WEBVTT - Ballard: sharp risk aversion after Brussels attacks

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<v Speaker 1>Broadcasting live to New York, Bloomberg even to Washington, d C,

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<v Speaker 1>Bloomberg to Boston, Bloomberg dwell Monders to San Francisco, Bloomberg

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<v Speaker 1>to the country, US Exam Channel one ninety and around

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<v Speaker 1>the globe the Bloomberg Radio plus Appen Bloomberg dot Com.

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<v Speaker 1>This is Bloomberg Surveillance. They're running Get His seven thirty

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<v Speaker 1>on Wall Street and Michael McKee along with Tom Keane.

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<v Speaker 1>The Brussels bombings the news of the day. There are

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<v Speaker 1>some corporate stories that will affect trading when US markets open.

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<v Speaker 1>The US government saying it may not need Apple's help

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<v Speaker 1>to unlock a terrorist iPhone accord. Hearing set today over

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<v Speaker 1>a judge's order to require Apple to help the FBI

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<v Speaker 1>bypass the phone security has been canceled. Former Intel chairman

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<v Speaker 1>Andy Grove has died at the age of seventy nine.

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<v Speaker 1>No cause given for his death. Deutsche Bank is declining

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<v Speaker 1>after Moody's Investor Service signaled it may cut the German

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<v Speaker 1>lenders credit radi AMID concerned it will struggle to restructure

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<v Speaker 1>its businesses. But as we know, the main focus today

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<v Speaker 1>is on the Brussels bombings. Let's bring in. Michael Byr

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<v Speaker 1>Now with the latest details, Mike, Mike, thank you very much.

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<v Speaker 1>Airport and subway blasts and Brussels have prompted a city

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<v Speaker 1>wide lockdown. Belgian Minister Maggie to Block says at least

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<v Speaker 1>eleven people were killed. You know what officials say our

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<v Speaker 1>terror attacks. Bloomberg's Jones Hayden has more from Brussels. Well,

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<v Speaker 1>at the at the airport, they're treating it as a

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<v Speaker 1>as a suicide attack. I'm not sure if that has

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<v Speaker 1>been confirmed, but that's what they what the prosecutor has said.

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<v Speaker 1>They're also looking to see. You know, it just seems

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<v Speaker 1>to be a coordinated attack, and this is one of

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<v Speaker 1>the things that this UM, this network that they've been investigating,

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<v Speaker 1>and they they arrested the main guy on Friday. In

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<v Speaker 1>this network, one of their things is to have the

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<v Speaker 1>spread out attacks. So it certainly seems like the same

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<v Speaker 1>kind of attack that we had in Paris. Back in November,

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<v Speaker 1>Cuba's national baseball team faces the Tampa Bay Rays and

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<v Speaker 1>event of this afternoon, the game comes as President Obama

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<v Speaker 1>is in Cuba for a third day. The President will

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<v Speaker 1>watch the game and we'll meet with the dissidents political

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<v Speaker 1>contests will be held in Arizona and Utah today for

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<v Speaker 1>Democrats and Republicans. Idaho Democrats will also hold caucuses today.

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<v Speaker 1>Global News twenty four hours a day, powered by our

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<v Speaker 1>two hundred journalists and more than one d fifty news

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<v Speaker 1>bureaus from around the world. Not Michael Barr Mike, thank you, Michael.

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<v Speaker 1>Time now for the Katina Auto Group. Bloomberg NBC Sports

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<v Speaker 1>Update with John stash Houre Mike. The Rangers went almost

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<v Speaker 1>three months without a two game losing streak, and they

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<v Speaker 1>had two of them in a week much needed win

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<v Speaker 1>at the garden Over Division, leading Florida four to Victor.

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<v Speaker 1>Stallberg scored first period, Matt Szucarello and the second, Rick

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<v Speaker 1>Nash and the third, and then Tanner Glass and empty

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<v Speaker 1>n and the waiting second. So in the Metro Division,

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<v Speaker 1>Rangers sit second, two points ahead of red hot Pittsburgh.

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<v Speaker 1>The Islanders, now fourth, are only three up on Philadelphia.

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<v Speaker 1>The Flyers scored twice in the second and third periods

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<v Speaker 1>they beat the slumping Aisles four to one in Brooklyn.

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<v Speaker 1>A record breaking season for Mona wins a national attention

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<v Speaker 1>With the antics of their bench players, many felt they

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<v Speaker 1>deserve to go to the n C Double A Tournament.

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<v Speaker 1>Their season ended losing to George Washington second round of

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<v Speaker 1>the n i p IF the NFL owners meetings in Florida,

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<v Speaker 1>Whitty Johnson tried to deliver a message the free agent

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<v Speaker 1>quarterback Ryan Fitzpatrick with the words come back to the Jets.

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<v Speaker 1>Their offer said to be around seven million dollars a year,

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<v Speaker 1>with Fitzpatrick coming off his best season looking for considerably more.

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<v Speaker 1>With the Bloomberg NBC Sports Something, I'm John Daniel, Thank

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<v Speaker 1>you John. We are two hours away from the US Open.

