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tv   The Pulse  Bloomberg  January 6, 2015 4:00am-6:01am EST

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>> crude selloff. >> more problems for merkel, the angela -- the german chancellor is a delphi. >> viva las vegas. ♪ >> you are watching "the pulse." we are in london. i am guy johnson. >> i am francine lacqua. oil prices continue to fall.
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the board of for you, if we can. >> staggering numbers. $52. down 1.28%. the implications is being felt in other asset classes. let's talk about what is happening. u.s. 10 year, some they 2014 could be painful in 2015 as well. the u.k. gilts, we will have data out and 9:30 a.m.. it's a solid push below and equities taking a knock. >> that's on the back of energy stocks. and the ftse down by 5%. the 30 day of declines -- the third day of declines. >> the number of the eurozone better than expected.
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whether that data is enough to move the dial given what crew has done, we will have that story. >> ryan chilcote, what exactly is the benchmark we are looking out for? how low can it go? >> really, brent, the global benchmark, we saw wti fall below 50 and that is the u.s. benchmark. when we see brent hit 50, we know we have a real global story and perhaps a one-off u.s. story. when is that going to happen? that is anybody's guess. what i can't tell you is in the financial crisis, we saw brent cut -- touch fortified dollars a barrel in 2008. one thing is clear, the decline in the oil prices is hitting equities and we saw that. the dow's 300 point decline and
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20 5% was energy chevron down 4%. at sundown 3%. it really happened through the date yesterday. -- chaperone -- chevron down 3%. it'll be something for all of the oil companies to pay attention to. >> how is affecting the exploration store? >> you think about this as a game of chicken between the middle east and the united states it doesn't like the u.s. is losing just yet. they are decreasing their spending, taking risks offline to the tune of, i guess about 290 three and in the last three months of the year. 17 rigs off of the last week. that expectation is another 200 will be taken off in the first three months of the year. rig wise, we we are where we
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were nine months ago. americans are cutting back on the >> and -- rigs and spending. record oil production last month in the united states. this is the issue. shell production is yielding a more despite the fact that some of the less profitable, less productive fields are coming off line than anyone anticipated. they are more effective in getting oil out of the ground. what we have is a slow boil story. what isn't getting explored are completely green fields where they do not know where the prospects are. they are continuing to drilled and find it. the u.s. hit a record, biggest production in at least 30 years will top russia, post-soviet high. and iraq as well producing more
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oil than at any point since the 1980's. there is a glut on the market and no signs of it stopping. >> thank you for that. the oil stored or almost all of the oil story. >> the dubai index is down more than 5% and though most in the world. >> elliott gotkine joins us with the very latest. elliott? >> francine, how the oil companies are being hit and the economies particular in the gulf they derive their revenues from oil and they are taking a big hit. it is evident in the stock market. all of the stock markets in the gulf are down. the worst in the world is dubai. almost down 6% at one point and now around 5%. they have not had a single day of climbs all year. the plunge in oil price is
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obviously one reason. we're also seeing a slight aversion to risk given the eurozone. and talking about big lots in oil, there is concern that perhaps some of the declines are a factor of a down -- a decline in demand. that would have broader ramifications not for only the middle east but the world economy. >> elliott, any sense of which is stocks are being hurt? one company taking a big not and met -- knock and maybe all of the oil flowing into the by is trickling in little bit -- into dubai is trickling a little bit. >> the biggest in dubai a big hit with the financial crisis and never covered quite a fair amount since then. a lot of money going in there
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has long from other gulf economies. and money to spend and perhaps looking to take some of their profits. dubai, and economy, unlike awful dobby -- i'll dobby -- abu dh abi, not reliance on oil and gas in terms of production and witnessing across the board a bit of a selloff and the gulf economy to oil money has been hit harder. >> to why so much. elliott gotkine on the troubles in the middle east. -- thank you so much. >> i think dubai is good for the oil price and given it is exposed to the rest of the region and that's where a lot of the money comes from. and we will see how it plays off. let's put all of this into expects if -- perspective.
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good morning to you. is it a happy new year if you're in the equity markets? >> that it is, that will be fine opportunity. >> aware. [laughter] >> enough to put things into perspective. we still have an environment where things are pretty liquidity. 2015 will be a year where we have take the fear factors whenever we have the unfolding of what would've had the multispeed economy down to phase three of market development, the crisis. once you have that in mind finding those stocks that you want and targeting and keeping on the structural shift going on, will talk about oil. it is actually a landmark. what does it mean >> mark some
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positive and some negative. we have a lot of shifting and politics with what is happening in russia is important china, clearly europe with greece and potentially and france as well with the populist vote rising. a lot of interesting things to find out. >> oversimplify and saying if you understand the oil price and can understand where it will go next that's the easiest way to make money? >> i think you are right. it is important to understand if we have an oil price below $50 or between $60 and $70. deflation, something we have talked about before, the rise of the dollar, clearly created a deflationary you know, impact around the world. that clearly has had an impact
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on commodities and oil but if we are below $50 in a sustainable manner, people will think about dividend payments. how many companies cannot pay from organic sources? potentially need to borrow to pay the dividends. when it happens, while interesting buying opportunities. you will have resource rich companies, probably sold off. a manner of really knowing which companies you want to target. possibly, what have a rebound but what is important to understand if the the nymex where russia and iraq are producing more. at a time where energy efficiency it again, something will talked about for years as well as weaker demand with neutral.
