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tv   Bloomberg Markets European Close  Bloomberg  July 12, 2019 11:00am-12:00pm EDT

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left in the trading day in europe. we are almost 90 minutes into the u.s. session. from new york, i'm vonnie quinn. this is the european close on "bloomberg markets." a little bit of a mixed picture. the stoxx 600 had been higher, but is ending the session pretty much flat, down about 1/4 of a point as we await the last 30 minutes of trading. bonds have been selling off in europe, particularly in france. mike up or dispense are getting out of -- market participants are getting out of bonds as it looks the ecb might just add to its bond purchases, which would leave little on the table for investors to pick up along the way. turkish lira weakening once again, 1.5 percent versus the u.s. dollar, as turkey accepts a delivery of missiles. we will dig into the details of why turkey might be doing this later this hour. in the u.s., we are seeing the s&p 500 holding its gains. it is about 3000.
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bullet finish the session there? we will have to wait and see. some stocks recovering from major losses yesterday, including hunt's transport services, having dropped 22% yesterday. companies like alumina, which gave a negative outlook, really getting punished today, down 16%. the 10 year yield backup to 2.12%. that is widening the spread. crude oil above $60 a barrel and holding. the mexican peso had been weakening. it is back above 19. the president tweeting this morning that the biggest development in u.s./mexico talks on trade has yet to be revealed. stephen mnuchin in the last few minutes warning the u.s. may hit the debt limit by early september in a letter to nancy pelosi. once again, the treasury secretary warning that the u.s. may run out of cash in early september. another develop and, up
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president trump's labor secretary out. one week left. alex acosta announcing this morning he is resigning. it was a surprise appearance by the president. we are joined by our bloomberg national reporter. right?ric circles, the labor secretary gave a news conference yesterday which seemed to defend his actions 10 , and ago and remove them then less than 24 hours later, he's resigning. will there be more fallout from the jeffrey epstein scandal? reporter: that is certainly ongoing, and i think we will continue to hear a lot more about that in his trial and prosecution. this is a major development in the trump administration. the labor secretary alex acosta is resigning. as you mentioned, in the midst of a firestorm over a plea deal he gave to jeffrey epstein into thousand eight when he was u.s. attorney in miami, critics said
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that -- in 2008 when he was u.s. attorney in miami that critics said let epstein off the hook. acosta gave a press conference this week and defended his plea deal. he did not apologize or express any regret for that. he did say something about how satiety -- how society treats victims differently today than in 2008. he still had agency to let jeffrey epstein off the hook in the way he did, and now it is coming back to roost. it says something about him and about society, as well. vonnie: president trump praised him and his work, and almost lamented that this had to happen. impugning that it shouldn't have had to happen, that the labor secretary should be able to stay on and that it was public opinion, or some other pressure, that made him resign. the president was also very careful to say he had never been to jeffrey epstein's island.
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he is distancing himself from the billionaire. sahil: a tweet in the last few moments from the president praising alex acosta, saying he was a great labor secretary. no criticism of him, and the president seems to suggest he decided to resign in the midst of all this criticism because acosta conveyed to the president it would be a distraction to his administration. the president has, of course, try to distance himself from jesse epstein. the two used to be friends. there are photos of them from years and years ago, but he says he hasn't spoken to epstein in many years. the water cooler talk in washington, d.c.? obviously jeffrey epstein himself is in trouble, but will it rub off on other people in politics, perhaps close to the administration even? sahil: we seen that ongoing for a while.
