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tv   Bloomberg Daybreak Europe  Bloomberg  August 31, 2017 1:00am-2:30am EDT

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>> a warning to washington. trump tells lawmakers not to fumble the chance to rewrite tax laws and reinvigorate the economy. >> i am committed to working with congress to get this job done. i don't want to be disappointed by congress, do you understand me? that as the president says 3%.can go much higher than in an interview with bloomberg, brian moynihan tells us he is not so sure. brian: we have a solid economy. without a relation growth at a faster rate, we are going to
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fight to see this thing get between 2% and 3%. manus: china's officials factory gates delivered a surprise jump revealing resilience. consulting the article. much harder to find bargains in the markets but stocks are the way to go. >> you put $100,000 in a 10 year for a form of investment, stocks still look attractive compared to that. ♪ manus: you are very welcome to "daybreak: europe." anna edwards is out for the day. you are left with me. i am manus cranny. let's take a look at what is going on with the market.
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you have had record after record. it is the rest of the market you might want to worry about. buffett says yes, stocks are the way to go. the u.s. stock market rally. it was a very small, select the ip crowd that game -- select vip crowd that gave you the highs. the flashpoint, a pileup in terms of the number of stocks hitting 52-week lows this month is rising. the numbers making two-week looks -- 52-week lows s makingred the number has. warren buffett saying it is harder to find a bargain. it is like shooting fish in a barrel. it was long after lehmans went bust and you had the confidence
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out there. investors seem to be shifting to a "show me" mode. thes a crowded area and breadth is questionable. you have msci up for the eighth month in a row. the data is trumping all of the rhetoric. msci asia is up .8%. trump, talking is not the answer as far as north korea but the u.s. gdp, the fastest in two years. robust economic growth. you want to see the data. the dollar is up in the green. it is the third day of a rally. was a curtain raiser on the jobs report. the market is underpricing the fed. the dollar should bounce from here. have a look at the yuan, we had good gdp data and good pmi data
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in china. , dolly looking at a yuan yuan, the biggest monthly gain since 2007 -- dollar yuan, the biggest monthly gain since 2007. gasoline futures still pumping ahead. shutteredharvey has 23% of u.s. capacity. the constrictions in terms of this supply of gasoline is really ratcheting high. you are looking at motor field prices in york rising by nearly 6.6%. at some point, this comes home to bear in the u.s. -- on the u.s. consumer. is it isolated? those are your market issues. let's get your first word news. juliette saly is standing by. juliette: donald trump has warned congress not to fumble the chance to rewrite the u.s. tax code and reinvigorate the
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economy. his comments came as he kicked off his efforts to sell the american public on his tax plan with a rally in missouri. >> i am committed to working with congress to get this job done. i don't want to be disappointed by congress, do you understand? understand. juliette: the ceo of bank of america has said donald trump's tax reforms could help the u.s. achieve growth of 3%. speaking exclusively to bloomberg, he cautioned that it would still be a struggle to hit that target. >> when you think about that time in the 1990's and 2000s when you have economic growth, you had a publishing growing. now it is hard to estimate. that difference is a lot of
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people and demand for houses, for food, for cars. economy. good, solid without publishing growth, you are going to see this thing fight to get between 2% to 3%. downtte: harvey has closed 23 -- 22% of u.s. oil refineries. the lowest since 2010. gasoline futures rose to the highest in two years and the fuels premium to crude is at a 17 month high. warren buffett has said the rally and markets over the last several years has made it harder to find bargains but stocks remain his choice over bonds. he was speaking to bloomberg. >>ks they are still very -- they are still very attractive compared to bonds. you are paying 45 times earnings when you buy that bond. earnings are not going to go up.
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if you put $100,000 in into your , the-- into a 10 year bond stoxx still look attractive compared to that. they don't look as nearly as attractive as they used to. strategiesacron's for the next five years is due to be unveiled in a news conference this afternoon. and lord philippe will set out the plans -- prime minister edouard philippe will set out the plans. the measures are needed to boost the economy. >> i think this is a very clear signal that we have to reinforce and strengthen our economy. these -- weto face need to have a stronger economy.
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juliette: global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . it is getting mixed in asian trade in the late session. we have some very strong weakness coming through from the hang seng. we had those bank earnings come through after the bell yesterday. they were a good, nonconforming loans, decreasing somewhat. you've got the yen weaker, the nikkei higher by 17%. australia's -- higher by .7%. australia's market big supported. stocks we have been watching in the session. we have a look at kia motors, down by 3.3% in seoul. kia has to pay bonuses on tops of -- on top of wages. it is not happy with the result.
