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Speaker 1: This is a Bloomberg business flag from Bloomberg World Headquarters.
Speaker 1: I'm Charlie Pellock, Britain. Vote, Vote, stock, sell off. This
Speaker 1: update brought to you by National Realty Providers of one
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Speaker 1: limit n r i A dot net lows of the
Speaker 1: session right now, Let's head right over to the first
Speaker 1: Word breaking news desk for today's afternoon call. Here he
Speaker 1: is Bill Maloney. Good afternoons. Shrilly stocks plunge around the
Speaker 1: world following that Briggs and vote and like you said,
Speaker 1: MANUS averages are on session lows. Dallas currently down six
Speaker 1: hundred and thirty four points, Sesspes drop seventy eight and
Speaker 1: NAZAC falls two hundred and eight points. The NAZAC colhard
Speaker 1: dropped back below the two engine day moving average. Over
Speaker 1: in Europe, Spain and Italy plummeted twelve percent well, the
Speaker 1: UK dropped three point two percent and the pound fell
Speaker 1: as much as eleven percent. Back in the US, A
Speaker 1: small cap six hundred down twenty seven points and the
Speaker 1: US ten yield at one point five eight percent. All
Speaker 1: ten as B sectors are lower, led by losses and financials, Materials,
Speaker 1: and technology. Dow Transports plunge three d and fifty seven points,
Speaker 1: and as A five Tech sank a hundred and thirty
Speaker 1: two points, and the vix is hired by forty four percent.
Speaker 1: In the Dow, Goman Sacks fell seven point four percent,
Speaker 1: Jping Morgan seven percent, and Caterpillar six point three percent.
Speaker 1: Verizon and Walmart were a little changed. New My Mining
Speaker 1: gained five point two percent and made a rally in
Speaker 1: the minors, while money manager Investco plunge as much as
Speaker 1: thirteen point two percent. That's in motions. August of eleven,
Speaker 1: Live from the First Breaking news desk gon Bill Maloney
Speaker 1: Charlotte allright, hey, thank you very much, Bill Maloney worth
Speaker 1: repeating SMP five hundred index down seventy nine, a drop
Speaker 1: there of three point eight percent of to hear live
Speaker 1: breaking news over your Bloomberg type squawk on your terminal
Speaker 1: vans squ a w K. I'm Charlie Pelotar Brexit coverage continues.
Speaker 1: That's a Bloomberg business flash. You're listening to, are taking
Speaker 1: Stuff with Kathleen Hay and Pim Fox on Bloomberg Radio,
Speaker 1: continuing coverage of the United Kingdom's decision to leave the
Speaker 1: European Union. Northern Ireland's Deputy First Minister, Martin McGuinness, has
Speaker 1: called for a border pole on a United Ireland. This,
Speaker 1: of course, after the UK voted to leave the EU.
Speaker 1: Support for the European Union considerably higher in Northern Ireland
Speaker 1: than in the rest of the United Kingdom. Here to
Speaker 1: tell us more, Karen Mohaal, Chief investment Officer, Global Reach Securities,
Speaker 1: joining us from Dublin, Ireland. Karen, thanks very much for
Speaker 1: being with us, first of all your reaction to the
Speaker 1: vote and tell us is there going to be a
Speaker 1: United Ireland as a result? Um? Good evening him speaking again.
Speaker 1: I I it's an interesting one. It's it's kind of
Speaker 1: come out a little bit out of a left field
Speaker 1: and in the nature of the makeup of of how
Speaker 1: maybe last night kind of panned out in the sense
Speaker 1: that London the kind of scent center of the kind
Speaker 1: of financial market elements of the UK economy, and and
Speaker 1: Scotland and Northern Ireland were the three kind of only
Speaker 1: the only three areas that were strong Remain votes. And
Speaker 1: so you know, in the in the last few hours
Speaker 1: you've had a lot of pressure amongst well, you know,
Speaker 1: certainly within Scotland and to some extent, I know I
Speaker 1: saw Mark mcginnison's comments today. I'm not sure if they
Speaker 1: they were a little bit tongue in cheek, but certainly
Speaker 1: some pressure coming on what role the kind of regions
Speaker 1: will play in in in and in a broader UK
Speaker 1: economy that's outside of of Europe. And certainly say Northern
Speaker 1: irdn would be a net beneficiary of inflows from from Europe.
