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tv   Bloomberg Markets Americas  Bloomberg  October 12, 2018 10:00am-11:01am EDT

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♪ vonnie: u.s. stocks bouncing back, putting two days of heavy selling in the rearview mirror. but we will see what happens. consumer confidence data. abigail: we are looking at a slight miss with the sentiment index for the month of october. the luminary reading at 99 versus the survey at 100.5 versus the final reading for september of 100.1, but essentially in-line. a small miss, but close to the mark. as for the major averages, not much influence from the sentiment index. on the bull run right now, a little bit of a relief rally, a rebound after the selling pressure. and the s&p 500 and nasdaq on pace for their best day since april. nasdaq composite its best day
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since march, so in extreme selling pressure on rising rates, on uncertainty on the trade war, plus the idea that too far too fast in the big rally, but today we have investors clearly buying the dip. lots of volatility. we have the worst week since march. so take a look at volatility. we have seen it before. volatility can breed volatility. buying pressure going both ways. earlier this year, we had a strong january. these are the updates for the s&p 500 in january. then selling pressure in february. that created more of the same, all the way into march. best day for the s&p 500. today, after those horrible days, this is the first up day for the s&p 500 in seven days. the longest losing streak since november of 2016. the big rebound rally matching or close to the day, the last big day we had here for the s&p 500 back in april.
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it will be interesting to see if the bulls hang on. we do again have this strength. and the financials, some earnings reports out. the financial sector doing rather well. ownrgan up 1.2%, their business it was a strong. wells fargo up 1.5%, they missed, but consumer loans are also good. citigroup saw a nice pop for their bonded trading, up 9% better than the estimate. and another piece of the rebound rally today, buying the dip. thing trade. faang chain. netflix and alphabet, take a look, what a difference a day makes. yesterday, investors not willing to touch these big internet names, but today is a different story. we will see if it lasts. vonnie: ok, more in the markets. a tumultuous week for investors. joining us is jeffrey kleintop from charles schwab, $3.6
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trillion in assets under management. jeff joining us from boston. it looks like price action was exhausted, but now massive support on a friday. what are your conclusions? jeffrey: the present is he a bounce after a sharp selloff. i do not forget was categorized by new developments. we have been dealing with the rising interest-rate for much of the year. this may have been due to the lack of buying from the corporate sharing purchases. that has been the biggest buyer of stocks this year with individual investors being net sellers, etc. that was the buying support the markets. and as we enter the earnings report season, they have lightened up. not surprising to see the rebound. what i am watching for more prolonged decline is the single from the unemployment rate and deflation rate. when they converge and become the same number, that is a sign of trouble ahead. or it has been for each of the
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last three big bull markets. we could be there in 2019. vonnie: so you are saying that the selloff, more than just a small selloff, it was pretty much a route, was nothing to blog about and you are not concerned -- blink about and you are not concerned? jeffrey: not concerned about this one, no, but we could see indicators of the next six months, maybe the gap between unemployment rate and inflation rate, or other classic indicators, we could see them point to an overheating economy. so i think investors should look at their portfolios, make sure that they are rebalanced to their targets in preparation for what could be a bear market beginning sometime in 2019. but maybe not this year. guy: just tactically, short-term, should investors read much into today's action? if i was a trader, if i had a pnl that had done well the last three days, i would be closing
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down to negative positions. are we getting flat into the weekend? isn't that what we are seeing here? jeffrey: perhaps taking off some of those bets. seeing a snap back in japan, japan is a market that has not been allergic to rising adjust rates. the japanese stock market moving up in lockstep with u.s. interest rates. but not the last week. so not surprising to see the snapback there. other markets could be reacting that same way. so normalization taking place going into the weekend. guy: let me ask about the currency overlay, because i am in london and at the currency overlay makes a really big difference with investments and how they perform in the u.s. over the last five days, the dollar -- this has been the caution of the day -- the dollar has not performed. theact, it has not been safe haven you would've expected it to be. why hasn't it done better over
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the last five days, and is it still the safe haven it was? jeffrey: i think that there are two reasons. one, softer inflation readings in the u.s. this week, both some of the core ppi numbers and cpi number lighter than expected. i think the market was braced for a hotter number and the cooler one reduced the prospects for the fed being more aggressive next year, supporting the dollar. going into this week, there was a perception around the chairman powell and his talk about being more aggressive nowhere near the neutral rates, so the thought that the fed may be more aggressive next year was dashed this year. i think that weakened the dollar. i think it is said to stabilize. we have had some wild moves this year, but one thing that is moving in sync with is president trump's approval rating. that leads is by three months. if that continues, has been true for a long time now, that means