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we've seen a lot of been in various perfect -- a lot of men in various professions, including politics, media, and business face these accusations. a lot of them have lost their careers for all of these instances in the past, ranging from sexual harassment, inappropriate touching, to some of the more horrifying and egregious actions of the sort that jeffrey epstein is accused. so yes, it has been ongoing, and will continue to be for a wild come. vonnie: reports from politico that the mueller testimony is going to be postponed by a week, now looking at july 24. any particular reason? sahil: the discussions for the delay seemed to be around the idea of creating more time for questioning. there is a lot to get to. the mueller report was a very long document and there are many things that democrats in particular want to explore. they view this as an opportunity to get this information out to a
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wider audience. the fact that mueller's one public statement he gave about this at so much attention and had such an impact in the way the public viewed this is an indication to democrats that they want him on camera explaining the findings of his report. it seems like the discussion of delaying that testimony are about creating more time for the numbers of congress to question the special counsel about what he found in this russia investigation. vonnie: thank you. sahil kapur there. we should note that a lawyer for epstein did not immediately respond to comment. sticking with markets now, global growth concerns mounting with an unexpected contraction in singapore's economy, a slump in china's exports in the data overnight, all sending a warning simmering trade tensions weigh on business confidence. we are joined by james bevan, c cla investment management cio.
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trade one of the things that is weighing on business confidence? obviously with brexit still undecided, it would seem to me that that might be something impacting things more. james: for sure. people certainly anticipate that trade is asus dental issue for the global economy, and the rate of sunshine -- a substantial issue for the global economy, and the ray of sunshine is that the global economy can continue even if the trade outcome is less precious than many might hope. vonnie: we had tom lee of fundstrat earlier on the show. he doesn't see any problems. the market is pretty healthy, according to him. what about europe? are we seeing something a little less healthy? bonds selling off today on the
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thinking that the ecb is going to buy more. james: i think the european economy is in a particularly difficult position. we have a challenge of very deteriorating demographics, and great contrast to the united states. we have productivity challenges as well. this something in the order of 10% less then in italy and spain. we either need to see germany and brace inflation, and of course they have no appetite to we need to see outright deflation in italy and spain. you can imagine that is deeply unpopular and a real political concern. vonnie: how do you think about this as an investor? you invest for endowments, charities, and on and on. where do you see 60 right now? james: i see -- where do you see safety right now? james: the free cash flow that
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equities offer, a country in mild excess of bond yields is a fabulous place to be right now. the forward-looking excess return from equities holy justifies people being paired to take a bit of risk in their portfolios. i look at they yields from , andable from bond markets this is an accident waiting to happen. vonnie: i want to pull of the probability of recession in the u.s. 12 months from the new york fed. it is visible via gtv on your bloomberg as well. it shows that any time this goes above 30%, there's been a recession that followed. right now, where are we? we are close to 33%. do you foresee a recession 12 months out? james: no i don't. these charts are predicated on the premise that an inverted yield curve, when short yields are in excess of long yields,
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predicts a recession in the pipeline. i would say that is long on three counts. first, we have not had the excesses build up in prior cycles to encourage tightened policy and drive the economy into recession. the second issue is i do think long yields will rise from current levels. they are so far below nominal economic growth. when the economy is thinking about where to's fair value reside, it was all about trying to recalibrate normal economic growth with nominal bond yields. of course, we are a million miles from their. i am expecting 25 basis points off of the open market committee meeting at the end of july, and probably another 25 basis points by the end of the year. vonnie: james, if that is the case, would you be hanging out in equities in the united states? do you see value in europe at all? many of the sectors are up.
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of course, this is just one day. but i'm wondering if you see value there. james: i see remarkably little value outside of the traditional long-term growth stories. i would be a buyer of unilever, the basic staples. as ald be a hold of lvmh luxuries company. those as a global view can absolutely hold their own. i worry that the european banks still haven't done enough to cleanse their balance sheets come put themselves on a forward-looking basis of rising profitability. we have negative interest rates from the european central bank that will get even more negative before the cycle turns. vonnie: what sectors would you be comfortable in right now? james: in a global perspective, i'm absolutely focused on quality and growth. i see good capacity to achieve i.t.t returns and parts of
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, and certainly in payment systems. i would be a buyer of microsoft and visa. equally, i do think that some of the health care businesses look extremely well-placed. stryker, for example, is a company that can offer excellent long-term shareholder returns. vonnie: you are not concerned at all for the administration's werets to mess with, as it , areas of health care? healthry today is that care is going to draw the most ire from the -- the most from the administration. james: i think traditional pharmaceutical companies will be in trouble because they are being disrupted, which means that the competitor propositions get to the market very quickly. for me it is not about thanking about drug companies.