Speaker 1: They would get an awful lot of structural structural moneys
Speaker 1: as well as money. Correct it's called peace money, the
Speaker 1: financial support from the European Union. Yes, absolutely, And and
Speaker 1: Nordon Irens is the only region within the UK and
Speaker 1: that is actually a net beneficiary from from from Europe.
Speaker 1: And so it's quite a big deal. And and and
Speaker 1: the Northern while then in the Republic, our economy has
Speaker 1: been has been going reasonably robustly over the last two
Speaker 1: or three years. Nordon Arden it's still reasonably slow growth,
Speaker 1: kind of dynamic and they would they would certainly not
Speaker 1: want to lose any help that Europe would provide them
Speaker 1: at the moment, and so and that's probably I guess
Speaker 1: where Martin McGinnis is coming from in terms of maybe
Speaker 1: looking for a normal IREN vote. They're trying to find
Speaker 1: a mechanism that would keep them within within europe state.
Speaker 1: They've obviously voted, they they voted, they were strong remain
Speaker 1: in last night's referendum. So Karen, earlier we had on
Speaker 1: the show of Marian Harkins, member of the EU Parliament,
Speaker 1: a former member of Ireland's parliament, and uh, she like
Speaker 1: our uh John Nichols Waite, our editor in chief for
Speaker 1: Bloomberg Editorial. They've basically said, how this house this is
Speaker 1: in a way, how kind of distressing this is? And
Speaker 1: of course I'm wondering. Then we can see what the
Speaker 1: mood in the markets is. We can see that. You
Speaker 1: look at European stocks, you know, Uh, the smallest loss
Speaker 1: ironically is in the foot See you've got the IBEX
Speaker 1: down and the foot well, actually, excuse me, when hundred
Speaker 1: is down three percent, the foot ce m ib is
Speaker 1: down twelve and a half percent. You have you know
Speaker 1: in Italy, yes, Italy, and the IBEX in in Spain,
Speaker 1: thank you sir. And of course Uh. Anyway, the mood
Speaker 1: is sell in Ireland, in Dublin, in your firm. What
Speaker 1: is the mood mood among people about this moment? Well,
Speaker 1: I don't think it. Very many people would have predicted
Speaker 1: this cutting and I guess that's the it's it's the
Speaker 1: kind of the broad sense of I don't. I think
Speaker 1: shock is probably a little bit of a kind of
Speaker 1: a strong word because you know, the referendum, the polls
Speaker 1: were always we're always reasonably tice and I think probably
Speaker 1: the in terms of the markets themselves, the important dynamic
Speaker 1: to understand is SOT. At this time last week, we
Speaker 1: were we weren't a whole lot of way from the
Speaker 1: color levels that we are now, certainly on European equity markets,
Speaker 1: certainly where the docks and the French cat closed, and
Speaker 1: it was within the range that we had been in
Speaker 1: the last couple of weeks. But what we did see
Speaker 1: was Friday, Monday, Tuesday this week a significant rally seven
Speaker 1: eight percent higher on the basis that remain had taken
Speaker 1: back the lead in terms of the polls. So you know,
Speaker 1: the sell off has been very aggressive, it has been
Speaker 1: um in in a very short period of time. In reality,
Speaker 1: we've kind of only moved back to the levels that
Speaker 1: we would have seen last week. Where we go from here, though,
Speaker 1: I think it's going to be very interesting because possibly,
Speaker 1: unlike maybe some of the worries we've had in the
Speaker 1: last couple of years, whether it be China or you know,
Speaker 1: your US procession or or you know, issues around a
Speaker 1: bowl of from from and this is going to be
Speaker 1: a very slow moving story. And there's going to be
Speaker 1: you know, a couple of catalysts in the next week
Speaker 1: or so, but after that it's delightly to die into
Speaker 1: the background for a couple of years. But kind of
Speaker 1: that level of uncertainty is going to remain and how
Speaker 1: and and we're going to see it sort of piecemeal
Speaker 1: drip drip drip as the UK tries to find a
Speaker 1: way to maneuver themselves out of Europe but also keep
Speaker 1: their keep their trade deals, et cetera, maybe in place.
Speaker 1: Jared Muhall is chief investment officer Dublin based Global Reach Securities.