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a stable dollar of the next three months. vonnie: i know that you are looking for a potential bear market to start in 2019, but over the immediate term what is top of your list of concerns from things like the u.s. -- to potentially china being labeled a currency manipulator, to the midterms? jeffrey: i am watching the midterm elections, certainly those prospects, and brexit and in the deliberations over the italian budget deficit, those things jump out to me as having the most potential impact on the markets that has not been priced in. the outlook for the midterm elections is probably gridlocked, probably not moving the market dramatically, unless we see a dramatic blue wave. we all know that two years is a lifetime in politics. vonnie: bank earnings, why do we thosee the xls, associated with the major banks up more? maybe a flatter yield
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curve, although we do see more consumer loan behavior, the spread zones are narrowing. so committees are not making as much money as they used to. and there are other worries about the environment going forward, the credit conditions being pretty favorable but likely to deteriorate perhaps over the coming year. spreads widening out, that could have a negative impact. there is a balance here. we downgraded it after being overweight to a market we position. guy: what has been interesting to my mind in the selloff we have seen over the last few days, is the symmetry. the u.s. has a sold off, europe has sold off, asia has sold off, except we have a situation where the u.s. markets have been going really strong over the last few months. i have this on a chart. but the u.s., or the european markets and asian market have had a tough time. why didn't money go out of the
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u.s., because it was looking like a u.s. story, and go into europe and asia? those markets have been being up for weeks, not days. jeffrey: that is true. but one of the reasons is the dollar strength and rising interest rates, of course that ed on the national markets because of the currency. but in the u.s., rising interest rates was not a real issue until it was looking like there was momentum there, we were going to break above 3.25 on the 10 year. these concerns started to affect the u.s. market. while the dollar has been softer this week, it has not pulled back dramatically enough to relieve the concerns in those markets. we still see pressure on the currencies of emerging-market countries, turkey come argentina and others. that lingers and will probably be with us for quite some time. guy: does this earnings season going to be of a to deliver enough earnings topline growth to be able to compensate for the
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higher yields we see in the bond market? jeffrey: i think, i think it will deliver. the question is whether the guidance will be strong enough as we look out to 2019, to support investors' expectations. i am not so sure. i think we have earnings momentum beginning to slow. not that they are fallen, but revisions are more to the and ite in recent weeks may continue through the earnings season as companies outlook, mayisk be take down the 2019 numbers. 'snnie: what is the schwab call on emerging markets broadly? are there any markets you are attracted to? jeffrey: one of the things that has been interesting is the selloff in china and korea. with a those markets are better positioned than the other basket cases like argentina and turkey and others. they have surpluses and a not a
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lot of external debt, those are vulnerabilities we see in other markets, so this could be areas to think about. they have been beaten back just as much, beginning -- but they do not share the same long-term vulnerabilities. guy: to wrap up, do you think we are done? was this just a storm in a teacup? theit long overdue, recalibration of the u.s. markets? jeffrey: what we have seen over the last couple days may be over, the volatility is not. i think we'll see more of these events in the fourth quarter and the next year. it is a new environment for volatility. and i expect that continue as global economic growth decelerate. blaster, it was accelerating -- last year, the market was accelerating, but this year not so much and that will continue as growth continues to decelerate in profits and economic momentum. guy: thank you for joining us. jeffrey kleintop from charles
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schwab. and let's check in on first word news. in turkey, andrew brunson has been freed after two years of detention in a case that strained ties between the two nations. he was convicted on charges relating to the coup attempt, but was freed on time served. the u.s. imposed sanctions on turkey over that matter and it rocked of the turkish lira. we will be live in is double, shortly. and secure steve mnuchin has been told that china is not manipulating the want. president trump has pressured steve mnuchin to declare them a currency manipulator, but the staff has not found grounds to do so. if steve mnuchin agrees, that whatever in escalation of the trade war. this as the imf says that the won is fairly valued. and rising to a record $34 billion last month, despite the trump. administration tariffs
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exports increased 13% in washington and beijing have put the tariffs on billions of dollars of goods, china may have rushed out existing orders for all the u.s. tariffs to the effect. and the disappearance of the saudi journalist is prompting some companies to drop out of the so-called davos. inthe desert the three-day future investment initiative that begins in two weeks. claim hesh officials was murdered and side the saudi consulate in his stumble. the ceos of uber and viacom have canceled their plans to attend. bloomberg media is sponsoring the event and is reviewing the situation. global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm kailey leinz. this is bloomberg. let's take you back to that story relating to what has been going on in turkey this afternoon. we are going to get more on that next. the lira has not bounced.