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it is thinking about diagnostics, medical instruments, and about the opportunity to help people with health using instruments and strategies that are noninvasive and nonpharmaceutical. vonnie: james, thank you for joining us today. our thanks to james bevan, ccla investment management cio. here in the u.s., the dow jones industrial average is up 4/10 of 1%. todaythe outperform her -- the outperformer today. 1/10, but firmly above the 3000 mark. the nasdaq up to tenths of 1%. this is bloomberg. ♪
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♪ vonnie: live from new york, i'm vonnie quinn. this is the european close on "bloomberg markets." let's check in on the bloomberg first word news with courtney donohoe. courtney: treasury secretary steven mnuchin told nancy pelosi the government may run out of cash in early september if congress doesn't increase the debt ceiling. he wants lawmakers to act before they take their six week recess starting on july 26, but it is not clear that the white house can reach a deal by then. a tropical storm racing through the gulf of mexico to louisiana could hit the coast as a hurricane tomorrow. the national hurricane center says two feet of rain could fall in some places, and that is likely to increase flooding in new orleans and cost up to $1 billion in damage. the storm has already shut down about half of its global oil output in the gulf. china promising to impose sanctions on u.s. companies
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involved in arms sales to taiwan. the foreign ministry says those will hurt china's sovereignty and national security. the state department has approved a package for taiwan that includes tanks and stinger missiles. to the world's largest automaker -- two of the worlds largest automaker's up on autonomous vehicles. argo's invest in unit, positioning as a challenge others. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm courtney donohoe. this is bloomberg. vonnie: let's get a check on global markets. here's taylor riggs. dow 27,000, s&p 3000, and nasdaq somewhere in between, up about 3/10 of 1%.
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better cpi yesterday, better ppi data this morning. even though we talk about how we are at record highs on the dow and the s&p, it has been a slow crawl back. we had a record high on the s&p on wednesday, july 3. we've come off those, and it wasn't until wednesday of this week when we slowly started to climb back every single day, so we are sort of hitting a look these record highs, but it did take a mile to get there. something else interesting is going on as we take a look cross asset. is fix is lower -- the vix lower, and we are seeing yen and wissie strength. this wouldn't normally happen since they are safe havens. despite some of the calm we are seeing in the vix, there are some other safe haven assets and play. better-than-expected ppi data
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came out this morning, so that is having an impact on the industrial and transportation companies. 5% inparticular up almost particular-- jb in nt in particular up almost 5%. we get next week earnings from the bank. hasmberg's hannah levitt been keeping an eye on an interminable search for a new wells fargo ceo. let's begin on the big banks, reporting next week. you can see bank of america cautious on select banks today, saying that earnings visibility and the outlook was cloudier and downgrading some. hannah: we are looking at rates falling all year.
