1 00:00:03,200 --> 00:00:06,560 Speaker 1: Global business news twenty four hours a day. If Bloomberg 2 00:00:06,640 --> 00:00:09,720 Speaker 1: dot Com the Radio plus Global Act and on your radio. 3 00:00:10,000 --> 00:00:14,360 Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters. 4 00:00:14,400 --> 00:00:16,960 Speaker 1: I'm Katherine Cowdery Will. The stock market is moving higher 5 00:00:17,160 --> 00:00:20,120 Speaker 1: as traders feel less anxious about Britain's vote last week 6 00:00:20,160 --> 00:00:23,239 Speaker 1: to leave the European Union. Mark Kearney signaled the Bank 7 00:00:23,239 --> 00:00:25,480 Speaker 1: of England could cut interest rates within months as a 8 00:00:25,560 --> 00:00:28,200 Speaker 1: central bank tries to shield an economy rattled by the 9 00:00:28,240 --> 00:00:32,280 Speaker 1: shock of Brexit. Now Standard in Pores has just reiterated 10 00:00:32,280 --> 00:00:36,040 Speaker 1: its rating on the United States at double A plus. 11 00:00:36,200 --> 00:00:39,800 Speaker 1: It affirmed its ratings the SMP five hundred on track 12 00:00:39,880 --> 00:00:42,880 Speaker 1: for a third straight quarterly advanced. All ten industry groups 13 00:00:42,880 --> 00:00:45,360 Speaker 1: in the s in the benchmark are gaining, with consumer 14 00:00:45,400 --> 00:00:48,080 Speaker 1: staple shares up the most. We check the markets every 15 00:00:48,080 --> 00:00:51,159 Speaker 1: fifteen minutes throughout the trading dawn. Bloomberg Radio doll Industrial 16 00:00:51,200 --> 00:00:53,599 Speaker 1: average of one hundred eighty seven points one point one 17 00:00:53,600 --> 00:00:57,120 Speaker 1: percent at seventeen thousand, eight hundred eighty one. SMP five 18 00:00:57,120 --> 00:00:59,400 Speaker 1: funded up twenty three points again at one point one 19 00:00:59,400 --> 00:01:02,840 Speaker 1: percent trade at two thousand ninety three. Nazac hier By 20 00:01:02,880 --> 00:01:05,120 Speaker 1: forty nine points, a gain of one percent, trading at 21 00:01:06,040 --> 00:01:09,000 Speaker 1: eight less Texas Intermedia Crude oil down a dollar fifty 22 00:01:09,040 --> 00:01:11,399 Speaker 1: three of barrel, three point one percent of forty eight 23 00:01:11,400 --> 00:01:14,200 Speaker 1: thirty six s about gold down three dollars thirty cents 24 00:01:14,200 --> 00:01:17,560 Speaker 1: announced of thirty three sixty ten. Your treasury up eleven 25 00:01:17,600 --> 00:01:20,200 Speaker 1: thirty seconds with the yield of one point for seven percent. 26 00:01:20,720 --> 00:01:24,080 Speaker 1: And that's a Bloomberg business flash, Catherine Cawnerie, thank you 27 00:01:24,160 --> 00:01:29,319 Speaker 1: so very much. Market volatility, the Brexit vote, so many 28 00:01:29,360 --> 00:01:32,360 Speaker 1: things hanging over investors head. Is it time to look 29 00:01:32,360 --> 00:01:34,600 Speaker 1: at an e t F? And if so, which kind? 30 00:01:35,240 --> 00:01:38,320 Speaker 1: Now it's time for our et F report with Catherine Cowndry. 31 00:01:38,640 --> 00:01:40,640 Speaker 1: It's a tale of two different kinds of e t 32 00:01:40,800 --> 00:01:43,880 Speaker 1: F investors told by flows after the UK vote to 33 00:01:43,959 --> 00:01:46,560 Speaker 1: withdraw from the European Union. We saw a lot of 34 00:01:46,600 --> 00:01:49,200 Speaker 1: the hot money. This is the big institutional money that 35 00:01:49,280 --> 00:01:51,880 Speaker 1: moves very short term. Leave a lot of the risk 36 00:01:51,960 --> 00:01:54,520 Speaker 1: on ETFs like s p Y and the cues. Bloomberg 37 00:01:54,600 --> 00:01:59,080 Speaker 1: Intelligence analyst Eric Deltuna says. In contrast, retail investors seemed 38 00:01:59,120 --> 00:02:01,360 Speaker 1: to shrug off the UK vote. If you look at 39 00:02:01,360 --> 00:02:03,960 Speaker 1: the e t F they like to use Vanguarden, Schwab, 40 00:02:04,280 --> 00:02:06,480 Speaker 1: they all took in money just like normal. You know, 41 00:02:06,520 --> 00:02:09,400 Speaker 1: there's a drip drip aspect to Vanguarden Schwab flows, and 42 00:02:09,440 --> 00:02:11,840 Speaker 1: that drip kept coming right through Friday, right through Monday. 