Speaker 1: He says this issue of the UK, which could play
Speaker 1: out over a couple of years, will kind of fade
Speaker 1: in the background to the markets. I'm wondering though, if
Speaker 1: there'll be headline risk was such an important global event.
Speaker 1: This is taking stock on Kathleen Hayes and Pim Fox
Speaker 1: on Bloomberg Radio, Bloomberg. Taking stock is brought you by
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Speaker 1: at JAM one and around the globe the Bloomberg Radio
Speaker 1: plus DApp and Bloomberg dot Com. This is taking stock.
Speaker 1: Coming up on taking stock, We're gonna take stock of
Speaker 1: the pound sterling, the British currency now down more than
Speaker 1: eight and a quarter percent at one thirty six fifty two.
Speaker 1: Find out will Mark Karney and the Bank of England
Speaker 1: have to intercede in order to maintain the value of
Speaker 1: the pound. That's next, also Pim, what should you buy?
Speaker 1: What should you keep selling? It's a very important question.
Speaker 1: That's We're going to continue our conversation with Karen Mulhall,
Speaker 1: chief investment officer at Dublin Blaced Global Reach Securities Charlotte
Speaker 1: Pillets back. Charlie Pillett is in our New York newsroom
Speaker 1: with Bloomberg Business Flash, Thank you very much. Kathleen Hayes
Speaker 1: pim Fox fast moving markets after that historic Brexit vote
Speaker 1: in the United Kingdom. Here's where we stand. We've got
Speaker 1: twenty nine minutes to go ahead of the clothes on
Speaker 1: this Friday. SMP five hundred nicks down seventy seven points.
Speaker 1: That's a drop of three point seven percent. The SMP
Speaker 1: now at two thousand, thirty six down. Industrials down six
Speaker 1: hundred nineteen points to drop there of three point four percent.
Speaker 1: That now at seventeen thousand, three hundred ninety two. Nasdaq
Speaker 1: is down two hundred six points to forty seven oh three,
Speaker 1: a drop there of four point two percent. Sterling right
Speaker 1: now is at one thirty six fifty six. We've got
Speaker 1: gold surging of fifty nine dollars the ounce to twelve
Speaker 1: thirteen twenty two on gold. That is a game of
Speaker 1: four point seven percent. So equity is sinking to session lows.
Speaker 1: The victory of the lead campaign stunning many investors. Michael
Speaker 1: Cogino is the president at the Permanent Portfolio family of funds.
Speaker 1: And in the coming months and years, Great Britain is
Speaker 1: gonna have to negotiate with the European Union as to
Speaker 1: how to exit whatever deals it has currently and enter
Speaker 1: into new deals as well as deals with other countries
Speaker 1: outside the European Union for trade deals that could be
Speaker 1: positive or negative. We just don't know already. Immediate impact
Speaker 1: on corporations British airways owner i a G lowering its
Speaker 1: two thousand sixteen profit targets, an oil tumbling along with
Speaker 1: most commodities. West Texas is going to be the crew
Speaker 1: down five dropping to one barrel on w T I
Speaker 1: now at sixty brand down four point nine percent. It
Speaker 1: is three thirty two on Wall Street. Now, let's take
Speaker 1: a look at other news from around the world. Thank you,
Speaker 1: Charlie from the Bloomberg Newsroom. I'm Jill Schneider. President Obama
Speaker 1: says he has spoken to British Prime Minister David Cameron
Speaker 1: and is confident the UK is committed to an orderly
Speaker 1: transition out of the European Union. Mr Obama spoke this
Speaker 1: afternoon at Stanford University. I do think that yesterday's vote
Speaker 1: speaks to the ongoing changes and challenges that are raised
Speaker 1: by globalization. But while the UK's relationship with the EU
Speaker 1: will change, one thing that will not change is the
Speaker 1: special relationship that exists between our two nations. The President
Speaker 1: had urged Britain to remain with the European Union. Donald
Speaker 1: Trump is hailing Britain's vote to leave the EU and
Speaker 1: predicting that other nations will follow suit. Hillary Clinton says
Speaker 1: we need to respect the choice the United Kingdom has made.
Speaker 1: British Prime Minister David Cameron is resigning in the wake
Speaker 1: of yesterday's vote. Cameron says he worked hard to stop
Speaker 1: the vote from passing, but failed. I held nothing back.
