1
00:00:03,200 --> 00:00:06,600
Speaker 1: Global business news twenty four hours a day at Bloomberg

2
00:00:06,640 --> 00:00:09,719
Speaker 1: dot Com, the Radio plus Global Act and on your radio.

3
00:00:09,960 --> 00:00:14,160
Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.

4
00:00:14,160 --> 00:00:17,360
Speaker 1: I'm Katherine Cowdery. Energy and financial shares are dragging the

5
00:00:17,360 --> 00:00:20,880
Speaker 1: stock market lower as investors shy away from riskier assets.

6
00:00:21,200 --> 00:00:24,000
Speaker 1: Banks are retreating for a second session, with JP, Morgan

7
00:00:24,079 --> 00:00:26,599
Speaker 1: Chase and Goldman Sacks down at least two point eight percent.

8
00:00:27,120 --> 00:00:30,440
Speaker 1: Comments from Bank of England Governor Mark Karney are rekindling

9
00:00:30,480 --> 00:00:33,960
Speaker 1: concerns that Britain's exit from the European Union will further

10
00:00:34,040 --> 00:00:37,080
Speaker 1: way on tepid global growth. Karney warned a day of

11
00:00:37,120 --> 00:00:39,720
Speaker 1: prospects for a material slowing of the economy on the

12
00:00:39,840 --> 00:00:43,640
Speaker 1: developing risks from Britain's EU decision. We talked to markets

13
00:00:43,640 --> 00:00:46,440
Speaker 1: every fifteen minutes throughout the trading day. Down. Industrial averages

14
00:00:46,479 --> 00:00:49,159
Speaker 1: down one d twenty five point seven tenths over percent

15
00:00:49,520 --> 00:00:52,800
Speaker 1: at seventeen thousand, eight hundred twenty three. SMP five founded

16
00:00:52,840 --> 00:00:55,240
Speaker 1: down seventeen points eight tenths of a percent to two

17
00:00:55,280 --> 00:00:58,200
Speaker 1: thousand and eighty six. The NAZZAC is down fifty points.

18
00:00:58,200 --> 00:01:01,360
Speaker 1: That's a loss of one percent. Is trading a West

19
00:01:01,400 --> 00:01:04,280
Speaker 1: Texas innermediate crude oil down two dollars five cents of

20
00:01:04,360 --> 00:01:08,080
Speaker 1: barrel four point six percent at seventy four. It's about

21
00:01:08,120 --> 00:01:10,880
Speaker 1: gold of eighteen dollars forty cents an ounce at thirty

22
00:01:11,840 --> 00:01:14,600
Speaker 1: and the tenure treasuring at seconds with the yield of

23
00:01:14,640 --> 00:01:18,600
Speaker 1: one point three seven And that's a Bloomberg business flash.

24
00:01:19,240 --> 00:01:22,679
Speaker 1: You're listening to Taking Stock with Kathleen and Pin Box

25
00:01:22,800 --> 00:01:27,600
Speaker 1: on Bloomberg Radio. From June the twenty three, when the

26
00:01:27,640 --> 00:01:31,800
Speaker 1: electorate in the United Kingdom voted to exit the European Union,

27
00:01:31,920 --> 00:01:36,160
Speaker 1: the pound sterling has lost more than twelve percent against

28
00:01:36,240 --> 00:01:39,200
Speaker 1: the US dollar. Here to tell us more about this

29
00:01:39,360 --> 00:01:42,880
Speaker 1: ongoing story is David Buick. He is a market commentator

30
00:01:42,920 --> 00:01:46,240
Speaker 1: for Penmir Gordon and Company and he joins us now

31
00:01:46,319 --> 00:01:48,600
Speaker 1: from London. David, thank you very much for being with us.

32
00:01:49,080 --> 00:01:52,160
Speaker 1: Pin Catherine, greetings to both of you. Tell us who

33
00:01:52,360 --> 00:01:57,240
Speaker 1: is Teresa May and what is her vision for the

34
00:01:57,280 --> 00:02:00,680
Speaker 1: future of the United Kingdom and for the Tour Party.