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the secular outlook of being neutral, meaning lower rates need a because growth is lower. all of this combined to tell you that this should go on. >> markets will start -- >> if markets and believe that your price stated below $50 for sustainable piano -- period. >> will stock is the lower? >> i think you of opportunity. because of that next thing we need to talk about, what is the impact on inflation or fear of inflation? you are a time in the first quarter where the year on year effects for inflation even in the u.s. could be quite pained. people although it is easy to forecast that, people might be surprised. >> if i am sitting on cash, do i do it now?
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is the moment now or do you think stocks will fall further? >> it is hard to say. in the first quarter, you should identify companies and well diversified. you definitely want consumers. the most pitiful show impact as -- the most beneficial impact is on asia and will meet in cars. car buying and the consumers are feeling the benefits of this. some countries, more than others. >> european and emerge markets or emerging markets stocks but mark >> globally, u.s. companies, the consumer in the u.s. if at an advantage because of the lower oil price is very strong there. like in europe where we have more taxes so it takes more times exporters from europe
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will continue to do well because it seems clear to me that the pressure on the euro will continue. the euro/dollar. if you think of japan, the pressure on the yen and japanese exporters and of course, as you might remember, more positive on china in the last year. what china offers at this point, with its currency being resilient and inward looking growth support and finally, some positive news continuing the anticorruption campaign. but showing some news in terms of small packages which are not scary the markets. all of this means you have on the double basses, nice opportunities. >> thank you so much. stay with us. back with us. snap elections in greece.
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the u.s. in recovery. and the ecb may go for full qe. but we will see what happens later in the month. experts, a cargo ship on the isle of wight and a way to refloat the vessel according to a number of reports. it was run aground to avoid capsizing. it is holding millions of pounds worth of cars and 105 jcb's and one rolls-royce. >> one, we spoke to the ceo. china is spending $1.1 trillion for infrastructure. the government approved it. 400 ventures until 2016. and the australian dollar rose on the news.
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>> the sony ceo made his first public comments on the hack attacks began at the consumer electronics show in las vegas. he called temperatures criminals. -- he called the perpetrators criminals. >> they were unfortunately the victims of the most malicious and victor -- a vicious attack we have known. i have to say, i am very proud of all of the employees and certainly no partners we worked with as well. against desk. again some of the extortion is efforts of the criminals that attack sony pictures. >> coming up, more from ces and we want you to join the conversation on twitter. what will you buy? tweet us. when will it be? five years?
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10 years? never? >> you never know. tell us what you think. ♪
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>> welcome back to "the pulse." >> we are back with the chief investment officer for global
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equities. let's talk about greece. markets seemed a little bit concerned about it. the greek assets have been suffering. elsewhere, it has not been in the story. has it gotten into position and that is what the markets are signaling? >> for me, good news/bad news how markets anticipate. meaning, is the fear of an exit putting pressure to have expectations of qe be on january 22nd and elections on january 25 and the other thing to think about it even if you are elected it will be moderation once they are in place. it seems like no one is interested clearly not the greeks interest after six years all paying in recession to actually put yourself in this situation where you have a
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currency no one buys and you are in default. this is not practical. chris and they could take the view that nothing could be worse. >> i agree, the situation has been tough. some of the members, because of the unofficial numbers it is clear it is a difficult situation and do you have -- what is happening. what we are saying is chance of moderation if the election goes in that direction are actually quite high. clearly europe is in a different state where it was compared to 2011. i think there's some element of fear but not panic. and i think that is justified. >> is it a political risk and something we touched on yesterday, is greece goes to an extreme party, there's a very
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big chance that spain, france, italy would follow suit. >> that is the fear that people would have. and a country like italy has a higher debt level than greece has when we started talking. it is very serious. at the same time, the desire for europe to continue for the core countries would be possibly tested but it is there. an element of bargaining, a new year and not every body is back. you have fear in the market that is very clear. all of you is thinking about the neutral, how we see the global economy, that it will be moderation even if it is elected. and good news/bad news so what would we see in terms of qe before that announced around
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january 22. that is the important thing. the risk of geopolitics, which you alluded to, is some we over the next 3-5 years must deal more with. of course, equity investors find it quite difficult for costs -- because -- by definition, it tends to be -- with that in mind, unlike with going back to stocks. i like i.t. digital defense, digital securities, for me, a long-term aim -- theme of forces around the world. i think those will do well during that time period because of shifting geopolitics. >> thank you so much. virginie maisonneuve chief investment officer. >> we will take a brief. -- take a break. rising tensions in germany.
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we'll have more on how angela merkel deals with that and what comes next. that is later on "the pulse." ♪
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>> the bad weather across the middle east is causing delays in airports across the region. turkey has canceled 44 flights.