43 00:02:11,919 --> 00:02:14,320 Speaker 1: No big deal about Tunis takes a closer look at 44 00:02:14,360 --> 00:02:17,200 Speaker 1: those flows. Since the Brexit vote, Spider's et f s 45 00:02:17,240 --> 00:02:20,639 Speaker 1: lost four billion, Vanguard took in a billion, Schwab a 46 00:02:20,680 --> 00:02:23,600 Speaker 1: couple hundred million. That to me shows a difference in 47 00:02:23,720 --> 00:02:28,080 Speaker 1: terms of how scared investor. Mel Juna says. There is 48 00:02:28,160 --> 00:02:31,000 Speaker 1: one e t F that's been popular with both institutional 49 00:02:31,080 --> 00:02:34,040 Speaker 1: and retail investors this year, and that's the Spider Gold 50 00:02:34,120 --> 00:02:36,840 Speaker 1: Chairs Taker d l D is taken in more than 51 00:02:36,880 --> 00:02:39,800 Speaker 1: twelve billion dollars so far this see here. That's your 52 00:02:39,840 --> 00:02:45,079 Speaker 1: Bloomberg ETF report. I'm Katherine Calderie. You're listening to Taking 53 00:02:45,120 --> 00:02:48,519 Speaker 1: Stock with Kathleen Hays and Pim Box on Bloomberg Radio. 54 00:02:49,600 --> 00:02:53,120 Speaker 1: The future more uncertainty than ever, it seems after the 55 00:02:53,200 --> 00:02:55,960 Speaker 1: Brexit Fox. We've been talking about that a lot on 56 00:02:56,040 --> 00:02:58,760 Speaker 1: Bloomberg as you know. Now we want to talk about 57 00:02:58,840 --> 00:03:00,519 Speaker 1: it with someone who has been watching in the markets 58 00:03:00,600 --> 00:03:03,440 Speaker 1: for many years and travels around the world speaking to 59 00:03:03,560 --> 00:03:06,799 Speaker 1: investors looking for companies to invest in. And that's Don Gimbel. 60 00:03:06,880 --> 00:03:11,240 Speaker 1: He's portfolio manager at Geneva Investment Management, which is based 61 00:03:11,240 --> 00:03:15,000 Speaker 1: in Chicago. Don joins us today from Helena, Montana. Don, 62 00:03:15,040 --> 00:03:19,880 Speaker 1: welcome back. It's some good good to have an opportunity 63 00:03:20,000 --> 00:03:22,160 Speaker 1: to discuss what has been beaten to death for the 64 00:03:22,240 --> 00:03:24,320 Speaker 1: last four days. Well, it's kind of hard not to 65 00:03:24,320 --> 00:03:26,080 Speaker 1: beat to death, or isn't it, Because it's a pretty 66 00:03:26,080 --> 00:03:29,959 Speaker 1: big deal. It is a huge deal, and I think 67 00:03:30,000 --> 00:03:34,600 Speaker 1: what is most interesting is how little anybody knows about 68 00:03:34,600 --> 00:03:39,560 Speaker 1: what the future holds, because this is a really monumental 69 00:03:40,080 --> 00:03:44,800 Speaker 1: sort of shift, which is, uh, what what the British 70 00:03:44,880 --> 00:03:47,520 Speaker 1: did is only the tip of the iceberg. I mean, 71 00:03:47,560 --> 00:03:52,600 Speaker 1: we we see people upset about the status quo all 72 00:03:52,640 --> 00:03:56,240 Speaker 1: over the world, and uh, I mean the United States 73 00:03:56,000 --> 00:04:00,480 Speaker 1: is not has not escaped that. Look at people we 74 00:04:00,560 --> 00:04:04,160 Speaker 1: have running for the highest office in the land. These 75 00:04:04,200 --> 00:04:09,280 Speaker 1: are people that the voters are saying, we want change, 76 00:04:09,400 --> 00:04:12,440 Speaker 1: and well that's what happened in England. We want change. 