tv On the Move Bloomberg January 15, 2015 3:00am-4:01am EST
1988 and the biggest drop. metals bounceback and credit growth surges. i am looking at futures markets higher by 95 points and we go higher on the open with manus cranny at the touchscreen. >> we will get a bounce after a session yesterday. the debate is whether to air on the side of a pace that you are concerned about growth in the u.s.. do you believe that we will test intermediates and what will that do to the oil market? do you believe china? there are big themes play with the markets. the oil will be around $55.
the equity markets are getting a buzz. what is moving? >> there is talk about expenditures coming and. let me check the notes. 60% of the oil and $86 a barrel. of 2.5%. more press speculation and they may be restructuring the business. along with a number of videos of oil companies talking about the same stories. the commodity elements are at play. as far as the bonds are concerned, it is critically important. the government bond yields in america are trading at .52% and have been going down with the
longest decline and losing streak in yields terms since 2010. they are pricing in deflation and they are at record lows. you see them begin to understand the u-turn. >> the indians or were at about inflation's and lowered the rates. they are shocked with the unscheduled meeting by the central bank. what they have done is go to 7.75%. inflation pressures the country that was still healing with the overly inflated situation. you see the story really take root in the economy. stocks to keep the ion is just a
maria. a couple other of's stocks had been flat. get out there and bio watch. the capital expenditure reductions and home retail news waiting for this. i have been to have slipped themselves up a lot. way under where the market was looking. it was looking for sales at 2.5% and the margins are improving. they beat the declines and did not decline as much as the market wanted. i am a one-man personal shopping band. i love them all. >> manus cranny. thank you.
good is our hire. the dax is up. commodities are in focus this morning. oil collapsed in price over the last six months. liu is producers showed no sign of slowing down and out put surged last week to the fastest pace in weekly record back to 1983. if the saudi's are trying to drive americans out, producers have not blinked. i look at the chart and i ask what is the lag time and when do we see the chart fall off of a cliff. >> it looks like the cuban missile crisis. i do not think anyone will blink yet. the main issue is pulling this stuff out of the ground and
having a social program and social commitments. they will burn through the reserves and the resources and that amount of time. they can hang around a little longer. >> we will talk russia later and oil is taking a beating. you are about to tell me that you are buying and humility position. i look at the stock up and the reports that they will cut jobs. what are you buying. >> we have looked at where some of the companies traded when oil was at $40 a barrel when we had the financial crisis. it is now at 125-130.
they will reach those levels again and we think it is a good idea to accumulate stocks. the ones that will have good equity. >> the view is that in the oil fields are expensive and you have to put more money and to get barrels out. which is about the oil fields. >> of the two, i prefer royal dutch. i don't think there are any differences in the costs of getting things moved around. i worry about bp and governance issues with a series of missteps. i would like to see clear distance the between the past
and the present to move on to the future. >> picking up the pieces, the transport stocks have been flying high. you have gone short. >> i have started to. the transport index as gone to plus or -9000. it is fueled by the united states being the best house in a bad neighborhood. the constituents have done well. we do not see gdp sliding greatly. it is better than europe and the u.k.. that is a relative trade. it is an absolute value trade. gdp is not something you can
hang your hat on. if it starts to stabilize. the volatility will go away and we would ask fact transport to increase and it is not a short-term trade. would not expect something to happen today. this could last 12-24 months. >> consumer stocks and retail sales. ugly. it is not supported by the data of yesterday. where do you stand on the view? >> consumers do not feel confident to spend it. there is a thinking that he is going and increasing spending. i would not have the savings
before i deployed it. i did not think there was any. it was too premature. so, the translation effect had even the pumps not moving that quickly. >> you have been looking at the supermarkets. the supermarkets took an absolute kick last year. some of those are down. have you picked up some? >> yes. we expect lots of bad news and hideous moments. we will hold these for five years. we bought them last year and will hand -- hang onto to them for at least five years. >> is this a structural change?