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crocs the mediterranean affected, israel and up into turkey flights across the region. let's talk about how the stock markets across the middle east have been performing as well. unrelated to the weather certainly related to oil, the major markets are down. that is what has been happening in saudi. the south, what is happening in dubai, generally index absolutely crushed. the markets over the last two days. wait until you see the dubai market. a significant low the worst-performing market in the world at one point today. pretty punchy. money flows out of the rest of the gcc into the by is the effect. >> markets on the slide around the world, asia down.
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you can follow both of us on twitter. we will see you in just a couple of minutes. we have a lot to get through. a little bit of technology in las vegas. ♪
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>> welcome back. selling off, pmi data significantly weaker than anticipated. 55.8% compared to last time around. 55 .5%. sterling on the back of this. down by 0.3%. treasuries back down. you are seeing sterling continuing to fall on that, the u.k. economy weaker than
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expected. >> and of course, pmi on a thursday. the top headlines. jpmorgan chase agreed to pay $100 million on a lawsuit and its role of the 40's changing market. it was one of a dozen been sued by institutional investors over the price-fixing. jpmorgan agreed to pay $1 billion for the investigation by regulators in the u.s., u.k., and switzerland. >> verizon has approached aol about a potential venture. verizon is primarily interested in aol's advertising technology which could have a future online video product. >> russian opposition leader has taken to twitter to declare an end to house arrest. he tweeted he has remote the
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electronic bracelet used by authorities to track his movements and said he has no plans to travel except for going to work and spending time with his family. he violated the terms of his house arrest last week after attending a protest. >> ok, u.s. carmakers report strong sales making 2014 their best year since 2000 it's. ryan chilcote joins us. draw a line between this and oil prices. take a moment to think about and we will come back to you. can you hear me? a voice in my head was say you are not ready. >> lower gas prices mean americans are happier to buy cars and a large car. we saw that yesterday. we got data from december and it was a good december. all other carmakers did better last december than a year
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before. g.m. in particular, did well. bucks troublemakers so it play to their strength and people happy to get into the big suvs. they saw a 19% increase in sales. their yukon suv and it is then. though sales were up 30%. when i say chrysler, 50%. really good news further sales a yet, we had a broad a lot yesterday and today were upon us as well. investors unmoved by the numbers. jim got about one point g.m. got about 1.5%. >> rolls-royce had record sale in u.s. >> the best year in their history. you can say the same by 2013 2012 2011 and 2010. this was their fifth consecutive record year in sales thomas sales are up 12%.
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they sold over 4000 rolls-royce. that is a car they introduce in 2013 and sales really taking off for it in 2014. you know, they also had a lot of custom orders this year personalized expressions of bling. rolls-royce, the biggest carmaker in the above 200,000 euro space and people in 2014 were quite clearly philip wealthier and were not ashamed to be seen in their wealthier very expensive cars. a good year, goodyear in the united states, their biggest markets and a good year in germany and uae. that would've helped things there but not good everywhere. and question marks about the future especially in russia. have a listen. >> we are watching russia, what
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happens in that market it is an important market for us. early days into early maybe to make a forecast of what happens in this market. it is hard to forecast what will happen in russia. >> well lower oil prices are good for the lower end of the car market because it means cheaper prices at the pump, i do not think too many worries customers really care. they are probably getting hit in place like they uae and that's something for rolls-royce to think about as well as a petition from barely hold will have the most expensive suv and dimer with the maybach. back to you. >> thank you, ryan chilcote with the latest on oil and rolls-royce. >> yeah, let's go to vegas.
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>> yeah cars are a bit player active sts in vegas from the bmw -- showing off how they are driving into the future. the very latest. we are focused on cars. >> is size for consumer electronics show a could be car electronics show is in the dna. -- it is called consumer electronics show but they could be car electronics show it is in the dna. it is not a building. we had a mustang being unveiled by ford. this year the spotlight is on mercedes and daimler, the owner took to the floor and we got that comment up and giving us a view of what his idea of the future is for the mercedes driverless car. they unveiled their new car which is the luxury and less
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have a look at the vision. >> the key to achieving this is idle moments. this technology will give everyone inside of the car, opportunity to spend their precious time, sleep, work, all with the latest need for speed edition. cars will turn into modern homes in the very best sense of the world and will be exclusive cix \\ -- cocoons on wheels. >> impetus will be -- you can swivel the seats arond. that is the vision. and they are pros at automated driving on the end of the decade. [laughter] >> kind of like this.
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>> let's talk about sony. we hearing more of the background story about what happened with the hack attack. >> away from cars and it is an electronic show. in front of wonder 60,000 people, the biggest trade show in the world, this is where the ceo, kazuo hirai for the first time discuss the habitat of that embroiled sony and hollywood studio which was about the film "the interview." he talked quite strongly about the people who worked for him. >> they were unfortunately the victims of one of the most vicious and malicious cyber attack we have known certainly in recent history. but i have to say, i am very proud of all of the employees and certainly the partners we work with as well.
