Transcripts For BLOOMBERG Countdown 20141017 : vimarsana.com

BLOOMBERG Countdown October 17, 2014

Means revenue estimates. Reverse sales with a mobile launch. Welcome to countdown. Batrton. It has been a heck of a week. Lets reflect back. The bond market. What a week. Treasury bonds crashed down to 1. 8 percent yield. And then they bounced again. Where are yields going to go . Do believe the Federal Reserve governor who shook the market. Meansd maybe the data they should rethink the end of qe . Growth globally. Deflation. Why do bonds rally . There is a concern about growth. And a lack of inflation. Sometimes, we try to make it a lot more, located. More complicated. Something that has been weighing on oil prices. Bouncing overnight. Prices headed for their third weekly loss. Correction in oil prices. We have data from the u. S. On stockpiles. 8. 9. Crease of that was against an estimate of 2. 4 5 million. Stockpiles, tilting up quicker than people thought. Why . Because production is running faster than people had exacted. In the stats the most since june, 1985. Bond markets in the were prevalent in equity as well. The s p down 1. 5 . A shortterm shot of adrenaline. Finished unchanged on the day. Still down 2. 3 for the week. Longest losing run in three years. It has not corrected, though. It is down seven point 4 from the high. In europe, stocks have corrected, 11 earlier but they finished earlier than they were in the day. Favorite stead of the day. The index in europe fell for the eighth consecutive day. The last time they fell for eight days blackeyed peas were number one. Oh no. Number one in 2003 with where is the love. I could probably sing that. We will save that till the end. From aimir putin flew in lawn peace talks with European Union leaders. After he threatened to cut the supply of natural gas in ukraine. Ryan chilcote cut up with putin and put the criticism he is that not doing enough. Lets look at the exchange. Ryan will be live from milan later in the day. With more on that story. Four minutes past six in london. Lets talk to ryan. He caught up with the European Commission president and asked how to ease tensions between russia and ukraine. I think it is good first of all that they speak. Russianeginning, the reaction was not to recognize the legitimacy of the new elected president of ukraine. Wehave been doing everything can to facilitate contacts between russia and ukraine. Im going to meet president putin along with other leaders we will encourage steps they can do to scale down the tension in the region. Interest of everybody to avoid this have you spoken to him . Sense that there is an opportunity for deescalation . I think there is that opportunity if there is good well. We are not adjusted. The European Union. And European Countries are not interested in a comfort inn with russia. Why should we . At the same time, we have questions it has to be clear that they respect the country like ukraine. We are doing everything we are the commission is promoting concrete steps. For example, negotiations on energy between russia and ukraine. Next week, the eu weenimeets. Is it too early to get rid of the sanctions . I cannot commit. My sense is the following. They asked them to prepare. If we believe there is enough level of guarantee on the russian side, yes. At this moment, it is too soon to tell. What happens here in the lawn over the next day could determine what happens with these engines against russia. W of course could dteremine what happens with the sanctions against russia. Of course. Google showing its age. Some 3 inas down afterhours trading. Hans nicholss will break down the numbers. Bad quarter . Are you panicking . I am still googling. In some ways, this is growing pains for a complete switching from desktop to mobile. Even though facebook is younger, we have seen them make this awkward adolescent transition already. Google eating their. When getting tehrthere. Revenue from tablets and mobile devices is 30 . That is where we see the awkwardness. Revenue at 13. 17 billion. Less than the estimates. But on some key metrics, there were concerns to read that may be why the stock was trading down in afterhours. We have revenue at 20 . 23 increase in the previous time. A little slow down. Spendingny is clearly a lot, especially on new employees. 3000 new employees. That brings the total to 55,000. When you look at what is happening on profit margins, they are down to 59 . They had been around the 60 range. On the upside, if youre looking for a case google has broken mobile,and understand if you look at the cost per click, it dropped only 2 . That gives you an indication maybe they are stabilizing. Figuring out mobile. On the way to having a fully integrated mobile and desktop strategy. The number of employees they hired. Was that the biggest prize . What was the biggest prize . Employees was big. 3000 and a quarter. Last quarter, 2500. That shows growth. Capital spending, 2. 4 billion. Ift is 10 billion a year they stay at that rate. They are investing in infrastructure for the cloud. They are not there in terms of customers. We want to be prepared. They are Building Infrastructure for the cloud. We will call this the umbrella strategy. Make sure you have enough lumber was for when the cloud starts to rain have enough umbrellas for when the cloud starts to rain. Hans nichols joins us from berlin. Lets get breaking news. The Third Quarter, the Swedish Telecom group has missed estimates. Tolysts estimating a move 4. 2 billion. The sixth straight drop in net income. They have met net income estimates in 12 out of the last 15 quarters. Currency haslocal decreased by 2 as well. The last time we saw a Revenue Growth was in the Third Quarter of. 2012. Forgood news is the outlook 2014 is unchanged. They are keeping the forecast for the margin on earnings to be little changed. 