Transcripts For BLOOMBERG Countdown 20160614 : vimarsana.com

Following the purchase of linkedin. Countdown countdown. I am anna edwards. It has just gone six a clock in the morning. Manus 6 00 in the morning. Manus it has just gone 9 01 here. Lets get straight to value destruction. It is all about those four polls. Sterling might be volatile, but what you have here is on the back of these four polls and the front page of the sun, channeling 1992, we can become richer, safer, and free. The msci all world value destruction. Trillion has been wiped off the value of equity markets. We have nothing a run of losses like this on a global scale since february 11. Recordo alone, they are shortselling. Another bank of japan is playing in their, but if you are look playing in there, but if you are looking for the real risk off anna all parts of the globe been given something to think about. Lets see where we are on currency markets and broader assets as well. The pound is once again weaker. The dollar index is flat. Versus the dity ollar at its highest since 2008. Down 0. 9 against the japanese currency as we see investors snapping up yen in all of this nervousness about what will happen around the Eu Referendum. The gold price is actually retreating just a touch. Down 0. 25 . Not seeing the flight of all of the risk assets as we have been seeing. Later,stockpiled data but a lot of the news flow seems to be around nigeria and that the government is having conversations with militants to end attacks on oil installations. Lets get the bloomberg first word news. Britainirl nejra seems to be on course to exit the European Union. Sun hash blow, the backed brexit on its front page. Yesterday saw volatility in the currency markets as the pound microsofts Credit Rating may be cut by moodys following its 26 billion purchase of linkedin. The agency made the announcement hours after the Technology Giant says it plans to fund the takeover with debt. It is the most extensive move so far in the ceos plan to remake the company to the future where most business computing happens over the internet. There is a microsoft graph which is about people, their relationships, their calendars, their projects. You connect to that with the professional graph and then you start completing the scenarios. You do not need to change the social network, but you do need to bring those together seamlessly. Orlandok obama says the nightclub killer was inspired by extremist propaganda. There is new evidence he was directed from abroad. The United States says omar mateen is the kind of homegrown terrorist authorities have long feared. A handgun and buy a handgun and Assault Rifle legally because he has no criminal record. 49 people were killed in the nightclub shooting. Pres. Obama at the last minute, he announced allegiance to isil. There is no evidence so far that he was directed. At this stage, there is the direct evidence he was part of a larger plot. Buying houses in sydney will pay a new property tax from next month. The New South Wales State Government will introduce a 4 duty surcharge and a land tax worth 0. 75 on top of current charges. Similar costs are in place in victoria and follow the moves by the banks to tighten on the find more stories bloomberg at top. Get up to speed with these markets. The pressure is on money flowing into the yen. Equities are getting pummeled. David ingles has the latest. Good morning. You were talking about the amount of fell you to structure and. Value amount of destruction. This risk aversion we have been painting in russia. Look at euroyet. We are way below 120. 119. 58 is your level. Bidding up not just against the dollar or the euro. This, looklated to at the bond markets. Different day, same story. We are looking at record lows again. New lows for japanese yields. 16 basis points below zero on the 10 year jgb. Australia has touched a record low as well. 162. Korea, the u. S. Is at 161, just for context. The equity markets, fourth straight day underwater. 4. 5 from thursdays close. Manus david ingles in hong kong. The Prime Minister of the netherlands has warned the u. K. Against leaving the European Union. Hes had life outside the worlds biggest trading block status andbritains prove economically damaging. I think there is such a strong case for the u. K. To remain as a member of the European Union, and to remain part of the single market. Geopolitically, economically in many aspects. In the netherlands, we really want you to stay. Anna the dutch Prime Minister speaking at an event yesterday. Boris johnson said the proeuropean camp is misjudging the british people. The remain campaign say that we cant. They are and leslie negative. This they are endlessly negative. They say we cannot do it on our own. I said they are woefully underestimating this country and the ability of the british people. Anna joining us here in the of benson. He cio great to have you on the program. When you are looking at what is going on in global markets, we have a chart that shows the nervousness, or what of the inputs to that nervousness. There is live data coming, people saying where they think it will go. We have jumped from a 39 chance of brexit, which is higher than 20 in may. Now, this is imperfect information, but the polls are giving us imperfect information by their admission. What do you make of it . I think you are right that the polls provider imperfect information, but odds checker is a bit more accurate. This is a troubling sign in terms of the odds of a brexit scenario. Troubling because it creates this cloud of uncertainty. We know that economies all over the world are fragile. All economies need is a big external event like this to create major slowdown. Channeling 1992, flashbacks of my youth. This is the front page of the sun. It is talking about beleave. The rhetoric is appealing to