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against some of the extortionist efforts of the criminal that attacked sony pictures and its employees. courts out of all employees -- >> out of all of the employees some had horrendous e-mails. he said they were standing behind freedom of speech and they were criticized by obama for pulling the release of "the interview" and they pulled it. they said freedom of speech is in their lifeblood. they unveiled items and the tv and a phone and 4k. that is a big theme this year. >> thank you. will this be the year there wearables go mainstream? >> we will ask that question. our panel will join us with their insights when we come back. ♪
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>> welcome back to "the pulse." >> talking tech. ces opens in sin city las vegas. what to watch out for may be a useful phrase. we are joined by lisa and ross.
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good morning to you. tech is really broad these days. in a world where, ces consumer, electronics encapsulates everything from drones to cars what stands out? if we were to use ces, what stands out? >> first thing i would say is everything is becoming a computer. everything from the clothes we wear, everything will become a computer. billions and billions will be connected. what you see this year are the next generations, smaller and smaller things and everything. as slowly and surely being connected. the cyclical trend is ubiquity and everything becomes a computer. >> we have so many gadgets.
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we have looked at some of these things and i do not know how they will ever take off. some are clunky will stop -- some are clunky. are we overdoing it? are we to hungry for the next big thing that we go out for gadgets that will never be sold? >> a big issue in regards if technology is just because then why. why is the big issue. what we look out for is be trends around solving consumer problems and sometimes that is done with hardware and sometimes more done with software and what we are looking for are things that will make big differences especially health and meditate and with smart watches and start to look at diseases and monitoring long-term illnesses. that is an area that would solve
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a bit consumer problem. maybe watering your plants is not a bit consumer issue. >> and there is a ring you can't turn on and off all of your appliance. >> is that the one you want? [laughter] >> ok. >> were getting him a beltie. >> it would fit him. ces is not really for consumers it is for geeks. what you need to realize it is not meant to be for people buying their refrigerators but geeks understanding amongst each other what the leading edge of technology is and the big brands will buy the things that make sense. chris is it where he -- >> is it where you go to look for that stuff or further down the food chain? >> if you are a big brand and want to add something to your refrigerator or televisions is
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them, you will go to ces and find out. it is so efficient to go there. go straight in. >> somebody said forget ces if you want to see what is next you want to look at what teenagers are looking at and doing. how do you figure out -- almost now, what is next? >> it is interesting. we have innovation and we have been dealing with these issues of trends and wearable and internet of things and the ecosystem. and so, the next big thing is the consumer the middle majority of consumers. very cutting edge, product ready , going out on the market yet. we see a trend, is it interesting? the cycle is going so rapidly now in bringing products to market. it is something we are going to
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put the money behind and a big brand opportunity. >> what is the next big thing? we talked about internet and driverless cars but if you put your anger on one trend that will really take off? >> making it work properly. i had a -- and try to get the music and it does not work and the tech is done and they do nothing about the customers. the next big thing is to be for humans and not geeks. >> as humans, what we want this to be like rich people and have things done for us by servants and that is one machine can do. >> apple is on that trend. a watch that matches my vital signs but a you lot yet more to be done. and i cannot get that to work in
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other rooms in either. but the software, the real issue here. apple with the home kit and samsung doing the same thing. taking the data and connectivity and aggregating them for consumers and making it easy. >> easy and straightforward is the key bit. hopefully, easy and straightforward. >> the kit is part of that. if you have smartphone, that's smart home, it means retrofitting as smart bulbs and that has to be put in by professionals. that's the interesting area where you this connectivity. it's not a hardware that is the interesting but the software. >> is it vhs versus bet the storya? we cannot figure out who will be the winner? >> a whole generation.
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>> in terms of which company which is standards dominate if stuff that needs to be easy, you want everybody working from a common standard. when i go out and look at that stuff, i do not see common standard. >> you have ios and android which is vhs but it doesn't matter. the things kids are invented with juicy in las vegas plugged into the internet and eventually ios or android. that argument is a good 1 -- >> i disagree with you. do you want to have a time or talked each other, to your music system, it -- setting some of the stuff up is quite complicated. you trying to generate a connected home and the fact that nothing quite talks to each other properly and partly down
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to the fact that we still have not figured out who is the dominant one. >> it is the people who develop and do not care yet but because they are so excited in the ink. >> i think we are getting there but i do not think we are quite there yet. it is all very, very new. >> three years, completely different set. the underlying platform and apple and google and samsung are getting their. i think samsung will be the interesting play with our work with their system and the way they work with smart things which is about connecting devices across the home. >> a quick question. [indiscernible] the europeans, does it surprise
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you? >> that have a great history of engineering and the past with orange and people like that and the best r&d across europe. they are encouraging the start of culture there. 120, have our startups. some are really great. some are ready today. kind of personal health area the blood pressure, the monitoring the watches does everything at the moment and plugs into your apple health system aggregator. it is open and closed. in regards to software. >> thank you so much. ross and ken. ross sleight and ken olsa. >> one of the things we do not talk about what cars and maybe we should talk about it now. cars will take center stage.