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some people expected to to go up as he was released. but that has not happened. i have to say, i am scratching my head on this, but it does go toward repositioning over the last few days. maybe this is the right call. or maybe it was the conviction. we will talk about that next. this is bloomberg. ♪
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guy: live from london i'm guy , johnson. vonnie: from new york, i'm vonnie quinn. this is "bloomberg markets." guy: turkey has convicted andrew brunson, but has released him on time served. the lira has not really responded to this. our bloomberg correspondent joins us from istanbul. is this a compromise that the
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turks were looking for to find a way out of this difficult situation? the pastor has been convicted of the offenses for which he was charged, including participating in some way in the 2016 coup attempt, but he is able to go because of the time already served. i -- walk me through the compromise they have come up with. reporter: as you said, it is a compromise, a welcome development for both countries. turkey got what it wanted, and now the u.s. has what it wanted. of course, washington has said if he was not released they would impose further sanctions on turkey. in august, the president was furious he had still not been released. and he had doubled the steel tariffs on turkey and put sanctions on two turkish officials and warned more would come. so this would be about of element for turkey, already struggling with an economy overheating. so it is welcome for both
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countries. vonnie: president trump tweeting, "working very hard on pastor andrew brunson." this after the announcement. the lira may not be moving, but the turkish stock exchange is seeing action with the main index higher by 1.25%. and bonds doing much better, perhaps this is a sign that there is more hope now for an economy that may not see another round of sanctions. so what happens next, because turkey has also gotten involved in the saudi arabia story of the disappearing journalist, who may or may not be alive? fearedr: yes, he is dead, but there are questions on whether he is alive or not. what happens next is, the u.s. and turkey, there are reports they will be working together to come to a conclusion in this case. the u.s. is unhappy about the developments, as is turkey, and is some countries in europe as
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well. so they will be working together to see what can happen, and if they can come to a conclusion about whether he is still alive. vonnie brings up one of the issues surrounding turkey at the moment, the other is the pastor. there are other issues as well. i come back to this story about the fact we have not seen a bounce in the turkish lira. people in london are surprised by this. is the market -- what else is still out there? reporter: it has been priced in. lira haspast week, the been strengthening, up 4% this week because there was speculation that the pastor was going to be released. so it is priced in and that is why we have not see much movement today. vonnie: and we did see some reaction in turkey's bonds, for example, and the outlook for
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inflation and with the central bank would have to do, would there be another round of sections, and president erdogan getting involved in central banking has been a very concerning to the markets. now?es president relax well the economy get itself -- will the economy get itself back into some kind of order? reporter: if you days ago, the turkish president came out and said that no matter what the decision is, it is a decision to be made by the turkish court and everybody has to respect it. it is obvious he will be happy with this decision and respected. and of course, there are problems with the turkish economy. it is overheating and inflation is at a 15 year high, five times the target rate of the central bank. next week come on a to be 25, the central bank has -- on october 25, central bank has another decision to make. the president has been pressuring the bank not to raise rates. so this should be ok for them as
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well. it could be a welcome situation for the bank, with this u.s. pastor be released it will ease pressure on the turkish lira. vonnie: turkey wants the release well. bank executive as and it remains to be seen what ties the u.s. but does on turkey for this. thank you to our correspondent in turkey. still ahead, we are watching bank stocks after earnings out today. this is bloomberg. ♪
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vonnie: we are going to abigail