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the 10 year treasury has been going down. the fed is widely expected to cut interest rates at the end of the month. for banks, that means their net interest income, the money they make from what they charge consumers on loans minus what they are paying out on deposits, that is what suffers for banks. that makes up half or more of the revenue stream. vonnie: presumably this will affect some banks more than others. let's begin with the begin vestment banks. , itah: the investment banks was not a good quarter. there was a lot of uncertainty with trade, everything from brexit to iran to mexico to china. the investment banks were looking at lower trading results and investment banking results that were actually quite lower. one analyst is expecting as much is a 21% drop in investment banking results. vonnie: a 21% drop across the board. there were some big
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ipos. investors will also be looking for guidance around deal pipelines for the rest of the year. vonnie: right. after this round of earnings, is there a possibility that we will see more deals, particularly among the smaller players? will there be another round of bank consolidation? hannah: that's been a big question all year. we saw bb&t and suntrust earlier this year in the biggest deal since the crisis. everyone has been waiting to the answer to that question, so i guess we will see. the leaders of these banks have been pretty cautious on saying anything about it. they've said they are happy with their current market share, etc. vonnie: i woke up this morning and one of the first stories i read was this great story that wells fargo is in its ceo hunt
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day 106. what is the problem? hannah: the former ceo steps down in march after political and regulatory scrutiny. at the time, the bank set out to find it external ceo. the chair of the board said that would help complete the transformation. they've been dealing with scandals that started with fake accounts in 2016. they've been conducting this external search, and what we reported today is that the pool of candidates has narrowed. running,ant is in the alsoordon smith, and then the co-cielo and president -- co-coo and president is not in the running. vonnie: is wells fargo spoiled for choice and can't decide, or peoplee a dearth of
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who can take the reins? hannah: that is a really good question. there's been a lot of speculation, dozens of names that have been thrown out. it is kind of a tough search when you look at how much you would have to pay someone to come over, and it is kind of a daunting job description when he think about the regulatory scrutiny and the rebuilding that has to go on. that's one of the big issues. vonnie: you have to wonder if it is the candidates interviewing wells fargo or the other way around. hannah levitt with a wonderful fargo'sday on wells continuing ceo search. this is bloomberg. ♪ omberg. ♪
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♪ vonnie: live from new york, i'm vonnie quinn. this is the european close on "bloomberg markets." the dow is up half of 1%. the s&p 500 also holding onto ate gains, up six points
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3006 right now. we'll see whether they close above 3000. the nasdaq is up 1/3 of 1%. at about 12.5%. right now, the dax down just seven points. the cac 40 is up 1/4 of 1%. french bonds selling off today, among bonds selling off more generally. the ftse 100 down fractionally as well. many groups in the stoxx 600 are higher today, being led higher by chemicals. the european close is next. this is bloomberg. ♪ xfinity mobile is a wireless network
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best devices. best value. simple. easy. awesome. click, call or visit a store today. vonnie: stocks finishing of the day in european trading. a mixed picture. we're just turning gray in britain. it had been lower.
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elsewhere we see a nice rally for stocks in some countries. france in particular seeing the cac 40 up .3% at the close. the stoxx 600 flat on the session. daimler having a major impact on the dax. it is down .1%. let's look at grr. the groups moving in the -- you can see chemicals put in a good session. mining, auto parts and then things like basic resources. banks also up .1%. the other end of the scale, a few groups lower, including health care. that is the u.s. story, down 1.3%. a lot of trepidation as to what president trump might focus on when it comes to drug pricing, pharmacy benefits managers, and so on. that is impacting u.s. stocks as well. let's look at currencies.
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eurosterling took a dive. a quarter percent weaker versus the british pound. we have been seesawing quite a bit. the pound at its lowest relative to the euro in 10 sessions. bonds across europe selling off today as well. france particularly impacted for some reason. the idea is the european central bank will get involved in sovereign bond markets. the turkish lira weakening by 1.4%. u.s., the s&p 500 is at 3006. putting in a good performance in the first couple hours of trading. the 10 year yield at 2.12 as markets continue to digest federal reserve statements. about $60 a barrel, a repeat of the s&p 500.
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that is look at global markets. let's get to turkey. turkey saying it has received the first major deliveries of a russian missile defense system. it has drawn the threat of sanctions from the u.s. over the nato'sal to undermine political capabilities. joining us is damian sassower and the national security team leader at bloomberg. i want to start with you in d.c. why did turkey receive these missiles comfortably? bill: this is something turkey has been talking about doing for over a year. has long beengan trying to assert his independence from the u.s. and nato. he has showed more allegiance to russia. this is something the u.s. and its allies have been trying to dissuade turkey from doing. sanctionstcheted up
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and threats of sanctions against turkey, but in the end president erdogan says turkey's defensive needs require purchasing this russian system. now we are waiting to see how the u.s. response. the u.s. says this radar and missile defense system is a direct threat to the f-35, which is the next-generation stealth jet the u.s. is building with international partners, including turkey. vonnie: why would president are one do this now -- why would president erdogan do this now? is he being mischievous or does he have something more serious in mind? bill: it is a bit of the declaration of independence from the u.s. and from nato. we are at a time where a lot of countries are questioning the value of this historic treaty and alliances. for president erdogan this is a way to assert his independence. our their costs to doing so?