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tell us when you think you will buy your for driverless car. we would like to hear from you. see you in a moment. ♪
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>> good morning, welcome back. angela merkel has asked her countrymen and women not to attend anti-islam protest and she was defied as a few hundred demonstrators gathered.
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let's get to hans nichols to talk about this movement that called itself the patriotic europeans august islamization. talk about how merkel is reacting. >> the wider political story is provided a great deal of unease cap, even when the numbers was 18,000 bigger than anybody expected, a general discontent that some of the demonstrators may be feeling at that is what have the political establishment and angela merkel's party potentially concerned. you had role call out a used her new year's address to say do not go -- the acronym and a protest and 18,000 did. you have seen the group of growth. in october, a couple of hundred and 10 10,000 and 15000 and yesterday, merkel was in the northeast and she spoke out
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against racism and anti-semitism and said it has no place in our society. the encounter protests, just behind me. 500 protesters protested against them. the same happening large anti-demonstrations in cologne and they turned off the lights and turn the lights off in front of the brand-new -- and volkswagen did the same with one of their factories. there is a counter protest. >> thank you so much. hans nichols. for those listening on radio first word is up next. for our viewers, a second hour of "the pulse." >> we will be talking about what is happening at ces and the fridge is taking over, a massive delegation. what does it mean? what are they sending to the world of technology?
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love, we will be talking about cars. >> you can tweet us when you will buy your first driverless car and we will be back in 2. ♪
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>> crude selloff. oil prices extended their drop. >> angela merkel defined as thousands gather for an anti-islamist protest. >> french entrepreneurs and the economy minister pushes for more tech investment. >> good morning to our viewers in a europe. a warm welcome to those waking up in the united states. >> this is "the pulse." >> let's get a check on the market. oil a big story.
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we are looking at brent at the 52 mark. 51.49. this is having a ripple effect across other asset classes. let's talk about this with ryan chilcott. -- ryan chilcote. >> that is the benchmark everyone is watching. as you say, we are at 51.43. brent down more than 3% after it was down 6% yesterday. anybody's guess if it will happen, how much it will go below $50. the last time brent went below 50, it fell to $45 a barrel. that was december 31, 2008.
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the oil price collapse in the fall yesterday contributed to a big decline in u.s. oil producer stocks yesterday, about one quarter of the dow 100 point the klein is attributable to decline in energy stocks. -- doubt 100 point decline is attributable to decline in energy stocks. going to have to watch this. nobody saw 70 coming. nobody saw 60 coming. >> thank you. the latest on some of the oil stocks. they are seeing a big selloff especially in dubai. elliott got can joins us with -- elliott got can -- elliott
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gotkine joins us. >> to buy has not managed to eat out a single day of gains. the oil price drop is a big reason why we are seeing that. in countries in places such as dubai in the sense that they do not make a lot of money out of getting it out of the ground and selling it, but they do lie on these -- but they do rely on spending. one of the worst performers today is mr properties. still earning more than 80% of mr malls. that is where we are seeing the biggest drops. we are seeing risk aversion. oil and gas companies being hit
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as well. concerned the plunge we are seeing in oil prices is partly due to weaker demand and there might be more ramifications for the economy in the middle east and for the rest of the world. >> thank you. elliott gotkine there with the selloff. >> keith wade joins us now. oil prices, good or bad if you are an investor? everyone is trying to figure this out. >> i would say we are in the dislocation phase where we are getting the big hit from the falling oil prices. we are seeing energy stocks weaken. there is concern where going to see shale gas having an effect on the banking sector. generally speaking this is a
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positive for equity markets. it is bringing down the cost of energy. it will help vendors -- it will help businesses. those things are good for growth. ultimately, it will be good, but we have to get through this phase. >> how low can it go? if a ghost of 45, stays at 50 -- if it goes to 45, stays at 50 , do you have a prediction on where it goes? >> we do not have a formal prediction. saudi arabia is trying to drive the price lower. it could fall from here. if they are determined to do drive shale producers out of business, they will have to drive it down lower to have that effect. in the long run when things settle down, oil price around
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$50 or $60 a barrel could be sustainable. >> the bond market tells us we are in a disinflation there he -- disinflationary environment. >> this tells us part of it is the concern the weakness of oil reflects the weakness of global demand. there is an issue there. one reason we are more optimistic is that we see a lot of supply side effects that are driving down the price. the saudi thing is one. yesterday there were reports about russia and a rack -- iraq increasing production. we think this will lead to better growth. this is an industry in
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disequilibrium trying to sort itself out. >> it means more pressure on inflation. if you look at the next couple of months, where is the most pressure coming from? >> what is interesting is the way the central banks look at this. in europe, the ecb is looking at the lower prices and saying we have to be worried about this. in the u.s. it is seen as a positive, more like a tax cut. in europe, there is concern that will feed on itself and lead to low wages. this is why the ecb is concerned. it is a different interpretation. i think we will see deflation in the eurozone. we will probably see it later in the week. my interpretation is it is a bit
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like what we saw in 2009 driving down inflation into negative territory. once it stabilize, inflation picked up. we did not see wages dipping off in the ways they did in japan 10 years ago. it would be deflation, but not the kind i would be concerned about. >> u.s. treasury 10 below 2% this morning. that is not telling me the economy is going to take off. we are in a period of low growth. it will be a lower growth rate. the fact that we have this ongoing downward slide it is
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not saying we are taking off for the moment. does any part of your brain say that the fed does not raise rates this year? >> it is a possibility. the dislocation of the oil prices coming off we have seen the fed will react to those kind of events. the strength of the dollar will have another factor and cause the fed to hesitate. the reason i think it will move is because interest rates are low in the u.s. the economy is growing. on friday, another fall in unemployment. monetary policy needs to normalize a little bit. it does not have to raise rates and an enormous amount. they are still too loose for where the economy is. i still see them tightening. >> we will be back after the
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break with keith wade. ♪
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>> welcome to "the pulse." >> a quick? one is happening in the markets. let's take a look at what is happening around the world. brent trading down over 3%.
