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Speaker 1: Broadcasting live to New York, Bloomberg eleventh Yo to Washington,

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Speaker 1: d C. Bloomberg to Boston, Bloomberg twelve hundreds to San Francisco,

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Speaker 1: Bloomberg to the Country, Serious Exam Channel one ninety and

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Speaker 1: around the globe. The Bloomberg Radio Plus happened. Bloomberg dot com.

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Speaker 1: This is Bloomberg Surveillance. The morning is seven thirty on

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Speaker 1: Wall Street. I Michael McKay along with Tom Keane. We've

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Speaker 1: got jobless claims at eight thirty this morning. That's the

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Speaker 1: big economic indicator Tomorrow, of course, jobs Day. Everybody watching that.

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Speaker 1: In the meantime, we are keeping on top of earnings.

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Speaker 1: Ali Baba fourth quarter revenue there beat analysts estimates, China's

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Speaker 1: biggest e commerce company, selling more advertising sales up thirty

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Speaker 1: nine to twenty four point two billion u N. That's

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Speaker 1: three point seven billion dollars for those of you without

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Speaker 1: a currency calculator in your hand. Twenty three point two

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Speaker 1: was the forecast, so better than expected. They were down

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Speaker 1: on a per share basis, though, uh The biggest buyer

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Speaker 1: of soured real estate in Europe, that's Cerberus. This is

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Speaker 1: that they'll be disposing of non performing loans from the

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Speaker 1: region's banks and governments until at least two thousand twenty one.

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Speaker 1: Barkley's sold about a fifth of its stake in Barkley's

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Speaker 1: Africa Group for about thirteen point one billion Rand again

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Speaker 1: a currency translation eight million dollars. It was part of

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Speaker 1: the plan to overhaul the British lender. They're likely to

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Speaker 1: sell off more of that company. Now, let's check in

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Speaker 1: with Michael Barr the latest world headlines. Mike, thank you

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Speaker 1: very much. Now that Donald Trump is the presumptive Republican

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Speaker 1: presidential nominee, he'll have to win support from congressional Republicans.

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Speaker 1: Out Speaker Paul Ryan and Senate Majority Leader Mitch McConnell

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Speaker 1: have been critical of Trump's comments. Congressman Steve King, chair

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Speaker 1: of the Republican Party Committee, has said, I've never seen

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Speaker 1: a nominee pour out so many insults on other people

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Speaker 1: as Donald Trump has. But now it's time to support

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Speaker 1: the nominee. The Consumer Financial Protection Bureau is about to

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Speaker 1: propose removing bank imposed rules on customers who feel they

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Speaker 1: have been wronged. The Bureau is announcing a proposal today

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Speaker 1: to ban mandatory arbitration clauses, which would affect the entire

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Speaker 1: financial industry and millions of accounts and mortgages. Currently, customers

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Speaker 1: are required to take any disputes with a bank to

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Speaker 1: a third party mediator. Turkeys per minister is said to

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Speaker 1: be stepping down later this month. Prime Minister i'm At

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Speaker 1: Davutoglu lost a power struggle with Turkey's president that sent

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Speaker 1: financial markets tumbling. Global News twenty four hours a day,

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Speaker 1: powered by where twenty four hundred journalists and more than

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Speaker 1: a hundred fifty news bureaus from around the world. Mike Labar,

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Speaker 1: Mike Thanke if I called time now for the Bloomberg

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Speaker 1: NBC Sports Update with John Stash are brought to you

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Speaker 1: by land Rover Parsippany, John Thank Michael is looking like

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Speaker 1: another night with quiet Yankee bats, but they finally woke up.

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Speaker 1: Scorts and runs three and the sixth, that in four

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Speaker 1: more in the eighth they want seven nothing at Baltimore

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Speaker 1: in a sixth game, losing steakture, Obi Elsberry got on

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Speaker 1: base five times. Brian McCann drove home three. C. C.

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Speaker 1: Sa Athia seven scoreless stings is best starting three years.

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Speaker 1: Yanko story massa hero to nacka tonight without Alex Rodriguez,

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Speaker 1: he's on the disabled list entured hamstring, and Brett Gardner

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Speaker 1: just heard his elbow of X rays for negative Mets

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Speaker 1: tonight in San Diego, kicking off an eleven game road trip.

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Speaker 1: They've won ten of the last twelve, eight nothing over.