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we are seeing some very strong moves coming through and a lot of these chinese gas producers because we have seen city gate prices lower for nonresidential customers. in sydney, harvey norman shares coming under pressure. manus. manus: juliette, thank you very much. breaking news coming through from the nikkei newspaper reporting that astrazeneca made for a japanese pharma company. it is trading at 6.5%. biggest that is the one-day move since november 10, 2016. ¥13 billion has been added to the value of the stock. this is according to nikkei business. they do not accept the bid but
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the possibility of an acquisition does remain. we are roughing along their. m&a -- along berin:. m&a is a rough thing. let's go back to one of our big themes, the data from china. it strengthened in august, manufacturing pmi strengthened to 51.7. that was a headed -- that was ahead of the economists forecast. tom mackenzie joins us from beijing. good to see you. this bodes well in terms of china, or does it? what does it tell us about the current trajectory of growth? a lot can change after a big congress. tom: that is an important emphasis. the economists seem to be around the consensus that this data in terms of the pmi number does flesh out a stronger second-half
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growth. we have seen other weakness. whether that is industrial profits, the satellite index showing confidence. metal prices picking up. there are a few factors feeding into this resilient strength, things like the european households, store demand there for chinese products. firstonger demand their chinese products. these companies can pay down their debts. things like real estate picture has slowed a little bit less than people expected. a lot of credit pumping into the system to build the infrastructure. one area a little -- one area of little weakness, the pmi number below the july figure it we
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spoke to one economist at figure. -- we spoke to one economist at jpmorgan. overall, the expectation is there will be continued strength in the second half. economists expect for your 6.7%. at around manus: i am looking at the yuan. i did it in the red, the best month in a number of years. the tolerant level of the pboc in terms of yuan strength, what do you think their response is likely to be? they have got the data and the yuan on their hands. they've got the fed hovering in the background and they like to mirror those movements. they have a lot to deal with. tom: they are factoring all of these aspects. you point to the yuan strength versus the dollar, it is up 5% this year. on the trade weighted basis, it is up.
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the pboc is taking this into account. economists do not expect them to raise either benchmark rates or interbank rates in the near to medium term because they want to ensure that they want to be getting credit to the real economy. that is the forecast from bloomberg. manus: well done. tom mackenzie. simon french is the chief economist who joins me now. welcome to the show. we decided to go into space on this one. anna is a way so we have ripped up the script. we are talking about the pmi satellite data. 6000 all showing industrial facilities across china in terms of using imagery. things are getting better.
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things are steady. is there a new cycle of growth in china? that is the question. simon: a new cycle, i think that is unlikely. it does tell you those 2015 and tom in q4 spoke about the big credit expansion. also a lot of the infrastructure brought forward. that has worked. does that precipitate a new cycle? does that extend the current cycle? manus: the congress, i like the way -- it is interesting that this is a clear manifestation of a timeline between stimulus and reality in numbers. it is the clearest definition of an 18 month timeline. it is a very key word that we
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use -- "current." one and henointed has done every thing to give succor to this growth. is it really a rebalancing? is there just a rehash of a rehash? toon: the administration has pull on some growth relievers. it was initially the growth of the yuan movement. there was the monetary stimulus data. it is a rehash but we could head into that congress with -- he could head into that congress with his head held high. what are the implications? they managed to stabilize this. china has benefited from global trade. one of the indicators is the
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fact that global trade dynamics have got over the initial shock and the commodity price bust that rattled the loss in the trading markets. they are stabilized in a stable growth. that is something that the chinese manufacturing sector has rocketed from. manus: simon french. fox onming to mind, liam a mission to move the japanese. more of that conversation a bit later. liam fox is speaking and saying the u.k. is championed -- is champion of free trade. 1000 companies employ 140,000 people in the united kingdom's. -- the united kingdom. brexit talks may fail citing german parliament to reports.