>> the real estate issues do not worry us. i do not think they handled competition well and are paying the price. they are not have the skill or the ambition to take over the market share or you will tend to find discounters taking 10-15% of the market share. they have had room in front of them to grow into. i do not see a scenario where the supermarkets become marginalized completely. >> the companies had a rough time last year. we will talk about that after break. will head to moscow to hey year break. he will talk about -- we will head to moscow to hear.
is heading into a recession if oil stays at $45 a barrel. we will listen to some of the sound and catch up with you. >> the current situation is expected to be all year long. it should be between 4% and 5%. >> you are working on this right now. >> the believe is is that it is in case the decline is for percent-5%.
-- 4%-5%. >> how long do you see the recession lasting? >> it depends on the global markets. >> what if the price of oil stays low? >> you have something like 170 as the initial and it is something around 10 trillion rubles and the crisis will be around. hopefully, more than three years of budget spending and the prices for budget and we win
with the devaluation for the budget. >> we have ryan joining us from moscow. they seem confident. how confident are the government officials about the future? >> will. they are confident and put on a brave face. nobody is talking about capital controls. the worst is behind them. the economy does economic minister made it clear that it depends on the oil price and it has been going the wrong way for them. we had a spike of the oil price yesterday and you saw the ruble go up. most of what is going on in russia is out of their hands.
>> they look back on what was a hectic 12 months. d you get a sense the crisis could have been handled differently? >> you do. a comes to how quickly they responded to the crisis. the economic minister reiterated this yesterday and said central banks should have hiked rates earlier. he said if they had moved earlier, they wouldn't have had to. we heard similar sentiment to the russian president. we softly --
she will be moving on to think about strategy. country will have a new person in charge of monetary policy. that is not a demotion. i think it reflects the criticism. they are on the right course. >> let's bring back in the ceo. i want to bring you back to london prime property. the slowdown is for the likes of the russians. >> the large capital value equities. i to a range of auctions.
i put the question to the panel as a member of the audience and asked what the main axis dental risk they perceived -- x essential risk -- existential risk they perceived for the equity markets. what i wanted to add and did was that they had not taken into account the money flow. you find the prime property has a lot of connectivity. a lot of the wealth created and deployed in the property market is derived from the value of businesses that are connected to assets. >> yeah. we talk about it a lot.
what is the lag between what happens in russia and prime property in london? >> we will not see a correction directly because of economic fallout in russia. there will be less frivolous discretionary income being deployed and i will suspect the number transaction at a level and it will not be so frothy as it used to be. we see a large number of people. >> thanks for the insight. thank you very much for joining us. we had out to india for the rate cuts. stay back -- stay tuned for that.
they have seen the deepest rally since october. it is worse with the dollar sitting at a six-week high. they raise the benchmark by 25 basis points ahead of this. the first rate cut we have seen in the country since 2013. they have been asking for a rate cut and the retail inflation has been below the 7% mark. all of the eyes are on the majority at the end of february and growth objectives to get back on track. for now, definite cheer on the markets. >> thank you for joining us. we are always watching the ecb. mario draghi can not keep his name off the list.
let's go to hans nicole's. he wants to help italy. he is better off staying where you are. >> it is the difference between frankfurt and rome. it seems like there is speculation he may be returning back for the open job now that he has resigned. part of what is fueling this is the january 22 and 23rd meeting in florence. some of the speculation is from that. let's be clear that that the speculation. here is what he told the newspaper. it is a great honor to be considered. it is not my job. as the president of italy, he would only make 238,000 euros a
year. when he was think of italy governor, he had 770 -- he is getting free housing with both. >> great work. stick to the a tie-in food. stay in germany. let's check in with the oil. bp is up. shell is up. late in the session yesterday brent when a higher. we're playing catch-up for the oil makers. they could cut jobs in the north. . we will bring you that. for now, just reports. after the break, taking a beating after copper collapses. is it time to buy?