Speaker 1: I was absolutely clear about my belief that Britain is stronger,
Speaker 1: safer and better off inside the European Union, and I
Speaker 1: made clear the referendum was about this and this alone,
Speaker 1: not the future of any single politician, including myself. Cameron
Speaker 1: says he will leave office knowing he did what he could.
Speaker 1: President Obama is designating the Stone Wall in Here in
Speaker 1: New York as a national monument, the first to honor
Speaker 1: gay rights. The tavern in Greenwich Village became the site
Speaker 1: of an uprising after police raided it in June nine,
Speaker 1: triggering what is widely viewed as the start of the
Speaker 1: gay rights movement. Global News twenty four hours a day,
Speaker 1: powered by more than hundred journalists and analysts in more
Speaker 1: than one hundred twenty countries. From the Bloomberg News Room,
Speaker 1: I'm Jill Schneider and this is Bloomberg Charlie, and we
Speaker 1: thank you, and again recapping equities Laura across the board,
Speaker 1: six hundred point drop in the down Jones Industrial Average,
Speaker 1: down three point three tenure yield one point five seven.
Speaker 1: Our Brexit coverage continues. I'm Charlie Pellett and that's a
Speaker 1: Bloomberg Business flash. This he's taking stuff with Kathleen Hayes
Speaker 1: and Pim Fox on Bloomberg Radio. A global sell off
Speaker 1: in global assessets on speculation, the UK decision to leave
Speaker 1: you hamper worldwide growth. We certainly con see it in
Speaker 1: the numbers. Is Charlie Pellett just so eloquently laid it
Speaker 1: out for us. We're continuing our conversation now with Karen
Speaker 1: will Hall's chief investment officer at Global Reach Securities in Dublin, Ireland.
Speaker 1: So certainly someone who is in the heart of the
Speaker 1: impact and all the big questions about where this leads
Speaker 1: next and of course for you here and this is
Speaker 1: such an important investment question because in your work at
Speaker 1: Global Reach Securities you invest mainly in stock indices or
Speaker 1: sectors through e t f s. You mostly have an international,
Speaker 1: a global macro focus. Let's start there. Pam was just
Speaker 1: mentioning how much the pound has fallen at the lowest
Speaker 1: level since is that where you start? Do you start
Speaker 1: with currencies? Do you look at this rally in uh,
Speaker 1: you know, government bond markets, particularly the US that seems
Speaker 1: to be continuing. What's your first step, I think, Cavin,
Speaker 1: when when we're still of looking at how our investment
Speaker 1: process that involved of and and kind of takes into
Speaker 1: account events like what we saw in the last twenty
Speaker 1: four hours, I think for the first thing, we kind
Speaker 1: of try and come back to what the double central
Speaker 1: banks are doing M and the certainly for the moment
Speaker 1: it will involve evolve over time, but for the moment,
Speaker 1: we were very focused on Mario dragging and what the
Speaker 1: use to be are doing. UM and we've spoken about
Speaker 1: this before, but the kind of the natural flow of
Speaker 1: that is that we would see the euro being on
Speaker 1: average weak currency, so we would look to both allocay
Speaker 1: capital away from the Europe, from the Euro to currencies
Speaker 1: that we think with strengthened against the Euro. And then
Speaker 1: within Europe, we've had had a recently um strong focused
Speaker 1: on to the European corporate bonds and we have stayed
Speaker 1: away from from European sovereign bonds valuations they're a little
Speaker 1: bit strained, but particularly European corporate bonds, some high yield
Speaker 1: corporate debt, and some European equities based around the German market.