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also it wants members of the european union to resist u.k. lobbying. warnings from europe. coming up, bank of america's ceo warning on tax reform that we needed. -- reform. we need it. we will bring you our interview with brian moynihan. this is bloomberg. ♪
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manus: tokyo, the emperor's palace has gone to: 20 in the afternoon. theresa may is visiting the prime minister of japan on a trade mission. breaking news coming from the prime minister of japan. the bilateral relationship between the united kingdom and japan and it is the most important base for japanese businesses in europe. the chinese prime minister speaking in tokyo. desk that are 1000
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japanese companies here in the united kingdom which higher e40,000 -- which hir 140,000 workers. the prime minister japan goes on to say they have trusted u.k. economy after brexit, even after brexit, many japanese companies made investments in the united kingdom. brexit has to be transparent, predictable to limit the damage. these are the desires of the japanese. can theresa may deliver? let's talk about one ceo who runs a pretty big company, bank of america. the ceo is brian moynihan. he repeated an interview that he made days into donald trump's presidency. washington should focus on reforming the u.s. tax code. interview,anging
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moynihan spoke about his plan for an eu hub in ireland after brexit. >> we just moved our operations in europe to dublin. dublin has a tax rate which is half of what the u.s. tax rate is. you are trying to get competitive. there are two basic principles. so that people did not shift money outside of our country. 30 is ago when people talk about tax reform, the global economy was not what it is. i can get raw materials, i can build whatever it is and i can sell it outside of the united states. 30 years ago, much more demand was in the united states that means money is going to be out there endlessly make it more equivalent to bring it back. >> them accredited the republicans agree on a need for tax reform. the question is when is it -- democrats and republicans agree on a need for tax reform.
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the question is when is it going to happen? >> i have confidence that of all of the issues they face, there has been multiyear agreement that this was the issue at the moment. we had to get tax reform done from the obama administration going back into the bush administration. it is still hard work. the devil is in the details. issues, this one has more of a uniform group of people are saying we have got to do this because it is obvious we are not competitive. >> can you take it into your plan? >> i don't bake a lot of external factors. theow would you rate
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president stewardship of the economy echo >> -- of the economy? >> it is going to be given more by what the consumers are doing. when people wanted to grow faster? absolutely. the reality is the economy looks like it did. it will until something changes. >> we cannot sit here and say the president doesn't have a consequence. the decisions the president makes do have consequences for the economy. >> decisions are made as policy matters. without any decisions made you are seeing the economy grow. more from brian moynihan throughout the show. , it is pretty evident, you need this 3%. we need confidence and tax
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reform. we got the percent growth yesterday -- we got 3% growth yesterday in gdp numbers. this is the kernel of the confidence. simon: what brian moynihan is talking about, we've got to get the 3%. we got to 3% a times under obama that it was not sustainable -- eight times under obama but it was not sustainable. unfortunately, it is the boring elements of public policy which will deliver that in the face of much less favorable demographics to achieve that nominal gdp growth that we had in previous cycles. this. the risk is the new york times wrote a lovely piece. back in 2004, text is reduced to -- tax was reduced.
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investments,on that is the risk. feel that thes value of returning that money or recycling that money into the economy in terms of capacity building, investing skills and broader entitlements to their workforce to boost the activity, if they feel that is the payoff that is appropriate versus supporting their shareholder base, then they will do that. there has been a lot over the last five or six years to return cash to shareholder base. manus: we have a few more issues to get through. breaking news coming through from -- she wants to build on the momentum in terms of the toyota. setting up new trade and investment working group with japan and will engage more
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actively with asian markets after brexit. we want to build on that momentum. a message from theresa may p we talk about brexit and japan next. -- theresa may. we talk about brexit and japan next. ♪
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manus: from whiskey to buildings we have breaking news. there is a live shot of hong kong. hang seng down by .6% as we stand in trading. you've got the yuan moving higher. telecoms company, they have delivered and confirmed the party 17 outlook, the first-half net income. a loss last year of 28 million euros. markets have penciled in -- it is a confirmation of their look and they are set to potentially benefit from the massive expansion of the paris transport network.
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will paris get the 2024 olympics. 60% of their revenue comes from france. mr. macron, will he spend? that could be another nice piece that adds to the story. organically current operation profitability of 3% to 5% and that to me, i had 5% written in. profit desk 2016 profit -- penciled in 2.41, that is a mess. -- that is a mess. profits of 3% to 5%. that is a raising of their
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earnings forecast and was it due to jamison. you've got the world's largest distiller, jamison whiskey extending the eight year sales street that they have had -- sales streak that they have had. earnings rose 3.2% on the 12 month through to june. growth has accelerated. confidence of improving our this is performance. confidence from a glass of havana club. morning., good nejra, take it away. index --e msci a is it msci asia index higher today. most industry groups higher.