>> welcome to "on the move." i'm jonathan ferro. this is how things are shaping up. the stoxx 600 up by 1%. the ftse 100 up by 1%. you saw brent comeback a little bit yesterday. the dax higher by over 100 points. starting with the stock moving lower. >> where is my optimism? an interesting story. all about black friday. it owns home base. argos showing the ups and downs of black friday.
they say, on a day sales up 45%. the problem was trying to respond, trying to protect our profits throughout the rest of the period. they have to shy away from discounting. that meant sales not nearly as high as anyone had been expecting. only just about managing growth over home base. so home retail, the worst performer on the stoxx 600. uoff by 5%. richemont not doing well over christmas. it owns montblanc, cartier. they saw a serious problem in asia. asian sales down 12%. hong kong disruption yesterday. it really did hurt richemont. they are seeing some of the sign of that torrid last quarter on their share price, off by 1%.
let's talk about face cream. nivea. this is the lead performer today, up by 5%. they are managing to adapt to the times. but they are managing to respond, getting out new shower creams and new deodorant. organic sales up 4.7%. we are confident about 2015. not many saying that at the moment. that is the one of the leaderboard. >> fantastic work. three stocks to watch. the top stories. india has cut interest rates by 25 basis points. the review by the reserve bank of india is the nation's first rate reduction since may 2013. it cited continuing disinflation pressure. stocks, bonds and the rupee surged. the russi central bank is aan
placing its head of monetary policies after emergency measures failed to stem the ruble strop. as russia faces its words currency crisis in 17 years. the ruble weakened 41% in 2014. new credit surged in china. aggregate financing came in well above estimates. china is the world's biggest metals consumer. a recent selloff in base metals might've been excessive. yesterday, you saw the move in copper. the worst start to the year since 1988. on the ftse 100, some of the big copper producers, glencore plunged. buig question -- is it time to pick up the pieces or is that like trying to catch a falling knife? we'll put that to john mayer. john pick up the pieces are try to catch a falling knife? >> a big momentum trade. yes you will be catching
a falling knife. there will be lots of people catching it with you. copper has good fundamental value. the market has been finally balance. it could go either way. now, that's the with oil prices going down, those traders, the flush with cash, they are loading up again on the oil short, said we will have a go at copper as well. they got hammered more than most people expected. >> is that with this is? when we talk about oil, the consensus is that this is a supply side story. but copper that is not the case. >> the copper market is very sensitive to price. they have a much predator -- better price disciplined than the other metals. remember that copper producer get paid 90% of the value when they ship the copper. and they get the rest when it is
smelted. there is a reconciliation coming in three months. so what you should do right now is buy julia louis-dreyfusbuy copper. they will have to pay money back to those smelters. that would be a very big hit for them. >> this is the story of losers for the miners. is there anyone it sticks out to? >> bhp, forget it. it is all over. oil iron ore, they have all gone down. rio is a better bet. glencore. they are making buckets out of trading copper and oil. >> how much of an hedge is that? >> they are trading it. so they can make it both ways in the market. they are good at what they do. sure they are big producer but they are very well diversified across the other metals. zinc, nickel. there is a whole suite of metals not so far affected. if you look at the way that
consumption is going, china has been -- there is a lot more copper wiring still do going to china because the ratio between iron ore and copper is 1/3 of what it was for copper. there is a lot of the men to come through. a lot of industries will buy more copper. a lot of the shorting coming out of shanghai. the chinese to push it down ahead of their new year. again, good reason why they will buy it back. >> let's talk about fundamental demand. in recent reports demand growth is slowing in china. this year from last year. there is a slowing demand growth story playing out. >> yeah. and we expect that in the industry expects it. but we have got less production coming through. rio cut 100,000 tons of the forecast. glencore 50,000 tons.