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doolittle. abigail: joining me is james of bloomberg intelligence to talk about etf's. what the weekly had to talk about etf's. a relief rally right now, but on the week we are looking at the worst week since march with concerns on trade tensions, may be too far too fast. how have you seen this through the lens of etf's? >> we tend to look at dollar volume. on average, etf's have traded over $80 billion a day, so that a significant, but we expect in times of -- but we expect that in terms of volatility. again, when you look at this historically in context, it is not that big of a deal. abigail: the terminal shows this. >> generally, we like to look at spy, liquid traders tend to use it. it is the fear gauge. we know that people are scared of things and they are trying to get out of the market. in reality, it is not a big deal. it is more like a category four
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hurricane versus category 5. you look at it compared to the flash crash in 2015, it is not even on the radar. beforeefore-- reporter: talking about bond, index one etf'son is what role does have in this sort of selloff, or 20 years ago you would have to sell into visual shares, but now you can unload a bunch. what was the role of that liquidity in the recent volatility? >> what happens is a good diversified by debt exposure and the correlations go up, so you can trade these and get in and out. but we only saw a billion outflows during this time, so most of the trading happened on exchange. this is normal. see isthe trading we actually people trading shares back and forth and not so much the redemption or access in the underlying market. >> more volatility to come? >> i guess, time will tell.
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etf's, anytime there is volatility, flows tend to increase afterwards and during. >> thank you so much for joining us to talk about etf's for etf friday. vonnie: thank you. we will go to guy, who has a market check. guy: let's talk about what is going on with the chinese currency. we are waiting for news on whether or not the treasury is going to label china a currency manipulator. reporting said just that the treasury is suggesting that is cannot be backed up with facts, but the relationship between china and the u.s. is interesting right now. we will talk about that next with michael mckee. this is bloomberg. ♪
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guy: one hour to go until european equity markets close. closing levels today will be super important, and europe is heading for what looks like a very flat close today.
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a data that the markets do not actually finish in positive territory, and that would be a negative signal coming out of the european session. dax at the moment is absolutely flatlining, and i think the next hour will be pivotal in terms of the way that we trade into next week and think about where the markets are. the euro-dollar is negative, the dollar is gaining traction, despite selling off of the last few sessions. a turnaround today. now the question of the day. and the turkish lira is not getting a bounce, despite the fact that a stranger branson has been released by the court in turkey. i have to say, i have spoken with traders who were expecting more action around this, the as we heard earlier on, the moves we have seen over the last few days have been enough when it comes to one of those better to travel than rise stories in the market. the other thing i want to highlight in the numbers is the short squeeze carrying on out of copenhagen.
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it looks like maybe that this is continuing throughout the day. the story of the last few days, it looks like the shorts have really been caught the wrong way around on this stock move, pandora from copenhagen around 8% today, 30 spot seven. that squeeze continues. check out the charts on your bloomberg. vonnie: we are looking at some domestic turkish assets rally, perhaps a u.s. response is needed before the lira makes a move. the u.s. treasury department staff had told secretary steven mnuchin that china is not a currency minute later. the president pressuring him to declare china a currency manipulator. michael mckee is joining us. there are three conditions in order for a country to be labeled a manipulator, does china not me all three of them? michael: no, at least according to the treasury staff, and has not since the 1990's. this is a congressional
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requirement my that twice a year they report on about 16 of them that they are watching, that have been a belated currencies -- that have manipulated currencies. china has a surplus with the united states, so check that one off. that would be 3% of gdp that is th, that they meet. but the third they do not meet. 10 intervenes in its currency market because it is -- to the dollar, but they have not been one-sided. of the last couple years, they have been try to push the yuan up, said they do not meet that criteria right now. if the markets are pushing a currency in a direction, that is considered ok. guy: michael, if it were determined or decided that china was going to be labeled a currency manipulator, what process does that kick into