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trading at 51.47. 50's have to be on everyone's radar. we saw the ripple effect yesterday. we are seeing a repeat performance today when it comes to equities. >> we are back with keith wade. we were talking about the price of oil where you saw it going, a kimi driven below 40. you are met -- you were mentioning the fed could cut interest rates. given what the ecb will do, are we going to have huge kqe on jra second? -- on january second? >> the situation in greece with
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the election, if it looks like -- is going to win and they take a stance towards the bailout plan, the ecb may want to hesitate before they buy bonds across europe. otherwise, that is where we are heading. >> is qe positive for european stocks? >> i would say it is. the mechanism is through the currency we will probably see the euro weaken and that will help large, international stocks that are prevalent in europe. in terms of growth i am not convinced it makes a difference. in other instances, a lot of the money builds up in the banking sector and does not feed into the real economy. the liquidity side is positive.
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>> we had more guests saying the market is expecting something from the ecb, but mario draghi may wait. would it be a mistake? >> if he waits, the market will be disappointed. expectations have been built up. it is almost as though he is backing the ecb into a corner so he can say we are going to cause the euro to appreciate and we do not want those things to happen. >> talking for a moment about japan. are they a lead indicator as far as abenomics we may see a repeat performance of that. what are the similarities between what is happening in
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japan and what is going to happen in europe? can i draw conclusions from one to the other? >> i think you can. the ecb has seen how they have managed to move their currencies significantly. the ecb would like to do the same thing. it is one of the few levers you have to pull. >> is there another way you can depreciate? is qe the best way of getting to the objective? >> in some ways. the other way is more explicit. you can go into the foreign exchange market and sell your currency. there is a political problem that if you openly go out and try to do you value your currency, -- if you try to devalue your cure and see -- your currency, -- >> people would be upset if we
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said we were going to revive the euro zone economy now. >> we are in the midst of a currency war. everyone is trying to grab a market share. that big move is going to be an advantage for japan if it does not change. other countries will realize that particularly in asia. that will be deflationary. this is why i think the ecb needs to step up and try to do its own devaluation. >> forecasters are bullish on the euro. >> a lot of expectations built up. if they do not do the qe now there will be a selloff. further out, you can see the
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euro staying 1.15 or 1.10. i cannot see the economy turning around without that stimulus. >> massive stimulus from banks, we will see what the fed does. we will stick with the view that they start to tighten. massive stimulus from ecb, from the boj. massive stimulus from the oil story. >> how do i play this? how does this work on a linear basis? >> it comes back to what we were saying about the moment we have a lot of dislocation from the fall in the oil price. that is working its way into markets. investors need to think about the beneficiaries of the
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stimulus. they have to start looking at things like consumer discretionary. those areas in the economies and the companies and markets that will benefit. that is how investors should position themselves. you will see stronger retail sales coming through. >> will greece leave the eurozone? if it does, are we ready for it? >> my sense, it will not. an opinion poll shows 75% do not want greece to leave the euro. i don't think they will push it hard. the aim will be to soften the terms of the bailout and get a lower interest rate. >> thank you. keith wade.
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>> coming up, the tech world arrives in las vegas. we will tell you what -- has to say next. ♪
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>> welcome back to "the pulse." >> the news of the day, let's
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take a look at it. you put money into the stock market a year ago, have you done well or not done well? there is your answer. if you invest into the equity market and stuck it there and left it to see what it is going to do, that is what you have been seeing. not the performance you would be hoping for. as we head towards the u.s. open, this is what we were looking at. looks like we are going to get a negative open. oil the standout story. this is what we have been watching. a massive impact on gulf markets.
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>> still talking about hangovers. the connection. >> which country has the best bartenders i said it was not italy. i could be about to get a new answer. it is not the italians, it is the robots. >> it is made by an italian company. check this out. we will get back to you. >> don't check this out. we don't have it for you. >> it is a great story about italian entrepreneurs that can make sure drinks and bars. -- mix your drinks in bars. >> it is a robotic bartender
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composed of two robotic arms and allows you to perform an infinite number of cocktails. you can log in and start creating your own recipe the, cocktail. you can name your own cocktail and share it with your friends. people are able to reorder your drink and you become your own bartender. we started it as an installation for the google convention in san francisco. after that installation, it became so popular. we decided to start after that. after 12 months, we were able to have the first and only robotic bartender ready to be sold. we have --.