77 00:04:12,440 --> 00:04:15,200 Speaker 1: We're not sure what we want, uh, and we're not 78 00:04:15,240 --> 00:04:18,080 Speaker 1: sure what it means, but we don't like what the 79 00:04:18,120 --> 00:04:23,640 Speaker 1: way it is as as economies change and develop and 80 00:04:23,720 --> 00:04:29,839 Speaker 1: mature around the world, people who were used to the 81 00:04:29,880 --> 00:04:34,360 Speaker 1: status quo somehow feel as though they're being excluded from 82 00:04:34,400 --> 00:04:39,200 Speaker 1: what's going on, and it's a very uncomfortable situation and 83 00:04:39,240 --> 00:04:44,039 Speaker 1: they're they are reacting, some would say irrationally. Uh to 84 00:04:44,680 --> 00:04:49,760 Speaker 1: to what to the normal change in the way governments 85 00:04:49,839 --> 00:04:55,800 Speaker 1: and countries work And this vote last week is simply 86 00:04:55,960 --> 00:04:59,279 Speaker 1: a manifestation of that. But we have to look more 87 00:04:59,320 --> 00:05:04,040 Speaker 1: closely at at how to how it affects politics, how 88 00:05:04,080 --> 00:05:07,800 Speaker 1: it affects government, how it affects markets, and then how 89 00:05:07,839 --> 00:05:11,599 Speaker 1: does it affect individual companies? And I think that's what 90 00:05:11,680 --> 00:05:15,839 Speaker 1: the latter is something that that hasn't we haven't spent 91 00:05:15,960 --> 00:05:18,920 Speaker 1: enough time disgusting. Well, let's do right now, how does 92 00:05:18,960 --> 00:05:20,920 Speaker 1: it gonna and how so, how do you start that 93 00:05:21,040 --> 00:05:26,200 Speaker 1: kind of gauging analysis, how it affects individual companies where 94 00:05:26,200 --> 00:05:28,640 Speaker 1: they're based, the size the industry there, and tell us 95 00:05:28,640 --> 00:05:32,080 Speaker 1: how how you're doing that done? Well, it's as well, 96 00:05:32,560 --> 00:05:34,760 Speaker 1: I'm glad you asked, because that's what I wanted to 97 00:05:34,800 --> 00:05:38,360 Speaker 1: talk about. Um. When when it comes to investing, and 98 00:05:38,400 --> 00:05:43,520 Speaker 1: we're investors, were not speculators, we're not traders were investors. 99 00:05:43,560 --> 00:05:46,000 Speaker 1: So the first thing we look at is the quality 100 00:05:46,040 --> 00:05:48,920 Speaker 1: of the management of the companies in which we are investing. 101 00:05:49,600 --> 00:05:53,000 Speaker 1: And if you, if you are invested in companies that 102 00:05:53,080 --> 00:05:59,240 Speaker 1: have great management, have a proven record of of knowing 103 00:05:59,360 --> 00:06:01,599 Speaker 1: what's going on, or at least having a good idea, 104 00:06:02,160 --> 00:06:09,119 Speaker 1: having a a good business plan that that can be modified, you, 105 00:06:09,120 --> 00:06:11,919 Speaker 1: you're a long way down the lane, uh in in 106 00:06:12,000 --> 00:06:15,839 Speaker 1: picking good investments. Now. Are there going to be huge 107 00:06:15,960 --> 00:06:21,239 Speaker 1: changes in in the relationship between the UK in Europe 108 00:06:21,240 --> 00:06:27,320 Speaker 1: and the next five years? Well, definitely. Uh. Until Article fifty, 109 00:06:27,800 --> 00:06:32,160 Speaker 1: though is brought to bear, nothing's going to change in 110 00:06:32,200 --> 00:06:36,279 Speaker 1: the UK. And the Prime Minister is already on record 111 00:06:36,320 --> 00:06:38,760 Speaker 1: is saying he doesn't want to do anything before before 