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gear? i am not saying it will happen, but i am curious to know what the other side of the trade looks like? michael: if you do not let us in, we will tell you again, like the old monty python routine. so if they were caught a manipulator, we would have to do with the chinese. but this is part of trade negotiations. it was set in motion a long train which could at some point result in congressionally mandated sanctions, but in the beginning it is a call for negotiations. be betweenwould not the u.s. and china as much as it would be probably in the financial markets, because it would lead it traders to think that the administration is going to ramp up tariffs or a trade war with the chinese. vonnie: china will send its yuan wherever it wants. where does china want this? michael: they do want to add a
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level in which it is neutral, not affecting their economy one way or the other. the imf told us that they think that is where the yuan is. talking about the seven barrier, the imf suggested it is not going to cross it at this point. chinese officials have made a show of saying, we will not use it to offset tariffs, we will not make a part of the trade war . this is the market pushing us in that direction. if it stays where it is, this might be the end of the depreciation, but we will see. guy: even if china is not labeled a currency minute later later, currency minute i am assuming it will stay on the watchlist. michael: the treasury has added it to the currency report. the watchlist, the countries close to the possibility of manipulation. south korea was on that list, we
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will see if they are still on it when we come out with a report next week, but china is definitely on the watchlist, but it does not mean anything. a kind of designation that will be quickly forgotten when the report is finally issued. guy: we are looking for to the coverage next week. michael mckee, thank you. now first word news. : the force of tension between turkey and the u.s. has been removed. a court has freed andrew brunson after holding him in prison for almost two years. the court convicted him of collaborating with terror groups and taking part in the 2016 coup attempt. the trump administration imposed sanctions and threatened more if he was not released. shinzoanese premise to abe will travel to china this month for his first formal visit in seven years. it is a further sign of improving relations between the rivals, along with trade and investment, talks between the leaders are also expected to touch on efforts to denuclearize north korea. pope francis has accepted the
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resignation of the washington cardinal, after he became in tangled in two two major cover-up scandals. in a letter released by his office, the pope praised his ally and is adjusted the world had unfairly become a scapegoat. he is the most high profile cardinal in the sick scandal. and theresa may will not accept a brexit deal that leaves the u.k. permanently tied to the irish backstop. that is a little guarantee to ensure that the average order remains invisible after brexit. a spokes person says that this condition is that it should be a temporary fix until the u.k.'s future relationship with the european union is set. global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm kailey leinz. this is bloomberg. vonnie: now to the micro story. athena health trading lower, even as we have a broad rally. this after reports the company
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is recording rejected suitors. what is the deal? ed hammond it joins us with the latest. what is this about athena reaching out to previously rejected suitors? ed: what we understand is that the report is in large part wrong, they have a much more robust process then it implies. i am told there are five bidders still in the process. and the bids are expected to be above the $135 a share number that it cited. another interesting point, one of the buyers mentioned, enthri am a portfolio company, i told that athena has never spoken to them. they have never been part of the process. and it is not somebody they are familiar with. it sounds like there is more going on here than meets the eye. i am told that this could get them by the end of the month. vonnie: ok, so first of all, there is still a bidding process
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into several bidders, is that correct? ed: that is correct, at least five people still in the process , it sounds like, so significant interest and a mix of the financial industry change of buyers. -- of strategic buyers. vonnie: this is the company that jonathan bush was kicked out of. and what does elliott want to happen? ed: they have been instrumental in this thing, removing bush and getting the company put up for sale. they will probably be part of it an ultimate buyer group, they are a thing as a shareholder and the likelihood is they would roll into whatever happens next. whether they go private or to another strategic and they end up holding equity in the new company, that remains to be seen, but it sounds like they will stick by the investment. vonnie: who is pamplona capital management and why, given that they are the owners of enthrive, is the story emerging that they might merge?