that why set are expected surplus straightaway. i think the markets is going to head back into deficit this year. it is only a matter of time before the numbers catch up with reality. >> i look at the oil story, and i see the stories like qatar and shell calling off plans to build that such a chemical plant. the mining story in the mental story is not a six-month story. two year story. can you talk about how quickly the mining sector versus the oil sectors reacts in terms of cap ex spending? >> the oil guys have great discipline. yes, the miners are slower. but there is always been more discipline in copper. if we go back to 2000 and one prices collapsed, the copper miners were quick to cut back. i think civil happen again. -- i think this will happen again. with oil prices lower, it does
reduce the cost of production for the copper producers. >> is there a consolidation story brewing here? >> difficult to say. i think glencore is getting ready to buy rio tinto again. i think that is a deal that could and should go through. but one there are some other small place. first quantum minerals great company. andover gas is looking to develop things more organically. but i do not think there is a lot of new cap ex spending the pipeline. >> we go back to glencore-rio. why does that make sense? >> i think the two groups fit together very well. sure, the chinese will want them to sell out some more copper but regulators were not have much trouble to be honest. it is a couple metric fit. -- complementary fit. adding in iron ore and coal fits
pretty well. >> another question as we had to the right. big picture -- glencore or rio? >> for me, it is glencore. >> there we go. thank you very much for joining us. here is a picture of the markets. the ftse 100 is higher. the dax up by 100 points. we are higher across europe. up next, blackberry shares a big boost on rumors of a takeover by samsung. ♪
>> welcome back to "on the move ." we are looking at blackberry stocks yesterday. srurging on reports that samsung is in talks to acquire. what a move in that stock. >> roller coaster ride. if you happen to be watching or happen to be holding blackberry stock. it jumped 30% at one point yesterday and trading. that was the biggest move in a decade for blackberry shares because a report that samsung allegedly had approached blackberry, the canadian smartphone maker, saying, we will offer you $7.5 billion for
the company. that was a 37% premium over the closing of the day before. apparently, the report saying executives met last week to discuss this. suddenly, though share gains started to eradicate themselves in after ghouhour trading. denials. samsung says the reports are groundless. blackberry says we are not engaged in discussions with samsung. to be fair they did not specify if they received a proposal. but they do seem to be saying we are not negotiating right now. more interestingly, we talk to a person close to blackberry saying, hey, we get approached all the time. many people have been reading up lacked very. -- blackberry. >> apparently i should not pay any attention to it. the deal is not going to happen. everybody looks at the chart and ask themselves, with the steal make sense? -- would this dela make sense?
>> i think you could be a win-win for both. and many people started to put the reports and some of the news out of late together and thought it was a very valid story because recently we actually saw samsung and black area team up together. they had a partnership. it is all to do with using blackberry's security and using their server. samsung had got in with their no x system, some business apps. they were wanted to build up their enterprise value. many people want to go into work and use their own device. how do you make a secure? ibm and apple team together. so samsung and blackberry teamed together trying to woo over businesses saying, look at the strength of the security. already there is a partnership. they were working together. maybe people thought that was what would win.
then, of course, you look at what blackberry has to offer, it is getting more valuable. german politicians like blackberry because of it security. and it has got a mountain of patents. it has got more than 4000, particularly to do with security. these are key. they are helpful to avoid any sony hacks. all enterprises are focused on this are 2015. this is why john chen has been focusing on the area of expertise -- their dominance in enterprise. this is what samsung lacks. this is why they are teeming with blackberry. and many people like the blackberry keyboard. this could be a lucrative deal. so say many experts in the industry. question is whether or not they will actually do a deal. it seems to be totally off the agenda according to the company. >> fascinating story.