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absolutely. i think we will see the cost building. turkey has already suffered a bit and president erdogan has had setbacks on his own agenda with the loss of the mayorship in istanbul. what is going on in his mind, i cannot say, other than the reason they do give is they think their defensive needs call for a different system. they are putting a huge amount of their economic and political fortunes at risk by doing this. vonnie: damien sass hour of bloomberg intelligence, certainly a reaction in the lira. erdogan hasresident taken control of the central bank. what would he do if there would be a jump condition in the bond market? damian: the lira is flat to the dollar and given the fact that they dismissed the former central bank governor earlier this week. just thinking about the
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sanctions, it remains to be seen what erdogan is thinking. he thinks perhaps his personal relationship with trump will bridge the divide. there are three sanctions being mulled about within washington. one is quite extreme, borderline iranian sanctions. that would be devastating for the economy given its external debt loads. , the proxy for sovereign credit risk in turkey is up 14 basis points to well over 400 basis points. that is the second widest to argentina. as we try to get a sense of what he is thinking, i think it has more to do with decisiveness inside the ak party. , the former defects president and former finance minister splinter off and maybe creating their own party. on the heels of the loss of the istanbul mayorship, it is anyone's guess what he is
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thinking. maybe he trying to slow to fight his power base internally. vonnie: what about the people of turkey. bill, perhaps you can answer this one. are the people behind this? it seems like this is encroaching further on independence and on the ability to live freely in the turkish democracy. will there be retribution on the part of the people? bill: politically, it will be very interesting to see how this plays out. it is hard to forecast that. we have already seen a lot of the costs of some of erdogan's more nationalistic policies and his decision to take greater control over things like central banks. thisfically with the s400, is a program that puts turkish manufacturers taking part in the f-35 program at risk. they've been told by the
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pentagon they will be phasing out turkey's role in the f-35. turkey was due to buy 100 of these jets that they are helping manufacturer. when you look in the decades ahead, this is a $1.1 trillion program. turkey was a key partner and ally in that. there is going to be cost on turkish manufacturers and the turkish economy. we have seen some of that play out. we will have to see if this creates more of a split, and with the u.s. and its allies, and whether turkey remains in the nato alliance. vonnie: i know we will hear more from the pentagon. they will continue to update you and you us. damian, one em fund manager told bloomberg that turkey was at the risk of a latin american style meltdown which could lead to nationalization. is that an overstatement?
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damian: i know you're talking about. making the correlation to venezuela is a big bridge. to me is about what we can effectively the near term. we can expect an increase in populist policies designed to build the ak party. we are talking about food subsidies, local business, retail bring down the margins in order to keep prices contained, , likenally we might see we saw this morning, regulations dropped on the banks encouraging loans and that means nonperforming loan ratios may get higher, and as we know, the turkish financial system is heavily embedded in offshore creditors. vonnie: thank you to you both. we'll continue to monitor closely. that is damian sassower in our studio and in washington, d.c. bill faires of bloomberg news. tropical storm barry is bearing
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down on the coastline in louisiana. it is also having a significant impact on the end -- on the energy industry in the gulf as you can see from our map. joining us is tina davis, bloombergs managing editor in the americas. speaking with someone at the cne who said for now prices are stable, it is all about demand and supply. what are people you're talking to saying about barry and what it could do to supply and infrastructure? seen so fare have is half of the gulf oil and gas production has been shuttered. that may sound like a huge number of the offshore is a lot less important to the overall u.s. output figures than it used to be. we have seen a bump up in terms of oil prices, along with the iranian tensions happening elsewhere in the world, it has not had an outsized effect yet.