a broad base of people. Shift market nervousness . Without a doubt. The recent polls have made the markets more jittery. The reality is that the polls will swing around. We still have another week in terms of the referendum. We will get further data points that will create further uncertainty. In terms of the implications on the economy, a lot of people have studied this, in the short run, it creates economic headwind. In the long run, nobody knows. Anna its interesting that manus is bringing up like a 92 1992. You have a comparison that goes back to black wednesday. Did to u. K. Assets. What lessons can we take . We saw depreciation in the pound, but the markets withstood that. Equity markets are up 25 in the u k six month later. Sixrnment in the u. K. Months later. Governments rallied. We hadart of it was that a newfound freedom and monetary policy. That is not a direct comparison with today, is it . It will never be exact parallels, but the uncertainty of a new environment and new economic regime you can draw some parallels. If you think about what would leave to major market losses, more often it is the you for ready euphoria of equity markets. We do not have that today. Manus i have moved on from my 1992 flashbacks. Volatility has become expensive. Vicks. Tocks versus the volatility in europe up by 73 . What is my risk reward . Lets put the polls aside. Waking up on the 24th. The world has said we have decided to remain. What is the upside . Is this one of the most wonderful, salient opportunities you have ever seen . The upside on the 24th, should there be ane xit an exit outcome is the market could present huge value opportunities. Volatility spiking to these levels it is still early days. What we see in these environments is that volatility tends to cluster and stay elevated for a long time. We still havent seen that in financial markets. Being patient is probably more sensible. Anna just getting news of a bid for premier it is a u. K. Business. Market cap is only 406 million pounds, but it is a u. K. Company nine days out from the Eu Referendum. They distribute electronic equipment internationally and are receiving a bid today with of 1. 9price value billion swiss 1. 09 billion swiss francs. Of will pay 1. 65 per share premier farnell. We get u. K. Inflation data. Half an hour later, euro area Industrial Production numbers will be released. Later on, the Federal Reserve begins its tuesday policy meeting. Msci will. K. Time, announce the results of its annual review including whether peru remains as an emerging market. Shares, will they be . That is the big question. We will talkt, microsoft in that 26 billion deal in the takeover of linkedin. Could it hit its Credit Rating . Details to come. Anna welcome back, this is countdown. A misty looking hong kong. 6 18 here in london. Kpmg has quit as auditor of world footballs governing body, though the reasons have not been released. Fifa is trying to clean up a repetition tarnished by allegations of widespread bribery and corruption. Ins and south korea south koreas companies have declined after a spokeswoman said prosecutors are searching the companys headquarters in seaoul. Investigations continue into alleged slush funds and embezzlement. Takata is selling shares in Auto Companies to raise cash for compensation claims over it potentially lethal product. Offloaded uploaded most of the 2. 2 million shares it held in honda. It also has holdings and toyota, andan, mitsubishi motors, suzuki. Revenuethirdquarter forecast by they say regulators have produced advertising from Drug Companies and other health care groups. That follows the death of a University Student linked to an unproven Cancer Treatment he found in an online search. Manus hanslinda, think you very much. Microsofts rating may be cut by moodys following the purchase of linkedin. Emily chang has this report on the deal. Emily it is the biggest deal in microsofts history, one of the biggest in the history of technology. Microsoft is buying linkedin for 26. 2 billion in an allcash deal. This is a deal that took almost everyone by surprise. There were no indications this was in the works. When you think about it, microsoft has more than one billion Customers Using microsoft office. Linkedin has 433 million members. There is potential to significantly scale in each others growth. Microsoft is saying that this increases the total market by 58 . I spoke with both ceos today. Crosofts had to say about what. About why. It is about bringing together the core networks. The dream we have had is how can we connect these two worlds tso can worlds so these users work more seamlessly. Emily the other question is, will we see more deals as a result . Another deal not getting much attention is symantec buying blue coat software. We are also looking at other smaller Energy Companies as potential targets. Is this allout war on salesforce . Edin couldplus link be a from edible challenge. Could be a formidable challenge. It will be interesting to see the way the rest of the industry response. Im sure it will be interesting to see how the industry and customers respond. It is all about adding value to our customers. The biggest question of all is integration execution. Can microsoft make this work . Microsoft has not had a great history of integrating big deals. If you look at nokia, or skype to a certain extent. One of our gadfly columnists put it bluntly, can microsoft do this wiht without breaking its new toy . I am emily chang in san francisco. Manus a great round up by emily. Ive gone to bloomberg intelligence. They have run the numbers to see who gets what. This,med, take a look at these are some of the stats. For hundred 33 million users from linkedin. 