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it is not about replacing bartenders. it is about interaction with people. >> it looks cool but it is disappointing. what would tom cruise say? >> what would james bond say? shaken, not stirred. voice recognition needs to be in there. >> even if you slur your words. >> i do not know what you are talking about. google may have competition from automakers when it comes to driverless cars. >> we have some tweets in about the subject. we will get your thoughts as well. we are looking forward to hearing about it. we are going to take you to sin city and find out what is going
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on. let us know your thoughts . @guyjohnsontv,@flacqua. ♪
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>> welcome back to "the pulse." i am francine lacqua. >> i am guy johnson. >> j.p. morgan chase will pay $100 million to settle a lawsuit. they were one of more than a dozen banks seized by institutional investors over the price fixing. they agreed to pay $1 billion to resolve a foreign exchange rate investigation by regulators. >> a morgan stanley advisor
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fired last week says he never intended to sell information he stole and is sorry for his conduct. he has been quapaw reading to protect the firm and its customers. morgan stanley says it has alerted law enforcement and found no evidence that customers lost any money. >> russian opposition leader has declared an end to his house arrest. he says he has no plans to travel except for going to work and spending time with his family. he violated the terms of his house arrest after being given a suspended sentence. >> those of the headlines.
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let's deal with the markets. >> the market brings in the big headline. stoxx $.50 2011. the dax lower. for europe, a big discussion whether this is a greece-led selloff. energy stocks taking a beating. the ftse down. oils, brent, you saw the move yesterday down by almost express them. this morning, we go lower by over 2%. these are 2009 close. look at the norwegian krone. this is the dollar against the norwegian krone. stronger dollar, weaker krone. that is the fx market. look at the bond market. you see oil go lower.
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growth expectations, some concerns. you see yields go lower. the german 10 year, down by three basis points. the bond market took all of the headlines. look at the treasury market. 10 year yields in the u.s. here is time for the judgment call. you ask what will happen with the u.s. economy. treasury yields could be seen as a symptom as a global slowdown. treasury yields the slow, oil the slow as that part of a seamless package or what? >> tom keene joins us with a preview. you will be looking at treasuries. >> we will link in correlations. we are beginning to see everything link up.
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francine, washington opens for business today. they get back to work. stan will join us from corbis capital. we will talk about his expertise on america's budget. we will get an update from him as republicans turn -- as republicans return to washington. what i would suggest is the german 10 year yield moving down to the new low yields shows the linkage as oil implodes. i cannot emphasize enough about how oil fell out of bed at about 4:30 our time. >> i know it is a pack show. looking forward to it. >> the biggest trades in the world upon us. -- the biggest tradeshow in the world is upon us.
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it is a fun event. we have had a more serious side to it. a reaction from sony on the hacking that occurred on the back end of 2014. caroline hyde has been tracking the story. >> they probably decided to put off a public statement until this event. it is the biggest tradeshow in the world. this is where they come out and say where their view is. it is focused on the hollywood studio and the film. he is putting his support behind his employees. >> they were the victim of one of the most vicious and malicious cyberattacks we have known in recent history.
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i am very proud of all of the employees and the partners that we worked with, who stood up against some of the extortionist efforts of the criminals that attacked sony pictures and its employees. >> sort of admitting perhaps the initial decision to pull the release of "the interview" was a mistake. clearly, he is standing behind the decision to release "the interview" in the end. >> cars are in the dna nowadays. seven years ago we saw some car companies making keynote
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speeches. ford unveiled a mustang. this year the big automakers trying to steal back the spotlight from google. now, we get mercedes owner making a keynote speech, unveiling a prototype. front seats swivel, the steering wheel goes that. you can have a chat. you can be working or sleeping. >> it was a clever way of filming inside the car, which they wieldheeled on. >> the key to achieve this is --. this technology will give everyone inside the car new opportunities to spend their time.
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browse the net, sleep, work or when the next race in the latest "need for speed" edition. there will be exclusive cocoons on wheels. >> it looks crazy. it will reach 75 miles per hour driverless, without any driver in front of it. highway driving without a driver will be a realization. samsung touchscreens within the bmws. these companies are desperate to say we can make this work. most u.s. drivers say they will spend at least $1500 on new technology and cars right now.
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when will you by your first driverless car? >> on that note, the best week -- the best tweet of the day. happiness is a driverless car with a robot that makes mixed drinks. >> thank you. >> let's go to las vegas and talk about it. >> it may be the venue for ces it may be there that the biggest delegation from the european side are the french. joining us now, jean david. we talked to tech experts. no one is surprised. the french have been leaving in terms of innovation. they have the big ipo. what can the french bring to the
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tech equation? >> something like 120 companies showcasing in vegas today. it is a big number. that is what british companies showcasing in the show are. there is a big vibrant ecosystem of startups in france and the connected devices. it is a good thing that all of these companies are there. >> what message is he sending? both at home and abroad. >> the economic policy in france has changed one year ago. he was an adviser to the
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president and a big promoter of the change. it is now a minister in charge of the economy and basically sending a message that france is about to change and the mistakes that the government may 2 years ago are fixed and that some mistake like the dailymotion case has to be forgotten somehow. >> do you welcome the fact that -- is at the head? >> two years ago, we were facing some kind of backward-looking fiscal policy that was dangerous and inappropriate for the tech ecosystem.