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Speaker 1: Atlanta had four home runs, two by Lucas through to

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Speaker 1: the back Stephen Matt Cleveland Cavaliers last night made twenty

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Speaker 1: five forty five three point shots in a one to

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Speaker 1: ninety eight rout of Atlanta. Twenty five main threes the

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Speaker 1: most any teams had in any game, regular or postseason.

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Speaker 1: Cansley the series two ZIF NHL. Pittsburgh's now up three

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Speaker 1: one on Washington Caps could be headed for yet another

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Speaker 1: playoff disappointment. They lost three two in overtime. Penguins third

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Speaker 1: straight win in the series. With the Bloomberg NBC Sports update,

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Speaker 1: I'm John stap Shamlin, Thank you, John Well headlines out

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Speaker 1: of Turkey. Prime Minister Devora tug lewis holding a news

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Speaker 1: conference now says they will be an extraordinary party Congress.

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Speaker 1: On party. He so far hasn't said whether or not

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Speaker 1: he's resigning. We're watching that and uh well, now there

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Speaker 1: he goes he says he won't stand for re election,

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Speaker 1: so he'll leave after the two of May. This is

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Speaker 1: Bloomberg surveillance and Mike McKey, along with Tom Keane and

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Speaker 1: repeating the headline that is just crossing Prime Minister davadt

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Speaker 1: vote in Turkey says he will not stand for leadership

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Speaker 1: at a new Congress on May, so he is out

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Speaker 1: as forecast in a power struggle with President Uragon. Will

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Speaker 1: continue to follow the implications of that as the morning

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Speaker 1: goes on. Futures high er SMP features up by seven

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Speaker 1: four tenths of a percent, of features up fifty five

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Speaker 1: three tenths in UH Europe, the toxic hundred up a point,

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Speaker 1: about a quarter of a percentage point. Time now for

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Speaker 1: the Bloomberg n j I T STEM Report, brought to you

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Speaker 1: you by a New Jersey Institute of Technology, investing more

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Speaker 1: than hundred and ten million dollars a year and applied

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Speaker 1: research to solve problems and improved life. Learn more its

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Speaker 1: stories of innovation dot m j I T dot a

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Speaker 1: d U. Here is Michael, good Morning. Here's what's making

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Speaker 1: news in science, technology, engineering and math. Time to beef

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Speaker 1: up Britain's broadband BT is seeking to fend off criticism

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Speaker 1: that it's done too little to upgrade the UK's principal

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Speaker 1: broadband network, and is proposing to spend six billion pounds

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Speaker 1: the equivalent of eight point seven billion dollars to bring

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Speaker 1: faster connections to millions of addresses. The UK's former telecom

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Speaker 1: monopoly unveiled the plan today as it reported better than

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Speaker 1: expected fourth quarter profit, saying it hopes to make ultra

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Speaker 1: fast broadband and four G mobile connections available to more

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Speaker 1: than ninety five per cent of the country by it

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Speaker 1: aims to reach two million homes and offices with direct

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Speaker 1: fiber optic connections. The US Environmental Protection Agency was accused

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Speaker 1: in a lawsuit being almost thirty years late in issuing

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Speaker 1: rules for the handling of waste water from oil and

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Speaker 1: gas exploration. Environmental groups asked for a court order compelling

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Speaker 1: the e p A to adopt measures regulating disposal of

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Speaker 1: the water and other resource development by products. They say

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Speaker 1: the need has become more acute with the prevalence of fracking,

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Speaker 1: which is increasingly being blamed for creating earthquakes and sink holes.

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Speaker 1: May come to mind when you think about whether fracking

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Speaker 1: should be introduced into Florida. It's a state with a

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Speaker 1: unique geology and hydrology that introduces a long list of

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Speaker 1: environmental concerns. There's been at least one exploratory well in

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Speaker 1: Florida using fracking, and over the past several months, a

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Speaker 1: number of counties and cities in Florida have banned fracking

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Speaker 1: over environmental concerns. That's this morning's Bloomberg and j I

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Speaker 1: t Stem report. Michael, thank you very much, Bob boon. Well,

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Speaker 1: the Turkish Prime minister is giving up. I'm at datadog.

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Speaker 1: Glue is stepping down, losing a power struggle with the President.