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what the thinking is is that the storm will pass over these offshore production facilities and not cause any great damage. what we are looking at in terms of whatever it does in terms of heavy rainfall in louisiana. it is aiming at a part of the country that has a huge amount of u.s. refining capacity. one out of every five barrels of refining capacity is in the path of the storm. refineries are able to handle hurricanes. they've been on the gulf coast for a long time. what the storm will do is drop a lot of rain. more than two feet of rain in some parts of louisiana. vonnie: those pictures are frightening. we are hoping for the best case scenario but even in the best case, crops and other commodities will be impacted. tina: we have to look at infrastructures, refineries, pipelines, the colonial pipeline is a key pipeline. we have to look at that potentially losing power because of rain.
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if that loses power, that happened after katrina and there were orders from the white house to get that power back to that pipeline. that is how crucial it is. in terms of agriculture, there is continuity louisiana, there is sugarcane, there are soybeans, and then you also have to look into arkansas, which is a huge provider of price. -- of rice. the region is dealing with all of the rain that has flooded the midwest in the upper midwest since the start of the year. the mississippi river has been at flood stage since january. this will not help the levees based on what with -- this will not over top the levees based on what we are seeing, but it could affect the region. vonnie: there is a human impact as well, but in terms of pricing , is there any way to take advantage of this? tina: yes, that does sound very mercenary. there have been events in the cotton market. we have not seen a lot of ag effect.
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in the oil, the market is try to figure out whether this will shut in a lot of production or a lot of demand. there is by ground the pricing based on where you are in these things, so there might be a cost of gasoline in that region. vonnie: we will keep an eye on see mds as well as oil -- on cmds as well as oil prices. tina will be monitoring barry all weekend. our thanks to tina davis. let's check where european stocks have settled as we head to the 11 court -- to the 11:42 mark. the dax in germany down less than .1%. not a huge move. it was dragged lower by the kidney company, down more than 2% on the idea that the administration here in the u.s. might overhaul kidney care. that sent u.s. stocks lower as well. that has been one of the themes of the week, health care along
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with the federal reserve and what might happen with rates. in britain, not seeing much action. the ftse 100 ends the session down four points. in france, some of the luxury companies had a good session. again of .4% for the cac 40. as we look at some of the movers in the cac 40, we see the best mover -- we would get that in a moment. the best mover in the cac 40 was -- we'll have to bring that up in a few moments. this is bloomberg. ♪
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vonnie: breaking news and johnson & johnson. the u.s. justice department pursuing a criminal investigation as to whether johnson & johnson lied to the
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public about the possible cancer risk of its top empower. -- talcum powder. plunging 4%. down more than that a little earlier. asbestos and baby powder has spurned a criminal probe. --rand jury is asking what j&j scientists also wrote memos warning about asbestos laced talcum powder. the stopper covering but it did take a hit. let's check in on the bloomberg first word news. here is courtney donohoe. courtney: president trump's labor secretary is out. announced he is resigning in a surprise appearance with the president. earlier this week he vowed to stay on the job despite the his role in the federal prosecution of jeffrey epstein on sex charges. president trump scissor be nationwide raids starting sunday to deport those in the country.
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the president said "we will be taking them out by the thousands." president trump previously postponed the race, saying he wanted to give more time to congress to change immigration laws. opec and itsts by allies did not prevent the return of an oil surplus. increased --piles global stockpiles increased in the first half of the year. the iea said consumption was worse than expected. british chancellor of the exchequer has put boards johnson on notice. he says he will fight any attempt by the next prime minister to leave the eu without a deal. he also will not back a proposal to suspend parliament in order to get a no brexit deal. >> if you were to attempt to shut down parliament in order to carry out a course of action which parliament is known to oppose, that would be very serious, indeed.