7 million active job listings and 2 million pet subscribers. Standpoint,rategic it seems like a natural extension of microsofts business. From a financial standpoint, microsoft is sitting on a load of cash. It has 100 billion in cash. It needs to put that to work. It is quite amusing that it is called an all cash deal. It is an all debt deal. The multiples they are paying are potentially excessive. This is very much on the prospect of integrating the business successfully, which as was noted, could be a challenge. Anna this is reid hoffman. Just got 1 billion richer. Boosted by this approach by microsoft. You talked about the tax advantage. A great story on bloomberg about how this means they do not have to repatriate some of their cash. It could bring down future tax bills. This isnt really the reason they are doing this . There must be underlying business logic. Without a doubt. They need to stay competitive in a competitive industry. They have 3 billion in cash on short in the u. S. , and 97 offshore. It does make sense from their cfos standpoint to finance the deal using debt. China . Is it all about trying to get ahead in china by whatever mechanism possible. Facebook blocked in china, apple did a deal in china. Withut lincolns growth it what about linkedins growth within china . Is the wider emerging market. As those countries become more affluent, as they have more in the workforce, then linkedin and other players will do well. There is an emerging market angle. This is looking at how they can market the microsoft strength with the linkedin strength. Anna what do you like in the Tech Industry, or do you at the moment . Where are you putting money to work in this sector . The Tech Industry is compelling from a valuation standpoint. Unlike 2000 when it was trading at 4050 times earnings. There isnt that excessive valuation at the sector level. What we look for in stocks is highquality, cash generative companies. Cisco comes to mind. They are building the infrastructure for the future. Internet companies and other such like things. Manus tell me this. Everyone is racing to know where the next deal comes from. Does this light the torch . There have been a few deals in the past months. Doesnt like a torch in the tech space . Surgedter actually yesterday on the back of this announcement on the expectation someone will come in and buy it. The tech titans have cash. And googleosoft, have a lot of cash and they will be looking to deploy it. Anna thank you very much. In or out. Not the breakfast vote, bu not the brexit vote, but the msci on whether to include china. That is coming up next on cap. On countdown. Get ready for the rio Olympic Games by switching to xfinity x1. Show me gymnastics. X1 lets you search by sport, watch nbcs highlights and catch every live event on your tv with nbc sports live extra. Im getting ready. Are you . X1 will change the way you experience nbcuniversals coverage of the rio Olympic Games. Call or go online today to switch to x1. Manus 1 30 p. M. In hong kong. Good morning. 6 30 a. M. In london. Britain appears to be on course to exit the European Union with four poles of three companies putting the leaving campaign ahead of remain. The uks biggest selling sun is backing the brexit on the front page. Ssespounds one with lo and gains. The rating may become by moodys 96. 2 billionf the dollar purchase of linkedin. The Ratings Agency made the announcement just hours after microsoft said they planned to fund the takeover with debt. This is the most expensive move thee dell is a push ceos push. There is a graph about their calendars and projects. Human dynamics is part of that with other information and crm. Connect that with the professional graph and you start completing the scenarios. These thingsring together seamlessly. Says the barack obama allegedly club killer was influenced by extremist propaganda but there was no inclination that he was influenced from abroad. He is the kind of homegrown terrorist they have long feared. He was interviewed twice by the f ei but was able to buy a handgun and Assault Rifle legally because he had no criminal record. 49 were killed in the Pulse Night Club shooting. He announcedma his allegiance to isolate the last minute, but there announced his allegiance to isil but there is no direct evidence that he was part of a larger plot. Taxinda a new property moves next month. The State Government will andoduce a 4 surcharge this is on top of the current charges. Similar costs are already in place in the torilla and follow moves to tighten lending to property lenders overseas. For global news 24 hours a day powered by 2400 journalists in more than 150 news bureaus around the world. More stories on the terminal. Anna haslinda, thank you. The uks upcoming vote healing anxiety ahead of key centralbank meetings this week. Nejra has more. Good morning. Risk aversion, volatility rising, moving into safe haven assets. I want to start with the pound and the yen. This has pushed down sterling seeing this at the twomonth low , the worst performer against the dollar while the yen, the safe haven, is the best performer. The yen approaching it strongest level since october 2014. 1. 41 sterling. The yield fall into another 0. 17 . Ecord, with volatility rising not just in fx markets but equities as well. Vicks and nikkei volatility has hit its highest level since march which is year today. Relatively measured by j. P. Morgan also spiking, as you can see, toward the end of the chart. Two weeks volatility at its highest since 2009, one month at the highest since 2008. A lot of concern and jitters in the market just ahead of the Eu Referendum but also, as you mentioned, ahead of various centralbank decisions not the least from the fed. No change expected from the fed. Moving on to asian stocks, fallen for a fourth day. Day loss is about 4. 