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underperformers are telecoms and energy. we're seeing a risk-on in the asian markets. we're looking ahead to the pce later today and the key jobs data. tomorrow, bloomberg dollar index higher for a third day, heading for its first monthly gain. we will take what we can get. bloomberg dollar index at 1156.623. metals, because we of copper surging toward 7000. it is up 7% this month. nickel, double-digit gains. morgan stanley analysts looking out the inverse relationship between the dollar and metals is back, so they could be vulnerable if we see a dollar rebound from here. i am keeping and i on gasoline test keeping an eye on gasoline in the wake of harvey. is its longest winning
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streak since 2013, manus. manus: harvey's lumbering path into louisiana has expanded the number of shuttered oil refineries. that is the lowest since 2010. let's get to singapore where dan martell is standing by -- dan martell is standing by. market turning in the other direction. coastms of assessing the energy infrastructure, do we have any benchmark to work with? futures aregasoline the main thing right now. today is the last day of trading for september futures.
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there is a major short squeeze going on. if there is physical delivery, it has to happen by september 28. with all of the colonial pipeline which is the biggest shutine in america, it has and so we are looking at possible physical shortages in the month of september. that is making traders in europe go crazy. they're looking for a cargo of gasoline that they can put on a boat and ship over to america and take advantage of these high prices. that has been the real market focus. the wti has been slammed by this . august has been the biggest month for crude inventory draws up until now. it doesn't matter because with all of these refineries shut, it is land locking all of this oil production going into the cushing miss mark storage area and sitting there. oil down, gasoline up.
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it adds to the woes of opec. thank you very much. caught up with caroline connan. european refineries are benefiting from harvey. let's turn our attention to the u.k. making headlines from theresa may and shinzo hobby -- since .hey -- shinzo abe the u.k. leader will seek to lay the groundwork. they said down for an elaborate ceremony with shinzo abe but what we lost in translation, how the u.k. are conducting their budget negotiations. engle, it is a much harder sale in terms of this
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whole position of the u.k., japan and the free trade agreement. how is it going so far? theresa may wants to see a quick agreement with japan based on the you deal. it is a lot of what we have heard before. stephen: i was going to say the same thing because i am running through all of the headlines abe.shinzo hobby -- shinzo theresa may wants to base the negotiation post-brexit between the u.k. and japan based on the fta that is about to be signed with the eu. japan is going, wait a minute, you were a part of the eu when we started these negotiations and we have been going through that. now we need to do another one and on what merit? there is lots of questions.
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japan is not going to come out and say, we don't like this. adage in japan that says the nail that six up is going to get hit down. the japanese don't understand why would you do that. we need reassurances. our 140,000 people that we employ by our japanese companies have operations there, nissan and toyota. they have expanded their factories. of business ties that are up in the air. the japanese leadership and business leaders, we're hearing from hitachi's leader, they want reassurances from theresa may. wants everybody reassurances from theresa may. me.hen engle is with just to build on that, everybody
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wants reassurances. i spoke to caroline hacker on digital radio. ambassador david warren said i the japanese said we don't understand why we are doing this. they are just too polite to say so publicly. >> they were not so polite in september last year with a center very strongly worded open letter to the u.k. government, 15 page letter setting out all of the data points around jobs. as a landinge u.k. craft for japanese investments in europe. you can trace back to september last year and the one word that came large of the letter was "predictability." the strategy perhaps defending theresa may's government. they are saying if we try and
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,ce the free trade arrangement then there is an element of predictability, consistency. theparallels between european union and the u.k. post-brexit was what you saw it in the letter. that's what you saw it in the you sought int the letter. manus: better deals. , simone agreement french, i presume. simon: agreed. manus: i am not herring you. simon: where it will stop is with the idea with existing trading partners, you get better trading arrangements. everybody is looking at getting
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the best advantage. looking at the liam fox argument which i don't subscribe to. he's got a lot to live up to given the friction that may be introduced in the existing program. he's got a very tough task on his hands. with japan you are likely to see at best the status quote maintained. in reality, more functions put in place. and in place.ons manus: getting windy over there in the u.k. this brexit barometer, the u.k. is asking for concessions on negotiation. risk of a snap walkout by the brits is rising. do you agree?
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simon: i think we will get a symbolic walkout over money. herene in gaping silence is we have added series of his vision papers in response to the eu saying you have not laid out your position. you are going into negotiations. none of it has covered the exit bill. not because i think the u.k. government should set a number, but the parameters on which you would count delete that would put the u.k. in the front books. they're not prepared to do that and then face-off twin bill that would calculate it in brussels, i think we would get data from david davis. manus: symbolic walkout before christmas? simon: depends on the end of october, european council
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meeting which is crucial. will the european council conclude that a not -- that not enough progress is being made. that walkout could happen. manus: if you had a genuine seat at the table, you would be to create theters lead on the brexit bill? what i would do is set out the parameters for the exit well. -- exit bill. prompter'soretical on how -- parameters on how you would calculate it. something that looks like a text for both the exit in the transition deal. those blanks can be filled in during negotiation. it presents the u.k. for being on the front foot.