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that would provoke a constitutional crisis. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. donohoe.tney this is bloomberg. vonnie: thank you. time for our stock of the hour. snap is rising for a fourth consecutive session, up 1.5% now after goldman sachs became the latest to get bullish on the stock. kailey leinz is here with more. i understand you can now do more with your snaps. kailey: there are a lot of filters that have gone viral, including one that can change your gender and your age, which have gotten popular among snaps younger users. goldman hopping on the bullish change. the highs weoff saw earlier because a lot of good news has already been priced in. it has rallied nearly 190% this year, as goldman and other analysts have got more positive. you can see the chart at gtv showing the median target
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price for the stock in the white and the yellow line is the stock price. analysts have not been able to keep up with the rally. nonetheless, these events are now buys. we saw citigroup raised their price target, credit suisse up their rating. analysts are now the most positive they have been on average since november of 2017. a lot of what they are citing are those more popular filters that are driving stronger user trends. goldman noting in may 41 million people downloaded snapchat. number of noting that according to some estimates, user download growth will have grown 67% in the second quarter compared to a 5% drop on that metric in the first quarter. things have turned around for snap. vonnie: you have to wonder how it takes these companies so long to get woke. they were not available for all of their potential customers until they added these altars. same thing with it -- these
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filters. same thing with facebook and instagram. they were not catering to the companies that might use the filters. our expectations too high? kailey: that is part of the question. we have seen an incredible run out. the street is expecting 37% revenue growth. they're expecting app users to be 139 million in the quarter. it raises the question of can snap me this numbers. barclays is one of the bulls on is little but said he bit skeptical of snap at these levels that have gotten frothy and he has doubts snap be able data thehe kind of market is looking for. we will see if snap is able to jump over that high bar. guy: thank -- vonnie: thank you for that. that is kailey leinz on snap. coming up, it is our global battle of the charts this
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friday. this is bloomberg. ♪
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vonnie: time for our global battle of the charts. you can see them on the bloomberg by running gtv . kicking things off is tina lee in london. tina: rate cuts are back in so as risk appetite, but to a lot of bears the chart behind me is something to worry about. what it shows is the equal weighted version of the msi growth index has dropped to the lowest versus the regular capitalization weighted index since 2008. what this shows is the recent rally has been led by the larger companies and you can see a similar phenomenon if you look at the ratio between the russell 2000 and the s&p 500, was is also near the lowest in a decade. you can say this is been true since 2010, so what this tells us is that even though the market has rallied, the gains
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have not been that well distributed and investors have been mostly comfortable with the larger companies rather than the smaller players. a little bit of something to worry about the midst the euphoria recently. guy: great chart -- vonnie: great chart. thank you for that. against you we have taylor riggs. taylor: for me it is all about the banks pushing it forward to monday where we will hear from citigroup, which is going to kick off some of the big financials. this is going to be key because that is when we heard the financials in the first quarter. rate hikesxpecting or a flat yield curve, not rate cuts. if you come in here in white, take a look at the five year yield which is tracking in blue. the banking index relative to the s&p 500, performance along with the five year yield falling. we are waiting to hear from jpmorgan and bank of america because they were talking about net interest margins,
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reaffirming that guidance. we do not think that will be the case. now that we are looking for cuts instead of hikes, looking to see if that forward guidance comes down. you can find this at gtv . vonnie: is a tough decision today. friday is always tough. i might award a tie for friday. it is the middle of july. what you think? are you happy with a tie? taylor: works for me. i will take what i can get. vonnie: we will send you into a battle of the charts play out, but not just yet. coming up, balance of power. the president of the afl-cio joins. let's check u.s. market. richard trumka coming up in balance of power. strugglings, the s&p to stay above 3000 for the session. will a close above that level? we shall see.
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3005 points right now. talking about the possibility of 3300 by the end of the year. dow isdaq up .33% in the up .5%. some components in the dow such as dow itself higher. chemicals in europe were also leading the way higher. after weaker off data out of china and singapore sent a shiver through markets around europe and the u.s.. also central banks keeping things dovish. balance of power is next. this is bloomberg. ♪
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>> from bloomberg world headquarters in new york, are
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marty schenker. .> and i am craig gordon welcome to "balance of power," where the world of politics meets the world of business. alex acosta has resigned. the move came after heightened scrutiny on the sexual misconduct charges levered against jeffrey epstein. anna enters and joins us now. announcement in a surprising appearance alongside president trump. what led to his downfall? this was an untenable situation for the white house and the cabinet. trump up to not have a problem , which is important for this president. it was not a good look for the white house and the president himself is too close to the story with his past friendship with jeffrey epstein. marty:

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