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i think things are being fully understood. he has a young and modern man and has fully embraced this ambition of -- tech startup in france. >> what does he need to do now? he has gone to vegas and talked to the big superstars in the tech landscape. what does he need to give the tech sector in france? >> an important thing for our country is to attract investors because you know when you run ambitious projects, eating capital and investors to back stories.
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he is meeting with my colleagues . he will probably try to attract them to france and make them aware that there is a young generation of companies here that are very ambitious and that deserve some attention. >> you were talking about the mistakes that they government has made in the last couple of years. france has great companies, but they are a very big perception that france is not that friendly , not only to the world of tech, but to foreign investment in general. >> the country is both
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conservative and creative. that is the best way to describe french people. if you look at the company like uber the way they are welcome in france is no different than what is happening in other countries. in germany, spain, india, the u.s., there are some regulatory issues. the way france is managing that is not different from what is happening elsewhere. the reputation is unfair. french people like their services. reputation is reputation.
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>> still to come, the ceo of rolls-royce. the possibility of an suv. stay tuned for that conversation here on "the pulse." ♪
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>> welcome that. a banner year for rolls-royce. delivering more vehicles than ever before. bloomberg spoke to its ceo. we asked him what the
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environment was like for his is this. >> we are operating far beyond the competitors. it is not competition between car brands. many of our customers who have lots of cars in their garages for good reason, and if you are in love with a certain product you buy that product. >> what would a rolls-royce suv look like? bentley is planning to roll out the priciest suv around $180,000. what would a rolls-royce suv, houston before we can get our hands on one?
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>> we have not made a final decision. we will come close to the decision this year. you will get the final and are, are we or are we not doing it. rolls-royce is without any compromises. we look carefully into it and talk to our customers what are their expectation levels, what is needed to be a rolls-royce. >> are you approaching it with a nod or shake of the head? >> we made progress over the last couple of months. >> we are joined by bloomberg news' chris. i was this a record year for rolls-royce? >> they have done a good job expanding globally.
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they added six dealerships last year, in places like mexico city and australia. they are spreading their geographic region. they have added products. that is driving their success and has been for the last two years. >> how does this fit into the overall strategy of bmw, which owns rolls-royce? >> bmw has had a great year. they will be the world's best selling luxury carmaker for the full year of 2014. they won out in the u.s. audi is on their heels and so is mercedes-benz. audi and mercedes are refreshing
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lineups and they will put the pressure on bmw to keep going. the role that rolls-royce plays for bmw is it is focused on the highest and wealthiest customers. it is a focused brand. if they lose their focus in terms of identity and in terms of compromising, bmw loses. rolls-royce is a case study for bmw to be focused on their customer. it is a reminder for the group every day of how they have to be focused on their customer. that is one thing they have done well. >> thank you. coming up, protests and counter protests. we will go back to berlin after the break. ♪
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>> a look at what we are watching the rest of the day. we are joined by hans nichols. >> we will continue to watch the german political reaction and the establishment reaction to what is happening with the anti-islamic protests.
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they reached 18,000 protesters in dresden and it is continuing to grow. it is an important story. >> angela merkel coming to london tomorrow. which hat will she be wearing? >> for official capacity will be as president of the g7. it is a short visit. she goes to the british museum and have dinner with cameron. there may be press availability. you may be able to intercept her. francine, you and your he with me. >> that is probably the only museum in london i know well. i can probably give you a guided tour.
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>> we have a great package idea. we should use this segment as packages we want to convince our boss to do. he can break in and bring us an exclusive interview with angela merkel on the eurozone. >> hans wants to break in. that is the added thing. they will be talking about the referendum? >> russia will be on the agenda, given this is a g7. we will see how much debt -- how much more difficult angela merkel makes a for them. >> thank you. >> that is it for "the pulse."
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"surveillance" is up next. we will see you tomorrow. ♪
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>> the implosion continues. junior yelled below 2%. oil plunges to below $49 a barrel. -- 10 year yield below 2%. oil plunges to blow $49 a
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barrel. mitch mcconnell would like the president to pick up the phone. it is frozen in america. the disney world is packed. good morning this is "bloomberg surveillance." we are live from our world headquarters in new york this tuesday, january 6. i am tom keene with scarlet fu and brendan greeley. that's get to our top headlines. >> let's start with oil. crashes yet another milestone. blew past the $50 a barrel level and try to below $49, down as much as 3%. this marks the fourth after klein for oil. red crude reaching as low as $51.23. speculation u.s. oil inventories will expand, putting even more pressure on prices. the government releases those inventory figures tomorrow. word that verizon approaches or


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