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<v Speaker 1>The biggest decliners so far in premarket trading travel related.

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<v Speaker 1>American Airlines is down by three point four percent, Delta

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<v Speaker 1>Airlines off by two point seven percent, Carnival down almost

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<v Speaker 1>three percent on the day. Starward Hotels hasn't open for

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<v Speaker 1>trading yet, but they say their hotels in the Brussels

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<v Speaker 1>area are on lockdown. We can imagine that will have

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<v Speaker 1>an impact on their trade today. In Europe, Air France

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<v Speaker 1>off by four point six percent, Left Tons and down

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<v Speaker 1>by one point seven per cent. The Belgian in the

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<v Speaker 1>stock market is still open. The Belgian twenty off by

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<v Speaker 1>two tenths of a per cent. You're listening, of course

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<v Speaker 1>to Bloomberg Radio worldwide. This is Bloomberg Saveillance. I'm Michael

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<v Speaker 1>McKeen along with Tom Keane US futures reacting to the

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<v Speaker 1>terror attacks in Belgium. Right now, SMP features are off

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<v Speaker 1>by seven points, three tenths of eight percent down features

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<v Speaker 1>down thirty nine. That's a two tents decline. It's a

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<v Speaker 1>four tents drop. For Nasdaq one e mening futures, they're

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<v Speaker 1>off seventeen points. The stock six hundred PAN European Index

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<v Speaker 1>down two points right now, six tenths of a percent.

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<v Speaker 1>The Bloomberg n j I T STEM Report brought to

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<v Speaker 1>you by the New Jersey Institute of Technology, partnering with

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<v Speaker 1>government and industry to apply the university's world class research

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<v Speaker 1>assets to innovate and spur economic growth. Learn more at

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<v Speaker 1>heg I T dot edu. Here's Bob Move Michael, good morning,

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<v Speaker 1>and here's what's making news in science, technolo, lergy, engineering

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<v Speaker 1>and math. A heart lesson on the limits of technology

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<v Speaker 1>out this morning. From the terror attacks in Brussels. People

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<v Speaker 1>in the Belgian capital are being urged to resort to

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<v Speaker 1>texting and internet messaging rather than calls because mobile networks

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<v Speaker 1>are overloaded. Phone carrier ap Proximus says the company's network

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<v Speaker 1>is operational, while encouraging the use of text messages for

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<v Speaker 1>communicating if calls don't get through. Other wireless carriers, including

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<v Speaker 1>Mobile Star, also asking customers to use WiFi networks or

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<v Speaker 1>text messaging. That brings us to Facebook, which, after some delay,

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<v Speaker 1>this morning, has activated its safety check service. The tool

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<v Speaker 1>works by sending a notification to all users in the

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<v Speaker 1>area affected by a crisis, which Facebook determines either based

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<v Speaker 1>on the city listed in a person's profile, the location

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<v Speaker 1>of their Internet connection, or from the location of their

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<v Speaker 1>mobile phone. If the user has allowed Facebook to access GPS,

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<v Speaker 1>asking if the user is safe. If the person says yes,

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<v Speaker 1>a status update saying so is automatically generated for that user.

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<v Speaker 1>A person's friend can also check them in as safe.

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<v Speaker 1>And that's this morning's Bloomberg and j I t Stem report.

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<v Speaker 1>Bob Boman, thank you very much the latest figures on

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<v Speaker 1>casualties that we have from Brussels. According to UH minister

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<v Speaker 1>in the Belgian government, eleven people killed at the Brussels airport,

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<v Speaker 1>fifteen people killed on the subway there, so twenty total.

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<v Speaker 1>All this remains unofficial, but those are the latest numbers

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<v Speaker 1>from the government there. Francis President Francois Oland is speaking

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<v Speaker 1>from his office live on television now saying that terrorists

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<v Speaker 1>struck Brussels, but it was Europe that was targeted and

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<v Speaker 1>that all of Europe must take part in the terrorism fight,

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<v Speaker 1>all of Europe certainly being affected. In terms of markets.

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<v Speaker 1>Simon Ballard is a credit strategist with Bloomberg News in London,

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<v Speaker 1>and Simon and there was an initial sharp reaction to

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<v Speaker 1>what happened in credit markets. Yeah, good morning, Michael Um. Yeah,

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<v Speaker 1>obviously we had a sharp a shop reaction risk aversion. First,

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<v Speaker 1>we had equities equities into the into the red um

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<v Speaker 1>and corporate bond spreads marketly wider, particularly through the synthetic indexes,

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<v Speaker 1>which are more liquid of course than the than the

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<v Speaker 1>cash bonds we hit we hit into day wide. We've

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<v Speaker 1>come back a little bit from those, but we're still

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<v Speaker 1>feeling surry, fragile cash bonds holding a little bit more

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<v Speaker 1>in actually the the investment grade spaces is net tieder

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<v Speaker 1>here in Europe this morning, still getting some support from

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<v Speaker 1>the prospect of that ECB corporate bond purchased program kicking