Speaker 1: We've we've had over the last six months and very
Speaker 1: its positions in Sterling against the Euro. We have very
Speaker 1: small exposure to Sterling at the moment with within the fund,
Speaker 1: mostly due to the uncertainty around what we've seen in the
Speaker 1: the last twenty four hours, and I can't I I
Speaker 1: see probably some opportunity for Sterling to to weaken a
Speaker 1: little bit further, and we certainly wouldn't be trying to
Speaker 1: buy and buy the difference sterling just yet, and we'd
Speaker 1: want to see a catalyst that turn it around, because
Speaker 1: as I think a couple of the other guests have
Speaker 1: already mentioned today that the UK is in a bit
Speaker 1: of a difficult spot in the sense that Karnie probably
Speaker 1: would quite like to cut rates and sort of give
Speaker 1: a bit of an indication of a of a of
Speaker 1: action into sort of, you know, improve confidence. But you know,
Speaker 1: if the if sterling is weakened so much already, and
Speaker 1: if it was the weaken materially more, it will lead
Speaker 1: to a huge problem with the important inflation. And the
Speaker 1: UK economy is very susceptible to important inflation and we
Speaker 1: saw that in the eleven and twenty twelve periods. So
Speaker 1: I would suspect if Cornie does decide to do anything,
Speaker 1: it's going to be more around maybe quantity of easy
Speaker 1: or liquidity as it measures, and at that point we
Speaker 1: might get more interested in in in terms of maybe
Speaker 1: taking some Sterling exposure and with within our investment process. Karen,
Speaker 1: I just want to follow up on something you're talking
Speaker 1: about having to do with the catalyst for a turnaround
Speaker 1: at that point, won't everybody know that there's that catalyst?
Speaker 1: And isn't this when real money is made, You look
Speaker 1: at things that no one else wants to buy because
Speaker 1: they believe that the situation will not change. Well, pin
Speaker 1: things can get cheaper, I guess, is what I'd always
Speaker 1: said to that, and I think even in terms of
Speaker 1: the clodity sell off we've seen over the last couple
Speaker 1: of years, and I've always been it's not that we
Speaker 1: would be necessarily be waiting for the turn, but I
Speaker 1: certainly think in terms of getting excited about about Sterling again,
Speaker 1: and you know there's there's some chance and and certainly
Speaker 1: some technical analysis that one of our team is Don't
Speaker 1: has done with suggested Sterling certainly against the daughter mightn't
Speaker 1: have a whole lot more downside to go. I think
Speaker 1: you'd have to, you'd have to let a bull the
Speaker 1: days go before you you decided to to really move
Speaker 1: in there. And yeah, and as I say, you'd be
Speaker 1: looking for something on the even on the fringes. It
Speaker 1: might not have to be a direct catalyst, but something
Speaker 1: on the fringes to suggest that the selling of of
Speaker 1: of Stirling has at least debated for a period. So
Speaker 1: over the long run, where how do you see this
Speaker 1: working out? And does it really make that much difference
Speaker 1: in some sense when all of a sudden and five
Speaker 1: years down the road for investors like you people have
Speaker 1: to manage money. Is it just is it? Is it
Speaker 1: going to all settle down and we'll be where we were,
Speaker 1: or does it have some lasting effect that we should
Speaker 1: be worried about what it's going to have a lasting
Speaker 1: effect on the growth look for the UK economy and
Speaker 1: the Leave camp have argued that's very strongly that the
Speaker 1: short term negative catalyst that we're sort of seeing begin
Speaker 1: to play out now we'll be offset by a longer
Speaker 1: term improvement in terms of trade deals, etcetera. And we'll
Speaker 1: have to see how that kind of works out. But
Speaker 1: for me, I guess um go in forward, it's not
Speaker 1: whether or not it has a lasting impact, it's how
Speaker 1: more how as I spoken maybe before the break, is
Speaker 1: how does the houses sort of play out? Does it
Speaker 1: kind of and it's probably not going to happen in
Speaker 1: the next week or so, but does it fade back
Speaker 1: into the background and then kind of re emerge as
Speaker 1: they were kind of a risk off move and then
Speaker 1: kind of go back and then re emerge again. And
Speaker 1: that's why I was quite interested to see Bars Johnson's
Speaker 1: comments and this morning, who has been the sort of
Speaker 1: main figurehead of the Leave camp. And you know, it
Speaker 1: occurs to me that maybe the Leave camp maybe weren't
Speaker 1: that confidence in their own success. And I'm not sure
Speaker 1: they have their own plan in place about how to
Speaker 1: proceed from here. Thank you very much for spending time
Speaker 1: with the Skier. And Mohall is chief investment officer for
Speaker 1: Global Reach Securities. They are based in Dublin, Ireland. The
Speaker 1: pound sterling right now down more than eight percent against
Speaker 1: the US dollar at one thirty six seventy four. You're
Speaker 1: listening to Bloomberg Radio. Coming up on Bloomberg Radio, Russelle
Speaker 1: balancing could be having a Brexit LNE like effect on
Speaker 1: US stocks too. We're going to find out why, what
Speaker 1: it means for the market's next on Bloomberg Radio.