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Speaker 1: Urign In Turkey says there will be an extraordinary meeting

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Speaker 1: of their party, the Ak Party, on May twenty two,

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Speaker 1: and he will not stand for election. That's having quite

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Speaker 1: the effect in the markets. Turkish lyra now down one

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Speaker 1: and half percent against the dollar to a point nine

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Speaker 1: one for for the Turkish lyra at the moment. Colum

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Speaker 1: Henderson uh is with the Eurasia Group. He's of Global

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Speaker 1: Markets Research Head. It used to be the standard chartered

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Speaker 1: following currencies around the world. So let's start there and

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Speaker 1: ask you column what does it mean for investors? Uh?

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Speaker 1: This power struggle in Turkey. How does it play out

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Speaker 1: and what's it going to mean? Sure? Well, the markets

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Speaker 1: already reacting negatively to these developments. I think you have

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Speaker 1: accommodation of factors. You have the political backdrop where you

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Speaker 1: have perceived um battle at the top in Turkish politics. Uh.

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Speaker 1: And you also have a central bank that's run down

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Speaker 1: its foreign exchange reserves that's flooding the domestic market with liquidity. UH.

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Speaker 1: You have on the plus side, you have high carry,

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Speaker 1: which is importance in you know, a negative rate worlds

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Speaker 1: outside the United States. But carry is not enough and

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Speaker 1: eventually you will get carried out. And that's that's what's

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Speaker 1: happening to investors right now. Uh. When you say carried out,

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Speaker 1: is this just losses or are we looking at something

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Speaker 1: catastrophic possibly happening to UM, to the lira, to the

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Speaker 1: Turkish stock market. I don't think catastrophic, but but certainly, Uh,

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Speaker 1: you will have a material market reaction UH in a

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Speaker 1: negative sense because of the perceived loss of policy certainty,

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Speaker 1: policy credibility. UH. And as I said, investors have been

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Speaker 1: in looking at the emerging markets over the past couple

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Speaker 1: of months in Turkey and South Africa and Brazil because

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Speaker 1: of the carry arguments, and that's that's been absolutely critical,

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Speaker 1: particularly at a time when China has been stabilizing, and

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Speaker 1: China is critical for the whole e M universe. Uh.

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Speaker 1: And now you have this political shock which adds to

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Speaker 1: the economic questions, the market questions as well. Let me

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Speaker 1: ask your question I asked earlier, and I guess it

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Speaker 1: goes more to Ian Bremer's territory, but I'll try it

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Speaker 1: on you. Are there elements here of what we saw

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Speaker 1: Mr Putin and Mr Medvedev years ago? Where Mr Putin

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Speaker 1: decided he was the top dog. We've seen that at

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Speaker 1: the same in Turkey. I mean, I think they're both

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Speaker 1: similarities and differences in the sense that's uh, you know,

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Speaker 1: clearly Mr Everyone is the top dog, as you said, um,

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Speaker 1: for for markets. Uh. The person who's doing who's just

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Speaker 1: obviously resigns. Yeah. He Uh, he was a source of

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Speaker 1: comfort of relief to two markets. That's uh. You know,

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Speaker 1: policy orthodoxy would be followed from from an economic perspective,

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Speaker 1: and and now he's gone. Uh. So there's there's a

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Speaker 1: greater contrast between those two than between Medvedev and Putin.

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Speaker 1: Just to get this thing quickly and we'll come back.

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Speaker 1: Call and Henderson, you're o lira. Euro lira is basically

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Speaker 1: a linear function of weakness. When do you know that

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Speaker 1: weakness is too weak for an for an emerging market,

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Speaker 1: they just get weaker and weaker and weaker and then

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Speaker 1: something breaks. What makes it break? Uh? Well, I mean

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Speaker 1: as as your shot shows, I mean you've had, you know,

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Speaker 1: try and weakness and lira. Uh. And that's that's at

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Speaker 1: a time, over months and over years, when when the

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Speaker 1: Euro itself has been has been weak. So that shows

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Speaker 1: you the degree of weakness in the in the in

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Speaker 1: the Turkish Later, I certainly think that's this kind of

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Speaker 1: political shock can cause capitulation for those who have held

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Speaker 1: on for sometimes. Okay, well, that's what's something to watch

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Speaker 1: for Calem Anderson with us with Eraise your group. I

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Speaker 1: just put out on Bloomberg Radio Plus that I did

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Speaker 1: earlier the dollar lyer. Right, here's the euro lira three

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Speaker 1: point three three Turkish lira per euro. We can do

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Speaker 1: that because we have the Bloomberg terminal. Michael McKee and

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Speaker 1: Tom Keene Bloomberg Svans A lot going on in the world.