2 , the steepest slide since february pushing the msci to a threeweek low. Crude has extended its decline from the lowest close in more than a week ahead of the u. S. Stock file data. Oilrich nigeria says they have talks with the militants and we have a new member of the Bloomberg Team who joins us now. Welcome to bloomberg. Chart of the hour. Welcome and take it away. Its a great way to kick off the week here in london. Isically, the opec report digesting as we wait for the eia numbers on wednesday. The key headline is the impact nigeria is having. The opec report is citing nigeria is the chief culprit in the 100,000 per barrel drop bringing it down to 32. 6 Million Barrels per day in may. If you put this up across the oil price over a longer time, take a look at this fascinating chart. Nigerian Oil Production down 29 since january 31. As the lowest production figure since 1989, manus. Take a closer look what happens after january 31. The scale, how steep the decline is and how it overlaps with the change and Inflection Point with the oil price as well. It gives you some clarity to the impact and this is causing nigeria a lot of money as it foreigncurrency reserves. Anna there are conversations withg place happening Oil Infrastructure and thats key for where we go next. Yousef we had the Nigerian Government be more conciliatory beentheyve saying saying. We dont have much of a response really, anna, from the group. We have an unverified statement on a website saying they would like to see a conducive atmosphere and repeated the warning store Oil Companies not to repair pipelines but to be taken with a grain of salt. We will see what they can salvage and try to recover some of the lost Oil Production. Gamal joining us with oil prices. Much more coming up from him in the months ahead. Index tracking Global Investors, whether they will be compelled to stop buying shares. Lets take a look at what theyre letting themselves in for. Sam is the Bloomberg Team leader for asian Market Structure joining us now from hong kong. Great to have your insights this morning. Whats the feeling about the msci decision looming and which way its going to go . To be honest, you hear all sorts of opinions. A few weeks back there was a feeling that they definitely would. You spoke to some people in there was a sense they would lean against. Nobody knows for sure. You see that the shares are down and they are not having a good week. It could suggest the market thinks the chinese shares will not be added to the index. Manus this is the great issue, isnt it . Between the active Fund Managers tusslesave a few between the two. How significant would the inclusion be . Its not everyone who wants it, is it . Is the Worlds Largest index compiler. Of course, not all of the emergingmarket indexes are involved, but we saw and hsbc report that upwards of 30 billion could flow into chineselisted shares. When you think about the chinese complex down, those it be pension funds, 401 k , mutual funds would have to go into the market because they would need to match the index if indeed msci does include chinese shares today. Mamudi, team leader on asian Market Structure from hong kong on what we can expect from the msci. This is quite significant, isnt it, whether the mainland shares will be included in this msci index . It could influence the markets quite a lot. Would push passive investors to be included in china. Global investors are used to investing in emerging markets and the volatility that comes with it. A substantial market and would have a huge countrye on that all index. There is some investment in thoughts to not want to be involved in the volatile market. Manus the bloomberg tracker still says 6. 9 growth and we have seen commodities come back towards a bull market. The world seems to rest easier on china for the moment. Do you . China has many troubling paradigm shifts in terms of moving it from its exportled model to more of a consumerled model. That will come with short, medium, and a longterm consequences and the huge amount of debt thats been accumulated. China is a running about 240 debt to gdp ratio and a lot of it is corporate, one of the highest in the world. That was pointed out earlier in the week from the imf. Wehave a nice chart anna have a nice chart looking at how this has been increasing an appeal since the outflow took place in may. A lot of people are crediting the msci decision with this. What is your overall thought about investing in china . You say they want to make an active choice and they dont necessarily want to be caught up in investing through the msci index. What would you be doing with china . Visit difference between being a forced investor in the market, if you look at the chinese equity market right now, it is presenting value so part of the inflow could be on the back of Value Investors coming into the market. We will not pick and choose stocks but just invest in a market that is distressed. Also some people buy into the longterm story of emerging markets. For us, china and asia as a whole is an area we and actively investing in. We see value there, more so than the developed markets which have seen strong performances in recent years. Theres a bit of a shakedown in the space. We have the longest losing streak in as many months. Msci produced for the fourth day. Reduced for the fourth day. This is probably more of a briggs at risk. Brexit risk. What are the ramifications for the region . What is the worst potential victim, as it were, of china at the moment . Mouhammed its neighbors, obviously, are highly affected. They have a lot of trade with china. If there are challenges in the economy they will suffer the most. The european economy is highly dependent on china as well. If we see a slowdown in china, it will effect the global economy. China today is what the u. S. Used to be 2050 years ago in terms of global impact. Its a concern for all. The transition story. This is our monthly gdp tracker