112 00:06:38,800 --> 00:06:42,640 Speaker 1: the fall, and people in Europe are saying that's not 113 00:06:42,680 --> 00:06:44,240 Speaker 1: good enough. You've got to do it now if you're 114 00:06:44,240 --> 00:06:46,760 Speaker 1: going to do it. So I think that there's a 115 00:06:46,760 --> 00:06:50,920 Speaker 1: lot of of indecision going on in the UK as 116 00:06:50,960 --> 00:06:53,919 Speaker 1: to what the time frame is, much less try to 117 00:06:53,960 --> 00:06:57,880 Speaker 1: address what the new relationships are going to be. But 118 00:06:58,040 --> 00:07:00,719 Speaker 1: as an investor, I look at the companies in which 119 00:07:00,760 --> 00:07:04,119 Speaker 1: I'm invested, and I know that the management of those 120 00:07:04,160 --> 00:07:06,680 Speaker 1: companies because I talked to them on a regular basis, 121 00:07:07,440 --> 00:07:11,160 Speaker 1: I know that they are Uh. They have already given 122 00:07:11,200 --> 00:07:13,040 Speaker 1: a lot of thought. They didn't think this was going 123 00:07:13,120 --> 00:07:14,960 Speaker 1: to happen, but it did. But they've been given it 124 00:07:15,000 --> 00:07:19,320 Speaker 1: a lot of thought as to are they positioned to 125 00:07:19,320 --> 00:07:22,720 Speaker 1: to continue to do well. And my answer is, you know, 126 00:07:23,280 --> 00:07:26,880 Speaker 1: in the industries that I particularly like are things like 127 00:07:27,000 --> 00:07:32,800 Speaker 1: pollution abatement, uh, things things like transportation, things like food 128 00:07:33,440 --> 00:07:36,760 Speaker 1: or these are basic industries. And if you've got companies 129 00:07:36,800 --> 00:07:40,960 Speaker 1: in those fields, uh that that have experience and are 130 00:07:41,040 --> 00:07:46,440 Speaker 1: well I have proven track records, these companies will do 131 00:07:46,560 --> 00:07:51,920 Speaker 1: well regardless of whether they're manufacturing operation is in the 132 00:07:52,080 --> 00:07:55,560 Speaker 1: UK or in France, or in the United States, or 133 00:07:55,600 --> 00:08:00,600 Speaker 1: in Brazil or in China. Uh. These are companies that 134 00:08:00,760 --> 00:08:06,320 Speaker 1: anticipate and look at the alternative possibilities and when when 135 00:08:06,400 --> 00:08:08,880 Speaker 1: something like this comes out of the blue or not 136 00:08:09,000 --> 00:08:12,560 Speaker 1: quite out of the blue, but certainly surprises, there is 137 00:08:12,600 --> 00:08:15,640 Speaker 1: a plan. And I think that over what the stock 138 00:08:15,680 --> 00:08:19,880 Speaker 1: market this week has said, as initially, oh my gosh, 139 00:08:20,200 --> 00:08:24,680 Speaker 1: the world is ending, then the realization that it's not 140 00:08:24,960 --> 00:08:31,280 Speaker 1: ending and we we need to uh sit down and 141 00:08:31,400 --> 00:08:36,920 Speaker 1: decide what what companies are going to do well, not 142 00:08:36,920 --> 00:08:39,520 Speaker 1: not just because of the industry they're in, but the 143 00:08:39,559 --> 00:08:42,520 Speaker 1: companies that have the management that are smart enough to 144 00:08:42,559 --> 00:08:44,800 Speaker 1: figure out where we're going. Okay, I want to turn 145 00:08:44,880 --> 00:08:47,800 Speaker 1: to China. Because you invest in Chinese companies, you travel 146 00:08:47,880 --> 00:08:51,520 Speaker 1: to China. The yuan touched its lowest levels since January. 147 00:08:51,520 --> 00:08:53,880 Speaker 1: Earlier today, there was a report that the PBOC, the 148 00:08:53,920 --> 00:08:57,240 Speaker 1: People's Bank of China, is ready to let the uan 149 00:08:57,600 --> 00:09:00,520 Speaker 1: its currency weekend. Now, it's not bad. For a while, 150 00:09:00,559 --> 00:09:03,280 Speaker 1: traders were wondering if they really had shifted their stance. 