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Speaker 1: Will continue our conversation with Calum Henderson from the Eurasia Group.

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Speaker 1: I know what he thinks about other political developments. Is

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Speaker 1: their country having an election? Somewhek Global Business News twenty

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Speaker 1: four hours a day at Bloomberg dot com, the Radio

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Speaker 1: plus mobile app and on your radio. This is a

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Speaker 1: Broomberg Business Flash and I'm Karen Moscow Allie Baba Group's

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Speaker 1: fourth quarter revenue rising thirty nine percent, beating analysts estimates

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Speaker 1: after China's biggest e commerce company drew in more users

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Speaker 1: and boosted services to merchants on its platforms. MARKA four

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Speaker 1: ten percent in early trading after reporting first quarter profit

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Speaker 1: that top analysts estimates as sales have recently introduced drugs

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Speaker 1: posted solid gains. Oil advancing a second day after data

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Speaker 1: show that US production failed the most innate months, and

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Speaker 1: Around said it's ready to act with OPEC once it

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Speaker 1: regains pre sanctions market share, which have the markets every

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Speaker 1: fifteen minutes throughout the trading day on Bloomberg. Nomex scrude

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Speaker 1: oil is up three point two percent of a dollar

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Speaker 1: forty to eighteen of barrel SNP. EVENI futures up seven

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Speaker 1: points now even the futures of fifty two NASDAC eveny

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Speaker 1: futures of fifteen the decks in Germany's up a tenth

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Speaker 1: of up percent. Tenure Treasury down six thirty seconds, the

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Speaker 1: yield one point seven nine percent comes Gold up seven

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Speaker 1: tenths per cent or eight dollar seventy cents at twelve

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Speaker 1: eighty three, announced the euro at other fourteen thirty one.

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Speaker 1: The yen one oh seven point one eight. Also watching

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Speaker 1: weight watchers is of thirteen percent this morning, after posting

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Speaker 1: a rebound in subscribers assigned its high profile partnership with

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Speaker 1: Oprah Winfrey is paying off. That's a Bloomberg business flash.

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Speaker 1: Tom and Mike Karen, thanks so much Bloomberg surveillance this morning.

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Speaker 1: Bunch of my interactive brokers Traders University. Even experienced traders

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Speaker 1: need to keep learning. Traders University will We'll get you

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Speaker 1: up to speed quickly with short videos, webinars, courses and more.

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Speaker 1: Visit I b k RB dot com, slash stay a

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Speaker 1: had Mike. Maybe this is a picture of what's going

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Speaker 1: to come from Secretary Clinton and from Mr Trump. The

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Speaker 1: Bloomberg headlines is Mr Trump um speaks on CNBC, I

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Speaker 1: am the King of debt, I love debt, and then

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Speaker 1: Mr Trump says, the US debt situation is quote very

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Speaker 1: very fragile, and then he goes on to say something

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Speaker 1: else about debt. It's like three different angles on debt

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Speaker 1: in the space of two minutes, which maybe that's where

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Speaker 1: we're going in this election. The thing about Mr Trump

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Speaker 1: is he has no policies that makes sense. He's against debt,

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Speaker 1: but he uh, he doesn't. He doesn't want to do

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Speaker 1: a thing to fix social security, he says, or well, anyway,

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Speaker 1: he says, I can find a coherent policy that I

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Speaker 1: don't want to make a political statement here, but you know,

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Speaker 1: part of our job is coherence here, like with Caitlin Henderson.

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Speaker 1: And I'm just looking at three not consecutive, but close

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Speaker 1: to consecutive headlines from a Trump that there's incoherent. Is

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Speaker 1: anything I've seen in a zillion years might bring in

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Speaker 1: Mr Henderson? Well, Cale Henderson is Eurasia Group's Global Markets

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Speaker 1: Research Senior vice president coherence. So what what is the

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Speaker 1: political risk two markets from the United States election? Right now?