35 in 2013. And we will be talking to the chief executive about those results. Dont miss that. And about 30 or so minutes. You can join the conversation on twitter. If you want to tell us how you managed to get through friday, that is where you will find us. After break, the eurozone in a liquidity trap. So says the pimco head of management in germany. He joins countdown after the break. Time for todays company news. Goldman sachs was the worst performer on the dow. That is after the Bank Reported a decline in trading revenue in the Third Quarter. The cfo said the decline was not a big issue even though competitors reported a rise in their trading revenue. Eliminate plans to around 20 of their german workforce. That is according to people familiar with the matter. The redundancy is part of cost cutting plans following the completion of the 11 billion earlier this month. And Singapore Air was planning to boost their stakes in tiger air. They will purchase more of stock to boost its share. This came as tiger reportedly biggest lost ever. S. Big moves in market ashould investigate investors navigate the markets. Pimco head of Portfolio Management in germany joins us. Great to have you with us to try and help us through the meyer. Mire. What a range. For bonds. 1. 86 to higher. What is going on . Good morning, manus. What we are seeing is a perfect storm. Aecome a nation o combination of four things. The market is no longer in position to provide liquidity. There is that gap, the wedge liquidity and fundamentals. Loose Monetary Policy has pushed the gap. Some valuations are extreme. Ridges jewele concerns about qe. The fourth thing is a downward revision to global growth. You put those things together, a lot of repositioning on a market that is not in a position to absorb that repositioning to the same extent it was in the past. Andrew, good to see you. This is anna. We were having a conversation to what extent the bond market was the tail wagging the dog. You send up what has been happening. How does that change whicat the fed is going to do . Is making it difficult for the fed to get out of there qe. Some of the comments from governors indicated this. You filter through all the volatility in financial markets, the underlying strength in the u. S. Labor markets, it looks reasonably intact. I would expect the fed to continue. I think they will be continuing at a cautious rate. That is being repriced into the market. Andrew, i have to ask you. Theres a piece on the bloomberg terminal. It quotes pimco and other institutions. Credit is a buy, specifically highyield. Pimco, black rock are ready to feast on the debt. That is the headline. Is that the are you ready to feast . [laughter] different people have different dietary references. One dynamic that is playing out there are lots of outflows taking place in some sectors of the market. Highyield in particular. The front end, the shorter maturities of u. S. Highyield, are starting to look attractive. You are getting interesting yield levels relative to the spread Duration Risk you are taking. I think there are nice pickings to be seen. Wendy expect the fed when do you expect the fed to h ike rates . I would stick with the center of next year. Extreme increase in implied suggests the timing has been called into question. The underlying data are reasonably on track for a firming of the economy, probably at a lower growth rate than was previously priced in. To the middle of next year as the center point, the most likely point for when the liftoff begins. Andrew, you will stay with us. We are not going to let you go. You are going to join us in the next part of countdown. We are going to discuss the story that china might be set to move on rates. All that still to come. Welcome back. Pimcosthe head of Portfolio Management in germany, andrew. Looking at the bond market. Premium to hold the periphery is widening. Nothe biggest risk the ecb doing enough for having the ability to do enough . Is it the lack of liquidity you just reference at the start of the last interview . I think the biggest risk in the eurozone is none of the above. Is on the political side. Is if thet risk fiscal agents do not push forward with their Structural Reforms, supplyside reforms. Then we are going to have a problem. The debate about whether the budget deficit should be cut that is lessrrow, of an issue so long as these countries are implementing reforms that are going to get there rates of growth up. That is a storm in a teacup taking place in the National Cities of the euro zone member states. It is less of an issue for financial markets. The risk is we are going to get the monetary arrow. The first arrow is going to be there. It is the third arrow to Structural Reforms that i am worried about. Looking at the monetary arrow, what can you expect the ecb to achieve . Even when you do get qe . Rates have been so low for so long in the eurozone. And yet the private sector has been deleveraging, taking unless that, not more. What can we expect qe to achieve . It will achieve two things. I rarely, it will increase the Monetary Base and the value of the euro. Into thes going to be g20 currency wars. That is the simple reality of what happens when you expand your balance sheet. Everybody else has done it. Why cant the ecb do it . And it will compress some of those risk premiums. The spreads, particularly in the longer ends. The combination is going to be, is it going to get unemployment is down and growth up . No, but it will help. Andrew, if we are going to move in the right direction, and potential currency wars what happene what with that due to the euro . This lower europe . Where does a need to go to have an impact on the European Growth story . Question. Very hard to answer. How further down it could go. It is probably not going to depreciate to the same extent that the dollar or pound depreciated when the Central Banks those countries embarked upon qe. The reason is the fact that the eurozone has a very large current account surplus. Urale is a nat appreciation strength. Maybe we get down to a we are going to have to leave it there. Great to have you with us. Still to come, wine. You are welcome back to countdown. I am manus cranny. The dollar is little bit lower. The fx market, at the eightmonth high. The dollar just coming off its initial spurt to