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he can say, hang on, we are on the front foot. have some assurance in your future investment prospects. manus: maybe liam is having a cup of tea with david davis. this is the pound. trade weighted basis is back to where it was. can it keep going on and not have a mention of it again? simon: i expect mark carney talking up sterling. that is not actively but within his narrative. theill start talking about impact on inflation and what that may lead to in terms of induction. bank of england is a price taker facing the slowing test the slowest growing economy in the g7. they are likely to raise rates. manus: carney may not be indifferent to exchange rates could will he repeat -- rates. will he repeat that?
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simon french, thank you for being here with me this morning. where to invest. name, warren buffett. he says the value markets has been hard to find bargains but stocks remained his choice over bonds. the oracle of omaha discussed the challenges of buying shares in the aftermath of the energy crisis. >> they were shooting fish in a barrel in late 2008 and 2009. stocks have been steadily going for march of 2009 was is eight so it plus years so stocks are not going to hurt more just because you pay more for them. they've got best attractive,
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they're still very attractive compared to bonds. if you look at the 10 year, that means you're paying 45 times earnings when you buy that bond. the earnings are going to go up. stocks still look attractive compared to that but not as attractive as they used to. as interest rates go up, the comparison becomes far less dramatic. >> i wonder if there's a connection. how much is it because of the central banks have really injected trillions of dollars, euros and yen into the system which have driven asset prices up? >> the interest rates are to stock prices what gravity is to matter. ,f interest rates were nothing
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you would be buying stuff that would yield you 1%. if interest rates are on the short rate 21% like they were in 1982, you can look at a stock it six times earnings. interest rate, that is what drives valuations and we have had these very low interest rates for some time. a lot longer than i thought we would have them. >> at the same time when the federal reserve signaling they are going to start coming off. will cut back it on quantitative easing. what effect might that have on stock prices? >> have to be careful on how they do it. the federal reserve has 48 trillion in assets now. they can do it but if they were
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to go back to the trillion, that would be 3 trillion of securing securities that they would not be taking up. somebody else would have to do it. they will be very careful. >> has quantitative easing worked? it has saved us but it seems like there was a to go down theory. -- was a trickle-down theory. the average hourly wage is not going up as fast. >> it did wonders for us coming out of 2008 print without it, -- out of 2008. without it, we would've gone back to the economics of 100 years ago. i think the fed is overwhelmingly -- has overwhelmingly done the right thing. we have never gone through a the oh this -- gone through a period
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like this. manus: that is the oracle of omaha. great interview by david west and. -- david westin. we've got bloomberg radio for you. china factory output shows resilience, what does that tell you on growth in the world among the second-largest economy echo --? this is bloomberg. ♪
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manus: it is a robust economy. that is the top line today. and return of 51.7 for august. douglas morton joins me now to focus on china. welcome. good to see you. we have gone to extreme -- we
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have spent money. we got the satellites out. 6000 locations. satellites telling is a good story, the data telling us a good story. is this all smoke and mirrors ahead of the 19th congress? is this growth real? it is positive for china because these results, the back of a lack of listening. there has been a tightening environment and we are seeing this robust growth. we are seeing capacity consolidation but also stimulation of demand which is one of the largest economic policies the world has ever seen. manus: we had fiscal great flurry with maps and routes and we stopped talking about it. it is very precedent and your cient in your
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world. why? doug mallory just douglas: you man --d rates -- that douglas: specifically targeting policies within china. it is a pretty big factor. manus: there is nothing short term about one belt/one road. it is a much longer planning period but extrapolate that in terms of one belt/one road. -- douglas: it is the largest economic policy the world is ever seen. 12 times larger -- 12 times larger than the marshall plan. it is truly that. we are at very early stages with this policy.
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the reason we are getting this to mission is twofold. xi jinping, it is his baby. also there is minister relation of private/public financing in china. the stimulation of private financing to public works. manus: you bothered by the strength of the yuan, because it has accelerated. one or two brokers are saying you could see this get stronger before the end of the year. morgan stanley moving down to 650. does it play into your thinking when you run the stoxx numbers? stocks numbers? douglas: china's trying to rebalance their economy. the context of china and just is one of the only global countries to reduce their reliance on exports at the
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moment. even in the context of now, on a trade week basis, we have seen a strong r&d. manus: i read your notes on banks. i went through some of them. i got to the end and i go right, you got nonperforming loans being one of the bolsters it i'm confused. -- bolsters p i'm confused. these are some of the names we have got. douglas: the artists -- they are stable at these levels. for five years now, everyone has been just describing the npl risk to china and ignoring it. the reality is at the moment, because of this strength and demand and the classic consolidation, which are the prominent and credit risk areas in china.