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ed: they have the mentioned in the past. they would not be a takeover, it would be a merger of a portfolio company with a private company, but the people i've spoken to have no idea who they are. they say that they are not part of the process, they have not been part of the process historically, so it raises questions about why this name is being linked to nothing at all. all.- to athena at but we will see as more information comes out, whether enthrive comes up or whether this is per speculation. vonnie: and in payments company with health care. there is broad consensus that if you held is a great company with great assets. and there should be a lot of interest in this because of the chairman. what price range is acceptable? michael: wonder succeed dollars a share with their own -- $160 a
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share with their own out, but i think that is too high. i think we could see $135 or one a $40, $150 at the high-end. but there is still a robust process, a number of interested parties and it seems to be on the part of the company, some hope that there could be something done in this month. vonnie: which is only another two weeks. and another story. some interesting activity around broadcom and rand paul this week. anyarize what we know about potential national security investigation. ed: a lot of speculation, it is hard to pick out what is true. we put out a story saying investigations have been opened on market main inflation, because they saw a fake memo put out which, seemed to be them saying we will look into this transaction. and then rand paul cited some facts and figures, saying he had
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not seen the memo, but it moved the stock. out,aid, somebody put this it was not the department of defense, so we should look into it. we should note there was a spike in short interest in the shares before the memo came out, about 8% of the company out short. so there are some interesting clashes about whether or not this was put out by the short-sellers or another effort admitted leading the market in broadcom and other shares. vonnie: what we know about their future right now? ed: they need to do acquisitions. this company was built by m&a. the member what happened with them and qualcomm, they were blocked from doing that. they said it would create a threat to u.s. dominance in the semiconductor space. but the chief executive, he is somebody that needs to do acquisitions. this is a big deal for him. company,are now u.s.
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said there are questions on whether or not he has jurisdiction, whether they could do this deal if they wanted to. brought come have to get this closed, it if they do they will continue upwards and do some m&a . if they are blocked for any reason, it will be a different company emerging. vonnie: up one point you percent today. -- up 1.8% today. thank you, and hammond. -- ed hammond. guy: quick check of the markets across the european close. the civil rights popping up a little bit -- table rates popping up a little bit. a report coming from diplomats of that the u.k. is asking for a longer transition period. the s&p really struggling with the 200 day moving average. it is becoming resistant now. 2766 is where we are, so we are still up. but thisounced today, could be a problem on the upside. banks also softening, so we are
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seeing banks under a little bit of pressure. anyway, we are now sort of around 45 minutes away from the european close. europe feeling very flat into the end of the week. the good news, at least it is not raining outside. this is bloomberg. ♪
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kailey: i'm guy johnson. vonnie: from new york, i'm vonnie quinn. banks reporting positive third-quarter earnings today .guy: and i'm guy johnson. after the biggest selloff since february. and after president trump criticize the federal reserve for raising rates. joining us is alison williams of
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bloomberg intelligence. alison, now that we have had time to digest the earnings, it's and like investors are loving citi. it is up. and jpmorgan flat. why is that? >> i think sometimes it is all about expectations. jpmorgan had a very solid quarter. i think that they are moving across their businesses and credit was a standout surprise for them, however, given where we are in the cycle it is hard to extrapolate that and continue, especially when it is coming from reserve releases. vonnie: they were excited about this. we got a nice bounce. is there a level at which it is not profitable for jp to lend a nd not offset gains? alison: there are a couple different factors. bakeries and short rates has been helpful on the funding side of things, expanding margins, and as long-term rates go higher
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and rates overall go higher, that can demand for financing. on the trading side, it is volatility. rates moving up has an impact, the old curve has an impact, but to the extent we get volatility, given the moves we have had this quarter we could be getting that to help with trading. kailey: -- guy: cit hasi had a good few weeks. itthis repeatable, because looks like it was generated out of this recent move we saw up in yields that moved fairly quickly? is the market correct in the pricing of the fed and u.s. economy, we are not going to get another repricing like that wondernd that makes me whether or not a move like this is repeatable in terms of the numbers going forward? alison: that is always the question with trading revenue in terms of the quarterly results, what does that mean coming into