that is the story, the phones. 2014 was a huge year for m&a in the telecom sector. what will 2015 look like? we are joined now. are you expecting more consolidation? 9 >> all operators are disclosing -- because there has a been a significant competition that drove pricing power is lower for these operators. so consolidation seems to be a viable way to the recovery. if if you look at the european markets, the regulators and exporters. you need to have at least four players in the market. when we look at the prices, the prices are lower in countries like spain, france, in the u.k. so, the expectation is that and
more deals may come. >> talk to me about the growth in the sector. how saturated is this market the u.k. versus europe? can these guys generate growth organically without having this consolidation? >> european telecoms suffers. within the last five years, you had three to five percent declines in revenue. if you look at the forecast, now the contraction is more moderate at 1%. an thd there is growth coming from the high-speed networks. so we are taking it more 4g. the regulatory impacts of certain cuts to roaming rates is more moderate. there is a hope that -- it will be on the way for european telecoms. >> it was defined by the hunger to buy content.
bp doing it with sport. blink box. >> we will see telecom operators moving into pay tv. this is because they want to have all the services available to customers from landline telephone and broadband and mobile to pay tv. in order to have a competitive position, we expect to see more investment in conentent. >> he talked about the charges for roaming. in the uk they spent a huge amount of money building out a 4g network. when i'm on my smart phone, i connect to wi-fi. i do not use 4g. it is expensive. how do these guys get around this problem? >> if you look at the overall market, we have 50% 4g population coverage. as the coverage increases, more
people adopt it. compared to nordic countries the wi-fi use is significant we hire. as the, titian starts in -- as the competition starts the prices will be more affordable and more people will be able to buy 4g. and you will see it increasing. >> thank you for joining us this morning. that is the outlook for the telecom sector. 50 minutes into the trading session. spain up by 1%. the dax surging by 100 points. the story on the footsie is the story for the oil majors -- the story for the ftse. shell up 1.5%. we will talk more after the break. ♪
little bit higher for brent yesterday. yes, we array some of those gains today but those moves supported bp. reports in the u.k. media that may be bp might be thinking about cutting jobs up in the north sea oil complex. reports not confirmed just yet. copper coming back, up by 2.4%. the biggest one day drop for a number of years. the worst start since 1988 for the red metal. the oil story does not match up with copper. some concerns about demand in china with his -- which accounts for 45% of demand. "the pulse" is coming of the top of the hour. guy the markets -- >> they continue to be front and center. we will talk about the risks we face. the head of pinacle analysis has
some pretty impressive downside targets. he sees brent finding a floor in the mid-30's. copper down from where we are here. the u.s. 30-year sub 2%. he has got some fairly aggressive targets. >> we need to start talking about what is going on at the line end of the -- the long end of the curve. curves flattening in europe and the u.s. there used to be a message in that move. the recession is a minute. what is the story? >> people are looking for a place to park their money. as simple of that. if you believe the inflationary environment is going to be one of being very, very subdued levels over the next three years, where do you park your pension money? do you look at the long end? >>whether or not that is overdone. my sense that the deflation story is being overdone on the down side. with the u.s. economy doing what
it is doing, and what is happening in europe with the upcoming oil impact and q.e. you feel the markets -- the pendulum swung too far. as they said, we have further to move. >> it is a global market story but the plot -- the problems are localized. the problem for the u.k. is nothing like a problem for the ecb and europe where the move and inflation predates the move in oil. >> and some of that is structural. you wanted to be. there is a growth dynamic story there which is problematic. you need to segmented and look at it differently across different regions. but do you not get the feeling that a move on copper, th e havling o -- the halving of the oil price -- when we readjust, we tend to over just? >> capitulation might be the
word. equities hard. call it a rebound. we are up by 1%. the ftse 100 comes up a session high, up by 56 points. the dax higher by 100 points. nice gains in italy. a quick check on the oil majors. bp coming up session highs but still up by 1.6%. a nice move in brent yesterday. lower again today but also some reports in the u.k. press the perhaps bp are looking at cutting jobs. some of these guys are going to have to cut costs. if you look at fx, i will bring up euro-dollar. a week and a day ahead of the big decision at the ecb. 1.1766. we are heading back to the 90's. there we are. down by 1/3 of 1%.