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those are the results we saw and the demand for npl and suggestion is very high. manus: douglas morton, thank you very much. ♪
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manus: a warning to washington. donald trump tells lawmakers do not fumble the chance to rewrite tax laws, reinvigorate the economy. rexam fully committed to working with congress to get this job done and i do not want to be disappointed by congress, do you understand me? gdps: u.s. president said can go much higher than 2%. in an exclusive interview, bank of america ceo brian moynihan tells liberty is not so sure. -- bloomberg he is not so sure. >> without population growth at
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a faster rate we will see this thing fight between two and three as opposed easily get there. surprise jim suggesting resilient output in august. consulting the oracle. warren buffett tells bloomberg it is harder to find bargains in the markets but stocks are the way to go. times you are paying 45 for a form of investment and the rate cannot go up. stocks look fantastic compared to that. manus: you're welcome to "bloomberg daybreak: europe." stocks are higher in futures market, london has been trading higher and shinzo abe and
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theresa may are cementing their symbiotic relationship on the basis -- or the basis of a symbiotic relationship. it is like shooting fish in a battle, that is what it was like in 2008. you would have risen and ridden it. what you have got here is a more difficult market to do with, more difficult times to do with, equities are higher, why? they are higher because of the data. chinese data, u.s. data, european data, global data is supportive of equity market eluate in sand the central banks have been rather minas event -- munificent. you are on course for your eighth straight months of rain, the longest winning streak in a decade and the asian market. breere talking about market adth. the starlets of the markets
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have given the margins. you have china factory index showing robust growth, bloomberg dollars index is up .1 of 1%. it is day three of the rally, almost like a big rather moment. e is worth more to the market. we are underpricing the propensity for the u.s. to hike rates. these are the currencies, the yuan by 2%. douglas morrison was just with me, they are not bothered by the value of the yuan, that does not impact china growth story at all. you have the gap in features 6.5%. storm harvey has closed 23% of the overall production gasoline portction in the u.s., arthur is closed my guess , theding its gain
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longest-running gains since 2013. you have the bond markets, anb -- bunds are down. wrod. -- to the first first word. juliette: donald trump has warned congress not to fumble the chance to rewrite the test code and reinvigorate the economy. he kicked off a rally in springfield, missouri. >> i am fully committed to working with congress to get this job done and i do not want to be disappointed by congress, do you understand me? understand? tropical storm harvey has close down a must a quarter of u.s. oil refining capacity as it made landfall for the second time, reducing fuel making
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capacity life 4.2 5 million barrels a day, the lowest since 2010. futures rose to the highest in premium to crude is at a seven month high. the u.k.'s prime minister theresa may and tends to lead her conservative party into the next election. when newspaper claim to know the date when she is planning to quit in 2019. she said there was no basis to speculate about her future and insisted she is in it for the long term. in june's snap election the premier lieu at 23 point holy and lost the tory majority in parliament. warren buffett has said the rally in markets over the last several years has made it harder to find bargains. the billionaire and chief executive officer of berkshire hathaway was talking to bloomberg. warren: if you look at [inaudible] paying 45 times
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earnings. if you put $100,000 in a 10 year bond you are paying for a form of investment. stocks still attractive compared to that area they do not look as attractive nearly as much as they used to and if interest rates go up the comparison becomes for list romantic. key part of emmanuel macron's political and economic strategy for the next five years is to to be unveiled at a news conference this afternoon. the prime minister will set out the plans for major labor reforms. the finance minister said the measures are needed to boost the economy. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top. higher, the seven -- gain.1% gain in a
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are seeing and commodity players particularly in iron ore. have a look at the switch out at hong kong and the csi 300 in china and we are seeing some week's comes through in the kospi. motor under pressure, losing a wage dispute in court. energy showing you what we are seeing in gas producers rallying. this is after city gate prices were lowered for nonresidential customers and harvey norman in sydney one of the worst performers. it missed with its dividend. 403, data out of china, it was encouraging, manufacturing pmi at 51.7 for august above estimates, nonmanufacturing pmi
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was lower than the previous month but as it can say we are starting to see some stability and traction coming through in the chinese economy. defying the odds against all those china doomsday's out there. manus: brian moynihan has said third-quarter trading results were solid but declined to forecast for the revenue will increase from last year. that was a wide-ranging interview he gave to bloomberg, one that made an appeal to washington for tax reform and explained why he is focused on consumption when projecting economic growth. >> if you sort out all of what you are thinking about about the economies, it come down to the large economy and two thirds is consumer. the thing you watch is what our consumers spending on and each month, consumers spent $40 billion to $50 million on credit cards. they spent an image -- an
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equivalent amount of checks. inis up 5% year-over-year terms of total cash out the door. wires, debit and credit cards up six or 7%, that means consumers are spending money. that includes cash coming out of atm's flat every year which is drift than it tends to down. consumers are spending, that is good area they are confident they have a job in the half been confident spending. what you saw today was them adjust up consumer spending and i would say our numbers are strong and have shown consistently they will be adjusting up and have been. they have been adjusting up that most every month. a little higher than it looks like from some of the indicators. grexit sounds like you see signs that they be economic growth can accelerate beyond its current trajectory. am i hearing that right? >> you are seeing wage growth.