35
00:02:01,920 --> 00:02:04,400
Speaker 1: Theresa May has just been through the first ballots to

36
00:02:04,440 --> 00:02:07,040
Speaker 1: become the leader of the Conservative Party in the next

37
00:02:07,040 --> 00:02:10,280
Speaker 1: Prime Minister. She pulled over a hundred and sixty votes

38
00:02:10,320 --> 00:02:13,760
Speaker 1: which is pretty much half. Her nearest rival was Andrea

39
00:02:13,840 --> 00:02:18,320
Speaker 1: Ledson with sixty three, and in third place was Michael Gove,

40
00:02:18,400 --> 00:02:21,799
Speaker 1: who was the old Justice Secretary with and a young

41
00:02:21,840 --> 00:02:24,440
Speaker 1: fellow called Stephen Grabb come in with thirty two and

42
00:02:24,520 --> 00:02:28,720
Speaker 1: Liam Fox has been eliminated with eighteen. Theresa May has

43
00:02:28,760 --> 00:02:34,160
Speaker 1: been Home Secretary for six years. She was basically very

44
00:02:34,240 --> 00:02:37,640
Speaker 1: quiet at the entering the campaign, but she was a

45
00:02:37,760 --> 00:02:41,840
Speaker 1: Ramoan rather than somebody wants that with We believe some

46
00:02:41,919 --> 00:02:46,760
Speaker 1: kind of reservation and we have been entirely reliant in

47
00:02:46,840 --> 00:02:50,919
Speaker 1: the course of the last nearly two weeks on the

48
00:02:51,000 --> 00:02:53,680
Speaker 1: calming influence of our Governor of the Bank of England,

49
00:02:53,720 --> 00:02:58,160
Speaker 1: Mark Karney, because the UK government has basically been moribundt.

50
00:02:58,760 --> 00:03:01,400
Speaker 1: We've had a couple of speeches from George Osborne the

51
00:03:01,520 --> 00:03:05,799
Speaker 1: Chance for the Exchequer, one fairly reassuring and one quite sensible,

52
00:03:05,840 --> 00:03:09,880
Speaker 1: suggesting that rather than have an austerity budget, which he

53
00:03:10,000 --> 00:03:13,240
Speaker 1: was suggesting with all kinds of horrific ideas, he's come

54
00:03:13,280 --> 00:03:16,240
Speaker 1: back saying you'd like to cut corporation tax down from

55
00:03:16,240 --> 00:03:18,960
Speaker 1: the current level of down to fifteen or even four,

56
00:03:20,000 --> 00:03:22,680
Speaker 1: with a view pin of being able to compete with

57
00:03:22,720 --> 00:03:25,680
Speaker 1: all the other nations in the world for attracting overseas business.

58
00:03:25,800 --> 00:03:28,800
Speaker 1: The only country that comes close to that, of course,

59
00:03:28,919 --> 00:03:31,239
Speaker 1: is the Republic of Ireland, which has a twelve and

60
00:03:31,240 --> 00:03:34,400
Speaker 1: a half percent corporation tax rate. But that is a

61
00:03:34,440 --> 00:03:36,920
Speaker 1: fairly small country with only about three and a half

62
00:03:36,920 --> 00:03:41,560
Speaker 1: million people, so it's not exactly a huge competition for London.

63
00:03:41,880 --> 00:03:45,640
Speaker 1: So David uh the immediate order of business is that

64
00:03:46,000 --> 00:03:51,240
Speaker 1: as we watch UK politicians vying for that top job

65
00:03:51,320 --> 00:03:53,760
Speaker 1: and get ready for the Parliament to vote and put

66
00:03:53,760 --> 00:03:56,120
Speaker 1: that person in place. Certainly, if you're Mark Carney, the

67
00:03:56,120 --> 00:03:59,480
Speaker 1: immediate impact is the very weak pound and the fact

68
00:03:59,480 --> 00:04:02,640
Speaker 1: that it could hit capital flows at the time when