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Speaker 1: Certainly one of one risk that we highlighted earlier this week,

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Speaker 1: in addition to the death issue is the feigning change policy. Uh,

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Speaker 1: it's it's been the conventional wisdom ever since Ruben that

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Speaker 1: you know, our strong dollars in there is in the

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Speaker 1: United States interest. But for for those who were either

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Speaker 1: around as we all were, um or who have interested

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Speaker 1: in history before that, there have been periods when the

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Speaker 1: US had explicitly or implicitly weak dollar policy. And if

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Speaker 1: you look at the fifty of the SMP, they get

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Speaker 1: hit by a strong dollar and also US exports uh fading,

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Speaker 1: you know, Chinese growth. Uh. There is a risk and

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Speaker 1: that's what we wanted to put it out as not

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Speaker 1: a certainty, but a risk that no matter who wins

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Speaker 1: in November, that you might have a fundamental change in

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Speaker 1: US foreign exchange policy. Um As I said, a risk,

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Speaker 1: not a certainty. But but markets are certainly not pricing

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Speaker 1: that in the moment. Is our markets pricing in the

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Speaker 1: possibility that the Republican presumptive nominee could actually win? Uh?

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Speaker 1: That is the I think the honest answer is that's

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Speaker 1: very hard to quantify. Uh. Certainly, if you look at

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Speaker 1: US assets, there are signs of a rising risk premium.

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Speaker 1: And we talked about this earlier, which is that's implied

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Speaker 1: volatility and also a volatility skew in a number of

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Speaker 1: dollar exchange rates against the G seven is higher than

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Speaker 1: it is against a bunch of markets. Where were you

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Speaker 1: in the middle nineties. Where are you in, uh? Um,

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Speaker 1: I was in Asia, in Hong Kong ninety two to six.

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Speaker 1: I was in New York, which is why I'm a

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Speaker 1: die hard Yankees fan. Well, this is a tough year

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Speaker 1: for you, then it is, Yeah, make him once a year.

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Speaker 1: He can appear once a year. I hasten to add

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Speaker 1: that we got sweats at Fenway, so I'm sure you did. Yes,

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Speaker 1: we did. Note that we did the Red Sox fan here,

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Speaker 1: so no, I know. But but seriously, here do you

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Speaker 1: have elements here of nine? Because a lot of people say,

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Speaker 1: there's really not a comparison. I mean there are similarities

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Speaker 1: and differences, which that clearly means that I should be

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Speaker 1: an economist. But but more seriously, I think there are

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Speaker 1: similarities to the first Clinton administration, where let's not forget

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Speaker 1: that we went into that with the new administration promising

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Speaker 1: free year trade, a level playing field, many of the

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Speaker 1: same things that both candidates are highlighting, uh this this time.

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Speaker 1: That's mean that the U. S. Exports will see be

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Speaker 1: supported and the implicit implication of that is that the

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Speaker 1: US door will turn lower. And from our perspective, the

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Speaker 1: US dollar is already turning lower. Whether or not the

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Speaker 1: fan hikes once or twice this year, this is a

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Speaker 1: transition year after that. Uh, certainly, my my view is

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Speaker 1: that the US door translower from here. What's the risk

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Speaker 1: to the economy transition year? Uh? People are beginning to

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Speaker 1: talk more and more about at some point soon we've

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Speaker 1: seen a contraction. I mean, well, obviously Monterrey policy has

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Speaker 1: has been ultra ultra loose. Fiscal policy is turning into

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Speaker 1: less of a headwind than it was, and not not

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Speaker 1: just in the in the United States. So both of

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Speaker 1: those are supportive. Um, the equity markets. Uh. It's not

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Speaker 1: a job to give stock uh stock picks or stop views.

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Speaker 1: But but the equity market is supported by the lack

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Speaker 1: of yeled elsewhere. So that that's a fundamental supports for

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Speaker 1: for the equity market, which is which is important. But

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Speaker 1: another point which Tom brought up earlier, which is declining productivity,

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Speaker 1: which is effectively diminishing marginal return. Uh, and that uh

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Speaker 1: that folds if that continues to fall, then the underpinnings

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Speaker 1: of the equity market are are undermined and Mike, that

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Speaker 1: gets back to the call of a lower terminal value

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Speaker 1: for potential GDP. Well, at this point you have to

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Speaker 1: to uh to say, then, you know, is the US

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Speaker 1: a good place to invest? We are the haven? Yes,

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Speaker 1: but is is it time to find somewhere else? But

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Speaker 1: it's not my phrase, but but but what I think

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Speaker 1: the US is the best horse in the glue factory.

