.ve on the upside, this company is trading higher. kinetic is trading higher as well through the gulf thoughts look like they are having a fairly solid day. of next, it is "surveillance." francine lacqua will be joined by tom keene. matt and i are going to bloomberg radio "daybreak," joined vietjet he -- joined by
francine: abandoned by business. donald trump's advisory councils are scrapped as ceo's jump ship over charlottesville. a battle between data and theories. the latest fomc minutes show fed officials wondering whether their model still works. and, theresa may's government is said to be considering visa free travel to the u.k. for europeans after brexit. this is "bloomberg surveillance ." happy thursday. this is your data. i w