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we have a series of policies, employees get paid more every year and they spend more. it will take more enthusiasm and a little bit more drive to get it to 3% and that will come from a series of policies which are geared to invest in the u.s. from the u.s. perspective. you are seeing europe grow better and china maintain the 6% plus growth rate, india has come back and is going well and brazil is turning to work its way out of its mess and of those happen the rest of the world comes along. yousef: the ceo of bank of america with eric cap -- with erik schatzker. rogers,lcome jordan good to see you. listen to brian moynihan talking, it will take extra to get a sustained 3% growth nimble -- number. an 11 yearfidence at high. is the dollar underpriced in the
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reality of the american economy? is the lack of inflation. the federal reserve has been talking about whether interest rates need to be higher and they are alluding to 2% or 3%, 3% is there. and they will not get to 3%. hikes left ine them, we get to 2% and they stop and the markets are not pricing that. they need -- they need to be more aggressive with hiking but not meaningfully changing the dollars outcome. it did not surprised go better bid on the back of a time of incredibly tense rhetoric last week. i do not know where we go with north korea next but there were some very tense moments at it was the yen and swiss and the euro took the mantle and the dollar continued to collapse but be offered area -- >> there is more than the risk off story.
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in terms of the dollar side, what we have seen is the current account deficit continuously occurring in the u.s., donald trump pushing on trade more recently. and trade is a negative for the dollar and he wants a weaker dollar to achieve its trade deficit to come in. america is not going to suddenly exporting a lot more goods to offset the chinese imports it is dealing with on a daily basis. the way to of -- offset that is to have a weaker dollar. myus: i just looked at notes, david finnerty said the fed will find it hard to avoid lowering the dot plot for interest late -- interest rate levels at its of timber meeting. is that a fair statement? i cannot see them moving on the this meeting. do you think they will? >> at the september meeting they
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are talking about whether they should adjust the sheet. to zero fromo come a large level. in janet yellen's words it is like watching paint dry. it could be at curve steepen her. you have a lot more supply compared to what would be before. the federal reserve unlikely to lower that. the reason i say that is they will be doing a hawkish step, it is the wrong message to give. if i am wrong -- they are not going to get to three percent. it will be a 2% terminal rate and at some point they will have to lower their dot. manus: i want to know what you make of this. s&p, i was quite shocked when i'm read this, this is the chief economist at the s&p saying
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raising the debt ceiling would be more catastrophic to the economy than the 2008 failure of lehman brothers and would raise many of the gains and recovery, i am shocked at that statement because i do not know whether she lived through lehmans but the debt ceiling i have lived through for 30 years. the prevarication is typical, debt ceiling, we get that. what risk is trying to quantify? >> she is quantifying an unlikely risk but when that is possible. america does not raise the debt ceiling. for folks at home it is confusing. it is something you need to raise to borrow more, simply. she is describing a situation not where they do not raise the debt ceiling but she is describing when they do not. and they run out of cash. the difference between the two. two weeks or so. manus: they are using a lot of reserves.