and it tries to work out what it means for a gdp number. This has been since the middle 5 2014 between the mid 7 on this monthly gdp tracker. Is this as low as china gets in the midst of this reorientation to a consumerdriven economy . Will it go down in history is quite an achievement . Mouhammed i will be quite surprised that they can sustain this level of growth. In 2007, china was growing at 14 and now its close to half that amount. A growing, mature economy cannot sustain 7 growth. The low Single Digits have ramifications. Its fascinating when we have here, the Global Trading relationships for china as they slow down. It is the United States and south korea where the great big trading relationship goes. Now i begin to understand the lew inal link from jack terms of what happens with the yuan, dont we . Mouhammed as you say, these links are very strong at present given the nature of the chinese trading that its a economy. As it shifts to a consumerlet economy, those relationships become less relevant. Still relevant but not as relevant as theyve been in the last few decades. That is the delicate shift that the chinese authorities have to work with. Unprecedented, in some ways, and challenging against the global backdrop thats not very positive right now. Choukeirhammed staying with us. Which of the four main Party Leaders come out best during last nights tv Election Debate . Brexit is not the only political question hanging over europe right now. We are days away and we returned to the spanish electoral story. 6 45 a. M. In london and we are taking a short break. 148 a. M. In the city that never sleeps. 1 48 a. M. Virtually unchanged and u. S. Equity traders sit hernandez cds equity traders sit down and they see these 4 holes. Lets go to haslinda amin. Quit auditing has the global foot all body but the reasons why have not then released. Fisa still trying to clean up a reputation with allegations of widespread corruption and they welcome the chance to work with a new arbiter. Alibaba founder said the counterfeit goods are now better than the Genuine Article complicating the attempts to root out fakes on the largest services but they insist alibaba is the best in the world at fighting the sale of counterfeits. Shares in south korea lodging, theyre searching the companys headquarters in seoul. Asy filed a 4. 5 billion ipo they are alleging slush funds and embezzlement. Shares toer selling raise cash for compensation claims over its potentially lethal products. To caught the has already uploaded offloaded most of it shares in its largest customer, honda. Subaru, mitsubishi, and suzuki. That is your Bloomberg Business flash. Campaignins election in gear last night when the major for Party Leaders took to the stage for a twohour debate. Unemployment was one of the subjects that acting Prime Minister Mariano Rajoy had to addressed. Forn 2014, the centers people at harvard he risk was less than the average of the eu and it increased to 7. 7 and spain dropped to 6. 4, there for the policies of the government even though we still have to continue them have been useful. I want to say the same about lowpaying jobs. There are a lot of people are temporary jobs, but 75 of spanish employees have a permanent contract. Spaniards will head to the polls on june 26 for the second time in six months after the parties failed to create a coalition that would produce a coalition in december. Then joins us live now from madrid. Good to have you with an update on the program this morning. What was striking about the debate yesterday . There were two things going on. On the one hand you have rajoy, a man who looks increasingly out of time. He struggles with the televi sion age. On the other side you have these three new leaders all jostling for position ahead of the election. And really ahead of the negotiations that will be taking place after the election trying to move themselves into position to be the one who can push out rajoy. He suffered the same old attacks tax about his integrity, about links to a whole stream of corruption. He did not have an answer to that just getting increasingly angrier at the personal attacks. Meanwhile, you had pablo trying to back the socialist into a corner to kind of force them to acknowledge the possibility of a progressive majority after the election. The difference there is three months ago, iglesias was offering support for a Coalition Government and now the polls suggest that podemos could be ahead of the socialists with the indication that maybe iglesias will expect the socialists to support his candidacy for Prime Minister after the election. Sills from the dread. From madrid. Manus lets talk about the fed. They will likely hold off raising the Interest Rate at the meetings kicking off today. They should expect the june statement to reflect eager yet cautious commitment and the slow growth and employment raising alarm bells. Is still with us in the london studio. This is a fine line. If the nonfarm payroll number from last week was a oneoff for the beginning of a bigger slowdown. Mouhammed i think you hit the nail on the head, 38 house and and8,000 sent shockwaves potential for rate hike in the june meeting has pretty much gone off the table. Reserve, as it always has stated, will be datadependent and wait for further confirmation that the economy is actually in a good place before it moves. They will always err on the side of caution in the current environment. , weve beenmed talking about when the fed will followup up on the rate hike. They took rates so low. One thing i thought was interesting and one of my colleagues at Bloomberg View drew my atteion to this that the probability of a cut has started to feature were talking about a 2 chance out into the future. Afterly, the conversation the jobs report has changed a little bit around the fed. Mouhammed