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this quarter. basically, it will set the run rate. and i think it is all about volatility. this quarter tends to be a weaker quarter, so not as important as the first quarter per se, but from a longer-term view it is volatility, so volatility that we have seen pick up in this quarter, cannot continue -- but, next year what does policy look like. that will give the leg of long-term. kailey: as you said -- guy: they benefited because of the credit, but that is not something we can guarantee going forward. jamie dimon talked about the pickup we have seen from the tax story coming through into the numbers once again. again, i wonder whether or not that is going to be something we can guarantee after the midterms. is this as good as it gets for u.s. banks? alison: that is one reason we have looked at loan growth. and to his point, they are
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benefiting from the changes, but i think investors coming into the year had hoped for more of a lift. and i think the question around the midterm elections is, there is the regulatory side of things, there is also the tax side of things, but will this have an outcome that supports continued momentum going into 2019, or will we have some risk of reversal? vonnie: what did executives say about the president's, then the federal reserve? alison: as far as comments on the federal reserve, i think the most interesting thing was jamie dimon's comments that 4% is perhaps more appropriate. he previously said 5%, so that is a bit lower. and also making the comment, obviously come into president wants rates to be lower, however i think, again looking at the broader commentary, the tax cuts, the better revelatory
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environment has been very good for banks and for the economy. kailey: thank you. guy: thank you, alison. this is bloomberg. ♪
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guy: from london i'm guy , johnson. vonnie: from new york, i'm vonnie quinn. this is "bloomberg markets." kailey: futures in focus. guy: keeping prices elevated and oil. the cme. the demand falls, prices rise. do you agree? >> if demand falls, prices are going to be a little bit on the even side to the upside. the interesting thing about all the opec news, everything coming out of the opec countries, is are alreadyd we
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adequately supplied. that will take volatility out of the market. so unless something happens, you know, if we go to some type of -- like tensions increase, another section comes into play, that statement is going to deflate volatility, so we will see how that actually plays out versus what is coming out in the headlines. so the stockpiles did decreased by 5.8 million, so we will see where this is going to go. guy: the dollar has gone down this week, what does that do to positioning down there? scott: it is increasing pretty much, it is having a huge effect across the board. anywhere between grains, to me tals, even some of the oil. we will see. the biggest thing with u.s. dollar that sparks my attention is yesterday with a move in gold.
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gold spike extremely high, it was up about $34. and going into that move for the last two days, you have to remember that the short interest in all the metals across the tord, it has been a large short interest since 2001, said the flight to safety has not shown up since early may. so what the dollar dropping yesterday and the big spike in gold, it was a big position reversal. and you have seen the shorts, they had to liquidate short contracts. it was a short squeeze, big spike in the price. coming off a little bit right now, but not much, not as much as you would expect. guy: it is interesting, you get a market like that and you wonder whether or not it has legs to take the move further. thank you. vonnie: it is time for the stock of the hour. shares higher today, you know why -- they announced a new call of duty game, it could be their biggest launch ever. black ops 4.
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if you are not playing it, listen to taylor riggs. taylor: i am not a gamer, but we can talk about the stock nonetheless. some analysts saying gaming has not been priced into the share price, so that is why we have a little bit of a rally today. we have a chart showing the history of these releases, because analysts are saying you could see 10 million sales in opening weekend. in the past with the first three games, those were traditionally some of their top sellers, up to 30 million for the first one, 29.6 million for the second, 26.5 million for the third. 10 million alone for the opening weekend could push it up there. it is interesting, the stock has been taking a beating. it think on october 2, but since a been down about 5%. the rally today is helping offset some of those losses. but analysts say that long-term they remain bullish on the stock. there is a blackout mode, which
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allows us some ingrained monetization strategies, they are party with tencent to expand in china. so things keeping analysts bullish. guy: is a zero-sum game, or do other stocks benefit? taylor: come into my terminal, date.e the basis here to activision has been a top performer. electronic arts had an interesting time, said they are about even for the year, year today. gamestop off 16%, but as it can see even though they have been hit pretty hard in the last few days, this is helping all the shares today. vonnie: alright. we will continue, not in blackout mode. this is bloomberg. ♪
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guy: 30 minutes left in the european trading day. i'm guy johnson. .onnie: i'm vonnie quinn this is the european close on bloomberg markets.
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guy: here are the top stories. stocks stabilize in the united states but not in europe. bounce little more than traders getting flat into the weekend. keep an eye on the closes, in europe this could be critical. it is struggling to avoid negative flows. jpmorgan negative fixed income but citi saw a surprise 9% jump. is this as good as it gets? andrew brunson is freed by a turkish court. after gaining over the last few days, the mirror has delivered a muted reaction to this news. -- the lira

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