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technically beyond the point at the moment. >> if we get to mid october that is the day she is talking about, the day they run out of cash to pay anything. manus: that means default. does it? >> delayed default. it could be end of october to give them more leeway if it gets to that point. let's say we get to december. by then they would have to default on their treasury notes or some sort of maturities. view theve me a market morning we walk in and we have a red headline, it is projection i know but the whole thing about preparedness is preparedness through projected risk. >> this is an unlikely scenario. manus: fine. >> if you did get to a point where they do not raise the debt ceiling and run out of cash and they and up doing extended to build maturities to get around it --
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>> they have got to fund, there is not a big treasure to bear. >> we have been tracking the market pressing around the debt short-termbills and paper expiring around october. .e have seen that tightening they need to pass a budget, that is completely separate to the debt ceiling and they need to fund returns for harvey to rebuild the economy as the flooding subsides. at the moment the debt ceiling is fine because congress needs it. manus: that is an interesting proposition, politicians need to act like adults. stocks to watch, asked her zeneca and why are they in the market for m&a? jamison andor
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we willnal cocktails, have more on the stocks.
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>> if they were go -- to go back to the trillion or trillion and a half it would be 3 trillion of maturing securities that they would not be taking up and some details would have to do it. they will be very careful about how they do it. manus: that was the oracle of omaha, berkshire hathaway ceo warren buffett on the -- on u.s. quantitative easing. it is 8:20 a.m. in paris. say itbuffett went on to is like shooting fish in a barrel in 2008 in terms of buying a stock. to findfficult now
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value hence the reason why cash is there. , prices down and yield up and the market against to tilde a head of steam ahead of the next european central bank meeting. will draghi go for some sort of verbal intervention and would it be worth his while? they did grand with a slightly higher euro. dubai finishes the last trading day of the week up .7 of 1%. double the colette the end. juliette saly is standing by, she has your is this flash. -- business flash. juliette: to tell has in force to close some of its operations as storm harvey inundate since is this. the port arthur refinery is likely to cost the company a few million dollars. >> maybe i am positive or optimistic about the capacity of the u.s. to rebound. active, andvery
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texas is the old country. there will be a strong mobilization and they will be able to restart. colleagues and. the industry to be able to recover from that situation. named theexpedia has new ceo, filling the job left open after the previous quit to lead over. since 2011.cfo our interview is at 3:30 p.m. u.k. time. that is your bloomberg business flash. manus: thank you. one week to go into the next european central bank policy decision. mario draghi will be standing by for the release of two pieces of economic data and the unemployment data at 10:00 a.m. u.k. time and the latest cpi
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number showing a pickup. how important is today in terms ?f the data flow for europe soft data is nice, it is good, more optimistic that a little bit of good news from the german data side. how important is today? >> you get the german breakdown first, the day before and i have today's release. we have got some of the good news from yesterday. the market will be looking for a good number. the market is trying to inflation.the ecb they're asking themselves in september will the ecb signal a return to normalization and tapering of the quantitative easing policy in the new year? the consensus feels to me they thought it would be september but perhaps they might delay this decision to october or
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december. manus: why do you think there might be a desire to delay? hard to get consensus on the council because of the rise of the euro. we are long the euro for many structural reasons but with that, it does to press inflation . when you have a stronger currency it reduces the cost of imports and inflation starts down. because of the rise of the euro since the french elections ecb's forecast on the two-year horizon will have to be revised down by 0.3%. it is hard to make a hawkish step in september because of this mechanical forecast change. , i createdve a chart this yesterday morning with hillary's a clean -- hillary, the queen of charts. premature we were in 2013.
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-- pretty much where we were in 2013. again it is a conundrum, it is not delivering the reaction function you would normally would associate with that kind of a move. everything is stacked against them. are we thinking they will be more aggressive than they can afford to be? >> to make that chart better you just need to push ahead the alpha by 12 months. it is a leading indicator not a right now indicator. the ecb knows that, it is why they have become more optimistic and why they might raise their growth forecast in september. they are on track toward normalization. when a matter of timing they make the small steps but the end result stays the same. kick thet's say they can into december. let's just project it out as being that. euro ins that do to the
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terms of taking it higher or is that priced in, that is my question and times of the retracement of pricing you see? the euros not in price. most economists are wavering on whether it is september, october, or december for that move. it is a hawkish move if they do versus mark -- market pricing, the euro will rally. manus: thank you for being with us this morning. jordan rogers, part of the fx .trategy team this is the french finance europe oneeaking on radio. seeing a stronger euro is a concern for the french economy and the french economy remains vulnerable. europere news lines from one radio. the european market open is next
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with guy johnson. i will be on the digital radio. preachers are set for a higher opening it a warning shot from the bow on the value of the euro.
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♪ good morning, welcome to bloomberg markets, this is the european open. you the first trade when that happens. i am guy johnson, imf am in london. matt miller is in berlin. let's talk about what is going on in france, the ench government will start weaving unions on its labor reform plan in a little over an hour. the prime minister will hold a press co


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