without a doubt. The monetary path has been more of a spread. You see inflation and growth, so they start to hike rates. They have to take their time because the backdrop is quite willenging and there always be fluctuations between rate rises in rate cuts given the aging demographics and the challenges in the global economy. Manus theres a great debate that we are seeing a flattening of yield curves and there is the potential. I know it is in a different place than what we look at bond yield curves, but what is the risk of recession in the u. S. . Mouhammed the risk of recession is higher than markets are currently pricing in. The reason is theres an environment or complacency around the u. S. Growing, that is robust. Attends to prevail on the back of some stronger data. The risk of recession, the u. S. Has not had a recession for tells usrs and history they happen more often than not. Looking at it from that perspective alone, you can see some challenges. , thank you for spending time with us this morning. The brexit getting a boost this morning from one of the nations largest newspapers. Down 2 yesterday on european markets. What will today hold . . C sv manus a boost for boris. Minister tellsme bloomberg exclusively that brexit wont happen. All my knowledge of the u. K. Is that, at the end, people will say it is important to stay part of that strong, common market. Stocks claw back there earlier losses as the msci prepares to decide on whether to include chinese shares to its global benchmark. And microsofts push to the cloud could create Stormy Weather for the tech firms. Moodys says it could cut their rating following the purchase of linkedin. Welcome to countdown, im manus cranny. Anna 7 00 in the morning here in london. Lets get straight to the futures. Calm ineen relative equity markets up until yesterday, when we saw a lot coming through on European Equity markets. It seems as if we will be weaker again, but not by such large margins, at least at the start of the trading day. 1 as weround 4 10 of get ready for the equity session. Still an hour off, but the currency markets and other markets of the trading overnight. Manus yeah. Lets check in a little bit of gold, sterlingyen. Top of the boards cable, down 7 10 of 1 . Could it be the boosting of sterling out of the erm . Sterlingyen on the other hand has volatility at 2008 levels, the strong as level against the pound since 2014. Gold, we are just off those four week has. There is money going into gold. Nymex crude down 9 10 of 1 . We are significantly sub that big psychological break point, which was 50, but it is all about the bond market, and you have got the board treasury volatility which is rocking it out. Anna its interesting to look at the bond markets in the context of nervousness around brexit. Look at whats happening of the kohlcoal space. Fairly unchanged on the german 10 year, but looking at my function, i can see there is a negative move in the yield. 0. 02 yield on the 10 year over in germany. I am wondering how long it takes to that turn more negative. Will we be negative at 10 year as well . Lets get the first word with has haslinda amin. Linda britain appears to be on course to exit the european with four pulls from three companies putting the leave campaign ahead of remain. The uks biggest selling newspaper has backed a brexit on its front page. Guesser they saw a day of intense volatility as the pounds swung between losses and gains. Pristine Credit Rating may be cut by moodys in the wake of its 26. 2 billion purchase of linkedin. They made the announcement hours after the Technology Giant said it plans to sign the takeover with debt. It is the most expensive risk so far in Satya Nadellas post to remake the company. Barack obama says the orlando nightclub anna a slight problem with has haslinda amin. Lets get an update on whats happening in life market. David ingles is standing by; we are seeing concerns about brexit taking their toll on equity markets. David right. I think the headline on bloomberg. Com is battered by brexit. I think it sums up what has been happening. I will get to the equity markets in a moment but we are still looking at losses tuesday. Momentum seems to have leveled off not a lot, but we are getting there. Let me start things off with the bond markets. We were talking about fields in casesy, so in japan it that we are below zero from a threemonth low all the way up until the 15 year. What happened on tuesday, it so weo a record low point are still a little bit above zero with some way to go, but who knows. Investors are really searching for yields, pulling everything nowr we are just above 2 for the australia 10 year bond deal. Of thisa symptom undercurrent of risk aversion. Youy mixed picture witha bit of a bright spot the various measures of volatility that we are seeing right now, continuing and that tells you that we are seeing the same sort of magnitude of loss that we see on monday. Getre still seeing people downside protection, so if you look at the price for some of these markets, talking about the record about of short, that shows you that investors cant be beyond the shortterm and the reason why we are seeing losses for the fourth straight day. Manus thank you. David ingles, you are right. Sometimes we are very shortterm ist. The Prime Minister of the netherlands has warned the u. K. Against leaving, speaking exclusively to bloomberg. He says it would harm britains status as a Global Financial center and proved to be economically damaging. Think there is such a strong case for the u. K. To remain as a member of of the European Union and to remain part of the single market. Geopolitically, politically, economically. In many aspects, we really want you to stay. Anna mark rutte. The Brexit Campaign Boris Johnson said the proeuropean care business judging the british