69
00:04:02,680 --> 00:04:05,560
Speaker 1: you need to fund your current account deficit, which is

70
00:04:05,560 --> 00:04:08,480
Speaker 1: something like seven percent of GDP today. He mentioned that

71
00:04:08,760 --> 00:04:11,640
Speaker 1: when he spoke and announced steps to help the banks

72
00:04:11,760 --> 00:04:14,600
Speaker 1: len More. He also mentioned already seeing an impact on

73
00:04:14,640 --> 00:04:17,839
Speaker 1: the commercial real estate market. What are the markets watching

74
00:04:17,880 --> 00:04:22,000
Speaker 1: more closely, basically what they're short of. I mean all

75
00:04:22,040 --> 00:04:24,240
Speaker 1: those comments that you made, Mark Connie did make, of

76
00:04:24,240 --> 00:04:26,560
Speaker 1: course he did. But what we are at the moment,

77
00:04:26,640 --> 00:04:31,520
Speaker 1: unfortunately is rudderless without leadership, and markets and the community

78
00:04:31,560 --> 00:04:33,360
Speaker 1: cope very well with good and bad news what they

79
00:04:33,360 --> 00:04:37,279
Speaker 1: can't cope with his uncertainty, and we have had some

80
00:04:37,440 --> 00:04:42,599
Speaker 1: pretty fisce. How could I describe it best campaign fear

81
00:04:42,760 --> 00:04:46,240
Speaker 1: which has turned into campaign reality, which is like serving

82
00:04:46,240 --> 00:04:48,320
Speaker 1: it up like John the Baptist head of our charger.

83
00:04:49,000 --> 00:04:53,120
Speaker 1: In other words, if you want to be Solomon Tomorrow

84
00:04:53,320 --> 00:04:56,279
Speaker 1: or profit of doom and end up in the vortex

85
00:04:56,320 --> 00:04:58,600
Speaker 1: that would despair. That's how you said about it. And

86
00:04:58,640 --> 00:05:01,040
Speaker 1: in my opinion some of the rhetory from the establishment

87
00:05:01,080 --> 00:05:04,680
Speaker 1: has been hysterical. And of course if you want something

88
00:05:04,760 --> 00:05:06,960
Speaker 1: to happen badly, it will do. And of course when

89
00:05:07,000 --> 00:05:10,599
Speaker 1: it sees a government with which is rudderless for the

90
00:05:10,680 --> 00:05:13,080
Speaker 1: period of really basically two weeks. In fact is probably

91
00:05:13,120 --> 00:05:15,360
Speaker 1: longer than that because during the campaign there wasn't much

92
00:05:15,960 --> 00:05:20,440
Speaker 1: sign of any intuition or any innovation at all. And

93
00:05:20,480 --> 00:05:24,160
Speaker 1: of course we've seen, as Mark Carney imported pointed out today,

94
00:05:24,440 --> 00:05:29,400
Speaker 1: commercial real estates turnover dropped by because investors are reluctant

95
00:05:29,800 --> 00:05:32,719
Speaker 1: to invest in any country unless it shows drive zest

96
00:05:32,839 --> 00:05:36,760
Speaker 1: urvan some innovation. We've also seen the domestic housing market,

97
00:05:36,760 --> 00:05:39,599
Speaker 1: which is such an important part of our economy, virtually

98
00:05:39,600 --> 00:05:42,520
Speaker 1: come to a grinding halt. And today, of course, we

99
00:05:42,560 --> 00:05:45,680
Speaker 1: had the p M service sector which fell below fifty,

100
00:05:45,760 --> 00:05:49,359
Speaker 1: which is the red light warning that things aren't good

101
00:05:49,680 --> 00:05:53,520
Speaker 1: coming down coming in about forty six. So Mark Karney's

102
00:05:53,600 --> 00:05:56,640
Speaker 1: much too smooth and operator, and also much too clever

103
00:05:56,720 --> 00:05:58,720
Speaker 1: in his statesmanlike in his looks. But he would have

104
00:05:58,760 --> 00:06:01,560
Speaker 1: smiled like a cheshire cat because he more or less

105
00:06:01,600 --> 00:06:05,760
Speaker 1: tried to forecast this some time ago in stating very

106
00:06:05,760 --> 00:06:08,320
Speaker 1: clearly that he felt it was the wrong move for

107
00:06:08,440 --> 00:06:11,039
Speaker 1: the United Kingdom to come out of the European Union.