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Speaker 1: Uh So, it's it's it's an ugly investment world, and

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Speaker 1: it's a challenging investment world. But in the absence of

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Speaker 1: higher risk adjusted returns. Uh that what you're seeing as

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Speaker 1: people are staying at home. What's brilliant about this? And

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Speaker 1: I just looked this up in the Bloomberg for that

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Speaker 1: the amount of data we have at our fingertips is shocking.

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Speaker 1: I just assumed we're growing at two percent and Singapore

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Speaker 1: must be growing at four But that's not the case.

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Speaker 1: I mean, you're getting developed world statistics among some of

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Speaker 1: these Asian nations. It is a different story. And our

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Speaker 1: childhood stereotype of the tiger economists that that's that's exactly right.

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Speaker 1: I mean, you've had a material slowdown in the emerging

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Speaker 1: markets generally, and and Asia more specifically, Uh so you

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Speaker 1: know it's a Singapore in particular, which is incredibly well managed,

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Speaker 1: did very well during the GFC, but is now trending Lark, Mike,

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Speaker 1: did you know Taiwan three quarters in a row year

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Speaker 1: over year negative GDP? I would have never guessed that

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Speaker 1: what's causing what's causing this this world on we well,

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Speaker 1: I mean you've you've also had a major change in

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Speaker 1: the direction of raid and and there's a fabulous page

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Speaker 1: on Bloomberg e C t R which shows the imap

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Speaker 1: direction of trade statistics. What you'll see there is that

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Speaker 1: over the last ten years, the whole of the emergent

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Speaker 1: markets has been become dependent on China. So as China

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Speaker 1: continues to slow, and as the market continues to question

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Speaker 1: the actual growth rate of China. So despite the fact

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Speaker 1: that the US is doing better, which benefits the likes

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Speaker 1: of say Mexico, that doesn't do much for Taiwan or

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Speaker 1: Hong Kong or Korea because they're all heavily leveraged to

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Speaker 1: Chinese time. I just gonna say I had not seen

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Speaker 1: e C t R. And this is the amazing things

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Speaker 1: commercial brought to you by Bloomberg. The amazing thing about

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Speaker 1: the Bloomberg terminal. That is a really cool page. It's

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Speaker 1: a fantastic pastion. It shows a map sort of circular movement.

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Speaker 1: It shows the trade linkages and how much uh we

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Speaker 1: we trade with each country. That is fabulous, really really interesting. Tom.

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Speaker 1: I'm sorry I interrupted. We need to emphasize that the

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Speaker 1: mass and scale of it is so big that Mike,

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Speaker 1: you and I collectively we've been on a hundred four

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Speaker 1: years at Bloomberg, and there's things that we find every

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Speaker 1: day that are brand new. And we said this morning

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Speaker 1: to all of Bloomberg LP programmers and particularly our analytics team,

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Speaker 1: which thinks up gorgeous pictures of trade so that you

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Speaker 1: can instantly look graphically and see what Singapore is doing

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Speaker 1: with the United States of America e C what does it?

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Speaker 1: Kalem E C t R E E C t R

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Speaker 1: which is the direction of Trades statistics. There's also another

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Speaker 1: great patrons just cp I S, which is the IMAP

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Speaker 1: Coordinated Portfolio Investment Survey, which just extraordinary, extraordinary data. To

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Speaker 1: have that live. You should come back tomorrow. I know

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Speaker 1: we should send him out with our sales department. Mike

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Speaker 1: Bloomberg is up looking inside our studio here. Of course,

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Speaker 1: we should point out that Mr Bloomberg is the majority

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Speaker 1: owner of Bloomberg LP and owner of this radio station

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Speaker 1: as well. Count Henderson, thank you so much. Can we

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Speaker 1: do a tag team with you and I and Bremer together?

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Speaker 1: We'd like to do that at sub Kellum. Member Henderson

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Speaker 1: with Eurasia Group. She usures up eleven earlier, up seven

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Speaker 1: now tomorrow jobs. Today we go beneath the headline data

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Speaker 1: James Glassman and Bill Gross is always the eight team

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Speaker 1: in the eight o'clock hour Bloomberg Surveillance