people. The remain campaign say that they are only saying that we can to do it on our own. I think, and i hope you agree, that they are woefully underestimating this country and woefully underestimating the duty of the british people. Anna lets bring our next guest into the conversation, the head of Global Equities at Henderson Global investors. Have your insights into this referendum debate i have a s notof the sun this i 1992. Do newspapers still have quite a hold over the voting public . What kind of impact would this have, or the latest polls have . Students of history will remember when the sun was very detrimental, helping john major and that famous too close to call election. To some degree we will remember that and be aware of the influence that it used to have on the british electorate. As an investor, the thing that has concerned me is how large the amount of undecideds there are. Is it enough to make a big difference over eight remain or leave vote . Its clearly very important it shows the odds of a brexit, as measured by markets now rising considerably. Anna this has just got off in the last hour we talked about this an hour ago when we were at 39 to over 40 in the last hour. Markets have been pretty efficient, generally, in valuing the likely event that will come ave, upremain or a le until the last two weeks. There is a degree of complacency because the odds state is so low. There will be an immediate markdown if they plan to leave but i think investors are still not grappling and im not sure we can what it means longerterm for the u. K. And european equities. Grappling with the longerterm is typical. When we were chatting beforehand, we said the only Reference Point is the decline of sterling back in the 1990s. One thing that strikes my mind is that your Reference Point . Volatility in the bond market, rising in british stocks. A relatively, european stocks in u. S. Volatility is less than it is here in europe. Its a paradigm. How do you protect your investors money at the moment . I think it is very difficult as a longerterm investor to make a big decision one way or the other today as markets stand. If you had asked me a week ago, i would have said it was a 5050 chance. Stocks, theat ramifications of the u. K. Leave or stay i think stocks are now pricing and a 40 chance of stay and a 60 chance of leave. Knows are soont large its hard to know where the other without using derivatives, which stock investors cant do. Companies you think will be resilient and grow their earnings, regardless of the economic environment, without shying away from the stocks that are very dependent on whether there is a remain or leave vote, and leaving those stocks to the date after the referendum at the end of next week. Manus look, we are trying to grapple with benchmarks from the political power of persuasion of the murdoch camp, talking about getting richer, Getting Better off, regaining sovereignty. When you talk to other funds managers, the only Reference Point we all have an market is sterling, and how that could collapse on the day after. Thats the presumed wisdom of the market. Talk me through the history. Talk me through what you think the benchmarks are for us to refer to. Heres the thing, we have no benchmarks other than what happened on wednesday. It fell 15 for rallying slightly stop lets recall where we were the day before David Cameron announced the speaker referendum. We are at 140, 141 against the dollar. Handful of weeks ago we were in the high one 40s, so we have already had a pretty significant move. Course must be how much of that has a pretty happened . How much of that is already in the price . What i know for certain is that there are a lot of companies i view from day to day who have told us clearly that they have been postponing investment in the u. K. Pending resolution of this vote. My guess is that as this price is negotiated, if we decide to leave, there will be certain uncertainty that will lead to further postponement of investment decisions. They will be corporates that will not actively go against the currency market to invest in the u. K. That has got to put downward pressure on sterling. There could be further foes yet to come. Anna stay with us. Matthew beasley. We will move on to technology news, because we have had some over the last 24 hours. Top Credit Rating may be cut in the wake of its 26. 2 billion purchase of linkedin. TheRatings Agency made announcement hours after the giant said it plans to fund the takeover with debt. The deal is the most expensive so far in Satya Nadellas push to remake the company. There is a microsoft graph which is about people, their relationships with other people, their calendars and projects. Even dynamics are in part of that. You connect that with a professional graph, and then you start completing the scenarios. You dont need to change the social network, but you do need to bring these things together seamlessly. Anna satya nadella. Matthew beasley is still with us. What do you make of this kind of deal . Do you think this looks expensive . Due Technology Stocks with expensive . We were comparing it to microsofts own history if you look at microsofts history, it has been checkered. Ave. E, quantu they wrote it all off within a year or so. However the logic is there to bring these companies together. You can draw the dots. We see what microsoft is trying to do with its corporate see how you can linkedin works. Whats fascinating is that microsoft is not using their large cash pile to make this, but instead taking out a loan. It is pretty cheap to borrow money and its so punitive to bring cash back into the u. S. , the taxes they have to pay to make this purchase which is part of the reason were looking at tax reform. Technology is a sector where if you think about Global Growth there is still structural