108
00:06:12,279 --> 00:06:15,719
Speaker 1: So what is going to happen is that we've seen

109
00:06:15,760 --> 00:06:18,040
Speaker 1: what's happened with the stock markets, which is quite clear

110
00:06:18,120 --> 00:06:21,760
Speaker 1: because the FOOTE one hundred, which is based about seventy

111
00:06:21,800 --> 00:06:23,920
Speaker 1: percent of the earnings are on dollar earnings and the

112
00:06:23,920 --> 00:06:26,720
Speaker 1: rest of it up another ten percent on euros. So

113
00:06:26,839 --> 00:06:29,920
Speaker 1: if the pound goes down, whoopee, we do very well.

114
00:06:29,960 --> 00:06:32,320
Speaker 1: But what is interesting is the foot two, which is

115
00:06:33,240 --> 00:06:37,279
Speaker 1: two companies half the sort of size of the SMP

116
00:06:37,400 --> 00:06:39,839
Speaker 1: five hundred. But that is much more a barometer of

117
00:06:39,920 --> 00:06:43,360
Speaker 1: life in the United Kingdom. And since that faithful day,

118
00:06:43,640 --> 00:06:47,839
Speaker 1: the twenty two of June, the foot see two fifty

119
00:06:47,960 --> 00:06:52,280
Speaker 1: has dropped by about eleven. That is very, very significant,

120
00:06:52,520 --> 00:06:54,560
Speaker 1: and I think the foe would have dropped but for

121
00:06:54,640 --> 00:06:57,120
Speaker 1: the value of the pound, which has obviously been in

122
00:06:57,120 --> 00:07:00,719
Speaker 1: the favor of those people who've got equities in drug companies,

123
00:07:00,720 --> 00:07:05,200
Speaker 1: tobacco companies, some banks, and various other issues. But what

124
00:07:05,320 --> 00:07:08,080
Speaker 1: we need above everything else in this country is a

125
00:07:08,240 --> 00:07:13,760
Speaker 1: restoration of confidence. And it is pretty horrific thought as

126
00:07:13,760 --> 00:07:15,520
Speaker 1: far as I'm concerned that it's going to be the

127
00:07:15,640 --> 00:07:17,840
Speaker 1: ninth of September before we know when we have our

128
00:07:17,840 --> 00:07:22,200
Speaker 1: next prime minister. David Buke eloquently put we thank you

129
00:07:22,280 --> 00:07:25,560
Speaker 1: so very much for joining us from London today. He's

130
00:07:25,600 --> 00:07:30,600
Speaker 1: market commentator at Panner, Gordon and Co. Talking to us

131
00:07:30,680 --> 00:07:36,400
Speaker 1: about uncertainty, talking us about what the difficulty of not

132
00:07:36,520 --> 00:07:38,480
Speaker 1: having a prime minister at a time when so much

133
00:07:38,520 --> 00:07:41,400
Speaker 1: needs to be done. This is taking stock. I'm Caffeine

134
00:07:41,480 --> 00:07:46,760
Speaker 1: Hayes with pim Fox. This is Bloomberg coming up on

135
00:07:46,960 --> 00:07:50,000
Speaker 1: taking stock. We're going to take stock of currencies. The

136
00:07:50,080 --> 00:07:54,640
Speaker 1: Japanese yen gains more than one percent one oh one

137
00:07:55,000 --> 00:07:57,960
Speaker 1: fifty three and also a look at the pounds, sterling

138
00:07:58,160 --> 00:08:00,040
Speaker 1: and the euro against the dollar. It