151 00:09:03,360 --> 00:09:06,000 Speaker 1: What do you make of this this speculation, what do 152 00:09:06,040 --> 00:09:09,400 Speaker 1: you make of what the PDOC may do done? Uh? Well, 153 00:09:09,480 --> 00:09:13,640 Speaker 1: the first the first comment is that the PBOC is 154 00:09:13,679 --> 00:09:18,480 Speaker 1: a very bright group of people, and they've they've been 155 00:09:18,480 --> 00:09:22,199 Speaker 1: working on what the real value of the yuan is 156 00:09:22,520 --> 00:09:25,319 Speaker 1: and what what its value should be against the US 157 00:09:25,440 --> 00:09:27,880 Speaker 1: dollar as well as against the yen and the euro. 158 00:09:28,520 --> 00:09:32,920 Speaker 1: And uh, there is there is an economic change going 159 00:09:32,960 --> 00:09:36,439 Speaker 1: on in the People's Republic, which a few years ago 160 00:09:36,720 --> 00:09:42,600 Speaker 1: was almost completely dedicated uh to their the exports of 161 00:09:42,200 --> 00:09:47,760 Speaker 1: of of goods from the People's Republic and the juan. 162 00:09:48,320 --> 00:09:53,160 Speaker 1: The Hue government um AS has changed that and we're 163 00:09:53,160 --> 00:09:56,480 Speaker 1: seeing lots of change in China, which over a long 164 00:09:56,520 --> 00:09:59,360 Speaker 1: period of time is going to be very beneficial. I 165 00:09:59,400 --> 00:10:02,480 Speaker 1: would I would suggest that the yuan could weaken a 166 00:10:02,520 --> 00:10:05,480 Speaker 1: little bit from here, but not very much, because it's 167 00:10:05,480 --> 00:10:08,560 Speaker 1: it's not really in the in the in the interests 168 00:10:08,559 --> 00:10:12,040 Speaker 1: of the pr of the People's Republic. They have two 169 00:10:12,120 --> 00:10:16,240 Speaker 1: weak currency because they are now major importers of a 170 00:10:16,240 --> 00:10:20,560 Speaker 1: lot of things goods and services, and uh, a much 171 00:10:20,600 --> 00:10:24,920 Speaker 1: weaker you want would be a negative for the People's Republic. 172 00:10:25,200 --> 00:10:28,400 Speaker 1: Just quick, very quick, final question. Uh the sp five hundred? 173 00:10:28,600 --> 00:10:31,000 Speaker 1: Uh are we is it gonna we't gonna stee this 174 00:10:31,120 --> 00:10:35,440 Speaker 1: range two by the end of the year, Higher lord, 175 00:10:35,520 --> 00:10:38,199 Speaker 1: Just quickly, what do you think done? I would say, 176 00:10:38,960 --> 00:10:41,959 Speaker 1: we're in a trading range. It might if it breaks out, 177 00:10:41,960 --> 00:10:44,040 Speaker 1: it will break out on the upside and out the downside, 178 00:10:44,040 --> 00:10:46,240 Speaker 1: because I think two thousand seventeen is going to be 179 00:10:46,280 --> 00:10:48,200 Speaker 1: a very good year for stock markets around the world. 180 00:10:48,679 --> 00:10:51,719 Speaker 1: All Right, Don Gimble just creating the pathway to his 181 00:10:51,840 --> 00:10:54,280 Speaker 1: next interview on taking stuff. We're gonna have to find 182 00:10:54,280 --> 00:10:57,280 Speaker 1: out why seventeen is going to be so good. Portfolio 183 00:10:57,440 --> 00:11:01,760 Speaker 1: manager Geneva Investment Management of Chicago. Don joined us today 184 00:11:01,840 --> 00:11:05,959 Speaker 1: from Helena, Montana. I'm Kathleen Hayes. My co host, Pim 185 00:11:06,040 --> 00:11:10,080 Speaker 1: Fox is on vacation this week. And this is taking Stock, 186 00:11:10,160 --> 00:11:11,960 Speaker 1: and this is Bloomberg.