Growth Opportunities and that is what we have been exploiting. Manus wherewith the next Global Investor trade be . Twitter spikes on the back of it, but for you, what do you look for in Tech Opportunities . In the u. S. Are in europe . Its everywhere, its global. To some degree with a structural growth, it should be while there clearly will be influences of corporate cycles on enterprise and spending, if there are structural markets to which it can be exposed, they should prevail regardless of the economic environment. We have a unique challenge with paypal and sap. Companies in the throes of bottomup structural growth and will continue regardless of the economic cycle. While that means shares are expensive, there are other options that concentrate around growth and visibility. Anna great to see you, thanks for joining us. Matthew beasley. Ceo of, we talked to the Crest Nicholson about his companys halfyear results and how he thinks brexit might affect the Housing Market. Manus its london, its gray, it stamp, and dollar sterling is reacting. Brexit blues across london, thats for sure. Welcome back to countdown. Lets leave the gloomy skies to one side for a moment. In the last 30 minutes, firsthalf revenue of Crest Nicholson is posted, and says it will deliver one billion pounds of revenue for the year. Stephen sloan is the ceo, joining us now. Great to see you again. We wont talk about the elephant in the room straight away. We will start out with your numbers. Asidepossible to put that and tell us how the business is performing. As you can see from the results, very strong operation for the first six months. We are trading very well. Providing the man in the street has a job and can get access to mortgage, the Housing Market should be quite resilient. Great operationally. Employed, currently probably several thousand to come. Those produce Great Results for us. Anna lets move on to the elephant. We have been following the odds of a brexit, the probability the average probability based on what people are putting their money on. How are you preparing your business for something that, according to this probability measure, looks increasingly likely . As you have seen from the numbers, while we have been doing is growing earnings with a robust balance sheet. Effectively when conditions get tougher we have to work a bit harder, and that is what we will do, what we have proven to do. The great thing about the Housing Market is its all about can i get access to the market. At the moment, the forecast is showing a slight dip in growth, and that should be given the Housing Market. Manus stephen, good morning. Its manus. The multipliers are critically important when it comes to whether i will move for step onto the property ladder. The biggest risk that liquidity could be all roads lead back to brexit. Its a worry, isnt it, in terms of what would happen to banking and mortgage liquidity if we voted to leave . The quiddity is very important in the Housing Market. They keep saying the Housing Market is about jobs and job creation, but also access to capital. At the moment, homebuyers have strong access to capital. We have low Interest Rates at the moment, helping to underpin housing growth. The great thing about the market at the moment is that the largest house bills are managing to grow volumes and earnings, and we have quite strong Balance Sheets with slow levels of debt. Could one of those things that the market might throw at you if the pound does cheapen, if we get a vote for that as a base buyersould foreign cash suddenly come into the market and buy more properties than they previously would buy . Everyone in london gets carried away with the Central Market and the role the foreign buyers. There is no doubt that the higher price has been underpinned by overseas buyers. That has perhaps disappeared since this that situation. Outside of london there are hardly any overseas wires. We may be doing 5 , 10 of and 5 in Central London of the higher price levels. You have to work very hard. Stephen, its hard to win sales, its hard to get people to go across the threshold, i have been through a couple of send downs in the property market. Back in 1982, tony blair said it was what some wanted and today e saying we could be richer, safer, and free at last. O forge our own destiny do you agree . Does this kind of messaging help . Ismy own personal situation that a reformed eu is in his best position. But thats not new. We have talked about two or three recession since the 1990s. The labor market has always been supported, first by the irish and the polish plumber. They have always been part of the labor market. The fact that this is often overlooked we have a strong relationship with europeans, bathrooms, kitchens, all across europe. Theres an easy trading agreement going on. Anna what kind of 40 for your industry if you were to be outside . Some of the strengths of the u. K. Domestic market when i was sitting here, u. K. Manufactures opened up and said we are producing more bricks now. But there are other areas that clearly take time to build up an internal domestic market. Think because we have a strong bank and balance sheet, we will pause for a period and see what the market is doing. Anna stephen stone, ceo of Crest Nicholson. Manus anna, i will leave us with your favorite. We are up at 40 , sterling under pressure, money going into the yen. Moving. S are you will do it all again tomorrow. Guy will come to on the move. We are counting your down to the european open. Im alongside matt miller in berlin. Here is what we are watching. Four polls what the u. K. On course to leave the eu. Should we believe the numbers . Were going to ask one of the countrys leading experts. Britains biggest selling newspaper, the sun, backs brexit. Is mr. Murdock on the right side of history . We will ask theme