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<v Speaker 1>in by the end of the second quarter, but high

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<v Speaker 1>yield spreads marginally wider um and on the on this

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<v Speaker 1>eye tracks indices, then yes, we're still six eight, six

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<v Speaker 1>or seven basis points wider on on crossover with a

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<v Speaker 1>primary markets fairly well stymy today other than from a

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<v Speaker 1>couple of very sort of low risk issues that are

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<v Speaker 1>still attempting to tap the market. Yeah, this would be

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<v Speaker 1>a day when people are risk averse, and I would

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<v Speaker 1>imagine that trading wouldn't be wouldn't be huge. No, I

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<v Speaker 1>think the volumes will will certainly be muted. Easiest way

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<v Speaker 1>to trade uncertainty and listeners is to is to sit

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<v Speaker 1>on your hands and keep keep your powder dry. Um.

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<v Speaker 1>And of course we're going into the holiday weekend here

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<v Speaker 1>and over there in the United States, so we're already

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<v Speaker 1>expecting liquidity to to be on the decline as the

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<v Speaker 1>as the week progress, and I think this will just

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<v Speaker 1>expedite that that move towards sort of a less liquid

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<v Speaker 1>and less less volumeous level of trading. Should I say

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<v Speaker 1>we're seeing the biggest impact in equity markets in the

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<v Speaker 1>travel and leisure shares. Are we seeing the same in

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<v Speaker 1>the credit markets? Yeah? I mean generally, credit, as I say,

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<v Speaker 1>encapsulates all of that. The travel sector is being hit most. Um,

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<v Speaker 1>we don't go down to isn't that that much liquidity

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<v Speaker 1>within the travel sector per se within credit and corporate

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<v Speaker 1>bond space itself. But if you would assume that that's

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<v Speaker 1>probably towards the lower end of the credit spectrum. If

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<v Speaker 1>you look at high yield eye tracks indusicries at seven

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<v Speaker 1>basis points wider versus one and a half basis points

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<v Speaker 1>wider in investment grade UM, it shows that the back

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<v Speaker 1>end of the quality curve is under performing. This morning,

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<v Speaker 1>the very nice and notably now do we have any

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<v Speaker 1>indication of or any good guess of how this plays

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<v Speaker 1>out in credit markets in coming days? And the reason

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<v Speaker 1>I asked us, of course, as we've been talking this morning,

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<v Speaker 1>is a political component to all this, the idea of Shingen,

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<v Speaker 1>the free movement of people across European borders being shut down,

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<v Speaker 1>and of course the Brexit whole question. And there are

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<v Speaker 1>so many moving parts to sort of portfolio management and

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<v Speaker 1>an investment strategy as it as it stands at the moment,

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<v Speaker 1>this is just sort of one and new part of

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<v Speaker 1>this UM. I think if we if we've got any

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<v Speaker 1>sort of further spread widening, any risk sell off on

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<v Speaker 1>as horrible it was got for a bit it happens,

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<v Speaker 1>you know, any further explosions or negative news headlines. Um.

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<v Speaker 1>Then over the medium term that may still be seen

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<v Speaker 1>as a selected by opportunity by some given that the

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<v Speaker 1>c B, as I said earlier, is going to be

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<v Speaker 1>a marginal bar of corporate bonds perhaps by the end

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<v Speaker 1>of the second quarter, which will give a new leg

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<v Speaker 1>to a potential spread tightening and a technical bid to

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<v Speaker 1>to the market. But yeah, you know, we're getting very

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<v Speaker 1>much into sort of that protection studiosyncratic type approach now

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<v Speaker 1>as we as we move through the geopolitical risk and

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<v Speaker 1>events within Europe, as we get into the UK EU

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<v Speaker 1>referendum debate and volatility and nervousness within Europe, sorry sterling

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<v Speaker 1>credit um. And of course there we've got the you know,

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<v Speaker 1>the headlines coming from the U S elections as well,

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<v Speaker 1>and protectionist headlines that you know Mr Trump is managing

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<v Speaker 1>to put out on the back of the the the

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<v Speaker 1>Brussels events today, et cetera. So you know, loads of

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<v Speaker 1>moving parts and you know, everything for for an importfully

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<v Speaker 1>managed to keep his eye on. But bottom line is

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<v Speaker 1>you know, in defensive In a defensive stance such as this,

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<v Speaker 1>it's very much key to focus on fundamentals and bottom

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<v Speaker 1>up analysis rather than just taking a broad brush view

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<v Speaker 1>to know spread winding as a bi opportunity. Simon Ballat

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<v Speaker 1>with Bloomberg News credit analyst in our London bureau, thank

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<v Speaker 1>you very much for joining us this morning. German two

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<v Speaker 1>year note yelled is down, but only marginally negative forty

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<v Speaker 1>eight basis points. Ten youre note yelled in Belgium sixty

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<v Speaker 1>one basis points. This is Bloomberg. Bloomberg News was a

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<v Speaker 1>surveillance brought to you by Valvo Cars White Plains. Visit

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