the upside. It comes down to this. When do you believe rates in the u. S. Will move . Qe might be left on the table. We have just spoken to pimco. They say rates will be hiked in the middle of 2015. A much more hawkish view. He said the hard data is good and he jobless numbers are good. Perhaps we are all over aching the bowl overegging the bull. An election in brazil. The polls arnett in that. In neck. Ck a head to head on the polls at the moment. L hit a low. I am anna edwards. These are the top headlines. The World Health Organization under fire for its missteps after the ebola a break first attempted in june. Detected in june. Putin in europe to face his critics. Euhas begun meetings with leaders and milan, the first face to face talks since the ukraine crisis. He tells bloomberg us always accused of doing something. Nish by mr. About the cost of sanctions. Russia gets hit the hardest. They are at zero growth. Add to that, the price of oil. Lets go to Ryan Chilcote standing by at the summit. Would you have for us . What do you have for us . The biggest topic is the crisis in ukraine. It is overshadowing the summit. Bywas meant to be discussed two of the most powerful leaders in europe last night. They chancellor of germany and the president of russia. The ddayt talk since celebrations on june the sixth. The meeting did not begin until 11 00 p. M. President putin late in arriving from serbia where he oversaw a military parade. The leader did not emerge until 1 30 in the morning. I had a chance to ask him what he makes of the allegation he is not doing enough to resolve the crisis in ukraine. He told me quote i am always accused of doing something. Have a listen. It was messy. Russian]ing the russian president was driven away into the night for more talks this morning. An hour. T and a half a breakfast hosted by the italian Prime Minister with the russian president and maybe the ukrainian president as well. The topic, ukraine. These meetings having one week happening one week before the eu meets to discuss sanctions with russia. Perhaps this is an attempt to avert them be rid the Prime Minister of finland said it is too early. I also spoke exclusively with the president of the eu commission. Expect me, we should not a break through. At europe does not want confrontation with russia. We talked about the market turmoil. He said as far as he is concerned, most of the peripheral countries are doing ok. Have a listen. This is key for our competitors. I believe it will be a big mistake to change the global reforms. S of the this is the key for europes recovery. Those who are doing better are those who have been pushing for the reforms. We heard a different message from the italian Prime Minister. He said there is a financial crisis out there, lingering on the horizon. The day before yesterday, he introduced a new budget plan for italy which calls for 18 million in tax cuts. Something some in his party say is not sustainable. He had a message for brussels officials. It is timeor saying to change the rules, given the financial situation. Imagine, president barroso was not having any of it. At the summit in the lawn. In the lawn. In milan. If you have always wanted to a special bottle of wine, but did not want to spend thousands. Heres technology that allows fine wines to be enjoyed by the glass. Tell us how it works. It has been described as a medical device designed by arthur vader for prada. Prada. H vader for it uses a needle i originally designed for chemotherapy. Needle has a sharp point that can pierce the cork, just like a normal bottle of medicine. Removed,emoved is the cork reseals. To do was to be able drink a glass of wine from any bottle without having to worry about the rest of the one going bad. This doesnt change the quality or taste of the wine et al. At all. If the cork stays in place, oxidation does not happen. We displace the wine with an inert gas that does not react with wine at all. We have been doing lined tastings. Blind tastings. They have not been able to hell etween aerence b bottle that has been poured and one that has not. Flex when you look at the wineen you look at the list, this will change how restaurants work and diners experience food and wine. I wanted to be a will to drink anymore and had in whatever quantity i wanted. About restaurants. But it has been one of the major uses of this. Restaurants are able to serve anyone they help by the glass. Would you like to demonstrate it to us . Always. You can explain how long can you pour a glass in . There is water in their. It is early in the morning. Put a clamp on top of the bottle. Push the needle through the cork. Tip it sideways. Gas goes in. Wine goes out. Its easier than opening a bottle. Some people have told us that. Especially with an older bottle. When im done, i tip my hand up and pull the needle out. How much does it cost . 69 pounds. Ounds. 2 what are your margins . That is a great question. I will tell you this much. We are still not profitable. We are expanding globally. We started it in the u. S. In july last year. Now we are launching in europe in the u. K. To launchto france their next week. Germany, spain, italy, and then hong kong. Who will adopt this . Is this sacrilege to a french somalier . I would say california and london and even new york are the three most perceptives markets receptive markets. It is amazing how many restaurants are serving great wine by the glass. Wines,ve all these but they have been hesitant to serve them because they are expensive by the bottle. Frances receptive but they are taking longer. The unexpected applications of orthopedics. I am amazed. Thank you. The founder joining us today. Coming up, the Swedish Telecom company focuses sharpens its investment focus. After the break. Time for todays company news. According to people familiar is valuedatter ee at 90 billion. They have lost 37,000 customers. N ipo. All off plans for a one Company Preparing to take a step into the market is jimmy choo. The luxury shoemaker will begin trading at 140 pence. Th

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